HL Deb 22 May 1980 vol 409 cc1061-73

4.40 p.m.

The MINISTER of STATE, DEPARTMENT of INDUSTRY (Viscount Trenchard)

My Lords, I beg to move that this Bill be now read a third time.

Moved, That the Bill be now read 3a—(Viscount Trenchard).

LORD BRUCE of DONINGTON

My Lords, we on this side of the House would not seek in any way to prevent the political will of the other place being accomplished in this legislation. We on this side of the House have sought to make as many constructive comments and amendments as we have thought fit. I feel bound to draw the noble Viscount's attention to the fact that some of the amendments that have been put forward, while not in any way obstructing the main political purposes of the Bill, would undoubtedly have improved it. I refer in particular to the amendment put forward by the noble Lord, Lord Rochester, which sought to secure the promotion of the involvement of the workers in the particular industries involved. That amendment could quite easily have been accepted by the Government.

I am bound to say that, so long as this House retains its function to scrutinise Bills that come from another place and to endeavour, in so far as it is possible, to improve on their wording, we are, in that way, discharging a valuable function. I can recall many instances in the time of the previous Administration when, on those grounds, amendments moved by the then Opposition were accepted by the House as a whole and were remitted back to the Commons for their consideration. In this particular instance the noble Viscount has insisted, in accordance with his brief or otherwise, on the Bill and nothing but the Bill, without any amendment whatever.

I feel bound, on behalf of those who sit with me, to draw the noble Viscount's attention and the attention of the Government to the dangers that may lie ahead if this course is continued. We have a very heavy parliamentary Session, and pressure towards the end of July may be very hard indeed. If the Government are prepared to be constructive in these matters and are prepared to depart from their rigid brief and admit amendments from all sides of the House when they are quite obviously and patently reasonable, then the position of the Government will be facilitated. If, on the other hand, the Government take the view, in regard to the remaining Bills to come before your Lordships, that they will, by means of their inbuilt parliamentary majority in this place, maintain intact every jot and tittle, every last letter and comma of the legis- lation they bring before us, then I must warn them that they may not receive the co-operation of many of your Lordships in getting their programme through on time. I deliver that warning because I believe it necessary that this House should be able to discharge without fear or favour its ordinary function, and I hope that the Government will take note of it.

This is a miserable little Bill. The only pleasant part about the Industry Bill is the very courteous and constructive manner in which the noble Viscount, Lord Trenchard, has introduced it and has piloted it through the House. I do not think that any Member of your Lordships' House could complain of the most careful courtesy and patience shown by the noble Viscount.

Since the Bill has been discussed on Report there have been two developments upon which I must comment. The objectives of the Bill are twofold, in the main, cutting out all that may be euphemistically called the "peripherals". The first objective has been to keep the noble Viscount's right honourable friend the Secretary of State within the narrow confines of his own ideology. Not only does he have acute sensibilities about his doctrine, but he evidently seeks to have them enshrined in statute. He has deliberately taken away from himself that degree of flexibility in the development of the whole of British industry which we on this side of the House think it advisable that he should have retained.

We live in times when unemployment is now at a record level, when inflation has over doubled itself since the Government came into office, and when the future of British industry—even according to some sections of the Confederation of British Industry—looks very bleak indeed. Therefore, we think it gravely unwise that the Minister should restrict himself within what, as I have said previously, are the confines of his own narrow political philosophy. He may rue the day when he dispensed with that flexibility.

The second aim of the Bill—apart from all the other matters which are, in the main, matters of administrative convenience—is to dispose of the assets of the National Enterprise Board. There have been developments since this Bill was discussed by your Lordships on Report. Since that time, as one reads from The Times of 20th May, a Mr. David Young, the chairman of Manufacturers Hanover Property Services, has been appointed special adviser to the Minister as regards denationalisation generally. Moreover, it is revealed that one of Mr. David Young's qualifications for this post—and I do not wish to minimise them in any way—is the fact that he is a property developer.

I do not wish to decry in any way the property development profession. Members of this House, especially those with memories that extend beyond the last five or six years, will have very acute memories as to what happened to property development, particularly during the Administration of Mr. Heath. Nevertheless, it is a very honourable profession and I have not the slightest doubt that Mr. David Young is a very able exponent of it. However, I must draw to the attention of the House the fact that the process of denationalisation, on which the Secretary of State appears to be bent, includes the disposal of businesses concerned, among other things, with spark erosion machinery, shower valves, telementary systems, chemicals, automotive products, tanning, undewater engineering equipment, industrial instruments, specialised vehicles, computer software, digital engineering equipment, process machinery, machine tools, microelectronics, word processing, typesetting, audio-equipment, glass manufacturing, paper manufacturing and sports equipment.

Viscount TRENCHARD

My Lords, perhaps the noble Lord can explain—because he has much more experience of the customs of this House than I—the relevance of Mr. Young's appointment, about which he could very easily ask a question, to the Third Reading of this Industry Bill or to the Industry Bill all?

Lord BRUCE of DONINGTON

Yes, my Lords. As I explained to the House, it is quite legitimate for this House, before giving a Third Reading to a Bill, to consider the developments that have, in fact, taken place since the Report stage of the Bill, which were not available at the particular time and which have very strict relevance to Clauses 1 and 2 of the Bill itself.

However, I press the point no further, except to say that it will be very interesting to hear from the noble Viscount what particular qualifications this very honour able gentleman has to advise Her Majesty's Government on these matters. Moreover—and this is also relevant to Clauses 1 and 2 of the Bill, which give the mechanics of returning this property to private ownership—it should also be remembered that Mr. David Young is a director of the Centre for Policy Studies, which is the research organisation of the Conservative Party. I would ask the noble Viscount to bear in mind, as this process of denationalisation goes forward, that we are in full possession of the particulars of those organisations and companies in this country which have contributed to Conservative Party funds. We shall keep an eye on their appearance on the list of acquisitors in due course.

The second point, which I raised on Report and which the noble Viscount was not in a position to answer at that time, was the position of INMOS. This still remains in suspense. The noble Viscount knows perfectly well that on Second Reading, during the Committee stage and on Report we were able to point out that the future of this particular micro-electronic section of the industry was still in suspense owing to the fact that the Government were unable to make up their mind as to whether they would continue to support it. We observe from the press that negotiations with GEC for an acquisition of a part-interest in it have so far not succeeded. The next day we find out, that they are still on. Before we dispose of this Bill, we should like the noble Viscount to say just what is the position of INMOS. It would seem to me a very great pity if we parted with the Bill without knowing what were the Government's firm intentions.

In conclusion, and summing up the attitude of those of us who sit on this side of the House, we consider that in the existing economic state of the country and with the divisions within the party of the noble Viscount opposite—which are becoming increasingly apprehensive, together with those of their colleagues in the CBI, of the policies pursued by Her Majesty's Government—the Government ought to be very careful indeed how they proceed under this Bill. If they proceed with very great caution and with due circumspection, no lasting harm will be done. But if the Secretary of State is allowed to get away with the political dogma that he has so often inflicted on another place and on the country, in my view and in the view of my colleagues who sit behind me, this Bill will not only not afford any assistance to the state of industry, as it is likely to develop over the next three years, but will bring lasting harm to the nation as a whole.

4.55 p.m.

LORD HATCH of LUSBY

My Lords, I should like to add to two points raised by my noble friend Lord Bruce of Donington, referring to the developments since the Report stage of the Bill. As my noble friend has pointed out, all the economic indicators that have been published since the Report stage bear out the fears that have been expressed by this side, that this Bill, along with its accompanying industrial policy from the Government, is leading to disaster.

We have never heard any answer to the questions that have been continually put from this side, on the Bill and on the Government's industrial strategy generally, as to why they consider that this strategy, in 1980, should have any effects different from the effects of the strategy employed between 1970 and 1972, which it so closely resembles. However, I shall not pursue the philosophical issue which I have tried and failed to impress upon the Government during the previous stages of the Bill.

I want to concentrate for just a few minutes on Clause 9 and to ask the noble Viscount who will reply for the Government to address himself to the fears and, indeed, the confusion with which I have been left as a result of the Government's attitude to this particular clause dealing with the powers of the NEB and the two agencies in providing overseas technical assistance. The noble Viscount, who replied to me during the Committee stage on the Bill, appeared to me to have confused both what I was saying and the contents of that clause. Perhaps I may remind the House of what the noble Viscount, Lord Long, said during the debate on the Committee stage. He said: Noble Lords will know that overseas aid is a matter for the Overseas Development Administration. It has the prime responsibility for work of that kind. It is therefore a job for that office to carry out and not for the NEB and the agencies ".— [Official Report, 29/4/80; col. 1146.] This surely is a confusion both of the meaning of Clause 9 and of the intention of the sections of those Acts which Clause 9 repeals. It is not a question of the NEB or the agencies competing with the overseas development administration. The intention of including the sections in the previous Acts, which are now to be repealed under Clause 9, was to allow what was then the Overseas Development Ministry to use the NEB or the agencies in order to provide technical assistance which the Overseas Development Ministry itself would govern.

Therefore, there is no question of competition here. It is a question whether public corporations, like the NEB, can be used to provide technical assistance. I would suggest that the Government are here destroying something which could be of immense value or—let us not exaggerate—of considerable value in their future policies both towards overseas aid and, in this case even more importantly, towards overseas trade.

This brings me to the issue raised by my noble friend Lord Bruce of Donington in his reference to the organisation known as INMOS. INMOS gives an opportunity for this country to at least get a toehold into the rapidly developing industry of micro-technology. It is of course owned by the NEB. Are the Government saying that if their Overseas Development Administration within the Foreign and Commonwealth Office wants to ask INMOS to provide some technical assistance to a developing country, or indeed to any country overseas, that it shall not be allowed to do so?

If that is what the Government are saying, then it seems to me to be a very short-sighted policy and quite unnecessary, because the clause to which I am referring Clause 9, does nothing really to strengthen the Bill, and the only argument we have heard in defence of this clause is that the NEB must concentrate on its work in this country. But this is not going to divert the NEB. This small measure, which can have some considerable significance in the future, is not going to divert either the NEB or the Scottish and Welsh Development Agencies from their work in this country, by providing technicians, knowledge, perhaps some software in the micro-technology industry, to overseas countries.

I should have thought that our whole experience shows that the use of this clause—perhaps it may be some time before it is used—and the power to use it could be of considerable value in the development of British overseas trade. As I have continually pointed out to this House, and as I think the Government accept, overseas aid, and particularly technical assistance, is of great stimulation to our overseas trade. The two things cannot be separated.

If the Government are looking for measures which can rectify their adverse balance of payments, if they are looking for measures which can assist the development of the export industries of this country, if they are looking for policies which can bridge that fantastic gap between the 18 million unemployed in the industrial countries and the starving half of the world, then this is a measure—admittedly a small measure—which will assist them in doing exactly that. To destroy that opportunity, to forsake the opportunity of the future, seems to me to make absolute nonsense. As yet I have heard no rational defence of Clause 9 in this Bill.

Finally, there is another dimension to the policy which is at least allowable within Clause 9. Is it the Government's belief that in the development of our overseas trade, and in the deployment of our ability to provide technical assistance, it is wiser, or perhaps more ideologically acceptable, to confine such provision to the multinational companies than it is to the public corporations of this country?

If that is the case, then I can tell the present Government and the Minister who is to reply, that that ideology would be widely rejected by many recipient countries. There is indeed among many of the developing countries a particular liking for the relationship between public sector industries in this country and public sector industries in their own countries. They prefer, and they trust more, the public sector industries within this country than they do the operations of many of the multinational firms that will be the only alternative if this clause is included in this Bill.

I would just ask the Minister to tell me something which I have asked before and to which I have not yet had an answer: Had there been consultations before this clause was drafted between the Department of Industry and the Foreign and Commonwealth Office, and particularly the Overseas Development Administration within the Foreign and Commonwealth Office? If there had, I would be astounded to hear that the Overseas Development Administration does not wish to have any longer the right to use the public sector; to use organisations like INMOS; to use the NEB-owned industries; or to use the Welsh and Scottish Development Agencies with their experience in the planning and development of industrial estates. I would be astonished if the Overseas Development Administration has told the Department of Industry that it no longer wishes to have this right.

Unfortunately, this clause, although we moved to delete it at Committee stage, has not been fully debated in either House. I hope it will be when it is taken back to the other House. It seems to me that this is a part of the blindness of the present Government to the opportunities that are open to them—which are being taken today by our competitors: by the Japanese; the Germans; the Americans; the Swiss; indeed by all our competitors—which are beckoning to us in the developing world, and which this minor clause is apparently designed to block.

I would ask the Minister

Is it not the case that he would be strengthened in his office if he at least retained the right to use both the NEB and the Welsh and Scottish Development Agencies when he is looking for the opportunity, along with the Overseas Development Administration, to provide the technical assistance in countries abroad which can lead to increased trade between our country and overseas lands?

5.9 p.m.

Viscount TRENCHARD

My Lords, I should like to thank the noble Lord, Lord Bruce of Donington, for his personal comments, and turn to the various points he has raised first and then to those that the noble Lord, Lord Hatch of Lusby, has raised. I must say to him that I believe he has a theory about my right honourable friend the Secretary of State which I can only tell him, out of the last year's contact with him, is a false theory. We on this side all share the view that private enterprise should be maximised and that it is the most effective way of creating new wealth which this country so badly needs.

But my right honourable friend in this Bill has not been dogmatic at all; he has left the National Enterprise Board and the agencies, in so far as their functions are partly covered by the Bill, with major functions of the kind and type that the previous Administration had given them. He has left them with a field which, as I have said to your Lordships before now, is, in my judgment as an industrialist from a big corporation for many years, as much as any board could deal with. Those views have been echoed in the latest annual report of the NEB, some quotations from which I referred to on Report. We have left the main structure of regional aid. In the circumstances in which we find ourselves, we have had to trim according to our budget, but we have managed to do that in a way which leaves a strong, and in some senses stronger, pool for any share of national potential investment to the areas of greatest need.

Where I believe the dogma lay is in the past in believing that the debilitation of British industry could be cured by one agency or by three, whichever way we look at it in relation to this Bill. I previously called this the idea: Having got private enterprise thoroughly dispirited, with its profit levels very low, after years of control and misuse, one could put the whole thing right with a panacea of an NEB and similar powers in the agencies for Wales and Scotland. We believe that is the dogma, and I must resist very strongly the suggestion that we have been dogmatic in the Bill.

It is a relatively small Bill. It leaves the NEB, the agencies and regional policy with major tasks to perform in a way which we believe is suitable to the current needs, to the current very difficult situation and to the current demands for public expenditure savings. I am sorry that the noble Lord feels that we have been quite insensitive to amendments and that we have thus departed from the tradition and purpose of this Chamber as a scrutiny and improving Chamber. I believe there is evidence, and will be more evidence on major complicated Bills, that that function of this House will continue. The noble Lord called this a "miserable little Bill"; I resent and reject the title "miserable". However, it is a little Bill and it is a comparitively simple one. It retains a lot, changes a bit and changes the long-term orientation.

The amendments moved by the noble Lord and his noble friends in vast majority could not for one moment be described as amendments to improve the detailed clauses of the Bill. They were to delete Clause 1, the objects, to delete Clause 2 and to delete other clauses. They were straightforward political amendments against the will, to which the noble Lord referred, of the majority in the other place. I suspect that the reason for tabling them was to air once again the reasons of the party of the last Administration for opposing the Bill and the change of emphasis towards private enterprise on which this Government were elected. But, really, the noble Lord cannot claim that the vast majority of amendments moved were improvement amendments in terms of what is often necessary in a big Bill to get detailed clauses more meaningful and to avoid unexpected effects.

I moved one amendment—not as a result of points raised in this House but as a result of points raised after the Bill had left the other place—which I was glad noble Lords opposite supported and which was based on finding, even in this small Bill, just such a fault where an intention had accidentally slipped in. There were no other amendments of that kind. The noble Lord referred to the amendment moved on Report by the noble Lord, Lord Rochester, and I accept that that amendment, as I said, was not one which had far-reaching effects on the legislation. But we felt quite strongly, and I still do, that, though one could not quarrel with the sentiment behind the moving of the amendment, it really did not have a place in legislation and it would not improve or increase the attention given, under the guidance of the NEB, to one of many very important functions that the NEB had.

I turn to the question of the appointment of Mr. David Young, who was already an adviser to my right honourable friend in certain respects and in relation to the EIEC, and whose terms of reference have now been broadened. I did in the end follow the tenuous thread, if I may so call it, by which the noble Lord connected it with this Bill, but I wish to say clearly that this in no way affects ministerial responsibility for the administration of the provisions of this Bill. This is an unpaid advisory post. We have learnt in the period during which we have had advice from Mr. David Young that it is very valuable advice he gives and that his width and range of knowledge, arising out of his contacts over a lifetime, is indeed much greater than I had understood initially. I therefore hope we shall not once again in this House—we were recently debating another appointment—in any way cast aspersions on a devoted British citizen who is giving of his advice freely, and I can say personally that we are finding it extremely helpful. With regard to INMOS, I think that in previous debates on the Bill I have said all that I can possibly say.

I believe that the Government, and indeed the NEB, would have been irresponsible not to allow certain negotiations to take place; irresponsible on behalf of the taxpayer, and more than conceivably irresponsible in terms of the development of British technology. I have said previously that we realise the need to make up our mind as soon as possible, and that we shall do. It is not really a question of making up our mind; it is a question of giving time for these negotiations to reach any conclusion not previously considered.

I turn to the points raised by the noble Lord, Lord Hatch of Lusby. My noble friend and I may have been guilty at previous stages of not explaining very clearly what we thought—and still think—is the answer to the noble Lord's point. Aid takes various forms, as the noble Lord, with his great interest in overseas matters, knows much better than I do; and aid overlaps with trade to greater or lesser degrees in the various categories on which it would be wrong for me to go into in detail on the Third Reading of the Bill. Requests for aid, the possibility of aid being given, and the possibility of the use of the aid trade contingency fund, will all arise in many ways as a result of both Government and official contacts, and as a result of the Overseas Development Administration. Here let me say that I am assured that the Foreign and Commonwealth Office was of course fully consulted on the terms of the Bill.

As I understand it, there is nothing to stop any of those who have the best purview of the needs for, and possible advantages of, aid, calling on the NEB or agency subsidiaries to suggest that they should investigate certain projects. There is nothing to stop those subsidiaries from applying under any schemes that exist. We are trying all the time to concentrate the functions of the NEB and the agencies, and we are trying to remove the extra function of looking at an area about which they cannot know very much, and thus using their powers to divert activity overseas.

If the knowhow is spotted, or wanted, there are many methods by which it can be used. The judgment as to whether it should be used will of course depend upon the position of the subsidiary and the advice that the NEB gives it in terms of its priorities, situation, and overall position. If those responsible for aid believe that this would be very valuable, then there are methods by which it could be made more worthwhile for a particular subsidiary.

I hope that I have answered the noble Lord's question in general, and I should certainly be prepared to follow up the matter with him, but for the moment I wish to assure him that what I have mentioned does not prohibit the use of knowhow that may be in the hands of a particular subsidiary. However, we do not want the NEB and the agencies actively considering more than the full range of functions—which in our view is still large—which we have left them under the Bill.

On Question, Bill read 3a, with the amendments, and passed, and returned to the Commons.