§ 3.56 p.m.
§ LORD DRUMALBYNMy Lords, with your Lordships' permission, I will now repeat a Statement that has just been made in another place on support for I.C.L.:
"The Government have discussed with I.C.L., in the light of the report of the Select Committee on Science and Technology, the finance required for the Company's R. & D. programme. The Government believe that the capability to develop, manufacture and market computer systems which I.C.L. represents should be maintained in this country so that the Company can play its part in a strong industry in Europe. We have agreed therefore to provide the support of £14.2 million during the period up to September, 1973, for which the Company has asked in order to maintain the momentum of its R. & D. programme. The Government are in touch with the new management about the Company's long-term needs."
§ LORD SHACKLETONMy Lords, we are grateful to the noble Lord for making that Statement. One-man band that he is, perhaps it is a relief to him that it is such a short Statement. But I am bound to say, in all seriousness, that it is one of the most extraordinary Statements that I think I have ever heard from the Government. We cannot go on 1170 about "lame ducks", I suppose, and about continuous reversal of Government policy, but this short Statement raises a number of important questions. I should like to ask the noble Lord, if he has had time to find out the answers—and I forgive him if he has not, between English housing, Scottish housing and various other matters—why the Government have completely ignored all the other recommendations of the Fourth Report from the Select Committee on Science and Technology. Here was a most important package in which, among other things, they recommended that there ought to be a figure of something like £50 million per annum for research and development.
Secondly, the support to be given is apparently £14.2 million up to September, 1973. There is no point in the Government giving the company £14 million for one year unless they are going to continue to give it £14 million a year for several years. Can the noble Lord give us any indication as to what Government policy is on this matter? Research and development is an on-going thing. Is the amount involved likely to be £100 million, £200 million or £500 million over ten years or twenty years? We should like to hear something on this.
Thirdly, under what powers are the Government giving this money? They have disposed of the old Act which the previous Government had, but now, with their rapid reversal of policy, there is another Bill before another place of which we have no particular knowledge. Will Parliament have to approve this? And what conditions will attach? I am sorry if I am going very fast but the noble Lord will agree that it is a short Statement. Is it a straight grant? Is is a loan? Are the Government intending to take any further equity in the firm? I should like particularly to ask why the Government, as they have apparently rejected the recommendation 1171 of the Committee for the formation of a Computer Research and Development Board, must deal directly all the time and get mixed up in industry. We thought that they wanted to keep far away. They have abolished the I.R.C. All right; start again! Why do they not consider setting up a Computer Research and Development Board?
May I also ask what steps the Government are taking to bear in mind the words used by the Select Committee when they said:
We found it difficult to describe present Government action regarding computer research and development as a policy. Many diverse projects have begun piecemeal for different reasons at different times"?How is this effort being monitored? My Lords, that is only the beginning of about one hundred questions one could ask on this Statement, but I will not go any further because I am sure that the noble Lord, Lord Avebury, who was at one time a member of this Committee, has another 20 or 30 questions.
§ LORD AVEBURYMy Lords, is the noble Lord, Lord Drumalbyn, aware that we deplore also the fact that there has been no public debate on the strategic issues, which are of importance to the computer industry, and in particular we deplore the conspicuous silence of the Government regarding the Report of the Select Committee on Science and Technology, which has now been with the Government since last October? We think that the longer the Government delay giving a considered reply to all the other recommendations of this Committee, the more difficult it will be for the computer industry to get back to full strength and to play a vigorous part in the promotion of British exports.
Is the noble Lord further aware that a short-term Statement of this nature does nothing to restore the confidence of British industry in the capabilities of International Computers Limited, and that in order to convince data-processing managers (and hence boards of directors) that they should buy I.C.L., they need to have an assurance, as I and my colleague, the Chairman of Data Processing Management, said in a letter to The Times last week, that the Company will continue to operate and have a thriving research and development programme, not over 1172 one year but over five or ten years, so that the Company will still be in existence when they come to the next generation of procurement.
May I also ask the noble Lord whether he is aware that we are extremely disappointed that this Statement says nothing about support for the other parts of the British computer industry—nothing about peripherals or about the software industry, for example? Will he say whether the money is to be tied to specific research and development projects and, in particular, whether it is to assist I.C.L. to launch their new range; or, contrary to the declared Statement on Government policy over the last year, to give general support for R. and D. Will the Government say what their official attitude will be to the bid which we understand has been made by Burroughs in the United States; what is now their policy on procurement, on single tendering and on preference for the British computer industry? Can the noble Lord say whether these will continue in their present form, and will the Government provide time for a comprehensive debate on the problems of the British computer industry and of I.C.L., in particular?
§ 4.4 p.m.
§ LORD DRUMALBYNMy Lords, I am not quite certain that I feel inclined to thank noble Lords for the way in which they have received the Statement this afternoon. I have been asked a great many questions and I will answer as many of them as I can.
Lord Shackleton's first question (ignoring his preamble) was concerned with the Select Committee. The Government, as he will no doubt be aware, have already set up, in the light of the Select Committee's Report, a Central Computer Agency to bring together central responsibility for computer projects, techniques, contracts and purchasing. This was announced in another place on March 23, 1972, so it is certainly not true to say that the Government have completely ignored all the Select Committee's recommendations. The Government's response to the recommendations as a whole will be made in the near future. The noble Lord then asked what was the Government's policy for the years after September, 1973. We are meeting a request, as I said in the Statement, from the Company itself. The Company has expressed its 1173 satisfaction with the Government's response. This is what it has asked for: it is obviously sufficient for the meantime.
The answer to the noble Lord, Lord Avebury, is that the Company is as much aware as anybody else that the customers need assurance of the Company's continued existence. The Government are not, of course at the moment in a position to make a further statement as to what will happen after September, 1973. The noble Lord asked under what powers this expenditure would be given. The answer to that is under the Industry Bill which is now before another place. We feel fairly confident that both Houses will support that Bill.
The next question was: why have we not set up a computer research and development board? As I have said, the Government's response to the Select Committee's recommendations will be made known soon. The noble Lord then asked about the general position of the Government. As the noble Lord will be aware, the present Company was set up under a merger agreement in 1968, and that agreement applies so long as the Government have an interest in the Company of 5 per cent. or more.
§ LORD SHACKLETONMy Lords, would the noble Lord be good enough to repeat that?
§ LORD DRUMALBYNMy Lords, the agreement applies so long as the Minister continues beneficially to own not less than 5 per cent. of the ordinary capital of I.C. (Holdings).
The noble Lord, Lord Avebury, asked what the Government support money was for—whether it was to help in the development of a new range or for general support. The answer is, so far as I know, both. He asked about the Burroughs bid. This was an informal approach; Burroughs have had discussions with I.C.L. and with the Minister for Industrial Development. No firm proposals were made and nothing has come out of the approach so far. The noble Lord also asked about the policy on single tendering. I can tell him that the present procurement policy will continue for the moment. This includes single tendering, primarily with I.C.L. for large and associated computers, as my honourable friend the Parliamentary Secretary for the Civil 1174 Service Department stated on March 2, 1971, in another place. Single-tender purchase will continue to be subject to the criteria of satisfactory price, performance and delivery dates. I hope that I have answered most, even if not all, of the questions—
§ LORD AVEBURYMy Lords, would it not be useful if we could have a debate on this subject?
§ LORD DRUMALBYNThat, my Lords, is not a question for me, unfortunately, but I will pass on to my noble friend the Leader of the House what the noble Lord has said.
§ LORD SHACKLETONIf the noble Lord speaks for the Government on all subjects, why is he coy about answering a particular question? I feel that it would be unfair to the noble Lord, for whom we have a very high regard, to press him further. But I wonder, if this Statement had been made by a Minister from a Labour Government, what the reaction of the House would have been to this absolutely casual expression of a major aspect of policy.
There are still many questions to be raised. The agency to which the noble Lord refers, if I recall correctly, relates to purchasing in a Government field which is a responsibility of the noble Earl, and an important one, where he inherited a satisfactory programme from his predecessor and I have no doubt is now carrying it on in an even better fashion. But the general policy is what causes great concern; and it will also cause great concern to I.B.M., to Burroughs, and to others who have important factories in Scotland and other development areas. I do not think that to-day is the right time to pursue the matter, but this Statement raises so many questions. All we know is that there is this money: I am still not clear whether it is going to be equity, but I understand that the Government hold 171p or 12 per cent. of the equity. We do not know what is happening on this: nor do we know what control there will be. We do not even know whether there has been a statement on the new management. Some of us know informally that there is a new management. I am inclined at the moment to leave it to the noble Lord and say that I think we ought to have a debate on this matter very soon.
§ LORD AVEBURYMy Lords, may I press the Minister again on the matter of a debate on this subject? He speaks on behalf of the Government, and would he not agree that the Statement which has been made this afternoon is of great importance but that it leaves out more than it says—that the problems of the industry and, particularly, the forthcoming reaction of the Government to the Report of the Select Committee, are of sufficient national importance to justify the provision of Government time? May I also ask the noble Lord what he meant when he said, in relation to the Burroughs bid, "Nothing has come out of it so far."? Does that mean that the Government are willing for an American company to come in. and take over part of the British-owned computer industry, or that some other arrangements might materialise out of the discussions?
§ LORD DRUMALBYNMy Lords, in answer to the noble Lord, the Government's view is that any possible association with an overseas firm should provide for the maintenance of a substantial computer research and development, manufacturing and marketing capability in this country. I would say to the noble Lord the Leader of the Opposition that the central sentence in my Statement was:
The Government believe that the capability to develop, manufacture and market computer systems which I.C.L. represents should be maintained in this country so that the company can play its part in a strong industry in Europe".That is the central sentence in the Statement. It then goes on to talk about the granting of the particular support that the industry has asked for towards its R. and D. I think this Statement is well worth while at this time. It will enable I.C.L. to know where it is and to carry on fulfilling its function as the leading British computer manufacturing company, which actually sells more computers in this country than any other firm.
§ LORD PARGITERMy Lords, will the noble Lord say whether or not this money will be made available before the Bill which is now before another place becomes law? If that is so, under what authority will it be made available?
§ LORD DRUMALBYNMy Lords, the Statement said:
We have agreed therefore to provide the support …1176 It does not follow that any money will be paid before the Bill is passed.
EARL JELLICOEMy Lords, there has been some question of a debate on this important issue and we all recognise the importance of the Statement and of the related issues. The noble Lord very properly said that my noble friend speaks for the Government on this as on other matters. He speaks on this, as on other matters, extremely well; but perhaps on this particular matter I speak more for the Government than most people. I have taken careful note of what noble Lords have said, and especially what the noble Lord, Lord Avebury, has said. The noble Lord made a plea for Government time. If he can find the Government the time I shall be very glad to oblige. That is a matter we can pursue through the usual channels.
§ LORD IRONSIDEMy Lords, may I ask my noble friend whether, in the light of European and American competition, the Government consider that £14.2 million is really enough to keep the industry here viable?
§ LORD DRUMALBYNMy Lords, it is in line with the kind of R. and D. assistance being given in France and Germany.