Clause 1

HC Deb 06 February 1980 vol 978 cc518-609

FUNCTIONS OF THE BOARD AND AGENCIES

Mr. John Silkin (Deptford)

I beg to move amendment No. 1, in page 1, leave out from beginning of line 7 to end of line 25 on page 2.

Mr. Speaker

With this, we shall take the following amendments.

No. 4, in page 1, line 14, at end insert— '(g) ensuring that, where an individual manufacturing plant is scheduled for closure or for change of use from manufacturing purposes, such plant should be offered for sale, to any buyer who is able to satisfy the Board of his intention and ability to continue the existing purposes.'

No. 5, in page 2, line 18, at end insert— '(j) to intervene where necessary to prevent the loss of industrial undertakings in Wales as a result of decisions taken by companies outside Wales;'.

Government amendments Nos. 6, 7, 29 and 31.

Mr. Silkin

In a sense, amendment No. 1 is the nub of the Bill. It would effectively remove the whole of the first clause. It is that clause in which the philosophy of the Government may be observed.

The clause does four things. First, it prohibits the National Enterprise Board and the agencies from promoting any industrial reorganisation. Secondly, it also prohibits the introduction and the promotion of industrial democracy by the National Enterprise Board in any concern in which it might be interested. Thirdly, it forces the National Enterprise Board and the agencies to dispose of assets which they may hold to the private sector. Fourthly, it stops the National Enterprise Board from exercising its previous function, given to it by the Industry Act 1975, of extending public ownership into profitable areas of manufacturing industry. As I said, this is really the philosophical nub of the Bill.

When one looks at the speeches of the Secretary of State on Second Reading and of his hon. Friend the Under-Secretary of State in Committee, one finds that very little justification is given for the omission of these various items, except that they are contrary to the philosophy of the Government. What, then, is the philosophy of the Secretary of State? He has told us many times that it is non-intervention in day-to-day management, and creation of an economic climate where industry can prosper. The Government have been in office for nine months, a sufficient period of gestation to see exactly how the economic climate is being made to prosper. One of their first measures was to abolish exchange controls, so that money which could be used for investment here is now free to go abroad, and is doing so at an alarming rate.

Mr. Nick Budgen: (Wolverhampton, South-West)

After nine months of the previous Government's taking office in February 1974, did the right hon. Gentleman accept responsibility for everything that was happening to the British economy?

Mr. Silkin

The Government of the day were the Government of the day. I am dealing with the present Government's philosophy and attitude.

Mr. Budgen

Answer the question.

Mr. Silkin

I am answering the question. The hon. Gentleman asked me whether I would accept responsibility. I said that the Government of the day accept responsibility, or that they should accept responsibility.

Mr. Budgen

Perhaps I did not make my question clear. I asked the right hon. Gentleman whether he and the last Government accepted responsibility for everything in the economy as from nine months after February 1974.

Mr. Silkin

The Government of the day accepted responsibility for their actions, and the present Government should accept responsibility for their actions. If the hon. Gentleman will listen to me, I am about to remind him of those actions. I had started to do so when he interrupted. I reminded him—perhaps he did not know or perhaps he was not told—that one of the main actions of the Government was to abolish exchange control. I added that the effect of that was to cause large sums of money to leave the country. The hon. Gentleman should read the Financial Times occasionally. He must increase his reading beyond his own column in the Sunday Telegraph.

Mr. Bruce-Gardyne

The right hon. Gentleman should read both the Financial Times and the Sunday Telegraph. He might discover that, far from money flowing out of the country, it has been flowing in on a massive scale—completely the reverse of what he has been saying.

Mr. Silkin

Both could be true. Money could come into the country in the form of shareholdings, but money could leave the country. I quoted from the Financial Times, which reported on the first two months of the operation. The interesting point about that report—the hon. Gentleman can no doubt write a good article on it in next Sunday's Sunday Telegraph—is that it showed that the amount of investment that had left Britain was greater than the £1,000 million that the Prime Minister is presently trying to cut down on or get squared off in her discussions with our partners in the EEC. I suggest that the hon. Gentleman reads back to the Financial Times of October or November, and he will see that I am right.

My second point is about the artificially high rate for the £ sterling, a basis which inevitably has its effect upon our exports. It is true that it makes imports cheaper, but in a hard competitive export market it has had the effect of hurting our exports.

My third point is the increase in minimum lending rate to 17 per cent. The effect of that is that small businesses in particular will be borrowing money at 20 per cent., 21 per cent. or sometimes even 22 per cent. Conservative Members are supposed to be concerned about small businesses. The high interest rate, which we were told five or six months ago would be temporary, now begins to look far too permanent for the health of most businesses. To cap it all, we have the first national steel strike for 53 years.

That is the result of nine months of Conservative Government and the Secretary of State's philosophy. Whenever we tackle the right hon. Gentleman, he says "We are leaving the economic climate alone and we are leaving day-to-day management to the industries concerned." He parades for our inspection a bleeding heart on behalf of what he calls the long-suffering taxpayer.

4.30 pm

I am not sure what the right hon. Gentleman means when he refers to the long-suffering taxpayer. In a sense, every man, woman and child in this country is a taxpayer, since everything that is consumed, with the exception of food, bears some form of tax. Does the right hon. Gentleman mean the whole community—he does not say that—those paying income tax or perhaps those paying higher rates? There must be some distinction in his mind.

If the right hon. Gentleman means the standard rate taxpayer, I have to point out that if unemployment increases, especially through the right hon. Gentleman's policies, he is not assisting the long-suffering taxpayer but reducing the number of taxpayers. I suppose that that is one way of getting them out of their misery, but it is not the virile national economy that the Under-Secretary advocated so keenly in Committee.

Of course, the right hon. Gentleman's action should have been foreseen. In his memoirs, Sir Winston Churchill said that when he assumed office in 1940 he realised that all his past life had been only a preparation for that moment. The same may be true of the Secretary of State for Industry in his own sphere. As Minister of Housing and Local Government, the right hon. Gentleman reorganised housing and the result was the tower blocks that we can see all over the country. They are the curse of urban dwellers and the right hon. Gentleman admits that he is ashamed that he built them.

Mr. Eldon Griffiths (Bury St. Edmunds)

They were built by local authorities.

Mr. Silkin

Yes, but the hon. Gentleman knows that they were built with his right hon. Friend's encouragement. The hon. Gentleman became a Member a short time after I was elected. Part of my maiden speech dealt with the tower blocks, and the hon. Gentleman will remember the then Government's expensive site subsidy which was designed to produce tower blocks.

When the right hon. Gentleman held office in the 1970–74 Conservative Government, he reorganised the National Health Service, which had an effect on the health of patients, the bureaucratic control of the NHS and the misery inflicted by the reorganisation through administrative delays and the appalling way in which the matter was dealt with. That had its effect on the misery of patients, just as the tower block policy had its effect on the misery of flat dwellers.

All that was merely a preparation for the great moment—the misery of mass unemployment. That is coming, not because of the difficulties of world recession, which we do not deny, but because of a deliberate policy. It is coming soon in the steel industry, unless it can be prevented, and in the coal industry and throughout the economy.

That is the result of the right hon. Gentleman's policies. I know that he likes to wear a hair shirt, but I do not see any reason why he should force the whole country to do so.

Mr. Bruce-Gardyne

On a point of order, Mr. Deputy Speaker. I wonder whether you can give the House some guidance. In the light of the course that the right hon. Gentleman's speech is taking, may we take it that it will be in order to discuss on this group of amendments such matters as the misery inflicted on the country by the chaotic performance of the right hon. Gentleman in negotiating in Brussels or the awful fate that he inflicted on the Labour Party when he was Patronage Secretary, as detailed day by day in Mrs. Castle's memoirs?

Mr. Deputy Speaker (Mr. Richard Crawshaw)

The right hon. Gentleman is going fairly wide on the amendments and it would be in order for other hon. Members to go as wide.

Mr. Silkin

It seems that we are in for an interesting debate, because clearly there will be a right of reply—indeed, judging by what the hon. Member for Knutsford (Mr. Bruce-Gardyne) has said, a right of several replies, some in the House and some in the Sunday Telegraph.

I hope that I was not going too wide. The clause is the philosophical nub of the Bill. If we are to deal with the four aspects that I have outlined, we must relate them to the philosophy of the Bill. I hope that I was not being unfair in stating the philosophy. The hon. Member for Kuntsford may think that I was unfair in outlining what the philosophy leads to, but I hope that he will agree that I spelt out the philosophy correctly. My text is that of the Secretary of State.

The trouble is that the philosophy is being given effect at a time when our manufacturing industry is in a worse position than ever before. The export of manufactured goods pays for the primary products, the food and raw materials, that we have to import into our island country in order to survive. For more than 150 years, it has been essential that we earn our living by the export of manufactured goods.

Unfortunately, imports of manufactured goods have equalled, and are in the process of overtaking, our exports of manufactured goods. The Treasury acknowledges that position, since its forecast shows that there will be a 20 per cent. drop in manufacturing capacity in this country over the next two years, and that is something with which we should concern ourselves.

It arises out of the economic climate that the Secretary of State is creating. He once said that it was necessary for a Government to provide three things—infrastructure, communications and training. The present Government have slashed all three. I do not know whether the right hon. Gentleman still holds that view, but, if so, it is not strong enough. Direct Government intervention is necessary if we are to have a manufacturing industry at all.

Every industry that the Government or the National Enterprise Board have stepped in to save is a net exporter. That is why Governments and the NEB have intervened. We have to save our manufacturing industries and exporting industries in order to live.

We shall not stimulate full employment if the NEB's role is restricted so that it acts merely as a casualty clearing centre. We may patch up one or two industries, but we will not create the industries that are necessary for this country's well-being.

If we are anxious about the taxpayer, we must accept that the direct taxpayer and, indeed, the whole community have a right to participate in profitable transactions as well as casualty clearing transactions. That is the difference between the Opposition's philosophy and that of the Secretary of State. We do not believe that it is possible to stimulate British industry by disposing of public assets or to do so without the ability to assist or promote reorganisation in the public sector.

We are reinforced in our argument by the fact that practically every one of our developed competitors takes the same view and in some cases, certainly France and Japan, much more drastically than did even the previous Labour Government. That aspect has been of urgent importance in the growth and improvement of our competitors' economies. It is something that the right hon. Gentleman is turning away.

Mr. Eldon Griffiths

I have followed what the hon. Gentleman has said, as always, with the keenest interest. Can he explain one main point? Over the past 10 to 20 years in our country the public sector has become larger. The amount of industry, including that of manufacturing, managed in one way or another in the State sector has increased and yet in that period our competitive performance internationally has declined. Is there no connection between the two?

Mr. Silkin

I think the hon. Gentleman is tempting me to a reply with which he might actually agree. The reply is that this is not the only factor that is necessary if one is to have regeneration of industry. A second and perhaps as important a factor is what sort of management—labour relations one should have to ensure that industry progresses.

My feeling on this matter—and I hope that I carry the hon. Gentleman with me—is that what we really need is industrialists who are among the best educated in our schools as we can possibly get in industry. The hon. Gentleman's experience will be much the same as mine. It is only fairly recently, in the past 15 to 20 years, that scientists have been encouraged in our schools; engineers are hardly encouraged at all. A great deal has to be done on that aspect. That is part of the problem. I can only say this to him. If we had not taken those industries into public ownership, the position would have been 10 times worse than it is now.

Mr. Michael Grylls (Surrey, North-West)

How does the right hon. Gentleman explain the fact that British Leyland, prior to getting into difficulties in 1975, was producing 1.3 million vehicles a year and is now producing barely 700,000 vehicles a year, yet it has had £1,000 million of taxpayers' money poured down its throat? That is hardly a great success story, is it?

Mr. Silkin

It is rather a success story for a number of reasons. The hon. Gentleman asked me for the reasons and I will give them to him. The first is that, compared with its competitors—and its competitors really are in Europe, hardly at all in Japan, which is restricting its exports to this country—if he looks at the amount of investment that is going into their motor car firms, in France, Germany and, indeed, Italy, he will see exactly why. It is because we are under-investing and have done so for years.

Mr. Grylls

The right hon. Gentleman may not have heard the last remark that I put to him. Since British Leyland has been rescued, and has had £1,000 million of taxpayers' money—I admit that some has gone to pay wages and losses, but much has gone into investment, and many British Leyland plants, as he should know, are the most modern in Europe, if not in the world—they are not getting the productivity.

4.45 pm

Mr. Silkin

The hon. Gentleman should study the figures. I do not have them before me at the moment, but I think he will find that in the German and French industries the investment figures are two or three times as great as that. That is the key.

Mr. Budgen

The right hon. Gentleman seems to be attracted to the fashionable idea that all investment is good investment, but surely when one looks, for instance, at what has happened in the steel industry, where there was massive investment—as it turned out, over-investment—as a result of major mistakes made by successive Governments, does he not think that his suggestion that we want more investment is a great deal too simple?

Mr. Silkin

I was dealing with the question why, despite the investment in British Leyland, we were not producing as much as our competitors.

What the hon. Gentleman is saying, and I agree with him, is that investment has to be properly directed; it has to go into the right things. I wonder whether the hon. Gentleman would agree with me that all the major countries which have enormously expanded steel production—in fact, steel consumption in the world has gone up over the years—and have also massively invested in new plant and machinery have nevertheless succeeded in taking a very good share of the market.

I was saying that one could not stimulate British industry by disposing of public assets. Equally, one cannot stimulate British industry without the ability to assist or promote reorganisation in the private sector. I pointed to the examples in France, Japan and Germany of exactly that happening.

It cannot be left to the private sector to reorganise alone, because the private sector will reorganise its industry sometimes for reasons totally divorced from the national interest, sometimes totally opposed to the national interest. We saw that in the 1960s and in the 1970s. We do not want to see it in the 1980s, because the purpose of reorganisation is to engage industry in the national good. It is not merely to create a basis for asset stripping, which was what happened in those earlier days.

I feel that the fourth point with which we have to deal in this clause is the one in which we, above all others, should have an interest, and a strong interest. We talk—and it exists in the National Enterprise Board at the moment—about the function of promoting industrial democracy. This Government and the Secretary of State are throwing that out of the window in the Bill. Yet it is an odd thing to be doing, because those of us who look back over the years to the immediate post-war period will remember that the German model of consultation, of management and unions working together, was created by the British Control Commission. The tragedy is that we did not impose the same form of industrial democracy in our own country as that which we encouraged in Germany. It seems to me illogical, and it is not only Conservative Governments but Labour Governments who have neglected it; it has even been neglected here.

If we want a viable, expanding and prosperous British manufacturing industry, there is only one way to achieve it, and that is by having the whole of the work force, management and workers together, working for the common good. In the many months that have gone by since this Government came to power, I have visited a number of factories. I am always refreshed by the amount of knowledge that is to be found on the shop floor. What worries and astonishes me is the enormous number of occasions when that knowledge and expertise are not used by management, when one has the idea that management knows best. It does not always know best.

The Secretary of State, in his attitude to management—and he has said over and over again "I will leave that to management"—is condemning a possible, a probable, a certain means of getting British industry to move into the 1980s. It is also a practical means of ensuring that we can go ahead of our competitors.

Mr. Cyril Smith (Rochdale)

I congratulate the right hon. Member for Deptford (Mr. Silkin) on his conversion to Liberal Party policy. It is a pity that he was not converted when in Government. If anybody doubts that the right hon. Gentleman is describing Liberal Party policy, he should read the yellow book published in 1928. What he is saying has been Liberal Party policy for over 50 years. May we assume that the TUC and the trade union movement are now converted to the idea of worker participation in industry?

Mr. Silkin

I talked about industrial democracy. I said that it was interesting that in Germany, in the days of the Control Commission, a species of industrial democracy was enforced. That is an absurdity in a way.

Mr. Eric S. Heffer (Liverpool, Walton)

Is my right hon. Friend aware that works councils, much in line with the policy in the 1928 yellow book published by the Liberals, were introduced in the Weimar Republic? They did not stop the rise of Hitler or Fascism. We must look deeper than that. We must examine the question of control of the means of production and then the possibility of introducing genuine worker management in relation to that.

Mr. Silkin

If my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) had been in the Chamber earlier, he would have known that I was developing my fourth argument. We believed that we could enforce a system of participation. It is strange that we did not apply such a system ourselves. I am astonished that the Secretary of State should think it necessary to outlaw any reference to industrial democracy in the Bill. I find that surprising. That reference is deliberately removed.

Mr. John Patten (Oxford)

When the Labour Government had powers under the 1975 Act to promote industrial democracy, why was the pace of promotion so slow? Was it lack of willpower?

Mr. Silkin

I think that the pace was too slow. I regret that we did not act more rapidly. I assume that the hon. Member for Oxford (Mr. Patten) believes that that principle should not be removed from legislation.

Clause 1 represents the gulf between two basic philosophies—a philosophy which has shown us in nine short months how to destroy a country's economy and a philosophy which accepts that the way forward is through public intervention, public ownership and public control. We are not ashamed that that is our policy. We believe that it is right. In the light of that belief, I hope that the House will support the amendment.

Mr. Adley

I am slightly disoriented by having to speak to amendment No. 4, which is being taken with the amendment moved by the right hon. Member for Deptford (Mr. Silkin). The House will understand if I do not discuss in detail the points raised by the right hon. Gentleman. I have no doubt that many of my hon. Friends will take him up on many of his arguments.

Seeing my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) in his place reminds me of the last time that I had the temerity to move an amendment against my Front Bench. It was during the proceedings on the Maplin Bill. My action displeased my hon. Friends no end. It also displeased my right hon. Friend the Member for Sidcup (Mr. Heath). On that occasion a group of my hon. Friends, with some hon. Members from the Opposition, succeeded in amending the Bill drastically. We helped to destroy a Bill which we believed to be misconceived. I am delighted that the present Government obviously share that opinion, because they have no intention of reintroducing another Maplin Bill.

I hope that this afternoon I shall be able to persuade my Front Bench colleagues to recognise that we are ahead of them in our thinking on this matter. On page 15 of the Conservative manifesto it is stated: We shall therefore amend the 1975 Industry Act and restrict the powers of the National Enterprise Board solely to the administration of the Government's temporary shareholdings, to be sold off as circumstances permit. The dispossession by the State, either voluntarily or otherwise, of some of its holdings forms the basis of my amendment. I hope to carry the House with me.

Surely our aim is to ensure that the most productive use is made of the nation's resources. The right hon. Member for Deptford referred to the taxpayer. As he said that is a word often used by my right hon Friend the Secretary of State far Industry We all understand the word "taxpayer" to mean, the generality of people I presume that we all wish to act in the taxpayers' or public interest. As the taxpayers fund the NEB, they have a real interest in seeing how the board behaves, particularly in relation to the companies which it owns on behalf of the nation.

The management of each individual nationalised industry should not always be allowed to be the sole arbiter of what is the national interest. There may be occasions when the individual commercial interest of a nationalised organisation is at variance with the wider national interest. That is the basis of the amendment.

Hon. Members have widely varying views about the role of the NEB. I believe that the NEB has a role. There is also a role for the Scottish and Welsh Development Agencies. I assume that the Secretary of State and his colleagues share that view. If they did not, we should be discussing a Bill to wind up those three bodies. If we accept that there is a role for the NEB, I hope that we can accept also that industrial policy stands to lose most by the imposition of dogmatic decision-making processes. I am sure that the hon. Member for Rochdale (Mr. Smith) agrees with me.

During the debate on what is now the 1972 Industry Act, the late Mr. John Davies made an impassioned speech about the way in which he thought that measure would revitalise the British economy. He said: But it seems clear that we are at long last moving out of the trough into which we seem latterly to have been sunk. The then Secretary of State, the right hon. Member for Bristol, South-East (Mr. Benn) supported that Bill, as did the Labour Party. The right hon. Gentleman said that the late Mr. John Davies had introduced a Bill, which the Opposition welcomed, by announcing the largest subsidies by the taxpayers to the regions which we have ever known, to industry generally, and to shipbuilding in particular, with total expenditure far exceeding anything that has been brought forward by previous Governments."—[Official Report, 22 May, 1972; Vol. 837, c. 1023.] When discussing the last Government's Industry Bill, the right hon. Member for Bristol, South-East said: The British people will come increasingly to see the Bill as an instrument that they can use for themselves to put this country once again in the forefront of the world's industrial nations."—[Official Report, 17 February 1975; Vol. 886, c. 946] The point that I am trying to make is that over the years successive Governments have tried to find State-involved solutions to revitalise British industry. I think that we would all agree that we have not done particularly well with any of the solutions that we have tried to labour for in the House. The conclusion that we are entitled to draw—I ask the right hon. Member for Deptford to accept this—is that State Control is not the only way to solve our industrial problems.

We understand that there is a role for the State, but on its own the State has not done too well. When there is a conflict between the national interest and the interest of an individual nationalised industry, the Government have a duty, or the NEB has, to ensure that on these rare occasions—they will be rare—the national interest comes before the interest of an individual State-controlled company.

5 pm

Mr. Dafydd Wigley (Caernarvon)

I am following the arguments of the hon. Member for Christchurch and Lymington (Mr. Adley) on the amendment with considerable interest. It could be a useful amendment. Will the hon. Gentleman accept that in the same way as there can be conflict between individual State-owned companies and the interests of the State, so there can be conflict between the interests of a private company and the interests of the community as a whole, and that, therefore, similar powers should be applicable?

Mr. Adley

I accept the principle advanced by the hon. Member for Caernarvon (Mr. Wigley). I can think of many examples of private companies which have acted in a way which many might consider to have been environmentally unacceptable. One thinks of the role of some of the oil companies in relation to oil pollution. I accept the hon. Gentleman's point head on and do not wish to disagree with him. However, I should like to concentrate on the point of my amendment.

Over the last few weeks a number of my hon. Friends have tried to persuade the Government that in the case of the MG car, and possibly also Consett, we have an individual nationalised organisation—on the one hand British Leyland and on the other the British Steel Corporation—seeking to close down a manufacturing plant for reasons which it believes to be in its own narrow commercial interests. The Government have sternly resisted any of our attempts to suggest that the Government's role is to act, one might say, as a referee on occasions when we believe that there is a conflict of interest. The purpose of the amendment is to ensure that the NEB acts as a referee in such cases.

My hon. Friend the Minister of State wrote to me on 22 November in answer to my letter about British Leyland and the MG sports car. He said: It would be quite inconsistent for us to require BL to act in other than their own business interests on a particular issue like the MG". I challenge that statement. As I said, I believe that there is a clear reason why British Leyland wishes to kill off the MG plant, which is to promote its own rival product within its own organisation, namely, the Triumph TR7. British Leyland has decided that it wishes to concentrate volume sports car production in this country on the TR7. The trouble with the MG is that in spite of—certainly not because of—the efforts of management it continues as a successful car, accounting for over 50 per cent. of British Leyland's sales in North America. BL's answer is to kill off its own company so that it can create for itself a State monopoly in the volume production of sports cars. My proposition is that that is not at all in the national interest.

Mr. Eldon Griffiths

I do not follow why what my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) has said about BL would create a monopoly of sports car production in this country. Why should not Ford go into sports car production if it wanted to? Why should not my hon. Friend, the Minister and I set up a company that makes sports cars? There is no reason why there should be a monopoly.

Mr. Adley

I do not know how much money my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) has in his pocket, but I do not have enough this week to go into volume production of sports cars. I am trying to deal with the reality, which is that the MG is the only volume British sports car other than the Triumph TR7, both of which are owned by BL. The fact that Ford has not gone into this market probably indicates that it is a highly specialised market, whereas Ford is a general manufacturer. My hon. Friend has helped me to make my point. This is a special sphere of production and it must be dealt with in a specialised manner.

I am comforted by the fact that my hon. Friend the Under-Secretary of State for Trade told me what his view was at Question Time last Monday. He said: I do not think that monopolies of any sort are normally desirable at all."—[Official Report, 4 February 1980; Vol. 978, c. 17.] The reality is that if MG is killed off by British Leyland there will be a monopoly in this country of volume production of sports cars, namely, the TR7.

In support of my case I should like to quote a letter that I received from the secretary of the shop stewards committee at the MG factory. This is directly relevant to what I am trying to say, and it is also important. He said: We cannot understand the logic behind the thinking of the BL Board, in wanting to discontinue production of a car that has proved itself worldwide over the years, unless it is to push the sales of the TR 7 which we all know does not command the same market potential as the MG. We believe that a takeover by Aston Martin would be in the best interests of the country and the employees at Abingdon and we urge you to do all in your power to get the Government and the Board of BL to seriously consider this. That is not my split infinitive, I hasten to add.

BL have said they need the space at Abingdon for unpacking Honda components, but we think that there is room for this operation and the continuing of production of the MGB. A spokesman from BL has indicated that the company are losing £800 per MGB but they have refused to tell us how this sum is arrived at. If the sum of £800 is anywhere near correct, it is because of the management's failure to supply us with the components to maintain production targets. We have, as we are sure that you are aware of, an industrial relations record second to none in the motor industry. All the Trade Unions, manual and staff, have always worked with the one aim of producing MG cars to the satisfaction of the company and the employees. I believe that that letter represents the view held not only in the Abingdonfactory—I am sure that if my hon. Friend the Member for Abingdon (Mr. Benyon) catches your eye, Mr. Deputy Speaker, he will wish to elaborate on that—but widely throughout the country.

I turn now to the word "intervention". It is clear that the reason why my right hon. Friend the Secretary of State has not shared our view is that he does not believe in any form of intervention. We are in danger of inventing another political boo-word because the NEB, by funding British Leyland, and the State, by funding many of the nationalised corporations, constantly intervene. If "intervention" is defined as intervening with taxpayers' money to prop up an organisation that would probably go bust, in general terms I do not think that we would want to support it. But what we promote in this amendment is precisely the opposite. Here is a company which clearly has a good marketing future which we believe to be viable but which a nationalised corporation wants to kill off. It is our belief that that is contrary to the national interest.

I understand that the last thing that any nationalised industry wants is a company to come along and prove, with its success, that it can manage more efficiently an industrial enterprise which the nationalised industry has been unable or unwilling to manage successfully. But that dog-in-the-manger attitude is not something I support.

My right hon. and hon. Friends, when asked about intervention, will not, I am sure, demur when I say that in our proposals for British Airways and British Aerospace we are directly intervening for reasons which we believe to be in the national interest. All I am suggesting in this amendment is that we might extend that principle and, at the same time, save a substantial number of highly skilled jobs.

I should stress that the result of saving MG at Abingdon, which could be achieved by this amendment, is not something that would be done at the taxpayers' expense. Surely, if there are people who are willing to invest millions of pounds of their own or their shareholders' money to keep a manufacturing process going and a plant which a nationalised corporation, or any corporation, wants to close down, the last thing that we in this House should do is in any way to discourage them. Therefore, the objective of the amendment is to ensure that where a factory of that sort is about to be closed, at least the NEB will have the task of going in to see whether there is anyone willing and able to keep that plant going.

Mr. Wigley

Will the hon. Member go over one point which he has not made absolutely clear? From the wording of the amendment as it stands—I find it a very encouraging amendment, and I think that it is one that will appeal on a broad basis in the House—does he accept that it provides powers for the NEB to intervene in a situation in which a private company is either closing down a manufacturing plant or changing its use from manufacturing? The National Enterprise Board—or in Wales or Scotland, if a similar amendment is proposed, the SDA or the WDA—could intervene for the very excellent reasons that he puts forward—to maintain the employment and the activity of the plant.

Mr. Adley

With respect, the amendment does not do any such thing. I do not wish to disillusion the hon. Member, but if he refers to the amendment and then the original Act—

Mr. Wigley

I have done so.

Mr. Adley

—he will find that the Industry Act 1975 refers to companies that are in the ownership of the NEB, so, if the company is not in the ownership of the NEB, clearly that provision does not apply.

Mr. John Silkin

I am rather impressed with what the hon. Gentleman says. I take it that he would reiterate that he would have no objection if that were the effect of the wording. If that is so, I have a feeling that although I have some quarrel with the wording—I should not like to see it used as a kind of creeping denationalisation or back-door denationalisation, which perhaps it could be with the present wording—nevertheless, if he is prepared to go along with the view of the hon. Member for Caernarvon (Mr. Wigley), I would advise my hon. Friends to support him in the Lobby.

Mr. Adley

Again, I can only say to the right hon. Gentleman that the amendment as drafted relates, as he obviously knows, to the Industry Act 1975 and to the role of the NEB. I should not wish to mislead anyone. I am not putting forward a proposal for anything other than those companies which are presently held in the ownership of the NEB. I should have thought that that was self-evident from what I have been saying. I would welcome the right hon. Gentleman's support, although that may not be necessary, because I am sure that my wise hon. Friends on the Government Front Bench will have heard my speech and will immediately want to accept the new subsection. However in the unlikely event that that may not be so, I should not like to mislead the right hon. Gentleman by suggesting that there is anything in my mind other than what is in the amendment, in that it relates to companies in the ownership of the NEB.

Mr. John Silkin

I hope that the hon. Gentleman will not mind my intervening too much, but this is an important matter. The hon. Member for Caernarvon made a very important point. It is not what was in the hon. Gentleman's mind at the start, but it concerns his reaction to the point put to him. He might ask leave to withdraw the amendment, but I am not certain that he would get it.

Mr. Adley

I do not want to hog this. I am referring to one amendment. It relates to the NEB. There is nothing more that I can say than that. That is what is in my amendment, and that is what is on the Amendment Paper.

Mr. Wigley

I am very pleased to speak to my amendment No. 5. Before doing that, however, I should like to refer to amendment No. 4. It is a very valuable amendment. I have studied closely the effect that it would have on section 2(2) of the Industry Act 1975. That subsection states: The functions of the Board shall be". It does not say "in relation to companies owned by the Board." If amendment No. 4 were incorporated in the Bill, section 2(2) would read: The functions of the Board shall be ensuring that, where an individual manufacturing plant is scheduled for closure or for change of use from manufacturing purposes, such plant should be offered for sale to any buyer who is able to satisfy the Board of his intention and ability to continue the existing purposes. I think that the hon. Member for Christchurch and Lymington (Mr. Adley) has put a very strong and valid case for there to be a degree of intervention where there is such a drastic happening as the closure of a plant and loss of jobs, possibly the end of an important product line, or the change of use of premises from manufacturing purposes to other purposes. That case is equally as valid in the circumstances of a privately owned company as it is with a publicly owned company. The hon. Member has made the case overwhelmingly, and it deserves the support of all hon. Members.

5.15 pm

Mr. Adley

It may be equally valid, but it is not in my amendment.

Mr. Wigley

The wording of the hon. Gentleman's amendment does not refer to either purely private or purely public companies, and the wording in the orginal Act, which is to be amended by the Bill, does not put it in that context either. Therefore, when incorporated into the original Act, this wording would have that purpose. It is a very worthwhile purpose and I welcome it. I hope that the hon. Gentleman's hon. Friends will press the amendment and that it is given support on both sides of the House and carried.

Mr. Adley

It is no use. The hon. Gentleman cannot get away with that, because the Industry Act 1975 was an Act to establish the National Enterprise Board. How can the hon. Member possibly draw that conclusion from it?

Mr. Wigley

I do so because, like the WDA and the SDA, the NEB has an intervention power. That is one of the reasons why the Conservative Party opposed their establishment in the first place. The general responsibilities placed on them are responsibilities not only towards companies that they own wholly; they also assist in other circumstances. They buy up minority shareholdings. The original powers were to reorganise industry. We had a long debate in Standing Committee on this matter. The powers to reorganise industry should be maintained not just for reorganisation in the public sector; there was very often a need for help in and stimulation of reorganisation in the private sector, and very often on the interface between the private sector and the public sector. The NEB has a role which impinges on the private sector.

I can understand that some of the more dogmatic Conservative Members would object to that, although I do not think that the hon. Member for Christchurch and Lymington is in that group.

Certainly there is a case that the NEB should, by the powers conferred on it under the 1975 Act—powers that are not amended by the Bill—have the responsibility, as it has, to keep an eye on the private sector as well. The incorporation of amendment No. 4 into section 2 of the 1975 Act will strengthen that in a wholly valid way. It can be used in many of the very difficult circumstances that face so many communities in Britain now.

That is the background to amendment No. 5. In many ways, I regret that I put forward amendment No. 5 only in the context of the WDA, because I believe that it is valid in terms of the NEB and the SDA as well. But I put it forward in that context because my argument can be put forward in circumstances that I understand, and my amendment refers to the need for the WDA or the NEB to intervene where necessary to prevent the loss of industrial undertakings in Wales as a result of decisions taken by companies outside Wales.

The point of the amendment is that a whole string of responsibilities is laid on the WDA by the Industry Act 1975, which establishes it. They are responsibilities similar to those of the NEB—to promote, to instigate, to try to attract and set up industry. But there should be an equal responsibility to prevent the closure of industry and to prevent asset stripping, as the right hon. Member for Deptford (Mr. Silkin) mentioned. We have seen the effects of asset stripping on so many of our communities. There is no doubt that it can very often have an effect directly contrary to the interests of public policy.

I should like to refer to a tragic instance in my constituency which has occurred during the last seven days. I do not apologise for going into detail on one case to illustrate my point, as the hon. Member for Christchurch and Lymington did, in respect of Triumph, to illustrate his point.

I refer to the factory of Bernard Wardle (Everflex) Ltd. in my constituency, which manufactures leathercloth. It is a factory that developed after the war as the only manufacturing capacity of the company. Thereafter, that company grew, acquired more plant and developed and it is now a multi-plant company. The factory in my constituency employed 800 people at one time but it now employs 322 only. Not only has it been successful but it is still successful. The figures for last year speak for themselves. Last year, it made £654,000 profit and maintained a substantial turnover with a volume of sales that was almost identical to the previous year. All that has been achieved in a difficult time for the PVC industry.

In the last few years, there has been a takeover bid for that company by the Birmingham and Midland Counties Trust Ltd. That is a group that is often associated with takeover bids and it has been lurking around with 29 per cent. of the equity of the company. Within a week of the announcement of the takeover bid, there was an announcement about the closure of the factory in my constituency.

Mr. Bob Cryer (Keighley)

Scandalous.

Mr. Wigley

Last year the factory's accounts showed that it had reserves of £2¾ million. It is running at a profit in a special development area—although, if Conservative Members have their way, it will be a development area only in August—which vitally needs jobs. It will be closed down and the work will be moved away from the area. The net result will be that not only will the jobs of 322 men be hit but 322 families—1,000 people or more—will be affected in an area where unemployment is running at a gross 10 per cent. and is likely to rise to near 20 per cent. with the developments in the pipeline.

That is an instance of what happens when such factories are closed. I have no doubt that it falls into the category of asset stripping. It is an operation that is directly contrary to the public interest, and I believe that it should be the responsibility of bodies such as the Welsh Development Agency and the NEB to step in. Not only should they try to encourage the development of new factories and employment but they should prevent the closure of factories in sensitive areas such as this area at the whim of financiers who are trying to make a quick buck.

That is the background to my amendment. Most hon. Members will know of instances in their constituencies where there have been takeovers, closures, asset stripping and so on. Ordinary people doing efficient, productive and profitable jobs are those who suffer. They are thrown like disposable side-lines on to the scrap heap in order that a restructuring of a financial empire can take place. It cannot be permitted to go on. If the Government do not intervene in such cases, they will drive people to more extreme politics because of the effect on their lives, families and communities. Whole communities are written off by this sort of development.

I have tabled the amendment because I believe that there should be powers to ensure that, when decisions are taken away from a manufacturing plant, there can be an acceptable intervention in the public interest by the WDA—in the case of Wales and of this amendment—the NEB or the SDA. The amendment stands on all fours with amendment No. 4, which has the same purpose—to ensure that when a plant is closed there can be intervention to save jobs. For that reason, not only do I support amendment No. 5 but I also believe that it will be important to support amendment No. 4 when it is called.

Mr. Eldon Griffiths

I shall try to make a brief speech. I shall not be able to support the amendment of the hon. Member for Caernarvon (Mr. Wigley)—nor, indeed, I must tell him plainly, the amendment of my hon. Friend the Member for Christchurch and Lymington (Mr. Adley).

I was one of those who supported the abolition of the IRC. Now I have to say that I regret that. I believe that it was necessary to trim the sails of the IRC, but, looking back, I believe that it was a mistake to get rid of it. Therefore, I believe that there is an important role for the NEB. I wish its chairman and new chief executive-designate, Mr. Ian Halliday, success in their many endeavours.

However, I do not support the functions and role of the NEB as set out by the previous Government. Therefore, I am pleased that the Bill has been brought to the House more accurately to define and limit the functions of the NEB. To be fair to the Labour Government—I always wish to be fair to the right hon. Member for Deptford (Mr. Silkin)—their purposes in setting up the NEB were mixed. I am sure one purpose stemmed from their belief that industry required State intervention and funds in order to be rationalised and to improve its performance. I do not quarrel with that, but I suspect that the previous Government had other motives. The right hon. Gentleman will not disagree if I say that his party believes in extending public ownership. That was one of its purposes in setting up the NEB—it was a mechanism for the extension of the State into other areas, notably manufacturing industry. He would not expect me to agree with that.

It is fair to say that the former Secretary of State, the right hon. Member for Chesterfield (Mr. Varley), who is not here this afternoon, had something else in mind. I am referring to what might be called the social and political aspect, namely, that the NEB, through participatory democracy and so on, would be engaged in what I would describe loosely as social engineering. I believe that there is a role for the NEB in certain specific industrial fields. However, I do not wish to see it engaged in the extension of public ownership, which I believe to be a political matter. Nor do I wish to see it involved in social engineering, which I do not see as being part of its job.

Mr. John Silkin

I pay the hon. Gentleman the compliment of intervening in his interesting speech, to which I have listened carefully. I understood him to say that he regretted that the Conservative Government in 1970 abolished the IRC and introduced the Industrial Development Executive. His regret, of course, is due to the fact that the Government stripped themselves of the power to reorganise industry.

Mr. Griffiths

No.

Mr. Silkin

In fact, that is what the IRC was helping to do. I understand his antipathy to public enterprise, but surely he cannot object to the ability to reorganise where necessary that was contained in the 1975 Act. It was never compulsory, but it could be done by agreement.

Mr. Griffiths

As I develop my few remarks, I hope to show that I find the role of organisation and reorganisation by the NEB to be superfluous.

I declare an interest. I am a director of an engineering group which makes most things, from steel flooring to complex dynamometers and machine tools. I am also a director of a road building equipment company and a substantial mill that makes steel tube in South Wales. I am heavily involved in the three matters that make industry tick—management, machinery and motivation, motivation of workers and management alike. I shall make a few points in respect of the amendment, which touches on all aspects of the Bill.

I believe that over the past 20 years management in this country has been knocked about by Governments of all complexions in a manner that almost invites poor performance. It has been overtaxed, unrewarded and, in some cases—though not all—overworked. In many cases, management is poorly trained for the jobs it has to do. We have insufficient engineers and scientists, as the right hon. Member for Deptford has pointed out, in our management.

However, I believe that British management has suffered from two particular disadvantages that are not so much in evidence in other countries.

First, Governments have not provided it with a stable industrial environment in which to do its job. Far too often, the interest rates with which it has to deal have gone up and down like yo-yos. Far too often, the frontier between the State and the private sector has been moved about by successive Parliaments in a way that has made it difficult for management to see continuity. Labour legislation has been changed left and right. Our fiscal policies have been changed up and down. As a result, unlike the stable industrial environment of competitors in many other countries, British management has had to operate against an industrial environment that chops and changes. That prevents it from doing its job.

Dr. John Cunningham (Whitehaven)

If the hon. Gentleman believes that—as I do—why is he supporting further changes on the basis of party dogma?

5.30 pm

Mr. Griffiths

I shall come to that point in a moment.

Mr. Gregor MacKenzie (Rutherglen)

Regional policy has gained wide support from all parties. A good regional policy was provided by the 1972 Act. That Act was introduced by Christopher Chataway, a colleague of the hon. Member. Uncertainty is now caused by chopping and changing regional policy and grants. Such actions by the Secretary of State for Industry have created more uncertainty than ever before.

Mr. Griffiths

The right hon. Gentleman knows that the previous Labour Government criss-crossed the country with a series of special development areas and development areas. Some areas received subsidies and others did not. Managements could not take industrial or economic decisions; they had to decide in which direction to go according to political whims. Regional policy provided yet another cross for management to bear.

Another aspect of the confused managerial environment is the removal of authority from management to trade unions. Competitive manufacturers in other countries do not suffer from that problem. I do not wish to make a speech that might be regarded as an attack on trade unions. They have an indispensable role to play in any industrial society. However, middle management and shop floor management find that the rug is pulled from beneath them far too often. That occurs on the shop floor where the task of producing goods and getting them out of the factory door is done. Management is therefore incapable of making operational decisions because shop stewards involve themselves far too often. Managements are often poorly trained and under motivated. They also suffer from a degree of political interference and of shop steward intervention that damages their job.

It is true that industry suffers from a lack of investment. However, investment is not bad in many areas of our industry. I have personal knowledge of the fact that a new and highly complex machine is often installed that, in order to be profitable, demands 70 to 90 hours of work a week. It must work those hours in order to achieve the necessary payback to compete internationally. Frequently an agreement is reached—as it must be—with the trade unions. However, once an agreement has been reached that includes higher pay per hour in order to achieve greater productivity, for one reason or another we unfortunately do not get the required result from the shop floor.

I know of machines that have been standing idle for far too long because trade union agreements have not been honoured. There is antipathy to shift work. Perhaps trade unions should not make agreements that include shift work. When they do, workers are often unwilling to accede to the agreement. The machine then stands idle and we do not get a return. I beg the House to recognise that investment by itself is useless. The only investment that counts is that which produces a result.

Mr. Heffer

The hon. Gentleman has raised a number of serious points. In order to justify his claims, will he spell out concrete examples? Hon. Members should not make statements in the House unless they can back them up.

Mr. Griffiths

Perhaps the House will forgive me if I do not go into detail, in the interests of time.

Mr. Heffer

Just one example.

Mr. Griffiths

I shall give the hon. Gentleman an example, if he allows me not to specify the company involved. A machine costing £850,000 was installed in a plant in the North-East with the agreement of the trade unions. The company was involved in steel-related engineering trades. Until a few months ago, that machine had been standing idle for about 18 months. It is necessary to get 84 hours of work from the machine per week in order to justify pay-back. An agreement was reached with the unions concerned, but the men on the shop floor were not prepared to accept shift work for various reasons. That shift work would have allowed the machine to earn its keep.

Mr. Heffer

The hon. Gentleman mentioned the unions concerned. I assume that he is referring to national officials who made the agreement. However, did they consult their rank and file members? Did they put the decision to a ballot?

Mr. Griffiths

The hon. Gentleman must not tempt me further. I was making a general point. Managements must have a stable environment, and it is important that neither the Government nor trade unions should usurp their authority if management is to do the job and get a return on investment.

The amendment concerns the promotion of private ownership. I favour that and I shall support the amendment. On the whole, private ownership has done a better job. When one looks at the assets held in the public or private sectors, the question arises as to who will put them to the best use. I do not hold any doctrinal view. It might be shown that the public sector has done, or is doing, a better job of using its limited assets. If that were so, I should favour the public sector.

The performance and record demonstrate that the public sector has generally made a thundering loss. There can be no doubt about that. The information is all there in the books. That means that there is a transfer of resources from the profitable private sector to the unprofitable public sector in order to make up for those losses. Perhaps there are some compensatory advantages in the public sector that justify that transfer of assets and that justify the taxation of the private sector in order to help the public sector.

Mr. Cryer rose—

Mr. Griffiths

I shall not give way as I must complete my point.

The use of other people's assets in the public sector has produced a loss. I shall ask some simple questions. Has the public sector done better on prices? However one measures the reality, the public sector has done worse on prices. Has the public sector done better on deliveries? Now that the State is involved in manufacturing, the public manufacturing corporations have generally done worse on deliveries. If I am pressed, I can give examples. Has the public sector done better on service to the customer and to the consumer? One has only to think of British Rail and the Post Office. The evidence is clear. The public sector has done worse on service to the consumer.

Mr. Cryer rose—

Mr. Griffiths

Has the public sector done better in industrial relations? One does not need to visit the steel industry or British Leyland to conclude that labour relations are worse in the public sector than in the private sector. On prices, deliveries, design and industrial relations, and taking into account the enormous financial losses, the record shows that the public sector has done worse and the private sector better, whether we like it or not.

Mr. Cryer

British Aerospace is profitable and has a good industrial relations record. On Second Reading of the British Aerospace Bill, the Secretary of State said that he had no criticism of the men, management or product, but the Government are selling British Aerospace to private enterprise. On the hon. Gentleman's criteria, will he vote against further attempts to denationalise British Aerospace?

Mr. Griffiths

That is another Bill.

I wish to conclude by looking at the second part of the clause. The purpose of the first part is to promote private ownership, and I believe that we ought to promote private enterprise because it does a better job. The second part concerns the disposal of securities and assets held by the National Enterprise Board. I favour that move but have some specific questions. How is it to be done? What is the timing? Who will make the decisions? In specific areas of the National Enterprise Board's portfolio, will the board of the company contemplating privatisation decide the timing, the price and the manner of disposal of assets?

I believe that in the Bill the National Enterprise Board and the Department of Industry will make those decisions, and I understand why. However, I should like an assurance that the boards of the many companies within the National Enterprise Board that sooner or later—and I hope sooner—will be sold back to the private sector will be carefully brought into discussions on timing, price and manner of disposal. It is necessary to give those managements confidence, and it is essential that they shall be taken fully into account when such decisions are made.

A problem that my right hon. Friend must be facing is that, with the present level of the stock market, it is difficult to float many of the companies in the National Enterprise Board portfolio. It is difficult to commend to the House or the public the sale of those companies at a thundering loss. It maybe necessary to wait a little until the market improves and we can see a better return on the public equity held in those companies. I should like to know who will decide, how that decision will be taken and how we can form a judgment as to whether the price obtained is the right one.

I have spoken longer than I intended, largely due to interventions. My right hon. Friend has the Bill just about right. He has not thrown out the National Enterprise Board. He has clipped its wings and defined its function. He has also increased his control over the National Enterprise Board, which I do not like. I find that difficult to justify. With all their faults the civil servants in the National Enterprise Board are slightly better than those in the Department of Industry. With that exception, I believe that my right hon. Friend has the balance just about right. Therefore, I oppose the amendment and strongly support the Bill.

Mr. Gregor MacKenzie

The hon. Member for Bury St. Edmunds (Mr. Griffiths) and I were elected to Parliament on the same day. We have been here almost 16 years and have not often found much to agree about. I disagreed with most of the hon. Gentleman's speech, particularly regarding profitability and service under public ownership compared with private enterprise, but I agree that British industry and the entire country are in need of stability. Over the years, we have experienced far too much uncertainty. However, I do not believe that the proposals in clause I offer greater stability. They will create a great deal of uncertainty, particularly in my part of the world—and I hope that I shall be excused if I concern myself with the Scottish Development Agency.

5.45 pm

I was not privileged to serve on the Committee, although I read some of the Minister's remarks. On Second Reading the Government appeared to show less concern about both development agencies than I would have hoped. The Secretary of State referred to the agencies only briefly. In winding up, the Minister of State devoted one paragraph to the Scottish Development Agency, and that was only after a Scottish nationalist Member intervened to ask a question. I hope that in discussing this amendment today the Under-Secretary of State for Scotland will tell us how he sees the role of the Scottish Development Agency and how it can assist our grave unemployment problems.

At Question Time today, in an odd reply, the Under-Secretary indicated that a great deal had been done for the Scottish economy during the nine months that this Government have been in office. The hon. Gentleman may be able to refresh my memory, but I believe that all this Government's actions have been unhelpful to Scottish industry. When my right hon. Friend the Member for Deptford (Mr. Silkin) suggested that, the hon. Member for Wolverhampton, South-West (Mr. Budgen) said that the problems were all due to the actions of the Labour Government.

Whenever the Government cannot think of the right answer, we once again hear the speech about the inheritance that they were left by the Labour Government. But it was not a Labour Government who substantially increased value added tax or the minimum lending rate. We did not create uncertainty among British management by changes in regional policy and the regional development grant. It was not a Labour Government who, a week or so ago, increased gas prices to an artificial level. Pausing there, that is an example of Government intervention, and we should like to see Government intervention in the steel industry. The Secretary of State is selective about the areas in which he chooses to intervene.

The Government actions that I have listed, which have adversely affected Scottish industry in the past few months, have hit small firms particularly badly. The Under-Secretary of State for Industry is genuinely interested in small firms, and we often discussed them when I was in the Department of Industry. What will the Scottish Development Agency do for these small companies? These small to medium-sized companies have been hard hit by the increases in VAT and the minimum lending rate. Under this Bill, will the Scottish Development Agency continue to assist them? I believe that in Scotland we have a greater proportion of smaller companies than is the case in any other part of the United Kingdom, so I hope that the Minister will understand my concern.

In the past year in the Strathclyde Region almost £1 million in grants and loans of one sort or another was given to small companies by the SDA. The Secretary of State says that he hopes that small companies will grow and prosper. If that is to happen, there must be a clearly defined role for the SDA.

Later in the debate we shall be discussing the counselling service that was introduced by the previous Labour Government in Newcastle and the small firms information centres that were introduced by a previous Conservative Government. We must have clarification of the role of the SDA in relation to small firms. It is an area in which the SDA could provide considerable assistance.

Another issue that worries me is what, in shorthand, could be termed as rescue cases. I know that the Under-Secretary of State for Scotland has strong views on the matter. In Committee he said: One of the basic economic errors made by the previous Government lay in their apparent belief that any kind of job, viable or not, productive or not, should be preserved artificially and indefinitely by never-ending injections of public money."—[0fficial Report, Standing Committee E, 4 December 1979; c. 511.] That was not true. The Scottish Economic Planning Department took the advice of the SIDAB before the SDA made an injection of capital into public companies, and an elaborate structure was laid down for that purpose.

Will the Minister, when he replies, tell us what he proposes to do when there is closure after closure? There are 200,000 unemployed in Scotland. There must be some further injection of public money or there will be an artificial position. I know that the Minister is a chartered accountant, who likes to read the balance sheets and likes to have them properly sorted out at the end of the day. However, there is more to the government of the county than ensuring that balance sheets look nice and tidy. We are talking about the lives of 200,000 people. I hope that when he is considering the closures the Minister will find a role for the SDA.

Had it not been for the good work done by SEPD and the SDA, there would be many more unemployed in Scotland. It is not good enough for the Minister to say that it is better to have a nice clean balance sheet than to be concerned about people's livelihood.

I turn to the newer industries. In Committee my hon. Friend the Member for Hamilton (Mr. Robertson) asked the Secretary of State about the micro-electronics industry. I had previously questioned him about that matter, but he has been less than helpful in his responses.

When the Labour Party governed the country, we introduced two excellent schemes to assist the development of the micro-electronics industry. As the House knows, it is of exceptional importance in Scotland, because we have a higher number of jobs connected with micro-electronics than in any other part of the country. We need these jobs because of of the rundown of the steel industry, the shipbuilding industry and the coal industry. It is up to the Government to take some action. I have written to the Secretary of State on the matter, but he sent me an unusually churlish reply and brushed my question aside in two paragraphs. He said that he was thinking about the matter, but I have had no word from him since.

When the Minister replies, perhaps he will indicate how he sees the role of the SDA in high technology industry. I am told that the answer can be found in the guidelines published by the Government recently. However, I could not discover from those guidelines any reference to the way in which the SDA might be involved in that industry.

I am conscious that a major problem is the shortage of mobile projects. My anxiety is that where we have such projects they should be encouraged to go to the parts of the country where there is the greatest unemployment. I see a special role for the SDA in attracting these industries and ensuring that they play their full part. The Secretary of State must allow for some element of risk-taking by the NEB, and certainly by the SDA and the Welsh Development Agency. I understand that there has been an instruction from the Government to these organisations to be much more cautious than they have been in the past. I am all for caution and prudence, but at the same time we are dealing with many thousands of unemployed and we should be a little less cautious than we have been in the past.

There is a new chairman of the SDA. I make no complaints about that. Like many hon. Members, I know him well and respect him. Indeed, I was responsible for his first-ever public appointment to a development corporation. I hope that he will not be told that he is there as a chartered accountant. He is there as an entrepreneur, working on behalf of the SDA. I hope that he will not have his role restricted and that the new guidelines that have been given to him will not restrict his work.

In Scotland we depend heavily on the service industries. The SDA has not been as helpful to the service industries as it might have been. I hope that the Secretary of State will tell the SDA that service industry is an area of activity of growing importance to Scotland and one in which the SDA has an important role to play.

There has been no clear definition from the Government of the future role of the SDA. We know that there are members of the Government who lo not like the SDA, and there are others who dislike it intensely and would like to cut its throat. I hope that the Minister will clarify the position when he replies and give some guidance on the matter.

Mr. John Peyton (Yeovil)

One of the cries to which the House is especially addicted is "injection of public money". I was a little surprised to hear the right hon. Member for Rutherglen (Mr. MacKenzie) lend his support to such fatuities. Injection of public money is so easily spoken of, but it is only a superficial way to approach the problem.

As I listened to the right hon. Member for Deptford (Mr. Silkin) moving his amendment, I cherished the hope that I might be called immediately after he had sat down and before the House had the chance, in its mercy, to forget what he had said. I do not wish to inflict any pain now by reminding the House of his speech, but it was one of the widest and most irrelevant speeches that I have heard in any debate in the House, and that is saying a considerable amount.

A newcomer to the House could be encouraged to think that there is merit in the amendment. Had the right hon. Gentleman's intention been the purification of the legislation, I should be tempted to support the amendment. But that is not his intention. Therefore, I take the opportunity of referring to the horrible terminology with which modern statutes are adorned. No one looking at the Bill could understand one word of what clause 1 means. That is disgraceful. I hope that my right hon. Friend the Secretary of State, for whose intellectual prose we all have great respect, will lend his influence in an effort to cleanse rather than to dirty the statute book with this kind of stuff. In no way was it the right hon. Gentleman's intention to clean up the legislation.

6 pm

The right hon. Member for Deptford brings considerable resources to the Dispatch box—not least a certain patchiness of memory, which he deployed with great effect today. He forgot, or appeared to forget, the messy footprints that he and his friends have left all over the statute book. He forgot the various essays that he and his friends have made in public ownership over the years. He did not seek to justify their record. Nor did he seek to indicate—because it was not possible—what he and his friends had learnt from each of those experiments. He apparently forgot the veritable cataract of legislation that he and his friends unleashed upon industry. He forgot, sadly, the feud—I put this as kindly as I can—which he and his friends have done nothing to diminish, between the two sides of industry.

The right hon. Gentleman made one remark to which I should like to call particular attention—that we cannot leave reorganisation to the private sector. In all conscience, one could not accuse him and his friends of having done that. They have left nothing to the private sector of industry. They have been constant in their tampering and interference—[Interruption.] The hon. Gentleman may say what he likes afterwards, but I assure him that had he been on the receiving end of that unending cataract of legislation, as the management of industry has been, he would not regard this as a laughing matter.

One of the most favoured pastimes in the House has been the examination of the blemishes of management, yet I do not believe that successive Governments or the House of Commons can count much to their credit in what they have done to ease the considerable difficulties facing modern management.

Again, this afternoon we have had one of those arid debates in which the House of Commons has shown that it unable to get itself forward into the second half of the twentieth century and to understand that wealth is created not by politicians, civil servants or trade union leaders but by industry.

Mr. Ted Leadbitter (Hartlepool)

The right hon. Gentleman has reverted to the venom of years ago since his Prime Minister dropped him from office. Will he try to address himself to the amendment? As I followed his words, he has not understood clause 1. Indeed, he said so. What is he talking about if he does not understand clause 1 or the amendment?

Mr. Peyton

The hon. Gentleman himself secretes a few miserable drops of venom, so let him not talk to me on that subject. The hon. Gentleman did not have the privilege or, perhaps, the good fortune of hearing his right hon. Friend the Member for Deptford move the amendment. I was not talking about the merits of the right hon. Gentleman's argument. In my initial remarks I referred to the untidiness of this legislation—the awful phraseology, which almost forbids understanding. On the other hand, I applaud the purpose of the legislation, in contradistinction to the right hon. Gentleman.

I want now to finish my remarks.

Mr. Leadbitter

Thank God!

Mr. Peyton

The hon. Gentleman's interventions contribute greatly in helping the House of Commons to understand him, and for that we must be grateful.

The right hon. Member for Deptford made only one positive point that showed any marks of humility—the admission that we had all neglected the cause of the engineer. I certainly agree with him on that. We have immense leeway to make up, but I do not believe that the debate we have had on this and almost every other industrial topic that I can recall since I have been a Member can be said to have been of assistance to that cause.

Mr. Don Dixon (Jarrow)

I support the amendment because it seeks to delete clause 1, which is the nub of the Bill. If the amendment falls I shall support amendment No. 4, in the name of the hon. Member for Christchurch and Lymington (Mr.Adley) who, I think, has had reservations since he perceived that he was getting support from the Opposition. Alternatively, I shall support amendment No. 5 if, as the hon. Member for Caernarvon (Mr. Wigley) suggested, it can be extended beyond Wales.

Mr. Adley

I do not mind from where I get support. I am delighted to welcome support from either side of the House. I have no reservations about getting support from the hon. Gentleman. The only reservation that I have is the interpretation put on my amendment by the hon. Member for Caernarvon (Mr. Wigley). If he is right, clearly it is not what I intended. I am waiting to find out whether I am right. I shall more than welcome the hon. Gentleman's support if I am right.

Mr. Dixon

I assure the hon. Gentleman that he will get my support if the amendment remains as drafted, not in the way that he meant to draft it.

On Second Reading, the Secretary of State said: The main purposes of the Bill are to modify the functions…of the National Enterprise Board and the Scottish and Welsh Development Agencies. What a pity it is that the right hon. Gentleman, with his usual honesty, did not say that the purpose of the Bill was to nullify the NEB, the Welsh Development Agency and the Scottish Development Agency, because that is precisely what clause 1 does.

The Bill is probably the most misnamed Bill to be presented before Parliament. It should be called not the Industry Bill but the National Enterprise Board (Abortion) Bill 1980, the Welsh Development Agency (Abortion) Bill 1980 or the Scottish Development Agency (Abortion) Bill 1980, because clause 1 effectively does what the Tories want, namely, to kill the National Enterprise Board.

The Secretary of State more or less indicated that on Second Reading when he said: I need hardly remind the House of our opposition to the basis on which the National Enterprise Board was established in 1975, and our continuing opposition to the way in which it has been encouraged to operate."—[Official Report, 6 November 1979; vol. 973, c. 240.] Clause 1 provides that the NEB shall cease to have the function to extend public ownership and promote industrial democracy or industrial reorganisation and gives it the new function of disposing of assets to promote private ownership. Under the 1975 Act, the NEB was allowed to promote or assist the reorganisation or development of an industry or any undertaking in an industry". I would have thought it was vitally important to allow reorganisation to stay. As the hon. Member for Caernarvon says, reorganisation is essential, and to remain effective it must stay part of the powers.

On industrial democracy, I would have thought it was essential, in the present state of British industry, since the Conservative Government came to power, that workers should participate in the decisions of management. It is essential to have full involvement of employees at all levels of decision-making. Under the Government's existing industrial policy. not only are workers up in arms; according to the Financial Times today, a survey carried out by the Confederation of British Industry shows a continuing decline in business confidence and investment.

There is nothing to say that assets that are disposed of will not go to foreign owners. Not long ago the Shah of Iran was buying tanks and other war equipment produced in my area. If, at that time, the National Enterprise Board had been disposing of its shares to private ownership and the Shah had bought them, instead of buying tanks and ships, the Ayatollah could have been one of the biggest business men in this country.

I should like to refer to the extension of public ownership. If one has public investment, one should, surely, also have public accountability. My only criticism of the National Enterprise Board and the previous Government is that the NEB was not given enough lead. It should have been allowed to take more investment. I am looking for the right words.

Mr. Leadbitter

The National Enterprise Board was employing, through equity holdings in a number of companies, about 400,000 people before the Conservative Government began to tamper with it. More than that, with the encouragement of the Labour Administration it was beginning to have quite a successful impact in the Northern region. Is it not, therefore, a mistake for the Government to diminish its role and refuse to allow it to have industrial reorganisation and industrial democracy functions, at a difficult time?

Mr. Dixon

I thank my hon. Friend for that intervention. I agree with what he says.

The words for which I was looking, before my hon. Friend's timely intervention, were "more risk investment". That is what is needed. That is my criticism of the previous Government regarding the National Enterprise Board.

I support the amendment. It would delete clause 1, which kills the National Enterprise Board, the Welsh Development Agency and the Scottish Development Agency.

Mr. Tom Benyon (Abingdon)

I hope, Mr. Speaker, that my speech will be tempered with a degree of verbal continence. I am minded of what Pascal said: If I had a longer period of time to prepare it, this speech would have been shorter. I should like to thank publicly and congratulate my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) on his efforts on behalf of Abingdon and MG. My hon. Friend has worked extremely hard and has been more than helpful to me as a new Member of the House over this extremely difficult subject.

I should like to relate to amendment No. 4 a constituency problem that concentrates my mind on a daily basis. One is clearly, first and foremost, a constituency Member of Parliament. The prospect of the MG car plant in Abingdon closing down is of great importance. Even though amendment No. 4 clearly has national repercussions, it is of great interest to my 1,100 constituents who are directly employed in the Abingdon works of MG and to many hundreds of people who work in small engineering firms in and around my constituency and make the parts that go inside the MG cars.

The Abingdon works and the work force have an excellent record in terms of labour relations, which are, and always have been, first-class. Their loyalty to the management of British Leyland has never been in question. The co-operation of union, management and work force has always been of a high order. It is in a unique situation in British Leyland.

6.15 pm

As hon. Members will know, the golden jubilee of the making of the MG car occurred recently. The MG car is not simply another motor car. It strikes a chord with people throughout the world. I think that the British Leyland management was amazed at the degree of discord, annoyance, surprise and frustration felt around the world, certainly by the American dealer network, over the prospect of a car which is considered of great importance and the spearhead of American sales by Leyland being taken away without what was considered to be sufficient thought, research and discussion. I believe that British Leyland management was surprised by the emotion that arose in this country. It seems that the MG car has a romantic name. Perhaps many people have had romantic experiences in MG cars and have a romantic attachment to the car itself.

Mr. Hal Miller (Bromsgrove and Redditch)

My physique disqualifies me, but I was in love with an MG car.

Mr. Benyon

My hon. Friend makes an intervention clearly with some degree of experience. However, this issue is of great seriousness to my constituency.

I do not wish to give the House a guided tour of the traumas of the deal that is likely to take a while longer to be consummated between British Leyland and the Aston Martin consortium. The deal hangs in the balance, A fine product has a question mark over it—whether it is to be aborted, sold, or publicly mortified, leading to a loss of jobs in my constituency.

I recognise that a considerable amount of debate has taken place in the House on this subject. Many hon. Friends have signed an early-day motion. An Adjournment debate has also taken place. The strength of feeling in the House is significant. I do not wish, however, to underestimate the problems that confront the successful conclusion of a deal between British Leyland and any purchaser. Many problems have still to be resolved. Losses are running at £850 a car. The question that hangs in the air is whether someone in the private sector can necessarily make the car pay if British Leyland is unable to do so. That has yet to be answered.

The Abingdon works are part of a chain of manufacture. They cannot, in their own right, manufacture cars. This is well known. The manufacture of the MG car takes place in several stages. What those in my constituency do superbly is to put it together. The car is extremely expensive to make because it is unique and so good. I have no reason to suppose that British Leyland management is telling me a pack of lies. I have examined the matter in some detail. I believe that the management consists of sincere men who have done their sums. One can say what one likes about Sir Michael Edwardes. Many people do. I am convinced, however, that he can do his arithmetic. British Leyland also has plans which it has carefully worked out for the Abingdon works. They are part of its overall strategy for the revival of British Leyland.

There are many other problems in the deal. What is the marque name worth? What will be the cost of the parts manufactured by British Leyland that will still have to go into the car? Can any consortium that has been making only selective, high-cost sports cars make a mass-produced car? What is the whole operation worth? All those matters must be worked out in a commercial deal.

The decision must be made by Sir Michael Edwardes, his board and the potential buyer alone. This House cannot decide a commercial deal. It is not the function of the House to do so. I am sure that that is not what my hon. Friend the Member for Christchurch and Lymington is suggesting. We cannot become involved. Certainly I should not be in favour of any politicians or civil servants making such a decision. The history of such decisions is that they have resulted in the financial and commercial bomb sites. I have seen no reason why that depressing trend should be reversed now.

It would not be in the interests of the country, of British Leyland or, most important to me, of my constituents to exert so much political pressure on British Leyland that we force it to enter into a deal that makes no sense to it, or to me or my constituents. My comments are not meant to cast any aspersions on the offer now being studied by British Leyland, which I am led to understand has been received from the Aston Martin consortium. I believe that that consortium has the expertise and the cash. It certainly has the enthusiasm to do the deal. But we cannot force such a deal through. It would be wrong to do so.

I do not use only MG as an example. Let us take another hypothetical case. If we forced a company to sell an entity, such as a car manufacturing plant, by exerting too much pressure, and the buyers did not have the expertise or the money, what would happen would not be in the interests of any of our constituents. The operation would doubtless collapse at some future stage. It would run out of money. If that happened in my constituency, the position would be worse than it is now. British Leyland proposes to reduce the work force from 1,100 to about 700. In the case that I have described, all the workers would lose their jobs. What good would that be? If we applied too much pressure, we should all be losers.

What the House should ensure is that no political pressures stand in the way of a nationalised industry, such as British Leyland, which has a plant which it believes is not commercially viable, concluding a successful deal with an outside buyer. That is what I want and what I should certainly support. I have no reason to suppose at present that there are any political obstacles in the way of concluding that deal.

What I want more than anything else is that MG should continue to be made in my constituency, that we do not one day hear of MG cars being made in Jakarta. They should be made in my constituency, where there has been a history of 50 years' satisfactory sports car manufacture. The MG is a British sports car. It is British-manufactured. Its reputation is unique and very high. The MG is as British as bowler hats and Mersey docks. We must make sure that it continues to be made in this country.

My hon. Friend's amendment clears the air. If there is any suspicion in my constituency, the country or the House that Leyland is dragging its feet, that it is being less than co-operative in concluding the deal—if it is a good and worthwhile deal—there is merit in the amendment, the most important part of which is the proviso that the buyer is able to satisfy the Board of his intention and ability to continue the existing purposes.

Mr. Charles R. Morris (Manchester, Openshaw)

I should like to take up two of the four points made by my right hon. Friend the Member for Deptford (Mr. Silkin) when he moved the amendment, one dealing with industrial democracy and the other with the private acquisition of public assets.

I was encouraged by the general air of approbation on both sides of the House when my right hon. Friend talked about the desirability of promoting industrial democracy. Even the Under-Secretary, the hon. Member for Basingstoke (Mr. Mitchell), nodded in agreement. The hon. Member for Oxford (Mr. Patten) suggested that the previous Government had been slightly lethargic about industrial democracy, but one of that Government's signal achievements was an imaginative exercise in industrial democracy, which led to Post Office staff being appointed to the board of the Post Office. Along came a Conservative Government, and the chairman of the corporation immediately proposed that this imaginative exercise should come to an end and that the members of the Board representing the staff should be taken off the board.

The Secretary of State for Industry caved in. The scourge of the British Steel Corporation, of Rolls-Royce and of British industry generally caved in to the chairman of the Post Office Corporation and meekly accepted that that exercise should be brought to a speedy end. I do not recall the hon. Member for Oxford or the Under-Secretary objecting when the Secretary of State took that crucial decision.

Clause 1 contains a proposal to promote the private acquisition of public assets. It imposes an obligation on the National Enterprise Board to divest itself of investments and holdings in particular companies.

I want to say a few words about a company about which there has been Rome press speculation. My constituents who are employed by that company believe that if the NEB investment in it is sold off, that will provoke what they amusingly describe as the sale of the century. I refer to the prospective sale of the NEB's 50 per cent. controlling stake in Ferranti, a company with an annual turnover of £200 million and pre-tax profits for 1979 of £10 million.

6.30 pm

Ferranti has an impressive record. It has made a significant contribution to the development of computer-assisted radar systems and computer control in factories. The Ferranti company is a leader in Britain in the development of lasers, semiconductors and microprocessors. The company has achieved great things in high technology. But it was the same company as was rescued from its financial difficulties by the National Enterprise Board in 1974.

I contend that before the question of selling the NEB's controlling interest in Ferranti arises, the 17,000 engineers, technicians and staff who have made the company's success a reality since 1974 should be consulted and that such consultation should be seen to influence the sale of Ferranti shares as contemplated under clause 1 of the Bill.

Seven thousand of the total Ferranti work force of engineers, technicians and staff are employed in Greater Manchester, and Sebastian Ferranti described them in the following words: Not one of them backed off when we had our troubles and many hundreds of them have put in over 40 years' service. Yet these people will not be considered at all, because the NEB is now under instruction to raise £100 million. Perhaps the Minister—if we are to believe today's press reports—will say that there will be a deferment of the timing for the raising of that £100 million, but the NEB is now under instructions to sell off its interest in companies such as Ferranti.

I believe that the staff who have made such a signal contribution to the success of the company should be consulted and allowed to participate in any discussions which concern the controlling interest of the company.

The possible sale of the NEB's controlling interest in Ferranti provokes many questions. At present, 60 per cent. of Ferranti's production is on defence contracts. To what kind of company will the controlling interest in Ferranti pass? Will it be to a foreign-controlled company? Will Ferranti pass into the control of a multinational company? Will it eventually be controlled by the four companies which, according to press speculation, are interested in acquiring control?

Will control go to Racal? I can understand the interest of that company in acquiring Ferranti's defence contracts. Perhaps control will pass to Plessey or GEC. Ferranti's success with defence contracts has been created to some extent by its efficiency in micro-circuitry. If control of Ferranti passes to GEC or Plessey, is it a possibility that Ferranti's micro-circuitry operations will be closed down and rationalised? Those are some of the major issues that should be considered by the House.

I am conscious that there are a number of ideas under consideration and that those ideas are the subject of speculation. I have read a suggestion that the Government are thinking of making 25 per cent. of the controlling shares available to the Ferranti work force. Is there any truth in that speculation or will future control of the company be so organised as to leave it in the hands of the Ferranti family?

The investment of the Ferranti family was saved by the National Enterprise Board in 1974 and the family is now sitting on what I would call a financial bonanza. These are important aspects of divesting the NEB of its stake in certain companies. The Government might take refuge in the view that decisions on these issues should be left to the NEB. I can tell the Minister that if the sale of the controlling interest in the company provokes redundancies and unemployment, my constituents who work for Ferranti will not forget the role played by the present Government.

Mr. James Hill (Southampton, Test)

It was my privilege to serve on the Committee for the Industry Bill and to listen to the same arguments as we have heard today. The right hon. Member for Deptford (Mr. Silkin), the hon. Member for Whitehaven (Dr. Cunningham), my hon. Friend the Member for Basingstoke (Mr. Mitchell) and my hon. Friend the Member for Edinburgh, North (Mr. Fletcher) were four of the most charming people to whom I have ever listened in debate. The Bill is emotive, but they were so able to merge their thoughts on the issues that the Bill enjoyed a series of smooth sessions in Committee, which enabled us to complete our deliberations in a short time. I think that the right hon. Member for Deptford has always maintained an amiable pose while telling some of the biggest whoppers about the NEB that it has been my privilege to hear.

The NEB, which became such a fiasco, was the brainchild of the then Secretary of State for Energy—the right hon. Member for Bristol, South-East (Mr. Benn). He decided that he did not simply want an industrial conglomerate posing as an aid to industry but that he also wanted a body that would, in his words, help industry in the public sector to change the power structure of our society. Following words of that kind, there was bound to be hostility to the concept of the NEB, though I do not think that the NEB has no future. However, the right hon. Member for Bristol, South-East barely gave the NEB a stillborn chance of surviving a change of Government.

We often bring forward legislation that we know must die as soon as a Government are defeated. We are then back at the beginning. Progress stops and no plan is formulated to ensure that such legislation can survive and be useful over a period. No one can change the power structure of our country in the lifetime of a Government. The NEB was given little or no chance of survival. That was a shame.

The NEB was stuffed with money. Any investment manager for an insurance company would know that to be given £1,000 million—I am talking of 1975—and then to be told to invest it—in order to help ailing industry in particular—in the regeneration of industry was an impossible task. The NEB was bound to fail with such guidelines. So it was. Not only was there failure within the board to invest so that it could always at least show a modicum of prifit; it had to get the money out to prove to politicians that the NEB was working.

There were conflicts with the boards of other industries. We all know about the Rolls-Royce affair, and now we have the British Leyland affair. Boards that consist of men of great ability will clash over matters of principle, certainly over the financial structure of a company or the funding that is needed for the next three years. Whenever there is a clash, personalities are brought into it.

One of the emotive issues that hit the Committee was when, at our second or third sitting, we heard that the whole of the NEB board had resigned. We heard that the board members had resigned as a result of some sort of conflict with Rolls-Royce, but my understanding is that they felt that they were justified in resigning because their portfolio was being reduced. It is obvious to me that their portfolio was not reduced by the hiving off of Rolls-Royce, because there was a separate budget for that and it would not have deterred the NEB from helping ailing industries, as before.

It could still have helped the Ferrantis, ICLs and any other companies that wanted assistance. But no; members of the board took it into their heads to resign on that date. It may have been prompted by the existence on the board of members who were almost political nominees. That was a mistake, and I hope that my right hon. Friend the Secretary of State will not make the same mistake. To have political nominees on a board that has to survive a change of Government is obviously a mistake. Discretion must always be the word.

The board of the NEB—consisting as it did of well-intentioned people—had a disastrous record. We all know of the Hivent company, which went bust. We know that Sinclair Radionics lost £2 million. We all know that Herbert and Cambridge Instruments lost a great deal of money. Power Dynamics also lost a great deal of money and British Tanners lost £5 million. It has been said that the NEB's record last year included five companies that went into receivership. I do not know whether that was caused by inflation or whether the general world recession had caught up with them.

If the sole purpose of the NEB is to buy up companies and to aid them, it should at least project those companies' profit margins, figures and order books for the next three to five years in order to ensure that it is not putting money into something that must fail. I quite agree that the NEB must take risks—it is in the small risk-taking business. But, having said that, I must point out that the board's record began to get horrific.

The hon. Member for Jarrow (Mr. Dixon), who is one of the best Labour Back Bench speakers that I have heard, is bitterly disappointed. In fact, he calls this Bill the NEB (Abortion) Bill, the Scottish Development Agency (Abortion) Bill or the Welsh Development Agency (Abortion) Bill. If I had a constituency such as Jarrow, I, too, would begin to think that it was time for despair. But the hon. Member must look further ahead than his emotions will allow him to do at present. The Bill is still there; the NEB and the two agencies are still there. Admittedly the cash flow is slightly halted—but only by a mere fraction; it has not been ruthlessly cut out. Certainly, the hon. Member should keep putting forward the arguments of the Opposition that more money is needed in certain specific areas, but he should approach this matter with the attitude that there has been no abortion and that the NEB still lives and will probably live longer in its modified form than it otherwise would have done. I think that he can take heart.

6.45 pm

The Secretary of State has been accused of many things, but he said on 19 July last—and we would all agree with this—that the merchant banking functions of the NEB should be ended. It is quite clear that we have a perfectly adequate banking system for dealing with companies that want to expand and progress. My right hon. Friend said on that occasion that he wished the NEB to realise some of the shares. That is only fair. Why should we go without hospitals or educational equipment when there is money in the NEB to be plucked out? This would do no harm to industry. My right hon. Friend is quite right in trying to raise £100 million from the assets of the NEB. Any sensible person running even a home knows that once in a while something is sold off in order to provide the family with a certain quality of life. That is what is happening with the NEB shares.

The problem over regional policy is not in this group of amendments, but we had an excellent debate about it in Committee. We all felt better after the debate. There has been a bit of despondency about what some people call the rundown of the NEB. I call it a clarification of the situation of a board that must survive a change or changes of Government. We must have an industrial programme for the next 10 to 15 years. Both major parties and even the Liberals must agree on an industrial performance for this country. If we do not do that, we shall have nothing.

Mr. Stuart Holland (Vauxhall)

So far in this debate we have had yet another chapter in the comedy of errors of the Conservative Party. We have already had Conservative Members referring to the fact that they regretted the dissolution of the Industrial Reorganisation Corporation, as well they might. In 1972, after its abolition, the Tory Government introduced an Industry Act with wide-ranging powers—far wider in their effect than those of the IRC. We can anticipate that there will be yet again a change of direction in Government policy as they realise that the comedy of their errors, in their changing and chopping of policy, gives way to tragic consequences for the British economy as a whole.

On purely ideological grounds—the most dogmatic of grounds, in fact—this Government, or that section of the Conservative Party that controls them, are convinced that public enterprise intervention is, of itself, Socialist. They have not grasped the fundamental fact that Governments of the Left, Right and Centre in continental Western Europe have intervened in the ownership and control of the same sectors and the same firms as those in which the Labour Government intervened the last time round. For example, one should look at the intervention of the Italian Government in the Industrial Reorganisation Institute and the State Hydrocarbons Corporation in Italy.

We should also look at the National Investment Company in Belgium, where Christian Democratic influence is strong. We should look at France under the Gaullist Party and under Giscard d'Estaing, where there is an Industrial Development Institute. In Germany, major extension of public enterprise has been seriously considered in the United Industries Company. Three of the most successful car companies in Western Europe—Volkswagen, Renault and Alfa Romeo—are under public control.

The irony is that in aiming to "privatise" the public sector, and in aiming to sell off or asset-strip resources in the National Enterprise Board, the Government are proving that they have been hijacked by the godfather of the new Chicago gang—Milton Friedman—and the kind of philosophy that he has been arguing in pamphlets of the Institute of Economic Affairs. I am delighted that the Secretary of State for Industry is present. I understand that such pamphlets from the institute are widely recommended reading in Government Departments.

The philosophy in those pamphlets is reflected ideally, in a mirror image, in the opening clauses of the Bill. Professor Friedman advocates that the Government should reduce the share of the public sector in the economy by selling off the assets of existing public enterprise. He does not take into account the structure of public enterprise in the Western European economies. I have not found one reference to the structure of these enterprises in any of his works.

In the British economy, including the holdings of the NEB at present, the share of public enterprise in the overall supply of goods and services in the system is only around 15 per cent. of GDP. That is paralleled throughout Western Europe, with the partial exception of Italy. If we look at the structure of public enterprise in Britain in relation to West Germany, we find that West German public enterprise represents a higher share of GDP than does British public enterprise.

We can see, therefore, that if there is a selling of the assets of public enterprise the Government will be stepping out of line not simply with the policies of the Labour Government in the 1970s but with policies which other Governments of the Centre and of the Right in Europe have been pursuing as a conscious policy of intervention in industry over 20 years.

We must also seriously consider the consequences of the selling of assets of public enterprise in the NEB case against the background of the reasons why such Governments to the Right or Centre have brought private enterprise into public ownership since the war. One of the most fundamental facts—I regret that it was lacking in the arguments of the hon. Member for Bury St. Edmunds (Mr. Griffiths) and of the hon. Member for Southampton, Test (Mr. Hill)—is the patent divorce between finance capital and industrial capital in key projects, and in key sectors of the modern capitalist economy.

There are certain areas of the system in which major investment is necessary before there can be any kind of pay-off. For example, the time horizon for planning in steel—for any Government who look shorter than a purely accountant's view of the 12 months ahead—should be not less than 20 years. The time horizon for the forward planning of a motor vehicle, between its conception and its phasing out after production, is around 15 years. There is a lengthening time horizon for major investment planning in electronics, with a rapid shortening of the production period in which the investment will be paid off. In other words, there is a double penalty. It takes a major entry ticket of about £1 billion to get into certain sections of the electronics market and major forward planning for years for products which in themselves may have a very short life.

We must view—as Governments abroad have done—the forward planning of increased scale and risk in new sectors and traditional sectors of the economy, through public as against private enterprise. When we look at those sectors throughout Western Europe, we find that the State has intervened to underwrite the risk and the scale of the investment which the private sector has patently failed to take.

A clear example is that of British Leyland, which has dominated the NEB to date. It is no accident, and it is central to my argument, that in the early 1970s Lord Stokes protested that the "rational" stock market of this system, according to its short-term profit logic, valued the whole of British Leyland—employing one-fifth of a million workers—no higher than one empty office block in London, the Centre Point building. Lord Stokes castigated the divorce between finance capital and actual industrial investment. It was Lord Stokes, not a Member for one of the Bristol constituencies, who said that unless there was a massive injection of money into the British motor industry, the derivative and supplier industries of components—rubber, glass and steel—would be seriously affected.

The Government are taking a purely financial view, serving the interest of finance capital, with which many Conservative Members are closely connected, rather than realising that the problems of investment in industry are not simply a matter of the personal incentive of entrepreneurs or the alleged climate of activity in the system as a whole but are related to the changing problems caused by new technology, a larger minimum scale of investment and massive entry and exit costs from industries.

The hon. Member for Bury St. Edmunds claimed that firms were being blown by winds of political decision-making in the changing of grants and aids for regional development. He seems to be totally unaware of the evidence produced by the Expenditure Committee, which studied regional investment grants and regional incentives, that such aids exerted next to no effect on the actual location decisions of leading enterprise within the system. The enterprise was concerned about the kind of guarantee of pay-off for a long-term investment project. If it was sure that there would be such a pay-off, it would undertake the investment. The problem now is that the lengthening time horizon of investment from 5, to 10, to 15 years spans longer not only than the lifetime of any individual Chancellor of the Exchequer or any individual Secretary of State for Industry but longer than the lifetime of Governments. It means that these companies cannot undertake the risk of long-term investment unless it is publicly financed and publicly supported.

The proposal to "privatise" these assets will also have perverse effects for the Government in terms of their committed economic philosophy. In practice, companies in the private sector which buy up subsidiaries will be using resources which should be going to investment rather than to asset acquisition. The Government have told us a great deal about the pre-emption of resources in the system and of how we must cut back spending on housing, health and education in order to release funds for investment in industry. Why are they pursuing a policy that will lead to a transfer of resources from the private sector to the Exchequer without any net investment? Why are they pursuing this squalid exercise in asset-stripping instead of underpinning the investment projects of major producers by showing that the public sector is committed to those areas and by relating the investment plans of leading companies and industries? That matter will be discussed further in terms of other clauses and amendments, and it is a matter to which many hon. Members will return.

It is clear that the Government have a false view of the functioning of the modern capitalist economy. They have not grasped the nature of the overall industrial problem in the system. The view from the boardroom is mainly a view of the financial behaviour of a company and rarely a view of how that company relates in terms of real risk and potentiality to the rest of the system. It is a business man's view; it is running the economy as a super firm rather than realising that the economy has to be run by other criteria if firms are to make money.

It is the business man's view, expressed in the "home economics" of some Conservative Members—the "household budget"approach—that we cannot run a deficit on any account, because if we do we are spending more than we earn. They do not ask the crucial question whether the massive finance available in the private sector will be invested over the 10 to 15 years in which we have some protection from North Sea oil. If the Government do not pursue policies of public intervention, they will run major risks.

7 pm

The hon. Member for Southampton, Test said that the NEB was set up against the background of a call by a former Secretary of State for Industry for a power shift in society. That former Secretary of State is not the only one who has claimed that we need such a power shift. When the Labour Party was proposing the establishment of the NEB, a leader in The Times in 1973 said that the country needed at least £2 billion a year invested in a national investment board which should effectively pursue its investment over at least a 10-year period. The Times said that only public funds injected over a long-term time horizon had a chance of turning British industry round and reversing the industrial decline of the economy.

Mr. John Patten

I take the hon. Gentleman's point about the length of time during which one has to evaluate investment decisions. He referred to 15 to 20 years for the steel industry, but does he not agree that since 1967 we have had nearly 15 years in which to evaluate some of the investment decisions in the steel industry which seem to have resulted in over-investment, because of other criteria, rather than under-investment?

Mr. Holland

I am delighted that the hon. Gentleman has asked that question, because it enables me to refer to the facts of productivity in nationalised industries. If one considers the 1960s and early 1970s, when investment in gas and electricity under public ownership during the 1950s had had time to take effect, one will see that productivity was uniformly higher in those sectors than in manufacturing industry. [HON. MEMBERS: "What about steel?"] Conservative Members must get it straight. I know that their memories are short, but they ought to rememeber that for most of the 1960s steel was under private ownership and exactly fulfilled my point. If we invest public funds in an industry, we cannot expect rationalisation to take place overnight. Conservative Members are giving us a perfect example of their financial accountancy approach to major investment programmes.

I should also make it clear that the losses incurred by public enterprise in the early 1970s were caused by the then Conservative Government's policy of consciously restraining prices charged by public industry as part of the falsely based counter-inflation policy. The productivity of an industry cannot be measured simply by its cash profits.

Mr. William Waldegrave (Bristol, West)

The hon. Gentleman is, of course, the true and only begetter of the NEB. He escaped from the question of my hon. Friend the Member for Oxford (Mr. Patten). Of course productivity was high in the gas industry—they just put a pipe in the ground and out came the gas.

We must look at the decisions that involve attempts at long-term planning of industrial projects, such as Concorde and the AGR. Wherever Governments have intervened in such projects, the result has been disastrous.

Mr. Holland

Conservative Members cannot have the argument both ways. I am glad if they now admit that productivity in the broad range of nationalised industry was higher than in private enterprise. The hon. Member for Bristol, West (Mr. Waldegrave) said that it was obvious that productivity would be high in the gas industry. That is corroborated in one respect by a former Conservative Prime Minister who has been rather neglected by his party recently. Baldwin said that nothing was more obvious than that public utilities such as gas and electricity should be taken into public ownership and control rather than leased to private enterprise at monopoly rents.

At the rate that the Government are going in privatising the NEB, which will not solve our industrial problems, and selling NEB assets, the public may ask where they intend to stop. Are we to see the sale of gas and electricity assets in order to reduce the public sector borrowing requirements with which the Government are falsely obsessed? They do not understand that the PSBR is not a drain on resources in itself. It depends on what one does with the public money.

Many of us feel that the proposal to sell the assets of the NEB on a short-term cash profit basis is a pure accountancy exercise by the Government.

Mr. Tom Ellis (Wrexham)

I agree with much of what my hon. Friend has said. Does he agree that if there is a drawback to public ownership it is the capriciousness of political intervention? One of the major purposes of the NEB was to establish an arm's length relationship between publicly owned enterprises and the Government. That virtue of the NEB is being reversed by the present Government.

Mr. Holland

I agree with my hon. Friend in one respect. The evolution of agencies such as the NEB in other countries has shown that Governments abroad, irrespective of their political colour, appreciate that the private sector has failed to invest in key areas of industry and services and that the public sector needs to intervene to do the job.

Mr. Hal Miller

I shall leave my hon. Friend the Under-Secretary to deal with the bizarre notion of the hon. Member for Vauxhall (Mr. Holland) that there is a fixed quantum of public investment applying to all capitalist economies and that we are failing in our duty if we do not reach that standard. No doubt my hon. Friend will also ask the hon. Gentleman about the use made of investment. I understand the hon. Gentleman's point about the need for an industrial infrastructure, but that is exactly what the Government have supported by the continuation of the provision of money for, to take two obvious examples, the steel industry and British Leyland.

I shall say no more about the hon. Gentleman's speech and turn, in the interests of brevity, to amendment No. 4, the case for which was so tightly argued and interestingly presented by my hon. Friend the Member for Christchurch and Lymington (Mr. Adley).

My hon. Friend the Member for Abingdon (Mr. Benyon) referred to the MG case striking a wide chord. I think that the amendment struck a wide chord, which resonated on the Labour Benches. I am not a lawyer, not even a lower-deck lawyer—perhaps the right hon. Member for Deptford (Mr. Silkin) will be able to construe the matter for me—but, as I read the amendment and the 1975 Act, it seems that the limitation that the amendment seeks to propose is capable of a much wider interpretation and could pave the way for the activities of the NEB to which many of us object and which cannot be justified even on the thesis of the hon. Member for Vauxhall that there should be investment in public industrial infrastructure. Some of the forays undertaken by the National Enterprise Board—indeed, one can think of Thwaites and Reed and other examples—so notably illustrated by my hon. Friend the Member for Chertsey and Walton (Mr. Pattie) had nothing to do with industrial infrastructure whatsoever. One can think further, of British Tanners.

Mr. Stuart Holland

My argument is not that public enterprise was restricted to infrastructure and public utilities in Western Europe but that the very institutions that I began by citing, some of which similarly employ between one-quarter and one-third of a million people, are beyond the basic framework of basic industry and services and into modern manufacturing, like the National Enterprise Board.

Mr. Miller

It is a little difficult to conceive of British Tanners as an enterprise in modern manufacturing. Indeed, it is regrettable that this venture went into liquidation and that private businesses—those that had not been wrecked by intervention in the first place—had to come and pick up the bits, which is largely the purpose of my hon. Friend's amendment, as I understand it. I think that he has opened the door much wider than he intended, because the purposes in section 2 of the Industry Act 1975 refer very much to the development or assistance of the economy and the promotion in any part of the United Kingdom of industrial efficiency and the provision, maintenance or safeguarding of productive employment", which is the bait to which the hon. Member for Caernarvon (Mr Wigley) was rising, because he suddenly saw in my hon. Friend's amendment a way of preserving enterprises in Wales that were perhaps no longer profitable and in some cases—I think that the right hon. Gentleman took this point—preserving enterprises from the NEB itself, which has been known to indulge in concentration—and we can think again of British Tanners.

I think that my hon. Friend would agree that he has opened the door very wide indeed. It is not in consonance with the principles that we uphold on the Government Benches and it could do very grave damage to private enterprise. Perhaps he would consider the current situation, where a bid is due for a Decca manufacture. Is it conceivable that either Racal or GEC would be willing to allow somebody to take over the radar manufacturing assets of Decca and continue to manufacture radar sets in that plant in competition with themselves? The whole presumption is that by concentrating the manufacturing in the plant they could do so more effectively. I suspect that they would not be willing to let somebody use the equipment for the manufacture of such plant, or the patents or even the brand names, so how is it that the National Enterprise Board is to apply a different set of criteria to such a situation? I think that this needs further consideration.

7.15 pm

My hon. Friend the Member for Abingdon referred to the possibilities of romantic experience in an MG car. I am sorry to say that I am disqualified by physique from indulging in such an experience, but I did have a love affair with an MG car, if not in an MG car; it was the first vehicle that I was proud to own, and I wish that the expansion of my family and the acquisition of a dog and a cat and other impedimenta did not prevent me from again riding in an MG car.

The argument is spread far wider than MG itself, but I wish to take up the point that my hon. Friend made, because he has played a leading role, and referred to the great kindness that he had been shown. I detected faintly that perhaps at some stage he had even been embarrassed by the great kindness that my hon. Friend the Member for Christchurch and Lymington had shown him, because the difficult question here is, largely, what is the future of British Leyland itself? What any purchaser of the MG asset has to consider is whether the supply of the necessary components will be forthcoming.

7.15 pm

Perhaps I may give my hon. Friend some reassurance. When I checked with the chairman of British Leyland today, I received the assurance that the offer by the consortium had been received, but only as recently as last week, that a reply would be given within a fortnight and that it would be considered on a commercial basis and on no other basis. I hope that that will give some reassurance to those like myself who have a fond recollection of and a firm belief in the virtues of the machine.

A cloud is cast over the whole scene at present by the announcement today of the findings of the AUEW team investigating the circumstances of the dismissal of Derek Robinson. I very much hope that right hon. and hon. Gentlemen on the Opposition side of the House will not be misled into trying to drum up support for any unconstitutional action by Derek Robinson—

Mr. Leadbitter

On a point of order, Mr. Deputy Speaker. With great respect, even with the flexibility that is generally allowed, is not the hon. Member deviating too far from the amendment?

Mr. Deputy Speaker

We were waiting to hear what he was saying.

Mr. Miller

I was going to content myself with saying that Mr. Robinson has a perfect remedy under the law if he considers that he has been unfairly dismissed, and that is to take his case to the tribunal. There are no grounds for him, like Samson, blindly pulling down the whole temple around him when there is a perfect legal remedy available. I hope that that will be accepted on all sides of the House.

In conclusion, I ask my hon. Friend again to consider his amendment very carefully, and further to consider whether his purpose would not be met by subsection (1)(b), where the following is to be added: promoting the private ownership of interests in industrial undertakings by the disposal of securities and other property held by the Board or any of their subsidiaries. I ask him to consider whether that paragraph does not meet his case absolutely—although I well understand that he wished for a peg on which to hang his argument, and I have complimented him on the felicity with which he argued his case.

Mr. Adley

I can see that the words in paragraph (f) held by the Board or any of their subsidiaries could wisely have been added to my amendment to make the position clearer. I am grateful to my hon. Friend for his suggestion.

Mr. Miller

I had concluded my remarks, but I am grateful to my hon. Friend for his clarification.

Mr. George Park (Coventry, North-East)

The Government are acting as though the Bill was already on the statute book. I refer to the stripping of the NEB assets, not currently a function of the board. I am not suggesting that they are doing this in a secretive way, because in Committee on 4 December the Secretary of State said that it was always clear that there would not be much time after the passage of the Bill into law for the NEB to sell its assets before the end of the financial year. But the NEB, having been warned, is no doubt making its preparations to identify and consider which assets it will sell. We understand that the Secretary of State has since backed off from that situation.

I should like to relate the stripping of assets to Alfred Herbert, the machine tool company. This company, once again, for the ninth time, is in the process of reorganising. As on previous occasions, this has been accompanied by the redundancy of several hundred of its workers. This has happened under a new chairman, appointed by the Secretary of State. We are told that it is necessary to sell off the profitable parts of Alfred Herbert to acquire a lump sum—for which the company is not prepared to go to the NEB—in order to continue to research and develop high technology machines in the part of the company that is running at a loss. I am at a loss to understand the logic of such an approach. I cannot understand why one should sell off the parts of a business that make a profit in order to sustain the part that does not.

I am equally worried about the impression created by the new chairman and the managing director that the money from the sale of assets will be used to develop a new family of high technology machines. The reason for my doubts is outlined in the new guidelines: The Board will be allowed to retain and reinvest some part of the receipts from the sale of certain investments, to be determined by the Secretary of State from time to time. The Bill goes further. It states that any sums received by the Secretary of State from the disposal of property shall be paid into the Consolidated Fund. The Minister asks for supreme sacrifices to he made, because he asks workers to lose their jobs to provide a lump sum for research and development. The Secretary of State has said that he will support the development of high technology. Yet Alfred Herbert, an NEB company, is not prepared to go to the NEB. It prefers to sack 700 highly skilled people. I have no doubt that the company will end up with an unbalanced labour force and that it will seek desperately to regain that labour force in order to survive. We are entitled to a clear reply from the Minister on that matter.

If the profitable parts of that company are sold off, will it have the right to retain the money gained for research and development?

The chairman was appointed by the Secretary of State, and he has the same philosophy as the Government. He is determined to do his bit to make private those parts of industry which should be left under the NEB.

It was suggested in Committee that industry would flow into the areas where the infrastructure was provided. That infrastructure has been provided in Coventry. There are communications, schools and a highly skilled labour force which is prepared to work in all types of industry. However, progressively, we are going further and further downhill.

I turn to the question of industrial democracy. The Government take the attitude that it is no longer the NEB's responsibility to encourage industrial democracy. They believe that industrial democracy has not been used sufficiently and that the principle should be removed from legislation. Conservative Members shed crocodile tears about industrial relations. They fail to realise that many industrial disputes arise because of a lack of information on the shop floor about what is happening to the jobs in which workers invest their labour and lives. The workers are entitled to know what is happening.

It is proposed that Ferranti should be sold off. Have the Government considered consulting the workers who have supported that company through thick and thin? They should have the opportunity to say whether they want to continue as they are or to work for an unknown private owner.

I shall end there, because I want my hon. Friends to have an opportunity to take part in the debate.

The Under-Secretary of State for Industry (Mr. David Mitchell)

The debate was opened by the right hon. Member for Deptford (Mr. Silkin). He dealt in interesting detail with his view of the Government's industrial philosophy and that of his party. I hope that the House will find it convenient for my right hon. Friend the Secretary of State to reply to that speech. I shall deal with the details that have arisen in the debate. My right hon. Friend has a detailed account of what was said by the right hon. Member for Deptford and I have taken notes of what took place in the general debate. I am intervening, not winding up.

The right hon. Member for Rutherglen (Mr. MacKenzie) was an Under-Secretary of State and Minister of State at the Scottish Office. He recognises the limitations and problems. We share an understanding of the realities and problems involved in running a small business. The right hon. Member sought an assurance that the Government were still concerned about Scotland's problems. I give him that assurance.

The right hon. Gentleman suggested that the present Government were responsible for a series of measures which are not helpful to small businesses. He said that the Opposition did not increase minimum lending rate. I agree that the Opposition did not increase minimum lending rate, but they were responsible for leaving the money supply largely out of control. They planned a £3,500 million increase in Government expenditure. As a result, we had to take the necessary steps to rein back on the economy. It ill befits Opposition Members to complain about our having to take the steps which were made necessary because of the legacy which they left us.

The right hon. Member for Rutherglen drew attention to the importance to Scotland of the microprocessor industry. I agree with him. The present microprocessor revolution can be compared with the Industrial Revolution. It was not the people who invented or manufactured steam engines who made the money out of the first Industrial Revolution; it was those who invented a multitude of applications. In exactly the same way, it will be those who invent, search out and apply a multitude of applications for the microprocessor, many of them small firms, who will grow in the future as that industry develops.

7.30 pm

Mr. Grylls

I follow what my hon. Friend has said about the microprocessor. Could he give the House any news about the Government's attitude to Inmos? He rightly said that the application of microprocessors is far more important than actual manufacture of them which is already being carried out by so many different companies. Could he tell us whether the Government will finally say "No" to more taxpayers' money being put into the subsidised production of microprocessors by Inmos?

Mr. Mitchell

I am sorry to disappoint my hon. Friend, but it is not for me to make an announcement. That matter is still under consideration, and when an announcement is made I am sure that it will be made by my right hon. Friend the Secretary of State.

I want to refer back to the important area of the microprocessor with the assurance that what I say applies also to Scotland. As the right hon. Member for Rutherglen will know, a training programme has been started by the Department of Industry. We expect that that will increase the number of course training places from 2,000 a year to no less than 35,000. That will make a substantial difference to industry's ability to apply the microprocessor, because it will have the skilled manpower.

There is also the microprocessor assessment project where we make available up to £2,000 to assess whether a microprocessor application belongs in a particular area. Thirdly, after that, where there is a recommendation to go ahead, we are prepared to make grants of up to 25 per cent. towards implementation costs. That is a considerable area of investment of public effort in microprocessors. Specifically in relation to Scotland, the Scottish Development Agency is carrying out a special research project jointly with the Stamford research institute. No doubt, when we have the results of that the right hon. Gentleman will receive a copy.

I turn now to an important point raised by the right hon. Gentleman about the need for mobile projects to go to the areas of worst unemployment. I fully understand and sympathise with those who are unemployed. I recognise that there are areas of deep structural unemployment that have existed for years and years, going right back to when we first had a policy in the 1920s and 1930s.

Regrettably, we still find that the same areas exist in Scotland, Merseyside, Newcastle and elsewhere. The right hon. Gentleman wants mobile projects to be encouraged to go to the worst areas, and that is why we have made changes whereby the special development areas, instead of having a 2 per cent. advantage over a development area, have a 7 per cent. advantage. That means that they stand out as relatively more attractive areas which, I believe, will help to make an impression on a deep-seated structural problem about which the right hon. Gentleman cares as much as I do.

Mr. Charles R. Morris

I do not question the Ministers sincerity, but, if he really believes what he has just said, is he now going to instruct that the Inmos factory should be located in a development area?

Mr. Mitchell

The management of Inmos has made known its preference for where it would like that project to be sited. The management pointed out that it is necessary to have the factory near the company's original advanced technology activities. That is a matter on which the management of Inmos made known its feelings. It is not for me to deal at this stage with the wider implication the Minister's sincerity, but, if he tions that there may be in the area to which the right hon. Member for Manchester Openshaw (Mr. Morris) has referred.

The right hon. Member for Rutherglen spoke about the shortage of mobile projects. He was absolutely right. There is a shortage. There has been a substantial contraction in the number of mobile projects available, both internationally and nationally. For that reason, I think that both he and I would agree that it is more important to concentrate attention on home-grown local start-up projects which can develop as a small business grows into a significant employer in an area. Now is not perhaps the moment to have a debate about the policy of the Government on small firms. I should be delighted to have such a debate at the Dispatch Box on another occasion. However, I can assure the right hon. Gentleman that the SDA has a small firms division, and David Ogilvy, whom I have met and for whom I have immense respect, plays a significant part in that area.

My hon. Friend the Member for Southampton, Test (Mr. Hill) made a very thoughtful speech and drew attention to the fact that State enterprises are not always successful and stressed the value of the private sector in its merchant banking role and its role of bringing about change in industry.

I am sorry that the hon. Member for Vauxhall (Mr. Holland) is not in the Chamber at the moment. In his great concern about the ownership of industry, he has failed to recognise that when making international comparisons it is not a matter of ownership so much as the ability of management to be allowed to manage that is important. That is something that the hon. Gentleman tended to overlook.

I turn to the special plea that was made by my hon. Friends the Members for Abingdon (Mr. Benyon) and Christchurch and Lymington (Mr. Adley). They tabled amendment No. 4 and expressed deep concern about the problem of the MG plant. My hon. Friend the Member for Christchurch and Lymington does not want the NEB or a company to be the sole arbiter of the national interest. I think that he will recognise that there is some conflict between our philosophy of seeking to allow commercial decisions to be made by companies in the commercial field and the concept of the Government constantly seeking to intervene to arbitrate in the way in which he asked.

I recognise that my hon. Friend gave voice to the widespread interest and concern about the problems with and interest in the MG motor car. My hon. Friend the Member for Abingdon laid great stress on the importance to his constituency of this car. He said—I think rightly—that it strikes a chord not only with the workers but an emotional chord with many people halfway across the world who, at one time or another, have felt the emotional and romantic pull of such a car. However, he recognised the reality that the Abingdon factory is only part of the chain and that we are dealing with an immensely complicated decision which British Leyland will have to take. It cannot be right, as he said, for the House to seek to intervene in a commercial deal. But the inevitable consequence of passing the amendment would be to intervene in the commercial judgment between the NEB and a company which it owned.

British Leyland has announced that production of the MGB model will be discontinued at the end of 1980 or early 1981. The company will stockpile for the United States market to follow after that, until a successor sports car based on the Triumph takes the place of the MGB. British Leyland is losing more money than was thought. I was asked for the figure. It is just over £900 for every car that is sold in the North American market.

There is the consortium to which my hon. Friend has referred, led by Aston Martin, which has made a bid, which would, I understand, continue to produce the old model for some time but would need inevitably to have to follow it with a new model at some stage. That bid was received by the company only last Friday. Therefore, it would be quite wrong for us to seek to intervene in the commercial judgment of British Leyland. Indeed, I believe that it would weaken British Leyland's negotiating position if we did that. It must be a commercial decision, one in which taxpayers' assets are involved. It would be quite wrong for us to weaken the hand of those who are seeking to negotiate.

However, I go a little further and draw my hon. Friend's attention to the consequences of his amendment. I think that there are two consequences which he has not appreciated. The first is that if a company owned by the NEB decided to build a more modern plant, perhaps nearby, perhaps in a special development area, and inevitably it geared itself in its marketing to the new plant it was going into, it would then be necessary, under the amendment, for the company to offer for sale the old plant. Therefore, it would then have its direct competitors setting up in competition with it and killing the very reason for having opened up a new plant and carried out the investment in the first place.

My hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller) drew attention to the even wider and more unfortunate consequence of accepting the amendment, because the terms in which it is worded would lead to the provision that, whenever any person or company anywhere in the United Kingdom envisaged closing any sort of factory or changing its use, the NEB would be expected to try to ensure that the factory was offered for sale to anyone, without regard to price or any other consideration, provided only that the buyer could satisfy the NEB that he would keep it open. Then, when it went bust, it would be open to the same system going on again, with a hapless NEB having to find another buyer.

I can give my hon. Friend no satisfaction in terms of the amendment and the words in which it is phrased. I hope that he will feel able not to press it. But I can give him and my hon. Friend the Member for Abingdon the assurance that their concern and the matters raised in this debate will be drawn to the attention of British Leyland. I hope that on that basis my hon. Friend the Member for Christchurch and Lymington will not seek to press his amendment.

Mr. Adley

If my hon. Friend is telling me—I shall accept his word for it—that my amendment as drafted would extend the NEB's powers beyond companies held by the board—that is what I understand him to be saying—that is totally alien to the spirit of the amendment. Is that what he is saying?

Secondly, I should like an assurance—I think that my hon. Friend may have just given it, but I should like it in terms—that he will bring to the attention of the chairman of the NEB the strong feelings that will arise in this House and elsewhere if any artificial barriers are erected against the sale of MG, be it to Aston Martin-Lagonda or anyone else. Many of us would find artificial barriers quite unacceptable and contrary to the national interest.

Mr. Mitchell

I think that my hon. Friend will have sensed some uneasiness among his hon. Friends when there was enthusiastic support for his amendment from Opposition Members. I regret to say that he is correct in his concern that it would have the effect of widening the role of the NEB—far wider than Opposition Members ever intended in their wildest dreams that it should be. I hope, therefore, that my hon. Friend will not wish to press an amendment which would be so embarrassing to him.

The hon. Member for Coventry, North-East (Mr. Park) stressed the advantages of Coventry in terms of its infrastructure. I pay tribute to the way in which he constantly draws attention to the opportunities which his city has to offer for industry moving to it.

The hon. Member raised the matter of Alfred Herbert. I am afraid that he is under some misapprehension. He said that Alfred Herbert's chairman was appointed by the Secretary of State. That is not true. It was an NEB appointment. The Herbert management decided and the NEB agreed that the only hope for the company's future lay in rationalisation. This is now in hand. The consent of the Secretary of State was not required. He merely noted the proposals. The NEB was acting within the existing law and guidelines laid down by the previous Government, and the action, like previous rationalisation of Herbert under the previous Administration, has no regard to the provisions of the Bill or the new guidelines which go with it.

7.45 pm

Mr. Park

I should like the Minister to state clearly whether Alfred Herbert will be able to retain this money. Also, will he take into account the fact that people are not only being asked to give up their jobs or being compelled to give them up but are being told that there is to be no redundancy money beyond the legal minimum, in spite of the fact that management representatives have always departed with a golden handshake?

Mr. Mitchell

The question of redundancy pay is a matter for the management of the company concerned. But on the wider question about whether the funds realised by Alfred Herbert from closures can be retained by the firm, the answer is "Certainly." The purpose of the exercise is to try to make what remains a viable concern. If that proves successful, as we must hope, it may be possible for the NEB to find a private buyer and so recoup some of the £43 million of public money which has been sunk in the company so far.

Mr. Charles R. Morris

Will the Minister give way?

Mr. Mitchell

I shall be coming to the right hon. Gentleman's points a little later.

The hon. Member for Coventry, North-East stressed the importance in terms of industrial relations of genuine information being available on the shop floor. I agree with him. However, that is a matter for companies' managements, and it is certainly one that we would wish to encourage. Good communications should be part of good management.

The hon. Member for Caernarvon (Mr. Wigley) half moved amendment No. 2, which is concerned with functions of the Welsh Development Agency. He raised the question, in summing up his amendment, of the WDA having a function to build up industry and he wanted it to have the function of stopping the closing down of industry. He instanced the case of Bernard Wardle, a factory in his constituency, where I am sorry to learn that 322 people are to lose their jobs following a takeover bid and a closure announcement. If he feels that it would be helpful to discuss the details with me, I assure him that my door is open for him to do so. But on the Amendment Paper he was to move an amendment promoting or assisting the reorganisation of an industry or any undertaking in an industry. That is the amendment tabled and selected for debate.

Mr. Wigley

Perhaps I may help the Minister. I think that he has got matters wrong. My amendment was No. 5, included with this group, and not No. 2. Amendment No. 2 has not been selected.

Mr. Mitchell

I have got the right argument even if I have the wrong number. Understandably, the hon. Member hardly mentioned his amendment when he was talking about the problems of the firm in his constituency. I invite the House to consider the case of the dog that did not bark, because what the hon. Member was doing was drawing our attention to the case of a company which is being rationalised while he was speaking to an amendment seeking to extend the powers to reorganise industries and undertakings within industries.

As the hon. Member well knows, one of the most frequent forms of reorganisation is rationalisation and closure of particular sections of a company. Therefore, I well understand his embarrassment at finding himself with the same item on the Amendment Paper which scores goals through his own goal posts.

Mr. Wigley

Clearly the Minister is talking to the wrong amendment. Amendment No. 5, which was the one taken and the one that I spoke to, gives power for the WDA to intervene in the case of a takeover by a company outside Wales, in this case, which leads to the closure of a company in Wales. I linked my argument with the one put forward by the right hon. Member for Deptford (Mr. Silkin) that decisions can be taken in this way that are contrary to public policy—for instance, when a company in a special development area or a development area is closed down on the directions of a head office outside that area in order to move jobs to a different area. To that extent, my amendment is totally coherent with what we are trying to achieve.

Mr. Mitchell

The hon. Gentleman may believe that his argument was coherent, but I take a different view. I believe that the intervention he is seeking could produce the sort of result that he has illustrated he does not want to take place.

My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths), in an effective speech, destroyed much of the case of the right hon. Member for Deptford. He realistically described the problems of British management and measured the performance of public and private sector deliveries, custom, service, design and industrial relations. He found in each case that the public sector was less successful.

The right hon. Member for Openshaw sought wider NEB consultations with workers. That is a matter for individual companies. We seek to encourage it, but it is not a matter for imposition.

In a powerful speech, my right hon. Friend the Member for Yeovil (Mr. Peyton) went back to first principles and demonstrated the enlarged role of the NEB that is sought by the Opposition and how it has no relevance and help to offer to the United Kingdom economy.

I hope that I have succeeded in covering some of the points raised by hon. Members. However, I am conscious that the House would like to hear my right hon. Friend the Secretary of State speak, particularly in view of the principles raised by the right hon. Member for Deptford.

Mr. Ron Brown (Edinburgh, Leith)

Clearly, this Government believe in private enterprise. Perhaps it is better known as the capitalist system. It is an animal that bites and it has a bark, because we have heard it today.

The Government have the honest philosophy that they do not have the right to plunder public assets, because those assets belong to the people of this country. We talk about democracy and owning property. I believe that property is an investment for the future. We have a responsibility to look after it. We all know of the problems of British industry, but it is no secret that the problems are worldwide. However, for various reasons, the problems in this country are more severe.

We should realise that the old story about the fall guys will not work. It is all very well to talk about greedy workers, but workers in this country are poorly paid. I have heard us described as the coolies of Europe. The wages and conditions prevailing in this country are often Dickensian. There are other allegations about our lazy workers. Workers in this country work as hard as their European counterparts. The problem is that they do not work efficiently enough, because of clapped-out machinery.

The real problem is lack of investment. Mr. Jack Jones spoke about an investment strike. Certainly, the right hon. Member for Sidcup (Mr. Heath) knew about that. He despaired because, despite the encouragement that he gave to big business, he did not get the response that he was looking for. The arrogance is typical of the old Empire days, when the saying was that when times were good there was no need to invest and that when times were bad people could not afford to invest. That attitude prevails today.

It is interesting to note the series of statistics produced by the National Westminster Bank referring to the year 1976. That is not too far off; most of us can remember it. The statistics show that assets per worker amounted to £7,500, compared with £23,000 in Germany and £30,000 in Japan. That is an indication of the seriousness of the problem. Since then, the problem has become worse.

The rate of unemployment in Scotland indicates that the matter is far worse there than in the rest of the country. The factory structure in Scotland is antiquated. Indeed, as was reported in The Scotsman, 40 per cent. of Scottish factories were built before the war—some were built before the First World War. All this means higher unit costs, and many companies in the United Kingdom work at far below capacity. The CBI has reported that 60 per cent. of factories work at below capacity. That gives us an idea of the size of the problem.

What is the Government's solution? Perhaps quack medicine is all right for lame ducks—I do not mean that as a pun. The Government speak about reducing the role of public enterprise and phasing out regional aid, which is vital in many parts of the country. In addition, there is the question of high interest payments, which are hitting small companies throughout the country—certainly those in my constituency. When small companies go to the wall, larger monopolies are created. Monopolies do not enhance the capitalist system, which the Tory Party believes in. They have the opposite effect.

The Government are not encouraging investment in this country, but they are encouraging it abroad. That was the reason why they took the controls off the export of capital. Money that has been created by the people in this country is being sent abroad to America, South Africa and Australia. It is no secret that many companies are being set up in, for example, the Cayman Islands and in Panama. We have only to read the press to see advertisements inviting companies to set up abroad and enjoy tax havens. I am sure that many companies are taking up those offers.

The Government are offering a new deal in reverse. They are taking back the support that industry previously enjoyed—at least, it had the possibility of enjoying it if the offer had been taken up. The matter is so desperate that rather than reduce the role of public enterprise we should try to improve upon it. Although the NEB, the WDA and the SDA were far from perfect, they were doing a good job and getting things moving. I believe that they should have more powers.

In certain parts of the country, companies such as Ferranti and Rolls-Royce were bailed out, maintained and brought back to health. That was good work. Many of my constituents who work for Ferranti are concerned that the shares in that company will be sold off. Those people are not militants, but the policies of the Government are turning them into militants. We see that happening in the steel industry and elsewhere. The Government must appreciate that working people will not accept reactionary policies indefinitely. They will have to pay the price for those policies.

The question now for the Labour Party is one of renationalisation when we regain office. That will take place quite soon, judging from the way things are going. We have to talk about taking back the assets and paying the minimum of compensation. I hear that demand repeatedly in the Labour movement throughout the country. That should be considered, because it is important.

If proof is needed, the crisis in Britain demonstrates that we need a programme of Socialist measures. Such measures must involve not only taking over private industries and companies but conquering the commanding heights. Insurance companies, large finance houses and banks must be taken over. Let us take over the real controlling powers. We should take over the companies that make profits and make those profits work for the people of Britain. We must inject money into the economy instead of spending it elsewhere.

Whenever nationalised industries are badly run, the Labour Party is blamed. However, as far as I know, the Labour Party has never thought of appointing a Socialist as chairman of a nationalised company. If we had a Socialist chairman at British Leyland, we would not have the same problems. We must put our people into our industries. We must turn public enterprise into Socialist enterprise. That is the only answer at the end of the day.

8 pm

The Secretary of State for Industry (Sir Keith Joseph)

The House knows that I had to be away from the Chamber for the early part of the debate. I have apologised to the Opposition Front Bench. I am grateful to the House for giving me the opportunity to reply to the big issues that the right hon. Member for Deptford (Mr. Silkin) and several of his hon. Friends have raised.

I should like to pick up some of the issues to which the hon. Member for Edinburgh, Leith (Mr. Brown) has just referred. I agreed with several of his comments. In particular, I deplore the relatively low standard of living. In some cases, many of our people live and work in Dickensian conditions. I hope that the hon. Gentleman will accept that my hon. Friends and I are animated by quite as much passion as any Opposition Member and that we wish to see conditions improved.

I hope that the hon. Gentleman will accept that we are a relatively low paid and low pensioned country because our output per head is relatively low. There is a close and intimate connection between the output per man or woman here, what the customer at home or abroad will buy and the standard of living. The right hon. Member for Deptford shakes his head. I shall be fascinated to read or hear his argument.

I must persuade the hon. Member for Leith that one of the statistics that he produced with great force, because he was convinced that he had proved his case. can be looked at differently. He argued that the major problem in Britain is that of investment. He argued that one need only look at the amount of investment per worker compared with that in other countries. However, the same figure that appears to show that our workers have relatively little investment behind them can be interpreted quite differently. It can be shown that we have about twice as many workers per unit of investment. Other countries have far more investment per worker because they have fewer workers for each unit of investment. In other words, we suffer from over manning, even though that over manning may be well intentioned. That is a major reason why our standard of living is lower than that of more successful countries.

If the hon. Gentleman were to say that this was a management problem, I would accept that primarily it is the responsibility of management. However, great obstacles are placed in the way of managements through the combination of wrong-headed Governments and uncomprehending trade unions. I do not wish to underestimate the range and scale of the problems facing us. I hope that the House will agree that, despite problem areas, we have much that is excellent within our economy. There are first-class firms, both large and small, in relatively weak industrial sectors. There are weak firms, large and small, in some of the strong industrial sectors.

I bitterly regret that behind all our debates lies a gulf between the understanding and perceptions of the Government and the Opposition. We perceive that jobs, the standard of living and social benefits ultimately flow from the customer at home and abroad. The Opposition agree that the customer is important. However, they seem to base much of their policy and rhetoric on the assumption that producers are more important than consumers. Alas, that is the way to impoverish producers. Producers depend upon the satisfaction of consumers for their jobs. We are all consumers and most of us are producers. The problem is to reconcile the interest of every individual as a producer with the interest of every individual as a consumer.

We believe that that reconciliation can best be made through free enterprise within a framework of humane laws, in- stitutions and safety nets. I long for increasingly common ground between the two sides. The hon. Member for Liverpool, Walton (Mr. Heifer) has now joined us. He is nobly restraining himself. Perhaps he will find something before I finish that he will not be able to tolerate in silence.

The British were industrial pioneers in many ways. We began the urban revolution, the agricultural revolution and the medical revolution in this millenium, as well as the Industrial Revolution. We have a proud record as pioneers. There is much academic dispute about the quality of management in different epochs of the nineteenth century. We all acknowledge the pioneering quality of the early entrepreneurs. There is much academic argument about what happened to their successors. There is also much academic argument about the quality of our education system. We argue not only about the relevance of that system to industry or commerce but about its quality. There is much argument about the relevance of the education system to our industrial performance.

Leaving the nineteenth century behind, there is little doubt that we have increasingly handicapped the scope of management. Above all, we have handicapped it by excess in monetary matters. There was too little money in the 1920s and 1930s, and too much in the 1960s and 1970s. That led to fierce deflation in the 1920s and 1930s, and fiercer and fiercer inflation in the 1960s and 1970s. We have handicapped our management by an anti-business attitude.

I hope that Opposition Members will be patient, as I am being as fast as I can. I hope that they will allow me to race through a few headings of those areas where we have handicapped management since the Second World War. Since then, we have had excessive Government spending. There have been discouraging levels of direct taxation. There has been too much egalitarianism. We have had too much nationalisation. There has been a continuation of anti-business attitudes. The trade union movement discourages the adaptability upon which service to the customer at home and abroad depends.

If hon. Gentlemen were not being patient, they would say that a number of other countries have one or more of those burdens, and I have to agree. However, I say to them that no other country in the free world has three, four or five, let alone all six, of those burdens on the economy. We are the only country that has all of them. Cumulatively, they account for much of our dispiriting performance.

Mr. Heffer

I am sure that the right hon. Gentleman will not agree, but I believe that there is an additional burden—the Conservative Government.

Sir K. Joseph

The hon. Gentleman can do better than that.

On top of all that, we now have high interest rates and a strong exchange rate, which are consequences of policies that we believe are in the interests of the country. Considering the cumulative effect, the miracle is that our management and industry do as well as they do.

Against that background, I come to the clash of philosophies represented in the debate on the amendments. We believe that the main job is to change the framework within which business has to operate in order to rectify some of the obstacles and disincentives. I do not for one moment deny that there will always be need for direct Government action in some fields within our responsibility. I am not stating that the Government have no action to take except on the framework. On the other hand, the Labour Party tends to put its emphasis not on the framework, which we believe to be deeply discouraging, but on direct action of the Government. Again, I am not saying that the Labour Party ignores the framework or that it expects everything to be done by direct Government intervention, but there is a difference of emphasis between us.

Mr. John Silkin

Not long ago, the right hon. Gentleman said that there were three proper elements for Government intervention—infrastructure, communications and training. His Government have cut the amount of money spent on all three. Does he dissociate himself from earlier remarks? If not, why are his Government cutting the amounts?

Sir K. Joseph

I am not conscious of having limited Government responsibility to those three elements. There are many others that I should accept.

I believe that against that background the Labour Party has greatly exaggerated the scope and potential of the National Enterprise Board.

Mr. Silkin

Will the right hon. Gentleman answer my question? Has he changed his mind?

Sir K. Joseph

No, I have not changed my mind. The Government have responsibility for many things, including those to which the right hon. Gentleman refers. The amount of taxpayers' money spent by the Government at any one time has to be subject to all the pressures of competing claims for resources, including claims of taxpayers to have more of their own resources left in their pockets and handbags.

Mr. Silkin

Does the right hon. Gentleman mean the claims of those paying surtax?

Sir K. Joseph

I hear the right hon. Gentleman muttering about surtax payers. We happen to believe that it impoverishes everyone in the country if those who have talent and drive in economic ways are discouraged by excessive taxation. We believe that it is in the interests of all that disincentive taxation should be reduced. I am not in the least on the defensive about what we have done to adjust taxation levels.

Mr. Cryer

The repeated claim of the right hon. Gentleman and his right hon. and learned Friend the Chancellor of the Exchequer is that the previous Budget gave people the incentive and drive to create jobs. Where are those jobs? Unemployment has increased and factories are closing week after week.

Sir K. Joseph

The hon. Gentleman knows that had he been answering a question about the effect of policies when he was, for a short time, a Minister speaking from these Benches, he would have said that the country could not expect instant transformation. He knows that I shall say that there must be a time lag in the results.

While we have no numbers, we know that many people who fled the country under the Socialist tax system have returned and will contribute to the increased vitality of our economy, from which all will benefit.

I am grateful to the House for its patience, and I wish now, very briefly, to deal with the amendments.

8.15 pm

I am told that the right hon. Member for Deptford, in my absence, spoke lovingly of my past and my comments on my past. I give him ample ammunition to use against me, and he unfailingly uses it. He went on to dwell with some relish—that is unfair; I withdraw the word "relish"—on our relatively poor manufacturing performance.

I have tried briefly to summarise the discouraging framework and attitudes. Against the NEB's wishes, the Labour Government left it in a truncated form, with only one single planning agreement in action and with far less money than many of its supporters wished to be made available. The concept that the NEB, even in its original form, could have started to rectify the problems of the country is disproportionate against the background that I have tried to summarise.

In an interview a few years ago, I allowed myself to compare the NEB and its scope, without any disrespect to the NEB, to a 10p piece against an average-sized table. If I may use the Dispatch Box for this unusual purpose, for the moment I will treat the Dispatch Box as being the magnitude of the whole economy. Here—and it is too large in proportion—is the scope of the NEB.

Surely it is more sensible to use our energy to alter the framework than to beef up or marginally beef down the NEB. I am not being disrespectful to the NEB. I accept that it might be able to do something useful, but let us get it in proportion.

The NEB, as we propose that it should be, will no longer have the right to reorganise industry. Those who imagine that, on balance, the NEB would have been beneficial to the country, had it been left with the power to reorganise British industry, should be a little humble in their interpretation of the past. It is true that there have been some reorganizations in industry that have proved beneficial. In one or two cases the NEB's predecessor, the IRC, had some connection with that reorganisation. However, there have been even more cases in which external reorganisations by Government agencies have been disastrous. A little humility and a little history should help us understand the real value of any such ambition.

It is true that we are denying the NEB the emphasis on public ownership. We see a catalytic role for the NEB on a limited number of fronts. We ask the NEB to dispense assets back to the private sector. That is not asset stripping. In return for the sale of those assets, the taxpayer will receive the price for them. We see the NEB as having, with its new membership, a valuable catalytic role in connection with high technology, small business, small firms and the regions. We accept a limited role for the NEB.

The debate included a number of interesting speeches which I heard and a number of, no doubt, interesting speeches which, I fear, I did not hear. I heard the speech of the hon. Member for Vauxhall (Mr. Holland), who spoke with fervour. We have no vendetta against public ownership or nationalisation. We accept that there are some utilities, especially utility monopolies, that cannot sensibly or easily be put into private ownership.

There would have to be a regulatory framework if, for instance, water, electricity or gas were put into private ownership. We distinguish sharply between utility nationalised industries and trading nationalised industries. It would be nothing short of madness in the intensely competitive markets of the world to nationalise trading activities where quick decisions and readiness to adapt to the market are absolutely indispensable if jobs are to flourish and the standard of living is to be increased.

We make no apology for putting in hand the partial denationalisation of British Aerospace, the National Freight Corporation and British Airways.

Mr. Cryer

The right hon. Gentleman says that he has no vendetta against public ownership. Is it not true that the right hon. Gentleman, on Second Reading of the British Aerospace Bill, said that British Aerospace workers and management were not the subject of criticism? Yet his Government, of which he is the Secretary of State for Industry, are busily selling off to private enterprise and unsettling and destroying the confidence of a vital industry that is doing a good job for the nation.

Sir K. Joseph

There has not been time for nationalisation to do its fell work on this important trading industry. It has been nationalised for about two years only. We very much fear that the jobs of those who work in it and the benefits for the country would have been sapped, not by the ill will or the inferior qualities of the managers or directors involved—it is not a question of personal qualities—but by its relatively poor market performance in a market industry, which flows from the immunity from bankruptcy. Because of that immunity, directors, management and workers feel that they do not need to adapt as readily as they know they must adapt in the private sector, where bankruptcy is round the corner.

I have tried to cover a large amount of ground simply to expose the clash between the two sides of the House on the amendments that have been considered. I hope that after the explanation of my hon. Friend the Under-Secretary, most of whose elegant and clear speech I heard, the House will have been convinced and that the amendment will be withdrawn. If it is not withdrawn, I hope that my right hon. and hon. Friends will vote against it.

Dr. John Cunningham

I, like the Secretary of State, will be brief. I refer to some of the words that the right hon. Gentleman used about the range and scale of the industrial problems that we face. He said that against the framework of the economy, and in this context, the NEB was a relatively small organisation. That is true, and we can agree about that. What we cannot agree about is that against our industrial and economic background the Government should further disable themselves by making the NEB even less effective in the national interest in helping to reorganise or regenerate industry.

Nor can we agree with the Secretary of State's brushing aside the points made by my right hon. Friend the Member for Deptford (Mr. Silkin) and others about the climate for enterprise. Far from improving the climate, the actions of the Government, as my hon. Friend the Member for Keighley (Mr. Cryer) and others said, have made the position much worse. This is especially so for small industrial firms. The right hon. Gentleman cannot escape the responsibility there.

The Budget, the high sterling policy of the Government, the high interest rates and the high rate of VAT have all been damaging in that regard. They have all been conscious decisions of the Administration of which the right hon. Gentleman is a member.

The right hon. Gentleman spoke briefly about the powers and functions of the NEB to reorganise industry and develop public enterprise into more profitable areas, but about further industrial development he said not a word. It is strange that in these circumstances, and against that background, the Government should, in a number of ways, be pushing the trade unions away from involvement in the difficulties that we face and that they should be taking a conscious decision not to draw people into greater involvement, understanding and participation in their own livelihoods and industries. We condemn them for taking that action, too.

It seems particularly strange that the right hon. Gentleman should be happy for merchant bankers, people in the City—the Slater Walkers of this world—to have the ability to reorganise many of our vital industries but that the State, the Government and the trade unions should have no effective, even though small, opportunity to participate in such reorganisation. That was the advantage of the NEB having this power and function. I should emphasise to Conservative Members that none of these functions carried any compulsory powers. No one can claim to have been under any threat from the NEB because of legal powers under any of these headings. These changes are being made on the basis of dogma and for no other good reason.

As the problems deepen, as the industrial background of the country worsens, as our ability to sustain our industries is eroded by foreign competition—some of it fair, some of it less than fair—as many of our competitor and partner countries, as was pointed out by my hon. Friend the Member for Vauxhall (Mr. Holland), are taking measures to strengthen public involvement and support, this Administration, almost alone, are weakening and withdrawing that support. Nowhere is the loss of flexibility to deal with these problems more apparent than in their destruction of these functions of the NEB.

Although time prevents me from referring to many speeches, I feel for the nightmare through which the hon. Member for Christchurch and Lymington (Mr. Adley) seems to have been going tonight. We know him as an assiduous, hardworking Member who takes a great deal of care to look after the interests of his constituents. He has been trying to do that today, and we congratulate him on it. Indeed, we urge him to continue in that vein by pressing his amendment to a Division. We assure him of our wholehearted support for the intention behind his amendment. If I were him, I should accept none of the blandishments of his hon. Friend the Under-Secretary of State and would press the amendment to a Division, in the interests of his constituents. We certainly welcome the opportunity to support the hon. Gentleman.

The speech of the hon. Member for Bury St. Edmunds (Mr. Griffiths) is worthy of comment, if only to draw attention to the labyrinth of inconsistencies within it. The hon. Gentleman said that he regretted the abolition of the Industrial Reorganisation Corporation and then proceeded to say that he would vote for the abolition of this function of the NEB. That seemed a remarkable inconsistency.

The hon. Gentleman said that more than anything else industry needed a period of stability and policy in approach, but he went on to say that he would vote for further changes in industrial policy under both the NEB and the terms and provisions of regional policy.

The hon. Gentleman made a slashing and mainly unsubstantiated attack on the public sector. Which sector of our economy has been more interfered with and more directed by the Government, particularly by his right hon. and hon. Friends, than our public sector enter-

prises? When the previous Labour Government came to office, almost all those enterprises were in deficit because of the policies of the previous Conservative Administration.

Mr. Eldon Griffiths

Should not we therefore have a smaller public sector, so that Governments do not interfere?

Dr. Cunningham

I see no logic in that, What has the size of the public sector to do with it? The size of the public sector is not relevant to this argument. At least, if it is, I fail to see how the hon. Gentleman has made the point.

My right hon. Friend the Member for Rutherglen (Mr. MacKenzie), who has experience as a Minister in the Department of Industry, and many of my colleagues have pointed out, from their experience, how industrialists in the private sector have welcomed assistance through, first, the IRC and then the National Enterprise Board, and through regional policy. Even the CBI, at its conference and elsewhere, has drawn attention to the need for greater communication with and involvement of the work force. It has said that although it wants public expenditure cuts, these should not involve expenditure that is meant to help it to develop and sustain its industrial activities.

We shall press our amendment to a vote. Although we admit—we have never said anything to the contrary—that the National Enterprise Board, exercising these powers and functions, could not, on its own, resolve all our industrial problems, the powers and functions are an important weapon for any Government. We believe that they should be sustained.

Question put, That the amendment be made:—

The House divided: Ayes 239, Noes 301.

Division No. 155]	AYES	[8.31 pm
Abse Leo	Bray, Dr Jeremy	Cohen, Stanley
Allaun, Frank	Brown, Hugh D. (Provan)	Coleman, Donald
Anderson, Donald	Brown, Robert C. (Newcastle W)	Concannon, Rt Hon J. D.
Archer, Rt Hon Peter	Brown, Ronald W. (Hackney S)	Cook, Robin F.
Armstrong, Rt Hon Ernest	Brown, Ron (Edinburgh, Leith)	Cowans, Harry
Ashley, Rt Hon Jack	Buchan, Norman	Cox, Tom (Wandsworth, Tooting)
Ashton, Joe	Callaghan, Rt Hon J. (Cardiff SE)	Craigen, J. M. (Glasgow, Maryhill)
Barnett, Guy (Greenwich)	Callaghan, Jim (Middlelon & P)	Crowther, J. S.
Barnett, Rt Hon Joel (Heywood)	Campbell, Ian	Cryer, Bob
Benn, Rt Hon Anthony Wedgwood	Campbell-Savours, Dale	Cunliffe, Lawrence
Bennett, Andrew (Stockport N)	Canavan, Dennis	Cunningham, George (Islington S)
Bidwell, Sydney	Cant, R. B.	Cunningham, Dr John (Whitehaven)
Booth, Rt Hon Albert	Carmichael, Neil	Dalyell, Tam
Boothroyd, Miss Betty	Carter-Jones, Lewis	Davidson, Arthur
Bottomley, Rt Hon Arthur (M'brough)	Clark, Dr David (South Shields)	Davies, Rt Hon Denzil (Llanelli)
Bradley, Tom	Cocks, Rt Hon Michael (Bristol S)	Davies, Ifor (Gower)
Davis, Clinton (Hackney Central)	Jones, Rt Hon Alec (Rhondda)	Race, Reg
Deakins, Eric	Jones, Barry (East Flint)	Rees, Rt Hon Merlyn (Leeds South)
Dean, Joseph (Leeds West)	Jones, Dan (Burnley)	Richardson, Jo
Dewar, Donald	Kaufman, Rt Hon Gerald	Roberts, Allan (Bootle)
Dixon, Donald	Kerr, Russell	Roberts, Ernest (Hackney North)
Dobson, Frank	Kilfedder, James A.	Roberts, Gwilym (Cannock)
Dormand, Jack	Kilroy-Silk, Robert	Robertson, George
Douglas, Dick	Lambie, David	Rodgers, Rt Hon William
Douglas-Mann, Bruce	Lamborn, Harry	Rooker, J. W.
Dubs, Alfred	Lamond, James	Ross, Ernest (Dundee West)
Duffy, A. E. P.	Leadbitter, Ted	Ross, Stephen (Isle of Wight)
Dunn, James A. (Liverpool, Kirkdale)	Leighton, Ronald	Rowlands, Ted
Dunwoody, Mrs. Gwyneth	Lestor, Miss Joan (Eton & Slough)	Ryman, John
Eadie, Alex	Lewis, Ron (Carlisle)	Sandelson, Neville
Eastham, Ken	Litherland, Robert	Sever, John
Edwards, Robert (Wolv SE)	Lofthouse, Geoffrey	Sheerman, Barry
Ellis, Raymond (NE Derbyshire)	Lyon, Alexander (York)	Sheldon, Rt Hon Robert (A'ton-u-L)
Ellis, Tom (Wrexham)	Lyons, Edward (Bradford West)	Shore, Rt Hon Peter (Step and Pop)
English, Michael	McCartney, Hugh	Short, Mrs. Renée
Ennals, Rt Hon David	McDonald, Dr Oonagh	Silkin, Rt Hon John (Deptford)
Evans, Ioan (Aberdare)	McElhone, Frank	Silkin, Rt Hon S. C. (Dulwich)
Evans, John (Newton)	McGuire, Michael (Ince)	Silverman, Julius
Ewing, Harry	McKelvey, William	Smith, Cyril (Rochdale)
Field, Frank	MacKenzie, Rt Hon Gregor	Soley, Clive
Fitt, Gerard	Maclennan, Robert	Spearing, Nigel
Flannery, Martin	McMahon, Andrew	Spriggs, Leslie
Fletcher, Ted (Darlington)	McMillan, Tom (Glasgow, Central)	Stallard, A. W.
Foot, Rt Hon Michael	McNally, Thomas	Steel, Rt Hon David
Ford, Ben	McNamara, Kevin	Stewart, Rt Hon Donald (W Isles)
Forrester, John	McWilliam, John	Stoddart, David
Foster, Derek	Magee, Bryan	Stott, Roger
Foulkes, George	Marks, Kenneth	Strang, Gavin
Freeson, Rt Hon Reginald	Marshall, David (Gl'sgow.Shettles'n)	Straw, Jack
Garrett, John (Norwich S)	Marshall, Dr Edmund (Goole)	Taylor, Mrs Ann (Bolton West)
Garrett, W. E. (Wallsend)	Marshall, Jim (Leicester South)	Thomas, Jeffrey (Abertillery)
Ginsburg, David	Martin, Michael (Gl'gow, Springb'rn)	Thomas, Mike (Newcastle East)
Golding, John	Mason, Rt Hon Roy	Thomas, Dr Roger (Carmarthen)
Gourlay, Harry	Maxton, John	Thorne, Stan (Preston South)
Graham, Ted	Maynard, Miss Joan	Tilley, John
Grant, George (Morpeth)	Meacher, Michael	Torney, Tom
Grant, John (Islington C)	Mellish, Rt Hon Robert	Varley, Rt Hon Eric G.
Hamilton, James (Bothwell)	Mikardo, Ian	Wainwright, Edwin (Dearne Valley)
Hamilton, W. W. (Central Fife)	Millan, Rt Hon Bruce	Wainwright, Richard (Colne Valley)
Hardy, Peter	Mitchell, Austin (Grimsby)	Walker, Rt Hon Harold (Doncaster)
Harrison, Rt Hon Walter	Morris, Rt Hon Alfred (Wythenshawe)	Watkins, David
Hart, Rt Hon Dame Judith	Morris, Rt Hon Charles (Openshaw)	Weetch, Ken
Hattersley, Rt Hon Roy	Morris, Rt Hon John (Aberavon)	Wellbeloved, James
Haynes, Frank	Morton, George	White, Frank R. (Bury & Radcliffe)
Healey, Rt Hon Denis	Moyle, Rt Hon Roland	White, James (Glasgow, Pollock)
Heffer, Eric S.	Mulley, Rt Hon Frederick	Whitlock, William
Hogg, Norman (E Dunbartonshire)	Newens, Stanley	Wigley, Dafydd
Holland, Stuart (L'beth, Vauxhall)	Oakes, Rt Hon Gordon	Willey, Rt Hon Frederick
Home Robertson, John	O'Halloran, Michael	Williams, Rt Hon Alan (Swansea W)
Homewood, William	O'Neill, Martin	Williams, Sir Thomas (Warrington)
Horam, John	Orme, Rt Hon Stanley	Wilson, Gordon (Dundee East)
Howells, Geraint	Owen, Rt Hon Dr David	Wilson, Rt Hon Sir Harold (Huyton)
Huckfield, Les	Palmer, Arthur	Wilson, William (Coventry SE)
Hudson Davies, Gwilym Ednyfed	Park, George	Winnick, David
Hughes, Mark (Durham)	Parker, John	Woodall, Alec
Hughes, Robert (Aberdeen North)	Parry, Robert	Woolmer, Kenneth
Hughes, Roy (Newport)	Pavitt, Laurie	Wrigglesworth, Ian
Janner, Hon Greville	Penhaligon, David
Jay, Rt Hon Douglas	Powell, Raymond (Ogmore)	TELLERS FOR THE AYES
John, Brynmor	Prescott, John	Mr. Terry Davis and
Johnston, Russell (Inverness)	Price, Christopher (Lewisham West)	Mr. James Tinn.
NOES
Adley, Robert	Bevan, David Gilroy	Brotherton, Michael
Aitken, Jonathan	Biffen, Rt Hon John	Brown, Michael (Brigg & Sc'thorpe)
Alexander, Richard	Biggs-Davison, John	Browne, John (Winchester)
Alison, Michael	Blackburn, John	Bruce-Gardyne, John
Amery, Rt Hon Julian	Blaker, Peter	Bryan, Sir Paul
Ancram, Michael	Body, Richard	Buchanan-Smith, Hon Alick
Arnold, Tom	Bonsor, Sir Nicholas	Budgen, Nick
Aspinwall, Jack	Boscawen, Hon Robert	Bulmer, Esmond
Atkins, Rt Hon H. (Spelthorne)	Bottomley, Peter (Woolwich West)	Burden, F. A.
Atkins, Robert (Preston North)	Bowden, Andrew	Butcher, John
Atkinson, David (B'mouth, East)	Boyson, Dr Rhodes	Butler, Hon Adam
Baker, Kenneth (St. Marylebone)	Bradford, Rev. R.	Cadbury, Jocelyn
Baker, Nicholas (North Dorset)	Braine, Sir Bernard	Carlisle, John (Luton West)
Bell, Sir Ronald	Bright, Graham	Carlisle, Kenneth (Lincoln)
Bendall, Vivian	Brinton, Tim	Carlisle, Rt Hon Mark (Runcorn)
Benyon, Thomas (Abingdon)	Brittan, Leon	Chalker, Mrs. Lynda
Benyon, W. (Buckingham)	Brocklebank-Fowler, Christopher	Channon, Paul
Best, Keith	Brooke, Hon Peter	Clark, Hon Alan (Plymouth, Sutton)

Clark, Sir William (Croydon South)	Jenkin, Rt Hon Patrick	Pym, Rt Hon Francis
Clarke, Kenneth (Rushcliffe)	Jessel, Toby	Raison, Timothy
Cockeram, Eric	Johnson Smith, Geoffrey	Rathbone, Tim
Colvin, Michael	Jopling, Rt Hon Michael	Rees, Peter (Dover and Deal)
Cope, John	Joseph, Rt Hon Sir Keith	Rees-Davies, W. R.
Cormack, Patrick	Kaberry, Sir Donald	Renton, Tim
Corrie, John	Kellett-Bowman, Mrs Elaine	Rhodes James, Robert
Costain, A. P.	Kershaw, Anthony	Rhys Williams, Sir Brandon
Cranborne, Viscount	Kimball, Marcus	Ridley, Hon Nicholas
Critchley, Julian	King, Rt Hon Tom	Rifkind, Malcolm
Crouch, David	Knight, Mrs Jill	Roberts, Wyn (Conway)
Dean, Paul (North Somerset)	Knox, David	Ross, Wm. (Londonderry)
Dickens, Geoffrey	Lang, Ian	Rossi, Hugh
Dorrell, Stephen	Latham, Michael	Rost, Peter
Douglas-Hamilton, Lord James	Lawrence, Ivan	Royle, Sir Anthony
Dover, Denshore	Lawson, Nigel	Sainsbury, Hon Timothy
du Cann, Rt Hon Edward	Lee, John	St. John-Stevas, Rt Hon Norman
Dunn, Robert (Dartford)	Lennox-Boyd, Hon Mark	Scott, Nicholas
Durant, Tony	Lewis, Kenneth (Rutland)	Shaw, Giles (Pudsey)
Eden, Rt Hon Sir John	Lloyd, Ian (Havant & Waterloo)	Shaw, Michael (Scarborough)
Edwards, Rt Hon N. (Pembroke)	Lloyd, Peter (Fareham)	Shelton, William (Streatham)
Eggar, Timothy	Loveridge, John	Shepherd, Colin (Hereford)
Elliott, Sir William	Luce, Richard	Shepherd, Richard(Aldridge-Br'hills)
Emery, Peter	Lyell, Nicholas	Shersby, Michael
Eyre, Reginald	McCusker, H.	Silvester, Fred
Fairbairn, Nicholas	Macfarlane, Neil	Sims, Roger
Fairgrieve, Russell	MacGregor, John	Skeet, T. H. H.
Faith, Mrs Sheila	MacKay, John (Argyll)	Smith, Dudley (War. and Leam'ton)
Farr, John	McNair-Wilson, Michael (Newbury)	Speller, Tony
Fell, Anthony	McNair-Wilson, Patrick (New Forest)	Spence, John
Fenner, Mrs Peggy	McQuarrie, Albert	Spicer, Jim (West Dorset)
Finsberg, Geoffrey	Madel, David	Spicer, Michael (S Worcestershire)
Fisher, Sir Nigel	Major, John	Sproat, Iain
Fletcher, Alexander (Edinburgh N)	Marland, Paul	Squire, Robin
Fletcher-Cooke, Charles	Marlow, Antony	Stainton, Keith
Fookes, Miss Janet	Marshall, Michael (Arundel)	Stanbrook, Ivor
Forman, Nigel	Marten, Neil (Banbury)	Stanley, John
Fowler, Rt Hon Norman	Mather, Carol	Steen, Anthony
Fox, Marcus	Mawby, Ray	Stevens, Martin
Fraser, Rt Hon H. (Stafford & St)	Mawhinney, Dr Brian	Stewart, John (East Renfrewshire)
Fraser, Peter (South Angus)	Maxwell-Hyslop, Robin	Stokes, John
Fry, Peter	Mayhew, Patrick	Stradling Thomas, J.
Galbraith, Hon T. G. D.	Mellor, David	Tapsell, Peter
Gardiner George (Reigate)	Meyer, Sir Anthony	Taylor, Robert (Croydon NW)
Gardner, Edward (South Fylde)	Miller, Hal (Bromsgrove & Redditch)	Tebbit, Norman
Garel-Jones, Tristan	Mills, Iain (Meriden)	Temple-Morris, Peter
Gilmour, Rt Hon Sir Ian	Mills, Peter (West Devon)	Thompson, Donald
Glyn, Dr Alan	Miscampbell, Norman	Thorne, Neil (Ilford South)
Goodhart, Philip	Mitchell, David (Basingstoke)	Thornton, Malcolm
Gorst, John	Moate, Roger	Townend, John (Bridlington)
Gow, Ian	Molyneaux, James	Townsend, Cyril D. (Bexleyheath)
Gower, Sir Raymond	Montgomery, Fergus	Trippier, David
Grieve, Percy	Moore, John	Trotter, Neville
Griffiths, Eldon (Bury St Edmunds)	Morgan, Geraint	van Straubenzee, W. R.
Griffiths, Peter (Portsmouth N)	Morris, Michael (Northampton, Sth)	Viggers, Peter
Grist, Ian	Morrison, Hon Peter (City of Chester)	Waddington, David
Grylls, Michael	Mudd, David	Wakeham, John
Gummer, John Selwyn	Murphy, Christopher	Waldegrave, Hon William
Hamilton, Hon Archie (Eps'm&Ew'll)	Myles, David	Walker, Rt Hon Peter (Worcester)
Hamilton, Michael (Salisbury)	Neale, Gerrard	Walker, Bill (Perth & E Perthshire)
Hampson, Dr Keith	Needham, Richard	Walker-Smith, Rt Hon Sir Derek
Hannam, John	Nelson, Anthony	Wall, Patrick
Haselhurst, Alan	Neubert, Michael	Waller, Gary
Hastings, Stephen	Newton, Tony	Walters, Dennis
Havers, Rt Hon Sir Michael	Normanton, Tom	Ward, John
Hawksley, Warren	Nott, Rt Hon John	Warren, Kenneth
Hayhoe, Barney	Osborn, John	Watson, John
Heddle, John	Page, John (Harrow, West)	Wells, John (Maidstone)
Henderson, Barry	Page, Rt Hon Sir R. Graham	Wells, Bowen (Hert'rd & Stev'nage)
Heseltine, Rt Hon Michael	Page, Richard (SW Hertfordshire)	Wheeler, John
Hicks, Robert	Parris, Matthew	Whitelaw, Rt Hon William
Higgins, Rt Hon Terence L.	Patten, Christopher (Bath)	Whitney, Raymond
Hill, James	Patten, John (Oxford)	Wickenden, Keith
Hogg, Hon Douglas (Grantham)	Pawsey, James	Wiggin, Jerry
Holland, Philip (Carlton)	Percival, Sir Ian	Williams, Delwyn (Montgomery)
Hooson, Tom	Peyton, Rt Hon John	Winterton, Nicholas
Hordern, Peter	Pink, R. Bonner	Wolfson, Mark
Howe, Rt Hon Sir Geoffrey	Pollock, Alexander	Young, Sir George (Acton)
Howell, Rt Hon David (Guildford)	Porter, George	Younger, Rt Hon George
Howell, Ralph (North Norfolk)	Powell, Rt Hon J. Enoch (S Down)
Hunt, David (Wirral)	Prentice, Rt Hon Reg	TELLERS FOR THE NOES:
Hunt, John (Ravensbourne)	Price, David (Eastleigh)	Mr. Spencer Le Marchant and
Hurd, Hon Douglas	Prior, Rt Hon James	Mr. Anthony Berry.
Irving, Charles (Cheltenham)	Proctor, K. Harvey

Question accordingly negatived.

Amendment proposed: No. 4, in page 1, line 14, at end insert— '(g) ensuring that, where an individual manufacturing plant is scheduled for closure or for change of use from manufacturing purposes, such plant should be offered for sale, to any buyer who is able to satisfy the Board

of his intention and ability to continue the existing purposes.'—[Mr. John Silkin.]

Question put, That the amendment be made:—

The House divided: Ayes 241, Noes 295.

Division No. 156]	AYES	[8.44 p.m.
Abse, Leo	Flannery, Martin	Marshall, Jim (Leicester South)
Allaun, Frank	Fletcher, Ted (Darlington)	Martin, Michael (Gl'gow, Springb'rn)
Anderson, Donald	Foot, Rt Hon Michael	Mason, Rt Hon Roy
Archer, Rt Hon Peter	Ford, Ben	Maxton, John
Armstrong, Rt Hon Ernest	Forrester, John	Maynard, Miss Joan
Ashley, Rt Hon Jack	Foster, Derek	Meacher, Michael
Ashton, Joe	Foulkes, George	Mellish, Rt Hon Robert
Barnett, Guy (Greenwich)	Freeson, Rt Hon Reginald	Mikardo, Ian
Barnett, Rt Hon Joel (Heywood)	Garrett, John (Norwich S)	Millan, Rt Hon Bruce
Benn, Rt Hon Anthony Wedgwood	Garrett, W. E. (Wallsend)	Mitchell, Austin (Grimsby)
Bennett, Andrew (Stockport N)	Ginsburg, David	Morris, Rt Hon Alfred (Wythenshawe)
Bidwell, Sydney	Golding, John	Morris, Rt Hon Charles (Openshaw)
Booth, Rt Hon Albert	Gourlay, Harry	Morris, Rt Hon John (Aberavon)
Boothroyd, Miss Betty	Graham, Ted	Morton, George
Bradley, Tom	Grant, George (Morpeth)	Moyle, Rt Hon Roland
Bray, Dr Jeremy	Grant, John (Islington C)	Mulley, Rt Hon Frederick
Brown, Hugh D. (Provan)	Hamilton, James (Bothwell)	Newens, Stanley
Brown, Robert C. (Newcastle W)	Hamilton, W. W. (Central Fife)	Oakes, Rt Hon Gordon
Brown, Ronald W. (Hackney S)	Hardy, Peter	O'Halloran, Michael
Brown, Ron (Edinburgh, Leith)	Harrison, Rt Hon Waller	O'Neill, Martin
Buchan, Norman	Hart, Rt Hon Dame Judith	Orme, Rt Hon Stanley
Callaghan, Rt Hon J. (Cardiff SE)	Hattersley, Rt Hon Roy	Owen, Rt Hon Dr David
Callaghan, Jim (Middleton & P)	Haynes, Frank	Palmer, Arthur
Campbell, Ian	Healey, Rt Hon Denis	Park, George
Campbell-Savours, Dale	Heffer, Eric S.	Parker, John
Canavan, Dennis	Hogg, Norman (E Dunbartonshire)	Parry, Robert
Cant, R. B.	Holland, Stuart (L'beth, Vauxhall)	Pavitt, Laurie
Carmichael, Neil	Home Robertson, John	Penhaligon, David
Carter-Jones, Lewis	Homewood, William	Powell, Raymond (Ogmore)
Clark, Dr David (South Shields)	Horam, John	Prescott, John
Cocks, Rt Hon Michael (Bristol S)	Howells, Geraint	Price, Christopher (Lewisham West)
Cohen, Stanley	Huckfield, Les	Race, Reg
Coleman, Donald	Hudson Davies, Gwilym Ednyfed	Rees, Rt Hon Merlyn (Leeds South)
Concannon, Rt Hon J. D.	Hughes, Mark (Durham)	Richardson, Jo
Cook, Robin F.	Hughes, Robert (Aberdeen North)	Roberts, Allan (Bootle)
Cowans, Harry	Hughes, Roy (Newport)	Roberts, Ernest (Hackney North)
Cox, Tom (Wandsworth, Tooting)	Janner, Hon Greville	Roberts, Gwilym (Cannock)
Craigen, J. M. (Glasgow, Maryhill)	Jay, Rt Hon Douglas	Robertson, George
Crowther, J. S.	John, Brynmor	Rodgers, Rt Hon William
Cryer, Bob	Johnston, Russell (Inverness)	Rooker, J. W.
Cunliffe, Lawrence	Jones, Rt Hon Alec (Rhondda)	Ross, Ernest (Dundee West)
Cunningham, George (Islington S)	Jones, Barry (East Flint)	Ross, Stephen (Isle of Wight)
Cunningham, Dr John (Whitehaven)	Jones, Dan (Burnley)	Rose, Wm. (Londonderry)
Dalyell, Tam	Kaufman, Rt Hon Gerald	Rowlands, Ted
Davidson, Arthur	Kerr, Russell	Ryman, John
Davies, Rt Hon Denzil (Llanelli)	Kilfedder, James A.	Sandelson, Neville
Davies, Ifor (Gower)	Kilroy-Silk, Robert	Sever, John
Davis, Clinton (Hackney Central)	Lambie, David	Sheerman, Barry
Davis, Terry (B'rm'ham, Stechford)	Lamborn, Harry	Sheldon, Rt Hon Robert (A'ton-u-L)
Deakins, Eric	Lamond, James	Shore, Rt Hon Peter (Step and Pop)
Dempsey, James	Leadbitter, Ted	Short, Mrs. Renée
Dewar, Donald	Leighton, Ronald	Silkin, Rt Hon John (Deptford)
Dixon, Donald	Lestor, Miss Joan (Eton & Slough)	Silkin, Rt Hon S. C. (Dulwich)
Dobson, Frank	Lewis, Ron (Carlisle)	Silverman, Julius
Dormand, Jack	Litherland, Robert	Smith, Cyril (Rochdale)
Douglas, Dick	Lofthouse, Geoffrey	Soley, Clive
Douglas-Mann, Bruce	Lyon, Alexander (York)	Spearing, Nigel
Dubs, Alfred	Lyons, Edward (Bradford West)	Spriggs, Leslie
Duffy, A. E. P.	McDonald, Dr Oonagh	Stallard, A. W.
Dunn, James A. (Liverpool, Kirkdale)	McElhone, Frank	Steel, Rt Hon David
Dunwoody, Mrs. Gwyneth	McGuire, Michael (Ince)	Stewart, Rt Hon Donald (W Isles)
Eadie, Alex	McKelvey, William	Stoddart, David
Eastham, Ken	MacKenzie, Rt Hon Gregor	Stott, Roger
Edwards, Robert (Wolv SE)	Maclennan, Robert	Strang, Gavin
Ellis, Raymond (NE Derbyshire)	McMahon, Andrew	Straw, Jack
Ellis, Tom (Wrexham)	McMillan, Tom (Glasgow, Central)	Taylor, Mrs Ann (Bolton West)
English, Michael	McNally, Thomas	Thomas, Jeffrey (Abertillery)
Ennals, Rt Hon David	McNamara, Kevin	Thomas, Mike (Newcastle East)
Evans, Ioan (Aberdare)	McWilliam, John	Thomas, Dr Roger (Carmarthen)
Evans, John (Newton)	Magee, Bryan	Thorne, Stan (Preston South)
Ewing, Harry	Marks, Kenneth	Tilley, John
Field, Frank	Marshall, David (Gl'sgow,Shettles'n)	Tinn, James
Fitt, Gerard	Marshall, Dr Edmund (Goole)	Torney, Tom
Varley, Rt Hon Eric G.	White, James (Glasgow, Pollock)	Winnick, David
Wainwright, Edwin (Dearne Valley)	Whitlock, William	Woodall, Alec
Wainwright, Richard (Colne Valley)	Wigley, Dafydd	Woolmer, Kenneth
Walker, Rt Hon Harold (Doncaster)	Willey, Rt Hon Frederick	Wrigglesworth, Ian
Watkins, David	Williams, Rt Hon Alan (Swansea W)
Weetch, Ken	Williams, Sir Thomas (Warrington)	TELLERS FOR THE AYES
Wellbeloved, James	Wilson, Gordon (Dundee East)	Mr. Hugh McCartney and Mr. Joseph Dean.
Welsh, Michael	Wilson, Rt Hon Sir Harold (Huyton)
White, Frank R. (Bury & Radcliffe)	Wilson William (Coventry SE)
NOES
Aitken, Jonathan	Elliott, Sir William	Lang, Ian
Alexander, Richard	Emery, Peter	Latham, Michael
Alison, Michael	Eyre, Reginald	Lawrence, Ivan
Amery, Rt Hon Julian	Fairbairn, Nicholas	Lawson, Nigel
Ancram, Michael	Fairgrieve, Russell	Lee, John
Arnold, Tom	Faith, Mrs Sheila	Lennox-Boyd, Hon Mark
Aspinwall, Jack	Farr, John	Lewis, Kenneth (Rutland)
Atkins, Rt Hon H. (Spelthorne)	Fell, Anthony	Lloyd, Ian (Havant & Waterloo)
Atkins, Robert (Preston North)	Fenner, Mrs Peggy	Lloyd, Peter (Fareham)
Atkinson, David (B'mouth, East)	Finsberg, Geoffrey	Loveridge, John
Baker, Kenneth (St. Marylebone)	Fisher, Sir Nigel	Luce, Richard
Baker, Nicholas (North Dorset)	Fletcher, Alexander (Edinburgh N)	Lyell, Nicholas
Bell, Sir Ronald	Fletcher-Cooke, Charles	McCusker, H.
Bendall, Vivian	Fookes, Miss Janet	Macfarlane, Neil
Benyon, W. (Buckingham)	Forman, Nigel	MacGregor, John
Best, Keith	Fowler, Rt Hon Norman	MacKay, John (Argyll)
Bevan, David Gilroy	Fox, Marcus	McNair-Wilson, Michael (Newbury)
Biffen, Rt Hon John	Fraser, Rt Hon H. (Stafford & St)	McNair-Wilson, Patrick (New Forest)
Biggs-Davison, John	Fraser, Peter (South Angus)	McQuarrie, Albert
Blackburn, John	Fry, Peter	Madel, David
Blaker, Peter	Galbraith, Hon T. G. D.	Major, John
Body, Richard	Gardiner, George (Reigate)	Marland, Paul
Bonsor, Sir Nicholas	Gardner, Edward (South Fylde)	Marlow, Tony
Boscawen, Hon Robert	Garel-Jones, Tristan	Marshall, Michael (Arundel)
Bowden, Andrew	Gilmour, Rt Hon Sir Ian	Marten, Neil (Banbury)
Boyson, Dr Rhodes	Glyn, Dr Alan	Mather, Carol
Bradford, Rev. R.	Goodhart, Philip	Mawby, Ray
Braine, Sir Bernard	Gorst, John	Mawhinney, Dr Brian
Bright, Graham	Gow, Ian	Maxwell-Hyslop, Robin
Brinton, Tim	Gower, Sir Raymond	Mayhew, Patrick
Brittan, Leon	Grieve, Percy	Mellor, David
Brocklebank-Fowler, Christopher	Griffiths, Peter (Portsmouth N)	Meyer, Sir Anthony
Brooke, Hon Peter	Grist, Ian	Miller, Hal (Bromsgrove & Redditch)
Brotherton, Michael	Grylls, Michael	Mills, Iain (Meriden)
Brown, Michael (Brigg & Sc'thorpe)	Gummer, John Selwyn	Miscampbell, Norman
Browne, John (Winchester)	Hamilton, Hon Archie (Eps'm&Ew'll)	Mitchell, David (Basingstoke)
Bruce-Gardyne, John	Hamilton, Michael (Salisbury)	Moate, Roger
Bryan, Sir Paul	Hampson, Dr Keith	Molyneaux, James
Buchanan-Smith, Hon Alick	Hannam, John	Montgomery, Fergus
Budgen, Nick	Haselhurst, Alan	Moore, John
Bulmer, Esmond	Hastings, Stephen	Morgan, Geraint
Burden, F. A.	Havers, Rt Hon Sir Michael	Morris, Michael (Northampton, Sth)
Butcher, John	Hawksley, Warren	Morrison, Hon Peter (City of Chester)
Butler, Hon Adam	Hayhoe, Barney	Mudd, David
Cadbury, Jocelyn	Heddle, John	Murphy, Christopher
Carlisle, John (Luton West)	Henderson, Barry	Myles, David
Carlisle, Kenneth (Lincoln)	Heseltine, Rt Hon Michael	Neale, Gerrard
Carlisle, Rt Hon Mark (Runcorn)	Hicks, Robert	Needham, Richard
Chalker, Mrs. Lynda	Higgins, Rt Hon Terence L.	Nelson, Anthony
Channon, Paul	Hill, James	Neubert, Michael
Clark, Hon Alan (Plymouth, Sutton)	Hogg, Hon Douglas (Grantham)	Newton, Tony
Clark, Sir William (Croydon South)	Holland, Philip (Carlton)	Normanton, Tom
Clarke, Kenneth (Rushcliffe)	Hooson, Tom	Nott, Rt Hon John
Cockeram, Eric	Hordern, Peter	Osborn, John
Colvin, Michael	Howe, Rt Hon Sir Geoffrey	Page, John (Harrow, West)
Cope, John	Howell, Rt Hon David (Guildford)	Page, Rt Hon Sir R. Graham
Cormack, Patrick	Howell, Ralph (North Norfolk)	Page, Richard (SW Hertfordshire)
Corrie, John	Hunt, David (Wirral)	Parris, Matthew
Costain, A. P.	Hunt, John (Ravensbourne)	Patten, Christopher (Bath)
Cranborne, Viscount	Hurd, Hon Douglas	Patten, John (Oxford)
Critchley, Julian	Irving, Charles (Cheltenham)	Pawsey, James
Crouch, David	Jenkin, Rt Hon Patrick	Percival, Sir Ian
Dean, Paul (North Somerset)	Jessel, Toby	Peyton, Rt Hon John
Dickens, Geoffrey	Johnson Smith, Geoffrey	Pink, R. Bonner
Dorrell, Stephen	Jopling, Rt Hon Michael	Pollock, Alexander
Douglas-Hamilton, Lord James	Joseph, Rt Hon Sir Keith	Porter, George
Dover, Denshore	Kaberry, Sir Donald	Powell, Rt Hon J. Enoch (S Down)
du Cann, Rt Hon Edward	Kellett-Bowman, Mrs Elaine	Prentice, Rt Hon Reg
Dunn, Robert (Dartford)	Kershaw, Anthony	Price, David (Eastleigh)
Durant, Tony	Kimball, Marcus	Prior, Rt Hon James
Eden, Rt Hon Sir John	King, Rt Hon Tom	Proctor, K. Harvey
Edwards, Rt Hon N. (Pembroke)	Knight, Mrs Jill	Pym, Rt Hon Francis
Eggar, Timothy	Knox, David	Raison, Timothy

Rathbone, Tim	Spicer, Jim (West Dorset)	Waldegrave, Hon William
Rees, Peter (Dover and Deal)	Spicer, Michael (S Worcestershire)	Walker, Rt Hon Peter (Worcester)
Rees-Davies, W. R.	Sproat, Iain	Walker, Bill (Perth & E Perthshire)
Renton, Tim	Squire, Robin	Walker-Smith, Rt Hon Sir Derek
Rhodes James, Robert	Stainton, Keith	Wall, Patrick
Rhys Williams, Sir Brandon	Stanbrook, Ivor	Waller, Gary
Ridley, Hon Nicholas	Stanley, John	Walters, Dennis
Rifkind, Malcolm	Steen, Anthony	Ward, John
Roberts, Wyn (Conway)	Stevens, Martin	Warren, Kenneth
Rossi, Hugh	Stewart, John (East Renfrewshire)	Watson, John
Rost, Peter	Stokes, John	Wells, John (Maidstone)
Royle, Sir Anthony	Stradling Thomas, J.	Wells, Bowen (Hert'rd & Stev'nage)
Sainsbury, Hon Timothy	Tapsell, Peter	Wheeler, John
St. John-Stevas, Rt Hon Norman	Taylor, Robert (Croydon NW)	Whitelaw, Rt Hon William
Scott, Nicholas	Tebbit, Norman	Whitney, Raymond
Shaw, Giles (Pudsey)	Temple-Morris, Peter	Wickenden, Keith
Shaw, Michael (Scarborough)	Thompson, Donald	Wiggin, Jerry
Shelton, William (Streatham)	Thorne, Nell (Ilford South)	Williams, Delwyn (Montgomery)
Shepherd, Colin (Hereford)	Thornton, Malcolm	Winterton, Nicholas
Shepherd, Richard (Aldridge-Br'hills)	Townend, John (Bridlington)	Wolfson, Mark
Shersby, Michael	Townsend, Cyril D. (Bexleyheath)	Young, Sir George (Acton)
Silvester, Fred	Trippier, David	Younger, Rt Hon George
Sims, Roger	Trotter, Neville
Skeet, T. H. H.	van Straubenzee, W. R.	TELLERS FOR THE NOES:
Smith, Dudley (War. and Leam'ton)	Viggers, Peter	Mr. Spencer Le Marchant and Mr. Anthony Berry.
Speller, Tony	Waddington, David
Spence, John	Wakeham, John

Question accordingly negatived.

Amendments made: No. 6, in page 2, line 22, leave out 'and'.

No. 7, in page 2, line 25, at end insert: 'and (d) in subsection (11) the words from "in connection" to "above" shall cease to have effect.'.—[Mr. Alexander Fletcher.]