HC Deb 21 June 1984 vol 62 cc492-532 4.17 pm
Mr. Peter Shore (Bethnal Green and Stepney)

I beg to move, That this House, concerned at the continuing fall in the United Kingdom share of the rapidly growing world market in information technology and particularly disturbed by reports of the impending disposal to foreign interests of Inmos, the only independent British firm with a major capability for developing the semiconductor technologies crucial to the economic and strategic future of the United Kingdom, calls upon Her Majesty's Government to ensure the continued rapid development of Inmos and its products and to maintain it as an independent company under majority United Kingdom ownership and control. The main focus of my remarks will be on the dangers that I foresee for the future of INMOS, a danger that the Government have a clear interest and duty to avert. Their amendment, clearly—I might say, almost notoriously—fails to deal with the major substance of the motion. It gives no guarantee whatever that, in transferring INMOS to private ownership, there will be any safeguard to ensure that the company is not broken up and that it remains under British ownership and majority control.

I will, at the outset, set my remarks both in the context of our publicly stated objectives for the development of semiconductor technology in Britain and in the wider context of the development: of information technology, in which advanced semiconductors play a vital part.

Few will dispute three crucial issues that are expressed in the motion. First, there is the overriding importance of Britain's ability successfully to compete in the world market. This essential objective will become increasingly dependent on the ability to incorporate electronics into the products and services on offer and the use of electronic techniques in design, manufacture, quality control and in management. Those words appear in the report last year to the NEDC of Sir Ievan Maddock, a man nurtured by the Atomic Energy Authority, who from 1971–77 was the chief scientist at the Department of Industry and from 1977–81 secretary to the British Association.

Still more recently—only last month—Professor John Ashworth, chairman of the information technology committee of Neddy, outlined the significance of information technology, a major part of electronics, when he asserted: Information technology is not just a new industry but a new way of conducting industrial, commercial, educational, administrative and even aspects of domestic and political business". Information technology covers the acquisition, transmission, processing and presentation of information in all its forms—video, audio, text and graphics—and brings into its industrial scope telecommunications, hardware and software, the peripherals of computing and a vast range of advanced office equipment. So much for the importance of information technology.

Secondly, no one would dispute IT's enormous, feverish rate of growth. It has grown by 18 per cent. to 20 per cent. per annum in the United Kingdom for most of the past decade and by up to 35 per cent. in the economies of our principal competitors, the United States and Japan. Thirdly and sadly, there is the grim fact that we are falling behind, in spite of all our natural endowment of inventiveness and scientific intelligence, the performance of our rivals.

I shall illustrate my argument by the use of six quotations from the paper presented by Professor Ashworth, the chairman of the little Neddy on information technology. The paper was presented to the recent meeting on 22 May of the NEDC. What does he say about the facts? The paper states that our share of the aggregate output of the five leading nation's information technology industries has dropped from 9 per cent. to 5 per cent. since 1970. More recent figures show that in 1982 UK IT Industry had an output of £3.3 billion, a trade deficit of £460 million and import penetration approaching 50 per cent. Last year, in spite of a leap forward in output and exports, imports increased to take some 54 per cent. of the UK market and the trade deficit is now £800 million. Professor Ashworth's second point is: every one of our industrial competitors gives high levels of support to this industry. The most recent programme to be announced is that of West Germany, which will provide about £800 million over four years for research and development support, public awareness and public procurement. Given this, and the fact that many of our competitors start from a stronger industrial or economic base, the competitive threat to the survival of an independent UK IT industry is now acute. The third and most serious point in Professor Ashworth's statement is as follows: on present trends the UK will not have an independent, broad-based IT industry by the end of the decade. It will have a mixture of inward investment, UK owned companies employing licensed technology and specialised niche and applications companies. If this happens, the ultimate losers will be those concerned with the manufacturing and service industries which could rise from or be influenced by IT. Those are the words of the man who presumably enjoys the greatest confidence of the Government. They appointed him the chairman of the little Neddy in charge of IT.

Professor Ashworth's fourth point is that, while welcoming the moves that the Government have made to put the UK firmly in the starting blocks", it is unfortunate that in the race that follows there are stronger runners than ourselves and we are falling behind. We surely all agree that we cannot be content. We shall not accept that the United Kingdom should become, as Sir Ievan Maddock warned us, a technological colony of large offshore companies which will determine what products are made where and when and how high or low the national standard of living should be. So much for what the majority of hon. Members on both sides of the House would surely agree upon. I do not deride what has been done by the Government and their predecessor, but it was especially disturbing to discover only a few days ago that less than £8 million of the Government's five years £350 million Alvey programme, intended to produce a British version of the computers of the 1990s, is actually being spent, although we have now entered the second of the five years. It is even more worrying to learn, as we did only yesterday, that science research faces a 25 per cent. decline in expenditure over the next decade. That was the evidence given by Professor Sir David Philips, chairman of the Advisory Board for the Research Councils, and by Dr. Derek Roberts, director of research at General Electric to the Select Committee on Education, Science and Arts. When we add to this the lack of trained personnel, the smaller proportion of our young people enrolled in full-time higher education than in the countries of our principal competitors, the actual reduction in facilities and in intake in a number of our high technological universities, the need for a new, much more energetic and much better directed national effort becomes abundantly plain. So much for the general background of electronics and information technology in the United Kingdom.

I turn to the achievements and prospects of INMOS. The background is well known. In 1978, the Labour Government decided that it was essential for Britain to have its own source of mass market microchips. As the private sector was not manufacturing them and as America and Japan were roaring ahead, it was decided that public enterprise would have to take the initiative. We decided to invest £25 million of public money in the launch of INMOS, based upon three brilliant innovators, one British and two American, in silicon chip semiconductor technology, with a further £25 million to follow. Initially, the enterprise was started in Colorado Springs, but the purpose was to shift the centre of gravity to the United Kingdom—at Bristol the headquarters, research and development and at Newport the most modern and sophisticated manufacturing plant, and as soon as possible.

The strategy of INMOS was threefold. This was reiterated in the evidence given to the Select Committee on Public Accounts. The first part of the strategy was to establish a viable memory business. The second was to enter the microcomputer business, using the memory business as a vehicle. The third part was to combine the two capabilities using advanced computer-aided design to compete in the market for silicon systems.

INMOS has already established itself in the mass memory business. Its first development has been in random access memories, where its development of the 16K static RAM has already brought it 70 per cent. of that specialised world market, mainly in the United States.

Its second development, at both Colorado Springs and at Newport, is the manufacture of 64K fast dynamic RAMs, where it is now achieving a major position in the world economy. It is moving ahead extremely fast. In just five years INMOS has become a major success. It is Britain's—and Europe's—only independent company in the world business of making general purpose microchips.

This is far from the complete story. INMOS appears poised to repeat its achievement in the other major market for microprocessors, using its revolutionary transputer. It has also created leading edge processes, significantly including those in the category that I am advised will be the most important in the next decade, which is CMOS. This is an area where the Japanese predominate, which makes today's news that a Japanese company, NMB, as I am sure I heard it confirmed only a few hours ago this morning, has purchased INMOS's CMOS technology—a remarkable endorsement of the calibre of INMOS's present capability.

This is, of course, the second phase in the INMOS strategy. The INMOS transputer, due for sampling later this year, is recognised as a major technical advance in microprocessors. Its performance and ease of use will make it a major competitor in the conventional microprocessor market, while the ability to interconnect large numbers of transmitters to build more powerful systems gives it a unique opportunity in the future market for fifth generation computer systems.

INMOS has developed one of the most advanced design aids in the world in which rapidly to create and test its products. I was glad to read that this has been taken up and will be exploited by Racal.

Hon. Members on both sides of the House will join me in accepting that the company's technical prowess is no longer at issue. It has put in place the building blocks for the next generation—the system on a chip. It is against that background that the House should now confront the serious threat that now exists—with the Government's connivance, if not instigation—first to break up INMOS into two separate parts and then to sell one half to the American giant American Telephone and Telegraph and the other to International Computers Ltd., which has just signed a new technological and sharing agreement with the Japanese company Fujitsu. If that were allowed to happen, Britain would cease to have what it has tried so hard and so successfully to achieve in the past six years—the possession of a world-class capacity, based and owned in the United Kingdom, to produce semiconductor hardware and software, which is crucial to our economic future.

The implications of such a decision are serious. I hope that the House will bear with me while I briefly tell the story of what has happened during the past few weeks and months, which has given us and should give the Government so much concern.

The company is now surging forward. With the rapid build-up of output at its very modern Newport facility, the company moved into profitability in the final quarter of 1983. My information is that that profitability has been more than sustained in the first quarter of 1984 and that the company now expects to make a profit in 1984 of at least £12 million.

There is a need for further expansion, and new investment in 1985 of the order of £60 million to £70 million. At least two thirds of that will come from internal profits, leaving considerably less than £20 million to be raised from external sources.

The merchant bankers who advise INMOS had carefully constructed a British consortium which was expected to provide some £30 million this summer, but the terms and the arrangements had been largely designed before INMOS surged into profit at the end of last year. The Minister for Information Technology and the Treasury decided therefore that £30 million was not a good enough deal. And the Treasury, greedy to make the maximum possible from the sale of publicly owned assets, has insisted upon alternative and more profitable arrangements.

During Question Time on 6 June 1984, the Minister for Information Technology confirmed the story as I have told it so far. He then said: A group of investors had proposed to make a placement of £30 million in new shares in the company, but in the light of Inmos's current performance and its improved prospects the Government have withheld signature of the British Technology Group to this proposal. The BTG is actively exploring other options for the transfer of the company to the private sector". Pressed by other hon. Members and indeed by myself about what these other options might involve, and in particular whether the Government were seriously thinking of selling INMOS to AT and T, the Minister gave this apparent assurance: There is no proposal of which I am aware for the outright purchase of Inmos by an overseas firm."—[Official Report, 6 June 1984; Vol. 61, c. 291–293.] At the time, the House must have concluded, as I did, that no takeover of INMOS by AT and T or any other company was in prospect. However, I have subsequently discovered—if I am wrong, it is up to the Minister to deny it—that while the Minister was linguistically correct in saying that there was no proposal for outright purchase by an overseas firm, there was a proposal, of which he was aware, for AT and T to buy the total assets of INMOS and to leave nothing but the company shell to its present owners. I do not think that the Minister was frank or open with the House. As we shall see—and this is more serious—the criteria laid down by the Minister in reply to questions about the conditions that might attach to the sale almost exactly fit the AT and T package proposal.

The Secretary of State and his Minister have apparently persuaded the Treasury that it would be just too embarrassing—as well as financially absurd—to allow for a straight AT and T takeover. They have there fore prompted the coming together of AT and T and ICL to make a new proposal under which AT and T takes over the ultra-modern plant and facilities at Newport and Colorado Springs while ICL acquires the crucial research establishment at Bristol.

I am reliably informed that an ingenious package for financing has been put together whereby AT and T would acquire both the assets and liabilities of INMOS. All that AT and T needs to do is to pay £58.5 million in three instalments of £19.5 million—the first upon contract, the second 12 months later, and the third two years after purchase. On my calculation—and the calculation of those inside INMOS—the greater part of the purchase price would be paid from the surging sales and profitability of INMOS itself. That apart, AT and T proposes to invest an additional £70 million, mainly but not exclusively in the Newport operation.

ICL would assume responsibility for Bristol. AT and T agrees that, as part of the overall deal, it would negotiate transfer of the assets and liabilities of Bristol, and the rights to the transputer, to ICL. Precisely what that negotiation would involve I do not know. But the arrangement would be bound to be complex because any development of the transputer into manufacturing would require the use of the Newport facilities, which AT and T would then exclusively own.

I can see why these arrangements would, in general terms, appeal to the short-term cash thinkers in the Treasury and to the Secretary of State and the Minister. The Treasury would get more money back, and it would be relieved of the responsibility of assisting Britain's major semiconductor firm to develop in the future. The Secretary of State would be able to say that at least the Bristol facility and the transputer remained under British control.

However, the House should be very much aware of the damaging consequences that will flow from such arrangements. First, if AT and T takes over the Newport facilities there is no guarantee at all for the future. We have had experience of paper guarantees before, and the guarantees that the Minister for Information Technology sought to give—those carefully tailored and carefully worded quasi-guarantees—lack real substance.

The plain truth is that AT and T is not interested in INMOS technology. AT and T willingly confesses that that is so. It has no intention of pursuing its strategy or of continuing to produce its products. It has its own range of products and services and its own corporate strategy. What AT and T wants—this is why it is in the market place—is, first, to use the ultra-modern facilities at Newport and Colorado Springs, secondly, to get under the 17.5 per cent EEC tariff by establishing itself at Newport, and, thirdly, to get close to major British consumer companies. In short, the 64K RAM will be discontinued and the transputer will depend entirely upon ICL.

Secondly, ICL for its part has no experience in, and no manufacturing capacity for, the transputer. It would have to lease capacity from Newport from AT and T, to redesign the transputer to use AT and T's processes and to accept a delay of at least a year in its entry into the world market. Meanwhile, ICL has just signed a co-operation and technical agreement with its Japanese partner Fujitsu, which will be only too happy to manufacture in Japan the revolutionary transputer developed in the United Kingdom.

The extremely innovative and important design work done at Bristol is dependent on intimate links with process development at Colorado Springs and with manufacturing at Newport and Colorado. It is utterly unrealistic to believe that transputer development could continue successfully following the split being proposed by AT and T and ICL. The links to AT and T technology would be too remote and uncertain and ICL would not be able to provide the necessary environment or background, other than through its Japanese partner, to maintain INMOS's transputer in its path. In addition, INMOS's worldwide sales organisation would be broken up and, far worse, there is good reason to believe that many of the brilliant team who are now at Bristol would disperse to find jobs elsewhere.

Mr. Roy Hughes (Newport, East)

I have followed my right hon. Friend's comments closely. Does he agree that he is making a strong case for INMOS remaining wholly in public ownership, as that would be in the interests of the nation and protect the interests of the work force at Newport?

Mr. Shore

My hon. Friend is right. We share a strong belief that when public money is invested and there is a great public benefit to be gained, it is only sensible to keep the concern in public ownership. That view is not shared by the Conservative party, and it is in government. The issue is not just whether INMOS should remain publicly owned, but whether it should remain in British ownership. It is whether the company should be available for development by British interests according to British strategy.

As a result of the sale, Britain would lose its major independent capacity in semiconducters. INMOS would be broken up, its strategy would be abandoned, its products would be discontinued and its great achievement and its prospects as a worldwide exporter of RAMs and still more advanced systems would be aborted. We should be dependent for economic and strategic uses on American extra-territoriality legislation and American presidential policies—a point which ought to weigh especially heavily with the Secretary of State after his unhappy experience in the United States recently. It would not be good enough to say that, as part of the package for obtaining the Newport and Colorado Springs facilities, AT and T was prepared to bring with it, as dowry, some new technology of its own. We must ask whether, in two or three years' time, it would choose to repeat this with the next leading edge capability. That has not happened with other multinational plants, and there are good reasons for that. Even if AT and T wished to make such technology available, would it be allowed to do so by the American Government?

What makes all this utterly unacceptable is that it is totally unnecessary. The success of INMOS has reached the point at which Thorn-EMI is offering £10 million for a stake in the enterprise, the Dutch are willing to finance a £50 million facility at Linberg and there is no need, given INMOS' cash flow this year, for more than a £10 million to £20 million recourse to additional capital.

The Government's proposals are strongly opposed by the work force, the management, the directors and the very innovators who made INMOS a reality. The Government are opposed by them all. The sale of INMOS now would be financial folly; to abandon its public stake would be no better than ideological spite; to break up the company would be little short of lunacy and to put it into the hands directly of the Americans and indirectly of the Japanese would be little short of technological treason. This is an issue that should be judged on its merits and against the criteria of major British interests. I call on both sides of the House to support our motion and to resist the Goverment's amendment, which fails to give even one assurance that the House should be demanding.

4.43 pm
The Secretary of State for Trade and Industry (Mr. Norman Tebbit)

I beg to move, To leave out from "House" to the end of the Question and to add instead thereof: 'recognises the importance of the United Kingdom establishing a strong position in world information technology markets; welcomes the substantial contribution made by the information technology programme of Her Majesty's Government to the international success of the industry; and supports the objective of Her Majesty's Government of transferring Inmos to private ownership.'. I welcome this chance to debate the new technologies and INMOS. I welcome, of course, the fact that the Opposition have been kind enought to use one of their half Supply days for this purpose. I even welcome the efforts that have been made by Opposition Whips to drag some Opposition Back Benchers in to listen to the debate. By their efforts, they have more than doubled the number present from three to seven—a triumph indeed—to show how important the Labour party's Back Benchers regard this subject.

I shall deal immediately with some of the points that the right hon. Member for Bethnal Green and Stepney (Mr. Shore) raised.

Mr. Martin Flannery (Sheffield, Hillsborough)

When did the Secretary of State do anything but act like a semi-house-trained polecat? What a nerve he has.

Mr. Tebbit

Yes, I do have a nerve—sufficient nerve to denounce the brazen impudence of people such as the hon. Member for Sheffield, Hillsborough (Mr. Flannery), who was dragged in by the Whips to make up the numbers.

The right hon. Member for Bethnal Green and Stepney had great praise for the German programme. He said that it was £800 million over four years. I remind him that Department of Trade and Industry support for research and development and product development in 1983–84 alone amounted to more than £200 million. That represents a fourfold increase on the approximately £50 million for 1978–79. It is in sharp contrast to the programme that we inherited from the Government of which the right hon. Gentleman was a member. The right hon. Gentleman also dealt with the so-called Ashworth report.

Mr. Nicholas Budgen (Wolverhampton, South-West)

Will my right hon. Friend give way?

Mr. Tebbit

Perhaps my hon. Friend will leave me for a moment, as I should like to get on a little further with my speech.

Mr. Budgen

Will my right hon. Friend give way?

Mr. Tebbit

No. I am sure that I shall return to the point that my hon. Friend wants to make. I suspect that I know what it is, as I heard quite well what he said from a sedentary position.

In regard to the Ashworth report, at least the right hon. Gentleman had the understanding to know that it is not a secret report that has been suppressed, as has been suggested by some parties. It has been available ever since it was discussed at the National Economic Development Council office, and I am extraordinarily surprised that anyone should have believed that it was secret or would not he published. The report made some criticisms and gave great support for what the Government are doing.

Typically, the right hon. Gentleman judged the Alvey programme by the amount of money that has been spent in the first year—£8 million. That is typical, as his only criterion is how much we spend. I remind him that, by the end of this year—1984–85—about half the total programme—roughly £175 million—will have been committed.

The right hon. Gentleman went into the typical opportunism of the Opposition by risking harm and causing prejudice to INMOS with some of the most flatfooted partisan blunderings into matters that he does not understand that even he has ever committed. He quoted estimates of profits and the like. He must know from his time as a Minister, when he had some shreds of responsibility, the risks that he is taking with the company by doing that. He must know that I cannot comment on those forecasts. An implication could be read into my not commenting on them, because I could be construed by other authorities as talking up the price. It is easy, and irresponsible, for the right hon. Gentleman to bandy figures, and it is impossible for me. In much the same way, he bandied around a lot of rumour, talk and prejudice about possible terms and understandings and about offers that are or are not being made. It would be irresponsible for me to become involved in a discussion, across the Floor of the House, on these most delicate commercial negotiations which the right hon. Gentleman is busy putting at risk out of prejudice and partisanship.

Mr. Shore

We know that it is a very hot day. That has had some effect on the right hon. Gentleman, especially with his general temperament and disposition. I must say that it is not good enough to try to avoid the responsibility of replying to a serious debate by saying that it is not possible for him to discuss the matter, although the public and open finances of INMOS have come before the Public Accounts Committee. We know exactly what those are.

Nor is it enough for the right hon. Gentleman to say that he cannot comment upon documents that have been submitted to him. If he inspected them, he would see that they mean the breaking up and smashing up of INMOS and its handing over to foreign industrialists. The right bon. Gentleman must be responsible.

Mr. Tebbit

The right hon. Gentleman knows perfectly well that I am not refusing to discuss confidential negotiations that are directed towards getting the best possible deal for INMOS, the taxpayers and this country. That is something that the right hon. Gentleman must have forgotten.

Indeed, the right hon. Gentleman is thoroughly confused about the matter. At one moment he was welcoming the INMOS-NMB link, and at the next he was deploring the ICL-Fujitsu link. He could not even manage to distinguish between patriotism and xenophobia.

Mr. Shore


Mr. Tebbit

The right hon. Gentleman had better sit down. I did not interrupt his speech. He can wait a little before he interrupts my speech further.

The right hon. Gentleman made a great issue of extraterritoriality. He must be having trouble with his random access memory today. The Labour Government based the whole INMOS strategy on risks of extra-territoriality. The firm is based on the technology of two American firms and one British firm and the importing of United States technology from a United States base. Could there be anything more prone to risk than that? Indeed, the Labour Government based their strategy on that, although we do not take too much notice of that.

Mr. Paddy Ashdown (Yeovil)

On the issue of extraterritoriality, I am sure, although I cannot speak for the right hon. Member for Bethnal Green and Stepney (Mr. Shore), that the key issue to which he alluded—I am sure that he will be able to confirm this in a moment—was not that of extra-territoriality in the sense used by the Secretary of State, but rather, the issue of the Americans seeking to impose United States law and to make the writ of that law run in Britain. That is a totally different matter. The Secretary of State knows that perfectly well.

Mr. Tebbit

I know that the fear in the hon. Gentleman's mind is that the Americans——

Mr. Ashdown

And the fear in the industry.

Mr. Tebbit

Yes, indeed. The hon. Gentleman fears that the Americans might control the secondary export of technology, but he should fear that they will control the primary export of technology as well. The right hon. Member for Bethnal Green and Stepney totally ignored that factor.

I know that the right hon. Gentleman has reaffirmed the Labour party's commitment to technology, but what he has really affirmed is a commitment to spending on technology. It is certainly not a commitment to the effective use of technology. That it has never had.

The ideal of the right hon. Gentleman and of his right hon. and hon. Friends, many of whom are in the trade union movement, is to have a vast and expensive collection of mint, unused technologies of the sort seen in Fleet street, and never to use them at all. The Labour party always votes for taxpayers' money to be spent on technology and always supports the strikes that prevent that technology from being used when we attempt to introduce it. That is entirely consistent. The right hon. Gentleman is a closet Luddite. If we followed the programmes that he has put forward, we would have too many exhibits in his museum.

The right hon. Gentleman was a little strong on his business acumen today in telling us how to manage negotiations and so on. He comes from a tried and tested team, I must say. Just look at them. There they are, the team that brought us De Lorean, telling us how to manage INMOS. It took a bit of skill to land that one, did it not?

That was not the only one. There was NEXOS which was a mere £31 million; there was Aragon, which has cost £4.5 million in cumulative losses to date; there was Insac, which cost just another £7.2 million and which went into liquidation in 1982; there was Alfred Herbert, which was just a light-hearted £75 million mistake. The record of the NEB, which is the record of the right hon. Gentleman, is outstanding in only one case. If we examine the trading results, the NEB made a loss in every year of its existence, except in 1976, which was its first full year, when it had not really got going.

Mr. Budgen

Can my right hon. Friend explain how the Government's investments in high tech are likely to be better than those of previous Governments?

Mr. Tebbit

I shall come back to that in a few moments.

I shall not go into some of the sad stories of heel-dragging over the introduction of the new technology which has been so expensively bought. I shall not go on for too long about the overall losses of the NEB and the fact that cumulative losses at the last published result are £105 million.

We share the right hon. Gentleman's interest in a commitment to new technology, not as a commitment to public expenditure but as a source of wealth and prosperity. It is hard to overstate, as the right hon. Gentleman said, the importance of the new technologies, not so much in their own right as in their pervasive effect throughout the economy. In printing, it is not so much the mechanics of the process when it was invented as the effect of that technology on a myriad of activities and the creation of myriads of others hitherto unknown. The new technologies are pervasive. They are available to us to cut costs and to improve traditional products. They will allow us to create new products, services and activities. Economic survival demands that we should embrace the new technologies and leave behind the obsolete restrictions.

Dr. David Owen (Plymouth, Devonport)

The right hon. Gentleman is off the INMOS point, having indulged in a good deal of badinage, and is now on to wilder flights. Will he reassure the House that he will return to the central question of the debate—that he will arrange whatever deal is open to us and, whatever the Trappist secrecy vows he deals under, do his utmost to safeguard the British interest in INMOS and not allow AT and T to walk away with the technology that has been aquired at heavy cost already by this country?

Mr. Tebbit

Like the right hon. Member for Plymouth, Devonport (Dr. Owen), I know when to be silent about the private affairs of my patients, among whom I number INMOS. I know what I should and should not say in public. I shall return to the policy on INMOS before I sit down.

Mr. Flannery

Come back to it? The Secretary of State has not even started to talk about it.

Mr. Tebbit

The hon. Member for Hillsborough is not really bright enough to notice what is being said in the debate.

We accept that there must be changes in education, training, apprenticeships, products, services and techniques, and in industrial relations. Government policies have changed to that end. For example, my Department—this is putting together the spend of the two previous Departments and correcting for the loss of activities of the transport section—spent in 1978–79 just over £2 billion in money of the day. Of that, nationalised industries and state-owned companies consumed more than £1 billion—more than a half of it. Some 5 per cent. of the total spend went on scientific and technological assistance. That was the position that I inherited from the right hon. Gentleman's technologically active Government.

In 1984–85 we plan to spend £1.5 billion in money of the day—a 25 per cent. reduction, which will doubtless please my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) and indeed all my hon. Friends. Of that, however, less than a quarter is scheduled for the support of state companies and nationalised industries, and 25 per cent. of the total spend will be on scientific and technological assistance. In the light of all that, does the right hon. Gentleman still have the sauce to defend his record and attack mine? I shall be very surprised if he has.

Mr. Shore

I have indeed. The right hon. Gentleman must understand that we are discussing probably the fastest-growing industry of our time, on which not just Britain but all countries have been spending far more in the late 1970s and the early 1980s than they were 10 or 12 years ago, because that makes sense. It is nonsense for the Secretary of State to suggest that, because he is spending more, he must be doing well, when Britain is losing its market share and the great possible advantage that we had.

Mr. Tebbit

The market share was being lost on the very industries that the right hon. Gentleman was supporting with £1 billion per year expenditure on nationalised industries by one Department alone.

We recognise that microelectronics is a key to competitiveness in world markets. The market is massive. It is forecast to be about £50 billion by 1990. Unfortunately, very few people have even troubled to get the facts straight. On the "In Business" programme last night on BBC Radio 4, it was said that INMOS was the only chip-maker in the United Kingdom. Perhaps the BBC and the right hon. Gentleman are unaware that Ferranti has pioneered uncommitted logic arrays and for the past two years has been the fastest growing manufacturer of semiconductors in the world. Moreover, STC has announced a £60 million expansion of its plant at Footscray to provide memory products, and two weeks ago Plessey announced that it intends to build a £50 million integrated circuit plant at Plymouth. The right hon. Gentleman should encourage his friends to take a broader view. Investment in the industry is growing rapidly, helped by the second microelectronic industry support programme which I announced in the Budget debate, which means a further £120 million to encourage investment.

Mr. Tam Dalyell (Linlithgow)

Having visited Newport as a guest of INMOS, I understood that Ferranti was not competitive with INMOS in memory products. Is the Secretary of State saying that that is no longer true?

Mr. Tebbit

No. I was suggesting that in debating new technologies we should take a broader view. They are not in competitive fields, but both manufacture chip devices, albeit of different kinds.

Foreign investment, too, has flowed in. In 1981, Motorola announced a £60 million expansion at East Kilbride. The Nippon Electronics Corporation of Japan announced a £31 million semiconductor production facility in Livingston to employ up to 650 people, and National Semiconductor has announced a £100 million investment at Greenock leading to 1,000 extra jobs in the next five years. I know that they are wicked foreign multinationals, but when a wicked foreign multinational, such as Ford, wants to close a small foundry, we find that labour Members love multinationals and want more investment from them.

Mr. David Crouch (Canterbury)

My right hon. Friend has talked a great deal about the new technologies and the advances that we must make. Is he confident that new technology of this kind will develop in the United Kingdom if we lose the making of process silicon entirely to the United States so that the Americans can cut off our supplies if they wish?

Mr. Tebbit

I shall return to that matter.

Our semiconductor base also attracts related operations, such as the silicon slice plants being introduced by Monsanto and Shin-Etsu Handotai. Major world producers of the product are coming to Britain. But we do not have to get hooked just on making chips. What counts is using them in industries, both new and old—in printing, textiles and packaging, as well as in making video-recorders and televisions. That may well be where the real reward comes.

The United Kingdom, as a market, has seen rapid growth in output of microcircuitry, which doubled between 1978 and 1982. There has been equally rapid growth in the use of microchips. For instance, Germany's share of the use of integrated circuits in Europe fell from 32 per cent. in 1980 to 26 per cent. in 1983, but the United Kingdom share has risen from 20 per cent. to 29 per cent. That puts rather a different gloss on the unrelieved gloom described by the right hon. Member for Bethnal Green and Stepney. The United Kingdom market for semiconductors grew by 40 per cent. last year, and we now have the fastest growing integrated circuit industry in Europe. European comparisons, however, are not enough. The international market in IT products and services is very competitive indeed. American and Japanese firms especially have attacked overseas markets with great determination and success.

The Government's commitment in supporting research and development in this area is evidence of the importance that we attach to producing the most highly competitive technology. The Alvey programme, which the right hon. Member for Bethnal Green and Stepney tried to badmouth, is aimed at keeping Britain in the forefront of IT research and development and up to £200 million of the total five-year cost of £350 million will come through the Government.

We must also press for the European market to be as far as possible a single market for IT products. The little Englander approach simply will not do. The United Kingdom has been a major contributor to the development of international standards, especially in Open Systems Interconnect and the recent European Industry Council meeting established a high level group to co-ordinate and promote this.

As I have said, the United Kingdom is increasingly favoured as a base for American and Japanese firms looking to supply information technology products to the European market, including IBM's decision to manufacture its personal computer in Scotland, Hewlett Packard's investment in Bristol and plans by other firms such as DEC and Microdata. The right hon. Member for Bethnal Green and Stepney sometimes welcomes these developments and sometimes does not, but never faces the fact that, if we followed his advice and left the European Community, there would be a darned sight fewer of them.

Despite all that, however, I pay tribute to the right hon. Gentleman and the Labour Government for setting up INMOS. They were right to do so. The company has been a success, albeit a rare one, and it is only fair to give credit where credit is due, even if it leads one to believe that there is some truth in the suggestion that if a troop of monkeys were left to jump on the typewriter keys for long enough they would eventually produce a Shakespeare sonnet.

Mr. Budgen

Does my right hon. Friend recall that he was one of the most enthusiastic attackers of the National Enterprise Board, which set up INMOS, and a vehement opponent of industrial intervention of this kind?

Mr. Tebbit

My hon. Friend is quite right. I attacked the NEB because it got things overwhelmingly wrong. It deserves a mark of about one out of 10. It has been disastrous. Nevertheless, by firing the shotgun into the bushes often enough, it managed to get something right. I am a fair-minded man, and I am willing to give it credit for that.

Over the years, Governments past and present have put £65 million into INMOS. The company is now beginning to make a profit, and its prospects are good in a notoriously volatile industry. It has established itself as a credible supplier of high quality microchips. It is set to become the largest semiconductor company in the United Kingdom and was rated eleventh in the world on sales of VLSIs—very large-scale integrations. It is a world leader in fast static random access memories, and it has a good position in so-called dynamic RAMs. It also intends shortly to enter the important business of electronically erasable memories. I shall recommend one of those to the right hon. Member for Bethnal Green and Stepney so that he may be more effective in future.

The most exciting potential product of INMOS is the transputer. It is a computer on a chip which promises fast and flexible operation in a computer architecture, Which offers new ways of organising processing. As a precursor to the transputer, INMOS has been promoting its programming language Occam, which has been well received. These developments are reflected in the compliment which the Japanese paid to the company by seeking a licensing agreement, and by the company's financial results. Naturally, INMOS took a while to establish itself.

Mr. Roger Stott (Wigan)

Held up by the Government.

Mr. Tebbit

Propped up by us.

After a loss last year on sales of £38 million, the company made a profit in the first quarter of 1984 of £1.2 million on sales of £19 million, and there are prospects of more to come.

The centre of gravity of the company is shifting to the United Kingdom. The right hon. Member for Bethnal Green and Stepney made another of his random access mistakes. He said that the Labour Government established the company at Newport. They did not. They had not decided where it would be established or made any arrangements about it. They had not firmed things up when they collapsed in a heap in 1979. It was my right hon. Friend the Secretary of State for Wales who was influential in establishing the company there. Production was deliberately started in Colorado, because the object of the exercise was to acquire United States technology. Production in Newport is growing, and at Bristol the company has a world class design centre for microchips.

The press has been confused and contradictory about INMOS, and that was well reflected today. It is said that Ministers are determined to sell to the Americans for peanuts. It is also said that they are confused and divided. It is further said that they are wilfully refusing golden offers from would-be buyers, who are flushed with cash.

Mr. Roy Hughes

The right hon. Gentleman should tell us the truth.

Mr. Tebbit

I always do.

The reality is more prosaic. INMOS is a good firm with good prospects, springing from its product development and market strategy. It has benefited from changes in the market, but it will need substantial additional capital investment. I shall not trade guesses with the right hon. Member for Bethnal Green and Stepney about that. I find myself in the embarrassing position of not being able to put right many of the remarks of the right hon. Gentleman. That is a pity, because I should love to take him apart on the realities as opposed to his fantasies. My responsibilities for the company's future prevent me from doing that.

I am certain that the right course is to transfer the company to the private sector and to let investors put up the cash needed to advance the enterprise. It is nonsense to suggest that we are abandoning the company. The company's management would not wish to remain for ever in the public sector. After all, two thirds of its founders were good American capitalist venturers.

The British Technology Group and INMOS are pursuing various possible options for introducing more private sector capital into the company. The House will be aware of the interest of the American Telephone and Telegraph Company and of the offer that was announced by Thorn-EMI to invest £10 million for a minority stake in the company. There are other possibilities—for example, the option of a flotation in the United Kingdom, in the United States, or in both countries.

The right hon. Member for Bethnal Green and Stepney must realise that he is not increasing the prospects for a successful outcome to these discussions by tabling today's motion. It may be that he does not wish to improve those prospects. He may want to make it impossible for the Government to sell the company to the private sector, and to ensure that it remains for ever as a state company. That would be compatible with his philosophy, but it would not be in the best interests of the company or of Great Britain.

I shall not conduct discussions in public at fourth hand about the future of the company. BTG and INMOS are responsible for the conduct of the negotiations, not the Government. BTG must obtain the consent of the Secretary of State for Trade and Industry, under the statutory guidelines, for the disposal of shares in INMOS.

Mr. Shore

The Secretary of State made it clear that he has responsibility. Will he guarantee not to permit the sale of that majority Government interest to foreign investors if and when INMOS is brought into private ownership?

Mr. Tebbit

I shall deal with the matter in the best national interest. The right hon. Gentleman is free to argue whether what I decide is in the best national interest, but I shall not guarantee to exclude any potential purchaser. If he has two penn'orth of common sense, he would know why.

The House is entitled to be told the factors that the Government will bear in mind when they consider the request of the BTG for consent.

Mr. Dennis Skinner (Bolsover)


Mr. Tebbit

I am surprised that the hon. Member for Bolsover (Mr. Skinner) has found time to attend the debate. I thought that he would be commiserating with his brother, who lost his post in the National Union of Mineworkers, or preventing his constituents in Bolsover from working in the coal mines.

Mr. Skinner

Far from losing his post, my brother has been nominated by the Nottinghamshire NUM to be the Labour candidate for Sherwood. Far from weeping, he is looking forward to the next general election and to kicking out the Tory Member. Then there will be two of us instead of one.

Mr. Deputy Speaker (Mr. Harold Walker)

Order. We should return to INMOS.

Mr. Tebbit

I am sure that the brother of the hon. Member for Bolsover will do as well in the next election as he did in the one in which he has just been defeated.

The price that BTG will receive for the shares depends on the value that prospective investors place on the company. It must take into account the cash requirements of the future company, its current performance and improved prospects, and it should be fair to the taxpayer. It was with those and other considerations in mind that the Government withheld the BTG's signature to a proposal, which I thought interested the right hon. Gentleman for Bethnal Green and Stepney but which apparently does not any more, from a group of investors to put £30 million in new shares into the company. The offer was turned down because it was not good enough. I was not willing to recommend it to my colleagues or to defend it in the House. I do not know why the right hon. Gentleman made such a meal of it in his speech.

Mr. Jonathan Sayeed (Bristol, East)

Will my right hon. Friend confirm that his understanding of the term "best national interest" means that we shall not sell INMOS at bucket shop prices, and that we shall not sell it to a company which would strip it of the expertise that it has gained?

Mr. Tebbit

My hon. Friend the Member for Bristol, East (Mr. Sayeed) should also mention the technology that the company has gained from overseas, especially the United States. I shall not sell it at bucket shop prices. Had I been prepared to do so, I should have accepted the £30 million deal towards the flotation. I shall look after the British national interest. I am not prepared to eliminate some contenders and to favour others in a way which would be contrary to the objectives that I have set out.

Dr. Owen

The right hon. Gentleman must admit that the legitimate interests of the House will be served by knowing what criteria he will apply to the sale that will protect British interests. That is the central question in the debate, and I hope he will not try to escape it in this great farrago of badinage, which I admit he is doing rather well.

Mr. Tebbit

That is very kind of the right hon. Gentleman, who often does it well himself. That is why he is overshadowing the other fellow who used to lead the alliance. The right hon. Gentleman must understand the implications of what I am saying, and I am sure that, on mature consideration, he will not wish to press me further.

The price of any commodity, including a company, must be determined by the market. I cannot conjure up an enhanced value for INMOS beyond what the market will bear. However, money is not the only measure of the return on the taxpayers' investment. As my right hon. Friend the Minister for Information Technology said on 6 June, the Government must also bear in mind the future development of INMOS technology and the benefits thereof to the United Kingdom. I should not on this account rule out a foreign bidder. Foreign investment has much to offer the United Kingdom in terms of new technology. The right hon. Member for Bethnal Green and Stepney and his friends are not adamantly opposed to investments made here, for example by IBM, although there is the risk of extra-territoriality and the buying of British brains by a foreign multinational.

The transfer of technology is a key part of INMOS strategy.

Mr. Ashdown

The Secretary of State said that money was not the only criterion in judging this matter. I was interested to note what Lord Cockfield said in the other place on 11 June in relation to the three criteria for the sale of INMOS: The third is to secure a price which adequately reflects the taxpayers' past investment in the company."—[Official Report, House of Lords; 11 June 1984; Vol. 452, c. 884.] Is the Secretary of State now withdrawing that statement?

Mr. Tebbit

The hon. Gentleman is overstraining on this point. My right hon. and noble Friend said that there were three criteria, and the hon. Gentleman mentioned one. I, too, have said that price is only one criterion. I do not know what the hon. Gentleman is getting into such a lather about.

Other projects in this area demonstrate that the United Kingdom is regarded as an attractive location for microelectronic projects. An excessive chauvinism, descending, as it sometimes does from the Opposition Benches, to outright xenophobia would do untold harm to employment and the creation of wealth in Britain. Nevertheless, I assure the House again that in considering any proposal for disposal, whether to a United Kingdom or a foreign bidder, the Government will bear very much in mind the technology spin-off effects for the United Kingdom.

I hope that both sides of the House share an awareness of the importance and pervasiveness of the new technologies. I hope that even the Opposition accept that the Government are strongly committed to bringing those new technologies into being, not just as museum pieces but as steps on the road to prosperity. We are determined that the market and the private sector should play their part, although we accept that on some occasions Government support is important. But technology is useless unless it creates wealth, so the market, above all, is important. All the schemes and incentives that we introduce to promote research and development are important, but it is essential above all to get those products on the market, and only the market and the private sector can do that effectively.

For those reasons, I ask my right hon. and hon. Friends to support the amendment.

5.23 pm
Mr. Doug Hoyle (Warrington, North)

The Secretary of State has been his usual self—rude, arrogant and partisan. Can one imagine him as a general practitioner? He would kill more patients than he cured. The Secretary of State is living proof of the saying that a little knowledge is a dangerous thing.

The Secretary of State always confuses issues. He tried to reprimand my hon. Friend the Member for Linlithgow (Mr. Dalyell) about his knowledge of the microchip industry, but my hon. Friend obviously knew far more than the Secretary of State, who tried to compare Ferranti with ICL. They operate in completely different areas. INMOS, which operates for mass production, is different from Ferranti, which is a specialist company. The Secretary of State gave the House a series of half-truths, which were all designed to cover up the central theme. Despite being asked repeatedly, the right hon. Gentleman would not give an assurance that he would not sell INMOS to a foreign bidder, whatever might be the consequences for British technology.

The Secretary of State also showed the pathological hatred felt by him and some of his hon. Friends about public ownership. They dislike any publicly owned company, however well it may do.

INMOS began by acquiring new technology in America—there was nowhere else to get it then—and in the past five or six years it has progressed so rapidly that it is recognised as one of the most advanced companies al its sector. However, despite the fact that we are now getting a return on the £100 million or more invested in the company, which is just beginning to make a profit, the Secretary of State intends to sell it, even though that may mean breaking it up and losing the transputer technology that is wanted by the rest of the world, especially by the Japanese. My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) said that Bristol is a design centre and Newport has the manufacturing capacity, and that ICL could not manufacture the transputer in Bristol. It needs the Newport factory. However, what will happen is that, with ICL's connections in Japan, the production will go there. The Secretary of State does not seem to be worried about that.

The right hon. Gentleman talked about getting value for the taxpayer, but the present offer—he did not deny this—from the Americans is £58 million. That does not get back the £100 million that we invested.

In his highly partisan speech the Secretary of State did not say that there is a world shortage of microchips, and that they are being rationed. His proposals would place us firmly in the hands of the Americans and the Japanese. Is that what we want? He talked about the need to use microchips in industry, but if microchips are rationed, it must be sensible—even the Secretary of State can see this—to have an indigenous supply. From what he said today, he patently does not understand that. Nor is he worried about it. He is simply concerned about the market and about getting some cash back to Britain, whatever the consequences.

The hon. Member for Canterbury (Mr. Crouch), who is far more sane in these matters, asked what would happen if INMOS was sold to foreign sources, but, like the Opposition, he received no reply. The matter was clouded in secrecy. I should have liked a clear assurance that INMOS will not be sold to a foreign company, especially not to a company such as American Telephone and Telegraph, which has no intention of developing the technology.

The development of INMOS has been a remarkable success story. It started from scratch and dominated the world market in the 16K static RAM. It is producing the 64K dynamic RAM in volume capacity, and it is going on to the transputer, which, as the Secretary of State said, is a microprocessor on a small quarter-inch silicon chip. The important thing is that it is being designed in Bristol and would be manufactured in Newport.

The Secretary of State also failed to refer to the fact that, while manufacture started off in the United States at Colorado Springs, a labour force is being built up at Newport and the future of the new development will be more and more at Bristol and Newport rather than in the United States. That is the strength of the company. That is what it offers us for the future. There is hope for the future so long as the company remains in British hands.

The Secretary of State should have told us why he wants even to hive the company off to the private sector. Surely it would have made more sense, 75 per cent. of the equity being in public hands, for the taxpayer to reap the reward of the initial investment, which would not have been undertaken by the City or by the private sector. Having taken the risk, surely the taxpayer is entitled to reap the reward when profits are to be made. It would be bad business to begin to sell off a highly successful company at this time.

If we go out of the market in mass-produced chips, it will cost three times as much to get back in. Two of the South Korean companies that are trying to enter the same market will have to spend up to $500 million to get in. Is it not stupid even to contemplate selling INMOS at the moment?

One cannot rest easily when a bovver boy like the Secretary of State is responsible for administering new technology and for British industry. In view of his delicate touch, one fears what will happen to the rest of British industry. One can only hope that wiser counsels will come from the Minister for Information Technology, who has prided himself on going about the country boasting of our achievements. I think he would recognise that, welcome though foreign investment is, the problem is that the research and development are not based in this country. We need an indigenous base.

The Secretary of State has said that we must not believe all we read. When we consider press speculation, I hope it is right that the Minister for Information Technology is resisting the sale of INMOS to the Americans. We may hear his opinion later. Perhaps he will either give us an assurance that this is what he is standing up for or, because his position would be jeopardised by what the Secretary of State has said, he might consider resigning, a very rare occurrence on the Government Benches. Usually Ministers are sacked by the Prime Minister.

Let us come to the Prime Minister, because I am told that when science and technology are talked about she claims to be the voice of science in the Cabinet. She even claims to be a scientist. When I examine her record, I find that she was a laboratory assistant washing vessels. That does not fill me with hope for the future.

Where is the pressure coming from? It is coming from the Chancellor of the Exchequer, that Luddite in the pinstriped suit who could not tell a computer from a commuter. All he is interested in is the pressure that is being put on him by City interests. He thinks that we must get money back as soon as possible. It is a very shortsighted outlook and it is in line with the narrow, blinkered outlook that the Cabinet has had since 1979. It relies on market forces.

If we had always relied on market forces, INMOS would not have been created, and Ferranti, which the Secretary of State has told us has a high volume of microchips, would not even have been here. It was rescued by the National Enterprise Board. If the Government say that INMOS must go, what about ICL? It would not have been here either if it had not been for the intervention of the NEB. I remind the Secretary of State that important successes occurred under the NEB.

I make a final appeal to the people of good reason, the more moderate and far-sighted Members on the Tory Benches. I hope that they will join us in the Lobby tonight in view of the fact that we have not had any assurance from the Secretary of State for Trade and Industry that INMOS will not be sold off to a foreign buyer, whatever the consequences. I hope that those Tory Members who are more reasonable in their outlook will put the national interest and the future of high technology in this country before a narrow, partisan, political approach which says that we should sell off regardless of whom we sell to, foreign or otherwise, regardless of the national interest, and regardless of losing the sole company that is publicly owned and that is mass producing the microchip. This is the only company that could enable us to compete with the Japanese and the Americans.

5.36 pm
Mr. Kenneth Warren (Hastings and Rye)

I wish to declare an interest as a practitioner in information technology on both sides of the Atlantic.

In debates on science and technology in the House over the years one thing is certain—the terms of reference always tend to be the same. Indeed, we can say that over a period we have not as a nation been able … fully to harness the resources of skill and ability we should be able to command. We have been falling steadily further behind our competitors … Successive Governments have striven to correct these deficiencies". Those are words that one could use today but, in fact, they are drawn from a document that is 10 years old, the White Paper on "The Regeneration of British Industry", published by the Labour Government in August 1974.

The problem is that over the 10 years since then—indeed, one could look back 10 years before that time—nothing has changed. Learning about how in politics we should try to progress in innovation and manage science and technology has not moved ahead nearly as fast as the process of technology itself. In a report that I was privileged to present to the House last week on behalf of the Select Committee on Trade and Industry, we drew attention to the fact that the problem of competitiveness has been with us throughout the centuries. It is not a decline that can be blamed on Governments of either party.

It is a decline that we have failed to notice. We have worked our way out of many of our traditional markets. Therefore, when we bring technology to this place, one of the problems is that we are looking upon this place as one of the few sources of funds of sufficient timeliness and volume to make it possible to fund high venture new types of technology such as electronics or genetic engineering.

One can trace the basic problem over the last 20 years to the steady decline in the rate of return which it has been possible to achieve on investment in manufacturing industry. We are now down to about one third of the rate of return that could have been 20 years ago. Because the return is so small—it is now running at below 4 per cent. per annum on average—there are many places where banks, private individuals and institutions of all kinds find it better to place their money on behalf of their clients. Because of this, the Government have found themselves very much in the forefront as an investor. The only other investors tend to be large conglomerates like ICL, GEC or Racal, which can generate the funds required to undertake the ventures.

The basic problem is not just that of money. Under successive Governments, we have to learn that we must express confidence in a target that is often on a horizon some five to 10 years ahead. That target means confidence in people and in leading edge technologies, such as that being practised by INMOS. The judgment has to be not just about money, but about whether the people involved in the leadership of that company are capable of getting to that target with a product in a timely fashion.

The problem has been thrown back to us in that Whitehall has never been a reservoir of entrepreneurs, and should not be required to be. It has had to take on that task, particularly in the past four years, without the tools to make the required assessments. We have asked Whitehall to make investment judgments and character judgments of individuals and teams wanting backing, and asked it to be able to travel across the long time span to win markets that are just glimmers in the eye of management. Therefore, that problem has become one of the hallmarks of most of the industrial endeavours in nationalisation.

If, 20 years ago, the late Frank Cousins and his advisers—at that time Frank Cousins was working under the leadership of the right hon. Member for Chesterfield (Mr. Benn)—had not turned down but had understood what Mr. Drummer and his colleagues had brought out at the Government telecommunications research establishment at Malvern—the integrated circuit—we would now be the prime exporter of electronics in the world. In that category, I have a somewhat similar message on the transputer development of INMOS. Today, we are talking about the same kind of judgment. With that product and that team, is it worth continuing to back that company?

I have known lain Barron for 20 years, and I worked with him at one time. He has established a fiercely independent industrial capability. Professionally, lie is more than halfway to sound success, and his products, after tremendous problems at the beginning, are on time in terms of market, quality and price. The figures that we have heard today show that proper generation has started. It is true that professionally I can find some faults with the INMOS operation, but that is not unusual in the information technology industry, where there are many fierce jealousies. I can remember a case in the early days of INMOS, when one valiant company wanted to buy it to close down its production line. One should always look at bids and ask why they have been made and whether they are good for the company and its products.

Now is the time for confidence in INMOS, and I believe that in my right hon. Friends the Secretary of State and the Minister for Information Technology we have established a creative and sensible vision of the position of Government and what they can do in practical terms to develop companies such as INMOS. There is a requirement on Government to sow the seeds of investment when others are fearful of stepping forward.

I appreciate that probably behind the scenes in the great secretiveness of British Government there is a great tussle going on between my right hon. Friends' Department and the Treasury. The Treasury looks upon INMOS in an entirely different way to that which I have been describing, which is the style presented by my right hon. Friend this afternoon. The Treasury always needs cash and sees denationalisation as a cash generator and the sale of INMOS as a means of generating that cash. Courageously, the Treasury, on behalf of the taxpayer, never wants to see more public money invested in any form of national enterprise. However, both sides of the House must keep up their courage——

Dr. Jeremy Bray (Motherwell, South)

With the experience that I know the hon. Gentleman has of the industry, and his detailed knowledge of INMOS, which is rather greater than that of most Conservative Members, would he agree that the worst solution would be to break the design capability within INMOS from its production capability?

Mr. Warren

I am just coming to that very point.

We must retain our courage to hold on to this company at this critical time, to see it through to the success that it can achieve. That is most important. One vital factor for a science/people-based company such as INMOS is that we should not leave its leadership with the uncertainty that is enveloping it now. That is bad. While the work force and management are worried about the future, they cannot be creating, and the creativity of that company is its major asset.

I come now to the point mentioned by the hon. Member for Motherwell, South (Dr. Bray). This company is ripe for technical plunder, in whole or in part. It is at the most critical part of its generation as a successful enterprise. Therefore, the terms and conditions of any sale at this stage—if the company is to be sold at this stage—must be that the control remains in the United Kingdom. There is no question about that, because otherwise we shall be throwing away all the tremendous investment that has been made in the company by the House on behalf of the taxpayers, and by qualified scientists and engineers who have devoted their time to the success of the company.

If INMOS is sold now or in the future, it must be sold at a price that reflects its worth. To be accurate, that company is worth £100 million—there is no question about that. I am sure that my right hon. Friend the Secretary of State can do the sums far more effectively than I.

Mr. Tebbit

Perhaps my hon. Friend would like to see me behind the Speaker's Chair immediately afterwards and put in his bid, backed by a suitable consortium.

Mr. Warren

My right hon. Friend is a dear friend of mine, and if he has not got information that the company is worth £100 million, he should change his advisers.

Mr. Tebbit

I am not discussing the price in public, but if my hon. Friend, has a clear view of the price, I am sure that he will be able to bring together, with his knowledge of the industry, a group of people who will make an all-British bid at the sort of price that will be compatible with what he says.

Mr. Warren

My right hon. Friend is skilled in these matters. I said that the control of the company should remain in the United Kingdom. That does not preclude outside investment in part, but the control must remain here. That company is worth £100 million, not only in terms of its current ability but in terms of its prospects. We must look to the future of companies in businesses such as this.

I end by commending to my right hon. Friend the words that I had already written before he intervened. He should not undersell our faith in our investment on behalf of the taxpayer.

5.47 pm
Mr. Roy Hughes (Newport, East)

This is a most worthwhile debate and I congratulate my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) on his initiative in securing it. As for the Secretary of State, I thought that he was evasive and that he demeaned the high office that he unfortunately holds.

Right hon. and hon. Members on both sides of the House will no doubt agree that it is essential for the United Kingdom to keep up with developments in the important sector of information technology. It cannot be denied that the previous Labour Government made every possible effort to bring INMOS to this country. Huge sums of public money were invested in it before the headquarters and research centre were established at Bristol and the production unit was established in Newport.

When I met one of the founders, Mr. Petritz, some time ago, I got the impression that he was amazed at the amount of support that had been received from the Government and the local authorities in Gwent. It was recognised from the start by the National Enterprise Board that this was a high risk venture but that the rewards could be substantial. United Kingdom expertise could be established in the key field of technology. It was reckoned that, by the mid-1980s, some 4,000 jobs could be established. That in turn would save about £20 million annually in imports and could generate £100 million in exports.

It is significant that when INMOS was up for grabs, no independent investor would put up the money. But now, one can see the carrion crows hovering, ready to swoop at any time—encouraged, of course, by the Government. The Minister for Information Technology confirmed in an answer on 6 June that the Government are ready to sell off this important public asset. The Government have made a fetish of selling off important public asset. Now the Government are apparently considering selling INMOS to American Telephone and Telegraph. My right hon. Friend the Member for Bethnal Green and Stepney pointed that out in his original remarks, and he was not refuted by the Secretary of State.

The sum of £50 million—a derisory figure—has been speculated about in important financial journals. That is only half what the taxpayer has already put into this concern. In turn, it is suggested that there would be a deal for AT and T to transfer the design team at Bristol to ICL, the computer concern which, despite the remarks of the Secretary of State, was another business saved by the previous Labour Government. Yet the company has signed a wide-ranging agreement with the Japanese company, Fujitsu. Where, then, is the protection for British interests if INMOS is to be linked up in that way?

On the price, referred to by the hon. Member for Hastings and Rye (Mr. Warren), it is worth pointing out that an independent American consultant has valued the company at over £200 million. What the Government seem to be proposing is little short of criminal. Anxiety has already been expressed about American attempts to strangle the flow of high technology to Europe. Those attempts are really about commercial considerations, but they come under the guise of stopping goods with military application from reaching the Soviet bloc. The plan that is allegedly being proposed by the Government could severely hamper plans for Newport. Jobs there could be in peril after so much money has been spent in the town to bring the factory to fruition. The work force at Newport must realise that its future livelihood is at stake as a result of the Government's proposals. The Government are putting the jobs in jeopardy. The Government are merely espousing a doctrinaire attitude.

The selling off of so many of our public assets is in line with the Government's plans to cut regional aid. Together, those policies could cause havoc in south Wales, which has already suffered so many thousands of redundancies due to steel and other factory closures. There is a certain incompatibility between the jobs lost in coal and steel and the type of work provided by INMOS. INMOS is not likely to take on many of the redundant workers from those two important basic industries. Nevertheless, Britain must have the new techology if we are to have any future as an industrial nation. If the Government really wished to assist INMOS they would accept that it is extravagant to have factories in Newport and a headquarters and design centre in Bristol. That is illogical and inefficient. Why should not the whole enterprise be centralised at Newport? I say categorically, in the interests of our nation and the work force whose future livelihood is at stake, that this enterprise should remain in public ownership.

5.56 pm
Mr. Mark Robinson (Newport, West)

The INMOS factory in Newport is in my constituency. I visited it only this week on Monday. I could not help but be impressed by the expansion and progress that has taken place over the past 12 months. That factory was completed in 1982 and it is no mean achievement that in 1983 it has realised sales amounting to £37.8 million. We have already heard the figures for the first quarter of this year. I understand that there is a possibility that at the end of 1984 profits may rise to over £10 million. If it is £12 million, as the hon. Member for Bethnal Green and Stepney (Mr. Shore) said earlier, projections have changed in the four days since I was at INMOS on Monday.

INMOS has become the largest semiconductor company in Britain with an annual turnover likely to be in excess of £100 million. It has also become a significant employer in my constituency. The number on site at present is over 700. By the end of this year, that figure is likely to have risen to over 1,000. There is every prospect that in 1985 that figure will rise still further.

The hon. Member for Newport, East (Mr. Hughes) always talks about job losses, but in INMOS in Newport we are talking about job gains and the prospect of further job gains.

Mr. Hoyle

Does not the hon. Gentleman agree that, if INMOS is sold to a foreign bidder, the prospect of the increase in jobs in Newport will be severely curtailed?

Mr. Robinson

No, I would not agree. I shall say something about that later.

Judging from some recent comments, the suggestion that INMOS should move towards private ownership seems to be new. The contention of Opposition Members that the privatisation of INMOS is being foisted on the company is untrue.

I quote from the National Enterprise Board guidelines published in 1980 under "Disposals": The board shall exercise their powers with a view to disposing to private ownership, as soon as commercially practicable, of all of their securities and other property and their subsidiaries' securities and other property. It is, therefore, not new that INMOS is to be put to the private sector. What is more, in my view it is right that, once INMOS has become profitable, it should go into the private sector.

As INMOS moves towards maturity it is important that, in transferring it to the private sector, we get the transfer right. As my right hon. Friend the Minister for Information Technology said in answer to a question that I put to him: The BTG is actively exploring other options for the transfer of the company to the private sector."—[Official Report, 6 June 1984; Vol. 61, c. 291.] The House should note the words "other options". The House has heard Opposition proposals that sounded as though they were Government proposals based on speculation that has been mounted in the financial press. There is the possibility not only of options that may be on the table but also of options that may still be in the pipeline. This debate is not the time to leap to conclusions as to what will happen in the context of the future of INMOS.

It is fundamental that, in disposing of INMOS, two things must be protected. The first is the taxpayer's investment in the company, and the second is the continuing transfer of technology to the company and the gains in technology that have been made by the company. Of equal importance, as my right hon. Friend said on 6 June, is the question of access to technology by British companies. Whatever happens to INMOS, it is vital that it continue the role that it has started to play in high technology industry in the country.

Mr. Shore

Surely the essential role is the capacity to carry forward into new and developing technology. It is not a matter just of continuing a transfer from outside or of maintaining what we have; it is a question of having the creative base from which to advance further into the future unimpeded by whatever restraints may be put upon us by external influences. That must surely also be in the hon. Gentleman's mind.

Mr. Robinson

It is of course in my mind. It is important that we should be able to carry forward these advances. What I think the Minister was saying when he gave the reply to which I referred is that, in terms of a transfer of INMOS to the private sector, that very advancement must be protected. I believe that to be correct.

Since its inception, INMOS has been beset by doubters and sceptics who would not have given it any chance of reaching even its present levels of profitability. In 1983, it was ranked number one in Europe and number 11 in the world in the sales of large-scale integrated circuits. It has become a world leader in fast static RAMs and has a leading position in fast dynamic RAMs. It is also making an entry into the important future business of EEPROMs. I understand that the development of the INMOS transputer is also an important technical advance in microprocessors.

It has also been claimed that INMOS's early investment and employment opportunities were biased towards the United States. That may have been true, but it was because the necessary advance process technology was available only in that country. Since the establishment of the Newport plant, that technology has been transferred to the United Kingdom. Now that the transfer has taken place, it has been possible, with the help of research and development in Bristol, to achieve considerable design advances. Indeed, INMOS has succeeded in moving into a position where it is ahead of the world market.

There is high morale in the company and a great belief among the work force in its ability to perform. It would be tragic if INMOS were to suffer from prolonged uncertainty and speculation. At the same time, it is clearly necessary for the Government to explore carefully all the options available to them so that the potential that INMOS represents, as the right hon. Member for Bethnal Green and Stepney said, will be developed not just to the full but to the maximum advantage of the country which has been responsible for its inception.

INMOS, with its dramatic architecture in Newport, is a visible example of the high technology industries that have come to south Wales. This debate takes in not just INMOS, but that new technology also.

At a time of industrial change and worldwide economic depression, the high technology industries offer considerable hope in the south Wales region. Many of my constituents who work in INMOS came into the company with no knowledge of high technology industry. They have been trained into it, and they now have a permanent job in it. They have been effective and successful. That is important in terms of the Government's policy of creating new jobs in the region. There are other examples of that in the south Wales region, including Mitel, the new Comdial plant, and the major expansion at National Panasonic. Controlled Data is also carrying out a considerable expansion. New high technology industries have been established at Llantarnam and Cwmbran, and the importance that the Government attach to these enterprises in south Wales can be seen by the decision of the Welsh Development Agency to establish a special agency called WlNtech, which is expected to be fully operational by the autumn. But the purpose of that body is to stimulate the application of technological development by firms in Wales, and it is just another sign of the Government's commitment to the new technology industries.

Mr. Allen Adams (Paisley, North)

Would the hon. Gentleman not agree that, had it not been for the farsighted policies of past Labour Governments, the company that we are debating would not have existed, because it was public funds in the first instance that created the entity? What has he to say about public investment in the future against the background of public investment in the past which obviously created jobs, and we could go back to 1929 when Ramsey MacDonald bailed out——

Mr. Speaker

Order. I understand that the first Front Bench speaker will seek to catch my eye at 6.30 pm, and a number of other hon. Members wish to take part in the debate.

Mr. Robinson

My right hon. Friend has already referred to the point that the hon. Member for Paisley, North (Mr. Adams) has raised.

I believe that it was the hon. Member for Warrington, North (Mr. Hoyle) who said that most doctors could not have killed as many patients as my right hon. Friend has done. I would make the point that most doctors would not have inherited as many incurable patients as we have from the last Labour Government.

The developments amount not just to jobs in high technology industry. They are also important for the services industries on whose support the high technology companies rely. Thus, there are two sources of new jobs of equal importance.

There can be no doubt about the value of the high technology industries in terms of overseas markets, and it is important to be able to maintain competitiveness in this important sphere. INMOS is an example of that competitiveness. It was started as a commercial company and its decisions have been made on a commercial basis. It is only right that INMOS should be afforded a proper basis for its future development. I am certain that my right hon. Friend will come to a conclusion on the future of INMOS only after a most careful review of all the options available to him, including those that may not yet be on the table.

Whatever the final outcome, I have no doubt that the new technology industries in South Wales are there to stay. They have provided an important opening for the future economic well-being of the region. INMOS has played a central and important part in that, and we must continue to allow it to do so.

6.10 pm
Mr. Paddy Ashdown (Yeovil)

The hon. Member for Newport, West (Mr. Robinson) said that the Government should keep all the options open. That is the fundamental difference between the two sides of the house, although the hon. Member for Hastings and Rye (Mr. Warren) expressed a different view. The one option which we must not keep open is that of allowing INMOS to pass to foreign hands. The hon. Member for Newport, West did not dismiss that as an option, nor did the Secretary of State. We could consider many other options, but that option must be written off. We hoped that the Minister would dispose of that fear adequately and unequivocally.

I shall not waste time talking about the need for new technologies. I pay tribute to the Minister for Information Technology because he and his Government have a greater recognition of the need to develop the new industrial revolution than previous Governments of any colour. I do not diminish the importance of previous Governments' perception of the need for new technology. They have done a great deal to bring the subject to the political forum. Unfortunately, we do not judge a Government by how important they believe an industry to be, but by how successful they are in doing something about it. The Minister and the Secretary of State have painted rosy and inaccurate pictures of how things are. Appropriate action springs from a correct perception of what needs to be done. The Government are working with blinkered vision.

The Secretary of State said that the NEDC pamphlet handed out some bouquets to the Government. I can see only one paragraph that is complimentary to the Government. It says some reasonable things, but the remainder of the document illustrates how our high technology industry is moving into crisis and explains how Government action has not been sufficient to cope with the problem.

The document presents a picture wholly different from that which the Government present. Our balance of trade has plummeted from a deficit of £89 million to £200 million in only three years. Imports have gone up from 41 per cent. to 54 per cent. Our high technology industry has grown at half the rate of that in the United States.

Paragraph 7 of the pamphlet states: Information technology industries of our main industrial competitors have grown much more rapidly than that of the UK. Is that supposed to be congratulatory of the Government? Paragraph 12 of the pamphlet states: Furthermore, every one of our industrial competitors gives higher levels of support to this industry. Is that supposed to be congratulatory? The pamphlet goes on: The UK is coming to depend far too heavily on imported technology. Even some of our own programmes are being used to support programmes abroad. How much of the Micros in Schools programme has been passed to foreign companies instead of local companies?

The pamphlet states that NEDC is most concerned about an impending crisis in the information technology industry. That is a far cry from the Secretary of State's attempt to convince us that all is well and that the Government have done a great deal for the information technology industry.

It is against a background of continuous decline, which cannot be blamed entirely on this Government, that we must examine the INMOS decision. I shall not go into the details of INMOS, but three factors make INMOS especially noteworthy. The first is the transputer, which takes 10 million instructions per second. It is 20 times faster than the current micros and between three and five times faster than the current 32-bit machines. That makes it worth preserving in British hands and writes off what the hon. Member for Newport, West said was an option. The CMOS production technique is not a matter for rejoicing. That technique, in which we are world leaders by two years, has been sold to the Japanese instead of being exploited in the United Kingdom.

INMOS provides the only chance to compete in the silicon systems of the future, as it becomes possible to integrate upwards of 1 million devices on to a chip. It will be necessary to fabricate complete systems on to silicon rather than make such systems from discrete components. Since most systems will consist primarily of memory and processing the business needs precisely the capabilities developed by INMOS in terms of designs, CAD and the Occam design language.

We must judge what the Government seek to do against that background. The Government do not deny that the new systems are essential, or that they have enormous potential. The Government do not deny that INMOS is moving into profit and that it is returning the investment that we courageously made in it, yet they have decided to take the risk of selling off INMOS and breaking up the design teams which are so essential to lay a strategic base for our future.

Never before has the rule of narrow party dogma so swamped the dictates of ordinary common-sense. What is worse, the Government seem to want to sell the company off at less than its value. The Minister for Information Technology did not mention price on 6 June. I was delighted to receive his assurances on that. I have with me a wonderful book called I have no gun, but I can spit". It is a collection of poems put together by the Minister. I direct attention to the poem by Jonathan Swift, which is a favourite of his called "On Irish Members of Parliament". The first two lines read: Let them when they once get in Sell the nation for a pin. We are worried that the Government will be tempted, for short-term reasons, to sell the nation for a pin.

The Minister for Information Technology (Mr. Kenneth Baker)

I am grateful to the hon. Member for Yeovil (Mr. Ashdown) for drawing attention to my anthology of poetry. I remind the House that it is still available at £2.95 from the best bookshops.

Mr. Ashdown

That comment requires no response. The Government have opened up the possibility that INMOS could go to a foreign owner. That could be AT and T. I recognise the Government's delicate position and that the Minister is unable to make as many clear statements as he might wish, but that possibility has not been denied. We have received no assurances.

Britain is already in danger of becoming a technological satellite to the United States. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) referred to the extra-territoriality exercised by the United States Government. We might be passing this vital component of the strategy of our new base for high technology to American hands, to a firm which is 20 times larger than Plessey and which is already negotiating for Olivetti in Europe, to make it one of the most powerful information technology forces in Europe. If we accept AT and T's invitation to purchase INMOS it will be the most foolish and dangerous invitation ever accepted since Red Riding Hood agreed to have tea with the wolf.

I hope that the Government will dismiss the invitation categorically. I am disturbed, worried and concerned—as Conservative Members should be—that the Government have not yet been prepared to say categorically that control of INMOS will not pass outside the United Kingdom.

I wish to conclude by quoting again from the NECD report. Paragraph 24.6 states that a European market as a base from which to enter international markets, holds much more promise than any of the individual national markets in Europe … the EDC believes that information technology creates the best opportunity that the UK has of achieving economic revitalisation. We welcome the very significant measures taken by the government to stimulate the IT industry and the IT applications. These have put the UK firmly in the starting blocks. Unfortunately, in the race that follows there are stronger runners than ourselves and we are falling behind. The EDC, therefore, asks for the forging of a new partnership between government and industry. It will do terrible damage to the so necessary new partnership if the right hon. Gentleman now risks not only breaking up the design teams that have run INMOS and made it so successful, but possibly allowing INMOS to pass into hands other than British, so that they will reap the benefit of the skill and courage that have made INMOS such a success.

6.22 pm
Mr. Rob Hayward (Kingswood)

We have listened to many references to questions asked during Question 'Time on 6 June. I am astounded that there have been so many interpretations of the answers given by my right hon. Friend the Minister for Information Technology. I found his answers as clear as anyone could have expected, given the detailed, complex and confidential negotiations taking place.

The hon. Member for Yeovil (Mr. Ashdown) said that my right hon. Friend had made no reference to INMOS being sold for a reasonable price. Yet on 6 June my right hon. Friend said: bearing in mind not only the price that is offered."—[Official Report, 6 June 1984; Vol. 61, c. 292.] Surely that is a reference to a reasonable price. On 17 February the hon. Member for Wigan (Mr. Stott) and I took part in a debate on new technology, when I said that a reasonable price had to be paid for INMOS, to whomsoever it was sold.

The right hon. Member for Bethnal Green and Stepney (Mr. Shore) referred to price and also made passing reference to liabilities, as though they did not matter. As I understand the position—and I am willing to be corrected—the liabilities amount to about £120 million. So we are talking not only of the purchase price, but about liabilities and long-term commitments. The right hon. Gentleman said that there was likely to be a £70 million commitment to the United Kingdom, and dismissed it as though it was nothing. He suggested that if INMOS was sold to AT and T, it would pick it up for a pittance and then asset-strip. He should appreciate that a substantial sum of money is involved if we take into account the purchase price, the liabilities and the long-term commitments. It is hardly likely that a company will buy INMOS and then asset-strip. Any company may want to redirect its product lines and commitments from one place to another. That applies to the majority of multinationals, whether they be British, American, German or any other.

The hon. Member for Newport, East (Mr. Hughes) pleaded for certainty. He then, in passing, threw in the suggestion that we might close the design centre at Bristol and move it to Newport. Surely he is throwing in additional uncertainty. I admire any potential bidder, whether British, American or Dutch, who succeeds in making a bid. So many people appear to have a vested interest—the management, the initial shareholders, the Government, and the British Technology Group—that it must be difficult for potential bidders to know to whom they must bid and understand whether they are getting a reasoned response.

There has been speculation about the position of ICL. It is said that it will definitely have the transputer operation and will definitely send it to Fujitsu. Why should that happen? I understand that Fujitsu is the last name linked in the national press with ICL. Opposition Members appear to have forgotten that ICL has links with five other international companies. Why should not the transputer operation go to one of them? There is no logic for saying that it will go to Fujitsu rather than one of the other companies.

The long-term interests of INMOS are based on the parameters to the bid set out by my right hon. Friend in answer to the hon. Member for Stockton, South (Mr. Wrigglesworth). My right hon. Friend not only identified price, he referred to the continuing access to the technology by British industry, the need for a continuing transfer of technology to Britain, and a commitment to the development and expansion of activity in the United Kingdom."—[Official Report, 6 June 1984; Vol. 61, c. 292.] I would want to see the involvement of INMOS being as strongly directed towards and allied to British industry as possible. But, as has been said on a number of occasions, that judgment can be made only when all the bids are available to BTG, INMOS and the Government. It is only at that point that it would be reasonable for any Minister, in any Government, to rule out any option.

6.26 pm
Mr. Tam Dalyell (Linlithgow)

I visited Newport and spent some hours as the guest of INMOS. It is an extremely interesting operation. First, can the Minister elaborate on what the Secretary of State referred to as the technology spin-off for the United Kingdom from the Government's proposals? Secondly, what is to be the future of the transputer operation in relation to the British national interest? Thirdly, on the electronically erasable memory, which is basically British work that we should not see go abroad, what is the Government's attitude towards protecting the work done in this country?

Fourthly, I was impressed by the link with the Wolfson Foundation Research in Edinburgh. Given that British universities have had a great deal of public money on related subjects, is there not a national interest to be protected? Fifthly, the INMOS system apparently is to be evaluated by the Alvey directorate. The Minister knows that it is a joint Government, industry and academic exercise. Precisely what will the Alvey directorate do in this position?

I see that my hon. Friend the Member for Wigan (Mr. Stott) is desperate to speak, and I shall give way to him as he knows a great deal about the subject.

6.28 pm
Mr. Roger Stott (Wigan)

I am grateful to my hon. Friend the Member for Linlithgow (Mr. Dalyell) for allowing me to speak now.

We have witnessed from the Secretary of State one of the most disgraceful speeches of which even he is capable. What it lacked in content he made up for in bile. It was a typical knee-jerk response to a sensible contribution from my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore). It will not do for the Secretary of State to come to the House and disguise his lack of knowledge with the sort of thuggery that he produced at the Dispatch Box this afternoon. It does the House no good at all in such a serious debate.

The Minister may recall that, in the debate on 17 February, I drew attention to, and put firmly on the record in more detail than time will allow me tonight, the Opposition's view of the serious threat of the competitive forces that are currently at work in the United Kingdom. In replying to that debate, the Minister, in his usual flamboyant and ambassadorial role as the saviour of the British IT industry, assured us that all was well and that the industry was safe in his hands. If the industry is safe in his hands and those of the Secretary of State for Trade and Industry, I would not put either of them in the slips.

What is happening in these sunrise industries today is extremely worrying. Reference has been made to the report of the NEDC and the remarks of its chairman. That document said that concern had been expressed that the industry is close to a threshold below which an independent, broad-based United Kingdom information technology industry would no longer be viable. It went on to note that the United Kingdom has many strengths in the industry to build on. I acknowledge that to be a fact, but it added: However, international competition is intense, and overseas competitors are also supported by their national governments. One need only look at recent press announcements to see that the Governments of other countries are supporting their indigenous industries to a considerable degree—including the French, German, Japanese and American Governments—albeit through rather circuitous routes. If one contrasts what they are doing in support of their industries with what we are doing, no wonder we are in our present state of demise.

What has been the Minister's response to this situation of crisis, if we are to believe the words of Professor Ashworth? First, the Government introduced a package of support under MISP 2, but the level of that support was lamentable and misdirected. Secondly, for months the Government have been creating chaos and uncertainty about the future of INMOS. After all, INMOS is the flagship of the British microprocessing industry. I shall address my remarks to the first before dealing with the second.

The right hon. Gentleman—Mr. Sunrise—has invented a new word to describe the Government's support for the IT industry. He calls it catalytic. I have another word for it. I call it catastrophic. The Minister assumes that the injection of £102 million of Government money will generate five times that amount from the private sector, inspiring British industry to commit £1 billion from its own resources over the next decade to the microelectronic sector.

If we are to believe that a £1 billion investment—that is the sum the Government estimate must be spent by British industry to stem the rising tide of imports and to put us on a par with our American and Japanese competitors—is necessary, it is clear that it will not be forthcoming as the result of the injection of a miserly £120 million. The reasoning—the magic catalytic formula—is not convincing, and I am not alone in that view.

Mr. Budgen


Mr. Stott

I do not have time to give way.

Another anomaly is that not all the companies that might benefit from the second Micros in Schools programme are British. As the Minister knows, there is a plethora of American and Japanese companies operating in the United Kingdom which would benefit from these provisions, and they would be entitled to apply for grant. The Government have confirmed that to be the case in written answers to me. If those companies were to receive that money, there would be no award conditions placed on it to ensure that the results of developments were used only in British products or that British manufacturers would have priority of supply.

The Government have already showered on these multinational companies a good deal of taxpayers' money. Grants under MISP 2 could, in my view, encourage these multinational companies to conduct their research and development in Britain and not use their British manufacturing bases as the assembly shops for the products forthcoming from that research and development. Thus, although funded by the Government's MISP 2, they could be manufactured abroad.

That is why the catalytic support for large British companies and high technology multinationals is a nonsense. The funding should be reserved for small United Kingdom-owned companies and those with obvious need for financial support. The support that is made available, and the benefits that flow from it, should become the property of the British information technology industry and not the industry of another country, but regrettably what we want to see in that respect is not happening.

I welcome inward investment. It creates jobs, no matter how few. But if the object of MISP 2 and other programmes is to stimulate and encourage British research activity that would not otherwise be funded, and to prevent the Britsh IT industry from dropping below the threshold of viability, the Government's current philosophy and policies must be reviewed as a matter of urgency, before the sun sets on the sunrise industries.

I well remember, when I was the Parliamentary Private Secretary to Eric Varley at the Department of Industry, the birth of INMOS and the excitement that that created. The potentially brilliant child had to be brought into the world with the care, attention and support of the state as its midwife. With their usual display of patriotic foresightedness, the City institutions would not touch it. It was left, instead, to the National Enterprise Board to use public funds to support and develop the potential of INMOS, and that we did. We did it among a chorus of carping criticism——

Mr. Budgen

Hear, hear.

Mr. Stott

—from Conservative Members who were to become the present Prime Minister, Secretary of State of Education and Science and Secretary for State for Trade and Industry.

Mr. Budgen

Quite right, too.

Mr. Stott

I have a long memory when it comes to the hon. Member for Chingford (Mr. Tebbit). I remember him sitting below the Gangway of the Opposition Benches snarling like some demented wart-hog every time public money was used to support INMOS.

The farsightedness of the people who founded INMOS, the commitment of Sir Leslie Murphy at the NEB and the support of the then Labour Government ensured the survival of INMOS, and how right we were. INMOS is now operating on the leading edge of semiconductor technology. The company has an excellent reputation throughout the world. The development of the transputer is a world first and the company made a £1.26 million pretax profit in the first quarter of the last financial year.

It is absurd—indeed, downright stupid—to allow a company such as INMOS to be dogged by doubts not only about its future ownership but about whether any change to its ownership would lead to the dismemberment of the company and the abandonment of the vital long-term strategy that it needs for survival. If the comments in the technical and serious press are to be believed, the Government do not have a friend at court as a result of their handling of this sensitive affair.

Let me drag the Minister's mind back once more to the debate in February when I warned him of the consequences if the Government started to mess about with INMOS. I warned him also of what the Opposition's attitude would be to the proposed sale of INMOS. I am gratified that so much informed expert opinion is now on our side.

An internecine war has been going on between the Treasury, which wants a quick sale at a ludricrously low figure to swell its coffers, the officials of the Department of Trade and Industry, who take a marginally more balanced view of what is in the best interests of Britain, and the third party, the directors of INMOS, who according to recent press reports are fighting a rearguard action against the combined forces of Whitehall to retain and control the company in its present form and prevent it from being broken up.

My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore), in his devastating critique of the way in which the Government have handled this sorry affair, outlined the sensible options that the Government could take to safeguard the national interest and the longterm interests of INMOS. I must emphasis that any attempt to take over INMOS by AT and T will be strenuously resisted by the Opposition. I remind the right hon. Gentleman of what I said in February when I drew his attention to an article that appeared in The Economist, in which one of his advisers, who happens to be an expert on semiconductors, stated: I really cannot see that AT&T is a hot prospect. AT&T has a long hit list in Europe, and [limos is just one company on the list. Clearly AT&T doesn't want Inmos's technology, it's got plenty of its own. Its only reason for wanting Inmos is to be able to put 'local' components into its products for the European market. I concur with that view. That is what would happen if AT and T were a successful bidder for the business

The INMOS affair exposes a serious weakness in the Government's industrial strategy. It shows that there is a lack of any practical commitment to the IT industries wherever they may exist. We have once again witnessed the Conservatives' manic distaste for public ownership, irrespective of the damage that that approach can do to a vital national asset. The Government should stop playing Russian roulette with INMOS. They should do what all sensible opinion has been counselling them to do over the months that the general debate has been taking place. They should do what we propose they should do in our motion. We propose that Her Majesty's Government should ensure the continued rapid development of Inmos and its products and to maintain it as an independent company under majority United Kingdom ownership and control. We have not had a commitment from the Secretary of State. All that we have had is a bland, ridiculous and stupid response, which is typical of the right hon. Gentleman's contributions of late. Anything less than what we have asked for in the motion will be a betrayal of INMOS. Anything less will be a betrayal of the national interest. It is time that the Government started at least to think about the value of the national interest.

6.43 pm
The Minister for Information Technology (Mr. Kenneth Baker)

When I heard last week that the Opposition were to use one of their precious supply days and to issue a three-line Whip to condemn the Government's information technology programme and our policy towards INMOS, I confess that I was puzzled. A range of information technology programmes have been introduced since I have held responsibility for this portfolio over the past three and a half years. The Government have put in place a series of initiatives on information technology to ensure that Britain does not lose the technological race. As these initiatives have been announced over the past three and a half years—for example, the micros in schools scheme, the network of information technology centres, the largest programme of civilian research since the war, the Alvey programme, the programme of support to encourage older industries to use new technologies——

Mr. Budgen


Mr. Baker

I hope that my hon. Friend will forgive me for not giving way. I have the scintilla of a feeling that I know the issue that he wishes to raise. If I may say so, he put it to my right hon. Friend the Secretary of State and since then he has rarely been in the Chamber. I hope that he will forgive me if I ask him to accept that I know the point that he wishes to make. Many of the programmes that we have introduced in the high technology area have helped companies in the constituency of my hon. Friend. High technology does not involve only microchips. It involves the use of new technologies by older industries.

The Opposition have chosen to impose a three-line Whip to attack the Government's range of policies. I thought that I would be subjected to a devastating critique, but that has not occurred. As I have listened to Labour Members I have had the sensation of being bombarded with cotton wool balls. Over the past three and a half years, the Opposition have subjected my proposals and the Government's programmes to silent approval. After three and a half years of that approval we now have three hours of denunciation.

The right hon. Member for Bethnal Green and Stepney (Mr. Shore) and the hon. Members for Wigan (Mr. Stott) and for Yeovil (Mr. Ashdown) have directed attention to a report from the information technology committee of Neddy. The report was made available to the Financial Times and The Guardian this morning as a secret document by the Social Democratic party. In fact, it has been a public document since 6 June. It is adding a new excitement to Whitehall now that the Liberal party or the Social Democratic party is leaking documents that have been in the public domain for the better part of 10 days.

The document is an excellent report but it is partially incomplete. I attended the Neddy meeting when it was discussed. If the hon. Member for Yeovil reads the notes to the first two annexes to the statistics he will note the following: statistics in this industry are partially incomplete". It is suggested that the reader cannot obtain a clear overall picture. It is an unhelpful picture because the statistics in the second annex omit the software industry, which is one of the great jewels in our crown. We estimate that the output of that industry is between £1.5 billion and £2 billion a year. That information is not to be found in the second annex, which sets out international comparisons. The first annex neglects to refer to the contributions of all the service industries and the applications of technologies. The report focuses on the hardware sector.

I do not want to be complacent or to give the impression that Britain's position in these technologies is stronger than it is. There are areas where we have a world lead and there are other areas where we are missing out on major markets. As my hon. Friend the Member for Hastings and Rye (Mr. Warren) and others have said, it is no good expecting only the new technology industries—INMOS, the microchip companies and the integrated circuit companies—to provide the number of jobs in the manufacturing sector that are being displaced in traditional industries. I accept that.

The new technologies will provide two types of job. They will create jobs in the new technological industries on a relatively modest scale. As technologies change from electro-mechanical to electronic, fewer employees will be required. Even the new high technology industries will not be insulated from that trend.

What is much more important is the position of the traditional industries of Britain—what economists call the smokestack industries. If heavy and light engineering companies, textile companies, paper-making companies and processing companies do not use the new technology, they will not be in business in five years' time. I hope that that is one of the messages that the House will send out to industry today. That is why we have provided support to enable medium-sized and small companies to introduce flexible manufacturing, computer-assisted design, robots and robotic devices. If such companies do not avail themselves of those technologies, they will not be competitive. They will go out of business, and unemployment will increase even further.

Mr. Shore

I agree that we should think about the application of new systems to traditional industries. But it is clear that the Minister is about to put this topic to one side. Before he does so, will he tell me whether he is saying that because Professor Ashworth, the chairman of the information technology Neddy did not know that software statistics were included in the appendix to the paper that he presented, all his judgments—including the conviction that on present trends the United Kingdom will not have an independent broad-based information technology industry by the end of the decade—are invalidated and wrong?

Mr. Baker

Professor Ashworth was concentrating upon hardware. Hardware is now responsible for only about 50 per cent. of the cost of any system, as hon. Members will know from their experience of buying word processors or other equipment for their secretarial services. The cost of the software is an integral part of all systems.

The report was selective and partial. However, I would not wish to dismiss it. It contained much that was useful. For example, it reminded us that we do not have much of an office equipment industry in this country. The hon. Member for Linlithgow (Mr. Dayell) asked me about the technological spin-off from the transputer and the chips. The reason why it is important that Britain should have a chip-making capability is that the manufacturers of electronic equipment must have access to those chips at an early stage. If they do not have access to them, other countries will step in first.

Most of the trade deficit arises in the office equipment field.

Mr. Budgen

What about INMOS?

Mr. Baker

There is no chance that I will forget INMOS, but the point that I am currently making—

Mr. Budgen


Mr. Baker

I would give way to an hon. Member who had spoken in the debate, but not to my hon. Friend, who has been present only at the beginning and the end of the debate.

There are deficiencies in the British office equipment industry. That is why we have promoted the development of the small microcomputer companies Acorn and Apricot, that is why we saved ICL in 1981—ICL has become the most successful mainframe computer company in Europe—and that is why we have encouraged the development in the United Kingdom of word processing companies. We do not want to import all that electronic equipment.

Where does Britain stand in relation to France, Germany and our European partners with regard to high technology? In 1983 our usage and consumption of microchips exceeded that of Germany. That was an exceptional achievement, because the German economy is stronger and larger than ours. In that year we consumed about 29 per cent. of all the integrated circuits and microchips used in Europe. Our share had risen from 26 per cent. to 29 per cent., while that of Germany had fallen from 32 per cent. to 26 per cent. More electronic equipment is being designed, developed and made here than in any other European country. We have the fastest-growing electronic industry in Europe.

One of the reasons why we are in that position is that we have taken certain initiatives. For example, there is the case of Acorn and the BBC micro. That programme has been triumphantly successful. We introduced it for social reasons. We wanted children leaving school at the age of 16 or 18 to be able to communicate with the new technologies. One of the spin-offs of that socially motivated plan was that we were able to give considerable stimulation to that company through public purchasing. It has now become established as the main world supplier of educational computers. There is a possibility that the computer will be adopted by the Indian education system as the basic computer for use throughout India. That is a real triumph and an enormous business opportunity.

We are making progress., not only in computers but in educational software. Teaching programmes are row written in England, principally at Newcastle polytechnic and by a private company in Birmingham. We should be proud of that. In the 19th century we exported textbooks throughout the world—Macmillan, Longman, Heinemann-Durrell's algebra and Kennedy's latin primer.

Dr. Bray

That was in the 19th century.

Mr. Baker

And in the 20th century. The textbooks of today and tomorrow will be the software programmes, and we have a world lead in that technology. In order to maintain our position and to increase and expand our role, we must have the basic technologies in this country.

Mr. Sayeed

In the four or five minutes that are left, will my right hon. Friend reassure us that we shall not, through the sale of INMOS, lose to overseas countries the intellectual property and the technical expertise that have been built up in that company?

Mr. Baker

I am about to deal with the importance of INMOS and of the microchip industry.

We should not think of microchips in isolation. There is a whole series of interlocking technologies, and it is just as important for us to have a world lead in fibre optics as in some semiconductor technology. It is quite wrong to believe that INMOS alone represents the main part of the British microchip industry. The fastest growing semiconductor company in the world is based in Manchester. it is Ferranti.

Mr. Budgen

Will my hon. Friend give way?

Mr. Baker

I must resist the blandishments of my hon. Friend, because I am about to deal with microchips.

INMOS is not alone. There are nine factories in Britain making semiconductors and integrated circuits. Ferranti is the fastest-growing electronics company in the world. I can give another example from a multinational company. The Opposition are hostile to multinational companies, but in Southampton there is a company called Mullards, which is a subsidiary of the multinational company Philips. That company manufactures in Southampton and designs its own chips in south London. It has complete independence from the mother company. It has a world lead in a specialised field—that of teletext and viewdata chips. That company is enabling us to maintain a world lead in teletext and viewdata technology.

Mr. Dennis Canavan (Falkirk, West)

Goodbye, Mr. Chips.

Mr. Baker

The hon. Gentleman comes from Scotand. He should be grateful for the investment in chip technology in Scotland. More people in Scotlnd are now employed in the high technologies than in traditional industries such as engineering and shipbuilding.

I wish to say something about INMOS but my task is made difficult by all the interventions. I agree with the comments of my right hon. Friend the Secretary of State for Trade and Industry, who recognised that it was right to establish INMOS. Since 1978, there has been a change. In 1978 there was a dearth of risk capital available for any technological investment in Britain. Larger companies were guilty of sins of omission. They did not invest. The City was not interested, and the private investor was ignorant. The position has now been totally transformed. Plenty of private capital is available for investment in high technology. That is why we believe that the future capital requirements of INMOS should be met from the private sector. That is not what the Opposition want.

Mr. Shore


Mr. Baker

Will the right hon. Gentleman allow me? I am about to deal with the criteria that will be used in the various options and possibilities that we are actively pursuing. We shall be concerned with jobs at Newport, a matter that was raised by my hon. Friend the Member for Newport, West (Mr. Robinson) and the hon. Member for Newport, East (Mr. Hughes), and with the technology spin-off, which was mentioned by the hon. Member for Linlithgow. We shall also be concerned about the continuing technology transfer. The House would expect us to be concerned about the price. We have heard the ludicrous suggestion that the Treasury want us to sell cheaply. No Treasury ever wants anyone to do that. I assure the House that we shall protect British interests in the deal on INMOS and that we shall protect technological interests.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 162, Noes 248.

Division No. 377] [7.00 pm
Abse, Leo Davies, Rt Hon Denzil (L'lli)
Adams, Allen (Paisley N) Davies, Ronald (Caerphilly)
Alton, David Davis, Terry (B'ham, H'ge H'l)
Anderson, Donald Deakins, Eric
Archer, Rt Hon Peter Dewar, Donald
Ashdown, Paddy Dixon, Donald
Ashley, Rt Hon Jack Dobson, Frank
Ashton, Joe Dormand, Jack
Atkinson, N. (Tottenham) Dubs, Alfred
Banks, Tony (Newham NW) Duffy, A. E. P.
Barnett, Guy Dunwoody, Hon Mrs G.
Bell, Stuart Eastham, Ken
Blair, Anthony Ellis, Raymond
Boothroyd, Miss Betty Evans, John (St. Helens N)
Boyes, Roland Fatchett, Derek
Bray, Dr Jeremy Field, Frank (Birkenhead)
Brown, Gordon (D'f'mline E) Fields, T. (L'pool Broad Gn)
Brown, Hugh D. (Provan) Fisher, Mark
Brown, N. (N'c'tle-u-Tyne E) Flannery, Martin
Brown, Ron (E'burgh, Leith) Foot, Rt Hon Michael
Buchan, Norman Forrester, John
Campbell-Savours, Dale Foster, Derek
Canavan, Dennis Foulkes, George
Cartwright, John Fraser, J. (Norwood)
Clarke, Thomas Freeson, Rt Hon Reginald
Clay, Robert Freud, Clement
Clwyd, Ms Ann Godman, Dr Norman
Cohen, Harry Golding, John
Concannon, Rt Hon J. D. Gould, Bryan
Conlan, Bernard Hamilton, James (M'well N)
Cook, Robin F. (Livingston) Hamilton, W. W. (Central Fife)
Craigen, J. M. Hancock, M.
Crowther, Stan Harman, Ms Harriet
Cunningham, Dr John Harrison, Rt Hon Walter
Dalyell, Tam Hart, Rt Hon Dame Judith
Hattersley, Rt Hon Roy Park, George
Havers, Rt Hon Sir Michael Patchett, Terry
Healey, Rt Hon Denis Pavitt, Laurie
Hogg, N. (C'nauld & Kilsyth) Pendry, Tom
Holland, Stuart (Vauxhall) Penhaligon, David
Home Robertson, John Pike, Peter
Howell, Rt Hon D. (S'heath) Powell, Raymond (Ogmore)
Hoyle, Douglas Prescott, John
Hughes, Dr. Mark (Durham) Radice, Giles
Hughes, Robert (Aberdeen N) Redmond, M.
Hughes, Roy (Newport East) Rees, Rt Hon M. (Leeds S)
Hughes, Sean (Knowsley S) Richardson, Ms Jo
Janner, Hon Greville Roberts, Allan (Bootle)
Jenkins, Rt Hon Roy (Hillh'd) Roberts, Ernest (Hackney N)
John, Brynmor Robertson, George
Jones, Barry (Alyn & Deeside) Rogers, Allan
Kaufman, Rt Hon Gerald Rooker, J. W.
Kilroy-Silk, Robert Ross, Ernest (Dundee W)
Kirkwood, Archy Rowlands, Ted
Lambie, David Ryman, John
Lamond, James Sedgemore, Brian
Leighton, Ronald Sheerman, Barry
Lewis, Ron (Carlisle) Sheldon, Rt Hon R.
Lewis, Terence (Worsley) Shore, Rt Hon Peter
Litherland, Robert Short, Ms Clare (Ladywood)
Lloyd, Tony (Stretford) Short, Mrs H.(W'hampt'n NE)
Lofthouse, Geoffrey Silkin, Rt Hon J.
Loyden, Edward Skinner, Dennis
McCrea, Rev William Smith, C.(lsl'ton S & F'bury)
McDonald, Dr Oonagh Smith, Rt Hon J. (M'kl'ds E)
McKelvey, William Spearing, Nigel
Mackenzie, Rt Hon Gregor Stott, Roger
McTaggart, Robert Strang, Gavin
McWilliam, John Straw, Jack
Madden, Max Thomas, Dafydd (Merioneth)
Marek, Dr John Thompson, J. (Wansbeck)
Marshall, David (Shettleston) Tinn, James
Martin, Michael Wardell, Gareth (Gower)
Mason, Rt Hon Roy Wareing, Robert
Meacher, Michael Weetch, Ken
Michie, William Welsh, Michael
Mikardo, Ian Williams, Rt Hon A.
Mitchell, Austin (G't Grimsby) Winnick, David
Morris, Rt Hon A. (W'shawe) Young, David (Bolton SE)
Morris, Rt Hon J. (Aberavon)
Oakes, Rt Hon Gordon Tellers for the Ayes:
O'Brien, William Mr. Allen McKay and Mr. Frank Haynes.
O'Neill, Martin
Owen, Rt Hon Dr David
Aitken, Jonathan Cope, John
Alison, Rt Hon Michael Couchman, James
Amery, Rt Hon Julian Crouch, David
Ancram, Michael Currie, Mrs Edwina
Ashby, David Dorrell, Stephen
Atkins, Rt Hon Sir H. Douglas-Hamilton, Lord J.
Atkins, Robert (South Ribble) Durant, Tony
Baker, Rt Hon K. (Mole Vall'y) Dykes, Hugh
Beggs, Roy Eggar, Tim
Bellingham, Henry Fallon, Michael
Biffen, Rt Hon John Favell, Anthony
Biggs-Davison, Sir John Fletcher, Alexander
Body, Richard Fookes, Miss Janet
Bonsor, Sir Nicholas Forman, Nigel
Bottomley, Peter Forsythe, Clifford (S Antrim)
Bottomley, Mrs Virginia Forth, Eric
Brandon-Bravo, Martin Fox, Marcus
Brittan, Rt Hon Leon Fraser, Peter (Angus East)
Bryan, Sir Paul Freeman, Roger
Buck, Sir Antony Gale, Roger
Budgen, Nick Galley, Roy
Butterfill, John Gardiner, George (Reigate)
Chapman, Sydney Gardner, Sir Edward (Fylde)
Chope, Christopher Garel-Jones, Tristan
Clarke, Rt Hon K. (Rushcliffe) Gilmour, Rt Hon Sir Ian
Clegg, Sir Walter Goodlad, Alastair
Colvin, Michael Gow, Ian
Conway, Derek Greenway, Harry
Coombs, Simon Gregory, Conal
Griffiths, E. (B'y St Edm'ds) Lyell, Nicholas
Griffiths, Peter (Portsm'th N) McCurley, Mrs Anna
Grylls, Michael McCusker, Harold
Gummer, John Selwyn Macfarlane, Neil
Hamilton, Hon A. (Epsom) MacKay, Andrew (Berkshire)
Hamilton, Neil (Tatton) Maclean, David John
Hampson, Dr Keith McNair-Wilson, P. (New F'st)
Hanley, Jeremy Madel, David
Hargreaves, Kenneth Maginnis, Ken
Harris, David Major, John
Harvey, Robert Malins, Humfrey
Haselhurst, Alan Malone, Gerald
Havers, Rt Hon Sir Michael Marland, Paul
Hawkins, C. (High Peak) Marlow, Antony
Hawksley, Warren Mates, Michael
Hayes, J. Mather, Carol
Hayward, Robert Maude, Hon Francis
Heathcoat-Amory, David Mawhinney, Dr Brian
Henderson, Barry Maxwell-Hyslop, Robin
Heseltine, Rt Hon Michael Mayhew, Sir Patrick
Higgins, Rt Hon Terence L. Mellor, David
Hind, Kenneth Merchant, Piers
Hirst, Michael Meyer, Sir Anthony
Hogg, Hon Douglas (Gr'th'm) Miller, Hal (B'grove)
Holland, Sir Philip (Gedling) Mills, Iain (Meriden)
Holt, Richard Mills, Sir Peter (West Devon)
Hordern, Peter Miscampbell, Norman
Howe, Rt Hon Sir Geoffrey Mitchell, David (NW Hants)
Howell, Rt Hon D. (G'ldford) Moate, Roger
Hubbard-Miles, Peter Molyneaux, Rt Hon James
Hunt, David (Wirral) Montgomery, Fergus
Hunt, John (Ravensbourne) Moore, John
Hunter, Andrew Morrison, Hon C. (Devizes)
Hurd, Rt Hon Douglas Moynihan, Hon C.
Irving, Charles Murphy, Christopher
Jackson, Robert Neale, Gerrard
Jenkin, Rt Hon Patrick Needham, Richard
Jones, Gwilym (Cardiff N) Nelson, Anthony
Jones, Robert (W Herts) Newton, Tony
Jopling, Rt Hon Michael Nicholls, Patrick
Kellett-Bowman, Mrs Elaine Nicholson, J.
Kershaw, Sir Anthony Normanton, Tom
Key, Robert Onslow, Cranley
King, Rt Hon Tom Oppenheim, Philip
Knight, Gregory (Derby N) Oppenheim, Rt Hon Mrs S.
Knowles, Michael Ottaway, Richard
Knox, David Page, Richard (Herts SW)
Lamont, Norman Parris, Matthew
Latham, Michael Patten, John (Oxford)
Lawler, Geoffrey Pattie, Geoffrey
Lawrence, Ivan Pawsey, James
Lawson, Rt Hon Nigel Porter, Barry
Lee, John (Pendle) Powell, Rt Hon J. E. (S Down)
Lewis, Sir Kenneth (Stamf'd) Powley, John
Lightbown, David Prentice, Rt Hon Reg
Lilley, Peter Price, Sir David
Lloyd, Peter, (Fareham) Prior, Rt Hon James
Proctor, K. Harvey Sumberg, David
Raison, Rt Hon Timothy Taylor, Teddy (S'end E)
Rathbone, Tim Tebbit, Rt Hon Norman
Rees, Rt Hon Peter (Dover) Temple-Morris, Peter
Renton, Tim Terlezki, Stefan
Rhodes James, Robert Thatcher, Rt Hon Mrs M.
Rhys Williams, Sir Brandon Thomas, Rt Hon Peter
Ridley, Rt Hon Nicholas Thompson, Donald (Caldar V)
Ridsdale, Sir Julian Thompson, Patrick (N'ich N)
Rifkind, Malcolm Thorne, Neil (Ilford S)
Roberts, Wyn (Conwy) Thurnham, Peter
Robinson, Mark (N'port W) Trotter, Neville
Rost, Peter Twinn, Dr Ian
Rowe, Andrew van Straubenzee, Sir W.
Rumbold, Mrs Angela Vaughan, Sir Gerard
Sackville, Hon Thomas Viggers, Peter
St. John-Stevas, Rt Hon N. Waddington, David
Sayeed, Jonathan Wakeham, Rt Hon John
Shaw, Sir Michael (Scarb') Walker, Cecil (Belfast N)
Shelton, William (Streatham) Walker, Bill (T'side N)
Shepherd, Colin (Hereford) Waller, Gary
Shersby, Michael Wardle, C. (Bexhill)
Silvester, Fred Warren, Kenneth
Sims, Roger Watson, John
Skeet, T. H. H. Watts, John
Smith, Tim (Beaconsfield) Wells, Bowen (Hertford)
Smyth, Rev W. M. (Belfast S) Wells, John (Maidstone)
Soames, Hon Nicholas Whitney, Raymond
Speed, Keith Winterton, Mrs Ann
Spencer, Derek Winterton, Nicholas
Spicer, Michael (S Worcs) Wolfson, Mark
Squire, Robin Wood, Timothy
Stanbrook, lvor Woodcock, Michael
Steen, Anthony Yeo, Tim
Stern, Michael Young, Sir George (Acton)
Stevens, Lewis (Nuneaton) Younger, Rt Hon George
Stevens, Martin (Fulham)
Stewart, Allan (Eastwood) Tellers for the Noes:
Stewart, Andrew (Sherwood) Mr. Michael Neubert and Mr. Tim Sainsbury.
Stewart, Ian (N Hertf'dshire)

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments) and agreed to.

Mr. Speaker

forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House recognises the importance of the United Kingdom establishing a strong position in world information technology markets; welcomes the substantial contribution made by the information technology programme of Her Majesty's Government to the international success of the industry; and supports the objective of Her Majesty's Government, of transferring Inmos to private ownership.'.