HL Deb 14 November 1985 vol 468 cc406-82

4.55 p.m.

Debate resumed.

Lord Ezra

My Lords, I regard it as a great honour to be speaking at this early stage in the debate initiated by the noble Earl, Lord Stockton. He is someone who has already entered into the history of our country as a great postwar Prime Minister. But he also continues to make history with the remarkable speeches which he delivers in your Lordships' House and elsewhere on the business of the nation. The speech that he gave today was remarkable for its breadth and for its logic, and for its compelling conclusions. I was glad to note that the noble Lord, Lord Bruce of Donington, fully supported the thrust of the speech. All that remains is for the noble Lord, Lord Young, also to support it, and then we shall have re-established consensus in the nation. But let us wait for that.

In the meantime, I would like to say that the noble Earl has pinpointed one of the most important issues that we should now be considering. It is not, of course, the first time that, in the Houses of Parliament, we have debated the question of technology and its impact on the nation and on our affairs. But, as the noble Lord, Lord Bruce, said, this is something that is developing with such speed that it requires our continued attention and reappraisal. We have the opportunity today to undertake that reappraisal in its widest sense.

We have to start by looking at this whole question of the impact of the new technologies in relation to where we as a nation stand in our industrial development. Like other nations, we have suffered in recent times. The impact of the second oil crisis in 1979 was serious for ourselves and for others. The unfortunate effect so far as we are concerned is that our recovery as an industrial nation seems to have been somewhat slower than that of others. We know about the remarkable way in which the Japanese have maintained their lead in world industrial affairs, and particularly in the technological sense. We have heard much of the way in which in America they have been creating a whole range of new jobs. But it is also a fact that nearer at hand, in Germany, in France, in Belgium and in Holland, industrial recovery has been more marked than here.

There are no doubt many reasons for this. The noble Earl referred to one—the somewhat mixed blessing of the oil in the North Sea. It is a blessing obviously because of the wealth it has given us, the energy independence it has given us. But it has masked the fact that our industrial resurgence has not been as significant and as important as it should have been.

I believe that the Select Committee report on Overseas Trade, which we shall be debating later on—the noble Lord, Lord Aldington, was the Select Committee's chairman—will enable us to go more fully into that whole issue. In the meantime, I think it desirable that we stick to the aspects of technology. In looking at this problem we need to consider what we should be doing about our industrial affairs. There are some who feel, and have publicly expressed the opinion, that it may be that we live in a post-industrial society when industrial activity, and particularly manufacturing activity, may be something that belongs to the past and that other forms of activity should now be developed. I believe that this view is now diminishing in its importance. It is very interesting to notice that there are more and more articles in the United States, and books being written about the need for industrial revival. Industrial revival is what we badly require in Britain.

How do we set about it? There is only one way in which we can effectively revive our industrial performance, and that is to make it as competitive as possible so that not only can we recapture the markets which we have increasingly lost at home, but also carve out a larger share of world markets. However, in saying that, one has to admit that there are many and complex factors which go into making a nation industrially more competitive. There is the framework of legislation, of fiscal policy. There are the attitude and skills of management; there is the dedication of all those who work in industry; the investment; the injection of technology, which these days has become very much more important than it was, as both the noble Lords who spoke earlier emphasised. And so we need to look very carefully at the way in which we are handling this whole technological issue.

To my mind it falls into two parts. There is, first, the development of the technology itself; and I refer here particularly to information technology. Then there is the application of that technology. I think that we need to test ourselves by looking at both aspects. How have we done in developing the new technology? And how have we done in applying it? As far as developing it is concerned there is no doubt that we have a remarkable number of inventive and innovative persons in this country who have contributed massively to the development of this technology. But the state of affairs at the moment is that in terms of trade we are way behind both America and Japan.

At our meetings of the Select Committee we were disturbed to learn the degree to which we have fallen back as between our exports and imports in this field. What was worse was that the projections showed that this gap would widen. At the moment the gap is something of the order of £2½ billion on our balance of trade in information technology; and the estimate was that before the end of this decade it could double. I think therefore that we need to look carefully at that situation to study what these other countries have done and, whether with Government support or by other means, we can achieve a degree of success which so far seems to be eluding us.

The second aspect is the application. There is not the slightest doubt that the new technologies—the computer-controlled operations—have introduced a totally new dimension in manufacturing operations. There is no way in which we can turn our back on those developments if we want our industry to revive and to become world competitive. There are many firms in this country who have applied these advanced technologies. They have taken the form of computer-aided design, computer-aided manufacturing, computer-aided engineering, and many other aspects as well. What these new forms of technology—particularly the application of information technology—have meant in the manufacturing process is that we have now entered a totally new era. We had the Industrial Revolution in the late 18th and the 19th century. In the first part of this century we moved into the economics of scale. It was found that the more you replicated a product, whether it be done by Ford in America, or whoever, the lower the cost would be, and the great expansion of markets—the consumer revolution—took place.

We are now moving into a new era. Instead of the economics of scale we now have at our disposal what might be described as the economics of scope. In other words, with this new technology we can become totally competitive and economic by not necessarily replicating the products; we can vary them at will. We can meet the consumers' requirements to the nth degree. This is veritable revolution. I believe that it is not generally recognised that we are moving into this wholly new industrial era. It is this that we must surely harness to our industrial endeavours.

And so we come to the question of what impact this will have on the people employed in industry. Let me say first of all that if we do not face up to this challenge the impact will be dire indeed, because others will be doing so, and we shall cease to be competitive at home and abroad. The second question therefore is: if we face up to this challenge, if we apply these technologies, what will that do to the workforce? What will that do to the numbers of people employed? I believe that it could be strongly argued that over time this could improve the number of jobs available, not necessarily in the business primarily affected, but in the supplying businesses.

Perhaps I could just mention my experience while I was in the coal industry—an old industry which I tried with my colleagues to make a new one by the introduction of advanced technology in mining. We found that not only did we derive great advantage from introducing these new technologies but we created an entirely new supply industry. The mining machinery and equipment industry itself generated its own life, moved into the export markets, and, at the time I left the industry some three or four years ago, was earning something like £300 million abroad in the markets of the world.

This question of technology is a very wide one indeed, which leads to a substantial restructuring but can lead to the creation of entirely new sectors to supply the existing mature sectors in which this technology will be applied. The relationship between major enterprises applying the new technologies and their suppliers is of vital importance in this situation.

I should like to conclude by saying that not only do we now have the opportunity but we have the pressing need to reindustrialise. We want to do so by applying the new technologies in a way which will enable us to get away from the previous systems of manufacture on a bulk scale and to get into manufacturing to meet individual needs on a competition basis. If we respond positively to that challenge, which will require effort on the part of governments, effort on the part of industry, effort indeed on the part of the consumers to put the right pressures on their suppliers, then I believe, as the noble Earl said, and as the noble Lord, Lord Bruce, said, we can look forward to getting back to becoming one of the industrial leaders in the world.

5.10 p.m.

Lord Young of Graffham

My Lords, I am most grateful to the noble Earl, Lord Stockton, for initiating this debate. I hope perhaps at a later stage to come back to those few areas where I would agree with the noble Lord, Lord Ezra, but I fear I cannot do it at the moment as I am desperately searching for areas where I can find some measure of agreement with the noble Lord, Lord Bruce of Donington. I hope I may succeed.

I am grateful to the noble Earl because technology is an issue of central importance to our future. It is highly appropriate that the noble Earl should raise this matter today. After all it was he who, when he was Prime Minister, created the post of Minister of Science more than 25 years ago. Furthermore, he appointed to that post my noble and learned friend the Lord Chancellor. It was, if I may say so, an innovation and an appointment in every way characteristic of the noble Earl's flair and vision, qualities which, as we heard today, he still enjoys in abundance.

But perhaps it is a doubly appropriate in that the noble Earl takes his title from the terminus of the first passenger railway line ever constructed. It is salutary to reflect that when the railways burst upon the world they were greeted in some quarters with hands uplifted in horror. The railways were depicted as a devouring monster; they would foment revolution by allowing the lower orders to travel about the country; and of course, once again, it was bad news for jobs.

We all know it did not work out quite like that, and that the railways played a central part in establishing the industrial ascendancy of this country for the rest of the century. And, my Lords, it is worth reflecting and remembering that during that period there were no nationalised industries, no great national investment banks, no great corporatist decisions by an all-knowing state. Indeed, as one whose initials, until he came to this place, were "DIY" it would not surprise you to know that I have, on occasion, read Samuel Smiles.

In 1868, in a book about the great engineers, Samuel Smiles was moved to comment on the failure of successive Governments to respond positively to the great innovations. He said: Thus, in all times, [England's] greatest national enterprises have not been planned by officialism and carried out upon any regular system, but have sprung … from the force of circumstances and the individual energies of the people. Hence railway extension. Like so many other great English enterprises, was … left to be carried out by the genius of English engineers, backed by the energy of the British public". My Lords, the railways were a triumph of venture capital, of risk-taking on the grand scale. The railway pioneers had the vision, and, equally important, the commitment, to make that vision a reality. And what energy and entrepreneurship the railways unleashed! The railways' speed of communication opened up new possibilities, and not just for travellers. People living in the cities were, for the first time, able to drink milk of the same quality as that enjoyed by people in the country. By 1867 the Great Western Railway alone was carrying over 1½ million gallons of milk. There were all the other interests which opened up.

Another great entrepreneur well known to my noble friend Lord Margadale, by repute at least, quickly recognised the possibilities inherent in the new mode of transport. A national newspaper industry was born.

Lord Howie of Troon

My Lords, I beg the noble Lord's pardon, but is the noble Lord leaving the railways at this point?

Lord Young of Graffham

No, my Lords.

Lord Howie of Troon

I thought that the noble Lord was going on to newspapers. I beg the noble Lord's pardon.

Lord Young of Graffham

My Lords, newspapers printed in the major towns could be delivered overnight throughout the length and breadth of the land. The railways brought jobs, pleasure and leisure opportunities. They opened up not just the grouse moors and salmon rivers; they opened up the seaside, and holidays away from home became a possibility for an increasing proportion of our citizens. Those among us who pay annual pilgrimages to places of delight such as Blackpool or Brighton actually follow in the well-trodden paths beaten bare by many generations and countless millions of our citizens.

It has been said that the one lesson of history is that no one learns the lessons of history. I think it is instructive to look at the first Industrial Revolution and see in how many respects it parallels the current revolution brought about by the new technologies. Perhaps even we today can begin to re-learn those self-same lessons.

The first lesson we can learn is that really profound changes are nearly always misunderstood by the people who live through them. When the Luddites smashed the new weaving machines they no doubt thought that they were behaving entirely rationally: smashing the new machines would preserve their jobs. But today, with all the wisdom of historical hindsight, we know that by 1850, with the improvements in productivity and efficiency brought about mechanisation, there were more people employed in textiles than there had been in 1800.

It is not surprising that people were slow to realise what was happening to the economy and to society. The pace of change was faster than ever before in our history. Between 1815 and 1850, for example, our output of iron rose eightfold to over 2 million tons; coal output increased from 16 to 50 million tons. Of the railways, we built 5,000 miles of railway in just 18 years. If we were to put it in perspective, it is just 18 years since Barbara Castle announced the construction of the M.25. But off course the railway pioneers did not have the great advantages of town planning and planning appeals.

The popular view of the Industrial Revolution had—and I fear still has—more to do with dark satanic mills than with the great strides forward in prosperity which actually occurred. Such profound upheavals inevitably bring disclocation in their wake. Change always has a cost. But I would suggest that our views have been coloured far too much by the novelists and poets who crusaded against what they saw as the excesses of the first Industrial Revolution.

We do not read Brunei, but we still travel on the railway he built. We do read Trollope, of whom I well know the noble Earl is a devotee, and of whose books I have long been a collector. But if we open and read Trollope there we find a deep distaste for the process of money making. Those who take risks are derided as "adventurers", and turn out to be shady types certain to come to a sticky end. And, my Lords, they inevitably do. And yet even Trollope, who seems to have hankered for a world where the most serious disturbance was perhaps intrigue in the cathedral close, was an innovator. He worked for the Post Office, and while he was there he invented the pillar box, and thus did his bit to improve communications.

But by the time Trollope was well into his writing career the disapproval of trade, which has so much hampered our progress and wealth creation in this country, was well established. For a while it was but a painless form of snobbery—for those who indulged in it, if not for those who were its targets. The engineers and entrepreneurs who laid the foundations for our prosperity in the 19th century could safely be regarded as vulgar upstarts, caricatured and even vilified, while the country continued to reap the rewards of their ingenuity and their risk-taking.

As I said, by the 1850s this country was producing one-half of the world's output of coal and iron, used one-half of the world's cotton, and one-third of its energy. It is easy to patronise the engine of wealth creation, when it guarantees your own high and improving standard of living.

Tom Brown went to a school where the world of business was disparaged as "mere money making". He went on to a university where it was actively despised. Of course, some careers were exalted—the Army, politics, the Civil Service and the higher professions—and, crucially, the education system reflected and fed values that left the entrepreneur well out in the cold. Even Brunei sent his own two sons to Harrow, scarcely renowned as a school of engineering.

The long-term consequences of that snobbery, of the feeling that there is something innately vulgar about enterprise, has been little short of disastrous. One result has been the reluctance of our education system over many years to acknowledge the importance of vocational training—an attitude which goes hand in hand with the belief that if a subject is useful it just cannot be academically respectable. That is grossly unfair to young people because it handicaps them throughout their working lives. It does no good to the rest of us either.

As a Government our task is clear: our task is to ensure that the innovators of tomorrow can work in a climate as healthy and as encouraging to their efforts as that enjoyed by the innovators of the first industrial revolution. An essential part of that is to ensure that our education system is responsive to the realities of today's labour market. That is why I, for one, am proud to have had some responsibility for introducing the technical and vocational education initiative, which is today spreading rapidly throughout our schools and is having a marked impact in stimulating a more vocationally directed curriculum. Parents, teachers and pupils have reacted enthusiastically to TVEI. It has encouraged a broad range of subjects from robotics to office management, to tourism and even—dare I say?—to business. The aim of the programme is to forge links between the world of education and the world of employment. The more that we can do that, and the more that we succeed, the better.

In fact, TVEI is not the only initiative that we have taken at school level to encourage greater relevance to the world of work. As a result of the Micros in Schools Scheme the United Kingdom now leads the world in the use of computers in education. On average we have at present 11 computers in each secondary school and one or two in each and every of the 25,000 primary schools in the land. For those who leave school at 16 we are well forward in developing a two-year vocational training programme to begin in April of next year. For far too long we have been unique in Europe but, alas!, unique in Europe only in allowing the majority of our 16-year-olds to go straight into the labour market from school with absolutely no systematic training for work. Our two-year programme will open up new horizons, offer substantial training, 20 weeks of which will be off the job, and help to build the foundations for tomorrow's jobs. However, more important than that, for the very first time it will give all our young the opportunity to obtain a real vocational qualification.

Many people in industry have expressed concern about the shortages of graduates in engineering and technology. The Government share that concern because skills in those key areas are clearly vital to the competitive and effective economy. My right honourable friend the Secretary of State for Education has therefore recently announced a substantial special programme. It will cost some £43 million over the next three years, and by the end of this decade should provide about 5,000 extra places in engineering and technology subjects in higher education. The relevance and the benefit to industry has been a prime criterion in drawing up the details of this particular programme. Therefore, we are looking closely to industry to demonstrate the value which it attaches to the programme by offering concrete support to the institutions involved.

The sheer pace of technological change is such that we have no choice but to adapt and to be flexible. We cannot opt out. The other lesson of the first industrial revolution is that once change has occurred, it has occurred—it is irreversible. As the noble Earl said in your Lordships' House on 23rd January: this industrial revolution is going to happen and the question is whether we are going to be in it". [Official Report, 23/1/85; col. 253.] Just so. Changes are happening. In our everyday lives we are aware of things which would have seemed no more than science fiction even a few years ago. For example, we now have portable telephones, satellite television and small computers. I was reminded recently that the first man on the moon had never seen a digital watch. The pace of change is enormous.

There can be little doubt that this country has a wealth of innovative skills. I recall that earlier this year I took the Premier of China to lunch at Trinity College, Cambridge. I told him on the way that Trinity was but one of the 31 colleges in Cambridge and that it had collected 26 Nobel prizes. Incidentally, Japan could boast only of two. It is almost heartbreaking to contemplate our failure in this country over many years to reward our innovators properly and to give their talents full rein. However, more than that, what is really heartbreaking in this country is our failure to develop, to manufacture, and to produce those many innovations. At times I wonder whether the same strain goes through our educational system: respect for the pure and the tendency to look down on the applied. Pure research is fine, but applied research is not.

However, I believe that the situation is now changing. I want to talk, therefore, about what we as a Government are doing directly to encourage the new technologies, quite apart from the foundations which we are laying in education, training and the economy as a whole. I find it hard to believe, but we are sometimes accused of being doctrinaire. Indeed, the noble Earl remarked on 23rd January in your Lordships' House at col. 253 of Hansard that the great figures in the Conservative Party were devoted to: Manchester liberalism of about 1860". If I have my history right, that means that we are more laissez-faire than dirigiste—and why the French language has cornered that market, I just do not know. However, new technology is one area of many where we have not been afraid to spend public money wisely, and to spend it for a specific purpose.

Our support for innovation has doubled in real terms since 1978. We are providing £200 million of the £350 million total cost of the Alvey programme which will mobilise this country's technical strengths in order to improve our long-term competitive position in world markets. We are involved in such European programmes as ESPRIT and basic research in industrial technologies.

We recognise—as our competitors have always done—that we must be prepared to commit resources to promoting the new technologies so that they can be used to sharpen our competitive edge and enable firms to produce goods and services better, faster and cheaper. We simply cannot stand on the sidelines and cheer.

We also recognise that the primary impulse to develop new businesses and new technologies must come from enterprising individuals and from industry. We have changed the climate. The last six years have seen a resurgence of the enterprise culture. We are now seeing some of the results. For example, in Cambridge, in the last five years more than 325 high-tech firms employing more than 14,000 people have started up. Many have been started by brilliant academics. In Scotland, Silicon Glen has some 300 electronic companies employing some 42,000 people. The pace of change can be shown by the fact that today nearly as many work in electronics as in steel, shipbuilding and coal put together. Scotland today manufacturers more semi-conductors per head of population than any other country in the world.

This is not just happening in the elite universities; it is throughout our university scene. There is the progress being made today at Salford and Aston, university science parks, where we see a very happy marriage between applied science and enterprise. We hear fewer and fewer people today suggesting that the proper response to new technology is to bury our heads in the sand and hope it will go away.

Lord Hatch of Lusby

My Lords, the noble Lord has just mentioned Salford and Aston universities. Before the noble Lord came into this House, I had asked his noble friends on the Front Bench many times about these two universities. Is it not the case that these two specialised, technical universities have suffered more from Government cuts under this Government than any other universities in the country?

Lord Young of Graffham

My Lords, I totally agree. I am very grateful to the noble Lord, Lord Hatch. If he were to speak to the vice chancellors of those universities, he would find that in their opinion they lost their way in the 'seventies and have found their way only in the 'eighties. I believe one of them suffered cuts, of 42 per cent. It was only when resources were such that they went out and did the one thing which our competitors do, which was to develop the right liaison between the universities and the industries. I should like the noble Lord to go to Salford and to Aston and to see the change in attitude there. That is something which gives me great hope. Your Lordships should see the new businesses there.

That is something which is happening and which will continue to happen. We are a trading nation, we will continue to be a trading nation and we will live by selling our goods and services in the market-places of the world—because no one has to buy them: we have to sell them. Our competitors show no reluctance whatsoever to innovate. They are making use of new technologies to enhance their competitiveness. A refusal on our part to innovate would be disastrous for our job prospects here.

I must tell your Lordships that the entirely negative attitudes with which the first Industrial Revolution had to contend are now hard to find here. There may be some in small pockets in places like Fleet Street, but on the whole you will find acceptance and a willingness to accept change and a new technology.

We have to guard against a more subtle defeatism, an attitude that says, "Well, perhaps the new technologies are here to stay; but why embrace them so wholeheartedly when a hurried peck on the cheek will do?". That attitude is a pale reflection of the distaste for the entrepreneur to which I have already referred. It is not unconnected with a disdain for the employment potential of the service sector, or for the contribution which small firms can make for our economic growth.

Time and time again we return to the question of attitudes. The resources are there. The inventiveness is there. What we need now—and this is why this debate is so timely—is to learn again the lessons of the first Industrial Revolution, so that the innovator and the entrepreneur can lead us into a second technological revolution. The opportunities are enormous. They lie close at hand. We must not fail to grasp them.

5.34 p.m.

The Lord Bishop of Lincoln

My Lords, when the noble Earl made his celebrated maiden speech in your Lordships' house, he said that during his time as Prime Minister he had come to think that the speeches made on economic and political subjects by bishops tended to be, as he courteously put it, somewhat eccentric and capricious. I believe that what I want to try to say conforms to neither of those adjectives. If I introduce a slightly different note than hitherto in this debate, it is not in any way that I should not want to put myself absolutely behind what the noble Earl has said and what all speakers have said so far about the vital importance of technology, about the huge opportunities it lays before us and about the importance of our grasping them for the good of our country.

However, what I want to try to say is this. While technology can often painfully displace people from paid employment, it need not necessarily displace them from work. That is at the moment what we are often allowing it to do. However, I believe that with imagination and resolve that surely need not necessarily be so. There is plenty of work in this country if only we can find ways of putting people to it and putting it to people.

The community programme is, I believe, the beginning of the opening of the chink in the door onto this possibility. The programmes of the Manpower Services Commission were originally set up as an emergency means, at a time when the scale and duration of long-term unemployment, as we now know it, was not really foreseen. However, they have come a long way since then. They have had much criticism and they have had much support. I should like to salute the Government on their expansion of the community programme and for a whole number of other measures such as the job clubs, the counselling now available in Jobcentres, measures introduced in the last few days. I should like to salute them for all that. Then I should like to press them to give imaginative attention to the implications of what they are doing, and I do not see them doing this enough.

The noble Lord the Minister has just returned to his seat. I should like to tell him that I have just been saluting him and the Government for measures which they have lately taken to expand the community programme and so forth. I do not believe it is eccentric or capricious to see the community programme as the embryo of what could and should develop into something like an overall national scheme, available to all unemployed people, not just for one year but on a permanent basis, while the shortage of jobs that we now have persists and looks like continuing to the end of this century.

We can say all that we have said about the huge importance and the huge opportunities of modern technology. However, I very much doubt that all the good that that will do will mop up the very serious unemployment that we have at the moment. I should have thought, as do other people think that to the end of this century there will still be very serious long-term unemployment which cannot merely be left to unemployment benefit.

In the community programme work is being found for people: work which needs to be done, work which is of value to the community, and work very often of a very satisfying nature to the individuals, and which is financed by the Exchequer. If we are to have serious long-term unemployment till the end of the century, I believe that we need to stretch out imaginations, our consciences and goodwill to find something better for the unemployed to have than unemployment benefit, something less wasteful of the national wealth and more appropriate to the national conscience.

Should we not very urgently explore what work is waiting and needing to be done and what other forms of human development are waiting to be grasped, and find a means to fund it so that people can again find their respective place in society which work gives them and of which unemployment deprives them?

To point in this direction in no way diverts attention from the urgency of job creation in paid employment, in the private and the public sectors. On the contrary: the Government are wholly to be affirmed in their efforts to stimulate this for the creation of the national wealth. Our public services depend on the national wealth, and a nationwide, on-going programme for unemployed people would not be least among those public services. One of the most important economic and social effects of technology would be its capacity to create this wealth, not least for that service.

Some very big issues would need to be faced if we moved in this direction. I think some of these are issues of the imagination, which perhaps the hectic, detailed pressures of politics do not always allow politicians sufficiently to develop. I have in mind a big, imaginative shift from seeing long-term unemployment as a tragic and dangerous problem to seeing it as a huge resource of labour available for much-needed work. That would be a very big imaginative shift, but I believe it is a real one. Without this kind of vision, the people perish; in this case millions whose self-respect has often already perished. And who can tell whether their social patience may not be perishing faster than we may guess?

Of course visions need to be earthed. This huge workforce available for a huge work-load (for that I believe it to be) could be seen not as it is now, in local penny-packets, but as a valuable supplement to already on-going work in normal paid employment in the private and public sectors. Even now, much of the community programme is of this nature, supplementing and reinforcing social work, for instance; supplementing work on social amenities like insulation and supplementing work in the improvement of the environment.

Another shift would be to seeing local communities as the appropriate fora for making this sort of work a reality. There are very many badly rundown communities where incomes are depressed and where services are depressed. Why should not such communities be enabled to decide on their own priorities and to develop structures by which to do so? "Here we need work on housing; here we need a crêche; here we need literary classes; here we need this, that or the other"—not on the basis of people working on it for a year and then back on to the dole—and 80 per cent of the people on the community programme at the moment, I believe, go back on to the dole—but on the basis of people permanently available in their own communities for work which their own communities need.

Of course, the pay issue would be the great issue to be faced and very skilful persuasion of the trade unions would be needed. Fervent supporter of responsible trade unionism as I have been for many years as an industrial chaplain and in other ways, I do not think I have so far been able to see trade union leadership engage as imaginatively as I would have hoped with the widespread unemployment of so many of their erstwhile members. Indeed, I believe that there are signs that many of the rank-and-file members of trades unions are sometimes more realistic about the social and economic effects of technology and the new situations than some of their leaders. The details of rates of pay for the sort of work that I have been talking about are not in my province, though obviously they are my interest and my concern.

What is within my province is to press for our making common cause more than we are doing towards the common good in a world where we have not been before and where, though modern technology may bring huge advantages and huge benefits, in the short term at least we are still likely to have serious problems of unemployment which cannot be ignored. I would really want to knock everyone's heads together—Government, Opposition, trade unions, employers, education, local government, Churches and the people at large—as a way of putting our heads together to find the future we all need lest we collapse into a future we all dread.

5.43 p.m.

Lord Gregson

My Lords, I am grateful to the noble Earl, Lord Stockton, for proposing this debate this afternoon. I am also delighted that a man of the stature and eloquence of the noble Earl should raise this subject, which I consider to be of absolutely crucial importance to the future well-being of this country. Unfortunately, due to a long-standing previous engagement and the long list of speakers tonight, I shall not be able to stay until the end of the debate. I hope that the noble Earl will forgive me for leaving early.

I know that many people are aware that technology is developing at a rapid rate but I really wonder how many people comprehend either the almost bewildering speed of that development or the all-pervasive nature of the application of the new technologies. Technology is expanding at an exponential rate and although it is perfectly clear that this cannot continue for ever there is yet no sign of a slowing down. In fact, it still appears to be accelerating at a very rapid rate. A recent study carried out in the United States indicates that the knowledge of computer science is doubling every 2.7 years. That is a really astounding rate of increase. It means that two or three years after a graduate in computer science of electronics leaves a university, he is already out of date.

A previous chief scientist in the Department of Trade and Industry calculated that more technical papers have been written in the past 10 years than were written in the whole of previous history. More than anything else, it is this rapid rate of expansion and the all-pervasive nature of the new technologies which have a very considerable effect on our economy and our social structure. The noble Earl reminded us that three weeks ago a select committee of your Lordships' House published a report on overseas trade. This report indicated the absolute necessity for us to earn our living in the competitive arena of world trade, mostly in manufactured goods but of course assisted by earnings in services. The committee indicated the necessity of this to prevent, as North Sea oil runs out our decline to a second-tier or even a third-tier nation, with a drastically reduced standard of living.

These are easy words to say but I wonder how many people have thought through the consequences of a rapid decline in our capability to produce wealth. As your Lordships' committee has said, we should have a very substantial deficit in our balance of payments, which, on all previous experience, will lead to a very real reduction of our exchange rate, notwithstanding high interest rates, which might actually increase. I agree with the Chancellor of Exchequer that this will lead to an inevitable increase in inflation. Let us project this further, as the noble Earl has done. An increase in inflation and a decrease in wealth creation taken together with an ageing population mean that there is no way that we can meet the pension expectations; and the pensions that are really at risk are the unfunded pensions in the public service. It is possible that those with funded pensions, especially where they are based on offshore funds, could receive part, if not the whole, of their expectations; but it is totally inconceivable in the circumstances that I have outlined that anybody could continue to receive index-linked increments.

I find it difficult to understand, even if I am only partially right—and I believe otherwise—why people, and especially the Government, should continue to emulate the ostrich by burying their heads in the sand because it is inopportune to consider the consequences. Many people, including the CBI, the Engineering Employers' Federation and the chambers of commerce and trade have highlighted the problem of earning our living after the North Sea oil. But I believe that they seriously overstress price competitiveness as the key issue. In my opinion, they have missed the main dilemma which we face. They have failed to take into account the rapid developments in technology about which I spoke a few

minutes ago. They have highlighted the strength of the exchange rate, the danger of high wage increases, and so on, mainly because their papers are drawn up by economists and these are the facts that they know and understand.

I believe that the real danger is elsewhere. Nobody, but nobody, anywhere in the world, wants to buy yesterday's technology. That, I believe, is the fundamental reason why our exports are declining while the German and Japanese exports are expanding. You cannot sell out-of-date technology. In fact, you insult people by trying to give it away. The truth of the matter is that this country is becoming technologically obsolescent. We are slipping behind in the technology race—suffering from a disease that develops very slowly through neglect. It is difficult to perceive from the inside; but all too easy for our trade competitors to perceive from the outside.

May I paraphrase the words of the noble Earl in a previous speech when he said that the ship of state was slowly sinking? Perhaps I may add that, if you do not look out of the portholes, you will never know until it is far too late. If you go into the shops and garages of this country and look at the foreign goods that people are buying, you will see that they are paying over the odds for technical performance and quality. They are not buying for low prices. The latest in technology is the modern way of "keeping up with the Joneses", and this is true of the markets all round the world. If you visit America, as I do, and if you looked in the shops there when the pound was low, almost at parity with the dollar, you did not see many British goods appearing on the shelves, as you saw the shops flooded with German and Japanese high-technology products. Oh yes, there were woollen goods, fine china and other semi-craft articles, but the Americans could not perceive that we had any new technology to offer them.

That is a very sad state indeed and we have simply got to recognise the situation and restore the position of British technology in the world's marketplace. It will mean a tremendous effort, education and training and R & D; a really big injection of science and technology. But I am afraid that our trade figures are burning while we all fiddle around the panacea of North Sea oil. But it cannot last, and I must make a plea for the Government, academia, industry and the whole population to wake up to the seriousness of the situation.

The Government yesterday published a somewhat belated response to the report of your Lordships' Select Committee on Science and Technology regarding education and training for new technologies; and I must say I was bitterly disappointed. The Government in their response were totally positive with your Committee's analysis of the extent and urgency of the problems, and totally negative in accepting that any action is necessary beyond the meagre measures which have been adopted to date and which mostly consist of advice. I quote: The Government fully endorses the main features of this analysis". They go on: The Government is particularly concerned by the evidence that the societies of our competitors are producing, and plan in the future to produce, more qualified scientists, engineers, technologists and technicians than the United Kingdom. A thriving economy needs these skills both to develop the talents of entrepreneurs and to support their achievements: if the present trends continue, the result seems likely to be a further fall in our relative standard of living and our ability to sustain our cultural heritage. Fine words indeed, my Lords. Therefore the Government recognise the problems and the urgency of action, but they then go on for the rest of the response to say why they cannot or will not do anything about it. It is a most remarkable document. I shall quote a typical response. Paragraph 36 states: The Government also strongly supports the view that a selective approach to the allocation of resources is helpful in making the most effective use of the funds available. Seven paragraphs of waffle later, they conclude: The Government believes that without imposing the rigidity associated with earmarking, broadly the same effect can be achieved, and within an acceptable timescale, by giving appropriate advice to institutions. I wonder whether they realise the urgency of the problem. They therefore propose to do nothing, and that is typical of the whole response. I repeat: I am deeply disappointed and I wonder where the will to drag this country into the fourth quarter of the 20th century will come from.

There is no way that industry by itself could make up for the many decades of neglect of science and technology in this country. It will need an outstanding national effort with a massive injection of funds, almost on a wartime footing. It can be done; and I would instance the mobilisation of resources to meet the Falklands threat. It must be understood that this support is not simply for the benefit of industry but for the benefit of every one of us, if we are to avoid the nasty consequences of descending to the level of a third-tier nation.

May I now turn to the other issue which was raised by the noble Earl earlier: the social problem of the advent of new technologies. Other than the most intelligent, intellectual activities, there is no part of human endeavour which cannot now be replaced or at least considerably assisted by the application of information technology and automation—both based on computer science, which is expanding so rapidly. The technology is already available which allows that to happen, although it may take time to apply it.

I believe that its application is inevitable and that we must in all urgency take stock of what this means to all of us, and particularly to children and young people who are hoping to start a career or to maintain one. But, my Lords, please be clear as to what I am saying. It is not simply manufacturing industry that will be affected. Many—and indeed most—of these technologies are easier and cheaper to apply to the service sector than to the manufacturing sector. It costs about £35,000 to replace a man or woman in a manufacturing activity; that is to say, with a payback in less than three years. It costs about £10,000 to replace a humanbeing in the service sector; that is, with a payback of less than a year. If our services and our manufacturers are to be competitive in the world, we cannot afford not to apply these new technologies.

Then one might well ask why it is not happening more than it is. I believe it is because the service sector does not have the technologists to recognise the potential, and the manufacturing sector does not have the money or the future confidence to apply them. But the Japanese do and the Germans do, and now I believe the Americans are beginning to recognise the dangers that they face. There is no future for us as a dinosaur.

It is possible to create wealth by absorbing the new technologies with a minimum of human employment. It is absolutely no use whatsoever—in fact it is downright dangerous—to assume that unemployment can be solved in the longer term by investment and economic expansion. If industry today, in either the manufacturing or the service sector, invests, the result is higher output with less employment. That is what we have to learn to live with; and quite frankly I do not see any political party yet facing up to that problem, and certainly not the Government.

But let us look a little further into the future and see where this expanding technology might be taking us. In all the major countries in the world there are fairly massive programmes to develop what is called the fifth generation of computers: computers that have built into them artificial intelligence, computers that operate by parallel processing which reduces hours to minutes, or even to fractions of a second; computers based on the new materials of science, such as gallium arsenide, etc.

That capability-combination of artificial intelligence and rapid processing leads to the development of so-called expert systems: that is, you programme the computer with all the known knowledge within the sector and teach it the logic to respond to a given situation. That development is already with us. This then begins to impinge on the professionals, where knowledge, logic and memory are the basis of the practice of their professional ability: in other words, the tools of the trade. It reduces the requirements for lawyers, accountants, teachers, estate agents and so on, with the exception of the very best and the most clever, who will have the job of programming the computers to replace their colleagues.

There is perceived wisdom that Great Britain produces more accountants per capita that any other country in the world, the United States of America more lawyers per capita than any other country in the world, and Japan more engineers per capita than any other country in the world. With the advent of artificial intelligence and expert systems, the accountants go first. They are the easiest to replace because they are a numerical activity and the computers thrives on it. The lawyers go next, because case law is memory and computers will have memories far superior to those of any human beings, past present or future—with the possible exception of the noble Earl, I might say. Nonetheless, very soon most of the case law will be committed to the memory of a computer. But the engineers are busy building the machines and creating the systems which replace their fellow professionals; and it is just possible that the Japanese have got it right and we have badly—oh, so badly!—lost our way.

6 p.m.

The Earl of Bessborough

My Lords, I, too, am very proud to have the honour of taking part in this debate initiated by my noble friend Lord Stockton, with whom I used to work in North Africa during the Second World War and for whom I developed great affection. I have been following his thoughts on economic affairs ever since, and his remarkable speech this afternoon was as memorable as it was moving. It was indeed a superb performance.

I was also most impressed by the speech of my noble friend Lord Young of Graffham—another Sussex Peer, I may say—not only by what he said to us today, but also by what he said yesterday. I agreed with what he said. That may not surprise noble Lords on the other side of the House. I have also read with great interest my noble friend's address to a meeting in Blackpool last month entitled Enterprise Regained, in which he vividly described the role of entrepreneurs in the hundred years of enterprise in this country from 1776 to 1876, as well as the hundred years of Empire from 1876 to the 1970s. There were some very significant points made in that address which I commend to all your Lordships.

But I should like to look at the whole question of the economic and social consequences of new technologies not only within the British context but also within the framework of the European Communities, which I served for a number of years. First, I should like to endorse very much what a distinguished French statesman said in opening the debate on new technologies in the European Parliament last month. He said, rightly, that the reason we are all debating the challenge of new technologies is that it is a political matter which affects all the peoples of Europe. He added that it was important to air these issues, since many people in Europe were unaware of the implications that technology had for them and for our society. Europe was likely to become a continent of lost opportunities if it failed to respond to the challenge.

There is, as your Lordships know, no lack of new technology successes in Europe, with CERN, the Centre for Nuclear Research, ESPRIT, which has already been mentioned by my noble friend, the Airbus and Joint European Torus, and, hopefully, in the future, EUREKA. Nor is there any lack of resources. In the United States, research has attracted this year the equivalent of over £77 billion; in Japan, I believe the figure is nearly £ 18 billion; and Europe's R & D expenditure, with a population three times the size of Japan, is some £37 billion. That is the European Community.

I think most of your Lordships know from what has already been said in this debate why we in Europe are lagging. First, even if we do as I believe, have a strategy here in Britain, through, for example, the Alvey programme in information technology, and also from what my noble friend has said in his speeches yesterday and today, I think we lack a coherent strategy for the Community as a whole. In the United States, it is possible to set up a business one day and begin operating the next day. In Europe, the same process may take six or eight months.

On the subject of robotics, I was very recently sitting next to a highly distinguished director of a worldwide corporation concerned with these advanced technologies. He told me a joke about robots. There is Joe, he said, standing in front of his boss's desk. He has been told that he has been made redundant and that he is being replaced not only by a robot, but by two programmers and, of course, a maintenance engineer! Whatever we may say about robots, I think it is true that throughout history new technologies have created and not destroyed jobs, and, as I know I have said in your Lordships' House before, in those areas and those firms specialising in the higher technologies unemployment is the lowest.

I have certainly found this in Silicon Valley and, for example, around Harvard University, the Massachusetts Institute of Technology and elsewhere in the United States. But it applies in other countries, too: not only in the USA, Japan and West Germany, but also here in Britain; and not only in the Cambridge Science Park and on the M4 corridor, or, as my noble friend said, in Silicon Glen, but also, for example, around Portsmouth and on the Hampshire/Sussex border, where I live. There IBM, Plessey and many other well-known high technology concerns have reduced unemployment to, I think, the lowest in Britain.

Whatever the problems of unemployment may be, there is no doubt that society as a whole must benefit from these new technologies. But I agree with some friends in Europe that this means negotiations with all the interested parties, including the trades unions and, as the right reverend Prelate said, the Churches. However, I believe many on all sides of the House agree that profit governs the free market, even if that should not necessarily be the sole criterion in developing new products.

Clearly, however, robotics may replace the work of the human being in certain areas, and this may well mean that not everyone in Western Europe can have a full-time job. Perhaps more and more may become part of the so-called black economy and take part in moonlighting, which may not be altogether undesirable. It must mean, however, that such people will have more leisure time; and I was interested the other day when someone said to me that we should not think of the unemployed or the under-employed as merely unemployed, but perhaps almost as members of a leisured or, shall I say, partially-leisured class. But I would not minimise here the importance of increased vocational industrial training in these new technologies, and it is certainly distressing to know how many unfilled vacancies there are in skilled high technology jobs. I was glad to hear what my noble friend and the right reverend Prelate said about this.

There is one point that I should like to interpolate here, and I doubt whether it is a point which any other noble Lord will raise. Either within the British or the European Community context I have believed for some time that there is a case for setting up a separate body to evaluate technical developments before decisions are taken. A body such as the Office of Technology Assessment in the United States has, in my view, been a success and of considerable value to members of both Houses of Congress. It enables informed decisions to be taken by politicians and decision makers, and greatly helps to make them aware of the social and economic consequences of these new technologies. I am not advocating a carbon copy of the American office, but perhaps a more limited operation serving both the European and national Parliaments.

I have not the time to answer the depressing message of the noble Lord, Lord Gregson. I am sure that my noble friend will be answering it later. All I shall say in summing up is that it may be largely as a result of these new technologies and the Government's support of innovation that the Government can claim that we in Britain are now in our fifth year of uninterrupted growth at an average rate of 3 per cent. a year, and that Britain is on course to be the fastest growing economy in the European Community. It may also be as a result of these new technologies that, in so far as the balance of payments is concerned, we have had five years of current account surpluses, and that manufacturing exports grew by more than 11 per cent. last year. With manufacturing output rising by 4 per cent. in 1984 and with nearly 30,000 jobs created last year as a result of inward investment, and with investment in manufacturing industry rising by more than 14 per cent., I do think, as I say, that this is largely the result of these new industrial processes and the Government's support of them. That is why I say, thank God for the new technologies.

6.12 p.m.

Lord Todd

My Lords, like earlier speakers this evening I should like to begin by thanking the noble Earl, Lord Stockton, for bringing before us this important topic, and for doing it in his own inimitable way. It is an important subject that we are discussing, for on our capacity to adapt to the radical changes which are being brought about continuously by new technologies our future as a country will depend.

We have a long list of speakers today. I have already listened with interest to six speeches, with the contents of which to some extent I would agree, and to some extent I certainly would not; but I do not propose to enter into these matters now. I feel that with this long list of speakers I should be brief and perhaps rather general in the way I approach the subject. To me there is nothing really very surprising about the predicament we are in nowadays, apart, that is, from our apparent slowness (indeed, it would seem our reluctance) to do anything about it. There is nothing new about economic turmoil occurring as a consequence of technological change. That has been the case ever since civilisation began. All that is different today, as has been pointed out by some earlier speakers, is the speed of technological change.

The speed of technological change has been continuously accelerating ever since the middle of last century, when men first began to base new technologies on the results of scientific research instead of simply relying, as they had done before, on chance discovery and invention. In my view it is the failure of society to adapt to the rapidity of technological change which has brought this country and much of the developed world to its present rather sorry pass.

What we usually call the industrial revolution began about 200 years ago with the more or less simultaneous appearance of a few chance inventions, of which I think the most important was probably the steam engine since it put into the hands of man for the first time enormous mechanical power and also revolutionised communication. Following upon these inventions there ensued a period of great industrial development accompanied by a large increase in population. The previous agricultural society was replaced, in this country especially, by a large and growing industrial proletariat which served the great new labour-intensive industries of the day—coal, iron, steel, shipbuilding and textiles—the raw materials for which this country apparently had in plenty.

These industries developed mightily, and, reinforced by the material benefits which flowed to us from a large and growing colonial empire, there was produced by the end of the 19th century a British industrial scene which was really not terribly different from what we know today—or, if you like, what we have seen collapsing before our eyes in the past decade or so. To go into detail about the troubles and the reasons for them would perhaps be inappropriate and would take far too long anyway, but I think it is fair to say that we clung to our traditional labour-intensive heavy industries, and not only were we slow to develop new technologies but we even failed to observe that every new technological advance in the heavy industries where we were pre-eminent was aimed at a reduction in the size of the labour force required and an increase in the technical knowledge and skill necessary for those who remained in employment. That means, in my view, that we had a failure both in vision and in education. That failure is still with us.

Innovation is the key to success (and, indeed, to survival) in industry, and innovation is possible only if we have people with knowledge and ideas and the skills to put them into effect. The key to the future therefore lies in education. For unskilled and semiskilled labour—I include management because there are lots of unskilled and semi-skilled managers around—the outlook is bleak. In the long-term there is no future in tackling the present huge unemployment problem simply by the old-fashioned "public works" approach. For most of the unskilled unemployed at all levels the outlook is, and will remain, bleak; but for those who acquire the knowledge and skills appropriate to the technologies of today and tomorrow the future is full of promise.

What then must we do? It seems to me clear that the future well-being of our society depends almost completely on our manufacturing industries increasing their share of world markets. The achievement of that depends on our ability to innovate and to manage rapid technological change. This calls for a considerable change in our social attitudes and especially in our educational system so that we can develop a better balance between breadth and depth in the education of our scientists, technologists and managers at all levels. Managers today must understand their colleagues and they must understand the technologies that they are operating. This is a necessity because of the very high rate of change that we see around us today. Gone are the days when any of us, from a shopfloor worker to a manager, could get by for a lifetime on one simple apprenticeship training. People now must be prepared for frequent changes in areas of specialisation, and that means continuing education and re-education at all levels throughout a working life. Here, industry as well as universities and colleagues must co-operate.

To summarise, the growth and success of manufacturing industry is essential for our economic wellbeing and social stability. That depends on enterprise based on innovation, which almost invariably comes ultimately from the results of scientific research adapted and developed by highly skilled workers at all levels. It is for that reason that I and many others are deeply worried by continuing cutbacks in the funds provided by the Government through, for example, the UGC and the research councils for academic and scientific research carried out at universities and polytechnics.

Many people forget that the research undertaken at such institutions has a most important training function. Without it, industry will not get the leaders capable of innovation and of keeping British industry in the forefront internationally. For that reason alone it is no use trying to make universities confine their efforts to the kind of directed research that industry must undertake.

That is not to decry applied research. It is not even to say that universities should have no association with it: but to drive universities towards industrial research with the idea of financing universities in that way is a nonsense. If we continue cutting back as we have been doing then it could be fatal for our hopes of an industrial renaissance. I urge the Government to reconsider their present policy with regard to scientific research. If they do not do so, we may simply follow the example of many great empires of the past and stagger forward into oblivion.

6.23 p.m.

Lord Kaldor

My Lords, it is a great privilege to speak to a Motion introduced by the noble Earl, lord Stockton. He is one of our great national assets, although thankfully he is not for sale. He is a statesman who formed his views about how to regain full employment in the 1930s, simultaneously with Keynes. He was an early advocate of the kind of policies which postwar governments, both Labour and Conservative, followed in the first two decades after the war—and which, as the noble Earl remarked earlier, made the post-Second World War period so different from the post-First World War period.

The noble Earl, Lord Stockton, was Prime Minister for 6½ years. During that time there was continuous full employment. For much of the time, the number of registered unemployed was below half of 1 million. Inflation, far from rising, was moderate and diminishing. Indeed, for two years, in 1959 and 1960, inflation virtually disappeared. In 1959 the rise in the cost of living was one-half of 1 per cent. In 1960 it was just over 1 per cent.

There was both full employment and virtual price stability while industrial production showed a steady rate of increase of a little under 3 per cent. per year. No doubt this was a relatively low rate of growth by comparison with other countries in Western Europe such as France or Germany, not to speak of Japan. However, it was by no means low in relation to Britain's own record, both in any earlier period or in later periods.

The causes of Britain's comparatively poor performance in productivity growth, which has lasted for at least 100 years, have never been satisfactorily explained. Nobody knows them now. Many reasons have been suggested in terms of a lack of technical educational and training that exists in other countries or because of the low social rating which a business career has in this country, and so on. However, the Macmillan era, if I may call it such, was characterised by a degree of social cohesion in this country which was surpassed only by that seen during the wartime coalition government of Winston Churchill.

The new, Right Wing, neo-liberal Conservatism of Mrs. Thatcher is a very different kettle of fish. Unlike most leaders of the Conservative Party, who were pragmatists, Mrs. Thatcher is, or has been, undoubtedly an ideologue. She came to power with strong convictions about the virtues of a free market, of the overpowering evil of inflation, of the superior efficiency of private monopolies over public monopolies, of the need for retrenchment in all branches of public spending, and last but not least about the prime importance of strict control of the money supply.

The first two years of Mrs. Thatcher's regime were little short of disastrous. The rate of price inflation, far from falling, more than doubled in her first year, from the previous figure of 10 per cent. to more than 21 per cent. This was in spite of a very strict monetary policy. Minimum lending rate was raised first to 14 per cent. and then to 17 per cent. The rise in inflation which occurred despite that was caused simply by the heavy increases in indirect taxation in the Budget of May 1979—which, to monetarist thinking, should have made no difference to the movement of the price level at all.

In those same two years, employment fell by 1⅓ million and unemployment rose by more than 1 million. As we know, it rose by a further 1 million in subsequent years. The output of manufacturing industry between the second quarter of 1979 and the second quarter of 1981—that is, a period of exactly two years—fell by no less than 17½. per cent. That was an absolutely unprecedented figure. It was never experienced before in Britain in either the 18th or 20th century. Manufacturing output did not fall by anything like as much even in the 1930s during the Great Depression, or during any of the depressions of the 19th century. This occurred at a time when production in other OED countries was at least maintained or gently rising. At the same time, the favored monetary target, sterling M3, went on merrily rising consistently above the official target.

However, as it turned out, 1981 was a turning point. From then on, matters began to improve. Apart from unemployment, which went on rising for a number of years, all the other economic indicators—the movement of production and of prices and the volume of exports—began to improve. Monetarism and monetary targets were quietly dropped from the Government's vocabulary.

The output of manufacturing industry started rising, albeit at a moderate rate. By the second quarter of this year it was fully 10 per cent. above its lowest level in the first quarter of 1981. That still left output at 7 per cent. below its pre-Thatcher level. Still, ministers such as Mr. Lawson can point with pride, as previous speakers on the other side of the House have done today, to the steady growth of output under this Government for four or five consecutive years. But that means that we start as if the world and Mrs. Thatcher began in 1981. They did not. She came to power in 1979 and what has happened since 1981 has not yet made up the loss caused in the first two years of Mrs. Thatcher's Government. Those early years are now expunged from memory. They simply ignore the fact that, despite all those years of steady improvement, manufacturing output has still not regained by a long chalk the level at which it stood when Mrs. Thatcher first came to power.

In terms of productivity—in output per man hour of manufacturing activity—the record of the Thatcher period is more genuinely impressive. It shows an improvement of 22 per cent. in the 5½ years since 1979 as against an improvement of only 6 per cent. in the five years prior to 1979. I mention this fact because I wish to be absolutely fair. Clearly the change in the conditions in the labour market must have induced a big shake-out of labour throughout industry. However, the benefits of enhanced productivity are so far somewhat dubious because all that has happened is not increased production but increased unemployment. Production is still substantially down.

The Government can also point with pride to their record of bringing down inflation after their spectacular failure in their first year, which I mentioned. The prices of manufactured goods sold on the home market rose by 40 per cent. in the 4½ years 1980–1985 whereas they rose by more than double that—90 per cent.—in the five years 1975–80. However, in my view this was no doubt largely the reflection of a big turn-round in commodity prices which form a major component in industrial costs. The UNCLAD index of commodity prices rose by 34 per cent. between 1976 and 1980 and fell by 30 per cent. in the period from 1980 until mid–1985. Here again, the Government can be credited only with luck, not with virtue.

But the worst aspect of the Government's record is in a less obvious field—in its spectacular failure to exploit the benefits of oil for improving the wealth-creating capacity of Britain. This can be traced to the abandonment of all exchange controls and the subsequent bonanza in overseas investment. Thanks to oil and despite the rapid deterioration in the balance of trade, our balance of payments on current account has shown a cumulative surplus of £ 18 billion in the years 1980–84. At the same time our official reserves were drawn down by over £5 billion, which meant that overseas investment financed from United Kingdom sources—that is, net of overseas borrowing—amounted to £23 billion. This sum, had it been invested in Britain, would have enabled us to develop our capacity in the new industries of information technology in which, despite all that has been said today, I still feel we are sadly trailing behind other countries—chiefly Japan and Germany—and would have also enabled us to modernize our capacity in other fields of manufacture. For despite all the facile talk about our future being in services, there is no substitute for a healthy and comprehensive manufacturing industry. I was very glad to hear this view supported in today's debate by both sides of the House. I have not heard anyone say that our future is in services and not in manufacturing.

The best that can be said of Mrs. Thatcher is that she is capable of learning from her mistakes. The original phraseology of monetarism is dead and buried. We hear no more mention of the need for retrenchment and for sticking to monetary targets; and Milton Friedman seems to have gone into hiding. The new phraseology is in terms of "the colossal programme of public expenditure" and of economic "renewal". That was in the newspapers yesterday. This morning Mrs. Thatcher gave an interview which sounded more conservative than that and less of a break. She denied any break with her previous views. However that may be, there is the optimism of the Chancellor and his policies; and I have no doubt whatever that for electoral reasons, if for no other, the emphasis, at least until after the election, will be on expansion. As a result, unemployment will come down.

There is one field of Government policy where there has been no U-turn; I refer to privatization. On the contrary, as we heard today, the yearly amount of money expected from this source will be nearly doubled. However, the argument that this will provide the finance for increased Government spending is completely bogus and I am sure that Mr. Lawson, who is an Oxford graduate in economics, knows that perfectly well. Money from the sale of public companies is a form of capital transfer. It comes to exactly the same as swapping equity shares for Government bonds. It is no different from money obtained by public borrowing; in other words, money obtained by the issue of Government securities. Hence, it is not an alternative to taxation because taxation does reduce spendable incomes, whether through a tax imposed on incomes or on goods on which incomes are spent.

Money obtained from the sale of assets does none of those things. It is ludicrous therefore to "net it out", as the Government have done, against Government expenditure to be covered by taxation. The policy, far from making room for tax cuts, does the very opposite. It makes higher taxation necessary to replace the loss of revenue which was previously derived from the income of state enterprises which have been sold. I cannot believe that Mr. Lawson, Mrs. Thatcher, or her advisers, are quite so ignorant as not to know this. Hence, the true motives for privatization must lie elsewhere.

One assertion often made is that private enterprises are more efficient in general; that private monopolies are better than public monopolies. However, I cannot see any difference in British Telecom since privatization except one: the privatized British Telecom takes very expensive full page advertisements in our national newspapers which convey the important message that telephones exist! No other message is given. Many readers of The Times who did not know that telephones exist are thus informed! So much for the superior efficiency of private enterprise.

The true motives for privatization lie elsewhere; that is, to increase the proportion of national production on which a private profit is earned. The more industries are privately owned, the greater is private profit as a share of the national income and the larger is the scope for capital gains. The true beneficiaries are therefore the shareholders. Judging by the performance of the Stock Exchange since 1979, it is the shareholders who are the true residuary legatees of the Government's policies. In a sense, this was not true of previous Conservative governments. It was not true of the government of the noble Earl whose Motion we are discussing, nor of the government of Mr. Churchill, nor for that matter of the governments of Mr. Baldwin or Mr. Balfour. This is not just a Conservative government; it is a shareholders' government.

6.40 p.m.

Lord Campbell of Allow ay

My Lords, it is always a pleasure to follow the noble Lord, Lord Kaldor. It would be an even greater pleasure if he could use his wizardry with this wide variety of statistics to somewhat less depressive effect. He seems to conclude that if anything that comes from my right honorable friend's Government works at all, it is just a matter of luck. He seems to forget that it was his policies that led a previous Administration to the IMF and to toting around the begging bowl.

It is a very great privilege to take part in this debate on a Motion moved by my noble friend Lord Stockton with his own elegance of style, which is the envy of us all on all sides of the House, and with his own unique sense of perspective that has left its mark on all subsequent speeches: His explanation of the misunderstanding of his views—such misunderstandings do so often occur—expressed on a somewhat less formal occasion a few days ago is a source of considerable relief, of course.

The economic and social consequences of the new technologies to which this Motion calls attention have already claimed much attention. In the main the impact is upon our manufacturing industries, with a knock-on effect on the job structure. That is the cause of concern. Far too many people cannot find a job, and there are too few to fill the types of job created by the new technologies, as my noble friend Lord Bessborough pointed out; and, as my noble friend Lord Stockton pointed out, there is a dire need to increase wealth creation.

This situation is not of the Government's making; it is not a consequence of Government policy. The question is whether the measures taken and proposed to be taken to deal with this situation are appropriate measures. Other noble Lords have spoken in support of the measures taken, including my noble friend Lord Young of Graffham in what seemed to me to be a remarkable speech of very wide dimension with its emphasis on training, research and education. To make yet another speech in support of Government policy would only be for me to presume upon the patience of your Lordships' House.

Assuredly my noble friend Lord Stockton does not in any sense stigmatise these measures as measures of confrontation. My noble friend rightly seeks a new spirit of co-operation. Yet as I understand it the noble Lord, Lord Bruce, who is not at the moment in his place, charges the Government once again, in effect, with indulging in the politics of confrontation and dividing the nation by these measures that we have taken—a charge which on any objective view of the facts is utterly misconceived. I wish the noble Lord were here, because I do not like to say unkind things when my opponent is not present, yet I must say them.

In your Lordships' House, to stigmatise the policy of a Government—a Government which I believe adopts the right measures—by saying it is "Devil take the hindmost; the weakest to the wall" is hurtful and unnecessary.

Before we come to the question of whether these policies are in any sense policies of confrontation or divisive, there are just a few aspects of the measures actually taken that are worthy of emphasis. First of all, as I see it—and I am no economist—there is really no shift in fundamental policy. The fundamental policy is to conserve wealth in the non-producing public sector and to create wealth from the producing public sector and the private sector, and to do this without any inflationary consequence. That is the fundamental policy. Only when this stock of wealth accumulates can it allow these resources to be distributed with greater flexibility. When the gate of the weir is opened to allow this is a question of timing and judgment. I trust the judgment of my right honourable friend the Chancellor, and so far it seems to have worked very well.

Again as I see it, this is no squandering of capital, as indeed my noble friend Lord Stockton expressly recognised. It is the use of capital investment to create more capital and more income, and to continue the rising process of wealth creation. This surely lands us up with benefits, with wealth and with jobs, and assuredly not in the dingy Dieppe or rather Boulogne boarding house. It allows the reduction in tax thresholds. This has a considerable consequence, because according to my understanding 40 per cent. of the tax which goes to the Revenue comes from those on or near the present tax threshold. It allows the margin between wages and state benefit to widen. It allows funds for the infrastructure; and, in a sentence, it gives incentives to work and creates more jobs.

The other point to emphasise is that there is an element of interaction between the measures taken as they affect the relief of unemployment which precludes any singular analysis of any particular measure in isolation from other measures.

As my noble friend Lord Eccles said yesterday in one of the most remarkable speeches I have heard, there really is no way that the high interest rates can be reduced by this country acting in isolation. Any noble Lord who reads his speech—I should not dream of repeating any part of it—would see the logic of his approach. High interest rates are, whether or not we like it—and, of course, we do not like it, but there is nothing we can do about it unilaterally—the main stumbling block to the relief of unemployment.

There is one caveat that I should like to enter on privatisation. Whether, when moving from one type of monopoly situation to another, these privatisation watchdogs and the whole complex panoply of the anti-competitive practices structure really afford adequate relief to the consumer is something which perhaps one day the Government might care to consider.

I come now to deal with the charge that is made in various forms: the suggestion that the measures are but the politics of confrontation, to divide the nation, it is said, between north and south; and at other times it is said also to divide the nation between points of the multi-ethnic compass. A Government which have introduced the measures that this Government have implemented do not confront or divide; they govern.

Any seeds of confrontation which divide this country were sown long, long ago during the term of office of a previous Administration. They took root when the militant trade union leaders and Marxist activists combined in an aspiration to govern the realm under a worker state, only to bear the fruit of violent confrontation when their aspirations were thwarted by the Thatcher Administration. That is the situation on any objective view. When the Thatcher Administration first came to office, as my noble friend Lord Stockton said, the situation was indeed serious. These new technologies had already taken a heavy toll. Our birthright as exporters of manufactured goods had been sold out to the trade unions by previous Administrations for a mess of pottage. There was the appeasement of extravagant wage claims and a blind eye to overmanning and other restrictive labour practices. There was a legacy of rampant inflation, and much of the market in the export of our manufactured goods, so essential to the creation of wealth, had been lost. The trade unions had a stranglehold on the economy.

If our way of life was to be preserved, if the welfare state, defence procurement and generous and relevant relief for unemployment was to be sustained, and if the social consequences of the new technologies were to be met, as my noble friend Lord Stockton again recognised, steps had to be taken—and were taken. Those steps were to free the country from the stranglehold grip in the interests of wealth creation and to allow our productive potential to operate; and, secondly, to free the rank and file membership of the unions and also the employers from that tyranny.

Steps were taken. They were opposed by activists in the unions and elsewhere trying either to unseat the Government or to thwart legislation. In that they allowed themselves to condone, instigate or commit conduct which, if not treasonable, bordered upon it. Yet it can be said against the Conservative Government that the Conservative Government confront and divide!

The element of dissent is the stuff and essence of democratic government and debate. It is not only inevitable: it is invaluable—but only if exercised in accordance with our fundamental freedoms and not tainted with violence, intimidation or oppression. As to unity—government by consensus among Government, industry and trade unions—that water recedes as soon as we stoop to take that tempting drink. The parliamentary system which enshrines dissent in constitutional form is much to be preferred as an appropriate means to achieve the goal of a new spirit of co-operation. I gather that the right reverend Prelate the Bishop of Lincoln, with his experience as an industrial chaplain, goes along with me on that.

In conclusion, the policies implemented to meet the challenge of the new technologies have caused the middle ground of British politics to suffer an irreversible sea-change. No Administration other than the Thatcher Administration would have had the foresight and the courage to introduce those policies, and that courage was expressly recognised by my noble friend Lord Stockton. No other Administration would have had the resolve to stand by those policies in the face of widespread defiance of the rule of law and grave public disorder. In the result, whether in peace or in war this country has seldom been so united as under the Government of my right honourable friend the Prime Minister.

6.57 p.m.

Lord Sherfield

My Lords, it is with great pleasure that I take part in this debate in support of the Motion moved by the noble Earl, Lord Stockton. He has always looked forward, never back. His mind has always been active above and beyond the daily tasks and the immediate problems of government and administration and has looked to the goals of policy and the needs of the future. So it is entirely in character that he has moved this Motion on the consequences of what he, among others, has called the third industrial revolution, or to use the title of Alvin Toffler's provocative and stimulating book, The Third Wave.

Since we are looking at the unknown or at least the speculative, there is inevitably a tendency to use rather general language. As a Norwegian diplomat said—or perhaps he was quoting Mark Twain—"It is very dangerous to make predictions, particularly about the future". But as the development of the new technologies accelerates, pointers are already appearing as to what the future may hold, enough certainly to call for "action this day". But what action?

The answer to that question needs thought and study, and the first point is where within the Government is that study and thought going on. Governments are necessarily preoccupied with the current problems—the endless crises, small and large, which crop up every day. The thrust of the present Government's policy is towards the short term—for example, as the noble Lord, Lord Todd, pointed out, in the area of research and development, where there is strong pressure for contract and commissioned research, necessarily short term, at the expense of the basic and strategic research looking to the future.

It was, I suppose, partly in recognition of the immediate present in which Governments have to operate, that the lamented, or perhaps unlamented think tank was set up. But even the tank's thought was increasingly directed to the short-term, such as, in the extreme case, the number and type of persons whom ambassadors should be allowed to entertain. So, possibly, its disappearance is no great loss.

There may, of course, be groups within the Administration who are sitting back from time to time or perhaps all the time and looking ahead. If not, the Government could perhaps take a leaf out of the American Administration's book and place research contracts with one or more of the many organisations which exist to provide these services. Both these things are possibly being done. But it would be nice to know that this is the case.

The specific area that is most nearly and obviously affected by the new technologies is the labour market. For a given process, high technology needs fewer people to make it work, and these may be people with different expertise from the old. For example, if I am not mistaken, maintenance work in the future will need less skill owing to the automatic test equipment available; hence the process known as de-skilling, while production work will need higher skills. So education, training and re-training are of the first importance. It is for this reason that your Select Committee on Science and Technology produced a report in January last on Education and Training for New Technologies. which was debated on 25th March and to which the noble Lord, Lord Gregson, has already referred.

The considered reply by the Government to the committee's recommendations unfortunately was delayed and only came out yesterday. So, although it is highly relevant to this Motion, your Lordships have not had the opportunity to read it. I have read it rapidly, and at first sight I share the disappointment of the noble Lord, Lord Gregson. It seems to say at almost every point, "You are quite right. We agree with everything you say but we are not going to do anything more about it than we are already doing".

I shall mention only one point. The committee was impressed by the circumstance that there appeared to be no forward thinking on manpower needs in the next few years, neither in the Government nor in industry, since most firms—although there are, of course, exceptions—feel able to look only a year or so ahead. The committee therefore recommended the establishment of an education and training board, within the framework of the Science and Engineering Research Council, to fill this vacuum. I cannot elaborate on the proposal in a brief speech. Suffice it to say that the Government have turned it down. This comes as no surprise to me as the Government seem automatically, or perhaps by some reflex action, to turn down any proposal, even a minor one, made by your Lordships' Select Committees on the machinery of government.

The reply suggests that the newly-created Information Technology Skills Agency would fill this role. The setting up of this agency is, of course, a welcome move so far as it goes, but it is apparently limited to information technology. What is needed, I think, over and above this, is some coherent thought about the education and training needs of each new technology as it emerges, to help schools, universities and polytechnics to adjust their courses in advance of need rather than when a shortfall of specialists occurs.

So, as the noble Lord, Lord Todd, and other noble Lords have said, the most important factor in this question is the nature of the education system. It is all too evident that the system has not produced enough men and women with the right qualifications to meet present industrial demands. Like the noble Earl, Lord Bessborough, I live in an area where there are many high-technology companies. Although the unemployment level is relatively low—but, of course, still far too high—the vacancies for skilled craftsmen and technical staff are hard to fill. It often takes months.

At a higher level, there is a notable lack of understanding among the public at large of the nature and value of advances in science and technology and, in many cases, a positive hostility to them based on ignorance and prejudice. I do not overlook or underrate the measures that the Government are now taking to meet the shortcomings in the educational and training systems. Their proposals have been outlined by the noble Lord, Lord Young of Graffham, in his speech just now. They are referred to in the reply to the Select Committee report. And there are many other initiatives to which he did not refer. But there has apparently been a disappointing response to many of these schemes owing to a reluctance among young people to submit to disciplined work. It is evident that the process has to start earlier in the education system.

Some Members of your Lordships' House and of the other place had occasion this summer to attend the Council of Europe's science and technology conference in Tokyo and were taken to see the exposition put on by the Japanese Government at the science city of Tsukuba. Here, the cutting edge of Japanese technology was on display but dressed up to appeal to a child from ten to 12 years of age. It was estimated that the great majority of all Japanese schoolchildren would be taken to see this exposition during the six months of its existence. There, for example, the small boys and girls could shake hands with friendly robots or be more subtly introduced to the nature of high technology. It should be possible to introduce the same sort of familiarising process, or inoculation, at an earlier stage in our own system. But here one comes up against the question-mark about the ability and the competence of the teaching in this field, a question with which the Select Committee deals in its report. I quote just one sentence: The Committee was disturbed at the amount of science teaching which is carried out by school teachers who are not qualified in the subject they teach". Sadly, at the moment, all teaching in the public sector is being disrupted. So another generation may be coming along with even less understanding of the need for scientific literacy.

I do not want to end on a pessimistic note, but I wish to emphasise how much the social and economic implications of new technologies will grow in significance and in seriousness if we do not now prepare our educational institutions and our teachers and lecturers properly. They must be given all the guidance which we can provide to ensure that education and training adapt in advance of need, not after it.

7.8 p.m.

Lord Fairfax of Cameron

My Lords, the benefits of the omnipresent computer and its attendant chip are obvious and undeniable. The 1980s' have proved so far to be the decade of chips with everything. But in the same way that a nutrionist would deplore reliance on such a diet, it is highly appropriate that we should stop now to think what will be the effect of our ever-increasing reliance on the computer chip, economically, socially and ethically. I hope that the second and third of those words do not become lost in this debate in a perfectly understandable concentration on unemployment.

The social and moral consequences of this new revolution that is just beginning are also incapable of overstatement. Because they are going to be so very enormous, even though they may not begin to show up really seriously for perhaps another 10 years, I strongly welcome the occasion that has been taken by my noble friend Lord Stockton today to initiate a debate on this deeply important subject with a message which rightly reflects Baden-Powell's motto: "We must be prepared".

But first I should like to turn back to the most obvious consequence of this revolution—its effect on employment. Unemployment is, quite rightly, on a par with nuclear catastrophe as the contemporary issue which worries most of us most and is certainly the single greatest preoccupation of anyone who has the misfortune to be unemployed.

It is worth considering for a moment why the condition of being unemployed is stigmatised as it presently is. Although this is bound to sound a little provocative I submit that it is not that today one starves if one is not in work—certainly there may be little room for more than the basics of subsistence, as was demonstrated in that documentary involving the Member of Parliament, Mr. Matthew Parris—but one no longer starves. No, I suggest that there are two other related reasons why the condition of being unemployed is regarded today in the way that it is. First, it is because we are conditioned by current economic and political theory to believe that everyone of working age should be in a job and therefore to be unemployed today is to be left out of a society designed in general around and for the employed. Secondly, for the individual concerned to be unemployed gives rise to intense feelings of frustration, inadequacy and, most of all perhaps, boredom.

The critical point to make in my opinion is that for most people—particularly for the majority of people in this country who live in urban environments—to be in a job is to be occupied; and if one is not occupied in this day and age at least that can have seriously undesirable consequences for the individual. But this has not always been so and is itself a consequence of the process of economic development which has produced our present situation where the majority of the people no longer have to devote their daily energies, as they once did, exclusively to the aim of maintaining the basics of subsisting. In many ways life is rather more luxurious now but not necessarily, I suggest, happier.

I would therefore echo the remarks I heard recently on the radio made by a former Minister in this Government when he said that the aim must be for the maximum number of people to be at least fully occupied if they cannot be fully employed. For this reason the Community Programme is to be very warmly welcomed and in my opinion may well prove to illustrate a policy that will become more and more significant as time goes on. In this regard I would adopt every word that I heard uttered today by the right reverend Prelate the Bishop of Lincoln in this debate.

The problem, in my opinion, is that technological development is conspiring to make this situation less rather than more likely. This is a perfect illustration of the truism that technological development does not necessarily mean the same thing as progress. To take a recent example, I refer to the anniversary of the dropping of the bomb on Hiroshima, which is a rather glaring illustration of that point. Regrettably, the ever-insatiable demand of the market place for new products, coupled with the boundless ingenuity of scientists, means that change and technological development are too often mistaken for progress. Silly gimmicks such as cars that talk to you in synthesised voices may represent technological development but they do not, in my opinion, represent progress. But to talk like this usually provokes two responses. The first is that you are a Luddite and a regressive; and the second that the new technology will have none of these effects in any event.

To take the second point first, it is said often that Japan leads the world in high-tech development and is a paragon of high employment; ditto Berkshire, Scotland and Silicon Valley. In other words, high-tech equals low dole. To those who believe that I would simply hold up an advertisement I have here from one of the Sunday magazine supplements, which has a caption which gives the whole thing away. As you can see, the advertisement says, "Teaching products to build products". The essence of that is that in future human workforces will not only become less relevant but the robots and computers will themselves be built by computers and robots. Indeed, if I may I shall quote a short extract from that advertisement: What do all these sophisticated tools have in common? Brains. And when these individual brains are commanded by a central computer, production assembly can be fully automated". I think that that is an extremely significant statement and illustrative of the problems we are going to be facing in the employment field in the future.

We are no doubt all familiar with the car factories where precisely that happens—the Fiat Robogate factory in Italy, and the Japanese factories where on present estimates there are 30,000 robots already in use. The wonderful thing about robots is that they do not drink, they do not eat, they do not sleep, they do not catch 'flu, they do not strike, they do not work to rule, and they do not need holidays. In short they beat a human manufacturing workforce hands down in terms of economic efficiency. Even when they cost a bit to begin with, their appeal to manufacturers in ever more competitive markets is obvious. It has been estimated by one analysis that by 1990—which is only, I remind your Lordships five years away—up to 10 per cent. of the manufacturing labour force in this country will have been replaced by robot labour.

But, say the protagonists of what, in his excellent book of the same name, Dr. Michael Shallis has called The Silicon Idol, those losses are and will be more than made up by the massive increases in the high-tech workforce in the high-tech fields. These arguments look fairly strong at the moment but I wonder how they will look in five or even ten years' time. We must remember that we are only just beginning on this grand new, high-tech magic mystery tour.

I would remind your Lordships that the first modern electric computer was built in 1946. It was the size of a large room and it weighed about 30 tons. The equivalent computing power is available today in a wafer-thin calculator that sits in the palm of your hand. The rate of development in this field is exponential and its curve is only just beginning to accelerate upwards above the horizontal towards a situation which its advocates no doubt believe is nirvana but which I fear may not be so heavenly unless its advent is sufficiently carefully anticipated.

I have mentioned manufacturing industry, but why stop there? Certainly the development engineers are not. Most of us are familiar with the expression "Fifth generation computers" which describes the ten-year project on which the Japanese are presently embarked to develop and explore the boundaries of what the computer scientists call artificial intelligence. The Alvey project in this country has a similar goal. Among the intended attributes of such fifth generation artificially intelligent computers are, first, an ability to communicate directly with humans without the need for an intervening artificial means of communication; and I think I need hardly say how significant that would be. The second goal for these fifth generation artificially intelligent computers is the ability to appear indistinguishable from a human as far as the computers' powers of deduction and reasoning are concerned. I almost added the word "initiative" but mercifully that is still a few years away yet. Although I understand that the scientists are not progressing very fast at the moment with the fifth generation project in Japan, and the Alvey project here, I have no doubt that, given the time and money, artificially intelligent machines will soon be upon us.

Lord Bruce of Donington

My Lords, I am sorry to interrupt the noble Lord but could he inform your Lordships' House as to whether he envisages any personal relationship developing between the human being on the one hand and the computer on the other?

Lord Fairfax of Cameron

My Lords, it is not for me to predict whether that will happen or not. But certainly if robots, computers, become capable of communicating directly with humans then such a thing will certainly be possible.

Viscount Massereene and Ferrard

My Lords, may I ask my noble friend whether he would consider it possible for a computer ever to have imagination and to write poetry or matters of that kind?

Lord Fairfax of Cameron

My Lords, you may not believe this. This all seems incredible. But I can assure your Lordships that the fifth generation project in Japan, which is managed by a body called ICOT, and the Alvey project are embarked on precisely this goal. It is a long way away. With respect to your Lordships, it may not be in your lifetime, and it may not be even in mine, but it is coming and we have to anticipate that fact in a debate such as this.

I was going to go on to say that I regard what I have just described as being inevitable in due course, but decidedly not necessarily desirable. The consequences of this are going to be nothing short of staggering. The employment effects of such developments will certainly not be confined to manufacturing industry. Who will need doctors, accountants, or lawyers when there will be machines whose ability to retain and apply knowledge in language everyone can understand will be far more reliable than those of its human competitors?

I heard a doctor on the radio the other day who described the use he already made of his "expert system" computer. He simply fed in his patient's symptoms and any other relevant data, and out came a series of alternative diagnoses. He said that it was not yet infallible, but no doubt within a few years it will be. Likewise I understand that a well-known electronics firm has just developed a voice sensitive auto-pilot which will effectively make the presence of pilots, at least on board civilian aircraft, one step nearer becoming unnecessary. I should add that when interviewed to comment on this development a test pilot said, I suggest very significantly, that he did not consider this development—and this was a pilot speaking—desirable or a good thing, but nevertheless he accepted that it was inevitable.

It is for those reasons that one study has forecast, I suggest not unrealistically, that the new technology could account for the removal of 7½ million jobs in this country alone by the end of this century. We are talking about 15 years hence, but that is a fairly dire prediction.

I have spent too long talking about the consequences for employment of the new technology. As I said at the beginning of this speech, I did not want to concentrate entirely on it, although it is predictable that many people would do so as it is the most obviously politically sensitive part of this whole debate.

Lord Kaldor

My Lords, may I ask whether the noble Lord's predictions are any different, except perhaps in more sophisticated expression and language, from the forecasts of the Luddites in 1819? They thought that they would all lose their jobs as a result of the introduction of factory methods.

Lord Fairfax of Cameron

My Lords, as I have said already, that is a totally predictable response, and in a way I have already mentioned that. I come on again to the Luddites at the end of my speech, and in particular the definition of a Luddite which the noble Lord might find interesting. I have spent too long so far talking about the consequences for employment of the new technology. I should now like briefly to mention a few of the other consequences which might follow. However far fetched and unrealistic they may appear to noble Lords like the noble Lord, Lord Kaldor, if one accepts the inevitability of development, then as surely as night follows day we will soon be grappling with these other consequences.

First, I suggest that there will be a need for a massive adaptation of our lifestyle to adapt safely to what some people call the leisure society, where it will be normal for the majority of people not to be engaged the majority of the time in working. Of course, I in no way suggest that all work is going to be abolished, but it may consist to a far greater extent than at present in projects under schemes such as the community programme, job sharing, increased public services, and cottage industries.

I would emphasise at this stage that the remarks I am making are not contemplating, or predicting, that something is going to happen next year or the year after, but I am looking towards the end of the century. If those of you who cannot believe some of these predictions will bear that thought in mind, it might make it a little easier to contemplate. As I say, of course not all work will be abolished, and there may be many people who would embrace such an apparently attractive prospect with open arms. But, as has been suggested in other speeches this evening, it is going to take a lot of time and careful thought to adapt our society from a work society to a leisure society. This leisure society might be a society where people would be happy to play squash all day and go to the opera or the cinema all night, as someone suggested, but certainly for the time being I think that the people of this country would not be ready for such a dramatic change.

The second major consequence of this will be the economic consequence. If the majority of jobs are going eventually to be performed by artificially intelligent robots, there will be very few people who will be earning money with which to buy the goods and services so efficiently and cheaply mass produced. In other words, there will be little or no economic demand, which I imagine would play havoc with conventional economic theory.

It may be, for example, that the Government of the day would be obliged to tax the people—the individuals and bodies—in whose hands these automated systems of production lay, and then redistribute that money in free handouts to the non-working population so that those people who are not working would have the wherewithal with which to buy these products. Again I see looks of disbelief on some noble Lords here, but this is not an inconceivable situation if the technological imperative—which is an expression which denotes the driving forward of technology without bounds—comes to pass and produces a situation where the work, both manufacturing and otherwise, is performed for the greatest part by a non-human workforce.

A third consequence other than the employment consequence will be the serious consequences for the individual in the concentration of information, and the consequent problems of protecting the confidentiality of that information. One of the most significant developments of this new technological revolution is of course the ability to centralise, collate, and obtain access to massive amounts of information.

It is likely that in the future this information will become concentrated more and more in fewer and fewer hands, to which fewer and fewer people may in practice have access. Protection and rights of access for the individual will have to be kept carefully in mind, and I anticipate that the Data Protection Act, recently enacted, although of course essential may well prove inadequate for this task when these massive demands might be made on it in the future.

Fourthly, reliance on computers to a greater and greater extent for actual decision making is going to happen. This is getting into the bounds of the area where machines really do become truly artificially intelligent. This in turn may lead to serious conflicts of interest, and I should like to give one small example. Suppose there is a situation where a computer is being used to take a decision concerning an item of defence procurement. What if that computer is manufactured by the same firm as one of the companies who are making a tender for the product or system under consideration? That is one small illustration of the conflicts which may come to pass if artificially intelligent machines are developed and used to their full potential in the future.

I am conscious that I have gone on too long, which I am afraid might have been compounded by the number of incidental questions I have answered. I should like quickly to summarise what I have tried to say. I should like to emphasise that, contrary to some of the speeches which have been made today and in particular the speech of the noble Lord, Lord Kaldor, this matter should not be a party political issue. Tempting though it may be, this matter should not be the subject of party political warfare. In view of the serious overtones for employment, it is inevitable and predictable that that will happen, but I regard it as regrettable. I believe that this is a matter which Governments of all political complexions in the future will have to accept and deal with and, in essence, the sooner they anticipate some of the problems which will arise, the better equipped they will be to deal with them.

Secondly, scientific development is inevitable. The question is whether all such development is desirable. Too often technological change is accepted as inevitable without thought being given to its desirability. Of course the chip has brought untold benefits, but some of its inherent dangers are arguably even greater.

Having said all that, I accept that the Government today may be unwittingly in something of a cleft stick. Naturally, their immediate priority is to encourage all industries which contribute significantly to the creation of jobs, and none is doing so more at the moment that the computer and high-tech industries. However, I have tried to show that this is merely a short-term phenonemon, because before long computers will be building computers, robots will be building robots, and businesses will be running themselves. I therefore hope that the Government of today and future Governments will not ignore this issue purely out of political expediency.

In summary, I have no doubt that many will think that this is an unnecessarily pessimistic and Luddite view of the future, one which takes little account of the undeniable myriad benefits bestowed by the silicon chip. I therefore enthusiastically hereby acknowledge all those benefits. I also bear in mind the recollection of those who, at the end of the last century, believed that London's streets would soon be submerged in the manure of the capital's horses, only to be saved from their prediction by the advent of the horseless carriage—the car.

However, I fear that the chip may in the long-term prove to be far from entirely beneficial, and it is for that reason that I counsel considered realism now rather than star-struck acquiescence in its allegedly miraculous powers. Finally, I should like to say a word about the definition of "Luddite" which the Oxford Dictionary describes as: A person seeking to obstruct progress. The essence of what I have tried to say is that we must ask ourselves whether what is going on is unquestionably progress. For that reason I strongly urge the House and our country to consider whether the road upon which we have set out is, indeed, a road of progress or perhaps something less benign.

7.34 p.m.

Lord Zuckerman

My Lords, the noble Earl, Lord Stockton, for whose vision in introducing this debate we should all be very grateful, pointed out in the course of his opening speech that nothing will stop the further march of new technologies. As the debate has proceeded, I believe that two problems have emerged. First, how quickly can the benefits of the new technologies be spread, and their ill-effects and short-term effects alleviated? Secondly, what part shall we play in the development of these new technologies? Obviously those are not just problems for government. Governments do not create new technologies. However, governments have always had to deal with the social and economic consequences of major technological innovations, and that point has been made by others who have already spoken in the debate.

We have been reminded that the industrial revolution of the 18th century not only produced new wealth and a new urbanisation, but it also brought with it a host of political and social problems, with the legacy of which we are still dealing. As the noble Earl and the others who have taken part in this debate have said, we are now being subjected to a whirlwind of new scientific technology, and one which is affecting the whole world. There has never been so rapid a pace of technological change.

When the noble Earl was Prime Minister, I had the pleasure and enjoyed the excitement of being his scientific adviser in the field of national security. I well remember him saying then that the politician has to run hard to keep up with the scientist. I also remember that when the laser first hit the headlines at the beginning of the 1960s, his private office sent a message across to me saying that they wanted me to set out in a couple of paragraphs exactly what the laser was, because the Prime Minister wanted to know. I did some swift telephoning and discovered something about coherent light and the energy which is involved. If we are talking about the pace of technological change, we must remember that today the laser is a piece of normal laboratory equipment. More important for your Lordships' House, lasers dominate the technology of President Reagan's SDI programme. Let us pray that this will not prove to be the most perilous use that is ever made of the newer technologies.

There is a debate scheduled for Monday, 25th November on the Report of the Select Committee on European Communities on ESPRIT to which I think reference has already been made. One does not want to pre-empt anything which may be said in that debate, but it is worth recognising one or two points which relate to today's debate. In seven years a positive balance of trade in information technology has been turned in Europe into a deficit of 10 billion dollars.

It is not only the politician who has therefore to run fast to keep up; the scientist also has to run hard to keep up with the repercussions of his discoveries and the consequences of their exploitation. Rarely does the scientist or the engineer who starts the process of innovation have to consider the social, economic and political consequences of what he is doing. My noble friend Lord Todd referred to James Watt and the steam engine. Of one thing I am quite certain: in the 10 years which it took James Watt to turn the Newcomen engine into an effective working engine, he was not thinking about the industrial revolution that was coming, the urbanisation that was coming, or indeed the legacies of that urban civilisation.

Much has been said in the debate about the measures which have already been taken to assure the scientific future of this country. The Secretary of State, the noble Lord, Lord Young of Graffham, referred to some of the measures which have been taken. My noble friend Lord Todd and I were members of the First Advisory Council on Scientific Policy at the conclusion of the Second World War and we have a fair knowledge of what was done. However, despite everything that was done to improve our scientific and technological effectiveness, the fact is that our economic power has declined relative to that of other countries.

Why, my Lords? Some answers were given by the noble Earl, Lord Stockton, when he was discussing economic factors. I should like to suggest another reason. We have tried too long to do everything on our own. We thought we could do it. Few of us had the imagination to see that a phoenix was going to arise from the ashes of Europe. Few of us appreciated the speed with which the United States pulled itself out of the depression of the 'thirties to establish during the war years an industrial base from which it could dominate the world. Practically nobody—and I look at some of the writings of the past 10 or 15 years—saw Japan emerging from the wings.

Today, however, we know that the size of our own market is far too small and our labour costs far too high for us to sustain high-tech industry on our own, even if some of the visions painted by the previous speaker, the noble Lord, Lord Fairfax, ever come true. We know that the United States with which we cooperate and with which we have to fight for markets, has an enormous homogenous market. It is an affluent society and affluence generates demand. We also know that high-tech industry erodes capital fast because of the rate of technological change.

The noble Earl, Lord Bessborough, referred to Europe. Even though our own market is too small to sustain high-tech industry, we are part of Europe. We are part of a much larger potential market. In my view, that is where our future in high-tech surely lies, even though Europe is still fragmented and however little we have to congratulate ourselves so far for our achievements in co-operation with other countries.

We turned down the opportunity to co-operate in the first major European venture, the Breguet Atlantique. The Airbus is a sad story. We came in on the Jaguar—half the Jaguar. Fortunately, Concorde survived. Tornado is a three-nation project. Our record in space is less than poor due to our failure to co-operate.

There is promise now in the field of information technology. The Alvey programme and the ESPRIT programme, which have been spoken about, promise well. We now have a call for European co-operation in the French Eureka programme of high technology. They have also just suggested an air consortium which really looks forward. All these programmes should be welcomed. They encourage co-operation between countries and between companies and universities—where many of the ideas are born.

What we must beware of now is that we do not lose out by demanding too much from our partners. The quest for leadership has cost us a great deal in the past. We must work with Europe. All history shows that economic power moves to the hands of the innovator and producer and does not necessarily fall into those of the bookkeeper and the merchant.

In terms of resources, the figures about which we are now talking, and the figures which the Secretary of State spelt out in his contribution to this debate, are trivial in relation to the competition we face from abroad, and particularly trivial in relation to America's next year's R & D budget for the SDI programme alone: 2.8 billion dollars. That is more than twice the total amount of money the Government are providing for science through the University Grants Committee and the research councils.

The other day the noble Earl referred to "the family silver". It has been referred to again here. Mr. Peter Walker did not like what he said. He told us that he was transferring the silver back from politicians and civil servants to the people to whom it belongs. But that was not the point that the noble Earl, Lord Stockton, was making. What we now know, and as he has pointed out today, is that he was asking whether the assets were going to be used to create new wealth better than they had been before. That is the point.

The Secretary of State in his speech in yesterday's debate told us that the Government would not invest in the white elephants of the past. Well, white elephants are very rare and they are desperately expensive to keep. The question we want answered, as this debate has shown, is whether the Government are going to invest in the birds that lay tommorow's high-tech golden eggs. How will they discharge the job of providing the climate in which innovations flourish, as the Secretary of State indicated in his speech? For unless we ourselves put in far more money than we are doing at the present moment, we shall lose out, and we shall lose out all the faster if we do not join forces with our neighbours in Europe.

Obviously, no single factor is by itself a sufficient condition of economic and industrial success. But apart from financial help, the most vital factor is in the hands of the Government. High-tech industry demands skilled scientists and engineers. Industry alone cannot create them. We used to boast that Britain produced the basic scientific ideas which others then exploited. That boast has an empty ring today. We are no longer as important a fount of the basic ideas which transform knowledge and industry as is sometimes supposed. We know that British high-tech companies are now suffering from the present recession, and suffering very badly. Competition is acute. We cannot expect those with whom they are competing to yield an inch.

However, British companies are not alone. Electronic companies in the United States are going to the wall at the moment. Japan is suffering; but Japan is dealing with the recession in a totally different way from the way we are. There, the cost of money is low. They are cutting prices and the Japanese people as a whole are sharing in the setbacks of today, knowing that when the recession lifts they will enjoy a bigger share of the market. If we are not to be enveloped by Japanese high-tech, by American advances, even by Russian advances, we have to move. It does not matter to us from where high-tech starts. It is bound to spread.

We should remember the lessons of the past, the lessons of the 1930s; the lessons of every period in which the resources for research and development have been cut in order to help balance the books. Our competitors do not necessarily do the same at the same time. The Japanese are not doing it at this moment. Your Lordships' Committee on ESPRIT, which is to be debated later this month, were right to point out that industrial and scientific research and development are so crucial to Europe's competitiveness and prosperity that even in times of financial restraint, the case for spending more is overwhelming.

The noble Earl in the speech which opened this debate referred to the need to keep up our research effort and to keep up our effort to educate—I was about to say "to train"; but it is not to train, it is not vocational training that we are talking about now. The noble Lord, Lord Todd, made it quite plain where the emphasis should be. There is as strong a case at the present moment to spend more in the universities as there is to spend in other ways on research and development.

The universities and research councils, as we know, and as the noble Lords, Lord Todd and Lord Sherfield pointed out, are very hard pressed now. They have been so hard squeezed by constraints on expenditure that they are now in the almost fantastic position of trying to re-employ scientists and engineers, the very kind of people who are wanted now but who were paid to take early retirement. If we go on eroding our storehouse of academic seedcorn, it will not matter to history what was the rate of inflation. And if we go on doing so, then in due course there will be many bookkeepers and accountants who will be seeking alternative employment as they envy the countries which made the sacrifices necessary to keep in the race of the new technologies.

7.53 p.m.

Lord Hatch of Lusby

My Lords, I was grateful to the noble Earl 25 years ago for his "wind of change" speech which made my task a great deal easier than I anticipated. I am grateful to him again this afternoon for raising this issue and for initiating the debate in so imaginative a manner as he did. The debate is supposed to be concentrating on the social and economic consequences of the new technologies. With few exceptions, the consequences have hardly been dealt with. I would make an exception in the case of the right reverend Prelate the Bishop of Lincoln, and that of the noble Lord, Lord Fairfax of Cameron, with much of whose speech I agreed.

I would suggest that where the alternative that we have to choose is fixed is between the use of the new technologies to increase production and the use of technologies to produce livelihood, by which I indicate the quality of life. Most speakers, and indeed most people in the country, assume that increased production is not only necessary but is desirable without thinking as to its effect upon the quality of life of the individuals. If I have one slight criticism of the noble Earl who introduced the debate, it is that perhaps he might have widened the horizon of the consequences of new technology beyond the borders of this country and to have looked at what is happening in the world as a whole.

May I remind noble Lords that, according to the reliable estimates of population increase, if we are able to cut down population increase just to replacement by the year 2000 in the developed world and by the year 2040 in the developing world, the population of the world will then stabilise in the middle of the next century at something like 15.5 billion people—four times the number living in the world today. I do not need to enunciate the details of what this means in terms of the pressures on the soil, on the seas, on water, on the atmosphere, on the demands for energy, for resources, for food. But it is a picture; and it is this picture with which we should be dealing this afternoon.

Into this picture come the new technologies which have been so clearly described by notable scientists this afternoon. I do not accept another of the premises of the noble Earl, that this is a new industrial revolution or a post-industrial revolution. The technology of today is a part of the developing industrial revolution going way back over the last 200 years and culminating at the moment in both the present state of technology and in what the noble Lord, Lord Fairfax, was giving us as an imaginative picture of the future. And that industrial revolution, whether it be the conventional industrial revolution of the 19th century or the modern technological revolution of this century, has been characterised by the same social and economic factors, by the concentration of wealth, the concentration of ownership, the concentration of power.

I may say to noble Lords who are not here in front of me that when they talk glibly and somewhat desperately about the value of share spreading, of spreading shares more widely than today, they are really spitting into the wind; because in fact our world and ourselves in this world are controlled to a very large extent by the mega-combines and particularly by the armament firms. And those armament firms employ over 50 per cent. of our scientists in this country alone. I would warn anyone who is looking simply at the summit meeting as a political exercise that if anyone tries to persuade big business to allow international disarmament it would be rather like preaching chastity to a brothel keeper.

What are the Government doing about this situation? They put a lot of weight upon what they call privatisation and they mislead those who believe them into considering that this is increasing the ownership of national assets. It is doing nothing of the kind. It is taking national assets away from the whole of the people of the country and putting them into the hands of those who can afford to buy them, very largely the financial institutions. It is tinkering about with jobs, which is no more than a camouflage for the inability (not particularly of the Government but of the system as it has developed through the industrial revolution down to today) to maintain or create employment.

Here the Government are responsible, and they are responsible for a semantic deception when they lay their emphasis on "real jobs". What real jobs, my Lords? Are they jobs creating wealth? Who is it who is making the profits out of the present situation, the situation as it has developed over the last six years and as it is developing under the privatisation policy? It is the gamblers in our society; it is the currency dealers; the people dabbling on the Stock Exchange; the property speculators. Only yesterday, in one day, £2½ billion was added to the share values on the Stock Exchange here. What happened yesterday?—

Viscount Caldecote

My Lords, before the noble Lord goes on too far in this vein, could he perhaps say whether he believes in financial institutions which put forward large sums of risk capital to enable industry to expand and to create jobs? Or does he think they ought to be replaced too?

Lord Hatch of Lusby

My Lords, I do not believe in that system of society at all but, having spent the last 12 months on your Lordships' Select Committee on Overseas Trade, and having heard about the difficulty that industry in this country has in getting finance and in paying the interest rates on that finance, I certainly cannot subscribe to his optimism over the value of the financial institutions of this country so far as financing our industrial expansion is concerned.

But that was not the point I was making. I was asking: what do the Government mean when they talk about "real jobs"? Are they talking about jobs which assist in wealth creation? If they are, what happened yesterday to add £2½ billion to the share prices? What new wealth was created yesterday that should enable those holding those shares to be £2½ billion richer today? To me, this is the economics of the Mafia.

One of the dangers of our new technological society is that it has developed within what almost appears to be a society of accountants, a society based on the philosophy of accountancy. For example—and I will give only one example of what I mean—how is it that housing, health services and education are all counted as national costs, not as wealth, whereas armaments, hotels and stocks and shares are all counted as wealth? They are all on the positive side of the national balance sheet. In other words, money and possessions are wealth and the welfare of people is cost. Is it any wonder that in this society crime is rising so fast, that riots have appeared on our streets for the first time in this century and that sickness from unemployment is now developing into an endemic disease in many areas of this country? And of course there is the ultimate in technology, which has been mentioned this afternoon and was mentioned by the noble Earl who introduced this debate: the nuclear technology. That, in my experience, holds a deeper cloud of fear over the young people of this country than any other single issue.

There is an alternative to this kind of society, with all its dangers as technology advances so fast. There is an alternative in which we can create and establish genuine equality—not just for the British people but for a widening community of people across the seas; one in which people can be genuinely free to choose their own character of life—freer than ever before because of the use of technology, if, and only if, they are able to participate in its ownership and in the decision-making as to how it shall be used.

There are obviously a variety of methods and institutions which can be created for this purpose. I would simply refer back to the fact that the national assets are owned not by something that is an abstraction of the state but by an elected Government, responsible to the people of the country. Change, yes—and change is coming. It has already begun and it will continue. The question is whether the new technological society will bring about a change in the social and economic institutions of this country by violence or by the deliberate will and choice of the people. Will the man-based society, which is possible on a wider scale than ever before because of the power of technology, come about through violence or through deliberate choice? These are the essential consequences of the new technological age.

To me, all these factors lead to a strengthening of belief in the socialist form of society, but I would give one word of warning to my own party and perhaps suggest to Members opposite that when they equate the newspaper language with all socialists and all members of the Labour Party, they are wrong. My word of warning is this. Nationalisation is not necessarily to be equated with socialism. To me, it is not; and there are many of us who have criticised the nationalisation programme as it has been carried out right from the start. Nationalisation is not the only form of common ownership; nor do I believe it to be the best form. My noble friend Lord Shinwell has frequently pointed out in this Chamber that when he was Minister of Fuel and Power and the coal industry was being nationalised he asked the National Union of Mineworkers to nominate members to the board of the National Coal Board. If they had done so then instead of refusing, the whole character of the National Coal Board and the relationship between the National Coal Board and the miners would have been quite different. I believe that we have to explore many different ways of common ownership and equal participation in decision-making, outside the bounds of nationalisation.

The noble Lord, Lord Fairfax, and the right reverend Prelate have pointed out that there are many profound changes coming through the application of technology, and particularly that employment and work must not necessarily be identified as the same thing, so that people who cannot find employment are not necessarily, and should not be, debarred from work. The noble Earl also suggested that there were many new avenues of activity opening up through the application of technology in a positive and constructive way, rather than simply grafted on to the old suppositions of the old industrial revolution.

Yes, my Lords, there are many new scopes from technology. I am not talking in covert terms of the crafts, hand-looming and so on, much though I admire those who indulge in them. But there are many forms of leisure activity and, above all—more important still—there are many forms of community activity which will be possible in this country, and in other countries, if technology is used not just to increase production and wealth but to give a freer opportunity for individuals to choose the quality of their lives.

Finally, I would just remind your Lordships that throughout history hundreds of species have disappeared from this planet for one common reason, that they were unable to adapt themselves to a changing environment. As my old friend the late Jacob Bronowski put it so often and so cogently, the future of the human race depends on the human being controlling the machines. All that was put to us by the noble Lord, Lord Fairfax, even if some of that was imaginative, leads one essentially to the most profound consequence of the technological age, that unless the human being controls the machines which, by his brainpower and skill he has invented and is still inventing, unless there is universal participation in the essential decision-making of society, then our species as a human race may also disappear for the same reason.

8.12 p.m.

Lord Bauer

My Lords, to speak to a Motion of the noble Earl, Lord Stockton, is an honour, but it also advises caution. The Motion addresses wide and enduring issues rather than specific and ephemeral topics, and so have most contributions to the debate.

The rapid advances in science and science-based technology in recent decades, awe-inspiring at times, will continue not only in areas much in the public eye, such as nuclear physics or computer technology, but also in less publicised but equally significant areas such as medicine, biology and genetics. The character and the social and economic implications of particular advances are too unpredictable to serve as a basis for specific or detailed policies. But it is safe to say that sustained rapid advance will profoundly affect social life and economic activity.

The advance is likely to underline some problems and dilemmas adumbrated in the 1930s by the late Professor A.G.B. Fisher and epitomised in the title of his book The Clash of Progress and Security. He argued that policies designated to resist change and to mitigate its consequences often merely postpone adjustment and bring about abrupt change, instead of more gradual adaptation. Nowadays this applies conspicuously. The present tin crisis is an up to the minute example.

The processes and consequences of rapid social, economic and technological change must disturb those affected by them. They could even unhinge people. There is only so much change that people can absorb, whether as individuals, families or societies. Rapid and pervasive change since the Second World War may have contributed to postwar discontents, which were already evident during the unbroken prosperity of the 1950s and early 1960s when, as the noble Earl told us at the time, people had never had it so good.

All this applies notably to change affecting people's livelihoods, especially, of course, adverse change. And nowadays such changes can come about at short notice through technological change originating thousands of miles away. People understandably resent and resist changes which threaten their living standards, especially so in a materialistic society.

Since the war, several factors have reinforced such reactions and, in particular, have made many people dread an enforced change of occupation. I can mention only briefly some of these factors. Inflation and heavy taxation have made it difficult for many people to build up and maintain a reserve for contingencies. Restrictions in the labour and housing markets and extensive licensing, even of small enterprises, inhibit movement between activities and exacerbate the hardships of adverse economic change, because these obstacles much magnify the loss of income of those affected adversely. The complexities of licensing, of building regulations and of taxation bear harshly on many alert and enterprising people with modest means, who often find it difficult to handle forms and formalities.

What follows? As has been recognised by noble Lords, it is impractical to try to stop technological advance. The hope entertained in Erewhon of prohibiting new machines is not a viable option. What can, however, be done is to facilitate adjustment to change and to mitigate its hardships. This means removal or reduction of the adverse factors which I have listed, while maintaining the role of the state as the ultimate provider of a decent safety net. The main implications for policy have often been rehearsed in your Lordships' House in different contexts.

I may perhaps mention two wider considerations. First, Governments should try to give as long notice as is practicable of legislative and administrative changes that they envisage consequent on technological change. Second, the near certainty of further advance, coupled with the unpredictability of its specific manifestations, may strengthen the case for firm grounding in general education at secondary and tertiary level, compared with highly specialised training, as this makes it easier for people to adjust to changing conditions in work and leisure. It also promotes social cohesion undermined by rapid change. Such education need not in the least imply a disdainful attitude to the wider world of enterprise, industry and trade, as some remarks of noble Lords, including those of my noble friend Lord Young of Graffham, may seem to imply.

Many people fear that technological advance must bring about widespread and persistent unemployment. This, of course, was a theme of the speech of my noble friend Lord Fairfax of Cameron. I think that this fear is unfounded. Such unemployment results from inappropriate monetary or fiscal policies or the malfunctioning of the labour market, and not from technological change as such, which in this context is only a speeding up of mechanisation.

As has been recognised in this debate, new technologies must hold out the possibilities of higher living standards, including more voluntary leisure. In the market sector at least they will be introduced only if they reduce real cost or produce widely desired new goods and services. New technologies need not herald hardship or doom, but rather hold out opportunities for wider choice and greater voluntary leisure, which are prerequisites for genuinely higher living standards.

8.20 p.m.

Lord Young of Dartington

My Lords, I should like to congratulate the noble Lord, Lord Bauer, on his excellent and simple speech, which I hope will be a model for me and others to come. I should like to join with others—those who are not here as well as those who are—in expressing gratitude to the noble Earl, not only for opening the debate today but for doing it with such a memorable speech and also for providing such a memorable sight which I shall remember for the rest of my life.

I was also grateful to my noble namesake on the Government Front Bench for the admirable conspectus with which he opened his part of the debate. I am sure he was right in attributing our economic malaise, longstanding as it is, at any rate in good part to the low social rating, to use one of the phrases of the noble Lord, Lord Kaldor, which attaches to industry and has attached to industry for a long time in the minds of many able and educated people. But I do hope that the noble Lord is not going to conclude from this that education itself, and taken in general, is somehow responsible, and conclude further that there is perhaps some kind of justification—if not a moral justification then a kind of technological justification—for cutting down or holding back education in general. It sometimes seems like that; and when the noble Lord spoke about Harrow, even though it was not quite contemporary Harrow, I almost thought that some people might believe that the battle of productivity was lost on the playing fields of Harrow quite a long time ago. That would be unfair, and I hope will not be repeated and made too explicit even though Brunei did make the mistake from one point of view of sending his child there instead of into whatever was the counterpart of TVEI at the time that that dread deed was done.

It used to be for all of us such a proud story. British education, from primary schools right up to university, was an exemplar to the world. Now what do we see? Apart from the bright spots—and I agree that there are some, particularly YTS and TVEI, which are a credit to the name of Young—we see our schools scarred by bitter disputes. It is hardly an exaggeration to say that the chances of an entire generation of children are being blasted. The Government seem to be standing by in their pay bargaining so determined to be a hard bargainer that they are forgetting, and forgetting very largely, what should be their first duty to the children and young people of this country, which is to provide a decent educational system, not just for now but for the fruits that it could realise in what we hope will be happier times during the rest of this century and the beginning of the next.

At the other end of the scale we see universities with empty posts galore which cannot be filled for shortage of money; research starved, as the noble Lords, Lord Todd and Lord Zuckerman, so well said; morale in many places at an all-time low; and sadly, more and more staff and post-graduate members of the universities with minds bent on emigration to the United States and other countries. With morale generally so low, and not just at Aston and other such universities, it just does not make sense in my view to give selective support to technological and other education and not to do it for education in general. Morale stands on its own and learning stands on its own.

I do not expect the noble Lord, my namesake, to give us any great comfort on this score, but if he does agree—I hope the "if does not need to be too heavily underlined—perhaps he will use his influence (if "influence" is the right word) with Sir Keith Joseph. I do not mind at all if the noble Lord uses unkind words or fairly unkind words about Harrow, but I do mind if he uses unkind words about our schools and our universities in general. I hope that the noble Lord and other members of the Government will recognise even now, at this late hour, the need to bring new heart into education and research, which does mean—and there is no way around it—spending more on them. I should like to warn the noble Lord, on a note slightly different from other noble Lords who have spoken, that I shall be able to stay until the end of the debate, and I look forward to hearing what he may have to say on the questions which I have implicitly put to him.

I want now to strike a rather different note on another subject which at any rate has the merit of not having been mentioned so far—or, if it has, I have missed it. I hope, incidentally, to be of some assistance to the Government despite the Benches on which I sit, or perhaps because of the Benches on which I sit. The subject is Government purchasing policy, where, despite some progress, I believe large gains could be made which could result at fairly low cost in substantial improvements in productivity. The Government are by far and away the country's biggest consumer. They buy in some £8 billion of goods and services each year. This is apart from what they spend on the health service and defence equipment, and apart from what local authorities and other public bodies spend.

The Government are an enormous consumer. The question for the country and for us—those who remain here tonight—is whether the Government are a good consumer. My answer is that they are not, and because they are not they are not nearly as helpful to industry as they could be. More is the pity, because if purchasing power on the part of public authorities could be used quite deliberately to improve the efficiency of British industry, so much could be achieved. If such power were properly deployed, perhaps we would see fewer reports from the Consumers Association, of which I have the honour to be the president, about the technical inferiority of British products in so many fields in comparison with the competition from abroad.

It is sad indeed to see so many manufacturers whose products are rated as of low quality in Which? magazine going out of production a few years later. One always hopes that they will read the reports, look at their sales figures and do something about it. They should get the products from Japan or Germany, or whichever country, and see, if they are superior, why they are superior, and redesign their products so that they can hold more of the British market. How sad it is—although it does happen, thank God—that it is not more frequent. Why can they not learn in point of design, appearance, engineering, efficiency and so on, from their overseas competitors when the superiority is pointed out? It is sad indeed, too, when the Government seem to show very little responsibility for what happens.

We had an example in the Consumers Association not so long ago of the prevailing attitude when we approached the DHSS with a very simple and mundane question. We wanted to know how they chose the mattresses which are bought by umpteen health authorities for health service hospitals. We wanted to know what standards they applied, as we thought that there might be information to be gained that could be useful to ordinary consumers. The answer from the DHSS was that purchasing policy was "evolutionary". I thought that was great. I am not quite sure what it means but perhaps the noble Lord on the Government Front Bench can interpret that word better than I. It does not seem the right word to use, whatever it means. The department said also that National Health Service supply officers just know what to buy out of long traditions of use. There one can see the British economy in microcosm.

In our view it is a scandal that testing stations for Government purchases—and there are plenty of them—will not disclose their methods of specifications. There is hardly any exchange of information, except informally, between them and testing stations such as that of the Consumers Association, which is one of the biggest in the country outside the Government service. It could be so fruitful an exchange in the interests of ordinary consumers as well as in the interests of the Government, as a monolithic consumer, who still control, by what they do, so much of what goes on in a sizeable part of industry. Unfortunately, we are again beset by the Government's obsession with secrecy.

The Government have a much wider duty—as I believe most noble Lords and others outside this House would agree—than to buy at the cheapest prices. What the Government do can have a major effect on the quality of design. Quality is the word. They could require higher standards in the goods they consume. All this would be so much more effective if the Government would consider the saleability of the goods they buy on the ordinary British market and on export markets. As much as or even more than buyers in Marks and Spencer, John Lewis and some of the other retailers who have really shown the way, Government purchasing officers should surely be briefed to work with industry to improve efficiency—not just by specifying higher standards of design, performance and appearance, but by bulk ordering (difficult though I know that is) between different departments so that industry can gain the advantages of longer runs.

Marks and Spencer, in its own field, has helped to reorganise whole sections of British industry by using the leverage of intelligent buying power backed by science and technology. The Government, if only they would wake up to the opportunity, could—in the months or even years they have before them—do the same.

I know that some progress has been made recently. I do not suppose there is any significance in the fact that the report to which I now refer has a black cover. It is a report on Government purchasing. Perhaps it is a sad story. It is a review of Government contract and procurement procedures, for report directly to the Prime Minister, published in December 1984. Unfortunately, the terms of reference of that report were all about value for money and how the Government could get more at cheaper prices, by and large. I could find no words in it about the wider effects that Government purchasing policy has on British industry.

I come now to my offer of co-operation. We have heard a good deal about co-operation today. I hope that the Government will be prepared to establish what might be called a consumer task force for their own purchasing, with the remit not just of enabling the Government to buy more economically but also of reducing imports and increasing exports. I hope also that bodies outside the Government would be brought in to pool their experience.

If the Government will adopt that proposal, I can say on behalf of the Consumers Association, which has a staff of some 400 or 500 people, that we will be very glad to take part in such a task force and pool our experience with that of Government purchasing officers, and, I hope, of people from retailing and industry who would have a good deal to contribute.

I suggest that the priority should be to concentrate on those industries most vulnerable to overseas competition, where Government purchases are large. We have already lost so much. We have lost our motorcycle industry. We have lost our typewriter industry. We have lost calculators and photocopiers. We have lost dishwashers. There is a severe squeeze on cutlery—that cutlery which so proudly used to be made in Sheffield. We are even in some danger of losing our bicycle industry, and there would be more than just Mr. Tebbit who would regret that if it happened.

The noble Earl, Lord Stockton, said that we have fallen gravely behind, and we have. We cannot allow that process to continue indefinitely. However, I hope most noble Lords will agree that it should not be stopped by erecting trade barriers. Improving efficiency is the way. According to DTI figures, import penetration of office machinery and data processing equipment is already 63 per cent. That should clearly be the first area of priority for the task force I have proposed. Government offices—and we know that there is no shortage of them—may get new technology, but it could be increasingly from abroad unless action is taken to stem this country's extraordinary susceptibility to imported office equipment.

A comparable figure on import penetration—bad enough, but not quite as bad—is 39 per cent. for motor vehicles and 30 per cent. for furniture. These should all be areas of priority for the consumer task force. The object would be to try to cut down the degree of import penetration.

I accept that there have been success stories already. A Neddy report on television sets used Consumers Association tests as its criteria. In 1975, fewer than 50 per cent. of TV sets made in Britain survived their first year without needing repair. Since then, by using Japanese quality control methods, the standards of British sets have improved. Judged by the same Consumers Association criteria, TV sets now made in Britain—partly by Japanese manufacturers, it is true, but not only by them—are as good as Japanese sets and are substantially better than those made in Europe. Very broadly, the same has happened in respect of washing machines and freezers, so it can be done. We do not have to accept the inevitability of decline.

In my view, a powerful impetus would be given to doing something about this problem if only the Government would recognise that they are, in their own right, an immensely powerful consumer who could use their leverage to help British industry in all sorts of ways. We still have a very long way to go. I only hope that on this very small front the noble Lord on the Government Front Bench will be able to accept the proposal made for a consumer task force. He may even be able to improve upon that name. If he is not able to accept my suggestion tonight, I hope that he will at least give my proposal serious consideration and let the House know the outcome. That suggestion is put forward in the utmost good faith.

8.38 p.m.

Viscount Caldecote

My Lords, it was a privilege to hear my noble friend Lord Stockton once more deliver a magnificent, wide-ranging review of past experience and present problems. Once again he showed penetrating insight and understanding of the real issues, particularly in spotlighting the fundamental significance of manufacturing industry and its role as a creator of real wealth. He raised the vital issue of how we may take advantage of the new technology to restore the prosperity of this country.

We shall not do it by following the advice of the noble Lord, Lord Bruce of Donington. His principle is apparently planning first, market second. It is terrifying that a spokesman of a leading political party should be so totally out of touch with the realities of industrial life.

The speech of my noble friend Lord Young from the Front Bench was music to my ears. He recognised the contribution of engineers to prosperity, of enterprise and applied research. He recognised the shortage of skills in engineering and science education. He recognised the need to reward successful innovators and entrepeneurs, and to recognise them. I really feel that we are on the right road. But we have a long way to go along it. In education in engineering and science, for example, I very much doubt whether we shall make fast enough progress without earmarking funds for those purposes in our universities and colleges. As for rewarding and recognising success in innovation, I am afraid we have a very long way to go.

I give your Lordships an example. The premier engineering award in this country for innovation is the MacRobert Award. It is administered by the Fellowship of Engineering. It is worth £25,000. It is presented by the Duke of Edinburgh at a ceremony in Buckingham Palace each year, followed by a lecture and a dinner. We send out many letters to the press and to others to attend the dinner and the lecture, but we get hardly any mention whatever in the press. In contrast, the Booker Award for Literature, worth £8,000, gets immense publicity and cover in the media. That is a fine example of what my noble friend on the Front Bench was saying earlier, but we are on the right road to correct it.

However, I am not so gloomy as the noble Lords, Lord Gregson and Lord Ezra. Yesterday I opened a high technology centre in a machine tool company. It was not what you might call a boffin centre. It was a marketing centre to show the wares of that company to its customers, to demonstrate what the products would do and to simulate what the systems would do. Recently parts of it were at the Hanover machine tool fair and the company has had a lot of interest in its products. Not long ago I met the chairman of a company in the textile industry. That company has put in a lot of high technology equipment. It had cut down its labour costs by half and, as a result, was gaining in competitiveness as against the Hong Kong, Indian and other markets overseas. The company had increased its labour force by some 30 per cent.

Recently I visited a customer in distribution of Investors in Industry, of which I have the privilege to be chairman. The company is spending £1 million or so on constructing an entirely automatic warehouse in the distribution trade. The company expects to employ more people as a result of gaining more business. I have also spoken to other companies lately who have licensed their products and processes to Japan, China, Germany and elsewhere on the Continent. The best British companies are holding their own in world competitive markets. The problem is that we need to encourage the growth of more companies like them, and we shall not do that by sweeping, generalised denigration of the achievements of British industry; nor yet by complacency. We shall make the necessary progress only if there is a wider understanding of the changes and investment that are required to take advantage of rapidly advancing technology. There must also be an understanding of the benefits that technology has brought, and can bring, to mankind and to this country.

Today, we can look back on more than three centuries which have passed since the Royal Society was founded, and we can see clearly the vast improvements in the quality of life which the application of scientific knowledge has achieved for millions of people. Probably the most significant developments in everyday life are the areas of public health, medicine, food production, transport and communications generally and in household appliances. But in spite of those and other obvious advances and benefits which have stemmed from technology—which is, of course, the art of applying scientific knowledge to useful purposes—there are many today who fear the accelerating influence of technology on our lives.

In essence, I believe the problem is to ensure and to demonstrate that technology is our servant and not our master. With that objective in mind, my own profession of engineering has a very heavy responsibility for ensuring that the forward march of technology is applied to purposes which benefit mankind. Indeed, it was with those considerations very much in mind that the Fellowship of Engineering was formed in 1976 to act as a focus for excellence and responsibility in engineering; to be for engineers what the Royal Society has been for scientists for a very long time and so to encourage the kind of recognition and understanding of the engineering contribution to which my noble friend Lord Young referred in his speech.

As well as changes in personal living standards, which I have already mentioned, there have also been vast changes in industry. New methods of production have done away with millions of dull, repetitive jobs. Much of the hard and dangerous work in such industries as coal mining is now done by machines. Such has been the effect of advancing technology in the industrialised nations. Apart from some serious concern about the effect on the environment and its contribution to arms production, technology has been almost universally beneficial, and understood to be so, in enabling most people to live a fuller and more satisfying life.

I realise, of course, that recently there has been some concern about the effect on employment, but that is a subject in itself and one which we touched upon yesterday. Nor do I think that this is the occasion to discuss the problems of technology in relation to defence and nuclear weapons. There will be other occasions for that. However, I should like to say a few words about conservation and pollution, because there is much misunderstanding about the effect of technology in that sphere. Advancing technology is often blamed for creating problems of pollution and for destroying the environment. The fact is that technology is at least as effective and adept at controlling pollution and protecting the environment; as witness the disappearance of pea soup fog, which at one time in my young days in London killed thousands of people, and the cleansing of the Thames and other rivers and the Canadian lakes where fish now flourish after many years of absence. It is not technology that causes pollution but society's failure to use it effectively and its reluctance to pay the price of applying it. Those are political, economic and social issues to which I believe we should give much greater attention.

Technology is also sometimes accused of encouraging greed, materialism and the breakdown of family life, but much of that sort of criticism in reality stems from resistance to change, or, perhaps more accurately, resistance to the rate of change which technology has stimulated. This makes many people feel an urge to return to the good old days of a simpler life. But it is forgotten that those days were good for relatively few. Such people fail to give credit to technology for its great achievements and its contributions, which I have already mentioned, to health, medicine, communications and so on, which have benefited so many.

There is no evidence, I suggest, that a no-growth, stagnant economy is likely to lead to a more humane, more tolerant or more rewarding life in a more satisfied society—quite the contrary. Mr. Edward Heath put it rather well some 10 years ago when he said: The alternative to expansion is not, as some occasionally seem to suppose, an England of quiet market towns linked only by trains puffing slowly and peacefully through green meadows. The alternative is slums, dangerous roads, old factories, cramped schools, stunted lives. In any case, it is impossible to put back the clock and dam the flow of increasing knowledge. But we can channel it into ways which will benefit mankind and our nation and that is one of the challenges which we in industrialised countries face today.

The fact is that technology is like money. It is a very powerful force. Power can be used for the benefit of people or it can be, and too often is, abused. The late Dr. Schumacher wrote in his book Small is Beautiful: In the subtle system of nature, technology, and in particular the super-technology of the modern world, acts like a foreign body, and there are now numerous signs of rejection. He asked, Can we develop the technology which really helps us to solve our problem, a technology with a human face? My Lords, I believe that that is indeed the nub of the problem; but it is a vast subject and I believe that the problem will always be with us. I suggest that we must make up our minds that technology is no different from any other powerful force. If wisely and firmly directed it can do much good, but if it is not well directed it can run riot and sweep all before it into a morass of selfish materialism.

So I submit that the best way we can ensure that technology is indeed our servant and not our master is to ensure that all of us understand it and learn about it as far as we are able. I believe we are making progress in that direction; but I think that there is one quite big obstacle in our national organisation which is holding up progress along that road and that is the recruitment policy to the higher levels of the Civil Service. Twenty or more years ago the Fulton Committee recommended—and its recommendations were accepted by the then Government—that more professional people such as engineers, accountants and the like, should enter the higher ranks of the Civil Service. Nothing at all has been done about it and there is no entry to the higher levels of the Civil Service for people with those kinds of qualifications and with experience of industrial life.

I commend that thought to my noble friend who will speak again in winding up this debate from the Front Bench, and I hope that the Government will take to heart also, when they are struggling with their priorities of expenditure, the vital importance of education in its broadest sense, so that the vast changes which are needed to get the best out of advancing technology will be understood by everybody, and those changes will be readily accepted and pushed forward by a well informed people in a united effort.

8.52 p.m.

Baroness Warnock

My Lords, I must add my expression of gratitude to the noble Earl, Lord Stockton, and my admiration for his vision in initiating this debate. I must also offer my apologies for not being able to stay to the end of the debate because of an immovable commitment elsewhere. Much as I should like to hear the noble Lord, Lord Young, reply to the generous and imaginative offer of the other noble Lord, I cannot do that. I hope that both noble Lords will forgive me for not staying to hear them or all the others who are going to speak later in this debate.

In spite of all our predictions, nobody can be certain of the future, but in the world of new technology as it has been presented to us this evening by noble Lords one thing is certain—that is, that we shall rely more and more on education. The noble Lord, Lord Todd, and others have said almost all there it to be said on this subject but it seems to me from everything I have heard that we are facing here a curious paradox. The more sophisticated a society becomes the more important is it that everybody in it should be highly educated. Moreover it has been stressed repeatedly that education is of great importance.

We all speak as though education should produce for us the very people required by society, and especially that it should produce for us the very people required by industry, and this seems to give a very important role to education. But the paradox is that at the same time as we all mouth these propositions we show in a number of ways that we in fact despise education. For one thing, we do not pay our teachers properly. I know that at the moment they may not seem to be deserving of it but I believe that, unless we do pay them properly, we shall never get the education we require. Above all, however, we seem to be unprepared to spend money on schools, on polytechnics and on universities, and without this money it seems to be impossible for them to perform the very functions that we demand of them.

I believe it is impossible to separate education from research. This is something about which many members of universities feel very strongly. It has sometimes been suggested that institutions should be divided into those which teach and those where research is carried out. I believe that that would be disastrous for education, teaching and research. But in talking about research I want briefly to reinforce some of the very percipient words of the noble Earl, Lord Stockton, the noble Lord, Lord Todd, and other noble Lords. At present I believe that research is suspect among the general public and it is suspect in the eyes of Government. Even though there is a certain recognition that research is needed, I think there is a very widespread misunderstanding about what research actually is.

People in general think of research as a matter of inventing things, a kind of collection of Professor Brainstorms, or other wild inventors, inventing things such as the dreaded non-stick pan mentioned earlier by one noble Lord, which as a matter of fact seems to me to have been one of the most disastrous, expensive and labour-intensive products ever to enter the British kitchen. People tend to think of research as producing solutions to existing and well-known problems. Of course I do not deny the urgency of updating immediate technological inventiveness which may very well have fallen behind, and I certainly do not undervalue the essential need to update our expertise. The need to do this was most graphically described earlier in the evening by the noble Lord, Lord Gregson. I do not undervalue that but I think that, more than this kind of updating inventiveness, we need and must have fundamental research.

By fundamental research, I mean of course research that is not intended to solve a particular, specifiable, practical problem and not intended to come up with a marketable product, but is aimed widely to extend the frontiers of knowledge. Of course such research may result and often has resulted in great benefit to mankind but its main and only instant benefit is an increase in human understanding. I believe that we have to face the fact that it is this research which will be killed off if the universities are not properly funded and particularly if universities are urged more and more to invent things and to market them themselves. Pure research is not instantly marketable. If we are to face the new technological age and its consequences, we must face that fact, and the fact that more and not less financial support is needed in the universities for fundamental research.

There is another related though different point which I should like to make. The more sophisticated our technology becomes—and this is true whether the technology originates in Japan, Germany or here—and at the same time the more highly we hope to educate people at large, the more people need to know exactly what is happening to them and their society. They will demand this knowledge—whether it is a matter of chemicals being added to their drinking water or bugs being added to their telephones.

People need to be well informed. They need to be able to make judgments themselves about the value, the utility, even the morality of the research that is being undertaken. They need to know that ultimately they may have a say in what happens and even perhaps, if necessary, call a halt to it. They must not be treated simply as manoeuvrable pawns in the new technological age. That requirement demands openness of research results—the publication of research findings. That has always been the most honourable tradition of the universities.

If universities are to be compelled more and more to become the marketers of their own research, if they are to become entrepreneurial institutions, compelled by financial stringency to invent things and sell them, that openness is in danger of coming to an end. We cannot expect competitive commercial undertakings to publish their results openly. Universities are increasingly being forced into a kind of commercial secrecy which is not only totally contrary to the academic tradition of the free exchange of learning but, more important, is deeply harmful to any society and particularly to the relatively highly educated society of the future.

I believe that we must, before it is too late, restore education and pure research to the position among our values that they deserve. At the moment, the Department of Education and Science is of all Government departments the most despised and the most obviously at the bottom of the pile. We must change that if we are to face the future with confidence. We must overcome the paradox—the contradiction—in our attitude towards education. It is a contradiction that has been manifest throughout the debate. On the one hand, we say that education is the most important thing; on the other, we devalue it by saying that it does not have a life of its own; it must live only if it can produce paid, marketable results. I believe that we have to overcome that contradition and show ourselves wholly to believe in our ability to understand, control and manage the consequences of the new technologies.

9.2 p.m.

Baroness Platt of Writtle

My Lords, like every other speaker in your Lordships' House this afternoon, or this evening as it now is, I am grateful to the noble Earl, Lord Stockton, for initiating this debate. I know that his interest in the subject was aroused by the report of your Lordships' Select Committee, as he gave us the pleasure of attending one of our meetings in order to express his interest and discuss the subject.

The message of our report has been echoed repeatedly this afternoon. The country's future and its ability to ensure gainful employment for its people are dependent upon its success in exporting manufactured goods to world markets. The economic prosperity of the United Kingdom is at stake. As the nature of wealth creation becomes less labour-intensive and physically demanding, the relevance of knowledge-based skills grows. Many people are frightened and suspicious of the new technologies. That fear and suspicion are fuelled by ignorance and lead to resistance to their successful application. As our report stated, the most vital need is to educate people to understand and control the applications of the new technologies—to make them our servants and not our masters, as my noble friend said.

The technological literacy of the whole nation has to be raised. It is necessary for the effective application of technology in industry to remove the possible gulf between technologists and industrial management. It is also needed by the whole population to cope with a society and with jobs in which technology is increasingly prominent and to ensure that it receives the attention and priority that its importance merits.

Industry and commerce have regularly to invest in new capital equipment so that they can utilise the applications of the new technologies. However, the way that the workforce at all levels applies the use of that equipment to the production and marketing of its particular product is crucial to the success of our industry and commerce. Coupled with the capital investment must be investment in human resources—the people in the workforce who are the most valuable resource in any organisation.

Our recommendations are clear; and I am delighted to see in their just published response to our report that the Government are in full agreement with them. I naturally hope that that will lead to action to see that they are put into effect. There should be a large-scale increase in provision of continuing education and in employers' updating and training programmes which have an importance approaching that of initial education. In particular, there should be more courses designed to meet the needs of women re-entering employment. In The Times today there is an advertisement by IBM which echoes those recommendations. It really is putting into action what we say, and that is a great delight because actions speak louder than words.

On 12th November 1975, the Sex Discrimination Act received Royal Assent and the Equal Opportunities Commission, which I have the honour to chair, was established. That was 10 years ago this week—a milestone in the progress towards equal opportunities for men and women in this country. It is a great pleasure to me to see sitting opposite the noble Baroness, Lady Lockwood, the first chairman of the Equal Opportunities Commission. Much has happened in those 10 years. The EOC has worked hard and long to change long established and traditional attitudes and assumptions which are deeply embedded in people's hearts and minds.

There has been considerable progress, and equality of opportunity between men and women is far more widely recognised as just and fair than it was then. This year Parliament has approved our code of practice and it has received wholehearted support on all sides which gives it considerable authority. In our second decade we shall build on the achievements of the first; but that second decade will be just as demanding, I am sure, and we shall need all the co-operation that we can muster. That will form a crucial part of the social progress of the remainder of this century, and I draw it most seriously to your Lordships' attention.

Two most important developments will be closely intertwined and need to be properly integrated—the development of equal opportunities and the application of the new technologies. In educating and training children and in continuing education and retraining of the workforce, girls and women as much as boys and men must be encouraged to understand and control the new technologies for the benefit of society, as the committee recommends in its report. I quote: The efforts of the Equal Opportunities Commission, the Engineering Council and others to encourage girls to take up science and technology are supported. The emphasis of initiatives should be at primary school and in the early years of secondary school. All local education authorities should draw up programmes to develop the interest of girls in science and technology, making use of positive action in favour of girls. Some instructors in mathematics, the sciences and the humanities should be compulsory for all children in the United Kingdom up to age 16". Again, the Government thoroughly endorse these recommendations. Once more, I hope that this leads to action. It is stated and restated in Better Schools and in their response to our report.

The WISE campaign (Women in Science and Engineering), started by the EOC and the Engineering Council, has been well supported by schools, colleges, industry and commerce, and government. It was initially for a year, but has to go on for at least a decade if it is to make the necessary impact. In 1981 there were 900,000 18-year-olds in the United Kingdom. By 1995 that number will have dropped to 600,000, a dramatic fall of one-third. That will mean intense competition for skills and talents to make up an increasingly knowledge-based work-force. Unless by then we have persuaded girls and women to enter what in the past have been non-traditional fields of work for them, we shall be in a parlous state as a country. I am pleased to say that by 1984 the percentage of women students in engineering had risen to 12 per cent.; but we still have a long way to go.

So WISE must go on. As well as the EOC, people like the Engineering Council, the Standing Conference for Schools Science and Technology, and enlightened industrialists and educationists are convinced of this. It will mean considerable effort to see that children, including girls, are interested in technology from primary schools upwards. It means teaching it in an interesting way, showing that it is relevant to their lives and will help other people. Introducing technology to show how it helps handicapped people, how it is vital to the development of hospital equipment such as incubators and kidney machines, and how it underlies the comfort and convenience of people at home and at work, can kindle the spark in a child's mind that leads on to a lifelong interest and the choice of a career in these fields of work.

The year 1986 is Industry Year—a marvellous year to demonstrate just those truths. It is a year to show, as the Royal Society of Arts, manufacturers and commerce say, that industry, the provision of products and services that people need and want, is fundamental to almost everything we do. Industrial success is a necessary condition for the provision of food, shelter and warmth, for the education of the young, for the care of the sick, old and handicapped, and for a better quality of life for the individual and for the community as a whole. I chair the women's committee, and we are doing all that we can to see that this message gets over to women, too. They constitute over 50 per cent. of the population and over 40 per cent. of the workforce.

Increasingly, for the remainder of this century and into the next industry will be making greater use of the new technologies in order to survive. When our committee went to Japan we were particularly impressed with the emphasis that the Japanese put on continuing education and retraining, and its contribution to good industrial relations and commercial success. Industrialists told us that as they install new technological equipment they retrain the workforce so far as possible to avoid redundancy. That fosters company loyalty and reduces the fear of redundancy with the onset of the new technologies. In that way, the application of new technologies is far more likely to be supported and enhanced by the workforce.

Additionally, this year Japan has passed through its Parliament equality legislation—ten years after us. As an ageing and developed nation like the United Kingdom, it, too, is realising that it must involve women far more in the workforce and help them to combine home life and a career in ways that have never been done before in Japan. Fujitsu are taking on 200 women software engineers a year and intend to retain their scarce skills throughout their working lives. A select committee is looking at how to help Japanese women researchers bridge the career break and keep in touch with rapidly advancing technology so that their expertise is not lost. We must not lose our headstart to Japan in the field of equality of opportunity as we have in so many other fields.

The Engineering Council, of which I am a member, has set up a career break working party to show in all sorts of practical ways how qualified women and their employers can arrange to keep their technological skills up to date while they have their families. Our report comes out next month. We hope that enlightened employers will put that into action during Industry Year.

A girl at school said recently, "Half the brains of this country are in girls' and women's heads". A decade after the passing of the Sex Discrimination Act, and at the onset of Industry Year, employers need to take a new look at their provision of education and training in the new technologies. Time is running out. We cannot afford any longer to neglect half the talents of our nation. Positive efforts must be made to enhance the technological skills and talents of women so that they, too, in co-operation with men (as the noble Earl, Lord Stockton, emphasised in his optimistic and inspiring speech) can make their full contribution to our national prosperity and reap the benefits as well. That is a vital social and economic development that we neglect at our peril.

9.15 p.m.

Lord Harris of High Cross

My Lords, I should like to express, along with others, my gratitude to the noble Earl, Lord Stockton, for this opportunity to take part in a wide-ranging and, I must add, at times extremely long-winded debate. Having admired the noble Earl's style and flair for 30 years I hope that he will be indulgent towards what he will doubtless regard as the aberrations of an economic liberal.

For all the speculations we have had, the bane of the central planner is that we can never know what surprises the future has in store. Even if we could be as certain as the noble Lord, Lord Gregson, what changes will become feasible in future production and consumption, their economic and social consequences must still depend, as my noble friend Lord Todd said, on how we in Britain are able to exploit the new opportunities by adapting to changing methods of work.

There are no inevitabilities, only possibilities and perplexities. But under the present administration I believe that we still have a sporting chance. I agree with the noble Lord, Lord Young of Graffham, that we should continue to loosen what I would call the collectivist corset which has impaired our economic mobility and freedom of action. If not, I fear that we shall be increasingly outmatched by more lively and supple competitors in other lands.

If Britain were more like Hong Kong, still the land of Samuel Smiles beloved by the noble Lord, Lord Young, we could have confidence in the flexibility of our economy and we should have little cause for worry. We could take comfort that, come what may, new technologies would bring the certainty of still faster advances in our standards of living and of leisure. No doubt there would be frictional unemployment as both men and machines were trained and adapted to new tasks. But however much technical change multiplied the production of consumer goods and services, we should not need to frighten ourselves, like some noble Lords, with the spectre of large and long-continued unemployment.

I often think that the trouble with this House is that it is not sufficiently backward-looking. Instead of peering vainly into the future and risking our eyesight, I think we should learn from the past. The TUC set a good example two years ago in a paper for the National Economic Council entitled, Where are the New Jobs Coming From? It recalled that two centuries ago most people worked on the land. The TUC suggested that, if someone had asked then where the new jobs would come from, it would have been impossible to envisage that the answer lay in a rapid upheaval characterised by a massive move of population from the land to the cities and a rapid restructuring of economic activity from agriculture to manufacturing". As I have said before in this House, that insight by the TUC prompts a most searching reflection. If modern governments and trade unions had been around at the time, does anyone—even the noble Lord, Lord Hatch—suppose that the Industrial Revolution would have been allowed to happen? In our own time, government intervention, regulation and taxation, along with the old trade union restrictions, have become the major impediments to the beneficial exploitation of the new technologies.

Whatever works in the corporatist culture of Japan, when British Ministers have come as Greeks bearing subsidies they have often done more harm than good. Two disappointing examples, familiar to the noble Earl, Lord Stockton, were the development of the Concorde and the British nuclear programme based on the AGR. The present Reith lecturer, Professor David Henderson, has described these vaunted Government achievements in the following words as, two of the worst civil investment decisions in the history of mankind". I do not expect that we shall hear anything today from Labour or Tory Benches about those wholly unrealistic forecasts we used to have for steel and coal production in the 1950s, the 1960s, and the 1970s. Yet one result throughout the post-war years was to burden and weaken new enterprise by high prices and taxation in order to prolong these old, decaying technologies from which the present Government are only now bravely extricating us.

We occasionally hear ancestral voices denouncing confrontation and calling us to worship once more at the shrine of the old consensus, sometimes dignified as the mixed economy or the middle way. What did it amount to? I sometimes think that in practice it amounted to the perpetuation of the anti-enterprise culture and the appeasement of trade unions and other powerful obstacles to progress. I sometimes even think that the consensus enshrined compromise as the highest principle of government. It survived through those post-war years only by accommodating increasing inflation and by delaying and dodging awkward choices which now have to be more painfully confronted.

I want to offer an example of the less obvious damage by government policy that can be detected today in the promising spheres of biotechnology, genetics and medical instrumentation. Here again British scientists and engineers have many inventions to their credit, including advanced scanners. Yet the promising development is held back by the existence of a monopoly National Health Service where, in the sacred but spurious name of free care for everyone, available resources are confined to what can be extracted by force from the taxpayer.

Now suppose that governments had the vision to act on the recent advice of Professor Ralf Dahrendorf. Suppose that governments had encouraged what he called "a massive extension of private health care and greater contributions by all to health costs". We could safely predict an expanding domestic market for British equipment and treatments, financed by increased private spending on medical insurance, perhaps in place of the consumer spending on Japanese imports which so frightened the Select Committee on Overseas Trade.

My Lords, we have heard some advanced thinking on information technology. Very well, consider the trade union attitude towards one application in computer typesetting, to which British engineers have again made a significant contribution. While this latest technology enables American newspapers to increase in size and to raise employment, Fleet Street still has to negotiate with the NGA for permission to print longer runs or larger papers, and on old machines which are found in America only in museums. If progress is to come in Fleet Street it will come by the prompting of Eddie Shah, surely a figure today worthy of Samuel Smiles.

My conclusion from economic analysis, confirmed, I believe, by history, is that the faster we can remove government and union obstacles to change, flexibility and adaptation, the less we have to fear from the economic and social consequences of new technologies. In contrast to those who look for hope to fallible politicians of any party, I believe we should open up the field by getting rid of government-spawned rigidities, especially in the markets for labour, rented housing and new construction.

We should not be required to put our shirt on the Government's selection. We should be more sceptical about political, economic and, I would say from the Cross-Benches to some of my colleagues here, scientific tipsters. Instead, we should spread our bets among a wider field of entrepreneurs, enlivened by deregulation, lower taxes, more share options and the motivation of decent British workers by linking wages to profits. If we are to embrace change as our ally, we must discard the status quo as a snare and a delusion.

9.25 p.m.

Viscount Massereene and Ferrard

My Lords, first I should like to thank my noble friend Lord Stockton for putting down this very timely Motion. The only matter about which I am rather ashamed is that among this very distinguished audience of scientists and engineers I am the most undistinguished. However, I have brought up the question of the microchip, the silicon chip and automation in this House on previous occasions. My concern has always been their effect on human beings. Although in the 19th century the steamship took the place of the sailing ship—the square rigger—it did not cause unemployment because in those days we had a small population compared with the size of the population today. As a result of the innovation of steam we had an expanding economy; we roared ahead and there was no question of unemployment.

However, I am not so happy about the situation today. The great point about the silicon chip is that I am sure that it will banish poverty and, if properly managed, it will create great wealth. However, whether it will banish all unemployment is something which I personally would doubt. My only experience of industry on my own account, concerns a plastics factory for injection moulding which I started after the War. I modernised it and installed the most modern machines at that time. There were one or two Luddites in the works and some of the machines were vandalised. I certainly do not blame those people—although I do not think that my bank manager was very pleased—because obviously they were frightened that the new machines would put them out of a job. In fact, they did not put them out of a job because productivity rose. However, although we became larger through automation, eventually we were not making any profit at all; we were overmanned. I am a hopeless businessman because I never have the heart to sack anyone. Therefore, to my great delight, a firm called Minerals Separation took me over and it was eventually taken over itself by one of its subsidiaries. So that got me out of that problem!

I was also involved in tramp shipping for a short time. We were bringing in grain from the River Plate to London Docks. I used to go down to the docks. When a grain ship came in some great big pipes went into the hold of the ship. They were rather like great Hoovers. There was only one man up in the granary—a high tower—who unloaded the grain. He turned a wheel and all the grain was sucked up. At the same time we had to have a docker at every pipe—there could be six or eight pipes—who did absolutely nothing at all except occasionally spitting into the grain. They had no work to do, but they were well paid. I suppose that with automation that is the type of thing that one probably has to do, because otherwise there would have been about eight dockers out of work for that period.

However, I feel that the great challenge of this age in the future will be to see how people who do not have a permanent job owing to automation will have a full life. Those who are fortunate enough to have natural talents will be all right. Those who do not cannot spend all their days in the pub and at the dog track. They must have some kind of training to give them a full life. I suppose the answer is that eventually many people will come down to a two or three day week.

However, I think that automation is a boon from Heaven because it will make wealth. As all the economists here will know—and I think there are quite a few around, especially the noble Lord who has just sat down—the object of the micro and silicon chip is to make wealth. By making wealth, one does not necessarily make well-paid jobs; but what one makes will have to be divided out, presumably through taxation, so that everybody has a full life. I cannot see any other way.

The service industries will absorb a great many jobs. If we manufacture all our computers, that in itself will create a great many jobs. The trouble is, are we going to import some of this machinery? If we do that, it will obviously rather spoil our own efforts at making computers. Thus we have to be sure that we have the best computers and that we try to conquer that market.

I must not speak for too long because we have had quite a long stint on this subject; but I should like to say this. The number of self-employed has greatly increased. Whether or not that is owing to automation, I do not know. I doubt that it is early to judge the cause yet. However, there are about 2½ million self-employed now.

As I say, technology may, I fear, be a great problem in human terms. I am an agriculturist. That is my chief field, apart from one to two other diversions not necessarily to do with industry. The position with agriculture is surprising, especially in regard to arable farming. On a farm where 40 years ago, I can remember, one would have employed 40 people, one would now employ only two. Up to this day, although agriculture has shed the majority of its labour, what is surprising is that it still has a high productivity. Its productivity has been rising the whole time. That is owing to automation, to technology, but it has in human terms got rid of a great deal of its labour. I imagine that some of the labour force must be on the dole through no fault of its own. That is a problem about which I am not very happy.

Small businesses will benefit very greatly from automation, but I am afraid that a great number of office workers will have to find some other jobs. For instance, the other day I was travelling down to Ashford in a train and I was speaking to a man who was a slight acquaintance. He told me that he had just installed a new computer in his office. He was in the insurance business. It was not a very big firm. He told me that he had to get rid of three people in his office. Presumably those people have become unemployed. I hope that they get jobs. However, that is what worries me.

But I think that automation and the silicon or micro chip is a wonderful thing and I have always been all for it—provided that we can organise it properly, as I am sure that we can. After all, we have in this country some of the most inventive brains in the world. The trouble always is, however, that we have such a small home market; whereas America markets a lot of our inventions because America has such a large home market. But we do not get all the credit. I should like to give a great welcome to this debate which I think, apart from my own contribution, has been of great use. I am sure that in the end the new technologies will grow from strength to strength in this country and that eventually even the doubters will be very pleased at the result and will all have fuller lives.

9.36 p.m.

Viscount Chandos

My Lords, if, at this late stage of the evening, I keep my thanks to the noble Earl, Lord Stockton, brief and my whole speech brief, I hope that your Lordships will not think that I am in any way less grateful than other noble Lords who have spoken at the noble Earl's initiative in introducing this debate, or any less struck by his memorable speech. The noble Earl's speech left one particular impression on me. It was of his strong and resolute optimism, overwhelming even the concerns and fears which he and many other noble Lords on this side of the House share, that the Government's policies are damaging the prospects for the country's continuing stability and increased prosperity.

In the handful of years that separate the noble Earl's experience from mine he has witnessed not just the depression of the 1920s, as he told us, but two calamitous world wars in each of which new technologies were used to terrible effect. The predictions of H. G. Wells have, with a few Martian exceptions, been fulfilled and often exceeded, and many aspects of life in the noble Earl's lifetime have been changed beyond recognition. Through this, the noble Earl has demonstrated enthusiasm for the changes, for the future and for the new technologies and a disinclination to regret a distant, golden Elysian age which I believe is the single most important factor for all of our attempts to make the best of the future world for which we are heading.

Sadly, I cannot share the confidence of the noble Lord, Lord Young of Graffham, that in this latter day, second industrial revolution there are not, and will not be, as widespread or as deeply-held fears and suspicions about the desirability of the changes in train. Even if the example of Fleet Street seems tragi-comically exaggerated, I think that none of us in your Lordships' House should underestimate the difference between accepting one's own job and those of perhaps all of one's families as casualties of the new technologies, to be replaced maybe somewhere at sometime with jobs quite different and considering such a prospect on a hypothetical, abstract basis.

I suppose that I may be guilty of underestimating the relentless march of technology in assuming that our jobs are secure in your Lordships' House, particularly when I suspect that the Government Chief Whip, the noble Lord, Lord Denham, is experimenting with an advanced robotic prototype with absolutely reliable and predictable voting habits. Nor would it be right to suggest that nervousness about the future and the instinct to resist change is still any less prevalent among management and in other walks of life than it is on the shop floor.

In my professional life I constantly see the deep distaste for change at the top of some companies, financial institutions and other organisations. The radical changes to the whole structure of the City and the United Kingdom's financial market were brought about not fundamentally by the Government's agreement with the Stock Exchange but by the spectacular and exciting application of new technology to the whole world's capital markets.

I agree with the noble Lord, Lord Bruce of Donington, in his concern that what might be called "high-tech" banking does not always benefit industry and other parts of the community as much as it might. But that cannot justify the attitude of many people, both inside and outside the City, that there was nothing wrong with the old system and that all the proposed changes are retrograde. I would urge the Government, therefore, not to underestimate the persuasion and encouragement that is still needed in every area of society and to look forward and respond to changes arising from the new technologies with the enthusiasm and relish which the noble Earl, Lord Stockton, has shown us as an example.

The subject of today's debate had suggested to me, even before the noble Earl himself mentioned H. G. Wells, that your Lordships were being invited to break out of the earthbound shackles of once more debating Government expenditure, monetary policy and impenetrable statistics, and instead to play the science fiction writer for a time and deliberate about the society of the future. I think the noble Lord, Lord Bruce of Donington, took the invitation in the same spirit, and I share with him the enjoyable and exciting anticipation of "teleconferencing", of the extinction of commuting and the prospect of a more balanced life for everyone in the community and a greater chance, at work and in leisure, to use the intellect and education bestowed upon us.

I was surprised, therefore, that the noble Lord, Lord Young, said that he found so little to agree with in the speech of the noble Lord, Lord Bruce, since I thought that, even by my standards, the noble Lord, Lord Bruce, devoted a very modest portion of his speech to criticising the Government. It seemed to me perhaps to be a slight case of "malice imaginaire", which I hope was not brought on by any of the remarks that were slipped in by the noble Earl, Lord Stockton, like little pins into a velvet cushion.

My noble ally, Lord Ezra, has spoken so well and authoritatively on the opportunities and problems for industry in an era of rapidly changing technology, and my noble friend Lord Young of Dartington has made the fascinating and important case for the role of Government purchasing as a tool for technological transformation.

Even if your Lordships' House tonight does not contain as many as the 26 Nobel prizewinners that Trinity College, Cambridge, can boast, the scientific expertise of many of the speakers makes it an almost impossible task to wind up without creating a great sense of anti-climax. Let me try to summarise very briefly the challenges and opportunities that might lie ahead of us. The new technologies have the potential to change radically our working lives and our leisure hours, our life expectancy and the quality of life, our security and our international relations, the environment and our culture, our prosperity and our wealth.

In all these cases, however, even with an absolute mastery of the technologies and with the flexibility, wisdom and understanding to be able to adopt every new one which emerges, there are formidable obstacles to using the technologies as well as we should, to using them for good rather than ill and to coping sensitively with the enormous human problems created, even if only temporarily or transitionally, by the technological changes.

It is to face this challenge that I believe we all need the type of optimism and enthusiasm displayed by the noble Earl. But I said, "even with an absolute mastery of the technologies", and your Lordships today have raised many doubts and produced much evidence that we will not have that mastery of technology. The seeds of that failure to grasp the new technologies are being sown by the excessive financial stringency now being shown by the Government towards the world of education and research, whatever the success of the YTS and TVEI initiatives and of a few specialist schemes.

My noble friend Lord Young of Dartington emphasised so clearly the waste and harm caused by allowing the whole state educational system to be demoralised and run down over the length of the Government's office when now, just as much as in the 19th century, the private schools, whatever other strengths they may or may not have, are not at the forefront of scientific engineering and technical education.

The noble Earl, Lord Stockton, has achieved national notoriety for the phrase: "Selling the family silver" with which to describe the Government's privatisation programme after my noble friend Lord Diamond has used it frequently in your Lordships' House. I am sure that the noble Earl, as a distinguished publisher, in addition to the other remarkable aspects of his career, will be able to agree royalty terms with my noble friend Lord Diamond, assisted, if necessary, by the literary agent of Mr. Jeffrey Archer. But perhaps such royalties could be waived if the noble Earl continues to publicise the false economies practised by the Government.

The financial constraints imposed at all levels of education and research are disastrous false economies whose long-term effects will take years to become fully apparent. Without the same metaphorical facility as my noble friend Lord Diamond, I would suggest that it is like selling the children's schoolbooks to pay for father's membership of the MCC which, as your Lordships know, stands for the Monetarists' and Cutters' Club.

Just as, on a smaller scale, private sponsorship of the ails—to pick up an earlier discussion today—should not and cannot take the place of the Government's continuing financial support for the Arts Council, so business support for universities, polytechnics and pure research, however desirable as extra complementary finance, cannot relieve the Government of their obligation to provide financing in these areas on a scale commensurate with the speed of change and the central importance of the new technologies that we have discussed today.

The noble Lord, Lord Young, further confused me with his fascinating review of the early railways and other aspects of Victorian life. I think that he approved of the entrepreneurial initiatives which established the railways, but rejected the anti-business attitudes which allowed our industrial pre-eminence of that time to be squandered. I had always thought that the Government—or the Prime Minister, at least—supported Victorian values, but then I suppose, as so often one has to pick and choose in any manifesto.

Where I am pleased that the noble Lord, Lord Young, renounced the Victorian principles of free market forces was in his strong advocacy of Government intervention in investing in and supporting the information technology industry. The SDP Green Paper on exploiting the new technologies, published in July, probably goes rather too far for his taste in proposing Government funding on a concessionary basis among its other policies, but I would nonetheless commend it to your Lordships.

I awoke this morning to hear the right honourable friend of the noble Lord, Lord Bruce, Mr. John Smith, talking on the radio about the Labour Party's similar policy document, much of whose analysis and some of whose proposals seemed very similar to the SDP's. As the noble Lord, Lord Bruce, did not mention it, perhaps I could persuade him to read ours instead.

The importance of Government, or Government sponsored, funding in high risk and long lead time high-tech industries can be clearly understood if your Lordships consider the growing divergence in the timescales under which industry and the City operate. Industrial investments involve longer and longer lead times and pay back periods, while stock market judgments and the performance of financial institu- tions are based on shorter and shorter—often quarterly—periods. Some assistance to the industries of the new technologies is essential, and I urge the Government to increase further generously and imaginatively, the support that they are already giving.

The noble Earl, Lord Stockton, has introduced a memorable debate whose subject has encouraged remarkable and stimulating contributions from every side of the House. The challenge of the new technologies represents a chance for tri-partisan policies to be adopted to ensure our future prosperity and welfare, and I hope that the moderate and restrained comments made today about the Government's policies in this area will encourage such a consensus policy to be formulated by the noble Lord, Lord Young, and his colleagues.

9.50 p.m.

Lord McIntosh of Haringey

My Lords, I propose to concentrate on the public policy and the political aspects of this Motion not only because I am totally unqualified to comment on the technological and philosophical side of it but because I believe that is what the noble Earl, Lord Stockton, to whom we are deeply grateful for giving us the opportunity to hear him and to debate this matter, meant by putting down the Motion in these terms. After all, the economic and social consequences", are exactly those consequences which affect public policy and with which we, as part of public policy, ought to be concerned this evening.

I am encouraged that I am able to do that by the fact there is so much common ground among noble Lords on all sides of the House about the inevitability of technological change. If I may say so, the noble Lord, Lord Young of Graffham, misjudged the spirit and the temper of the House to some extent when he spent the first 10 minutes of his speech talking about the period up until the 1850s. I did not sense at all in the House this afternoon or this evening any Luddite tendencies. I did not sense any feeling that the new technologies could or should in any way be resisted. I felt that there was a common ground between all of us that, whatever our anticipations of the benefits or lack of benefits of new technologies, we had no option but to make the best, and even better than the best, of the opportunities we have through their introduction.

We can look at these opportunities and dangers with a considerable degree of unanimity on all sides of the House. There is the prospect of job loss, and there has been a great deal of job loss in this country as a result of the death of low technology industries. But there has been a considerable increase in the number of jobs, as yet a much smaller increase, directly due to electronics and directly due to technology. The noble Lord, Lord Young, himself quoted the figure of 45,000 jobs in electronics in Scotland, which is higher than the total number of jobs in three of what we have to call the sunset industries.

It is not just the number of jobs that come through the new technologies; it is the fact that these are better jobs. They are more congenial jobs, they have greater variety, and they require greater and more adaptable skills. It is not just the nature of the jobs themselves. These jobs produce products which make our lives more pleasant. There seems to be some disagreement about the virtues or otherwise of non-stick pans, but in most cases we feel and experience in our daily lives the advantages of new technology in electronics from the moment in the morning when we switch off our alarms to the last thing at night when we switch off our television sets. These are not unalloyed advantages—there are those who resist them—but nevertheless they are real.

Beyond that there is the opportunity which is given by new technologies of a different form of organisation of work, a different form of interaction between work and leisure. I do not mean that purely in the negative way that has been referred to on one or two occasions. Yes, my Lords, of course it will be true that some people will be forced to work less and for less remuneration that they would wish, although a great deal of the part-time working to which the noble Lord, Lord Young refers consists of second jobs rather than first or main jobs. However, there is the prospect that more people will be able to arrange their work around their other interests; to formulate job patterns which are not necessarily full-time, and which do not necessarily operate all the year round or involve one wage earner per family. Conventional job patterns are no longer as applicable to modern society as they used to be. A flexibility of working patterns is made possible to a considerable extent by new technology.

The noble Lord, Lord Harris, made effective reference to the loss of agricultural jobs at the time of the first industrial revolution. Indeed, I would have said that it was more the previous agricultural revolution of the late 18th century which caused those job losses in agriculture. We have learned in Western Europe and in the United States—as other parts of the world will no doubt learn—that we are able to feed ourselves on the labour of fewer than 10 per cent. of the adult population of this country. We may well learn that we are able to make the physical goods we want on the labour, in the traditional sense, of 10 per cent. of our working population.

Is that necessarily a bad thing? There are many other things which people want to do and can do which would enrich their lives. There could be social and economic consequences of very great value to us, if we use our opportunities aright. This is where I come to dealing with the issue of public policy; of the people who will be involved in our economy and in the resources which we shall be devoting to adapting to our new economy.

In the course of this debate, many noble Lords have quite rightly concentrated on the problems of the skills required and how we are to achieve them. They have concentrated on education and training as well as on the more scientific and technological issues of how applied research is to be supported and encouraged, and how it is to be developed from research into positive investment in industry. I will begin with education and training and make one or two comparisons with one of our more successful competitors—the Federal Republic of Germany.

I begin with our schooling system, before moving on to vocational training. Here, the contrast between Britain and Germany is very great. The proportion of British school leavers entering the labour force—or, as is so often the case, unfortunately, not entering the labour force—who leave school with minimal educational qualifications such as three O-levels in English, maths and one modern language is only 12.2 per cent. in Britain, but is three times as high in Western Germany. If we consider the British figure rather more severely by adding a science, which could not be said to be extremely severe, we find that only 10.5 per cent. of school leavers in Britain have that degree of qualification. That contrast between Britain and Germany is not acceptable. It is not just unacceptable for the future, but we know from comparative studies that it is not acceptable in terms of the skills of our existing workforce.

Studies were published this year by the National Institute Economic Review which make detailed comparisons in the machine tool industry between the British workforce and the German workforce and between the conditions under which they operate. That study concluded that the lack of technical expertise and training, rather than a simple lack of modern machinery, is the stumbling block to success in the machine tool industry.

That does not occur just at the workplace. If one looks at the vocational training initiatives, while I do not wish to attack the Youth Training Scheme or the TVEI at the moment, I believe that they have many defects. One finds problems there, too. The same article from which I have already quoted comments that the YTS has a lack of examinable standards". I believe that is a fair criticism and that the Government would accept it is a fair criticism, when one considers the demands which will be made on our labour force.

The study comments on the TVEI that, while it may help raise the proficiency of the unskilled, much more will be necessary if at least some section of the workforce is to be raised to the higher skill standards implicit in the German vocational scheme". There is a great deal more to do and we must not fall into complacency, even despite our recognition of the efforts which have been made. I do not think that it is necessary, after the weighty contributions that have been made about higher education, for me to repeat that. I want to say only that I thought that the attacks on Salford and Aston were particularly unwelcome.

Lord Young of Graffham

My Lords, will the noble Lord forgive me? I was actually praising Salford and Aston, I have been very impressed on my visits and have nothing but the highest regard for the vice-chancellors of both institutions.

Lord McIntosh of Haringey

My Lords, if I misinterpreted the noble Lord I can only apologise. I thought I heard him say that the vice-chancellors, when the cuts in resources were made, had acknowledged that they were defective and not working as efficiently as they should be. If I am proved wrong when we see the Official Report I will certainly apologise, and I do so in advance.

The total amounts invested in research and in teaching in higher education are simply not good enough for the demands which are now being made upon our universities and colleges. Noble Lords with far more expertise than I have made that point eminently clear.

I turn now—pausing only to say that I agree very much with what the noble Lord, Lord Todd, and the noble Baroness, Lady Platt, said about continuing education—to the issue of applied research and development. Here again, I believe that there is no cause for complacency in our attitude towards our applied research and development effort. I take as one particular example the Alvey initiative. This was, after all, welcomed by the Government and implemented by this Government. It was intended to be a national collaborative effort with Government backing. There is no question of a conflict here between private sector funding and public sector funding. The idea was that it would be a collaborative effort between academic bodies and industry, with Government backing. The Alvey Report said that the financing should be 50–50 between Government and industry. In fact, it was 90 per cent. industry backing and only 10 per cent. of Government backing.

I am sorry to say that only today we have seen further examples of the lack of progress—if I may put it that way—in the Alvey initiatives. We learn today that GEC has opted out of the Cobweb initiative under the Alvey research programme. We learn today that perhaps the most important initiative—the Flagship programme at the Imperial College, London—has been subject to a visit by the American Defence Department. The Government's reaction to that appears to be that it is fine and they do not mind if American defence funding takes over from other funding on this most important aspect of the Alvey programme. I cannot believe that those two facts come from an entirely clear run of progress and success in the Alvey initiatives. I cannot believe that we are moving fully in the right direction in the form of applied research.

A number of noble Lords referred to artificial intelligence and the fifth generation of computers. We have two distinguished centres in this country for the study of artificial intelligence; but the Americans have at least 10 and the Japanese have at least 30 centres. Here, again, we are not keeping up with the work that is being done in other countries. This is not because we do not have the abilities among our scientists and our technologists but because the Government are not giving them the kind of support which the German, Japanese and other governments are giving them. I can only say that I listened with horror to what the noble Lord, Lord Gregson, and the noble Lord, Lord Sherfield, said about the Government's response yesterday to the report of the Select Committee on Science and Technology. I have not had an opportunity to read that response, but I read the debate and the report, and to hear so much lip service being paid to the need for better vocational education in these areas and then to hear that what is proposed is that there should be advice from the Government to those responsible, rather than positive support, filled me with horror.

The issue of applied research then goes on to the question of actual investment, and I know that my right honourable friend John Smith, to whom the noble Viscount has referred, has spoken on this matter and has made his views very clear. I share those views. The fact of the matter is that the financial institutions in this country have not provided adequate support for technological investment, and where they have provided support they have proved to be exceptionally cowardly in the face of what may well be temporary setbacks.

Look at what has happened to the share prices and the management of some of our companies like STC or Hewlett-Packard, where the City seems to back away from the slightest hint that there might be something wrong. In point of fact Hewlett-Packard has increased its labour force by 12 per cent. in the past year, though you would not get that impression from the way it is being treated in the business press.

We are not doing enough in terms of financial investment in high technology industries, and this is one reason why my right honourable friend said that there is a need for a national investment bank—and I agree with him. This is exactly the kind of example where we need positive action by the Government to interfere in our financial institutions. I know that remark will not please the noble Viscount, Lord Caldecote, but I believe the facts show that it is in fact necessary. As the noble Lord, Lord Young of Darting-ton, said, we also need to improve the procurement policies of the Government as our largest consumer.

I may be thought to have been somewhat negative in these latter comments. I have been negative. I believe the position is not as it should be. I believe that the Government have to go a great deal further than the sometimes complacent statements of Government spokesmen in response to detailed and factual criticism of our policies on education, training, investment in industry and all the things which are needed to make us technologically a successful country. H. G. Wells has already been referred to. He said that human history is a race between education and catastrophe. We shall never win that race if we are complacent.

10.8 p.m.

Lord Young of Graffham

My Lords, I think that all of us will agree—this is one area where we shall have consensus—that we have had a good run round the course today. We have ranged far and wide across the effects of new technology. We have covered not only the Motion itself but many references have been made to your Lordships' Select Committees on Trade and on Science and Technology. I hope we shall have an opportunity of debating the report on trade in full, and I hope I may be allowed to refer in a moment to our immediate response to your Select Committee on Science and Technology.

There is one matter which I should like to make clear right at the outset. Running as a thread through our deliberations today has been the concept that somehow consensus exists by itself, that it is an abstract good, and that if only we could get consensus, all would be better. I suspect that there was a fair degree of consensus at the Nuremberg rallies before the war. One could say that there was a consensus of the lemmings. What we must have consensus about is the right direction in which to go and the right things to do. We must never have agreement for its own sake. I wish to touch on the question of the direction in which we may go.

I reflected again on the contribution of the noble Lord, Lord Bruce of Donington, this evening. I thought that I would suggest to him that he might spend a little while with the noble Lord, Lord Harris of High Cross, who could explain the difference between market forces and planning and laissez-faire and planning. We believe very much in market forces and not in laissez-faire for its own sake. If one looks at the record of this Government and of other governments of this country, one sees that they intervene very much in our society—sometimes far too often.

Of course we plan. I stood here but two days ago and read the Chancellor's Autumn Statement which shows our spending pattern for the next three years. All governments plan. But we never believe that governments know better than people. Governments may say what products are required, what will sell and what products need to be produced, but in the end all economies find that the only efficient way is the market itself. I agree with the noble Lord, Lord Ezra, that competitiveness is the heart of our problem. It is no good just having products. We must have the new technologies, and what we produce and where we go with the new technologies must be competitive.

If I may refer for a moment to the right reverend Prelate the Bishop of Lincoln, another thread running through our discussions today is what happens to those who in the midst of change get left by the wayside—the long-term unemployed. I must tell your Lordships that that is not the subject of tonight's debate, but this Government have as good a record as any with their concern for those who have been out of work for some time. The community programme is expanding as fast as it can. There are about 10,000 places a month, and by next summer the figure will be up to 230,000. I was able to announce two new pilot schemes devoted specifically to help the long-term unemployed come back into work. I am looking closely at the output—what we produce with the community programme—and I hope very much that the necessity for such a programme will not be with us for ever. But while it is, I hope that we can do things to help people help themselves.

What I was concerned about was a deep sense of pessimism, perhaps portrayed by the noble Lords, Lord Gregson and Lord Todd—pessimism perhaps about education, but in particular about our response to your Lordships' Select Committee. I am surprised at that. I was concerned with a number of the recommendations, and what I thought that the Government had done was to produce action and not waffle. We have taken a large number of initiatives.

Noble Lords may not be overly enthusiastic about TVEI, micros in schools and many of the other programmes. I mentioned that we had gone through a programme, popularly known as "the switch", which will give an extra 5,000 degree places, largely in technology subjects. It is easy to talk about having many new places, but if we want new electronic engineers, such is the narrowness of our educational system that it takes nine years before one can affect the output. It is not a question of those who come into a degree course. One has to look at the A-levels or the A-level equivalent exams that they take, and that is two more years; and one has to look at the O-levels which govern them; so one goes back to young people of 12 or 13. The choices that they make then govern the degree courses that they take. Then there is the information technology and higher education initiative which we had already created by October of this year for 5,000 new degree and higher diploma places in electronic engineering and computer science.

We rejected the concept of setting up yet another board to plan the future direction of training and courses. I had the privilege of spending two and half years as chairman of the Manpower Services Commission—a tripartite body which was originally set up with the idea of planning the labour market. I know that its record and the record of all planning in the labour market is perhaps only as effective as all long-term planning is. It just does not work. We have to develop flexible systems which have a quick response, and I believe that that is the way we are going. I hope very much that noble Lords will look again at the Government's response to our Select Committee and will realise that we have taken all practical steps—

Lord Sherfield

My Lords, will the noble Lord give way? I had intended to say that, of course, we have had only a day or two to read this report. We shall certainly study it with great care in the hope that we may find a nugget or two embedded in the prose.

Lord Young of Graffham

My Lords, I am comforted by the fact that, in history, most of the gold strikes started off with a nugget or two. I hope the noble Lord will keep panning for it.

I am grateful to my noble friend Lord Bessborough for his kind remarks about myself, his story about robots, which I shall unhesitatingly use, and for the sense of comfort that it gives me. I can perhaps comfort my noble friend Lord Fairfax of Cameron about the effect of high technology on employment. There have been many people who have forecast doom and gloom about the outcome of technology, from the Luddites onwards. I just cannot see this happening with fifth generation computers, or the sixth, seventh or eighth, because the whole history of mankind shows that the more technology we introduce so we increase, time after time, the demand for jobs. The trick and the difficulty is that these are often different sorts of jobs. There, again, we must be able to show that we are adaptable and that we welcome change.

I can perhaps say a word to the noble Lord, Lord Hatch of Lusby. We have a long and distinguished line of prophets of woe and gloom from Malthus onwards, always prophesying that the world is about to run out, over-pollute or whatever. In the world today there are only two areas that do not have food surpluses—the Soviet Union and Africa. I hope very much that the Soviet Union will go the way of China and produce food surpluses. I suspect that if it changed its economic system it might do so, because it used to be the grain basket of Europe. I look forward very much to the time when Africa becomes a part of the world that can support itself. We shall then live in a world composed entirely of food surpluses.

I take the warning of my noble friend Lord Bauer that we must not change too fast and that we must look closely at the burden of bureacracy.

I come to my noble namesake, the noble Lord, Lord Young of Dartington. I should like to say at the outset that I certainly did not intend any reflection on Harrow. I did not go to Harrow, nor did I go to Eton; nor to any public school if truth be known. I intended no reflection at all. I was talking about the type of education and not the institution. This evening, many noble Lords have talked about our teachers. I believe they have confused the desire to raise standards with the demand to spend more money. It is a delicate matter to discuss the teachers' dispute at this stage. I have no wish to say more than that there is no other aspect of human activity in the private sector where the qualities or standards of service are more considered. I know very much that the Government will be more than happy to deal with the situation if we can just look at standards of service to see where we are going. Our desire surely must be to improve the quality of the education system. Yet this is the one area of human endeavour where we cannot equate the quality of the output with the quantity of money going in. I shall come to that in a moment.

I am grateful to my noble friend Lord Caldecote for what I might describe as a cheery contribution. He exuded a sense of optimism—and a sense of optimism was in rather short supply, I thought, during most of the debate. We must be looking for enthusiasm in which to embrace the new technologies. I was not cheered by the comparison of the Booker award with his award and I shall in future be quite careful in the way I go around recommending Booker. But I shall indeed try to find out who wins the noble Lord's award next year.

I know that the noble Baroness, Lady Warnock, has apologised for not being here. But the noble Baroness was very concerned not only with the teachers but with the amount of money we spend. Perhaps I could bring all those together and talk a little later on about the quality and quantity of money.

May I say to my noble friend Lord Massereene and Ferrard that I shall apply to the noble Viscount for a job when the time comes. It seems to me that he will be a very suitable employer. The noble Viscount mentioned during his contribution the change in employment in agriculture. This is not to do with the 18th or 19th century. At the beginning of this century 30 per cent. of people in employment in the United Kingdom were employed in agriculture. Today it is 2½ per cent., and we produce six times as much food. I am not saying that there are parallels in manufacturing but that result comes of technology which was embraced with enthusiasm.

I am sorry that I may have confused the noble Viscount, Lord Chandos, with my remarks about Victorian England. In fact I hope that the noble Viscount will read the record. I was looking at the great enthusiasm with which entrepreneurship was embraced in this country and the way in which it was distorted at the very end of the Victorian period. If one looks at our history and what we did to ourselves, I think it comes through very clearly that it is not just high technology; it is high technology combined with entrepreneurship with a sense of exploiting the commercial worth.

Turning to the contribution of the noble Lord, Lord McIntosh, I apologise if I misjudged the mood of the House, but I suspect that I did not because I have never thought that this House would ever be accused of Luddism. My contribution was intended to be a paeon of praise to the entrepreneur because that, as I say, is not only the essential element of technology, but should be the essential element of an education system that looks very closely to see that these things do not come about by state planning which leaves others to make the decisions. This comes out of the drive and initiative of individuals.

When we look time and again at the educational system, and when we say time and again that this Government do not give enough resources or assets, surely we should accept very clearly that the differences between the output of our educational system and that of the educational system in Germany is not merely a question of money or resources. The noble Lord opposite will know that in the area of the world from which he takes his title the pupil/teacher ratio is fifteen to one, some 20 per cent. lower than the national average. One cannot equate the output of education, as the noble Lord well knows, in his area with the pupil/teacher ratio. The two do not go together. It is quality.

When we come to quality of education I hope that there will be a more general recognition that not all our young people are naturally academic, and that one of the reasons why only 12.2 per cent. of our young come out of the school system with the equivalent of three O-levels, and that three times as many come out in Germany, is because when one looks at the education systems in Germany and in France one finds that they are not totally or specifically academic. They embrace more pragmatic, vocational subjects as well, and appeal to a much higher percentage of young people.

I gladly accept that the youth training scheme has a lack of examinable standards. Of course it is not perfect. But in two or three weeks' time, after two and a half years of existence, the one-millionth young person will be entering the scheme. How could it possibly be perfect when two and half years old? We have a compulsory system 110 years old and we are not yet satisfied with that. But I know that standards are improving each year. I hope that in a very short period of time the noble Lord opposite will come to me and say that he is more than satisfied with the success of the youth training scheme; but I am an incorrigible optimist.

Lord McIntosh of Haringey

My Lords, I hope that the noble Lord will come to us in Government and say the same thing.

Lord Young of Graffham

My Lords, I am not a pessimist but an incorrigible optimist. I should like to end with two matters. This debate for me was a notable first. I have not commented on the contribution of the noble Lord, Lord Kaldor, who gave us a history lesson which started in the second quarter of 1979. What happened in the two years after the second quarter does have some reference to the events which happened in the two years before the second quarter of 1979.I hope that the noble Lord will give me an opportunity to discuss this with him one day. Rather surprisingly for me, he accused my noble friend Lord Fairfax of Cameron of being a Luddite and there I found myself in total agreement with him. I am grateful to the noble Lord that we have one view in common.

I should like to make one point about the City. I find it a difficult concept to say to the City, "You are being cowardly". I spent many years as a banker and the one thing I learned was that the cowardice never came into it. There was such a thing as prudent lending and such a thing as reckless lending; and reckless lending always comes to a sticky end.

The noble Lord opposite mentioned Hewlett Packard. Hewlett Packard, an American company, not ours, has one great lesson for British employers and an even bigger lesson for the British work force. A few months ago Hewlett Packard said to its work force. "If we are to maintain employment the way we want it to be, I am afraid we shall all have to take a 5 per cent. salary cut and get our productivity right to maintain ourselves in existence", and they did so. That is a lesson which other countries have followed.

I am not in the business of persuading people to take less; I am in the business of helping productivity—and here I agree with the noble Lord, Lord Ezra—so that our businesses can flourish, and in this country that has not been a notable tendency of ours. But I would never accuse the City of being cowardly, and I worry greatly about the concept that a bank that invests does so with a sense of bravery.

One of my early jobs after 1979 was to look at the results of the "brave" investments of the National Enterprise Board. I hope very much that if there ever should be a national investment bank—but I think that is a fairly remote prospect—it would actually invest with prudence. I think that bravery is something that should be left for another place.

We have had an interesting discussion. We have looked at many aspects of the future. I suspect once again that technology is merely a by-line. The real test of our adaptability to tomorrow's world is not new technology but old attitudes. If we can bring back a sense of entrepreneurship, a sense of enthusiasm, a sense of commitment, then we shall once again do what we did so well in the past, and that will give us another industrial revolution.

Lord Young of Dartington

My Lords, before the Minister sits down, perhaps I may ask this question. He has covered many points, but is he able to say something about Government purchasing policy?

Lord Young of Graffham

My Lords, I shall undertake to speak to my colleagues with regard not only to mattress purchasing in the DHSS but the way that the DHSS looks at it, and I shall certainly take the noble Lord's ideas away and study them, if I may.

The Earl of Stockton

My Lords, I thank your Lordships for the debate and the interesting speeches that have been made. I ask leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.