HL Deb 09 June 1986 vol 476 cc70-2

7.37 p.m.

Lord Lucas of Chilworth rose to move, That the draft order laid before the House on 30th April be approved. [22nd Report from the Joint Committee.]

The noble Lord said: My Lords, I beg to move that the Cutlery and Stainless Steel Flatware Industry (Scientific Research Levy) (Abolition) Order 1986, which was laid before the House on 30th April, be approved. The effect of the order would be to abolish the statutory levy on the cutlery and stainless steel flatwear industry, which contributes towards the funding of the Cutlery and Allied Trades Research Association—CATRA for short. The levy was last reviewed in 1980 as part of a government review of all statutory levies, when there was a narrow majority in favour of its retention. Since that time, however, the costs in staff time involved in administering the levy have increased, whereas the number of companies paying it has fallen. The effect of this has been that these costs, which the Department of Trade and Industry cannot recover, now represent about one-quarter of the total levy money collected.

In view of this, the department undertook a further review in 1985. Representative bodies of both employers and employees in the industry were consulted and the levy-paying firms were balloted on two alternative propositions. The first proposition was to abolish the levy and the second was to raise the minimum qualifying turnover from its present £3,000 per annum to £100,000 per annum. This would of course have helped to reduce collection costs by exempting some of the smaller companies from liability to pay the levy. The results of this review indicated that their unequivocal support for the continuation of the levy did not exist. Given these findings and the disproportionate costs of collection, the conclusion drawn, therefore, is that it can no longer be justified.

The Cutlery and Allied Trades Research Association was also consulted and I myself met representatives of CATRA to hear their views. Indeed, I visited the research association's premises in Sheffield to see what was being done before there was a final decision. The research association has been kept fully informed of the outcome of the review and the proposal to abolish the levy. Indeed, I now understand that the association has accepted the proposal to end the levy and is setting about the task of developing other sources of income. I commend the Cutlery and Allied Trades Research Association for the pragmatism which it has shown and the realism which it has demonstrated in this approach.

In 1984, the levy collected amounted to only 27 per cent. of CATRA's total income, compared with 40 per cent. in 1979. On the other hand, CATRA's commercial performance has improved considerably in recent years, with income from private sector clients rising from 8 per cent. of total income in 1982 to 40 per cent. in 1984. In order therefore that CATRA can adjust to the loss of the levy income it is proposed that the termination of the levy should be delayed until the end of 1987.

In conclusion, I emphasise that this order is intended to remove a requirement which the cutlery industry has demonstrated no strong desire to have retained and which has become disproportionately expensive to administer. With that explanation, I commend the order to the House.

Moved, that the draft order laid before the House on 30th April be approved. [22nd Report from the Joint Committee.]—(Lord Lucas of Chilworth.)

Lord Bruce of Donington

My Lords, we are grateful to the noble Lord for having introduced this draft instrument this evening. Perhaps we ought to say how remarkable it is that all non-contentious items seem to come before us for affirmative resolution and that only the controversial ones seem to require the negative procedure. But that is neither here nor here on this instrument. We on this side of the House do not see any reason why we should do anything other than support the Government in the matter.

There is one minor point which the noble Lord may care to clear up. He said that the association accepted the proposals. There is a world of difference between acceptance and support. I take it that we can have the noble Lord's assurance that the association's arm was in no way twisted in this matter and that what he really meant was that the association entirely supported the proposals. Subject to the noble Lord's satisfactory reply to that query, we on this side of the House have no reason to do anything other than support the passing of the order.

Lord Lucas of Chilworth

My Lords, I took note of what the noble Lord, Lord Bruce of Donington, said in the earlier part of his response, over which I shall also pass. He asked me a specific question. The answer is, no. The research association did not have its arm twisted, but no research association receiving a percentage of its income by virtue of a levy likes to see that removed. Nevertheless, when we pointed out to the association the costs and the relative decline of that source of income and when we offered some two years to find additional sources, it accepted the wisdom of our approach in the best interests of its own industry. So I can say quite fairly to the noble Lord that its acceptance is alongside its support.

On Question, Motion agreed to.

Lord Brabazon of Tara

My Lords, in view of the fact that we are due to return to the Dockyard Services Bill in one minute, and as I think that all noble Lords who wish to take part in the Committee stage are present at the moment, I see no reason to adjourn the House.