HL Deb 06 February 1975 vol 356 cc981-6

3.15 p.m.


My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether it is their policy to reduce the private sector of British industry in relation to the public sector.


My Lords, the Government have made it clear that they are committed to a mixed economy in which the private sector is vigorous, alert and profitable. Within that economy there will be, as stated, an extension of public enterprise. If it is in the national interest that financial assistance should be given to particular firms, the nation must have a right to seek a share, if it so wishes, in the equity of those firms. This will be done through the medium of the National Enterprise Board.


My Lords, are the Government concerned about the speech which was made by the Chairman of the Confederation of British Industry two days ago in which he expressed anxiety about the Government's proposals for industry and warned that they could mean the end of the private sector as we know it today and also that they would mean higher unemployment?


My Lords, of course one always takes into account what is said by the President of the CBI. My view is that he is under a misapprehension and that view has been expressed to him.


My Lords, does not the noble Lord agree that it would be very detrimental to the standard of living of the people if the Government further reduced the private sector of British industry? After all, does not the noble Lord agree that it is the profits from the private sector that provide the real wealth which goes to subsidise the enormous losses of the public sector of industry?


My Lords, it depends what the noble Lord has in mind when he talks about "real wealth" ; but if he looks at it in terms of goods and services he will see that this country would have been in a bad way indeed had there not been public enterprise in this country.


My Lords, without going into the complexities of the last question, may I ask the noble Lord whether he would agree that the position must be made as clear as possible? Therefore, may I ask him whether he would agree that at the present time, particularly when confidence is so important, it should be made clear that there will not be an increase in the public sector at the expense of the private sector purely for ideological reasons?


It is my view, my Lords, that most of us are getting too much worked up about the public as against the private sector. I think it would be a good thing if we spoke in terms of productive sectors; and if we can get more productivity one way than another, that is the line we should pursue.


My Lords, is the noble Lord aware that if the President of the CBI is under a misapprehension a lot of other people are under the same misapprehension, and particularly people outside this country whose investment is vital to us to meet the challenge of the future?


My Lords, in the first place I made that statement because I had seen it stated—I will not say by the President of the CBI but certainly by some commentators—that the Industry Bill now before Parliament gives unlimited power to my right honourable friend compulsorily to acquire equities in companies ; and that just is not true. The NEB will not be able compulsorily to acquire equities of private companies. There is a good deal of misapprehension and I am personally in favour of having a proper discussion in this House as to what is involved. I would add this, in reply to the noble Lord: there are difficulties at the present time but he is grossly mistaken if he thinks they are difficulties that have arisen only in the last 12 months.


My Lords, while paying tribute to the anxiety of the noble Lord not to get worked up, may I ask whether he would tell his right honourable friend the Secretary of State for Industry that perhaps he is doing some of the "working "?


Well, that is not a bad thing, my Lords.


My Lords, will the noble Lord tell us what is to happen when we find that day by day and week by week the private firms of this country are coming to the Government to be bailed out?


My Lords, it is a fact that a number of people in this country—skilled management—are more concerned with getting investment capital than about the ownership of that capital, and if it can come only from public concerns they are glad to get it.


My Lords, will the noble Lord tell us where the £2,000 million from the NEB is coming from? And if it is to come from public funds, why was this sum not included in the public expenditure programme for forthcoming years?


My Lords, it will come from public funds. It has not yet been approved by law.


My Lords, if in fact private concerns do come for working capital in the manner suggested by the noble Lord below the gangway opposite, may it not be in part due to the taxation policy pursued by the present Chancellor of the Exchequer?


My Lords, if it is to do with taxation policies, then the taxation policy of the previous Conservative Administration must have been pretty poor, because it was at the time that they took over that the investment in this country began so decidedly to drop.


My Lords, may I ask my noble friend to explain one thing? In this matter of taking over private industry for ideological purposes, can he recall any occasion when an industry was taken over for that purpose? Was it not a fact that they had to be taken over, otherwise the position would have been more calamitous?


My Lords, personally I have a high regard for ideology. I remember when we took over the coal industry, that was for an ideological reason; it was for the good of the country.


My Lords, may I ask the Minister whether it is not wrong to use the phrase "private sector" when a hundred companies control 75 per cent. of the manufactures of this country? Is it not the case that it is not individual enterprise but great corporations which now dominate our economy?


My Lords, that is a point of view which is accepted by many people. I myself think it is a mistake to speak in the way we do about the private sector, because a great deal of the so-called private sector depends so much upon public funds.


My Lords, will my noble friend take no notice of the brouhaha of the Liberal Party, whether from Liberal Lords or others, because my noble friend may or may not be aware of the fact that His Grace the Duke of Sutherland in 1885 accused the Liberal Party of being in the pay of Russia? Secondly, is he aware that the Conservative ideology is such that they still believe private enterprise is in the 19th century, when it is now a co-operation between capital and the people who are trying to discover a formula for the new methods of production?


My Lords, I give my noble friend a categorical assurance that from now on I will take no notice of the brouhaha.


My Lords, in considering this matter will the noble Lord take into account the tens of thousands of shareholders in this country in concerns like ICI and Courtaulds, many of them small investors with life savings involved? These and also trade union pension funds and other pension funds all have to be considered as the country's wealth, and the Secretary of State is playing around with the whole future of this country's economy.


My Lords, I think the noble Lord ought not to say what he did in the latter part of his question. The fact of the matter is that pension funds and some of the trade union funds are taking a beating now and there is great anxiety. No one is using this area as a playground. It should give us all cause for serious concern.

The Earl of ONSLOW

My Lords, is the noble Lord saying that the fall in capital values has nothing to do with Her Majesty's present advisers?


My Lords, what I am saying is that the difficulty we now face did not begin with the present Labour Government, and anyone who thinks it did gravely misunderstands the basic changes that have taken place in the Western World in the last few years.

Viscount MONCK

My Lords, in the hope of bringing this Question to an end, would the noble Lord allow us to congratulate him on the many replies he has given, which I think are excellent, especially in view of the heavy cold from which he is obviously suffering?