§ 7.2 p.m.
§ LORD BROWN rose to ask Her Majesty's Government whether they will reconsider their decision that the Furniture Development Council shall cease to exercise its function on December 31, 1973, and be dissolved. The noble Lord said: My Lords, before commenting on this Question, may I declare a past interest, because from 1949 until 1963 I was an independent member of the Furniture Development Council. The position is a complex one. The Furniture Development Council was established in 1948 under the Industrial Organisation and Development Act 1947, and it established a research and information committee. In 1961 this became the Furniture Industry Research Association, popularly referred to as "FIRA". Most of the functions of the Council were passed over to FIRA. In fact the main function of the Furniture Development Council—which, if I may, I shall refer to in the rest of my comments as the "F.D.C."—now is to collect their statutory levy on the furniture industry, which they are entitled to do under the Act. The income of F.D.C. and FIRA collectively to-day is £326,000 annually. That was the income last year. Of that amount the levy amounts to 34 per cent. They also receive a grant from the Department of Trade and Industry, which is the normal grant given to research associations, and that amounts to 18 per cent. The striking feature is that they earn 48 per cent, of their total revenue in the services provided largely to suppliers of material and other things to the furniture industry. There are 1,532 companies paying levy under the Act, but 200 of these pay less than £5 per year, and a very substantial number pay fairly trivial sums. I draw attention at this early stage in what I have to say to the fact that the whole of the levy is collected by two women in the employ of the Furniture Development Council. They have the job computerised.990
§ Mr. Nicholas Ridley decided at the fifth quinquennial review, which had to decide whether the Furniture Development Council continued under the Act, to terminate it at the end of 1973. There had been a number of previous quinquennial reviews. I am aware of the detail of these because I happened on at least two occasions to be a member of the triumvirate from the F.D.C. which argued the case for continuance before the Government of the day. On each occasion when I went there we had to report that a majority by number of the furniture manufacturers who had to pay this levy were against a continuance. But a wise Government, in the form, I remember, on at least one occasion of the noble Lord, Lord Erroll of Hale, decided that this body was performing its functions so excellently that despite the results of the referenda that had been conducted it should continue. In fact I think I am safe in saying that on every occasion when the quinquennial review has come up there has been a majority of manufacturers against continuance, and yet this body has gone on and grown in strength from year to year. It has continuously received the support of the trade unions concerned, the National Association of Retailers, and other bodies.
§ I think one is safe in saying, without knowing precisely, that the majority of the larger firms in the furniture industry show a high appreciation of the F.D.C. and FIRA, and wish it to continue. At any rate, this was so in the days when I was a member of the Council. Because of the unfortunate situation where it is believed that the voting in the B.F.M. is based on one vote per firm, which takes no account of the size of the firm—and I say that this is believed to be the position, because the matter is so complex that it is difficult to discover what the real position is—this adverse vote has come up in the past and has been rejected by the Government of the day, but was accepted by Mr. Nicholas Ridley.
I should like to quote from the Cabinet Maker and Retail Furnisher on this subject. This is from their edition of 1971. They say:
Now, however, he"—
referring to the Minister at the time—
says the industry's views should he put through the chairman of the F.D.C., Sir Roger
Falk, who has agreed to see this through. This is going to place a heavy responsibility on the chairman and his council members. Neither the chairman nor the seven manufacturers, seven trade unionists, three independents and the lone retailer are themselves in a position. or empowered, to give a representative view. Even though the council and the board of FIRA consist mainly of furniture people, they would lay themselves open to accusations of bias because, merely by holding office, they must be research-minded. So how does anyone obtain a representative view? A straight referendum does not seem to be the answer. A counting heads operation takes no account of the size of the bodies which the heads control, and whether one measures height, weight or girth there will be ail kinds of anomalies. To obtain the views of various organisations is to become enmeshed in trade politics and jealousies. What might appear a majority opinion may in practice be the view of a small but active lobby—something not confined to the furniture industry! There is the added problem that an individual who says now he will support a voluntary system may be less keen to sign the cheque when the time comes, especially when he does not know the amount in advance, and also whether there is going to be a down-turn in trade.
FIRA, a body which depends to a very large extent on this statutory and compulsory levy, is in danger. This is an institute which is not exampled in any other country in the world. Germany, Italy, and the U.S.A. have nothing equivalent to it; Czechoslovakia, Denmark and Sweden have small national institutes, but they are not of the importance of FIRA. In other words, FIRA is unique and it is the envy of the furniture industry in every other country in the world. May I quote Doctor Ullmann who has a substantial furniture business in Holland. He writes to the trade press, saying:
In your country you have a most efficient instrument for aiding the furniture industry… Why give up such an asset at a moment which may be critical for some members of the industry and at a time when you can use it to defend your position on the home market and to strengthen your efforts for export? While in the weaker countries within the E.E.C. (France and Holland) Government and industry are planning to set up instruments to support the industry, you are planning to demolish the existing organisations.
§ What about the work FIRA does? It tests virtually all materials which the furniture industry uses, in the interests of the furniture industry and the general public—chipboard, fibre board, various plastics, upholstery, lacquers, joints—and it ensures that these are up to standard and suitable for furniture. In the course 992 of its many years of work it has caused many materials and lacquers to be withdrawn from the market because they are not up to standard. This is a voluntary service given to suppliers. It has cut out the manufacture of matchstick furniture in this country such as used to be prevalent before the war. People who, when they got married, invested their savings in furniture for their homes were buying rotten furniture which broke down and collapsed in a short period of years. Today, when one goes into a shop to buy furniture one is probably buying furniture which has been put through dynamic performance tests in the FIRA laboratories before being put on the market. They have given a service to manufacturers which assures them that the panels they use will not warp; they have taught the furniture industry how to make better joints and what are the best glues to use. They have looked after the interests of 200 suppliers in ensuring that supplies are up to standard.
§ The suppliers are paying FIRA about £150,000 per year for these services, not under statutory levy but by voluntary payment. FIRA deals with 6,000 technical queries each year. It is involved on 40 committees of the British Standards Institution. It is also involved in the International Standards Organisation to ensure that decisions are not taken in the International Organisation which are against the interests of the British furniture manufacturers. It carries out consultancy activities in marketing, economic surveys, costing, industrial engineering, stock control, wage systems and so on—the list is too long for me to quote it all. It produces all the basic trade statistics for the furniture industry. It conducts study tours overseas so that British furniture manufacturers can see what others are doing and can explore export markets. It employs 78 people in an extremely good building which the F.D.C. financed at Stevenage. Of those 78 members of staff, 30 per cent. are university graduates. That is a brief recital of the importance of this Institute.
§ If we move, as is envisaged by Her Majesty's Government, to a situation where the Furniture Development Council is being abolished, then the only basis of support from the industry itself would either be voluntary, with all the dangers that voluntary payments give rise to, or, 993 as has been envisaged by Mr. Ridley and indeed by the noble Lord opposite in a letter to me, the introduction of what is known as a Section 9 Order which would re-introduce a compulsory levy on the industry, if the industry wanted it and if Parliament agreed to pass the Order. I would put it to your Lordships that as things stand at the present moment—and the compulsory levy exists and is supported by all except a large number of small firms in the furniture industry—the statutory levy is efficiently collected by two women in the furniture industry.
§ If the intention of the Government is to abolish the Furniture Development Council, with the intention of using the 1947 Act to introduce a Section 9 statutory levy, then I would say, with great respect, that this is an utterly stupid thing to do. Noble Lords will agree that all this would mean is abolishing an effective instrument for collecting the levy, and the Government would then have to put an order through the House and the levy would have to he collected by the Ministry of Trade and Industry—probably less efficiently than the experienced people on the Furniture Development Council who are doing it now. The purpose of the abolition, if the statutory levy is to be continued, completely eludes me. There is no logic in it. One must therefore assume that the purpose of bringing the Furniture Development Council to an end at the end of 1973 is not with the intention of substituting for the current statutory levy an alternative statutory levy, but with the object of opening up the way for abolishing the statutory levy altogether. This is the clear writing on the wall which the trade Press and most members of the industry assume the Governments intention to be. This places the future of FIRA at risk
§ The Government may reply that there is no reason why a voluntary levy should not take the place of a statutory levy. My Lords, like many other Members of your Lordships' House, I have been in industry for a very long time, and one knows the history of important bodies which had to rely on voluntary payments. As soon as there is a down-turn in trade some of the bigger people feel, "We are paying this voluntary levy and many smaller firms are not paying the levy. We cannot in our dire straits go on pay 994 ing a large voluntary levy to support services which are enjoyed by everybody." This is the pattern which inevitably emerges.
§ Members of the staff of FIRA are not available straight from university. They have to be taken in as engineers, chemists and so on, and trained to the needs of the furniture industry; they have to learn this job in FIRA. They are valuable and need to be kept there. One knows in advance the effect on members of the staff of a body like FIRA of banishing the statutory levy. Jobs are immediately at risk, and the more adventurous—and perhaps the best—members of the staff consider leaving. This has happened with similar bodies over and over again in history. Her Majesty's Government know this perfectly well.
§ The dissolution of this council is in my view a highly retrograde step, because of its effects not only on the future of the industry, and on the exports and the quality of goods, but also on society itself. The Furniture Development Council and the parent body, FIRA, have made a profound contribution to the improvement of the quality of furniture in this country over the years of their existence. There is no doubt about that. My Lords, surely Her Majesty's Government have already paid due obeisance to their idol of vanishing institutions. They have abolished the I.R.C., which could have helped with Rolls-Royce and U.C.S. They have abolished the Prices and Incomes Board, which could have helped them in this wage inflationary period through which we are passing. They abolished investment grants and have had to bring them back in a different guise; and they are going to abolish the regional employment premium, which is needed to provide help in areas of high unemployment. They have abolished the Land Commission which would have been a great help at this stage. Is it really necessary to go on and abolish yet another institution? The Furniture Development Council is much smaller than the ones I have mentioned, but it has a record of service to the industry and to the community which is second to none for its size.
§ The action which has been taken menaces it, and I suggest that if the Government proceed to settle the issue of 995 the Furniture Development Council, and with it FIRA, by the process of listening to the counting of heads conducted by the British furniture manufacturers, then, as I said in this House last week, they are resorting to the use of the referendum technique. We in this House know that that is not the right way; it is shrugging off a responsibility of Government which they should shoulder. If the furniture industry is to be subject to this process of counting of heads, then its institutions will disappear, as other institutions have disappeared in the past in similar circumstances. I sincerely put it to the Minister that second thoughts should prevail in this matter, and I am quite sure that in saying that I speak for a large and important section of the furniture industry.
§ 7.21 p.m.
§ VISCOUNT HANWORTH
My Lords, as the noble Lord, Lord Brown, has said, what is at issue here is the future of FIRA, the Furniture Industry Research Association. What strikes one as extraordinary is that the Government should, first of all, decide to abolish the Furniture Development Council, which has been funding FIRA, before finding out what can be done in the way of voluntary funding of FIRA. A questionnaire has now been issued and it may well appear, on paper at any rate, that the difference can be made up and that a similar amount of money can be provided on a voluntary basis. But why on earth have the Government said that they will abolish the Council before finding out whether FIRA can be funded on a voluntary basis? We do not know what the answer will be and, though we may get from this questionnaire an assurance that for three years a certain amount of money will be provided, my experience of industry when trade is not so prosperous is that very soon people look to the economies which they can make. So I should like an assurance from the Government that if at any time in the immediate future the voluntary funds fail to provide the income which FIRA is getting at the moment—and preferably more—they will then invoke Section 9 of the Industrial Organisation and Development Act which provides for a compulsory levy.
Not all industries have a development council; it is rather exceptional to have 996 one. I presume that it was started in the furniture industry because it is a fragmented industry. It has a large number of small firms and, without being unkind, I may say that a good many of them are still living in the past and have not come to terms with modern methods. Therefore, it is all the more important that there should be a research association which is as alive as FIRA is to helping the industry in the many ways it has done. It is particularly important at the moment when we are thinking of competing in the Common Market. Unfortunately, though FIRA has done a great deal in finding different methods of measuring performance and a lot is being done to standardise such methods internationally, the furniture industry as a whole has decided that it is not in its interests to pay the small contribution necessary to the B.S.I. to continue this work on an international basis. That may give your Lordships some idea of how inward-looking are certain sections of the industry.
From my personal experience, I can confirm what the noble Lord, Lord Brown, has said about the immense good which FIRA has done. It is certainly one of the liveliest of the research associations. The best study of the use of computers in small firms which I have ever read was produced by FIRA. It has done absolutely pioneering work on methods of measuring performance, and now has proposals for the strength and stability of certain types of furniture. I think one can say that in the furniture industry there is a special case for continuing to fund a research association adequately. I must say that the Government's decision to run down research associations is one of the gravest mistakes that has ever been made. Here is an opportunity to get modern techniques into many of our firms which are still far from being competitive in this modern age. The mere £4 million which the Government paid out for this is chicken-feed compared with the money which they waste in their own larger research establishments with far less effect. Furthermore, this is happening at a time when we think it is important to he competitive in Europe and other foreign markets. Even if their policy is not wholly reversible. I appeal to the Government at least to show that they still feel that something can be done for the furniture industry.
§ 7.27 p.m.
§ LORD DIAMOND
My Lords, I want to support as strongly as I can the wholly persuasive case put forward by my noble friend Lord Brown and by the noble Viscount, Lord Hanworth. In fact, I want to ask the Government what has changed since they, as the Government of the country during the 13 years from 1951 to 1964, continued with this Development Council, when FIRA was established and flourished? Your Lordships have not heard to-day, and I have not heard—I have no direct knowledge, but I have a good deal of contact with this Development Council and with FIRA—of any complaint about the usefulness of its work. Indeed, so far as I know the Government do not allege that FIRS is without use as a development association. The only question is: In which form will the work be continued? Its use has been well-established and relates to something as basic as holes in furniture and what goes into them.
We all know what an enormous improvement has taken place in the design as well as in the structure and strength of materials. I cannot think of anything else which is more felt by the ordinary man and woman and the family than the furniture in the home. Nobody will suggest that research in this industry is overdone, so I repeat that the only question before the Government is: What is the best way of financing this research which has had valuable results and should continue, as it continued throughout the period of the Conservative Government from 1951 to 1964, and which, so far as my recollection goes, was subject to ups and down within that period? I am told that there has always been a story of less than 100 per cent. support within the industry for this Council, and for the research element in it. There has always been less than 100 per cent. support. It is not unusual at all, and it did not happen for the first time in recent years.
§ LORD DIAMOND
It did not happen in recent years that, for the first time, a large number of the smaller firms were anxious not to continue it. It is a very familiar situation in industry generally, and it is a familiar situation in this particular industry, which the previous Conservative Government knew about 998 and nevertheless decided, on the advice of its then chairman and of the Departmental Ministers concerned, to continue. So where you have a good thing and where you have, as a matter of policy, continued it, it is very difficult to understand why the Government should be thinking of prejudicing its continuation. I would go much further and say that it is not merely going to prejudice its continuation: this step by the Government would make it almost certain that it would not continue, because one knows that in industry there are any number of small firms who in the nature of things, if I may be forgiven for saying so, are not managed by very far-sighted people, who have to consider their annual profit and loss accounts and whose point of view is a short-term point of view, and they will be concerned to save expenses wherever they can save them. Yet here is something which redounds to the long-term benefit of the industry and to the long-term improvement of our homes.
I should like to suggest to the Government that, unless the Development Council is continued, we will undoubtedly see FIRA coming to an end. Pressures from the small firms will build up; and voluntary organisations always have difficulty in collecting money for such unidentifiable things as research associations. You can always see the benefit of research looked at over the past, but it is very difficult to demonstrate it as the research is being carried on. Therefore I should have thought that without doubt if the Government continue in this attitude a most valuable research organisation will be brought to an end. So I endorse what my noble friend Lord Brown said about this being a very retrograde step, and I invite the Government to think again. I invite the Government to recollect the history. So far as I am aware, it is the only Development Council stemming from the 1947 Act, which I recollect because it was the first one of which I had the privilege to be the chairman in Standing Committee a very long time ago. I have that kind of paternal affection for it, but I have no closer connection than that. I have been concerned for a very long time with an industry which is not very different from the furniture industry, and I therefore know, from those sources, how useful FIRA has been and the organisation generally. The 999 argument is very clear. There has been a very solid reason for keeping this organisation going, notwithstanding the continual rumbling that has gone on. We invite the Government to show the necessary leadership and to show their beliet in research and in this sensible method of maintaining research.
§ 7.34 p.m.
§ THE EARL OP SHANNON
My Lords, I shall be making only a very small contribution to this short debate on Lord Brown's Unstarred Question. In doing so, I must make my usual declaration of interest in so far as anything to do with research associations is concerned. We are very much indebted to Lord Brown for raising this matter by way of an Unstarred Question; and, like others who have spoken, I am appalled at the shortsightedness of this decision if it in fact means cancelling or terminating the levy. This comes at a time when, as I know only too well from the position I occupy, our research associations are arousing great interest abroad. I get a large number of inquiries from abroad asking how they work. People want to know more about them, and it is for the very simple reason that they envy them, as your Lordships have been told. Yet here we are starting to put some of our major institutions at risk. My Lords, we are here worrying about a comparatively small amount of money—and this when, on the Continent, many similar institutions are in fact being funded very heavily, not by levies on industry within the country but out of levies on imported goods in those categories. A classic example of this is the French levy on leather. Leather goods are very heavily dutied into France—and what happens to the money? It goes straight to the French equivalent of the Leather Research Association.
My Lords, it is going to be a very traumatic time for British industry when we enter the Common Market. It is going to be a time when British industry will need all the help it can get, as the noble Viscount, Lord Hanworth, has already brought to our notice. This decision may he in line with "True Blue" philosophy, that industry must pay for what it wants, and if it does not want to pay for it then it does not need it. That is very nice, neat, tidy, political 1000 thought; but economically it is very shaky. The state of this particular industry is very well brought out by the fact that whereas the average research association has around 500 members—that is a simple calculation: the total number of members divided by the number of research associations—FIRA has 1,400 members. That shows how fragmented this industry is—more than any other—and we have heard how small some of the members are. Therefore it becomes all the more important to the philosophy that goes behind such a decision as this that, as I remarked to your Lordships during the research debate on February 28 [OFFICIAL REPORT, Col. 884]:…the customer should be in a position to understand and define his needs ".My Lords, if we have such a small, fragmented industry, surely these small companies are going to be in no position to know exactly what the customers need.
These small companies happily use all sorts of standards—standards that were created by FIRA. They often do this completely unknowingly, and if they do they say. "The standards are there: why can we not use them?" They are going to make use of things in the future for which probably they will not be prepared to pay their fair share. We are talking about taking away 30 per cent. of FIRA'S income. I am not so pessimistic as to think that just because 30 per cent. of FIRA's income is going to be taken away. that means the end of FIRA. I do not think it does at all. But it does mean that if 30 per cent. of its income is removed, something is going to happen at FIRA. These small companies may go on happily for a bit, but when they want FIRA's services again FIRA may not be there; it may not be there in the form in which they have it now and in the form that they require it. And, probably, almost worst of all, we shall have lost to foreign predominance in this field. We have heard that this is one industry at least in which we hold a lead. For goodness sake, let us try to hang on to it! Short-sighted decisions such as these, I believe, can have very detrimental, far-reaching effects.
The noble Lord, Lord Brown, gave details of the record of FIRA, and I think that this in itself is a sufficient tribute to FIRA for the Government to reconsider 1001 this decision very seriously. But I would ask that their own publication, New Technology. London edition, No. 57, April, 1972, be required reading for Ministers in the Department of Trade and Industry. On the front page is an excellent article, written by Mrs. Shuttleworth of the Research Division of the Department of Trade and Industry. I think that if the Ministers would read that (and it mentions FIRA) they would seriously reconsider this decision.
We all appreciate that research associations, by the very nature of co-operative research, cannot necessarily be wholly attractive to industry, especially when times get a little hard and some companies are inward-looking. As an example, suppose that FIRA were to produce a better and cheaper chair. All the member companies would receive details of this. They would all start making this new, better and cheaper chair. But they would say, "As we are all doing it, none of us is individually going to get any benefit vis-à-vis the others. The benefit will accrue to the customer." Granted. But the whole of that section of British industry will be so very much more competitive internationally, even if not among themselves. This is a very important point and one that is often not appreciated by industry when it comes to paying something towards a research association. Like the noble Lords, Lord Brown and Lord Diamond, I strongly urge the Government to reconsider what I consider to be a highly retrograde decision.
§ 7.42 p.m.
§ BARONESS GAITSKELL
My Lords, may I apologise to the noble Earl, Lord Shannon, for attempting to rise before him? I did not see him jump to his feet and I wondered whether he was here. There is very little to add to the support given by everyone who has spoken to my friend Lord Brown's Unstarred Question. All the arguments lead me to the same question: Why are the Government doing this? The Furniture Development Council is now nearly 25 years old; it has had a high reputation and is of very great benefit to the furniture industry. Undoubtedly it is also of great benefit to the consumer, although the co-operative scientific research in which it engages works for the whole domestic furniture 1002 industry. Why are the Government seeking to change the rules after 1973? The cost of the Research Council, as has been said to-day, is a tiny levy on the industry, and the result of changing the statutory levy for a voluntary one will mean that those who do not pay will get the same benefits as those who do. This makes no sense or justice to me.
This brings us to the philosophy and psychology of Tory politics. It seems that consumer protection organisations have to be voluntary, pay-for-it-themselves organisations. This goes for the F.D.C., and it has gone for the Consumer Council. What is the virtue of a voluntary levy? One result of introducing it is that it opens the door to the use of shoddy materials and bad workmanship. In this case women especially suffer from the danger of falling standards, for women spend so much of their lives within the precincts of their home, in their kitchen, in their living rooms, in their bedrooms. The home is a great source of pride and satisfaction. The important thing in a home is that the furniture should be good-looking and lasting. So I ask again: why are the Government acting in a way that will cause the disappearance of the Furniture Development Council? is it a belief in the homely maxim, "Take care of the pence and the pounds will take care of themselves"? They save £240,000 a year on the abolition of the Consumer Council and about £150,000, I believe, by the dissolution of the Furniture Research Development Council. Set this beside the profligate cost of Concorde, which is likely to end as profitably as "the biggest aspidistra in the world"! I believe that on this issue the Government are very misguided. I hope that they will listen to everything that has been said to-day by people who know very much more about it than I do. I hope that the Government will change their minds about this and will continue with the statutory levy and so with the research body.
§ 7.46 p.m.
§ Loan GRANVILLE OF EYE
My Lords, at this late hour I hesitate to intervene in this debate. I must declare an interest. I have been associated with the industry for most of my life and I am at the present time a director of a 1003 group of furniture manufacturing companies. I think that the House is grateful to my noble friend Lord Brown for having introduced this subject and, if I may say so, he made out a very powerful case which I think the Government are going to find extremely difficult to answer.
There are probably three views held at the present time in the furniture industry. There are those who perhaps want FIRA to lapse; there are those who want to see a statutory levy; and there are those who say that it should be voluntary. As my noble friend Lord Brown has said, there is a questionnaire going round the industry at the present time to try to gather their views. My own considered opinion about this, having seen this industry with its ups and downs over a number of years, is that the Government will make a great mistake if they do not go on with the support they have recently given to the industry. I suppose that the furniture industry has always been extremely difficult to organise and to rationalise. As Lord Brown has said, it is a conglomeration of small firms and a number of larger ones. It has never been led by consensus; it has never depended on consensus for any advance it has made in the field of design. It has depended vitally on the leadership of one or two leading firms who had money to spend. We have had great advances in the furniture industry since the Kite standard was established many years ago—advances certainly in design, in quality control and in research and we owe a great deal to men like Sir Gordon Russell and the Design Centre, the Colleges of Art, the technical colleges and their seminars for the progress which has been made.
A few weeks ago I visited the Cologne International Furniture Fair which is the largest of its kind in the world. When we go into the Common Market this industry will have to face some of the toughest competition in the whole of its history from the Germans, the Italians and the Scandinavians. The competition is here now. So when the advantages of the Common Market enable the Germans, the Italians and the Danes to import into this country without restriction, the furniture industry in the home market will face one of the toughest fights it has ever had. Last year France 1004 increased her export of furniture by 160 per cent.; we increased ours by 42 per cent. This is the industry which once led the world—Chippendale. Adams, Hepplewhite, Sheraton—and still leads on reproduction or traditional furniture. But the only real design in furniture in modern times is by Scandinavia in the use of teak. We have a lot to do if we are to compete.
My Lords, a great deal will depend on observing what the Germans and the Italians are doing. As my noble friend, Lord Brown said, it will depend on efficiency in the industry and on its technology. I think that Stevenage, FIRA and the Furniture Development Council are doing a very good job. It will be a tragedy if Stevenage lost those graduates and research workers over which they have taken time and trouble. I hope the Government will listen seriously and reconsider the question of the grant which has been made in the past.
§ 7.52 p.m.
§ THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN)
My Lords, this debate, following upon the Unstarred Question by the noble Lord, Lord Brown, really concerns the decision to abolish the Furniture Development Council. The noble Lord has asked that we should reconsider that decision. We are not debating whether or not FIRA should continue—that is not the issue. The noble Lord, Lord Brown, has linked the two and has gone so far as to say that if we were to stop the compulsory levy the continuance of the Furniture Industry Research Association would be placed at risk. But this is not the question that we are considering. The noble Lord made quite clear that if the industry were of that opinion it would be possible to make a Section 9 Order under the Act which would make it possible to continue the compulsory levy. This is not the issue we are considering at the moment.
The noble Baroness, Lady Gaitskell, seemed to think that the two bodies were identical, the Furniture Development Council and the research body. But this is not so. The issue we are considering to-night is purely the question of the Furniture Development Council. Perhaps I may be allowed to give a little of the background. The Council was set up on January 1, 1949, under the Industrial 1005 Organisation and Development Act which was passed in 1947 to deal with the special problems facing industries of many kinds at that time. It is now the only council that remains, apart from one set up in 1966 to deal with apples and pears in a very different situation. Originally, the Council was given 18 specific functions to be exercised, as the Act says, in such a way as to increase efficiency and productivity in the industry within its scope, to improve the service that the industry renders to the community and to enable the industry to render that service more economically.
My Lords, it is not in question that the Council has done a great deal of valuable work of benefit to the furniture industry, notably in the early days as regards standards, and scientific and technological research. But, little by little, it has ceased to exercise those functions as other organisations have taken them over—for example on export promotion—and as the functions ceased to be appropriate; for example, encouraging people to enter the industry. In particular, the Council was instrumental in 1961, with the support of the Department of Scientific and Industrial Research of that time and the British Furniture Manufacturers' Federated Associations in setting up the Furniture Industries Research Association to take over the research and information work which the Council had been doing up to that time.
Virtually the only function that the Council now exercises is that of collecting the levy. The Council collects the levy and pays over to the FIRA almost the entire proceeds, amounting to a little over £100,000 a year, retaining only enough to pay its administrative expenses. The Act lays down that there should be a continual review—this is in Section 8(3)—and that it is the duty of the Minister (there may be different Ministers for different industries, and in this case it is the Department of Trade and industry) to consult the interests concerned. This is not a question of counting heads; this is a question of consultation—a very different matter. This is what the Department did and I am assured that it found there was very little support for the continuance of the Council. This is quite separate from FIRA—
§ LORD DRUMALBYN
My Lords, I hope that the noble Lord, Lord Brown, will allow me to develop my argument. On FIRA and the method of financing it there has been a division of opinion. It is to deal with that division of opinion that the Chairman, in association with British Furniture Manufacturers and FIRA, and in consultation with the Department, has sent out a circular, a questionnaire, to all members to find out what they thought should be done, whether FIRA should be financed by a compulsory levy or by a voluntary levy. Does the noble Lord wish to intervene?
§ LORD BROWN
My Lords. I want to suggest to the noble Lord that he has been misinformed. He said that it is not a question of counting heads. May I read a short sentence from the letter written by Mr. Nicholas Ridley to the Furniture Industry Research Association. He says:I hope that the industry can express to me through the Chairman of the Furniture Development Council a clear majority view as to whether after 31st December, 1973, effective research"—et cetera. et cetera. "A clear majority view." That is the counting of heads.
§ LORD DRUMALBYN
My Lords, that may be interpreted in different ways. The noble Lord is himself an accountant and no doubt he knows what happens, for example. with debenture holders. The majority view does not necessarily mean the majority of debenture holders. But I do not want to rely on any kind of abstruse accounting argument over this. The fact of the matter is that the questionnaire sent out gives detailed information and. I may add, this debate will add greatly to the importance that the manufacturers will attach to the continuance of FIRA. I think it may serve a very useful purpose and to some extent determine the way in which the members decide to express their opinion.
The circular is a pretty large document and it is intended to enable the members of the industry to see what issues are involved and then to decide whether they are in favour of a voluntary membership subscription—the amount is stated—and, if so, whether they are prepared to contract for a period to make 1007 this voluntary subscription, or whether they would prefer a statutory compulsory levy. That is the position as it is now. I repeat that if there is a preponderance of opinion in favour of a voluntary system, then the Minister will want to be satisfied that an effective system can be worked out if grant is to continue to be paid. If, on the other hand, the weight of opinion is in favour of a compulsory levy, the industry will be able to apply for a Section 9 Order; and Mr. Ridley was careful to leave enough time for the industry to make up its mind and for the financial arrangements to be worked out—because, of course, an Order requires to be laid in draft before both Houses of Parliament and it requires an Affirmative Resolution.
I should make it clear, so that there is no misunderstanding about this, that a decision to impose a levy does not automatically follow upon an application; but the Minister would certainly consider an application sympathetically. And he would consider it in the light of the questionnaires. From this questionnaire, which is signed—it is not just a tick and sent off anonymously—indicating the firm from which it emanates it will be possible to afford due weight to the various opinions expressed.
I do not for one instant dispute that the Council has served the domestic furniture industry well in the past. The noble Lord. Lord Diamond, said that he wondered what had changed. The fact of the matter is that at the last quinquennium but one there was a majority of opinion in favour of the continuance of the Council. At this last quinquennial review there was very little support indeed for the continuance of the Council. That is one thing that has changed. The other thing that has changed over the years has been the fact that here we have a Council set up under an Act with a wide variety of functions and the only function that remains is the collection of levy, and that object can be achieved in other ways. I really do not think that it would be appropriate to keep in existence against the wishes of the majority of the industry—against the weight of opinion in the industry if you like—a Council which was set up to exercise this wide range of functions, merely to collect a compulsory levy which 1008 could be collected by other means should it be decided that a compulsory levy was still necessary.
§ LORD DIAMOND
My Lords, I am sorry to interrupt the noble Lord. I have listened carefully to what he has said, and he is not dealing with the essence of the matter at all. The decision of the Government may be expressed as merely bringing to an end an association which no longer carries out the 19 possible functions which the Act originally provided. The decision of the Government brings to an end the Research Council unless something is done. Is the noble Lord telling us that the Government undertake that, even if there is not a strong majority of the members—which would not be surprising—they will bring in a compulsory levy? If not, the act of the Government in bringing the Association to an end is determining the life of the Research Council.
§ LORD DRUMALBYN
My Lords, I thought that I had covered that point. It does not follow that they will be determining the life of the Research Association, because it will be possible to deal with this by voluntary measures if the industry so desires. I have indicated the type of question that has been put. I must put this to noble Lords, because I feel that, whatever we may think of this at the present time, it is the final consideration at the moment. The noble Lord is asking the Government to reconsider their decision. Supposing I were to say to-night, "Yes, the Government will reconsider their decision". What on earth is the industry going to think of that? Here they have just been asked to express their opinions, not on whether they want FIRA to be brought to an end, but whether they want it to continue to be financed by voluntary or by compulsory means. And supposing we were to say "We are sorry. We should not have sent out that questionnaire. The Government will reconsider the matter, and it does not matter what you may think." Is that a tenable thing for us to do at the present time? I must say to noble Lords that in the present circumstances surely the right course is to wait and see what the result of the initiative taken by the Chairman of the F.D.C. is before we take any further action.
§ LORD BROWN
My Lords, the noble Lord has asked a question and perhaps I may have the temerity to answer it. He said: "What would the industry think if we now said that we would reconsider the matter, when a questionnaire is in their hands?" Fair enough. The effect of my question is this: in the event of there being a majority against the renewal of the Furniture Development Council or some other means of introducing a statutory levy, will the Government, when they have received the questionnaire, overlook a majority against, in the light of the fluctuating view for and against in the past? We are not children in this House. The Minister knows very well that what we are after is an assurance that some form of statutory levy will continue in the furniture industry. We do not want to embarrass the Government by having them to go to the industry at this stage and say that they have changed horses. We want the Government to say that they will await these questionnaires, and see what happens when the answers to them come in. But we want the Government to resolve in their minds, in the light of what has been said about this Council in the House to-night, that they will not take too much notice of a mere numerical majority against.
§ LORD DRUMALBYN
My Lords, the noble Lord has shown how difficult it is to keep to the point in this matter. It may have been a slip of the tongue, but the industry is not being asked in this questionnaire about the continuance of the Development Council: that is a matter that the Government have already decided. It is being asked about the method of financing the Research Association. All I can say now is that it is only right—we are bound in any case to consult before there can be a Section 9 Order—that we should await the outcome of this questionnaire, find out what people think in the industry—that is what "consultation" means—and then try to think out the best way of ensuring (and that is what we want to do) that the Research Association will continue in existence. Because everybody appreciates the valuable work that they are doing and have been doing and the importance of their continuing in existence.