Commons Sitting of 11 July 1980

Preamble
The House met at half-past Nine o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRAYERS

  INFORMATION TECHNOLOGY
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Le Marchant.]
  9.36 am
  The Under-Secretary of State for Industry (Mr. Michael Marshall): It is good to see you in your place this morning, Mr. Speaker, after a long and hard week.
  The House has the opportunity today to debate a subject that is frequently mentioned but that we do not often have the opportunity to discuss in detail. We must recognise immediately that the interest that a number of hon. Members on both sides of the House have taken in this subject is long-standing. If I single out my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd) it is because he, in his all-party role, has been especially active. My hon. Friend the Member for St. Marylebone (Mr. Baker), in a notable speech last month, touched on a national strategy for information technology. In many ways he gave us a useful check list, to which I hope to return during the course of the debate. If I have the leave of the House, I hope to reply briefly at the end of the debate.
  The Government would enter one immediate caveat. We must try to consider these matters in a careful and, indeed, international way. We must try to look at the world scene. I hope that we shall avoid the temptation to wander down the bottomless-purse lane. We must consider Britain's interest in these areas not only in terms of international comparisons but in relation to our existing activities and to the wider restraints within the economy at the present time. As far as possible, comparisons must take national circumstances fully into account.
  916
  The debate provides the House with an opportunity to consider a subject that will play an increasingly important part in all our lives. It might be as well to define what we mean by information technology. That terminology is aimed to embrace hardware that is used to capture, store, process, transmit and display information, where those activities are heavily dependent on the use of microelectronics. It is also used to define systems where techniques of information handling are applied to certain problems.
  Although the term "information technology" is relatively new, major elements have been with us for a long time. Britain has not been backward in producing many of the ingredients. We have had the computer for 30 years, the integrated circuit for more than 20 years, and others such as the communications elements, telephones, radio, and cable link for a great deal longer. Those sectors have been traditionally impressive as creators of new jobs and new industries with above-average growth and profitability.
  We are now seeing that new technology pervade the market place as a result of several interdependent trends. They include the combination of miniaturisation and mass production techniques, and circuits of great complexity and versatility, which can be produced in high volumes at low unit costs. That combination in information handling means that widespread application of micro-circuits is both technically feasible and economically justifiable.
  New equipment is not only a natural progression from equipment already in use; it is a step-by-step change to dramatically new concepts. That brings with it not only a growth of opportunity and a need for continual updating but problems that we should face squarely in the debate today, as well as considering the opportunities. Nevertheless, engineering of complete systems is the key to successful information industries.
  Systems engineering welds together specific technologies in computing, telecommunications, data storage and information display to form marketable products. This requires close co-ordination of many specialist skills, and it is important to stress that this is an area in which the United Kingdom already

  917
  excels. It excels in project leadership, design testing, electronics, software design and programming. I suppose that such skills have been particularly evident in the software programmes—which are tailor-made to the almost unlimited versatility of the chip to perform specific functions—and, through electro-mechanical devices, the sensors and limbs of the microprocessor.
  Systems engineering and the microelectronic industry have developed together. Again, that presents problems as well as opportunities. On the one hand there is the problem of pervasiveness and, on the other, the opportunity for convergence. As communications engineers increasingly adopt techniques and technologies, so communications costs fall in real terms.
  But what about pervasiveness? How will information technology affect our lives? Technical convergence of computers and telecommunications makes information available rapidly and cheaply over long distances, and the international dimension of information technology is of critical importance. Certainly this technology will increasingly have an impact on the habits and behaviour of most individuals and organisations, such as their methods of selecting what they buy and the means of paying for it, and of entertaining and educating themselves. Responses will change structures and forms of competition for industries principally affected. Those most affected will include the information handling industries, such as banking, financial services, travel agents, printing, publishing and education.
  By changing the terms of competition, technology may also encourage new sources of competition from unforeseen quarters. Once familiar with the technology's capabilities, individuals and companies will learn to expect, and demand, higher standards of speed, choice and presentation from all organisations, whether in the public or the private sector. Such pressures are already felt by manufacturing industries. All markets require information to function at all. Improved information technology could enable them all to function better.
  What is the role of the Government in all this? Of course, this is a rapidly changing area, and while it is, perhaps,
  918
  the first reaction always to turn to the Government for help—I have already warned of the dangers of a bottomless-purse approach—the fact is that the Government have a major role to play, both as customer and co-ordinator. Such activities must be seen as part of the wider economic objectives. Without reiterating them at great length, I am sure that the House is familiar with the Government's determination to give top priority to the avoidance of unnecessary changes in fiscal and economic policy, and of our view that the overriding need is to create financial stability and a climate that is favourable to enterprise and growth.
  We are, of course, clear that firm monetary policy and cuts in public expenditure have been designed to secure a progressive reduction in inflation. A start has also been made on switching the burden from direct to indirect taxation and reducing excessive rates of income tax in order to improve rewards and incentives. All those features, especially the last, are particularly relevant to the subject that we are discussing today.
  During this transition period—I recognise that it is a transition period of which we speak—the question relates to what the Government are doing in a direct sense. Following the review last year, the Government continue to encourage important equipment sectors in a number of ways. For example, support for microelectronics is currently running at £55 million under the microelectronics industry support scheme. A similar sum is available to promote awareness and encouragement of the faster rate of microelectronics in manufacturing under the microprocessor applications projects scheme. Support is also available under the Science and Technology Act to encourage research and development, and for hardware developments through the product and process development scheme. In addition, the software sector has benefited from having its own scheme to encourage product development through the software product scheme. There is the involvement of the research requirements boards, which are also relevant. There is also the continued work of the National Enterprise Board in the process of what my right hon. Friend described last year is the business of educating the market place.

  919
  It is often said that Government support for information technology is a very strong feature among our major competitors. For example, much has been said about the French Telematique proposals for co-ordinating initiatives in this sphere. We must look at those initiatives with a somewhat critical eye, if only to beware of blinding ourselves with the science of others. But the fact is that one must recognise that the French were coming from a relatively low base, and it will be interesting to see the degree to which they are able to achieve their projects in terms of time and target and price.
  The United States is the clearest example of where information technology industries have grown a great deal from the impact of defence projects. Japan, with considerable wealth at its disposal, has certainly recognised the importance of this subject. But let us not forget that this country already has a number of market leaders. It is important to look at some of our own national strengths when discussing this matter. In projects such as Prestel, Teletext, fibre-optics and the new generation of telephone exchanges, we have a number of leaders in the world scene. At Telecom 79 in Geneva last year, I was privileged to see the way in which System X is now being developed by BTS, a joint co-operative venture between the Post Office and leading British manufacturers. It was extremely impressive, because all the PTT Ministers throughout the world were literally flocking to see it. There is no doubt that that is one of the most important opportunities that we have at present.
  We must build on the lead in those projects and see how they fit in the wider context. This is where the Government can assist, by ensuring that the correct infrastructure exists for the development of information technology. Communications are crucial, and the Post Office, as well as British manufacturers, will have a pivotal role.
  The House will know that the Government have been reviewing the Post Office monopoly, and we expect to bring forward proposals very soon. We anticipate that they will allow, and encourage, many new opportunities for United Kingdom manufacturers. However, the Post Office must provide the core tele
  920
  communications network, and we look to it to open the way to new applications of technology through its relationship with its suppliers and in providing a demanding and innovative market for some key products. The Post Office has, at Martlesham, an R and D centre of undoubted excellence. As I have said, the modernisation of the telecommunications network using the digital technology of System X is under way. After all, the investment programme of the Post Office of £1·5 billion is by no means insubstantial.
  The role of the public sector in purchasing is also critical. The purchase of equipment should be seen as part of vital support for British industry, and the Government are determined to see that British industry benefits from enlightened public purchasing wherever possible.
  There is then the question of the role of the Government as user. There are obviously opportunities for the Government to be involved, in their own administrative machinery, in looking to the electronic office—the office of the future. The same is true of our role overseas. As many of my hon. Friends will have noted, Prestel is now in operation in our embassy in Paris. That is the kind of development which one would like to see spread.
  I should like to touch on one area which perhaps has not received the attention that it might have, and which is relevant to this whole subject. That is the related question of space and satellite applications. In his speech last month about information technology, my hon. Friend the Member for St. Marylebone listed that as one of the key points for action, and I agree with him.
  On this question I should like especially to respond to the point that my hon. Friend raised then, when he spoke of the need to create a more concentrated national space and satellite programme. He was right to make this reference to space applications, which must figure in any discussion of information technology.
  Clearly, the nature and capability of the communications network is paramount in the development and utilisation of the sophisticated systems that we have in mind here today. Not only will satellites be an increasingly important

  921
  dimension in the telecommunications networks of the world; they have a special contribution to make to telecommunications in a wider sense. Already we can see that satellites are making a major impact on business systems in the United States. A newly formed company in that country will be launching its first satellite, dedicated to business systems, later this year.
  Inevitably, once new markets of this sort are initiated and the benefits more widely perceived, interest grows, and with it business opportunities. There is clear evidence that interest is stirring in this country. It is obviously, therefore, an area of industrial activity that we cannot afford to ignore. Our own industry, which is concerned with both the satellite and ground sectors, believes that significant markets will emerge in the near future for the requirements of large and international businesses.
  Successive Administrations since 1972 have provided significant support, largely through international programmes, to help build up the United Kingdom industry with a capability to compete for this business. Currently, we are spending about £37 million a year in my Department on space activities. The bulk of his funding is devoted to collaborative international projects undertaken through the European Space Agency, and the main thrust of our current policy has been to direct our efforts towards telecommunications satellites.
  This work within the European Space Agency raises two points to which perhaps insufficient attention is paid, certainly by those who write and cover these matters in the press and the media. I suggest to the House that the European Space Agency has been a good example of the way in which European collaboration can work in practice in an industrial context. The opportunity to share the substantial research and development cost of space development has enabled us to match in many ways work that otherwise is perhaps excelled only in the United States.
  In terms of the impact on ordinary lives, it is true to say that many people who look at the television weather satellite picture when they turn on the tele
  922
  vision for the weather forecast are perhaps not always fully aware of the work that has gone on in the meteorological satellite field and that is still going on in earth sensing, in ship-to-ship, ship-to-shore, and now in the telecommunications satellite field within the European Space Agency, in which we play a leading part.
  It is not perhaps fully recognised that Britain has a number of pre-eminent skills in the area of satellite construction. Indeed, as I am reminded, we are world leaders. It is not just a question that arises within the European Space Agency, for on the pallet construction for the space laboratory on the NASA shuttle, British Aerospace and British equipment manufacturers will be represented and present in a physical sense.
  In terms of the future development of the whole space scene, the way in which the earth stations—where much of the hardware business is to be obtained—are developed will turn not just on the ability of United Kingdom manufacturers but on the operating experience of Cable and Wireless, which is again a world leader.
  There are areas of British excellence from which we can draw not just comfort but hope for the future, and we do well to talk about these matters from time to time. Apart from my own Department's interest in this matter, the Science Research Council spends about £13 million a year on scientific research in space. I have had an opportunity this week—as I am sure other hon. Members have—to see some of the work in the Rutherford laboratories. Some outstanding work is taking place. In addition, the Ministry of Defence, through its requirements, can contribute substantially to our industrial base in this area.
  There is also the immensely exciting possibility—which will certainly have an impact on the lives of everyone with expansion of the number of television stations that can be received—that will come to every viewer in this country within a very short space of time once direct satellite broadcasting becomes an accepted fact. The House is aware, therefore, of the importance of the major study currently being undertaken by the Home Office.

  923
  Satellites and their applications have attracted a good deal of support, and some now offer potential for exploitation both nationally and internationally. We have to remember that there must be some international regulation and control for the purpose of dealing with telecommunications, the use of frequencies for particular purposes, and so on, but on the domestic scene I recognise that Government policy also has a profound effect on what it is possible for industry to do. The way in which the Government's own activities on space are organised is extremely important.
  It is with all these considerations and the growing consideration of satellite applications in mind that I am glad to tell the House that the Government have now asked the Central Policy Review Staff to undertake a general survey of space activities in the United Kingdom. It is intended that this survey should look at the way in which the various departmental interests are co-ordinated. We also wish to examine the national and international opportunities that exist and the policies that we should formulate to give British industry the maximum opportunity to exploit them.
  The development of information technology is not, of course, dependent on the use of satellite systems, but in my view it will not develop its full potenttial without them. I am sure that many of my hon. Friends and Opposition Members are aware of what many of our competitors are already doing or planning to do in satellite broadcasting and communications. We must maintain our presence in this area of activity, which, unlike others that we often discuss in the House, is exciting and promising.
  On the wider front of information technology in general we look forward to the report by the Advisory Council on Applied Research and Development on information technology. My Department has, of course, been very much involved in co-operating in the preparation of that report, and we hope that ACARD will provide an independent analysis that will be helpful to the House and to the country.
  It may be that within Whitehall we should examine the widespread responsibilities for many aspects of information technology, ranging as they do from equipment supply through the legal
  924
  framework to manpower and education needs. I have heard calls—I think I heard one just now—for a Minister of Information Technology, and we need to consider suggestions such as that. But I can say that we are currently considering reorganising the working arrangements in my Department in this area.
  The Government are fully aware of the implications for this country of the impact of information technology. Overall, our aim is to ensure that market mechanisms operate effectively to encourage the United Kingdom information industries to be both innovative at home and competitive abroad.
  I have not been able to mention all aspects of information technology. Indeed, I particularly want to take the opportunity later, if I am given the leave of the House, to respond to points of particular interest to all hon. Members. I am glad that we have the chance to debate the matter today and I shall look forward to hearing contributions from each side of the House.
  9.58 am
  Mr. John Silkin: Some weeks ago the House debated the Finniston report arising from the committee of inquiry into the engineering industry. In a sense the debate today follows a similar pattern, in that both the Finniston report and information technology are about what British industry should be some years from now. Although the current cut and thrust between the parties on the industrial position, the industrial policies, of the country—the sort of debate that we had yesterday—is of much more immediate importance, the fact remains that by concentrating on the immediate issues we can forget that it is the future of our country, the future of British industry, that we are really discussing.
  When we discussed the Finniston report, several hon. Members—including myself—commented on the negative presence of the press. I suspect that we shall find ourselves talking to one another, to the industry and to technical persons, but not to the general public. I deplore that and I am sure that the Minister does as well. With his usual ability and workmanlike presentation the Minister rightly told us about the importance of information technology. He gave us a clear

  925
  view of what he and his Department considered essential. I am sure that the House will agree on the importance of the issue. We may find a greater degree of difference about what should be done. Bravely and intelligently, the Minister raised the question of the role of the Government. However, I shall seek to show that, having raised it, he put it down again.
  Last week I saw an excellent television programme which compared the advent of air travel in our generation to the advent of railway travel in the early part of the nineteenth century. The coming of the railway brought people together from great distances. The thrust of the programme was that air travel was doing the same thing today. It is having that effect on the carriage of goods and people, and it is shrinking the world. However, I cannot help thinking that the real comparison in our time should be between the railway of the nineteenth century and information technology today.
  I hope that the House will be indulgent, as I am one of the few non-technicians in the Chamber. When I tried to clear my mind about the issues involved, it helped to carry that railway analogy further. Information can be regarded in the same way as one considers a train. Computers are analogous to railway stations, the telecommunications network is analogous to the railway track and microelectronics is analogous to the electric power that feeds the railway system. That analogy enables me to keep in mind the essential point, namely, that information technology is as vital to the new industrial revolution as railways were to the first Industrial Revolution.
  I shall keep that analogy going for a little longer. Analogies tend to get boring if they are used throughout a speech. One begins to argue about the analogy rather than about the issue. The number of stations should be greatly increased. We need more stations in more places. We need them in homes. The Under-Secretary referred to Prestel. We also need them in offices, in the form of word processors. We need them in factories, in the form of robotics, for production and stock control. They are also needed in shops.
  We need an extended and upgraded track. We need more subscribers. I
  926
  was glad that the Under-Secretary spoke about the development of System X, which is vital. I am also glad that he spoke about optical fibres, as they play an enormous part. There should be a vast extension of electrification, or of microelectronics. We can then begin to make the future work.
  However, Britain needs more than that. We need more and better British-made stations—the analogy to stations being computers and office equipment. We need more and better tracks. In other words, we need an improved telecommunications network. Our industry must extend the availability of electrification. In other words, we must build up the capacity of microelectronics.
  I noted carefully what the Minister said about the role of the Government. He believed that there was a role for the Government. I had a slight feeling that he may have thought that the Government could play a bigger role than his departmental position would allow him to say. However, he put in the qualification which any Minister in a Conservative Government feels bound to mention, in case we thought that he was going too far. He spoke about avoiding unnecessary change to fiscal and economic policies. However, it is precisely those policies that are involved.
  Perhaps I might finalise the railway analogy. I suspect that the Government's policy will lead to another Beeching. In a sense, they are cutting the number of United Kingdom stations. Yesterday my right hon. Friend the Member for Leeds, East (Mr. Healey), the hon. Member for Southampton, Test (Mr. Hill) and I asked the Secretary of State for Industry about the future of International Computers Limited. We received no reply. One may argue that we receive no reply to many of our points, but I should have thought that a request that was made by both Conservative and Labour Members would be answered. Perhaps the Under-Secretary will consider that point when he replies to the debate.
  Mr. James Hill: Perhaps the right hon. Gentleman will re-emphasise his argument by stating that it is not just an order but that it is of national importance. Twelve regional centres are being planned by the Inland

  927
  Revenue for PAYE. That will involve 20,000 visual display terminals.
  Mr. Silkin: I am not sure whether the hon. Gentleman is supporting me, or whether I am supporting him. However, we are at least supporting each other on the issue, and we are both supporting ICL.
  Mr. Hill: I am supporting "Buy British".
  Mr. Silkin: I accept that, but perhaps I can turn the name "Beeching" into a verb. It has been done before. Another "Beech" is being done on the National Enterprise Board. The Under-Secretary seemed to wear a badge of pride when he said that the NEB was continuing. That is true. He reminded us that his right hon. Friend the Secretary of State had spoken of one of its remaining functions as being that of the adult educator of the market place. The right hon. Gentleman also said that it would preserve its catalytic functions. Those functions apply to companies such as NEXOS. I was sorry that the Under-Secretary did not mention that. Perhaps he will return to it later. The reduction of the NEB's finance and control will inevitably have an effect. I fear that we may end up by handing over a supply of terminal equipment to foreign multinationals. I believe in a British industry and in British skills. I hone that all hon. Members will agree that we want those skills to remain in Britain, for the benefit and enjoyment of generations to come.
  To continue my analogy with the Beeching programme, there is no doubt that it is the Government's firm policy to delay what might be called track improvements. For example, the tight cash limits are already delaying the modernisation of the telecommunications system.
  Finally—and the House will be delighted to hear that I have almost finished with this analogy—when it comes to the question of electrification, we have the apparent delay which may mean the abandonment of the Inmos project, yet this is the best system that we have of developing electrification in the microelectronics field.
  What should we do? First, we should use the power of the public to purchase on the largest possible scale. Here I return to ICL. I am not a technician, and I have not the knowledge that is necessary to
  928
  put the case as well as I should like to put it. We have touched strongly on the implications of what would happen if we could direct procurement by the Inland Revenue. If free market forces are allowed to have full play—and I suspect that this is at the back of the Government's mind—the tender for this vast project will be open to all potential suppliers, and foreign-owned companies, which are anxious to dominate the United Kingdom market—as they do most others—may adjust their bids to achieve an order of unusual significance.
  If we could keep that order, the work would be carried out in the United Kingdom and this would stimulate United Kingdom skills and development. Above all else, the national economy would benefit. It would benefit from the savings of using our own supplies, and it would benefit from increased export earnings by United Kingdom companies.
  If we were to use this purchasing power we could see advantages in other areas as well. I take as an example office machinery and equipment. The office machinery sector working party this year made the following recommendations:
  "Local authorities, nationalised industries and other large corporations in which Government have a stake should be encouraged by Government to provide an extended market launch pad for products in certain definable circumstances. Such policies could be crucial in the next few years to the United Kingdom's ability to establish itself as a competitive manufacturing base in one of the fastest growing sectors—automotive office equipment."
  Many times recently I have heard the Prime Minister at Question Time dealing with the role of the Government as an employer. Whenever a question is put to her that the Government's policy amounts to an incomes policy, her reply, broadly paraphrased, is "Well, what can you expect? The Government are one of the biggest employers in the country and it must be expected that such a big employer will use its influence in particular ways". I am not arguing the politics of this; I am merely saying that this is the basis behind the policy on public wage settlements. Equally, the public are the largest customer in the country, and such a customer can use influence for good or for evil. The public can certainly use their influence for good in preserving, increasing and foreseeing a British industrial future.

  929
  Of course we were bound to find ourselves in some conflict over the extent of that, but not on the principle. When it comes to public investment by the Government, there is a great divide between the Government and the Opposition. However, I suspect that not all Conservative Members would take that view. Some are a little more desiccated than others and some are perhaps a little damper. Some may have occasional green mould growing on their desiccation. Perhaps here and there something that I say will not be construed on the Conservative Benches as altogether unfriendly.
  I believe that the National Enterprise Board requires the greatest possible assistance. That is obvious. In this area I hope that I shall receive some support from Conservative Members. I hope that the Minister will deal with Nexos when he winds up the debate. We are dealing with advanced office equipment supplies, and this is an area that has an enormous future. As those concerned with Nexos point out, the trouble with this technology is its speed. Another difficulty is, of course, its cost. In this respect we must deal with the basic point, and that is our attitude to the role of the Government in the whole area of information technology. The vital question is how much we should do, and what we should do about it.
  We have had one of the best debates that I have ever heard in this House on Inmos. That is a matter which every hon. Member felt was of vital importance to this country. When I mentioned Finniston earlier I said that this was perhaps an area in which there might not be so much press interest. I fear that that was also the case with Inmos to some extent. Yet what we are discussing here is the future of our country, our children and our children's children and the industry that will exist in this country in the future. I do not wish to go over all the arguments that were raised in the debate on Inmos. The House is already familiar with those arguments. But there are one or two points that I wish to make having listened to that debate, and reread it since.
  It is vital for the future of this country that we have a close interaction between those who develop the microchip and
  930
  those who develop electronic products. It seems to me that the chips are of such a nature that in this country they should be more designed to meet the needs of the customer before they are even designed. There should be a continuing process between the two areas at one and the same time.
  That means that this sort of semi-specialisation is essential if we are to design the microchips for maximum market applications, rather than just by guessing. This interaction becomes increasingly important as the semi-conductor developers move away from simply making parts to working systems. All this needs an enormous amount of support, and this is weher the role of the Government must come in. It will not be achieved by itself.
  We need to keep our technologists and we need new technologists. Above all—and this is fundamental—we need much more research and development in our own country. We are way behind. That trend has taken place not only in 1980, but has been apparent for a long time, and needs to be remedied. The hon. Gentleman mentioned the space aspect, which is of vital importance. However, the research and development should not be done abroad. If we are to achieve the best possible result, it should be done in this country. The Government have an important role here.
  I have so far dealt with matters that are more or less within the Government's ambit, but they have complete control over the Post Office network. At present, Post Office capital spending on telecommunications is self-financed. In order to pursue its modernisation plans it needs to borrow what it calls a very small proportion of its total investment needs, and the Government have resisted that. That is shortsighted. The Government's philosophy is often described as rigid and unyielding, but there have been minor adjustments to their policy in other industries. Why can an exception not be made here? If the Government resist, the telecommunications authority will either have to cut investment or seek further price increases. That is obvious, although additionally we have it on the authority of Mr. Peter Benton. Neither would be good for the future of the Post Office network.

  931
  The hon. Gentleman touched on the international comparison rather gingerly, so much so that I felt that he might be preparing for a move to the Foreign Office, where such delicacy is more appreciated than it is in the rougher and more real world of industry. He dealt beautifully with the question of grants. Although he sprinkled a touch of cold water on the French, he did so in a way that could not disturb a single French susceptibility. I congratulate him. However, I admire what the French are doing in this and other fields. I wish that we had the guts to do the same.
  The electronic consumer goods sector working party progress report 1980 recommends that the United Kingdom Government should consider a public sector programme similar to the French Government's telecommunications and view data programme. The report lists a number of possibilities, including television broadcast satellites, an optical fibre television network, educational software and so on. It says that the list is never-ending. In a way that is no bad thing. We are talking about the never-ending progress of industrial and technological revolution, which I hope will be for the benefit of our country and mankind.
  The hon. Gentleman handled his side of the House very well, where there must be those who, like me, believe that we should adopt the French style of dealing with matters or at least be aware of their importance and implications for us. He said that it was not a good thing to go for international comparisons. However, the fact that there is to be an enormous review of the space programme will lead to international comparisons.
  The French have launched one of the most ambitious programmes in the telecommunications field for one reason only. They intend to become world leaders. Their programme, backed by an annual investment of £3 billion, is not far off the £5 billion that the hon. Member for Havant and Waterloo (Mr. Lloyd) advocated for the microelectronics industry the other day. It is twice what the United Kingdom is investing in telecommunications. The Minister said that £1,500 million is not an insignificant figure, but that depends on what one compares it with. Compared with what a Member of Parliament receives in a year
  932
  it is extremely large, but compared with the development of a tremendous industry with tremendous potential, is it so very large?
  What are the French proposing to do? They are proposing to increase the number of telephone subscribers from 14 million to 34 million within the next 11 or 12 years. That is a fantastic change, and, incidentally, a cultural as well as an industrial change of enormous importance. The viewdata terminal for all subscribers will initially replace telephone directories. That is a breath-taking concept but possible, probable, and certain if the money is made available. I gather that the first pilot scheme is to come next year, with a quarter of a million subscribers in Ile-et-Vilaine.
  The important point is that all contracts for the supply of terminals will be given to French firms, which will result in enormous economies of scale. It is said that the unit cost will come down to less than £50 per terminal from £500 today. It will give French manufacturers an enormous advantage in the years ahead.
  The hon. Gentleman implied that we have to cut our suit in accordance with the cloth; that we are broke and cannot afford it. However, we cannot afford not to take such action. The French programme is expected to reach its peak in 1992, when we shall be in a much worse position if we have not tackled the matter with the same resolution and resources. We should then have to buy French. It is an industry with great potential. Despite arguments about our own core industries, we should not disagree on that. It is vital to our future.
  I hope that I have not sounded too peevish. I have had to make my difference with the Government clear, not only because Oppositions and Governments have different views, but because we are dealing with our future. It is vital to get it right.
  I repeat that perhaps one of the greatest tragedies is that we are talking to ourselves, almost like an unreported Standing Committee, and we have all been through that experience. The great British press, whose future also depends on this, will be away quietly enjoying

  933
  itself, wherever it enjoys itself on a Friday, complaining that none of us gets on with the job.
  10.30 am
  Mr. Kenneth Baker: I do not intend to accuse the right hon. Member for Deptford (Mr. Silkin) of being at all peevish in his remarks. A feature that has characterised this debate already is the relative lack of party controversy. I agree with the right hon. Gentleman. I suspect that we shall have a more constructive and interesting debate than we had yesterday but that it will be less widely reported and less dramatic. It counterpoints clearly the position in which the House finds itself continually, as do Governments of both parties. We spend far too much time dealing with the problems of the past rather than discussing the opportunities of the future.
  Industrial debates in this House, whether they be about the British steel industry or the British car industry, inevitably are concerned with our great and almost intractible manufacturing problems. That was pinpointed the other day when my right hon. Friend the Secretary of State announced a further £500 million of support this year for the British Steel Corporation. As my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd) said at the time, it would be better if that money could be spent on our future industries rather than on past ones. I do not quarrel about the need for support for the British Steel Corporation, but it is symptomatic of the problems facing us.
  Today we are discussing an industry that will provide enormous opportunities for employment and British industry. I am not one of those who believe that the development and use of information technology will produce widespread unemployment. I believe that it will create a large number of job opportunities. I disagree with the views expressed by Mr. Clive Jenkins who, in the past, has voiced the unemployment argument. From the rather smooth and sophisticated exterior of Mr. Clive Jenkins there is a nasty little Luddite trying to break through. The job opportunities in the British hardware and software industries are enormous.
  934
  I draw support for that belief from the fact that in America, where word-processing machines and systems are now widely used in offices, there has not been a drop in employment in those offices. Instead, there has been a change in the nature of jobs. Many of the routine, simple typing and paper-keeping jobs have been largely eliminated, with the people formerly engaged in them doing more interesting jobs higher up the scale. There are considerable job opportunities in this area. The industry that we are discussing is the growing edge of the economy.
  The most successful countries in the future will be those with strong and inventive electronics industries with close links with capital and consumer goods industries. Britain should not be left behind in this technological race. We shall have to run fast to keep abreast of our European partners, and we shall have to run very fast to keep ahead of the newly emerging countries. Most countries accept that there are considerable job opportunities here, and they cannot resist the trend of progress. Some American figures indicate that the annual rate of growth in hardware for the 1980s will be at least 10 per cent. per annum, and that is probably on the low side. The opportunities here are enormous.
  We in Britain should not be ashamed of our performance. In many of these areas we actually have a world lead. In Prestel, for example we have developed the best television-telephone link, and all credit to the Post Office for that. Eleven countries are copying it. In many of the uses of satellite information, again we have a world lead. It is now possible to sense the movement of shoals of fish in the sea and to determine the growing patterns of crops by satellite, and the process was developed in the United Kingdom. We have nothing to be ashamed of in this country.
  I wish to argue today that in a very short time we should develop a national strategy for information technology. Let me make it clear immediately that I have not in mind a national plan type of strategy with massive Government investment and ownership in the industry. However, the various elements of this strategy should see the Government's role as a co-ordinator and a catalyst.

  935
  The Government inevitably are involved in this industry. There is an interface between the public and private sectors in the industry, and it should be a creative and constructive interface. The Government are involved in many ways as a vast purchaser of electronic systems, as a small investor in certain companies and as a provider of research and development funds. I am arguing that we should pull all this together.
  The strategy for which I am arguing consists of 10 aspects, which I intend to mention briefly.
  First, I should like to see a Minister of State designated in the Department of Industry as Minister for Information Technology. This is not a gimmick. Within the Government machine we need someone who can gather together all the threads, the various activities in the Department of Industry, the Department of Education and Science and in other Departments, and act as a focal point within the Department of Industry.
  Mr. Anthony Nelson: I have a great deal of sympathy with my hon. Friend's suggestion. Does he propose to confine this to information technology? Is there not just as good a case for having a Minister for Technology as well?
  Mr. Baker: I happen to believe that information technology produces the greatest opportunities. Information technology ranges from the very large computer systems to micro-devices in the home. The area covers a great deal of technology. If my hon. Friend is asking whether we should not have a Minister to cover such matters as biotechnology and related subjects, my immediate reaction is that these are embryonic technologies. I prefer to concentrate on one that exists, and where there is already industrial back-up I want to try to concentrate the Government's attention upon that. It is all happening at various parts and at various levels. I believe that there is a strong argument, to use an American phrase, for the Government to get their act together. I argue, first, the need to have one Minister responsible for that in the Department. I do not argue for a great bureaucracy. Various Departments exist. What would he do?
  Secondly, the Government should prepare and issue a policy document on information technology in the United
  936
  Kingdom in the 1980s, pointing out the opportunities that exist in the United Kingdom for these technologies. Here the Government's role is inevitable. It cannot be left entirely to the market. In this area the market cannot entirely appreciate the consequences of, for example, having a television-telephone link in the home. Once that link exists, the market will respond for a variety of services and other bits of equipment which the Government could not predict. That is where there is an interaction of the private and public sectors.
  Thirdly, I believe that the Departments of Industry and Trade should initiate a strong programme to sell the products of British information technology abroad. This would be one of the prime functions of the Minister of State responsible for information technology. He would ensure, for example, that when British Ministers went overseas they were fully briefed on the possibilities of selling and helping to sell British information technology equipment.
  When travelling round the world, various hon. Members have probably met French Ministers travelling. There is no doubt that when French Ministers travel they are helping to sell French telecommunications, French satellites and French radar. It is part of their operation. I should like to see British Ministers directed rather more forcefully in that direction. We need a bit less chatting up over drinks in embassies and a bit more hard-nosed promotion of British industry. This will not happen without someone in the Department of Industry taking an initiative and making sure that it happens.
  Fourthly, I believe that the Government should announce a new procurement policy—I am not namby-pamby about this—that is British based. As the right hon. Member for Deptford said, the French Government have adopted a policy even within the EEC of being chauvinistic in purchasing. We play the game. It was F. E. Smith who said of Austen Chamberlain "The trouble about Austen Chamberlain is that Austen Chamberlain always played the game and always lost". So often in these matters of public procurement we play the game. We open up all our contracts to competition, and we play the game with rather old-fashioned rules.
  We should aggressively support British industry in public procurement policy.

  937
  When I refer to British industry I mean the whole range, not just the producers of the hardware. Too often such a statement has been interpreted as support for British hardware, but in this industry it is the software applications as well where there is a British content. Let us be proud of the fact that British software is some of the best in the world. There is a "chemistry" that works well when it comes to making the hardware work.
  Fifthly, the Government should identify a number of applications within their own domain where they can procure equipment and supplies from British industry. For example, they should take a stronger initiative in developing the electronic office in Whitehall. I am aware, since I serve on the Treasury and Civil Service Committee, of the attitude of the Civil Service unions, but the Civil Service cannot stand back and refuse to introduce this concept. There are enormous savings to be made from it.
  The use of Prestel should be encouraged in Government Departments and our embassies. I should like the National Health Service to use information technology much more widely—not just for patients' records, but for diagnostic analysis and such things. That is another area in which the Government uniquely, can invest.
  I should like every school to be provided within the next 12 months with small microcomputers so that children of 14, 15 and 16 can, while learning the digital operating skills, also appreciate how the system will have an impact on their lives. I see this with my own children. Instead of the old tune-in radio sets that I had as a child, my children show a facility with tapes, cassettes, recordings and re-recordings at the age of nine or 10. They are living in that generation. I hope that every school will have a series of microcomputers. I would give the British hardware industry the job of designing and manufacturing them quickly.
  It can be done on that time scale. I become impatient when people talk of spending five, six or seven years to design great computer systems. I remind them that it took us only five years to win a world war. A great deal more can be done with greater push.
  938
  I was pleased to hear what the Minister said about the space and satellite system and about the CPRS study in this area. That also is an area in which we cannot afford to lose tricks.
  Lastly, under the heading of what the Government can do in their own domain, and coming back to the Post Office investment programme, I have some sympathy with what the right hon. Member for Deptford said. When an industry is largely self-financing and profitable, as is British telecommunications, it should be allowed to raise what money it can from the market. I have pressed Ministers in the House to follow this policy and I hope they do, since an enormous amount of money will be needed by British telecommunications. For example, the telecommunications system of the City of London—a central, functional information-swapping area of the world—is now creaking. Without a really efficient system, much of the City's business will be lost.
  Returning to my list of 10, my sixth point is one that I have touched on before—the fact that our corporation tax system discriminates unfairly against service industry. I have argued for a much lower level to avoid this discrimination. This is a Finance Bill matter, but it is important. Our odd system of corporation tax tries to help, and does help, manufacturing industry, but it discriminates against the growing service companies which will produce future jobs. That cannot be right.
  Seventhly, the new Minister should take a lead in setting up technology agreements between unions and employers. I am glad that the official policy of the TUC is to support information technology in the introduction of the new technologies. Only a few union leaders are urging that people should go slow, that they should not take it seriously or that they should not touch it with a barge pole. The inevitable logic is that we must accept the technologies but that we must talk to the unions about them. There is no way of avoiding that.
  Eighthly, rather too much of the Government's research and development is the exclusive preserve of the Government research establishments. Those establishments are centres of excellence—I

  939
  am not knocking them—but I should prefer a greater interface between them and industry. I am sure that industry would welcome it, and I hope that the establishments would.
  Government contracts should openly state that they contain an element for research and development. That is how the American defence programme has operated for years. From 1972 to 1974 IBM received over $900 million from the United States Government in that way. We should openly recognise the element of research and development and allow the companies to recover the cost.
  Ninthly, the enterprise zones provide an opportunity for an imaginative use of information technology. When a zone is designated, a network of services should be provided, rather as the Victorians provided for sewerage, water and gas. Within this network small companies could plug into highly sophisticated systems for intercommunications, for their accounting systems, their stock control and that sort of advice.
  Wearing my London hat, I should like an area of the enterprise zone in docklands to be designated as a workshop area with a running example of an electronic office, and with workshops to train people in the new skills. We need some imagination in this area because we must lead people to recognise that this is an exciting industry that will influence all their lives.
  Tenthly, we are simply not doing enough in education in information technology. All the reports that have been produced show a substantial gap between the number of people available and the vacancies. All the computer newspapers and magazines have page after page of such advertisements. Therefore, at all levels—school, polytechnic and university—there must be a greater concentration upon training and education in these skills. That will also help to do away with the anti-science bias that still exists in our education system.
  I have outlined some suggestions of how the Government can help. I emphasise that I am not arguing, as some in the Labour Party argue, for a massive investment programme of the sort that characterised the previous Government. I accept entirely that some of my sugges
  940
  tions will cost money—it would be naive of me to say that they would not—but I emphasise that much money is already being spent by the Government in penny packets here and there. I am calling for co-ordination: let us get our act together.
  It would be stupid to deny that more money will have to be spent. I should be stupid to deny it. But there are priorities in Government expenditure. I am simply asking that this matter should go a little higher up the list.
  I am pleased that this debate is taking place. I hope that it is an indication of the Government's thinking and that it means that something along the lines of what I advocate will soon be announced. We are fortunate in the fact that for the first time the occupant of No. 10 has a scientific background and an instinctive understanding of some of these matters. I am reassured—I am optimistic—that many of my proposals will be implemented.
  Before I sit down may I make an apology? I have an engagement in my constituency at 1 pm that will preclude my staying until the end of the debate, but I hope to stay for as long as possible.
  10.50 am
  Mr. Laurie Pavitt: The speeches of the hon. Member for St. Marylebone (Mr. Baker) and my right hon. Friend the Member for Deptford (Mr. Silkin) showed the House at its best. This is a constructive debate, and during both speeches it could be observed that hon. Members from both sides of the House nodded in agreement as each constructive point was made. Unfortunately, when the House is at its best there is no blood and gore running between the two sides. There is no great controversial issue, and my right hon. Friend is right that the Press will report very little. I blame not the press, but the public, who seem to like sensation. When we are in a constructive mood, as we are today, the public are not much interested.
  I take up two points made by the hon. Member for St. Marylebone, namely, employment and procurement. I suggest that the obvious and logical conclusion is that when the Government place orders for telecommunications or other equipment, and when tenders are being submitted by IBM and ICL, one of the

  941
  factors that should be taken into account is that the cost of an unemployed man is £8,000 a year. Therefore, in assessing the foreign competition to British-built computers that figure should be considered.
  Mr. Barry Henderson: I have some sympathy with what the hon. Gentleman says. However, will he take note of the fact that in Scotland several thousand people are employed by computer manufacturers? Not one person is employed by ICL in computer manufacturing in Scotland.
  Mr. Pavitt: This would not be a constructive debate unless there was a voice from Scotland telling us about the differences between the two countries. I accept the point made by the hon. Member, and one hopes that those facts will be considered in relation to procurement.
  The Under-Secretary spoke for me when he said that people were blinded by science, as did my right hon. Friend when he said that he was a non-technician. It will not surprise the House to know that I do not even understand the internal combustion engine in my car. When we come to microchips and the technology about which experts in the House have been talking, I am afraid that my knowledge is elementary.
  Nevertheless, the purpose of the internal combustion engine is to get from A to B. I wish to address my remarks solely to the application of the information technology that we are discussing to the needs of users rather than to the producers, technologists and R and D experts who are preparing the material for the next 20 years. I shall concentrate my mind, and I hope that of the House, on the use of computers in the National Health Service. I shall speak of the importance of the development of this new skill as one of the tools of the trade for dealing with the 55 million people in this country, all of whom, at some time or other, are users of the National Health Service.
  Computers have been in use for many years in the NHS, particularly in hospitals. I should like to concentrate on their use by general practitioners. Between 80 and 90 per cent. of contact on health matters between doctor and patient takes place in general practice.
  942
  I believe that the Government and our people should concentrate their minds more on the NHS sector of primary care; and if we gave priority to general practice and devoted just 10 per cent. of the total resources used by the Health Service to general practice we could transform the present situation. One of the resources that one would expect in those circumstances would be the necessary small computers that could do so much in general medical practice. I welcomed the statement of the Under-Secretary that the Government are thinking rather more about the low unit cost of the small highly informative and technical machines.
  The problem for the family doctor is time. His problem is not money, though the press concentrates mostly on money matters. The average GP has about 2,400 patients, and there are 20,000 GPs. If we could allow the GP more time, and if more information was easily obtainable, a large number of referrals to hospitals would not be necessary. In the same way, if a good deal of the information needed after a patient had come out of hospital was available to the doctor, it would save the nation a lot of money in unnecessary medication. It would save money on unnecessary and sometimes dangerous follow-up procedures which, until the information reaches the doctor, could be almost harmful to a patient.
  Naturally, doctors are concerned about these matters, and by coincidence this week in Newcastle upon Tyne the British Medical Association has been addressing itself precisely to this problem. In May the BMA commissioned a study of the use of computers in general practice, and it hopes that the report will be published in the autumn. No doubt when that happens the Under-Secretary will use his influence in the Department to see that the maximum amount of co-ordination takes place to give effect to any recommendations in the report.
  It is almost certain that the report will opt for the use of microcomputers in GPs' surgeries rather than for a more centralised automatic data processing system. The BMA says that:
  "The study will aim to produce protocols for communication between computer systems in this field so that whatever equipment is used by the GP, it will look 'standard' to another

  943
  machine receiving or transferring information from a distance."
  One can foresee the tremendous immediate problem that will face the Treasury by any attempt to move into this area. We are talking of a large expenditure.
  The point made by my right hon. Friend the Member for Deptford is apt in this context. If we do not spend money today, we shall need to spend 10 times more in 10 or 20 years' time. Therefore, one hopes that we shall adopt a commonsense approach to these matters and spend £1 today rather than £10 in the years to come.
  Doctors are concerned about confidentiality. They believe that the information that a doctor receives should be sacrosanct. There are many reasons for that. The human relationships experienced by a patient with his family, at work, and in other areas, not excluding his benefits from the social security system, are matters which a doctor is entitled to keep entirely confidential between himself and his patient. Doctors are concerned about problems that might arise in this context.
  Doctors also feel concerned about whether there will be a difference in attitude between the Department of Health and Social Security and the practice observed in the NHS regional computer agencies. On Wednesday in Newcastle two resolutions were passed by the doctors at their annual conference. They were
  "1. That the confidentiality of medical reports should be sacrosanct.
  2. That this meeting confirms that there is an essential continuing role for doctors trained in the field of preventive and educational medicine, and that this can only benefit all individuals in the population if important information is shared freely."—
  I repeat that phrase—
  "if important information is shared freely, but with full precautions to maintain confidentiality, between doctors practising curative and preventive medicine".
  One of the importances that I attach to the second resolution is that we are still concentrating on curative rather than preventive medicine. The tools that could lead us towards preventing illness should be extended. The initial suggestions to the BMA in 1978 came from the Child Health Computing Committee. The BMA submitted alternative hardware proposals to the Department. Its study showed that the present equipment was obsolescent and could not guarantee confidentiality. If
  944
  that is so, the equipment must be brought up to date.
  The issue has been aired in the House on two occasions—on 26 May 1978 when the then Minister of State made a statement, and on 6 May this year when the present Minister for Health made a statement. Ministers of both Governments gave assurances that there would be confidentiality. At the same time, they gave no great encouragement or incentive to extend the use of informative technology in the Health Service.
  The trends must be applied to where they matter most. They must be applied to our citizens. The warning notices issued by the Committee on Safety of Medicines about drug interactions, such as those affecting people who are allergic to penicillin, and a variety of education and diagnostic programmes, and a whole network of informative technology for general practitioners, could be of great value. It would allow NHS regions to have information about trends in general practice which would be invaluable for planning purposes.
  The hon. Member for St. Marylebone suggested that a Minister should be appointed to deal with information technology. He made a constructive speech. While the present Government are in power—naturally, I hope that that will not be for too long—I can think of no better man for the job. If the Prime Minister intends to make such an appointment she should consider the hon. Gentleman's claims. If she does appoint him I shall send congratulations to the Prime Minister because she will have made a good choice.
  11.3 am
  Mr. Robert Atkins: I declare a non-financial interest in the topic. Before becoming a Member of the House I worked for IBM for seven years and for Rank Xerox for four years. I hold no particular brief for either company, but my experience allows me to comment on the industry. I was involved in the selling and marketing of data and word processors and copiers.
  I liked the analogy used by the right hon. Member for Deptford (Mr. Silkin) when he talked of the contrast between the railways of the last century and the technology of this century. We are discussing the greatest change in equipment

  945
  since the invention of the railways more than 100 years ago and the development of the telephone and typewriter in the latter part of the last century and the early part of this century. Many conditions have changed, but some equipment has begun to change only recently.
  My hon. Friend the Member for St. Marylebone (Mr. Baker) made some interesting remarks about the future in relation to government and the problems of unemployment and the trade unions. I confess that on many occasions when I was making a lot of money selling equipment I was concerned because the equipment that I was trying to persuade customers to buy was likely to put people out of work. Perhaps we do not devote enough attention to the change of employment that will result from the technology that we are discussing, particularly in local government.
  I had the good fortune and privilege to serve on a London borough council for 10 years before moving to the North. That authority spent much time and money employing vast numbers of staff. When I was on the personnel committee I suggested that certain improvements and changes could be made by using technology that would reduce the staff requirement and therefore the cost to the ratepayers. I am afraid that my suggestion did not go down too well.
  The problems about which my hon. Friend the Member for St. Marylebone spoke are pertinent. I have been a member of the Association of Scientific, Technical and Managerial Staffs for some years. I disagree with the attitude of Mr. Clive Jenkins. The potential in this area of technology is so great that anyone who adopts a Luddite approach is particularly shortsighted. However, we must realise that the hold of the labour unions will be reduced because processing—whether it is word, data or informa-tion—is a reducing factor. Clearly, union members will feel that they no longer control the market place as they do in the more labour-intensive industries.
  We should pay more attention to the problems of changing employment. The introduction of such technology will create more time for leisure. I am sure that the problems were discussed long before I came to the House, but it does
  946
  not seem that much has resulted from the prolonged discussions. I am thinking in particular of the problems relating to photocopying and typing in offices. The word processors and new copiers will do away with the jobs now done by young girl clerks and male juniors.
  We should pay more attention to the schemes that exist in Europe. In Germany the 16 to 18-year-olds are removed from the sphere of collective productivity bargaining by being paid a small wage and being encouraged to take up apprenticeships. New technology will do away with mundane jobs and create the potential for extending and encouraging young people. They can be persuaded that the loss of the dead-end jobs that are being taken over will allow them to spread their wings and find other outlets in different parts of society.
  The technology also involves another ethical aspect. Putting information on to central computers, whether in the National Health Service or on police files, could affect the liberty of the subject. I am not sure that we have paid enough attention to that. Perhaps the new minister for technology will.
  Many of the principles in data processing, word processing and copying were invented or developed in the United Kingdom. The old names that spring to mind in office equipment technology and related telecommunications are Gestetner, Roneo, Standard Telephones and Imperial Typewriters. I do not wish to do them a disservice, but companies such as Gestetner and Roneo are serving an ever-declining market in spirit duplication and photostat copying. Indeed, we understand that an Italian company has made an attempt to take over Roneo, so it may no longer be a wholly British company.
  The names that count now are those such as ITT, IBM, Xerox, Mitsubishi and Kallé. They are involved in taking over the market, particularly for office equipment. We may consider that because of developments in computers and photocopiers we can no longer play a major role in their development, but that is not the case in relation to office equipment. The market for word processers and related technology is still enormous. I do not suppose that even 10 per cent. of the market of companies that are still using outdated technology has been

  947
  examined. There is great potential for change.
  It is an area to which the Government and British industry should devote considerable attention, in order to grab an enormous slice of a potentially enormous market. We are fortunate to have a Prestel operation in our Library. I have been avidly sitting in front of the screen trying to work out what it is all about. I have not got much beyond the cricket scores and Stock Exchange prices, but there is great potential for such systems.
  I notice that ITN has managed to negotiate an agreement with its unions for the use of electronic news gathering. I congratulate ITN on doing that—not before time. There have been problems in the newspaper industry. My own local newspaper has changed from supposedly outdated technology to photocomposition, which has caused problems. I do not want to state partisan views about the newspaper in Nottingham that decided to go in for new technology. That laid off enormous numbers of staff but will supposedly produce the paper quicker and more effectively. Those are the sort of problems to which we must turn our attention.
  I am delighted that British Aerospace, one of the major companies in my constituency, is involved in the potential development in this sphere. I congratulate the company on what it is doing. It is of particular interest to me that, with the company about to become a private company, the potential for research and development is maintained.
  In the context of trade unions and the potential loss or change of jobs that may result from the new technology, I always take the view that the technology must be used for humanity rather than by humanity. Instead of computers or robots taking over events, we should dictate to them how they should be used. The potential there is large and it has not received sufficient consideration.
  I wish to put to the House a thought that may startle some of my hon. Friends. I have wondered for some time whether data processing should be "nationalised". I take the analogy of water. Water cannot be improved much more. The commodity exists and there is not a lot that we can do to make or improve it. How
  948
  ever, we can spend much time developing the equipment for moving water round the country.
  In data processing, we could have a central authority responsible for the processing of data, with the facilities at the end of the "railway lines" to which the right hon. Member for Deptford referred and everything that relates to them being in a highly competitive environment. There is an argument for that because of the concern about memory banks and whether we should have a central organisation under the control of the Government or another agency, or a number of companies in competition, with all the pressures upon the ethics of the memory bank. That must be considered in more detail.
  The area of greatest concern is research and where the money comes from. IBM and Xerox devote vast sums to future development. They are able to do that because of the skill with which they have been able to make money over the years on the products that they originally funded.
  I believe that there is a role for the National Enterprise Board. There has been some concern in my part of the country about a high technology industry, ASR Servotron in Liverpool, which was set up only five or six months ago and has collapsed. That is not necessarily the disaster that some have made it out to be, because we shall always have problems in this difficult area and the NEB should not be put off by such events, though clearly it must be careful about the sort of people to whom it gives money.
  I am also interested in the big deal concerning ICL and IBM and the Inland Revenue computer. Although I used to work for IBM, I should like us to buy British. If there is equality, or even a slight inequality, on price and delivery, British should come first every time. That is also true in military contracts. I have a particular interest in that, because I have a British Aerospace factory in my constituency. I believe that encouragement should be given to our buyers to purchase British equipment rather than foreign equipment.
  The House is concerned about the problems of declining industries. The new technologies and new industries provide hope for the future. I was delighted

  949
  hear what my hon. Friend the Member for St. Marylebone said about enterprise zones. I wholeheartedly endorse his comments. We could move in and set up a web of technology of various shapes and sizes, perhaps with telecommunications, data processing, photocopying and so on. I particularly like my hon. Friend's idea of having a show house where the public could see that this is not a frightening or highly technical area but something that will benefit them in the long term.
  We can invent things in this country, but we are not quite as good at marketing them, as is proved by the fact that when IBM and Xerox come to this country with their ideas and some of their management techniquies they pool together our inventions and their marketing. If only we could do the same. I am convinced that we can, provided we are aware of the potential of the market and the effects of the high technology.
  If we managed to do both those things, industrially we could conquer the world. If we also resolve the ethical problems and the problems of changing employment and education among our young people in this area, not only will we conquer the world, we will serve the world.
  11.19 am
  Mr. W. E. Garrett: A stranger coming into the Chamber this morning and not knowing where members of the respective parties sat would assume that the Opposition were on the Government Benches and the Government were on our Benches. I have never before taken part in a debate in which it has been difficult to distinguish who are the Government and who are the Opposition.
  It was heartening to hear the Under-Secretary of State for Industry extol the virtues of the State's role in information and the technological processes. Indeed, I found his shyness and reluctance to mention any facet of private enterprise positively embarrassing.
  The hon. Member for St. Marylebone (Mr. Baker) spoke with skill and enthusiasm. It is difficult to understand why he is not in the Government and an eminent Minister.
  950
  The hon. Member for Chichester (Mr. Nelson) advocated another Department, in addition to the one that the hon. Member for St. Marylebone advocated. Here we have a contradiction. The Conservatives are advocating massive cuts in bureaucracy, and then two Conservative Members advocate two more Departments. They had better have a quiet talk together to see whether they can sort the matter out. They had better not let the Prime Minister know what they are up to. She would cut their arguments down to size and say "There is nothing doing". She may be eminent in science, but she will not distinguish herself by creating any more Departments. Therefore, the people in the Box advising the Minister will have to soldier on as best they can with the depleted number of bureaucrats that they will have to work with. That is likely to become a fact of life during the period in office of the present Government.
  I am pleasantly surprised to realise that in a Chamber where "technology" is an unknown word, and in a Parliament, in which there are very few people of scientific or technical ability, there are some hon. Members in the Chamber with the knowledge that the hon. Member for Preston, North (Mr. Atkins) has. Those with no technical knowledge need not apologise. They are not alone. One of the curses of this country is that any subject to do with technology, science, engineering or electronics immediately produces a yawn and the apologetic statement "I am sorry, old boy. I do not know much about this subject".
  When one goes to the more advanced industrialised countries—I think of West Germany and the United States in particular—one finds that it is a source of pride for a person to say "I have a faint smattering of that. I have some knowledge, and I shall try to find out more about the technology that concerns me or is likely to concern my industry". I should like to see that attitude developed here, but because of the nature of our education system, where there seems to be little change in this direction, those of my generation will see little change.
  The difficulty will be to explain to people what we mean by information technology, what we mean by an electronic system. We do not all want to have a knowledge of the internal combustion

  951
  engine. That is not important in itself. What is important is an understanding of how science and technology have developed and how they can be applied practically to people's method of understanding.
  I must declare an interest. I advise the British machine tool industry, and have done for the past 12 years. Like my hon. Friends the Members for Newton (Mr. Evans) and for Blaydon (Mr. McWilliam), I have an engineering background. We have been brought up in engineering, so we do not find it too difficult to read and understand the issues, even if not with the expertise that we should like to have.
  I am disconcerted by the way in which in the United Kingdom we undersell our achievements—some of them public and some of them achievements that are a tribute to the private sector. If I were to say that the British machine tool industry was successful, most people would yawn and say "It is not true. That is wrong. Look at Herberts. They are not very successful", but there has been developed numerical control technology which, if the customers in the United Kingdom would purchase the machines, would bring us up to the level of some of our major industrialised competitors.
  However, for the very reason that the hon. Member for Preston, North gave, management is reluctant to buy, because it is reluctant to come to grips with the changes that would have to take place in the work force. The failure to get a bond of discussion between the unions involved and the management is an indictment of both parties.
  We have the technology available, but we are losing. Our competitors are gaining in America, Japan and West Germany. They are progressing to the extent that they are achieving lower unit costs. We have a deplorable record in robot control, a subject that nobody should find frightening. It is used in the British car industry in a pitifully meagre way compared with Japan—hence the Japanese success—and in America, where it is also very successful. We proceed slowly and timidly in this form of contribution towards output. We must come to grips with the matter. The Government can help by bringing together the parties con
  952
  cerned. Companies such as British Leyland can also help by explaining to the public how robot control can benefit the product and ultimately their lives.
  A successful industry is the British chemical industry. I was fortunate enough to work for a number of years with ICI. It was exciting, because we saw new processes, using scientific information. We saw new technology being developed to carry the scientific advances into production and ultimately to the customer. That is continuing, which is why the industry is in the main very successful in the present harsh world conditions. But the industry is unsung; it is unheard of. Most people have no idea of the vast changes that have taken place in the industry and in the petrochemical industry. The two are closely linked.
  The success of our North Sea oil operations is based on good, sound information technology. Some of it we have acquired from the Americans, but in some ways we are ahead of them in the art of extracting oil from the bowels of the earth. The Americans are coming to us for information and the techniques that we have developed, but we are modest about them. We do not make the matter the major issue that we should.
  One of the reasons is the one given by my right hon. Friend the Member for Deptford (Mr. Silkin). Such success is not exciting news for the media. We have some highly skilled technical newspapers of exceptionally good quality, but the mass circulation newspapers and the media generally are guilty of not reporting the success stories that they should. Had these successes been achieved in the Soviet Union or any of the other COMECON countries, they would have been the subject of television programmes, and education would have been carried out on those programmes.
  I am glad that the hon. Member for St. Marylebone referred to the farming industry. One of the success stories of British agriculture is the way in which, using data processing and information technology, we have worked to produce some of the finest beef herds in the world. We are ahead of any other nation in the procreation, birth and then production of cattle. Those who have seen the new method of cattle and sheep production

  953
  that is being rapidly established in the United Kingdom will understand its contribution towards cheaper, more plentiful and better-quality food to supply us all, and to go to export.
  My hon. Friend the Member for Brent, South (Mr. Pavitt) did the House a favour by drawing attention to the way in which the National Health Service was developing the techniques. He rightly said that there was a shortage of funds. That is another problem that we must come to grips with.
  I hope that the hon. Member for St. Marylebone will not think that I am making his speech the major point of my speech. That is not my intention. He mentioned the antiquated telephone and communication system in the City of London. If we cannot get the City to invest in a more modern system, where do we start? One of the problems is the lack of investment. It was sitting on its investment funds instead of using them.
  Mr. Kenneth Baker: I am glad that the hon. Gentleman has reminded me of something that I omitted from my speech. It is a typical example of where the erosion of the Post Office telecommunications monopoly for the supply of equipment will help the investment programme. I agree with the hon Gentleman that that is a classic example of where the private sector can enter into a partnership with telecommunications for PABX and peripheral equipment. It will require some Government action to allow the private sector to enter that area. I am glad to note that, when the Government produce legislation to that effect, it will have the support of the hon. Gentleman.
  Mr. Garrett: I think that the House will be obliged to me for allowing the hon. Gentleman to make that intervention so that we could receive the clarification that we needed.
  I am obliged to the Minister for influencing his colleagues to provide time for this debate. It is regrettable that there are so few Members present, but while we are not here in numbers, we are here in technical efficiency.
  11.32 am
  Mr. John Butcher: I declare an interest in that I have earned my living in the computer industry for 12 years, and I am still asso
  954
  ciated with it. The subject of today's debate is sufficiently general and comprehensive for me not to have to declare a direct interest. I intend to be brief, not because the House was kind and indulgent enough to allow me to speak about this subject in my maiden speech but because Mr. Speaker has agreed to an Adjournment debate on Wednesday on public purchasing policy in the information technology industry. I hope that I can put to one side both the social and economic implications of the impending resolution and the crucial element of Government activity, namely, the enlightened purchasing policy to which my hon. Friend the Minister referred in his opening remarks.
  The speech made by my hon. Friend the Member for St. Marylebone (Mr. Baker) was most provocative. I am aware of his lobbying inside the industry and his strenuous efforts to change the climate in which we discuss the impending revolution—and that is precisely what it is. I suppose that, over the centuries, Back Benchers have predicted coming revolutions. They might have homed in on a certain political development. But I have in mind technological or economic developments. I would have liked to be a Member of the House in the 1790s, when someone noticed that a steam engine was being developed. Perhaps he had an odd inkling that it might one day run on rails and change the social and economic habits of a nation.
  We have more surety now, because this revolution is already upon us. As the Americans would say in one of their famous television programmes, "We have the technology". All we need now is the will to implement it. Fortunately, the private sector is leading the Government down a path that inevitably must be trodden. There is much consensus in the remarks of my hon. Friend the Member for St. Marylebone. I hope that he will not think me a little churlish if I take up a couple of his points—perhaps the only two on which we disagree. I agree with his overall strategy, but when he says that we must co-ordinate all the information available and publish a report I am bound to say that that function has long since been exercised by Government Departments. One of my first acts as an hon. Member was to

  955
  raise a file called "Information Technology". It is about five inches thick, and that thickness is accounted for by simply the official publications. The Department of Industry has been chewing the cud over that subject for a considerable time. The quality of advice available to it is excellent. All that remains to be seen is how we use it.
  I return to my hon. Friend's point, There is a legitimate and important role inside the Department of Industry in the co-ordination of all the work that is taking place inside Government Departments. Already, through five or six speeches, we have ascertained that the debate is highly relevant to what is taking place inside the Home Office, the DHSS, the Department of Trade and, to a certain extent, the Foreign Office, and anywhere where information needs to be collected, collated, analysed and disseminated—and that means Government agencies. This revolution—the information society that we are about to enter—will change our pattern of Government.
  Many hon. Members referred to the attitudes of trade unions. I offer a differing note. The TUC document on the silicon chip "The Information Revolution" is a positive and progressive document. If we consider that in conjunction with the reports from the CBI we find very little difference in the stated objectives of those two organisations. There is already consensus outside the House and, more or less, inside the House. It is natural that the hon. Member for Wallsend (Mr. Garrett) should remind us that it is difficult to decide who is a Conservative and who is a Socialist in this debate. The subject is so massive and awesome that at present there is little room for the striking of stances between the parties.
  There is one area where we have to be very careful. If the information society produces a massive boost in efficiency—and it is a potential for a massive boost—we shall have to discuss what to do with all the surplus wealth that is sloshing around in the economy. Without repeating yesterday's debate—I see that the right hon. Member for Deptford (Mr. Silkin) is in his place—it is true to say that there are differing approaches in the House about what we should do with surplus wealth. There may be a collectivist approach which says that there
  956
  should be a State or corporate body that would analyse needs in society and redistribute the surplus wealth accordingly. There could be an individualistic approach which would allow the natural dynamism inside our pluralistic society not only to develop the wealth creation process but to assist in its distribution. We may find ourselves arguing with a vengeance about such matters as workers' co-operatives, which I prefer to call self-employed co-operatives.
  It is vital to set the tone for the sort of society that is developing. That society will not necessarily have mass leisure or mass unemployment. I hope that it will not be a society that will use the advent of these devices to move towards a four-day working week—there lies the road to ruin—but it might be a society that will maintain the five-day working week but have longer holidays—not to the tune of half a year each year but a mandatory six-week holiday period for most in Britain within the next five or six years.
  I listened carefully to the remarks of the hon. Member for Wallsend. In one part of his speech he used the expression "the depleted number of bureaucrats". He regretted that we might wish to pursue a policy that might not be possible because there were not the officers or executives available. The question of the depletion of bureaucrats is crucial. We can use distributive processing to cope with the Government's present requirement to hold the level of the current account in the public sector. That does not mean that our target of reducing civil servants by 10 per cent. can be exceeded; it means that if we could operate with 600,000 civil servants, those in situ would be able to do more effectively the job that they were put there to do.
  Let me give an example that is very close to home. A system has been introduced inside the DHSS to allow the clerks in each local office to interrogate the central files at Newcastle in order to deal with mundane queries. They will store the queries on cassette during the day, the queries will be transmitted overnight to Newcastle, and the answers will then come back. I am ashamed to say that many of those terminals are simply lying idle in the basements of

  957
  local offices, gathering cobwebs because there is considerable reluctance by the trade unions to use them.
  If the DHSS staff are engaged in the business of caring for, and resolving the problems of, individuals, surely it is far better that they are relieved of those rather tedious queries in order to spend more time at the counter, as well as dealing with correspondence and inquiries from Members of Parliament and local councillors. I think that that summarises the dilemma that management and unions will have to face.
  We should adopt a positive view to use this chance to provide better public services and to have a more efficient private industry and wealth-creating sector—indeed, a public wealth-creating sector, for that matter. However, when we come to the question of the distribution of that surplus wealth we shall see what sort of politicians we are, because I believe that the polarisation of this debate could do a grave disservice to our community.
  Incidentally, I was delighted to hear the hon. Member for Wallsend mention the machine tool industry and American control. In the past I have enjoyed a fruitful relationship with BSA and that magnificent machine, the Batchmatic, which is a classic example of Britain being 20 years ahead in the development of this technology but somehow yet again losing the main chance, with the Germans and Americans coming in and out-marketing us. We now see the sorry sequel to that in the story of Alfred Herbert over the last few days.
  There are two main points that I should like to firm up on. The first relates to the role of the Government in easing the channels through which our telecommunications and information technology revolution can take place. The first aspect concerns the Lindop report and the whole issue of data protection. The Home Office is alive to this problem. It is aware that in other countries in Western Europe the issue of data secrecy is now being resolved. What we must do is to balance the legitimate fears of individuals that the age of the huge data banks may somehow infringe their personal liberties. A good example of that fear was the recent request by Her Majesty's inspectors of
  958
  taxes for access to the files of the Swansea vehicle licensing centre. Apparently they wanted to indulge in an exercise by which they could chase up those self-employed who somehow did not appear on files elsewhere. Therefore, the secrecy aspect must be weighed in the balance.
  On the other side—I hope that this aspect of the equation will not be neglected—there is the legitimate need of business and industries to behave as they always have. Here I draw the attention of the Minister to a rather worrying fact that has emerged in the Council or Europe, in that it has prescribed the privacy of a legal person as something that can also be ascribed to a company or association of people. Imagine for a moment what would happen if a company, because it had the rights of a legal person under data protection law, said "I, company A, wish to inquire of company B the details of its purchase ledger files and major customers". If that sort of thing is introduced into our commercial dealings we might find a deterioration of the rights of people because it could be the precursor to a reduction in the level of free and fair competition between companies in the same industry.
  I hope that my hon. Friend will liaise closely with his right hon. Friend the Home Secretary to see where we now stand with regard to the provision of the overdue report arising out of discussions on Lindop.
  My second point relates to telecommunications. I notice the hon. Member for Blaydon (Mr. McWilliam) in his place. He will recall conversations that we have had in other parts of the House about Post Office telecommunications. The role of Post Office telecommunications is absolutely crucial. It is literally sitting in the middle of this potential explosion. I have a feeling that the Post Office Engineering Union will assume a significance in the trade union world that has hitherto been ascribed to the National Union of Mineworkers.
  If one reads the POEU's blue book one will find it to be an excellent document. I recommend it to any hon. Member who wants a crash course in what we are about to go through over the next 10 years. It is a positive document, which is a helpful addition to our debate. For the record, I spent a day with the line

  959
  crews and jointers of the POEU to see how they saw fibre-optics affecting their future, how they viewed System X, and so on. I am encouraged to believe that that union and work force will be an asset to us in our future objectives.
  The Government must look closely at the ways in which the monopoly will work. As my hon. Friend the Member for St. Marylebone said, there is a delicate area, inasmuch as a large number of companies with a large number of products that they wish to introduce into the telecommunications network are at present being delayed because they need type approval. Perhaps we could look at the type approval procedures with the Post Office, so that they can be speeded up and streamlined. We must also assuage the fear of the Post Office that somehow all sorts of substandard devices, which will probably be imported, will be plugged in to the jack plugs that will soon be appearing in every home and office. That aspect of the debate could be resolved. It is a legitimate function of the Government. Needless to say, I hope that such a co-ordination does not cost any money.
  I would not like to take a firm position on the question whether we need a Minister for Information Technology. Within the Department of Industry's existing responsibilities, I should like to see a co-ordination of all the things that we are discussing today, particularly those in respect of enlightened purchasing. Without intending any disrespect to my right hon. Friend the Minister of State, Civil Service Department, I wonder whether he would consider transferring part of his role to the Department of Industry so that our debates, on, say, the purchasing of an ICL main frame can have an input from all Government Departments, as opposed to the user Departments and the Civil Service itself. The sort of arguments that will have to be weighed in the balance are interdisciplinary. They will affect our trading and industrial position and the way in which we behave with regard to computer secrecy. Therefore, it will not just be Her Majesty's Inspectors of Taxes who will be involved.
  On that note, I gladly give way to other hon. Members who wish to speak.
  11.49 am
  Mr. John McWilliam: I begin by declaring an interest, in that I am sponsored by the Post Office Engineering Union. Indeed, I spent 20 years as a Post Office engineer. Therefore, I feel that I may be able to make a worthwhile contribution.
  I thank the hon. Member for Coventry, South-West (Mr. Butcher) for the kind remarks that he made about the POEU. We have a proud and long record in the introduction of new technology, and we hope that we will continue with the development of new systems and modem technology as well as with the procurement of modern equipment from British manufacturers.
  I also appreciated the opening speech of the Minister, although there were one or two points in respect of which I felt his appreciation was not in keeping with the general level of appreciation of the problems that he showed throughout most of his speech. I shall return to those in a moment.
  One of the problems facing the development of information technology is that Britan does not stand alone in the world. Indeed, Britain is one of the last outposts against the decimation of our industry by the massive multinational giants that would dearly love to be able to dominate our market as they dominate so much of the world market.
  This is a problem that the Government have to face fairly and squarely. In this respect I have in mind the Inland Revenue project, with all that it entails and all the development work involved. This kind of project is not just a simple on-line system; it is not just a simple interrogatory system. It is far more complex than that, and it is moving into a new area of information technology. If this project goes outside the United Kingdom and we lose the opportunity to develop the system we shall not only have lost something that we can never regain; it will be one more nail in the coffin that the outside world would like to put into our microelectronics industry.
  Let us not be unaware of the fact that we do not stand alone. We have real problems. Let us also not be unaware of the fact that there are real problems

  961
  and tensions in this country on the industrial side. These are being faced and met elsewhere. Some of them were alluded to by the hon. Member for Coventry, South-West. We are not even beginning to look at them. There is shock and horror at the prospect that the working week may be anything less than 40 hours. There seems to be something sacrosanct about that figure. Yet at the same time we are expecting great developments in productivity, brought about partly by the new equipment becoming available and partly within the industry itself, because of the development work that it is doing. We have to be aware of the fact that the strains on the people working in new technology are much greater than anything in the past. I can remember when I first went into a major telephone exchange—a 10,000-line exchange—over 20 years ago. There were 12 technical officers, fully qualified staff, a couple of lads to run jumpers, and somebody to do the cleaning. The last 10,000-line exchange that I was in was electronic, and there were only two people there.
  The next generation of System X exchanges will require even fewer staff. Indeed, it is suggested that the future staffing standards for telephone exchanges will be one man and a dog. The man will be there to feed the dog and to clean up after it. The dog will be there to keep the man off the equipment.
  It may sound funny, but there is a degree of truth in it, in that with modern equipment the reliability factor is so great, and the amount of protection built into it is so great, that the routine maintenance work is much less.
  As a planner, one of my last jobs was to produce an introduction design for an electronic exchange. It takes about four times as long as an electro-mechanical one. That is assuming that one can get enough computer time for the purpose, otherwise the job would never be finished.
  The nature of employment, therefore, is bound to change. I am not suggesting that in specific areas no unemployment will result from the introduction of new technology, but there seems to be an indication at least that employment could be spread.
  It is utterly foolish to count the borrowing for Post Office Telecom, as I
  962
  think it is called—I wonder who thought of such an ugly name—a commercially viable and profitable organisation, against the public sector borrowing requirement, in the same way as we count the borrowing for the Army, the Navy, the Civil Service, and so on. Equally, it is the height of folly to take the same decisions relating to that borrowing as have been related to those other organisations.
  My right hon. Friend the Member for Deptford (Mr. Silkin) pointed out that the Post Office was largely self-financing in terms of capital investment and that the topping up was needed for modernisation. That is true. The present cash limit is posing a serious threat to the speed of modernisation. If the network cannot be modernised sufficiently quickly it will not be capable of meeting the demands that will be put upon it by those who increasingly want to send data over it and, less frequently, want to speak over it.
  This is even more true of the development of System X exchanges. If we had a complete System X telecommunications system, with good broad-band links between the exchanges, we would be able to provide for the data requirements of this nation, but until we get that we shall be faced with exchanges and line systems that are 20 or 30 years out of date. Indeed, I can remember working on one not long ago that was obsolescent in 1922. It has gone now. We shall be faced with the fact that large chunks of the existing system remain unmodernised. Of necessity, they are in the rural areas, many of which are represented by Conservative Members.
  One of the advantages of the information society is that it makes people relatively independent of their place of work. They can live in more pleasant and less populated parts of the country and work from there.
  Mr. Butcher: Does the hon. Gentleman agree that this is the first industrial revolution whose industry will not be confined to a particular region, as people will be able to work from their homes as long as the communication network is efficient? A man can be equally effective as an analyst in the North of Scotland or in the West of Cornwall as he can in the industrial Midlands.
  Mr. McWilliam: That is precisely the point that I am trying to make, and I

  963
  thank the hon. Member for his intervention. Because of the opportunity to be independent of one's place of work in terms of distance, there will be other changes in society as well. But all this is dependent on the effectiveness of the communications network, and the integrity of that network and its development must be a matter of paramount national importance. It we do not do it now we shall be outstripped and overtaken again, and we shall find that we are unable to cope with the inevitable pressures that the large conurbations are putting on resources.
  The Government's statements of late about public sector pay—I am sorry to raise this—will have a dramatic effect on my members, because they are not prepared to double the system size every five or 10 years with the same number of people employed and not expect at least some proportion of that massive productivity gain to be reflected in their standard of living. Unless this is recognised, whether in hours or in money, there will undoubtedly be problems.
  It is easy to say to someone "It is a new system, but you will get along with it—you have got along with all the rest." That is true. Most engineers that I know are only too glad to get their hands on the background notes on new systems. They love it. All engineers are like that. We like new toys to play with. We like new systems. But the engineers have also said that they are not prepared to cooperate further unless attitudes change.
  The Minister mentioned that the Government are in the process of bringing to the House a Bill to reorganise the Post Office. While we are on the subject of new technology, may I make another request of him? No member of the present Post Office board is an engineer. No member of the present Post Office board has any more experience of the Post Office than four years. That is an outrage. It must be rectified if we want those who are to control the Post Office to understand some of the concepts that will be introduced to bring about a revolution in information technology.
  I hope that the Government will adopt a more realistic attitude to the borrowing requirements of the Post Office, in order to enable it to underpin the work of in
  964
  dustry and develop micoelectronics. Will the Minister give a specific undertaking to facilitate the implementation of the national packet switching system? That is very important. If he does not do that, many of the projects in which hon. Members are interested, and the development of data transmission, will be threatened.
  Will the Minister tell the Prime Minister that she should not make sweeping statements that apply to everybody? Everybody is different, and problems differ. The impact on one industry will be different from that on another. The strategic national importance of various sectors must be recognised. I refer not only to the economic strategy affecting the Post Office but to defence. One need only consider Inmos, and the effect if our defence systems were suddenly denied access to chips. It must be realised that that is important.
  I hope that the Minister will accept that all is not right. The pattern for development is not sufficient to ensure the effective future development of information technology. The garden is not quite as rosy as the Under-Secretary's opening speech portrayed. He should persuade his colleagues to think about the constructive remarks that have been made by hon. Members from all parties.
  Finally, I apologise to the House, because I have a constituency engagement this evening. If matter transmission were available I should be able to stay until the end of the debate. Sadly, that is in the distant future. I shall rely on the railways mentioned by my right hon. Friend the Member for Deptford. However, I shall rely not on slow Victorian trains but on the high-speed effective trains that run on the East Coast. If I could cast myself back to the time suggested by my hon. Friend the Member for Coventry, South-West I would probably have been the Back-Bencher that he mentioned. Wylam, where Stephenson had his works, is partly in my constituency.
  12.2 pm
  Mr. Barry Henderson: I am glad to speak after the hon. Member for Blaydon (Mr. McWilliam). The Post Office Engineering Union has already made important contributions to this type of discussion. I met some local

  965
  members of that union, and I hope that I shall do so again before the next Session. I believe that we shall discuss many matters next Session that will be of concern to its members.
  I have read the document about information technology and advances in communications. I hope that a balance will be struck between recognition of the considerable productivity improvements achieved by members of the Post Office Engineering Union and the interests of the country as a whole. Members of that union will not be in danger of losing employment in the next decade or so. They are more likely to become "hot properties", as Americans say. They are in demand from more than just the public sector.
  I declare an interest, because since 1960 I have worked in roughly equal proportions for a major British computer manufacturer, for one of its major American competitors, and as an independent consultant advising users on their and other people's, computers.
  The right hon. Member for Deptford (Mr. Silkin) made an interesting analogy with the railway system. To put the significance of developments in information processing in the past 30 years into perspective one needs only to realise that we have seen the equivalent of the introduction of the steam engine, the internal combustion engine, the electric motor and the jet engine. Information processing has achieved the equivalent of those developments within a generation. The other inventions took place over a period of 200 years. That gives some indication of the speed and pace of development. Each of those developments had great significance for the generation in which it was king. That emphasises the greater significance of the present developments in information processing.
  The year 1974 was a fairly traumatic year for me, because I came into and went out of this House. I remember it well. Shortly after I left the House I attended a large seminar for those working in the computer industry. A speaker of great international distinction expressed the view that those working in the industry thought that we had achieved a plateau of development. There were nods all round the room. However, she
  966
  stopped them short ond said that she believed that, by any definition, the era of development in the computer industry was only just beginning. Even those involved in the industry did not realise that the pace of development would continue, but when we look back it seems obvious. We have had not only the mini-processor but the micro processor, the chip, developments in calculators, and so on. All those developments have been made within a short time.
  Several policy aspects need attention. Hon. Members could make a different speech on this subject every day of the week for the next week. That is unlike many of our debates, which sound like gramophone recordings of previous efforts. More attention should be paid to many areas of policy. There are three main areas of interest in innovation policy, namely, the Government, universities and other institutions, and industry. Each of those groups has a particular role to play. I am not sure that their separate roles have been clearly identified. The co-ordination between them is not what it should be.
  The Government have two main interests. First, they are interested in stimulating innovation that will directly meet their future requirements. Secondly, they are interested in stimulating innovation that will not otherwise take place, and that will meet defined general needs. Closely associated with that—because so much university funding comes from Government sources—I believe that much could be done in the stimulation and coordination of the fundamental research work that the universities do so well. In industry there is a great deal of innovative work going on. However, we must recognise that industrial innovation is more likely to be concerned with development towards a product than with fundamental research. This is one of the reasons why there must be better co-ordination.
  In that sense, our greatest anxieties do not lie in an innovation policy. It is universally accepted that we are extremely good at the origination of new concepts. This is true of the whole of the information processing area, from the earliest kind of computer that cracked the German codes, right through to the

  967
  Atlas. We have no difficulty with innovation. But when we come to the development of products and the application of those innovations we lose. We are much poorer at that.
  The Finniston report has given us a great deal to think about and act upon. Much of the success of any application policy will depend upon manufacturing industry and the way in which it goes about the things. I am concerned about the slowness of manufacturing industry to grasp the opportunities presented by information processing in many different ways. I am not talking just about the use of obvious facilities, such as project planning facilities on traditional computing engines, but about the use of microprocessors, either to put into these products to make them more attractive or to put into the machinery to make it more effective.
  There are two matters that need attention in that area. These are not directly related to information processing, but they may have a great deal of effect on the extent to which information processing is applied for the benefit of the community.
  Production management, generally, is a section of industry that is underpaid and undervalued. This area does not attract the best brains from our universities and other institutions. I do not know which is the chicken and which is the egg—whether it is the fact that prospects for status and remuneration in manufacturing industry have not attracted people, or whether it is the fact that people who have the skills do not want to go into that kind of activity. It is certainly a cause for real concern that manufacturing industry has in many ways not grasped the opportunities.
  The hon. Member for Wallsend (Mr. Garrett) referred to the agriculture industry, which is often thought of as a sleepy industry by those who do not understand it. In fact, it is one of the most remarkably developing and productive sectors of British industry. It has used computers, both for information and data processing and for the use of products themselves, in a way that makes manufacturing industry look rather sad.
  Mr. John Silkin: This is an important point, because there is a history behind this. Before the Second World War the
  968
  agriculture industry was "dog and stick agriculture", but because of the pressures of the war the Government did three things: first, they set up ADAS, or its ancestor, so that there was close connection between Government research and development; secondly, they encouraged the proliferation of agricultural colleges—there were only one or two before the war—and, thirdly, they gave monumental subsidies—and still do—to agriculture to improve its technology.
  Mr. Henderson: If I may—as a representative of a large farming population—add to what the right hon. Member has said in that context, there are two other important characteristics. Many of these farming businesses are family run, and are therefore small businesses by any definition. The man who has the responsibility for investment is usually the man responsible for management. Secondly, as a broad generalisation, the level of technical education and professional training of the modern farmer is very much higher than that of people in almost any other industry in the country. That is another reason why the hon. Member for Wallsend was right to draw attention to what the agriculture industry has done in this area, and which might well be emulated by other industries.
  To be fair to manufacturing industry, it has suffered to a degree which no other section of industry has suffered. A great proportion of the management's time is taken up with industrial relations matters, sometimes of the most unfruitful kind. I acknowledge what has been said about the work that the trade union movement has done in the development of thinking about the effects of microprocessors in our society, but when it comes to the pinch there is often still a degree of Ludditeism about the implications and the use of technology. Worse than that, a great deal of management and trade union time is taken up in fighting among themselves when they should be thinking more together about improving productivity in their firm. They should also consider the desirability of their firm's product in order to enhance their job prospects in those industries.
  I deal next with Government procurement policy. There is immense scope for improving this. For starters, there must be a much better long-term view of the Government's likely procurement requirements

  969
  and those that are particularly appropriate or relevant in order to stimulate economic benefit for the country. We are talking about an industry that is developing very rapidly—when I say "long-term", I mean about five years. Without trying to be legalistic about the terms of such a policy, I believe that there needs to be wide understanding, preferably across the House, about the key elements of a procurement policy.
  One of the most important parts of any procurement policy must be the relationship between future product and service requirements by the Government and the stimulation of research and development before that requirement is finally defined Again and again the Government suddenly put out to tender something that is required next month. The industry is set back on its heels because it is unprepared, and low and behold the Government buy somewhere else. If they had just thought ahead a little about their potential requirements they could have ensured that British industry was alerted to the opportunities that might arise from a procurement in the foreseeable future. That would help to develop its research and development programmes at the same time.
  Here I should like to deal with the ICL Inland Revenue proposals. In a major project of that kind—a multi-million pound project—the margin between one offering and another from international computer manufacturers of standing must be insignificant in terms of money. I should be surprised if it were otherwise. There would have to be powerful reasons to make me believe that ICL was incompetent to perform the operation within the time scales envisaged if the company was not to be given that kind of business.
  However, attention should be given within ICL, if not in the Government's attitude to it, to its restrictive practices in procuring computer equipment. I know of no other company with such a restrictive policy to attachments of other firms' equipment to its systems. If we are talking about procurement policy that will help the British processing industry, ICL, as the major company in the field, could do much to stimulate the broader field of information processing, such as terminal manufacturing. It could give
  970
  greater encouragement to others to participate in such projects.
  There is a major distinction between import controls and economic nationalism in terms of world trade. I do not want to see import controls that would damage world trade, and British trade in particular because of the importance of our international trade. However, I consider that in spending taxpayers' money the Government are entitled to buy goods from the source most advantageous to the taxpayer.
  Mr. James Hill: ICL is being supported by public money to the tune of £60 million. Is this perhaps the time to see a good return on that public expenditure?
  Mr. Henderson: Some of that expenditure was designed to ensure that ICL would be a valid tenderer for a project of such magnitude. Had that not been so, I should be even more concerned about the Government's procurement policy and encouragement of innovation.
  There is a poverty of venture capital in the country, although that view may not be shared by all my hon. Friends. I do not wish to spend too long on broad economic arguments, but one reason is that there are not enough well-off people in the country. Many institutions have vast amounts of capital resources, as witnessed by the amount of money that the Government are able to borrow in the City each day, amounting to thousands of millions a year. However, on a historical basis public or private institutions cannot be expected to have a substantial degree of adventurism. There is the broad economic argument about how we can create the environment in which more people will have greater ability to back their investment judgments.
  The sources of general capital would do the country a great service if they could at least see that, because they are institutional and careful, perhaps a small proportion of the total funds that they have available for investment could be well invested in adventurous areas, of which few could be more exciting than information processing. If that capital was spread evenly it would be of immense benefit not only to the British information processing industry but to potential users. Much of the great development in the coming decade will be

  971
  not so much in information processing as in the way in which the facilities are used.
  Trade policy has been muddled in the past. Many people in Britain involved in information processing have been surprisingly unadventurous in regarding themselves as a base for an international marketing operation. Even our largest company, GEC, is small by international standards. One reason why we have not made real profit out of many of the products that we have invented is that we have not seen the international market with all its opportunities. When the Japanese invent a new camera, they test-market it in Germany, which they consider to be the most difficult market to penetrate. If successful, they mass produce it. If we could imagine the hardest market in which to sell a new information-processing product, go there and sell it, and develop it from there, it would be helpful. However, we have often played the game, and restrictive trade practices have occurred in other countries that have damaged our interests. That is another area in which the Government could be alert to help the British industrial effort.
  It would be interesting if the Government could give an indication of the aspects of information processing that they foresee in the next year or two as appropriate for legislation. I understand that there are legislative moves in the United States over copyright. Privacy, flowing from the Lindo report, could also be considered, although I do not believe that as much legislation is needed there as is often suggested by the industry, and many aspects could be dealt with by administrative action.
  Mr. Butcher: To resolve the dilemma of whether to legislate it would perhaps be helpful if the Home Office were to endorse the voluntary code of practice, which could be monitored by the industry through the National Computer Centre.
  Mr. Henderson: That is an interesting suggestion, which underlines the need for interaction between the Government and the House so that we are aware of the Government's thinking on what would be appropriate for administrative action, for the action described by my hon.
  972
  Friend, and for legislative action where absolutely necessary.
  We should also consider monopoly, and not only in terms of the Post Office, which will get a good going-over in the next Session. I hope that we shall have constructive debates and not merely political wrangling. A fine balance needs to be struck on many monopoly arguments concerning the Post Office. Monopoly practices exist generally, and we may need to further strengthen legislation.
  Last, but not least, we should consider how our legislative environment relates to that in other countries and internationally, not least within the European Community with its Euronets, and the United States. A great deal of attention needs to be paid to legislative policy.
  I have underlined the need for co-ordination of the Government's approach to innovation, application, procurement, investment, trade and legislation. I have not mentioned education. I hope that the Government will seriously consider the suggestion of my hon. Friend the Member for St. Marylebone (Mr. Baker), and especially the possibility of a Minister with specific responsibility for co-ordination.
  There is a public and private sector need for action. Whatever public money may be involved in supporting and encouraging information processing technology, we shall receive maximum value for that investment only if we have a more rational co-ordination of policy and administration.
  We have heard of the effect of this new technology on employment, especially in the private sector. Nothing caused me greater depression than attending a seminar about a year ago and listening to pundits saying "How terrible it is. We are caught in a Catch-22 situation. We known that if we introduce microprocessing technology rapidly it will mean increases in unemployment. But, if we do not do it, our international competitors will and therefore we shall suffer severe unemployment." That was a most depressing analysis of the future.
  I take a much more positive and hopeful view. It should be said to such people "O ye of little faith", and on occasion "O ye of vested interests".

  973
  As I said earlier, the trade unions have done a lot of good work in this area both in practical terms of negotiation and in theoretical terms of publication. How ever, at times they have squeezed the maximum poundage out of a deal to allow a manufacturer to improve his capability to compete.
  Last, but not least, I hope that people will grasp the opportunities presented by this revolution—opportunities for themselves, for their companies and for their country—and not approach it in a reluctant way, merely being forced into it by competition.
  12.42 pm
  Mr. Ian Lloyd: As I look round this empty Chamber—perhaps not untypically empty for a Friday—I cannot help concluding that the past is not present, that it will probably be buried with its own mistakes, and that the future has not yet taken its seat. Those of us who are in the Chamber form a very slender bridge between the two.
  I hope that my hon. Friend the Member for Fife, East (Mr. Henderson) will forgive me if in my own comments I do not follow too closely what he said, but I agree with virtually every word that he said. I want also to thank the Under-Secretary of State—my hon. Friend the Member for Arundel (Mr. Marshall)—for his generous tribute to the all-party committee on information technology, which has supported me strenuously in my attempts to get this debate.
  I also pay tribute to the Leader of the House for arranging this debate. He and I both attended the university in which the claims and achievements of science were widely recognised, though I think that we were both students of the humanities. I regret to say that my right hon. Friend went on to have his judgment corrupted at another place—a somewhat inferior place of learning. If it was Cambridge that stamped him irretrievably as a bachelor, Oxford must accept the responsibility for his indissoluble affection for the arts.
  My right hon. Friend made it clear that technology is not his cup of tea, and I fear that he considers information technology to be of much the same character as science fiction—that the science is all in the imagination and that
  974
  the fiction is not of the same quality as that of Dickens, Maugham or, possibly, C. P. Snow.
  Had that most perceptive founding editor of The Economist, Walter Bagehot, been alive today, undobtedly he would have recognised the significance of information technology. He understood the importance of technology, and most certainly he understood the power of information. Perhaps Bagehot's ghost has appeared to my right hon. Friend from time to time—a ghostly wraith on the cover of The Economist shouting, in one of those Private Eye balloons, "Norman, beware the Megabyte, my son. It gyres and wimbles in the microwave."
  I hope that I have discharged my debt of appreciation. I turn to the substance of the debate. If the House will allow me, I shall seek to answer what I believe to be six important questions that have to be answered. Some hon. Members have touched on them already, which will enable me to summarise them quite rapidly.
  First, we have to ask ourselves why we have sought so persistently for this debate on this somewhat esoteric subject. Secondly, what is information technology? There is something still to be said on that. Thirdly, what is its economic and political relevance, especially to today's problems? As one of my hon. Friends has already said, we could all make many speeches on that. Fourthly, what role have the Government to play in monitoring or actively encouraging its application? Fifthly, what most needs to be done by institutions other than the Government, and what, if any, role can the House play in this context? Finally, is our national performance adequate and, if not, how can it be improved?
  I have sought this debate for four principal reasons. The first is that the debate on information technology is now, in many senses, a continuing national and international discussion. There are few industrial, commercial or scientific conferences and few discussion programmes in which information technology does not feature either here or abroad. It is a common thread in the policies that are evolving in almost every sphere to deal with complexity, and complexity is the subject which I wish to emphasise. The growth of complexity in human affairs—an exponential explosion of information,

  975
  inter-relationships, causes and its effects—is surely the major problem of our age.
  The second reason is that it is quite absurd that the House should discuss virtually every subject except what some of us believe to be a revolutionary solvent in human affairs—a matter that affects most economic, social and even political relationships, to say nothing of the decision-making processes and the criteria by which those processes must be resolved.
  We have to legislate, but we live at the centre of a venturi of uncertainty. The greater the energy we devote to repairing the consequences of past misjudgments the less likely we are to perceive and allow for those basic changes that in the past have repeatedly destroyed great nations and even great civilisations, especially when we ignore new challenges and the opportunities that often accompany them.
  The third reason is that I believe that there is now a new generation of hon. Members represented by my hon. Friends the Members for Preston, North (Mr. Atkins), Coventry, South-West (Mr. Butcher), and Fife, East and the hon. Member for Blaydon (Mr. McWilliam), many of whom have now lived at least part of their adult lives in a world dominated by the computer, even if none so far can claim to have been educated with and by it, as our grandchildren most certainly will.
  The fourth reason is that the ACARD reports have sounded a tocsin, and the very least that we can do by holding this debate is to let the nation know that some of us have heard it. Other nations have heard the same bell, some at least a decade ago.
  That brings me to my next question: what is information technology? I have used the simile of the bell, for it suits the concept rather well. It is a definition of that concept that I wish to turn to now, for if information is the bell—a familiar concept even if we are now most aware of it as the prefix to the term "explosion"—the new technology that has struck it is a clapper of quite extraordinary power, and the sound reverberates in every crevice of society.
  There is nothing fundamentally new about information. We as politicians associate it with power. Without relevant and reasonably complete information, judgment becomes lame and decision
  976
  falters and fails. But we are aware of the exponential growth of information and the vast increase in the amount needed to make good commercial, financial, scientific or even political decisions. The extension of the Select Committee process is a reflection of that decision by the House.
  There is no change in the criteria, but there is a dramatic change in the technology of capturing, recording, storing, analysing, retrieving, transmitting and presenting information. Virtually all the technical and cost limitations of the printed word have now disappeared. If some limitations remain, they will have disappeared next year—and I say "next year" advisedly. The large, cumbersome computers of 20 years ago could do it all at a price, and they gave a clear indication of what was possible. But the computer of today, reinforced by new electronic technologies, which themselves are developing at an unprecedented pace because of the microprocessor, have turned the possible into the practical—the immediately practicable. Within a decade, information technology has developed so rapidly that concepts and processes that were advanced even three or four years ago are now obsolete or obsolescent.
  If the calculator on a chip appeared in 1972, the computer on a chip in 1976, the microsystem on a chip in 1978, and the minicomputer this year, and if the maxi computer—that is, as large as anything we now know exists—is expected to appear within two or three years on the microchip, the significance of this development can easily be lost. It is that information-handling power, equivalent to that which cost us hundreds of thousands of pounds in the early 1960s, is now virtually within the physical and cost limitations of a wrist watch. That will be a practical reality before the decade is out.
  Let us consider it in our own terms. The Library of the House will be available to any hon. Member in his own home at any time. If it is available to us, there is no reason why it should not be available to anyone else. Much the same will apply to the British Library and to the citizens of this country or any other country—because this is an international phenomenon. The next generation will assume a capacity to use,

  977
  analyse and transfer information which is almost inconceivable to most of us today.
  Inevitably, great fear is associated with the changes, because our social and political hierarchies are largely the mirror image of our information hierarchies and those who feel threatened will try to lock up the information and inhibit change. But they are certain to fail. This House is a monument to the information technology of the nineteenth century. It imposes severe limits on what we can do, much as the heliograph and morse limited the messages which could be sent by the military in the same century. The great libraries and the ingenious systems that support them are the sphinxes of early twentieth century information systems—magnificent, monolithic and obsolete.
  We will undoubtedly try to adapt to the new information technology and to do it within our old structures. What we should do in this House and in the country is to rethink our objectives and re-examine the limitations which we have accepted, in the light of this new information technology, but I fully accept that we will build horseless carriages in this sphere for several decades.
  What, then, is the relevance of this matter? The main relevance as I see it is in keeping with what everyone perceives as the challenge of complexity. Within the last few weeks, I have had the privilege of standing in the control room at Three-Mile Island, in the control room that is being built on one of the oil rigs at Murchison, in the North Sea, and in several nuclear power station control rooms.
  This is an example of the need for information technology, because none of those systems can be controlled without it. Indeed, the failure at Three-Mile Island was, and is now, recognised to have been a local and specific failure of information technology.
  But this is not the only form of complexity that our societies face. We heard talk on the radio this morning of Euro-control. Air traffic cannot be controlled today without information technology. The road traffic of the future will demand information technology on a scale that we cannot conceive today. It is because of information technology and not
  978
  because of legislation that it will probably be totally safe by the end of the century.
  So we have complex physical systems, complex economic systems, complex military systems—we all know the story of the failure of the NORAD computer: again, a failure of information technology—and of course immense complex scientific information flows. About 5 million new scientific documents are produced every year, which our society must try to incorporate, appraise and apply. That cannot be done without information technology.
  But the real potential lies in the social, the biological and the medical spheres. That suggests questions that we should put to ourselves. I have already mentioned the question of road safety. Should we deal with this by legislation or by information technology? I think the answer is the latter.
  Should we try to deal with energy wastage by the crass mechanism of legislation, which may have limited success and which may well be necessary, or by information technology, which can make an enormous contribution to energy efficiency? That is the only way in which this kind of control can be dispersed throughout the community.
  Should we deal with health—the hon. Member for Brent, South (Mr. Pavitt) made an interesting speech, and referred to health matters—by massively expensive remedial systems which will never catch up? Or should we endeavour to achieve far better results by the use of information technology, which will transform the potential for preventive health care? The answer is the latter.
  Mr. Pavitt: The hon. Gentleman has explained the importance of communication between different sectors. In preventive medicine, the Department of Employment deals with occupational health and the DHSS deals with other matters. The hon. Gentleman's point is underlined by the fact that in order to prevent illness one could now, because of new techniques and technologies, unite two different sectors so that information would be available in the cause of prevention.
  Mr. Lloyd: I do not quarrel at all with that intervention. I accept it in the

  979
  spirit in which it was offered and it brings me to the role of the Government.
  This is, perhaps, an area where the all-party unanimity that certainly exists in my committee and that has been displayed today might find itself under a little strain. Last week reference was made in The Times to a confidential Labour document—although nothing is confidential these days. Dealing with microchips, The Times started its summary by stating:
  "The challenge to society … can be met only in a socialist planned economy,"
  Few of my right hon. and hon. Friends will accept that, and I could not help thinking that if that is the conclusion, God help the whole of North America. That is where the whole thing started, it is where it is continuing, and it is where the pace is set. There is certainly not a Socialist planned economy in any sense there. None the less, in that same document mention was made of the need for intervention from the schoolroom to the shop floor. It is not inconsistent to argue that there is a need for such intervention. One does not have to be a Socialist or a planner or go all that way to accept that that is a fair argument.
  I believe, however, that there is no substitute for the spontaneous enthusiasm of excited, interested, opportunist and enterprising people. This is a call for intelligence and stimulus. It is not necessarily a call for total control, which is the way I read much of the philosophy summarised, perhaps unfairly, in that argument in The Times. If that requires public finance, it is an argument that we should consider on its merits. If we need a continuous, widespread and imaginative educational programme—and I think that we do—I would say "yes" to that. If that requires an element of public finance, I would support it.
  But all is not doom, gloom and despondency in this area. Recently, the Sheffield Regional Centre for Science and Technology sent me a paper known as "The Next Frontier", which described the most imaginative and enterprising experiments in the Sheffield area in the application of information technology in the education system. I commend it to my hon. Friends. It is a dramatic example of how we can do things effectively when we are convinced that they
  980
  need to be done and that we must get on with the job.
  I quote briefly from the paper, because I think that it is most relevant:
  "We must all know that our country and our culture have a serious problem about the concept of technology"—
  we all say "Amen" to that—
  "It is as though the high fever of ideas and activity which swept in with the Industrial Revolution and which made us the first industrial nation then induced a stupor of such complacency and unreality among so many of us, people in industry, education and in politics alike, that we lost control of our fortunes and even lost a clear view of the direction we were travelling in."
  The author said:
  "A new clear vision is what we must now achieve … broadly across the nation we have not chosen to develop our understandings and turn the full power of our intellectual resources upon our own control of our total environment."
  I share that conclusion. We need a new vision and new energy.
  What must be done by institutions other than the Government? The House has set a good lead today. However, one debate once will be about as beneficial as much African democracy involving one vote once. This must be a beginning. The House should return to the subject at least once a year, and preferably more frequently.
  In relation to schools I agree with the philosophy expressed recently in a document published by ICL, a company that has done much in this sphere. It realises that the expansion of computer literacy or education is fundamental not only to its success as a company but to the success of the nation. The document states:
  "from its relatively small impact in education courses into a study area undertaken by all primary and secondary schools' students. This is the direction in which we must go."
  I heartily endorse that.
  We must move more rapidly and intensively in universities. Some months ago I addressed 50 or 60 undergraduates at Norwich university on the subject of information technology. I asked how many in the room had laid their hands on a computer terminal in any way. None of them had. For that to be so today, whether the students were studying science, the humanities or languages, it is a sorry and solemn reflection on what we are doing.

  981
  I turn to the question of industry. I support the micro-processor applications programme, but it needs more urgency and drive. I support wholeheartedly the excellent work by the Wolfson Microelectronics Foundation at Edinburgh university with considerable support from the Science Research Council and other Government funds. It has established a precise bridge between society and technology which we want to build throughout the United Kingdom.
  Is our national performance adequate? However good it might be—I accept that there are many excellent examples of energetic and successful work—it must be related to the challenge that is facing society. If one relates it to that challenge the answer must be a resounding "No". It is not enough in any sense.
  As my hon. Friend the Member for Marylebone (Mr. Baker) said, there is no central responsibility. I was delighted to have his support for the proposal that we made before the last election that there should be such a central responsibility. Whether it takes the form of a Minister for Information Technology or some other form, the case is powerful and is made from both sides of the House. I hope that Ministers will take that message on board.
  There is too little co-ordination between responsible Ministries. I refer in particular to the Departments of Industry, Education and Science, Energy, Agriculture, Fisheries and Food and the Treasury. I have not given much thought to it, but they are probably the major Departments within which and from which this technology must receive support.
  Sums of £55 million and other amounts go through the books, but do we spend the money effectively, and in the direction in which it should be spent? That is a fundamental question, and the answer is not satisfactory. The Minister said that it would be wrong to assume that there is a bottomless purse. I accept that philosophy. Equally, it is wrong to assume that there is always an empty purse. The decisions that would flow from such an assumption would be incorrect.
  We concentrate too much on our support of one segment of information technology—hardware—and neglect the
  982
  opportunities that our scientific capability as a nation open up for software and right-across-the-board peripherals.
  Mr. Henderson: Will my hon. Friend add to that the relationship between information processing and doing things with sensors, activators, and so on, in a wider system, of which the processor would merely be the centre? Is that not an area that needs increasing attention?
  Mr. Lloyd: I accept that point. I understand that it is one of the interfaces that the Wolfson institution is dedicating itself to bridge. There is a need for that all over the country, probably in every major centre of industrial performance.
  The discovery of information in its modern sense is comparable to the discovery of money. Money changed all economic, political and social relationships. It became the conduit of power. Its control was ultimately centralised in a central ministry in most countries. We call it the Treasury; other countries call it the Ministry of Finance.
  The arguments against centralisation in relation to new technology are powerful, but a Minister reporting directly to the Prime Minister on information technology—shall we call him a prodder-inchief?—could, indeed must, work miracles.
  The right hon. Member for Deptford (Mr. Silkin) developed the interesting analogy of the railways. If we take the analogy to its limit, we should have a station in every home. The right hon. Member said that wherever possible we should have British-made stations. That takes us back to the ICL public purchasing argument with a vengeance.
  I have to say that in this sphere, above all others, there is a great danger in what I describe as national boundary thinking, because the national boundary has already become almost an irrelevance. It is a confusion to thought and to policy to allow it to dominate our thinking.
  Almost by definition, information technology is an international technology, with an international manufacturing base, an international research and developing support base, and an international market at virtually all levels. In addition, it is international in the application of software.
  I believe that we shall have more than our national market share of the bigger

  983
  cake. That is a legitimate aspiration. The United Kingdom respresents about 12 per cent. of the developed world and I believe that we shall have 16 per cent. or 17 per cent. of the information technology market. That would be a reflection of our energy and enthusiasm, and the correctness of our judgments.
  If we went the other way and said that we must have particular types of technology, manufactured solely or mainly in the United Kingdom, we could find our-selves diverting our resources in ways that would be less than satisfactory.
  My concluding note is basically one of optimism. There is no doubt that man has not yet appreciated that with the enormous range of problems facing him there are lying to hand new methods of dealing with complexity and of solving problems, controlling systems and eliminating drudgery that are unparalleled in the contribution that they can make if we organise ourselves properly to receive that contribution.
  The message that we should send out from the House is one of profound optimism. The pessimists are wrong, and they will be confounded.
  12.59 pm
  Mr. James Hill: A word of praise is in order for my own university, Southampton. As is well known by the technologists who have taken part in the debate, it was in the forefront of all the research and development on fibre-optics. The university's department of electronics cannot be surpassed in Western Europe.
  I know that to most people fibre-optics are unexplainable. Signals transmitted by laser lights are almost out of science fiction. Nevertheless, by 1982 this country's telephone network will include 2,200 miles of optic fibres. The first phase should be started in September this year. Therefore, the optimism here this morning is well-founded.
  There is no doubt that we have a great future—with one proviso. Here it may be difficult for the Government to meet my requirements. Support for British companies is sadly lacking at certain times. There is a long-term plan to use public purchasing, particularly in information technology, to improve the competitiveness of British goods at home and abroad. I understand that the
  984
  Cabinet has already approved this, and that my right hon. Friend the Secretary of State for Industry has the matter in hand. It covers a broad area—not only office technology, medical electronics and energy conservation but telecommunications.
  I hope that in all his future dialogues, certainly in a long-term plan that I hope will not be too long-term, my right hon. Friend will push, as far as it is possible for the Government to push, the chairmen of the nationalised industries and local authorities to buy British whenever possible. I know that that is difficult in a true private enterprise system, and that certain of our industrialists resent being told how to operate their own management teams. However, I believe that the public purchasing market is estimated at about £20 billion a year, and at least a fair proportion of those concerned could be directed to buy British whenever possible.
  In yesterday's debate we got on to the subject of British Leyland's "Buy British" campaign. The appeal by Sir Michael Edwardes could well be duplicated throughout British industry, including the tool manufacturing and information technology industries. My constituency contains the firm of Mullard, employing more than 2,000 people. The firm needs support at present. It realises that other countries are supporting high-technology companies in a way that it will not be possible for us to duplicate, because of our economic climate.
  No matter how many ideas are brought forward by researchers, ideas men, developers and scientists—I think particularly of Sir Christopher Cockerell and the hovercraft—if there is not the capital, whether from public or private sources, to provide the necessary research and development and enough stimulus to enter other markets, even the brightest idea, such as fibre-optics, could fall.
  I was rather uncomfortable when I read in The Guardian, of all papers, on 12 February that the Post Office had had one of its top men leave to work for French telecommunicatons, to develop the French input into its telephone service and the services that it will adapt. That adminstrator has left the Post Office at a time when, it having been decided to split the Post Office, telecommunications will

  985
  be the glamour boy of the Post Office services. Yet he has gone to France to set up in competition with future ideas in Britain.
  As the right hon. Member for Deptford (Mr. Silkin) said, France is beginning to think about all the people who do not have telephones. France is underdeveloped when compared with Britain, but it will soon catch up. The British Post Office will be buying some of the old analogue equipment system until 1983–84, but France plans to end that system by 1982. A significant part of the transformation of the French telephone system will be the use of fibre-optics. People keep saying that we are ahead in our technology, but the managing director of Mullard told me that we are only about two years ahead. This is not the time to be optimistic that we can remain ahead without a vast input of capital, such as the French Government are giving to their telecommunications service.
  That is borne out by the fact that it is a cost benefit. I shall give one or two figures for word processors produced in Britain. In 1977 the average cost of a word processor was £10,000. By 1982, we are hoping to reduce the price to £1,000. That is what it is all about. If the French gain an advantage, if their telecommunications service includes a video view of an up-to-the-minute telephone directory alongside every telephone, and if their research and development in the mass market that that will produce receives a thrust, it is obvious that in future we shall be buying from the French, rather than the French buying from us.
  It is the same with practically every item that one cares to mention in public purchasing policy. We must try to help companies in that area. In many instances they are supported by public money. Earlier I mentioned ICL, which has £60 million of public money. It is a £650 million company, which is capable of forging its way in Europe. It is desperately hoping that the Inland Revenue, which is currently using six medium to large ICL machines, will implement the new systems of tax collection on four large ICL systems. When we are talking in the range of 20,000 visual display terminals, we are talking about a vast market.
  Mr. Butcher: Does my hon. Friend agree that one of the main problems with the 2900 series has been the clumsiness with which the operating system has coped with telecommunications in remote job entry applications? That bug has now been eliminated, and the 2900 series performance has been considerably enhanced.
  Mr. Hill: I should not care to disagree with my hon. Friend, who is an expert in such matters.
  Like my hon. Friend the Member for St. Marylebone (Mr. Baker), my concern is that we may be playing a game of cricket with gentleman players who are quietly non-professional and not putting too much side on anything. I am worried that if, while playing the game, one or two nasty tricks are played on us, we shall just accept it, because we know that good will prevail in the EEC and that the gentlemen will have the finest game and the greatest opportunity. However, no one but the British believes that. Time and time again we have come to realise that if we do not support our own industries no one else will.
  My recollection of the visit that I made to ICL is that the company is desperately worried because it feels that it is important that the revenue from the Inland Revenue project should increase its research and development. Great experience could be gained by the project and the company could considerably increase its overseas sales. That project, with its extensive use of communication links and terminals, is typical of how world markets are developing.
  Overseas buyers will look upon the Government's order as a vote of confidence in ICL. That is important when one is dealing in high technology. It releases the Government from dependence on foreign suppliers and reduces the negative balance of payments in respect of data processing equipment for the United Kingdom.
  In addition—I do not put too much weight on this because nothing is confidential these days—it will leave the tax files of the United Kingdom populace in British hands. I am sure that that is not of great moment, but confidentiality is a grave concern in all computer activity.
  There is a grave doubt that the Government are not applying their mind to

  987
  their plan to boost industry by public purchasing. It would be useful if, at a later date, the Secretary of State for Industry could tell the House just how far that long-term plan has progressed. I understand that my right hon. Friend is pressed at the present time, but perhaps we can have such a statement after the Summer Recess. Perhaps the Minister will tell me what aid, help or progress has been forthcoming to support firms in the United Kingdom, such as Mullard, which are basically concerned with microelectronics and competing with Europe, sometimes very successfully. Perhaps he can say what hope he can give such firms, so that the message can go out to the rest of British industry that is working in this sphere.
  1.13 pm
  Mr. Anthony Nelson: I welcome the opportunity to contribute to the debate. Before making my points, I should like to pay three tributes. My first is to say what a pleasure it is to see the hon. Member for Newton (Mr. Evans) occupying a place on the Opposition Front Bench. I understand that he will reply to the debate. The grace with which he occupies that eminent position leaves us in no doubt that we shall see him there on many occasions.
  My second tribute is to the Government for allocating a day to discuss this most important matter. It is a welcome opportunity for the House to deliberate, and express its view, upon the future application of developments within this industry. The Government have shown foresight and responsibility in enabling us so to express our views.
  The third tribute is to my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd), who, of all hon. Members, has been in the vanguard of those who have drawn to the attention of the Government, the House and the public the importance of this developing industry and its applications in the public and private sectors.
  Much of the debate has dwelt on the role that the Government can play in the information technology industry. I should like to look at the reverse—the role that information technology can play in government. My hon. Friend the Member for Havant and Waterloo talked
  988
  about the archaic nature of many of our procedures and the way in which we organise ourselves, and that is true of the administration of the Civil Service and the great Departments of State.
  There has been some mention of the application in Government Departments of this technology, but I do not believe that we have begun to scratch the surface. When we look at the quantity of data that is collected and stored, and at the transmission of data, we find that the methods used have barely moved from the days of the scribe with his quill and people taking physical copies and passing them around, with messengers dashing between Government Departments. Even the telephone is seen as something of an innovation. They really have not begun to wake up to the implications of this technology in improving the efficiency of the administration.
  I put it to the Minister that hon. Members are concerned to ensure that the taxpayer gets good value for money and that there is efficiency within the Civil Service and the Administration. One way in which we can ensure that this system is used effectively and run efficiently is to implement information technology in the Civil Service and the great spending Departments.
  In the Department of the Environment, with which I have some connection, there are 11 miles of filing cabinets being filled at the rate of 1 mile per year. This statistic was mentioned by the Secretary of State for the Environment in a speech to the British Institute of Management on the 26 November 1979. It is crazy that we have this amount of data being stored, and the manpower that is necessary to transfer it whenever recall is necessary.
  Information technology should be looked at in two ways. One is the storage of information, and the other is the transmission of information. The storage has been revolutionised by random access memory chips of various types. The transmission has been revolutionised by a number of developments that have been mentioned today, such as optic-fibres.
  When we consider the amount of data that is stored by the various Departments of Government, we can only arrive at the conclusion that it is immense. Let

  989
  us consider, for example, the photocopier—that great boon but great generator of copies and data. For every memorandum that circulates, the civil servant naturally produces photocopies. Playing safe, he will take a large number of them because there is very little restraint on his doing so. All those photocopies are filed because people in the Civil Service are frightened of throwing anything away. There is no discouragement to store it, so the filing builds up. There is a sort of Parkinson's law that one can apply to technology: the information that is generated goes to fill the available space for it.
  While I welcome and agree with much that has been said today, I sound a cautionary note. It is that one of the problems with this new technology is that the more memory facilities we provide, the greater the irrelevant information that will be developed and stored. The concomitant responsibility for Government Departments if they implement it in the future is to ensure that those who use these facilities store only that information that is vital, and that there is a much more selective approach to storage and a much more efficient approach towards the withdrawal of information.
  With regard to the transmission of information, here again we have not begun to apply some of the developments in the public sector. The Inland Revenue has been mentioned. I am in favour of self-assessment and a much simpler tax system. I have expressed that view during the course of numerous Finance Bills. At present, everybody's tax liability is individually assessed by somebody in the Inland Revenue. I fill in my tax return every year, and I receive an assessment from the tax inspector that is handwritten in biro. The computation is put at the end. Given the amount of people in the tax net, and the complexity of our tax system, surely it would represent a dereliction of our duty if we did not force some technology on the Government.
  There is great scope for that to be done. I hope that the Government will consider the applications that can be made. I agree that one option would be to have a Minister with specific responsibility for technology. For some years I was a member of the Select Committee on Science and Technology, and I feel
  990
  that that responsibility should be widened to cover areas of technology other than information technology alone.
  We often speak in this Chamber, in a vacuum. We have little influence on the course of events, least of all in the private sector. Sadly, we have little influence on the public sector. The only thing that gives me cause for hope is that the Under-Secretary, my hon. Friend the Member for Arundel (Mr. Marshall), is on the Front Bench. His ability and influence on the Government should not be underestimated. I am sure that he will pass our message to the Secretary of State for Industry and to other Government Departments. I hope that that message will be heeded and not go unnoticed, as has so often happened in the past. This technology offers great hope for the future. As has been said, we should be optimistic about it, not pessimistic. Let us use it to advantage. Let the public sector and the Government be in the vanguard of those who implement the exciting possibilities offered.
  1.21 pm
  Mr. Gary Waller: We have waited some time for the debate. All hon. Members will agree that the high quality of the contributions made has justified the wait.
  I welcome the debate. As my hon. Friend the Member for Coventry, South-West (Mr. Butcher) said, we are talking about the future. We often talk about past failures. Microelectronics is one of the most important subjects for the future. My hon. Friend the Under-Secretary said that the Government were aware of the implications. I am sure that he is correct. When Government Departments consider their policies for the next 20 years, I wonder whether they are aware of the changes that will be made to transport, housing, education, and so on. We may suffer, because we have five-year Parliaments. Inevitably, Govenments consider changes in the short term. They take insufficient account of the long-term development that will ensue.
  I have been interested in this subject for the past 10 years, during which time many forecasts have developed from science fiction to reality. Governments have taken relatively little account of such developments.
  My hon. Friend the Member for Coventry, South-West correctly spoke

  991
  about a revolution. Many of the changes are qualitative rather than quantitative. Governments will have to do things differently because of new technology, but not necessarily more efficiently. Reference has been made, for example, to the collection of information. Such information can be stored easily, and, more importantly, one has speedy access to it. That gives an incentive to collect such information in both the private and public sectors.
  In his book "Nineteen Eighty-four", George Orwell envisaged the development of an all-powerful Administration. He foresaw that the State would see into people's homes by means of technology. George Orwell was right about many things, but perhaps this technology is more subtle. If the electronic computer is used in the wrong way it may be as great a cause for in as for good.
  Whenever the possibility of collecting information arises we must consider whether this information is really necessary. The fact that Government Departments may wish to combine and collate information in a way that was mentioned by my hon. Friend the Member for Coventry, South-West, when he spoke about the Driver and Vehicle Licensing Centre at Swansea, should give us grounds for thought. Such collation would be done in the interests of efficiency. But efficiency is only one of the questions. We must consider whether we want a society that is not only efficient but which also acts in the interests of its members. The fact that people may be acting for benevolent motives is not sufficient to guarantee that the results will be for the benefit of the public.
  In the private sector we should consider the area of criminal activity. In these days, fewer and fewer transactions are carried out on a cash basis, so perhaps the possibility of theft of large amounts of cash is diminishing. But we pay too little attention to one of our most treasured possessions—the information held about ourselves. In the past few years there has been legislation to improve the position of the individual. Even so, the matter of computer fraud and theft of information is one of which the law takes insufficient account. Our law has developed over many years, and suddenly technology means that we must consider a large number of changes that
  992
  may have to come about because of these developments.
  For example, one can look ahead to the time when many retail transactions are carried out by pressing buttons on the video-television set. The housewife sitting at home will be able to call up on her screen the prices and quality of goods in the local shops. She will be able to make her purchases from an armchair and then go out and collect the goods 10 minutes later, rather than wander around the shops comparing prices. What does this mean in terms of consumer protection? That is one thing that we must consider.
  Also, we can foresee the time when football pools will be done on an automatic basis. People will sit at home and call up the coupon on their television screens, then mark their crosses on the screen. Their bank accounts will be debited automatically. I do not think that the Royal Commission on Gambling paid any attention to this area when it considered football pools, but that sort of situation is probably closer than many people think, especially when one considers the inefficient way in which thousands of collectors go round the countryside every Wednesday and Thursday collecting football pools from people who wish to take part.
  The hon. Member for Brent, South (Mr. Pavitt) mentioned medicine, and the privacy of the individual in this regard. Obviously, if someone collapses outside the Palace of Westminster and a doctor happens to be passing he may not have the available information to save that person's life, and it may take a considerable time to obtain it. In an emergency he may prescribe totally unsuitable drugs. But if he can call up almost instantaneously that individual's medical records from a national data bank he may have the tools at his disposal to save that person's life. One appreciates the need for the Government to take an active interest when one considers the privacy of an individual's medical records.
  Whether one is optimistic about the future, as are many of my hon. Friends, or pessimistic, like Professor Stonier, of Bradford university—who believes that in a few years one-tenth of the population will be able to produce the goods

  993
  and services that the remaining nine-tenths requires—one must accept that there will undoubtedly be enormous changes. That is true in no field more than education. The microelectronics education project will help, but it is only a beginning. We shall have to consider very seriously the needs of those who are to leave school in the next few years. They will probably embark on a career that they will have to change early in their lives because technology will make it redundant.
  The Government must take into account microelectronic developments in all their policies. The sooner that it is given special consideration the better.
  1.31 pm
  Mr. John Evans: It is a cliché to say that this has been an excellent debate. However, in many ways the House has been at its best today. There has been a lack of political partisanship and a genuine desire to explore the problems and possibilities of modern technology.
  I feel inadequate in attempting to reply to the wide-ranging debate. Instead of the Dispatch Box I should prefer a visual display terminal before me to help me answer the arguments put forward. My knowledge of the subject is limited. The various speakers have far more specialist knowledge.
  I join in congratulating the Government on allowing the debate. I welcome the Minister's comments. He asked the important question, how will information technology affect our lives? That is difficult to answer until we have been through the experience. The Minister listed a variety of projects that the Government are involved in and support. It is unfortunate that the Secretary of State may not take the same view as the Minister on how much Government support should be given to information technology. I hope that the Minister's counsels prevail.
  The hon. Gentleman mentioned the enormous amount of money that Post Office Telecom and British Aerospace are investing in research and development. That is Government money. The hon. Member made a good case for a Minister of Information Technology. It is a horrible term, but the subject is
  994
  important, and we need a Minister with that responsibility.
  In that respect I think that it will be recognised that one of the most important and remarkable speeches made today came from the hon. Member for St. Marylebone (Mr. Baker). I was impressed by it, as I often am by his speeches. It is obvious that he does not share many of the economic or financial views of his Government colleagues.
  In passing, the hon. Member for St. Marylebone took the usual rhetorical swipe at the Labour Party, public ownership and planning, but went on to enumerate a 10-point plan which, if it had been produced by the national executive committee of the Labour Party, would probably have been denounced by the press as being the height of human folly. However, it was interesting that several Government supporters who contributed to the debate expressed their support for many of the items in that 10-point programme. I have no intention of going through them all, but one of the most important was that this area could not be left to market forces alone. The hon. Member for St. Marylebone indicated clearly that there was a substantial role for the Government to play.
  The hon. Member for Preston, North (Mr. Atkins) agreed with the hon. Member for St. Marylebone in taking to task Clive Jenkins, the leader of the ASTMS, for some of his comments. I suggest that both hon. Members have misread the attitude of Mr. Jenkins. He, probably as much as the hon. Member for Havant and Waterloo (Mr. Lloyd), has sought to launch the public debate on this vitally important subject. If some of his comments have been headline-catching, that is Mr. Jenkins's style. He was performing an important duty in bringing this subject to public attention and having programmes on television about the dangers as well as the advantages that might flow from this technology. I should prefer hon. Members to think through what Mr. Jenkins said before attacking him.
  My hon. Friend the Member for Brent, South (Mr. Pavitt) made a very important speech about the possible impact of this technology on the National Health Service. We all recognise my hon. Friend's great love of the NHS and the tremendous work that he has done in this

  995
  area. One phrase that he used impressed me greatly. He said that there were 55 million potential users of the NHS, and he went on to make out the case for a vast extension of this technology into the Health Service.
  We recognise that there is an understandable hostility from doctors about the potential dangers that can flow from a loss of clinical freedom. We are also aware of the civil liberties problem and the need for confidentiality of files. We recognise the tremendous future for this technology in the NHS.
  The hon. Member for Preston, North, who obviously has considerable knowledge, made an interesting but, in places, peculiar speech. He was not worried about unemployment, he said, since employment would change, but he went on to describe a number of areas where the application of new technology simply meant fewer jobs. He mentioned the newspaper industry, particularly in Nottingham.
  I do not think that the hon. Member thought through his argument. I am not criticising him, but he referred to technology removing the necessity for office juniors. I know that he meant that they could be doing something more useful, but our present problem is the need to find jobs for office juniors, in the light of our appalling youth unemployment.
  Although this technology cannot be stopped, we must consider employment. I was interested when the hon. Member asked—I am sure that few of his hon. Friends will agree with him—whether we should not nationalise data processing. I agree with him, but whether his Government will is another matter.
  I have known my hon. Friend the Member for Wallsend (Mr. Garrett) for many years, since we are in the same union and have served on the same district committee on Tyneside. As one would expect, he referred to the machine tool industry. I agree with him that its present state is a tragedy. He is also right to say that we should recognise our national characteristic of underselling ourselves. I was impressed by his description of the new numerically controlled British machine tools that British industrialists cannot be persuaded to buy. I agree that we are too easily impressed in this area by American, Swedish, Ger
  996
  man or Swiss goods and tend to deride our own.
  This is a national problem that applies to other areas as well. That theme also has run through the debate—the necessity to buy British wherever possible and practicable. The hon. Member for Coventry, South-West (Mr. Butcher) made an excellent speech from his tremendous experience, and I agreed with much of it. He said that he would have liked to be in the House in the 1790s arguing about the future. I believe that the Secretary of State for Industry is trying to take us back to the 1790s; I hope that the hon. Gentleman will use his excellent knowledge to impress his arguments on his right hon. Friend.
  The hon. Gentleman made some fair comments about the important consensus between the TUC and the CBI in this field. All hon. Members will agree that the Government should encourage that, and that if they cannot talk to the TUC on economics, finance or taxation, they should at least talk to those two bodies together about the impact of this technology.
  The hon. Member also mentioned the Lindop report on data security. That will require a separate debate, because different hon. Members would want to take part, but it is a crucial matter.
  The hon. Member for Brighouse and Spenborough (Mr. Waller) referred to the possibilities of fraud, when experts can tap into data banks and other systems, I ask the Minister to note that problem, which cannot be divorced from a debate such as this.
  My hon. Friend the Member for Blaydon (Mr. McWilliam) is sponsored by the Post Office Engineering Union. An excellent feature of the House is that hon. Members who have worked on both sides of industry can give us the benefit of their knowledge. My hon. Friend spoke with authority about the changing pattern of technology and employment. I was particularly impressed with his description of the position 15 or 20 years ago and the numbers employed then and the way in which he contrasted that with the situation today and with what will happen tomorrow when the dog will be keeping the man from the technology. The hon. Member for Fife, East (Mr. Henderson) made an excellent speech

  997
  and I commend a great deal of what he said to the Minister, particularly his reference to the Government's procurement programme. There is a clear recognition by Back Benchers on both sides of the House that the Government have a major role to play in that context, and it is important that the procurement policies of the various Departments are brought together.
  Several hon. Members mentioned ICL, and I have just learnt that an early-day motion has been tabled by my hon. Friends. I commend it to those hon. Gentlemen who have referred to this matter. It reads:
  "That this House recognising the public investment in ICL and the strategic and economic importance of maintaining the Company's success in computer information technology, calls upon the Government to ensure that the largest computer system in the United Kingdom for the Inland Revenue PAYE system is procured with ICL as prime contractor."
  That puts the case better than I could have done in dealing with all the points raised concerning ICL and the Inland Revenue.
  The hon. Member for Havant and Waterloo (Mr. Lloyd) has been congratulated by everyone in the House on his work in this context. I join them. He is well versed in this subject. He is a constant thorn in the side of the Government, as he was in the side of the previous Labour Government, for insisting that these issues be debated and brought before the public eye. I pay tribute to the work of his committee and I know that that work will continue. The hon. Gentleman asked and answered six important questions, and I shall be interested to see whether the Minister agrees with the answers that the hon. Gentleman provided to his own questions.
  I thank the hon. Member for Chichester (Mr. Nelson) for his gracious tribute to me. He mentioned the tremendously important need for the introduction of this technology into the Civil Service and Government Departments. I agree with him that it has taken Government Departments a long time even to start thinking along these lines. I was horrified—I suspect other hon. Members were—to hear that the Department of the Environment has between 11 and 12 miles of filing cabinets. That speaks for itself. Anybody can picture the space required. I am told that in London space costs
  998
  money, and I would have assumed that Government Departments would long ago have put Government documents on to microfilm.
  I turn to another aspect of the debate, which I suspect has been glossed over, since most of us tend to be enthusiasts in this area. I suggest that the setting for the debate could be a quotation from the NEDC sector working party that reported on the microelectronics industry in June 1978. That report was published by the Department of Industry in a document called "Microelectronics The new technology". The document states:
  "In every major country where silicon monolithic integrated circuits are produced, the Government supports and to some extent guides the microelectronics industry, often with large subventions. This industry is the key to all other industries, requiring high-technology electronics."
  I agree with the Minister that discussing the impact of the computer on society is nothing new. I recall attending seminars and weekend schools organised by my own trade union, the AUEW, on this subject 20 years ago. A major impact on my thinking at that time about computers was a small cartoon in my union magazine. It showed an American motor car industry boss showing the late Walter Reuther, then the head of the American car workers' union, round an automated car production plant. He is saying to Reuther "How are you going to persuade these machines to join your union?" Reuther replies "And how are you going to persuade the machines to buy your cars?" That summed up the dilemma, as we saw it, of the impact of the computer on society.
  The technology abolished millions of jobs and we knew that unless it was efficiently and properly managed and controlled it would result in great riches for a privileged few and unemployment and hardship for the majority. There was the additional and puzzling problem of how the unemployed in an impoverished society would purchase the products that the new technology could produce. None of us foresaw the explosion of jobs in the next 20 years as a result of the new technology. None of us realised that new consumer goods would become available on a scale that was beyond the comprehension of man in his previous circumstances.
  As we stand on the brink of the microcomputer age we must not forget that in

  999
  that 20 years we lost millions of jobs. Millions of jobs were swept away. Throughout the Western world millions of jobs in traditionally labour-intensive industries disappeared. Iron and steel making, textiles, construction, coal mining, heavy engineering and other industries shed jobs on a vast scale, partly because of a decline in the industries and partly because new technology replaced the need for so much manpower.
  We must not be lulled into believing that in the next 20 years new jobs will be created on anything like the scale of the previous 20 years. In that I differ from some hon. Members who have spoken on the subject. We must be aware that the advent of the microcomputer is potentially by far the most devastating piece of technology that man has created. The original range of computer technology eroded jobs in heavy industries which were often dangerous and dirty, and r-required hard physical labour. In its wake were created jobs in new indusstries in pleasant surroundings, which were not dirty or dangerous jobs and which did not require heavy physical labour. Invariably, better wages and salaries were paid.
  The microcomputer will cut a swathe, not through the older industries, although it will have an impact on them, but through the new jobs created in the past 20 years and through other areas which have scarcely been touched, in commerce, banking, telecommunications, transport, energy generation and supply, in Whitehall and local government. The home and modern manufacturing units will also be affected. In industries that use mass production methods industrial robots will replace some of the work force. Scarcely an enterprise will not feel the impact of the microcomputer. This time we shall not simply remove the hard, dirty and dangerous jobs whose passing nobody really regretted. We shall remove the jobs of the educated, the articulate and the skilled. Therein lies the potential danger to our society.
  How should the problem be tackled, and who should tackle it? Should it be the Government, industry, or the trade unions? All three have a major role to play in creating the climate that will make the advent of the microcomputer and the range of technology acceptable to our people. The British people in all
  1000
  walks of life whether they are employers, trade union members, politicians, or academics, must recognise that we have to accept the advent of the new technology. If we try to resist and impede it we, as a manufacturing nation, will be swamped by our competitors, who even now are exploring every possible adaptation of its use.
  If we accept the inevitability of the microcomputer and recognise the possibilities for human advancement it is imperative that the right decisions on the production and uses of the new technology are taken now.
  I submit that the key role in considering the future of the microcomputer lies with the Government. It is vital that everyone, irrespective of his politics, makes abundantly clear to the Secretary of State for Industry and the Cabinet that it is the Government's duty to take the initiative. This issue is probably the most important non-military issue facing our society and it is nonsense to suggest that it is an industrial matter that should be left entirely to industry, without Government intervention.
  However, because the record of the involvement of successive Governments is pretty inept, it is essential that both sides of industry demand to be involved in all stages of the decision-making process now. I repeat "now" because a great deal of time has been wasted and the Government can hardly procrastinate much longer.
  I am disappointed that the Under-Secretary has not used the debate as an opportunity to announce that the Government have at last arrived at a decision on whether to grant the second £25 million tranche to Inmos. I hope that he will take the message that the Government must make up their minds, not simply on the question of the second tranche, but on whether they are to kill off Inmos or allow it to go ahead.
  With all the force at my command I urge the Government to honour the pledge of the previous Administration that the production units of Inmos would be sited in assisted areas. We have tremendous problems in our regions and the original intention—everything that I say is dependent on the Government's determination to go ahead—was that regions such as the North-West, the North-East,

  1001
  Wales and Scotland would have an important stake in the new industry. That was of considerable importance to those regions, and the suggestion by Inmos that its units should be sited in Bristol was a bitter blow to all concerned.
  It is vital that we go ahead with the project. There have been many comments about the Government's determination to bring private capital into the company, but so far there has been no sign of any such capital being involved. There is plenty of money available in Britain. We are awash with money. Anyone who disputes that should consider how much is being bandied around by the groups that are trying to win commercial television contracts. The problem is that risk capital is not interested in the frontiers of technology. The stakes are too high, the technology is changing too quickly. and the returns are too uncertain.
  If it is accepted that, for our industrial survival, Britain must participate at the sharp end of technology, it must be recognised that that can be done only with a Government-financed and supported industry. Such a company already exists. Inmos has been established with taxpayers' money channelled through the NEB.
  For all the reasons put forward by my hon. Friends and Conservative Members, and particularly for the reasons outlined in the powerful speech of my right hon. Friend the Member for Deptford (Mr. Silkin), I call on the Government to accept that there is a strategic necessity for a major British presence in this vital technology and to recognise that it is in the national interest that a democratically elected Government should maintain a guiding hand on the technology's progress. The technology is truly far too important to be left to those whose only motive is profit.
  2 pm
  Mr. Michael Marshall: With the leave of the House, I should like to reply to the debate.
  First, I join all hon. Members in welcoming the hon. Member for Newton (Mr. Evans) to the Opposition Front Bench. He did a good job in summarising some of the views that we have heard expressed today, and he made a valuable
  1002
  contribution in talking about the explosion of jobs and the problems that come in its train, putting the matter in historical perspective with regard to the computer, looking 20 years back.
  That historical perspective nicely echoed the views expressed in a powerful speech by my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd). The hon. Member for Newton struck a nice note in reflecting upon the new generation of hon. Members who are perhaps, if not themselves wholly steeped in formation technology, increasingly versed in its ways. As the hon. Gentleman rightly said, it will become for all our children much more a way of life than it is now.
  However, the hon. Gentleman could not resist—I suppose that this is what happens when one has been locked away as a Whip for long hours—trying to stir matters up. He implied that there was a divide in the Department of Industry between my right hon. Friend the Secretary of State and myself. He further implied that the views of my hon. Friend the Member for St. Marylebone (Mr. Baker) and those of the Department might not square. I must put the hon Gentleman straight right away. The debate is taking place because of my right hon. Friend's enthusiasm for the subject. His views on information technology and on research and development are shared by all hon. Members who have spoken today. He is a great enthusiast.
  It is the theme of enthusiasm that I should like to pick up. As the hon. Gentleman said, it is a cliché to talk about hon. Members' valuable contributions, but I cannot recall hearing in my time in the House a more constructive debate. Every hon. Member who has spoken has, in varying ways, put a different but complementary viewpoint. We have had a worthwhile debate. I commend to all hon. Members that they read and study the Official Report of the debate and reflect upon a number of the points that have been made. They are crucial not only to the House but to our future way of life.
  The right hon. Member for Deptford (Mr. Silkin) asked a number of questions. I agree with his analogy between the debate on the Finniston report and this debate as representing an important look into the future, to see the ways in which

  1003
  our society and industry will be shaped over many years. When the right hon. Gentleman asked a number of specific questions, I think that he knew before asking that some of them could not receive definitive answers today. However, I shall try to clear up a few of them.
  The right hon. Gentleman and a number of hon. Members raised the question of ICL. The Government recognise the importance of the PAYE computer project to this country's industry, but the industry is aware that the Government's policy of acquiring large computers by single tender from ICL must be subject to satisfactory price, performance and delivery. That policy will continue until the end of this year, when new EEC and GATT rules come into operation. Therefore, any contract placed this year will depend on ICL's ability to meet those criteria. However, I take on board the points that were put.
  The right hon. Gentleman also asked about Nexos. He probably received a letter from that company on the same day as I did.
  Mr. John Silkin: It was a similar letter.
  Mr. Marshall: Indeed. The company has a valuable contribution to make to the office of the future. In his genial way the right hon. Gentleman was trying to get me on to the ice, trying to get me to give a definitive view, which is more properly a matter for the NEB. That is an activity that must be examined in this whole context.
  The right hon. Gentleman took some trouble to talk about the French situation and the role of our own Post Office. It is right to put some of his remarks in perspective. I said that the French had started from a relatively low base. The latest international comparisons are for 1977, which may suggest that information technology needs to speed up a little in that direction. In that year, telephones per hundred of the population were 33 in France and 42 in this country. The waiting list for telephones in France in 1977 was seven months, and in Britain it was slightly over two months. The point that I made is valid; starting from a lower base, the impetus must differ. If we consider what we are doing in Teletext which has been operating since
  1004
  1975, and Prestel since 1979, we find that we are well to the fore in those activities.
  The question of the Post Office investment programme was raised by a number of hon. Members, including the right hon. Member for Deptford and the hon. Member for Blaydon (Mr. McWilliam), who contributed his Post Office Engineering Union experience. We are determined to reduce the rate of inflation by controlling the money supply. It is crucial to constrain the public sector borrowing requirement. Against that background, if nationalised industries—whether the Post Office, which is in profit, or other industries that are not in profit—borrow, they can do so only at the expense of Government expenditure in other areas, because the limits are finite. That view must prevail when considering these matters. The Government have been, and are, looking at that area to see whether there are ways in which proper investment can be considered which might not fall within that constraint. It is a difficult issue, which cannot easily be resolved.
  As I said in my opening speech, the investment programme of £1·5 billion is substantial. The EFL, while it exerts a discipline, is not the end of the story. The Post Office has opportunities through increased efficiency, increased productivity, and, more importantly, through striking a reasonable balance in its wage negotiations, to find a little elbow room if it seeks to do so.
  On the question of the comparative activities of the Post Office with other countries, there has been a suggestion that we have not been doing as much as our competitors. That needs careful examination. Figures are not readily available, and I recognise that the right hon. Member for Deptford is in as much difficulty as I am because of that. I shall relate the Post Office investment of £1·5 billion to Japan. It is often said that the Japanese Government are investing £500 million in microchips, but the best estimates suggest that the Japanese Government investment, including their PTT investment, is about £200 million over the five-year period 1976 to 1980, with the balance coming from the private sector, which will largely take over the programme at the end of that time.

  1005
  That gives me the theme for our Government's policy, which is to look to the private sector for those things that the private sector can do best. Where we have difficulties in the interim period, not only with economic pressures but with the squeeze over many years on corporate profits and the way in which the whole of the research and development function has been under pressure, I recognise the role of the Government. The right hon. Member for Deptford referred to my right hon. Friend the Secretary of State's description of a catalytic role. That is still the case for a number of the schemes that I mentioned earlier.
  I turn to a number of points raised by my hon. Friend the Member for Havant and Waterloo. The House appreciates the work that he has done with the all-party committee on information technology. I was especially glad to hear him bring into the debate his international perspective and the House of Commons perspective. His point about the free exchange of technology is valuable. It must temper our judgments in the natural "Buy British" patriotic argument, to which we all subscribe.
  The hon. Member for Newton referred to Inmos. It was a skilful piece of work on his part. He made a speech that he was not allowed to make during the Inmos debate. As I said during that debate—and it is worth repeating today—it is important to recognise that Inmos is not the sole British source of production of standard chips. The best estimates suggest that by 1984, with other projects for which taxpayers' funding has already been agreed, there will be assured production of about £300 million of standard chips, quite outside the estimated £120 million production by Inmos. The fact that a number of major multinational companies have come into the regions—Motorola, ITT, General Instruments and National Semiconductors in Scotland and STC in Kent, with the backing of the taxpayer under successive Governments—suggests that this interchange of technology is working in practice.
  Indeed, the fact that those developments have largely gone into the regional areas picks up the point made by the hon. Member for Newton, that if one has
  1006
  a regional policy that is working effectively one can give some effect to some of the things for which he was calling.
  Mr. Ian Lloyd: I was interested to learn of the production of £300 million of chips by 1984. Can my right hon. Friend tell us what proportion of that output will be dedicated production that is taken up by firms themselves for their own internal markets, and what proportion will be available as supplies of standard integrated circuits to the international market as a whole, including the United Kingdom?
  Mr. Marshall: I am afraid that I cannot answer that question without notice, but I shall make inquiries and write to my hon. Friend. It is an interesting question.
  Another aspect touched on related to the views of the House. I believe that the House has a major part to play, not just in looking to the future and trying to take a long-term view, or in relation to Select Committees—enthusiastic though I have always been about such developments. My hon. Friend the Member for Chichester (Mr. Nelson) made the point very effectively. I believe that the House ought to be seen to be giving a lead in this day and age, and I agree that these are developments that one would wish to encourage among all hon. Members, because we can then be seen to be playing our part in what is clearly an important national development.
  I turn to the speech of my hon. Friend the Member for St. Marylebone, to whom tribute has been paid on all sides of the House. He made a powerful speech, which repeated a contribution which he made at a conference last month. It was no worse for that. Indeed, he has written to me on the subject, and I have had an opportunity to look at the 10-point programme which he put forward. As his was an important contribution, I should like to reply to his 10 points, because they were echoed by a number of hon. Members.
  The suggestion about a Minister for Information Technology is something that the Government are considering. But I have already mentioned that within the Department of Industry some work to reorganise particular activities to reflect

  1007
  that part of the Department's work is under way. I shall keep my hon. Friend's wider suggestion in mind.
  My hon. Friend also suggested that the Government should prepare and issue a policy document, which I think he entitled "Information technology in the United Kingdom in the 1980s". That is a somewhat similar proposal to the French Telematique initiative, and I can see that there are certain arguments in its favour. I think that the right hon. Member for Deptford had that in mind in an earlier contribution. Certainly, the country could benefit from an awareness programme. However, a number of programmes are already in existence, such as the microprocessor awareness project, and one would need to consider any public expenditure implications arising from such programmes.
  Quite a lot is happening with regard to information technology in the United Kingdom. Many hon. Members have referred to that. For example, we have Prestel, Teletext and System X. They are not desperate items but rather part of a comprehensive, visible programme.
  It was suggested that the Department of Industry and the Department of Trade should do more to sell abroad the products of British information technology. It was also suggested that Ministers might very well lend their weight to this activity. I am the first to agree with this concept. I suspect that the right hon. Member for Deptford would also be the first to agree with me that when we consider the practical aspects of leaving the House and going off to help British industry to sell anything anywhere, there are great difficulties, given the nature of our parliamentary democracy and our voting commitments.
  Mr. John Silkin: I do not want to interrupt the hon. Gentleman's flow. I rise merely to agree with him. When the suggestion was made, I thought just for one moment—it was the only moment in the year when I have done so—how lucky the French Ministers are in not having to worry at all about the National Assembly.
  Mr. Marshall: The right hon. Gentleman took the words out of my mouth. I was about to mention the French dimension. The point has some validity.
  1008
  The private sector must take the lead, and I do not believe that one should regard ministerial or Government activities in this area as taking its place in any way. It can be supplemented.
  Many of my hon. Friends are devoting considerable efforts, particularly in the Department of Trade, to looking at these issues, among many others.
  It was suggested that the Government should gather a number of applications for advanced systems within their own activities and procure them from the British technology industry. As an enthusiast, I look forward to the day when we can get the electronic office into Whitehall. A number of trials are taking place using various information technology elements, but this again has to be related to resources. As was rightly mentioned in the debate, it has to be related to the attitudes of the trade unions in these matters. These have not always been particularly helpful in terms of moving ahead.
  Reference was made to the use of Prestel by the Government at home and by our embassies. I have already mentioned the Paris example, and there are plans for the installation of Prestel in other embassies.
  The Department of Industry intends to establish an experimental in-house closed-use Prestel system, involving 40 terminals. I hope that that will help us to give practical evidence of the value of Prestel.
  The hon. Member for Brent, South (Mr. Pavitt) raised a question—it was also in the list of my hon. Friend the Member for St. Marylebone—concerning the use of this technology in the Health Service. The hon. Member was his characterically modest self in saying that he was not an expert in this area. The whole House knows that he has great experience in the Health Service, and I thought that his point had validity. It is a difficult area, as he showed, because the problems of confidentiality and the attitude of the British Medical Association have to be balanced against the possibilities of co-ordinating a number of the records in the Health Service. Certainly in a wider sense one would like to add to that that the possibilities for coordinating public purchasing between health authoritites relate to an area in

  1009
  which one might expect to make progress with the growth in information technology.
  Mention was made of schools and their provision with low-cost microcomputers and software systems. In an ideal world one would be happy to agree that this is something that we would all wish to see, but one comes back to the question of resources. The Department of Industry is promoting a competition for schools under the microprocessor application projects scheme, with 100 microcomputers as prizes. My colleagues in the Department of Education and Science have recently launched a national development programme for schools and colleges that will contribute to widening the awareness of young people to the implications of this technology.
  With regard to space and the satellite programme, in opening I took the opportunity to announce the CPRS study that is to be undertaken. I was asked by several hon. Members about the precise status of that study. I am very happy to confirm that my right hon. Friend the Prime Minister has given the project her personal blessing. An inter-departmental group of officials has been set up to look at this whole area. I shall have the opportunity of chairing it and of reporting to my right hon. Friend the Secretary of State for Industry on space matters. These are areas in which I was very happy to find in the House so much enthusiasm for what really is an important adjunct to this technology.
  The Government are committed to energy savings in buildings, and to starting with the Government's own estate. The fifth plank of my hon. Friend's platform concerning the improvement of telecommunications, particularly in the City of London. I was delighted that the hon. Member for Wallsend (Mr. Garrett) looked to the liberalisation of the Post Office monopoly, as that will help to mop up consumer demand. Amiable figure though he is, the hon. Gentleman could not resist trying to tweak my tail by saying that I had mentioned public sector companies but not private companies. He will understand that I am fairly relaxed about this issue. British Aerospace will shortly become private, and with a little liberalisation of the Post Office we may be able to close ranks and take a more relaxed public/private view together.
  1010
  I am sure that the hon. Gentleman will understand that there is always some difficulty about mentioning companies in the private sector that are competing. I might seem to advertise one in preference to another. I shall mention the activities of several companies in the private sector that are doing valuable work, particularly in research and development. Three examples involving space, for which I have responsibility, are GEC, Plessey and Marconi.
  It was suggested that corporation tax should be charged in such a way that any discrimination against service industry is reduced or eliminated. I shall pass that point on to my right hon. and learned Friend the Chancellor of the Exchequer, so that it may be considered in the corporation taxation review that is at present taking place.
  Many hon. Members raised questions that were relevant to other Departments. I shall ensure that they find their appropriate homes. It was suggested that if a Minister were appointed he should take a lead in setting up technology agreements. The hon. Member for Newton was right to suggest that unions are beginning to realise that the adoption of new technology—including information technology—may bring long-term benefits, as well as challenges. It is difficult to accept change in terms of contraction. As the hon. Gentleman said, a failure to do so may lead to greater job losses and to industry becoming more uncompetitive. I am also pleased about discussions at NEDC on new technology. I am also pleased that the CBI and the TUC have agreed to establish a continuing dialogue.
  It was suggested that the Government research and development programme in information technology was almost exclusively the preserve of universities and of Government research establishments. It was also suggested that it should be put on a wider basis. I agree that it would be an advantage to have a greater interface between public and private research and development. I have visited research and development establishments, and it is clear to me that there are opportunities to put out work to sub-contractors on a commercial basis. There are also opportunities for those establishments to work on behalf of the private sector. In some cases,

  1011
  that might save the private sector from setting up research and development facilities de novo.
  The Post Office research and development centre at Martlesham is heavily involved in information technology. Private sector finance for research and development has generally declined in recent years, largely as a result of the squeeze on profit levels. The ACARD report on public purchasing—to which the Government have yet to respond—questioned whether the balance between the public and private sectors was correct. I have given my response today.
  It was said that enterprise zones should be the subject of a major Government initiative in promoting information technology in small firms. However, I must quarrel slightly with that proposal. Enterprise zones were suggested in order to take the Government away from the planning activity of particular areas. The experiment is being watched with great interest. Enterprise zones are not only for small firms. They essentially involve a relaxation of controls and a reduction of bureaucracy, and so on. One initiative—which has already been mentioned in connection with Docklands—was part of the PA Management Consultants' scheme, under which a wired city would be laid out with the most modern telecommunications facilities. It would be able to attract high technology companies. I think that this project is known as Southwark Quays. It was not specifically linked to an enterprise zone, although Docklands subsequently has been suggested as a suitable area. That is the kind of situation in which one may see the two concepts coming together.
  Finally, my hon. Friend suggested that the Government should ensure that more people are trained at all levels in these new skills. The shortage of appropriately skilled manpower is well known. The recent study by the computer sector working party showed that although the stock of computer-skilled manpower is greater than might be supposed, there are severe shortages in computer manufacturing, computer services and computer usage. The solution to this problem must inevitably come from industry. The private sector's training turnover in computer skills is estimated at about £90 million a year. Certainly, the Man
  1012
  power Services Commission is aware of this problem.
  A number of other points were raised by hon. Members. My hon. Friend the Member for Southampton, Test (Mr. Hill) was particularly interested to hear the latest situation at the Mullard company, in his constituency. He raised this in the context of the microelectronics support programme. It has been implied that the programmes have already been fully committed, and I wish to make it clear that only the £14 million allocated to mass-produced standards has been fully taken up. But a further £28 million has been allocated for a separate subsector and there is still some money available there.
  My hon. Friend the Member for Test related this to Mullard. He said that that subsector looked to the manufacture of microelectronic devices specially designed for particular customers or particular sectors of industry, such as telecommunications, the motor industry, or television. I am happy to tell the House—I cannot guarantee to give this sort of service every day—that we have just been able to approve £1 million to help Mullard continue to develop its design and press this capability, and to ensure that it remains and grows in the United Kingdom. Therefore, Mullard takes its place alongside other important companies, namely, Ferranti, GEC and Plessey, as well as the multinational companies working in this sector and located in the United Kingdom.
  There were a number of other points of interest raised. My hon. Friend the Member for Coventry, South-West (Mr. Butcher) rightly described this as "a massive and awesome subject". He referred to the EEC aspect and Community telematic policies. That is a broad area, which we have not had the opportunity to discuss today, but many hon. Members will be aware that following the views put forward at the Dublin European Council in November 1979 a number of major initiatives are being explored within the EEC to see how far a Community policy can be found to seek to prevent the duplication and unnecessary doubling up.
  These initiatives will see whether there is a way to share the costs and, in effect, to share some of the benefits in this area. Much work still remains to be

  1013
  done and I recognise that this is not easy, given the natural tendency of the various countries to seek to pursue their own objectives. Nevertheless, it is a valuable initiative, which needs to be explored fully.
  The hon. Member for Blaydon asked about packet switching networks. I understand that the Post Office is progressing with its plan for a national packet switching network that is intended to come into service later this year. It will be one of the first public packet switching networks outside North America.
  The hon. Gentleman also referred to Inmos, and put forward what he may consider to be a strategic argument. I have to correct him. Inmos has produced standard chips essentially for the civil market. The Ministry of Defence gets special microprocessor devices from Ferranti, GEC, Plessey and a number of multinational companies. The United Kingdom presence is still reasonably assured.
  As I said, the debate has been constructive. Perhaps, on reflection, hon. Members will consider that the fact that the Government have provided time for the debate and the answers given today demonstrates at the Government are keenly aware of the importance of this technology. The general views put forward have been of the greatest value and will be taken on board in furthering our policies.
  It being half-past Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

  NATIONAL ENTERPRISE BOARD (ASSETS)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
  2.30 pm
  Mr. Gerald Kaufman: This debate takes place against the background of the most frightening unemployment that Manchester has suffered since the war. In the 14 months since this Conservative Government came to power. 60,237 redundancies in Greater Manchester have been reported to the Department of Employment. In the city of Manchester the number of redun
  1014
  dancies reported to the Department is 10,288. Those are devastating figures. In Greater Manchester we have 89,597 in the dole queues, including 11,641 school leavers. In the city of Manchester the jobless total is 49,294, including 5,445 school leavers. That is the blackest unemployment situation in Manchester for very many years. Manchester is now above the national average for unemployment.
  That tragedy has been brought about by the deliberate policies of this Government, yet this is the moment when they have decided to meddle with the security of three of the most important employers in Manchester. Between them, Ferranti, ICL and Fairey Engineering employ 14,000 workers in Greater Manchester. Ferranti has increased its overall work force by 350 in the past five years. The two ICL factories in my constituency of Ardwick have increased their work force over the same period by 300. Very few companies have been able to increase their work force in recent years, but Ferranti and ICL have been doing so.
  All three companies were rescued by Labour Governments from the mistakes and disasters of private ownership. Thanks to the efforts of the workers, and with the help of the National Enterprise Board, they became successful and prosperous. They were making profits and providing secure employment. Their shares were held on behalf of the taxpayer by the National Enterprise Board—100 per cent. at Fairey, 50 per cent. at Ferranti and 25 per cent. at ICL. Dividends were being paid to the taxpayers as a return on their investment. Then, for wanton political reasons, this Government ordered the National Enterprise Board to sell off the shares. The result at a time of economic crisis is that security has been replaced by uncertainty and confusion. What is more, the taxpayer has not only lost the prospect of further dividends but has made a capital loss on the sales. Taking into account the impact of inflation, the money received or expected on these shares sales is less than the money that the taxpayer put into those three companies. In the case of ICL, it is less than half.
  Other problems have also been created by those forced sales. When the National Enterprise Board owned 25 per cent. of ICL, the Minister at the Department of

  1015
  Industry with responsibility for the National Enterprise Board had the special duty of protecting the interests of ICL. I held that job, and I discharged that duty. There is now no such ministerial responsibility. As a result, there is no one with the special duty to speak up for ICL in the Cabinet. Yet, within the next few days, ICL needs a spokesman in the Cabinet more than ever before because the Government are about to take a decision of immense importance affecting ICL. It was referred to in the previous debate, but I make no apology for returning to it, especially in the light of the inadequacy of the reply to that debate by the Under-Secretary of State.
  The Government are about to decide on an order worth £150 million for a new computer system for the Inland Revenue. Of that, £60 million worth would go to ICL. A large part of the equipment was designed in my constituency in West Gorton. It would mean work at the factory at Ardwick in my constituency and at Ashton-under-Lyne, and 500 jobs are at stake.
  There is no doubt that ICL can do the job. It can supply the computers competitively, and back their installation with a nationwide support service. This will be the largest computer system in the United Kingdom. It is a huge project involving 20,000 visual display terminals in 60 district offices. Many British companies in addition to ICL would gain from it.
  The Government have a clear policy, inherited from the Labour Government, of special preference for ICL, the only British-owned computer company facing cut-throat competition from powerful foreign interests. That policy involves placing Government computer orders with ICL on a single tender basis rather than going to open tender.
  The Labour Government would certainly have placed the order on that basis. If this Government fail to do so they will inflict a massive blow deeply damaging to the prospects of ICL in world markets where ICL earns £300 million a year for Britain. At a time of high unemployment, it would be folly if this order were taken away from ICL.
  On behalf of my constituents and on behalf of British technology, I ask the Minister for an explicit assurance that
  1016
  this order will go to ICL. I ask for a vote of confidence in ICL.
  Secondly, I ask the Minister for assurances about the future of Fairey Engineering. The morale of the company has been damaged by the months of degrading haggling over the sale of Fairey. Now S. Pearson has become the owner, but constituents of mine who work there complain that during this critical period there has been no adequate consultation with the work force. I have heard today from trade union reresentatives that the unions have not been consulted to date on the takeover by Pearson. They learnt of the sale from the company notice boards.
  The workers are deeply concerned about redundancies which recently have been declared and have not been justified to their satisfaction. They believe that the company faces grave problems without new capital investment. The workers did not want Fairey to be sold, but under its new ownership they ask for assurances. First, they want an assurance that the group will be kept together. I understand that my hon. Friend the Member for Stockport, South (Mr. McNally) who, together with my hon. Friend the Member for Stockport, North (Mr. Bennett), will seek to intervene in this debate, has something to say about that. Secondly, the workers ask for consultation with the unions about plans for the future. Thirdly, they ask for a guarantee that Fairey Engineering, Stockport, will be kept as a viable site. Fourthly, they ask for fresh investment to give the company confident prospects for the future.
  I ask the Minister for these assurances on behalf of my constituents and those of my hon. Friends.
  Thirdly, I ask for assurances about the future of Ferranti. Last week the Government bowed to pressure in this House and acted to prevent Ferranti from being auctioned off like a white elephant to the highest bidder. Although the immediate threat has been lifted, the peril remains because in two years the shares will be free to be put on the market and the City vultures who did nothing to save Ferranti at its time of trouble will be able to swoop once again. Ferranti is living under a two-year suspended sentence.
  I ask the Minister for two assurances about Ferranti. First, I ask for a promise that the Government will make a reference

  1017
  to the Monopolies and Mergers Commission if there is any likelihood of a major company moving to prepare a takeover of Ferranti. Secondly, I ask for Government action to prevent foreign shareholders from buying into Ferranti, which is so dependent on defence orders. Preventing a foreign takeover under the Labour Government's 1975 Industry Act is not enough. A substantial foreign minority shareholding would provoke serious problems and must be prevented.
  None of these worries would be aroused, and none of these assurances would be necessary if the Government had not wantonly decided to meddle with the security and stability of these companies by ordering their forced sale, but these deplorable developments have taken place. Therefore, on behalf of my constituents and of the people of Manchester, I ask for these assurances, as the minimum that we have the right to expect.
  2.40 pm
  Mr. Tom McNally: I reinforce what my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) has said—not least about the way in which trade union workers in NEB companies have been treated over the last few weeks and months. The Minister knows that hon. Members have frequently asked Ministers to consult unionists. These workers in companies that have got into trouble have given the maximum co-operation to help in their rescue.
  My constituents and many others in South Manchester have come face to face with reality, not with theory. We heard the theory last night—how market forces and the guiding hand of the market will rescue our high technology industries. My constituents know that when their companies came under pressure and they needed help the market was absent. It was the NEB that kept three major high technology companies in being and kept together workers of high skill to carry on good work. The reward, as my right hon. Friend said, is that they are to be degraded, to be hawked around the market with scant care for the companies that they helped to save. Even at this stage the Minister should give us some assurances about consulting the unions.
  Whether or not the present incumbents of the Department of Industry accept it,
  1018
  or some later incumbent does so or not, once the U-turns come the emasculation of the NEB will be shown to have been a major error by this Government. The NEB was building up a track record of co-operation and shrewd judgment that would have benefited this country.
  As my right hon. Friend said, the Secretary of State has meddled where there was no need for him to be involved, yet in other parts of the North-West, such as the textile industry, where he could be usefully employed, he says "That is for the market; I will not be involved". There have been many attempts to describe the Secretary of State. I thought of describing him as Sweeney Todd, but when I read the reviews of the new musical show of that name I discovered that Sweeney Todd at least had a constructive purpose in cutting throats. The Secretary of State is cutting throats and leaving viable industries to bleed to death. He should be ashamed of himself
  2.43 pm
  Mr. Andrew F. Bennett: I congratulate my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) on initiating the debate and on his speech, with every word of which I concur. Once again, I record the debt of gratitude that the people of South Manchester owe my right hon. Friend for his period as a Minister, when he worked so hard to get the NEB involved in saving these companies from the market forces which so nearly destroyed them.
  I agree that the most important thing, certainly for the workers of Fairey, is to remove the uncertainty created by the Government, to give them guarantees about job security and guarantees that they will be consulted and that the investment promised by the NEB will be made.
  I have written to the NEB on behalf of Labour Members concerned about this problem. I have received a reply which gives some assurances which I should like the Minister to underwrite. It states:
  "Thank you for your letter of 1st July, 1980, about the sale of the NEB's shares in Fairey Holdings Limited to Doulton and Company Limited, which was completed on 27th June, 1980.
  In offering to purchase these shares Doulton gave assurances to the NEB that the present Fairey Group would be kept intact with a

  1019
  separate identity within the Doulton Group and that the Fairey name would be maintained In addition, Doulton has given undertakings that the terms of employment of the employees of Fairey and its subsidiaries would be no less favourable than those applying at the date of completion, and that it has no present intention of effecting any redundancies in relation to Fairey or its subsidiaries.
  These undertakings have been reflected in public announcements which have been made by the NEB and by Doulton and Co. Ltd."
  I hope that the Minister will underwrite those undertakings. I hope also that if there is no intention of bringing about redundancies—that seems to be firmly said in the letter—he will say what is the position of those who are employed by Fairey but who have received notices that there will be redundancies. They feel that they were being made redundant as part of the manoeuvring to try to get a better price for the company. They have a right to know as soon as possible whether Doulton is prepared to take back their redundancy notices or whether it is going to press them.
  Many of us were concerned that Fairey was committed to two products only—on the nuclear side and on the military side. We wished to see the development of a third product, and Fairey was making good progress, with NEB assistance, in developing a programme for robotics. I hope that we can have assurances that the new financial arrangement will ensure that that new investment goes ahead and that the company has the opportunity to grow in those three areas, and not merely rest on its existing technology.
  2.46 pm
  The Under-Secretary of State for Industry (Mr. Michael Marshall): This has been an interesting day. In opening I should like to say that it is good to see the right hon. Member for Manchester, Ardwick (Mr. Kaufman) talking on industrial matters again. We missed him on the wilder shores of Environment, but, as usual, he brought his sense of excitement and emotive language to the occasion. I welcome him back into the fold, as it were, and I appreciate that he has a most serious constituency interest here, as do the hon. Members for Stockport, North (Mr. Bennett) and Stockport South (Mr. McNally).
  1020
  Judging by the figures in front of me, I think that I am right in saying that the right hon. Gentleman is representing his interest in ICL, whereas his hon. Friends are representing their interests in Fairey and Ferranti. It is in that broad context that the right hon. Gentleman brought all these points together.
  The right hon. Gentleman and his hon. Friends made a number of specific points about the implications of the disposals of the NEB shareholding for the companies concerned. Before I respond to those points it is essential that I remind the House of the policy of the Government on the disposal of the NEB, as it is relevant to many of the points that the right hon. Gentleman and his hon. Friends made in relation to individual cases.
  In some cases they knew that the assurances that they sought could not be given here. They are in many cases assurances which, if they pursue them, they will wish to pursue with the commercial interests concerned directly in their constituencies. I have no doubt they have the ability to do that.
  It is a fundamental theme of Government policy that we should transfer resources from the public sector to the private sector wherever possible. We believe that market forces provide the best response to the needs of the economy and that without the discipline imposed by the free market it is all too easy for the country's limited resources to be misallocated.
  In the case of the National Enterprise Board the natural progression—if that is what is argued by the Opposition—by which assistance was offered should, in my view, lead to the termination of that assistance at the earliest and most convenient time. By definition, that releases resources that could be used by a whole range of other desirable activities.
  Over the past five years, under successive Governments, the NEB has acquired interests in a miscellany of unrelated companies. Some the right hon. Gentleman will remember well from his time at the Department. They were imposed by the previous Administration without rhyme or reason in some cases. In the case of Rolls-Royce, after a period it became increasingly clear that that was not the best mechanism by which to relate the taxpayers' interests, the Government's role and the interests of that

  1021
  company. One must look at each individual case on its merits, even in terms of the existing portfolio.
  We do not believe that any useful or indispensable purpose would be served by the NEB retaining many of the companies that I have just mentioned. The Industry Act 1980 has given the NEB the function of disposing of its shareholdings to the private sector.
  In the new guidelines that will be published shortly we are giving the board certain criteria to guide it in exercising that function. In particular, in preparing for any disposal the board shall seek to secure the highest available consideration, subject to the interests of the taxpayer and the company, taking into account such other factors as the Secretary of State may draw to the board's attention—for example, the United Kingdom's defence interests.
  When I speak of taking the company's interests into account I mean the interests of the work force and the widest possible consultation that can be arranged in each circumstance. The guidelines also specify that NEB shareholdings should be sold off as soon as is commercially practicable.
  Within the overall requirement, however, normally the board will have to use its judgment about the timing and nature of its disposals. I am pleased to say that the board has made a good start with the disposal of its holdings in ICL, Fairey, and Ferranti, with a healthy return, despite what the right hon. Member for Ardwick said, on the taxpayer's investment.
  In the debate following my right hon. Friend's statement on the NEB, almost exactly a year ago, the right hon. Member for Ardwick expressed fears on behalf of the work forces at ICL, Fairey and Ferranti. I revert to the right hon. Gentleman's mastery of emotive language. He said that the companies were being sold off in order to be "looted" by the private speculators who let them down in the first place. The right hon. Gentleman and his friends who appear to support that line are still trying to argue that case, in spite of the fact that none of the three disposals provides any evidence of that view.
  I turn to the specific points made in the debate. We were told that there is
  1022
  considerable anxiety in the Fairey work force about the future of the company. I hope that Opposition Members will not attempt to increase that anxiety in in order to score political points. After all, Fairey, in common with other companies in the engineering sector, has recently experienced a down-turn in orders. That has forced the company to announce redundancies at Stockport. They are not a consequence of the disposal of NEB shares. The redundancies were announced before that was completed. It is wrong to assume that they would have been averted had the company remained with the NEB.
  It must be clear to hon. Members that for a number of other companies in which the NEB is involved—Alfred Herbert comes to mind—the market situation cannot be denied.
  I turn to the terms of the disposals. I assure the House that the interests of the company and the work force have been fully taken into account.
  Mr. Andrew F. Bennett: The Minister says that the interests of the work force were taken into account. Why were the employees not consulted, so that they could decide whether their interests were being taken into account?
  Mr. Marshall: The hon. Gentleman and I will never agree about what makes fair consultation at this remove. I am not privy to the detail. Prior to the debate I sought assurances from the NEB about what has taken place. I have no reason to believe that its account is unfair.
  In offering to purchase the shares the Doulton group assured the NEB that the present Fairey group would be kept intact, with a separate identity within the group. Undertakings have also been given that the terms of employment for the work force at Fairey and its subsidiaries will be no less favourable than those applying at the time of acquisition and that there is no present intention of effecting redundancies at Fairey or its subsidiaries.
  The Doulton group has made it clear that the purpose of acquiring Fairey is to diversify its interests into the engineering sector and that it is looking for the Fairey board to continue to develop a coherent strategy for the profitable development of the group.

  1023
  It is wrong to suggest that Fairey's prospects have been damaged in any way by the disposal. I can understand that the right hon. Member for Ardwick is anxious to ensure that the company's interests, as well as the taxpayer's interests, are considered when the NEB sells its shares. In that case there is nothing between us. The guidelines make it clear that the NEB must have regard to both. That is what it has done in the Fairey case.
  However, if the right hon. Gentleman wants the NEB to be a sort of sanctuary to insulate companies from economic realities, I have to take issue with him. In the long term that course would be inimical to the interests of the company and its work force. The only way that the long-term interests of companies and their employees can be secured is through maintaining competitiveness, and the challenge of a free market is the best spur to competitiveness.
  Despite what the right hon. Member for Ardwick said, ICL is keen to distance itself from the image, which the right hon. Gentleman has fostered from time to time, that the company is either Government-owned or was Government-rescued. It has gone so far as to make the point in a recent advertisement in The Times. The company is clearly proud of the fact that it is privately owned, independent and dynamic, and I know that the right hon. Gentleman will wish, as I do, that its continuing success will provide continuing employment for his constituents.
  The PAYE computer project has nothing to do with the disposal of the NEB shareholding in ICL, but since the matter has been raised in the debate I should reiterate that the Government recognise the importance of that project to the United Kingdom computer industry. The industry is aware that the Government's policy of acquiring large computers by a single tender from ICL must be subject to satisfactory price, performance and delivery.
  I confess that I was a little concerned that the right hon. Member for Ardwick was seeking an unqualified assurance that orders would go to ICL, without reference to what was put on offer. I am sure that the right hon.
  1024
  Gentleman, reflecting on his former role, will appreciate that any purchaser must look at price, performance and delivery. However, the interest of the right hon. Gentleman is clear and the Government will take it fully into account. Of course, we are up against the deadline of changing EEC and GATT regulations, but any contract placed before the end of the year must take into account satisfactory price, performance and delivery. If we did not ensure that, we should be failing in our duty.
  The right hon. Member for Ardwick asked what safeguards there were that Ferranti would remain independent at the end of the two-year period during which institutions have undertaken not to sell their shares. As my right hon. Friend made clear to the House on 1 July, it is impossible to provide that sort of safeguard. It is not in the interests of the company—or its work force—for it to be permanently safeguarded from bids on the market. In certain circumstances, such a bid might present major opportunities for growth and further employment.
  Ferranti management and representatives of the work force who came to see my right hon. Friend—many hon. Members haxe expressed an interest in this matter—asked for a two-year breathing space. We have provided that by placing the NEB's shares with institutions on the conditions that have been announced. Indeed, it was clear from the general tenor of our debate on the matter that that view was widely-shared throughout the House. Lest it be argued that the Government are not responsive to the views of the House, I cite that case as an example of where what was carried out took full account of the general sentiments of the House.
  As to the possibility of a foreign takeover, when I give the right hon. Gentleman the reply that he has so often given me, namely, that it is a hypothetical question, he will know from his many years' experience on Standing Committees that I give that reply because it is a fact. The question cannot be determined in advance. The right hon. Gentleman mentioned the existing powers to prevent a foreign takeover of an important manufacturing undertaking

  1025
  that is of special interest to the United Kingdom. Those powers would be considered if a foreign bid materialised.
  I appreciate the way in which the right hon. Gentleman the Member for Ardwick and his hon. Friends put their questions to me. I wish to cover two or three more points before I finish. I have no quarrel with the way in which the NEB has exercised its shareholding in the companies. The top managements have been left to get on with their jobs. That emphasises the point that I made earlier about the need for direct contact if hon. Members wish to look at the present state of the companies now that the NEB is no longer directly involved.
  1026
  Against that background, we see no public benefit in the NEB's retaining its holdings. There is every reason to suppose that the managements of the companies can do their job just as well under private ownership. I believe, therefore, that the disposal of the NEB's shareholding will have done harm neither to the companies and their employees nor to Greater Manchester. The public resources that have been released by the sale of the holdings can be applied where they are most neeeded, to the benefit of the country as a whole.
  Question put and agreed to.
  Adjourned accordingly at Three o'clock.