HC Deb 21 November 1984 vol 68 cc281-2
2. Mr. Moynihan

asked the Secretary of State for Trade and Industry whether his Department intends to review the extent of its financial intervention in industry and the current direction of industrial strategy in its support of investment programmes towards light industry, services and information technology.

The Minister for Information Technology (Mr. Geoffrey Pattie)

Last week, on 12 November, I announced a review of the Department's support for industrial research and development to be completed within five months. The White Paper "Regional Industrial Development", published last December, announced our review of support for investment in the assisted areas, the results of which are due to be announced shortly. The White Paper made it clear we intend greater parity of treatment between manufacturing and service industries and to pay special attention to the needs of small firms. Other schemes of assistance are kept under regular review, not least in the context of the annual expenditure survey.

Mr. Moynihan

I regret the recent moratorium, but does my hon. Friend agree that it is a reflection of the greater liquidity of British industry, and will he confirm that pump priming is of vital importance to any industrial strategy, and particularly to our industrial strategy at the present time?

Mr. Pattie

I agree with my hon. Friend. Pump priming is an excellent way of describing the Government's approach in these matters. I am grateful to my hon. Friend for pointing out that the need for the moratorium on the support for innovation programmes has been occasioned entirely by the improving liquidity in British industry, which is causing companies to bring forward research and development proposals.

Mr. Ashdown

Will the Minister make a statement on the recent National Economic Development Council report on information technology? Does he recognise that that industry will have 1,500 fewer graduates than it needs this year and 5,000 fewer than it will need in 1988? Is the Minister aware that the deficit in information technology goods will reach £800 million this year? What action will he take to ensure that this key strategic industry is encouraged in Britain?

Mr. Pattie

I have read the report and discussed it with some of those who compiled it. The Government have already made their views clear. We believe that although there is a problem, the tone of the report is possibly unreasonably pessimistic. We are not complacent. The report possibly over-exaggerates the difficulties to have an effect.

Mr. Stokes

When supporting the new industries, will my hon. Friend not forget the basic industries, such as the manufacturing and engineering industries in the midlands? Is he aware that what they want is not intervention but a fair crack of the whip?

Mr. Pattie

I am sure that as long as my hon. Friend is in the House those industries will have a fair crack of the whip.

Mr. John Smith

Does the Minister realise that a written parliamentary answer is a furtive way of announcing a major change in Government policy? Does he appreciate that it is ridiuculous for the Government to introduce schemes for research and development support and then suddenly to withdraw them? Is he aware that that causes unfairness and uncertainty? Is that not a riduculous way to organise a relationship between Government and industry and to encourage the modernisation of important industries?

Mr. Pattie

No, it is not. The right hon. Gentleman will remember from his days as Secretary of State for Trade that demand-led schemes may have to be stopped quickly for the simple and obvious reason that, if they are not stopped, many additional applications will be made in the intervening period.