THAMES BOARD MILLS LIMITED

HC Deb 29 November 1977 vol 940 cc429-62

11.29 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 the Industry Act 1975 and the Industry (Amendment) Act 1976, in respect of the business carried on by Thames Board Mills Ltd. at Workington sums exceeding £5 million but not exceeding £10.5 million. This is the first project to come before the House under the selective investment scheme introduced in December 1976. It follows on the experience that we had under the highly successful accelerated project scheme, and like that scheme it has a minimum project value of half a million pounds. It is also aimed to encourage where possible investment to take place earlier than it would otherwise have been undertaken. We have widened its purpose to include projects where the company will undertake larger investment in scale, including modernisation, than was previously envisaged.

Each individual case is examined against the national benefits that will arise from it. So far we have approved 40 offers of assistance amounting to £11.5 million under the scheme, and the approvals could include further projects that will lead to investment of £123 million. That means that every £1 million of Government money is at present generating £10 million of actual investment.

Altogether these projects will benefit the balance of payments by over £83 million a year by 1980. They will create 2,200 new jobs and will safeguard many more. Already there are 88 other applications under consideration for projects worth over £1,000 million. There have been 85 applications turned down or withdrawn.

Applications cover a wide range of industries, and there are various distinctive features that have appealed to us in the projects that we have approved so far. As has already been intimated, the time-scales of some projects have been brought forward where there have been significant increases in the scale of investment, where we have been enabled to obtain new inward investment that would not other- wise have come to the country, or where important technological advance has been achieved.

The proposal that we are considering has been put forward by Thames Board Mills Limited, which is a wholly owned subsidiary of Unilever. The one project will cost the company £100 million. I believe that it is its largest single investment project. The project will be located at Workington in Cumbria, which is itself a special development area with a rate of unemployment of over 8 per cent. It will produce 100,000 tons of Duplex a year, which is high-quality packaging board.

The £100 million will be made up as follows. There will be £19.5 million spent on buildings and £63.4 million on plant and machinery. I assure my hon. Friend the Member for Bury and Radcliffe (Mr. White), who spoke to me earlier today about the matter, that the company is aware of our wish that as far as possible it purchases its equipment in Britain. It is conscious of the Government's priorities in that respect. In fairness to the company, it has a good record of purchasing in Britain wherever possible, but it has to take into account reasonable commercial considerations in giving such priority. A further £3.1 million will be used for pre-operation expenses and technical support plus £13 million in working capital.

At present there is not sufficient capacity in the United Kingdom to meet the demand for Duplex, and 50 per cent of our requirement—that is 100,000 tons—is imported each year from Scandinavia, mainly from Sweden and Finland. The market is expected to grow by a further 100,000 tons by the early 1980s. Unless additional capacity is introduced within the United Kingdom, all the extra 100,000 tons will have to be imported, giving a total import of about 200,000 tons.

Duplex is made from mechanical pulp and will be manufactured on site from timber grown in this country. I stress that we have had assurances from the Forestry Commission that there are ample supplies of appropriate pulp wood thinnings that will meet not only the requirements of the Thames project but any other projects that are expected or foreseeable.

Mr. Max Madden (Sowerby)

Has the plant any recycling capacity?

Mr. Williams

That, of course, would be so if there was waste paper recycling under the paper and board scheme, but this is a product made from wood pulp, not waste paper. There is a health reason for that. This is a high quality product and it is used for the packaging of food and so on. However, it cannot readily be produced from waste products and that is not a feature of its production.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

The Minister says that he has had an assurance from the Forestry Commission that there will be adequate supplies for this mill. What discussions has he had with his right hon. Friends the Secretary of State for the Environment and the Secretary of State for Scotland about road conditions from the areas where the forests are grown to the pulp mill? A project of this kind will certainly affect the roads in, for example, my constituency.

Mr. Williams

I understand that 20 to 30 per cent of the supplies of the raw material will come from Scottish sources, mainly private estates.

Mr. Hector Monro (Dumfries)

rose——

Mr. Williams

I cannot give way to the hon. Gentleman for the moment. I shall get into trouble with the Chief Whip for speaking for too long and yet it will have been people interrupting me who will have prolonged my speech when I was trying to keep it brief.

About 20 per cent. or 30 per cent. of the raw material supplies will come from Scotland and I have not heard it suggested that there will be any transport difficulties. However, in view of what has been said, I will certainly ensure that that matter is discussed with the Scottish Office.

Mr. Monro

The right hon. Gentleman cannot say with any authority that the majority of the raw material supply will come from private sources. It will come from the Forestry Commission, largely from Northumberland and the south of Scotland

The right hon. Gentleman said that he knew that the roads would be adequate, but the right hon. Member for Roxburgh, Selkidk and Peebles (Mr. Steel) and I know that they simply cannot be adequate.

Mr. Williams

I do not remember claiming that the roads would be adequate. I do not personally know the locality. What I said was that I would ensure that this matter was discussed with the appropriate Departments.

A substantial part of the raw material suppliers will come from Scotland and it is therefore probable that a comparable proportion of the job creation will arise in Scotland. I shall have more to say about that later.

The balance of payments will benefit from this project by £28 million a year by 1985 because of the 100,000 tons import substitution. About 280 jobs will be created at Workington, which, as I have said, is an area of high unemployment. A further 350 jobs will arise from the preparation and transport of the wood thinnings and a proportion of that number will be in Scotland. Construction work will give rise at peak to an extra 500 jobs between 1970 and 1980. Substantial other work will arise from the placing of orders for much of the plant and machinery with British companies

Mr. Dennis Skinner (Bolsover)

I am not worried about the Chief Whip and I hope that my right hon. Friend is not. I am incapable of being frightened by him. Is my right hon. Friend saying that in Workington the free market forces which sent an hon. Member here on the Tory platform are incapable of solving the unemployment problem and that we are now having to have subsidies paid by the taxpayer in an attempt to resolve some of the unemployment problems there? If that is the case, would it not be sensible in future for Workington to send a Socialist Member here to uphold these principles?

Mr. Williams

I find the arguments of my hon. Friend the Member for Bolsover (Mr. Skinner) absolutely convincing. I cannot take exception to anything that he has just said. It is interesting to note that when we last voted under Section 8 of the Industry Act—the section under which these funds are made available—Conservative Members trooped into the Lobbies against providing that money. If they had their way Workington would not be getting this project.

The company had to satisfy the Department that the project would not have taken place at this time without the support of the interest relief grant of £10.5 million. We have examined the company's records and we confirm that the project had not found a place in its forward investment programme for the immediate future and that, subsequent to the announcement of the selective investment scheme, they brought the scheme forward for review in the light of the new assistance.

The company's reservations are understandable. A total of £100 million is an enormous investment and one can understand that the company looked at it very critically. There would also be a three or four-year period before production and the company would be vulnerable to changes in exchange rates. All these facts led the company to ask for Government support before it committed itself.

Mr. Ron Thomas (Bristol, North West)

What is the evidence that the company would not have invested without this subvention from public funds? What will be the total public subsidy to this massive company, Unilever, in terms of development grants, tax reliefs and the £5 million to £10 million that we a giving to it?

Mr. Williams

The company will qualify for regional development grant in addition to the interest relief grant. Officials in the Department looked at the scheme in detail to establish whether it had been in the company's investment programme. The officials were satisfied that the scheme had not been in the programme.

The scheme was then scrutinised by the independent Industrial Development Advisory Board which commended it as being ideally suitable for selective investment support. The matter has been vetted not only by departmental officials, including those who were co-opted into the Department to deal with such matters, but by the entirely independent Industrial Development Advisory Board. The project is consistent with the scheme. It will make a major contribution in terms of import substitution and will therefore have a positive effect on the balance of payments.

Dr. Oonagh McDonald (Thurrock)

Various assurances have been received from the company, such as that British machinery would be used and that the project would give rise to import substitution. Does my right hon. Friend not think that this large special grant and these assurances would have been better had they been dealt with in the context of a planning agreement with the company?

Mr. Williams

No, I do not. Planning agreements take a substantial time to develop. In this case it was important to get the investment under way as quickly as possible. A planning agreement would not have been the most helpful course. I hope that the House will support the proposal.

11.45 p.m.

Mr. Kenneth Clarke (Rushcliffe)

I say at once that it is not the intention of the Opposition to divide against the motion. We take the view that this is one of those rare occasions when the Government are proposing to make worthwhile use of the powers available under the Conservative Government's Industry Act 1972.

In reaching that position, we were helped by my hon. Friend the Member for Workington (Mr. Page), whose constituency is most directly affected by the project and who has the most first-hand knowledge of it. He has visited the existing plant, has familiarised himself with the project, and has given invaluable advice. By happy coincidence, he is an officer of the Conservative Industry committee, and we look forward to his valuable advice on the industrial situation in his part of the country for many years.

The effects on Workington are somewhat limited. The project when completed will provide only 279 additional jobs. The total cost to public funds of the assistance is about £28½ million, before any account is taken of tax relief. Normally speaking, expenditure of that size in order to produce 279 jobs is not of itself an adequate reason to support the application.

The employment-creating potential of this investment is not, therefore, the major factor, but it is important in view of the employment situation in Workington town. There are other key factors, and the debate gives me the opportunity to explain yet again to the Minister what position we take on Section 8 of the Industry Act, and why we feel that that these powers should be used properly but sparingly on a selective basis for the purpose for which they were contemplated by the Conservative Government.

The first key factor in the case is that there is no question of the company being a lame duck or any similar species of animal. The company, a subsidiary of Unilever, is highly profitable; the present plant is highly profitable and successful. The Government on this occasion are not attempting to use public money to retain jobs for the short term in any uncompetitive industry.

Mr. Mike Noble (Rossendale)

The hon. Gentleman refers to lame ducks. I recall the statement he made in the Clothier some time ago about the clothing industry. Will he give us his definition of a lame duck? Would he give aid if he were in a position to give it?

Mr. Clarke

I never use the term "lame duck" as a serious description. When we have a debate on the clothing industry—I know the hon. Gentleman's close interest in it—I will happily amplify my views. I am glad that he notes them when they appear in the Clothier.

The second major reason for supporting this investment is that given by the Minister—that the project has great import-saving potential. The paper and board industry has a very large import bill. The position of this country has been greatly affected by the recent decline in the exchange rate, and the cost of imported wood pulp, upon which our industry heavily relies for almost half its pulp requirements, has gone up because it is traded usually in United States dollars. The Minister says, rightly, that 28 million dollars, the estimated saving by manufacturing Duplex board in this country, is a significant contribution to the balance of payments.

The third principal reason for supporting this investment is that it seems to be a case where public money being put into investment is probably needed in order to persuade this company to undertake the investment. That is supposal to be the criterion for all Section 8 assistance, and the Minister is satisfied that the company would not have gone ahead without the offer of assistance.

Of course the hon. Gentleman is easily satisfied on that score by the many hundreds of companies making claims under Section 8. But in this case one can see that there are reasons why even a major concern such as Thames Board Mills might hesitate unless it had some direct grant assistance. The paper and board industry in which the company operates has gone through a great recession. In 1975 the industry as a whole had the worst year of recession that it has ever known, and at the moment it is only hoping that in 1978 it can get back to the levels of production of 1973. So these are not auspicious times for a company in the industry lightly to undertake a major investment.

In addition, with a project of this kind the company is having to look up to 15 years ahead in trying to form a judgment on its likely market and the return on investment. That involves taking a view about highly speculative matters some of which are under the control of Governments. I refer to such matters as the level of the exchange rate over the intervening period, and the likely level of the market and demand, all of which depend on the way in which the economy of the country is managed.

The company has used its commercial judgment and would not have contemplated the scheme unless it was satisfied that there was a potential market for Duplex board which it could occupy profitably if it invested in this scheme. But it appears likely that that decision in principle would not be likely to be put into practice without a substantial public contribution. This is an area of Section 8 assistance policy where we in the Conseravative Party are always most cautious and intend to remain so. I was glad to see that the hon. Member for Bristol, North-West (Mr. Thomas) also had doubts on this score when looking at assistance given to private industry.

Normally, when making investment decisions, companies rely on their own judgment of the anticipated market and the likely return on capital, and they weigh that against the risks involved. That is what determines investment, and far too often the Government's contribution of taxpayers' money is a bonus contribution which the companies claim when they want it. The clothing industry scheme, about which the hon. Member for Rossendale (Mr. Noble) expressed an interest, is an example of where the Government have thrown money at an industry but where the industry cannot be persuaded to take it up because there is no good commercial reason for investing the £15 million currently available.

Take the case of the ferrous foundry industry in respect of which the Government claim so much success for their policies. We are satisfied that a large proportion of the Government money is contributing to investment which would have gone ahead in any event and which would have been financed by capital raised on the market.

But in the case now before us the risk involved for the investment is so great, and the scale so large, that the company is taking a decision that it would not take at the moment if it were not helped. Grants towards investment in this way can influence the timing of investment decisions and sometimes the location of investment, although that is not relevant here because the company is already located in Workington and has the site to which it intends to go. There is an obvious inducement here to take a risk which the Government believe to be in the national interest.

This is one of the rare cases where we feel that the use of Section 8 is justified, and for which the section was designed. We shall support it.

Mr. Anthony Nelson (Chichester)

Does my hon. Friend agree that on the more general question of providing aid for advance investment programmes such as this there is a more general problem in that there is the risk of extending the recession for certain industries with the provision of assistance for certain productive capacity? Does he agree that by increasing capacity and production in that industry one might artificially depress prices and therefore extend the recession and delay the revival of natural investment in the industry? Is that not a wider and more real consideration which might weigh against schemes of the kind we are now considering?

Mr. Clarke

That is a valid point, but it is not particularly applicable to Duplex board and this investment. There is only limited capacity in this country for the manufacture of this board. Most of the existing capacity is in Scandinavia, and it is anticipated that in the 1980s there will be a substantial growth in the market both here and abroad. British capacity would save a large import bill.

I come now to the questions which I have to ask about this assistance. First, I want the Minister to give an answer to his hon. Friend the Member for Bristol, North-West about the total of grant likely to be involved in this £100 million project at Workington. We are debating the £10½ million being given under Section 8 of the 1972 Act, but there is a bigger sum being given by way of regional development grant under Section 1 of the Act, that being an automatic grant of aid which does not require express parliamentary approval.

My understanding is that the company is likely to receive 22 per cent. of the eligible costs of the scheme, and that is likely to come to about £18½ million. So there is a grant of taxpayers' money here, I understand, of about £29 million. I should like the Minister to confirm that.

Mr. Skinner

Surely, the hon. Gentleman's answer a moment ago to his hon. Friend the Member for Chichester (Mr. Nelson), with his remarks about the market economy—that is roughly what he was driving at—should have included a reference to his hon. Friend's past association as one of Slater Walker's young blades with activities which resulted in the end in the taxpayer recently having to find about £70 million in order to pick up the pieces which he and his friends left.

Mr. Clarke

My hon. Friend has a perfectly reputable business career behind him, and I should say, on the strength of his experience, that he knows a great deal more about these matters than does the hon. Member for Bolsover (Mr. Skinner). The hon. Member shows a rather ridiculous approach to a debate on a serious matter by coming in and making snide and misplaced remarks about one of my hon. Friends.

I come now to my next question. Why is this grant being made not under the Paper and Board Industry Scheme, a separate scheme, but under Section 8 of the Industry Act? Since we are looking at the question of assistance to the paper and board industry generally, I shall put another point to the Minister. How much of the £23 million already available to the industry under the Paper and Board Industry Scheme has so far been offered and taken up? Why was not this application brought within that scheme? Also—this may shed light on that matter—does the Paper and Board Industry Scheme extend to projects of this kind which are aimed at the use of indigenous timber? Is that scheme confined to the recycling of waste paper and other fibres? That seems to be by no means clear in the day-to-day operation of the scheme.

If the problem is that the scheme does not extend to the use of indigenous timber, that takes me to other questions which, I think, my hon. Friend the Member for Dumfries will seek to raise later if he catches the eye of the Chair. I refer to the question of the availability of timber and the way in which the timber will be transported to the mill.

The Paper and Board Industry Scheme as originally brought out seemed to contemplate the use of indigenous timber, and its first guidelines contained certain caveats about the availability of timber. When they floated the scheme, the Government said, for instance, that the Department of Industry, is considering applications of this kind, will need to he satisfied that the necessary supplies of indigenous timber will be available on a long-term basis and that the Secretary of State will take into account possible alternative uses for such timber. Certain Press reports have indicated that the timber for the project under debate will come from the company's own forests. In fact, the company does not own any forests, and I understand that most of the timber will come from the Forestry Commission in the north of England and southern Scotland. The Minister said that the Forestry Commission is happy that it can satisfy the demand. Has he made doubly sure of that, and why is he satisfied of it now when his Department put such cautious words into the guidance for the Paper and Board Industry Scheme less than two years ago?

I turn next to the question of the purchase of British equipment, in which the hon. Member for Bury and Radcliffe (Mr. White) is interested. The Minister said that it was the Government's wish that British equipment should be brought for this plant, and I am sure that that is echoed by us all, but my understanding is that it is in no way a condition of these grants—I trust that it is not—that any particular equipment should be purchased. I hope also that the Minister can reassure us that no constraints whatever have been put on the company's own judgment of what is technically the most appropriate for this project and what is the best and most tried equipment to employ.

Those are my only queries on the matter, and I hope that the Minister can answer them. Otherwise, we are content that this grant should be made. It will help one of the biggest investments by anyone in the paper and board industry for many years. It involves something of a speculation about the future shape of the market, but obviously it is in the country's interest that the project should succeed. In the end, we should get a great deal of import saving and an improvement in our balance of payments as a result.

We wish well to the project and to the plant when it is finally established, and we trust that it will prove to be a successful contribution to the industrial activity of the North-West.

12 midnight.

Mr. Mike Noble (Rossendale)

It may seem strange that a Member from the Lancashire area is speaking in this debate, but I have two interests in this subject. The first is that I look forward to the time after the next General Election when I can welcome one of my former constituents, Mr. Dale Campbell Savers, as a Labour Member of Parliament. He fought the last by-election in Workington on the basis of intervention in industry and providing jobs, but this was attacked by Conservative Members.

My second interest is that the paper machinery industry is concentrated in the North-West, particularly in Bury, and many of my constituents work in that industry. That means that I welcome the statement, although I regret, as my hon. Friend the Member for Thurrock (Dr. McDonald) pointed out, that we have not obtained the degree of accountability that we would wish in controlling this element of public expenditure. Nevertheless, it will create jobs not only in Workington and in the forestry areas but, we hope, in the North-West and particularly in the Bury and Radcliffe and Rossendale areas, where many people work in the paper and the paper machinery industry.

I ask my right hon. Friend the Minister to make sure that the development is carried through in consultation between Thames Board Mills and the paper machinery industry in Bury and Radcliffe and Rossendale, so that if there are any design or technological problems we can have full consultation from the beginning to ensure that this investment in machinery—which from my reading is the bulk of the investment—remains in this country, so that we can have a flourishing and expanding paper machinery industry. I hope that my right hon. Friend will pay careful regard to that, and monitor the project to make sure that the jobs come about.

An important principle raised by this debate is the ambivalent attitude of the Conservatives where public funds are involved, whether for the financing of industry or for anything else. The hon. Member for Rushcliffe (Mr. Clarke) made a statement to Clothier about lame ducks. We in the textile industry are still waiting for a reply. He said that this firm is not a lame duck. Does that mean that the Conservative Party is not prepared to preserve jobs in the North-West? Does it mean that the temporary employment subsidy will be withdrawn by the Conservative Party in many areas?

I return to the hon. Member for Workington (Mr. Page). In the West Cumberland Times and Star on 13th August the hon. Member stated in an open letter to trade unionists, many of whom work for Thames Board Mills: If only the Government had behaved in expenditure and restraint on interference in all a similar manner with restraint on public sections of activity"— presumably he meant the industry— there would have been a much improved chance of being poised to join in with the world recovery. What exactly did he mean? Does he want to see his constituents in Workington starved of this investment? He fought the election campaign on the basis of non-interference in private industry. I was there, and so were many of my hon. Friends. The hon. Member for Workington wanted to see a completely free market economy.

My colleague Dale Campbell Savers fought the election on the basis of the statement made by my right hon. Friend, of providing Government funds for industry in Workington and elsewhere. The hon. Member for Workington hid behind the skirts of many of his hon. Friends and won the election. Now he is coming to the Chamber to ask for the Government aid that he denied last year in that election campaign.

Mr. Kenneth Clarke

Does the hon. Gentleman realise that the grants are being made under legislation passed by the last Conservative Government, and that his own Government are expressly disowning any intention of forcing a planning agreement on the company, of taking a public stake in it or demanding undertakings from it about the purchase of machinery or intervening in the purchase, as he is demanding? Therefore, we are glad to see that my hon. Friend the Member for Workington (Mr. Page) and others of my hon. Friends have converted the Minister against the sort of public intervention that his colleagues are demanding.

Mr. Noble

In the debate on the Gracious Speech the right hon. Member for Leeds, North-East (Sir K. Joseph) said that we should withdraw subsidies from industry and that there should be no support for lame ducks. When the hon. Member for Chichester (Mr. Nelson) raised the question of advanced purchasing of investment capacity, the hon. Member for Workington nodded his head when the right hon. Gentleman said that that could cause a continuation of the recession. Does that mean that the hon. Member for Workington objects to this investment in his constituency? Perhaps he will come clean.

There is ambivalence in the Conservative Party's attitude towards support for industry. We are all aware of it, and the public are becoming aware of it. Many of us on the Labour Benches would like to see the Department of Industry tying down industries with planning agreements and so on. We would prefer some accountability for the way in which the taxpayer's money is spent. But even in the absence of that, we wish to see jobs created. On that basis, we are prepared to support my right hon. Friend the Minister tonight. We do not think that we have achieved the whole cake. Perhaps this is half way. We want to see big companies such as Unilever and Courtaulds and many more tied down so that when they receive public funds those funds create jobs and are not used in the way that Conservative Members would argue.

I return to the point with which I opened. We have a serious position in the paper industry in Bury, Radcliffe and Rossendale. Regardless of what the hon. Member for Rushcliffe says, we not only ask but expect my right hon. Friend to enter into consultations with Thames Board Mills to make sure that there are continuing negotiations and discussions between the machinery manufacturers in our area and the company, to ensure that the massive investment in plant and machinery will come to our area.

There is a great deal at stake. We hope that my right hon. Friend will remember that and forget the blandishments of Conservative Members who simply want to see money pumped into private industry with no accountability.

12.8 a.m.

Mr. Richard Page (Workington)

I am pleased that we have this further opportunity to discuss future industrial expansion in Workington. I am delighted that industry in the area is expanding, and coming away from its original twin foundations of coal and steel.

It may help the House if I explain why such a vast investment is necessary for what appears to be just a piece of paper. Duplex folding board is a superior-quality board used to make the boxes that hold one's cereals, chocolates and cigarettes—and one's fruit pies, if one is brave enough to risk them. Like most things that appear to be simple, it turns out to be fairly complicated. At present it is made—and this is vital, because it goes into the cost of the plant and machinery—by one thin layer of high-quality material being laid, then three layers of infill, and then a thin layer of backing—two sides of the sandwich to hold the meat in the middle.

Duplex has superior qualities of creasing and folding ability, better printability and extra rigidity and stiffness. These qualities are very superior to those of the white-lined chipboard that is used extensively at present. Market trends point to increasing demand for Duplex board.

From the national point of view, this plant produces some 25 per cent. of the United Kingdom demand, running at the moment at 190,000 tons. Of that, over 50 per cent., as mentioned by the Minister, is coming from Scandinavia.

Thames Board Mills Limited has done a lot of very careful market projections and reckons that in 1986 over 310,000 tons will be used in this country. If we do nothing about it and leave it as it is, the United Kingdom capacity of 120,000 tons will give a shortfall of 200,000 tons. If we are to maintain the status quo, it is absolutely vital that we produce the extra 100,000 tons. This is where the expansion of Thames Board Mills Limited comes in.

A variety of figures of cost have been bandied around. It should be just under £100 million, and in that there is an inflation clause of £25 million. That is the extra cost for inflation simply to be able to put in this plant. The new machine will do the meat in the sandwich layer in one and not three separate sections. From the technical point of view that will help not only in speed of production but with greater layer separation.

We are discussing the £10.5 million. I do not think that the Minister has made the point that it is not allowable against tax. It will help the company with cash flow, and when the company moves into profit it will pay back 52½ per cent., so that £5 million will come back.

The hon. Member for Bolsover (Mr. Skinner) made certain comments which I find quite unbelievable. It is a sad reflection on the Government's industrial policy that a successful company has to come to this House to ask for money in order to undertake some form of investment for the future. Since I fought the election in Workington in 1974, unemployment has gone up by 4 per cent. and I know which Government are responsible for that rise. I know where to point the finger, and it is not at the Opposition.

>I tell the hon. Member for Rossendale (Mr. Noble) that I should be only too willing to have another election. I should like it to be right now. Will he tell the Leader of his party that I should love to have an election right now? I know who would be coming back to this House. The people of Workington know which is the party to lead this country and to bring it the right way round. The Labour Government have run the country into the ground, and it is no use trying to blame the Conservative Party.

Mr. Noble

In view of that statement, can the hon. Gentleman tell me why the workers in Miller's in Workington, a foot-wear factory, are writing to me about their problems and not to him?

Mr. Page

The hon. Gentleman should try to get his facts right. The workers from Miller's have already contacted me, particularly about closed uppers coming in from Third world countries, and we are discussing with Ministers ways of monitoring these so that they do not get by the agreed levels. Let that be under-stood.

I mentioned earlier the increase of 100,000 tons. If this level is maintained, there will be a saving in imports of £35 million in 1986. That is at 1977 prices. Some of my hon. Friends have already commented on the supply of thinnings from Scotland.

From a constituency point of view- I have been talking nationally up to now—I believe that this proposed development is welcome on a variety of bases. It telescopes stages two and three into one. When the plant went in originally it was stage one, then stage two, and then stage three. This puts it into one. The production will be coming in one machine. I welcome it on the ground that it will help our future balance of payments and also help with jobs in West Cumbria. I also welcome it because it is support for profitable industry and will give a return to the Exchequer when it is in operation.

12.15 a.m.

Mr. George Thompson (Galloway)

I promised that I would be brief and I shall be. I have visited Workington and I was amazed by the size of the plant as well as by the small number of people required to work it. I still ask myself whether it is absolutely essential for plants to be as large as or larger than this. That is something that we all need to think about.

Certainly this country so far as it can, wants to move towards self-sufficiency in timber products.

But it seems to me that the Government's asking the House tonight to pass this motion is tantamount to asking us to rubber stamp a blank cheque. The House has not debated forestry for many years. How can the Government ask us to vote this money without giving us a full picture of Government thinking on forestry and on the timber industry? It is not good enough simply to talk about one particular mill. It is absolutely necessary for the House regularly to debate forestry in the United Kingdom. It is not good enough that we are allowed to make the occasional speech when the Scottish Grand Committee debates agriculture. Only by having regular debates on forestry can we be in a position to understand the full significance of what we are being asked to do tonight.

The House should remember that the bulk of the wood used by Thames Board Mills of Workington comes from Scotland, as witnessed in an article in the Financial Times on Saturday which said: Pulp used for the board is already made at Workington, mainly from Scottish trees". This means that Scotland runs the risk of becoming a colony providing raw materials for processing in another country. Dumfries and Galloway are no longer prepared to be that. Hon. Gentlemen may laugh as much as they like, but the people of Scotland will note their laughter and will draw the necessary conclusion at the end of the day.

Mr. Winifred Ewing (Moray and Nairn)

The more they laugh, the better for us.

Mr. Thompson

We in Dumfries and Galloway want sawmills and by the 1990s a particle mill and a pulp mill in our region. The Government must come clean and tell us whether this development at Workington will pre-empt further essential development in Dumfries and Galloway within the next two decades.

The people of Galloway are no longer prepared to be hewers of wood and drawers of water, neither mere drawers of water to make tea for tourists nor hewers of wood to produce primary materials to be processed in other parts of the country which will get the benefit from the downstream timber industry.

Mr. Dennis Canavan (West Stirlingshire)

What about Thompson's bairns?

Mr. Thompson

In Galloway they are all Geordie Thompson's bairns and at the next election they will remain Geordie Thompson's bairns.

We want timber processing in Galloway. I draw the attention of the House to an excellent consultative document produced by the regional council and simply called "A Study of Forest Resources". Page 15 of that document says: The conclusion reached is that there does not appear to be any technical reason why, in time, 90 per cent or more of the Region's timber output should not be processed locally". If there are to be a particle mill and a pulp mill in Galloway, I would stake a strong claim to one of them being in the Wigtown district, which has such a terrible unemployment problem.

The Scots will note that the Government are tonight willing to vote money to Workington. But what are the Government doing about the Scottish Timber Products mill at Cowie? Everyone from the Secretary of State for Scotland downwards admits that that mill is essential to Scotland's future as a timber processor. I understand that the Scottish Development Agency is looking for a private sector partner for this enterprise. The Government should now allow the SDA to keep Cowie going until such a partner is found.

Everyone in Scotland agrees that this modern mill, whatever the faults of its former management or the defects of its financial provision, is absolutely essential both to the industry in Scotland and as a source of much-needed jobs in the Central Region where youth unemployment is the second highest in Scotland.

The Under-Secretary of State for Scotland (Mr. Harry Ewing)

I am sure that it is not in the hon. Gentleman's nature to mislead the House or the country. I am sure that he is very much aware that the Government are doing a great deal for Scottish Timber Products. The position is that we now have three projects that are being evaluated with regard to Scottish Timber Products. The hon. Gentleman should know—I understand he has made some inquiries from STP—that it is not possible for the Scottish Development Agency to inject management into what is a specialised industry.

If the hon. Gentleman has any knowledge at all about forestry and about the chipboard industry he will realise that it is better to proceed, as the Government propose, by seeking to get a purchaser for STP which will provide the expertise in management terms that will be to the long-term benefit and interests of the employees of STP. I can assure him that the employees themselves and the people in the Central Region also accept the Government's involvement in this.

Mr. Thompson

I am grateful to the Minister for intervening along those lines. In fact, his right hon. Friend the Secretary of State wrote to me in exactly those terms. I agree that all these efforts have been made, and I think that the hon. Gentleman will agree, when he reads Hansard, that I have in no way contradicted anything that he said. The hon. Gentleman said exactly what his right hon. Friend told me, and what I have said matches up with that. But surely it is essential to keep the mill going until the Government are able to clinch a deal with one of the partners for whom they are looking, and I think that the Minister will agree with me about that as well.

My right hon. and hon. Friends and I intend to divide the House in order to fire a shot across the Government's bows to teach them that forestry requires proper and regular debates in this House and to make clear that we demand that Scottish timber should, in the long run, be processed in Scotland.

12.22 a.m.

Mr. Hector Monro (Dumfries)

I am glad to have this opportunity to take up what the hon. Member for Galloway (Mr. Thompson) said in some detail.

First, however, I want to underline the outstanding work done by my hon. Friend the Member for Workington (Mr. Page) in trying to bring jobs to an area of very high unemployment. The Minister said that unemployment in the area was of the order of 6.5 per cent. In Dumfries and Galloway it is at least at that level and even as high as 14 per cent. in certain areas in my constituency.

I do not doubt the Minister's good intentions, and I welcome what he said about investment in industry in areas of high unemployment, especially in special development areas, of which I approve strongly.

I want to refer to some further repercussions of the grant to Thames Board, especially in relation to timber production in Scotland, and I do so in terms of the marketing area from where trees are drawn for Workington—and not in a Scotland or North of England context, but in the whole Solway estuarial context, where trees are grown and supplied to Workington. This includes Newcastleton, Keilder, Cumbria. Dumfries and Galloway.

This decision will have a very long-term impact on my constituency and on Galloway, which is the region in Scotland which has the highest percentage of aforestation of any region in the whole country. I ask the Minister to think again, if not to take further advice from his officials, about his indication that the majority of the timber came from the private sector.

Mr. Alan Williams

The hon. Gentle man is quite correct. Although there will be supplies from the private sector in Scotland, the bulk will be from the Forestry Commission.

Mr. Munro

I am grateful for that intervention. Fortunately, the Dumfries and Galloway region has had the foresight to prepare for regional councillors a detailed programme and consultation document on the future of forestry in the area. It is an industry which is most important for Scotland. I welcome this initiative and the assessment of future potential and how to maximise employment in the region from forestry and the development of timber activities in the area.

This motion—and I wish to adopt the views of by hon. Friend the Member for Rushcliffe (Mr. Clarke)—will have great repercussions. Therefore, I should like an explanation of three main issues—namely, sawmill timber, pulp wood and chipboard. At present in the region 6 per cent. of chipboard is exported, 17 per cent. of sawmill timber is exported and 27 per cent. goes to pulp, the vast majority of it to Workington. Therefore, half the timber produced in Dumfries and Galloway goes basically to Workington for pulp or to the sawmill at Workington. Thus this vast injection of capital will have an important effect on Dumfries and Galloway.

Is the decision which has been taken purely an industrial expedient, or does it comprise long-term planning for the whole of North-West England and South-West Scotland? Have the Government examined what was said by the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) about the impact on the road communications of the whole area? We know the hazards of the A75 from Stranraer to Carlisle, and a substantial amount of the timber will travel along that route, on the A7, and local roads from Newcastle to Carlisle and on to Workington.

Are the Government prepared to put substantial sums of money into the infrastructure of improving roads to take a vast quantity of timber to Workington? Has that point been considered? Furthermore, have the Government considered the implications of employment in relation to Workington and timber-producing areas?

Has the South of Scotland Conservancy of the Forestry Commission been consulted? Indeed, if it has been consulted, has it been asked the right question? If the Forestry Commission is asked "Can you produce the trees?", it will answer in the affirmative. But if it is asked whether it would prefer the pulp to be taken by the shorter route, say to Dumfries or Kirkcudbright, it might take the view that that would make more economic sense than the long haul to Workington. Have the Government considered the long-term future of timber production and the long-term repercussions of any development solely in West Cumberland? Has the Secretary of State for Scotland or the Minister discussed this matter with the Dumfries and Galloway region, because it is most important to the future viability of its major product in the years ahead?

In the next decade Dumfries and Galloway will have about 165,000 cubic metres of timber available for pulp as opposed to saw-milling and board timber. That is a viable pulp-mill capacity. Will it be jeopardised because timber is likely to be taken to West Cumberland instead?

Mr. Giles Radice (Chester-le-Street)

Will the hon. Gentleman say how far Dumfries is from Workington?

Mr. Monro

About 65 miles. This is particularly important. I want to know whether the Government have considered those points and, if they have, I want them to give me some answers in relation to this whole issue of the production, harvesting and haulage of timber.

Mr. Robert Hughes (Aberdeen, North)

I understand that the hon. Gentleman is making a case for bulk timber mill capacity in the area of the trees. Is he asking the Government or private enterprise to supply it? I had thought that the hon. Gentleman's policy was to leave things to the free market because he did not believe in Socialist planning.

Mr. Monro

If the hon. Gentleman knew what he was questioning me about, he would realise that his question is 10 years too soon. We cannot have a pulp mill in Dumfries and Galloway until the trees are ready for harvesting, and that will not happen for 10 years. However, if this decision is taken tonight, the opportunity will be gone for ever. Have the Government considered the long-term repercussions of this? I hope that the Minister will give me answers to my questions because the long-term issues are as important as the short-term issues.

12.37 a.m.

Mr. Dennis Canavan (West Stirlingshire)

I have listened to many speeches in the House, but I doubt if I have ever heard such sheer hypocrisy and opportunism as the contribution from the Scottish National Party tonight. The hon. Member for Galloway (Mr. Thompson) purported to exploit an unemployment emergency in my constituency to encourage his hon. Friends to vote against the Order. A vote against the motion would not create one job in Cowie or Galloway or anywhere else in Scotland. Indeed, by voting against this motion the SNP would be destroying the employment prospects of forestry and other workers in Scotland.

I should like to say a few words about the emergency in my constituency which the SNP attempted to misuse in order to mislead the House tonight. It appears to me that SNP Members did not have the courtesy to be here at the start of the debate when the Minister moved the motion, and their ignorance about the terms of the motion is matched by their ignorance about the Scottish Timber Products situation in my constitunecy. That company went into receivership about two months ago—another typical example of the failure of capitalism in this period of economic recession. During that two-month period, neither the SNP nor the Tories have been in official contact with the trade union movement in that factory. I shall tell the House who has been in contact, and that is the Minister, the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing). and I who have been in the forefront of the campaign. I shall also tell the House something that will stick in the craw of the SNP—that is that we shall win this campaign.

We have been backed not just by the working class in Cowie and Scotland, but by more than 40 Labour MPs from Scotland and from south of the border who have supported a motion for a rescue operation. We have been backed by the trade union movement, at local level by the Stirling District Trades Council, by the might of the Transport and General Workers Union, and by the Scottish TUC.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Order. I hope that the hon. Gentleman is relating this to the motion that we are discussing.

Mr. Canavan

I am answering points that have been put forward by hon. Members opposite to try to encourage other hon. Members to vote against the motion, which is intended to provide financial assistance for a mill in Workington. What I am saying is related to the situation in my constituency. Hon. Members opposite were allowed to use it as an example and I am merely answering their points.

The situation at Cowie is not just about 400 jobs in the immediate area. A survey by Edinburgh University indicates that up to 2,000 jobs could be at stake when one takes into account the effects on road haulage and the timber and forestry industry generally. Jobs south of the border could also be in danger because some of the raw material, particularly resin, comes from England.

As my hon. Friend the Under-Secretary has said, there are three offers in and part of the progress that we have had so far has been due to the pressure from the Labour and trade union movement. I understand that the offers are conditional on Government assistance being forthcoming and it is misleading for hon. Members to suggest that the Government are unwilling to give assistance.

Looking at the history of the firm, it could be argued that Governments have possibly been too generous in the past in giving public money without getting the public accountability that would have ensured a long-term, viable economic future for the company and the long-term security of the workers' jobs. There is one way in which that can best be achieved and that is through a public stake in the company by the Scottish Development Agency. That is the line that the trade union movement and I have been taking.

We shall win the battle and not in a silly Scotland versus England way. The original name of the firm was Scottish Timber Products. Despite that name, it was registered in England—though that did not make it any stronger in terms of riding the recession or the troubles of capitalism. Capitalism is in trouble north and south of the border, even though the SNP thinks it can build a capitalist empire north of the River Tweed.

Nothing will be gained by voting against the motion. Let everyone realise that the SNP action is just a cheap political stunt. Scottish Timber Products will not be saved by the hypocritical chanters and opportunists in the SNP. It will be saved by the unity and strength of the Labour movement.

12.38 a.m.

Mr. Michael Marshall (Arundel)

It would be difficult—[Interruption]—to follow the speech of—[Interruption.]

Mr. Deputy Speaker

Order. The House is doing itself no credit if we do not hear what the hon. Gentleman is saying.

Mr. Marshall

I hope that the hon. Member for West Stirlingshire (Mr. Canavan) will forgive me if I do not join in what appears to be a private battle. The hon. Gentleman's speech did, however, underline one of the main criticisms of the way this matter has been handled.

Once again the Minister of State made an extremely poor presentation. There was very little on which we could base a judgment. The whole question of the future of the timber industry in Scotland has been raised on all sides and it is a matter to which I hope the Minister will address himself.

The Minister gave an extremely thin presentation. We have the highest regard for the right hon. Gentleman. He is an amiable chap, but he seems to rely on this amiable late-night attitude to present matters in a very thin way. If it had not been for my hon. Friends the Members for Rushcliffe (Mr. Clarke) and Workington (Mr. Page) and some Scottish Members, many matters would never have been put into proper perspective. Issues of the greatest importance that were not mentioned by the Minister are the infrastructure and transportation involved in this important development.

To take the arguments that the right hon. Gentleman posed, the nub of the argument is whether Unilever would have gone ahead without Government assistance. That is the question to which we must address ourselves.

The Minister was bland. He said that the Department has carried out an investigation, but his evidence was nonexistent. Therefore there must be grave doubt as to the ability of the Department properly to scrutinise matters that arise under Section 8.

What evidence were we given? There was no reference to the profitability of the company. There was no explanation that Thames Board Mills Ltd. is a wholly-owned subsidiary of Unilever. There was no attempt to describe the profit pattern of the company within Unilever. No reference was made to the likely cash flow or expected earnings from the project. If any part of the Government is to talk about expenditure of this sort, we expect to have some reasonable explanation of, the track record and the anticipation.

The basic question is whether Unilever would have gone ahead with the project without Government assistance. What is the evidence? Unfortunately, the Minister would not give way when I sought to question him on the matter. The only evidence that is available to us is in the report and accounts for the year ending 1976. They show that Unilever doubled its retained profits between 1975–76, a fact that I greatly welcome. I wish that there were more British companies that could show the same record. That is the only evidence, and prima facie it hardly suggests that here is a company this is profitable at this moment. Therefore, we need to have a good deal more reassurance.

Appendix 1 of the annual report on the Industry Act lays down the criteria under which the selective investment schemes are to operate. It lays down a detailed list, none of which was touched on by the Minister. All that we had from the right hon. Gentleman was the bland assertion that Unilever would not have gone ahead with the project without Government assistance. There was no reference to advancement in time or to a scale of efficiency. There is no back-up for the argument that the Government have put forward.

It is not good enough. Bearing in mind the history of these matters, it is not surprising that when a motion of this nature comes before us, some of us are tempted to oppose it—[Interruption.] The Minister is always sitting on the Government Front Bench late at night with nothing to contribute and no work to do. He is simply a member of the late-night barracking brigade. No doubt he would be much happier below the Gangway. That is where he is most at home.

What will be the likely situation if the development goes ahead? My hon. Friend the Member for Rushcliffe made out a good case—far better than the right hon. Gentleman's—for the scheme, and I am convinced that it is a sound project. Why should we support this major development?

I speak as one who has seen the mill from its inception. It may be that I am the last surviving commercial director of the old Workington Iron and Steel Company. When the board mill came to Workington it made a tremendous difference to the whole local economy. It was a private enterprise development. It has to be said that it was the run-down by British Steel of Workington following on the run-down of Millom that created much of the unemployment that has afflicted East Cumberland.

In this instance we have a good example of private enterprise providing employment and a long-term future for the area. Therefore, it is to be welcomed. One wants to see it going on. However, it is not sufficient to say, as did the Minister, that the project is something that the Government should support because Unilever would not have gone ahead unless the Government had done something about it. There is no evidence for that assertion.

I am persuaded that the scheme has intrinsic merit. It seems that there is a reasonable profitable record. Above all, and this goes right to the root of the decision that we are taking tonight—I am perfectly willing to confess this to the House—I would rather that the Government put money into profitable private enterprise where there is a guarantee of a return to the taxpayer than into the nationalised industries and many other such projects where there is no return on the taxpayers' money. For that reason I shall support this measure, but I urge the Minister seriously to address himself to the many issues that have been raised.

I hope that when the right hon. Gentleman comes before the House again with a proposal under Section 8 he will try to present a detailed case with some financial data. This is the third time of asking in the past 12 months, and I hope that he has now hoisted that point on board. If he does not come forward with proper data, he will invite rejection of the measure, even though on the face of it, as in this case, it seems desirable.

12.46 a.m.

Mr. Ron Thomas (Bristol, North-West)

During the debate the hon. Member for Workington (Mr. Page) slipped very easily into the political schizophrenia of his colleagues. Throughout his election campaign he extolled the market economy and the need for non-intervention by the Government as being the only way in which to deal with unemployment and so on.

He mentioned unemployment and suggested that the Government had made it necessary for private firms continually to beg for public money. I assure the hon. Gentleman that when he has been here long enough, if he is a full-time Member, as some of us are, he will see that begging for public funds is almost a weekly routine, and he will find that it has been going on for almost a couple of decades.

We on this side of the House are not opposed to the use of public money to save jobs and regenerate British industry —in fact, we support it. But what we are still waiting for—and I say this to the Government—is full public accountability. During the last Tory Government hundreds of millions if not billions of pounds were given to private firms in subsidies and public assistance without any public accountability. We said that that had to stop. If we are to give public funds to private firms, especially when they are multinational companies such as Unilever, we expect some kind of public accountability.

I return to the question that I put to my right hon. Friend. We are to give this company anything up to £10 million and it will get a 22½ per cent. investment grant, which, on £100 million, is roughly £23 million On the assumption that this is a profitable exercise, as we are told, it will attract a 100 per cent. depreciation allowance. Therefore, over 10 years the public will have paid for this £100 million worth of capital investment. If my figures are wrong, perhaps my right hon. Friend will tell me. We shall have paid for it without one ounce of public accountability being forthcoming.

In our election manifesto we said that in a situation of this kind there were two possibilities. The first was to take an equity share in the company. Why can we not have £10 million worth of equity shares in Unilever in exchange for this money? Equally, why can we not say to Unilever, "You cannot have this money until you sign a planning agreement with the unions concerned"? It seems easy for the Government when a private company meets a legitimate pay claim to tell the company that if it does so the Government will stop all kinds of aid. It is high time that we began to use such pressure to get planning agreements.

Mr. Nelson

From the comments that he has heard this evening, would the hon. Member judge whether in this case it is essential for the taxpayer to provide £28 million towards this investment of £100 million? According to his argument, it is reasonable to ask for 28 per cent. of the equity of that venture. Can he assess whether the company would be likely to proceed with the investment in those circumstances? I do not know, but I guess that the aswer is that it would not, but what does the hon. Member think? If that were the case, he would now be arguing against the virtues that he claims to uphold.

Mr. Thomas

I do not know whether the company would have proceeded. I have not had an answer to my question. Would the company have brought forward this investment if it had not been given the money under the scheme?

I am very worried about the advance selective investment scheme because I believe that accountants are now working out projects that will allow companies to say that they will delay a project unless it receives £5 million or £10 million from the Government when it has had no intention of introducing that project at a particular time.

It is strange that a company with large sums of money, such as Unilever, should be in a position to say that it will adjust its thinking and expectations because of this scheme. I think it is an accountant's fiddle.

Under the Price Code we have given £1,000 million to private industry. This is yet another example of the failure of our capitalist system. It is time that we thought more about the expansion of public ownership and public accountability than about handing out such large sums of public money.

12.52 a.m.

Mr. Alan Williams

The hon. Member for Dumfries (Mr. Monro) was absolutely correct to say that the main supply would come from the Forestry Commission rather than from private sources. He asked why this development, which is based on Scottish timber, should take place in Workington. The explanation is that there is already a substantial operation of this type in the place concerned. This happens to be a sector of the industry where concentration of the production units produces considerable economies, particularly in the use of shared services.

This was a major contribution to the viability of the project and an essential feature of the scheme's acceptability.

The hon. Member for Rushcliffe (Mr. Clarke) asked why this project did not go ahead under the Paper and Board Scheme. The answer is that although the Paper and Board Scheme applies to any indigenous fibre, its primary intention is that it should encourage the use of waste materials. This would, therefore, have pre-empted a large proportion of that scheme and diverted resources.

The hon. Member asked how many projects have been approved under the scheme. A total of 31 projects have been approved involving £6.1 million of assistance, and £33 million total project value has been raised from that support.

The hon. Member said that he did not want to see the Government supporting "lame ducks" under this legislation. So far the projects that have been approved involve companies such as Albright and Wilson, Walls, Pirelli, Hamworthy Engineering, Vickers and Platts Forgings.

The hon. Member for Galloway (Mr. Thompson) was worried that this might pre-empt any further development in Scotland. It certainly will not pre-empt such development because, according to the Forestry Commission, ample raw material resources will be available.

Again, the particular operation to which the hon. Gentleman referred uses a different quality of raw material. In any case, even if he were backing further development in this category of product, he should bear in mind that even after this plant is in operation there will still be a shortfall of 100,000 tons in our ability to meet our own requirements.

My hon. Friend the Member for West Stirlingshire (Mr. Canavan) said, rightly, that to vote against this motion would be voting against jobs for forestry workers in Scotland.

Mr. David Penhaligon (Truro)

As I understand it, we are being asked for in vestment to the tune of £500,000 for the creation of a single job. Has the hon. Gentleman calculated how much it would cost to alleviate United Kingdom unemployment by investment on this scale? Are we not back on a nonsense concept of solving the country's basic problem—unemployment?

Mr. Williams

The hon. Gentleman should look back to his arithmetic books and consider the figures again. There will be immediate jobs, and more jobs will be created in the supplying sector. I did not include the construction jobs, which will be short-term. There will be 258 jobs in the actual operation, plus 350 in the supplying sector—some of them, as my hon. Friend pointed out, in Scotland

Dr. McDonald

Is my hon. Friend not concerned that there is no guarantee that this project will lead to the machines required being purchased in this country? An information sheet from Thames Board Mills says: To date an overseas design already operating in Europe and the U.S. has proved the most satisfactory in meeting the required product specification.

Mr. Williams

There is one particular part of the equipment that is just not available in a suitable form in this country and therefore the company has to go abroad for it. There is another part of the equipment, amounting to about a £14 million element, which might conceivably be available in this country and about which the company is now undertaking discussion with a firm in the constituency of my hon. Friend the Member for Bury and Radcliffe (Mr. White). It has still not reached a final decision on that, however. But, as I have said, this company, wherever it can, bases its purchases in Britain.

We all recognise that my hon. Friend the Member for West Stirlingshire, not the Scottish nationalists, has led the campaign to save the operation at Cowie, and he deserves public credit for his vigorous campaigning. As my hon. Friend the Under-Secretary of State for Scotland has said, substantial Government aid is available for that project as long as a viable proposal is received. There is nothing unusual about using a receivership. I used the same route to save a dye mill that is now a viable and successful process.

Opposition to this motion is a cynical operation by the SNP, but it is equally cynical of the Conservatives to support it because they are doing so not because they are necessarily convinced of any industrial merit but because it is convenient in marginal constituency terms. The hon. Member for Workington (Mr. Page) should bear in mind what I said

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 the Industry Act 1975 and the industry (Amendment) Act 1976, in respect of the business carried on by Thames Board Mills Ltd. at Workington sums exceeding £ million but not exceeding £10.5 million.

—that his party led the opposition to the funds which were used—

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

The House divided: Ayes 96, Noes 11.

Division No. 27]	AYES	[1.0 a.m.
Anderson, Donald	George, Bruce	Murray, Rt Hon Ronald King
Archer, Rt Hon Peter	Gower, Sir Raymond (Barry)	Noble, Mike
Armstrong, Ernest	Graham, Ted	O'Halloran, Michael
Atkins, Rt Hon H. (Spelthorne)	Grant, John (Islington C)	Page, Richard (Workington)
Atkins, Ronald (Preston N)	Hamilton, James (Bothwell)	Palmer, Arthur
Barnett, Guy (Greenwich)	Harper, Joseph	Price, William (Rugby)
Bates, Alf	Harrison, Rt Hon Walter	Radice, Giles
Bishop, Rt Hon Edward	Hart, Rt Hon Judith	Roberts, Michael (Cardiff NW)
Blenkinsop, Arthur	Hughes, Robert (Aberdeen N)	Roderick, Caerwyn
Boothroyd, Miss Betty	Hunter, Adam	Rooker, J. W.
Bray, Dr Jeremy	Jackson, Miss Margaret (Lincoln)	Ross, Rt Hon W. (Kilmarnock)
Buchanan, Richard	John, Brynmor	Sever, John
Callaghan, Jim (Middleton & P)	Kerr, Russell	Silkin, Rt Hon S. C. (Dulwich)
Campbell, Ian	Lamond, James	Skinner, Dennis
Canavan, Dennis	Le Marchant, Spencer	Small, William
Carmichael, Neil	Lester, Jim (Beeston)	Smith, John (N Lanarkshire)
Clarke, Kenneth (Rushcliffe)	Loyden, Eddie	Spearing, Nigel
Clemitson, Ivor	Luard, Evan	Stewart, Rt Hon M. (Fulham)
Cocks, Rt Hon Michael (Bristol S)	Lyons, Edward (Bradford W)	Stradling Thomas, J.
Cohen, Stanley	McDonald, Dr Oonagh	Thomas, Ron (Bristol NW)
Coleman, Donald	McElhone, Frank	Tinn, James
Cox, Thomas (Tooting)	MacFarquhar, Roderick	Wainwright, Edwin (Dearne V)
Cryer, Bob	Mackenzie, Rt Hon Gregor	Walker, Terry (Kingswood)
Cunningham, Dr J. (Whiteh)	McMillan, Tom (Glasgow C)	Ward, Michael
Deakins, Eric	Madden, Max	Watkins, David
Dempsey, James	Mahon, Simon	White, Frank R. (Bury)
Doig, Peter	Mallalieu, J. P. W.	Williams, Alan Lee (Hornch' ch)
Dormand, J. D.	Marks, Kenneth	Wilson, Alexander (Hamilton)
Douglas-Mann, Bruce	Marshall, Dr Edmund (Goole)	Young, Sir G. (Ealing, Acton)
English, Michael	Marshall, Jim (Leicester S)
Ewing, Harry (Stirling)	Mendelson, John	TELLERS FOR THE AYES:
Fernyhough, Rt Hon E.	Millan, Rt Hon Bruce	Mr. A. W. Stallard and Mrs. Ann Taylor.
Forrester, John	Morrison, Hon Peter (Chester)
Freeson, Rt Hon Reginald

NOES
Bain, Mrs Margaret	Steel, Rt Hon David	TELLERS FOR THE NOES:
Henderson, Douglas	Thompson, George	Mrs. Winifred Ewing and Mr. Douglas Crawford.
MacCormick, Iain	Watt, Hamish
Penhaligon, David	Welsh, Andrew
Ross, Stephen (Isle of Wight)	Wilson, Gordon (Dundee E)
Smith, Cyril (Rochdale)