Industry and New Technologies

HC Deb 15 May 1985 vol 79 cc328-423

Mr. Speaker

I have selected the amendment in the name of the Prime Minister. In view of the number of right hon. and hon. Members who have indicated their wish to take part, I propose to apply the 10-minute rule to speeches between 7 pm and 8.50 pm.

3.46 pm

Mr. John Smith (Monklands, East)

I beg to move, That this House deplores the Government's wilful neglect of British manufacturing industry which has caused the continuous erosion of the individual base, the record high levels of unemployment and the huge and unprecedented trade deficit in manufactured goods; and calls upon the Government to put into effect a programme of industrial regeneration based on the application of new technology to modernise existing industries and to develop new products and processes, the provision of adequate investment for industry in Britain, the necessary provision of research and development and a massive expansion of education and training in order to reduce production costs and increase competitiveness at home and abroad. Outwith the ranks of Government apologists and acolytes, there are few people in Britain today with any knowledge of our industry who take seriously the Government's claim that their economic and, in particular, industrial policies have been successful. That, of course, is the claim — everthing is improving, increasing or growing. Each week we have to listen to the Prime Minister during Prime Minister's Question Time replying with a carefully manicured set of selective statistics. She will claim that industrial output is better in 1985 than it was in 1981. Perhaps so. It should be. It was at an utterly disastrous level in 1981. The fact that that disastrous level was caused by her policies does not seem to worry her.

The Government's policy is to brass it out, and to batter the critics with selective statistics and sometimes, I understand, with slogans that cause offence to Conservative right hon. Members; to suppress criticism — although not successfully in some cases; to malign critics—that is almost always done; to claim that all public intervention of any kind would be disastrous, despite the evidence of the results of the lack of it; to claim that all spending must be inflationary; and to pretend that one can live comfortably and with a good conscience in a nation where there are nearly 4 million people unemployed, where there is a growing under class of the deeply impoverished, and where the young generation has been condemned to idleness or to a gross diminution of opportunity.

To put matters into perspective, let us remind ourselves of the statistics. Investment in manufacturing is still 25 per cent. below 1979 levels and manufacturing output has far from reached the 1979 levels. What a result of six years' so-called progress. Over those years we have seen a relentless erosion of our capacity for industrial success. Indeed, if production had increased at the levels of 1974 to 1979, it would be 6 per cent. higher than it is at present, which means that a great deal more wealth would have been available to this country.

Mr. John Harvey-Jones, together with Lord Weinstock, in giving evidence in another place the other week, fired a broadside at the complacent Government by observing that not only did he sell 11 per cent. less of ICI's products in the United Kingdom than he sold in 1979 but that the principal reason for that was that 30 per cent. of his customers had ceased to exist since 1979. [Interruption.] That seems to be the cause of some merriment to the parliamentary private secretary, the hon. Member for Hertfordshire, South-West (Mr. Page). I assure him that it is a matter of deep concern to those customers who have ceased to exist since 1979.

Mr. Richard Page (Hertfordshire, South-West)

Is the right hon. and learned Gentleman aware that this is his party's Supply Day and that the packed Labour Benches show the extreme interest of his hon. Friends in what he described as a severe and difficult subject?

Mr. Smith

I was not remarking on that. I was remarking on the fact that the hon. Gentleman appeared to find it amusing that 30 per cent. of ICI's customers had ceased to exist. That should be a matter for shame among Conservative Members.

Mr. Robert Atkins (South Ribble)

rose —

Mr. Smith

I have hardly started my speech. Perhaps I may be allowed to develop my case before being interrupted.

In our motion, we draw attention to the catastrophic position in trade and manufactured goods. In 1984, the trade deficit in manufactured goods on current account was £4 billion. That was not some blip in the figures or flash in the pan. In 1983, the deficit was £2.5 billion, and it seems from the figures for the first quarter of 1985 that we are heading for an annual deficit of well over £4 billion.

We see not a word about that from the Government in their rather silly amendment to our motion. However, it throws a searchlight of truth on the Government's selective statistics. We are losing out in the competition with other industrial countries. Not only are we now in deficit where once we were in continuous surplus, but the size of the deficit is alarming.

When he replies, I hope that the Secretary of State will explain precisely what the Government plan to do about this worrying trade deficit. What is their view of it? We have never heard one expressed. They may not wish to discuss it, but here, in the House of Commons, where they are accountable, they must discuss it. The truth is that it reveals a serious decline in the capacity, competitiveness and effectiveness of British Industry.

These problems have, at the least, been sharply accentuated, if not caused — indeed, we believe that many of them have been so caused—by Government policies, or the lack of them, towards industry since 1979. They have neglected British industry with the dire consequences which we now confront. They do not believe in Britain as a manufacturing economy. The Chancellor said in February of last year: I am at a loss to understand the selective importance attached by the Opposition and some Tories to the manufacturing sector". It could not have been said more clearly or plainly than that. He and his predecessors have believed that Britain could get by living on North sea oil revenues, on the expansion of service industries and on a few profitable industrial centres. That is the heresy of modern Conservatism. It is a dangerous heresy. It was corroborated by that other famous fatuity of the Chancellor when he spoke to the International Monetary Fund on 25 September of last year and said: Many of the jobs of the future will be in the labour-intensive service industries which are not so much low-tech as no-tech. What a vision of the future for a Chancellor of the Exchequer to have. If he intends to staff all the fried chicken concessions from one end of the land to the other, he will have to do that by driving down the wages of young people so that they will be forced to abandon their legitimate ambitions and submit to low grade work for low grade pay.

Mrs. Elaine Kellett-Bowman (Lancaster)

The right hon. and learned Gentleman is disparaging the extremely important job-creating and money-earning capacity of tourism, which is vital to the north west.

Mr. Smith

I have not yet said anything about tourism. I was talking about fried chicken. If the hon. Lady regards that as tourism, she needs to learn a little more before attempting to cross-question me on the subject. In fact, I regard tourism as an important sector. Its services, like those of banking and finance, are internationally tradeable. Many so-called service industries, however, are merely an exercise in taking in one another's washing and do little to increase our wealth, competitiveness or economic strength. The hon. Lady should have a word with her right hon. Friend the Chancellor about the dangerous fallacy of creating so-called service industries and forcing young people especially to accept low wages to work in them.

There is no better example of the Government's neglect of industry than the present situation at British Leyland. BL has put to the Government a corporate plan for the Austin Rover group, including a replacement for the A series engine which was originally designed in 1951 and requires replacement by a product in line with modern technology and performance expectations. I understand that those improvements are unlikely to take place because the Government regard the corporate plan as too ambitious. If BL cannot produce the replacement engine itself, it is supposed to take one from Honda. The Government claim that there is no problem and that they are simply having friendly discussions with BL, but last week a prominent BL executive resigned in disgust at the Government's reaction to the corporate plan and it is clear that the Government have no intention of supporting the development of the new engine.

Collaboration with Honda is one thing. Capitulation is quite another. BL is a vital, British-owned part of our manufacturing industry. There has been a magnificent fight-back by workers and management and it must not be prejudiced by a silly Government's refusal to support the sensible proposals in the corporate plan. I hope that the Government will soon remove that uncertainty. If they support the corporate plan and give BL the resources that all who work there believe that it deserves and which the Opposition certainly support, I shall be the first to congratulate the Government. If, however, they let slip another asset and tip Britain's remaining capacity to develop motor vehicle engines gratuitously into the hands of the Japanese, they will deserve the contempt of the House, the entire British people and especially of those who depend on that industry for their livelihood.

Mr. Robert Atkins

As the Member representing Leyland, I have as much interest in it as the right hon. and learned Gentleman has. Will he comment on the problems faced by the truck and bus division, which is part and parcel of BL? I agree with the right hon. and learned Gentleman's comments about the difficult times that the firm has been through and the achievements of the work force in terms of productivity and facing up to the problems involved. The biggest problem for the truck and bus division, however, is the fall in exports to Third world markets caused by the recession. How does the right hon. and learned Gentleman expect the company to get out of that problem?

Mr. Smith

I was referring to the need for the Austin Rover group to update and replace the series A engine and nothing in the hon. Gentleman's comments contradicts that. If the hon. Gentleman is as interested in the future of BL as he claims, I hope that he will join the Opposition in pressing the Government to support the company and the industry properly.

There is a serious trade deficit in the motor vehicles sector. Even sadder to relate, another example is that of information technology goods. In 1984, the deficit in the information technology sector alone was £2.3 billion, following deficits of £462 million in 1982 and £800 million in 1983. The situation seems to be worsening and there is now about 54 per cent. import penetration, so the situation is desperately serious for our industry.

Information technology has the capacity to change the whole of our society, and it is of the greatest importance that we maintain our position. The trouble is that it looks as though our position is seriously deteriorating. The Ashworth report, which was prepared by the information technology economic development committee of the National Economic Development Office, told us that United Kingdom industry faces a crisis of survival. It now has such a small share of the market that it can no longer invest adequately in product development. In the graphic words of Professor Ashworth, "the so-called sunrise industry may be eclipsed before it has even risen."

This aspect is of strategic importance to the whole of British industry. If we become dependent on overseas suppliers, we shall not only lose the wealth that we could have gained if we had produced the goods ourselves but become seriously disadvantaged in other crucial respects. Inevitably, our imported equipment will lag behind the best that has been produced by the originators. The originators will be better placed to anticipate the next moves forward and to foresee more clearly and act more quickly to exploit more applications and markets. Perhaps the worst aspect of all is the fact that we shall be in the hands of others.

Lest there be any doubt about the danger, let us remember the letter that IBM sent to all those who had bought its products in the United Kingdom, reminding them of the so-called requirement to observe the law of the United States—another example of the legal imperialism to which, I am sorry to say, the United States is so wedded.

The only way in which we can protect our industry and people and safeguard our key technology is to free ourselves from such a dependence and support our industry. That would, of course, involve the Government. The Government have been involved, but only tentatively, in the support of information technology.

Mr. Edward Leigh (Gainsborough and Horncastle)

The right hon. and learned Gentleman has made an interesting point about world demand. Is he aware of the statistic—

Mr. Smith

I was not talking about that.

Mr. Leigh

I think that the right hon. and learned Gentleman was talking about the market for British goods.

Mr. Smith

I was not making that point.

Mr. Leigh

In that case, I shall intervene later.

Mr. Smith

As the hon. Gentleman was asking a question on an assumption that I had not articulated, I think that I was foolish to give way to him.

The Alvey programme amounts to £350 million over five years — far too small a contribution — for precompetitive research. It is only scratching at the edge of the problem. Support for the innovation programme was brought to a shuddering halt last November when it was suddenly cut. There was a five-month moratorium before the Government finally emerged from their deliberations to announce a new programme of support for innovation. The sum of £10 million has been cut from a budget that was already too small.

The Ashworth report showed that a consensus exists in the information technology industry, comprehending management, the unions and the experts, all asking for action to be taken by the Government. The only people so far to lag behind are the Government, who have refused to support the, industry in the way requested.

Mr. Phillip Oppenheim (Amber Valley)

Does it come as a great shock to the right hon. and learned Gentleman to learn that there is a consensus within the industry about the need for more Government money?

Mr. Smith

It does not come as a great shock to me. If there is a need for more research and development, for more education and training and for support to be given to industry in this country on a similar level to support in other countries, I would expect an intelligent industry to ask the Government for support. I am shocked not by the request but by the Government's response—a response which this Government appear almost uniquely to give. Our competitor countries do not take that attitude. The hon. Member for Amber Valley (Mr. Oppenheim) and his colleagues would do better to back industry rather than this rather silly Government.

Mr. Ian Lloyd (Havant)

Will the right hon. and learned Gentleman give way?

Mr. Smith

This is the last time I shall give way. I have given way frequently.

Mr. Lloyd

I have been following with great fascination the arguments which the right hon. and learned Gentleman has been articulating, because they closely match those that I directed at the Labour party when it was in power. That is not to say that some of his arguments do not have some validity. The right hon. and learned Gentleman seeks to pin responsibility "uniquely" on this Government. Has he read the OECD report on the semiconductor industry which points out clearly that the main difference is between, on the one hand, the United States and Japan and, on the other, the whole of western Europe? The criticism that the right hon. and learned Gentleman is applying uniquely to the British Government applies to the whole of western Europe and all its Governments, Conservative and Socialist alike. How does the right hon. and learned Gentleman escape from that dilemma?

Mr. Smith

The hon. Gentleman should read the Ashworth report in detail. In it unfavourable comparisons were made between the support given to industry by other OECD countries and that given by the United Kingdom. It may well be true that, regrettably, the United States and Japan are well ahead of western Europe as a whole; I would not dispute that for one moment. I am prepared to compare our performance with that of Japan and the United States and our performance with that of the EEC. Even comparing Britain's performance with that of the rest of Europe, the Government have no cause to congratulate themselves. I am sure that the hon. Member for Havant (Mr. Lloyd), who has long had an interest in these matters, agrees that the importance of information technology cannot be underestimated. It is the key to the new products and processes of the future. It is as important to the renovation of traditional industries as it is to the discovery and development of new industries, some of which may at present be beyond our imagination.

The motor vehicle industry is one of the biggest users of modern electronics. The fewer cars we make, the fewer components we sell, and so on—the process goes right down the line. We lose out at every stage. The Labour party certainly rejects a superficial distinction between sunrise and sunset industries. The crucial question to ask is whether the industries can be renewed.

The leader in The Times today says that the Labour party is wrong to attack the Government for their neglect of the new technologies. The Times says that Britain is doing quite well. Its leader writer should read the Ashworth report. He certainly does not seem to have noticed the trade deficit of £2.3 billion. He said that finance was easily available to companies in the high-tech sector, but I think that that will come as a great surprise to some of those companies that have gone under recently. It will come as even more of a surprise to those who have had to sell out to United States companies to stay in existence and to the management of Acorn which developed the BBC2 microcomputer and which, because it could not find finance in this country, was recently taken over by Olivetti. Many companies in this sector have been forced into amalgamations or forced to stop business because of the lack of suitable finance.

When companies seek to expand in the information technology sector and other sectors, they run into problems because of high unemployment. They run into labour shortages — of computer technicians, scientists and other people at all levels. This is true of a much wider range of British industry than just the IT sector. We read of the difficulties faced in finding workers, even those with traditional skills, such as fitters, welders and machinists. All this is happening in the wake of the dismantling of the industrial training boards, the destruction of the apprentice training system and the closing down of the skillcentres — all of which have been the result of Government policies. The Government cannot be surprised when those aspects of British industry that can expand seek to do so and collide immediately with labour shortages. Much of the responsibility for that lies at the Government's door.

This will go on—high unemployment together with skill shortages, poor collaboration of research and development with poor Government support of it, missed opportunities and the colonising of our markets by our competitors—until we have an industrial strategy and resolve to plan our recovery and the regeneration of our industry. The present Government will not do that. They are wedded to non-intervention as a political principle and to market forces. Specifically in the crucial area of the Department of Trade and Industry, they avow a policy of withdrawing from the industrial scene.

I do not think that the Liberals or Social Democrats are likely to produce a different policy. They are as wedded to market forces as the Government. This is especially so of the Social Democratic party. I note that the hon. Member for Stockton, South (Mr. Wrigglesworth) is here. The leader of the Social Democrats is even more extreme than the Government in his addiction to market forces. So addicted is the right hon. Member for Plymouth, Devonport (Dr. Owen) that he has been tipped by a former director of the Institute of Directors as the next leader of the Conservative party.

Any recovery and adoption of industrial strategy must be planned. This will not happen accidentally or spontaneously. We argue that three crucial engines of that recovery must be at the heart of any intelligent industrial strategy: new policies for investment; new policies for education and training; and new policies for research and development.

We know that the City has failed to provide for the investment needs of British industry, especially at the high-technology, high-risk, end. It is difficult enough for investment to be made with the highest real interest rates in our history and with the most erratic movements in the exchange rate, to both of which Government folly has subjected us.

In too many cases the City and its institutions refused to provide adequate finance. Indeed, we suffer grievously from the lack of an industrial banking system. That is why the Labour party urges the creation of a national investment bank which can lend to industry on a time scale and on a basis which will secure the investment that our industry needs to re-equip, particularly in the new technologies—[interruption.] I think that the objections of some Conservative Members arise from the fact that they think that the City already provides adequately for the needs of British industry and that there is no need for the state to provide an institution such as the Labour party proposes.

If that is their belief, I recommend that they listen to the words of one of their colleagues in the Cabinet. I refer to a speech of the Secretary of State for Wales to Cardiff Business Club. I quote from the Financial Times of 9 March 1985 what he said about the City: there is a prejudice, ignorance and a striking lack of awareness of what is actually happening in a fast-changing industrial world outside the narrow confines of their own experience. He went on to say that there was a "physical chasm" between the City and Britain's industrial areas. He said: Among many household names in the financial world, there is at best a failure to comprehend the problem"— that seems to be a problem here as well— and at worst a startling arrogance that leads them to conclude that all is well, that nothing calls for reform and that anyone with a good project can always find backing for it. I think that the Secretary of State for Wales has played himself into the position of "Centre Forward" with that observation.

In research and development, the notion of Government non-involvement is particularly absurd. No one can believe that there will be any improvement in research and development in Britain unless the Government take a hand and sponsor it. It is through our universities, our polytechnics and our research institutes that we shall help the research and development that should have been going on in industry. At present it is left to market forces, and it is simply not happening. A Government who recognise that Britain needs an industrial strategy and needs to have the proper research and development which alone will find the new products and processes need to sponsor it directly and make sure that it happens.

We have magnificent inventors and scientists. Very often the innovative breakthrough in technology is made here, but for some reason the brilliant idea and the successful product are too infrequently connected. It is just not happening. Do we sit back and let it not happen, or do we set to work to make it happen?

The only way in which we shall get research and development on the scale that modern British industry needs will be for the Government to take upon themselves the responsibility to make sure that it happens. That will mean the commitment of resources and investment by the Government. I do not know why Conservative Members find that difficult to understand. It is so commonplace that it would not merit comment in Japan or in our competitor countries in Europe. They would not regard it as a startling statement to make. It is so obvious that they would wonder why it needs to be articulated.

We need a massive expansion of education and training. It was always true to say that our future depended on the skills of our people. In an age of information technology, it is even more profoundly true. Education is now a crucial part of an intelligent industrial policy. In the destruction of our apprenticeship system and the whole apparatus of industrial training, to which the Secretary of State for Trade and Industry committed himself when he was Secretary of State for Employment, the Government have done of their greatest disservices out of many to the British people. Education and training simply cannot be left to the erratic play of market forces.

The programme for investment, education and training, and research and development, will need resources and investment. Is there any alternative to what the Opposition are proposing? It is not as if the Government have not had resources in recent years. Since 1979 they have had what the previous Labour Government did not have—North sea oil revenues, now running at more than £13 billion each year. Only a fraction of that huge windfall of North sea oil revenues has been spent on industrial investment, in research and development, and in education and training. With proper investment, would not our industrial prospects have been transformed?

The money was handed to the Government on a plate when they took office. What have they done with it? They have spent every penny piece of it on paying for the cost of extra unemployment created since they came to office. That is the contrast between the Opposition and the Government. Investment must be made in the crucial areas to which I referred.

Unemployment, which is costing about £19 billion in benefits, lost income tax and other taxes, is the expensive option. Apart from the fact that it is the road to misery for millions of our people, and a denial of opportunity to a whole generation, it is such a misshapen use of resources that it is almost obscene.

Therefore, we ask the House to support our motion, which draws attention to the neglect under which British industry has languished under this Government, manifes-ted so clearly by the disastrous trade figures of recent months and years. But we do more than that: we point the way forward to a sensible policy for the 1990s. Our fear is that Britain will enter the 1990s with an industry based on an obsolescent technology and with an unskilled work force, just at the time when North sea oil is running out, and that we shall be exposed to the full force of international competition, without the masking effect which North sea oil has had over our trade statistics. That would plainly be a disaster. The decisions have to be taken fairly soon if they are to have any effect in avoiding that catastrophe in the 1990s.

That is why the Labour party has embarked on a jobs and industry campaign to put the issues at the centre of political debate, not only in this House but throughout the country. We hope to start a national debate, and that our views will find increasing favour with the electorate. I believe that they will.

The Government deserve the censure of the House for the neglect to which they have subjected British industry. But their true reckoning will not be in the debate here today; it will be at the next general election, when, because of their record, they will be replaced.

4.18 pm

The Minister for Information Technology (Mr. Geoffrey Pattie)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: 'welcomes the recent substantial increase in manufacturing output, the sharp rise in exports, the major gains in the competitiveness of British industry, and the improved optimism of independent bodies such as the Confederation of British Industry; congratulates the Government on the measures it has taken to assist the recovery of British industry through its support for innovation programme, support for investment, support for exports, business and technical advisory services, assistance with education and training and in particular today's Export for Jobs seminar and the commencement of Local Enterprise Week, as well as its policies to improve the economic climate in which business operates; and regrets the Opposition's willingness to support every single strike no matter what the cost, its reactionary and damaging policies in favour of increased taxation, further nationalisation, and greater state intervention, its policies of deplorable fiscal irresponsibility, incompatible with the restraint of inflation and enhancement of competitiveness, and its eagerness to seek partisan gain at the expense of British industry and jobs.'.

An hon. Member

Speech.

Mr. Pattie

I did wonder, after hearing the length of the motion moved by the right hon. and learned Member for Monklands, East (Mr. Smith), whether he would sit down after reading it, which would have enabled me to do the same after reading the amendment, thereby giving more time for our respective Back Benchers to contribute.

The Opposition have chosen a manufacturing topic, and the right hon. and learned Gentleman was somewhat slighting in his reference to the service industries, which are extremely important. The House is aware that services in all advanced economies are taking a larger and larger share of the total national output as living standards improve and a larger share of consumers' income is spent on services rather than physical assets. That trend will undoubtedly continue. For example, in the United States the service sector is now three times the size of the manufacturing sector.

There was a series of significant inaccuracies in the right hon. and learned Gentleman's speech. Early in his speech he said that the unemployment figure was nearly 4 million—in fact, it is 3.2 million—[HON. MEMBERS: "It is more."] I do not believe that 3.2 million is nearly 4 million, but the mathematics of the right hon. and learned Gentleman may be at variance with mine.

Mr. Alan Williams (Swansea, West)

Does the Minister recognise that when the Government took office they excluded people from the register and allowed people not to register but still obtain benefits in order to massage the figures? The real figure includes the best part of 800,000 above that admitted by the Government. It is in fact over 4 million.

Mr. Pattie

I reject that. We are talking about the actual figures for unemployment. Opposition Members are fond of making comparisons with other nations. They might be interested to know that if Germany included the people on training schemes or conscripted into the armed forces, its unemployment figure would be about 5 million.

The right hon. and learned Member for Monklands, East was wrong when he spoke about support for the innovation programme. He said that when my right hon. Friend announced the lifting of the moratorium at the end of March, the budget had been cut by £10 million. It was not. The 1985–86 budget for research and development is £297 million; the 1984–85 budget is £283 million. That is an increase, not a decrease. However, once again the right hon. and learned Gentleman's maths may be at variance with mine.

Mr. John Smith

If I am wrong, it is because I quoted from a Department of Trade and Industry press notice which said that funds allocated for the programme in 1984–85 were £308 million, and for 1985–86, £298 million. The Minister can work out for himself that that is a reduction of £10 million. If he is wrong, will he tell his press office to stop misinforming people?

Mr. Pattie

The right hon. and learned Gentleman was talking about research and development. We are quoting two sets of figures, both of which may be right. We spoke at length about British Leyland—I say that my figures are right and he says that his figures are right—

Mr. Alan Williams

Which figures are right?

Mr. Pattie

If the right hon. and learned Gentleman got his figures from a press handout from my Department, they must be right.

I was talking about the main theme of the right hon. and learned Gentleman's speech, which was research and development. I may have misheard him because he spoke at such speed. He spoke about British Leyland as though the Government had given it no support at all. He waxed lyrical about the Government wasting a great national asset. He ignored the fact that since they took office in 1979 the Government have pumped £1.34 billion into that company. I agree with him about the great efforts made by the work force and management together. However, he tried to create a wrong impression.

The right hon. and learned Gentleman spoke about the information technology trade deficit—

Mr. Barry Sheerman (Huddersfield)

What about the new engine for Leyland?

Mr. Pattie

My right hon. Friend the Secretary of State will make a statement about that.

The right hon. and learned Gentleman was selective in his figures for the information technology trade deficit. He went back to 1980 and mentioned a figure of £384 million, which was correct. In 1981 the deficit increased, as it did in 1982, and in 1983 it increased again to £2.149 billion. The figure for 1984 was 2.259 billion. It is a marginal increase, and certainly not the increase predicted by Professor Ashworth. Of course, it is a larger figure than we want, and I am not suggesting that such a deficit is desirable. I am trying to get the flavour of the right hon. and learned Gentleman's remarks. The Ashworth report has been proved to be wrong. It forecast that by now we would be heading for a £3 billion to £4 billion trade deficit, but it has actually levelled out.

Mr. Stuart Randall (Kingston upon Hull, West)

Why has the House not had an opportunity fully to debate that report?

Mr. Pattie

That is not a matter for me. The hon. Gentleman will have to raise it through the usual channels.

Mr. Randall

We did, but our request was turned down.

Mr. Pattie

The hon. Gentleman knows that that is not a matter for me. He will have to raise it with his Chief Whip, who is carefully listening to the debate. He is a man of enormous influence in the House.

I used my best shorthand to try to take down what the right hon. and learned Gentleman said—that the notion of Government non-involvement in research and development was absurd. We are often pointed towards Japan and the United States, yet in Japan 74 per cent. of all research and development is carried out by private industry, not by the Government. So, at one moment we are told that all research and development must be done by the Government, and then we are told that it must all be done by industry.

Mr. John Smith

I am concerned not about the precise size of the information technology trade deficit — I accept the Minister's figures—but about the fact that, even on the Minister's information, there is a deficit in excess of £2 billion that appears to be persistent. regular and likely to be maintained, even if the figure does not rise. What do the Government say about that and about the £4 billion trade deficit in manufactured goods? What do they propose to do about it?

Mr. Pattie

The right hon. and learned Gentleman has brought me back to the figures, which I do not mind. The reason for the levelling off of the deficit has been a tremendous increase in our exports, from £4.024 billion in 1983 to £5.530 billion in 1984. When the deficit occurred, the campaign to promote awareness of information technology had been extremely successful. My predecessor initiated that campaign in 1982 and many companies decided that they would have to invest in information technology products to improve their manufacturing processes, and, therefore, their competitiveness. In all too many cases they discovered that the necessary products were not available in the United Kingdom, so they had to import them.

Much as I deplore a trade deficit in information technology or anything else, if the price of avoiding such a deficit is that our manufacturing industry does not modernise itself, I would rather that it went out and acquired the necessary equipment from wherever it was available, so that Britain's capacity in the information technology industry improved.

The increase in our exports that I have mentioned—and I will not weary the House with the figures again—means that in our view we have turned that particular corner. However, at the time when manufacturing industry became aware of the need to modernise by using equipment of this sort, it had to go out and get it from wheresoever it could.

Where we part company with the Opposition is over the conclusions that are reached about how to improve industrial performance. We do not believe that the answer lies in bringing everything under state control, either through outright nationalisation or through the encroaching tentacles of a national investment bank, about which we have heard yet again. The suggestion is that we must have a national investment bank because we obviously have an investment gap, yet, if one looks at the investment gap which is computed on the bases of gross domestic fixed capital formation, in 1981 the figure was £38.675 billion, in 1982, £40.645 billion and in 1983, £42.348 billion, which does not seem to indicate that there is any form of investment gap. What we are seeing is the doctrinal obsession of the Opposition in saying, "Right, we had better have a national investment bank." We have tried it all before—it does not work.

We do not believe that the answer lies in pumping taxpayers' money willy-nilly into industry. There is ample evidence that such policies do not work, and simply hurt the efficient. We do not believe that the answer lies in preventing overseas investment, building some kind of wall round the United Kingdom, in restricting dividends or in denigrating profit. We do not believe that protection is the answer. I would have thought that even a casual analysis of the economic performance of the world's protected economies clearly demonstrated the inevitable links between protection, lack of competition, lack of incentives, inefficiency and low growth. We certainly do not believe in taxing industry through such ingenious devices as the national insurance surcharge to restore its international competitiveness.

It is instructive to look at industry's historical development. The development of manufacturing industry is particularly well documented. Manufacturing's decline is not a recent development, as right hon. and hon. Opposition Members would have us believe. There has been a relative decline over many decades. It is not so much that manufacturing's share of total output has been falling, since that is common to many industrialised countries. There has been a very long decline in manufacturing's productivity relative to our competitors. Our share of main manufacturing countries' world exports of manufactures has declined steadily from 20 per cent. in 1955, to 15 per cent. in 1963, to 9 per cent. in 1979 and to 8 per cent. now. Slowly but surely this relative decline has turned into absolute decline.

I will again have to disillusion right hon. and hon. Opposition Members by telling them that the absolute decline did not coincide with the election of this Government in 1979. The absolute decline started in the early 1970s. The volume of manufacturing output fell 4 per cent. between its cyclical peaks in 1973 and 1978. With lower productivity than our competitors, a falling share of world trade and continual balance of payments crises, our manufacturing growth rate was only a shadow of what was achieved by other developed countries. It is to reverse this long-term decline in industrial economic performance that the Government policies are tailored.

Mr. Nigel Forman (Carshalton and Wallington)

I have listened carefully to what my hon. Friend has said about the long run decline in manufacturing. Is he about to make the point, in relation to the classification of industrial activity, that what has also happened recently is that a number of activities which previously would have been classified as manufacturing are now classified as service activities and that is partly responsible for the relationship between these two sectors?

Mr. Pattie

I am grateful to my hon. Friend. That is an important point, and he is exactly right, as always.

The analysis of our industrial decline reveals shortcomings in both price competitiveness and in a host of other factors such as quality, design, reliability and delivery, which it has become fashionable to call non-price factors. The heart of our strategy to restore industry's price competitiveness has been the reduction of inflation. That remains the heart of our strategy. Through a policy of sound money and responsible control of public expenditure, we have created a climate in which business clearly prosper and in which enterprise can flourish.

Mr. Sheerman

If the Minister is so right in that analysis, what does he say to the people living in west Yorkshire who woke up yesterday morning to find that the Philips factory—a main manufacturer of tumble dryers and washing machines, and one of the biggest producers in the country—had closed with the loss of 600 jobs? When does this fine theory about reintroducing enterprise into the country work through to real jobs in real industries?

Mr. Pattie

Obviously I sympathise with the local news that the hon. Gentleman has, because of the personal difficulties that it raises for the individuals concerned. However, I would say to him that the decision is obviously taken in the light of the competitiveness of the company, and it is precisely the factors that I have been describing that take quite a while to turn round. The point that I have been making—I hope clearly—is that nothing new has begun since 1979 in terms of this decline.

As the memory of Labour's hyperinflation fades, so the lessons of its consequences are being forgotten. But let there be no doubt that the benefits of this policy are indispensable to industrial recovery and renewed competitiveness. It is a lesson we have learnt from bitter experience as British companies have been priced out of both domestic and overseas markets by high inflation. Perpetual devaluation of the exchange rate proved to be no answer. Low inflation is the best service that we can give industry in its efforts to increase output and jobs. And yet, as memories fade, we are once again hearing the old calls to pump money into the economy. Are our memories so short?

Higher inflation followed by higher unemployment. That is the history of the last twenty years. Those are not my words, but those of the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan). Inflation is the mother and father of increased unemployment. Not my words, but those of the right hon. Gentleman's predecessor, Lord Wilson of Rievaulx. We believe that unless we keep inflation under control, all other economic objectives will fail. Not my words, but those of the righ hon. Member for Birmingham, Sparkbrook (Mr. Hattersley).

We have achieved considerable success in the fight against inflation, but more still needs to be done. Our inflation rate is still well ahead of several of our major competitors. In the 12 months to March, prices rose by 2.5 per cent. in West Germany, by 3.7 per cent. in the United States and by only 1.6 per cent. in Japan. In particular, if industry is to continue to recover competitiveness, the rise in earnings must continue to abate. With average earnings in recent years rising by 3 per cent. a year in real terms, much of the benefit of the recovery has been taken by those in employment. Although, by historical standards, industry's unit cost increases have been moderate in recent years, they have still been well ahead of our main competitors, the United States, Germany and Japan, where unit costs have actually been falling.

There has been much discussion recently about the relationship between real wages and employment. I believe that the arguments are now well understood, but I will make one point in relation to experience in the United States which I know that right hon. and hon. Opposition Members are fond of quoting—at least, fond of quoting those bits which are selectively appealing. Between 1970 and 1980 real earnings per hour in the United States fell while employment rose by 25 per cent. Conversely, in Europe real wages continued their substantial upward rise over this period with a marked increase in unemployment. There can be no clearer lesson than that.

Responsible control of public expenditure has also allowed room to remove—

Mr. John Smith

Before the Minister leaves the question of incomes and earnings, as I think he described it, presumably the lesson that he is trying to teach people is that they should not ask for wage increases. He must be aware, as I think all hon. Members are, that the largest increase in remuneration in recent years has been in top management in industrial companies, who have voted themselves huge increases in salaries and often large capital appreciation through share option schemes. Does he have the same strictures for them as he has for the industrial worker?

Mr. Pattie

Some of the more spectacular examples have been geared to the performance of the company. If a company has performed well, that seems to be a fair response by the person with executive responsibility.

Mr. Ian Wrigglesworth (Stockton, South)

The Minister has criticised the general level of pay increases. If they are leading to an increase in inflation, a loss of jobs and a lack of competitiveness, what do the Government propose to do?

Mr. Pattie

The Government certainly do not intend to introduce an incomes policy, as proposed in the alliance amendment. We have been down the incomes policy road before. We have a policy for our employees in the sector that we can control. We shall continue to urge manufacturing industry in the private sector to keep wage increases within close limits. The consequences of not doing that are there for all to see.

Responsible control of public expenditure has also allowed room to remove or reduce other previously imposed Government costs on industry, such as the national insurance surcharge, which was costing private industry about £3 billion a year. That was introduced by the Labour Government.

When the House listens to the demands for changes in economic strategy by the Opposition parties it would do well to remember the sort of taxes that destroy industry and jobs and that are necessary to finance their pet programmes. The measures that we have taken to create conditions conducive to business and enterprise go far beyond the control of inflation. Industry cannot get on with the job if burdened with unnecessary Government regulations and controls.

Since coming to office we have abolished price controls, factory building controls, dividend controls, hire purchase controls and foreign exchange controls. We have introduced a wide range of measures over the past six years to encourage entrepreneurship, risk-taking and self-employment. Many of those measures have remedied tax disincentives to enterprise and hence to employment generation; and yet those are precisely the measures which the Opposition so mistakenly dismiss as tax benefits to the rich.

Nothing could be further from the truth. The evidence is plain to see. In 1983 the net increase in the number of firms starting up over those going out of business was over 42,000—the highest figure on record and double the level for 1982. Altogether, in the four years from 1980, the net increase in new businesses was 112,000, which means that net starts were averaging over 500 a week during this period. The numbers of self-employed are at record levels.

Industry now is much more capable of competing on price; but while that is an essential prerequisite for improved performance, the so-called non-price factors are more intractable. Unfortunately, the Government cannot legislate for improvements in performance. Much of the task must lie in industry's own hands. It is firms, the producers, which must adopt efficient production methods and working practices. It is firms which must research markets to discover customers' requirements. It is films which must design products to customers' specifications and adapt to change, and it is firms which must adopt the new technologies.

However, the Government accept that they have a vital role to play in the transformation that is needed to regain international competitiveness. One area vital to future competitiveness is research and development and innovation. Science and technology is central to wealth and job creation. I stress that innovation and adoption of the new technologies are as essential in the traditional as in the more modern high technology industries.

Mr. Laurie Pavitt (Brent, South)

Will the Minister consider the innovation in my constituency? A famous food firm, Heinz, which makes baked beans, has had to bring machinery from Switzerland because of the rundown in high-grade technology equipment production in Britain. The material that the firm requires for innovation cannot be found here. Surely public investment would have cut the need for tremendous import charges and perhaps prevented the 600 redundancies in an area where unemployment has quadrupled in the past five years.

Mr. Pattie

That is yet another tragic example for the people involved of what happens as a result of inadequate investment. The hon. Gentleman makes a false analysis because public investment is not involved. The hon. Gentleman suggests that Government money can force companies to produce certain products. There is no evidence of that.

I stress again that innovation and adoption of the new technologies are as essential in the traditional industries as they are in the more modern and high technology industries. Innovative exploitation of science and technology provide the driving force for internationally competitive products.

Technology is now an essential ingredient of improved product performance, quality and reliability. We cannot afford to stand still because we can be sure that our competitors will not. Yet industry has not devoted sufficient resources to this vital area.

I am glad to say that I believe we are now making progress. The revival in profitability has brought with it increased industrial interest in R and D and innovation. An arousal of interest has been fostered by the Department of Trade and Industry's assistance to innovation and the adoption of new technologies. This is an area where the Government have been very active, to match the speed of progress in the new technologies themselves. Since 1978 we have more than doubled in real terms our financial assistance for innovation to over £300 million a year.

Under the last Labour Administration, the maximum scientific and technological assistance provided by the Department of Industry in any one year was £139 million in 1980 prices. This is less than that for any year under the present Government, and less than half that of £294 million at 1980 prices for 1984–85.

One of the main aims of the Department has been the promotion of innovation. We have done this by increasing awareness, and by encouraging and assisting where it is appropriate to do so. Our record has been impressive. Since 1979 we have quadrupled expenditure in support of industrial R and D, innovation and technology transfer.

We keep our policies under review to ensure efficient use of funds and value for money. Since the launch of the support for innovation programme the Department has offered nearly £400 million to more than 3,100 projects. The number of applications dealt with by the Department under this Administration grew rapidly. In the last year of the Labour Government the Department handled some 400 applications for this form of assistance. By 1981–82 the number had more than doubled. In 1982–83 it reached 1,500 and in 1983–84 2,500 — I am talking of actual cases of people receiving assistance.

There are many elements of our support for innovation promotion. Following my review of the Department's general industrial support for R and D which was occasioned by the very rapid growth of applications, there will be some changes of emphasis in the direction of assistance. The House will be aware of some of them. A larger proportion of assistance will be devoted to advisory services, to encouraging best practice, to improving the supply of key skills and to collaborative research. Support in these areas should help to improve the capacity of a wide range of companies to exploit technological opportunities.

Correspondingly, a smaller proportion of assistance will be devoted to near-market project support, which can now be more readily financed by industry with the increase in profits and liquidity in the past few years. Our aim will be to concentrate project support on innovative projects which represent a significant advance for the industry or sector concerned, taking into account the degree of innovation, the degree of technical and commercial risk involved, the potential for market exploitation, and any wider industrial benefits. Within these general arrangements for project support we will continue to emphasise certain key technologies and their application, such as microelectronics, fibre optics and computer software.

The Department's assistance to encourage the application in industry of microelectronics has achieved substantial success. In 1977 only 5 per cent. of manufacturing firms were using, or planning to use, microelectronics in their products or processes. By 1981 that figure had risen to 30 per cent. and by last year it had reached 50 per cent.

Another area where we have achieved considerable success is advanced manufacturing technology. Success in manufacturing results from the transformation of good design into high quality products through efficient manufacture. The three elements are inseparable and mutually dependent. Yet for too long production has been the poor relation of manufacturing industry. In many firms production strategy was rarely considered important enough to merit board room consideration.

Dr. Jeremy Bray (Motherwell, South)

If the Government's policies in the promotion of research and development in manufacturing industry have been so successful, will the Minister explain why actual expenditure at 1975 prices fell from £1,512 million in 1978 to £1,465 million in 1983?

Mr. Pattie

Is the hon. Gentleman talking about all research and development?

Dr. Bray

I am talking about intramural research and development expenditure in the whole of manufacturing industry, financed from whatever source, including private as well as Government finance.

Mr. Pattie

According to the figures that I have, taking 1975 as the base year, expenditure was £1,340 million in that year. In 1983 it was £1,564 million and in 1981 it was £1,661 million. We reckon, on the basis of the high increase — [HON. MEMBERS: "But there has been a reduction."' Indeed — I have just given the figures. However, judging by the applications that we have had for the SFI programme, the 1984 figures will be up on those for 1983.

Our support for advanced manufacturing technology began with the robot support programme, launched in 1981. That was followed by CADCAM — computer-aided design and manufacture. Later we expanded to embrace computer-aided production management and flexible manufacturing systems. Through all those programmes we have already laid a firm foundation of user experience.

To date there have been over 200 consultancy, development and installation projects under the robot support scheme. I was at the robot exhibition in Birmingham yesterday, and met representatives of a company called Unimation which, with Government assistance, has seen its work force grow by 30 per cent. and production space increase by 500 per cent. In the past 12 months, more than 300 robot technicians have been trained at that company's facility. It has also sold over 500 of a product called the Puma 560 robot, which has been developed with Government assistance. It is worth noting that 98 per cent. of the product is of United Kingdom origin.

Over 250 companies have been assisted in the development and installation of robots in a wide range of industries from aviation to pharmaceuticals. Under the CADCAM programme about 9,000 companies have made use of the wide range of facilities and services that have been offered. Under the flexible manufacturing systems scheme assistance has been offered for 114 planning studies and 43 installation projects, representing an industrial investment of more than £111 million.

The Government's help to industry, to enable it to keep abreast of the very rapid changes in technology, is very wide ranging. Design is a key factor influencing the market success of our manufacturing and service industries. We have been acting vigorously and creatively ever since the Prime Minister's influential seminar on design in January 1982.

With the help of the Design Council we ran a countrywide series of seminars in 1983 with 1,500 senior people from industry. We set up a funded consultancy scheme, which is producing excellent results for 2,500 small and medium-sized firms that have used it: 1,000 firms are expected to receive consultancies this year. We are assisting a number of bodies in the educational and training aspects of design.

In addition to the schemes that I have just mentioned, my Department has been active in encouraging biotechnology, fibre optics and optoelectronics in industry; in the development of software products and telecommunications products; in collaborative research under the Alvey programme on VLSI—very large-scale integrated circuits — software engineering, intelligent knowledge-based systems, man-machine interface and infrastructure and communications.

Mr. Spencer Batiste (Elmet)

Does my hon. Friend agree that if our computer and software industry is to continue to build upon the successes that it has already achieved, it is important that when the details of the British COCOM licence are established in June there should be as few restrictions as possible on our software industry, and as little red tape as possible to prohibit commercial activities?

Mr. Pattie

I agree with my hon. Friend. That must be the aim.

The Government are providing £200 million over five years to this major initiative to keep Britain at the forefront of information technology. It is highly encouraging that a programme only two years old has now approved 100 projects involving 50 companies, 40 academic bodies and five research institutions. I am confident that we can all expect substantial and exciting results from that enormous collaborative effort. There is also a wide range of advisory and consultancy services covering quality assurance, design, manufacturing efficiency, small firms and technical assistance.

One point needs particular emphasis. If we are to compete with the United States and Japan, our approach to the new technologies and innovation must not he purely national. The new technologies need the potential of a community market of 270 million people—soon to he 320 million. That is why we have taken the lead in pressing for practical measures towards an integrated market for the new technologies, as well as for more familiar goods and services. I am glad to say that the support that we have given to developing standards through the Community for telecommunications and information technology is beginning to bear real fruit. The first step to liberalise public procurement in telecommun-ications has been taken. The Community is on the point of coming to grips with developing standards for advanced manufacturing technology. The Government can, have, and will continue to make a contribution to creating a community framework in which enterprise can flourish.

But it is industry itself that must exploit these opportunities. The ESPRIT programme, partly funded from the Community budget, shows how co-operation can work in practice. There are encouraging examples of industry initiatives — the links between Plessey and Elettronica, and between Racal and Selenia, for instance. There is also the arrangement between Bull, Siemens and International Computers Ltd., and between Plessey, Siemens, Alcatel and Italtel. The spread of such industry-led collaboration can only be to our advantage. Support for the new technologies and their adoption across industry is not, however, sufficient in itself. The new technologies emphasise the crucial importance to industry of a highly qualified and skilled work force. In the information technology sector—the fastest growing industrial sector worldwide—there has been concern that shortages of skilled manpower were leading to a lower growth rate for the United Kingdom industry compared with our competitors. We therefore set up a committee last year, under the chairmanship of my hon. Friend the Parliamentary Under-Secretary of State, to study the situation as a matter of urgency and to propose action to deal with identified problems. This IT skills shortages committee includes representatives from industry and the education sector as well as from Government Departments.

The committee's first report, published in July last year and focusing on shortages of graduates, and its second, issued in January and dealing with technicians, both stressed the importance of forging a partnership between industry and the education system. Only industry is in a position to define its skills requirements and to explain them to those who provide education and training; they in turn should respond flexibly and rapidly to industry's needs.

Industry has already committed itself to contributing finance, teaching manpower and equipment to carry forward that concept. In addition, it has set up the IT skills agency under the auspices of the CBI education foundation to co-ordinate industry's contributions to the partnership. That is a welcome and imaginative response by industry to solving the problems of IT skills shortages.

For their part, the Government have responded to the requests from industry for more graduates in engineering and technology. The Government are making £43 million available over the next three years to provide additional places for engineering and technology students in higher industrial institutions. Several Departments, including my own, the Department of Trade and Industry, are contributing to the cost. That follows on from earlier moves, such as the information technology initiative taken in 1982, which is adding 5,000 extra places in IT-related higher education, and the £14 million engineering and technology programme in Scotland announced in November 1984.

In 1978 the Department estimated that each year in the United Kingdom there were only about 2,500 short course places available for updating engineers in microelectronics techniques. Studies suggested that that would be insufficient to meet the needs of industry if it were to adopt the technology as fast as the Government hoped. Skill shortage was likely seriously to inhibit take-up of the technology. Consequently grants for developing training courses became an integral part of the microelectronics applications programme. They go to colleges, univer-sities, polytechnics and firms to develop courses on microelectronics for industrial engineers and managers. More than 30,000 such course places are now available annually compared with 2,500 short course places when the Labour Government were in office.

Therefore, the Government have a coherent and well developed policy for industry, manufacturing and the new technologies. It is not a policy to preserve every firm—

Mr. Paddy Ashdown (Yeovil)

I have listened to the Minister's speech with care, hoping to detect some spark of a realisation of the country's position. The hon. Gentleman has made careful use of figures. May I present him with four more? Has not output in manufacturing industry fallen by nearly a tenth since 1979? Has not output in production industry, despite the oil surge, fallen by nearly a twentieth? Has not investment in manufacturing fallen by nearly a third? Is not the non-oil trade deficit now at a level of nearly £12 billion? In the face of such figures, how can the Minister be so complacent?

Mr. Pattie

If he catches your eye, Mr. Deputy Speaker, the hon. Gentleman will no doubt develop the points that he has just made in what was virtually a speech. No doubt he too will welcome my right hon. Friend's reply to the debate.

Our policy is to create the conditions in which manufacturing and industry as a whole can flourish, to encourage and assist it to adapt and to be competitive, and to allow it to use its resources and strengths unhindered by Government restrictions wherever possible.

The policy is clearly working, because since early 1981, the trough of the world recession, the economy in the United Kingdom has grown steadily for four years. Total output is now at an all-time peak, not just in money terms but in real terms. It is some 4 per cent. above its previous peak in 1979.

Total fixed investment and total business investment are at real peak levels. Employment is responding, with over 600,000 more people employed now than in the spring of 1983, and buoyant growth is continuing. All the forecasters predict continued growth throughout 1985 of up to 4 per cent., following the end of the miners' strike. We are expected to have the highest growth rate in Europe this year for the second time in three years. But for the miners' strike, it would have been three out of three.

Encouragingly, growth is widely based, with manufacturing industry sharing fully in the recovery. Since the first quarter of 1981, the trough of the manufacturing recession, manufacturing output has grown by some 10..5 per cent. As with total output, manufacturing is entering its fifth year of successive sustained growth. Manufacturing investment is rising strongly again—up 13 per cent. last year.

There is, as the Labour party keeps telling us—and it is right—some way to go before we achieve the volume of output of the previous cyclical peak in 1979. That is a point that the hon. Member for Yeovil (Mr. Ashdown) has continually in mind in his interventions. But there are no signs, despite the doomsters' prophecies of last year, that the upturn in manufacturing is petering out. Although some hon. Gentlemen may discount it on the radio, and say that it is merely a flash in the pan, the latest CBI industrial trends survey is even more optimistic than the many buoyant surveys over recent years.

The survey shows a significant improvement in business confidence and expectations of future output growth that are better than at any time in the last two years. Most encouragingly, the steep long-term downward trend in manufacturing employment seems to have ended, with employment expected to be broadly stable over coming months.

Export confidence and orders are particularly strong. Indeed, one very encouraging aspect of the recovery in manufacturing has been the improvement in export performance. Since the end of 1983 manufactured exports have been rising strongly, and by the end of 1984 they were surging ahead. This surge has continued in the first quarter of this year. Export volumes of manufactures, excluding erratic items, are up 14 per cent. compared with the same period a year ago. We are now exporting more manufactured goods in real terms than ever before in our history. Export volumes are running at over 10 per cent. above their previous peak level.

As in all recoveries, some sectors within manufacturing have done better than others. Not all have grown; nor would we expect them to in a dynamic and rapidly changing market place. However, the growth of some manufacturing sectors has been dramatic. Output of office machinery, including electronic data processing equipment, has risen by a remarkable 170 per cent. since the first quarter of 1981, the trough of the manufacturing recession. Electronic consumer goods output has grown by 53 per cent., electronic industrial goods by 30 per cent. and electrical consumer goods by 22 per cent.

Rapid growth has not been confined to the so-called high-tech industries. The established industries have also participated, particularly chemicals. Agricultural chemicals output is up 27 per cent. on the first quarter of 1981, plastic products by 35 per cent., pharmaceutical and consumer chemicals by 21 per cent. and industrial chemicals by 24 per cent. All those sectors are now producing at record real levels of output.

We accept that much remains to be done. We must not slacken our efforts and jeopardise the substantial progress that has been achieved over the past four years. These achievements have laid the foundations for a competitive manufacturing and industrial sector. Productivity in manufacturing has risen by an average 6.5 per cent. a year for the past four years, well above the rates of our main industrial competitors, and there has been a much-needed rise in profitability. Profits of industrial and commercial companies rose by over 20 per cent. in 1984 and the real rate of return is expected to have been around 7 per cent. in 1984 for non-North sea industrial and commercial companies.

The opportunities are now there to be grasped. The rewards of success will be high both for industry itself and for the nation. It is very heartening to see industry responding to the challenge and the opportunities. For our part, I can assure the House that the Government will continue with their policies to facilitate and encourage a dynamic, adaptive and efficient manufacturing and industrial sector. I urge the House to support our amendment.

5.6 pm

Mr. Tony Benn (Chesterfield)

I do not need to repeat the points made by my right hon. and learned Friend the Member for Monklands East (Mr. Smith) in chronicling what has happened to British industry in the six years since the Government came to office. The Minister sounded like a managing director in a difficult year. I congratulate his officials on writing the brief, though not the hon. Gentleman on reading it. At no point did he touch on the major tragedy that has occurred in Britain as a result of the destruction of so much of our manufacturing industry.

Two hon. Members intervened to say a word about individual closures such as we could all cite. The Minister said, "That is tragic, but․" The truth is that whole areas of the country have been laid desolate. Anyone who sees what has happened in Liverpool is reminded of Beirut. We should remember the destruction of industry, the high unemployment and the hopelessness of young people. In the mining areas, if the closures go ahead, there will be the same desolation in south Wales and in the north-east. The Minister failed to allude, except in passing, to what has happened to basic industries, such as those which other countries have invested in and developed, or to the human tragedy.

The police are now being asked to prepare themselves by increasing their numbers and improving their equipment to deal with the social disaffection that inevitably follows the implications and implementation of the Government's policies. I wonder how many people who are unemployed or face other problems, reading the Minister's speech, will feel that they are living in the same country as the hon. Gentleman.

People are now realising—this explains some of the changes in the Conservative party, to which I shall refer —that the Government are not pursuing an economic policy. I do not believe that the Government are monetarist. I do not believe that they are Thatcherite. I do not believe that the Government are wilful—despite the words of our motion — or incompetent. They are following a deliberate policy of hammering those whom, broadly speaking, the Labour party, of which I am proud to be a member, seeks to represent.

The Government are hammering young people. Young working-class unemployed people are being put through a youth training scheme that is an absolute fraud. The scheme provides free labour for the employers. We are told that the Government cannot intervene in industry, but the Government give thousands of young people to employers, without charging them a penny, and call it training. Many of the young people receive no proper training at all. They are not protected for health and safety purposes. They are substitutes for adult labour.

Mr. Robert Atkins

rose —

Mr. Benn

I shall not give way to the hon. Gentleman. Experience shows that his interventions are not related to the argument.

The youth training scheme involves giving free labour to employers; it is designed to get wages down and to get people accustomed to low wages. In many cases it replaces apprenticeships, does not come under the protection of the trade union movement and is a substitute for adult labour.

That low wage policy was enshrined in the Budget. The Chancellor said to employers, "If you pay low wages, you will pay lower national insurance." Just the other day I met someone on a train who works in a hairdresser's shop. She has suffered a cut in wages since the Budget, because the employer said, "By cutting your wages, I shall be able to pay less national insurance." That girl could not find another job because of high unemployment in the area in which she lives. The abolition of the wages councils and the ending of shopping restrictions, which we shall discuss on Monday, are designed to create a low wage economy, and that means mass unemployment.

Mr. Leigh

rose —

Mr. Benn

I shall not give way as I want to be brief. When I have made my point, other hon. Members can follow it up.

The Secretary of State for Trade and Industry is famous for his phrase, "On yer bike." He got it wrong, because he meant, "On yer knees." His intention was to create mass unemployment, which is the real economic policy that the Government are following. Unemployment keeps real wages down, and, when assisted by Government measures, lowers real wages. If one lowers real wages, one boosts profits, and the employers do not necessarily plough such profits back into the industries in which they are made.

I asked the Library to undertake a corner shop economics calculation to determine the export of capital per head of population. That shows that £1,097 of capital per head has been exported since the Government came to power. Therefore, if people tighten their belts in response to Government pleas and employers make larger profits, such profits are exported to places where wages are lower.

Unemployment not only boosts profits and lowers wages; it also undermines the strength of trade unions. It is a marvellous form of import control, because person out of work does not buy Japanese videos, French cars or American tobacco, and all this has nothing whatever to do with the argument advanced by the Cabinet.

Viscount Cranborne (Dorset, South)

rose —

Mr. Benn

I am seeking to keep within the 10-minute limitation on speeches. I shall be able to do so only if there are no interventions.

If full employment were to return, the Government's whole strategy would be undermined because the unions would be stronger, wages and conditions would be improved and there would be a demand that the dole money saved should be channelled into health and education.

When people read this debate in Hansard, I suspect that they will perceive my comments to be more relevant than those of the Minister. If the Government continue to pursue their present policy — I think that I share this view with certain Conservative Members—we shall see the destruction of the Tory party at the next election. We were told that Conservative policy would result in a strengthened economy—coming phoenix like out of the ashes—but the one that is now pursued will create such a powerful public reaction that the Government will never be re-elected. Lest anyone be in any doubt, I need only say that the Government's prospects have changed sharply since the end of the miners' strike, and that their brutality towards the miners has resulted in a powerful counter-reaction.

The second alternative which is occasionally put forward by the right hon. Member for Old Bexley and Sidcup (Mr. Heath) and the Centre Forward group is to return to the policies of the last 40 years. That is advocated by Mr. Peter Jenkins in The Sunday Times, who I was told was paid a transfer fee of £115,000 to join that newspaper. The idea is to go back to what were essentially SDP-type policies, which were followed by the previous Conservative Government as well as the Labour Government of which I was a member. It is argued that that will solve the problem.

Incomes policy is at the heart of that approach. We now have an incomes policy which is known as unemployment, yet the Liberal party and others favour an incomes policy as an alternative to monetarism. Having served in Cabinet for 11 years, I know what incomes policy means —centralised wage bargaining in the hands of Ministers.

Mr. Wrigglesworth

No.

Mr. Benn

Of course it does. I do not think that the hon. Gentleman has ever been involved in ministerial discussions, where one talks about who will get an increase and the use of Government sanctions if there is disagreement. An incomes policy runs absolutely counter to everything that the alliance says about not having statism. It is the most statist policy that one can have. If, in addition, we adopted the European monetary system, under which we would join a federal Europe, we would lose control of our currency. Therefore, if we were to adopt the proposals advanced by the Liberal party, we would have the most authoritarian form of central Government control possible.

I can understand why some Conservative Members want to follow that policy. They believe—I think that they are right—that the present Prime Minister will be the first woman but the last Conservative Prime Minister this century. They think that the party can be salvaged by returning to the patrician ingredient of certain noble politicians who became Prime Minister. They also think that prospects can be improved by returning to the absolutely rigid, bureaucratic centralism of the previous Conservative leader. I must be candid and admit that much of it was followed through by the Wilson Government.

Neither of those policies can work. The policies of earlier years contributed to the decline that we have witnessed. The policies pursued by the present Government have catapulted that decline into such acute decay that, when the oil runs out, this country will be faced with mass unemployment and mass emigration, with nothing but a little bit of tourism to keep us going. That will not worry business, because by then it will have invested its money in other countries where it can achieve a sufficient return, whether or not there is manufacturing in Britain.

My mind goes back to the period which confronted us after the war. I am one of the five Back-Bench survivors of the Attlee Government, and I vividly remember the task assumed by Mr. Attlee when he came to power in 1945. At that time our industry had been neglected because we concentrated on the war, but at least there were 3 million or 4 million service men ready to be demobilised so that those industries could work again.

The damage that the present Prime Minister has done to British industry is far greater than that achieved by the German bombers, because our industry is now gone. There is no industry. Equipment has been sold abroad, much of it with Government money. Industry will not exist. Instead of 3 million or 4 million service. men waiting to be demobilised, we shall have 4 million demoralised unemployed, many without a skill because of the cuts in the education and training provision which is so necessary for high technology industry.

The policies supported by the alliance, which began in 1940 under Churchill and ended in 1979, are not adequate. Nor is the alternative economic strategy which was initially advocated by me in 1974. I have little doubt that the electorate will reject the present Government, but the Prime Minister may be hard to move, even with the help of her former colleagues.

We shall have to plan much more carefully. We shall have to ensure that the export of capital stops. We will have to plan our trade to prevent industries from being destroyed as we rebuild them.

We will have to assume far greater responsibility for the banking and financial institutions—if the Prime Minister has not nationalised them before we get there, as Mussolini did when faced with the collapse of the financial institutions in Italy in the 1920s. Anyone who thinks that the world banking structure is altogether safe may be living in a dream world. It is normal to laugh at people who carry out their function to warn that what will be required is a radical policy and more than just a little reflation, a little more public expenditure, a little adjustment to the PSBR or appeals for higher productivity.

The country has been ruined by this Government, and it will have to be rebuilt by another Government using methods of planning comparable to those that are necessary to win a war. These arguments are penetrating to the public and will be understood. I do not think that the Government are following an economic policy. It is a political policy for the destruction of working people, their services, their jobs, their unions and their ballot box. The country will not be saved by a lot of consensus politicians trying to revitalise the policies which were tried by honest men and women but which failed.

We will have to rebuild. It will require an effort of will, a sense of purpose and instruments for planning and greater democratic involvement than we have yet contemplated in this Chamber. That is the point that I want to make in the debate.

5.21 pm

Mr. James Prior (Waveney)

I am glad that the right hon. Member for Chesterfield (Mr. Berm) made that speech. It has made me feel much more comfortable sitting on these Benches. The people who feel uncomfortable because of the right hon. Gentleman's speech are those on the Opposition Benches.

One of the sad things for the right hon. Gentleman is that there was a time when he could fill the Chamber when he made a speech. Now he is isolated and neglected even by his former friends. That gives some idea of how utterly barmy his views have become. There is no other word that one could use because he is so far removed from the politics of the present, let alone the industrial circumstances of today, as to make himself rather a sad character. He, like me, does not speak often in the House. When he speaks, he thinks he has to bring in everything. We have listened to the whole range of political and industrial matters in a quarter of an hour. He does his party and his own record an enourmous disservice by the sort of speech he has just made.

Mr. Benn

Can the right hon. Gentleman tell me from his own long experience how to be influential with his own leader?

Mr. Prior

I did not catch all that the right hon. Gentleman said, but I cannot believe that he will be influential—I hope he will not be—with his leader with the sort of views that he has put forward today, although I fear he may be.

I want to describe briefly what it is like when one moves from Government to the Back Benches and perhaps from Government to industry, and what Goverment begins to look like from the point of view of someone who has moved into industry.

Mr. Dennis Skinner (Bolsover)

The right hon. Gentleman has four jobs already.

Mr. Prior

A few years ago I made the great mistake of saying that the hon. Member for Bolsover (Mr. Skinner) was the Brian Clough of the House of Commons. I now know what an insult that was to Brian Clough. I have been longing to tell the hon. Gentleman that.

Manufacturing industry is absolutely vital to the future of this country. I do not believe that we can have a prosperous service industry unless we have a strong manufacturing industry behind it. That is a very important lesson that we have to take on board.

We have not measured up yet to the problems of international trade and the enormous competition there is now in overseas markets, particularly for major capital projects. Such projects can be won only by large British companies which will use as subcontractors the small and medium-sized companies which help to make up the British economy. When a large British company gets a major contract, about 30 per cent. of the work will go to that company and 70 per cent. will go to a range of smaller companies. We need large British companies of an international scale if we are to compete with large companies elsewhere.

We look upon ICI as a large company, but in terms of the chemical industry there are four or five world companies that are larger than ICI. My own company, GEC, in which I declare my interest, is regarded here as a very large electrical company, but there are six or seven electrical companies throughout the world that are far bigger. General Electric in the United States is twice as big, as is Siemens.

Many companies with which we have to compete in overseas markets are bigger than British companies. Therefore, the important lesson for us all to learn is not so much that we need to make certain that there is competition within companies in Britain but that we must compete with international companies which are far stronger than most British companies.

If we are to do that successfully in the great world markets, we must compete on equal terms. I went on the Young mission to China. One of the messages from that visit was that France, Japan and other countries are granting long-term cheap credit. The French were commonly reputed to be giving 30-year credit at 3 per cent. We know what the Japanese have been doing all round the world. Many other countries have been doing the same. If we cannot compete with those countries, we are not in a position to do business.

The Secretary of State must run trade policy and must be our champion on trade policy. That means that we have to take a different attitude towards aid and soft credit, aid and trade provision in particular and bilateral aid.

In 1983 our bilateral aid was $850 million. In France, one of our main competitors, the comparable figure was $3,145 million. Again, our ATP budget has been about £66 million but we have only once in the last five years come up to our budget.

One of the best ways that we can help manufacturing industry and, therefore, our overall level of employment and prosperity is by ensuring that we get a fair share of overseas contracts. There again from my experience in government I think that the Treasury have far too much control over the Export Credits Guarantee Department and over ATP. The Secretary of State for Trade and Industry has nothing like enough control.

Much nonsense has been circulated. The Byatt report contained the shibboleth that there was no follow-through business when a great contract was obtained. That is utter nonsense. It has been refuted by an unpublished NEDO report, which I hope will be published shortly. The NEDO report makes it plain that there is a great follow-through from the obtaining of large contracts overseas. If we obtain a contract for an airport, a railway, a signalling system or a telecommunications system, we are likely to be called upon to provide spares and there will be further work for many years to come.

I do not say that manufacturing industry will employ much more labour, but it will employ much less unless we get things right. If we provide it with the right conditions, manufacturing industry will create prosperity for service industry, where growth in employment is probable and where it must come.

Mr. David Crouch (Canterbury)

As I think the House knows, I, too, have an interest in the chemical industry. Contractors are attempting to secure contracts to build large chemical plants abroad. On average, these contracts are worth £50 million to £100 million. The contractors are being required by ECGD to pay premiums for tender-to-contract cover which are almost prohibitive. Sometimes a contractor will have four or five tenders out at one time and will have put down about £500,000, which will be lost if the company does not obtain the contracts. This is an example of Government intervention being unhelpful rather than helpful.

Mr. Prior

I agree with my hon. Friend. My right hon. Friend the Secretary of State is listening carefully to the views that are being expressed by his right hon. and hon. Friends. A fresh assessment must be made of ATP and our bilateral aid. We need mixed credit and soft loans. We do not need to give 100 per cent. grants. A much smaller grant and a greater spread of the money would achieve a great deal more.

I urge my right hon. Friend to bully the Treasury and the ODA so that he gets his way and they do not get theirs. Over the years, the Treasury has been allowed to obfuscate what we wish to do, and that should be stopped. The Secretary of State should take charge and the Treasury should not be allowed to examine every individual contract in the way that it has been doing in recent years. I hope that some of the frustrations that have built up over the past few years can be removed. There is nothing more frustrating when a company goes to enormous efforts to win a large contract and finds that the problems of getting ECGD cover, or ATP, have delayed the decision so long that the contract goes elsewhere although it could have come to the United Kingdom.

The provision of the appropriate machinery to assist companies to win large contracts is much more important than research and development. The Opposition are wrong to concentrate their attack on the need for greater investment in research and development. There is no real shortage of research and development effort. We are short of the money to market and to sell our goods. That is much more important than R and D.

Dr. Bray

Will the right hon. Gentleman explain why his own company, GEC, has doubled its research and development expenditure over the past four years?

Mr. Prior

That is our money. We put a vast amount of money into research and development, but it is our money. We research and develop the goods that we think we shall be able to sell. That is a decision that should be left to the company. It is much more important that the Government should help with the selling of goods in overseas markets where we meet intense competition rather than on the research and development side, where we can manage matters for ourselves to a much greater extent.

Viscount Cranborne

I have lived and worked abroad and I have had the experience of working for a foreign company. Most of what my right hon. Friend has said about the lack of support from the ECGD and the other Government agencies is true, but does he accept that time and again good British investment and good British products are frustrated by poor salesmanship? We often see 40 Japanese selling over three years while one British agent is working part time in selling a large product. Is it not true that British industry could put much more energy into its sales efforts in supplementing any soft loans that might be available?

Mr. Prior

I do not doubt that that is right. I am not defending British industry and all that it does. There is a great deal wrong with British industry and there is a great deal that needs to be put right. British industry is constantly trying to improve, and there have been remarkable improvements in the past few years. However, many of the goods that we sell abroad still do not come up to standard. There are shoddy goods that are not delivered on time or are not of the right design. I acknowledge that we have a great deal more to do. I do not believe that it is lack of research and development that holds Britain back. The greatest problem lies in the large infrastructure capital goods market overseas.

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

My right hon. Friend will understand that I do not want to pick a quarrel with him on what he has said, but I think that he should take into account the fact that in 1979–80 the ECGD had a cash inflow of £50 million and that last year there was a cash outflow of about £470 million. It is clear that ECGD and the taxpayer are carrying a heavy load. I emphasise that they are cash flows one way and the other, but they are very considerable sums of money.

Mr. Prior

I am not as critical of ECGD as I am of the Government over ATP and on bilateral aid. I think that the ECGD needs to respond more quickly. I was more critical of the Byatt report and the attitude of the Treasury towards the ECGD, but I was concentrating my fire elsewhere.

I want to turn to purchasing policy, whether it be public purchasing policy or that of large industry in Britain, whether it be nationalised or a private monopoly. I believe we shall not have a great export market unless we have a strong home base. I am worried that not enough account is being taken by some of our large consumer industries at home of the need to help British manufacturing industry in what the overseas markets require.

My firm has a great interest in the telecommunications industry. The automatic exclusion of 20 per cent. of the home market by British Telecom—this has been given to Ericsson—will result in a loss to GEC and Plessey of about 3,000 direct jobs and a further 2,000 to subcontractors. The effect of giving 20 per cent. to Ericsson will be to create a few hundred extra jobs in this country, but it will do nothing to help technology because all of the research and development and all of the training will be carried out in Sweden. This makes it much more difficult for Britain to sell its exports because it will be said, "Your own telecommunications industry is not buying your products." We shall have less ability in research and development for new systems because we shall not have the necessary money, and reduced ability, especially in information technology, which is at the core of British industry.

The answer must be for the Government to do all that they can, by means of their purchasing policy and the influence that they can bring to bear upon others, to ensure that large consumers in-Britain buy British goods and give support to British industry wherever they can. That applies also to competition. The breaking down of trade barriers and our membership of the European Community is bound to lead to greater competition between companies throughout the world. There will then be less room for the kind of competition between companies in this country that we thought was necessary until a few years ago.

Mr. Phillip Oppenheim

My right hon. Friend has drawn to the attention of the House the fact that British Telecom proposes to buy 20 per cent. of its digital exchanges from Ericsson. Jobs will be created in Britain through the assembly of those exchanges, but I suspect that they will be few in number. Is not the situation made worse by the fact that the Swedish PTT totally refuses to countenance the purchase of any British equipment to the extent that last year the Swedes exported £22.9 million worth of telecommunications equipment to Britain, while we in return were able to export only a derisory amount?

Mr. Prior

My hon. Friend helps me with my point. These matters need to be considered very carefully. We can do certain things to help ourselves without extra finance being involved.

One can argue about the base year which ought to be adopted for the output of manufacturing industry. Should one take 1973, 1979 or 1981 and work out from that how well or how badly one has been doing? Although Britain's manufacturing performance has improved remarkably during the past few years, it faces enormous problems. I should not want the Government to think that their efforts during the last three or four years or that the growth in manufacturing output during that period will carry Britain through when North sea oil begins to run out. We have to use this period to ensure that British industry becomes as competitive as possible. That is why I urge my right hon. Friend the Secretary of State for Trade and Industry to fight very hard in Cabinet for a change in the bilateral aid policy, in the aid and trade provision, and in the attitude of the Treasury. The "crawling over" of these figures that goes on time and time again delays decisions and frustrates so much of British industry.

Vast numbers of British industrialists want to support the Government. They believe that the Government's industrial relations policy has resulted in the tightening up of manufacturing production generally. They want to continue to support the Government. They believe, as I do, that the time has come to look again at some of our overseas trade policies.

When the Prime Minister was in Indonesia during her tour of the far east, which she regarded as a market into which Britain ought to be getting in a big way, she found that we were almost totally excluded from Indonesia because we are unable to match the soft credit and other packages which other countries are able to supply to that market. Yet it, together with China, is one of the most important markets that we ought to be developing during the next few years.

Contrary to what has been said, when she goes overseas the Prime Minister does a remarkably good job by sticking up for British industry and getting orders for Britain. However, she would be the first to agree that, if Britain is to win orders, our policy on bilateral aid and ATP, and to a certain extent the way that it is manipulated within Government, has to change. I have not suggested a figure to my right hon. Friend the Secretary of State for Trade and Industry. That would be silly. To suggest figures would immediately give to our opponents and competitors abroad the chance to "up" their figures as well. All I want to do is to ensure that Britain has a fair chance to obtain orders. The rest is up to industry.

5.46 pm

Mr. Ian Wrigglesworth (Stockton, South)

I am pleased to follow the right hon. Member for Waveney (Mr. Prior) because, not for the first time, I agree with much that he said about the rather narrow policy area with which he dealt. However, I would point out to the right hon. Gentleman, to his right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) and to their colleagues in the newly formed Centre Forward group that if they wish changes to be made to Government policy they must understand, as I am sure they do, that Governments take notice only of votes—either votes in the ballot box or votes in this House. I believe that there are sufficient right hon. and hon. Members belonging to the Conservative party to join with some of those on the Opposition Benches who strongly disagree with many of the policies to which the right hon. Gentleman addressed his remarks to bring about the change in Government policy that the right hon. Member and his right hoe and hon. Friends seek to effect. If they are prepared to follow up their speeches with their votes, that could be so.

I am also pleased to follow the right hon. Member for Chesterfield (Mr. Benn). It is a pity that the right hon. Gentleman has not learnt, as all hon. Members need to learn, a little more humility from his experience in Government, politics and industry than he demonstrated in his speech. One of the lessons that he might have learned from the period 1939 to 1945, which he praised as a very successful period for this country, was that we then had a sense of direction and purpose which has not existed for other than the very shortest periods since the war years. That, rather than the other factors to which he referred, led to this country's success during that period. Some of the alliance members believe that that kind of success will never again be achieved in the industrial and manufacturing sectors and by the economy of this country until there is a broader degree of agreement and consensus between the parties instead of absurd and exaggerated arguments being waged over the declining body of British manufacturing industry. We have witnessed such exaggerated arguments in this debate.

It is just as absurd to suggest, as it was suggested by the Opposition Front Bench spokesman, the right hon. and learned Member for Monklands, East (Mr. Smith). that the Government are doing nothing to help industry and are leaving everything to market forces as it is to suggest, as the Minister for Information Technology suggested in his opening speech, that everything should be left alone and there should be no Government intervention. As was acknowledged by the Minister in the second part of his speech, the reality is that this Government, like every other Government, are involved in industry.

In the second part of his speech the Minister catalogued the way in which the Government are intervening in the market, helping industry and associating with it in the many ways which he outlined. My criticism is not that the Government are not intervening in industry, because they are, but that they are not intervening in the right way and are providing insufficient resources to help to prevent the decline in manufacturing industry, which is the subject of this debate.

There are many matters, with which I cannot deal this evening, that the Government might consider doing, not only by means of the revenue from North Sea oil, which amounts to about £12 billion or £13 billion, but by means of the enormous revenue that we now learn the Government will receive from the sale of British Gas. What will the Government do with the £6 billion to £8 billion that they will receive from the sale of British Gas? Perhaps they will listen to the Society of Motor Manufacturers and Traders and remove the tax on the automotive industry with part of it. If the tax on the car industry were removed, there would be a good return for British industry. The tax is regularly criticised by the motor industry because it puts it at a disadvantage when compared to other countries. In any country the motor industry is a generator of jobs and wealth.

The revenues received from North sea oil and the sale of public assets, such as British Gas, could be ploughed back into many sectors of industry to provide the seed corn and investment for the creation of future wealth.

After six years, the Government's policies are failing. The decline in the contribution of the manufacturing industries to the economy has accelerated dramatically. I take no pleasure in recording that fact. There has been a structural shift away from manufacturing towards services in all the developing countries, but the scale of the shift in the United Kingdom was not inevitable and should not have been so great.

Twenty five years ago, 38 per cent. of our work force was employed in manufacturing. Today, the figure is 27 per cent., which represents 5.5 million jobs. There are 3 million fewer jobs. Under this Government, 1.76 million jobs in manufacturing have been lost. At 20.9 per cent., the contribution of United Kingdom manufacturing to the GDP is lower than that of any country other than the United States. That is a bad state of affairs.

The Minister pointed out that the manufacturing sector has been in terrible decline since the early 1970s. Between 1979 and 1984, however, manufacturing investment fell by 30 per cent. in real terms. Despite the past year's recovery to which Ministers have referred, manufacturing output is still 10 per cent. below the 1979 level.

This country, which was once the workshop of the world, fell in 1982 into deficit on manufactured goods for the first time since the Napoleonic wars. In 1984, the deficit was nearly £4 billion. That was a major contribution to last year's horrendous non-oil deficit of £11.4 billion. The contraction in manufacturing was pointed out graphically by the right hon. Member for Chesham and Amersham (Sir I. Gilmour) in his article in The Observer in which he said: Net investment in manufacturing has on balance been negative since 1979; in other words the measured stock of plant at the disposal of manufacturing industry is actually lower than it was six years ago. Those of us with constituencies in the north, Scotland and Wales can see that. We can see the open spaces where the factories used to be and the empty buildings standing around as the tombstones of our industrial past.

The sharp contraction in our manufacturing base owed much to the unprecedented 50 per cent. loss of competitiveness between 1979 and 1981. It was the result of a deliberate policy of allowing sterling to appreciate against all major currencies, and the inflation stoked up in the Government's first year of office as a consequence of the naive monetarist belief that pay increases could not affect the level of inflation. Caught by that cruel vice, manufacturers had no choice but to embark upon a savage round of closures and labour shake-outs to stay in business. Many, of course, went out of business during that period. Our manufacturing competitiveness has still not returned to the level of 1976 and 1979.

The Government have made much of the contribution of the service industries to the so-called economic recovery. All-the employment growth that has taken place since the trough of early 1983 has been in the service industries — financial services, distribution, leisure services — and in self employment. The "improved optimism" of the CBI survey mentioned in the Government amendment is based on the interpretation that manufacturing employment will stop falling. That belief may not be unreasonable. It is borne out by my chamber of commerce's survey of local manufacturing firms. However, much of that optimism will melt away when the results of the Government's tightening of monetary policy since February this year feed through and the brief export recovery that we have seen is aborted by the appreciation of sterling.

The net increase of some 480,000 jobs between March 1983 and September 1984, about which we have heard so much from Ministers and Conservative spokesmen, includes 318,000 part-time jobs for ladies. Welcome though those opportunities are to many, such as married women, who left the unemployment register during the recession, they mask the fact that during that period full-time employment fell by 162,000.

It is ironic that the Government's anxiety to massage the figures in 1983 by changing the basis of the register now results in the fact that the return of many unregistered unemployed to work means that the latest figures for the registered unemployed are still rising, despite the increase in employment, because the people becoming employed are not on the register. The Government's excuse, that the labour force is still increasing, takes no account of the fact that over the past 10 years the United Kingdom has had a lower working age population growth rate than almost all the major industrialised countries. It was Keynes, I think, who remarked that we should remember that for every pair of hands there is a mouth. The increase in the working population provides the opportunity for increased consumption and increased production. Increased population provides us with an opportunity for economic growth and not for the stagnation that we have seen in recent years.

The manufacturing sector, as an engine of wealth creation, remains crucial to the economy. Half the value added in all our exports of goods and services comes from manufacturers and one third of the remainder comes from the service industries interdependent upon manufacturing exports—transport, shipping, finance and insurance—and nearly two thirds of exports of goods and services are derived from manufacturing.

As the director general of the CBI said recently in his speech to that other Conservative splinter group —Conservative Action to Revive Employment: if anyone thought services could replace manufacturing in our exports, they must remember that if they did our service earnings would have to be three times as big as they are today. That is an inconceivable change, and I do not believe that anyone would seriously suggest that it could happen.

As the right hon. Member for Cambridgeshire, South-East said, the Government have no industrial strategy. They have now entered their seventh lean year and there are few prospects of any fat years ahead. The Government are relying on the increases in the special employment measures contained in the Budget to contrive a reduction in the employment figures before an election in 1987 or shortly after.

The Government ridicule people, such as Lord Weinstock of GEC and the chairman of ICI, John Harvey-Jones, and suggest that they are out of their tiny Chinese minds when they call for a clear exchange rate policy and are sceptical of the suggestion that services can fill the gap left by the decline in manufacturing. It is a pity that that type of attack is directed towards the leaders of some of our more successful industries, which contribute to so many parts of the country and so much to the national economy.

This year's public expenditure White Paper revealed the extent to which the Government have savaged spending on jobs and industry. In the five years up to 1987–88 they will have cut the budget of the Department of Trade and Industry by half in real terms. Spending on regional development grants, which has already been halved in three years, will fall by a further 43 per cent. in cash terms over the next three years. The only advantage of the Government's scorched earth policies is that they make it possible to embark on an entirely new strategy of constructive intervention, working, as we should like to see, with the grain of the market.

For industry, this depends on getting the right framework of macroeconomic policy. We have debated that issue on previous occasions and we shall, no doubt, debate it on many future occasions. We have in our budget proposals a modest fiscal expansion of £4 billion, which would cut unemployment initially by 0.5 million and in 1987 by 900,000 below the forecast levels, and cut increased borrowing by £1.9 billion. Unlike any other packages on offer, our policy has a credible anti-inflation element in the form of a firm monetary policy, within the framework of the European monetary system, helping to stabilise the crazy interest rate and exchange rate see-saw that has taken place since the winter.

In February the Chancellor rejected the advice of his chief economic adviser and the enthusiastic support of the CBI and industrialists, as well as the technical opinion of the governor of the Bank of England, and spurned the opportunity to join the exchange rate mechanism of the EMS at a competitive rate against the Deutschmark and a basket of European currencies.

Mr. Tebbit

Is the hon. Gentleman in a position to say whether the two industrialists he named—I will not ask him about any other—Lord Weinstock and Mr. Harvey-Jones, are enthusiastic advocates of the alliance policy of taxing away pay rises which are judged to be excessive? It would be interesting to know whether those two gentlemen support that policy.

Mr. Wrigglesworth

They, like many other industrialists, on looking at the policy that my colleagues and I have proposed, will realise that a decentralised incomes policy of that sort is better than not having the growth in the economy that would help their companies to grow more rapidly than they have done in recent years.

The difference between ourselves and Conservatives or Socialists is that we in the alliance are at last prepared to confront the problem, which is more than can be said of Ministers. All that we get from them, as we got from the Minister earlier, is sheer exhortation, with complaints about the level of income increases and the effect that that is having on our competitiveness, inflation and the economy generally.

From the Government we get nothing but exhortation and from the Labour Benches we get only a refusal to face up to the consequences of pay increases. At least from the alliance there is a recognition of the problem that confronts the country, and we put forward solutions for dealing with it.

Mr. Prior

Many people have quoted in defence of their cases words that Lord Weinstock is reputed to have used. As he is the managing director of GEC, perhaps I should remind the hon. Gentleman that it would be wise for people to wait to read the evidence, when it is published. I have read it and I assure him that it does not necessarily conform to what the hon. Gentleman said, to what my right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) has said or to what was said by the right hon. and learned Member for Monklands, East (Mr. Smith).

Mr. Wrigglesworth

The remarks of the managing director of GEC were widely published when they were made before the Select Committee. The right hon. Gentleman should not believe that I and other hon. Members have not read them with great care and did not draw the obvious conclusion, that he was being most critical of the policies of the Government. I appreciate that from my contacts with industrialists, because his remarks bore out what I have found is the feeling among those in a broad spectrum of British industry about Government policies in recent years.

I move from the general macroeconomic issues to the question of the high technology industries and innovation. We must acknowledge the findings of a number of investigations that have been made. The Ashworth report last autumn showed that Britain's growth rate in information technology, at 12 per cent. between 1970 and 1982, was slower than that of any of our main competitors. In Japan it was 23 per cent.; in France, 19 per cent.; in the US, 18 per cent.; and in West Germany, 15 percent.

It also showed that our share of world output in information technology fell from 9 to 5 per cent. and that our balance of trade had deteriorated from parity to almost £1 billion, with import penetration accounting for more than half of the market.

In biotechnology, the British Technology Group could find few British backers for its Agricultural Genetics Corporation, and Celltech has had to go into partnership with an American company, Air Products, to develop its new product.

While the application of microelectronics grew in the United Kingdom by 60 per cent. between 1981 and 1983, only 10 per cent. of those companies were using microchips as part of their product ranges. Recent published studies by the Policy Studies Institute and PA Technology show that we lag behind competitors such as West Germany and the United States. About 19 per cent. of the firms in the PA survey reported a high impact of information products at 16 per cent. of processes. That compared with 44 and 38 per cent. in West Germany, and 42 and 34 per cent. in the United States. That is a clear indication of the way in which we are falling behind.

The PSI survey showed that Britain's continuing failure to innovate owed most to inadequate training and a shortage of professional engineers, which the Information Technology Committee, under the chairmanship of the Parliamentary Under-Secretary, estimated at 1,500 now and at over 5,000 by 1988.

It is estimated that employers are spending £2.5 billion on training — on average less than 1 per cent. of turnover— and are failing to fill the gap left by the collapse of apprenticeships in recent years, down from 100,000 in 1979 to 40,000 in 1983, coupled with the abolition of most of the industrial training boards

We believe that there is need for a considerable increase in investment in education and training. As I have said from these Benches before, one way in which we could help to co-ordinate and improve training in Britain far more than we are doing now is to bring together the training side of the Department of Employment and the education and training side of the Department of Education and Science, and have a department of education and training.

Many people are getting increasingly worried about the enormous growth of the MSC and all the work that it is doing, and about the way in which it fits in with the work of the further education colleges and other training institutions which are run by the local education authorities, basically under the auspices of the Department of Education and Science.

I hope that the Government will consider bringing those two much closer together, getting a better use of the resources and turning the YTS, which we fully support, into much more of a training module that will help the young people taking part in it to go on to further qualifications. It is not as good as it should be. It should contain a bigger training component, and it is important that the scheme be developed with more resources. We on these Benches would like to see various types of action being taken in those areas. There is need for a larger general programme to upgrade and extend maths and science teaching in the schools. The Secretary of State for Education and Science is doing a number of good things in that connection, but we need to do more, more rapidly, with more resources being applied. We need crash programmes to provide more people qualified in electronics and more teachers qualified to teach maths, science and technical subjects. This must be a matter of the highest priority. I am not saying that the Government are not aware of this or that the Secretary of State is not doing anything. He is, but the Government must give a higher priority to, and put more resources into, this whole sphere.

The science budget should be increased by £50 million to restore the recent cuts that have been made. It is appalling that, in this period of our history, that budget should have been cut. The Minister did not say that the £43 million that was being injected in this area was being taken out of existing budgets, so that it did not represent an increase in real expenditure.

We also believe that there should be an increase in expenditure in support of innovation. The Minister explained how much the Government were doing, but more needs to be done. Expenditure on this aspect was frozen by the Government at £185 million, with a complete moratorium imposed on applications, as the right hon. and learned Member for Monklands, East pointed out. I know how much that has hit many firms because one such company is in my constituency. I hope that the Minister will pursue that case following this debate.

The Minister recently wrote to that company — it makes industrial robots—congratulating it on what it had achieved. At the same time, his hon. Friend had almost brought the company to the verge of bankruptcy by the moratorium and by withdrawing support for a flexible manufacturing system on which the firm was embarking. I hope that the Minister will investigate that case. I am certainly willing to send him the correspondence. The effect of that moratorium was extremely damaging for firms in the very area in which this country needs to expand as rapidly as possible. More money, not less, is therefore required.

We also need a far more effective programme than the Alvey programme. It is staggering that only £40 million has been taken up from a budget of £350 million. It might meet the Government's prejudices if the programme became rather more market oriented, along the lines of the German microperipheral support programme, which relies far more on decisions on products and marketing for the small, high-tech companies involved. I hope that the Minister will also consider that.

The right hon. Member for Waveney tends to write off the need for more money for research and development. I know that his company and many others spend a great deal on this, but many sectors of industry spend nothing like as much as they should. That being so, in addition to giving grants the Government might consider working with the grain of the market and using the tax system as a carrot to encourage firms to invest more in research and development.

We propose also that the Government should introduce an industrial credit scheme. The capital markets in the City have many excellent features but for a very long time the City has lacked a market in fixed, long-term bonds. Efforts have been made to try to get such a market off the ground but they have never worked. Press reports in the past 24 hours have shown that American operators are now moving into this area of the London market to try to create a real market in stock of that kind, but I do not believe that that will be enough. Firms need a means to avoid the high rates of interest that they now have to pay on such loans.

An industrial credit scheme—rather like a domestic ECGD — would help to direct investment towards research and development and other development programmes on which companies wish to embark by providing a fixed rate of interest over a period, supported by the Government. We believe that that, together with small firms investment companies, would be of enormous benefit in helping companies to increase their investment. It would also be a highly cost-effective way of working through the market and the banking system to provide a subsidy on interest rates for approved schemes. For instance, a subsidy of £100 million per annum over five years would allow £1 billion to be made available in loans at 10 per cent. below market rates, or £2 billion in loans at 5 per cent. below market rates. That would be of enormous benefit to companies and I hope that the Government will consider it most seriously together with the proposal for small firms investment companies which we, the CBI and other organisations have suggested.

I have covered the major areas in which we want action to be taken. If my hon. Friend the Member for Yeovil (Mr. Ashdown) catches your eye later in the debate, Mr. Deputy Speaker, he will expand on some of the other areas which are covered by our amendment and in which he has taken a close interest. I hope that the Government will recognise far more than they have so far that there is a desperate need for action in the whole area of manufacturing industry and high technology. If the Government do not move quickly, the boat will have gone and we shall be left high and dry if North sea oil runs out and we do not have the manufactures that we need on which to base our service industries to create wealth and jobs for the future.

6.14 pm

Mr. Ian Lloyd (Havant)

The hon. Member for Stockton, South (Mr. Wrigglesworth) invariably engages our interest. I followed his speech today with interest and agreed with some of it. So often on these occasions, however, we each have our own template that we apply to the British economy—and probably our own version of the economy that we apply to the template—and then comment on the parts that do not fit. My right hon. Friend the Member for Waveney (Mr. Prior) did very much the same. The common feature is the attempt to wash the problems with money. It is always a beguiling and plausible argument. Many problems can be washed with money, sometimes successfully and sometimes not.

At present there is a cornucopia in the North sea. The latest manifestation concerns the proceeds from British Gas, but hon. Members on both sides seem to think that that money can be spent twice. I have never been persuaded that that is so. Unless one hypothecates it—an argument that the Treasury has rightly resisted for a very long time—the money goes to the Treasury and reduces the Government's requirement in terms of borrowing or taxation to meet their total commitments, but that money cannot be spent twice. If we hypothecate it, allocating some or all of the North sea revenues to these very desirable projects or even adding £2 billion to ECGD, either the money must be found elsewhere in the system or other projects have to be abandoned or curtailed. I have never heard a satisfactory explanation of how that can be avoided, so I am riot persuaded.

If those who use that argument could say where they proposed to take the money from or what they intended to curtail—or, more significantly, how they proposed to increase GNP by X per cent. and to spend that real increase when it became available — I should have infinitely more sympathy with the argument for increased research and development, more support for the semi-conductor industries, of which I approve, or more assistance for overseas companies. In that context, we could learn a great deal from the extraordinarily interesting example recently written up in the greatest detail in a fascinating OECD report on the way in which the great Japanese trading companies operate.

I take issue with the claim of the right hon. and learned Member for Monklands, East (Mr. Smith) that the Government do not believe in Britain as a manufacturing economy. We are having difficulty in this debate about the definition of the term "manufacturing." In the United States, the total employed in what is defined there as manufacturing—their definition is not dissimilar to ours —has, I believe, declined from about 26 per cent. to about 11 per cent. in the past 10 years and is still declining. So far as I have observed, however, that decline has not been associated with any decline in the real wealth or economic performance of the United States.

The number of people employed in the United States service sector has risen to such an extent that nearly 60 per cent. of the employed population is now employed in that sector. The right hon. and learned Member for Monklands, East implied that the British Government were trying to force people into service industries so as to create a low-wage economy. That is poppycock. Those employed in the service sector in the United States are among the most prosperous people on earth. We should consider that example if we, too, want to prosper.

The facts are obvious. One does not need to get into a space shuttle, as a United States senator recently did, to grasp those facts. One has only to consider modern manufacturing technology in those areas of the world where it is at its most successful and prosperous. Some are in the United Kingdom, some in other parts of western Europe, many in the United States and, regrettably, a very large number in Japan. The very small segment of the employed population whom we used to describe as employed in the manufacturing sector, because we recognised that they were doing something with their hands—standing at a lathe and handling products—has decreased in the most outstanding cases to less than 1 per cent. of the total work force, but it is supported by a vast tail of extremely skilful, sophisticated people supplying services which that sector requires to compete arid to achieve its legitimate and important industrial objectives. We would be unwise to lose sight of that essential fact.

As I have argued before in the Chamber and will argue again—not least because some months ago in Japan I witnessed the many changes that have occurred over almost five years—there is no escape from this direction of movement. It will happen in Britain, western Europe and throughout the developed world. If it does not, many of the difficulties that we fear will come to pass. There will be serious unemployment and loss of wealth and capacity. Our relative position will continue to decline.

Another point on which I take issue with the right hon. and learned Member for Monklands, East concerns IBM. I declare an interest, because of the large IBM plant in my constituency. The right hon. and learned Gentleman said that we must consider and help only our industry. I do not want to delve too much into the merits and demerits of this case, but I must point our that, in the information technology sector alone, IBM is the largest single contributor to our balance of payments. It employs 12,000 or more British citizens. How can we define information technology firms as "ours" or "theirs"? The old definition is obsolete. We cannot look intelligently at this aspect if we look through our spectacles in terms of what is inside or outside a national frontier.

From where does ICL derive its semiconductors, much of its software and, recently, some of the most interesting developments in advanced computer technology? The answer is Japan — and good luck to ICL. That is probably the right policy. ICL is still, however, "our" company. I hope. that it will make an even larger contribution to our information technology balance of payments.

A much more fundamental point concerns what our strategy should be. The Opposition are fond of the word "strategy." I am not so fond of it, because in many cases the results of strategies adopted by Governments have been singularly uninteresting and unsuccessful and, in some cases, disastrous. If we look at "strategy" in this context, we must recognise that we have no alternative but to go for restructuring. Total world semiconductor output is $29 billion, including $2 billion from western Europe as a whole, $18 billion from the United States and $8 billion from Japan.

Dr. Bray

I am sure that the hon. Gentleman would not wish to mislead the House in referring to contributions by companies to our balance of payments. IBM claims that its exports equal its imports. Therefore, it makes a net nil contribution to our balance of payments. That is a great deal better than other American companies in the United Kingdom which have much higher imports than exports.

Mr. Lloyd

I am sure that the hon. Gentleman could make a very effective point on this, but I still say that Britain would be substantially poorer, our information technology as technology would be less and our economic performance would be substantially reduced if, as a result of what is said here today, IBM said, "No more investment in Britain. We shall wind our business down and take it out of Britain. They do not regard us as their company any longer."

Mr. John Smith

The hon. Member for Havant (Mr. Lloyd) appears to have been directed by a point in my speech. My point about IBM had nothing to do with investment. I raised the problem of companies like IBM sending letters to all the people who had bought their products, reminding them of some sort of obligation to observe United States law. I pointed out that when we are dependent on companies such as IBM, that is not a sound strategic position. I hope that the companies concerned defy the invitation contained in the letters. That was all I said about IBM. Perhaps the hon. Gentleman will accept that and tell us what he thinks about the problem that I have raised.

Mr. Lloyd

I am glad to accept that invitation. I appreciate the dilemma of the right hon. and learned Gentleman, the Government and IBM. IBM must follow the dicates and sense of its Government. That Government pretend and say that they have at the centre of their policies the interests of the defence of the West as a whole. These are severe and serious paradoxes, to which I do not pretend to have the solutions. I would not say that tomorrow the United States Government must abandon this policy and let all technology flow without restraint into the Soviet Union. Equally, the imposition of severe commercial constraints outside the jurisdiction of the United States Government raises considerable problems which we should address more seriously.

The most offensive part of the Opposition's motion was the reference to "wilful neglect". I find that hard to accept. Of course, it can be argued that there has been neglect. I would have been less concerned if the motion had referred to "mistaken", "misjudged" or "serious" neglect. I do not believe that either the Labour Government or the Conservative Government have shown "wilful neglect" in solving those problems. They are often much larger and more complex than people realise. All Governments make mistakes, but I believe that we have made fewer mistakes throughout the 20 years during which I have been arguing in the House that we should have a larger, more prosperous and more successful information technology industry.

If our information technology industry is insufficient, what is the reason? Why has Europe as a whole—not just the United Kingdom — failed to surf on this enormous industrial surge which can be seen on an examination of almost all the statistics? The answer—I do not claim any originality for this—is that we do not have a Silicon valley or a Tskupa science city, which are two ways of building an information technology industry. Both those ways have been highly successful; our way has been less successful. We must learn where we can and adapt the successful lessons to our circumstances. Above all, we must adapt them in our strategy. We must choose where we shall be excellent and successful. The Government, the private sector and everyone else involved must do everything in their power to achieve that objective.

Two perspectives are missing — technological and entrepreneurial. The Government have been doing everything in their power to give a positive stimulus to the creation of an entrepreneurial culture, and I support that entirely. I shall give one example showing where we have failed and others have succeeded.

Recently, I attended a conference in France at which a presentation was made by a four-year-old American company. I shall give its name because I should like hon. Members to know what it is doing. The company is called Birdview Satellites. In 1981, the company had a turnover of about $700,000. This year it expects a turnover of about $100 million. That is what the company has done in only four years. That company has discovered that there is an extremely important and interesting market for the supply of domestic satellite receivers to the private individual in the United States. Nearly 1 million have now been supplied, and the company has been supplying about 10 per cent. of that total. The company expects to grow bigger. It is extremely successful commercially.

Why have we not done the same? We have not done so because our whole regulatory framework and attitude is one of fear. We are terrified of what may happen if someone can tune in a television receiver and get a direct signal from a satellite. The United States Government had exactly the same fear and probably went through the same arguments, but eight months ago they gave the green light, with the result that the company is now employing 800 people. It is making things which have never before been listed in the manufacturing handbooks. In my judgment, it will soon be a very substantial company. It has not happened here because we lack the technological imagination at all levels of our society and the entrepreneurial attitudes which follow that imagination.

We have done partially what we set out to do. One is reminded of the examiner's report, "Could do better." All Governments could do better. I do not think that any Government have an exemption in this context. The technology that we have to apply is undoubtedly all-pervasive and is sweeping into every aspect of our society. There is no point in any of us being under the illusion that by opening up the taps and the hoses of public expenditure we can go back to the days of 1972 or 1968, and that the old factories will be filled with old chaps doing the old things. That has gone, and it will never happen again. We have only one road before us—and that is forward. We can take it only if we support adventurous, skilful, but essentially carefully chosen, policies. That is the main point that I want to make.

We shall fail completely if we divert too large a proportion of our resources to attempts to maintain old industries in old places. With new information technology, new computer-aided design and manufacture, some firms in some industries may be helped to survive. If we know that, through information technology, the standardised technologies have migrated to the Third world — and they have been encouraged and assisted to migrate by some of the Japanese trading companies to which I referred earlier—all we shall be doing is pouring good money after bad. We shall be wasting our national resources on an unforgivable scale if we continue to subsidise industries which we know perfectly well cannot ever recover. We must help them and the communities which were employed in them in every possible way to change direction and to move forward. If we do that, we shall regain our national prosperity.

6.33 pm

Dr. John Marek (Wrexham)

The hon. Member for Havant (Mr. Lloyd) took exception to the use in the Opposition's motion of the term wilful neglect of British manufacturing industry". I am happy to see the word "wilful" in the motion because I think it is rightly there. The Opposition see the Government as having one idol before them — the market—so that everything the market wants must be right. From that point of view, the Government wish to disengage themselves from interfering in industry and from helping industry in any way. That is why the word "wilful" appears in the motion.

Mr. Tony Baldry (Banbury)

The hon. Gentleman must understand that the Conservative party has always been an interventionist party. If we had simply left it to the market place, there would not be a motor car industry, a shipbuilding or a ship repairing industry in Britain today.

Dr. Marek

I am afraid that there is not much of a motor car industry today, and there is not much of a shipbuilding industry either, so I cannot agree with the hon. Gentleman.

It may well be that the real Conservative party is an interventionist party. Unfortunately, it has been hi-jacked, and the present Conservative party is a completely different creature. Therefore, I stand by what I said—that the word "wilful" is in the motion because the present Conservative party believes that anything the market wants is right. The market wants to have freedom to go abroad for its investment, or to stay here it can get enough profits.

The Government have in many ways got rid of all the possibilities that Governments used to have in developing vital industries in Britain. In addition, the Government have been proclaiming that there has been a recovery, that there is record investment in manufacturing, a record growth of exports, that employment is at an all-time high, and that unemployment is about to fall. The Government have put their case cleverly because it disguises the truth about what is happening to the nation.

The Government forget that 1979, 1980 and 1981 were three disastrous years for the industrial areas. Industry was decimated. It is no wonder that after the disastrous record of 1981 and 1982 the Government can point to some sort of recovery or increase in investment. It comes as no surprise that productivity has increased after the honors that the British people had to endure in the first three years of the Government's first Adminstration. There is some recovery, but in many ways it has not yet brought us back to where we were in 1979, certainly in manufacturing. The hon. Member for Yeovil (Mr. Ashdown) said that manufacturing output was about 10 per cent. below the 1979 figure. He said that investment in the United Kingdom is 33 per cent. below what it was in 1975. My figure is 25 per cent., but I will not argue about it.

We have seen a series of disasters. The money supply figures for April were awful. As a result, we shall see high interest rates continuing. No doubt the "month-on" figures will show that inflation will drop towards the end of this year and early next year, but City economists are now expecting inflation to rise after that.

Mr. Baldry

The hon. Gentleman is carping about what he regards as a series of disasters. Does he include the announcement yesterday from his constituency that Sony is to double its employment, with the expectation of adding several hundred more employees in the next two or three years?

Dr. Marek

It is not Sony but Sharp. Naturally, I am very pleased about the announcement, but it should be recognised that it has happened because the Wrexham borough council went to Japan and got the contract by talking to Sharp. I have had a detailed account of how the contract was obtained. Wrexham borough council used ratepayers' money to secure industrial development The Welsh Office does not "disregard" that money and it is liable to grant holdbacks. Wrexham borough council, against the desires of the Government and Conservative Members, went out and obtained a deal so that microwave equipment will be made in Wrexham instead of West Germany or France — countries which understand manufacturing and the business of getting investment.

The Government are following a disastrous policy of lowering the industrial base of this country. Unemployment is increasing, and there are no signs of it decreasing. The underlying trend is still high. It is telling that the Minister argued with my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) whether the unemployment figure was 3.2 million or 3.8 million. It is a sorry state when the figure is over 1.5 million — its level when the Labour Government left office. It is now at an all-time high. The Government claim the figure to be 3.2 million, but in reality it is well over 4 million. Many of the jobs that they include in the figures are part time and low paid. The figures when the Labour Government were in office related to head-of-household jobs—people who worked to support their families.

It is true that Sharp will provide 190 jobs in Wrexham — indeed, I hope that eventually the figure will be higher. But three or four weeks ago Courtaulds announced that 510 jobs would disappear from Wrexham. The workers were not told about that, yet the chairman put his name to an article saying that companies should always tell their workers their plans and not spring surprises upon them. The Courtaulds action is an example of something that I do not regard as good company practice. Without any warning, it has taken away 510 head-of-household jobs. They are well-paid and skilled jobs. We do not know why Courtaulds is doing this, but we suspect that it will transfer the work to its factories in Barcelona and Russia. The other Courtaulds factory to be closed at Greenfields will transfer its production to Grimsby. However, it is common gossip that the Grimsby factory will also close and the production transferred to India.

If I am carping, so be it. I and my hon. Friends are indignant about this matter. It is time that the Government faced their responsibilities and took action. Instead, they say, "Let us see how it goes. We have £40 million for this and a few million for that. We will rejig the figures. Just trust us and everything will be fine." I do not believe that. Many Conservative Members now recognise that and are making the same criticisms about Government policy that the Opposition continually make.

The Building Employers Confederation said in its June publication: While a further modest growth in building industry output this year is indicated by responses to the current Building Employers Confederation State of Trade Enquiry, enquiries for new work remain flat and less than one-third of firms questioned are working at full capacity. Similar items have appeared in its previous bulletins during the two years that I have been a Member of Parliament. Not one article has suggested that the building industry can look forward to an upturn in new building and employment.

When Conservative Members make ritual noises about not wanting unemployment and pretend that they are sorry about it, they say, "We are going through a bad patch. Do not blame us; there is a world recession. We are trying to do our best." I question their sincerity when they troop through the Lobbies day after day supporting Government policies that lead to high unemployment.

Mr. Michael J. Martin (Glasgow, Springburn)

They shed crocodile tears.

Dr. Marek

Precisely. Conservative Members do not place a high priority on reducing unemployment.

I find it frightening that last year, for the first time, there was a trade deficit in our manufactured goods, and as an exporting nation that is a danger to our survival. I could never support a Government who pursued policies that resulted in a deficit in our manufactured goods.

There is also a growing deficit on the non-oil trade account. The hon. Member for Yeovil mentioned a figure of £12 billion. It is true that non-oil exports have risen by 1 or 2 per cent. since 1979—something upon which the Government seize—but, unfortunately, non-oil imports have also risen, and not by 1 or 2 per cent. but by more than 4 per cent. Surely that worries the Government. They tell us the same old story of exports being at record levels, and say that industry needs to be left alone to produce the goods and make the profits. They should be worried that non-oil imports are exceeding non-oil exports by a factor of four to one. Perhaps the Minister will tell us whether he is worried about that. It certainly worries the Labour party.

Mr. John Maples (Lewisham, West)

Of course Conservative Members are worried about the deficit in manufactured trade. Will the hon. Gentleman explain the Labour party's policy of leaving the EEC, with which most of our manufactured trade takes place? How can such a policy help to increase our manufactured exports?

Dr. Marek

I do not want to delve too much into that aspect of Labour party policy—[Interruption.] I did not support Britain's entry into the EEC, yet I have always believed that we should follow the treaty to the last letter. But as the other EEC countries do not adopt that view, we only harm ourselves if we pursue that attitude. I regret that I have reached a view that we should take a sceptical attitude to many of the EEC regulations.

Hon. Members have mentioned Japan, and I agree that it is a world leader in the way that it organises its industry. I have no connection with Japan and, indeed, have never visited it, but I have spoken to people who have been there. They say that Japan organises its main manufacturing industries in an efficient manner with new high technology. I understand that one can walk about factories in Japan without seeing any workers other than one or two controllers. All the work is done by robots. However, the Japanese Government ensure that their people are employed. For example, one might use a bank card in the high-technology system outside a bank, but inside there are armies of clerks looking after one's affairs. There are many people in the service industries.

That is the difference between the attitude of the Japanese Government and the attitude of the British Government. We need investment and the most modern high technology for our manufacturing industry, and we cannot survive without it. But we must consider the people that technology displaces. The Government have thrown them on the dole queue and told them that they have no future. Young people, after two years on a youth training scheme, are trained only for a life on the dole. That must be changed. I recognise, as hon. Members have said, that we are changing over to more jobs in the service industry because all the developed countries have been doing this.

As an example, let us take the railway system. Instead of trying to cut down on the services available on platforms and in the trains, if the Government said that people should be employed to provide a decent service, and a degree of comfort, those engaged in the industry could take a pride in running an efficient railway system. If the Government took that view and at the same time insisted on having the highest technology and the most modern system of production in our manufacturing base, we would have much more of a one-country feeling and more unity of purpose with a sense of going somewhere as a developed country. I am sorry to say that at present that unity of purpose does not exist.

I do not believe that the people of Japan are more inventive than the people of this country. The people of this country are second to none in their inventiveness, creativity and ability to do front-line research and in enabling technologies so that front-line research can be put into action. Not much thought is given to this by the Government. It seems that the only thing that the Government can crow about is the fact that small companies are mushrooming and bringing forward new technology, but big companies have to be looked after as well in terms of research and development.

The Government have an interventionist role to play to make sure that the creativity of the people of this country can be put to good use, but this is the problem that the Government fail to recognise.

Let us take universities as an example. Since 1979 universities have been worried about whether they will retain the same numbers of people in their departments and whether the students will be forthcoming. This must have an affect on teachers in their researches and in their teaching. Indeed, I know that this is happening in universities, because I was at a university until 1983. Almost any university teacher in the country, when asked, will speak of the lack of morale. People wake up in the morning wondering whether there will be some new announcement by the chancellor or the principal that another 20 or 30 jobs must be cut because of the Government's plans to cut .5 per cent. for the next five years. This cannot be the way to run a country or to ensure that we become a developed nation again.

To give one example, I quote from an article in this week's Economist entitled "The Thin Way to Faster Chips" on the subject of low dimensional structures. The stage has now been reached where the chip is so small that problems arise if one wants to make it any smaller. We must now consider whether there is a future in molecular electronics as opposed to the current well-known standard microchips. The article says: The British Government is so impressed by the potential of low dimensional structures technology that it is considering spending up to £20 million on a five-year research programme to co-ordinate the work of universities and private companies. One spur for this initiative is the British contingent's dismal performance at a conference on low dimensional structures held in Oxford in late 1983 when few of the research papers came from British universities. That sums up the present state of our technology. Everybody is worried about whether there will be enough money and whether their research, teaching or company job will exist in three or four years. They do not have the time to spend on such matters as low dimensional structures technology which may be of crucial importance in five, 10 or 15 years. Make no mistake about it—countries like West Germany, France and Japan do not follow these lines. If there is a possibility of technological advance, the money is provided, and there are no half measures about it.

I should like the Government to do an about-turn. The Government should realise that they have an interventionist role to play in regard to industry and technology.

Although the right hon. Member for Waveney (Mr. Prior) spoke about something slightly different from me, I agree with what he said about support for industries from the Export Credits Guarantee Department and better bilateral aid. Again, we can learn from the French, the Germans and the Japanese, but I am sad to say that we seem not to be learning.

The Government must get rid of their obsession with medium-term financial strategy and grocer shop economics. There are important questions to be considered about fifth generation computers and enabling tech-nologies, and we still have time to take some action. I hope that the Government will realise the error of their ways. If they do not do anything about it, the next Government will.

Mr. Deputy Speaker (Mr. Ernest Armstrong)

I should tell the House that the 10-minute rule will apply from 7 o'clock.

6.55 pm

Sir David Price (Eastleigh)

I shall endeavour to put up the productivity of speeches and be rather briefer than other hon. Members.

I have listened to some of the speeches of Opposition Members, in particular that of the right hon. and learned Member for Monklands, East (Mr. Smith). I can tell the right hon. and learned Gentleman — I do not know whether he will be pleased or disappointed — that manufacturing industry in my constituency is doing very much better than the Opposition's motion or the right hon. and learned Member's speech would suggest.

I suggest that there are two reasons for that. The first lies in the fact that we have nurtured and encouraged new high-tech industries. In addition, in our older industries we have been applying high tech to the traditional products and to older methods of production. I know that some of my hon. Friends in the aspirant part of the Administration, Parliamentary Secretaries, who have visited my constituency, have seen evidence of this.

I have a personal reason for intervening in the debate. I am fundamentally an industrial animal. I came into the House 30 years ago from industry. I still retain a modest working connection with industry. Indeed, I find this helps me to keep closer to economic reality. I still feel more at home on the shop floor than on the Floor of the House.

British industry is doing better than the Opposition make out, but it is not doing well enough. I believe that we have a long way to go before we can with confidence face the future in the knowledge that we have a sound enough base to deal with the challenges of the future, particularly those that my hon. Friend the Member for Havant (Mr. Lloyd) pointed out, and upon which we can build a freer, more responsible and more prosperous society.

What is wrong with British industry? As a Back-Bencher, I will not detain the House on a detailed answer to that question; it would be beyond my proper station in the House to endeavour to do so. I shall content myself, therefore, in proof of this proposition, with a short quotation from a discussion paper produced by the CBI in which it identifies three significant problems: The structure of UK production and trade is very down-market in relation to UK cost levels and, hence, is highly vulnerable to competition from low-cost producers. Despite success in improving productivity, UK costs are rising relative to those of competitors. We are still losing market shares (both in goods and services). In support of this analysis by the CBI, I should like to draw to the attention of the House the amount of foreign machinery that is used in our factories today. I am sure that hon. Members, when they visit factories, observe the type of machinery that is being used and, above all, look at the nameplate showing where the machinery was made. It is depressing that so much of it is foreign made.

My own professional institution, the Institution of Industrial Managers, recently conducted a survey of the machine tools used in many of the factories in which its 23,000 members work. It found that a depressing number of machine tools were foreign made. When it asked why members were using a foreign machine, it received answers which gave the clue to the basic structural weakness in British industry and in our society. The first question was: Is it because the type required is not made in the UK? A total of 93 per cent. of the managers using foreign machines gave that as the first reason. The second question was about foreign machine tools having more advanced technology. A total of 78 per cent. said that that was the reason. A total of 57 per cent. said that foreign machine tools were more reliable, and 57 per cent. said that they were cheaper, but cheapness was not the principal reason. The principal reasons were non-availability of machines with the level of modern technology required and the fact that foreign machines were more advanced technically. These reasons are telling. They have nothing to do with whether machines were cheaper or whether delivery was better.

The answer to our industrial weaknesses does not lie principally in the manner in which this Government, or any other Government, manage the macro-economy, although obviously economic management matters. I believe that the answer is to be found in our anti-industrial culture, in our prevailing social values, and, above all, in the low esteem which we place on engineering. In short, we place engineers too low in the pecking order and reward them too poorly.

We have suffered far too long from the unholy alliance of the aristocratic Right and the intellectual Left in the proposition that industry is a dirty business and is not for us. Of course, the need for industry is reluctantly accepted as an intellectual proposition by the alliance, but it is emotionally, culturally and socially scorned.

Mr. Tebbit

I agree with what my hon. Friend has said about the intellectual arrogance of the aristrocratic Right and the political Left, but when they are combined in the same person in an arrogant and extreme Left aristocrat it is worst of all.

Mr. Benn

The Japanese, with a national income of much more than twice ours, spent 1 per cent. of their national income on defence when we spent 6 per cent. It is no wonder that the world's shops and showrooms are crammed with Japanese cameras and videos and that all we can sell are missiles to the dictators whom the Secretary of State loves so much.

Sir David Price

I disagree profoundly with the right hon. Member for Chesterfield (Mr. Benn). He is talking about the difference between 1 per cent. and 6 per cent. and I am talking about the cultural attitudes of the United Kingdom towards its engineers and those who get their hands dirty in industry.

I shall illustrate my point from Government. The Treasury is the greatest of the economic Departments. I am told that it is staffed by the cream of the intellectual elite of our Civil Service. Who in the Treasury has managed a factory? Who in the Treasury has supervised a building site, built a bridge, designed an aeroplane, or won a contract in Japan or Texas? In the world of wealth creation, the Treasury is an economic eunuch, as are many in the media who criticise and lecture us about industry.

The House may think that I exaggerate, so I shall quote from a much under-studied and under-read report by Monty Finniston and his colleagues called "Engineering our Future". It states: It is internationally acknowledged that Britain is a country rich in inventiveness and creative talent. Yet, with some eminent exceptions, these inventive talents have not been harnessed effectively by manufacturing industry because, compared with Continental Europe and the large part of the world which has followed its lead, there have been neither the cultural nor the pecuniary rewards in this country to attract sufficient of the brightest national talents into engineering in industry. Great prestige is attached to science, medicine and the creative arts, so that to be associated with their activities is to share in that esteem, but there is no cultural equivalent in Britain, and hence no basis for according similar esteem to the European concepts conveyed in German by `Technik' — the synthesis of knowledge from many disciplines to devise technical and economic solutions to practical problems. Over the 30 years that I have sat in the House I have become aware that Britain lacks that "Technik". We do not respect our engineers. What happened to the Fulton report about engineers and scientists in the Civil Service? How many such people have become permanent secretaries?

Until we give the engineer and the industrial manager a proper place in our society we shall not realise the full potential of our people and of our economy. I say to the House, "Come back Telford; come back Watt; come back Brunel. All is forgiven." If any hon. Members thinks that I am preaching a purely materialistic culture which lacks spiritual values, I remind him of the wise saying of Dr. Samuel Johnson: that words are the daughters of earth and that things are the sons of heaven. I remind the House that, to be caring and compassionate, it is not necessary to be inefficient.

7.8 pm

Mr. Stuart Randall (Kingston upon Hull, West)

I am sorry that the hon. Member for Havant (Mr. Lloyd) is no longer in the Chamber, because his speech contained many interesting comments with which I agree. In particular, I agreed when he said that the Government had neglected the information technology industry. He said that the neglect was not wilful. I think that he was wrong.

One reason for the neglect is that the Government have not accepted the remarkable change in the industry. Many of the statistics used by the Minister, comparing this Government with the last Labour Government, were invalid because we are now on the vertical part of the graph and the rate of change is remarkable.

Mr. Hayward

The hon. Member for Kingston upon Hull, West (Mr. Randall) is not being fair to my hon. Friend the Member for Havant (Mr. Lloyd), because he said that Government had neglected the industry in certain circumstances. He did not relate his comments specifically to the present Government.

Mr. Randall

The hon. Member for Havant implied that he was talking about this Government, because he referred to the NEDO report in which strong comments are made about the Government's role in the information technology industry. The report says that the information technology industry is in crisis, so one cannot be other than alarmed about what is happening in that crucial industry.

I was particularly disturbed when, in February, having asked the Leader of the House during business questions whether the Government would be prepared to put aside some time to discuss that report, I drew a blank. That shows the Government's lack of interest, and their complacency towards the industry.

The industry is important. We must draw important conclusions from the current balance of payments situation. The industry has gone rapidly into a balance of payments deficit. The reason is that there is so much import content in many of the products that we sell, and our own industry has not been able to respond to the intense competition from many of the foreign-owned multinationals.

However, the industry is growing fast. The figures in the NEDO report show that in 1983 world demand for IT products was about $50 billion, going up to about $150 billion by the early 1990s. By any measure, that is a rapid rate of growth. The problem for the United Kingdom industry is that it is not getting its fair share of the cake. What is happening in the British IT industry is reflected in the national economic situation. We know that the Government have devastated British industry. The facts are there. Only a fool would argue against that. What the Government have not done for IT is part and parcel of the economic and industrial disaster that has been wrought in this country. Our information technology industry is dying before it has had the opportunity even to blossom.

What have the Government done? I shall be positive about it. They had their 1982 IT programme. The Parliamentary Under-Secretary was influential in that programme. One must accept that the Government were successful in improving awareness in this country of what information technology is about. The decisions made by the Government on ICL were accepted as being basically good for the country. Otherwise, I am sure that ICL would have gone to the wall. Such things must be encouraged.

The Government have a broad range of schemes. The Minister touched on them during his speech. There is the support for innovation programme, the microelectronics application programme, and all the others. People in the industry tell me that that there is a wide range of schemes, but it is too wide. It is baffling for the small firms. The complexity of applications turns away many small companies, and results in an automatic "No." I hope that the Minister will take up that matter, because I believe that there is a genuine requirement for simplification of many of the present schemes.

Mr. Pattie

The hon. Gentleman will be aware that my hon. Friend the Parliamentary Under-Secretary with responsibility for small firms, the hon. Member for Rossendale and Darwen (Mr. Trippier), repackaged about 64 schemes into four separate schemes to meet that very point.

Mr. Randall

I am glad to hear that. My point was the result of discussions that I had with people with knowledge of the industry.

I should like to refer to the 21 pilot projects. The Parliamentary Under-Secretary and I debated that subject in an Adjournment debate that I introduced just before Christmas. The projects are good stuff, but the scale is too modest. Because the rate of change is so rapid, because international competition is so fierce and because the United States and particularly Japan are consolidating their positions, it is tinkering with the matter. We must think about it on a far grander scale.

We have Alvey, which is to be encouraged. However, there are administrative problems and unknowns about the final outcome and how we convert it into a real product that will enhance the industry and create jobs. Similar things can be said about ESPRIT.

What should the Government do about information technology? I feel that the Government should play a much stronger role as a customer rather than a sponsor. There should be a coherent and powerful procurement policy in the public sector. I should like to see all Government Departments, including the Department of Health and Social Security, the Department of the Environment and the Ministry of Defence, take up the use of information technology to a far greater extent. I go further and say that we should have a really big scheme, with the objective of creating the best public administration systems in the world. I get tired of our always having to match the competition. We now have the opportunity to go ahead and do more.

If I were a Minister, I would bring in the permanent secretaries and say, "Draw up plans that will totally transform your Departments." That would be important for the country and good for public administration. It would also be good for the morale of the Civil Service, which is very low at the moment because of all the cuts that have been taking place for a long time. We must think far bigger. I would adopt the Kennedy style. He said that the Americans would have a man on the moon in the 1970s. I would say that we shall have the best public administration systems in the world by a certain date.

If we did what I am suggesting, there would be a marked improvement on the demand side of the industry. Many of the policies are on the supply side — for example, structuring and research. That must go on, but much needs to be done on the demand side. If any Conservative Member is prepared to tell me that if the next Labour Government were to do that it would be an irresponsible use of public money, I shall sit down and give way. Of course it would not. It would be eminently sensible. I hope that when the Labour party forms a Government in two years' time, it will do just that.

Mr. Baldry

Will the hon. Gentleman give way?

Mr. Randall

I shall not give way, because I am running out of time.

In the short term, there would be a boost to the IT industry as a result of such a policy. The industry would then be able to respond to large projects. It would be able to deliver on time and with far better quality products. That is what happens in the United States. Public money goes into such projects there. I could quote numerous examples of the way in which the Americans have done that, but I do not have the time. That is what we should do. Even our local authorities have a role to play. For example, the Greater London council—

Mr. Deputy Speaker (Mr. Harold Walker)

Order. The hon. Member has exhausted his 10 minutes.

7.18 pm

Mr. David Evennett (Erith and Crayford)

I am pleased to be able to take part in the debate and to support the amendment in the name of the Prime Minister, as well as what was said by my hon. Friend the Minister for Information Technology.

I was amazed by the speech of the right hon. and learned Member for Monklands, East (Mr. Smith). Its content was pure, red-blooded Socialism. If his policies were carried out, they would have a devastating effect on our industry. I was disappointed by the comments made by the alternative Opposition — the alliance. The constructive comments in the debate have come from Conservative Benches, which is encouraging.

My constituency of Erith and Crayford has suffered a major change, with the decline of the heavy manufacturing industries and the development of the new technological industries. We must accept such a change. It brings less employment, but it is exciting in many ways because it represents the future. It is the future that we should discuss, not the past and the solutions that come from the past. We have seen them too often.

I remind Opposition Members that historically our industry and our entrepreneurial spirit made our country wealthy — not Governments, politicians or more and more money pumped in by the taxpayer, but the initiative and entrepreneurial spirit of the industrialists. That is what we must generate today. That is what we must recover. I was impressed by the fact that my hon. Friend the Minister not only listed the Government's efforts to encourage industry but described how they are trying to instil a new spirit into industry in connection with the new technology. [Interruption.] Hon. Gentlemen may laugh. They are not, like us, interested in creating more wealth for the country.

I totally support what my hon. Friend the Member for Eastleigh (Sir D. Price) said about the lack of status accorded to scientists and engineers in the past. I hope that that regrettable attitude will change within the next few years.

Education and training are vital. I was disappointed that the hon. Member for Stockton, South (Mr. Wrigglesworth) did not develop that theme. It is vital that we should consider education, training and cost. Those are major factors in meeting the demands of the new, high-technology products. We need good, educated workers trained to produce and utilise the new equipment. I believe that the Government have shown that they are willing to play their role in that area, and, indeed, that they have done so successfully. Without the necessary skills, we would be unable to compete in the production of modern technology or to make the best use of its many and varied applications.

A wide range of skills is required. We need to train people in basic keyboard skills so that they can operate computers. We also need graduate scientists, technologists and engineers to carry out innovative research and to develop commercially viable end products. We must create products that people are willing to buy on the world markets and at home.

Much is being done to encourage the learning of such skills in schools. Many pupils are learning to operate micro-computers, many of which are provided with funds from the Department of Trade and Industry. Further changes in tuition in mathematics, sciences and craft subjects mean that pupils receive an education that is better fitted to the needs of modern society. In addition, schemes such as the technical and vocational education initiative ensure that pupils are well prepared and able to compete in a rapidly changing world. Beyond school, the Government are encouraging more students to take degrees in technological subjects to meet the needs of the sunrise industries.

We have heard too often of the shortage of skilled people in industry. That shortage is regrettable. It must and will be made good.

As well as the educational initiative in the schools, universities and polytechnics, there is a need to encourage training to meet the changing needs of industry. The Government have made clear their wish to see the training provided by the Manpower Services Commission made more relevant and adaptable to the needs of industry. That positive move is to be welcomed. It is especially important to retrain those employed in dying industries. We must accept the fact that some industries are dying. The Opposition, when in government, wanted to pump more and more money into dying industries. That is why, in the past 20 years, we have not been able to release resources for the dynamic new industries.

Dr. Norman A. Godman (Greenock and Port Glasgow)

rose —

Mr. Evennett

I am sorry, but time is short.

We must retrain manpower from the dying industries to take up the challenge of the new industries. That is the only way in which we can create more jobs.

The Government have some role to play, but it is distressing to be told that only the Government have a role. That is what the Opposition Front Bench tells us all too often. When Opposition spokesmen say, "The Government must do such-and-such", they are talking about taxpayers' money. Employers have a major role to play. They must take more responsibility for training. Many of them are keen to do so. They must make use of the facilities offered by the Government and build upon them.

One of the strengths of many of our overseas competitors is the extent to which they are involved in training and retraining employees within the firms. Employees, too, and the unions that represent them have a crucial role to play. They must be willing to move away from outmoded and wasteful training methods. Mention has been made of the trade apprenticeships, which seem to me to be more concerned with the time served than the skill and confidence gained. That is not acceptable.

If greater training is to be provided by employers, those receiving that training must adopt a more realistic attitude to the costs and other burdens that such training imposes on the employer, and must therefore be willing to accept a lower rate of pay during training. They will benefit in the long term.

The cost of training cannot be ignored any more than any other cost in industry. Ultimately, costs determine the price at which the goods can be sold on the market. If the customer will not pay the price, there will be no industry and no goods for sale. We are competing in international markets where products are keenly priced. Unless our costs are kept as low as possible, we will not succeed in capturing an increased share of the world market.

Despite recent improvements, our costs, especially labour costs, do not compare favourably with those of our competitors. That is worrying. The Opposition will not accept the fact that trainees should be paid at a lower rate. When inflation was running riot, it was acceptable for workers to want higher wages; they did not know what next year would bring. As my hon. Friend the Minister said, memories are short. In the 1970s, inflation ran riot. Nowadays it is under control and we need realistic wage settlements. We should congratulate the Government on their efforts. For the first time in 20 years of decay, we are looking to the future and the new industries. That is to be applauded and not criticised. We could all, of course, make many suggestions about slight improvements, but the basic principle is what we are discussing today. We are looking for an improvement across the board in our economic performance. We therefore need more investment in the new industries, much retraining, and changes in education.

The Opposition claim that industry cannot rely on the Government. They are completely wrong, as usual. This is in fact the only possible Government to which the country could look to encourage our industries and our future. The Opposition would look backwards to the dying industries.

Industrial success demands a sound economy. We are on the right course. We would like to see a few alterations, and we will discuss them at length in future in debates on particular subjects. However, to a greater extent than for many years, we are looking forward, and that is a great improvement.

7.27 pm

Mr. Paddy Ashdown (Yeovil)

My hon. Friend the Member for Stockton, South (Mr. Wrigglesworth) has outlined the attitude of the alliance to the present situation and said what it would seek to do about it.

I should like to concentrate on a single topic that was raised, towards the end of his speech, by the hon. Member for Erith and Crayford (Mr. Evennett). He talked about the importance of a free trade system for our technologies. As has been said, the new technology industries are fundamental to our future. A fair system of trade to allow our high technology industries to operate normally and to export effectively is therefore crucial.

However, our high technology industries are now being severely inhibited from exporting effectively, not because of the laws of this country, but because of constraints placed upon them by our principal ally, the United States. I shall show how the United States has sought and continues to seek to impose United States laws on British firms operating in Britain in a way that not only prevents them from trading effectively, but effectively undermines the sovereignty of Parliament.

I have spoken before in the House about the now infamous IBM letter of 22 December 1983 which required purchasers of certain IBM machines to ask the permission of the United States Government before moving those machines, even within the United Kingdom. I asked the Government to intervene in the matter to protect British firms and British sovereignty, but they have done nothing —or at least nothing effective.

The IBM letter still stands unrescinded, and it remains operative. But, worse than that, other American firms have now joined IBM in similar actions. A more recent letter which was sent to United Kingdom firms by Texas Instruments has come to light. It states: We seek an assurance from you, our customer…that your Company will not, without prior authorisation, export technical data to any destination or country which is prohibited under the laws of the USA. That includes countries, such as Austria, Sweden, Switzerland and Spain, with which the United Kingdom has perfectly ordinary trading relationships. The letter goes on to define technical data in terms which make it clear that software is included, and even data—to quote the company's coy phrase—of "an intangible nature". That relates to data held in people's heads. In other words, anyone with such information in his head must presumably ask the permission of the United States Government before travelling from Britain to one of the nations prohibited under United States law. Similar letters have been sent by other United States suppliers, including General Instruments and Microelectronics.

The high technology industry is international. Almost every high technology item manufactured in Britain and elsewhere contains components made in other countries. Indeed, it is calculated that non-United States manufactured high technology goods are 60 to 80 per cent. dependent on United States-produced components. In effect, therefore, as many as 60 per cent. — perhaps more—of British manufacturers must seek a licence from the United States before exporting their goods to many destinations.

I should make it clear that these conditions are placed on British firms, not as part of their contractual requirements with their United States suppliers. That at least would be understandable, if difficult to enforce. No such contractual terms have ever been required. Therefore, these are impositions placed directly on United Kingdom firms by the United States Government bypassing the United Kingdom Government. Is that not an infringement of our sovereignty?

What are the Government doing to protect United Kingdom firms and industry from such action? The Government have gone through the ritual motions of protest, but none of the Secretary of State's wringing of hands has had any effect, as I shall seek to show.

I accept the need to place restraints and controls upon the export of items, especially high-tech items, which, if they fell into the hands of an enemy or potential enemy, could prejudice security. But surely it is for the United Kingdom to decide on such controls, not for the United States to impose them unilaterally on British firms over the head of our own Government.

It is apparent that the United States Government are prepared not only to impose the writ of their own law on British industry, but to back up what they see as infringements with heavy sanctions — again directly imposed on British firms in Britain for infringements of United States law, not British law.

The most famous recent example relates to the Leeds-based company of Systime, until recently a wholly-owned British firm. Systime fell under suspicion of being involved in trading from Britain with countries of which the United States disapproved — Iraq and Pakistan —although they are nations with which Britain has perfectly normal trading relationships. The company was subsequently threatened by the United States Department of Commerce—without an opportunity to put its case—with total denial of all supplies of components from the United States. In effect, that would have meant the death of Systime. Systime agreed to negotiate terms with the United States Government, believing, as a result of talks at the highest level with the Department of Trade and Industry, that our Government either would not or could not effectively come to its aid. It is a matter of public record that the company has now agreed to pay the United States Government a "fine" of $400,000, and it is likely that it will have to accept terms and conditions which will include giving details of all United Kingdom customers to the United States on a regular basis.

I repeat that at the time those sanctions were imposed Systime was a wholly-owned United Kingdom company, operating in and from the United Kingdom. It had broken no United Kingdom law. In the absence of effective action by the Department of Trade and Industry, it had no option but to accept the United States fine and conditions or to go out of business.

I have several questions for the Minister. Why in this matter has the Minister abrogated the sovereignty of Parliament to the United States? Is this an appropriate way for an ally to act? How can he pretend to be interested in encouraging exports from high-tech industry when he will not act to stop the imposition of restraints on those imports by other, more powerful, nations?

Unhappily, Systime is not an isolated case. Even ICL, Britain's foremost computer company, has been similarly affected. It has been fined $15,000, and its exports have also been made subject to United States control. Here again, it was exporting to a nation with which Britain has normal trading relationships, but of which the United States Government disapproved.

United States export licences are now often required by British firms exporting British manufactured goods to EEC countries. In some cases, those goods contain as little as 2 per cent. United States-made components. Such constraints on inter-EEC trade clearly infringe EEC laws. That matter is currently being investigated in Brussels. Why are the United Kingdom Government not taking similar action?

It is now clear that the United States Government are prepared to back up their investigations and action by using United States Government officials within Britain but without the British Government's permission. That much was admitted to me in a parliamentary answer on 19 December 1984, in which the Minister agreed that a United States official, Mr. Jack Lacey, had visited and investigated a British firm without any reference to, or permission from, the British Government. There have been other similar incidents.

In a speech in Palo Alto, California, in April 1984, the then director of the CIA said that the CIA had a list of 300 black-listed firms in Europe. Shortly after that speech, I telephoned the CIA in Washington, and it confirmed that British firms were included in that black list. Is that the appropriate action of an ally? How did those British firms get on that list? Perhaps the answer lies in a conversation that I had with Mr. Richard Perle earlier this year, following a television debate. I asked him how on earth the United States could use its Customs and Excise to enforce its regulations abroad. He said that in his view this was a job not wholly for Customs and Excise, but also for the intelligence services. Is that how this information on British firms reached the CIA's black list?

There is one further twist to this saga. The United States has now decided that the limitations on the export of intangible assets—the assets in people's heads—entitles its Government to place restraints on open scientific conferences. A recent open conference on optoelectronics held in the United States was summarily closed by the Pentagon. Foreign scientists, including, I believe, British ones, were excluded from meetings, and the United States scientists who were allowed to attend were required to sign control forms.

I understand that the British Computer Society has already written to the Minister expressing its deep concern over this matter, but that it has yet to receive a reply. I also understand that tomorrow it will be making a statement expressing its concern on the matter. Given the previous action that I have already mentioned, will we now see United States pressure to exercise similar action to control the movement of people, as well as hardware and software, in Britain?

The high technology industry uses a buzz word to express what it fears most. It is referred to as FUD—fear, uncertainty and doubt. The Government have allowed such a climate to prevail over high-tech exports —fear of unilateral extraterritorial action by the United States against British firms operating in Britain within British law; uncertainty about what, if any, action the Department of Trade and Industry will take to protect them; and doubt about what to do next.

The Minister can paint whatever rosy pictures he wishes about our high-tech industries. He can call on them to export until he is blue in the face; he can institute as many export for jobs seminars as he likes; but unless he and the Government are prepared to stand up for British high-tech firms which wish to export, he will find that Britain will become just another technological satellite of the United States and that the trading laws under which our industry exports are those which come not from Ashdown house but from Washington.

7.39 pm

Mr. Roger King (Birmingham, Northfield)

In a week or so the eyes of the world's motor racing fans will be centred upon a world famous spot which stages the oldest motor race in the world, the Indianapolis 500. There will congregate many aspirants for the coveted prize, the richest prize in motor sport. This year 79 cars have been entered for the 33 start places. Not many Japanese cars will be found there. In fact, there will be none. Not many French, German or Italian cars will be there; again, there will be none. There will not be many American cars; in fact, there will be four. The remaining 75 entrants are all British-built racing cars.

The same happened last year. Of the 33 starters, 29 were British-built March cars. All 14 finishers were British-built. Sometimes we are our own worst enemy. We spend our time criticising ourselves instead of compli-menting ourselves on some of the great attributes that we have as a country.

In formula I racing car design we are world renowned for our expertise. Our engine technology has been unsurpassed, with the Cosworth engine having powered almost all the formula I winners for nearly 15 years until it was superseded by later designs. Robin Herd, one of the chief designers of March racing cars, has just received the 1985 Duke of Edinburgh award for design for the excellent work he has done overseas. That was a well-deserved award. In the design of racing cars, surely the highest form of vehicle transportation, we are pre-eminent.

In many ordinary bread-and-butter car designs we are also pre-eminent. Lotus, Jaguar and TVR—three British manufacturers—have announced record sales. Lotus has announced substantial profits. Those are motor engineering companies with a world renowned reputation; they are building products wanted by the market not just in this country but overseas.

I cannot help but be depressed when I hear Opposition Members, and in particular the Leader of Her Majesty's Opposition, no doubt crawling around for county council and shire county votes in the recent election, telling the workers in my constituency, who have built up a good record of reliability and product quality, that 5,000 jobs are likely to go, that no more money is coming from Government and that the whole industry is likely to fall flat on its face. They were referring, of course, to the so-called corporate plan of BL and principally to the future of the plant at Longbridge in my constituency.

The facts do not fit that argument. In the last three months a 10-year record has been achieved by Austin Rover. A total of 142,507 cars has been built, with a 19.3 per cent. penetration of the United Kingdom market. The Austin Montego is ahead of the Ford Sierra in sales; that has been achieved through very hard work. The new Rover 200 series built at Longbridge has also reached the top 10 and accounts for 2.2 per cent. of the United Kingdom market.

The Austin Rover group is running at 98 per cent. of capacity — an unprecedented level for any British automobile company. That means that if it wished to increase output or to start assembling Honda cars on its assembly lines it would have to take on extra workers. In regard to workers, it is useful to point out that because of the quality of the products Longbridge, far from getting rid of people, has taken on no fewer than 1,365 new employees since the beginning of January last year, so a great deal has been achieved.

When one listens to the Opposition one would imagine that no investment had taken place at Longbridge. At the same time as Opposition Members talk about 5,000 jobs being lost, a new gearbox line has been installed to build the Honda gearbox and a new O series diesel engine line has been prepared for the diesel engine being produced in conjunction with Perkins. That is reckoned to be of an advanced nature and acceptable for today's modern motoring style.

We know about the new S series engine which powers the Maestro and the Montego, and the new O series turbo engine which powers the fastest saloon car currently available at under £10,000. Much work is being undertaken at Longbridge and no one should go around spreading doom, gloom and despondency.

When it comes to new investment in the A series replacement engine one cannot take the requirements of Austin Rover in isolation. Ford and Fiat have decided to get together to produce another generation of cars. Those are Europe's two largest manufacturers, which account for 27 per cent. of the European market. If they find it necessary to form a partnership to develop the next range of cars, surely it makes sense for Austin Rover to look beyond itself for a new generation of engines for its smaller saloon cars. It is hardly surprising, therefore, that the management has decided to review the corporate plan in line with the requirements that it envisages the market will want and what it can afford over the next few years. The partnership with Honda, which is essential for the well-being of the company, has produced good news recently. It can be developed much further so long as it is not a screwdriver job but a joint working venture.

We look forward to increased sales afforded by the entry of Austin Rover to the United States, where it is aiming to sell 20,000 cars in 1987. One must look with dismay at what is happening in Spain. This year some 90,000 Spanish cars will come to this country, yet we are allowed to send only 3,500 Austin Rover cars to Spain. The market is there. The company has just exhibited at Barcelona with one of the largest stands in the show. It could sell 20,000 cars in that market but it is not allowed to do so because of the import limitation. That is where jobs could be found. I have already mentioned that the company is operating at 98 per cent. of capacity. If it could gain access to the Spanish market that would almost inevitably lead to the creation of extra jobs.

It is not necessarily the Government but the customer who buys the product who will provide the investment. We have just heard today about the demise of the Philips washing and drying machine industry in this country. I have just bought a Philips drying machine because I believe in buying British and because it is good equipment. How many Opposition Members have bought Philips drying machines and washing machines? They prefer Candy, Zanussi and all the other foreign manufactured machines. If we want manufacturing to stay in this country, if we want products to be built in this country and if we want the investment, we must support those products by buying British, because they are the best quality and the best price and give our people the best opportunity for their future.

7.47 pm

Mr. Peter Pike (Burnley)

I can claim two credentials for speaking in the debate. First, I represent the constituency of Burnley in which people depend heavily on work in the manufacturing industries. Secondly, until I was elected a Member of Parliament in 1983 I worked in manufacturing industry on the continental shift system, changing shifts every three days. I was also a shop steward in the Mullard group, part of Philips, to which the hon. Member for Birmingham, Northfield (Mr. King) has just referred.

I know how the work force was reduced in that factory from 3,500 to 1,200 during the 10 years that I worked there. New technology and new methods were introduced. Obviously it was an extremely difficult period, but that industry survived because of the great understanding between the unions and the employers. One point that should emerge from today's debate is that we should give every encouragement to management to involve the work force more in the decisions that are taken. Many of the problems in industry arise from the failure to have adequate communications with the work force If that consultation takes place and if the work force knows what is going on, it will co-operate with change, however difficult that might be. It is better to have job security for fewer employees than to have no job security at all. The trade unions and the employers have a mutual interest in that respect.

I recognise that if we are to compete in the world's market places we must accept that new technology must be introduced into our industries. If we are to compete on equal terms, we cannot adhere to old-fashioned methods and equipment.

As I have said, I was employed by Mullard, which is part of the Philips group, before being elected to this House. The company manufactured cones that were used on the back of television tubes. As a result of co-operation between the management and the unions, we were able to make them so efficiently and so well that we could make in about six to eight months all that we needed for a year. That was all well and good while we were allowed to export the surplus cones, but suddenly the parent company in Eindhoven decided that Mullard would no longer export the cones and that the export trade would be left to the Aachen glass factory of the Philips group. As a consequence, the section of the Mullard work force producing the cones had to be made redundant. Every cone that is incorporated in a television set that is made in Britain has to be imported from the continent.

That is an example of one of the difficulties that many British industries face when they are part of a multinational group. The group's decisions are not taken in Britain's national interest, and nor are they taken in the best interests of British workers. The multinational group decides where it wants to make profit or where it wants the job to be done. The decisions of multinationals can be contrary to the best interests of Britain.

I have lived and worked in an old textile town that had to accept transformation in the early years after the second world war from textiles to new industries. I am well aware of the adaptability of the work force, especially in my part of north-east Lancashire. The area has seen the appearance of new industries. Lucas Aerospace is at the fore front in my constituency. It supplies many of the world's major aerospace companies but every company overseas with which it is in competition receives far more Government assistance than it receives from the British Government. There is no doubt that the management and work force at Lucas Aerospace at Burnley are first class and that they produce first-class products. However, if they are to win contracts and survive, they must be able to compete on an equal basis with their competitors from abroad. The Government should give more consideration to that factor.

There is a new industry in my constituency which has been formed by two people who went to school in Burnley. Their company, AMS, will soon move into a new factory in the Burnley enterprise zone. The company makes excellent audio equipment which is exported throughout the world. The average age of the employees is less than 23 years. Unfortunately, there is little of that sort of work in Lancashire and the regions. Most of the industries of that type are concentrated in the more prosperous south-east. The company happens to be in Burnley because the two people who run it were born and educated in the town. The company has, for the second year in succession, won a Queen's award for industry this year. That is a sign of the way in which people in a constituency such as mine are prepared to accept new types of job if they are given the opportunity to do so.

The Government have failed to capitalise on many of Britain's leads. One example is our ability to make substitute natural gas. We could gain a world market in our capability to produce the necessary equipment for the production of substitute natural gas if the Government were to instruct British Gas to initiate a programme of conversion. I accept that the need for substitute natural gas may not be with us, but it would be in the best interests of our energy policy if we were to start the conversion now. We could gain tremendous world markets if the Government were to give the go-ahead to British Gas for that project.

Britain has a lead in cable and satellite television broadcasting. The Minister who was responsible for the industry accepted that that was so when I asked a question to that effect two years ago. However, because decisions have not been taken in time, we are allowing the rest of the world to catch up with us. Ultimately we shall be overtaken and the rest of the world will enjoy the advantage and not our industries.

In my constituency the unemployment rate is slightly over 13 per cent. Most of my constituents, whether they are employers or trade unionists, believe that the Government have no policy for industry and that they are not interested in manufacturing industry. That judgment can be arrived at from the answers that Ministers have given to our questions. They suggest that a trading deficit on manufactured goods is not of great consequence. They refer to invisible exports and say that we must view the picture overall. I accept that invisible earnings are important to our financial well-being, but we are a manu-facturing country. We have depended on manufacturing industries in the past and our future will similarly depend upon them. If we are to survive, we must ensure that our manufacturing industries are able to compete. If we do not recognise that, there is a danger that we shall become a satellite of other countries.

In the car manufacturing industry, for example, there is a danger that we shall end up with only an assembly industry and that the development of new cars will not be concentrated within Britain. If that is followed by a further recession in the motor trade, Britain will suffer the major blow and not the countries that are involved in development work.

I have a great fear—I know that it is shared by many of my constituents—that when North sea oil and gas are depleted, and when the Government have no more assets to dispose of, those, in work will enjoy an improved standard of living and all those who are unfortunate enough not to be in work—the unemployed, the retired, the sick or the disabled—will see a fairly rapid decline in their way of life. We are already moving in that direction. When announcements are made on the future of the welfare state, I am sure that they will prove my predictions to be right. However, we have shown in the past an ability to develop new schemes. The Government should encourage both sides of industry to ensure that we go forward.

7.59 pm

Mr. Charles Wardle (Bexhill and Battle)

There is a word in the Yiddish language which defies straightforward translation into English but which is relevant to the nature of the debate. The word I have in mind is "chutzpah", which, loosely, means barefaced nerve. An American authority on the Yiddish vocabulary once illustrated its meaning by the story of an armed mugger who cried "Help" while beating up a defenceless person. In moving the motion the Opposition have provided the House with a classic illustration of chutzpah when we consider the permanent damage that was sone to industry under the Labour Government.

Over the past six years a vast amount has been accomplished to restore the foundation of Britain's industrial welfare and prosperity and to create the necessary conditions for future growth. The fundamental weaknesses that were allowed to develop in the middle and late 1970s mean that it will be some time yet before all the structural changes that are taking place in industry are completed and before the transition from a predominantly traditional manufacturing base to one that is fully reliant on new technology is achieved.

In spite of the fact that this country's economic growth rate is among the highest in Europe, that productivity has improved, that company profits are increasing and that hundreds of thousands of new jobs have been created in the private sector, there is no denying that industry still has visible scars from the recession that began in 1980 One has only to travel to the west midlands to witness the effects of that recession upon the industrial landscape. But the savagery of the recession's impact there has to a very considerable extent been the result of the Labour Government's policies for industry in the latter half of the 1970s I am not suggesting that that Government were solely to blame for what happened. Management, trade unions and previous Governments have to take their share of responsibility, too.

Not only was inflation allowed to soar in a manner that priced British goods beyond all hope of competitiveness; there was the iniquitous tax on jobs and the absurd bureaucracy of the Price Commission. Even the measures introduced by the then Chancellor at the end of 1974 in his emergency Budget—and welcomed, it has to be said, by management at the time—to provide stock relief and improved capital allowances for industry had an inflationary effect. Either that Labour Government did not understand or did not want to face up to the problem that was eating away at British industry, which was that pay increases were far outstripping productivity so long as the inflationary spiral continued unchecked.

Hon. Members are more than familiar with the events that followed, but the effect of Labour's approach to industry in the 1970s meant that when the recession emerged at the back end of the steel strike early in 1980 a great many manufacturing companies were overloaded with stocks of finished goods, carried on their shelves at inflationary prices that simply could not match foreign prices in the competition for market share that intensified as the recession grew worse. That situation called for large cutbacks in the number of employees, in stocks and in capital equipment and the closure of many factories which it will take a great deal more time to replace.

There is little doubt that inflation made much worse what may, anyway, have been an inevitable process as this country moved towards a second industrial revolution with the advent of microchip technology. For a generation or more management had not done nearly enough to secure new markets with new products in order to replace what had been the comfortable captive markets of the old empire and commonwealth and even for a short time, immediately after the war, the virtually captive markets of Europe. Nor had management or successive Governments paid nearly sufficient attention to changing technology.

The roots of the decline go deep but inflation greatly exacerbated an already difficult situation. Therefore, in 1979 there were no soft options left. There are still no soft options. In order to give industry the best chance of recovery, there needed to be a radical reform of the structure of our economy and of our attitudes to work.

During the past six years a great deal has been done. Inflation has been brought down. Public spending is under control. It is at record levels, but it is nevertheless under control. Each year £55 billion is spent upon capital investment, £22 billion of which is investment in the public sector, on top of which another £5 billion is spent upon maintenance. Unnecessary controls have been abolished. There have been tax reforms, national insurance changes, incentives for small companies, privatisation, wider share ownership, legislation that has brought flexibility to the trade union movement and training incentives and moves that will suitably revolutionise our approach to education for the computer age that lies ahead. All of these bold and constructive measures have helped to create the climate without which industrial recovery could not have begun. It has begun and it will continue step by step, provided that the essentials of the present policy are maintained and properly understood by the public.

What else, if anything, can be done to speed up the process of industrial regeneration? I would suggest to my right hon. Friend the Secretary of State for Trade and Industry that a number of practical improvements could be made which do not involve a change in strategy and do not call for a greater injection of public money. Rather, they call for a change of approach on the part of those who participate in the industrial scene. I except for the moment the trade union movement, because changes have already taken place there. Changes are required elsewhere as well.

I turn first to the role of big companies. It is not generally recognised that the relationship between big companies and their smaller suppliers is crucial. It is a symbiotic relationship that works well in some instances in this country—for example, at Marks and Spencer and at the Ford motor company, with their various component suppliers. However, it does not work well in all other cases. One finds that it works very well in Japan. If one goes where most foreign visitors do not tread—that is, to the component suppliers of the Japanese automotive industry —one one finds a very different scene from that which pertains in the big automotive factories. The small companies work to a very strict regime in which wage scales are much lower. They work to a tight schedule, with deliveries twice a day.

The same sort of pattern applies much more generally in the United States. Those conditions did not apply during the recession at British Leyland. It may be that the then chairman of British Leyland did a great deal to change attitudes among the trade union membership as to the future of that company and to change the public perception of that company. What was not achieved was any improvement in middle management, particularly in buying management. It let down many smaller companies which might otherwise have survived and come through the recession.

While I am dealing with management, it is fair to say that management has taken a terrible beating in the debate about industry during the last few years. However, it should also be recorded that the old style of management, starting with chargehand, foreman and shop manager all the way through to works manager and production director, has been swept away—and rightly so. There is good, young management in its thirties and early forties in British industry, and it should be given a chance. I suggest to my right hon. Friend the Secretary of State and to other members of the Government that they should go beyond the list of the great and good when they are looking for extra management talent. It is available. I find all too often that hon. Members, as well as those in the City and in the media, tend to be dismissive about management and that those who are dismissive about management have never employed anybody, or made anything, or made any money at all, as was pointed out by my hon. Friend the Member for Eastleigh (Sir D. Price). Therefore, British management ought to be given a chance. It ought to be brought alongside officials in Government, not in any dirigiste way, not in any corporatist way and not to replace officials but to inject a practical flavour.

There is plenty of money in the City of London for industry. There is plenty of money for the bigger companies, which can produce a sophisticated case. There is also plenty of money for the smaller companies, but I am not convinced that it always reaches them. The most practical way to reach those companies is through the high street banks. The managers of high street banks have directed a great part of their funds towards shoring up companies which have been in difficulties, and towards looking after individual banking accounts when those individuals have lost their jobs and found themselves financially stretched. Despite some of the advertisements, I believe that the banks are timid about approaching smaller companies, but small beginnings today will make the large companies of tomorrow. It is not the chap who walks into the City with a pat argument who will be successful but the chap who goes to see his bank manager in the black country and says, "All I want to do is to buy a piece of second hand machinery, carry out a finishing operation and pass it on to the next chap down the road."

There is a prevailing portfolio approach to investment. It is an asset cover and balance sheet approach. It has got little to do with competitive advantage and the dynamics of industry which the Americans, the Japanese, the Germans and even the Swiss demonstrate so effectively.

Finally, research and development will remain crucial. We have an excellent record. The Government have ensured a fourfold increase in research and development investment, but the gap is still huge. I hope that my right hon. Friend the Chancellor of the Exchequer and the Secretary of State for Trade and Industry will keep this in mind. It is a gap that must be bridged. These are practical aspects within the framework of existing policy which will do much to regenerate British industry and allow small beginnings to grow extensively.

8.9 pm

Mr. Michael J. Martin (Glasgow, Springburn)

I owe you, Mr. Deputy Speaker, and the House an apology for not being in the Chamber throughout the debate. The reason is that today I received word that 1,200 jobs are to be lost in the British Rail Engineering Limited workshops, the only major employer left in my constituency. During the next two years the work force is to be reduced to about 460 personnel, both salaried and wage staff. It is a blow for any hon. Member to receive such news. It is harsh in any community which has suffered a great deal from redundancies, because there have been several closures in my constituency since the turn of the year. Many of the closures and redundancies are due to changing technology.

Productivity at White Horse Distillers Ltd., the whisky company in my constituency, has increased. Industrial relations were second to none and sales were on the increase, but the company was able to obtain a grant of £8 million from the EEC and it built a massive plant on the other side of Glasgow. It was then able to produce White Horse whisky there. Only a few of the jobs in the old plant were transferred to the new one.

It is difficult to accept that taxpayers' money—that is what EEC grants are—is being handed to companies to enable them to throw people aside like rusty nails. Those people were loyal to the company for many years. Some of them have worked in the company since they were boys and girls of 14 years of age. They are now being thrown on the scrap heap, not because there are no orders but because the Government are handing out money for new plants. They are putting money into multinationals without giving any thought to the social consequences.

To return to BREL, 30 years ago my constituency was famous throughout the world for its railway engineering facilities. In its heyday, Springburn had about 10,000 skilled people employed in railway engineering. Within the next two years there could be as few as 460 I fear the worst, because 460 people cannot sustain an engineering facility. If British Rail invests in new engines—I do not dispute that it should—those new engines will not need the same maintenance and repairs as the old ones. The Government cannot then bury their head in the sand and say, "That is it. The facility will have to close. We shall not put anything else in its place."

This Government, like any other, when they go to the electorate always promise jobs. Why do they start to make excuses when they get into office with the majority that they want? They are well aware of the social consequences of unemployment in a constituency such as mine. In a country as small as the United Kingdom one can get into a car in London and reach any part of the country within 24 hours. There is therefore no excuse for saying that the areas with the old industries cannot have new industries. If we can create new towns and enterprise zones in areas which only a few years previously were virgin sites, we can replace the industries which are in decline in the old communities.

If the Government forget about those old communities, they will have the problems which exist in Springburn and most urban areas—crime, drug addiction, vandalism and despair. The Tory party — the law and order party—keeps telling us that it will reduce crime. One of the ways in which it can do that is by giving young people hope for the future.

The main problem of the police in my community is vandalism. We can reduce vandalism by giving young people a worthwhile job which keeps them off the streets because they have to get out of bed early in the morning.

I have often heard the Minister say what a great thing YTS is. If our industries are declining and our young people cannot obtain work in the traditional industries and have to move away from the communities in which they were brought up, the least we can do for them is to give them a skill that they can take to another part of the country or abroad.

The building industry has three-year apprenticeships. There are four-year apprenticeships in the engineering industry. If the Government are serious about training, why do they not have YTS schemes that last for three years where an employer can take a boy or girl and give them a proper training? They would then at least have a skill.

When I was a young apprentice, a boy was sacked when he reached the age of 21 in some shipyards in Glasgow. That was not good, but at least the boy had a skill. That is all he was asking for. He had something that he could take to another part of the world. The Government are throwing away a golden opportunity by failing to examine our training schemes and by not allowing the good employers—there are many of them—to take on young people to give them the skills that they need.

Like many other hon. Members, I often go to seminars on information technology. I hear all the talk about floppy discs, megabytes and all the other jargon. In the Tea Room all Members can talk about is their computers and word processors. They are of no use to a company unless it has orders on its books. A company which employs one man and a dog does not need a computer to work out its wages bill, to order its material or to keep stock. All the fancy technology is useless unless we can obtain orders and have the industrial base that can use the technology. The only way that we can do that is by protecting our heavy industries.

The Minister should hang his head in shame, because we are frittering away our opportunities in the North sea. He knows as well as anyone that in the British sector of the North sea the ratio is about eight Scandinavian supply vessels to two British. It is the opposite in the Norwegian sector. The Norwegians look after their own. We do not protect our contractors, even in the North sea. There are small companies in my constituency employing 10 or 12 people which work for the North sea. I am told that when they get—

Mr. Deputy Speaker (Mr. Ernest Armstrong)

Order. The hon. Member must conclude his speech.

Mr. Martin

Certainly, Mr. Deputy Speaker.

It is time that the Government did something to help the community and the work force in companies such as BREL in Springburn.

8.20 pm

Mr. John Maples (Lewisham, West)

I hope that the hon. Member for Glasgow, Springburn (Mr. Martin) will forgive me if I do not deal with the subjects to which he referred. There are a few points on which I shall concentrate in the short time available to me.

It is worth reflecting that prosperity and wealth are largely created by what people do, be they managers, entrepreneurs, trade unionists or workers. While the Government can and should help, their job is to create an environment in which business can flourish. Unfortunately, there are many cultural and historical reasons why we do not seem to be a productive and businesslike country. There is much evidence to show that that is changing, but it will take time to do so and, in the meantime, the job of the Government is to encourage change and, as I say, create an environment in which business can flourish.

The Government have had some success in doing that, but we have some serious fundamental problems, some of which have received attention in today's debate. For example, our share of world trade continues to decline, to a level which is now very disturbing indeed. The deficit which has developed in manufacturing trade should worry us greatly. All of that has combined in a pattern of relative decline, where the British economy has consistently grown at a rate less than the growth rate experienced by most OECD countries. Whereas in 1970 our GDP per head was about 7 per cent. above the OECD average, it is now about 10 per cent. below. That is what relative decline means, but at some point there must be a serious danger of it turning into absolute decline.

Those problems of world trade and a deficit in manufactured goods are associated with manufacturing industry. It is obvious that many jobs may come in the services sector of the economy, but we need a strong manufacturing sector, because our economy cannot survive on services alone. They may provide the jobs, but they will not provide all the wealth.

Much of the expansion that has taken place in service sector employment in the last 20 years has occurred in public services. That is unlikely to be repeated. In any event, the service industries need something to service. They need a domestic manufacturing industry to service, because there is not enough for them to do simply servicing imports or tourism. They need a domestic manufacturing base. That is illustrated by the fact that in the south-east of England both manufacturing and service industries have been successful in recent years. The service industries in that area have been successful because they have had relatively successful manufacturing industries to give them work.

Above all, we need manufactured exports to take the place of oil when it runs out. What shall we use to pay for manufactured imports when we no longer have exports of oil? I think, therefore, that our future lies in having a high wage, high productivity, manufacturing economy, producing and exporting sophisticated goods and services. I shall suggest two areas in which Government policy can be not only influential but important in promoting the success of British manufacturing industry.

One is in the area of competitiveness in industrial costs. A substantial element of industrial costs is wages. Therefore, the need to keep wage rises in line with increased productivity is extremely important. The real wage argument does not demand that people's real wages should come down but that the increases in those real wages should reflect the increases in productivity that are taking place.

A substantial non-wage cost of employment is national insurance contributions paid by employers. I should have thought that there was an overwhelming case for reducing those across the board, or on a selective basis if the cost of doing so across the board was considered too high. Perhaps it could be concentrated on manufacturing.

One of the biggest cost barriers facing industry today is high interest rates. Those are largely caused by the United States deficit, although they are to some extent caused by the enormous expansion that has taken place in personal borrowing in the United Kingdom. One cannot help wondering whether we can continue a situation in which the interest rates that must be paid by British manufacturing industry are caused by two factors such as those. We should examine whether we can have some control over those factors.

The area of Government involvement in helping manufacturing industry in Britain is in the sphere of trade policy. While I am basically a free trader — if not something of a fair weather free trader—I accept that we do not live in much of a free trade world. All of the trade of the Eastern bloc and the Third world, and most of the trade of the middle eastern countries and Latin America, is managed and conducted, if not by their Governments, by Government agencies.

We also have trade practices by some of our major OECD trading partners—such as Japan, the US and France—which are far from fair in terms of free trade. Thus, the British Government must be involved, too. We need a partnership between the Government and industry to ensure that British industry beats the foreign competition. Nowhere is the role of Government in that connection more important than in trade policy.

One area in which we could be more active is in trying to reduce non-tariff barriers in the EEC. The fact that, 30 years after the Common Market came into existence, 27 forms are still needed for a lorry to go from Holland to Italy illustrates the point.

From our point of view, what may be more important are the national restrictions that are placed on the expansion of certain industries in which we happen to be particularly good, such as banking, insurance and airlines. The expansion of those into Europe is seriously restricted by national institutions. I should have thought that our net contribution to the common agricultural policy would be a small price to pay for the freedom of those successful industries to expand in the EEC.

The unfair trade practices from which we suffer are also practised by OECD countries. Many instances have been given concerning France, and we have an extraordinary arrangement with Spain under which it can export cars to this country through a 4 per cent. tariff barrier, whereas British cars exported to Spain go through a tariff barrier of about 60 per cent.

The real offenders in this scenario are the Japanese. We heard at the Bonn summit of yet another warning being given—a reading of the Riot Act—to the Japanese. I hope that it was not a ritual warning and that we shall be assured that on this occasion we told the Japanese that we mean to stop putting up with their nonsense. It is absolutely unacceptable that we should continue to have manufacturing industries in this country destroyed by their managed trade practices in circumstances in which we cannot do the same to them and their national regulations prevent us from exporting to them.

An area which I should think is ripe for action is the current expansion in the City involving Japanese banks and security companies. It is well within our power and that of the Department of Trade and Industry and the Bank of England to put a stop to that quickly. That should be an extremely soft point at which to exercise leverage on the Japanese. We cannot continue to play fair in a trading world in which everyone else cheats.

Services are undoubtedly vital to the country, to our standard of living and to our future employment, but they are not enough. We also need a strong manufacturing sector, and in today's world that means Government involvement in industry, but particularly in trade. Without that, we shall not have a high paid, high productivity economy, which is the only way forward to give us the standards of living and public services that we want.

8.27 pm

Dr. Norman A. Godman (Greenock and Port Glasgow)

I must at the outset apologise for my absence from the Chamber earlier in the debate. Hon. Members will agree that my absence was out of character. It was brought about by circumstances beyond my control.

I agreed with the hon. Member for Lewisham, West (Mr. Maples) when he said that the economy needed a strong manufacturing sector and a thriving services sector. We must acknowledge that manufacturing in Britain has been in decline for some decades, and nowhere has that been more clearly experienced than in Scotland.

Scotland was pre-eminent for generations in shipbuilding, marine and heavy engineering, coal mining and textiles. Indeed, the textile industry was, and still is to some extent, a major employer. Everywhere there has been decline, and I concede that, because that decline has been taking place for three or four decades, it cannot be said to have started in May 1979. The picture is complicated, and mitigated to some extent, by the growth in Scotland of the information technology industry, by growth in the services industry and by the development of the offshore oil and gas industries.

Nowhere are the opposing tendencies of growth and decline more clearly seen than in my constituency. The traditional industries of shipbuilding, ship repairing and marine engineering have been in decline for a considerable time. Similarly, the cane sugar refining industry has experienced such a dismal decline that there is now only one refinery. On the bright side, however, there is the continued expansion of IBM — a company mentioned earlier in less complimentary vein by the Liberal spokesman, the hon. Member for Yeovil (Mr. Ashdown). National Semiconductor is also in my constituency and information technology is now the biggest employer in a traditional shipbuilding and marine engineering area.

The recent announcement of some 600 redundancies by Scott Lithgow was a further dismal blow to the Greenock travel-to-work area, which has a scandalous 24 per cent. male unemployment. The Secretary of State and I have exchanged comments about Scott Lithgow on previous occasions. I fervently hope that in the very near future Scott Lithgow will win Ministry of Defence and offshore orders. I am certainly not begging for orders or pleading for social security for the company. I believe that Scott Lithgow can win orders in both areas on merit. I certainly hope to see it building conventional patrol submarines next year.

The offshore oil and gas industry has saved Scotland from almost complete economic devastation, providing scores of thousands of jobs both directly and indirectly. Even there, however, mistakes have been made both by industrial organisations and by the Government. The chairman and managing director of one of our most successful companies in this type of activity, Mr. Ian Wood, recently said: There is a strong belief in the United Kingdom fostered by both this and the previous Government that UK industry has done well in the development of North Sea oil. I personally believe that this is a dangerous myth. Far too many of the successful North Sea performers are the incoming international companies who simply operate a local UK base to cater for North Sea oil. They are not building up genuine UK technology and know-how to be supplied in further expansion overseas. Mr. Wood, one of the most successful Scottish business men in the offshore industry, went on to say: Any present realistic assessment of the number of UK companies who have the know-how, technology and manufacturing skills to expand into the offshore industry worldwide would provide a pitifully small number nowhere near the level of presence and influence that should have been achieved from our privileged frontier starting position. There are thus two main areas of policy objectives for the Government in the offshore oil and gas industries—the expansion of Scottish and United Kingdom involvement in the North sea and assistance for United Kingdom companies to compete more successfully in the international offshore market.

A further complication, to which I alluded in my opening comments, is the shift from manufacturing to service industries. No economy can grow simply on an expanding service sector when manufacturing industry is in decline. Both sectors are important. Manufacturing industry must be revitalised, which will lead to continued growth in the service sector. What is needed is home-led demand for the manufacturing industries and more direct Government influence on investment. That requires the development of economic and industrial policies which have as their object a successful manufacturing industry.

8.35 pm

Mr. Phillip Oppenheim (Amber Valley)

I do not agree with every aspect of Government policy on high technology, but the Government are rarely given sufficient credit for their achievements in the past few years—the great success of the micros in schools programme, the aid for innovation, the expansion of training, and initiatives such as Itech. High technology training cannot be geared up overnight. First, we must have qualified trainers, of which there was a desperate shortage. The Department of Trade and Industry has helped selected companies. The Alvey programme in the United Kingdom and the Esprit programme in Europe are not perfect, and almost every pundit in the industry thinks that he or she could run them better. Nevertheless, a huge amount of taxpayers' money and Government effort has gone into high technology.

Much of the greatly over-publicised gloom and doom about our information technology industry is unjustified. The recent NEDO report referred to huge deficits but entirely ignored microchips, of which this country is now Europe's largest producer. The report also failed to acknowledge that many imported components, which appear in the trade figures as part of the balance of payments deficit on our high-tech trading account, are incorporated in electromechanical equipment such as machine tools and re-exported but do not reappear on the positive side of the high-tech trading account because those exports come into another sector. The much-quoted high-tech deficit is thus somewhat misleading.

Recent figures have been relatively encouraging. In 1981 our deficit in the information technology sector was £1 billion. By 1983 it had risen to £2 billion, but preliminary figures for 1984 suggest that it has stabilised at that level. Indeed, 1984 production figures for the electronic and electrical engineering sectors show an increase of 12 per cent., data processing products an increase of 39 per cent. and components production an increase of 21 per cent.

This country is not alone in having a high-tech trade deficit. The United States, supposedly a high-tech high flier, had a $6.8 billion deficit in information technology products last year. Europe has not done much better. France had a £750 million deficit last year on computers alone. It is not surprising that many western countries are running larger deficits in the information technology sector because this is the main growth sector in most western economies.

Having expressed my support for what the Government have done so far, I believe that in some areas they may change their emphasis and do a little better. All too often, inward investment strategy is not sufficiently selective and we rush headlong to create jobs in problem areas, often supporting the entry of overseas companies into our markets to compete against British firms.

Recently, Micro-Image Technology, in my constituency, which is a company owned by Laporte and has developed a good market in specialist chemicals for the microchip industry, and invested heavily in a non-development area to expand into reprocessing of scrap silicon wafers. No sooner had the company announced its investment plans than it heard that the Department of Trade and Industry was about to subsidise two American rivals to come to Scotland to compete against the company on its home market. That is somewhat ludicrous.

As international divisions of labour intensify and as it becomes difficult for any one country to have national champions for every product area, we should be trying to concentrate on areas where we can excel. Where we can excel we should not subsidise foreign competition, allowing it to come to this country. Where we cannot excel, it is to our benefit to import products as cheaply as possible—possibly incorporating them in products that are re-exported—or to encourage foreign firms to set up assembly operations in Britain.

To date, there has not been a clear direction of this sort in Department of Trade and Industry policy. We could excel in home and business computers, custom chips, some types of equipment for telecoms and certain components and software. We are unlikely to excel, because of the nature of our industry, in mainframes, commodity RAM chips, most areas of consumer electronics, computer printers, photo-copiers and typewriters.

Another problem affecting the industry is the issue of reciprocal access to overseas markets. Since the 1981 and 1984 Telecommunications Acts, our market has largely been opened to imports of foreign telecommunications equipment. Most of us agree that free trade is an excellent policy—but only if everyone follows it. Our policy has been a high risk one of opening our market, while no country, apart from the United States, has opened its market in return.

I could cite many examples, but I shall refer only to the key telephone systems sector. The overseas suppliers comprise two Ericsson systems from Sweden, NEC from Japan, AIOP from France, Panasonic from Japan, the Blick Alcatel system from France, Siemens from West Germany, DTWE from West Germany, TIE from the United States, Nitsuko from Japan and MITEL from a United States plant. The only British manufacturers in that market are Philips, GEC and Plessey, which assembles the Nitsuko system. All the cellular radio equipment on the market comes from Sweden and the United States. British Telecom recently agreed to buy Ericsson digital exchanges and Mercury is buying Northern Telecom exchanges from Canada.

The result is that in the year to February 1985, we imported £36.2 million worth of telecom equipment from Japan and £22.9 million worth from Sweden. In return, we sent just £400,000 worth to Japan and £4.1 million to Sweden—hardly "free trade" in the true sense of the term.

The answer to the problem is not nationalisation or the ludicrous dirigiste policies proposed by the Opposition. Those policies have been discredited and have failed in France. In 1982, the Socialist-Communist Government in France produced the grand plan filière électronrique aimed at creating 200,000 new jobs and a £2.75 billion trade surplus for the French IT industry. Instead, the nationalised electronics companies in France have notched up vast losses, the French deficit in IT products has increased by leaps and bounds and employment has decreased.

Grandiose schemes dreamt up by politicians and bureaucrats are not the answer. We need only look at our example of Nexos, which was dreamt up by the last Labour Government as a United Kingdom rival to IBM. In its three years of operation, it succeeded only in importing Japanese facsimile machines at way above cost through a middle man. When it went bust in 1982, £2 million worth of its facsimile machines were sold back to the same middle man for just £1. Through National Enterprise Board policies of giving cost-plus contracts to other NEB companies, Nexos ended up losing a total of £36 million of taxpayers' money — so much for grandiose schemes dreamt up by politicians and bureaucrats totally out of touch with reality, but with a hand deep in the taxpayers' pocket.

I often feel that politicians are arrogant in thinking that they succeed in creating jobs by waving a magic wand when experienced business men cannot. I especially feel that many Opposition Members are arrogant when they have no business experience, having been full-time politicians, academics or journalists.

At the end of the day, the best way of helping high-tech industries — [Interruption.] Mr. Deputy Speaker, I believe that an Opposition Member wishes to intervene.

Mr. Deputy Speaker

The debate will not continue for much longer. The hon. Member should draw his remarks to a close.

Mr. Oppenheim

Yes, Mr. Deputy Speaker. At the end of the day, the best way of helping high technology is by creating a strong and flourishing economy through lowering inflation, through incentives and by encouraging venture capital. We have some way to go—

Mr. Deputy Speaker

Order. I am sorry, but the hon. Member's time has expired.

8.46 pm

Mr. Barry Sheerman (Huddersfield)

I hope that I shall not keep the House long, but I wish to concentrate on education and training for the new technologies. I have heard many Conservative Members talk about improvements and the light at the end of the tunnel. I find that difficult to believe, as a Member from the west Yorkshire area and having heard only yesterday the chilling news that another large, modern factory would close in the Brighouse area. That is not in my constituency, but I have a constituency interest in it because many of my constituents work in that factory. I heard that 550 jobs have been lost at the factory of Philips, an important manufacturer of washing machines and tumble dryers. I understand that that factory will be closed because it would have been more difficult for the company to close its Italian factory. What will the Secretary of State do about that? Will he intervene to save those 550 jobs? Will he ensure that the Government make an effort, not with grandiose schemes but by encouraging Philips to stay in this country and produce appliances using high technology?

The motion refers to investment, research and development and education and training. Sadly, on all three counts, this country is in a parlous position. The more I look at the research and development failure of our industry, the more I see that this is paralleled by our failure to train and educate people in high technology.

If we are to have a proper training policy for high technology or, for that matter, any kind of technology, it is about time the Government took a lead, recognised their mistakes and returned to a system of industrial training boards — perhaps a modified system — and either a training tax or a training levy to ensure that training is provided. The Government should step in and provide training for the future if industry cannot afford to do so.

During this debate we have talked a little more sensibly than we did during the days of one of the predecessors of the present Secretary of State when we were sharply divided between the need for sunrise and sunset industries. Most of us have known that all industries are a mixture of both. The older, more established industries—such as the textiles and engineering industries in west Yorkshire —depend for their future and their order books, both at home and abroad, on investment in the latest technology. Some companies have done that, but some companies need help and incentives from the Government. Often, firms that are not in the industrial development regions lose out to foreign competitors and competitors in the industrial development regions.

I wish to concentrate on the infrastructure of training, which seems to be disappearing. The infrastructure of education and training for our engineering and textile industries is reaching such a low point that one cannot find departments in the polytechnics or technical colleges that sufficiently support local industry.

The report of the House of Lords Select Committee on Science and Technology, which was published only at the end of last year, points out the real deficiencies in education and training for the new technologies. The first paragraph of the summary of conclusions and recommendations says that Technological progress in the UK is being hampered by failure to develop its human resources. The UK's competitive edge in international trade is at stake. There is no more serious challenge than the adequate provision of people properly qualified and trained to exploit new technologies as they emerge. As the report so starkly points out, the situation that we face today is one in which our polytechnics and universities have been run down and, even more important, the morale of the people responsible for education and training in our polytechnics and universities has been reduced to an all-time low. If the Government are to do anything about the problem, they must first put money into the polytechnics and universities, so that there can be an expansion programme instead of a decline. The people who man the polytechnics and universities must be told that the Government believe in them, and that they want to give them a future and to pay them a proper rate for the job.

8.51 pm

Mr. Tony Baldry (Banbury)

I commend to the hon. Member for Huddersfield (Mr. Sheerman) for bedtime reading the report by the Institute of Manpower Studies on conflicts and competition, in which he would find that the British Government spend proportionately as much on training as our competitors, West Germany, Japan and the United States. The difficulty is that we need to get British industry to spend more money on training.

To ensure a truly caring society it is necessary for us as a community to create sufficient wealth. Indeed, it was the shadow Secretary of State for Trade and Industry who, very pertinently, once said: We must persuade people that job creation is the key to creating jobs in the caring industries like the hospitals. Socialists must interest themselves more in the creation of wealth and not just in the redistribution of wealth. To create wealth we need to have a competitive trade policy, and there are three points on an agenda for action to which the Government need to address themselves. First, they must try to achieve some stability in the exchange rates. At one moment the pound is riding high; at the next it seems to be heading for a fall. Uncertainty and confusion are a nightmare for exporters. One of the most destructive aspects of high inflation rates is that it is very difficult for industrialists and business men to predict the future. A similar situation arises when there are wildly fluctuating exchange rates. Therefore, there is a desperate need for stability in exchange rates.

I urge the Government to give serious consideration to the need for us to work much more closely together in the European Community. That means the United Kingdom joining the European monetary system so that Europe as a community can begin to acquire a more powerful and coordinated voice in the world economy once more.

The second point on an agenda for action is related to the first one. There is a need to keep on bludgeoning Japan into the realisation that Japan, more than any other country, is dependent on there being free trade in the world. It is nonsense if a sweet manufacturer cannot export sweets to Japan without the Japanese complaining about the colour of the sweets, or if it takes eight days to import goods into Japan—one to clear customs and the other seven to clear document control.

It is not only Japan that is involved. If countries such as the United States start to take retaliatory action against Japan, there will be a danger of Japanese automotive, mechanical and telecommunications goods being dumped in Britain. The world international community as a whole must keep on making it clear to the Japanese that their behaviour and their actions are wholly and completely unacceptable, and that in addition they actually endanger Japan's long-term prosperity as much as that of the rest of the free world.

The third point on the agenda for action was eloquently articulated by my hon. Friend the Member for Lewisham, West (Mr. Maples). In looking around the world, we can see many places in which there is free trade. Increasingly, Governments are involving themselves in their industry on a selective basis. I choose one random example from a recent report by Hawker Siddeley, which concluded that British exporters are being gazumped by foreign Governments in the international bidding for big contracts with developing countries. The report concluded that the generosity and flexibility of France, West Germany and Japan, our competitors, in offering soft loans and tied aid in support of their own exporters' tenders helped them to win world contracts.

I am not suggesting for a moment that we should allow ourselves to be sucked into a subsidy quagmire, but there is a clear need—particularly against the background of our recently losing the Bosphorus bridge contract—to consider how Governments can more selectively assess British manufacturers to win the increasingly few high prestige contracts. This is not subsidy but selective partnership between Government and industry. If we can achieve that sort of agenda for action—we can do it if we do not lose our nerve, and if we do not panic and endanger what has already been achieved—we can start to win back for Britain an increasing share of world trade.

In the past few weeks much has been made of the views of the CBI and its attitudes towards Government policy and the broad strategy that the Conservative party is following. I draw to the attention of the House—I do not think that it has had a wide enough press — a statement by Sir Terence Beckett when he spoke to a Committee of the House in the week before last. He said: There is profound confusion, in the national debate, between the level of unemployment, attended by the feeling this encourages that our present policies are failing, and the progress that we are actually making with those policies in improving the effectiveness of the economy. Those policies"— by that he meant our Government's policies— represent the best hope we have for the future prosperity of the country, and for dealing with unemployment in the best possible way. I believe that, providing we can with vigour turn our minds to how we can ensure a competitive trade policy not only here but throughout the rest of the world, and how we can help British industry by stabilising the exchange rate, there is no reason why the boom that we are now witnessing, with our GDP growing this year by 4 per cent., cannot be a continuing boom which will bring back the wealth that we as a society need if we are to be a truly caring society.

8.58 pm

Dr. Jeremy Bray (Motherwell, South)

The Secretary of State is not, I suspect, someone who wastes a great deal of time reading his speeches in Hansard. But he might at least ensure that those who draft Government amendments read his press releases. The Government congratulate themselves on the recent substantial increase in manufacturing output, but it is only just over half way back to the level that they inherited in 1979. They congratulate themselves on the sharp rise in exports — which, unfortunately, has been exceeded by an even sharper rise in imports. They congratulate themselves on major gains in competitiveness, which has been caused by a fall in the pound that panicked the Chancellor into raising interest rates to exorbitant levels. As to the optimism of the CBI about business, it has not yet recovered to its level of a year ago, before the miners' strike. That is not a pleasant picture of our industrial scene.

The Minister catalogued the measures taken to stimulate research and development in British industry, but admitted that the net effect has resulted in a small fall in real terms—of £2 million from £1,566 million—in intramural research and development in industry between 1978 and 1983. He said that he thought matters would be better in 1984, but he will never know because his Department has run down the statistical service and in 1984 will not collect any returns from industry about research and development.

The right hon. Member for Waveney (Mr. Prior) rightly stressed the role of manufacturing industry as essential to our economic recovery. As chairman of a great company, he naturally observes the closing stages of negotiations of major bids. He should talk to his technical director. Even if GEC does not need the money to compete with other British firms in research and development, it has always been forward in claiming whatever money is available—quite naturally—and also in complaining that if there is not a lot of money to support research and development it is at a disadvantage compared with its overseas competitors. I hope that the right hon. Gentleman will discuss that with his very competent technical director.

The hon. Member for Havant (Mr. Lloyd) stressed the need for a properly designed industrial strategy, but he did not offer us any niches in which we could survive the rigours of this Government's policies. My hon. Friend the Member for Wrexham (Dr. Marek) described how his local authority, against all the odds, attracted to his constituency — as much in need of jobs as all our constituencies—the Japanese calculator firm Sharp.

The hon. Member for Eastleigh (Sir D. Price) has seen a loss of jobs in his constituency, although he did not mention that. However, my hon. Friend the Member for Glasgow, Springburn (Mr. Martin) dwelt on that at some length. It concerns the effect of the running down and closure of railway workshops. There is a loss of 1,200 jobs, which can be ill afforded, in Springburn and 400 jobs in Eastleigh.

With the decline of the old, there is an absence of the development of the new. My hon. Friends were right to say that when the Government can see years ahead the effects of technical change, they should provide support for alternative development.

My hon. Friend the Member for Kingston upon Hull, West (Mr. Randall) stressed the need for the right sort of support for the electronics industry, which, unfortunately, it is not getting.

The hon. Member for Yeovil (Mr. Ashdown) spoke with knowledge and insight of the need to protect British firms against interference from American suppliers under American law, which is a monstrous intrusion not only on our freedom of trade but on our legal independence.

My hon. Friend the Member for Burnley (Mr. Pike) spoke eloquently of the co-operation between management and workers needed in handling technical change—a co-operation that the Government have sought to whittle away by their attack upon the trade unions. He argued that new technological developments offered new industries that could bring relief to areas of high unemployment, such as his constituency.

My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has a unique combination of the old and the new in his constituency. In the care that he exercises over both, we see the kind of work being done by hon. Members on both sides of the House to cushion their constituents against the appalling rigours to which the Government's policies have subjected them.

My hon. Friend the Member for Huddersfield (Mr. Sheerman) spoke of the closure of the Philips washing machine plant in his constituency, which was announced today. He made an eloquent plea for the training that is absolutely essential to industrial recovery.

The hon. Member for Banbury (Mr. Baldry) called for stability of the exchange rate, which I fear he will not find while the Government cling to their medium-term financial strategy, which specifically excludes stabilisation of the exchange rate.

We are concerned with the products that people want to buy in the shops and the showrooms, with the processes by which they are produced and, above all, with the people we need to produce them. The Government's record is catastrophic.

It is symbolic that nationally we are compulsive video viewers. We have been reduced to that — perhaps because the Government have left us so little to do—but we have not the wit to make video players for ourselves.

In 1979, we had a surplus of £2.7 billion in the balance of trade in manufactured goods. In 1985, that had turned into a deficit of £3.8 billion. The shift, some £6.5 billion, represents 13 per cent. of our imports in 1984. The decline in trade performance, measured by exports as a percentage of imports, has spread across the board.

I commend the Secretary of State to read another of his own releases, the publication "United Kingdom trade with European countries", which states: Crude balances can give a misleading indication of relative trading performance over time so we also give the ratio of exports to imports. In motor vehicles, electrical and electronic and data processing equipment, exports, already only 91 per cent. of imports in 1979, had fallen to 71 per cent. of imports by 1984. Even in the strongest class of goods, chemicals, exports fell from 132 per cent. of imports in 1979 to 126 per cent. in 1984.

What is alarming is that there is a tendency for the fastest growing industries to suffer the greatest decline in their trade position. Two industries in which I have a constituency interest, steel and mining machinery, illustrate the point. In steel, despite all its difficulties, the ratio of exports to imports has increased from 106 per cent. in 1979 to 138 per cent. in 1984. Mining machinery has the unique distinction of maintaining the ratio of exports to imports at just over 700 per cent. with scarcely any imports able to compete against the thoroughly efficient firms of Anderson, Strathclyde in my constituency and Dowty. Pharmaceuticals, a growth industry, fell from 242 per cent. to 204 per cent. in the ratio of exports to imports, and active electronic components, which includes micro circuits, fell from 106 per cent. to 70 per cent.

If one reads through some of the industries in which the improvement in the ratio has been more than 10 per cent. and contrasts those with the industries in which the deterioration has been more than 10 per cent., one observes the pattern. The improvement has come in the extraction of minerals, the steel industry, leather and leather goods, food, drink and tobacco and non-ferrous metals—not exactly the most buoyant growth industries of today. The deterioration in the trade balance has come in electronic data, man-made fibres, pharmaceutical products, timber and wooden furniture, industrial electrical equipment, non-metallic minerals, instrument engineering, rubber and plastics, motor vehicles and parts, food, chemical machinery and active electronic components. It is a devastating picture.

With the increase in exports and imports of manufactures up to 1979, British industry is now highly integrated with that of other industrial countries particularly in the European Community. The flows of exports and imports are now about equal to the value added in manufacturing industry and to home consumption of manufactured goods. In other words, trade is not peripheral. Trade is as large as home production and as large as home consumption. The export market is as important as the home market. As a source of supply of goods, imports are as important as home production, so shifts in trade have a major impact on home production. The same integration that exists over the economy as a whole is also to be found in individual firms, with few major establishments today able to survive without their overseas suppliers and customers.

The 13 per cent. widening in the manufactures trade gap has been reflected in a 14 per cent. fall in manufacturing output between 1979 and 1981 with manufacturing output now still 6.8 per cent. below the 1979 peak.

If the oil wealth were used to modernise and re-equip British industry, it would be reasonable to expect a surge of investment and a flood of imported machinery, but investment in manufacturing dropped by a disastrous 35 per cent. between 1979 and 1982, and in 1984 it was still 25 per cent. below the 1979 level.

Not only has investment fallen below the replacement level needed to maintain capacity, but a fall of 14 per cent. in manufacturing output between 1979 and 1981 has knocked out swathes of existing manufacturing capacity in all our constituencies. Nothing like that has happened before in Britain since the war; nor has it happened in the past 10 years in any other industrial country.

We must consider price and technical competitiveness together. We cannot create an overall competitive industry by a shift in the exchange rate, but we can quickly destroy it. The Government destroyed overall competitiveness and industry itself in a massive way between 1979 and 1981. Industry will take many years to recover from that destruction.

To the Chancellor none of this matters. To him manufacturing industry is a bore. He sees Britain's future as a jumbo-sized tax haven—another Channel island. When the second oil price increase knocked out the Channel islands' tomato-growing industry, the young people flocked to the tax-dodging Channel island banks which were growing explosively. The Chancellor seems to think that that can happen in Britain—in Barnsley, Greenock and Port Glasgow — with the growth in services making good the decline in manufacturing.

The Chancellor does not care about jobs. But look at the balance of payments. As one right hon. Member argued recently, manufacturing industry provides about 25 per cent. of our GDP and 25 per cent. of our jobs. It also provides 75 per cent. of our visible trade exports. If we were to replace the contribution by manufacturing industry to the balance of payments we would need to increase our exports of services by between £60 billion and £70 billion a year. To do that we should have to increase our share of world exports of services dramatically from under 10 per cent. today to over 50 per cent. That is really a wholly impossible task at the moment. So without manufacturing industry Britain would not survive. That was not one of my right hon. Friends; that was the right hon. Member for Mole Valley (Mr. Baker), the Minister for Local Government, from his previous perch as Minister for Information Technology, in evidence to the Lords Select Committee on Science and Technology. Britain cannot hope to increase its share of world trade in services fast enough to earn the foreign exchange needed to bring Britain's millions back into employment.

The Thatcherite solution is to cut Britain's overheads, by cutting social security and the real wages of workers. By these means they hope to price Britain back into work as a low-wage, low tech, low growth, low skilled economy.

Mr. Randall

The Hong Kong of the west.

Dr. Bray

That is not the nature of Hong Kong—which is the place where I was born—and it would never tolerate this Government's policies.

Thatcherite Britain is condemned to a tightening vortex of high interest rates, high interest costs, low investment, low technology, low skills, low growth, high cost, deteriorating trade, a falling pound and still higher interest rates—all with the pretext of reducing inflation which obstinately bounces along among the upper rates of inflation in industrial countries. Meanwhile, such strength as this country has left in higher education, scientific research and democratic government is being recklessly whittled away.

The industrial decline of Britain has been lamented lovingly ever since the Paris exhibition of 1867, when a Britain then producing one third of the world's manufactures was prominent in scarcely a dozen out of 90 classes of manufactures exhibited. Under this Government, that long, agonising, drawn-out decline has become a near terminal collapse. What we need now is emergency resuscitation followed by policies to reverse the long-term decline.

The three engines of growth on the supply side of a serious industrial policy are education and training, investment and research and development. The Government have neglected all three. In the earlier stages of recovery, there has to be a major increase in research and development effort on specific products and processes in manufacturing industry. That is needed to ensure that our products are in demand and up to date, that our training is in relevant skills and that investment is in competitive plants and processes, not in the obsolete plant of yesteryear.

Research and development expenditure in manufacturing industry is about £4 billion a year. There has been no increase since 1978. In no industry has it kept Britain's trade performance in balance with the competition. It is unevenly distributed. Research and development expenditure in the three research-intensive industries — chemicals, the electrical and electronics industry, and aerospace — is about £2,500 per worker per annum. Much of the research and development in electronics and aerospace is for defence purposes, paid for by the Government and lacking civil application. Research and development expenditure in the rest of the manufacturing industry, with 80 per cent. of total manufacturing employment, is, compared with the £2,500 per worker in the research-intensive sector, £250 per worker. Thus there are two sectors—the research-intensive sector and the low research sector.

In aerospace, with a strong element of defence support, research and development expenditure is £4,700 per employee, and much of it is on development. In imperial Chemical Industries, with the longest and strongest tradition of civil research and development, expenditure is £3,400 per worker per year. Motor vehicles have come up well. They are in an intermediate position, pulling up with £840 per worker. The British Steel Corporation, after the MacGregor cuts, is now down to £220 per employee. BSC is rapidly becoming a technological vassal of Japan. Textiles and paper, printing and publishing—mostly our beloved newspapers—are spending as little as £40 per worker per year. In footwear and clothing, expenditure is £17 per employee.

Mr. Baldry

Would not greater progress be made in the newspapers if the unions were more co-operative about introducing new technology? Perhaps the hon. Gentleman can have a word with Sogat.

Dr. Bray

There is some justice in what toe hon. Gentleman says. However, it is a chicken and egg argument. Had there been proper consultation with workers when the technological revolution in printing began, there would be a different picture today.

With the imbalance that we have in research intensity between the two sectors of the economy, if any increase in research and development expenditure were con-centrated on the research-intensive sector, the great mass of manufacturing industry would rapidly become less competitive. If, on the other hand, the research-intensive sector were denied further support, it would continue to fall victim to foreign competition, and we would lose possibly the most effective research and development in terms of potential gross domestic product per pound of additional research and development expenditure. An optimum distribution of support would lie somewhere in between.

The only principles guiding the Government's policies are that the market will provide, and that, where it does not, expenditure must be cut. The trouble is that there is no inherent competitive incentive in a market economy to public or private commercial organisations to undertake pre-competitive research, and the Government are starving such research of resources. Basic science and pre-competitive applied research, including research in enabling technologies and in public concerns such as health, safety and the environment, must be financed by the Government.

Sometimes pre-competitive research may be essential to the survival of an industry, but, because the benefits of the research cannot be used to strengthen one firm against its competitors, firms may not undertake that research on their own. That may be one factor lying behind the collapse of shipbuilding in this country.

Competitive research and development aimed at specific products and processes may also be neglected by firms if they have suffered from low profits and have had to concentrate simply on maintaining cash flow, if they have no confidence that profitable times will continue for long enough to enable them to reap the benefits of research, or if they always have to pitch their profit and loss accounts at maintaining a higher share price in order to frighten off the big bad takeover wolf.

All those conditions have applied in recent years and they have reached a new intensity under the present Government. United Kingdom research and development, and its fruits in manufacturing competitiveness as reflected in trade statistics, are now rapidly falling behind other industrial countries. We need to pull up rapidly and to pull ahead in research and development to make good the oil revenues that will now decline. The position is moving so fast that international comparisons at a point in time are no longer an appropriate guide to action.

Faced with the need for research and development, the inadequacies of the Government's actions make one weep. In the past, Britain has been pre-eminent in basic science, which is the necessary foundation for a healthy, advanced industrial economy, as Japan is discovering. Today, at a time of seminal growth in many branches of science, the Government's advisory board on the research councils has told the Government that their present plans will lead to a decline of 25 per cent. in the basic science budget over the next 10 years.

Already, whether measured by Nobel prizes, citations in the science journals, registration of patents or just common observation at any international scientific conference, Britain is falling behind in basic science. In the initial surge of research and development needed in manufacturing industry, the emphasis must be on fairly short-term developments and on updating products and processes. The aim should be for industry effectively to review and, where necessary, to develop and design anew all the products and processes of United Kingdom manufacturing industry.

We should not be too highfalutin about what constitutes development. The OECD Frascati definitions strike the right note in distinguishing research and development from investment and other activities by the element of novelty or innovation. What may be development in one industry may be standard practice in another. Thus, the use of computer-aided design and manfucturing systems may be standard practice in aerospace, but its introduction would be development in most general engineering.

An early step must be technological reconnaissance internationally. The purchasing and testing of competitors' products and their licensing, improvement and redesign must be seen as development and supported as such. But what do the Government do? They cut the staff of the Department of Trade and Industry engaged on such work, and make no provision for its takeover by industry. Today, a medium-sized industrial economy cannot hope to develop all its own technology. Most of it will come from abroad, embodied in plant or transferred by licensing. Likewise, modern industry cannot keep up, and will not understand, unless it has sufficient of its own technology that is fully competitive in world markets. That is why Government support for research and development in manufacturing industry is essential.

The point is often made that research and development and technological advance generally are restricted by inadequate supplies of qualified technologists and scientists. That is true. But it need not prevent an initial surge in R and D to prime the pump for more effective deployment and training of qualified manpower. Today 80,000 scientists and engineers are engaged in research and development in manufacturing industry. There are 500,000 economically active scientists and engineers with the equivalent of first degree or higher qualifications working elsewhere.

In 1982, just before the Government cuts in higher education which have not been made good by the recent restoration in engineering, 35,000 technologists, engineers and scientists obtained first degrees. Therefore, there is room for a substantial, early and major increase in research and development at the sharper end of the development of manufacturing industry. But research and development alone will not restore competitiveness. There must be investment and training as well, with proper planning within the enterprise.

My right hon. and hon. Friends rightly stress the need for national planning. The need for planning within the enterprise is equally important. Indeed, the right hon. Member for Waveney will have great fun listening to the views of the lower levels of management in GEC in relation to planning, and constrasting those with the views of his managing director. A marked change is today taking place in industry, because many of our young scientists and engineers who have graduated in the lifetime of this Government have seen no future in technology and have gone into training as accountants. Therefore, a thoroughly modern point of view is available about the methods and systems that we waffle on about in this House when applied to other people, but are so reluctant to apply to our own affairs, as are the senior managers with whom we talk who are responsible for the conduct of business as a whole.

My right hon. and hon. Friends have put forward practical proposals to make the long-term funds available for investment and to create the levels of education and training that are needed. Where are the Government's plans? They have none to measure up to the task which faces the nation.

Where will the money and jobs come from? We are talking about research and development, investment and training — the basic wealth-creating resources of the country. We are talking about a payback from fairly short-term development and technology transfer which is certainly available within five years. Research and longer term development will need longer horizons, but only one tenth of the expenditure. Therefore, there should be no difficulty nationally in funding research and development.

For investment in manufacturing industry, the proposals of my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) for the repatriation of overseas portfolio investment will encourage manufacturing industry to make good use of the funds which will become available—and money is much better spent on training than on having to pay unemployment benefit.

Finally and most important, what of the jobs? If we succeed in our objectives of restoring and maintaining the technical and price competitiveness of manufacturing industry, there is no reason why, over the first five years, employment in manufacturing industry should not increase. There is no limit if we are fully competitive in world markets. We can increase our share of home and export markets.

However, there is a long-term shift away from employment in manufacturing, just as there has been in agriculture for many years. Provided we maintain that competitiveness, so that there is no balance of payments constraint on the expansion of public and private services and construction, there are ample demands and needs there to absorb the one in six of our people who are denied jobs as a result of the Government's policies. True, we cannot eat our cake before we have baked it. The first priority must be to get manufacturing back on its feet, once again creating the wealth that this Government have squandered with such profligacy.

9.29 pm

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

I owe the House an explanation for my absence at the beginning of the debate. Some months ago I committed myself to opening a British Overseas Trade Board conference on exports and jobs, so I faced the choice between talking to 200 industrialists, engaged in the business of exports, or listening to the right hon. and learned Member for Monklands, East (Mr. Smith). Out of courtesy I must at least pretend that it was a struggle, but I doubt whether anyone in the House would believe me. I am told that the right hon. and learned gentleman said that he wanted to start a great national debate. [Interruption.] I took the trouble to get reports of what the right hon. and learned Gentleman said.

Mr. John Smith

Can the right hon. Gentleman believe them?

Mr. Tebbit

I will come back to the right hon. and learned Gentleman before long. He had better save his breath.

Mr. Smith

When the right hon. Gentleman speaks again I will go to a seminar.

Mr. Tebbit

Every time I speak it is a seminar for the right hon. and learned Gentleman. He said that he wanted to start a great debate about industry. I must tell him that industry stopped the debate a long time ago and got on with the business of growing, and he has not even noticed. Of course, I am sorry about the clash between the two events today. Certainly I would not accuse the Opposition of knowingly seeking to detract from the BOTB event.

Mr. Smith

I did not even know that it was on.

Mr. Tebbit

Indeed, that answers it. The right hon. and learned Gentleman is not guilty on the main charge, but we find him guilty on the lesser charge of ignorance and fecklessness. He is ignorant of what the Government are doing to assist industry and exports and to create sobs. For that he and his colleagues have a list of convictions as long as one's arm, and they are not alone in that.

The other day I was reading The Guardian, what I call the flabby end of the Fleet street heavies. A Mr. Keegan —I understand he is a financial journalist—was writing in The Guardian on Monday. He accused the Government of raising billions and billions from selling public sector assets without pumping a penny piece back into resuscitating the declining industrial and hitech heart of Britain. That is broadly the charge levelled against the Government in today's debate. That is not surprising. It was the charge that was made by the TUC in its document, "The Future Business". It was rehashed by Mr. Keegan and regurgitated by the right hon. and learned Member for Monklands, East, sticking to his brief as always like the lawyer he is. Mr. Keegan referred to us raising billions and billions from privatisation. Yes, we have, £5.5 billion to date.

Mr. Smith

I did not say that.

Mr. Tebbit

I know that the right hon. and learned Gentleman did not say that bit. He did not get time to rehash all of it. The Guardian referred to the Government raising billions without pumping a penny piece back into resuscitating the declining industrial and hightech heart of Britain. Over the six years 1979–80 to 1984–85 my Department's aggregate expenditure on regional industrial assistance has been nearly £3.3 billion, on science and technology nearly £1.6 billion, on export promotion £180 million, and on other industrial support some £3 billion, including £1.4 billion for BL and £0.5 billion for Rolls-Royce. The nationalised industries' external financing limits over those years amount to another £14 billion. That is well clear of £20 billion all told. Not a penny piece, says The Guardian. It cannot tell the difference between a penny piece and £14 billion. Last year alone the cost of assistance to private industry was about the same as the £5.5 billion that has resulted from privatisation since 1979. It is only crass ignorance or wilful partisan bias that can cause the production of such rubbish. I believe that the hon. Member for Motherwell, South (Dr. Bray) has from time to time expressed an interest in recycling rubbish — he has certainly been at it today.

At the lower end of Fleet street we have the Star. On Monday 13 May, in an article about exports to China, it made a great deal of our lack of success in selling aircraft to that country. It spoke of a mere £25 million that has been paid for eight mini-airliners from Short Bros. of Belfast. That, it said, is all that we have achieved. Ignorance or political spite caused the Star to forget our 20 per cent. share of a $150 million order for airbuses and the $150 million order for 10 HS146s. It is that degree of distortion and ignorance that we have to combat. That being so, I turn again to the right hon. and learned Member for Monksland, East.

In the right hon. and learned Gentleman's restatement of TUC policy, presumably because the TUC thought that it had not had much coverage and asked the Opposition to give it a whirl again, the right hon. and learned Gentleman attempted to start, as he called it, the great debate. By 6 o'clock this evening there was one Labour Back Bencher and one Labour Front Bencher in the Chamber. Even the right hon. and learned Gentleman was not present for the great debate.

Mr. Sheerman

There were only two Tories present.

Mr. Tebbit

No. There has been a good Conservative attendance throughout the debate. I accept that the Labour Whips had better things to do than to sit in the Chamber. Indeed, they were outside trying to get Labour Back Benchers to participate in the debate. They got them in one at a time. The right hon. and learned Gentleman gave the TUC document another whirl. He neither added to nor subtracted from the TUC's position.

Mr. John Smith

What document?

Mr. Tebbit

The right hon. and learned Gentleman's ignorance is even deeper than I thought. He does not know that the TUC has published the document to which I have referred.

Mr. Smith

I hesitate to engage the right hon. Gentleman at the level to which he has reduced the debate. It is a serious debate and he has great responsibility to the country and to the House. As the right hon. Gentleman did not hear my speech, let me make it plain now that from start to finish I made no reference to any TUC document. I ask him to listen to my speech next time instead of listening to unreliable reporters.

Mr. Tebbit

I have already told the right hon. and learned Gentleman of the terrible clash with which I was faced. I had to decide whether to listen to him or to help 200 British exporters to get more jobs. Incidentally, I have a photocopy of the TUC document. If the right hon. and learned Gentleman has not seen it, I shall pass it to him at the end of the debate. It is entitled "The Future Business". It seems that the right hon. and learned Gentleman has not even read it. He will get into terrible trouble when the TUC hears about that. However, I have met very few people who have read it.

I enjoyed immensely the speech of the right hon. Member for Chesterfield (Mr. Benn). I suppose that it would not be within the rules of order to make it again so that those who were not present when it was delivered could hear it. What a pity that is. I am not sure whether the right hon. and learned Gentleman enjoyed it too much. After all, the right hon. Gentleman, however much we may pull his leg, represents a substantial slice of opinion in the Labour party. It is probably a minority opinion. It is certainly a minority opinion in this House, but whether it is a minority opinion among paid-up individual members of the Labour party —a pretty select band—is another matter.

When I heard the right hon. Member for Chesterfield compare Liverpool with Beirut, I wondered at his capacity for distorting reality into Left-wing fantasy, although I enjoyed his lumping into one revisionist bundle Sir Winston Churchill, Earls Attlee, Eden and Stockton, Lord Wilson, my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), Sir Stafford Cripps, Ernie Bevin, the right hon. Member for Leeds, East (Mr. Healey) and a cast of thousands. He continued with a splendid attack, which I enjoyed, on aristocrats, of which he is one, and on the last Labour Government, of which he was a member. The right hon. Gentleman ended with the astounding statement, "Industry has gone." And then, so was he. What a vision of the barmy Left, which is the visible manifestation of the nasty Left that is dominating the Labour party.

In a different way entirely I enjoyed the speech of my right hon. Friend the Member for Waveney (Mr. Prior). It was a very constructive and reasoned speech, even if I could not agree immediately with everything that he said.

The hon. Member for Stockton, South (Mr. Wrigglesworth), unlike the right hon. Member for Chesterfield's hysterical and paranoic view of impending disaster, had a sort of pale beige middle of the road, boring view of impending disaster, but I should like to cheer him up a little. He is really a very nice chap, I am told. He should not be so miserable, except when he considers the opinion polls and their implications for the alliance. I can cheer him up about Alvey. The hon. Member was looking only at the payments which have been made, which lag well behind the projects which have been approved. During the last two years about 100 projects have been approved and about three quarters of the total funds which have been allowed for Alvey have now been allocated. Similarly, his genteel gloom about the use of microelectronics in manufacturing industries was not well justified. We are just behind the Germans, but we are well ahead of France, and in European terms we are performing well.

My hon. Friend the Member for Havant (Mr. Lloyd) made a splendid speech. He neglected only one major aspect of his proposed strategy which damages all of us very much—the lack of a European common market. One day I hope that we shall create it.

The hon. Member for Wrexham (Dr. Marek) was somewhat misleading. I spoke this afternoon to my right hon. Friend the Secretary of State for Wales. He told me that the decision by the Sharp company of Japan to increase its operations in Wrexham was taken well before the visit by the borough council, although I am sure that that visit was not harmful to the project. I believe that there are excellent relationships between the company and the council.

Dr. Marek

There is one way to decide this matter: to ask Sharp. I hope that the Secretary of State will also ask the leader and the chief executive of Wrexham borough council. I think he will find that what I said was correct.

Mr. Tebbit

If there is any doubt about the matter, I am sure that my right hon. Friend the Secretary of State for Wales will let me know.

The hon. Member for Wrexham was also rather gloomy and dismissive about the number of new jobs which have been created during the last two years. During that period 613,000 extra jobs have been created. Many of them are, admittedly, part-time jobs, but at least 118,000 are full-time jobs. When the hon. Gentleman is making comparisons with other countries he ought to bear in mind that 65 per cent. of the population of the United Kingdom between the ages of 15 and 64 is in work, compared with 59 per cent. in Germany, 61 per cent. in France and 66 per cent, in the United States.

I enjoyed the speeches of my hon. Friends the Members for Eastleigh (Sir D. Price) and for Erith and Crayford (Mr. Evennett) and the report of what my hon. Friend the Member for Birmingham, Northfield (Mr. King) said and his encouraging view of the great efforts being made at British Leyland.

I must tell the hon. Member for Burnley (Mr. Pike) that it is not true that Lucas has been badly treated by the Government. I cannot, of course, comment on financial support for individual companies, but for the aircraft and aerospace industry, which is vital to Lucas, the support in the past five years has been £1.28 billion.

My hon. Friend the Member for Bexhill and Battle (Mr. Wardle) made some interesting points about the relations between big and small firms. One of the purposes of the BOTB conference which I attended this afternoon was to encourage large firms to assist smaller firms in their export efforts by carrying them, so to speak, piggyback into markets where they would not previously have been. I hope that that practice will grow.

Of course I agree with my hon. Friend the Member for Lewisham, West (Mr. Maples) that we want manufacturing industry, but services will provide more and more of our jobs as they do in the United States. I agree about the need for support for exporters. It is hard work removing trade barriers, especially in the European Community. As to Japan and the Japanese banks, I hope that he will forgive me if I do not deal with how we might react to the problem of reciprocity.

The hon. Member for Greenock and Port Glasgow (Dr. Godman) was understanding of the role of the electronics industry in his constituency and his part of Scotland. I share his hopes for Scott Lithgow.

My hon. Friend the Member for Amber Valley (Mr. Oppenheim) was thoughtful and understanding. I think carefully about those whom we wish to encourage to be inward investors.

I share the desire of my hon. Friend the Member for Banbury (Mr. Baldry) for a stable exchange rate. My worry is whether we can fix the price of the dollar. That is the question that must be asked when we ask whether we can fix the price of sterling. That is a formidable undertaking. I doubt whether the Americans can fix the price of the dollar, let alone us. I share his desire to put more pressure on Japan.

The hon. Member for Motherwell, South seems to be in a bad way today. He seems to be gloomy, upset and nostalgic for those good old Labour Government days when they had a massive trade deficit. He does not talk about those days.

Mr. John Smith

Has the right hon. Gentleman heard about North sea oil?

Mr. Tebbit

Yes. I might equally ask the right hon. and learned Gentleman whether he has ever heard of manufacturing, banking or financial services, or any other aspect of our trade. The Labour Government suffered from chronic balance of payments problems, and for the past five years we have had a balance or better on our trade. [HON. MEMBERS: "It is oil".] So, it is oil. Goodness me, if it were coal Opposition Members would not be shouting in derision "It is coal", would they? What is the difference between coal and oil except that oil is more difficult to get out from the North sea and it is got out profitably by private enterprise whereas coal is easier to extract and we lose money on getting it out with a nationalised industry?

Mr. Smith

The right hon. Gentleman mentioned oil. The Tory Government did nothing to obtain North sea oil.

They inherited a self-sufficiency of production in North sea oil when they took office in 1979. The Tory Government received a windfall. They have had more money than any Government have ever had and they have done nothing for it. They are now overproducing it to balance the books and it will run out earlier because of that. Will the right hon. Gentleman explain why the Government chose to spend all the money on paying for the extra unemployment that they created instead of investing it in British industry?

Mr. Tebbit

The right hon. and learned Gentleman talks as though it were he and the right hon. Member for Chesterfield, the former Secretary of State for Energy, who got out into the North sea, drilled the holes, built the platforms and got out the oil. It was private enterprise that did that. What is more, it was overwhelmingly those filthy, nasty multinationals that did it. Without them, the right hon. and learned Gentleman would have had no industry to hand over to us.

Mr. Smith

What did the Government spend the money on?

Mr. Tebbit

I promise to return to the right hon. and learned Gentleman's speech. He is a glutton for punishment tonight.

I listened carefully twice today to the speech of the hon. Member for Motherwell, South. I heard it not for the first time— nor, I fear, for the last—on BBC radio this morning. We heard it again this afternoon and, no doubt, we shall hear it when he next addresses us.

Dr. Bray

I hope that the right hon. Gentleman learnt from it.

Mr. Tebbit

I did learn from it. I learnt, for example, about the extraordinary ignorance, bias and partisanship of the Labour party—[Interruption.] —but not a word came from the hon. Member for Motherwell, South about the increase of 10 per cent. in manufactured exports in 1984. Does he know that our exports of manufactured goods expanded by 10 per cent. in 1984? Does he know that they expanded by 14 per cent. in the first quarter of this year compared with the first quarter of 1984? Does he know that these figures are reaching record levels?

Dr. Bray

rose —

Mr. Tebbit

Let us see if the hon. Gentleman answers my question. Did he know about those figures but preferred not to give them?

Dr. Bray

Perhaps the right hon. Gentleman's knowledge of arithmetic extends to the point that if one has exports and one takes away imports, one gets the balance. The balance for visible trade in January was minus £76 million; in February it was minus £270 million: and in March it was £900 million. That is what the right hon. Gentleman describes as an improvement in the trade position.

Mr. Tebbit

The hon. Gentleman, the House will have noticed, did not reply to my question.

Dr. Bray

rose —

Mr. Tebbit

No, the hon. Gentleman had his chance. Dr. Bray rose —

Mr. Tebbit

No, no, no. The hon. Gentleman had his chance and I will now deal with the point that he raises. [Interruption.] He knows full well that we have had five years of surplus in our trade figures. He knows full well that there is a marked seasonal pattern to the trade figures in the early part of the year. He also knows that there were a number of major erratic items in those trade figures.

Dr. Bray

rose —

Mr. Tebbit

The hon. Gentleman knows full well that we shall be well on track for a surplus on our trade account again this year.

Dr. Bray

Look at the figures.

Mr. Tebbit

I am amazed that the hon. Member for Motherwell, South dismissed the CBI's view of the state of industry. On BBC radio this morning he said that the CBI's view was too weak to merit consideration. I say to him that, as a scientist, he should have some ability to read the trend lines on graphs and to read more than one of them. I urge him to examine the CBI report.

Dr. Bray

I urge the right hon. Gentleman to look at the figures. I hand them to him.

Mr. Tebbit

I am grateful to the hon. Gentleman. In the CBI report he will find that the first question asks: Are you more or less optimistic — than you were four months ago? If the hon. Gentleman then takes the trend line, he will see a clear improvement. On page 5 the hon. Gentleman will see that in relation to the expected trend in volume of output in the next four months there is a level of optimism not exceeded since way back.

Dr. Bray

When we were in power.

Mr. Tebbit

It is always useful to look at the front page, too. [Interruption.] I will read from the hon. Gentleman's copy as he has taken the trouble to pass it to me. Page 1 states: Demand for manufactures continued to grow over the last few months at a rather faster rate than in the last three Quarterly Surveys. This rate is expected to continue over the next few months. Demand has also become rather less of a constraint on output…. Output volume is reported to have grown faster than in the last three Surveys and its rate of growth is expected to accelerate over the next few months. The capital goods sector continued to grow rather faster than the average. Capacity utilisation still remains broadly constant and has now remained static over the last four quarters. Given the increase in orders and output"․ [Interruption.] The hon. Member for Motherwell, South should not giggle. He should wait for the next sentence. It reads: Given the increase in orders and output, this must reflect rising total capacity, probably due to the increased investment. Investment is expected to continue rising over the next twelve months, at a slightly faster rate than in the January Survey. How can the hon. Gentleman dismiss that evidence as too weak to merit consideration? The truth is that it did not fit his TUC brief, so he did not want to talk about it.

The hon. Gentleman does not have to restrict himself to studying the views of the CBI. He can consider the views of The Economist and The Times. The Economist this week said: Between mid-1981 and the end of 1985, Britain's real gdp will have grown by about 2¾ per cent. a year. That is almost back to its average in the 1960s—making Britain the only country apart from America to have regained its earlier growth. More polemically, Britain had a slower growth rate than France in all but one of the 19 years 1964–82; by December, its growth will have been faster in each of the three years 1983–85 … Britain is at last winning back some foreign markets: in the 12 months to the first quarter of 1985, the volume of its no-oil exports…grew by 12 per cent., which was probably more than the growth in world trade. What has the right hon. and learned Member for Monklands, East to say about that? He does not want to know because it does not fit his prejudices.

We sometimes debate curiously unreal motions, but on this occasion the divide between the Opposition motion and the Government amendment is clear. I spent the early part of this debate at a conference of some 200 industrialists and exporters. If what the right hon. and learned Member for Monklands, East and his hon. Friend the Member for Motherwell, South have said about the state of industry and Government policy is right, one wonders why those who attended that conference were so cheerful. This has been the best CBI survey in years, so who are we to believe— industry, or bitter, negative, frustrated, out-of-office politicians?

It is no use the Labour party claiming support from industry because it has no such support. One has only to consider what a Labour Government would offer to the very people whom they claim to need—the high-tech employees. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) wants to inflict taxation on the rich—on everyone with more than £20,000 per year. The hon. Member for Oldham, West (Mr. Meacher) wants to stop tax relief on mortgage interest. A Labour Government would drive out of the country the very people they need to regenerate British industry. Out of office, the Labour party talks about support for industry and supports every strike, however bloody-minded and irrational. In the words of the right hon. Member for Sparkbrook: It is an official strike and therefore it is right for the Labour Party to support it. There is no doubt whatsoever that—

Mr. Michael Cocks (Bristol, South)

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

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

The House divided: Ayes 177, Noes 274.

Division No. 209]	[10 pm
AYES
Abse, Leo	Brown, N. (N'c'tle-u-Tyne E)
Archer, Rt Hon Peter	Brown, R. (N'c'tle-u-Tyne N)
Ashdown, Paddy	Buchan, Norman
Ashley, Rt Hon Jack	Callaghan, Rt Hon J.
Ashton, Joe	Campbell, Ian
Atkinson, N. (Tottenham)	Campbell-Savours, Dale
Bagier, Gordon A. T.	Canavan, Dennis
Banks, Tony (Newham NW)	Carlile, Alexander (Montg'y)
Barnett, Guy	Carter-Jones, Lewis
Barron, Kevin	Cartwright, John
Beckett, Mrs Margaret	Clark, Dr David (S Shields)
Beith, A. J.	Clarke, Thomas
Bell, Stuart	Clwyd, Mrs Ann
Benn, Tony	Cocks, Rt Hon M. (Bristol S.)
Bermingham, Gerald	Cohen, Harry
Bidwell, Sydney	Concannon, Rt Hon J. D.
Blair, Anthony	Cook, Frank (Stockton North)
Boothroyd, Miss Betty	Cook, Robin F. (Livingston)
Boyes, Roland	Corbyn, Jeremy
Bray, Dr Jeremy	Cowans, Harry
Brown, Gordon (D'f'mline E)	Crowther, Stan
Brown, Hugh D. (Provan)	Cunliffe, Lawrence

Cunningham, Dr John	Marek, Dr John
Davies, Rt Hon Denzil (L'lli)	Marshall, David (Shettleston)
Deakins, Eric	Martin, Michael
Dewar, Donald	Mason, Rt Hon Roy
Dixon, Donald	Maxton, John
Dobson, Frank	Maynard, Miss Joan
Dormand, Jack	Meacher, Michael
Douglas, Dick	Meadowcroft, Michael
Dubs, Alfred	Mikardo, Ian
Duffy, A. E. P.	Millan, Rt Hon Bruce
Dunwoody, Hon Mrs G.	Miller, Dr M. S. (E Kilbride)
Eadie, Alex	Mitchell, Austin (G't Grimsby)
Eastham, Ken	Morris, Rt Hon A. (W'shawe)
Evans, John (St. Helens N)	Nellist, David
Ewing, Harry	Oakes, Rt Hon Gordon
Field, Frank (Birkenhead)	O'Neill, Martin
Fisher, Mark	Orme, Rt Hon Stanley
Foot, Rt Hon Michael	Owen, Rt Hon Dr David
Forrester, John	Park, George
Foulkes, George	Parry, Robert
Fraser, J. (Norwood)	Patchett, Terry
Freeson, Rt Hon Reginald	Pavitt, Laurie
Freud. Clement	Pendry, Tom
George, Bruce	Penhaligon, David
Godman, Dr Norman	Pike, Peter
Golding, John	Powell, Raymond (Ogmore)
Gould, Bryan	Prescott, John
Gourlay, Harry	Radice, Giles
Hamilton, James (M'well N)	Randall, Stuart
Hamilton, W. W. (Central Fife)	Redmond, M.
Hancock, Mr. Michael	Rees, Rt Hon M. (Leeds S)
Hardy, Peter	Richardson, Ms Jo
Harman, Ms Harriet	Roberts, Ernest (Hackney N)
Harrison, Rt Hon Walter	Robertson, George
Hattersley, Rt Hon Roy	Robinson, G. (Coventry NW)
Healey, Rt Hon Denis	Rooker, J. W.
Heffer, Eric S.	Rowlands, Ted
Home Robertson, John	Ryman, John
Howell, Rt Hon D. (S'heath)	Sedgemore, Brian
Howells, Geraint	Sheerman, Barry
Hughes, Robert (Aberdeen N)	Short, Ms Clare (Ladywood)
Hughes, Roy (Newport East)	Silkin, Rt Hon J.
Hughes, Sean (Knowsley S)	Skinner, Dennis
Janner, Hon Greville	Smith, Rt Hon J. (M'kl'ds E)
John, Brynmor	Snape, Peter
Jones, Barry (Alyn & Deeside)	Soley, Clive
Kaufman, Rt Hon Gerald	Spearing, Nigel
Kennedy, Charles	Stewart, Rt Hon D. (W Isles)
Kilroy-Silk, Robert	Strang, Gavin
Kirkwood, Archy	Thomas, Dafydd (Merioneth)
Lambie, David	Thomas, Dr R. (Carmarthen)
Lamond, James	Thompson, J. (Wansbeck)
Leadbitter, Ted	Thorne, Stan (Preston)
Leighton, Ronald	Tinn, James
Lewis, Ron (Carlisle)	Wallace, James
Lewis, Terence (Worsley)	Warden, Gareth (Gower)
Litherland, Robert	Weetch, Ken
Lloyd, Tony (Stretford)	Welsh, Michael
Loyden, Edward	Wigley, Dafydd
McCartney, Hugh	Williams, Rt Hon A.
McDonald, Dr Oonagh	Wilson, Gordon
McKay, Allen (Penistone)	Winnick, David
McKelvey, William	Wrigglesworth, Ian
MacKenzie, Rt Hon Gregor	Young, David (Bolton SE)
Maclennan, Robert
McNamara, Kevin	Tellers for the Ayes:
McTaggart, Robert	Mr. Frank Haynes and
McWilliam, John	Mr. Robin Corbett.
Madden, Max
NOES
Adley, Robert	Aspinwall, Jack
Aitken, Jonathan	Atkins, Rt Hon Sir H.
Alexander, Richard	Atkins, Robert (South Ribble)
Alison, Rt Hon Michael	Baker, Nicholas (N Dorset)
Amery, Rt Hon Julian	Baldry, Tony
Amess, David	Banks, Robert (Harrogate)
Ancram, Michael	Batiste, Spencer
Arnold, Tom	Beaumont-Dark, Anthony
Ashby, David	Bellingham, Henry

Bendall, Vivian	Gale, Roger
Benyon, William	Galley, Roy
Best, Keith	Gardiner, George (Reigate)
Bevan, David Gilroy	Garel-Jones, Tristan
Biffen, Rt Hon John	Glyn, Dr Alan
Biggs-Davison, Sir John	Goodhart, Sir Philip
Blackburn, John	Goodlad, Alastair
Blaker, Rt Hon Sir Peter	Gower, Sir Raymond
Body, Richard	Grant, Sir Anthony
Boscawen, Hon Robert	Greenway, Harry
Bottomley, Peter	Gregory, Conal
Bottomley, Mrs Virginia	Griffiths, Peter (Portsm'th N)
Bowden, A. (Brighton K'to'n)	Hamilton, Hon A. (Epsom)
Bowden, Gerald (Dulwich)	Hamilton, Neil (Tatton)
Boyson, Dr Rhodes	Hampson, Dr Keith
Brandon-Bravo, Martin	Hanley, Jeremy
Brinton, Tim	Hannam, John
Brown, M. (Brigg & Cl'thpes)	Hargreaves, Kenneth
Browne, John	Harris, David
Bruinvels, Peter	Harvey, Robert
Bryan, Sir Paul	Haselhurst, Alan
Buchanan-Smith, Rt Hon A.	Havers, Rt Hon Sir Michael
Buck, Sir Antony	Hawkins, Sir Paul (SW N'folk)
Budgen, Nick	Hawksley, Warren
Bulmer, Esmond	Hayes, J.
Burt, Alistair	Hayhoe, Barney
Butcher, John	Hayward, Robert
Butler, Hon Adam	Heathcoat-Amory, David
Butterfill, John	Heddle, John
Carlisle, John (N Luton)	Henderson, Barry
Carlisle, Kenneth (Lincoln)	Hickmet, Richard
Carlisle, Rt Hon M. (W'ton S)	Hicks, Robert
Carttiss, Michael	Higgins, Rt Hon Terence L.
Cash, William	Hill, James
Chapman, Sydney	Hind, Kenneth
Chope, Christopher	Hogg, Hon Douglas (Gr'th'm)
Churchill, W. S.	Holland, Sir Philip (Gedling)
Clark, Dr Michael (Rochford)	Holt, Richard
Clark, Sir W. (Croydon S)	Hordern, Peter
Clarke, Rt Hon K. (Rushcliffe)	Howarth, Alan (Stratf'd-on-A)
Clegg, Sir Walter	Howarth, Gerald (Cannock)
Cockeram, Eric	Howell, Ralph (N Norfolk)
Colvin, Michael	Hunt, David (Wirral)
Coombs, Simon	Hunt, John (Ravensbourne)
Cope, John	Hunter, Andrew
Cormack, Patrick	Hurd, Rt Hon Douglas
Couchman, James	Jackson, Robert
Cranborne, Viscount	Johnson Smith, Sir Geoffrey
Critchley, Julian	Jones, Gwilym (Cardiff N)
Crouch, David	Jones, Robert (W Herts)
Currie, Mrs Edwina	Joseph, Rt Hon Sir Keith
Dickens, Geoffrey	Kellett-Bowman, Mrs Elaine
Dicks, Terry	Kershaw, Sir Anthony
Dorrell, Stephen	Key, Robert
Douglas-Hamilton, Lord J.	King, Roger (B'ham N'field)
Dover, Den	King, Rt Hon Tom
du Cann, Rt Hon Sir Edward	Knight, Gregory (Derby N)
Dunn, Robert	Knight, Mrs Jill (Edgbaston)
Durant, Tony	Knowles, Michael
Edwards, Rt Hon N. (P'broke)	Knox, David
Eggar, Tim	Lamont, Norman
Emery, Sir Peter	Lang, Ian
Evennett, David	Latham, Michael
Eyre, Sir Reginald	Lawler, Geoffrey
Fairbairn, Nicholas	Lawrence, Ivan
Fallon, Michael	Lawson, Rt Hon Nigel
Farr, Sir John	Lee, John (Pendle)
Favell, Anthony	Leigh, Edward (Gainsbor'gh)
Fenner, Mrs Peggy	Lennox-Boyd, Hon Mark
Finsberg, Sir Geoffrey	Lester, Jim
Fookes, Miss Janet	Lewis, Sir Kenneth (Stamf'd)
Forman, Nigel	Lightbown, David
Forsyth, Michael (Stirling)	Lilley, Peter
Forth, Eric	Lloyd, Ian (Havant)
Fowler, Rt Hon Norman	Lord, Michael
Fox, Marcus	Luce, Richard
Franks, Cecil	Lyell, Nicholas
Fraser, Peter (Angus East)	McCrindle, Robert
Freeman, Roger	McCurley, Mrs Anna
Fry, Peter	Macfarlane, Neil

Question accordingly negatived.

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

The House divided: Ayes 272, Noes 178.

Division No. 209]	[10 pm
AYES
Abse, Leo	Brown, N. (N'c'tle-u-Tyne E)
Archer, Rt Hon Peter	Brown, R. (N'c'tle-u-Tyne N)
Ashdown, Paddy	Buchan, Norman
Ashley, Rt Hon Jack	Callaghan, Rt Hon J.
Ashton, Joe	Campbell, Ian
Atkinson, N. (Tottenham)	Campbell-Savours, Dale
Bagier, Gordon A. T.	Canavan, Dennis
Banks, Tony (Newham NW)	Carlile, Alexander (Montg'y)
Barnett, Guy	Carter-Jones, Lewis
Barron, Kevin	Cartwright, John
Beckett, Mrs Margaret	Clark, Dr David (S Shields)
Beith, A. J.	Clarke, Thomas
Bell, Stuart	Clwyd, Mrs Ann
Benn, Tony	Cocks, Rt Hon M. (Bristol S.)
Bermingham, Gerald	Cohen, Harry
Bidwell, Sydney	Concannon, Rt Hon J. D.
Blair, Anthony	Cook, Frank (Stockton North)
Boothroyd, Miss Betty	Cook, Robin F. (Livingston)
Boyes, Roland	Corbyn, Jeremy
Bray, Dr Jeremy	Cowans, Harry
Brown, Gordon (D'f'mline E)	Crowther, Stan
Brown, Hugh D. (Provan)	Cunliffe, Lawrence

Cunningham, Dr John	Marek, Dr John
Davies, Rt Hon Denzil (L'lli)	Marshall, David (Shettleston)
Deakins, Eric	Martin, Michael
Dewar, Donald	Mason, Rt Hon Roy
Dixon, Donald	Maxton, John
Dobson, Frank	Maynard, Miss Joan
Dormand, Jack	Meacher, Michael
Douglas, Dick	Meadowcroft, Michael
Dubs, Alfred	Mikardo, Ian
Duffy, A. E. P.	Millan, Rt Hon Bruce
Dunwoody, Hon Mrs G.	Miller, Dr M. S. (E Kilbride)
Eadie, Alex	Mitchell, Austin (G't Grimsby)
Eastham, Ken	Morris, Rt Hon A. (W'shawe)
Evans, John (St. Helens N)	Nellist, David
Ewing, Harry	Oakes, Rt Hon Gordon
Field, Frank (Birkenhead)	O'Neill, Martin
Fisher, Mark	Orme, Rt Hon Stanley
Foot, Rt Hon Michael	Owen, Rt Hon Dr David
Forrester, John	Park, George
Foulkes, George	Parry, Robert
Fraser, J. (Norwood)	Patchett, Terry
Freeson, Rt Hon Reginald	Pavitt, Laurie
Freud. Clement	Pendry, Tom
George, Bruce	Penhaligon, David
Godman, Dr Norman	Pike, Peter
Golding, John	Powell, Raymond (Ogmore)
Gould, Bryan	Prescott, John
Gourlay, Harry	Radice, Giles
Hamilton, James (M'well N)	Randall, Stuart
Hamilton, W. W. (Central Fife)	Redmond, M.
Hancock, Mr. Michael	Rees, Rt Hon M. (Leeds S)
Hardy, Peter	Richardson, Ms Jo
Harman, Ms Harriet	Roberts, Ernest (Hackney N)
Harrison, Rt Hon Walter	Robertson, George
Hattersley, Rt Hon Roy	Robinson, G. (Coventry NW)
Healey, Rt Hon Denis	Rooker, J. W.
Heffer, Eric S.	Rowlands, Ted
Home Robertson, John	Ryman, John
Howell, Rt Hon D. (S'heath)	Sedgemore, Brian
Howells, Geraint	Sheerman, Barry
Hughes, Robert (Aberdeen N)	Short, Ms Clare (Ladywood)
Hughes, Roy (Newport East)	Silkin, Rt Hon J.
Hughes, Sean (Knowsley S)	Skinner, Dennis
Janner, Hon Greville	Smith, Rt Hon J. (M'kl'ds E)
John, Brynmor	Snape, Peter
Jones, Barry (Alyn & Deeside)	Soley, Clive
Kaufman, Rt Hon Gerald	Spearing, Nigel
Kennedy, Charles	Stewart, Rt Hon D. (W Isles)
Kilroy-Silk, Robert	Strang, Gavin
Kirkwood, Archy	Thomas, Dafydd (Merioneth)
Lambie, David	Thomas, Dr R. (Carmarthen)
Lamond, James	Thompson, J. (Wansbeck)
Leadbitter, Ted	Thorne, Stan (Preston)
Leighton, Ronald	Tinn, James
Lewis, Ron (Carlisle)	Wallace, James
Lewis, Terence (Worsley)	Warden, Gareth (Gower)
Litherland, Robert	Weetch, Ken
Lloyd, Tony (Stretford)	Welsh, Michael
Loyden, Edward	Wigley, Dafydd
McCartney, Hugh	Williams, Rt Hon A.
McDonald, Dr Oonagh	Wilson, Gordon
McKay, Allen (Penistone)	Winnick, David
McKelvey, William	Wrigglesworth, Ian
MacKenzie, Rt Hon Gregor	Young, David (Bolton SE)
Maclennan, Robert
McNamara, Kevin	Tellers for the Ayes:
McTaggart, Robert	Mr. Frank Haynes and
McWilliam, John	Mr. Robin Corbett.
Madden, Max
NOES
Adley, Robert	Aspinwall, Jack
Aitken, Jonathan	Atkins, Rt Hon Sir H.
Alexander, Richard	Atkins, Robert (South Ribble)
Alison, Rt Hon Michael	Baker, Nicholas (N Dorset)
Amery, Rt Hon Julian	Baldry, Tony
Amess, David	Banks, Robert (Harrogate)
Ancram, Michael	Batiste, Spencer
Arnold, Tom	Beaumont-Dark, Anthony
Ashby, David	Bellingham, Henry

Bendall, Vivian	Gale, Roger
Benyon, William	Galley, Roy
Best, Keith	Gardiner, George (Reigate)
Bevan, David Gilroy	Garel-Jones, Tristan
Biffen, Rt Hon John	Glyn, Dr Alan
Biggs-Davison, Sir John	Goodhart, Sir Philip
Blackburn, John	Goodlad, Alastair
Blaker, Rt Hon Sir Peter	Gower, Sir Raymond
Body, Richard	Grant, Sir Anthony
Boscawen, Hon Robert	Greenway, Harry
Bottomley, Peter	Gregory, Conal
Bottomley, Mrs Virginia	Griffiths, Peter (Portsm'th N)
Bowden, A. (Brighton K'to'n)	Hamilton, Hon A. (Epsom)
Bowden, Gerald (Dulwich)	Hamilton, Neil (Tatton)
Boyson, Dr Rhodes	Hampson, Dr Keith
Brandon-Bravo, Martin	Hanley, Jeremy
Brinton, Tim	Hannam, John
Brown, M. (Brigg & Cl'thpes)	Hargreaves, Kenneth
Browne, John	Harris, David
Bruinvels, Peter	Harvey, Robert
Bryan, Sir Paul	Haselhurst, Alan
Buchanan-Smith, Rt Hon A.	Havers, Rt Hon Sir Michael
Buck, Sir Antony	Hawkins, Sir Paul (SW N'folk)
Budgen, Nick	Hawksley, Warren
Bulmer, Esmond	Hayes, J.
Burt, Alistair	Hayhoe, Barney
Butcher, John	Hayward, Robert
Butler, Hon Adam	Heathcoat-Amory, David
Butterfill, John	Heddle, John
Carlisle, John (N Luton)	Henderson, Barry
Carlisle, Kenneth (Lincoln)	Hickmet, Richard
Carlisle, Rt Hon M. (W'ton S)	Hicks, Robert
Carttiss, Michael	Higgins, Rt Hon Terence L.
Cash, William	Hill, James
Chapman, Sydney	Hind, Kenneth
Chope, Christopher	Hogg, Hon Douglas (Gr'th'm)
Churchill, W. S.	Holland, Sir Philip (Gedling)
Clark, Dr Michael (Rochford)	Holt, Richard
Clark, Sir W. (Croydon S)	Hordern, Peter
Clarke, Rt Hon K. (Rushcliffe)	Howarth, Alan (Stratf'd-on-A)
Clegg, Sir Walter	Howarth, Gerald (Cannock)
Cockeram, Eric	Howell, Ralph (N Norfolk)
Colvin, Michael	Hunt, David (Wirral)
Coombs, Simon	Hunt, John (Ravensbourne)
Cope, John	Hunter, Andrew
Cormack, Patrick	Hurd, Rt Hon Douglas
Couchman, James	Jackson, Robert
Cranborne, Viscount	Johnson Smith, Sir Geoffrey
Critchley, Julian	Jones, Gwilym (Cardiff N)
Crouch, David	Jones, Robert (W Herts)
Currie, Mrs Edwina	Joseph, Rt Hon Sir Keith
Dickens, Geoffrey	Kellett-Bowman, Mrs Elaine
Dicks, Terry	Kershaw, Sir Anthony
Dorrell, Stephen	Key, Robert
Douglas-Hamilton, Lord J.	King, Roger (B'ham N'field)
Dover, Den	King, Rt Hon Tom
du Cann, Rt Hon Sir Edward	Knight, Gregory (Derby N)
Dunn, Robert	Knight, Mrs Jill (Edgbaston)
Durant, Tony	Knowles, Michael
Edwards, Rt Hon N. (P'broke)	Knox, David
Eggar, Tim	Lamont, Norman
Emery, Sir Peter	Lang, Ian
Evennett, David	Latham, Michael
Eyre, Sir Reginald	Lawler, Geoffrey
Fairbairn, Nicholas	Lawrence, Ivan
Fallon, Michael	Lawson, Rt Hon Nigel
Farr, Sir John	Lee, John (Pendle)
Favell, Anthony	Leigh, Edward (Gainsbor'gh)
Fenner, Mrs Peggy	Lennox-Boyd, Hon Mark
Finsberg, Sir Geoffrey	Lester, Jim
Fookes, Miss Janet	Lewis, Sir Kenneth (Stamf'd)
Forman, Nigel	Lightbown, David
Forsyth, Michael (Stirling)	Lilley, Peter
Forth, Eric	Lloyd, Ian (Havant)
Fowler, Rt Hon Norman	Lord, Michael
Fox, Marcus	Luce, Richard
Franks, Cecil	Lyell, Nicholas
Fraser, Peter (Angus East)	McCrindle, Robert
Freeman, Roger	McCurley, Mrs Anna
Fry, Peter	Macfarlane, Neil
MacKay, Andrew (Berkshire)	Portillo, Michael
MacKay, John (Argyll & Bute)	Powell, Rt Hon J. E. (S Down)
Maclean, David John	Powell, William (Corby)
McNair-Wilson, P. (New F'st)	Powley, John
McQuarrie, Albert	Price, Sir David
Madel, David	Prior, Rt Hon James
Major, John	Proctor, K. Harvey
Malins, Humfrey	Raffan, Keith
Malone, Gerald	Rathbone, Tim
Maples, John	Rhodes James, Robert
Marland, Paul	Rhys Williams, Sir Brandon
Marlow, Antony	Ridley, Rt Hon Nicholas
Marshall, Michael (Arundel)	Rifkind, Malcolm
Mates, Michael	Robinson, Mark (N'port W)
Mather, Carol	Roe, Mrs Marion
Maude, Hon Francis	Rossi, Sir Hugh
Mawhinney, Dr Brian	Rowe, Andrew
Maxwell-Hyslop, Robin	Ryder, Richard
Mayhew, Sir Patrick	Sackville, Hon Thomas
Mellor, David	Sainsbury, Hon Timothy
Merchant, Piers	St. John-Stevas, Rt Hon N.
Meyer, Sir Anthony	Scott, Nicholas
Miller, Hal (B'grove)	Shaw, Giles (Pudsey)
Mills, lain (Meriden)	Smith, Sir Dudley (Warwick)
Mills, Sir Peter (West Devon)	Speed, Keith
Miscampbell, Norman	Stanbrook, Ivor
Mitchell, David (NW Hants)	Stevens, Martin (Fulham)
Moate, Roger	Stewart, Andrew (Sherwood)
Monro, Sir Hector	Stokes, John
Montgomery, Sir Fergus	Taylor, John (Solihull)
Moore, John	Tebbit, Rt Hon Norman
Morris, M. (N'hampton, S)	Thompson, Donald (Calder V)
Moynihan, Hon C.	Thompson, Patrick (N'ich N)
Neale, Gerrard	Thurnham, Peter
Needham, Richard	Townsend, Cyril D. (B'heath)
Nelson, Anthony	Tracey, Richard
Newton, Tony	Trotter, Neville
Nicholls, Patrick	Viggers, Peter
Normanton, Tom	Walden, George
Norris, Steven	Walker, Bill (T'side N)
Oppenheim, Phillip	Wall, Sir Patrick
Osborn, Sir John	Wardle, C. (Bexhill)
Ottaway, Richard	Watts, John
Page, Richard (Herts SW)	Wiggin, Jerry
Parkinson, Rt Hon Cecil	Wilkinson, John
Parris, Matthew	Yeo, Tim
Patten, Christopher (Bath)
Pattie, Geoffrey	Tellers for the Noes:
Pawsey, James	Mr. Michael Neubert and
Pollock, Alexander	Mr. Peter Lloyd.

Division No. 2101	[10.15 pm
AYES
Adley, Robert	Benyon, William
Aitken, Jonathan	Best, Keith
Alexander, Richard	Bevan, David Gilroy
Alison, Rt Hon Michael	Biffen, Rt Hon John
Amery, Rt Hon Julian	Biggs-Davison, Sir John
Amess, David	Blackburn, John
Ancram, Michael	Blaker, Rt Hon Sir Peter
Arnold, Tom	Body, Richard
Ashby, David	Boscawen, Hon Robert
Aspinwall, Jack	Bottomley, Peter
Atkins, Rt Hon Sir H.	Bottomley, Mrs Virginia
Atkins, Robert (South Ribble)	Bowden, A. (Brighton K'to'n)
Baker, Nicholas (N Dorset)	Bowden, Gerald (Dulwich)
Baldry, Tony	Boyson, Dr Rhodes
Banks, Robert (Harrogate)	Brandon-Bravo, Martin
Batiste, Spencer	Brinton, Tim
Beaumont-Dark, Anthony	Brown, M. (Brigg & Cl'thpes)
Bellingham, Henry	Browne, John
Bendall, Vivian	Bruinvels, Peter

Bryan, Sir Paul	Havers, Rt Hon Sir Michael
Buchanan-Smith, Rt Hon A.	Hawkins, Sir Paul (SW N'folk)
Buck, Sir Antony	Hawksley, Warren
Budgen, Nick	Hayes, J.
Bulmer, Esmond	Hayhoe, Barney
Burt, Alistair	Hayward, Robert
Butcher, John	Heathcoat-Amory, David
Butler, Hon Adam	Heddle, John
Butterfill, John	Henderson, Barry
Carlisle, John (N Luton)	Hickmet, Richard
Carlisle, Kenneth (Lincoln)	Hicks, Robert
Carlisle, Rt Hon M. (W'ton S)	Higgins, Rt Hon Terence L.
Carttiss, Michael	Hill, James
Cash, William	Hind, Kenneth
Chapman, Sydney	Hogg, Hon Douglas (Gr'th'm)
Chope, Christopher	Holland, Sir Philip (Gedling)
Churchill, W. S.	Holt, Richard
Clark, Dr Michael (Rochford)	Hordern, Peter
Clark, Sir W. (Croydon S)	Howarth, Alan (Stratf'd-on-A)
Clarke, Rt Hon K. (Rushcliffe)	Howarth, Gerald (Cannock)
Clegg, Sir Walter	Howell, Ralph (N Norfolk)
Cockeram, Eric	Hunt, David (Wirral)
Colvin, Michael	Hunt, John (Ravensbourne)
Coombs, Simon	Hunter, Andrew
Cope, John	Hurd, Rt Hon Douglas
Cormack, Patrick	Jackson, Robert
Couchman, James	Johnson Smith, Sir Geoffrey
Cranborne, Viscount	Jones, Gwilym (Cardiff N)
Critchley, Julian	Jones, Robert (W Herts)
Crouch, David	Joseph, Rt Hon Sir Keith
Currie, Mrs Edwina	Kellett-Bowman, Mrs Elaine
Dickens, Geoffrey	Kershaw, Sir Anthony
Dicks, Terry	Key, Robert
Dorrell, Stephen	King, Roger (B'ham N'field)
Douglas-Hamilton, Lord J.	King, Rt Hon Tom
Dover, Den	Knight, Gregory (Derby N)
du Cann, Rt Hon Sir Edward	Knight, Mrs Jill (Edgbaston)
Dunn, Robert	Knowles, Michael
Edwards, Rt Hon N. (P'broke)	Knox, David
Eggar, Tim	Lamont, Norman
Emery, Sir Peter	Lang, Ian
Evennett, David	Latham, Michael
Eyre, Sir Reginald	Lawler, Geoffrey
Fairbairn, Nicholas	Lawrence, Ivan
Fallon, Michael	Lawson, Rt Hon Nigel
Farr, Sir John	Lee, John (Pendle)
Favell, Anthony	Leigh, Edward (Gainsbor'gh)
Fenner, Mrs Peggy	Lennox-Boyd, Hon Mark
Finsberg, Sir Geoffrey	Lester, Jim
Fookes, Miss Janet	Lewis, Sir Kenneth (Stamf'd)
Forman, Nigel	Lightbown, David
Forsyth, Michael (Stirling)	Lilley, Peter
Forth, Eric	Lloyd, Ian (Havant)
Fowler, Rt Hon Norman	Lord, Michael
Fox, Marcus	Luce, Richard
Franks, Cecil	Lyell, Nicholas
Fraser, Peter (Angus East)	McCrindle, Robert
Freeman, Roger	McCurley, Mrs Anna
Fry, Peter	Macfarlane, Neil
Gale, Roger	MacKay, Andrew (Berkshire)
Galley, Roy	MacKay, John (Argyll & Bute)
Gardiner, George (Reigate)	Maclean, David John
Garel-Jones, Tristan	McNair-Wilson, P. (New F'st)
Glyn, Dr Alan	McQuarrie, Albert
Goodhart, Sir Philip	Madel, David
Goodlad, Alastair	Major, John
Gower, Sir Raymond	Malins, Humfrey
Grant, Sir Anthony	Malone, Gerald
Greenway, Harry	Maples, John
Gregory, Conal	Marland, Paul
Griffiths, Peter (Portsm'th N)	Marlow, Antony
Hamilton, Hon A. (Epsom)	Marshall, Michael (Arundel)
Hamilton, Neil (Tatton)	Mates, Michael
Hampson, Dr Keith	Mather, Carol
Hanley, Jeremy	Maude, Hon Francis
Hannam, John	Mawhinney, Dr Brian
Hargreaves, Kenneth	Maxwell-Hyslop, Robin
Harris, David	Mayhew, Sir Patrick
Harvey, Robert	Mellor, David
Haselhurst, Alan	Merchant, Piers

Meyer, Sir Anthony	Rhys Williams, Sir Brandon
Miller, Hal (B'grove)	Ridley, Rt Hon Nicholas
Mills, Iain (Meriden)	Rifkind, Malcolm
Mills, Sir Peter (West Devon)	Rippon, Rt Hon Geoffrey
Miscampbell, Norman	Robinson, Mark (N'port W)
Mitchell, David (NW Hants)	Roe, Mrs Marion
Moate, Roger	Rossi, Sir Hugh
Monro, Sir Hector	Rowe, Andrew
Montgomery, Sir Fergus	Ryder, Richard
Moore, John	Sackville, Hon Thomas
Morris, M. (N'hampton, S)	Sainsbury, Hon Timothy
Moynihan, Hon C.	St. John-Stevas, Rt Hon N.
Neale, Gerrard	Scott, Nicholas
Needham, Richard	Shaw, Giles (Pudsey)
Nelson, Anthony	Smith, Sir Dudley (Warwick)
Neubert, Michael	Speed, Keith
Newton, Tony	Stanbrook, Ivor
Nicholls, Patrick	Stevens, Martin (Fulham)
Normanton, Tom	Stewart, Andrew (Sherwood)
Norris, Steven	Stokes, John
Oppenheim, Phillip	Taylor, John (Solihull)
Osborn, Sir John	Tebbit, Rt Hon Norman
Ottaway, Richard	Thompson, Donald (Calder V)
Page, Richard (Herts SW)	Thompson, Patrick (N'ich N)
Parkinson, Rt Hon Cecil	Thurnham, Peter
Parris, Matthew	Townsend, Cyril D. (B'heath)
Patten, Christopher (Bath)	Tracey, Richard
Pattie, Geoffrey	Viggers, Peter
Pawsey, James	Walden, George
Pollock, Alexander	Walker, Bill (T'side N)
Portillo, Michael	Wall, Sir Patrick
Powell, William (Corby)	Wardle, C. (Bexhill)
Powley, John	Wiggin, Jerry
Price, Sir David	Wilkinson, John
Prior, Rt Hon James	Yeo, Tim
Proctor, K. Harvey
Raffan, Keith	Tellers for the Ayes:
Rathbone, Tim	Mr. Peter Lloyd and
Rhodes James, Robert	Mr. Tony Durant.

NOES
Abse, Leo	Concannon, Rt Hon J. D.
Archer, Rt Hon Peter	Cook, Frank (Stockton North)
Ashdown, Paddy	Cook, Robin F. (Livingston)
Ashley, Rt Hon Jack	Corbett, Robin
Ashton, Joe	Corbyn, Jeremy
Atkinson, N. (Tottenham)	Cowans, Harry
Bagier, Gordon A. T.	Crowther, Stan
Banks, Tony (Newham NW)	Cunliffe, Lawrence
Barnett, Guy	Cunningham, Dr John
Barron, Kevin	Deakins, Eric
Beckett, Mrs Margaret	Dewar, Donald
Beith, A. J.	Dixon, Donald
Bell, Stuart	Dobson, Frank
Benn, Tony	Dormand, Jack
Bermingham, Gerald	Douglas, Dick
Bidwell, Sydney	Dubs, Alfred
Blair, Anthony	Duffy, A. E. P.
Boothroyd, Miss Betty	Dunwoody, Hon Mrs G.
Boyes, Roland	Eadie, Alex
Bray, Dr Jeremy	Eastham, Ken
Brown, Gordon (D'f'mline E)	Evans, John (St. Helens N)
Brown, Hugh D. (Provan)	Ewing, Harry
Brown, N. (N'c'tle-u-Tyne E)	Field, Frank (Birkenhead)
Brown, R. (N'c'tle-u-Tyne N)	Fisher, Mark
Buchan, Norman	Foot, Rt Hon Michael
Callaghan, Rt Hon J.	Forrester, John
Campbell, Ian	Foulkes, George
Campbell-Savours, Dale	Fraser, J. (Norwood)
Canavan, Dennis	Freeson, Rt Hon Reginald
Carlile, Alexander (Montg'y)	Freud, Clement
Carter-Jones, Lewis	George, Bruce
Cartwright, John	Godman, Dr Norman
Clark, Dr David (S Shields)	Golding, John
Clarke, Thomas	Gould, Bryan
Clwyd, Mrs Ann	Gourlay, Harry
Cocks, Rt Hon M. (Bristol S.)	Hamilton, James (M'well N)
Cohen, Harry	Hamilton, W. W. (Central Fife)

Hancock, Mr. Michael	O'Neill, Martin
Hardy, Peter	Orme, Rt Hon Stanley
Harman, Ms Harriet	Owen, Rt Hon Dr David
Harrison, Rt Hon Walter	Park, George
Hattersley, Rt Hon Roy	Patchett, Terry
Healey, Rt Hon Denis	Pavitt, Laurie
Heffer, Eric S.	Pendry, Tom
Home Robertson, John	Penhaligon, David
Howell, Rt Hon D. (S'heath)	Pike, Peter
Howells, Geraint	Powell, Raymond (Ogmore)
Hughes, Robert (Aberdeen N)	Prescott, John
Hughes, Roy (Newport East)	Radice, Giles
Janner, Hon Greville	Randall, Stuart
John, Brynmor	Redmond, M.
Kaufman, Rt Hon Gerald	Rees, Rt Hon M. (Leeds S)
Kennedy, Charles	Richardson, Ms Jo
Kilroy-Silk, Robert	Roberts, Ernest (Hackney N)
Kirkwood, Archy	Robertson, George
Lambie, David	Robinson, G. (Coventry NW)
Lamond, James	Rooker, J. W.
Leadbitter, Ted	Rowlands, Ted
Leighton, Ronald	Ryman, John
Lewis, Ron (Carlisle)	Sedgemore, Brian
Lewis, Terence (Worsley)	Sheerman, Barry
Litherland, Robert	Short, Ms Clare (Ladywood)
Lloyd, Tony (Stretford)	Silkin, Rt Hon J.
Loyden, Edward	Skinner, Dennis
McCartney, Hugh	Smith, Rt Hon J. (M'kl'ds E)
McDonald, Dr Oonagh	Snape, Peter
McKay, Allen (Penistone)	Soley, Clive
McKelvey, William	Spearing, Nigel
MacKenzie, Rt Hon Gregor	Stewart, Rt Hon D, (W Isles)
Maclennan, Robert	Strang, Gavin
McNamara, Kevin	Thomas, Dafydd (Merioneth)
McTaggart, Robert	Thomas, Dr R. (Carmarthen)
McWilliam, John	Thompson, J. (Wansbeck)
Madden, Max	Thorne, Stan (Preston)
Marek, Dr John	Tinn, James
Marshall, David (Shettleston)	Wallace, James
Martin, Michael	Wardell, Gareth (Gower)
Mason, Rt Hon Roy	Weetch, Ken
Maxton, John	Welsh, Michael
Maynard, Miss Joan	Wigley, Dafydd
Meacher, Michael	Williams, Rt Hon A.
Meadowcroft, Michael	Wilson, Gordon
Mikardo, Ian	Winnick, David
Millan, Rt Hon Bruce	Wrigglesworth, Ian
Miller, Dr M. S. (E Kilbride)	Young, David (Bolton SE)
Mitchell, Austin (G't Grimsby)
Morris, Rt Hon A. (W'shawe)	Tellers for the Noes:
Nellist, David	Mr. Frank Haynes and
Oakes, Rt Hon Gordon	Mr. Sean Hughes.

Question accordingly agreed to.

Mr. Speaker

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

Resolved,

That this House welcomes the recent substantial increase in manufacturing output, the sharp rise in exports, the major gains in the competitiveness of British industry, and the improved optimism of independent bodies such as the Confederation of British Industry; congratulates the Government on the measures it has taken to assist the recovery of British Industry through its support for innovation programme, support for investment, support for exports, business and technical advisory services, assistance with education and training and in particular today's Export for Jobs seminar and the commencement of Local Enterprise Week, as well as its policies to improve the economic climate in which business operates; and regrets the Opposition's willingness to support every single strike no matter what the cost, its reactionary and damaging policies in favour of increased taxation further nationalisation, and greater state intervention, its policies of deplorable fiscal irresponsibility, incompatible with the restraint of inflation and enhancement of competitiveness, and its eagerness to seek partisan gain at the expense of British industry and jobs.