HC Deb 18 January 1989 vol 145 cc325-7
11. Mr. Flynn

To ask the Chancellor of the Duchy of Lancaster if he will take action to guarantee the independence and security of the British semi-conductor manufacture industry.

Mr. Forth

The ownership of companies in the semi-conductor industry is primarily a matter for the boards and shareholders of those companies.

Mr. Flynn

Will the Government take action to ensure that Inmos remains British, either independently or as part of a larger British group? Does the Minister agree that the future of Inmos looks rosy in the short term under any circumstances because of the great strength of its products and its recent brilliant success? Does he further agree that if it is part of a state-owned company, SGS-Thomson, there are grave fears that future decisions on investment will be taken on national rather than commercial grounds? Will he guarantee that the British Government's involvement and investment in, and promotion of, Inmos will be at least as strong as such action by the French, Italian and American Governments in respect of their semi-conductor industries?

Mr. Forth

I am delighted that the hon. Gentleman has joined us in acknowledging that under state ownership a company's future is uncertain and in saying that he would prefer the company to remain in private ownership. I welcome his new view, which very much reflects those that we have adopted.

As the hon. Gentleman well knows—my hon. Friend the Parliamentary Under-Secretary of State for Corporate Affairs wrote to him recently—the matter is under consideration by the Director General of Fair Trading. Until he determines his views it would be improper for us to take a view.

Mr. Oppenheim

Is it not true that the British and European semi-conductor industries already get a great deal of help in the form of high tariffs, substantial Government subsidies and now, potentially, European anti-dumping duties? Do not these protectionist instruments only compound the inefficiencies of the British and European industries and disadvantage the industrial consumers of semi-conductors, making it far less likely that the assemblers of electronic products can sell them on the world market?

Mr. Forth

Yes. My hon. Friend, who has considerable and respected knowledge of these matters, has put his finger on the key, which is that everyone will prosper in a freely trading global market in which everyone benefits from the best products available in it. To look at the issue in a narrow, nationalist or protectionist way does no service to the wealth-creating sector.

Mr. John Garrett

Does the Minister agree that the Government are likely to allow the extinction of the domestically owned semi-conductor industry, with the likelihood of the control of Inmos moving abroad, together with 600 graduates, representing the largest pool of talent in this area in the world? A similar threat hangs over Plessey. Does the hon. Gentleman accept that we cannot maintain our place in the world market for information technology without a base of domestically owned semi-conductor manufacturing? Is this not another example of the vacuum where the Government's national information technology strategy should be?

Mr. Forth

The brief answer to the question is no. I can only reiterate at this stage that we cannot prejudge the matters that may be before the Director General of Fair Trading, or which may come before my right hon. and noble Friend the Secretary of State.

In principle, we believe that a free flow of capital, information and goods across national boundaries is to the benefit of consumers and producers alike, and we shall continue to encourage such moves.