Computer Industry (Hansard, 9 February 1981)

§ 9. Mr. Dykes
asked the Secretary of State for Industry if he plans any measures in the medium and long term aimed at assisting the strength and viability of the United Kingdom computer industry.

§ Mr. Kenneth Baker
The United Kingdom computer industry must develop and market internationally competitive products if it is to remain strong and viable. The Govenment currently operate a number of measures aimed at encouraging the development of such products which will continue to make a substantial contribution to the medium and long-term future of the industry.

§ Mr. Dykes
May I thank my hon. Friend for that answer? Bearing in mind that the survival of the British computer industry is literally at stake in international terms and that the Government are bound to be involved in providing some form of public funds for high technology products and new electronics, will the Government now consider providing more as a proportion of the total research and development expenditure for British computer companies and more in comparison with their ferocious competitors in other countries?

§ Mr. Baker
My hon. Friend makes a good point. However, I must emphasise the amount of support that is already available under three schemes that my Department operates. First, there is the MAP scheme—namely, the microelectronics applications programme, which involves £55 million over four years. Secondly, there is the microelectronics industry support scheme and, thirdly, the product and process development scheme, which involves many projects that are directed to microelectronics. My Deprtment provides research and development facilities and money for those projects. I am conscious of the value of that support.

§ Mr. Eastham
Will the hon. Gentleman bear in mind that only a few months ago the Minister of State was gloating about the privatisation of ICL? I do not know whether he has read the financial reports, but ICL is now running into a deficit of possibly £50 million. What is he prepared to do about this? Is he prepared to emulate the previous Labour Government and save the British computer industry and thousands of jobs or is he merely prepared idly to stand by?

§ Mr. Baker
It is clear that ICL is experiencing the same problems as many companies in the recession. Orders are short and costs are high. The chairman said at the annual general meeting last week that the company is implementing a series of measures to conserve its cash flow, such as plant closure, no general wage increase and the disposal of surplus premises. These measures are prudent and necessary and will strengthen the company.

§ Mr. Henderson
May we take it from my hon. Friend's reply that he at least is not making the mistake of confusing the totality of the British computer industry with the individual interests of one company?

§ Mr. Baker
No, Sir. The British computer industry is composed of many companies that operate in hardware, 590 software, the mainframe area, mini-computers and microcomputers. There is a great deal of vitality and strength in the industry.

§ Mr. John Garrett
Will the Minister make it clear that he intends to guarantee the future of ICL?

§ Mr. Baker
My Department has not received any specific and formal request for assistance from ICL. I understand that the company is having talks with its bankers. I saw from the chairman's statement last week that the company is putting in hand measures to strengthen its cash position. My Department is in frequent contact with ICL over its future research and development programme, as with all other major information technology companies. The public sector is a major user of ICL equipment.