HL Deb 22 July 1970 vol 311 cc1011-58

4.41 p.m.

Debate continued.


My Lords, I welcome this opportunity and privilege of congratulating my noble friend Lord Slater on his maiden speech, which he delivered with the effective voice of the North-East, and with an oblique reminder of what happens when one abandons sensible policies. When I looked at the batting list to-day, I was very surprised to find—I thought I had studied over quite a long time the normal procedure for a debate—that a Government spokesman was not following my noble friend Lord Brown. I thought it might be due to an oversight, or perhaps even a lack of courtesy, but I am at some disadvantage because I was hoping to be able to follow in the true spirit of the debate, and at least to know what the attitude of the Government really was.

But the oversight has been very well taken care of, because we have had the intervention for the Statement which has given me all the information I want for the debate in which we are now engaged. It is now quite clear that the attitude of the Government is to dismember those objects of which, doctrinally, they disapprove; that they are going—as my noble friend Lord Beswick tried to point out—to ignore the fact that in Government Departments there is a great deal of information which, in many cases, makes their Party programme not only difficult, but silly. That is the basis of this debate.

My noble friend Lord Brown wishes: To call attention to the policies and the institutional arrangements which have been developed during the last five years, designed to assist industry and to enhance collaboration with the Government…". If I had thought of it in advance, or had had any consultation with my noble friend, I think I should have accepted in preference the words of the right reverend Prelate the Bishop of Blackburn, who referred to the social and economic wellbeing of our country. Whatever we may do in terms of assisting industry and enhancing collaboration with the Government, the only object of the exercise is, I hope, social betterment, and even the Conservative Government have a pattern for how they hope to achieve an improvement.

The one point to which I want to address my attention—because it is a point which concerns some of us very profoundly indeed—is the institutional arrangements which the late Government had begun to set up in relation to a matter of very deep concern; that is, the whole question of pollution in this country. This is not an irrelevance. This is very much a question of assisting industry and enhancing the wellbeing of this country because, demonstrably, the pollution which is destroying our amenities to-day is one of the most flagrant instances of sheer inefficiency in industry.

The great traditional saying in the North was, "Where there's muck there's brass"; where you create muck you can extract money. That has been true since the Industrial Revolution, and the testimony of our countryside, our slag heaps, and the destruction of our rivers and a great many of our amenities is the result of the extraction of the wealth and the creation of the muck. I have said in other circumstances that pollution is a crime compounded of avarice and ignorance. To-day there is little excuse for ignorance, because we are confronted by the effects and we know a great many of the answers and what measures should be taken.

I am sorry not to have given notice to the Leader of the House that I might be posing this question, but I simply assumed that any question which I was likely to ask would be answered by the pro forma, which is, "This is under review; this is being considered", and so on. But to-day we have had an instance, in the case of the Land Commission, of the fact that when the Government make up their minds to do something they do it jolly quickly. So that while I am prepared to wait with some patience to see what is going to happen in regard to matters which concern some of us, not only in the industrial context but in the wider social context, until after the Recess when the Government have done their homework, I should like to know who takes care of the caretaker's daughter when the caretaker is busy taking care? What is going to happen in the meantime to many of those policies which are normally in cold storage, but which, if they are going to gather any momentum, ought now at least to be kept not in moth bails, but well-oiled? This is a matter of very deep concern to me.

I do rot want to anticipate any reaction of the Leader of the House to what I am saying, and I know that we shall get a perfectly sincere assurance that both he and the Government are just as concerned about pollution as we are. But I should like to have some idea of what institutional arrangements we can hope to see in terms of pollution and environmental control. That is all I want to say. I could have developed along many other lines the points which my noble friend Lord Brown made. Among other things, I am particularly concerned about what is going to happen to the industrial training boards—


My Lords, I wonder whether it will be helpful if I briefly interject at this stage. I think I am right in saying that the noble Lord was asking what interim arrangements there might be for departmental responsibilities regarding environmental pollution, pending the review of departmental functions as a whole. It might be helpful if I make it quite clear to him that pro tem., pending that review, this is the area of responsibility of my right honourable friend the Minister of Housing and Local Government.


My Lords, I am very grateful to the noble Earl the Leader of the House for that re-assurance, although I knew the position. But I would ask again what has been initiated—and I assure your Lordships that in this case I say it in no Party spirit, because I have been involved, in the question of pollution, with a great many industrial concerns which I know are very heavily committed to doing something about pollution. In fact, they may have begun to discover that, "Where there's muck there's brass". Indeed, a great deal of this waste is not only waste in the serse of a social waste but is an extravagent waste of a great many materials capable of profitable exploitation. In fact, in a broadcast to America I said that what we ought to be talking about is that we can now make wealth from waste; and that will be part of our answer to pollution. My Lords, I hope that I have made my point about pollution. I again offer my congratulations to the noble Lord, Lord Slater. I know that we shall hear him many times in the future, and we shall be very glad.

4.52 p.m.


My Lords, the other day, in another place, there was a significant announcement. It came from the Minister of Technology, Mr. Rippon, who informed honourable Members in another place that in future there would be no unnecessary Government intervention in industrial affairs. This aroused the interest of honourable Members, and many questions were asked. But he hedged and dodged, as one might have suspected—at any rate, those who know him might have suspected—and the result was that no information of any significance was vouchsafed on that occasion. The assumption is that the Government have not yet made up their minds about their policy in the future.

It is of no use for the Government to excuse themselves on the ground that they have not had time to review the situation. We had an example just a few minutes ago. Along come the Government and say, "We are now going to abolish the Land Commission."—just like that: instant government, if ever there was. Yet when it comes to the question of intervention, or non-intervention, in industrial affairs the Government have to review the situation; they have to take time. Why should they take time? For the last four years at least they have been cogitating and indulging in research; preparing blueprints of the most voluminous character, so we understand; and making pronouncement after pronouncement: declarations, firm and dogmatic—no nonsense about it. Now they come along, having won the Election, and say, "We want time to review the position." It is not good enough. Of course, as my noble friend who has just resumed his seat mentioned, this does not take the form of debate. If the Government had sought to reply to my noble friend Lord Brown, then we might have got our teeth into debate and had some cut-and-thrust. As it is, we are almost speaking in a vacuum. It just is not good enough.

On the subject which has been raised by my noble friend, and which he developed with great skill, I should like to preface my further observations with this remark. No Government in this century have done more for capitalist industry than the previous Labour Government. It may be asked: is this the objective that one expects from a Labour Government—to bolster up capitalist industry, to prop it up when it is inefficient, when it is almost on the verge of bankruptcy? Is this the purpose and objective of a Labour Government? After all, they are accused of being a Socialist Government. Propping up capitalist industry is quite alien to a Socialist purpose. It might be necessary for the purposes of preparing the ground for further adventures, but it is certainly foreign to a Socialist purpose, although it might be suitable for a Labour Government.

Let us see what has been done. I preface my further observations thus. At the end of the debate I should like to know whether anybody on the Government side, in winding up, can interpret, so far as it is possible to interpret, that remarkable statement made by the Minister of Technology, that there will be no further Government intervention in industrial affairs. What does it mean? What does it denote? What is the connotation? We are entitled to know, more particularly because there is much uncertainty among industrial firms who for several years have been gathering in the spoils provided by a beneficent Labour Government. To what extent have these firms profited? Let us look at the facts and the figures. I cannot go over the whole ground because it is much too late, and I would not seek to detain noble Lords unduly; but let us take a couple of figures. In 1969, which is quite recently, the Government actually expended on industry, in investment grants—cash on the nail—£590 million. It is perfectly true that some part of that is returned in tax—I do not deny that. And why not? Five hundred million pounds is "a lot of potatoes", if I may use an American expression which I hope your Lordships will understand.

But there is an estimate for the current year. What is the estimate? It is not£590 million but£600 million, for the benefit of industry—to prop it up, to keep it on its feet. This is what a Labour Government have been doing. I want to ask: what are the present Government going to do? Because the C.B.I. would like to know. Its constituent elements are consumed with anxiety. They do not know where they are. But that is precisely the position of the Government: they do not know where they are. It is not a valid excuse to come along and say, "We have not had time". They have had too much time. They have been straining at the leash to gain power. They have had plenty of time—and with what result? They do not yet know where they are. But we want to know where we are; and so does the industry of the country. It is very important.

I am bound to say (it may confound my noble friend Lord Brown, though that is not my intention: this is just a passing thought) that it occurs to me that he presented what might be described as the capitalist case for industry, not the Socialist case for industry. But I can understand that: we have got to repair the ravages of capitalist failure. We have to do that; and, indeed, we have made an effort, without a doubt. But, of course, one can stand on either this leg or that leg. Let me furnish an example to illustrate the point I have just made.

A Labour Government, for instance, can decide to let capitalism rot; to let it go by the board. There is no use in propping up, by providing investment grants or subsidies, or by subventions of various kinds, an industry that is efficient and capable of high productivity. When everything in the garden is lovely, there is no reason why they should get anything: a very good case has to be made out for providing them with subventions. But what about inefficient industry, the industry that is falling off its feet? They do not deserve to be provided with financial assistance because they happen to be inefficient.

So a Labour Government—provided that it is a Socialist Government with Socialist purposes—could have said: "Let capitalism go to the board!There is to be no money, no subventions of any kind, no investment grants, no cash on the nail". They could have said that. And in that way there might have been a revolutionary situation, and we could have taken over the whole of industry. That is one way. I do not agree with it. I merely mention it in passing. Or you can adopt another method; you can stand on another leg, one regarded by some as a more stable leg. That is, just to recognise the fact that you are living in a capitalist economy, what we call a "mixed economy"—and it is very much mixed, so much so that sometimes you can hardly fathom what it is about, except that industry always wants aid from the Government.

You can adopt that method, the method propounded by my noble friend Lord Brown in a very eloquent fashion with all the facts available. You could do that. But what we want to know is: Is that the intention of the Government—to go on propping up industry by investment grants? Is that the intention? Or are they going to refuse to provide investment grants in future? We ought to know. After all, this is the very basic foundation, the rock upon which Government economic policy stands. We must know where we are. Industry wants to know: Is it going to be left in the lurch? Is the policy of the Labour Government to be abandoned? Is there to be no more propping up, no more money? Is industry to stand on its own feet?

Why do I ask that? For the very good reason that this is precisely what the Prime Minister said not many weeks ago. I will quote him. If I do not quote him accurately, no doubt the noble Lord opposite in reply will correct me. This is what I understood him to say: that in future the Government should be the last port of call for industry. That was what he said: "the last port of call for industry". In effect, he was telling industry, "You can go to the banks, to the financial pundits, to wizards in the City of London. Go to those places and see if you can capitalise in those areas. Don't come to us". That is what he meant. If he did not mean that, then perhaps the noble Earl opposite will be kind enough, or courteous enough, to say what he did mean. And I do not doubt for a moment that he is courteous already to make himself available to my point of view—although it is not my point of view; it is the Prime Minister's point of view.

"The Government are the last resort"—that is what the Prime Minister said. "As a last resort come to the Government." What arrant nonsense, my Lords! Every industrial tycoon in the country—maybe there are some among noble Lords; and I hope that the word "tycoon" is not regarded as offensive; it is not intended to be; I picked it up somewhere—everybody associated with industry, is well aware that industry in this country (for a variety of reasons which I need not go into: they must be familiar to noble Lords) must ask for Government intervention.

I recall that many years ago, when I was associated with the seafaring community and related in a way with the shipping industry—not financially, of course, but in the way of offering advice and all the rest—the shipowners said: "No Government intervention!" They were individualists to a man—independent, resourceful. They were shipowners then, not financial pundits, not accountants. But they changed all that. Would noble Lords take the opportunity of inspecting the booklet produced by the Chamber of Shipping over a number of years and contrast the current issue with the statements made by the shipowners, say, 30 or 40 years ago? Then they were independent; now they have come along—I do not like to use the term I am about to use—cap in hand to the Government, or to the Board of Trade, asking: "What are you going to do for us?" and talking of flags of convenience, of competition and the rest. I say this advisedly and deliberately, and I challenge contradiction; industry in this country, of any kind, must occasionally come to the Government for assistance, and the Government must intervene. There is no possible way out, no alternative.

I want to address myself, if I may, to one aspect of the subject, to shipbuilding—only in passing, not to make a long debate of it. What is the position there? My noble friend Lord Brown made a short reference to it. My Lords, no industry in this country has gained more from the financial assistance rendered it by a Labour Government than the shipbuilding and shipping industry. Had it not been for the help rendered—financial and in credits, and by a variety of methods—it is very doubtful indeed whether the shipbuilding industry of the United Kingdom would have survived. Some years ago the shipbuilding industry was in the doldrums, suffering from the blows of harsh competition from abroad—competition which was bolstered up by subventions of every sort and kind. There is not a shipbuilding country in the world where subventions are absent. The shipbuilding industries of Japan, of West Germany, of the Scandinavian countries, all are bolstered up by subventions. So that method had to be adopted in this country.

It was begun, I admit—I give them credit for it—by a Conservative Government with a very small grant, a matter of£75 million in the way of credit. The Shipbuilding Industry Board was established and it was decided by the Labour Government to provide loan credit of£200 million on the recommendation of that Board. That sum has now been increased to£400 million. And only the other day I discovered from the pages of Hansard of the other place—even now that I am in this Chamber I venture to read the Report of the place at the other end of the corridor—that the Conservative Benches, not the Labour Benches, were demanding more than£400 million. Indeed, a Member of the Government—a junior Member, an excellent person, a man of considerable integrity and with great knowledge in this subject; I do not know whether I should mention his name—claimed credit for having advised the Labour Government to make it£800 million. And with good reason: because the shipbuilding industry has suffered considerably in terms of world trade. Of the total global shipbuilding orders way back in 1960, a matter of 10 years ago, our share was£1.4 million as against£9.7 million. Last year, the last available year for which figures are presented, the proportions were£2.4 million for the United Kingdom against£26.9 million—a startling change in the situation. The position has improved in shipbuilding because of the assistance rendered by the Labour Government but the proportions are still far from satisfactory.

Moreover, the shipowners still continue to buy their ships from overseas. In 1967 the total volume of ships ordered by British shipowners from overseas amounted to£19 million. In 1968 the figure was£75 million, and in 1969 it actually amounted to£150 million. That is what is happening, and it is very unsatisfactory for the shipbuilding industry and for the related shipping industry. The Government have had to come in and help, and they will be compelled to help. I think we on these Benches are entitled to ask (because we are concerned about the economic situation and the interests of our country; very much so), what are the intentions of the Government? I repeat, there must be no more excuses; no more coming along and saying, "We have not had time."

Yesterday, my Lords, we paid tribute to a very fine man who has passed away. I knew him well; he was a brilliant debater. In the tributes paid to him—in the Daily Telegraph this morning and in The Times, and last night on television—we were told that Mr. Macleod had been preparing for a long time, for almost four years; that he had been studying hard; investigating; preparing the ground for his ambition—quite a laudible ambition—to become a Chancellor of the Exchequer and to be able to implement his policy and programme. Already we are told that because, regrettably, he has passed away, there is nobody to take his place. That is what we are told; that the Government are at their wit's end.

Who is to occupy that exalted position at the Treasury? Mr. Maudling has been mentioned, but whether he should be switched from the Home Office to the Treasury is a matter for very great care. And Sir Keith Joseph's name has been mentioned. I ask your Lordships—I just ask, I do not demand an answer—does it matter who goes into that office? This is the point I wish to make. Mr. Iain Macleod had been preparing; painstakingly, and with the courage and the knowledge that he possessed. All the programmes and items of policy that he was preparing ready to be put into operation should be available at the Treasury. When the noble Lord, Lord Butler of Saffron Waiden, spoke on television last night he was asked by the interviewer whether he had ever been appraised by Mr. Macleod of his economic and financial proposals. The noble Lord, Lord Butler, for a moment, exercised some caution; and then he admitted that he had been given some information. Others may have gained some information also, particularly in the Treasury. I have been in Government and I know that it is quite impossible to prepare, and study, and interest oneself in a particular idea and project without the civil servants knowing something about it and colleagues being made aware of it. Of course, my Lords., the Government know very well. Anybody could be sent to the Treasury now; it is all ready. What it portends for us I do not know—neither does anybody else. That remains to be seen.

So, my Lords, I support my noble friend Lord Brown. Though I may not have agreed with every word he uttered, I agree with him to this extent: that the Government ought to come clean and very soon. We are going on vacation. I hope that before we do, perhaps tomorrow, if not to-night (I would prefer to have it to-night; but if not to-night at best to-morrow, on the last day before we go into Recess) we shall be furnished with some information to enable us to tell our industrial friends outside (some of us have industrial friends outside, strange as it may seem) something to relieve them from their anxiety. That is what we are asking for, and that is the burden of my observations.

5.16 p.m.


My Lords, I, too, as a recent fellow sufferer, would like to congratulate the noble Lord, Lord Slater, on his experienced maiden speech. As for the speech of the noble Lord, Lord Shinwell, I suppose that I should describe myself as "Judy following Punch." I heard with interest the noble Lord, Lord Brown, introducing the Motion, and I hope he will forgive me in absentia if I describe him, in a general and metaphorical way, as "Farmer Brown", and not as "Mother Brown" as did the right reverend Prelate the Bishop of Blackburn in his thoughtful address. For the noble Lord, Lord Brown, reminds me of a farmer who has invited his friends to come and view his prize herd of sacred cows. He has taken us to the paddock; we have looked over the fence and, low and behold!although the field has been over-grazed, die herd—despite the rich pasture on which it has been feeding— remains wasted and emaciated; reduced to skin and bone. My Lords, what the noble farmer forgot after all his careful planning and foresight was the warble fly. The warble flies have been hard at work feeding on poor industry over the past year or two. Most of the muck spread on the fields by the Ministry of Technology and most of the cake ladled out by the I.R.C. has been wasted, while the flies have fattened and multiplied.

Labour costs have risen in industry by as much as 15 per cent. over the past year, and are still rising. It seems likely now that the whole increase in wages and salaries, from 1968, when the incomes policy was abandoned by the last Government, to the end of 1970, may well be as high as 25 per cent., and the increase in material costs another 25 per cent. This is the road to economic disaster; and I warn noble Lords opposite that, having compounded their troubles in 1964 by crying, "Economic crisis", they may well fall into the same trap in 1970 by crying, "No crisis."

My Lords, there is a growing crisis, engendered by former Ministers on the Benches opposite, when they sat on a head of steam for two years with a statutory incomes policy and then let it go before the Election. I am not exaggerating when I tell noble Lords that a director of a leading manufacturing company (and a political sympathiser with noble Lords opposite), when asked in the spring by his managing director what he should do when faced with a wage demand amounting to no less than 20 per cent., replied, "Give it to them; this is the year of the worker. "I would suggest that every year should be the year of the worker, but not to the tune of a 20 per cent. annual wage increase. I would suggest that all directors and managements show a greater sense of responsibility in future, whatever their political beliefs, and even in an Election year.

The crisis of rising wages and rising industrial costs will be followed by economic disaster in a year or two's time, unless the situation can be brought quickly under control and if it is not already too late. The new Chancellor will not have time to wait or waste, and I counsel him to adopt a policy of reduced taxation, as an incentive to dampen down wage demands, followed by a vigorous drive to increase savings, and to promote and re-introduce a voluntary incomes policy. I shall say no more on this subject at this time, because it is not strictly the business of the noble Lord's Motion.

I listened with interest to noble Lords opposite during the debate on the gracious Speech and also to Opposition speakers in another place, and it seems to me that they are trying to represent themselves as the champions of planning, crossing swords with the Government, whom they see in their minds as laissez faire economists of the old school, disciples of Adam Smith, dedicated to the free play of natural market forces. And I feel that the noble Lord's Motion is very much in line with this concept. If Her Majesty's Government fail to stand by these masterpieces of planning created over the past five years by the previous Government, then they are to be tarred with crude laissez faire and feathered with clumsy market forces.

It is not the market forces, but the institution, the brainchild of the planners, which has become crude and clumsy. Examine I.R.C. I can only commend the objects for which it was set up, to promote the efficiency and profitability of industry, and must praise the well-intentioned efforts of the brilliant men and women who administer that organisation. But it was built on the wrong foundations, in that it is based on a conception of industry which is obsessed with structure, the conception that Government can tinker with the structure of industry as if it were drawing up blueprints for a new town or development area. Once set up, it was seized upon by the former Government as an instrument to provide a hidden subsidy for manufacturing industry in its fight to capture export markets: and this at a time when it was evident to the last Government that increased export represented their only hope of salvation from the flight from the pound, which their own alarums and excursions had engendered.


My Lords, is the noble Earl implying that this Government do not think that exports are vital for the existence of the Government and our economy?


No, my Lords, what I am saying is that the objects of I.R.C. will change. With no judicial standing, I.R.C. undertook quasi-judicial functions, acting as umpire in the battles between financial and industrial giants, to the delight of the financial Press, and often to the detriment of companies whom it should have been at pains to protect. And its final role in the hands of its last political masters was to pour millions of public money into a limited liability company to keep it from bankruptcy, in the knowledge that this money was required to sustain in employment the shipwrights of the Merseyside, because they cannot bring themselves to work as hard as their German, Dutch or Japanese counterparts.

There is no sense in feather-bedding industry—I know that the noble Lord, Lord Brown, does not like the word: he called it "snide" but I should prefer to call it "snug"—in the name of full employment. Social justice and humanity dictate that we protect those made unemployed in inefficient or declining industries by redundancy payments, by unemployment benefits and by retraining schemes. But it is expecting too much of the taxpayer that he should be called upon to subsidise out-of-date productive capacity. Nor can such a policy have in the long run other than an adverse effect upon our competitive position in world markets and upon the balance of payments.

In this last role, the I.R.C. has become a back door to nationalisation, giving the State a controlling interest in companies which it is no part of the business of Government to control and which, if they are declining industries, may prove an added burden to the already overburdened taxpayer. I would have no objection to I.R.C. performing, perhaps in conjunction with I.C.F.C, a pump priming role to get industry over a temporary hump, when liquidity is scarce, much in the same way as I.M.F. provides temporary facilities for debtor nations. This, I believe, would be a useful function and would be of some assistance to industry, especially at the present time, when it is suffering from a shortage or withholding of private investment capital.

I have suggested priming the pump of the private sector of industry with public money, and that I.R.C. be retained as an instrument for this purpose. And I have mentioned reductions in taxation which I believe to be necessary and urgently required to ease the pressure for higher wages. I cannot make these suggestions without pointing to sources for all this money, which I would estimate to be at least£1,000 million per annum between reduced taxation and increased investment in the private sector. Part will have to come from savings, but part could come from the welfare services. This thought, I know, will be distasteful to noble Lords opposite, but in business terms it is no good carrying overheads that we cannot recover; and that is what we are doing when we make sacroscanct expenditure on welfare. It is not in the interests of the nation to live well in the short term and then go bankrupt.


My Lords, I do not want to interrupt the noble Earl, but he is surely well aware that in most of the developed nations of Europe they are paying 50 per cent. tax on their pay rolls to support their social services. If he thinks that reducing social services in this country is a means of helping industry, he is very much mistaken. If European industry can survive with that degree of taxation directly on their pay rolls, it is not too much to ask British industry to survive on the current level of taxation, which is very much less in these respects.


My Lords, I have had some experience of industry on the Continent, having a factory over there. Their payments for social services are in addition to a rate of corporation tax somewhat lower than our own, which in a sense balances off the other. I am not suggesting that we can do without welfare services. If the noble Lord will allow me to carry on with my argument, he will see that I am far from suggesting that, but we have to find the money from somewhere.

In this connection, I should like to tell a little story—a true story. A company with which I am familiar recently experienced an unofficial strike. When the strikers went out of the factory gates—and I repeat that this was an unofficial strike—they were met by a representative of their union, who told them, "Go to the Social Security and while you are on strike you are entitled to the following benefits:£3 per week for your wife;£3 per week for each of your children. Your rent or mortgage interest will be paid by Social Security, as will the rental due on your television set and other appliances; and you will get an allowance for lighting and heating. All this will be mainly tax free, and in addition you can claim back the tax paid in the preceding period."

The effect of this, my Lords, was that men on unofficial strike were receiving in excess of£20 per week from social security; and at least one man was receiving more each week than he would have done had he remained in employment. I see that noble Lords opposite are doubtful about this, but I shall be happy to provide full details. This is not a satisfactory way of dealing with unofficial strikes, nor a proper expenditure of public money. These are extreme cases, but there are no doubt many such; and they add up to a substantial part of social security expenditure which could be reduced or eliminated.

It is no more true to portray present Ministers and their supporters as laissez-faire economists than to describe the previous Government and noble Lords opposite as planners gone mad. The truth lies somewhere halfway between these two figments of the imagination. Certainly we shall not overcome our present difficulties without planning in all fields of the economy—but perhaps rather less extensive planning than noble Lords opposite and the Opposition in another place would consider desirable, or would themselves undertake. I believe that market forces must be allowed some play, especially in the field of industrial reconstruction, or, as I should prefer to call it, reorganisation. While, therefore, I am in favour of retaining I.R.C. as an institution, I recommend that the skills and energies of its management be re-directed to a pump-priming function in line with the original objects for which it was set up. I see no reason for I.R.C. to receive equity, and no merit in its doing so. I hope that the Minister will induce I.R.C. to divest itself of its existing equity holdings at an appropriate time and when market conditions are favourable.

My Lords, if parts of my speech have seemed irrelevant to the Motion before noble Lords to-day, I must, for my part, criticise the Motion as being irrelevant to the main issues which confront industry and the nation. It is not the noble Lord's sacred cattle that will ensure the efficiency and profitability of industry. These depend upon the hard work and thrift of the people—qualities which are inborn in the British nation but which require a spark and a challenge to arouse them. I hope that the present Government will light that spark and pose the challenge. Without a clarion call for action this day, we shall surely and inevitably be lost.

5.33 p.m.


My Lords, I am sorry that I cannot follow the noble Earl, Lord Dudley. I should like to answer him perhaps on another occasion, because I was an industrialist, and I take a quite different view on some of the things that he said. I am grateful for the opportunity that my noble friend Lord Brown has given me to draw attention to an old problem. I have spoken on many occasions during the last five and a half years on the need to develop our own mineral resources in order that we should achieve a maximum degree of independence. We are now far too dependent on other countries whose political future may not be as stable as our own.

My maiden speech was on an Unstarred Question on this subject, and I was supported by my noble friend Lord Brown. This time, I hope that my contribution, as his was on that occasion, will be pertinent. What I have to say will be short and will take the form of a plea to the new Government not to be overruled once more by short-sighted Treasury philosophy. It is now 21 years since the Mineral Development Committee set up by my noble friend Lord Shinwell produced its Report. I should like to pay tribute on this occasion to my noble friend's far-sightedness in setting up that Committee, of which I was proud to be a member.

We were 12 members, under the chairmanship of the late Lord Westwood. Six of us were experienced mining engineers or heads of mining and geological departments, and even the secretary was a mining engineer. There are three of us who were members of that Committee and are now sitting in your Lordships' House; the other two being my noble friend Lord Balogh, who is an economist, and the noble Lord, Lord Thorneycroft, who wrote the Minority Report, differing only on two of the main conclusions, those which advocated the nationalisation of all minerals. He did not, I am glad to say, disagree with the other many recommendations, which included an enlightened attitude towards the pattern of mining taxation as adopted in all other countries where base metals are mined. I hope that the noble Lord still supports all the recommendations except the two that I have mentioned.

This important Report is still a classic. It is a very neglected Report, in spite of the many times that its conclusions have been quoted in another place, here and elsewhere. At last there seems to be some hope that the recommendations are to be examined. My right honourable friend the Leader of the Opposition in another place took action when he was Prime Minister in the autumn of last year, and instead of there being involved in mineral development some eight Ministries, there is now one department in the Ministry of Technology charged with a responsibility to investigate and report on the future pattern of mineral development, including, I hope, a comprehensive geological survey and the examination of all means to encourage the exploitation of our mineral wealth. As the work of this department will be of vital importance in the future production of what are really strategic minerals, my plea to the Government is not to guillotine the work that this department is doing. We have already lost over 20 years, and time is now running short.

I feel like a voice in the wilderness. So far as I know, there are only three, or possibly four, Members of your Lordships' House who are concerned in the practice of mining and geology. My noble friend Lord Energlyn is out of the country, unfortunately, otherwise I should not feel quite so lonely. However, at a later date, I hope to put down a Motion for debate and to muster everyone who realises the danger that we are in by not giving our utmost support and encouragement, as the Irish have done, to international mining companies. I know that there are concessions, all of which can be wiped out overnight. The Irish Government entered into a definite long-term programme. The result is that Ireland, in only five to six years from the start, are producing ten times the average annual value of what we have been producing over the last forty years—and Ireland has never been famed for its mineral wealth. Yet in Cornwall we have one of the most, if not the most, highly mineralised regions in the world.

There are Members of your Lordships' House who may not be chartered mining engineers but whose knowledge of the policies of international mining companies, by reason of their being directors of such companies, is more than adequate. They can confirm the fact that the attitudes of Governments play a very importart part in decisions to spend large sums at maximum risks in the countries where they operate. Before I put a Motion down for debate after the Recess, I shall do some research work with the object of enlisting maximum support from directors of international mining companies who are Members of your Lordships' House.

In the meantime, once more I say that I hope nothing will be allowed to disrupt the very valuable work being carried out by the Mineral Development Department of the Ministry of Technology. I was very pleased to know that the noble Earl, Lord Bessborough, is to answer questions on behalf of the Ministry of Technology in your Lordships' House. I am aware of his interest in the development of natural resources, and I hope he can extend a protecting arm over the work now being done in his Department. We mining engineers are as much concerned about the economic future of our country as any Treasury official or economist, although each may see the problems in accordance with the limit of his own experience. We know we are now producing only 5 per cent. of the base metals we use and must use if we are to survive economically.

My Lords, it would be unfair to ask too many pointed questions so early in the life of a new Government, and the object of my participation in this debate is to give notice of the Motion I referred to earlier. I hope answers will be given to questions which are now urgent, and such answers will, at last, be quite satisfactory to the mining industry. As my noble friend Lord Shinwell said, industry deserves to know as quickly as possible the policy that a Government is going to follow.

We shall, as the years go by, be more dependent on what we can produce in our own country then we have been for the past hundred years or more. All wealth comes from the earth, and as industry develops in to-day's undeveloped countries they will be ever more reluctant to part with the fruits of the earth contained in their own country and needed in their own industries. It takes the best part of ten years to prospect, prove an adequate yield, sink shafts, drive development levels, build processing plants and attain a profitable production run, not the few months it takes to build and equip a factory to use the product of that mine.

I have been in this fight for 33 years. I feel we could now be coming to the last rounds, but if that new Department is allowed to fade out, no words will be sufficiently strong to express the contempt of the whole mining industry, both capital and labour. If anything, the Department requires strengthening in order to be adequate for the tasks demanded and to cut down the time needed just to confirm the conclusions we came to twenty years ago, also to resist any whittling down on the old spurious excuse that the mining industry is seeking preferential treatment.

My noble friend Lord Brown early in his speech referred to the whispers going round about the Government programme for industry. Recently there was a disturbing report in the Daily Telegraph dated June 29 of this year. This was headed, "Tory threat to kill Britain's mining industry". Now I quote extracts from this well-informed report which deserves recording in a much more permanent way than is usually given to newspaper reports: Britain's undoubtedly substantial mineral deposits are, in fact, virtually untapped. They are untapped because exploration, mining and metal recovery techniques in the late 19th century were positively primitive compared with those of to-day. Mines then often closed down after reaching a depth of 400 feet or so because of minor water problems. Geophysics, geochemistry and deep diamond drilling were unknown in the 19th century. Discoveries were virtually all made from visual observation of mineral outcrops. No one knew until quite recently that the massive gabbro rock formations of the Aberdeenshire area are nickel bearing. Consolidated Gold Fields and Rio Tinto Zinc have found 1 per cent. nickel sulphide values there and are now actively prospecting the area and tying up mineral rights. They may yet come up with a British Poseidon. There is probably more tin left in Cornwall than has been tatken out of it in the last 3,000 years. Britain also contains Europe's largest tungsten deposits at Henerden in Devon and has sizeable fluorspar fields. I know this area and I know these places.

The article continues: North Yorkshire, for example, contains a major world potash field… Given a decade of development, it is conceivable that Britain could save at least half of her£400 million a year import bill for copper, lead, zinc and tin from domestic production… But it is no good just keeping on the present investment grants system to encourage the mining industry. The first snag about grants is that their value falls to 20 per cent. outside the development areas.… The second reason for instituting a special grant is that the mining companies require long-term stability so that they can plan their mines. If grants are bestowed or withdrawn on political whim it will destroy any number of delicately balanced mining projects. Even the egalitarian-minded Labour Government recognised the need for special mining industry incentives when it completely changed the basis on mineral royalties. Before the change mineral rights holders were faced with an enormous tax disincentive if they allowed mining companies to work their land. That was one of the finest acts of charity ever performed by the Labour Government. This enlightened action has really cleared the way for the long-term development of Britain's great mineral potential. But I am certain this development will be assured if mining grants could be created and mining's special and ligitimate needs recognised in our tax codes. The Tories have a golden chance to press home the advantage already won. My Lords, the question is whether the new Government will now press home the advantages created for them by the 1945–51 Labour Government in the shape of the Mineral Development Committee's report, ignored by the Conservatives between 1951 and 1964 and now reopened by the last Labour Government, or are they going to allow themselves to be once more the victims of an unenlightened, negative and antiquated Treasury policy?

5.48 p.m.


My Lords, until a few minutes ago I thought that all the noble Lords who had spoken in this debate, with the exception of the right reverend Prelate the Bishop of Blackburn, had disappeared for the day. Whether this was in expectation that I was going to repeat everything that my noble friend Lord Brown has said, or, equally, in the certainty that we were not going to get anything very definite from the noble Earl, I do not know. At any rate, I was rather depressed until I saw them return. Although I do not see my noble friend Lord Slater, in the House (perhaps he is checking his contribution to Hansard) I should like to congratulate him on a most moving maiden speech. Many of us made maiden speeches in this Chamber many years ago, and one felt that in his speech there was some of the history, tragedy and quality of British life in those areas of Britain which have suffered so much in the past.

Before I come on to the main theme, I should like to deal with the speech of the noble Earl, Lord Dudley. I must confess and apologise to noble Lords opposite that it is my fault that the noble Earl spoke, for I asked him to do so. That was clearly a rash and enthusiastically misguided thing to do. I must say that I found it very trying that he freely and somewhat disarmingly admitted that some of his speech had nothing at all to do with the subject of the debate. None the less, I suggest that he puts down a Motion on some of these subjects, so that he can deploy his accusations against unofficial strikers and his generally brisk, if dangerous, attitude to industry. I suspect that he is so far to the Right of many of his noble friends in regard to industrial policy that his speeches are, if anything, an embarrassment to the noble Earl, Lord Jellicoe. However, at least his vitality is appreciated—a vitality which I would say is surpassed, as I am sure your Lordships would acknowledge, by the vitality of my noble friend Lord Shinwell, who delivered a most formidable speech to which I hope we shall receive some answer this afternoon.

I felt that my noble friend Lord Shinwell, like all of us, was teetering on this difficulty of feeling that somehow we had to support capitalism in industry in the interests of the nation, but not being quite sure whether it was respectable to do so. But it is of course a fact that we live in a mixed economy. My noble friend Lord Brown has made a most formidable case to those who would listen to it seriously, and I ask the noble Earl, Lord Jellicoe, to do so. Whatever "warble-flies" may have been around, were in industry already. One of the things we were tempted to do was to get rid of some of the "warble-flies"; and our policy is in fact to improve the effectiveness of the economy. These arguments have been very powerfully supported by my noble friend Lord Shinwell.

Then we had that very interesting speech on mineral development from my noble friend Lord Arwyn, who seems to have left us—the rapidity with which noble Lords move is remarkable. However, I am very glad to welcome back to the Chamber my noble friend Lord Slater, whom, as he is an old and experienced House of Commons man, I should not have expected to make the mistake of not being here for the winding-up speeches. I will not repeat my tribute to him, but the House was deeply moved by the noble Lord's remarks. Then we had another important aspect brought in by my noble friend Lord Ritchie-Calder. This is a continuous spectrum and the whole of the environment is involved in the role of Government in relation to industry.

Like my noble friend Lord Shinwell, I am rather astonished that the Government, who if we were to believe their Election propaganda had thought all this out in advance, have so far said nothing on this subject. The noble Earl, Lord Jellicoe. I know, can properly complain that he has not yet spoken. I will not twit him too much, but I strongly suspect that he has little to say to us. Nevertheless, we live in hopes. It occurs to me, since there is quite a considerable House present, that if we do not get a satisfactory reply from the noble Earl we might recommend the House to adjourn the debate. It is possible that there would then be a Division. I see the Whips on the other side looking apparently not very worried about this; they have their numbers tucked away somewhere. Hut if we do not hear anything very definite this afternoon we shall have to consider what our action will be. That will be a matter for my noble friend Lord Brown when he comes to make a brief reply.

What we basically want to know is what steps the Government propose to correct what they regard as excessive Government intervention in industry—the noble Earl's "warble-flies". The noble Earl, Lord Bessborough (I am sorry he could not be here to-day; I realise that he is abroad on Government business), said that the new Government believe that intervention by the last Government went too far. We on this side—my noble friends Lord Delacourt-Smilh and Lord Shepherd, and I myself—all pressed him to give a single specific example. We hop; that we shall be given some examples this afternoon. I shall come on to some of the noble Earl's remarks because he is on a valid and logical point with regard to certain industries, and we should like to know what the Government's policy will be towards these industries in the future.

The truth of the matter is, my Lords, that the previous Government—and I ask noble Lords opposite to take this observation seriously, as I am sure the noble Earl, Lord Jellicoe, will—developed a whole series of practical policies and provided the arrangements, many of them pragmatic and experimental, to make those policies effective. These have been of value in persuading industry to reform and, indeed, in certain areas, to modernise itself and to improve its structure and management. Of course it gave some pain to some noble Lords and honourable Members in another place to see the money involved going out. I suspect that my noble friend Lord Shinwell, too, suffered a little in the process. But we all accept, as he did, that this was in public industry. As my noble friend said, it is not only we but industry who need to know the answers.

So far the Government have been unable to put forward any concrete proposals. Perhaps they have drawn a sheet, a curtain, over their Election programme—although nasty little bits like that on the Land Commission came up to-day. While the fact that the Government have not told us of their proposals may be something of a condemnation of their electioneering, it gives us some hope that they will continue to think hard, and to think hard about: the policies of the previous Government. I stress to the noble Earl that, as my noble friend Lord Brown made clear, we do not approach this problem in a doctrinaire sense at all. It was already apparent when we came into office, as indeed it must be apparent to the present Government, that the culmination of monetary policies and market forces, which evidently appealed to the noble Earl, Lord Dudley, would not alone succeed in correcting the remaining basic weaknesses in British industry. What frightens me is that even if the Government accept some of our policies there will not be the will to develop these policies further.

It is worth just mentioning again some of the grounds for Government intervention: there are any number that one can cite. There were the basic purposes to which the right reverend Prelate referred. I do not seek to put these grounds in any order of priority, but basically they are to promote higher levels of productivity and efficiency; they are also, in certain areas, to achieve a measure of public accountability. But all are designed to promote national and, in particular, regional policies and to do so in relation to the needs of society generally. There are the social needs, such as the institution to deal with pollution, on which the noble Earl has already intervened. And the instruments are extremely varied. There is no single textbook version that is applicable in every case. It is necessary to have a great deal of flexibility. It is also necessary to realise that these projects absorb manpower; it is necessary to judge whether they are really effective in their purposes.

In the last years of the Tory Government, from 1962 to 1964, the Government of noble Lords opposite showed some enthusiasm for creating new interventionist instruments. They had the National Incomes Commission, which we thought defective in certain important aspects, particularly in relation to prices. There were the National Economic Development Council and the industrial training boards. All credit to the previous Government! But what we should like to know is whether the Tory Government of to-day are going back on their own initiatives in order to appease ideological antiquarians such as the noble Earl. It is on this that we should like guidance.

It is true that C.B.I. leadership in recent years has been under pressure from certain industrialists—from some of its members—to reduce its involvement in Government planning, but there has been a marked reluctance on the part of some of the larger companies to oppose Government intervention. The noble Earl gave the figures perfectly correctly, and I accept that he asked why those handouts should not be given. They are an important factor in influencing industry and in improving the effectiveness of the economy.

In a mixed economy, and in the private enterprise part of that economy, there is inevitably a tendency for mergers and takeovers to take place, and this will continue as a natural part of the process of change. But the issue is not whether or not mergers will take place, but how far the Government, in a mixed economy, ought, in the national interest, to seek to influence the pace and the character of the I changes, whether by merger or by other processes in the structure of industry. The previous Government had a very clear view upon this. They intervened, especially in some industries, such as shipbuilding, where the operations of private enterprise under market conditions up to 1964 had led to a disastrous condition. Noble Lords will remember the Geddes Report. I saw the noble Lord, Lord Geddes, here this afternoon. Your Lordships will remember the shipbuilding industry Board which was set up, admittedly with some co-operation from the Party opposite. As my noble friend Lord Shinwell and others have pointed out, it was an absolute lifesaver. We had an industry there which was split into a large number of units and had shown in practice a sharply diminishing international competitiveness; but we could, as we did before, discuss. The shipbuilding industry has been a subject under discussion for many years past. I remember when we were in Opposition before pressing the noble and learned Lord who now sits on the Woolsack for the publication of what I think was called the Mitchell Report, which revealed the deficiencies. The important thing is that the Government did something about it, and the shipbuilding industry welcomed it.

I recognise that problems of increasing cost are factors in this question, but there was a transformation. Therefore what is to be the policy with regard to Harland and Wolfe and Cammell Lairds? Some noble Lords would prefer to see some of those areas close down, and we should see another Jarrow. I would not accuse noble Lords sitting on the Front Bench opposite of wishing it or of doing anything to encourage it, but it is clear that they will have a number of difficult problems in regard to which they will have to weigh the social costs—and these are capable of being quantified—against the economic cost of Government support. But if taxpayers' money is to go into this, it is of course for the Government to see that they get value for it. Therefore, with the help of industry it may be necessary to take steps with regard to both the structure and the management.

The bulk of the Government's policy in this area was operated by the Industrial Reorganisation Corporation. As noble Lords will know, this body was composed of men of wide experience in industry, including the noble Lord, Lord Stokes—a Member of your Lordships' House. I will not go through the complete list of names, but they had a freedom of action—and this is the point made by my noble friend Lord Brown, and I stress it—and a flexibility which a Government Department could hardly achieve in this work. We know that the Government are interested. They talk about "hiving off" and giving more discretion. It would be absolute folly for them now to start clamping down on an instrument which works so well.

The Corporation was set up in 1966, and since then it has been directly involved in more than 50 projects concerning nearly 150 companies, and it has had talks and consultations with hundreds more. It is fair to say that the Ministry of Technology, with the help of the I.R.C., has effected a far more radical reorganisation of private industry than anyone could have believed possible in 1964: the motor-car, electrical engineering, ball-bearings and instruments industries, to take only some of the industries in which it has been involved. Of course it has its critics, and there may be those who, looking back on particular operations, may have wondered whether it was worth while. But can we possibly dispense with such an instrument? I can see no other alternative, and if there is one I shall be glad to hear about it from the noble Earl, either to-day or during the adjourned debate when we have it in the autumn.

The Corporation has not been doctrinaire or indiscriminate in its activity. It has not worshiped size for its own sake. It has not believed that mergers in themselves necessarily create units that can compete successfully in world markets, but it has argued that they produce the basis upon which success in world markets is made more likely. To quote from their recent report: … the plain fact is that in more and more sectors we shall have to get accustomed to the difficulties of building and running large concerns. Whilst reorganisation is difficult enough to achieve, it is still more difficult to get the benefits of reorganisation. Renewing, —as opposed to totally scrapping— out-of-date industrial structures is often an uphill struggle from behind to repair the results of years of civergent policies and neglect. One has only to read the report of the I.R.C., even in its moderate terms, to find what an indictment it is—and I do not use the term in a hostile or moral sense—of parts of British industry.

The Corporation has been using its influence to stimulate British industrial companies to use new and profitable methods, sometimes without recourse to merger or takeover, and indeed in all its dealings it has proceeded overwhelmingly by advice and by persuasion. On this I should like to quote—and particularly for those who are doubtful—what the noble Lord, Lord Thorneycroft, said in November, 1969, when we debated economic affairs on the Address in reply to Her Majesty's Speech. He had a number of criticisms of the Government of the day, but when he turned to the I.R.C. he said: I would ask my friends not to take any hasty decision about the future of the Industrial Reorganisation Corporation before they have, while in office, had experience of its working. I know the talk about putting it here or there, or taking its powers away, or something of that kind. But business is quite a complicated affair to carry on, and some of the decisions that have to be taken…can be of a highly confidential character, naturally; they affect one's competitors, the people who work for them and sometimes foreign Governments as well. They are not things one can take all around the town. To be able to go to some body of men who understand straight away what you are talking about, whether they agree with you or not, who know the arguments and have seen it all before, is of very great assistance to many industrialists. I would ask my friends"— and I would ask the noble Earl, Lord Jellicoe— to talk with some of the people who have practical experience of this particular body and not to take quick decisions to start altering its structure."—[OFFICIAL REPORT, 5/11/69, col. 405.] My Lords, we believe that a mere reliance on market forces could not produce results as good as can be expected from bodies like the I.R.C. I am not rejecting market forces; I am merely saying that they cannot in all circumstances have this result. To give a simple example (and my noble friend Lord Brown knows this) common sense does not suggest that there is any reason in many industries—and I speak as someone who has been involved in export in the past—to think that export in itself is inherently profitable, even though a previous Minister (I cannot remember whether it was Mr. Macmillan or someone else) called it "fun". I expect the noble Earl, Lord Dudley, has had moments of fun in export but other moments which were not fun at all. It is not just enough to assume that industry will go for export participation and that it will be an overriding consideration in mergers effected by private industries. There are many patriotic businessmen who do go for it, but the important thing is to provide them with the support. I would at this point pay a special tribute to my noble friend Lord Brown in this field. He has unquestionably brought to this matter a devotion and energy quite exceptional in Ministers. He is one of the special institutional arrangements which, unfortunately, cannot be carried on under the present Government.

I do not want to underrate the efforts of various private institutions, whether it be the merchant banks or some of the leading consultants and others, in promoting mergers and seeking efficiency. They are of great importance, not just to the firms concerned but to the national economy. It would be a mistake to assume, as Gerald Newbold said in his recent book—I am quoting from The Times of July 13—that the picture of efficient management taking over the inefficient is fully supported by the evidence. There is, therefore, a need for a genuine understanding in this matter. There is a need for a careful approach, which I am quite sure the noble Earl will bring to consideration of these matters, and we are urging the Government to think very carefully in order to ensure a proper partnership between Government and industry in the public interest.

I should like to ask the noble Earl what is to be the Government's policy in the avoidance of restriction in markets. The natural, and indeed understandable, tendency of businessmen, given complete freedom from Government intervention, is to try by their own actions to limit competition as much as possible. On this we have the authority of Sir Keith Joseph, who said in a speech earlier this year: Left to themselves, most businessmen would share the market and keep newcomers out. To maintain competition calls for determined, tireless Government action". In fact, Government intervention.

I do not know how the Government expect to get vigorous competition. They appear to be opposed to the Prices and Incomes Board. They are certainly opposed to the Commission for Industry and Manpower. Are they going to rely entirely on the Restrictive Practices Court, the experience of which has shown how industry seeks loopholes, some of which we had to close in the 1968 Act? Will they make greater use of the Monopolies Commission? What is to be its future? When the Restrictive Practices Court was set up in 1956 the membership of the Monopolies Commission was cut down to a mere 10, all of them, except the chairman, working on a part-time basis. With a Commission of this size, inquiries can take on average 4½years to produce a report. This is a matter, one may argue, that the previous Government should have dealt with, but of course we were dealing with it in the new body we were setting up. The flow of references to the Commission was a very small one until the General Election of 1964.

It is not possible to give a complete picture of the work of all the various agencies, but I would stress that most of them are supported by the more far-sighted leaders of industry, and it really would be a tragedy if they were not further developed. In particular, again I would ask the Government what their policy is with regard to the National Board for Prices and Incomes. The work of this body went very much further than dealing with prices and incomes. There may have been faults in some of their reports, but it was a developing body and it was a powerful influence towards the improvement of pay structures in industry and therefore an improvement of management and organisation. This was an institution, I believe, absolutely vital to the economy.

I do not know whether the stones we read in the Press are correct. We are never quite sure whether members of the Government communicate with one another. We know that the Secretary of State for Defence does not know what the Foreign Secretary says at his Press conferences, so it may be that the noble Earl cannot tell us the attitude of Mr Maudling, and in so far as the discussion is private I would not expect it. But I would urge the Government to maintain, whether in the same form or another one, a body which can operate across the economy in the field of prices and incomes, not merely in the public sector, which, whatever the intention of the Government, is likely to be interpreted in the public services merely as an instrument to get us back to the Selwyn-Lloyd freeze of public service pay. I know that the noble Earl would resist any policy of that kind. There are a number of other instruments we should like to know about, the policy on the "Neddies" and so on.

Finally, can we hear something further about regional policy? We have been told very little. How long is it proposed to honour the undertaking to go on paying investment grants? Until 1974? What again is to be the machinery in regard to the regions? There is one final question which falls directly in the field of the noble Earl's own Department. This relates to the one new institution they appear to have invented or thought they had invented, and that is the introduction of businessmen into Government. Surprisingly, so far we have had no mention of that admirable group of industrialists, led by able businessmen like Mr. Campbell Adamson, Mr. Clive de Paula—and I recommend the noble Earl to read Mr. de Paula's recent report on the Royal Mint—and Mr. Norman Rigby. Has their opinion been asked on any of these matters., and will their advice continue to be available, not just to the Ministry of Technology but to other Government departments? I hope that the Government, having thought, "Let us bring in businessmen", and then finding that they have a lot already in Government, are not going to put one lot in and the others out.

There is one suggestion I should like to press on the noble Earl. If there are changes in Government, it is for consideration whether industrial advisers should come under his Department, where they are so clearly under a central Department. I do net ask for an answer to-day. Of one thing I am clear: the concept of bringing businessmen into Government is sound if you bring them in as advisers, but as super-managers I believe they are doomed to failure. I hope that the noble Earl will make good use of the industrial advisers. I believe that the most important thing we can do with businessmen is to produce exchanges between industry and Government. With a larger team of industrial advisers, not just spread one here and one there, where they will be isolated from one another, I think there is a lot to be said for maintaining the collegiate approach we have at the moment.

I should like to end by saying this. How are the Tory Government hoping to combat rising prices unless they can show that they understand the whole role of Government in industry? I say to the noble Earl that "walkabouts" in Smith-field and Covent Garden by Ministers are really no substitute for policy. How do they propose to help industry to get more competitive costs and prices in world markets unless they admit the role of Government in relation to the development of industry and the encouragement of mergers? If the Government still believe that we are living in the age of small businessmen then they ought to look at the figures, because the small businessmen, numerous as they are, still produce a minute proportion of the productive wealth of this country.

We are, as yet, no wiser as to Government policy in these matters. We hope that at any moment the curtain will be raised, that the policy will be unveiled and that the noble Earl will tell us what the results of years of thinking in the Conservative Central Office, with those blueprints and computers, are going to reveal to us. If we do not get this information, well, we shall go on pressing for it. But I hope that if the Government have got their plans and are beginning to think about them again, and do see some virtue in the previous arrangements, they will not shrink from saying that they are going to consider carefully the policy of the previous Government. I hope, therefore, that they will do their utmost to preserve and develop arrangements which we introduced but which no doubt need changing in certain respects. I hope, too, that they will forget their Election undertakings, which are really vague enough for them quite honourably to forget.

6.22 p.m.


My Lords, I feel that I owe an apology to noble Lords opposite for the fact that we have had speeches from two high calibre Opposition Front Bench speakers, and that there there is only me speaking on this side to-day. I should like to explain that my noble friend Lord Bessborough, who normally handles these matters, is unable to do so to-day because he is attending, with my right honourable friend the Minister of Technology, the most important European Space Conference which started to-day in Brussels. I was also going to apologise for coming in so late in the debate myself, although I think it is perfectly normal in a debate of this duration. The tears sprang to my eyes when I heard the noble Lord, Lord Shinwell, being denied, with sobs in his voice, the cut-and-thrust of debate. The tears were a little dispelled when the noble Lord then immediately indulged in an exhibition which would have done D'Artagnan proud. I should perhaps add that it was just as well for the proprieties that I postponed my entry into this debate, because I happened to split my trousers. I came into your Lordships' House after luncheon, and if I had risen to speak earlier in the debate I should have risen in my split state. As it happened, it was necessary to make certain sartorial adjustments.

Without further ado, I should like to pay my tribute to the noble Lord, Lord Slater, on his maiden speech. It was a very great pleasure to hear him, and it will be a great pleasure to hear him again, not least because of the evident feeling with which he speaks about the things he knows most intimately and of the region to which he has himself made such a notable contribution. While in this charming vein, I should also like to thank the noble Lord, Lord Brown, for his moderate and sensible speech—sensible because it was so moderate.

Having said that, I should now like straight-away to criticise his Motion because I believe that it betokens a certain Panglossian belief that under the last Administration all was for the best in the best of all possible industrial worlds, come wind, come weather, come Brown—the other one, not this one—come devaluation, and come inflation. I feel that this Motion portrays a deep conservatism, that certain conservatism which seizes all Governments after they have been in power for a certain time; and it is illustrated by the implicit assumption in the Motion that all the institutions and all the agencies developed by the late Government are not only sacrosanct but should be further developed and further elaborated.

Quite frankly, that is not our point of view. We believe that it is unreasonable for each and every activity inaugurated during the last five years necessarily to be perpetuated. But we are not going to judge this in a doctrinaire fashion, such as has been suggested by noble Lords opposite. We wish to judge these institutions and their agencies on their merits; and it is with that in mind that we have instituted the process of review which noble Lords opposite like ridiculing; but at the same time, rather inconsistently, like the noble Lord, Lord Shackleton, they ask us to approach these matters carefully and with deliberation—the "careful approach", I think were the words he used. I can assure the noble Lord immediately that that is precisely our approach to these general problems.

Noble Lords have pressed me to lift a little of the veil on the Government's intentions across this broad field. I am sure that they are going to be bitterly disappointed at my inability to disclose our neat ankles. But on the institutional side I should like to say a word or two about a number of the institutions and organisations about which I have been asked. I turn in the first place to the National Economic Development Council. I can straightaway assure noble Lords opposite that the Government most certainly propose to maintain the N.E.D.C. as an effective forum, which they believe it to be, in which they can consider with the Confederation of British Industry, the T.U.C. and other members of the Council, the major economic problems before policy is settled and determined. In fact my right honourable friend the Prime Minister chaired a meeting of the N.E.D.C. only two days ago; and it was decided at that particular meeting to set in train a scrutiny of the "little Neddies", of which, noble Lords know, there are 21, in order to ensure that they make the most effective possible contribution to the working of the umbrella organisation.

As for the Industrial Reorganisation Corporation, on which a great deal of attention has been focused, I think rightly, in this debate, I am glad that I was asked about its future. The noble Lord, Lord Brown, and the noble Lord, Lord Shackleton, doubtless know a great deal more about this animal than I do. But I claim to have been, in a certain way, in at its birth, in that its founding director, Mr. Ronald Grierson, more or less delivered this baby in the next door office to mine in the City four years ago. I can also assure the noble Lord, Lord Shackleton, that I have taken his advice in speaking to a number of prominent industrialists about the I.R.C. Apart from anything else, I have had the good fortune at board meetings once a month, to sit next to Sir Joseph Lockwood, who happens to be the Chairman of the I.R.C.; and I happen to know his opinion of his own organisation.

That said, I think it is true to say that there is no universal opinion held about the precise merits of the I.R.C.—not among business men, not in the City, not indeed in your Lordships' House. Some are for, some are against, and some are in between. In any event, my right honourable friend the Minister of Technology has made it perfectly clear that the future of the I.R.C. is now under review. I say straightaway that that review will be carried out expeditiously. In the meantime, I can of course assure noble Lords that the I.R.C. will honour all its present commitments.

Obviously, it would be quite improper for me to try to anticipate the outcome of that review, and to that extent my lips, albeit eager, are at least in part sealed. But I should like to mention some of the factors which I believe to be relevant. There is the question of public expenditure. I think I am right in saying that from the last Report the late Government were laying out around£40 million a year on the I.R.C. One thing which we must all ask ourselves is whether it is essential that public funds of this magnitude should be devoted to the particular activities which the Corporation has been set up to promote; whether the advantages which have been claimed by noble Lords opposite can be substantiated, and how far those activities could more properly be left to the freer operation of the market.

As the noble Lord, Lord Shackleton, has mentioned, a major task of the I.R.C. has been to facilitate mergers. The merger boom, in this country at least, reached something of a peak two years ago; it has since declined. There were 33 really big mergers—that is, by the yardstick of over£10 million—in 1968, and that had fallen to 18 in 1969. It is worth noting that only relatively few of those major mergers were as the result of I.R.C. activities. Most of them were hatched out as a result of what I would call "natural causes". Indeed, there are some who suggest that the merger boom has gone too far and too fast, that size is sometimes wrongly pursued for its own sake regardless of efficiency, and that mergers may not produce all the economies which are anticipated. I think the noble Lord, Lord Brown, quizzed some of those who sit on this side of the House as possibly being against size qua size.


My Lords, I wonder whether I might just say this. In most industries size is a potentiality to be exploited. We all know that it is sometimes very poorly exploited, but it is a potentiality which is necessary if one is going to produce goods in sufficient volume to compete with larger companies overseas. That is my point of view.


My Lords, I think it is a point of view which I would largely share. There are certain industries where size could be a positive disadvantage, but in certain other industries I would certainly agree that size has a potential advantage. I am thinking of the motor assembly industry, for example, and of computers, and the chemical industry. Indeed, there are certain industries where, in terms of economies of scale, we should be looking to the pan-European company in certain instances rather than to a purely national base. I am quite prepared to concede that in certain of its activities the I.R.C. has been very conscientious about seeking to extract the potential advantages from economies of scale by rationalisation. All I am saying is that I think those cases must be judged as cases.


My Lords, may I interrupt the noble Earl? A greater part of the policy of the I.R.C. has not just been pursuing mergers or necessarily size; they have been pursuing reorganisation on its merits.


My Lords, I have been a merchant banker for the last four years and I know, if the noble Lord will forgive me, a certain amount of what the I.R.C. has been indulging in. I was just saying that many of its activities have been concentrated on mergers, and I am merely saying that whether the I.R.C. should properly, from the point of view of efficiency, have been involved to the extent it has been, is an open question. My personal view—and I confess that this is a personal prejudice which could well be dispelled by the results of the review—is that the right type of I.R.C. can play a useful role as a catalyst, an honest midwife helping births which might otherwise be difficult or protracted. I am more doubtful about the I.R.C. in the role which it sometimes exercised, of promoting what I would call "shotgun industrial marriages". I personally believe that in some instances there is a case for what I would term "I.R.C. Mark I"; I am more doubtful—but here I am speaking personally—about "I.R.C. Mark II". In any event, I propose, and the Government propose, to suspend judgment until the results of that review, which is being carried out expeditiously, are available to us.

One more area of institutions on which noble Lords have quite properly asked for an indication of the Government's attitude—and I make no bones about this; all I can do at the moment is to indicate the trend of our thinking on these matters (in speaking of the I.R.C. just now I was indicating the trend of my own personal thinking)—is the question of competition and of monopoly, and the future of the Monopolies Commission and the National Board for Prices and Incomes. On that I would merely content myself with saying that the Government have made it crystal clear that they intend to pursue a vigorous policy of competition, and that is why we are here again undertaking a thorough review (with the careful approach for which noble Lords have so rightly praised us) of the ways in which we can develop competition policy. This review covers the National Board for Prices and Incomes, and the precise form of the Monopolies Commission. Until that review is completed, I am afraid noble Lords will have to await final announcements. What I can assure noble Lords is that competition policy will be strengthened and developed under the present Administration, and that the Monopolies Commission will have an important part to play in this. The noble Lord also referred to the Restrictive Practices Court, and I would only remind him that the Opposition supported the Restrictive Trade Practices Act 1968.

Could I now turn to the field of exports, on which noble Lords have again, and I think rightly, concentrated—not least the noble Lord, Lord Brown. I was not surprised that the noble Lord, Lord Brown, did so, because I have seen something at first hand of the energy and enthusiasm, and the undoctrinaire ability, which he has brought to his work at the Board of Trade over the last four and a half years. I strongly hold that there is a great deal to be said for cross-fertilisation between Government and business. In this area the noble Lord has been, if he will forgive the expression, a "cross-fertiliser par excellence".

The noble Lord spoke on a subject very dear to his heart, the Export Credits Guarantee Department, and I am at one with him, and so are the Government, in believing that the E.C.G.D., together with our modern foreign service—and I believe they are very good in this field in general, now—have a key role to play as an essential instrument of our export policy. Like the noble Lord, Lord Brown, I welcome the fact that apart from its traditional credit techniques the E.C.G.D. has lately favoured the further expansion of lines of credit. I understand that 24 lines of credit have so far been signed, with a total loan value of£250 million, and that a further 20 or so are under negotiation. I know the noble Lord's own interest in this particular field. I believe that those lines of credit open up opportunities for British exporters which otherwise might well not be there. In addition, I have no hesitation at all in saying that the credit insurance and financial guarantee facilities offered by the E.C.G.D. are probably the best and cheapest in the world. I can confirm to noble Lords that we are determined to keep it that way.

The noble Lord, Lord Brown, suggested, or, if he did not, I will suggest, that possibly at times the E.C.G.D. are not able to react with the speed which the fast moving international commercial scene dictates. If that really is so, I think in large measure it is due to problems of staffing. Here again I am speaking personally, but it is my belief that, apart from a greater measure of autonomy—which they called for, as I understood it—it might be helpful if in this field of export credit rather more responsibility were devolved on the clearing banks and on the merchants banks themselves. That might take some load off the E.C.G.D. itself.

We have all seen in recent years, in a number of ways, how very versatile the City of London is. I am not making a Party point here, but I believe that the technical expertise and the innovating skills of the City are something we must all encourage. With that in mind, I was a little surprised that noble Lords opposite, in speaking of our export machinery, paid no more credit than they did to the enormous efforts—and indeed the enormous successes—which have attended the work of our invisible exporters. In this context, I should like to pay my tribute to the work of the Committee on Invisible Exports, and mention what is no doubt familiar to the noble Lord, Lord Brown: that the Board of Trade are examining the extent to which Government assistance to exporters is adequate, and caters adequately for the needs of the invisible exporters. I am glad to say that the Committee on Invisibles is co-operating very closely in that field.

With regard to another point put to me by the noble Lord, Lord Brown, I would say that the short answer to his question about export support services which have been developed by the Board of Trade in recent years—I think to a certain extent under his direct and personal inspiration—is that we may well find over the next years that if we need to change the pattern here it will be by way of increase rather than by way of decrease.




My Lords, I should now like to turn to the other main area about which I was asked questions by noble Lords opposite; that is, the field of regional policy. I fully agree with noble Lords opposite on the need for a vigorous regional development policy. I believe, with my noble friend Lord O'Neill of the Maine, who made such a notable contribution on this subject in the debate on the humble Address two weeks ago, that this is one of the areas where central Government have basic responsibilities which they must recognise and discharge. If I believe in anything in this field I believe here, as in other areas, in the philosophy of one nation. So much, I believe, is common ground between us.

But Government support for an energetic programme of assistance to development areas does not necessarily mean that we should also support the particular measures which have been introduced and pursued by a previous Administration. Indeed, we believe that a number of the regional policies which the last Government introduced gave poor value for money, and contributed little to the growth of employment in the development areas. I rather suspect that in cerain respects the noble Lord, Lord Brown (though I may be doing him an injustice here), would not entirely dissent from that point of view.

I would remind your Lordships that in June, 1970, there were well over 500,000 persons unemployed in this country, and almost 200,000 of those happened to be in the development areas. Expenditure on regional incentives to industry has, of course, increased substantially, and the Party opposite have claimed great credit for that increase. But I am sure all noble Lords will agree that the acid test here is not how much money is spent on regional incentives, but how effective those incentives are. What matters here, as elsewhere, is results. That is why the Government are re-examining—again the careful approach which the noble Lord, Lord Shinwell, deplores, but which the noble Lord, Lord Shackleton, advocates—the financial incentives at present available in the development and intermediate areas.


My Lords, may I interrupt the noble Earl, because I should not want him to attempt to drive a rift between my noble friend Lord Shinwell and myself? I criticised the Government in this matter because they told us that they had everything ready; but since what they looked like having ready was going to be bad, I welcome their serious consideration of this matter. Also, may I ask him to bear in mind, in relation to the regions, that there has probably been the biggest run-down—over 500,000 jobs in the basic industries have gone—in the last five years, and in those five years the previous Government produced 50 per cent. more new jobs in industry than had been produced in the previous five years. One can go on arguing about these statistics, and these figures have already been given a couple of times by noble Lords.


My Lords, of course I recognise the impact in the development areas of the run-down in the older, traditional basic industries, and it would be foolish of me not to do so. But I will not pursue a statistical argument here, because if I were to do so it would take us through a jungle from which we should not emerge for a very long time. In any event, we have made it clear that it is our intention to phase out the regional employment premium, but (and here may I assure the noble Lord, Lord Shackleton, who asked me specifically about this?) taking account of, and honouring, existing obligations and commitments.

Some noble Lords—the noble Lord, Lord Shinwell, for example, engagingly—have sought to argue that the prospect of changes in regional incentives creates uncertainty and worry in industry, and may hold up the flow of new investments, new decisions and so on. I have a feeling that the noble Lord, Lord Shinwell, may have been slightly overstating his case here, because industry is perfectly well aware that the present Government are wholeheartedly committed to the development of the less prosperous parts of this country. Our record in the 1960's, for which the noble and learned Lord the Lord Chancellor can take so much credit, at the time when he was wearing a rather comfy cloth cap as opposed to the less comfortable wig which now adorns him, shows what we achieved in this field in the past. But the Government fully accept that the changeover to whatever new incentives may be introduced must be as smooth as possible, in order to avoid disruption or delay to plans for new investment and expansion in the development areas.


My Lords, one of the difficulties about policy on the development areas has often been that the parent body has been sited somewhere in the Midlands or the South-East, and an offshoot has been sent up to a development area; then, when there is a little recession, the offshoot has been closed down. I wonder if the noble Earl can indicate whether the Government will be able to offer certain inducements, so that the parent body is encouraged to go up into the development areas, as this would give greater continuity. I am not overstating my case, and we have experienced this problem in the North-East over a number of years.


My Lords, I recognise the problem. I also suspect that I recognise some of the difficulties in following through to the end the noble Lord's suggestion. But I shall most certainly see that the point is brought to the attention of my right honourable friend the Minister of Technology in his review of I.D.C. policy.

When I was interrupted I was saying that we were reviewing our regional policy. It is of course no secret that our bias at the present time is away from the investment grants favoured by noble Lords opposite, and towards some form of taxation incentive or taxation reduction. Beyond that I will not go at this stage. What I will do is again to confirm that if we make changes in policy here—and I believe that we shall—they will be made carefully and with a view to ensuring that the transitional period is smooth and does no damage to investment possibilities.

My Lords, I think I am right in saying that the noble Lord, Lord Brown, asked me a question about industrial training. I think I can reassure him by referring him to page 13 of the Conservative Election Manifesto. He will find that we have there committed ourselves to a major expansion of the opportunities for retraining, and to a number of improvements designed to see that our industry can secure the skilled labour, managerial as well as operative, to which he rightly attaches such importance. That commitment was echoed in the Queen's Speech, and it is a promise which, like all our other promises, will be fulfilled.


My Lords, does this include the industrial training boards?


Yes, my Lords, it does. I will not say that in certain instances we might not make modifications if, as it were, there was pressure from within industry; but indeed it does.

My Lords, we have been discussing the role of Government in industry. Perhaps, particularly since I am responding to an invitation extended to me by the noble Lord, Lord Shackleton, we can now for a moment (and I am coming towards the conclusion of these rather over-lengthy remarks, but I have been asked a number of questions by noble Lords opposite) reverse the penny and look at the role of business in Government. Since there has been a good deal of Press speculation about this matter recently, some of it a bit "off-beam", it may not be an inappropriate moment for me to say something about our general approach to this subject. I should like first of all to make it clear that I believe that in this country we have the best Civil Service in the world; and I say that the more readily having been a civil servant myself; and like my predecessor, I count myself honoured to have a position of some responsibility in the Civil Service Department. Nor am I one of those who believe that the British Civil Service is a sort of prehistoric animal stranded in a world unfamiliar with P.P.B S., computers and the rest of it. I know, to the contrary, that some Whitehall Departments have been in the lead in this country in developing and employing the latest management techniques.

But, my Lords, that said, I believe there is far too large an area of mutual ignorance between Government and business in this country to-day, and that both will stand to gain, and gain substantially, by effective, if selective, cross-fertilisation. Let me say at once, following the thought of the noble Lord, Lord Shackleton, that the idea of introducing businessmen into Government was not a sudden idea dreamt up by "Selsdon man" at Sundridge Park, and I acknowledge the pioneering work of our predecessors in this field. The businessmen who have served as industrial advisers, formerly in the Department of Economic Affairs and now in the Ministry of Technology, have made an important contribution to Government thinking and practice, as have others who have served or are serving in other Departments.

Businessmen also have made a very valuable contribution to the work of committees looking at the way in which Government run their affairs. I am thinking of the work that prominent industrialists like Sir Val Duncan or Sir John Mallabar have been carrying out; and again I should like to pay a particular tribute to the work of Sir Robert Bellenger and his panel, who have been working for over a year with an emphasis on saving manpower by challenging in a constructive way some of the tasks undertaken by the Civil Service. This corresponds precisely with what my right honourable friend the Prime Minister said at the inauguration of the Civil Service Staff College at Sunningdale, which I was glad the noble Lord, Lord Shackleton, attended: namely, that while it is our aim to reduce the size of the Civil Service, we shall do it not by slimming manpower yet leaving the functions intact, but by slimming functions and, in proportion to that, slimming manpower; and it is my understanding that in this field Sir Robert and his panel, with whom I remain in consultation, have made and are making a valuable contribution.

Our aim now, my Lords, is to develop this assistance by the appointment of a team of full-time businessmen—full-time is the difference here, and a team—with new responsibilities; and let me be very clear as to what we propose to do. We do not have it in mind that the business team should do the work of the Civil Service for them. Though high in quality the businessmen are few in numbers, and this would be an absurd thing for them to do. What we believe, on the contrary, is that they can bring to bear on the decision-making process of Government varied experience and critical faculties which will help Ministers, civil servants and the outside advisers themselves, working in partnership, to advise on new approaches to decision-making and the other processes of government. I really believe it true that in the case of any organisation a trained mind from outside can often suggest new approaches which those who have spent longer in that organisation and are more committed to its ways may not always perceive.

One area, among others, where I believe that their assistance can be useful is in helping to develop what central Government has hitherto and rather conspicuously lacked; and that is a serious capability at the centre for analysing programmes and for assessing the longer-term options open to Government and the longer-term side effects of particular decisions. In addition, of course, there are some areas of Government activity where a clear indication exists that experience of modern business methods may well be very useful indeed. I speak, as a specific example, of the whole area of Government procurement and purchasing.

My Lords, it is not our intention, at least in the first instance, that those who join us in this way shall have an executive role. They will advise, supplement and develop existing capacity, and develop new capacities and, above all, new processes. We need here to learn from experience how the skills and the expertise of businessmen can best be employed to supplement the very considerable skill and experience of civil servants; to combine, as I think it is sensible to do, the best of both worlds. In any event, my Lords, under the leadership of Mr. Meyjes, of Shell, whose appointment was announced a month ago, good progress has already been made in building up a small but high-quality team, and that process will continue.


My Lords, may I ask one question? I am very relieved that, somehow, the Government have managed to wriggle off the rather naïve original presentation of their views, but I should still like to ask where they will fit in. The industrial advisers are a team and this is to be a parallel team. I do not know whether they think it will be at a higher level. Secondly, of course, when it comes to analysis of a really advanced kind, I think there is force in the argument that they can help in the procurement field; and it is there that the previous Government employed some business help. But when it comes to the most sophisticated forms of analysis, I think it is very unlikely that they will have anything to teach the Government Service.


My Lords, I think the noble Lord misunderstood me. I was not saying that they would necessarily have anything to teach the Government Service in the actual process of analysis. What I was suggesting was that in the machinery of analysis they might well have a very useful contribution to make, along with others, in instituting the machinery of what I like to term a central analytical capability, but that is rather a mouthful.

On the question of where these businessmen fit in, the noble Lord was anticipating what I was about to say: because I should like to make it clear that it is our intention, and very much the intention of the businessmen concerned, that this team shall work with the grain, and not against the grain, of the Civil Service. I think that the noble Lord would like to know that Mr. Meyjes in fact will report to me, that the team is located within the Civil Service Department and has supporting services provided by the Civil Service Department. That is rather a minor administrative detail.

I have dealt, perhaps inadequately but as frankly as I could, with the problems put to me by noble Lords opposite. I have certainly endeavoured to answer those questions which were put to me; but if there are some that I have failed to answer (and on which our process of review has gone far enough for me to be in a position to answer) on which noble Lords would like to tackle me afterwards or write to me about, I shall endeavour to ensure that they are provided with an answer. That said, I should like to conclude my remarks by saying this. In listening to noble Lords opposite —and especially to Lord Shackleton's, I think, very unfair strictures on my noble friend Lord Dudley—one would think that the Conservative Party has become the party of laissez-faire, the "Manchester school" and all that. I would only remind noble Lords once again (and the noble Lord, Lord Brown, has already reminded us of it when he talked about the problems of the cotton industry and the Industrial Training Act of 1964) that these were Conservative initiatives; and that it was we who set up the National Economic Development Council. We have always accepted that special circumstances may dictate Government action; for example to ease the problems of industrial change or to promote effective regional economic development to which we are wedded; and that the duty of the Government here is to provide a proper framework for the activities of industry.

In a mixed economy the problem is always going to be to find the right balance. We believe that in the past five or six years that balance has shifted too far towards the State and too far away from the free working of industry, and that the consequent frustration of the forces of economic vigour goes far to explain the trouble which we in this country face to-day. In our view the proper role of Government is to create the right framework in which enterprise and competition can flourish in the interests of all; not to impose in any rigid way the views of Whitehall on the shape and direction of industry; to concentrate more on doing and things which only Government can do and to do those things really well; and less on involving ourselves in those things which industry can do and does do for itself. That is the spirit which animates our policies. That is the spirit which will come through in our programmes as they emerge and as the result of the reviews now being undertaken. I can assure noble Lords opposite—and here again I take up the words of the noble Lord, Lord Shackleton—that in all this our approach will be a careful approach. We intend to get these matters right; and if that means a little delay, there will be a little delay. But having made up our minds, we shall then move forward in these various fields.

7.4 p.m.


My Lords, I think we have had a very interesting and, to me, satisfying debate. I say "satisfying", though I am not completely satisfied. We have had no instances given to us of where intervention has spelt disaster or has damaged industry. We had a great many questions put during the Queen's Speech, and many more again to-day, which have not been answered. I must admit that we have had rather more answers from the noble Earl who leads the House than we expected, and that is always something to make one happy. We have had one manifestation of the debate which pleased me, and that was the heated denial of the fact that the Government are laissez-faire in their thinking. I have never made that accusation, although the noble Earl, Lord Dudley, accused me of it. But the heat with which it was denied was encouraging.

I do not think that we were hard on the noble Earl, Lord Dudley, who spoke with eloquence, competence and sincerity. What he did not realise he was doing was to give us for the completion of our considerations here as nice a personification of "Laissez-faire Man, 1970 Edition" as I have seen for a long time. I shall close this debate by saying that he is entitled to his own views, but I would say to the Government Front Bench that he and many others like him, though thinking and speaking with great sincerity, are a danger to the Government's policies. I think that the Government know enough about this to avoid these dangers. I am grateful to the noble Earl, Lord Jellicoe, for his care in replying, and I now beg leave to withdraw my Motion for papers.

Motion for Papers, by leave, withdrawn.