High Technology Industries

HC Deb 15 July 1986 vol 101 cc873-915

Mr. Deputy Speaker (Mr. Harold Walker)

I inform the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.

4.33 pm

Mr. Paddy Ashdown (Yeovil)

I beg to move, That this House, recognising the importance to employment, defence, education and the economy of a strong high technology sector, expresses its concern that a regettable consequence of the United States Government's attempts to impose its laws on United Kingdom companies is to damage relationships between the two countries; regrets Her Majesty's Government's failure to take effective action to stop the extra-territorial imposition of United States law on United Kingdom firms exporting high technology from the United Kingdom; notes that a number of British computer manufacturers have been forced out of business by use of the United States blacklist; urges the Government to refuse to allow United States Government officials to inspect United Kingdom companies for compliance with United States laws; and calls on the Government to defend and assist British high technology industries, to preserve United Kingdom sovereignty, to support the rule of international law and to use the opportunity of the Presidency of the European Community Commission to co-ordinate policies to promote European high technology co-operation. This debate is, in part, about the state of Britain's hightech industry. Goodness knows, the industry needs some attention. Last year we had a deficit in high-tech trade of £1.3 billion, and the deficit is predicted to rise by 1990 to about £5 billion annually. The industry is suffering severe problems in software, as the recent ACARD report revealed. The earlier NEDO report told us that there are problems in the industry generally. Meanwhile, at a time of high unemployment, the skill gap in trained high technologists is growing wider and wider, with the number of computer graduates leaving university falling further and further behind the industry's needs. I have no doubt that all these matters will be referred to by others during the debate.

I wish to raise a matter that is at once more specific and wider in its overall implication. The United States Government are being permitted by the British Government to impose and even administer their own laws on British high-tech firms operating within Britain. This is damaging appropriate relations between allies and placing burdens on British high-technology trade. It is yet another example of the way in which the Government seem prepared to allow the United States Government increasingly to dictate what happens within the United Kingdom.

Of the top 10 computer companies in Britain, nine are United States subsidiaries. Even ICL, our only homegrown United Kingdom company that is in the list, is 25 per cent. United States owned. Perhaps more important is the fact that 80 per cent. of all components used in United Kingdom high-tech manufacture come from the United States. There is nothing wrong in that because high-tech trade is truly international, and I would not wish to see it otherwise. What is wrong, however, is the way in which the British Government permit the United States to use their powerful position in the United Kingdom market place to impose United States regulations in Britain and to diminish the viability and capacity of United Kingdom companies to trade abroad. This is exactly what is happening and what has happened continuously over the past four years.

This issue surfaced with the now famous IBM letter of 23 December 1983. The letter, which was sent to all IBM's United Kingdom customers, informed British firms that certain computers that they had purchased from IBM could not be moved within the United Kingdom without permission from the United States Government. Despite considerable public comment about the letter, IBM has recently confirmed to me that the letter still applies and will not be withdrawn.

Digital Equipment Corporation — DEC UK Ltd tells its United Kingdom customers in a written document that they must obey United States export control laws, even when trading within the United Kingdom, and that DEC UK will control movement of hardware, software and knowhow within Britain. That will be done, apparently, according to United States laws. Texas Instruments and many other major United States firms operating in Britain insist on similar provisions.

The effects of these requirements are considerable. Many United Kingdom banks and large corporations that own certain United States produced computers will be required formally and technically to ask for a licence from the United States Government before moving the computers from one location to another, even within the United Kingdom. This requirement appears even to apply to certain computers owned by the Government themselves, as I shall shortly show. Secondly, United States subsidiaries within the United Kingdom do not generally export any of their products except to their own subsidiaries. That is a consequence of United States law. Thirdly, United Kingdom companies seeking to export their manufactured goods must now apply for United States export licences if the goods contain any United States produced component, no matter how small.

In essence, they must apply for two export licences, one from the Department of Trade and Industry to conform with COCOM regulations and one from the United States Department of Commerce. I am happy to say that they are usually able to get a licence quickly from the DTI. It is a fairly simple process and we are grateful for that. However, this is not the case when it comes to the licence that has to be obtained from the United States. The Department of Commerce frequently takes up to three months to issue a licence, and has in the past been known to refuse a licence to a United Kingdom company without offering any explanation. For example, major export orders were lost to Cable and Wireless because the Department of Commerce in Washington, without any explanation. rejected, ignored and finally returned licence applications relating to equipment for China. It is a matter of record that at the same time United States firms were selling precisely the same equipment to the Chinese Government. They were doing so without restraint.

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

How wide is the hon. Gentleman's definition of high technology industries? Is his definition confined to the information technology industry, or does it embrace, for example, the offshore oil and gas industry?

Mr. Ashdown

In this instance my definition is directed chiefly to the information technology industry and the components that it uses. I am sure that the hon. Gentleman will be able to make his own contribution to the debate.

I am not at liberty to say which British firms have approached me expressing their concern about the situation which I have described and the impact that it is having on their trading viability. The firms concerned are naturally frightened of retaliatory action from the United States Department of Commerce if they kick up a fuss. I can say, however, that numbered among the firms are Britain's foremost computer manufacturers.

On 23 April the United States Government enacted the final formalisation of their export regulations covering high-tech exports under the United States Export Administration Act. Apart from the conditions already described, the new regulations make the Department of Commerce responsible for the policing of United States distribution licences in foreign countries, including the United Kingdom. It also makes the checking of end users abroad the responsibility of other "United States agencies". I understand this to be the normal form of words used in many instances to describe the CIA. We know from a speech in Palo Alto made by the then director of the CIA, Mr. William Casey, on 3 April 1984, that the CIA operates a blacklist of 300 European firms which have contravened United States regulations. I was subsequently informed during a telephone conversation that I had with the CIA that among these are a number of British firms.

It is under this new regulation that United States Commerce Department officials sought to visit the United Kingdom earlier this year to inspect the books of United Kingdom companies operating within Britain in order to ensure that they complied with United States law. I am astounded to know that the Government did not dismiss this application out of hand. Indeed, I believe that they are still considering it. I ask the Minister to make it clear in his speech what the Government intend to do to protect United Kingdom firms from this intrusion, and why they have taken so long to do it.

The Government have always said that they reject these United States claims. When I first raised the matter with the then Secretary of State in 1984 I was informed that they would treat each United States demand on a "case-by-case basis"—the very words, incidentally, used in the Government's amendment to our motion. But they have done nothing about the IBM letter, a copy of which they have; or about the DEC licence instructions, a copy of which they have, or about the Texas Instruments demands, a copy of which they have.

In a letter to me of 3 July 1985, the Attorney-General declared that United States claims in this matter were an unwarranted encroachment on UK jurisdiction and contrary to international law". Yet such claims continue, they are not dismissed —indeed, the Government say that they are still considering them. The House is entitled to know why.

The problem has worsened. In the last few months a major United States subsidiary, Motorola, has refused a British citizen a car phone because he is said to be on a United States Government denial list. This has had the effect initially of denying a British citizen access to the British Telecom network. DEC UK has also recently insisted that any British student attending a DEC course in Britain must sign a form agreeing to accept United States export administration law, even though he will not place one foot outside the United Kingdom.

I have also learnt that United Kingdom companies submitting licence applications to the United States will have full details of their firms and operations passed on to the Pentagon, which will check up on them and the equipment that they are purchasing. The effect of this, as I understand it, is that if a British-manufactured Apricot computer is bought by a firm today and subsequently sold, say, seventh hand in five years' time to a buyer in a prohibited country—which incidentally, includes Iran, Iraq and Syria—that British firm could technically be held responsible for that ultimate destination. Indeed, one United Kingdom company, Systime, has effectively been driven out of business because of United States sanctions —or at least partly because of United States sanctions—against it for exporting in this case to Switzerland. I also understand that Thorn EMI is having considerable difficulty extracting its own equipment and designs for its world-heating transputer from its United States factory.

What have the Government done about this? Perhaps most remarkable of all, in view of the Government's agreement that these United States claims are illegal and will be countered on a "case-by-case basis"—I use the words used in the amendment—is the fact that the Government themselves seem to have agreed to accept a United States claim that they must ask the United States Government's permission to move a computer that they themselves own from one location to another.

As I understand it, the United States Government have forbidden Her Majesty's Government to move their own Cray super-computer owned by the Department of Energy at Harwell to the university of London without formal United States approval. This happened in May, yet our Government are still considering the matter. Indeed, I have just heard today that the United States Government have imposed unilateral third party restraints on the Japanese companies Fujitsu, Hitachi and NEC, and their European distributors Amdahl, Basef and Siemens, to prevent them from supplying London university with an alternative super-computer. Meanwhile our own Department of Trade and Industry, I understand, is still petitioning the United States Government for permission to move its own Government computer 40 miles from Essex to London.

Is this not a disgraceful situation for a British Government to accept? I ask the Minister to indicate clearly to the House whether the United States claim on this matter will be repudiated or whether the Government intend to be party to an act which their own Attorney-General has described as an … encroachment on UK jurisdiction and contrary to international law". Our Government's apparent acceptance of the fact that the United States has a right not only to impose but also to administer its own law in Britain is a direct infringement of our sovereignty. It also comprises a major and damaging barrier to United Kingdom trade.

I do not claim that the United States Government's intention is to give their own firms a trading advantage through these actions. I am convinced that United States claims are driven by a genuine, if in my view mistaken, attempt to protect high-tech secrets. But there is no doubt that these regulations are being used by United States industry, and particularly the larger United States firms, to keep out United Kingdom and European exporters while they move in and clean up. The figures show this perfectly clearly. According to the only figure that I have managed to get out — I stand to be corrected if I am wrong, but it is difficult to pull out figures because they are not differentiated very clearly — while United Kingdom high-tech exports to the eastern bloc have fallen to approximately £40 million a year, in the same period, United States high-tech trade to the eastern bloc countries has risen from $230 million in 1980 to $1.5 billion last year, and is predicted to rise to $5 billion this year.

I do not suggest that we do not need a mechanism to ensure the security of our high-tech secrets, but we already have such a mechanism in place. The international NATO-based multilateral organisation COCOM already provides just such a mechanism. Indeed, one of my major arguments against United States unilateral action in this area is that it undermines and makes a nonsense of international action by western countries through COCOM. I am glad to note that the Minister agrees.

Neither do I necessarily blame the United States Government for trying it on. They are, after all, only pursuing their national interest, which is what governments are supposed to do. If the Government insist on conveniently lying down in front of the United States Government, who can blame the United States for taking the opportunity to walk all over us?

What now needs to be done in this serious matter? First, the Government must use the opportunity of the European presidency to co-ordinate European action to make it clear to the United States Government that we simply will not accept their extraterritorial claims. In this matter I draw the Minister's attention to the fact that a resolution is now before the European Parliament calling on the Community to reject United States claims. I hope that he will make it clear in his speech that the Government welcome this motion.

Secondly, the Government must make it clear that they do not expect United Kingdom firms to deal with Washington themselves but that, where claims are made, the Government will treat these as matters to be taken up on a Government-to-Government basis.

Lastly, in my view, the Government should insist that all letters such as those put out by IBM, DEC UK Ltd., Texas Instruments and others that seek to impose within the United Kingdom the laws of the United States should be formally, and at the Government's request, withdrawn.

United States attempts to impose its law on firms in Britain undermine the effectiveness of the existing international organisation COCOM; they constitute actions that are inappropriate as between allies; they are damaging to United States-United Kingdom relations at a time when anti-Americanism is becoming all too prevalent in our society; they directly infringe United Kingdom sovereignty; they are illegal under international law; they increase the pace of United States high technology colonisation of Europe and they seriously damage the economic viability and trading capacity of the United Kingdom's already depleted high-tech industry.

The question that the House wants to have answered, after the Government have been doing nothing very effective, is: what are the Government going to do about it?

4.48 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: `recognising the importance to employment, defence, education and the economy of a strong high technology sector, applauds Her Majesty's Government's actions to support this sector through the provision of a favourable climate for business and through support for research and development; endorses Her Majesty's Government's continuing efforts to prevent, by discussion on a case-by-case basis, the extraterritorial imposition of United States law on United Kingdom firms exporting high technology from the United Kingdom; and supports the Government's initiatives to encourage British high technology industries and their intention during the Presidency of the Council of the European Communities to co-ordinate policies to promote European high technology co-operation.'. The hon. Member for Yeovil (Mr. Ashdown) has raised a very broad subject, which I imagine hon. Members will want to take further in the debate. I look forward, with the leave of the House, Mr. Deputy Speaker, to the possibility of catching your eye, perhaps briefly, to respond to those comments.

The hon. Gentleman has concentrated his remarks on one aspect of high technology, although the motion is quite widely drawn. It would, therefore, seem appropriate to address some of the wider aspects in addition to the points that he has made on extraterritoriality. I share his concern about the cases where extraterritorial difficulties arise, but I want to begin by putting the points that he has made into a broader context.

We have an expanding high technology sector which the Government have taken a number of measures to stimulate and foster. It is an industry that benefits from the multiplicity of commercial and scientific links that this country enjoys with the United States. It is against that wider background that the issues raised by the hon. Gentlman need to be seen.

I shall begin by saying something about United States export controls. We all agree that they represent an important topic. Certainly I welcome the opportunity to restate the Government's position. However, those controls need to be seen in the context of our close links with the United States. They also need to be seen against the background of United States concern, which this Government share, about high technology goods reaching the eastern bloc.

There is, of course, a well-tried mechanism to deal with those concerns in the COCOM framework, about which I shall say something in a moment. I wish to remind the House of the many steps that my Department is taking to make United Kingdom high technology firms less vulnerable in their dependence on United States technology and on sourcing from the United States, by providing support for research and development and strengthening our links with high technology industries in other member states of the European Community, which the United Kingdom currently chairs in its presidency role.

We have very close and harmonious relationships with the United States not only in trade but across the whole realm of defence policy. As the hon. Gentleman has said, high technology is very much an international trade. Of course, we have very close commercial links with many important United States companies that are established in this country; IBM, Ford, General Motors and many others have important British subsidiaries. British companies have a powerful presence in the United States and, indeed, this country is the largest foreign investor in the United States. At present we enjoy a positive balance of trade with the United States.

In high technology this community of interest is reflected in the COCOM arrangements, which have been in existence for nearly 40 years. As the House knows, the arrangements cover exports to Warsaw pact countries and to China of strategically sensitive goods and technology, including those designed for civil purposes but also having military applications. The controls are co-ordinated through the Paris-based COCOM committee which provides the framework for maintaining agreement between NATO countries on the operation of a controlled list of products. True, COCOM is an informal body, but it provides an essential link in co-ordinating the interests of the United Kingdom, the United States and other countries in their approach to high technology exports. The controls we have are our own, of course, and are imposed through the Export of Goods Control Order 1985 which, as the House will remember, was debated in Standing Committee in July last year.

So the problem in a general sense of controlling sensitive technology is not new. In the United Kingdom's view the right way to go about it remains through multilateral co-operation agreement in COCOM. Against that background, unilateral action on extraterritorial claims to jurisdiction is harmful to such agreement. Because the United States is a dominant economic power in the world and a major source of high technology, the extraterritorial nature of its export controls inevitably leads to tension and dispute.

In our view the only law that applies in the United Kingdom is United Kingdom law on which our own controls are based. We reject out of hand claims by the United States Government to have jurisdiction over United States goods or goods based on United States technology while they are in the United Kingdom or when they are being exported from the United Kingdom. If we could compel the United States Government to withdraw this claim the problem could be eliminated easily, but we cannot. We have tried, and will continue to try, to persuade the United States Government to change their policy. Where we judge that it is the right response we shall not hesitate to use the Protection of Trading Interests Act 1980 to safeguard United Kingdom sovereignty.

Mr. Ashdown

If that is the case—and it is the same case as has been deployed before — surely the Government accept that they could ask United Kingdom firms such as IBM and DEC to withdraw those letters. Why have the Government not done that? Why do the Government even accept the possibility that the United States Government should be able to control the movement of the computer owned by the British Government from Harwell to London university?

Mr. Pattie

The hon. Gentleman made both those points in his speech. I shall come to them in my speech.

Other hon. Members may raise the same point as he did about why the British Government do not have more frequent recourse to our powers under the Protection of Trading Interests Act. We have those powers. They were used originally to direct companies in the United Kingdom not to comply with the extraterritorial provisions of the United States export administration regulations in the Siberian pipeline affair. They could indeed be used again, if that seemed the best way to protect overall United Kingdom interests in a particular case. But hon. Members should be wary of the temptation of thinking that use of the Act to impose a general ban on compliance— which could take no account of the commercial and other interests in broad cases—would offer the right solution to the joint problem.

If I may explain, the usual method by which the United States enforces its extraterritorial controls is by blacklisting companies that do not comply, making it an offence to supply them with United States-controlled goods. Use of the Protection of Trading Interests Act could strike at the application of blacklisting to United Kingdom companies; but the main sanction—denial of supplies direct from the United States—would not be touched. The United States reaction to a direct and comprehensive challenge to its law cannot be predicted, but any indiscriminate use of the Act could jeopardise British companies dependent on continued access to United States goods and technology. The Government therefore believe that a case-by-case approach to problems best serves United Kingdom interests. And, unless a major dispute, like the Siberian pipeline affair, makes confrontation unavoidable, the Government consider that in general it is best for companies to be left free to make their own commercial decision as to whether to comply with United States rules.

United States export controls create uncertainty and the extra burden of compliance is a disincentive to sourcing from the United States. That is a factor which, inevitably, companies here have to consider, and it is a point which the United States Government should reflect upon too. It is in no one's interest that the flow of goods and technology between trusted allies should be distorted by unjustified and over-zealous attempts to impose unilaterally another layer of control, bureaucracy and legal claim.

The hon. Member for Yeovil has also urged the Government to refuse to allow United States Government officials to inspect United Kingdom companies for compliance with United States laws. In doing so, he is referring to the proposals by the United States Government to introduce a distribution licence system, under which United Kingdom companies importing United States goods would have the option of applying for the status of approved foreign consignees and so be released from the need to import high technology goods from the United States under individual United States export licences. I put it to the hon. Gentleman that this could be a benefit. But its cost would be that United Kingdom companies' books might be open to inspection by United States Government officials monitoring compliance with the United States rules.

The United States Government have made an approach to us to ask whether we would be ready to countenance such inspections. A proposal that foreign inspectors should visit companies here to monitor their compliance with foreign rules can never be easy. We thought it right, as a first step, to consult our own high technology industries; and I can tell the House that, while not enthusiastic—perhaps not surprisingly—they would not wish to be denied access to the proposed United States licensing facility. To answer the hon. Gentleman's point, that is why we have taken some time. It is very easy to make the instant, emotional response, which is to say that we deny the jurisdiction and therefore we deny the request. But, as has been made clear, the Government are considering the United States Government's request. I can say now that it is not by any means a request that could be granted unconditionally. We should not get our difficulties in this area out of proportion. We see eye to eye with—

Mr. Geoffrey Robinson (Coventry, North-West)

The Minister is aware that his hon. Friend the Minister for Trade has written to me on this matter, and I understand that in some respects it is a difficult issue. However, he will appreciate that this is something that the Opposition could not countenance or agree with. Is the Minister saying, because I could not quite follow him, that in principle his Department is now prepared officially to agree to United States Department of Commerce officials coming here to inspect the books of British companies? Provided that the specific case is satisfactory, is the Minister now prepared in principle to concede that major issue of principle?

Mr. Pattie

No, I am not saying that. I am saying that we thought that it was right first to ask the industry what it would like. We have had previous debates on this matter, particularly in the context of the Systime affair. On that occasion I sought to make it clear that it would be to nobody's advantage to take action with or against the United States Government that had the effect of putting a British company on to a particular blacklist, which effectively would mean that it was denied access to the material that it wished, thereby causing it to be put out of business.

I urge the hon. Member for Yeovil and the House to put the matter into a broader context. The Government's view has always been that on matters of this kind the nation's sovereignty should be respected. We believe that United States claims to jurisdiction over re-export are an infringement of our sovereignty and that they are contrary to international law. I assure the hon. Gentleman that this Government will continue to do their utmost to protect British interests, and we stand ready to support any United Kingdom company that in the course of its legitimate trading has fallen foul of United States extraterritoriality.

It was interesting to note that during the hon. Gentleman's speech, with its echoes of the Systime debate, he said that he had received letters. He felt unable to name companies, but he said that he had a list of companies and that he had been in correspondence with them. That is precisely the nub of the problem. We are not saying that companies should deal exclusively with the United States Government, but if the companies who have written to the hon. Gentleman would care to write to me and make arrangements to come and see me, I should be very happy to see them. The practical question is whether or not they are prepared to comply with the requirements of the American multinational companies. That is primarily a question for them. However, the question whether we shall admit United States Government inspectors to carry out inspections is a completely different matter, and we shall not gladly comply with such a request.

The Government asked whether we would consider using our presidency to draw together a European position. We certainly would. This matter is causing concern to our partner countries in the Community, and we could well take an initiative on it during our presidency. We have been considering the matter, and I am glad to be able to respond positively to the hon. Gentleman on that point.

I shall be prepared, particularly if the companies concerned will make representations to me, to examine again the United States circulars, to raise the matter with the various American companies and find out whether they would be prepared to vary the terms of those circulars. The companies that are making these requirements need to be aware of the fact that, although they are established in the United Kingdom and are trading in the United Kingdom — we are delighted to have those companies here; many of them have been here for many years and they make a valuable contribution to our economy — they need to consider whether the continuation of such a policy is in their best interest, or in the interests of the industry in general.

It would help a great deal if there could be a lessening of the dependence of United Kingdom companies on supplies from the United States. One of the ways in which this can be promoted is by developing greater co-operation throughout Europe. As the hon. Member for Yeovil knows, we have developed in recent years a considerable number of programmes. The most recent is the series of EUREKA programmes. As we have the presidency of the European Community, we are taking a very active role at the moment in developing the research and development programme. We shall need to obtain agreement for the European Community research framework programme at the Research Council meeting on 9 December. If we obtain that agreement, it will be quite a major achievement.

As for domestic support, may I make it quite clear that the Government do not envisage activities in Europe— be they in EUREKA or in the European Community research framework programme—ESPRIT, RACE and BRITE — as a substitute for activities in the United Kingdom.

Mr. Ashdown

Will the hon. Gentleman give way?

Mr. Pattie

May I just develop this point? It is very important for the House fully to understand that the Government are not looking, through greater participation in European programmes, for means of diminishing the national base of research and development. If that were to happen, before very long we should cease to have the ability to participate in these programmes.

When one looks at the support that my Department has given to research and development it is interesting to note that in 1979–80 that support was £143 million and that in 1985–86 it was £440 million—a doubling, in real terms. People write learned articles, or what they claim to be learned articles, alleging that not enough is being spent by the Government on research and development and that this, and this alone, is one of the causes of our problems in the world of high technology and in other forms of technology. I dispute that. Significant sums of money are spent on research and development by the Government, but the problem is that British industry does not spend on research and development anything like the comparable figures that are spent upon research and development by either Japanese or German industry. This country must find ways to encourage industry to spend more on research and development and at the same time to encourage the City to take a more favourable view of investment in research and development.

I do not believe that the problem simply relates to the level of expenditure on research and development. When I carried out my consultations during the run-up to the first EUREKA conference and asked various people in industry what they would like the EUREKA movement and series of programmes to be, it as extremely interesting that they said to me, "Please, not another research and development programme." In their view, research and development programmes are coming out of companies' ears. What they were looking for, and what they have got, is a series of programmes that are close to the market place, that are therefore market-related and that have in view an actual product and a service.

The problem in this country over many years has been not so much the level of our research and development or the amount of innovation, which compares favourably with that of many other nations, certainly in terms of the number of Nobel prizewinners that we have produced, as our inability to exploit our research. We have failed to pull through the science into applied technology. When that is added to the fact that our domestic markets are too small to support many of our high technology firms, it is obvious that United Kingdom companies need to look much more towards European collaboration and markets as the springboard for world markets. Therefore our policies and our industrial research and development expenditure are directed towards stimulating greater European collaboration and a greater investment in research and development by industry from within its own resources.

In Europe, there are some areas of technology, especially over the harmonisation of standards, where there is considerable additional value in having a Community research and development programme.

Under the proposed changes to the treaty of Rome agreed last year, it is recognised that the Community must devote a greater share of its research and development to promoting the competitiveness of European industry in world markets. That has been recognised in the Commission's proposals for a new Community research and development framework. The Government are committed to a gradual growth in European Community research and development and will seek agreement on a new framework programme during the current presidency. The most significant European Community programme is ESPRIT — the European strategic programme for research and development in information technology. The United Kingdom has done extremely well in ESPRIT, being involved in 135 of the 200 projects.

Similarly, my Department proposes to support RACE — another acronym for the research on advanced communications in Europe programme—in which again United Kingdom companies have done well, at a suitable level, reflecting the sharing of collaborative research and development, the opening up of markets and the forging of standards for future telecommunications networks.

The BRITE programme—basic research in industrial technologies for Europe— is also important and allows the more traditional industries to benefit from recent advances in technology.

I have mentioned EUREKA, which is a framework programme involving 19 countries, which seeks to encourage European collaboration on market-led high technology projects, thus helping to increase Europe's competitiveness with Japan and the United States. Seventy-two projects have been announced, 32 of which involve British companies. The EUREKA project information net can help British industry to find partners for collaborative projects and to inform them of other projects in which they might wish to participate. Where firms involved in a EUREKA project discover a market barrier to commercial success, Governments can act as a lobby to resolve that problem. That is one of the most important future developments for EUREKA as a market-opening device to get the internal market that we all wish.

Mr. Michael Marshall (Arundel)

I wonder whether, in the course of my hon. Friend's further remarks, he might wish to reflect on our success in European Space collaboration. I know that he is following the work that the British National Space Centre has in hand and which looks towards the future, but does he accept that we have a great success story on which we can build, and which will allow us to collaborate with the National Aeronautics and Space Administration and with the United States generally?

Mr. Pattie

I am grateful to my hon. Friend for that intervention, although he has anticipated a point that I was about to make. It would be remiss of me if I did not mention the Alvey programme, the second annual conference of which was held just recently at the university of Sussex. It is the largest collaborative programme we have, and it brings together my Department, the Ministry of Defence, the Science and Engineering Research Council, various parts of industry and also higher educational institutes in collaborative projects in four main areas of information technology. Some 187 full industrial projects have been approved, and 116 academic-only projects. Public funds of £200 million are provided by the Government, with the remainder coming from industry.

One of the most successful research schemes of recent years is the joint opto-electronics research scheme — JOERS— which is a pre-competitive joint research scheme between industry and higher educational institutions. The take-up of funds — £25 million — has been rapid with many applications of high quality being submitted. Both the motion and the amendment concentrate on higher technology, and the aerospace industry is a very important user of various aspects of it. In March 1984, the Government provided £250 million in launch aid to British Aerospace in respect of its participation in the design and development of the Airbus A320. By the end of May this year, 134 A320s had been ordered by 12 different airlines. That is encouraging and discussions are taking place on the possibility of support for future members of the Airbus family. Launch aid funding of £60 million has also been provided for the new fuel-efficient IAE V2500 in which Rolls-Royce is participating, and for Westland for its participation in the EH101 multi-role helicopter.

As my hon. Friend the Member for Arundel (Mr. Marshall) has said, Government support for space research and development is aimed at creating an industry capable of exploiting the rapidly growing commercial opportunities by producing space hardware, software and services. The British National Space Centre was formed in November 1985. Total Government expenditure on space in 1985–86 was £100 million, of which the largest share, £70 million, was provided by the Department of Trade and Industry. But space development is expensive, and it is therefore essential to work through the European Space Agency. The British contribution to the European Space Agency, administered through the British National Space Centre, was about £80 million, of which the Department of Trade and Industry contributed £60 million. That contribution represents about 80 per cent. of British Government civil space research and development and about 15 per cent. of the total ESA budget.

Mr. John Wilkinson (Ruislip-Northwood)

Am I right in thinking that the director of the British National Space Centre, Roy Gibson, presented his British space plan to the Department of Trade and Industry on 4 July? If so, when does my hon. Friend think that he can make a decision on the basis of the proposals in that document? Will he be making a statement to the House? If not, how will we be made party to that final decision?

Mr. Pattie

No, it is not true that Roy Gibson presented the plan although that was his aim. I understand, however, that I am about to receive it. My colleagues and I in the Department will wish first to consider it carefully and will try to arrive at a decision, which may be taken before the House reconvenes. I should be happy to give an assurance to my hon. Friend that there will be a statement on the Floor of the House, but it would be unwise to do so. I am sure that the usual channels will ensure that a debate takes place if that is the wish of the House.

We are conscious of the needs of small firms, and my Department especially welcomes applications from small firms for the various support programmes that we have. In April this year we announced the small firms merit award scheme for research and technology. It draws openly and unashamedly on the experience of the United States and on what is known over there as the small business innovation research programme, which has worked well. The first two examples will cover the areas of biotechnology and instrumentation for a one-year trial.

It is also important for the House to be aware of the great emphasis that the Department of Trade and Industry places on close co-operation between it and the Ministry of Defence. The Department spends £35 million a year in and through the Royal Aircraft Establishment and the Royal Signals and Radar Establishment at Malvern to provide technical underpinning of aircraft, electronics, information technology and space industries.

We have carried through some important recent developments. Defence Technology Enterprises Ltd. has been set up to license technology in such establishments as the Royal Aircraft Establishment, the Royal Signals and Radar Establishment, and the Admiralty Research Establishment and that has now extended to the Royal Armament Research and Development Establishment. The national electronics research initiatives at the Royal Signals and Radar Establishment bring together researchers from collaborating firms to form strong teams.

I strongly believe in the need to bring the civil sector and the military sector together as often as possible, and that initiative at the Royal Signals and Radar Establishment represents an excellent forerunner of technology transfer programmes to come. The teaching company scheme is an important programme for helping to deal with the problems that the hon. Member for Yeovil referred to in his opening remarks about skill shortages and about improving co-operation between the educational sector and industry. We strongly support the technique of research clubs such as those that I have already mentioned in Alvey and JOERS. That seems to us to be a very acceptable way in which to proceed.

The Government generally believe that high technology and other companies can be assisted by the right economic climate, in which taxation is reduced and devices such as the business expansion scheme are introduced.

On the subject of venture capital it is interesting to note that in 1979 there were only five funds investing £7 million. There are now more than 100 specialist funds investing £270 million a year. That is good news for the high technology sector. We have worked hard across Government to reduce many of the bureaucratic burdens in terms of price, dividend, exchange and many other controls. This is extremely important. Various high technology companies have done extremely well following the privatisation programme, such as British Telecom, Cable and Wireless, British Aerospace, and Amersham International. There is now an upsurge of various companies which are emerging from the academic sector. In that context, it is extremely interesting to note the success of science parks. They have done extremely well, not only in Cambridge but elsewhere, often in contrast to the lack of success of similar attempts in the United States.

I hope that the hon. Member for Yeovil will feel that I have given him good measure in my speech. I fully accept that extraterritoriality is a problem. We recognise that, and are also conscious of the practical difficulties faced by companies that are caught up in such practices. I have given the hon. Gentleman certain assurances, and I hope that he will find them acceptable. The Government are running several programmes to help British high-tech firms to be strong enough to cope with those pressures, particularly through developing co-operation and collaboration with other companies in Europe.

The subject of today's debate is important and I look forward to hearing the views of other hon. Members on matters of common concern. I assure the House that this subject is serious, and that the high technology sector is vigorous and developing. We are very pleased with the progress that it is making.

5.20 pm

Mr. Geoffrey Robinson (Coventry, North-West)

I am sure that the Minister did not expect many Opposition Members to be impressed by that complacent recitation of the recent activities of his Government and Department.

This comprehensive motion gives us an opportunity to discuss a matter that has in recent years aroused intense and growing resentment in the country, in British industry and, in particular, among British industrialists. I am sure that the hon. Member for Yeovil (Mr. Ashdown) will be pleased to know that we shall support the motion standing in his name and in that of his right hon. and hon. Friends.

When we debated high technology on 15 May 1985, it was again against the background of the infamous IBM letter of December 1983, and of the earlier raging controversy over the John Brown Russian pipeline contract. Those, and a growing number of other similar events, have demonstrated the American Administration's now octopodal interference in the high technology trading relationships of Britain with other countries, in addition to the COCOM member states.

Since our last debate, matters have degenerated further. Far from backing off from its claim to extraterritorial and retroactive imposition of United States law, the Reagan Administration seek to extend it and to institutionalise it with a step-by-step policy of effective commercial coercion orchestrated by Mr. Richard Perle at the Pentagon, and encompassing not just the United States Department of Commerce, but the United States Customs and Excise and, apparently, even the CIA.

The latest step to be taken by the United States authorities—the Minister will know about it, as I have been in touch with the Minister for Trade—involves a set of new regulations for the distribution licence, a system of bulk licensing that allows American exporters to export specified goods to approved foreign consignees without the individual transaction approval that the United States authorities usually require.

In his letter of 30 June, I was informed by the Minister that the system is designed to free the companies concerned from the delays and expense of applying for individual licences. No-one—not even this gullible Government or Minister —would swallow that. The simplification procedure is nothing more than a sprat to catch a mackerel. The real purpose, long hankered after by Mr. Richard Perle and his associates, is that United Kingdom companies that accept those new regulations would be required to accept audit visits by United States Department of Commerce officials.

Furthermore, as the Minister has frankly admitted to the House, the United States Government have sought this Government's agreement to visits by Department of Commerce officials in order to audit the books of British companies. I asked the Minister whether he had conceded that principle, but I am not sure what his answer was. He seems to be confirming that no such concession will be made by the British Government—[Interruption.] I am trying to put some words into his mouth for him, which he could then use when he replies to the debate.

On behalf of the official Opposition, I say that any acceptance of any such jurisdiction by the Government in order to audit the books of British companies would he utterly unacceptable. It would be tantamount to an official acceptance of the United States' long-standing attempt to have that imposition of American laws on United Kingdom companies accepted. To us, that is unacceptable.

Mr. Pattie

Will the hon. Gentleman address himself to my point, that it is important to take into account the feelings and aspirations of the companies concerned? What would he do if they said that they preferred to continue with the regulations?

Mr. Robinson

I am grateful to the Minister for that intervention. Given the total lack of support given to companies by this Government, I can well understand companies accepting almost anything that would give them some freedom of access to American technology. But the matter should not be approached in that way. The Government should make it clear to British companies that they are standing four square behind them in resisting that unacceptable pressure from America. What would those companies then say? If they felt that the Government were four square behind them and had embarked on a policy of resistance to pressure from the United States, none of them would want to go along with that set of regulations.

As a Minister, the hon. Gentleman bears responsibility for upholding the laws of this country, and he cannot hide behind any temporary commercial convenience. Incomprehensible and feeble as the Minister's position is, he will no doubt try to explain it at the end of the debate.

Following the Minister's intervention, it is even more clear that the Government will not give any categorical assurance. Consequently, we can do little but echo the remarks that have been made about this Government's attitude towards standing up for British industry. Several British business men sought the Government's support in resisting American pressures. They were interviewed in that remarkable "TV Eye" programme, "Uncle Sam's Law". The Minister should consider his intervention against this background. Mr. Colin Hill, a British business man who was under American pressure, sought help from the British Government and from the Department of Trade and Industry. He said: our Government is not strong enough. And certainly our Department of Trade and Industry always gives me the appearance of being like a toothless tiger. I mean, all it does is bare its gums at the opposition. We know that feeling from our debates in the House.

The same point was put later in the same programme, perhaps even more appositely, by another business man, who said that he did not blame the Americans for defending their interests but What I do blame is the British Government for being so wet, and frankly so pusillanimous, not to stand up for British interests. That is the reputation shared by the Minister and his Department. It is time that he did something about it.

But I am asking that of a Government who, in their supine appeasement of the American President, agreed to the F111 raid on Libya from British territory, and am asking it of a Government who have a total lack of faith in British technology or in British managers and workers. They forced through the sale of Westland to the Americans and tried to do the same when it came to disposing of Britain's vital motor vehicle industry to General Motors and Ford. Consequently, there is not much hope of support for British industry from this Government.

It is not to be wondered at that a Government who are opposed to the very idea of an industrial strategy for a high technology centre should be so wet, half-hearted, hesitant and lacking in self-confidence when it comes to opposng the United States' attempt to impose extra-territorial law on trade in critical high technology components which is being conducted by British industry.

But even if we resisted the Reagan Administration's most overt attempts to ride roughshod over our commercial interests — we could perhaps do that occasionally on a case-by-case basis — as long as that American law stands, the problems experienced so acutely in recent years by the microcomputer industry would persist. I accept that point. I agree with the Minister that we must deal with the real world as we find it. We must be tough about it, not supine.

I would put one question to the Minister. If there are cases where it could be considered to be illegal, especially in the conduct of some American companies or even American agencies such as the CIA —perhaps there is no evidence for that—and the Pentagon and so on, is there no case that we can take to the International Court? Are there no grounds on which we could seek a legal resolution of a problem which seems irresoluble other than by legal action? Even if we do all the things which were valiantly called for by the hon. Member for Yeovil, it will not solve the problem. Even if we get the letters revoked or have Government-to-Government confrontation instead of confrontation of the Minister and a United States Department of Commerce official, I promise the hon. Gentleman that it will not solve the problem. I leave it with the Minister. He should not be as afraid to take on our strong and powerful allies as he appears.

The history of the international relations of the United States Department of Commerce has shown it to be sensitive to actions that call into doubt the exactitude of American commercial behaviour. Nothing showed that better than the action we took on American steel imports which quickly made the Americans rescind the legislation that we considered directly infringed the rules of the general agreement on tariffs and trade. I do not necessarily expect an answer from the Minister tonight. I am sure that our correspondence on these matters will continue. We are definitely looking for a much more vigorous and determined pursuit and defence of British national interest than he or his Department have shown to date.

That can only be half of the issue. The second part of the motion must not be dominated by the first part. What is needed, beyond the negative defence of our interests to the best of our abilities, is a positive and determined British effort to build up a British and European high technology base to lessen, as rapidly as possible, our dependence on United States technology. For once, there is no alternative. However, instead of pursuing that course with vigour and a real commitment to British science and technology, the Government have preached the value of low-wage service industries and boasted only of their commitment to the creation of a low-tech and even a no-tech economy. The fearsome prospect for the country is that in this one area the Government are likely to have achieved their policy objectives. The whole of the distinguished British scientific community has felt so threatened that it has launched a Save British Science campaign supported by over 100 fellows of the Royal Society, 11 Nobel laureates and a substantial number of vice-chancellors and presidents of learned societies.

Mr. Bill Walker (Tayside, North)

The hon. Gentleman will be aware that some of the leaders in that campaign, especially one I debated with on radio, were unaware of the amount of money that the Ministry of Defence spends on research and development every year. He did not take that into account and that is nonsense because of the importance that it has for high technology.

Mr. Robinson

That is a valid point. This country spends far too much on defence-oriented research and development and has done so for far too long. The ignorance of that fact on the part of one fellow of the Royal Society or a supporter of the Save British Science campaign in no way detracts from that. Indeed, the continuing heavy commitment to defence research and development explains why vital areas of civil research and development, including those represented among the coordinating committee and supporters of the campaign, are being sadly neglected. Later in my speech I shall give the hon. Member for Tayside, North (Mr. Walker) some examples from the campaign literature which I am sure he has seen but has not found time to read.

I should like to deal with one more of the Minister's arguments. It is becoming tiresomely familiar to all hon. Members. The argument goes along the lines that, although we have a long and distinguished record of basic scientific research, as a nation we have failed to capitalise on British inventiveness by translating the research into marketable products for world trade. That is a fair representation of how the argument goes. It is my view that we trumpet rather too much about our scientific research and its successes. In that area, as in many others in today's world of rapid and extensive development, there can be no room for such complacency.

Even if we accept, for the sake of argument, that Britain has done well at fundamental scientific research and less well at exploiting it, it is utterly perverse logic to argue that we should cut basic research, which is what we are doing. It is perverse to argue that by hacking to pieces what we are good at and by chucking overboard decades of priceless scientific fundamental research, we would be able to improve our record in exploiting it. The argument does not begin to stand up.

The attack on British science is part of the Government's attack on the whole educational framework of the country. Its consequences are felt in the critical shortage of mathematics and physics teachers in our secondary schools, in the shortage of electronic, computer and engineering graduates from universities and colleges of further education and now in the haemorrhage to posts abroad of many of our most brilliant research graduates.

As I promised, I shall give a few examples from the Save British Science campaign document. It gets better with rereading. One example deals with inorganic chemistry where, in the assessment of one of the fellows of the Royal Society, 'the best of the British inorganic chemists in the age group 30–45 are now employed by American universities of high repute.' A further example comes from the head of an important department of Glasgow university. The extent of the move abroad, the brain drain of British research, is quantified in this way: Of our 15 British Ph D graduates since 1981 only 3 are working in science within the UK 10 are in the USA and one is in France. One further example is about a lost "new blood" appointment where a "superb candidate" according to the head of department, was being interviewed and was offered a place in Lancaster physics department in the area of experimental low-temperature physics. The reasons given by the superb candidate for not taking up the offer, as set out in the document by the head of department, were as follows: I understand that the reason for his change of heart lay not so much in the inadequate salary per se—although this doubtless played a part—but in the belief that the British university system was being allowed to collapse … (he will) continue his career in North America.

Mr. James Hill (Southampton, Test)

Some of the facts from the university of Southampton in the latest University Grants Committee allocations for departments that are really making their way in scientific and development work, show that the university got £750,000 and it raised £13 million by doing outside work in science and development. I do not think that the denigration of our universities is helpful.

Mr. Robinson

I am sure that the hon. Gentleman's remarks concerning the university in his constituency are well noted. I shall refrain from telling him about the outstanding record of Warwick university in my city. If the hon. Gentleman cares to check, I think that he will find that there are some quotations from Southampton making the same points. It is not me who is making the comments but those who are working in British universities and are concerned about maintaining and developing British science in the universities.

The hon. Gentleman should address to those concerned his queries and remonstrations as to whether documents of that kind are harming science. I am sure that he would be rapidly convinced to the contrary. If he reads the report again he will read the conclusion: Our conclusion is not only that damage has been done but that some of it may now already be irreversible. The lead even in technologically important areas of research has been allowed to slip to other countries. The Government are presiding over a brain drain of Britain's top scientific talents, the extensive damage of which will be felt over the next decade and beyond, when it will become clear that Britain has wasted a golden opportunity to capitalise on its strong research capabilities, and to play a leading role in the creation of the new technologies on a Europewide basis.

We accept that the scale of resources required for research and development, as well as the size of the homogeneous market required, will mean that the organisation and exploitation of the next generation of scientists and technologists must take place on a European scale. That is why, from the beginning, we have supported ESPRIT and RACE and BRITE. The Minister also referred to RACE and BRITE, which are lesser-known but still very useful European projects. We condemned the Government when they dragged their feet over the EUREKA project when it was initiated by the French. Equally, we welcomed the Government's change of heart and the backing they are giving to EUREKA during this important period of the British presidency of the Community.

What continues to puzzle us — I hope the Minister will address himself to this when he replies—is how we shall sustain a high profile active role in Europe if the overall funds from the Department of Trade and Industry and Government support for innovation and other schemes, are not increased. The Minister has refused to tell us whether the funds will be increased and if so by how much. He will be aware that a good deal of anxiety persists in industry as to whether the Government will continue to support ESPRIT and more importantly, EUREKA. Such support will require new additional money to be found from the existing DTI budget at the expense of other national programmes.

The Minister made it clear that he did not consider the European projects as substitutes for national projects but he has been extremely coy about how much money the projects will cost and whether there will be adequate money for both sets of programmes. I have raised this matter with him on a number of occasions, most recently at Question Time on 18 June 1986. With regard to the companies participating in the European projects, he gave me the assurance: we are not talking about alternative or substitutional activities. It is important to put that on the record." —[Official Report, 18 June 1986; Vol. 99, c. 1019.] He put that on the record again today.

If that is the case—industry will be relieved that it is so—there must be new additional money for EUREKA.

Following the completion of the Bide committee's report later in the year there must be new and additional money for Alvey. I urge the Minister not to postpone the new funding which is urgently required on Alvey. He will be aware of the immense damage that was done by the five-month moratorium which was introduced—I give him the benefit of the doubt — prior to his taking over his position. Later in the year, industry and universities will be looking to the Government for urgent and positive decisions on Alvey.

If we consider the scale of Government resources needed, I draw to the Minister's attention two instances which give us some idea of the scale of competition which we will face. On 1 July, when the latest EUREKA project was announced—to a general welcome, as the Minister said — the Financial Times stated that the French Government expected to pay 40 per cent. of the near £400 million which French companies are expected to spend on EUREKA. That is the scale of the French involvement. It comes on top of the five times greater spend by the French on electronics. German expenditure on support for electronics is running at over three times the British level.

Mr. Phillip Oppenheim (Amber Valley)

rose—

Mr. Robinson

I will give way in a moment.

The Minister has said that he is committed to additional programmes and in his reply to me during a recent Question Time, he gave a commitment to meeting industry's requirements for EUREKA. Can he tell us where the money will come from, how much it will be, and what he means by "satisfying industrial requirements"?

Mr. Oppenheim

I thank the hon. Member for giving way. A moment ago he said that the French Government spend five times what our Government spend on their electronics industry. Is he aware that a vast proportion of this is spent to make up the losses in the nationalised French electronics industry? It was nationalised in the 1980s and previously had been profitable, but it is now making massive losses and is costing the French taxpayer a huge sum of money.

Mr. Robinson

The hon. Member is not aware that French research and development represents 3 per cent. of its gross national product. Since the war, the French have had a long successful tradition of Government-backed research and development in industry through to bringing products on to the market. In many ways France has set a pattern for us of what can be achieved by positive collaboration between Government and industry. That is anathema to this Tory Administration.

My attention has been drawn by that intervention to the French microelectronics industry. I am sure that the hon. Member for Amber Valley (Mr. Oppenheim), when he intervened to so little effect, overlooked the fact that when the three major semiconductor manufacturers—Thomson of France, Philips of Holland and Siemens of Germany — met in June this year to discuss joint research and development on advanced technology needed to design and make microchips in the late 1990s, no British company was invited. A couple of years ago when the French and German Governments were holding talks about industrial co-operation — talks that led to the important plans for the key design and production technologies wich western European semiconductor makers will need in order to be competitive with the Japanese and the United States in 1995 — the Conservative Government of Britain were venting their bitter spite against any form of public or private cooperation by crippling INMOS as an independent British producer.

The result of the Government's attack on British research and development, their inadequate funding for national and joint European projects, their failure to harness the power of public purchasing for the purpose of developing British technologies is evident, in its cumulative effect, in the massive deficit that we now face on our balance of trade in information technology products. The deficit on the balance of trade has grown from £384 million in 1980 to no less than £2.3 billion in 1984.

The Minister may take some comfort from the apparent stabilisation of the deficit in the past couple of years, but he will know, as every expert will tell him, that the situation is getting worse.

The recent Advisory Council for Applied Research and Development publication which dealt primarily with software and of which the Minister is so fond, also addressed itself to the growing critical deficit in information technology. It projected that, by 1990, we shall be facing no less than a £9 billion deficit on our balance of trade in information technology products. What are the Government going to do about it? We do not expect an answer from the Minister, because the harsh truth is the Government do not know what to do. If the Government wanted a plan, they are forbidden one anyway and above all, whatever is done must not involve any further expenditure. [Interruption.]

I am aware that many Members wish to speak, and I will certainly make haste, I wish to consider two documents which have recently been published by ACA RD — "Software: a Vital Key to UK Competitiveness" and "Exploitable Areas of Science". These documents, which have brought together experts in different areas, make it clear that what is lacking in Britain is a coherent strategy for the development and exploitation of science and technology. These experts cannot bring themselves to say that, as they are contorted by the need to observe Thatcherite semantics. The criticism has been dressed up in the process of consultation, and despite the evidence of recommendations in the software report, the document states that there is no need for Government intervention or subvention. Yet it is clear that six of the principal recommendations of the report need direct Government intervention and indirect Government subvention.

Rather than set up a planned, independent procedure for the valuation of British science, the Government have sneaked through, in a Cabinet Office document, a science and technology assessment office. Nobody is clear as to the exact purpose of this office. It is significant that, on the same day that it was announced, Mr. Fairclough let slip in his evidence to the House of Lords Select Committee on Science and Technology that the Government had announced £5 million further cuts in their research funding. No doubt Mr. Fairclough has only just started.

The combination of the Prime Minister's craven subservience to President Reagan and her pathological antipathy to constructive Government and industry cooperation make it impossible for the country, under this Government, to develop and carry through a coherent industrial strategy.

Such a strategy must be driven by three engines of recovery — research and development, training and investment. In all of those the Government have a major role to play. The next Labour Government are pledged to those policies, which will halt the decline of British science and high technology. The implementation of those policies awaits only the sure and certain victory of the Labour party at the next general election.

5.49 pm

Mr. Richard Page (Hertfordshire, South-West)

I congratulate the alliance on choosing this important topic for debate. I must confess some surprise that the hon. Member for Yeovil (Mr. Ashdown) took an important but narrow point in the motion. I was hoping that we might be given a little insight into the Liberal party's policies on information technology.

I want to know whether the Liberal party has moved on from the days of the Lib-Lab pact when, as the House knows, it supported the Labour party when it spawned the National Enterprise Board when the Government of the day went out to pick high-tech winners.

I take the strictures of the hon. Member for Coventry, North-West (Mr. Robinson) slightly awry when I think of the companies that were chosen. The names of those companies that went bankrupt should be inscribed on a brass plate so that politicians can constantly look at them and be reminded of their own fallibility. I do not know how many tens of millions of pounds it cost the taxpayer, but it was a great number.

Having said that, I recognise that we need a balanced and dynamic programme for high-tech research, if Britain is to maintain its position as an industrial power. For any country to have a high-tech policy it must have an efficient communications system to communicate data throughout the country and, if required, on through the rest of the world.

For that reason, Conservative Members should take considerable pride in the fact that we brought about the improvements in British Telecom by its privatisation. We did that just in the nick of time. The delays in installation, the poor quality and the few choices of equipment were becoming a scandal. There was no way that the vast sums of money needed to bring about the new systems could have been generated out of earnings and the Treasury was reluctant to find such vast sums of money from the taxpayer. As we know, there is no way that the value added network services, which are now doing such a valuable job throughout Britain, could have been allowed without the liberalisation of the system.

It is interesting to note that the parties responsible for the debate tonight had their usual voting pattern on that measure. Some voted for it, some against it, and some abstained. I think that that covers all the possible options. For the record, I should point out that BT is now providing the Treasury with £1.3 billion a year, near enough double what it was producing when it was a nationalised industry. That point should be repeated time and again.

I hope that, when the hon. Member for Stockton, South (Mr. Wrigglesworth) replies, he will mention what he sees as the future of BT if and when the unlikely event occurs that the Social Democratic and Liberal parties have a say in its future.

Mr. Stuart Randall (Kingston upon Hull, West)

Does the hon. Gentleman agree that under the new privatised regime, domestic telephone charges have gone up?

Mr. Page

Yes, they have, but the formula is such, as the hon. Gentleman knows, that the overall bill has not changed and, if inflation continues to fall, telephone bills will come clown.

Mr. Bill Walker

Does not my hon. Friend also agree that telephone bills have always gone up? I can never remember them coming down.

Mr. Page

Yes, that is a fact of life. The only thing that I have noticed recently that has come down in price has been the second-class stamp.

I have already pointed out what would happen if the Government started to try to second-guess the market place. But there is no doubt that, if we are to remain an industrial power, our industries must be willing and eager to embrace the sunbelt sector.

The predictions of the market for information technology and electronics vary, but everybody agrees that, whatever the figure, it will be huge. To secure a fair slice of that market, the Government have already played an important role in encouraging companies to introduce new technology into their methods of operation and the CADCAM and robotic programmes are examples of what they have already done.

In addition, as my hon. Friend the Minister has already mentioned, in 1983 the Government launched the biggest collaborative research programme that Britain has known since the second world war — the Alvey programme, which has pulled together the universities and companies to combine theory with the demands of the market place.

As my hon. Friend knows, that programme comes to an end in 1988 and talks are already taking place on Alvey mark 2. I appreciate that there must be an evaluation of the effectiveness of that programme, but I want to echo what has already been said by Opposition Members. I hope that my hon. Friend will announce his decisions as soon as possible, for a variety of reasons. One is that research teams take a little time to put together. They cost money to bring together, and, as their programmes come to an end, they want to know whether they will have a continuation or whether that is the end of the line for their project.

Let me make one further suggestion to do with Alvey clubs. At the moment, there is a general feeling that there has been a little too much emphasis on the supplier input rather than on the user input. I hope that when my hon. Friend comes to make his decisions on that point he will bear that in mind. The field of opportunity is probably larger at the moment on the user side than on the supplier side.

The vital role that Government have to play is to ensure that the United Kingdom competes successfully with the other two major powers, the United States and Japan, who have not only been making most of the technological discoveries that have recently been brought before us but have been bringing them to the market place with great effect. That has led our Government to seek the support of our EEC partners and with it a market potential to match that of the competition. That could be the answer to the extraterritorial question. If we have our own continental alternatives, we shall not have to go down the route of all the legal hassle and argument with the United States.

As has already been mentioned, one of the participating programmes is that of ESPRIT, which is similar to the Alvey programme, and must be the way in which the huge investments needed for this type of research can be found. The other, which puts a more commercial face on research, is EUREKA. Any collaboration must have an end in view — a product that can be bought by the customer, particularly in the EEC, and, I hope, in the rest of the world. I am glad to hear that my hon. Friend emphasises the need to exploit those discoveries.

The hon. Member for Coventry, North-West made great play of the Save British Science campaign. It has its particular arguments, but he did not read out—this is why the Alvey programme is successful—that the theme of the Government's pronouncements on research is that support depends upon perceived economic benefits. If we are to compete with the rest of the world, we must make a product that will eventually be bought. Vast sums for pure research that have no financial benefit at the end of the day cannot be funded for ever. I believe that the EUREKA programme is attacking the matter in exactly the right way.

The theme running through the speeches of Opposition Members is the desire to become involved in the use of taxpayers' money, whether by way of nationalization— another phrase that is used now is "social ownership" —a national investment hank, which is rumoured, or the new technological enterprise corporation. That still adds to a severe case of the politicians' disease of them knowing better than the experts in the industry. I hope that the Government will follow the path of providing support but not of going into the realm of endeavouring to pick winners. I believe that Government can only lay the ground rules and create the framework. British people and British companies will provide the growth, wealth and employment for the people of this country.

6 pm

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

A great deal of the debate has focused on the information technology industry. That industry is important to my constituency. For example, IBM, which employs 2,900 people, is the biggest employer in my constituency. That company, along with National Semiconductor, generates work for thousands of people.

I wish to widen the debate a little and talk about the United Kingdom's offshore oil and gas industry and the problems that it faces. With your favour, Mr. Deputy Speaker, the title of the motion — "Defending British High Technology Industries"—allows me to do so. The Government's amendment refers to the defence of British high technology industries. The offshore oil and gas industry must be one of the most advanced industries. On 24 June, the Minister of State, Department of Energy told the Scottish Grand Committee: The industry is taking the lead, particularly in offshore technology, not only in our own continental shelf but in other parts of the world." — [Official Report, Scottish Grand Committee, 24 June 1986; c. 3.] I would not dispute that comment. It is an important industry to Scotland as well as to the United Kingdom. The Scott-Lithgow company in my constituency is building one of the most technologically advanced semi-submersible rigs ever built for drilling purposes in deep water.

The low oil price since the end of 1985 has led to a marked reduction in exploration and appraisal drilling and the deferment and delay of the development of new fields in the North sea, although no significant reduction in production has taken place. A survey of oil company intentions by the Grampian regional council this year suggests that the downturn in development activity will last throughout the whole of this year, 1987 and 1988. That report, commissioned by the Grampian regional council, suggests that there will be an upturn in 1989 and that there will be a large increase in activity in 1990 and into the 1990s.

The problem with such a projection is that the three lean years of 1986, 1987 and 1988 almost certainly mean that a considerable capability that has been built up in the oil service and supply sectors in the United Kingdom, especially in Scotland, will not survive to 1989 to enjoy the benefits of an upturn in the market. Scotland is already seeing the redundancies coming through. Britoil recently declared redundant 400 of its employees in Glasgow. Forty of those employees were senior technologists and managers. The company gave them an hour to clear their desks.

Aberdeen, which is an employment bright spot in Scotland—male unemployment is less than 10 per cent, which is a vastly different position from that which exists in my constituency and others on Clydeside — is suffering redundancies in the oil and ancillary industrial organisations. An upturn in the market in 1989 will encounter severe shortages in local services and supplies, leading to rapid price inflation and a greater dependence than hitherto on overseas supplies.

My intervention is a plea for a temporary amendment to the tax regime in respect of the North sea, which might help to even out the cycle, to the long-run benefit of the oil companies, the services and supply industries and employment in Scotland and the United Kingdom.

At the moment, oil operators offset the development costs of a new field against the petroleum revenue tax payable on production from that field. However, the oil companies need money up front to develop the field first. Since the drastic fall in the oil price, those companies are saying that it is a simple shortage of cash that is causing them to defer or delay developments in new fields. For my constituents and the rest of Scotland, that spells disaster. If orders are not made, the fabrication yards, the engineering industry and the information technology industry will suffer.

One change to the present tax regime that might help to overcome the problem would be if the oil companies were allowed to offset the development of new fields against the petroleum revenue tax that they are currently paying on existing production from other fields in the North sea. Such a tax regime would provide the oil companies with the money to carry out new development. In order to ensure that the United Kingdom achieves some additional benefit from such a change to the tax regime, it could be limited to projects approved after the announcement of the change and the costs incurred on the projects before the end of 1988.

By that means, the gain to the companies would accrue only to new projects brought forward and implemented later this year, in 1987 and in 1988, not to existing projects already under way, and only to expenditure incurred in that period. That might be a substantial encouragement to some oil companies to bring forward into 1986–88 projects that would not otherwise be developed until after 1989. The state would not necessarily lose tax revenue because it would accrue a tax revenue from the new field. The tax take could be rescheduled from 1986–88 to 1989 and onwards.

There may be some loss of revenue to the extent that the new fields would yield less tax than existing fields. The net outcome for the Treasury would need to be calculated on the basis of likely effects of the tax change and the tax profiles of particular fields. The advantage of such a proposal is that it would directly address the need for cash up front to develop the new fields. Being for a limited period only, it would be a direct incentive to bring forward deferred projects. The limited time would also ensure that the tax concession would be operative only where there was a gain in activity. Also, the delay or loss in tax revenue implied by the proposal would be kept to a minimum by the limited time period.

Given the drastic fall in the price of oil, Scotland, in particular, faces massive employment problems. The industry, including its ancillary activities, is one of the most important and technologically advanced that we have. It has a huge market potential overseas wherever oil exploration takes place on continental shelves or even in much deeper waters.

A positive response is needed quickly from the Government to prevent those worsening circumstances leading to much higher unemployment in the bright spots of the Grampian region.

6.10 pm

Mr. John Wilkinson (Ruislip-Northwood)

I shall not seek to follow the remarks made by the hon. Member for Greenock and Port Glasgow (Dr. Godman), although they are relevant to my speech. He described adequately and with force the impending decline of Britain's first-class sub-sea industry unless drastic measures are taken. I wish to contrast that possibility of decline, which we all hope will not happen, with the undoubted possibilities of expansion, profitability and scientific return from an enlarged space programme on the part of the United Kingdom.

My hon. Friend the Minister briefly alluded to the United Kingdom's space programme in his opening remarks and referred in particular to the inauguration of the British National Space Centre at Farnborough, which has borne fruit under his stewardship. I give full credit to my hon. Friend for that event because it brings us in line with our French and German counterparts, and will enable us to play a better co-ordinated part in the European Space Agency's programme for the next 10 years, which was decided at the ESA ministerial meeting in Rome in December 1985.

The space progammme for Europe, which my hon. Friend approved, was extremely important strategically for the United Kingdom and Europe. Our expenditure on space is to be increased by some 70 per cent. over a 10-year period. Many key decisions were made. One such decision was that we are to continue the development of Europe's launcher capacity through Ariane 5. If the full potential of Ariane 5 is to be realised it should be a man rated vehicle, and this possibility was to be studied. I understand ESA's latest decision is for a preparatory programme to study how Hermes, a manned vehicle to be carried by Ariane 5, could be constructed. It is not merely a question of simple evaluation. It is a concrete programme to prepare for the launch of Hermes. The launch date for Hermes will be in the middle of the next decade.

Furthermore, the breakdown of funding for Hermes was approved in principle at the June meeting of ESA. If reports are correct, the French are to assume 50 per cent. of the responsibility and the Germans 25 per cent., leaving a further 25 per cent. to be divided among the remaining nine ESA members.

The House will recall that the United Kingdom was in the forefront of launcher development. We unilaterally developed Blue Streak, initially as a ballistic missile system. Following the cancellation of the Blue Streak missile, it was adopted by the European Launcher Development Organisation as Europe's satellite launcher. Some eight launches were achieved and then, regrettably, Europa, as it was known, was cancelled. Since then, the United Kingdom has been out of the launcher business.

However, British Aerospace and Rolls-Royce have put to the ESA our proposals for a revolutionary re-usable horizontal take-off and landing vehicle, designated HOTOL, with an exciting new power plant, the commercial potential of which is so great that it must be classified. The power plant is both air breathing in the lower layers and rocket-powered in exo-atmospheric flight.

I do not see HOTOL as a direct competitor to Hermes, but it is important that the British National Space Centre and the Government in their inputs to ESA secure the ultimate development of HOTOL by ESA. I do not think that there need be a conflict with Hermes, which is a more immediate programme. The technology of Hermes is less advanced and its systems less sophisticated than those of HOTOL. To support Europe's participation in the NASA space station— this is a key element in ESA's 10-year programme — the Columbus module, primarily to be constructed by the Germans arid Italians, will be the central European element. The European module and European activity in support of the NASA station will require a manned re-usable vehicle, and Hermes could have real merits.

There are two essential deficiencies in the European space programme. First, until now we have not had a manned space programme of our own. The United States and the Soviet Union recognised the key importance of man in space, which has enabled them to mobilise public opinion and political support for the ambitious programmes they have pursued. The Soviets recognised that to an extreme extent through the development of the Soyuz series of vehicles. They intend to place a permanent manned space station into orbit, probably in two or three years' time. Indeed, Commander Leonid Kizim, the present commander of Soyuz 15, is the first astronaut who has spent over a year in space. He reached that point on 5 July 1986. Another Soviet cosmonaut, a flight engineer, has completed 361 days in space. Clearly, the Soviets have long experience of sustained manned space flight operations, not merely for the greater good of Marxist-Leninism, but for sound strategic purposes. The Soviets' space programme is essentially military in nature.

I hope that the lack of a manned element in Europe's space programme will shortly be remedied through Hermes and HOTOL. It was a shame that Squadron Leader Nigel Wood, who was to have been the payload specialist for the launch of Skynet 4, has had to return to the United Kingdom following the decision to launch Skynet 4 on Ariane. We want an independent European manned space programme, not just that European astronauts should fly on the shuttle, as was done by the German payload specialist for Spacelab, or the French astronaut Chretian with the Soviets. We need an indigenous, autonomous, European manned space programme. Secondly, we must develop the full potential of space technology for our European defence.

The Federal German Minister for Defence, Manfred Wörner, has been at the forefront of efforts to push the European members of NATO towards the development of a European strategic defence initiative. Lieutenant General Jim Abrahamson was in this country yesterday on his way to Brussels in an attempt to goad the Europeans into a more active participation in the strategic defence initiative—and rightly so in my judgment.

In no area is European participation more important than in the development of short-range systems to protect Europe from the growing threat of SS21, SS22 and SS23 ballistic missiles situated in the western military districts of the Soviet Union and in Czechoslovakia and East Germany, against which at present there is no defence. The current negotiations — on intermediate range and strategic nuclear arms reductions— do not cover these weapons.

As part of the European input to the strategic defence initiative, I hope that we will do all that we can to play as full a part as possible in the development of these short-range, defensive, anti-ballistic missile systems which, in this exposed and much threatened continent, we badly need.

In conclusion, I see the need for an expanding European space programme with an enlarged British participation. It could be a major engine for economic growth and above all for the development of new high technology industries. To their credit, the Government have made significant steps in the right direction but their commitment in financial terms has not matched their good sense in political judgment.

If Roy Gibson's national space programme is approved, we are likely to see a doubling of the British space commitment which runs to the tune of some £100 million at present. However, we spend £40,000 million on social security. A lot of the money goes straight down the drain. If we compare that prodigious expenditure with the paltry amount which we invest in space—the technology of mankind's future—we can see the lack of proportion in our expenditure priorities. I commend the amendment and I hope that the Government will do more in the area of space technology to create an enlarged and more effective European space programme.

6.22 pm

Mr. Michael Meadowcroft (Leeds, West)

I am glad that we have selected this topic for debate. It is natural that the topics raised reflect a wide range of interests, and these have ranged wider than the terms of the motion. Nevertheless, we have heard interesting comments from hon. Members on both sides of the House.

It is interesting that we are talking not simply with hindsight. The present position was predicted some time ago. I have always been impressed by the comments of the French Liberal, Servan-Schreiber, who, in his book, "The American Challenge", which was written almost 20 years ago, described what would happen if we were to follow the path that we have followed in the intervening 20 years. He remarked at the time: If Europe really wishes to escape American domination, there is only the way of federalism and social justice. He went on to state: If Europe is not to be defeated in this battle of computer manufacturing, it must unify its efforts under a single command. The high technology industries are a perfect example of the problems that we face in endeavouring to compete fairly on an international scale. Supplies within our industries are dominated by huge United States corporations backed by the extraterritorial application of United States export laws, mentioned by my hon. Friend the Member for Yeovil (Mr. Ashdown). In some cases, there have been questionable trading practices. It is extremely difficult for smaller United Kingdom companies to challenge this market domination. It is not impossible for them to do so on the basis of a lack of imagination or technical knowledge. In a sense, the Americans wish to restrict and constrict the market for our companies because of the excellence of some British innovations. If it had not been for the fact that some American-based companies were fearful of what would happen if there were fair competition with the United Kingdom, I doubt whether they would have wanted to exert the pressure that they have on British companies.

The Minister commented on the Systime problem, which we raised in an Adjournment debate in February. I received a response from the Minister of State yesterday, and my colleagues and I are carefully considering our response to it. Under the United States Freedom of Information Act—their system is somewhat better than ours because it enables us to obtain material on these matters — we have received copies of the documents involved in the recent case in which Systime was fined a substantial amount of money by the United States Department of Commerce.

When I received those documents, I was interested to see, contrary to what I had fondly imagined, that the case against Systime was not against the United States subsidiary of Systime UK but was directly against Systime Computers Limited of Millshaw park, Leeds 11. It is astonishing that the American Department of Commerce —the documents are available and clearly state this—should seek to impose its legal jurisdiction on a United Kingdom company in that way. As I understand the law, if Systime wanted, it could have refused to take part in any conduct of that case. It could have walked away and claimed that the department had no jurisdiction over that company.

As the Minister made clear in his opening remarks, the problem is that if companies do not believe that the Government will defend them against such extraterritorial intervention, there is no way that a company can hope to survive without submitting. Unless a company can continue to receive supplies, it cannot trade. Companies do not have the cash flow or resources to enable them to carry out a long battle with American companies. Therefore, rather than fighting under such circumstances, they can do nothing but give in.

The Minister wondered whether companies wanted to go on to a blacklist. It is astonishing that the Government accept that there could be a blacklist for our companies. I accept that that is the reality, but throughout this debate we have asked what the Government will do to make such a blacklist ineffective. We know that such a blacklist will exist and we know of the existence of export denials of companies that export in this country. We know that that happens and that efforts are made to continue that process.

The American Government will continue to push against the door to open it as wide as possible to affect our industry. Will the British Government try to close that door? At present, we believe that the United States Department of Commerce is pushing against an open door. That increases interference week by week, month by month. The Minister also questioned whether it was better for a company to be consulted to discover whether it wanted to take part in a process of the Americans examining its accounts rather than taking part in the licensing process. The Minister appears to be prepared to allow commercial companies to decide whether sovereignty is waived. It is astonishing that a Conservative Government, who pride themselves on a belief in sovereignty, could allow such a discussion to take place.

There is far more freedom for smaller companies to contest against larger companies in the United States than there is for United Kingdom companies to defend themselves in this country against United States companies. Emulex, which trades in this country but which is American-based, has managed to win concessions out of DEC in the United States which it could not possibly have won had it fought under United Kingdom law from this country.

The Minister has asked for examples of such cases and I noted his stricture to my hon. Friend the Member for Yeovil about confidentiality and anonymity. It is no wonder that companies are not anxious to have their names broadcast when they are worried about future restrictions on supply. On that basis, I can quote an example, but, as we are in the real world, I dare not give the name of the company. A letter that I received on 22 April states: All our activities are approached with full support of the Board of Trade and with all necessary UK Export Licences, but now we find ourselves in the crazy situation where our activities are illegal with regard to the American Government. To give you an example, we took an order from a Singaporian customer for £500,000 worth of computer system which we had put together using American components: this was in November of last year. We got the UK Export Licence within seven days, and at the same time applied to the Department of Commerce in Washington on the infamous ITA699P Permission to Re-export Application'. Our customer had been approved by the Singaporian Government, and yet we are still waiting for the US Licence to be approved. As a business decision we shipped the order, and as a result we have won follow-on orders from this customer. That is a United Kingdom high technology business that has fought its way in an overseas market. It said that to make sure that it was able to fulfil that order and get repeat orders, it had to ship illegally according to the United States Government. That is unacceptable.

Are we being anti-American by raising such points? If any of us are concerned about our relationship with the Americans and the development of our relationship not only on a governmental level but between our different peoples, it is important that we warn our American friends and allies when we feel that they are doing things that are harmful to that relationship. It is no friend or ally who sees the Americans heading towards greater bitterness and distress from what they are doing in this country without warning them that that is happening. That is why it is crucial that we debate the matter today before it goes further.

In view of what was written 20 years ago and what we have said on numerous occasions in the House and outside, I believe that unless there is a united European market, and unless there is united European co-operation on those matters, there is no way that we can stand up to the Americans' desire to involve themselves in our market for the sake of maintaining their own economy. I believe that the United States economy is in deep distress. It has cumulative problems, and it seeks to maintain the American dream by looking at other places where it can develop. Unless we in Europe are prepared to say that we have a strong, powerful and effective industry and that we have resources that the Americans might want to use, it will be impossible to prevent the blacklist and the extraterritorial export rules. This is all about being able to compete fairly. That is all that the customers, the clients and the companies with which we have been involved wish, but we do not see the British Government standing up for their rights.

6.32 pm

Mr. Phillip Oppenheim (Amber Valley)

One of the Opposition's consistent themes is that our information technology industry is doing badly. They say that it is doing badly simply because there is not enough Government money to support it. It is true that some of the raw statistics show that the deficit in our IT products trade has been growing, although it has been stabilising recently. However, of course that deficit has grown, in the same way as the whole sector has grown. The IT deficit is also growing at a far faster rate in Europe and, indeed, in the United States, which went into deficit on its IT products a couple of years ago. Looking at the raw statistics hides the fact that in many areas of our information technology and electronics industries we are doing exceedingly well. Where companies are making good quality products and taking the trouble to go out into the world, and go to Japan and sell them, they are prospering.

The Opposition claim that the Government have no strategy m information technology. Let us have a quick look at what the Opposition's strategy is. Their policies rely on two major pillars — more money and more Government control and intervention. The Opposition spokesman, the hon. Member for Coventry, North-West (Mr. Robinson), looked to the French as an example of successful intervention in industry. He could not have chosen a more disastrous example if he had tried. In the 1950s, the 1960s, the 1970s and the 1980s the French Government poured billions of francs into the French electronics industry. In the mid-1960s under de Gaulle they encouraged the merger of CII and Bull, and later they brought in Honeywell as well. That was a disaster. When the Communist-Socialist coalition came into power in 1981 the Government nationalised the French electronics industry and encouraged the merger of Thomson Alcatel and CGE. At the time they promised that employment in the French electronics industry would double. In fact, it has fallen by 25 per cent. and the French electronics industry is in a disastrous state. What is more, it is costing the French taxpayer billions of francs every year.

However, we do not have to look across the water. We can look at the policies of the Labour Government when they were in power in the 1970s. They tried the old interventionist, dirigiste themes. We had the National Enterprise Board. One of its favourite companies was one called Nexos, which has recently been the subject of an investigation by the Public Accounts Committee. Nexos was meant to he Britain's answer to IBM. With Government support, the politicians and the civil servants were going to create a British IBM. What happened? Nexos went bust a few years later, having cost the taxpayer £40 million. During its brief reign it succeeded in importing vast quantities of Japanese office equipment. It managed to import more Japanese facsimile machines in one year than could be sold in the whole of the market. When the company finally went bust it still had on its books 1,000 of those Japanese facsimile machines. The British Technology Group, which took over from the NEB, had to sell those machines, which had been bought for more than £1 million, for £1—not £1 each, but £1.

Mr. Randall

Will the hon. Gentleman give way?

Mr. Oppenheim

I apologise. I cannot give way as time is short.

I attended the debate in the House a few years ago on technology, in which many Opposition Members praised INMOS, which is another of the NEB's creations. At that time INMOS was riding on the crest of one of the biggest booms that the electronics and microchip industry has ever seen. Obviously, it was doing well then. Since then, unfortunately, it has sunk into great losses. Although many people admire its transputer products and other products, the fact is that, unfortunately, it is not doing very well in selling those products on the world market.

What is Labour's new policy? Its new policy for the 1980s and 1990s, should a Labour Government be elected, involves renationalisation of British Telecom. What a pathetic, backward-looking policy. Our privatisation of British Telecom has been one of the most successful policies ever carried out by a Government in this country. It has meant not only that the workers in that company have a share in the company, but consumers have a better deal and the Government are getting more money from the company. The fact is that under Labour, when the General Post Office ran the telecommunications system, if one wanted to buy anything from the telecommunications side, and if one wanted an interview with a sales representative, it was almost like trying to get an interview with the Pope. It was almost impossible to get anything. Businesses had to bribe telecommunications engineers to get the essential equipment that they wanted into their companies.

If those policies are implemented in the late 1980s and the 1990s, we shall have the same results as those policies produced in the 1970s. We shall have a vast waste of public money and demoralisation of our industry because of the simple fact that Opposition Members, with their lack of business experience, have not learnt that politicians and civil servants simply cannot run private industry. It is as simple as that. They have not learnt that lesson.

Opposition Members say that the Government have no strategy for the information technology industry. They do have a strategy. It relies on creating the conditions in which businesses can prosper. Our IT industry is no different from any other of our industries in that regard. It needs the same preconditions for its prosperity. It needs long-term pro-enterprise policies, stable prices, good industrial relations and quality in management, which is allowed to manage its company, and above all it needs profit. Of course, "profit" was a dirty word under the Labour Government. The countries that have done best in information technology—the United States and Japan—have followed those policies consistently for the past 30 or 40 years.

As we are all aware, Britain does not have an especially large market compared to the Japanese or the United States home markets. It is unfortunately true that we do not yet have a full internal market in Europe. Unfortunately, a number of non-tariff barriers in Europe prevent us from selling our equipment on the European market, especially the telecommunications market. In many ways, those tariffs are illogical. For example, tariffs on fully assembled computers or sub-assemblies are higher than tariffs on the imported components. Clearly, that is a disincentive for British manufacturers to get their goods assembled onshore. That is why companies such as Amstrad and Apricot have to get much of their equipment assembled offshore.

Time is running out. I believe that this Government have done more to encourage the IT industries than any previous Government. Their policies are forward-looking. If there is another Labour Government—I hope that will never happen—we shall be back with the stale old ideas and policies that have failed before in this country and abroad.

6.40 pm

Mr. Ian Wrigglesworth (Stockton, South)

It is regrettable that the hon. Member for Amber Valley (Mr. Oppenheim) did not dwell more on the role of the subject of the debate, which he at last reached in his final sentences. I shall comment on one point made by the hon. Gentleman and the hon. Member for Hertfordshire, South-West (Mr. Page) about British telecommunications. Clearly, that industry is central to the development of high technology and all industry. It is regrettable that the question of the renationalisation of British Telecom has been raised because of the Labour party's recent pronouncements and the decision of the court in Strasbourg as a result of the British Government's action.

The waiting list for telephone equipment and handsets was ended not by privatisation but by liberalisation and the introduction of competition. British Telecom might give better service to its customers, offer more competitive prices and be more efficient if there were even more competition than the Government allowed under the British Telecommunications Bill which was introduced to privatise telecommunications. Competition, not privatisation, has brought about better service for the consumer.

The debate has ranged widely between the constituency interests of the hon. Member for Greenock and Port Glasgow (Dr. Godman), who has apologised because he had to leave to go to his constituency, and the future of the space industry, which was raised by the hon. Member for Ruislip-Northwood (Mr. Wilkinson). I agreed with many of the remarks by the hon. Member for Ruislip- Northwood about the development of the space industry. Unfortunately, he spoilt them by his references to spending on social security. He slightly over-egged the pudding. He ignored the small contribution—2 per cent. —that we are making to the European Space Agency. The development at Farnborough is excellent and I hope that it is built up and strengthened and will work in cooperation with the ESA. I hope, too, that British Aerospace's work with HOTOL is successful and can be integrated in or at least co-ordinated with the work in Europe.

The hon. Member for Ruislip-Northwood did not mention the excellent work on satellites by British Aerospace. One of our major contributions on space has been through the work of British Aerospace and other companies on satellite technology. We have been involved in European as well as other rockets.

I wish to refer to the core of the motion and debate. Over a long period, my hon. Friends the Members for Leeds, West (Mr. Meadowcroft) and for Yeovil (Mr. Ashdown) have vigorously pursued this issue. The House and the industry owe them a debt for the vigour with which they have pursued it. They have displayed their interest and knowledge of extraterritoriality—United States law restricting British companies and high technology development in this country.

We are saying two things. First, the United Kingdom is doing badly in high technology. It cannot afford this impediment to progress of British companies in high technology. Secondly, it is unacceptable in principle that United States law should be used in the way described by the lawyers of the Crown as an unwarranted encroachment on our territory and contrary to international law. An analogy can be drawn with our battle with the United States over the imposition of unitary taxation. I was part of a delegation which recently went to make representations to the United States Government and Congress about that issue. Once again, United States law was used in a way that penalised British companies, outside all the conventions of international law, and operated basically on the basis of "might is right". We should be saying loudly and clearly that we are not prepared to accept that.

We are doing badly in high technology. I believe that all hon. Members will feel that the response by the Minister for Information Technology to my hon. Friend the Member for Yeovil was disappointing and displayed tremendous complacency in the light of the damage being done and the weaknesses of our high technology industries. The crude balance of trade for information technology has widened from a deficit of £468 million in 1979 to £2.4 billion in 1984 and £1.8 billion in 1985. For microelectronics, the trade deficit widened from £13 million in 1979 to £645 million in 1984 and £565 million in 1985.

We have dangerous levels of import penetration in a number of key respects. For example, it is 57 per cent. in electronic data processing, 67 per cent. in office machinery and 24 per cent. in radio/electronic capital goods. One could go on citing key aspects where the level of import penetration is disastrous for our industry.

An article in today's Financial Times estimates that 70 per cent. of the crucial European software market is dominated by the United States. The Government have not been able or prepared to take action to reverse that pattern.

The major subject of the motion is the unwarranted encroachment by United States law on our companies. It is intolerable — I hope that the Minister will recognise this and reflect it in his language—that businesses are being impeded by having to wait for up to three months for licences from the United States Department of Commerce. What is the Minister prepared to say— he did not respond to my hon. Friend the Member for Yeovil —about the United States preventing the Government from moving a computer from Harwell to London university? What will the Government do about that? Do they accept it? Are they prepared to tolerate it? What have the Government said about it to the United States?

Companies which are being impeded by this extraterritorial action would be given some hope if the Government were at least prepared to do more on their behalf. They are in an impossible position. I am afraid that one concluded on listening to the Minister that he was prepared, to allow companies to be put into a position in which they fundamentally have to give way to blackmail. They face the threat of being put on a blacklist, of losing business and of not being able to obtain and to export products if they do not accept the legislation of the United States Government. That is unacceptable.

Companies are not strong enough to take on the whole of the United States Administration. In many instances, they are not even strong enough to take on the bureaucracy and expense involved in going through that whole rigmarole. That is doing enormous damage. When the Minister replies, I hope that he will go much further than he did in his earlier remarks and give hope to companies that have been hit by this requirement of the United States that the British Government will fight in a way that we have not seen to date.

There is a well known, well recognised and possible way of resolving the problem with the United States. Everyone knows that the answer is to go through COCOM in Paris. There was no need to go down the road that the Government chose. That route was inappropriate and there is the possibility that relationships between the United Kingdom and the United States will be impeded and interrupted, but we must make it clear that we shall be a thorn in the side of the United States unless it is prepared to take action. That was the message that was taken to the White House and the United States treasury on unitary taxation. I hope that Ministers will make it clear to the Department of Commerce and Congress that good relations will be impeded unless the United States Administration is prepared to act.

The Minister has an opportunity this evening to give that message loud and clear to the United States Administration and to give hope to the companies that have been hit. He can make it clear that the Government will give them backing in fighting the requirement. We must demonstrate that might is not right and that we are not prepared to be blackmailed, whether the blackmail comes from individuals, from institutions or from a Government.

Mr. Pattie

rose—

Mr. Deputy Speaker (Mr. Harold Walker)

Does the Minister have the leave of the House to speak again? I take it that he has.

6.52 pm

Mr. Pattie

We have had the extensive and wide-ranging debate that was foreshadowed when it began. I am sure that alliance Members realised that it might range far. My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) talked about the transformation of the performance of British Telecom and raised various matters concerning the Alvey programme. I can confirm that the user aspect will be emphasised when we come to examine the Bide report. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) talked about space, about which he knows a great deal. As I said to him in an earlier intervention, we await with interest the plan of the British National Space Centre, on which we shall take decisions in the near future.

My hon. Friend the Member for Amber Valley (Mr. Oppenheim) correctly assessed by the less than entirely successful position in France caused by interventionist policies over the years. He reminded us of the considerable benefits and improvements in the performance of British Telecom. I have received a message from the hon. Member for Greenock and Port Glasgow (Dr. Godman) that he has had to leave the Chamber to return to his constituency. The matters that he raised about tax regimes for offshore oil companies, for example, are not for me. They will, however, be referred to the appropriate Department.

The hon. Member for Stockton, South (Mr. Wrigglesworth) was right when he said that it was not simply the creation of British Telecom that had produced improvements and a dramatic increase in performance. He omitted to say that liberalisation and competition are part and parcel of the same process. We cannot have liberalisation and competition unless we create something in the nature of British Telecom in the first place.

The hon. Member for Stockton, South referred to the excellent work on satellites that British Aerospace carries out. This reference was characteristic of the thoughtful speeches that the hon. Gentleman makes in the House.

The hon. Member for Coventry, North-West (Mr. Robinson) always gives me some problems. I make notes and address myself to his reasonable arguments, only to find that suddenly he changes gear and produces a stream of complete gibberish. That is one of his specialities. I prepared myself to respond to his question about whether we would delay taking a decision on the Bide committee's follow-on to the Alvey programme. The answer is that we shall not. We shall want to take a decision as quickly as possible once the Bide committee has reported in October. When I was making that note, the gibberish began. There was a series of rapidly uttered non sequiturs — for example, the assertion that Westland is being sold to the United States. Such assertions make me wonder where the hon. Gentleman has been.

The hon. Member for Coventry, North-West spoke about France. It seems that he, like many others, thinks that everything that is done in France is marvellous. He said that France spends more as a percentage of its GDP on research and development than we do. In fact, France spends 2.1 per cent. of its GDP on research and development and not 3 per cent. as he claimed. We spend more as a percentage of GDP as our spending amounts to 2.3 per cent. The hon. Gentleman should concentrate a little more on getting his facts straight.

To be fair to the hon. Member for Coventry, North-West, he was the only Member to participate in the debate who referred to the International Court of Justice and a juridical outcome. He was saying, in effect, "How about Her Majesty's Government taking the United States to the Court of Justice?" Further research would have told him that the United States has decided, on the basis of Nicaragua, I think, that it will not be party to any actions brought in the International Court of Justice unless it agrees that it will accept the jurisdiction. There is no point in anyone inside or outside the House wringing his hands about that. We accept that we are faced with a serious problem, and what I would call the juridical route is not open to us.

The hon. Member for Stockton, South listed various examples of import penetration and added that most of it involved the United States, without being prepared to say that that does not put us in a very strong position to take the crusading attitude that he would like us to adopt. He told us that, with others, he went to the White House and bearded the Congressmen in their den on Capital hill. That is great, and I applaud his efforts. If penetration of our market by the United States has reached the extent that he claims— I do not refute any of his figures—that does not put us in a very favourable position to take a strong line on behalf of British companies—

Mr. Ashdown

rose—

Mr. Pattie

No, I shall not give way.

Mr. Ashdown

Deal with the Harwell computer.

Mr. Pattie

Very well. The impression has been given by the hon. Member for Yeovil (Mr. Ashdown) and others that nothing is being done, and that every time the United States talks about the moving of the Harwell computer to London university we say, "That is fine. There is no problem." We are making the most urgent and strenuous representations—

Mr. Ashdown

It is the Government's computer.

Mr. Pattie

Discussions are in progress now. If the hon. Gentleman listens, I shall answer his questions. The computer is in the United Kingdom and there is a service, maintenance and enhancement contract.

Mr. Ashdown

It is your computer.

Mr. Pattie

The contract is with an American company. Even the hon. Gentleman, with his incredible stupidity, will realise that we must take account of a contract. What is the position if the United Kingdom Government or a university want to move a computer and the company which has supplied it says, "If you wish to move it, you will have to break down the computer and comply with the agreements that have been made."? We do not like that and we are having discussions with the United States Government. They are not taking place on the Floor of the House for the benefit of the hon. Gentleman or of anyone else. To suggest that nothing is being done is a travesty, and I want to take the hon. Gentleman to task. The Liberals and SDP have decided to base their case on what could have been a wide-ranging debate on a very important topic; they have decided instead to base it on a very narrow point, and have not proved their case.

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

The House divided: Ayes 158, Noes 250.

Division No. 257]	[7.00pm
AYES
Adams, Allen (Paisley N)	Johnston, Sir Russell
Anderson, Donald	Jones, Barry (Alyn & Deeside)
Archer, Rt Hon Peter	Kennedy, Charles
Ashdown, Paddy	Kilroy-Silk, Robert
Ashley, Rt Hon Jack	Kirkwood, Archy
Ashton, Joe	Lamond, James
Atkinson, N. (Tottenham)	Leadbitter, Ted
Barron, Kevin	Lewis, Ron (Carlisle)
Beckett, Mrs Margaret	Lewis, Terence (Worsley)
Beith, A. J.	Litherland, Robert
Benn, Rt Hon Tony	Livsey, Richard
Bennett, A. (Dent'n & Red'sh)	Lofthouse, Geoffrey
Bermingham, Gerald	Loyden, Edward
Boothroyd, Miss Betty	McCartney, Hugh
Boyes, Roland	McDonald, Dr Oonagh
Bray, Dr Jeremy	McGuire, Michael
Brown, Gordon (D'f'mline E)	McKay, Allen (Penistone)
Brown, N. (N'c'tle-u-Tyne E)	McKelvey, William
Brown, R. (N'c'tle-u-Tyne N)	MacKenzie, Rt Hon Gregor
Bruce, Malcolm	Maclennan, Robert
Caborn, Richard	McTaggart, Robert
Callaghan, Jim (Heyw'd & M)	Madden, Max
Campbell-Savours, Dale	Marek, Dr John
Carl Me, Alexander (Montg'y)	Mason, Rt Hon Roy
Carter-Jones, Lewis	Maxton, John
Clark, Dr David (S Shields)	Maynard, Miss Joan
Clarke, Thomas	Meadowcroft, Michael
Clay, Robert	Michie, William
Clwyd, Mrs Ann	Mikardo, Ian
Cocks, Rt Hon M. (Bristol S)	Millan, Rt Hon Bruce
Cohen, Harry	Morris, Rt Hon A. (W'shawe)
Coleman, Donald	Nellist, David
Corbett, Robin	O'Brien, William
Corbyn, Jeremy	O'Neill, Martin
Cox, Thomas (Tooting)	Orme, Rt Hon Stanley
Craigen, J. M.	Owen, Rt Hon Dr David
Cunliffe, Lawrence	Park, George
Dalyell, Tam	Parry, Robert
Davis, Terry (B'ham, H'ge H'I)	Patchett, Terry
Deakins, Eric	Pavitt, Laurie
Dewar, Donald	Penhaligon, David
Douglas, Dick	Pike, Peter
Dubs, Alfred	Powell, Raymond (Ogmore)
Duffy, A. E. P.	Prescott, John
Dunwoody, Hon Mrs G.	Radice, Giles
Eadie, Alex	Randall, Stuart
Eastham, Ken	Raynsford, Nick
Edwards, Bob (W'h'mpt'n SE)	Richardson, Ms Jo
Evans, John (St. Helens N)	Roberts, Allan (Bootle)
Ewing, Harry	Roberts, Ernest (Hackney N)
Faulds, Andrew	Robinson, G. (Coventry NW)
Field, Frank (Birkenhead)	Rogers, Allan
Flannery, Martin	Rooker, J. W.
Foot, Rt Hon Michael	Ross, Ernest (Dundee W)
Forrester, John	Sheerman, Barry
Foster, Derek	Sheldon, Rt Hon R.
Foulkes, George	Shields, Mrs Elizabeth
Freeson, Rt Hon Reginald	Shore, Rt Hon Peter
Freud, Clement	Short, Ms Clare (Ladywood)
Garrett, W. E.	Short, Mrs R.(W'hampt'n NE)
Gilbert, Rt Hon Dr John	Silkin, Rt Hon J.
Gourlay, Harry	Skinner, Dennis
Hamilton, James (M'well N)	Smith, C (Isl'ton S & F'bury)
Hamilton, W. W. (Fife Central)	Smith, Cyril (Rochdale)
Hancock, Michael	Snape, Peter
Hardy, Peter	Soley, Clive
Hattersley, Rt Hon Roy	Steel, Rt Hon David
Heffer, Eric S.	Stewart, Rt Hon D. (W Isles)
Hogg, N. (C'nauld & Kilsyth)	Stott, Roger
Home Robertson, John	Strang, Gavin
Howells, Geraint	Thomas, Dr R. (Carmarthen)
Hoyle, Douglas	Thompson, J. (Wansbeck)
Hughes, Dr Mark (Durham)	Thorne, Stan (Preston)
Hughes, Robert (Aberdeen N)	Tinn, James
Hughes, Roy (Newport East)	Wardell, Gareth (Gower)
Hughes, Simon (Southwark)	Wareing, Robert
Janner, Hon Greville	Wigley, Dafydd
John, Brynmor	Wilson, Gordon

Woodall, Alec	Tellers for the Ayes:
Wrigglesworth, Ian	Mr. John Cartwright and
	Mr. James Wallace.

NOES
Alexander, Richard	Fairbairn, Nicholas
Amess, David	Fallon, Michael
Ancram, Michael	Farr, Sir John
Arnold, Tom	Fenner, Mrs Peggy
Ashby, David	Fletcher, Alexander
Aspinwall, Jack	Fox, Sir Marcus
Atkins, Rt Hon Sir H.	Gale, Roger
Atkinson, David (B'm'th E)	Galley, Roy
Baker, Rt Hon K. (Mole Vall'y)	Garel-Jones, Tristan
Baker, Nicholas (Dorset N)	Gilmour, Rt Hon Sir Ian
Baldry, Tony	Glyn, Dr Alan
Banks, Robert (Harrogate)	Gower, Sir Raymond
Batiste, Spencer	Griffiths, Sir Eldon
Bellingham, Henry	Ground, Patrick
Bendall, Vivian	Hamilton, Hon A. (Epsom)
Benyon, William	Hamilton, Neil (Tatton)
Best, Keith	Hampson, Dr Keith
Biffen, Rt Hon John	Harris, David
Biggs-Davison, Sir John	Haselhurst, Alan
Blackburn, John	Hawkins, Sir Paul (N'folk SW)
Blaker, Rt Hon Sir Peter	Hayhoe, Rt Hon Barney
Boscawen, Hon Robert	Hayward, Robert
Bottomley, Peter	Heddle, John
Bottomley, Mrs Virginia	Henderson, Barry
Bowden, A. (Brighton K'to'n)	Hill, James
Bowden, Gerald (Dulwich)	Holland, Sir Philip (Gedling)
Boyson, Dr Rhodes	Holt, Richard
Braine, Rt Hon Sir Bernard	Hordern, Sir Peter
Brandon-Bravo, Martin	Howarth, Gerald (Cannock)
Bright, Graham	Howell, Rt Hon D. (G'ldford)
Brinton, Tim	Hubbard-Miles, Peter
Brittan, Rt Hon Leon	Hunt, David (Wirral W)
Brooke, Hon Peter	Hunter, Andrew
Brown, M. (Brigg & Cl'thpes)	Irving, Charles
Bruinvels, Peter	Jackson, Robert
Bryan, Sir Paul	Jenkin, Rt Hon Patrick
Buchanan-Smith, Rt Hon A.	Jessel, Toby
Buck, Sir Antony	Johnson Smith, Sir Geoffrey
Bulmer, Esmond	Jones, Gwilym (Cardiff N)
Burt, Alistair	Jones, Robert (Herts W)
Butler, Rt Hon Sir Adam	King, Rt Hon Tom
Butterfill, John	Knight, Greg (Derby N)
Carlisle, Kenneth (Lincoln)	Lawler, Geoffrey
Carlisle, Rt Hon M. (W'ton S)	Lawrence, Ivan
Carttiss, Michael	Leigh, Edward (Gainsbor'gh)
Chalker, Mrs Lynda	Lennox-Boyd, Hon Mark
Channon, R: Hon Paul	Lewis, Sir Kenneth (Stamf'd)
Chapman, Sydney	Lilley, Peter
Chope, Christopher	Lloyd, Peter (Fareham)
Churchill, W. S.	Lyell, Nicholas
Clark, Hon A. (Plym'th S'n)	Macfarlane, Neil
Clark, Dr Michael (Rochford)	MacKay, Andrew (Berkshire)
Clark, Sir W. (Croydon S)	MacKay, John (Argyll & Bute)
Clarke, Rt Hon K. (Rushcliffe)	Maclean, David John
Clegg, Sir Walter	McLoughlin, Patrick
Cockeram, Eric	McNair-Wilson, M. (N'bury)
Colvin, Michael	McNair-Wilson, P. (New F'st)
Conway, Derek	McQuarrie, Albert
Coombs, Simon	Major, John
Cope, John	Malins, Humfrey
Cormack, Patrick	Malone, Gerald
Corrie, John	Maples, John
Couchman, James	Marland, Paul
Cranborne, Viscount	Marlow, Antony
Currie, Mrs Edwina	Marshall, Michael (Arundel)
Dickens, Geoffrey	Mather, Carol
Dorrell, Stephen	Maude, Hon Francis
Douglas-Hamilton, Lord J.	Maxwell-Hyslop, Robin
Dover, Den	Mayhew, Sir Patrick
Dunn, Robert	Merchant, Piers
Durant, Tony	Meyer, Sir Anthony
Edwards, R1 Hon N. (P'broke)	Mills, Iain (Meriden)
Eggar, Tim	Mills, Sir Peter (West Devon)
Evennett, David	Miscampbell, Norman
Eyre, Sir Reginald	Mitchell, David (Hants NW)

Montgomery, Sir Fergus	Spicer, Jim (Dorset W)
Moore, Rt Hon John	Spicer, Michael (S Worcs)
Morrison, Hon C. (Devizes)	Squire, Robin
Moynihan, Hon C.	Stanbrook, Ivor
Murphy, Christopher	Stanley, Rt Hon John
Neale, Gerrard	Stern, Michael
Newton, Tony	Stevens, Lewis (Nuneaton)
Nicholls, Patrick	Stewart, Allan (Eastwood)
Norris, Steven	Stewart, Andrew (Sherwood)
Oppenheim, Phillip	Sumberg, David
Osborn, Sir John	Taylor, John (Solihull)
Ottaway, Richard	Taylor, Teddy (S'end E)
Page, Sir John (Harrow W)	Temple-Morris, Peter
Page, Richard (Herts SW)	Terlezki, Stefan
Pattie, Geoffrey	Thomas, Rt Hon Peter
Pawsey, James	Thompson, Donald (Calder V)
Percival, Rt Hon Sir Ian	Thompson, Patrick (N'ich N)
Pollock, Alexander	Thorne, Neil (Ilford S)
Porter, Barry	Thornton, Malcolm
Portillo, Michael	Thurnham, Peter
Powell, William (Corby)	Townsend, Cyril D. (B'heath)
Powley, John	Twinn, Dr Ian
Prentice, Rt Hon Reg	van Straubenzee, Sir W.
Price, Sir David	Viggers, Peter
Proctor, K. Harvey	Waddington, David
Pym, Rt Hon Francis	Wakeham, Rt Hon John
Raffan, Keith	Waldegrave, Hon William
Rathbone, Tim	Walden, George
Rhodes James, Robert	Walker, Bill (T'side N)
Rhys Williams, Sir Brandon	Waller, Gary
Robinson, Mark (N'port W)	Ward, John
Roe, Mrs Marion	Wardle, C. (Bexhill)
Rossi, Sir Hugh	Watson, John
Rost, Peter	Wells, Bowen (Hertford)
Rowe, Andrew	Wells, Sir John (Maidstone)
Ryder, Richard	Wheeler, John
Sayeed, Jonathan	Whitfield, John
Scott, Nicholas	Whitney, Raymond
Shaw, Giles (Pudsey)	Wiggin, Jerry
Shaw, Sir Michael (Scarb')	Wilkinson, John
Shelton, William (Streatham)	Winterton, Mrs Ann
Shepherd, Colin (Hereford)	Winterton, Nicholas
Shepherd, Richard (Aldridge)	Wolfson, Mark
Shersby, Michael	Wood, Timothy
Silvester, Fred	Woodcock, Michael
Sims, Roger	Yeo, Tim
Skeet, Sir Trevor	Young, Sir George (Acton)
Smith, Sir Dudley (Warwick)	Younger, Rt Hon George
Smith, Tim (Beaconsfield)
Speed, Keith	Tellers for the Noes:
Speller, Tony	Mr. Michael Neubert and
Spencer, Derek	Mr. Tim Sainsbury.

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 246, Noes 149.

Division No. 258]	[7.15 pm
AYES
Alexander, Richard	Blackburn, John
Amess, David	Blaker, Rt Hon Sir Peter
Ancram, Michael	Boscawen, Hon Robert
Arnold, Tom	Bottomley, Peter
Ashby, David	Bottomley, Mrs Virginia
Aspinwall, Jack	Bowden, A. (Brighton K'to'n)
Atkins, Rt Hon Sir H.	Boyson, Dr Rhodes
Atkinson, David (B'm'th E)	Braine, Rt Hon Sir Bernard
Baker, Nicholas (Dorset N)	Brandon-Bravo, Martin
Baldry, Tony	Bright, Graham
Banks, Robert (Harrogate)	Brinton, Tim
Batiste, Spencer	Brittan, Rt Hon Leon
Bellingham, Henry	Brooke, Hon Peter
Bendall, Vivian	Brown, M. (Brigg & Cl'thpes)
Best, Keith	Bruinvels, Peter
Biffen, Rt Hon John	Bryan, Sir Paul
Biggs-Davison, Sir John	Buchanan-Smith, Rt Hon A.

Bulmer, Esmond	Lewis, Sir Kenneth (Stamf'd)
Burt, Alistair	Lilley, Peter
Butler, Rt Hon Sir Adam	Lloyd, Peter (Fareham)
Butterfill, John	Lyell, Nicholas
Carlisle, Kenneth (Lincoln)	Macfarlane, Neil
Carlisle, Rt Hon M. (W'ton S)	MacKay, Andrew (Berkshire)
Carttiss, Michael	MacKay, John (Argyll & Bute)
Chalker, Mrs Lynda	Maclean, David John
Channon, Rt Hon Paul	McLoughlin, Patrick
Chapman, Sydney	McNair-Wilson, M. (N'bury)
Chope, Christopher	McNair-Wilson, P. (New F'st)
Churchill, W. S.	McQuarrie, Albert
Clark, Hon A. (Plym'th S'n)	Major, John
Clark, Dr Michael (Rochford)	Malins, Humfrey
Clark, Sir W. (Croydon S)	Marland, Paul
Clarke, Rt Hon K. (Rushcliffe)	Marlow, Antony
Clegg, Sir Walter	Marshall, Michael (Arundel)
Cockeram, Eric	Mather, Carol
Colvin, Michael	Maude, Hon Francis
Conway, Derek	Maxwell-Hyslop, Robin
Coombs, Simon	Mayhew, Sir Patrick
Cope, John	Merchant, Piers
Cormack, Patrick	Meyer, Sir Anthony
Corrie, John	Mills, Iain (Meriden)
Couchman, James	Mills, Sir Peter (West Devon)
Cranborne, Viscount	Miscampbell, Norman
Currie, Mrs Edwina	Mitchell, David (Hants NW)
Dickens, Geoffrey	Moate, Roger
Dorrell, Stephen	Montgomery, Sir Fergus
Douglas-Hamilton, Lord J.	Moore, Rt Hon John
Dover, Den	Morrison, Hon C. (Devizes)
Edwards, Rt Hon N. (P'broke)	Moynihan, Hon C.
Eggar, Tim	Murphy, Christopher
Evennett, David	Neale, Gerrard
Eyre, Sir Reginald	Needham, Richard
Fairbairn, Nicholas	Nelson, Anthony
Fallon, Michael	Neubert, Michael
Farr, Sir John	Newton, Tony
Fenner, Mrs Peggy	Nicholls, Patrick
Fletcher, Alexander	Norris, Steven
Gale, Roger	Oppenheim, Phillip
Galley, Roy	Osborn, Sir John
Garel-Jones, Tristan	Ottaway, Richard
Gilmour, Rt Hon Sir Ian	Page, Sir John (Harrow W)
Glyn, Dr Alan	Page, Richard (Herts SW)
Gower, Sir Raymond	Pattie, Geoffrey
Gregory, Conal	Pawsey, James
Griffiths, Sir Eldon	Percival, Rt Hon Sir Ian
Ground, Patrick	Pollock, Alexander
Hamilton, Hon A. (Epsom)	Porter, Barry
Hamilton, Neil (Tatton)	Portillo, Michael
Hampson, Dr Keith	Powell, William (Corby)
Harris, David	Powley, John
Haselhurst, Alan	Prentice, Rt Hon Reg
Hawkins, Sir Paul (N'folk SW)	Price, Sir David
Hayhoe, Rt Hon Barney	Proctor, K. Harvey
Hayward, Robert	Pym, Rt Hon Francis
Henderson, Barry	Raffan, Keith
Hill, James	Rathbone, Tim
Holland, Sir Philip (Gedling)	Rhodes James, Robert
Holt, Richard	Ridsdale, Sir Julian
Hordern, Sir Peter	Rifkind, Rt Hon Malcolm
Howarth, Gerald (Cannock)	Robinson, Mark (N'port W)
Howell, Rt Hon D. (G'ldford)	Roe, Mrs Marion
Hubbard-Miles, Peter	Rossi, Sir Hugh
Hunt, David (Wirral W)	Rost, Peter
Hunter, Andrew	Rowe, Andrew
Irving, Charles	Ryder, Richard
Jackson, Robert	Sainsbury, Hon Timothy
Jenkin, Rt Hon Patrick	Sayeed, Jonathan
Jessel, Toby	Scott, Nicholas
Johnson Smith, Sir Geoffrey	Shaw, Giles (Pudsey)
Jones, Gwilym (Cardiff N)	Shaw, Sir Michael (Scarb')
Jones, Robert (Herts W)	Shelton, William (Streatham)
King, Rt Hon Tom	Shepherd, Colin (Hereford)
Knight, Greg (Derby N)	Shepherd, Richard (Aldridge)
Lawler, Geoffrey	Shersby, Michael
Lawrence, Ivan	Silvester, Fred
Lennox-Boyd, Hon Mark	Sims, Roger
Lester, Jim	Skeet, Sir Trevor

Smith, Sir Dudley (Warwick)	Wakeham, Rt Hon John
Smith, Tim (Beaconsfield)	Waldegrave, Hon William
Speed, Keith	Walden, George
Speller, Tony	Walker, Bill (T'side N)
Spencer, Derek	Waller, Gary
Spicer, Jim (Dorset W)	Ward, John
Spicer, Michael (S Worcs)	Wardle, C. (Bexhiil)
Squire, Robin	Warren, Kenneth
Stanbrook, Ivor	Watson, John
Stern, Michael	Wells, Bowen (Hertford)
Stevens, Lewis (Nuneaton)	Wells, Sir John (Maidstone)
Stewart, Allan (Eastwood)	Wheeler, John
Stewart, Andrew (Sherwood)	Whittield, John
Sumberg, David	Whitney, Raymond
Taylor, John (Solihull)	Wiggin, Jerry
Taylor, Teddy (S'end E)	Wilkinson, John
Temple-Morris, Peter	Winterton, Mrs Ann
Terlezki, Stefan	Winterton, Nicholas
Thomas, Rt Hon Peter	Wolfson, Mark
Thompson, Donald (Calder V)	Wood, Timothy
Thompson, Patrick (N'ich N)	Woodcock, Michael
Thorne, Neil (Ilford S)	Yeo, Tim
Thornton, Malcolm	Young, Sir George (Acton)
Thurnham, Peter	Younger, Rt Hon George
Townsend, Cyril D. (B'heath)
Twinn, Dr Ian	Tellers for the Ayes:
Viggers, Peter	Mr. Tony Durant and
Waddington, David	Mr. Gerald Malone.

NOES
Adams, Allen (Paisley N)	Forrester, John
Anderson, Donald	Foster, Derek
Archer, Rt Hon Peter	Foulkes, George
Ashdown, Paddy	Freeson, Rt Hon Reginald
Ashley, Rt Hon Jack	Freud, Clement
Atkinson, N. (Tottenham)	Garrett, W. E.
Beckett, Mrs Margaret	George, Bruce
Beith, A. J.	Gilbert, Rt Hon Dr John
Benn, Rt Hon Tony	Gourlay, Harry
Bennett, A. (Dent'n & Red'sh)	Hamilton, James (M'well N)
Bermingham, Gerald	Hamilton, W. W. (Fife Central)
Bidwell, Sydney	Hancock, Michael
Boothroyd, Miss Betty	Hardy, Peter
Boyes, Roland	Harrison, Rt Hon Walter
Bray, Dr Jeremy	Heffer, Eric S.
Brown, Gordon (D'f'mline E)	Hogg, N. (C'nauld & Kilsyth)
Brown, N. (N'c'tle-u-Tyne E)	Home Robertson, John
Brown, R. (N'c'tle-u-Tyne N)	Howells, Geraint
Bruce, Malcolm	Hoyle, Douglas
Callaghan, Jim (Heyw'd & M)	Hughes, Dr Mark (Durham)
Campbell-Savours, Dale	Hughes, Roy (Newport East)
Carlile, Alexander (Montg'y)	Hughes, Simon (Southwark)
Carter-Jones, Lewis	Janner, Hon Greville
Clark, Dr David (S Shields)	John, Brynmor
Clarke, Thomas	Johnston, Sir Russell
Clay, Robert	Jones, Barry (Alyn & Deeside)
Clwyd, Mrs Ann	Kennedy, Charles
Cocks, Rt Hon M. (Bristol S)	Kilroy-Silk, Robert
Coleman, Donald	Kirkwood, Archy
Corbett, Robin	Lamond, James
Corbyn, Jeremy	Leadbitter, Ted
Cox, Thomas (Tooting)	Leighton, Ronald
Craigen, J. M.	Lewis, Ron (Carlisle)
Cunliffe, Lawrence	Lewis, Terence (Worsley)
Dalyell, Tam	Litherland, Robert
Davis, Terry (B'ham, H'ge H'I)	Livsey, Richard
Deakins, Eric	Lofthouse, Geoffrey
Dewar, Donald	Loyden, Edward
Douglas, Dick	McCartney, Hugh
Dubs, Alfred	McDonald, Dr Oonagh
Duffy, A. E. P.	McGuire, Michael
Dunwoody, Hon Mrs G.	McKay, Allen (Penistone)
Eadie, Alex	McKelvey, William
Eastham, Ken	MacKenzie, Rt Hon Gregor
Evans, John (St. Helens N)	Maclennan, Robert
Ewing, Harry	Madden, Max
Faulds, Andrew	Marek, Dr John
Field, Frank (Birkenhead)	Mason, Rt Hon Roy
Flannery, Martin	Maxton, John
Foot, Rt Hon Michael	Maynard, Miss Joan

Meadowcroft, Michael	Sheerman, Barry
Michie, William	Sheldon, Rt Hon R.
Mikardo. Ian	Shields, Mrs Elizabeth
Millan, Rt Hon Bruce	Shore, Rt Hon Peter
Morris, Rt Hon A. (W'shawe)	Short, Ms Clare (Ladywood)
Nellist, David	Short, Mrs R.(W'hampt'n NE)
O'Brien, William	Silkin, Rt Hon J.
O'Neill, Martin	Skinner, Dennis
Orme, Rt Hon Stanley	Smith, C.(Isrton S & F'bury)
Owen, Rt Hon Dr David	Smith, Rt Hon J. (M'ds E)
Park, George	Snape, Peter
Parry, Robert	Soley, Clive
Patchett, Terry	Steel, Rt Hon David
Pavitt, Laurie	Stott, Roger
Penhaligon, David	Thomas, Dr R. (Carmarthen)
Pike, Peter	Thorne, Stan (Preston)
Powell, Raymond (Ogmore)	Tinn, James
Prescott, John	Wardell, Gareth (Gower)
Radice, Giles	Wareing, Robert
Randall, Stuart	Wigley, Dafydd
Raynsford, Nick	Woodall, Alec
Redmond, Martin	Wrigglesworth, Ian
Richardson, Ms Jo
Roberts, Allan (Bootle)	Tellers for the Noes:
Roberts, Ernest (Hackney N)	Mr. James Wallace and
Robinson, G. (Coventry NW)	Mr. John Cartwright.
Rogers, Allan

Question accordingly agreed to.

Resolved, That this House, recognising the importance to employment, defence, education and the economy of a strong high technology sector, applauds Her Majesty's Government's actions to support this sector through the provision of a favourable climate for business and through support for research and development; endorses Her Majesty's Government's continuing efforts to prevent, by discussion on a case-by-case basis, the extra-territorial imposition of United States law on United Kingdom firms exporting high technology from the United Kingdom; and supports the Government's initiatives to encourage British high technology industries and their intention during the Presidency of the Council of the European Communities to co-ordinate policies to promote European high technology co-operation.