HC Deb 25 January 1982 vol 16 cc600-1
5. Mr. Chapman

asked the Secretary of State for Industry what is his latest estimate of the total amount of public subsidy to be paid to industry this financial year; and how much of this is to be made available to the British Steel Corporation, BL and British Shipbuilders.

The Secretary of State for Industry (Mr. Patrick Jenkin)

Total support for British industry in the current year is estimated to be around £3 billion. This includes the whole of regional assistance to industry, support for small firms, science and technology and many other heads. A little over half of the total sum will go to finance the three industries mentioned in my hon. Friend's question. I regard this proportion as excessive, and it must be reduced as soon as practicable.

Mr. Chapman

As I understand that the British Steel Corporation, British Leyland and British Shipbuilders have shed substantial amounts of labour in recent years—about 25, 25 and 20 per cent. respectively—can my right hon. Friend give me an assurance that in future the amount of public subsidy put into these three nationalised industries will be dramatically reduced and, indeed, that any subsidy that may be necessary will go into investment in sound capital projects, not into the preserving of uneconomic labour?

Mr. Jenkin

I have a great deal of sympathy for the point made by my hon. Friend. Much of the money that has been spent has gone into sound capital projects. For example, in the case of BL, I have here a list of nine major capital projects financed over the last five years with a total investment—this comes from a variety of sources—getting on for £1, 000 million. In the steel industry there has been some valuable investment as part of the restructuring. I hope that over the next two to three years we shall see a substantial reduction in the burden that these firms represent to the taxpayer so that we can do a bit more in the new, modern industries where all major industrial countries give support.

Mr. Roy Hughes

Does the right hon. Gentleman agree that the steel, motor car and shipbuilding industries are vital if Britain is to have any future as an industrial nation? Furthermore, does he agree that all these industries have been run down? If this new capital is now to be realised and a return made upon it, should not the Government consider import controls to make sure of it?

Mr. Jenkin

I do not think that it would be of any help in encouraging the increasing competitiveness of British industry if we were now to embark upon a wide-ranging programme of import controls as advocated by the official Opposition. As to the essentialness of industries, there is no point in maintaining in perpetuity industries in whatever product, that cannot in the end pay their way. The Government and the boards intend to make these industries viable so that they can contribute to rather than be a drain on the British economy.

Mr. Ward

I welcome what my right hon. Friend said about making these industries viable, but will he continually remind both managers and workers in them that they are kept going by the grace of the taxpayer and the grace of the profits of those firms which are already viable, and that it is vital that they should realise that there is a limit to how long those in viable industries are prepared to go on subsidising them if they continue to work towards their own destruction, as some of them seem to be doing now?

Mr. Jenkin

I am satisfied that the managements in these concerns are aware of that point. The question of how such information is made available to the work forces must be for the managements to decide.

Mr. Orme

Does the right hon. Gentleman agree that this investment in the public sector has a direct effect on the private sector and creates many thousands of jobs, as we saw recently in the motor car industry? Will he acknowledge that fact?

Mr. Jenkin

I certainly acknowledge that fact. That is why I included support for those three major concerns in what I called total support for British industry. However, as much of the support, both in the past and now, goes to meeting losses, my hon. Friends are entitled to draw attention to that point and to say that they wish to see an end to it.