HL Deb 28 June 1979 vol 400 cc1661-6

5.47 p.m.

Viscount LONGrose to move, That the draft order, laid before the House on 16th May, be approved. The noble Viscount said: My Lords, the purpose of this order, which my right honourable friend the Secretary of State for Industry proposed to make under Section 9 of the Industrial Organisation and Development Act 1947, is to amend the Iron Casting Industry (Scientific Research Levy) Order 1971 so as to update the formula by which part of the levy is calculated.

The existing order imposes a levy on the iron casting industry to finance scientific research carried out on behalf of the industry by the British Cast Iron Research Association (BCIRA). The new order is necessary in order to take account of a change of the base year of the index, upon which part of the levy depends from 1970 to 1975. The amount of the levy at the date of introduction will remain the same as if the old base year and index had continued in use. The proceeds of the levy will continue to be collected by my right honourable friend and then released against the Association's expenditure on scientific research.

The activities of BCIRA need to be viewed against the background of the iron castings industry. Many companies in the industry are small and would find it difficult to support their own research activities. They are nevertheless of vital importance to British manufacturing industry generally. The Research Association provides the whole of the iron castings industry with a wide range of services which include general scientific research, contract research and consultancy and advisory services. The high standard and practical usefulness of the association's work is widely recognised.

Much of the Association's scientific research is supported by a statutory levy collected from companies in the industry under the provisions of Section 9 of the Industrial Organisation and Development Act 1947. The levy was first introduced in 1966 after wide consultation with the industry and was increased in 1971 to take account of the rise in costs experienced by the Association, and in 1976 to take account of a further rise.

Under the orders at present in operation every iron foundry is liable to pay each quarter a levy made up of two components. First, it pays 0.15 per cent. of emoluments of those employed in the industry. Secondly, it pays a levy per tonne on the iron castings it produces. The rate of the levy per tonne is linked to the index of the United Kingdom wholesale selling prices of iron castings published by my right honourable friends' department in Trade and Industry. Because of the increase of this index since 1976, the levy has gone up from 11p per tonne to 14.5 per tonne.

The part of the formula linked to the index does not allow for changes in the base of the index. That base has recently changed from 1970 equals 100 to 1975 equals 100, and a new order incorporating an updated formula is therefore required. The new order has been so worded as to preserve most of the terms of its predecessors, and I would emphasise that the rate of levy chargeable from the end of June 1979 of 16.5p per tonne is no different from the rate of levy that would have been reached had the 1970 index remained in use. This new order merely revises the mechanics of calculating the levy and does not change the principles under which it operates.

The organisations representing both the industry and the persons employed in it, who were consulted at the time of the 1976 order, have been notified and no objections to this mechanical change have been received. I therefore commend the new order to your Lordships for support. I beg to move.

Moved, That the draft order laid before the House on 16th May, be approved.—(Viscount Long.)

5.52 p.m.

Lord WALLACE of COSLANY

My Lords, first, may I thank the noble Viscount for his very clear outline of this amending order. I am sure that the House will agree with me that any effort to maintain or indeed extend research into the industry is to be welcomed. While not opposing the order, I should like to raise one or two small points. This is an amending order on the levy aspect only and so I understand that all other provisions of the 1971 order remain in force, including Article 12(1) containing penalty provisions of a fine of not more than £5 per day for failure to make returns. I should like to know if possible how many convictions have been secured since 1971, and whether it is really necessary today for this penal provision to continue.

Secondly, will the levy, increased as it will be, when paid out to the Cast Iron Research Association still attract the Government grant usually given to research associations? If so, will the grant be extended as a result of the levy increase? I ask this because we understand that the levy increase is designed to maintain and extend research, and to my mind it would follow that the Government grant should also increase.

Finally, I must confess that I was completely befogged—and I found that I needed a micro-chip—due to the fact that the method of calculating the levy seems to be somewhat complicated. However, I do not beg for an explanation, much as I am sure that the noble Viscount would be able to provide one. In view of the fact that there has been consultation, I do not intend to pursue that point. All I need add is that on this side of the House we accept the order.

Lord WYNNE-JONES

My Lords, I consider it appropriate to congratulate the Government upon for the first time since coming into office ceasing to be revolutionary, and being conservative instead. It is agreeable to find that for once the Government are prepared to accept that what has been done in the past might be continued in the future, especially when it comes to research work in industry. The order laid before us deals with a problem involving the Cast Iron Research Association, which is one of the most important associations in this country in terms of our future, and it is vital that we realise that unless the research is carried on effectively, the cast iron industry will suffer enormously.

I happen to know a little—not a great deal—about the Cast Iron Research Association. It was that association which produced, by its own investigations, a new form of cast iron, the grey cast iron, which is an extremely important addition to our industrial potential; and it is vital that this should be maintained. Therefore, I congratulate the Government upon for once ceasing to employ their preconceived ideas about being prepared to destroy everything which has been well done, and instead being prepared to do what we are now considering.

I wish to emphasise that it has always been the policy of the research asso- ciations, and of the Government support of them, that the Government should supply as much money as is raised within the industry. This is an essential factor which in this country has made successful the whole research association programme, which started at the end of the First World War, and which has played a vital part in developing much of our industry. Unless the Government are prepared to go on doing this, they will be doing a grave disservice to the industry.

I should like to put a question to the noble Viscount on this point towards which I know he is most sympathetic. I wish to ask him whether the Government are prepared to ensure that Government support for the Cast Iron Research Association is in no way diminished? I do not mean to say diminished in absolute terms, but in terms of the percentage contribution made by the Government, because I believe that this is most vital for the future progress of the industry, upon which much of the rest of our industry depends, as I know the noble Viscount will agree.

Viscount LONG

My Lords, I am most grateful to the noble Lords, Lord Wallace of Coslany, and Lord Wynne-Jones, for their comments on the order. I am so pleased that they agree with the Conservative Government in our intention to continue all the grants towards research.

Lord WYNNE-JONES

I mean the conservative part of the Conservative Government's policies.

Viscount LONG

The noble Lord, Lord Wallace, posed a series of very important questions in connection with the order. First, he wanted to know how many convictions there had been since 1971. At the moment we have no trace of any convictions at all, and I hope that the noble Lord will agree that that is a very good situation. The noble Lord also asked whether the penalty provisions still stand. It is the case that they stand as they were; and the noble Lord will probably remember that they were based on a scale involving a figure of £5.

I should like to include the noble Lord, Lord Wynne-Jones, in my reply to the next question which the noble Lord, Lord Wallace, asked. I do so because I noted that the noble Lord, Lord Wynne- Jones, felt strongly that research needs all the money that it can get. I could not agree more that, in such an important industry, without research it would collapse; and it is vital to the rest of industry. So I am not expressing sympathy; I am stating an absolute fact in saying that I believe in what he said.

Perhaps I can help noble Lords on what the grants consist of and how the money is brought in. More than half is from the levy, not from Government grants. Another part of the money that comes into research for the iron cast industry is from Government grants for specific research projects. This amounts to about 20 per cent. Then, further monies are obtained by research associations themselves selling their own expertise. If that helps in any way, my Lords, that is the way the money comes in and that is the way the Government intend to keep it. I hope that, if I have not answered all the questions, your Lordships will allow me to do so by writing to noble Lords afterwards. I am most grateful to noble Lords for their kind contributions to the debate on this very important order.

On Question, Motion agreed to.