Sitting of 12 July 1974

Preamble
The House met at Eleven o'clock
PRAYERS

  DIVISIONS (CASTING VOTE)
  Mr. Speaker: I wish to make a brief reference to the casting votes given by Mr. Deputy Speaker and myself yesterday, particularly as similar situations may arise in the near future.
  It is being widely said that in accordance with precedent we gave our casting votes for the Government. That might, quite unintentionally, be misleading. In accordance with precedent we gave our casting votes for the Bill as it had come to the House from the Standing Committee and against the proposed amendments, the proposed changes.
  We would have done exactly the same had the amendments been Government amendments, and on a tie we would have voted against them. To carry an amendment or, indeed, finally, a Bill, there must be a substantive majority and not a casting vote.

  WRITTEN ANSWERS (PUBLICATION)
  Mr. Tom King: On a point of order, Mr. Speaker. I have asked your leave to raise this point of order—of which I have also given notice to the Leader of the House—because I consider an important House of Commons matter is involved.
  You will be aware that the House of Commons has for a considerable number of days been severely inconvenienced by the dispute in the HANSARD printers. We appreciate the difficulties over this, and I would like to say immediately that we recognise the tremendous efforts being made to provide the House with as much information and as much of HANSARD as can be provided in these difficult circumstances.
  A point has just emerged which does not seem to have been raised so far but which is crucial to the working of the
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  House of Commons. I refer to the fact that no answers to Written Questions are being printed in any form that is available to hon. Members except the individual Member to whom the answer is given. This is a fundamental point. We are not naive on either side of the House.
  We all know that the Written Answer is a favourite device used by Governments to publish information which they are often obliged to publish for some reason or other. Often it is the least obvious way in which to pass on information. The Government hope that such a method will attract rather less publicity. It is our responsibility as Members to scrutinise Written Answers, particularly in those areas with which we are most concerned, and to see what are the activities of the various Departments.
  Many important matters can be disclosed through a Written Answer and it is vital for the proper working of this House that Written Answers are made available to all Members. I have not been able to check the position in the Lobby to discover whether its members are receiving copies of Written Answers. If they are, it is a privilege which they are receiving above those given to Members of Parliament.
  If the Government have a piece of information which they are obliged to make public they can persuade one of their friendly back benchers to put down a Question. They can issue the answer to him and, since he is under no obligation to publish it, no other hon. Member will have the slightest indication that the answer has been given. This is a serious matter, about which the Leader of the House or the Minister of State, who I am glad to see present, must give satisfactory assurances. If we are to proceed properly with our duty as Members, then Written Answers must be made available.
  Alternatively, the Government will have to undertake that because no controversial or difficult matters which would in any way be open to criticism can be published in the form of Written Answers, in the good name of this House, they will make statements on all occasions about any such matter which might otherwise be disclosed by a Written Answer.
  I know that many representations have been made to the Leader of the House. I

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  do not think it is betraying a confidence if I say that the chairman of our back benchers' committee saw the Leader of the House and was given assurances that all necessary papers would be made available. It has therefore come as a considerable shock to my right hon. and hon. Friends to find that the Leader of the House does not apparently consider Written Answers to be essential parliamentary papers. I am bound to say, too, that while the Leader of the House was extremely courteous, he did not seem to be aware that Written Answers were not being produced. That gave rise to considerable disquiet as to just how well the Government are controlling and coping with this difficult situation.
  I believe that this is an important parliamentary matter. How are we to do our job properly as back benchers? I know that I carry all right hon. and hon. Gentlemen with me in making this point. They know the importance of Written Answers and the importance of being able to see Written Answers from all departments. Therefore I hope that the Government can give a very satisfactory assurance on this matter now.
  The Minister of State, Civil Service Department (Mr. Robert Sheldon): Further to that point of order, Mr. Speaker. What the hon. Member for Bridgwater (Mr. King) has said is correct, and I must offer to the House apologies on behalf of those concerned. But it has been the practice in the past that Written Answers have been arriving very much later at times of overwork and stress, quite apart from disputes, than other material which is available in HANSARD and in other forms for the benefit of the House. The problem about Written Answers is that they result in a large quantity of material in a form which is not quite so readily duplicated or prepared for the benefit of the House as are other documents. If it is the wish of the House, I shall be delighted to see what can be done to make available these essential papers.
  Mr. Michael Heseltine: Further to that point of order, Mr. Speaker. While acepting the apologies that the Minister of State has made, may I ask him to go a little further and to assure us that in the course of his investi
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  gation he will make certain that the Government do not use the time honoured technique of the Written Answer to announce significant matters of policy?
  Mr. Sheldon: The hon. Member for Henley (Mr. Heseltine) will realise that a large number of the Questions put down with this point in mind are as a result of you, Mr. Speaker, rightly drawing attention to the large number of statements which have been made in the House and the need to convey material to hon. Members in ways which do not take up the time of the House. But I shall take note of what the hon. Gentleman has said.
  Mr. Richard Wainwright: Further to that point of order, Mr. Speaker. Can the Minister also assure us that, without disturbing the distribution arrangements, which must remain in the hands of Her Majesty's Stationery Office, he is giving urgent consideration to the installation of photo-litho machines in the basement of this building so that papers may be printed?
  Mr. Sheldon: Any change in the preparation of papers is your responsibility, Mr. Speaker, and that of the House, and I shall be guided by such instructions as I am given.

  WRITTEN ANSWERS (PUBLICATION)

    Ordered,
    That the Road Traffic Bill [Lords] be referred to a Second Reading Committee.—[Mr. Pavitt.]

  RIGHT HONOURABLE MEMBER FOR CHICHESTER
  Mr. Richard Wainwright: On a point of order, Mr. Speaker. With your customary regard for the physical disabilities which advancing age brings to many of us, will you consider adjourning the House for a moment or two so that the right hon. Member for Chichester (Mr. Chataway) may have an opportunity to be in his place?
  Mr. Speaker: Points of order should not be frivolous.

  INDUSTRIAL POLICY
  11.12 a.m.
  Mr. Robert Kilroy-Silk: I beg to move,
  That this House would welcome an early statement on the Government's industrial policy.
  I want first to extend a warm welcome to the hon. Member for Henley (Mr. Heseltine), who no doubt has come here to learn, and to my hon. Friend the Minister of State for Industry, who is more than able to provide the instruction which the hon. Member for Henley has demonstrated by his previous pompous and inane comments that he needs desperately. I hope that today we shall hear no more of the hon. Gentleman's claptrap of bright confident mornings giving way to gathering darkness which is his usual response to reasoned arguments by Government supporters in defence of the nationalised industries.
  This is a very important subject. It is one which deserves and demands a full, reasoned and dispassionate debate. I trust that the hon. Member for Henley will treat it with the seriousness which he alleges to bring to the subject in his public utterances but which he fails to convey in his remarks in this House. We do not want waffle, emotion and hidebound, prejudiced dogma. We want facts and argument. The Government have already outlined their plans for dealing with the weaknesses in our economy and for restructuring it to provide the basis on which we can expect growth in employment, in production, in exports and therefore in national prosperity. I hope that this debate will result in the clearer definition of those plans, a firm commitment to their implementation, and a clearer demonstration of the case upon which they rest.
  The case for greater public intervention in industry rests in part, of course, on the manifest and undisputed fact of the failure of private enterprise. It is a failure which has been demonstrated particularly in investment. It is a failure on the part of private industry, and the Opposition have not disputed these facts. The hon. Member for Henley did not dispute them when he had an opportunity to do so on 20th June. Private enterprise has demonstrated its failure and unwillingness to invest. Industrial investment fell
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  by 17 per cent. between 1970 and 1972, and it did not recover from that position. By the time that the previous Government left office in 1974, manufacturing investment was back at what it was in 1970.
  The most recent survey of investment intentions of manufacturing industry undertaken by the Department of Industry pointed to an increase in manufacturing capital expenditure of about 5 per cent. in real terms between 1973 and 1974, and hon. Gentlemen should be made aware that this was before industry had time to take account of the present Government's proposals for industry. All the nonsense which has been peddled in the media and in this Chamber about industry not investing because of its fears of the Labour Government's programme and policies is nailed by these statistics. Investment fell catastrophically under the previous administration.
  Investment intentions of industry, as announced before our plans were presented, show that industry lacked confidence and was unwilling to invest as necessary. One example is North Sea oil and gas. One could not choose a more graphic example of industry's lack of imagination and entrepreneurial skills. Here was presented the greatest opportunity for British industry to provide the services and the technological skills for a major development which could bring enormous benefits and be of great value to the country. Those opportunities have been allowed to slip away to competitors in foreign countries.
  This is what private industry is supposed to be about. It is supposed to be able to grasp these opportunities to use risk capital to exploit our resources. The one major resource that this country has had in the past few decades has been almost totally ignored by private industry. There is no more powerful argument for new institutional arrangements like a national enterprise board to stimulate investment than British industry's failure to invest in the exploration and exploitation of North Sea oil and gas.
  The Opposition and their friends in industry are the first to talk about patriotism. It tends to be a favourite word on occasions like this. They are also the people who are witnessing and in many cases encouraging a steady drip of British investment abroad. Take, for

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  example, the Slater Walker organisation. Here we have a company which is not content with asset-stripping—and I am talking about British industry's failure to invest—throwing men out of work in the search for a quick and easy buck. In the past week, the company has sold off £50 million worth of securities because it can get a better return on loan capital than by investing in British industry. That in itself is a condemnation of the morality of private enterprise and of the private enterprise system as a whole. At the same time as hon. Members opposite tell us that more investment is needed in industry, their prototype entrepreneur is rushing round selling off industrial assets and taking investment out of manufacturing industry and putting it into loans.
  Just as private industry has failed in investment, so it has failed, quite naturally, in providing jobs. It has failed to innovate and expand. It has failed to provide a reasonable scatter of jobs throughout the country. It has shown a complete and utter disregard for the regions. There are high profits, high prices, high unemployment and low pay, low productivity and excessive overtime.
  The regions, in particular, have been badly served by private industry. In its search for the quick, easy profit, private industry has neglected to deal with the problems of areas which require far more industrial investment than has been allocated to them and a better creation of jobs. At the click of higher profits elsewhere, factories are closed, redundancies are announced, men are thrown on the scrap heap and the livelihoods of families and of whole towns are put in jeopardy.
  That has happened time after time in Kirkby, in my constituency, where there is already an excessive and unacceptable level of unemployment, particularly among school leavers. Over 2,000 redundancies in the area were announced during the latter period of the Conservative Government's term of office. Nearly 4,000 adults are unemployed in a total adult population of just over 35,000. Industry must be made to serve the people, not profit.
  What we want from the Government, indeed what we want from all Governments—and here I address myself to my hon. Friend the Member for Walton—
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  is greater regional aid. Specifically, we want Merseyside, with its very high level of unemployment, to be made a special development area and to receive, as a result of being given that status, all the extra incentives and Government grants and aids applicable. Merseyside, because of its history and need for restructuring, and because of a large amount of dereliction and obsolescent factories, needs more Government assistance than has been forthcoming. I know that the Government are actively considering the question whether to give it special development area status. I should like, if not a clear commitment, then a warmer appreciation of its problems to be shown than has been shown by previous administrations.
  We want for the regions stricter control of industrial development certificates in non-assisted regions while certificates are made more freely available in other regions, particularly in the North-West. We want more Government advance factories and we want the Government to make it far more difficult to obtain office development certificates in the South-East. It is intolerable that offices should be built haphazardly and chaotically in a hotch-potch fashion in an already overcrowded and congested area when other regions are crying out for development and for the ancillary employment which it would bring in its train.
  Control must be exercised in the South-East and resources must be diverted to the regions, particularly to Merseyside. There must be a major dispersal of Government jobs from the South-East to Merseyside, and particularly to Kirkby. That is perhaps the most important objective of regional aid for Merseyside. We want the Hardman report to be implemented.
  It makes economic sense to bring Government work to Kirkby. Job dispersal would bring work to an area which requires it desperately and where employment opportunities are much needed. It would reduce expenditure on supplementary benefits. It would relieve congestion in the South. It would also be cheaper. The cost of leasing office accommodation in Kirkby is one-third the cost of leasing similar accommodation in London. The dispersal of jobs is an urgent necessity and, furthermore, it makes sound economic sense. We expect the

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  Government to activate the Hardman Report as a matter of urgency.
  Perhaps my hon. Friends who represent London constituencies will not entirely agree, but we believe that the London weighting system should be re-examined. We see no reason why people should be paid an extra allowance for congesting London which is already congested or why they should be attracted to an already overcrowded area. We accept that the allowance should be paid where necessary to people who perform essential services, but we want stricter control and certainly re-examination of the London weighting system.
  When we talk about public intervention in industry and the extension of public ownership, one of the criticisms frequently made by hon. Members opposite is that too much power is being concentrated. One of their major criticisms in previous debates has been the concentration of power which they allege nationalised industries involve. They are right: the concentration of power is a problem. Too much economic power is concentrated in too few hands. It is intolerable that men should be at the mercy of forces which they do not understand and should be controlled by anonymous and amorphous groups over which they exercise no control and little influence and which are accountable to no one. Many workers do not know who owns the company which owns the company which owns the company which owns their plant. This is the concentration of economic power which we should be considering, which contains abuses and is abused, and which is irresponsible and unaccountable. When talking about the concentration of economic power, let us be clear where it lies and where it is irresponsible. It is in the private sector, not in the public sector.
  Hon. Members opposite have the gall to talk about public enterprise being remote. We talk, fox want of a better phrase, although an apposite one, about the failure of capitalism. We must point to the duplication and waste which a capitalistic free enterprise economy entails. To illustrate the point, one has only to walk down any high street and see the proliferation of competing banks, insurance companies and building societies. No one with any sense of reason or who is intelligent can but doubt that it is
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  both irrational and a wicked waste of scarce resources that such duplication and competition should exist. It is about time that we took the banks, building societies and insurance companies into public ownership. No doubt the hon. Member for Henley, in one of his dramatic non-utterances—we have not had one today; I thought that we might have done—will say that that would be shackling them and putting them under something called State control.
  It is private industry which is on trial. It is private enterprise which is in the dock and which has been found wanting. But there are more compelling reasons for an extension of public ownership than the failure of capitalism. The issue is for what purpose the economy is to be run. The answer surely is clear and unambiguous: it is to be run in the interests of the community. The question is how is it to be managed and the answer, given the failure, inefficiency and waste of capitalism, is by greater public intervention.
  The case for greater public intervention is irrefutable. Capitalism has failed and its failure is demonstrated to all who can avoid party dogma and who can stray away from their colourful and emotive phrases to look at the facts. The traditional fiscal and monetary measures of managing the economy are inadequate. There was a time when it was believed that our Socialist objectives could be achieved by fiscal and monetary means, by a subtle managing, tinkering and general chivvying of the economy. The last five or six years have shown that the fiscal and monetary controls at the Government's disposal are inadequate to their purpose and will not enable them to achieve their objectives.
  It is obvious, too, that in spite of the mercantalist rantings of Conservative Members, private and public interests do not coincide. There is no coincidence between the private pursuit of profits by a Slater Walker and the public interest in providing jobs in the regions.
  In all the assertions about private industry being more profitable than nationalised industries, we should remember that it depends on the community. It is the community that has provided the infrastructure, built the roads, the railways and the airports. It is the community that produced the skills of management

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  and workers through its educational system. It is the community that provides all the services without which private industry could not exist?
  Mr. Stephen Hastings: Would the hon. Gentleman explain who actually takes the risks?
  Mr. Kilroy-Silk: The people who often take the risks and who come off worst are those who are exploited, who live in poor houses and poor conditions and who in future will have the risks taken for them by the Government. When hon. Members opposite intervene again, I hope that they will make substantive points.
  We assert that the public interest comes first and is final. The public interest is in investment, employment and exports, which are all inextricably linked. We have an interest, whether the Conservatives like it or not, in employment, investment, exports and the balance of payments, so we also have an involvement in their objectives. There is therefore a need for an organisation to promote jobs and investment. Tinkering is not enough. We need a fundamental restructuring not just of the economy or of economic relationships but of society as a whole. No one could dispute this; indeed, we should all welcome it.
  There is a factory in my constituency which is at present in the hands of the receiver, which is owned by International Property Developers. A property firm running a manufacturing company—
  Mr. Tom King: What was it before?
  Mr. Kilroy-Silk: If the hon. Member would care to make a point, perhaps he would like to get off his behind.
  Mr. King: Would the hon. Gentleman tell the whole story? Would he say how the factory became the property of that company?
  Mr. Kilroy-Silk: It was acquired by International Property Developers from Fisher-Bendix. This is the company that has now put its plant in Kirkby in the hands of the receiver. Hon. Members opposite have been putting down Questions asking for Government assistance. Suddenly, when their friends are in trouble, they want aid. Why is it right then but wrong when we want to do it for our objectives? Why is it right when 1752
  even the leader of the minority Tories takes an interest in the matter and decides, for straightforward electoral reasons, that they are now interested in bailing out private enterprise?
  I know that my hon. Friend the Minister of State, Department of Industry, has been deeply and actively involved in this matter and is very committed to this plant and its employees. He knows that for a long time I and the Secretary of State have been trying to deal with the problem created by this failure of private enterprise. Will the Minister give a categorical assurance to the 1,200 men whose jobs and the livelihood of whose families are in jeopardy that those jobs will be safeguarded by the Government? Certainly—I am speaking for the workers—I would welcome a Government takeover of the plant and premises.
  But what is important is not the side issue of having to bail out capitalism in its crisis but the development of a strategy for the future which is entailed in the creation of the National Enterprise Board, the objectives of which will be met by direct and positive intervention. It is intended that it will influence major companies in each sector by a competitive stimulus. They have clearly shown that they need such a jolt. It will rationalise industrial structure in each main sector in line with the long-term public interest rather than the short-term profit interest. It will act upon monopolies—something which Conservative Members have been concerned about and should welcome wholeheartedly.
  It will initiate new physical investment in the region and so create a better regional balance of industry and employment. A State holding company of this kind will provide not only a useful base for integrating firms and industries into the public sector but also new jobs. Instead of a hotch-potch, haphazard development, we shall have an orderly development of industry. Instead of congestion at one end in the South-East and deprivation at the other on Merseyside, we shall have a rational and fair distribution of our economic resources. The National Enterprise Board fits closely with the Government's policy on planning agreements. The hon. Member for Henley seems to think that it will be a great Draconian measure which will shackle companies, but it fits closely with the

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  objective of trying to develop strategic plans for stimulating invesment, production and employment.
  The objectives of planning agreements are simply to ensure that major companies work in concert with national priorities. Is that wrong? Of course not. Why, then, all the fuss about Draconian measures, why all this kerfuffle and fake orgasm about what will happen to British industry? What is wrong with the Government giving official assistance to firms which co-operate in the pursuit of their plans and policies? Do Conservatives give money away without conditions? Is it wrong or acting like a commissariat to give aid but to lay down conditions at the same time? Of course it is not. Hon. Members of the Opposition should realise that and stop making the kind of hoo-ha that they have been making in the past, and they should meet the case on its merits.
  Certainly there is nothing wrong with giving money to private industry. The previous Government demonstrated that. But what we are sick and tired of is the queue of Rolls-Royces one can see almost every day outside the Department of Industry, begging bowls of their passengers at the ready, they wanting cash without qualification or any form of control to be exercised. If we give financial asistance, we demand the right to take equities and to exercise a degree of intervention in those industries and companies. This is happening all the time. They are always asking for money. It was reported in the Financial Times on 9th July that the NEDC is now telling the steel casting industries to seek Government assistance under the Industry Act. The NEDC report shows that there is a failure to invest of over 60 per cent. That is both confirmation, on the one hand, of the failure of industry to invest and, on the other hand, an indication that it is very happy to have Government money but when it comes to the Government's saying, "Yes, but we shall make conditions" there are squeals of anguish.
  The whole House should welcome the Government's attempt to take hold of a rambling and discordant economy, to set national objectives and to give financial assistance to industries and companies in order to achieve them. All right—so it is a system of sanctions and incentives. But when have we not had such a
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  system? What, after all, was the Industry Act, passed by the previous Government? What was the counter-inflation policy but intervention and control—often of a very dictatorial kind, particularly in one specific area of activity? What was the Pay Board but intervention? What was the Resale Prices Act but intervention? We have always had a system of incentives, sanctions and Government intervention.
  What we are saying now is that what we want, expect and will get from the present Government is intervention that is logical, rational and determined by a set of priorities which relate to the national interest and not to the interests of private, irresponsible individuals. With the implementation of planning agreements, the National Enterprise Board and, along with that, a further extention of public ownership, we see our industrial strategy as being a combination of planning agreements, the National Enterprise Board and further extensions of public ownership.
  We want the public ownership of shipbuilding and ship repairing. I am quite sure that my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) will make the case for the nationalisation of those industries more than adequately. We also want—and we are now getting, it seems—the nationalisation of North Sea oil and gas. And why not? They are our resources. Should they not be exploited and developed to the benefit of the community as a whole? We want the further nationalisation of the pharmaceutical industry, road haulage, machine-tools, and the aerospace industry. The hon. Member for Henley has the lost of these. He is already sending it to companies. There is no need to repeat it now.
  Along with this, we shall be able, through planning agreements, the National Enterprise Board and a further extension of public ownership, to achieve a logical and coherent pattern of economic development. We shall be able to match jobs to the regions, to match investment needs to the necessity for promoting employment, to substitute stability and employ-men for instability and unemployment, to replace selfish interest with community goals, and to inject a social conscience and purpose into industry.

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  The Leader of the Opposition is very critical of our proposals. He makes some substantial points, which ought to be taken very seriously and which warrant detailed and comprehensive reply. Addressing Conservative workers in Leicester—I did not know there were Conservative workers in Leicester—on 9th July and referring to the nationalised industries and their problems, the right hon. Gentleman said that their demands for investment were enormous, that they were not responsive to customers' needs and that they had industrial relations troubles. He could have been talking of British Leyland, ICI or GKN. That is the only case that the right hon. Gentleman the Leader of the Opposition and his friends seem to be able to produce against our plans for further public involvement in industry.
  Mr. Tom King: Will the hon. Gentleman illustrate the facts with examples? He obviously speaks with authority on the industrial relations experience of ICI in comparison with the nationalised industries.
  Mr. Kilroy-Silk: I speak of the industrial relations problems of the British motor industry. The hon. Gentleman is well aware that the motor industry in general—
  Mr. King: I asked about ICI.
  Mr. Kilroy-Silk:—has the worst industrial relations record in the country. That has been demonstrated repeatedly by objective reports commissioned by the motor industry.
  Mr. Michael Heseltine: The hon. Gentleman is putting forward a sincere and interesting case, to which we are listening. He mentioned ICI. Perhaps he will give the figures.
  Mr. Kilroy-Silk: I shall write to the hon. Gentleman.
  It is also said that the nationalised industries are not efficient. That is a substantial point, to which, perhaps, the hon. Member would care to reply. The net output, per head, of nationalised industries between 1963 and 1974 rose by 124 per cent. In private manufacturing industry in the same period it rose by 95 per cent. Is that in dispute? Of course not. Does that demonstrate that nationalised industries are inefficient? It does not.
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  It demonstrates the contrary. I see that no hon. Members opposite want—
  Mr. Heseltine rose—
  Mr. Kilroy-Silk: We have flushed one out!
  Mr. Heseltine: The hon. Gentleman knows full well that figures of this sort depend entirely on the base from which one starts. If he would care to publish his detailed calculations as to how he arrived at those figures, we should, of course, discuss them with him.
  Mr. Kilroy-Silk: Certainly. If the hon. Gentleman had done his homework, as I should have thought he would have done before coming to this debate, he would have got the figures from a Press release of the Department of Trade and Industry. However, let me give another figure and another base. The hon. Gentleman wanted other figures. In 1972 the net output per head in nationalised industries was £2,962. The net output per head in private industry was £2,200. That is a different set of figures, a different year and a different comparison—but the same result. Private manufacturing industry has been shown to be far less efficient than the nationalised industries.
  Mr. Tom King: Will the hon. Gentleman give way?
  Mr. Kilroy-Silk: The hon. Gentleman is starting to behave like—
  Mr. King rose—
  Mr. Deputy Speaker (Mr. George Thomas): Order. We cannot have two hon. Members on their feet at the same time. As there appears to be plenty of time, if hon. Members can restrain themselves their opportunity will come.
  Mr. King: We were challenged, Mr. Deputy Speaker.
  Hon. Members: Sit down.
  Mr. Deputy Speaker: Order. Challenges are commonplace in this House.
  Mr. Kilroy-Silk: The hon. Member for Bridgwater (Mr. King) is acting like a jack-in-the-box. If he has a substantial point to make, I shall give way.
  Mr. King: The hon. Gentleman has compared outputs and said that output therefore equals efficiency. Output may be a factor of capital investment in the

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  nationalised industries. As the hon. Gentleman knows, investment in private industry has to relate to profitability, and the ability to finance capital investment. If the hon. Gentleman looks at output in regard to power stations in relation to capital investment figures—power stations which may cost as much as £50 million or £100 million—he will find that it is a very different matter from the output of, for instance, a shoe factory, where the capital investment per employee is much less.
  Mr. Kilroy-Silk: The point is still as valid as it was when I made it, namely, that whatever basis is taken—I gave figures for 1963–74 and again for 1972—productivity in the nationalised industries is much higher than it is in private industry. I refer the hon. Gentleman to the very learned and excellent book by Richard Price on the nationalised industries, which again demonstrates clearly, following a long and detailed research exercise and quoting a wealth of statistics with which I am sure the hon. Gentleman will be delighted, that productivity in the nationalised industries is far in excess of that in private industry. If private industry had shown the same progress as the nationalised industries have shown we would not be in the mess we are in now.
  It is argued that nationalised industries are uneconomic. They are often run as uneconomic enterprises, on the very valid and reasonable ground of social necessity. If Tory Members say that that should not be so, perhaps they should talk to some of the London commuters, and commuters in the regions, whose railway lines are subsidised. The anti-nationalisers would be the first to run with their banners, demonstrating, if we ever threatened to close an uneconomic railway line.
  The nationalised industries have been the unprofitable base on which private industry and enterprise has made private profits. There is no disputing the fact that the lower costs of the products of nationalised industries have subsidised private industry. Electricity, coal, gas, railways—because they are uneconomic, because they are often run as loss-making activities—have often provided an indirect and hidden subsidy to private industry. Even then, private industry cannot compete in the world markets,
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  and it fails to invest adequately and to provide jobs in the way it should.
  It is said, secondly, that nationalised industries are bureaucratic. Are they any more bureaucratic than ICI, Guest Keen and Nettlefold, or some other multinational companies? Of course they are not.
  It is said that the nationalised industries have industrial relations problems. I have already dealt with this point adequately. The one major sector in private industry which is the most highly advanced and which employs the most workers is the motor industry, and it has the worst industrial relations record. Even the miners, about whom we hear so much, came out on strike only once since 1926, and then only as a result of the divisive policies pursued by the Tory Government.
  Mr. Tom King: When was the hon. Gentleman born?
  Mr. Kilroy-Silk: In 1942. We have already seen the lack of initiative demonstrated by private enterprise with respect to North Sea oil and gas. The lack of initiative which is supposed to exist in nationalised industries exists clearly in private enterprise.
  It is said, finally, that there is freedom of choice in private industry. That is the phrase that is always used when hon. Members opposite are defending a vested interest, whether it be in private education, private medicine or private enterprise. Tory Members tell us that nationalised industries remove the element of choice. It is said that there are no monopolies in private enterprise; but there are. The right hon. Member for Farnham (Mr. Macmillan) who unfortunately does not seem to be here today, admitted in the debate on 20th June that indeed there are monopolies and that there is a great tendency to monopoly in private industry.
  In the end, the case for private enterprise comes from Lord Watkinson, who wrote in the Financial Times:
  "The case for private enterprise is a statement of belief."
  We do not hold those beliefs. We want to know what the Tory alternative is. We have adequately demonstrated our policy and our proposals. Our proposals have received the maximum of publicity,

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  particularly from Tory Members, even if it is often not the right kind of publicity. We have a right to ask what the Tory alternative is.
  The alternative is no policy—just waffle, humbug, and talk of bright mornings and gathering darkness, whatever that may mean. Is it a policy to stay where we are, to drift on?
  Mr. Raymond Fletcher: I must defend the Tory Party. When it was confronted with a new form of this type of crisis, it nationalised one company in one day, with my full and active support. I refer, of course, to Rolls-Royce.
  Mr. Kilroy-Silk: I am grateful to my hon. Friend. He has made an effective point.
  The hon. Member for Henley should take this debate a little more seriously than he has so far. I hope that he is learning something from it.
  We have a right to ask what the policy of the Tories is. What is the policy of the Tory Party, which spends so much of its time attacking our policy without putting one forward in substitution? Is it a policy simply to drift—as we were drifting for three and a half years under the Tory Government—from one crisis to another, with no co-ordinated plan? Tory Members are resolute and firm in walking backwards to the future. We have had far too much of that in the last three and a half years. We are sick and tired of the Department of Industry's being an outdoor relief for private enterprise. If private enterprise wants our money, it will have to serve our purposes and objectives.
  The case for public ownership can be and has been demonstrated beyond dispute, but we must ensure that in the further extension of public ownership we are subtle and sensitive in our approach. For example, I ask the Minister to make clear the Government's position on small businesses. There has been general comment and a great deal of unwarranted criticism about this, and perhaps the Government should bear some responsibility for clearing the issue.
  What we certainly do not want is for the Government to go along picking up the lame ducks and the pieces of private enterprise. We want a co-ordinated and
  1760
  a comprehensive approach. We want the Government to make clear, in their proposals and in the Bills which will be presented to the House, what the financial criteria will be for judging public ownership. They should put forward a clear definition of the relationship between management and customers. Above all, they should promote effective plans for involving workers in the running of the industries concerned.
  At this point I enter a caveat to the Government's proposals. I do not accept that the worker-director should be drawn exclusively from trade union officials. If we are to have greater worker participation, as hon. Members on the Government side wish, those workers must also come from the shop floor.
  In the debate on 20th June the Leader of the Opposition, talking about the 100 companies, said: "…others "—he meant Aims of Industry—
  "will make sure that those 100 firms are known in every constituency in the country; in every branch they have, no matter where they are, the workers will be told exactly what lies in store for them if this Government had a chance to implement these proposals".
  So they will—we shall do it. I have no doubt that the hon. Member for Henley sends our documents to all the major companies. I trust that he does. It is expected of him by Transport House. He is regarded as our main purveyor of literature, to the regions and to the companies.
  We are not ashamed of these proposals. The Secretary of State has already indicated that he will go on a barnstorming tour of the countryside talking to trade unionists, to workers, to employers. We do not wish to hide our proposals. We are not ashamed of them. We are proud of them. We are proud of them for their intrinsic merits and because we believe that they offer the only viable solution to the problems facing Britain.
  We have never sought to hide our proposals. They were fully debated at all our conferences. We produced numerous Opposition Green Papers on them. The proposals were in our manifestos. They have been debated in the House.
  Where are the hon. Members opposite who are so keen and so interested in this subject—all six of them, and one of them a minor Tory? They are so concerned about nationalisation that only five major

  1761
  and one minor Tory can drag themselves here to talk about it.
  Unlike the previous Government, we intend to carry out our manifesto and fulfil our pledges.
  Mr. Clement Freud: On a point of order, Mr. Deputy Speaker. The hon. Gentleman's argument has been fallacious enough without his departing from the truth and talking about minor Tories and major Tories. I do not know what sort of minor Labour Party man he is.
  Mr. Deputy Speaker: That is not exactly a point of order. As for defining truth, it is beyond me.
  Mr. Kilroy-Silk: I am very sorry. I would not have wanted in any sense to offend the hon. Gentleman. Perhaps I should have said "big Tories and little Tories".
  The right hon. Member for Farnham is very intelligent. That is why he removed himself to the back benches, I suppose. But at least he has a grasp of what our proposals are all about. He said that in essence they are socialistic. Of course, they are socialistic. We know, and the whole country knows, that they are socialistic. That is why we are here, to create a socialist society, and that is why there will be more of us here after the next General Election.
  12.1 p.m.
  Mr. Tom Boardman: We have listened with interest to a rather long speech from the hon. Member for Ormskirk (Mr. Kilroy-Silk). He began by saying that we want not waffle and emotion but hard facts. I waited anxiously for the hard facts to be produced. There was plenty of waffle and emotion, but such figures as were quoted by the hon. Gentleman were given in such a way that they were difficult to interpret, and I thought that the hon. Gentleman's interpretation was completely fallacious.
  I shall not detain the House by referring to the right hon. Gentleman's comparison between the public sector figures and the private sector figures, in terms of the rate of productivity and efficiency. By doing a little research, the hon. Gentleman can see that he drew a completely wrong conclusion.
  Mr. Martin Flannery rose—
  Mr. Boardman: No, I will not give way so early in my speech.
  Mr. Flannery: Will the hon. Gentleman be kind enough to give way on this point?
  Mr. Boardman: No, I do not propose to give way at the beginning of my speech. If there are points which the hon. Gentleman wishes to make, he may have an opportunity of doing so if he catches your eye, Mr. Deputy Speaker.
  What worried me about the hon. Gentleman's speech was not so much its effect on industry as the attitude that it represented from the universities. It is apparent that he has been filled with fallacious ideas about the way in which industry operates, and what is more worrying is the fact that he may have been passing on those ideas as a university lecturer. I am filled with fear about the effect of this sort of indoctrination in universities concerning the way in which industry operates in this country. The hon. Gentleman said he did not know that there were workers in Leicester.
  Mr. Kilroy-Silk: Tory workers.
  Mr. Boardman: I beg his pardon—Conservative workers. I assure the lion. Gentleman that there are many workers in Leicester, in addition to those who voted Tory in previous elections, who will be voting Tory in the next election, in defence of the private enterprise system which has contributed so much to the prosperity of that city.
  I have a good deal of sympathy with the suggestion that the House would welcome an early statement on the Government's industrial policy. I am sure that we would all welcome such a statement. We have releases and speeches outside this House from the Secretary of State for Industry. Whether they represent official Labour Party policy is always in some doubt, because the Paymaster-General then makes a speech in a different tone and we are left wondering what is Labour Government policy towards industry. We know what the policies of the Secretary of State for Industry and his Minister of State are. We know,

  1763
  indeed, the policy which the hon. Member opposite who opened this debate, wishes to adopt, but we should welcome a clear statement of Government policy.
  I was particularly concerned to hear, yesterday, that the White Paper which we expected this month may not be published while the House is sitting. The Leader of the House said that in any event there would not be an opportunity to debate it. It is scandalous that a Government should produce a policy document of that nature, with such a fundamental impact upon our industrial life, at a time when this House is not sitting and when the document cannot be debated. I hope that the Government will reflect on that matter.
  The hon. Gentleman, in his philosophy about industry, seemed to have overlooked the basic purpose of industry. The rôle of industry must be the creation of national wealth. In doing that, there are many objectives which it must fulfil—social objectives and the like—but without the creation of national wealth by industry the social objectives of the nation as a whole can never be attained.
  Mr. Kilroy-Silk: I accept the point. Of course, that is so. But what is more important is how that wealth is distributed, once it has been produced. It has been demonstrated that private industry is failing to produce the wealth. That is why we want greater public involvement in industry.
  Mr. Boardman: The hon. Gentleman says that it has been demonstrated that private industry is failing to produce the wealth. I waited to hear some of the hard facts in such a demonstration. The hon. Gentleman in his reference to the City of Leicester showed a complete lack of understanding of where wealth is created. It is created in the private sector.
  Mr. James Lamond: Is the hon. Gentleman not aware of the recently produced report by the Department of the Environment entitled "Strategy in the North-West", produced under the Tory Government? It is an inch-thick catalogue of the failures of capitalism to provide for the needs of society. Surely there is ample evidence there if the hon. Gentleman cares to read it.
  Mr. Boardman: I do not accept the hon. Gentleman's statement of what that document illustrated. Certainly it showed clearly the future needs in that area, the problems which had to be tackled and the need to create national wealth in order to tackle those problems. In creating national wealth there are requirements for incentives for personal prosperity, because the creation of national wealth and personal prosperity are complementary and are not conflicting objectives. This is something which the party opposite must learn.
  Hon, Members opposite must learn what are the needs of industry in order to prosper. They must recognise, as the Chancellor of the Exchequer has not done, that industry must have a healthy cash flow. The Chancellor of the Exchequer has completely misunderstood the figures, or, if he has understood them, his interpretation of them has caused considerable alarm. Yesterday, at Question Time, he referred to the cash resources available to industry. He said that at the end of 1973 industry had liquid assets of over £10,000 million, claiming, as he had done on previous occasions, that industry was not being squeezed for cash. Yesterday, as on previous occasions, he overlooked the fact that bank advances to industry were over £14,000 million and that there was a negative liquid position of £4,000 million. Industry is desperately squeezed for cash—a squeeze that has been accentuated in a dramatic and highly regrettable way by the Budget which the Chancellor introduced.
  The impact on industry is very grave indeed. Industry needs to invest. The hon. Member for Ormskirk referred to the need for investment, and I endorse what he said. There must be investment in order that our industries can be competitive with, and we hope ahead of, industries overseas, but in order that they can invest they must have cash. This is one thing which, above all, the Chancellor's budget made scarce.
  The Chancellor of the Exchequer and, indeed, the Secretary of State for Industry have taken a complacent attitude about investment. The Chancellor has said that investment is going ahead strongly, and the hon. Member for Ormskirk compared the level of investment in 1972 with previous levels. But both of them—indeed

  1765
  probably all hon. Members on the Government side—seem to overlook the time lag between investment intentions being formed and taking place, the period that elapses between the time when a board sits down and looks at future plans, the time when it eventually decides to build, perhaps, a new factory, or install new plant, and the time when those plans are turned into hard orders which qualify as investment. The time lag varies from industry to industry, but between 18 months and two years is a fair measure of the period between the time when those who are to invest form their plans and the time when their intentions turn into steel or bricks and mortar.
  When the Chancellor of the Exchequer or the Secretary of State for Industry refer to buoyant investment they are talking about investment which is taking place today but which was committed during the period of the previous Government, at a time of rising confidence. Orders which were placed last year, or earlier, are now materialising, and such developments as half-contracted buildings cannot now be stopped, except at enormous cost. The Chancellor and the Secretary of State should be reflecting on the intentions and decisions now being made in the board rooms of the country in which the Government's attitude of hostility towards private enterprise is being recognised. Companies are realising that the squeeze on cash means that they may not be able to finance future investment plans. The Government's attitude is inflicting on industry damage, the full impact of which may not be felt until 1975 or 1976.
  Industry also needs to be able to give a proper and adequate return to those who invest in it. The Chancellor's policy—indeed, the Government's policy—of limiting dividends to 5 per cent. increases is completely unrealistic when inflation is today running at four times that rate. I am not putting this forward as a plea on behalf of large, rich shareholders, whom hon. Gentlemen opposite seem to think are the only people involved. There are 14 million people in this country—employees, and members of pension or insurance schemes—with a direct interest in returns on investment at least keeping pace with, if not overtaking, inflation which will otherwise erode the value of their savings. These
  1766
  people are interested in getting an adequate and proper return on their money, on their savings and for their pension schemes and insurance policies that are invested in industry. The wealth of the nation will ultimately depend upon the return earned by industry.
  Industry also requires a responsible and firm attitude by Government on wages and salaries. I shall not detain the House by going over all the ground on this, or talking about the troubles brought about by the Labour Government's surrender to brute force—a surrender which, indeed, goes back to the time of the previous Labour Government. So many of our troubles today stem from surrenders by the Labour Government. I believe that there is exidence to show that many of our problems go back to the Labour Party surrender over "In Place of Strife" in the face of threats or other action by unions. This is an infection which is now spreading to responsible citizens, people in responsible jobs—white-collar workers and the like—who would never in the past have dreamed of taking the sort of industrial action they are now taking to keep their place against those who have exercised such action without such responsibility in the past. We are rapidly slipping down a dangerous path towards anarchy. Industry asks how it can look forward with confidence, how it can invest, and how the necessary stimulus can be secured for this country to regain its place in the world league and so at least ensure the maintenance of the living standards of our people.
  We must think about the whole approach which is being put forward in what is called "Bennery". This approach which has been leaked and put out in other ways, threatens our industry. There is "The Current Programme of Work", issued by the Secretary of State containing the threats of Labour Party policy. There are also threats of more nationalisation. I have in mind yesterday's announcement that the Government are intending to take an investment, which could be up to £2,000 million, in participating in North Sea oil. The hon. Member for Ormskirk referred to the ownership of North Sea oil. He should be aware that that ownership has never been in doubt. The previous Conservative Government bar one, back in 1963,

  1767
  ensured that those resources belonged to this country, and that is still the position.
  Mr. James Lamond rose—
  Mr. Boardman: I cannot give way at present. There will no doubt be a future occasion upon which to debate North Sea oil. When the hon. Member for Ormskirk refers to the failure of British industry to invest in North Sea oil he should get his facts right and find out what massive investment has been made by industry in North Sea oil, at a time when it was highly speculative and there was a high risk. Now that the position is more secure the Government reckon to put £2,000 million—borrowed or printed, I know not which—into securing a slice of the proceeds from North Sea oil which could in any case be achieved by a normal form of taxation. I hope that there will be another occasion for me to develop the argument which illustrates the Government's attitude towards British industry—
  Mr. Lamond rose—
  Mr. Boardman: I will not give way. The Government's policy has been aptly and accurately described as one of envy and spite. This is how it is seen through the attitude presented by the Government; but if this is not so let us have clarification and let the Government make a statement on their attitude. They have undermined confidence in British industry and are doing grave damage to industries' future prospects. The Secretary of State for Industry and others have taken an attitude in which they say in effect, "We are the masters". Those may not be their actual words, but that is the message they have left in the minds of those who are managing and are responsible for British industry today.
  Mr. Lamond rose—
  Mr. Boardman: The hon. Member for Ormskirk spoke at some length about the record of the nationalised industries. I do not criticise management or men in those industries. I had ministerial responsibility for a large section of those industries for some time and I recognise the ability, skill and competence of those employed in what are extremely difficult tasks. But the output and the results of nationalised industries are not of the
  1768
  sort which the hon. Member seeks to suggest.
  It cannot be said that the customers feel particularly happy about the way the nationalised industries are run, and, whether they be commuters or those who are dependent on various nationalised monopolies supplying goods and services—gas, electricity, coal, transport and so on—they do not have the opportunity to go to the shop next door to obtain better service if the service supplied is not what they would like.
  Industrial relations within the nationalised industries have certainly been no better—to put it at its lowest—than they have been in the private sector. However, I shall not dwell further on that or go into the comparisons.
  Mr. John Tomlinson rose—
  Mr. Boardman: No, I shall not give way. Does the British taxpayer feel a glow of pride as he pays his additional taxes to meet the heavy losses which the nationalised industries incur? I accept that in large measure those heavy losses are the result of Government policies requiring prices to be kept down. [HON. MEMBERS: "Conservative Government policies."] Hon. Members cannot have it both ways. If prices are kept down so that a service may be provided at low cost, the bill has to be picked up by the taxpayer. Do the British people, as commuters, customers or taxpayers, feel that now that we own the railways, the coal mines, and so on, we are better supplied and served? I am sure that they do not. I see no evidence of it, and I have seen no evidence of it in my experience.
  Mr. Flannery rose—
  Mr. Boardman: No, I shall not give way. I am making no criticism of the people employed in the nationalised industries, for whom, from my experience, I have a very high regard.
  I fear that we are approaching a serious economic crisis. If it is allowed to develop, it will, initially, hit most severely the weak in this country. But it may well go on to set this country back by a generation. By their policies towards industry, by their starvation of industry's cash, by their threats to industry and by

  1769
  their undermining of industrial confidence, the Government are eroding the foundations upon which our national wealth depends.
  I urge the Minister of State and the Secretary of State to give an undertaking that they will make clear their policies to the House. Let them allow those policies to be debated, since only putting the spotlight of the criticism of the House of Commons upon those policies, exposing them as they should be exposed, shall we have any hope of restoring some sanity and balance in our relations with industry in Britain.
  12.23 p.m.
  Mr. Eric Moonman: We are grateful—I am sure that all parties are—to my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk) for giving us this opportunity to talk meaningfully and, I hope, rationally, about the problems of industry. Those of us who took part in the previous debate, a brief debate directed to criticism of the Secretary of State for Industry, recognised that that was too short an opportunity and did not give time for a proper exchange of views. We are, therefore, grateful to my hon. Friend not only for giving us this opportunity but for the clear way in which he put the case.
  There is some regret that the proposed White Paper on industry is not likely to be made available to us before the House goes into recess. I say "regret" because we desire to expound our case, to ensure that industry in particular, and the nation as a whole, are made aware that our policy is not quite so revolutionary as has been suggested and that, in fact, it makes good management and industrial sense.
  I hope that my hon. Friend the Minister of State will take that into account in his reply to the debate. I realise that there are many pressures in the Department and that Ministers must get the policy statement right, but at the same time I hope that, in the remainder of this Session, some account will be taken of the need felt on both sides of the House to have the White Paper as soon as possible.
  I am extremely disturbed by some of the recent remarks of the hon. Member for Henley (Mr. Heseltine). The hon. Gentleman has held office, and I can only
  1770
  say that I am surprised at some of his recent comments. Yesterday, for example, he used some damagingly strong language about the Secretary of State for Industry. We do not have HANSARD to remind us, but we have seen the reports in this morning's newspapers saying that the Secretary of State for Industry spoke of actions which could cause dismay and anger throughout Britain.
  The hon. Gentleman has been enjoying himself at the expense of the Secretary of State for Industry. I need not defend my right hon. Friend the Secretary of State. As chairman of the Parliamentary Labour Party's industry committee, I know that, if rational criticism is made, he can look after himself. But what I regard as totally wrong is that the game which has come to be known as "Bennery" should be indulged in when there are enough serious economic problems to be tackled, whichever party is returned at the next election, whenever that may be. There are serious questions of industrial expansion and development, far too serious for a responsible politician, as I believe the hon. Member for Henley to be, to engage in that sort of exercise.
  If I may add an additional note—it is not my style to engage in personal attacks, but I must say that—I do not believe that the hon. Gentleman's own track record in relation to decision-making in Government should be forgotten. I am reminded of this by a report in The Times of 7th September 1973 saying that the Select Committee on Science and Technology
  "… in one of the most scathing reports of its kind ever published criticised particularly two ministers mainly responsible "—the hon. Member for Henley and his colleague the then Minister for Transport Industries.
  Having served on that Select Committee, I can assure the House that such is the modest style of language used in its reports that if the Committee felt that that should be said, it recognised a great need to say it. The Committee, we were told, was
  "startled by the action of the Department of Trade and Industry in making over to a private company on a preferential basis technology either owned by the NRDC or existing at Imperial College, support for which was to be given on a 5 to 1 basis from public funds, in return for work as yet unspecified, partly dependent on an adviser they had not consulted."

  1771
  This is not, I suggest, an occasion for others to be unduly critical of the way in which Ministers handle their Departments. We ought to take account of the great problems of decision making in Government today. I shall give the hon. Member for Henley the benefit of the doubt, assuming that, perhaps, he did not know what was going on.
  I come now to the main issue in this debate, which I see as the reality that industry today cannot manage without Government aid. It is absurd to ignore this basic fact. The Conservative Government's short-lived lame duck policy showed the futility of thinking otherwise. The question now is not whether the Government should intervene in industry but what form that intervention should take, whether it should be restricted to the giving of financial subsidies or whether there should be strings attached, whether the Government should ask for some sort of quid pro quo from industry. This is the point at which we should be examining the industry-Government interface.
  I take, first, the question of scale. In the past three years, Government financial aid to industry has amounted to some £3,000 million. Any industrialist should realise that it is not good management sense to carry on putting that kind of money into any venture without knowing what the return is. Anyone with experience in industry, on the shop floor or in management, will regard that as the basic question: if we are paying out that sort of money, what benefit are we getting? What is the value of it? That is perfectly reasonable. It is just what I should have done in a management situation, and I am sure that that is what industry does in its own affairs.
  We need to know how individual industries have benefited and what advantages, if any, have accrued to the nation as a whole as a result of that expenditure. It is not prying. It is not said out of spite. There is no question of a policy of spite here. It is a simple question. Let us know more about it. Perhaps this is not the best use of resources. Perhaps one industry should have more than another. These are the questions which should be considered. So let us look at the total picture now.
  1772
  Once that is realised, it becomes obvious that the investigation which the Department of Industry is carrying out into the 20 companies—about which the hon. Member for Henley has been so alarmist—is an essential cost-benefit analysis, an analysis aimed at assessing the effectiveness of Government subsidies to industry. It is an exercise which must be undertaken so that realistic decisions about future Government investment in industry may be taken. It is a fact-finding exercise characteristic of Labour's new industrial policies.
  Mr. Heseltine: I recognise that the hon. Gentleman is making a serious point, and I put it to him that it is a matter of communications and approach. If one wanted to do the sort of analysis of which he speaks, there would be no difficulty in asking the companies concerned to take part in it, to provide the information and to co-operate. But what the companies were appalled to find was that the whole thing was announced in a speech by the Secretary of State for Industry in which he launched a massive attack upon the type of activity which was going on. That is why there was such trouble.
  Mr. Moonman: I have said previously, and I told this to the Secretary of State in the previous industrial debate, that he would probably get a better return and co-operation from industry if we did not overstate the case. I believe that he is being made aware of that fact and he would probably answer, if he were here, that he has been provoked into this approach, but of course it does not serve much useful purpose to try to sort out who actually started the fight, but I take the hon. Member's point.
  The fact-finding exercise is characteristic of Labour's new industrial policies. It is relevant and it makes good management sense. It will provide a basis for consistent and effective policies for the future. Our industrial policies will not get the support of the electorate at an election in October 1974 or at any other time, unless they are realistic and effective. Both Labour and Conservative Parties know that, and that is why the Leader of the Opposition is putting so much effort into distorting those policies and building up the picture of "Benn the bogyman", regardless of the damage his alarmist talk does to the economy.

  1773
  All parties share responsibility for trying to maintain the whole debate on industry and the economy at a more rational level, but we have had a good idea of what would be in the Government's White Paper. We have not got the document and I am concerned about that, but it is plain that there is no revolution afoot. We shall get a series of significant, modest and necessary reforms designed to rationalise the way in which Government aid is given, to improve communications between Government and industry and to involve industry more closely in Government forward planning. They are reforms which make good industrial sense. It makes good sense to appreciate the help which will be given by the National Enterprise Board.
  The value of the work done through the old IRC is widely recognised, but it made mistakes and it had a limited area of responsibility. It did not take into account the effect of its decisions on employment. While it was moving in one direction trying to establish a rational structure for certain sectors of industry, necessary and understandable concern was being expressed by the employees affected. The NEB will also have responsibility for regional development while its responsibility for Government holdings in industry will ensure a consistent approach and a clear line of communication with Government.
  It is good industrial sense to take into public ownership industries where most of the present investment comes from Government, where the products are designed for and sold to Government. In this light surely it is not unreasonable to question whether the aircraft industry and the shipbuilding and the marine engineering industries should remain in private hands. It is undeniably good industrial sense to improve Government-industry communications by cutting out unnecessary secrecy in the Department of Industry's work. One of the most frequent complaints of industrialists in giving evidence to Select Committees over the last 10 years has been about the unnecessary secrecy adopted by Government Departments. The extension of the Department of Industry's consultation procedures to take in the trade unions is no more than a recognition of the facts of industrial life, as is the projected move towards
  1774
  the introduction on some degree of industrial democracy.
  The need for a new companies law has been argued as much in the City and in this House, and I do not intend to take up those points now. I want to demonstrate the relevance and managerial good sense of the proposed planning agreement system which will offer the best opportunity we have had of a fruitful Government-industry partnership, but it would be a major tragedy if the exaggerations and distortions now being circulated were to mean that industry has to be dragged kicking and screaming into what it sees as a shotgun wedding instead of taking its proper place as a willing and able partner.
  There is nothing new about planning agreements. They are operated in Belgium, France and Italy, and in other countries there are systems which involve companies in looking to their schedules and forward planning. Basically the planning agreement is a means whereby the Government can be closely involved in the forward planning of a major company, having access to information about that company which will enable the Government to identify its own planning objectives and distribute its resources accordingly. The companies will supply up-to-date information about past performance and future programmes and this will be checked against results at a later date. In return for the Government supplying requested financial assistance the companies will be expected to conform with national economic objectives.
  I wonder whether on reflection Conservative Members with some Ministerial experience would not feel attracted to the idea in terms of the way in which they took decisions on behalf of industry—not nationalised industry—and in terms of the assistance this would provide Ministers who lacked information about the company concerned. The system would be of help in deciding the priorities of the plans of other Departments and possibly at times of economic crisis. In that situation any chief executive would want more information about how some of the ingredients of his programme were operating, and in spite of the tendency to misunderstand precisely what planning agreements stand for I wonder whether they

  1775
  do not have some value in this collation of information.
  Mr. Tom Boardman: Surely there is a very real difference between the sort of relationship between industry and Government where there is a mere exchange of views and confidence on such matters, and the type of planning agreement which the Secretary of State has in mind.
  Mr. Moonman: It is conceivable—I would not put it any stronger than that, and it is for the Minister to reply anyway—that some of the voluntary arrangements under which this information is provided simply have not worked. It may be that at a certain point in decision making Ministers require greater authority and some sanction. I hope that sanction would not be used. It would depend upon relationships between the civil servants, the Minister and the company. But based on the evidence given to Select Committees in the period I mentioned it appears to me that purely casual arrangements of communication—and some of them are voluntary in the extreme, and might consist of just having lunch with the chairman or attending a cocktail party once a year—have not provided information successfully.
  There is a dilemma about how this will operate. I can only generalise about what will be in the planning agreements. Maybe the Minister will say a little more precisely how it will work and whether there is a fundamental difference between the voluntary system and arrangements of a more compulsory nature.
  The present intention is to involve just 100 companies. On the basis of the information they will supply, the written planning agreements will be drawn up involving the trade unions, the company and the Government. The agreements will cover operational areas. So many consultants have gone into companies and produced the information or tried to extract it and have been told by the chief executive, "Thank heavens someone has taken the trouble to get it because in the past I have needed it so desperately myself." We must not assume that industry is always highly efficient and has information readily available. I wonder whether some of the tortured cries coming from chief executives are perhaps not because he does not want to give
  1776
  the information to Government but because he has not got it readily available, and that is a criticism of the information processes operating in many companies.
  The level of home and overseas sales would be reported, as would regional distribution of employment, price control, domestic investment levels, industrial relations practice and product development. Some of these areas have already been covered by previous Acts which would surely mean that the information would not be difficult to obtain. The Government will give financial aid on the basis of written agreements to enable programmes formulated to be met, but by agreeing corporate policies on an annual and a rolling-forward five-year basis, both long and short-term practices can be taken into account. A detailed annual report to the nation on the record of the companies and the degree of progress towards the achievement of the nation's economic objectives will ensure that the overall function of the agreements is not forgotten.
  The advantages to the nation are obvious. Government aid will be shifted towards the fulfilment of national economic objectives, an important point when the majority of the largest firms either have overseas subsidiaries or are part of a wider international grouping. Companies will have clearly spelt out their responsibilities not only to their shareholders but to the nation at large.
  There are also clear advantages for the companies, a point that has been lost sight of in previous discussions. Government money will be readily available for projects jointly planned, while the formulation of long-term objectives within the national framework, with both Government and industry fully informed on all the factors involved, will mean that companies will be less subject to sudden changes in the direction of the economy, and there is no question of intervention in their day-to-day running.
  I am sure that my hon. Friend the Minister will want to say something on this point, as he has said it elsewhere. If we are to satisfy some of the genuine questions that might be put about this matter, it may be worth while for him to say it again. He has said elsewhere that there is no question of intervention

  1777
  in the day-to-day running of the companies. Within the scope of written agreements, companies will have complete freedom as to their tactics to meet strategic objectives.
  The planning agreements system is about forward planning, a basic and essential tenet of good industrial management. It is not about nationalising the top 100, 50, 25 or 10 companies. That is another issue. It is absurd to suggest that the management competence exists to undertake such a task. But past events have demonstrated the need for a closer system of monitoring industries in which public investment has been heavy, and of developing a strategy for these industries which is in the interests of the country's economy.
  We have relevant recent examples of industries with a fair degree of high technology without adequate monitoring of Government support. Government interest has been rather unsatisfactory. Fortunately, this does not involve one particular Government, so one can be reasonably dispassionate about the matter. My examples are Concorde and the computer industry. In both the aircraft and computer industries there are inevitably worries and anxieties for any Government receiving a request from a company to fund it or help it or to build up a programme.
  First, there is concern that it does not have the competence to deal with a highly complex piece of technology. Then, it must take a decision through its own lifetime. This debate has taken place in regard to aircraft many times, but it is particularly relevant now; both Concorde and the computer industry are extremely relevant in terms of industrial decision-making. I have no doubt that when a decision is made about Concorde—whether it is to go on or the programme is to be scrapped, whatever people mean by scrapping it—it will reveal a failure in the information systems and communication between Government and industry over the past 10 years.
  Concorde is a piece of very complex technology. There may be other areas of complex technology that will be involved over the next five to 15 years, adding to the troubles of Ministers in making decisions based not merely on the cost to the nation but on sharing the cost with other nations in Europe, which seems
  1778
  very reasonable. I have argued in a previous Parliament about trying to save some of the high initial research and development costs of certain projects by working with other European countries.
  We must recognise that we have not yet worked out a good system of monitoring those costs. We end with three or four sets of politicians and the officials of several countries, and they are not all as rational as we are in this country. There is the inevitable short-term interest of a Prime Minister or President, and there are the overtones of a political environment in which decisions are being made. It is very difficult for anybody who is gifted or who has been trained or who has done a job in a particular industry to find that his company's future may be suddenly cut up by the way in which political developments have taken place after four or five years.
  I believe that Concorde is a viable operation. The research reports published. by reasonably independent bodies suggest that it is competitive. About 75–90 per cent. of the United States market that travels first-class has said that it will be willing to travel by Concorde, and the 33 per cent. of the business community that travel economy class have said that they would prefer to travel in Concorde. Therefore, it has the beginnings of a market.
  I turn to the operating costs. Many different groups of people are involved, both in Government and the industry. Worst of all, perhaps, British Airways will put forward sets of figures that will be selective to their own particular needs and demands of Government. I understand the problems experienced by both the previous Secretary of State and my right hon. Friend in dealing with this complex area.
  Those who want assistance, who want to see a project going on, will probably overstate the market, but fuel costs, seating lay-out, amortisation periods and so on are such that it looks not unreasonable that by 1977 the aircraft could break even on its operational networks with around 50 passengers. Others would put the figure at 80.
  Let us consider its worldwide spread. It is a mistake to think of Concorde as an aircraft that will merely fly the Atlantic. It will have great value when

  1779
  it can fly to the Far East, to Australia and Japan.
  There is also the ambiguity of the company involved. The Government have had close relationships with the British aircraft industry.
  Then there is the problem of the buyer. Apart from those overseas, we have had a very ambiguous policy from British Airways. I will put it no stronger than that. British Airways said that it was not possible to fly the aircraft unless it had more Government support. Within a few days it was taking full-page advertisements in the Press saying that it was a splendid aircraft, that it was going to fly and that everything would be all right. The credibility of British Airways management does not come out of it too well.
  Although we may be disappointed one way or the other with regard to Concorde I hope that we shall carry on with the project. At some point Ministers should talk seriously to the chief executives of British Airways, telling them, "We believe that your management policy and operating policy over the past few months has not been particularly helpful."
  Mr. Heseltine: The management policy of British Airways towards Concorde was totally helpful up to the point when the Secretary of State for Industry, with hardly any consultation with British Airways, announced in the House that it had told him that it could not make a profit out of Concorde. It then had no choice but to reveal the figures, showing the wide range of possibilities, including some of loss.
  Mr. Moonman: British Airways has already made its statement, and the hon. Gentleman reminds us of them. It is a matter of opinion, but I still maintain that there is an ambiguity. It may have been done out of pique, though I hope not. British Airways has made it difficult for any Minister in the situation over the past month or so to try to establish an accurate position in which to have a major decision for the aircraft manufacturing industry.
  There is another matter with regard to British Airways that I find difficult to understand. Those who do not appreciate the importance of Concorde and those
  1780
  who fear that we are to spend even more money should realise the cost of British Airways' insistence on buying Boeing 747s, which cost the country £20 million each in foreign exchange. British Airways is committed to purchases to the tune of £320 million, which must have an adverse effect on our balance of payments. That is a salutary point to bear in mind when we talk about ditching a piece of British technology. Apart from the loss of a first-class piece of technology, with all the effects on industry, the regions and the employees concerned, there would be an effect on the balance of payments. We should not encourage that.
  For all these reasons, and possibly many others, the key to the Concorde project is to try to establish a manner of working which will ensure that the difficulty—recognising the Government's figures as being indicative of divided control—is successfully handled. The difficulty arises because of the injection of the project. There are the Governments of the countries concerned, officials in several departments and the four main companies, BAC and Rolls-Royce in Britain and the French companies.
  If there had been a planning agreement about 10 years ago which would have made possible a much closer sharing of information between the Government and the companies concerned it is possible that we might have had better access to information and there might have been a greater refinement of decision making. I am not suggesting that the project would not have presented the same sort of alarms and anxieties but we would have been in a better position with better access. I suggest that this would have been much more helpful.
  I turn now to the computer industry, an industry which for some inexplicable reason has not been much discussed on the Floor of the House as much as has Concorde, perhaps because a decision is about to be made. But the computer industry is a most significant and dynamic industry not only in its own right and because of the enormous quantity of money we pay to ICL but also because of the tremendous spin-off in other areas of the electronics industry.
  According to figures given within the last week by the Government, £40·5 million has been given to ICL since 1968.

  1781
  In 1972 the figure was £26 million. A further£16 million remains to be paid by 1976 under agreements announced in 1973. The Minister will realise that despite all the money and a Select Committee hearing which produced recommendations for the future of the industry, we still have no strategy for it. This seems to be a recurring problem.
  There has been an acceptance by the last Labour Government, the previous Tory administration and this Government that there would be a viable computer industry. What does this mean? It means that we are prepared to give large sums of money to ICL yet to give derisory sums to the NCC for computer training. We are prepared to look sympathetically at other companies which might be in trouble. What we have failed to do is to show a relationship between these different firms. We have not told the industry what we expect from it or, what is possible and the industry has not told us what is possible. Therefore the evidence collected between 1966 and 1970 is now out of date. Yet the need for a strategy for the computer industry is vital both in the national interest and the European interest.
  Why should it be so significant, it may be asked? Why is this not just like any other industry? A typical layman's view of the computer is that it is either irrelevant or a dangerous object. We do not understand it, so we ignore it. We must take this national and European interest seriously because 85 per cent. of this vital growth area is at present controlled from outside Europe. A 70 per cent. hold on the European market is exercised by IBM.
  We talk about intervention by Government in industry and the fears that a Labour Government will begin to affect the way in which industry takes decisions. We seem totally to ignore, if we ever knew, that companies set patterns of industry and organisation in this country. This is a first-class example. IBM has massive authority as to the way decisions are taken in this country and in the rest of Europe.
  Many of us want to know why this should be so. If we cannot affect the authority of IBM, let us do the next most sensible thing which is to set up a viable computer company of the sort which does not exist elsewhere. That means that we
  1782
  have to support the industry. The Government have done this to the tune of £40 million. What we ought to ask ourselves is whether this is the best way of using the money. Is there any other way of co-ordinating our interests in the computer industry?
  Is this not something that we could do in relation to other European countries? Despite the encouraging noises in the Select Committee, of which I was a member, the officials of ICL—although not the present management—when asked whether they could look closer at rationalisation of that sort in Europe said that they could not. We were very gentle with them. We asked whether it was not possible to look towards other countries in Europe with a merger in view. Some noises were made but the response was generally "No".
  What Ministers ought to be asking is, "Why not?" We want the best value for our money. We want to think that ICL is doing the right thing competitively. Ministers should say to it that they feel that ICL should tell them more about its European strategy. I regret to say that I believe that ICL has no European strategy. It is concerned with the hits and misses. If it acquired any company in Europe it would not be because of Government encouragement and interest but simply because it had happened that way.
  This may be a strong criticism of many people I know who work in ICL but we have to speak frankly. What troubles many people inside the industry is that there seems to be no understanding of the way in which the company will meet the wider international challenge in the next 10 years. When we talk about challenge in the computer industry we are talking about IBM.
  The computer market is expected to double by 1977, reaching a total of almost £20,000 million. Europe has the potential to take a large share of this expansion and to provide much of the expertise. providing that the European countries coordinate their programmes and projects instead of duplicating them. The ability exists to match the American computer expertise and to learn from the serious mistakes made by American companies. For every successful American company, for every leader, whether in pharmaceuticals or computers, there are many

  1783
  other companies which have failed to make it.
  The European electronics industry can mass-produce essential components at a competitive price. If the industry is developed on a trans-European scale with support from all the Governments involved, not only in the form of subsidies but through purchasing policies, then Europe has the potential to become the leader in systems and software. We can learn to match and surpass the marketing techniques used to such advantage by IBM.
  The lines on which a strategy for the computer industry can be drawn up are fairly clear but to get such a strategy operative and to get a return on money invested demands a degree of Government-industry co-operation. I am sure that hon. Members will think that because of the colossal sums of money we have handed out to ICL there has been some sort of meaningful, direct discussion between Ministers and the company over the past six years. I know that there have been discussions, but I believe that those which have taken place, described as friendly and voluntary discussions, are no substitute for a direct, written plan of agreement.
  I am forcibly driven to the conclusion that there is no real substitute in the relationship between Government and industry but to have a clearly defined set of objectives. Talk and friendly discussion is not sufficient. A further essential element in the Government-industry interface is the managerial competence of those who handle the relationship. I am not impressed by what I have seen. It is important that we should have a close look at the way in which the Civil Service generally does its job. One or two men, as advisers, coming in at the top, will not make much difference. It is like arguing that there is worker participation in a plant with one worker-director on the board of a company. That is not worker particpation in my book. It depends how the interest patterns and work patterns are built up throughout the whole organisation.
  I do not support the idea of saying that we are getting a better dialogue by having an advisory department. It is more relevant to look at the managerial competence of the civil servants involved.
  1784
  It is no good having a policy for industry which is relevant and effective if the people responsible for administering it on a day to day basis do not know how industry functions. Therefore I urge the Minister to examine his Department carefully to ensure that his civil servants are not administering the growth industries of the 1970s on the basis of nineteenth century administrative principles. Governments have had ample opportunities to develop industrial expertise over the past 10 years, but fundamental mistakes in communication and understanding still occur. Our industrial civil servants should be specialists versed in the ways of industry. If they are not, these highly relevant policies which are about to be introduced will founder in a morass of secrecy and red tape, as their predecessors have.
  My last point arises from the reference made yesterday to the support which was to be given by this Government to Brown Boveri. There will be many more cases where the Department comes to the conclusion that support is required. But in my view it would be more intelligent and more correct to this House if there were a Select Committee able to look at cases every time they arose. It was not referred to yesterday, as far as I recall. I read about it in this morning's papers. This is a very important development. It is another Government interest in a company which is an extension of the original IRC support. If it is to take place and if it is to occur on many other occasions, it would be handsome for this House to be able to refer such proposals immediately to a Select Committee.
  I do not think that there is any facility to do it at the moment. If we did this, we would go some way towards meeting the needs and aspirations of the people who vote Labour. It is the kind of development that they wish to see. The whole question of an industrial discussion is not only about how well industry is managed. It is also about how understanding and sensitive we are of the problems of industry. Industry does not mean just management. It is one of those extraordinary connotations that when we talk about industry in this House we mean employers and management.
  But it means the trade unions as well. It means the way in which the two sides of industry can share information and

  1785
  work out common objectives. I know that both sides would be willing to share information with the Government if they realised that the Government were taking them seriously. That is the challenge to my hon. Friend and other Ministers who will follow him.
  1.3 p.m.
  Mr. Michael Heseltine: I say at once that I am delighted that we are debating this motion, and I support it, as will the overwhelming majority of all those involved on both sides of industry.
  We face a real difficulty because of the uncertainty surrounding the Government's industrial policies. For that reason, the quicker they can be clarified the easier it will be to be certain. At the moment, we have no alternative but to go upon the documents available to us and upon the speeches of Ministers and their hon. Friends who have indicated clearly the approach to industry that they would like to see.
  One dilemma facing the Opposition could not have been better highlighted than by the speeches of the hon. Member for Ormskirk (Mr. Kilroy-Silk) and the hon. Member for Basildon (Mr. Moon-man). The one was obviously motivated by a contempt for the private enterprise system and the wish to see it brought to an end and replaced by a Socialist society. I do not quarrel with the right of the hon. Member for Ormskirk to say that, and I have no wish to prevent him articulating those views. Having listened to them, I should like to see them brought to the attention of a greater number of people, so that more people were able to see what the great debate was about.
  Philosophically, I find the arguments of the hon. Member for Ormskirk quite repugnant. I am sure that the hon. Gentleman will not deny me the right to say that. There is a genuine divide. The hon. Gentleman represents the views of his hon. Friend the Minister of State for Industry. If the Secretary of State for Industry were here today, the hon. Member for Ormskirk would bring a gleam to those already over-gleaming eyes. However, the harsh reality is that the language of the hon. Member for Ormskirk and of the Minister of State is very different from that of the hon. Member for Basildon.
  1786
  The hon. Member for Basildon has examined a very complex set of circumstances. He has applied a formidable intellect to the problems and has tried to find a way of building on the structures which already exist. There are areas in respect of which I disagree with his conclusions. There are not so many areas where I disagree with his analysis. I cannot help feeling that if I were sitting alongside him at a table we should be working with much the same end in mind. If I were sitting beside the Minister of State or the hon. Member for Ormskirk, no dialogue between us could ever have any meaning. We are seeking different social objectives. That is why my right hon. and hon. Friends and the overwhelming majority of people to whom I talk, especially people in industry, are quite appalled by the implications of the documents which have recently come from the Labour Party—not from the whole Labour Party but from the motivating elements of the party. They are the elements which are always pressing on to the next horizon. Once a battle has been engaged and in their view won, there is immediately a visionary move to the next battleground.
  Over the past 20 years or so, we have seen industry after industry divided, argued over, nationalised, in one case denationalised, and then become part of the public sector. In very few cases have the results come anywhere near the expectancy that we were promised. The obsessional conviction that private enterprise must be destroyed is the motivating force.
  We know that we have a firm commitment to nationalise five industries. If the Labour Party is returned to power at the next General Election and those industries are nationalised, I am sure that at the election following it there will be another five. There is no doubt about that. It is not a matter of the end of the road. It is simply a question of the speed at which we are to go down the road. The end resting place is quite clear. The private sector will be replaced for philosophical and possibly moral reasons.
  I cannot accept the Labour Party's analysis, its criteria or its judgment. I am more concerned with consequences of what it is doing and with many of the matters discussed by the hon. Member for Basildon, and I want to put to the

  1787
  hon. Gentleman one or two serious points which his speech merits.
  As the House knows, I was responsible for many of the areas where the relationship between Government and industry was at its closest and where large sums of money were being spent, The principal area was the Concorde programme. There is no doubt that the flow of information between industry and Government was total. From time to time we knew practically all that there was to know. The difficulty was that the judgments were usually wrong. The bills went on mounting, the technology was more expensive, and the time was longer. But that was not because we did not talk to each other. We were not able to make the judgments.
  I do not believe that saying that there is to be a series of compulsory planning agreements will bring about a better state of affairs in the other industries affected than we had in the relationship over the Concorde. In harsh reality, life is not that predictable in industry.
  I take a simple example, though I agree that it is an extreme one. If we had had planning agreements with British industry in September last year, we should have had an industry prepared to invest at a rate not seen since the war, confident, outward-looking and building a virtual paradise on the concept of the investment opportunities then available. The Government would have taken decisions, and six months later the whole lot would have had to be put in the waste paper basket, not through industry's fault but because of the energy crisis.
  However, that is overstating the difficulty, and I do not wish that extreme example to be quoted as my total case. But there is a multiplicity of changes in competing and conflicting economic forces which make it extremely difficult for industry to look forward with the precision which hon. Members opposite would like to see. My right hon. Friend the Member for Chichester (Mr. Chataway) did much to bring industry more closely into the dialogue with the Civil Service, to see whether there were ways in which co-operation could improve the opportunities for both. Industry welcomed that development and took advantage of it, and, backed by the Industry Act—a flexible Act to meet circumstances
  1788
  which we could not define in advance—it showed a manifestation of a wish by the Conservative Party, by no means a doctrinal party, to help.
  Let me illustrate for the hon. Member for Basildon two of the realities which would flow from the Government's proposals. I deal first with the question of the compulsory planning agreements with the top 100 companies. What does the hon. Member think is the duty of directors, managers, and executives in those companies when they are asked to expose to the Government their anxieties, doubts, difficulties and uncertainties, as well as all the good things about the innermost thinking of the companies for which they are responsible, knowing that it is almost certain that within a foreseeable time the Ministers who ask them to treat them as friends will say, "We propose to nationalise your company"? If the Minister says, "You told me it was all going wrong", and he exaggerates the situation in order to get the company for a knockdown price, how can one have an arm's-length relationship once one has entered into a compulsory planning agreement?
  The hon. Member for Basildon may say, "But that is not the purpose, because we are looking forward to building a new and profitable relationship with these companies". Why do not the Ministers say that? Why do the Secretaries of State for Industry and Trade make speeches about the future of industry in language which can only send a chill down the spine of anyone whose livelihood is tied up with it?
  The Minister of State, Department of Industry (Mr. Eric Heffer): The hon. Member keeps repeating the statement that the proposed planning agreements will be compulsory. I have again looked very carefully through the Labour Party's programme on which the proposal was based and the manifesto on which the Labour Party fought the last election. The word "compulsory" does not appear anywhere. It enters only into the mind of the hon. Gentleman and of his hon. Friends.
  Mr. Heseltine: That raises an important point. I do not understand why it is not possible for the Minister of State to say today, "We shall enter into voluntary planning agreements with the companies"—which, in effect, is what he has just

  1789
  said. The hon. Gentleman has just made an important Government statement. I welcome the fact that the matter has been clarified. I am sure that industry will be interested in what he has just said.
  If the agreements are to be voluntary, what happens if the 100 companies do not want to enter into agreements? Will they be free not to do so? The implication of the Minister of State's statement is that they will be totally free not to do so. I suspect that industry does not feel over-enamoured with the planning agreement concept, and that some companies will not wish to enter into such agreements. What will happen to them?
  Mr. Tom Boardman: My hon. Friend will no doubt be aware of the Current Work Programme of the Department of Industry note by the Secretary of State. Can my hon. Friend deduce from it a clear message that the agreements v ill be voluntary?
  Mr. Heseltine: My hon. Friend has greatly helped, and so has the Minister. The impression has been given that there will be a great degree of compulsion. The fact that the agreements are to be voluntary planning agreements is of interest. I shall deal later with one or two of the implications of the agreements.
  Mr. Heffer: The hon. Gentleman and his hon. Friends continually repeat statements in the House and outside about what the Labour Party's proposals are supposed to be, and not what they are. Even the proposals in the party programme and in the manifesto are nothing like the proposals referred to by the hon. Gentleman. We have never said that there would be compulsory planning agreements. The suggestion that we shall control 100 large companies through rigid planning agreements which would not be voluntarily made is a figment of the hon. Gentleman's imagination.
  Mr. Heseltine: I need not press the point, providing I can obtain from the Minister of State the assurance that the agreements will be voluntary. I think that was what he said.
  Mr. Heffer: I said that.
  Mr. Heseltine: I wished it to be clear that we have established that they will be voluntary agreements.
  1790
  The next point concerns the problem of the conversion of the aid given to the regions into the equity of the companies which receive the aid. Presumably many of the top 100 companies will be companies to which aid has been given in order to help them to create jobs in the regions. As I understand the Labour Party's proposals, the idea is that the aid should be in the form of shares as opposed to grants to the regions. Let us suppose that an overseas company investing in the regions is expected to trade regional aid for shares in the company. What impact does the hon. Member for Basildon think that that will have on companies investing in the regions?
  Mr. Moonman: I am a patient man, and I should therefore like to answer the question which the hon. Gentleman asked about 10 minutes ago. He asked a fundamental question, namely, whether the managements of companies would be prepared to work with a group of Government officials against the background of possible nationalisation. As my hon. Friend the Minister has said, we are talking about 100 companies which would give information voluntarily. We are not talking about the nationalisation of 100 companies. The Government's responsibility—the Minister has recognised it—is to specify at the earliest possible moment which companies and industries are to be nationalised. That would deal with the point which the hon. Gentleman has raised in a sensible way and would remove the apparent fear which has been expressed.
  However, continual repetition of the point does not help, because the public are getting the feeling that the agreements will be compulsory and will mean that the companies will be nationalised. That is not intended, and if this debate has clarified one thing it has clarified the fact that the agreements are to be voluntary and that they do not mean the nationalisation of the 100 companies.
  Mr. Heseltine: I understand that. However, our great difficulty is that successive Socialist Governments have widened their ambitions. Through the intellectual force of the Socialist movement, once a common frontier between the public sector and the private sector is established, there are continual demands for it to be pushed

  1791
  forward. The hon. Member for Ormskirk said that the State should take over the banks. The hon. Member for Basildon said that the industries to be nationalised should be listed. If it were possible, in a hypothetical world, to say, "Let us nationalise five, and then we shall have done what we want to do", that would not have credibility, because the hon. Member for Ormskirk then would say, "Let us nationalise the banks", and doubtless the Minister of State would have a list of his own to add. There would be no resting point.
  That is why the hon. Member for Basildon must understand my belief that we must resist the Government's proposals from the outset because there can be no compromise between the society which his hon. Friends want and the society which I want.
  The important thing which has emerged today on the question of voluntary agreements, as we now know them to be, is that no one on this side can understand, in industrial terms, why we do not have a White Paper. Hon. Members will remember the enthusiasm, just after the election, for a great "open government" dialogue and a Green Paper so that everyone could be involved. There was no Green Paper. Instead, we had a series of leaks inspired by the Secretary of State or the Minister of State in Press interviews and addresses to union conferences, including an article in the Sunday Times soon after the Government came to office. Parliament, which has an interest in the matter, is not to have a Green Paper.
  Then interesting things started to happen. Ministers other than those responsible for industry and trade suddenly began to get unnerved because the leaks were having their effect. The Opposition were not responsible. We played our constitutional part, but it was the leaks which caused the difficulties, and they came from Ministers responsible for the policy. But other Ministers—the Prime Minister, the Home Secretary, the Paymaster-General and even the Prime Minister's Parliamentary Private Secretary and the Chancellor of the Exchequer—started making speeches saying, "Do not believe it; it is not true."
  Everyone knows that the Government are torn apart by this dialogue—[HON.
  1792
  Members: "No."] If not, why have we not had a Green Paper? Because the Prime Minister has told us that we must have a White Paper to end the uncertainty. The White Paper might have gone further than we wanted but it would have ended the uncertainty and we could at least have had a debate. Yesterday, the Leader of the House said that we may get a White Paper in the Summer Recess.
  The only certain thing about the Government's industrial policies is that they will not be debated in the House before the General Election. If, of course, we are not to have a General Election in the autumn, I will withdraw that, but I am accepting the advice of so many Members of the Government, who say we are. So there will be no debate in Parliament on the most fundamental division facing British industry. That I regard as contemptible. If the Government do not understand that it is causing unease and difficulty and lack of confidence on the most persistent and deep-rooted scale that I have ever known, they are not talking to the same people that I am.
  This motion is timely. I cannot help it if it is motivated for the wrong reasons, but it is irrefutable that there should be a clear statement of Government policy. My only sadness is that we shall not vote on it. But if we did, I should be with the hon. Gentleman in the Lobby—if it would not embarrass him too much—to help clear up the mess and clarify the future. This country is tearing itself apart. It is a major national tragedy that we are now putting the whole of industry on the chopping block to be torn over doctrinally.
  Many people in the nationalised industries are trying to do a good job. It is not their fault that their structure makes management difficult. No one in this place in 20 years of nationalisation has been able to give those industries the clarity of objective which is easily defined in terms of social justice but, just the same, leads to the closing of mines and railways. There is no way of spelling out factually what we want those industries to do. That is why they have been so massively interfered with, why managers are difficult to recruit, and why there has been a major impact on our industrial efficiency.
  It is sad that we go on in this dialogue. It is sad for the overwhelming majority of people who live and work in the private

  1793
  sector, and whose savings and pensions are tied up in it, that Labour Members continually denigrate what the private sector has done. I would never claim that it has achieved everything we want. No system has done that. But when the Secretary of State says that the private sector is not doing what we want, I would ask him to look at France, Germany, Japan and America, where the private sector is the one system driving those economies. There is a fundamental clash of intellectual understanding here which I do not begin to comprehend.
  Just as we should seek a beter way of managing nationalised industries, why do not hon. Gentlemen opposite say that their interests are in creating a more powerful and efficient private sector, and that they will bend their minds to that aim. 'I hey laugh. Exactly—because that is not what the dialogue is all about, in their terms.
  Mr. Kilroy-Silk: Of course not.
  Mr. Heseltine: That is exactly the dilemma. That is my answer to those who ask, "Why have a confrontation with the Socialists? Why not come to terms with them?" There is no way. They will press on until the standards which I believe to be important and which have contributed most to the wealth of the western world have been removed.
  Whatever the White Paper says, I do not believe that we will remain with voluntary planning agreements or just five industries to be nationalised. This relentless quest for power for the State has to be recognised for what it is. It has to be resisted wherever it is forced upon us, and it must above all be the subject of the widest possible public debate, which we shall ensure and which the electorate alone can judge.
  1.27 p.m.
  Mr. Bob Cryer: I am alarmed at the defeatist attitude of the hon. Member for Henley (Mr. Heseltine). If anyone is spreading alarm and despondency in British industry it is people like him. There is no doubt that investment in private industry declined under the Conservative administration. The private investor is not especially interested in the advance of British industry but only in profit, and if it is more profitable to invest in the EEC or in South Africa, that is where the money goes. Over the
  1794
  past few years, capital has been flowing from this country at the rate of more than £1,000 million a year. That is the patriotic attitude taken by owners of capital.
  We should congratulate my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk) on introducing this debate, which is a valuable contribution to the exchange of ideas. The notion that Conservative Members should expect us to subjugate our ideas to theirs and accept their values shows their continued arrogance which has been eroded only by the election of successive Labour Governments.
  Mr. Tom King: Hon. Members opposite are trying to subjugate industry.
  Mr. Cryer: We are not trying to subjugate anyone or anything. We are trying to put forward the ideas on which we were elected and we are not prepared to subjugate ourselves to the ideas of the Conservatives, which have been disproved in theory over many years.
  We look forward to a statement by the Government, but we recognise that the Labour Government have done more in four months than the previous administration did in almost four years. Because a Labour Government have a dynamic, because they seek to promote change, everyone expects them to change everything in a short time. They cannot; they must tackle things piecemeal. Also, the Government inherited a large number of problems and have had to tackle such crises as Court Line. In the midst of all this work, one cannot easily get down to the academic job of producing a White Paper.
  We need to look to previous experience for our example. It is not without significance that in 1972 the previous Conservative administration found it necessary to use the nationalised sector to stimulate the economy. They know that they have no control over the private sector and that if private investors choose not to invest—as they did during the highest period of unemployment since 1939, which the previous Goverment created—there is nothing that the Government can do about it. So they turn to the public sector. If we are to have control over our economy, we have to have a fairly comprehensive publicly-owned sector. The previous Government showed that they were prepared to engage in

  1795
  public ownership when it suited their book. We cannot control our economy unless we have control of essential parts of it.
  Mention has been made of the mysterious plans. The Opposition have been using a very unscrupulous journalistic technique. They have been personalising the argument. They know that much of our daily Press is not prepared to print the detailed argument, and much prefers to personalise something. The Opposition have personalised it in the name of the Secretary of State for Industry. The Opposition know the position. We should emphasise repeatedly that they have read our manifesto. They have produced it as a weapon with which to attack us. They know that our plans were laid out in the manifesto and were put forward to the electorate. During the election campaign they did not choose to make an issue of this matter because they were besotted by the miners.
  The Labour Government had the problem of the three-day working week when they came to office. That problem was created by the doctrinaire opposition of the then Government. During the campaign I was asked questions which I answered readily and fully. I am sure that is true of every Labour candidate and was so at national Press conferences. To say now that somehow the Secretary of State has conjured up plans from his imagination is part of the Opposition's plan to discredit these ideas, which have been approved at a democratically convened Labour Party conference.
  Such ideas do not suddenly spin out of people's heads. They are laid down because the Labour Party is a democratic organisation. The policy of the Labour Party is not produced by a group of a elitists meeting in a sticky room in a Selsdon hotel but by the rank and file of the party at the annual conference, debating and laying down the policies there. The policy was laid down and was adopted for the election platform. That is why we have the right to put forward these ideas. The notion that the Secretary of State is in any way putting forward his own ideas is a grotesque exaggeration and one which, alas, too often has the support of the mass media.
  1796
  An argument is advanced that we should not have control of private enterprise, which is getting £2 million a day in subsidy. The argument is that private enterprise pays taxes and that the money it gets back is paid for by the tax. But what about the 20 million days that are lost every year through industrial injury and the 1,000 people who are killed every year in industry? Some are killed in nationalised industries, but the vast majority of those killed are killed in private enterprise. It is unquestionable that the general standards of safety and health at work in the nationalised industries are much superior to those laid down for private industry. When one considers the £2 million subsidy per day, and the hospital treatment, retraining and unfortunately, on many occasions, the death grants which are paid by the State as a result of industrial injury and loss of life, it must be recognised that the community as a whole, the State, pays out a massive sum to private industry.
  It is worth bearing in mind that the Conservative Party has never scrupled to take into public ownership anything that suited its purpose. When it thought, for example, that a national broadcasting system might get into the wrong hands—whoever that may be—it created the BBC and made sure that it was a State monopoly. The Conservatives changed their minds later because commercial television was a strong lobby for printing money; but at the beginning that was done by the Tories.
  In 1928 the Conservatives formed the CEGB because it was inconvenient for industry to have widely differing sources of supply or power. They therefore created a nationalised board. In 1915 the Liberals and the Tories, working together—the Liberals had no scruples about the matter—when they thought that all the munitions workers of Carlisle would be staggering around drunk, nationalised the breweries. The Home Office has been running the police force and the State breweries for many years since then. Recently, the previous Tory administration sold off those breweries to their friends. They may deny that, and say that it was not because the breweries gave them a lot of money. But if they receive money from the breweries and sell off State enterprises, they must not be offended if we cast a little doubt over their motives.
  Mr. Freud: Will the hon. Gentleman explain how one can win? He has explained two very good ways of losing, so far.
  Mr. Cryer: Like most of the hon. Gentleman's statements, that one was rather obscure. His motives are, at best, obscure, as was exemplified very graphically in his motion to reduce the school leaving age. But we have won in those State-owned industries.
  One may be told by the people of Carlisle that the State-owned beer was cheaper and of better quality than the private enterprise beer that has replaced it. That may be a very trivial point. However, we are always being denigrated because the State-owned industries are supposed to produce goods at high cost levels and great loss. But the breweries and State-owned pubs were providing a very valuable service. That is why they were sold off.
  The Opposition must not seek to deny to a Labour Government what they themselves were prepared to undertake, as, for instance, more recently, in the case of Rolls-Royce. There was a situation which meant either the loss of 35,000 jobs or State ownership. However, as is characteristic, the Conservatives used the taxpayers' money to prop up the jobs in the profit-making section which they sold off to their friends. The motor-car division of Rolls-Royce, which made a profit last year, remains under private enterprise; but the airframe and aero-engine division, which failed under private enterprise, has been propped up by State money. It is a deplorable record. This is the sort of policy which the Conservatives seek to deny us in regard to public ownership, but they are prepared to adopt it whenever it suits them.
  I should have thought that many small and medium-sized firms were in far greater danger of being taken over not by the Government but by large multinational companies. There is a record of this in my constituency, where I meet this argument about public ownership. The managing director of a local firm asked me, "Are my workers better off in my employment than they are in State employment?" My answer was simple. I said, "The record of engineering in my constituency is not of public ownership. It is of big firms taking over
  1798
  small firms, closing them down, taking the trade name and rights, and making people in Keighley jobless."
  This happened in the case of Platts taking over an old textile manufacturers, Prince, Smith and Stells. The works have now closed down and the jobs have gone. Another firm, Darling and Sellers, produced high quality machine tools and equipment. Ward, Haggas and Smith took it over. That has gone. Small firms have gone, either because a family firm has decided that it was too much trouble to continue or because a competitor bought them up, closed them down or put them out of business and concentrated its production facilities elsewhere.
  The Opposition cannot deny to the Labour Government the right to preserve jobs, because this is a very important element in any organisation of public ownership. Indeed, I was amazed by the total lack of criticism from the Opposition when Court Line was taken over. Court Line produced some very interesting comments. The Labour weekly, Tribune contained a report on 5th July for one worker's comments about the public ownership of Court Line:
  "'If you had mentioned the word "nationalisation" to these lads a month ago, they'd have shuddered at the thought. But today they're over the moon because the Government has stepped in and saved our jobs.' This was the reaction of just one shop steward at the Appledore Shipbuilding yard in north Devon, once owned by Court Line but now under public ownership.
  Bill Porter, secretary of the Wearside district of the Confederation of Shipbuilding and Engineering Unions where Court Line had other shipyards, reiterates this point. 'Everybody is delighted', he says. I was at a Wear Confederation committee meeting last night and I have never seen so much enthusiasm. At last the working class will be really involved in running this industry.
  'It presents us with a golden opportunity. We must nationalise and make a success of it, and I am confident that it can be made successful. For far too long British industry has been pumping money all round the world and not bothering to invest in its own country and this has been one of the biggest problems of the shipbuilding industry'."
  Mr. Porter concluded with these very pointed words:
  "It is typical, is it not? As soon as they get in a hole they want the Government to get them out of it."
  Mr. Freud: Will the hon. Gentleman admit that the reason the shipbuilding

  1799
  industry is in its present state is that it has the threat of nationalisation hanging over it, which is exactly why nobody will invest money in it?
  Mr. Cryer: I am not surprised at the amount of rubbish the hon. Gentleman talks. Public money has been poured into British shipbuilding over many years. It did not, however, prevent what happened at Upper Clyde. The hon. Gentleman knows that the Upper Clyde crisis was not created by the threat of nationalisation.
  Mr. Freud: That is a different case.
  Mr. Cryer: So it is a different case; but it is part of the shipbuilding industry. The workpeople protected that shipyard because they were not prepared to accept redundancy imposed by people taking decisions from down here. So the hon. Gentleman has produced another weak argument.
  If private enterprise really worked for the public good, it would not adopt some of the attitudes which it does adopt. Industrialists subscribe to Aims of Industry, which produces a lot of propaganda against public ownership. At the same time these industrialists are queueing up at the back door to get as much public money as they can. This is an extraordinary dichotomy of attitude.
  If private enterprise wants to convince us that it is working in the best interests of the community, it might be of advantage if some of the directors set us all an example by cutting out their salaries, their company pension schemes, their company houses and fiats, their company chauffeur-driven limousines, and so forth. It would be an example from which many of us would take heart. However, industrialists never do this. There are, in addition, school fees paid for them and the whole panoply of privilege.
  We have, by a legalistic fluke, the case of Lonrho, where a former patriot was actually making arrangements to avoid tax by investing money in a foreign country. We learned of that only because there was a serious split on the board. How many other board rooms have such arrangements? We know that a large number of company directors have pecuniary advantages. I have a list here—
  Mr. Tom King: That is the most sordid form of slur by association. The hon. Gentleman has already criticised other people who personalise the argument. He has now fallen deep into that same trap. If he has evidence of other board rooms where that practice exists, will he name them? Otherwise, will he withdraw that slur on the great breadth of British industry, which applies also to firms in his constituency and others?
  Mr. Cryer: I will not withdraw. If firms are prepared to open their books completely to me, I am willing to go and examine them with a team of accountants. Until they do that, I am terribly sorry, but the question mark must remain over them. The hon. Gentleman must admit that it was only by a fluke that we found out about Lonrho. Because it came to our attention purely by a fluke the question mark must hang over British industry. I am suggesting that British industry opens its books for inspection and makes an example to us all.
  Mr. Tom King: The hon. Gentleman is, therefore, working on a new principle of law—that companies and boards are guilty until they are proved innocent. He will accept that, by that same argument, they are entitled to expect him to be indulging, and to believe him to be indulging, in any form of financial chicanery unless he gives them total access to all private information he may have.
  Mr. Cryer: It is a peculiar argument. There is a question mark hanging over British industry. If I or my associates were behaving in the same way as Lonrho behaved, naturally enough there would be a question mark hanging over me. In fact, we do not so behave. Therefore, we are entitled to a presumption of innocence.
  Mr. Tom King: The point is that nor do the vast majority of British companies. The hon. Gentleman, however, is assuming that they do so behave. Therefore, my point stands.
  Mr. Cryer: The hon. Gentleman cannot deny that the vast majority of company directors have financial advantages of one sort or another over their employees. How many workers on the workshop floor have pension schemes or company cars? How many have school fees paid? How many company employees, when they

  1801
  are employed to sweep up an engineering works, are given the option of sending their children to a private school through the company assistance scheme? The hon. Gentleman knows that they are not given these privileges and that there is this clear division between an employee and an employer. By and large, an employer has privileges which an employee does not. Therefore, because the employer has these privileges, I still insist that a question mark remains over the board rooms of British industry.
  I will give the hon. Gentleman a list of the earnings of some chairmen for the year ending 1972. The Chairman of Vauxhall Motors went home with £91,408.
  Mr. Tom King: He did not go home with that at all.
  Mr. Cryer: He received in total £91,408. I do not mind the hon. Gentleman speaking from a sedentary position, although it is usually against the rules of the House. The Chairman of Imperial Chemical Industries received £65,695. The Chairman of Rank Organisation received £65,000. The Chairman of Triumph Investment Trust received £59,618. The Chairman of Unilever received £50,000. This was all in addition to the perks I have talked about.
  If British industry tells us that we must all tighten belts and make sacrifices, it is about time it said, "We will get rid of all these financial perks. We will cut our salaries and show the British worker that we mean business." But these people do not. They keep on in their privileged position. So they must forgive us if we say that they do not work in the public interest but work to maintain their own privileged position.
  If private enterprise is working for the public interest, why did the Tory administration fail to clean up the law relating to companies? I know that they had a suggestion which was never brought into practice. In July 1970 my local paper did a first-rate series of exposés on fraudulent central heating salesmen who formed companies one after the other. The paper, which is not given to especially radical journalism, had this plea on its front page:
  "Change law plea over bankrupt firms. The Government must take action to protect the public."
  1802
  Alas the law remains unchanged. Company directors, because they have this peculiar corporate status, can go on being directors of companies and winding up their previous companies, as these people did.
  I want to make it absolutely clear that the vast majority of British companies do not engage in these practices and that it is only a fraudulent and doubtful minority which does. However, the practice exists. Over-generous legislation allows this to take place and has prevented a tightening up which is long overdue.
  The idea which has been advanced today of private enterprise working fully in the public interest is to some degree discredited.
  The concept of public ownership involves also, for many of us on these benches, democratic control by workers and consumers. I greatly hope that when the Government make a statement they will have imaginative plans to implement this concept. The Minister knows full well my concern about this, because I have tabled Questions about it.
  The publicly-owned industries, it seems to me, should be the pacemakers in democratic control. Let us have elections to the boards. I recognise that it is difficult and that the organisation of control is difficult, but let us try to start on this path. For one thing, it would have an electrifying effect on the ordinary employee in the publicly-owned industries, who for too long—and we must recognise that those industries are subject to valid criticism—has felt that there has not been any degree of socialist aims and objectives within the publicly-owned industries at the top.
  For far too many years, retired generals have been shunted into some siding on British Rail. The lad on the station platform does not feel that there is any measure of democratic participation when the train conveying the Chairman of the Board draws into the station and things are cleaned up and polished for him. That sort of thing suggests to the man on the station platform a situation which is reminiscent of his army days.
  Publicly-owned industries are often too bureaucratic. I want to make clear to the House that we on these benches do not blindly accept the concept of

  1803
  public ownership. We are alive and alert to the deficiencies. We want to see public ownership succeed so that it catches the imagination of the nation. The only way that we can do that is by capturing the imagination of the people inside the publicly-owned industries as well as outside.
  This means that the consumers must be brought into the structure of administration. At the moment there are a number of consultative bodies all of which are appointed, and by virtue of being appointed they tend—not in every case, I am sure—to be "safe" people. I know of no reason why we cannot extend our democratic system to provide for election from the public to the boards of the nationalised industries. That is the sort of thing which catches people's imagination.
  Socialism is emphatically not about bureaucratic administration and government. It is the antithesis of that. If we are going to have socialist control we must get the people involved. We must have workshop discussions on policy, with elections from the workshop to boardroom level, and those who are elected must report back. We cannot have democratic elections to a board merely to reproduce another élite. The people who are elected must report back to the people from whence they came. We must argue our case for publicly-owned industries throughout the country.
  The principle of distribution of wealth in favour of the working people who create wealth is right. The retention of jobs without having to subsidise private industry is right, especially in the regions which are hard hit. Control over the economy is also a correct principle. But we must argue our case thoughout the country because our cause is just and we believe that with a sound firm Government statement about our intentions we can carry the people with us.
  1.54 p.m.
  Mr. Ivan Lawrence: I am happy to join with the hon. Member for Ormskirk (Mr. Kilroy-Silk) in asking for an early statement on the Government's industrial policy. I also welcome another opportunity to alert the British people to the threat of this worst of all policies of Socialism.
  1804
  We shall not get an early statement on the Government's industrial policy because the Government are terrified to let the country know at this stage the details of their policy. They are terrified to allow British industry to quantify the cost of this policy to the taxpayer. That is why the British people are not being told any more than the barest outline. They are not being told any more than the barest outline, lest Labour voters at the next election vote Conservative. The working man is perfectly capable of showing his contempt for the policy which the Government have espoused.
  It is absolutely clear that by this policy the Government have abandoned any possible pretence at being a centre party in this country. That is why there is to be no consultation on this fundamental change in the economic life of this country, despite the earlier promise by the Secretary of State that there will be a Green Paper so that we can discuss the plans in this House. That is why there is to be only a White Paper with their firm proposals, where public discussions will inevitably be stultified.
  I was amazed to hear the hon. Member for Keighley (Mr. Cryer) put forward the astonishing proposition that because the Government have been too preoccupied with Court Line they have not had time to prepare their Green or White Paper. I am sure that the gentlemen who advise the Government in these matters are as astonished as I am at that rather amazing suggestion.
  The reason why the Government are behaving in this extraordinary way was exemplified by the behaviour of my opponent at the last General Election. In the Burton division there are Allied Breweries, Bass Charrington, Pirelli, Cavenham Foods, BTR Silvertown, JCB—all threatened enterprises of varying sizes, and my opponent stood at the gateways of some of them with many of his supporters on the day of the election, denying that it was Labour's intention to nationalise those industries. That is now shown to be a blatant attempt to mislead my constituents, although my constituents were must too sensible to fall for it. However, it indicates how even at the last election there were people on the Labour platform who were ashamed of the policy which was being propounded.

  1805
  That sort of thing was said not only by Labour candidates. There was Mr. Healey, talking to the CBI on 14th May 1974, uttering sweet words trying to play down the bogey of nationalisation. He said:
  "The Government has no intention of destroying the private sector or encouraging its decay."
  He added:
  "It is our firm intention to … take action to … see that investment is not endangered by the undue restriction of profits."
  That is a very different sort of statement from that which we have heard from the hon. Member for Keighley.
  Mr. Cryer: We recognise the hon. Gentleman's quotation from the Chancellor of the Exchequer, but it is rather a squalid method of debate to quote chapter and verse from somebody who is not in the House, to quote an alleged remark without any documentary evidence and which nobody present can refute, by virtue of the hon. Gentleman's flukey victory.
  Mr. Lawrence: I am even more astonished to hear that intervention from the hon. Gentleman. Perhaps he will take advice from his hon. Friend the Minister of State as to whether or not Mr. Healey did say that to the CBI.
  Mr. Deputy Speaker: Order. That is the second time that the hon. Gentleman has referred to the right hon. Gentleman by his name. He must refer to Members of this House by their constituencies or their offices.
  Mr. Lawrence: I am sorry, Mr. Deputy Speaker; I should have said "the Chancellor of the Exchequer". I shall read again what the Chancellor said and perhaps the hon. Gentleman would care to write it down and take advice on it:
  "The Government has no intention of destroying the private sector or encouraging its decay.… It is our firm intention to … take action to … see that investment is not endangered by the undue restriction of profits."
  That conflicts strongly with the basis upon which the General Election campaign was fought, not only by the Chancellor of the Exchequer but also by the Prime Minister. There was for example an attack on what was called the obscene level of bank profits, an attack which has been mirrored today in the speech of the
  1806
  hon. Member for Keighley, who read out a list of profits which people in industry were making.
  It is clear that there is a playing down approach which hon. Members on the Government side are anxious to try to put across in order to lull British industry and the British taxpayer into thinking that what the Government have up their sleeve is not really very significant. But hon. Gentlemen opposite must realise that the British people appreciate that for all its faults the capitalist system, which has now settled into a sort of flexible mixed economy, is the best system yet devised for our Western industrial democracy. By and large, that system produces a greater choice for the consumer; by and large. it produces better quality goods; by and large it produces cheaper goods; by and large, it produces more investment, and therefore more employment, which is what so many hon. Gentlemen on the Government side want. The system also produces a saving to the taxpayer of vast sums.
  In the past week there have been exchanges on this matter during Question Time, and it has emerged that although the State has paid £2 million a day to private industry, private industry has been paying back to the State at a rate of £10 million a day.
  Mr. George Rodgers: Is the hon. Gentleman seriously suggesting that private industry should not pay tax?
  Mr. Lawrence: Of course I am not, but I am seriously suggesting that the observation that private industry is a tax upon the State is manifestly absurd. It is no such thing. Private industry produces much of the finances of the State, and the figures which I have read out will probably be a reminder to the hon. Gentleman, as I believe he was present for much of the Question Time to which I referred.
  Above all, the British people realise that it is no accident that political freedom survives most strongly in countries such as the United States, Canada and Australia, as well as the United Kingdom, countries in which free enterprise is given a chance to prove itself. We live in a modified democracy and the virtues of the free enterprise system, as we operate it here, involve a modified free

  1807
  enterprise mixed economy, which, by and large, works. Yet nationalisation has proved to be in many aspects a millstone, with money from the taxpayer gushing down the drain. That money is my money and other hon. Members' money. It does not come from the sky; it is money which people have to work for and which they have to hand over, and they resent paying more and more taxation.
  Mr. Neville Sandelson rose—
  Mr. Lawrence: I shall be delighted to hear the hon. Gentleman's argument later, if I do not take up too much time. The British people will come to realise, if they do not already realise, that the preparations to which the Government are now committed, in which they will increase the gush of money down the economic drain by buying the enterprises of North Sea oil, are frightening. [Interruption.] We shall see at the next General Election whether the British people are delighted.
  My right hon. Friend the Leader of the Opposition asked in the House the other day why, if the State was to get all it could reasonably get from taxation—he was speaking in terms of up to 85 per cent. taxation—and through the control of the licensing system, was it necessary to spend between £2,000 million and £5,000 million of taxpayers' money? There was no answer, because the point is unanswerable.
  If the Government, in making their demands, are not improving the State's control over the management of North Sea oil or increasing the nation's share in taxation, they must be acting purely for doctrinal, not practical reasons. It surprises me that hon. Gentlemen opposite, particularly the hon. Member for Ormskirk, who is an economics lecturer, do not appreciate that if public expenditure is increased, particularly at a time when public expenditure has been a root cause of the excessive rise in inflation, this merely fans the flames of inflation. This is something which we learned when we first sat in front of economic lecturers like the hon. Member for Ormskirk. The over-spending of money by the State means too much money circulating in society and chasing too few goods. That is a classic definition of inflation.
  1808
  Do hon. Members on the Government side not realise that what destroys investment in private industry is the fear that a Labour Government might win an election and so make investment worthless. It is no coincidence that half the firms in this country have reduced their investment plans in the period since the Government took office. How is that explained other than in terms that private industry is terrified of the risk of nationalisation—
  Mr. Sandelson: Last October.
  Mr. Lawrence: I am speaking of the period since the Government came to office. The hon. Member for Hayes and Harlington (Mr. Sandelson) is in error. I am talking about economic statistics for the last few months, while the Government have been in office. Investment may have declined during some period of the Conservative Government's term of office, but world inflationary problems, which are now coming to be acknowledged by Members on the Government side, fully explain the reasons for that decline. Now that the economic state of the world is beginning to straighten itself out and commodity prices are beginning to fall, and it seems that at some future time world economies will become more stable, there is less excuse for declining investment.
  The hon. Member for Ormskirk spoke about the decline in national production under the Conservatives. From what he said it seemed that he could not have been listening to the Chancellor of the Exchequer, who said, during Question Time the other day—declaring what was set out in the Bank of England's quarterly bulletin for June—that the value of exports had increased by 11 per cent. It was one of the largest increases, in relation to the period involved, ever known. [Interruption.] Inflation may to some extent be the explanation for that, but not the full extent. Even this Government have not been inflating at an increased rate of 11 per cent. since they have been in office. No, this relates to exports which were produced in September, October and November last year, during the three-day week, and which are being presented at ports of exit and being valued now. The 11 per cent. increase in the value of exports is a direct result of goods produced during the period when there was increasing production in the

  1809
  last months of the Conservative Government, despite the three-day week.
  Apart from the general impression given to the nation by the Government's plans for nationalising industry, there is the impact on the ordinary citizen. He must be terrified at the prospect. He will buy a State-built house. He will go to a State surveyor for a survey. The house will be conveyed to him by a State organisation. He will get his mortgage from the State. He will get his bridging loan from the State bank, and there will be no going elsewhere if he is dissatisfied. He will insure his house in a State insurance scheme. His car insurance and his life assurance will all come under a State insurance scheme. If he is unwell, his drugs will be State-produced. I invite hon. Members opposite to give any examples of new drugs invented in a country such as the Soviet Union. These things are not done in State-controlled organisations. The ordinary citizen will get his washing powder from a State company, his shoes from a State company, his car from a State company and his fish fingers from a State company.
  The list is endless, and the cost to the taxpayer will be staggering. It cannot be quantified because the Government will not give us the figures; they will not give us the names of the companies which they propose to take over. But it has been suggested that the cost will add half as much again to the national debt.
  Even at the start, even if there are only 25 companies to be nationalised, the national enterprise board will be 10 times the size of ICI. The national capital sharing scheme would own the largest shore-holding in 3,000 companies. If the insurance companies are taken over, there will be £17,950 million worth of assets falling under Government control. One shudders to think of the size of these institutions, and how unwieldy they will be. Could the Stock Exchange survive as a fair market when the majority of shares were owned by one owner, the State? Could shares be traded in companies which were not making profits for their shareholders but were subject to the political control of the Government?
  Such a programme would be a crash programme indeed for British industry. It would bring about a crash on a scale not seen since the inter-war years.
  1810
  the hon. Member for Keighley, the Yorkshire Post, on 15th May last year:
  "Investment would stop at once, shares would become near-worthless, big and small savers would suddenly find their nest-eggs almost wiped out. And the faster industry collapsed the faster, presumably, the Labour Government would rush in and take over management under the guise of shoring up the concerns or of seeing that some national plan was fulfilled".
  That is what hon. Members opposite want, is it not?
  This is what was said in what I suppose one could regard as the local paper of
  "The foundations of trade and industry in this country have been gravely weakened by inflation over the years (more than many realise). If ever there was a programme for a crash, this is it."
  However blinkered and hidebound Socialists may be—I have noticed even today that not all hon. Members opposite are blinkered and hidebound Socialists—those genuinely involved in and concerned for British industry know that only in a system of relatively free enterprise is there any hope for the wellbeing and prosperity of this nation. This is a hope shared by the 14 million ordinary people whose investments are part of the nation's wealth under the present system, and it is a hope shared also by many workers in British industry who do not want to be nationalised, who do not want to be part of an industry which will be the first to come under the hammer in a time of economic stress and have their wages kept down.
  Of course, no one wastes time arguing that the free enterprise system is perfect. No system is perfect, and complete free enterprise is a dream. The reality is that some companies fail, and some need some State money in order to preserve their employment. One thinks of such examples as Rolls Royce and enterprises involved in State secrets. That is why a flexible policy serves the nation best. Once some companies are nationalised, they cannot be sold back to private enterprise because no one will buy them. But this is another reason why a flexible policy serves the nation best. We have a flexible policy, and it is that policy which has our wholehearted support on this side. We want to see it maintained.
  I have taken the time of the House—[HON. MEMBERS: "Hear, hear."] Naturally, it irritates hon. Members opposite, as truth will always irritate

  1811
  them. I accepted the invitation accorded me by the hon. Member for Ormskirk to come along and be educated. But, alas, as sometimes happens in educational institutions today, those who hold themselves out as capable of giving instruction are utterly incapable of doing more to inspire the pupil than to engender in him an ardent desire to be elsewhere.
  2.15 p.m.
  The Minister of State, Department of Industry (Mr. Eric Heffer): We are delighted that my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk) put down his motion for today. Those hon. Members opposite who may have thought that we did not welcome such a motion were, as usual, utterly wrong. We welcome such a motion, and we welcome the opportunity to discuss a matter of the utmost importance not only to the future of our economy but to the future of the country itself. My hon. Friend is to be congratulated also on making a first-class speech in introducing his motion.
  We have not heard first-class speeches from all hon. Members opposite. On this occasion, as on several others, we have heard from the Opposition some irresponsible, scare-mongering speeches based not upon what the Government in fact propose but what they want the mass of the people to believe we propose; and they have been joined in that attack by various writers in certain journals and newspapers, as well as by Aims of Industry in its interesting little pamphlet with, on the front, the picture of my right hon. Friend as the great bogeyman.
  We have been subjected to attacks of that kind for some time. The object is not only to frighten the mass of the people, but, in particular, to scare the small business man.
  Mr. Ernle Money: He does not need scaring.
  Mr. Heffer: I hear what the hon. Gentleman says. With the way things have been going in the Opposition for some time now, I should have thought that the small business man had been scared a good deal by the alarmist statements deliberately put about.
  On 25th June, the hon. Member for Henley (Mr. Heseltine)—he told me that
  1812
  he had to leave early, and I understand why he is unable to be present to hear what I have to say, which is a pity—suggested that 4,000 firms were on the Government's shopping list for nationalisation. He and his hon. Friends know that to be untrue. They are basing that assertion on my right hon. Friend's publication of a list of 20 companies, at the request of one of his hon. Friends, those 20 companies being exclusively concerned with determining how much Government financial aid had been paid to some of them.
  The question of nationalisation had not been raised, but on the basis of that Answer a great deal of propaganda emanated from the Opposition, statements were made on television and on radio and people were told that we intended to nationalise 4,000 subsidiaries. Among these misleading statements was one on 19th June by the right hon. and learned Member for Surrey, East (Sir G. Howe) who said that
  "All these Socialist Ministers are fashioned in the same mould. Millbank man is working quite explicitly for the establishment of a Marxist society."
  I do not want to make too much of that statement. The right hon. and learned Gentleman is a lawyer and I always thought that lawyers got their facts right from the start, or tried to, or at least ought to. The right hon. and learned Gentleman apparently did not know that the Secretary of State and myself, about whom presumably he was talking, have our offices in Victoria Street. I assume that when the Tories are directing their attacks at Millbank man they are referring to my noble Friend Lord Beswick, because his office is in Millbank, and he is, presumably, the terrible Marxist to whom the Conservatives are referring. The right hon. and learned Gentleman's references to Millbank were about as accurate as the rest of his speech.
  There has been a concerted effort by the Opposition and other people to scare the nation. We are constantly getting public relations efforts by the hon. Member for Henley. He said in a statement issued to the Press yesterday which appeared in most of this mornings' newspapers that the Government have decided to prevent parliamentary discussion of our proposals. The Conservatives have

  1813
  repeated that allegation this afternoon and have suggested that because we have decided on a White Paper there will be no consultation. That is not true. There will be the fullest consultation, and preliminary discussions have already teen held with both the CBI and the TUC, at least in an exploratory fashion, not on the details of the White Paper but at least to outline the sort of problems which must be discussed.
  Yet the hon. Member constantly raises the point that there will be no consultation. When the Conservative Government produced their White Paper on industrial relations they said there could be no discussion on the fundamentals, only on the details. Unlike that, we shall discuss our proposals for industry with everyone who wants to discuss them when the White Paper has been published.
  Mr. Lawrence: The Minister said that we were scaring the nation with our talk about nationalisation. Why does he think that talking about nationalisation scares the nation? Will he set my constituents' minds at rest by saying whether Allied Breweries, Bass-Charrington, Cavenham Foods or any of the other large industries in Burton on Trent will be nationalised?
  Mr. Heffer: The hon. Member is doing precisely that of which I have been accusing the Opposition. He is listing firms which have in no way been put on any list for public ownership. The Conservatives hope to go out to each constituency at the next election saying that every firm, including the small firm on the street corner, is about to be brought under public ownership. I can assure them, however, that they will not be able to do that because by then the White Paper will have been published and the people will be able to judge for themselves the Government's proposals on public ownership and planning agreements.
  The hon. Member asked why it should scare the nation to be told that we plan to take certain industries into public ownership. We are not saying that the nation is scared by the concept of public ownership. The point is that the Opposition are deliberately misleading the public by implying that we intend to nationalise everything in one go.
  Mr. Tom King: The answer to any misleading propaganda in any situation is the truth. The hon. Member for Ormskirk (Mr. Kilroy-Silk) is asking for the truth. He wants an early statement on the Government's industrial policy. We fully support him in that. The Minister knows that the Opposition have to rely on Press stories and Press leaks because there is no official statement from the Government. Will the Minister tell us today when we shall have this information, why the Green Paper idea has been dropped and a White Paper is proposed. and why we cannot have what as a democrat and a great supporter of the House of Commons the Minister would want to see, a debate in Parliament on these proposals.
  Mr. Heffer: The hon. Member raises these matters as if the country had no knowledge of what the Labour Party and the Labour Government intended to propose.
  Mr. King: Your Government, not the Labour Party.
  Mr. Heffer: Yes, the Government. The Secretary of State and the Prime Minister have explained in this House in speeches that have been publicised throughout the country, first in the Queen's Speech debate and again in the debate on 20th June, precisely what the Government have in mind in principle. We have pointed out that we are working on our proposals and that they will be published in detail at the ealiest possible moment. The hon. Member for Bridgwater (Mr. King) has been here long enough to know that it takes Departments a long time to work out the detail of their White Papers. I can remember that when I was in Opposition White Papers might take up to a year to appear after the idea was first mooted—
  Several hon. Members rose—
  Mr. Heffer: I hope that hon. Members not keep interrupting me. I did not interrupt them except for a brief intervention in the speech by the hon. Member for Henley.
  Several hon. Members rose—
  Mr. Heffer: I hope that I may be allowed to develop my speech. If hon. Members want to pursue points they will

  1815
  have plenty of time after I have spoken. I know that they are hoping to deflect me from making my own argument. They hope that I will argue about the issues they have raised, but I have been in this House far too long to fall for that.
  Mr. King: We want the Minister to say something.
  Mr. Heffer: If hon. Members will allow me I shall do so.
  Mr. Tom Boardman rose—
  Mr. Heffer: My hon. Friends asked the right hon. Member for Leicester, South (Mr. Boardman) to give way and he did so only once. I am therefore not too anxious to give way to him.
  Mr. Tom Boardman rose—
  Mr. Heffer: I may give way a little later, but not now.
  I have said that the hon. Member for Henley has been up to his usual public relations tricks. It is not true that the proposals will not be put before Parliament. The hon. Gentleman is trying to suggest that there will be an election. We do not know when the election will come. It may come at the end of the year; it may not. [HON. MEMBERS: "Oh."] It is not for me or any other hon. Member, apart from my right hon. Friend the Prime Minister, to say when a General Election will take place. Conservative Members are trying to confuse the public.
  The hon. Gentleman referred to a number of industries that he said we shall take over—shipbuilding, pharmaceuticals, road haulage, machine tools and the aero-space industry. He also talked about open Government. It is amazing. The hon. Gentleman comes up with that list as though it had not been heard of before, as though it were a secret out of Pandora's Box. The whole world was able to read our manifesto, if it wanted to. Most of my hon. Friends had large chunks of the manifesto in their election addresses, as I did. It said:
  "In addition to our plans set out in point 5 above for taking into common ownership land required for development, we shall substantially extend public enterprise by taking mineral rights. We shall also take shipbuilding ship-repairing and marine engineering, ports, the manufacture of airframes and aero-engines into public ownership and control … sections of pharmaceuticals, road haulage, construction, machine tools, in addition to our proposals for North Sea and Celtic Sea oil and gas.
  1816
  There is nothing hidden. No one says that we would not do those things. We explained our policy to the electorate clearly in our manifesto. I can only assume that the Opposition cannot read, or that if they have learned to read in the meantime they are trying to mislead the public. It could be that during the election period Conservative Members were so busy trying to clobber the miners and get the country on to a three-day week that they did not have time to read the Labour Party manifesto.
  Mr. Tom King: A total of 18 million people did read it.
  Mr. Heffer: The hon. Gentleman must not keep getting up and down like a jack-in-the-box. I am sure that if he wishes to speak Mr. Deputy Speaker will not refuse him.
  Mr. Hastings: On a point of order, Mr. Deputy Speaker. If the Minister insists on repeatedly insulting hon. Members on the Opposition Benches who have made serious contributions to the debate, can he complain if hon. Members interrupt him? He should give way.
  Mr. Deputy Speaker (Mr. Oscar Murton): Whether the Minister gives way is entirely a matter within his discretion.
  Mr. Money: Further to that point of order—[HON. MEMBERS: "It is not a point of order."] On a point of order. Is it not a normal practice of the House that if Members—and particularly Ministers—make provocative remarks deliberately challenging individual Members, as the remarks made by the Minister did, they give way?
  Mr. Deputy Speaker: That is not a matter for the Chair.
  Mr. Heffer: I have not challenged any individual Member. I said that possibly all Opposition Members could not read. I did not say that any individual Member could not read. I was saying that the Conservatives were probably so busy during the election attacking the miners, trying to suggest that the country's problems were due to the miners, and putting us on to a three-day week, that they did not have time to look at the manifesto and the programme of the Labour Party upon which we fought that election.

  1817
  Now Conservative Members have apparently discovered the manifesto and are suggesting that we are trying to bring in something new, something different from the programme on which we fought the election. We are not introducing anything new; we are going ahead with our manifesto.
  It could be that the Conservatives are already getting into a pre-electioneering mood, and that it is on that basis that they are trying to scare the country. I have the highest personal respect for the right hon. Member for Penrith and The Border (Mr. Whitelaw), who unfortunately is not here. It is sad that he should also have joined the chorus. He said on 14th June:
  "Labour's plans would give more powers to the State in this country than in any industrial country outside the Iron Curtain."
  The implication is clear. That sort of posturing led the President of the CBI, Mr. Bateman, to say that the country was drifting like a sleepwalker towards an economic system not unlike that favoured by the Eastern block Communist States. Such statements remind us of the sort of propaganda the Conservative Party brought out during the 1930s, such as the Zinoviev letter.
  Immediately after the Second World War even so great a man as Sir Winston Churchill likened my party to the Nazis. When they know that they are on a bad wicket, that they have no real argument, the Conservatives bring out that sort of propaganda against the Labour Party. It was rubbish then, and it is rubbish now.
  The Opposition have no constructive answers to the serious problems which the country faces—problems of investment, liquidity problems, regional imbalances—and which have been mentioned by some of my hon. Friends and by Opposition Members. There is a need to make certain that our people have security. The rate of inflation is too high. All these serious problems have to be dealt with, but instead of constructive policies from the Opposition, and especially their Front Bench speakers, all we have heard is abuse and exaggerated language. My right hon. Friend the Secretary of State and I are referred to as commissars and so on. This is not
  1818
  good enough. If the Opposition reject the solution put forward by the Labour Party and the Labour Government, what answers do they have? There is an answer, loud and clear, which the people of the country will note. It is simply that there is no answer at all—except to call members of the Labour Party bogey men and so on.
  Let us look at this question of investment. The truth is that between 1952 and 1964, when a Conservative Government were in office, investment by manufacturing industry rose on average by 4·1 per cent. Between 1964 and 1970, when the Labour Government was in office, the figure increased to 5·2 per cent. After the Conservatives regained power in 1970 the rate of investment dropped rapidly. Investment has fallen from the high level it reached in 1970 under a Labour Government. It made a limited recovery in 1973 when there was a rise of 6½ per cent. in volume. A further rise of 12½ per cent. in investment is needed this year merely to reach the 1970 level when the Labour Government went out of office.
  One thing is clear. If the Conservatives were by some mischance returned to office, either as a majority Government or in association with the Liberal Party, then, if some of their policies were adopted, we would face mass unemployment. That is not a scare statement. It is based upon speeches made by prominent members of the Opposition. I refer in particular to a speech made by the right hon. Member for Leeds, North-East (Sir K. Joseph). In an interesting speech a couple of weeks ago he said:
  "Thirty years of increasing State ownership and control have so weakened the economy that its Socialist critics can use the very weakness created as justification for still further collectivism."
  He went on to argue that the only conceivable basis for prosperity rested on a healthy, competitive private enterprise system.
  In other words he said that we ought to get back to Selsdon Man. We had Selsdon Man from 1970 to 1972. Then we had a rapid increase of unemployment and a loss of confidence which was reflected in reduced investment following the abolition of investment grants and the pursuit of Conservative regional policy. That was an approach based

  1819
  on the competitive, private enterprise system.
  We have not forgotten the state of affairs which existed in this country before the Second World War when millions of our people were unemployed because of uncontrolled capitalism. Then areas such as Merseyside, where my hon. Friend the Member for Ormskirk comes from, did not only have their present problems, when school-leavers cannot find employment. There were whole streets, whole areas of workers unemployed. There was mass misery and poverty. That was free and uncontrolled capitalism. That is what the Selsdon Man concept means and that is what—if such a policy were adopted—we would be returning to.
  The Leader of the Opposition, who has just emerged from being Prime Minister for three-and-a-half years, said in the debate on 20th June:
  "The industrial policy of the Labour Party has been the curse of Britain for 25 years."—[OFFICIAL REPORT, 20th June, 1974.]
  Out of those 25 years we had only a short period of office. During that time investment and employment went up. We can point out clearly that it was competitive capitalism that was responsible for the state of the country and not Labour Party policies. I know that hon. Gentlemen opposite do not like these arguments. They must bear in mind what was said in 1970 when their party took power. The Conservative Manifesto said:
  "it will not be enough for a Conservative Government to make a fresh start with new policies. We must create a new way of running our national affairs."
  We got a new way. We got the Selsdon Man concept and that led to high unemployment and a fall in investment. Hon. Gentlemen should remember that they abolished the Industrial Expansion Act yet within 22 years of office were forced to introduce the Industry Act upon which we now base our policies because that Act is a necessary rescue provision, even for the existing capitalist system.
  There has been criticism about the Court Line situation. Court Line was brought into public ownership as a result of the Industry Act. We will build upon the Act introduced by the Conservatives. The hon. Gentleman should not suggest that great revolutionary changes are being made. We have said that we shall base
  1820
  our new Industry Act on the Industry Act of 1972.
  Mr. Tom King: The hon. Member began by criticising scare-mongering and the propaganda of my right hon. and hon. Friends. He has gone on to raise the biggest scare imaginable—the bogus scare of mass unemployment. Can he explain how it is that when jobs in the nationalised industries were lost to the tune of 400,000, new jobs were provided ill the private sector of industry totalling 630,000? Is this a criticism of private industry? Is this not the justification for my right hon. Friend saying that it is by a healthy and lively private enterprise that jobs will be secure?
  May I add a point of detail? The hon. Gentleman has said that he is using the Industry Act to deal with Court Line. Will he confirm that the Secretary of State will offer to the public at the first opportunity the shares he is to acquire in Court Line?
  Mr. Heffer: The hon. Gentleman knows that under the Industry Act the shares have to be offered back to the public. He also knows that we have clearly stated that we intend making amendments to that Act and to go beyond its provisions.
  The Opposition have suggested that I am scare-mongering because I refer to unemployment. But I have pointed out that if we have the uncontrolled capitalism which the right hon. Member for Leeds, North-East and others advocate, we are bound to get a rise in unemployment and we are bound to get back to the situation which existed before the Second World War.
  The Opposition should remember that that part of the privately owned sector which was induced to help provide jobs where there were nationalised industry rundowns such as that which occurred in the coal industry was able to do that because of the interventionist policies of the Labour Government and the continuation of those policies by the Conservative Party, which, incidentally, rejected them during the first two years of Conservative Government from 1970 to 1972. I should like the Opposition to bear in mind precisely what that means.
  In this country we face either a return to the policies of laissez faire or the middle way concept, by adopting a policy

  1821
  such as that suggested by the hon. Member for Horncastle (Mr. Tapsell). I think that his right hon. and hon. Friends should know that he said in a recent speech:
  "As a practical concept, free enterprise perished in the second winter of the last administration, as many of us younger Tories had predicted. The Ministers who believed in the old-fashioned Selsdon version of the economy, which owed more to Bonar Law than to Baldwin, went into a state of shock and perplexity from which some of them have hardly emerged."
  Mr. J. Bruce-Gardyne: Rubbish.
  Mr. Heffer: The hon. Member for South Angus (Mr. Bruce-Gardyne) says, "Rubbish". But there is a division in his party on the question of intervention. The more far-seeing elements recognise that the State has to intervene to deal with the problems of a modern economy. The more reactionary, backward-looking section, which includes a considerable number of Opposition Front Bench Spokesmen, wants a complete return to the Selsdon Man—the old fashioned concept. The Opposition have to make up their minds.
  We as a Government and as a party are saying that we intend not to go back to the old ideas of capitalism and uncontrolled free enterprise or even to purely controlled capitalism. We say that we have to go beyond that. Neither of those concepts will solve the problems that we face—problems brought out very well by the speeches of my hon. Friends today, so I shall not go over them again.
  The Labour Party manifesto laid down very clearly that we intended to extend public ownership to shipbuilding and ship repairing, to the ports and to a number of other industries—precisely the five which were—
  Mr. Bruce-Gardyne: Which ones?
  Mr. Heffer: The five which the hon. Member for Henley was only too keen to spell out. We also said that we intended to set up a national enterprise board to make certain that we used these new instruments to deal with the imbalance in our economy, to deal with our regional problems, to give security, and to make certain that we had the right investment.
  1822
  I come, then, to the last part of my argument—the planning agreements. We have never said that planning agreements will be compulsory. That is a figment of the imagination of the hon. Member for Henley. What we have said is that planning agreements will be agreements between the Government and industry, a number of companies or possibly even sectors. It depends how the planning agreements are worked out. The trade unions will be fully involved in the discussions on those agreements. That is what we have said. That clearly is our position. I cannot understand why—
  Mr. Tom King: Voluntary.
  Mr. Heffer: If it is not compulsory, it must be voluntary. The hon. Member for Bridgwater apparently does not understand the English language.
  We are saying that we need these new instruments of policy—a national enterprise board and planning agreements plus the extension of public ownership in a traditional sense in certain industries—to deal with the very serious problems which the country faces. If only the Opposition would concentrate seriously on what we are proposing and doing, they would know that the only way that we can get the country on its feet again, give our people security, make sure there is full employment, and alter the imbalances in the regions is by having these instruments of policy.
  That is our objective. We are not ashamed of it. We are proud of it. We know that when our case finally goes before the British people, they will accept it as being the only way to deal with our problems.
  2.57 p.m.
  Mr. Tom King: I am very pleased to be called immediately after hearing the speech of the Minister of State, since it gives me an opportunity to clarify the English language. We all know what "voluntary" means. It is something which people can freely enter into of their own will. In view of that, I hope that the Minister will clarify one point about which my hon. Friend the Member for Henley (Mr. Heseltine) asked earlier. "Voluntary" means that people can enter into agreements or choose not to. What will be the sanction against those who choose not to, or what will

  1823
  be the advantage for those who choose to do so? Is there a carrot and a stick, or is it an entirely voluntary agreement? I use the word advisedly.
  I come, then, to the possibility of a White Paper. If we are not to have a White Paper soon, that again will prolong the uncertainty and difficulty.
  I have to express a degree of sympathy for the hon. Member for Ormskirk (Mr Kilroy-Silk). I admired his initiative in initiating this debate. He must have been very disappointed with the Minister's speech. It was the hon. Member who asked for an early statement on the Government's industrial policy. He did not get it. He got some wide-ranging ideas, some criticism of my right hon. and hon. Friends and a few scares about possible Conservative policies. He got no indication of an early statement of the Government's industrial policy to this House.
  This is a very serious matter. I have been in this House with the Minister for a number of years, but he has been here a good deal longer than I have, as has his right hon. Friend the Secretary of State. I can picture in my mind the Secretary of State standing at this Dispatch Box when his party was in opposition saying, "This House of Commons is the place where these matters should be discussed. This House of Commons is the place which should be sovereign." The right hon. Gentleman is always stomping round the country talking about the sovereignty of Parliament. If there is one Secretary of State showing more contempt for Parliament than any other since taking office, it is the Secretary of State for Industry, who was so eloquent in opposition about the sovereignty of this House of Commons.
  As a long-serving House of Commons man, how would the hon. Gentleman have felt if he had sat on this side of the House yesterday when the Leader of the House, who was asked what would happen about the White Paper, said, "It may or may not be published before the recess, but it certainly will not be debated in the House"? How would the hon. Gentleman have responded if a Conservative Leader of the House had said that? I know that the hon. Gentleman is fair in these matters and will understand my feelings when I heard the Leader of the House make it abundantly clear that he
  1824
  would ensure that the White Paper was not debated.
  The Minister of State cannot ride off on the claim that this matter was contained in the Labour Party manifesto and in Transport House handouts. The first indication which I had of it was in the cutting from The Times—a palpable, planted "leak", which I believe is fairly accurate. But we have had no authoritative statement. The hon. Member for Ormskirk is as ignorant as I am about whether what is suggested is official policy, unless there has been confirmation of it in private Labour Party circles of which the House has been denied.
  Instead of policy we have had a campaign of ridicule, scorn and contempt for private industry. The Under-Secretary of State for Trade made a speech last weekend in which he said that British management was the worst in Europe. On what evidence was it based? What good it does to this country and what advantage is gained by making that sort of totally fallacious and misleading remark I fail to see.
  The hon. Member for Ormskirk said that private industry had failed. That was a rather fatuous remark. It was untrue and singularly unproductive. Would one say that ICI, Courtaulds, United Biscuits, GKN, Cadbury/Schweppes, Marks and Spencer, and Sainsbury had failed? By any standard they are some of the most outstandingly successful companies in the world and yet they are enveloped in the statement of the hon. Member for Ormskirk that private industry has completely failed. That was not only an untrue but a damaging remark.
  Mr. Eddie Loyden: Will the hon. Gentleman say how much Government money ICI has received in the recent past?
  Mr. King: I would need to check the figures, but the hon. Member could find out from ICI. I am sure that the hon. Gentleman would also like to check on the contribution which it makes in export earnings, which it has increased markedly in recent years, and the corporation tax which it pays and the salaries and wages which it pays. The hon. Gentleman has chosen an exceptionally bad example. If he is seriously interested in these matters, I hope that he will check the figures and

  1825
  will find out for himself, unless he wants to believe the half truths with which he has been fed by his Government colleagues. If he checks the figures he will get a shock. My hon. Friends have established that industry pays to the Government five times more than it receives from the Government. I would hazard the guess that in the case of ICI the figure is larger than that, but no doubt the hon. Gentleman would wish to check it.
  What concerns me is the fact that the misleading attacks which are made on private industry do nothing for this country. We agree about the analysis of the problems. This country faces problems, but it is not alone in that. I challenge any hon. Member to name any country which does not face problems. We can analyse and identify the problems, but we must ascertain what will be helpful in sorting them out. If we malign and pour scorn on private industry, which is absolutely crucial in our mixed economy—private industry's export contribution is vital—we shall do nothing but damage industry. The scorn and ridicule is reported in the newspapers and is read in different parts of the world. The risks of Government policy are noted and enormous damage is done.
  For instance, we are all concerned about the regions. One of the best ways of helping them is to support more investment locally but also, in important ways, to attract new inward investment, perhaps from overseas companies. Anyone who knows Northern Ireland will know the contribution that has been made by the "dreaded" multi-nationals, whose factories have contributed so much to employment.
  What do hon. Members think is the impact of their hinted, rumoured and leaked policies on people thinking of investing in this country? I have reason to know that a number of investment programmes of substantial size could have come to this country—
  Mr. HefferName them.
  Mr. King:—I am not at liberty to give the names because this is confidential commercial information, but I happen to know—[Interruption.] If the hon. Member thinks that I am telling a
  1826
  lie, he may say so. Otherwise, I am not at liberty to name—
  Mr. Deputy Speaker: Order. I do not think that the hon. Member should provoke anyone to make such an accusation, since the Chair would then have to take a hand in the matter.
  Mr. King: I accept that entirely, Mr. Deputy Speaker. I am telling the Government this in total sincerity and good faith. What I am much more concerned about than the party battle in this House is the future of this country. If hon. Members choose to ignore it, that is up to them. But it may not have escaped their attention that recently, from certain of the oil countries, substantial investment programmes are being put in hand. The Minister will know that France and Germany have conducted successful negotiations and people may start to wonder why we are not enjoying similar success.
  Mr. George Rodgers: Why was there such a reluctance to invest during the period of the hon. Gentleman's own Government?
  Mr. King: One of the most bogus facets of the argument about investment—the Minister of State did this—is the talk about investment rates in the periods of different Governments. As has been said, most Governments pick up the rewards and fruits of the investment climate of their predecessors. The arguments about the success of investment in 1970, 1971 and 1972 were almost all conditioned by decisions taken in 1969–70. The only thing that can happen is that it is a frail and delicate flower—the process of encouraging investment. In an unsettled situation managements will not leap into investment decisions. Therefore it normally takes some time for investment plans to be made and implemented. The only thing that can be done quickly and effectively is to choke off investment. That is exactly what we are seeing now.
  Mr. John Garrett: Does the hon. Gentleman not agree that the serious thing is that the invesment in plant and equipment behind each worker in manufacturing industry is far lower than in any other country in the Western industrial world? This is the point to which we should be addressing ourselves.
  Mr. King: I accept that entirely. That is the sort of point to which we should be addressing ourselves. What are the problems of British industry? The hon. Gentleman has made the analysis and addressed himself to the question. He has mentioned the problems of investment and employment. There are many others, such as training and regional policy. All these matters are vital. Then we have a great jump, and we say, "Because we are not happy about all these things, we must change the whole system and start on something new." But what no one has done to anyone's satisfaction is to explain why the particular solutions that the hon. Gentleman has in mind has any relevance to the problems that exist.
  There was a very interesting article by Keith Richardson in the Sunday Times, which he entitled "How to breed winners." He said that he got bored with the question he was asked—" Can you tell me just what is wrong with British industry?" He said that he had got into the habit of turning the question around and saying "How on earth has it happened that so much of British industry is still surviving with at least the appearance of moderate good health?" He then went on to wonder whether so far from criticising British industry and saying that British industry is responsible for all the problems that we face, it could be that there are some situations in which British industry has to operate—uniquely in this country, as opposed to other countries, industries—that may be something to do with the fact that we are not entirely happy with the performance that we see. Keith Richardson went on to suggest that it was, perhaps, the fact that in Britain industry has been something of a political football.
  It is asked how it could be that the Labour Party's industrial policy could be alleged by my hon. Friends to be the curse of Britain over the last 25 years, when the Labour Party has been in power only for certain limited periods in that time. The answer, simply, is that this curse is as effective, as a threat, when the Labour Party is out of power as it is when it is in power. In some ways it is almost worse, because it hangs as a threat and people are not sure where they stand. If the Labour Party is regarded by people taking business de
  1828
  cisions as the alternative Government—the Opposition party that is most likely to succeed—no company in it senses, in making a decision whether to build a paper mill that is to last for 20 or 25 years, or a big petro-chemical complex which is to last for such a time, can take into account only the fact that there might be a certain Government in power for the next three years; it must look at the broader span. Against that background, it does not matter whether the Labour Party is in opposition or government. During all that time threats of intervention of a direct and oppressive kind have been a massive disincentive to investment.
  Mr. Heffer: On the figures that I gave, can the hon. Gentleman deny that investment increased during the previous Labour Government's term of office and that the Labour Government put right the balance of payments? We had a surplus, after coming to power in 1964 with a very serious deficit, and when we left office again on the last occasion, the Tory Government managed another fantastic deficit, which is like a millstone around the necks of the nation.
  Mr. King: I think that we are making progress and getting through to the hon. Gentleman. I shall now give him an extract from Keith Richardson which extends this argument. Mr. Richardson said:
  "As I see it, if you had actually sat down and tried to draw up a national plan for throwing a modern industrial society on to its beam ends you could hardly have done better than this combination of a less-than-3 per cent. growth rate, violent zigzags of economic policy every two years, chaotic shifts in the relationship between government and industry, a pretty unremitting squeeze on both company profits and executive salaries (when you have allowed for both tax and inflation), and the extraordinarily widespread encouragement of the idea that the best way of making the people of a country prosperous is to bring its business enterprises to their knees."
  That is the opposite argument, an argument which has not been put. It has this to support it. The private enterprise system is criticised for our problems. We are asked once again, "Why are we not successful like the United States, Japan, France and Germany?" If they are cited by hon. Members opposite, one supposes that these must be examples of their policies. In fact, they are exactly the

  1829
  opposite. Those countries are even more private enterprise oriented than is Britain.
  Does not the tiniest germ of doubt begin to grow in the mind of the Minister of State that perhaps this is not the solution? He is critical of Britain's performance compared with that of countries which are more free-enterprise-minded than we are. There is no evidence that the formula for which he is going has had any success anywhere in the world.
  The Minister of State said that there is a division in the Tory Party on this issue. That is true to an extent. He knows that I am an interventionist and that I was involved in the Industry Act. I believe that there must be a partnership. The hon. Gentleman attempted, with a measure of justification, to qualify the system existing in Germany, France and Japan. Those countries have perfected a unique form of partnership which is based on a considerable element of mutual trust. It is a four-cornered partnership composed of Government, industry, finance and the banks, and the unions. They are all working for one thing—their own country and its success. That is one way in which their system is different from ours.
  Could it be that this is what we should be working for, instead of saying that we will perpetuate the argument of State versus private enterprise? Is it not becoming increasingly clear that this internal argument is tearing Britain to shreds?
  I welcome the Prime Minister's call for a clear frontier between private and public enterprise. It would be marvellous if we could get that and keep it, and if people knew where they stood. However, I do not fancy that we shall get it. We have already had a very fuzzy argument between the hon. Members for Basildon and for Ormskirk as to quite where the frontier is. The hon. Member for Ormskirk clearly thinks that all the building societies and the banks are on one side of the frontier, and he is more than happy to have that repeated. I do not know if the Prime Minister takes the same view.
  My right hon. Friend the Leader of the Opposition said that if a frontier could be drawn which is crossed only when it is essential for—
  Mr. George Rodgers: A rescue operation?
  Mr. King: I accept that. The concept was that the frontier should be crossed only where, for national and social reasons, it was necessary for the State to intervene. I said that I recognised that there must be intervention in certain situations.
  Our shipbuilding industry will not survive without Government support, for one reason above all others, namely, that it is competing with shipyards around the world, every one of which receives Government support. If all other countries support their shipyards, independent shipyards in Britain have not a hope of standing on their own feet unless we in our turn are prepared to back our industry. The Minister of State and I crossed swords on the Industrial Relations Bill. He used to say that my hon. Friends and I did not understand unions and union members. I accept that the hon. Gentleman has much more contact with unions than I, and has had longer experience of them. However, I have been in industry all my working life, as the hon. Gentleman knows, and I do know what people are thinking.
  I believe that the present proposals will do enormous damage to confidence. The hon. Gentleman tries to ride this off by saying that I am spreading alarm and despondency again. I am genuinely telling him what people are saying to me and what they are thinking. He can ignore it and blithely go on his own way if he wishes; he is not obliged to accept what I say, but I am telling him that this is a genuine concern of many people. If we can kill once and for all this divisive thing which is biting the guts out of our country—this argument which is doing so much damage—and if only we can get ourselves together again in a situation in which we can say that there will be public enterprise and also a vigorous private enterprise system which will have the Government behind it trying to help it, instead of trying to get political and other control over it—if we can all work together for Britain, some of our problems may be solved.
  3.21 p.m.
  Mr. John Garrett: We are debating industrial policy at a time when it is becoming doubtful

  1831
  whether Britain any longer has a claim to be an advanced industrial nation. Although this is a subject on which we seem to have an infinite capacity for patriotic self-delusion, the fact is that the long-term industrial decline in this country has gone so far that within the next few years it is likely that we shall be a net importer of industrial manufactured goods.
  Britain's share of world exports of manufactures—over 20 per cent. in 1954 and 16·5 per cent. in 1960—fell to less than 10 per cent. last year. Despite two devaluations in the last eight years, the rate of real growth of exports in the period has been barely half the average of other industrial nations. The OECD index of exporting efficiency, which measures a country's growth in exports in terms of the growth of its export markets, shows Britain at the bottom of the league for the last decade.
  If we look at Britain's industrial performance on a sectoral basis and if we take two sectors of the engineering industry in which, on historical grounds, we should be among the leading nations in the world, we find that Britain's passenger car exports have declined every year since 1969 and are now half the French level and a quarter of the German level. British ship completions, in million gross tons, were no higher in 1973 than in 1963, while world completions have trebled. Japanese completions have risen more than fivefold; French, Italian and Swedish outputs have doubled, and all of those last three countries have caught up with us.
  Mr. Tom King: Private enterprise!
  Mr. Garrett: These examples of in. ability to compete can be repeated in many industries. Unfortunately, new examples are continually appearing, as we can see from Britain's share of the service and equipment industries for North Sea oil and gas, and in the flood of household durables and electronic imports into this country.
  This problem has been with us for many decades. Its genesis was observed in the late nineteenth century when it appears that the lead in industrial innovation was taken from this country and fell principally to the United States of America and Germany.
  Mr. Money: The hon. Member for Norwich, South (Mr. Garrett) cited sectors of the engineering industry. Would it not be better to look closer at home, to his own constituency and other parts of East Anglia, where productivity and the share of the export market have gone up?
  Mr. Garrett: I was speaking of the performance of the engineering industry in the country as a whole. Britain's share in world exports is declining despite efforts by companies in my constituency. That is a fact; I cannot speak for the hon. Gentleman's constituency. He spoke of engineering productivity in this country, which is deplorably low by western European standards.
  A small academic industry has grown up around the search for the causes of this relative industrial decline. It is averred that the causes lie in the mistakes in the Government's management of the economy, in a historically overvalued currency, in bad management/labour relations, in persistent labour shortages, in an inadequate educational system, in inadequate technical and management education and training, in a dependence upon Commonwealth markets, in lack of competition and in social attitudes.
  There is no doubt some truth in all these reasons, but in my working experience, which is wholly in management and principally in the management of large industrial organisations, the problem centres on the awareness and responsiveness of industrial management in this country. The Brookings Institute Report on Britain's economic prospects observed that British industry is altogether too custodial and too defensive in outlook and is unable to respond quickly and in a sustained way to new opportunities. Its dominant characteristic is a reluctance to invest even when demand is there, when investment funds and generous Government incentives are available. The result is that British industry is grossly under-provided with modern plant and equipment. Only one in five of Britain's metal cutting tools are less than five years old, compared with one in three in Germany and more than half in Japan.
  As my right hon. Friend the Secretary of State for Industry pointed out on 20th June there is only £250 worth of plant

  1833
  and equipment backing up every British industrial worker in manufacturing industry, compared with £600 in France and £700 in the United States. This is the reason we have the lowest industrial productivity in the Western industrial world, not our industrial relations problems or the reluctance of our workers to work. British workers work more overtime, have fewer days' holidays, and lower absenteeism and sickness than Continental workers and a working tempo at least the equal of Continental workers. But they do not have modern tools and equipment to work with.
  They are also not led by managements which are alive to opportunities, keen to innovate, orientated to the demands of the market, or dedicated to a high performance. British management has too many sleepers and not enough thrusters. I detect from my working experience in management, as a management consultant with a fairly wide range of experience in various industries the rise of a new generation of industrial managers in this country, a new professionalism which may revive British industry eventually. But I doubt if we can as a nation afford to wait that long. New industrial policies are required from government. Exhortation is not enough, encouragement is not enough, liberal and random incentives and assistance are not enough. Government has to intervene in management processes, selectively but firmly.
  The Government policy which I support rests on three pillars. The first is the creation of industrial democracy; the second is creation of a system of planning in which government and industry together pursue national industrial goals; the third is public ownership and public enterprise. I shall not develop the argument for industrial democracy today, except to say that we can no longer expect a better-educated, more articulate and more concerned labour force to be willing to put up with a system which gives them no say in decisions which affect their working lives. The day of management prerogative is over and the day of co-determination has arrived. Unless major reforms in the organisation of industry are made, and unless the command group in industry is made more open and is accountable to those who spend their working lives in industry, we may as well resign ourselves to a persis
  1834
  tent, constant class warfare on the shop floor.
  I wish to discuss Labour's plans for a planning agreement system and for an extension of public ownership. I could argue both these policies on doctrinal grounds, as a Socialist, and on grounds of public control of economic power, but I propose, instead, to argue them on managerial grounds. I shall argue them on the grounds of the crucial need to which I referred earlier, to upgrade the effectiveness of management decision in this country.
  I believe that these arguments will be perfectly acceptable to my generation of industrial management. The planning agreements system has as its aim the congruence of national and corporate objectives in areas of acute national concern. The largest companies will be required to enter into a dialogue with government in such matters as investment, exports, location, employment and innovations. Where national objectives in these matters cannot be met by corporations, Government and industry will be in a position to assess the extent to which the Government assistance would enable them to be met.
  The whole proposition would be not only familiar but perfectly acceptable to anyone associated with corporate planning in large-scale industry in this country. Indeed, corporate planning would be must assisted by the obligation upon the Government to state and abide by their industrial objectives. The requirement is likely to be much more onerous on the Government than on industry.
  One advantage from the national point of view is that managerial accountability would be established for the employment of public funds, and performance in pursuit of national objectives could be monitored. Another advantage is that it would require management to consider the national benefit when drawing up its plans and to be continually alive to the national implications of its actions.
  I believe that planning agreements are imperative if the dialogue between the Government and industry is to get down to specifics and away from exhortation and mutual recrimination. A system in which the Government and large-scale industries together review corporate plans

  1835
  and priorities, together examine the gap between those priorities and national priorities, and together agree areas and objectives for Government assistance, has substantial benefits for management. The trade unions, for their part, can make a central contribution to this whole process of aligning where industries want to go and what national objectives are.
  Given the background of experience of the Civil Service, I should on the whole prefer the planning machinery to be operated by a State agency rather than by a Department, and be staffed by planners and analysts from industry.
  Planning agreements work well in other industrial countries, and they seem to me to be the only way by which a rational and systematic choice can be made for the development and stimulation of British industry.
  Some national objectives can be met only by public ownership. In some areas it is wrong that the Government should provide a large part of the funding for industry but forgo control. Aerospace is one such example. Public accountability for public expenditure can in some cases be satisfied only by direct public control of the spending organisation. There are some areas where public ownership will be required as a means of ensuring that a company remains under British control. There may be national and strategic arguments for national ownership. From time to time, some firms will have to be rescued by the State in order to prevent massive redundancies. The national enterprise board will need to have the resources to provide the management for ailing companies.
  Most important, I believe, is industrial innovation by a public corporation. The State should not only encourage but should directly manage import substitution, for example. It is ridiculous that we import so many goods which we are perfectly capable of producing here. I well realise the benefits of international specialisation, but our national standard of living is being severely reduced by trade deficits which arise because of the inability of British industry to take advantage of demand in the home market.
  I am particularly keen to see a new ventures division in the national enterprise board resourced and managed to carry out a systematic analysis of the
  1836
  gaps in Britain's industrial portfolio, of the areas of high inflow of profitable imports, of product areas for which world demand is fast growing where British industry is unrepresented, of areas where British management is either sound asleep or unaware, or is unwilling to take risks.
  Our industrial situation is now so critical that every pound of State assistance to industry must be targeted to bring the greatest national benefit. Planning agreements and public enterprise, and especially innovation in public enterprise, seem to me to offer the only logical way forward. I am sure that our best managers could be recruited for these exciting and immeasurably worthwhile tasks.
  I listened with interest to the opening speech by my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk), but, having listened with equal interest to the reply by my hon. Friend the Minister of State, I noticed that that reply failed to deal with a number of valid points—many of them constituency points—which my hon. Friend the Member for Ormskirk raised.
  Mr. Heffer: I apologise. I fully intended to reply to those points, but I was deflected on occasion from the main line of my argument. Time went by, and half an hour was, I thought, quite long enough—
  Mr. Money: Too long.
  Mr. Heffer:—I know that it would be too long for the hon. Gentleman—if other hon. Members were to have a chance to speak. I apologise to my hon. Friend the Member for Ormskirk, and I assure him that I shall ensure that he has a written reply from me to all the points which he raised.
  Mr. Garrett: I believe in a new partnership between Government and private industry. Inevitably the Government will have to intervene in areas where private industry has hitherto been unable or unwilling to act. We could argue for Greater State intervention and State control of industry on socialist grounds, on human rights grounds or on grounds of the right of people to control these great and growing economic concentrations of power. But it should not be lost on the country, particularly among middle and upper management

  1837
  whose support we need in these policies, that there are perfectly valid, sustainable, rational, managerial arguments for the planning agreement system and for the extension of public ownership.
  Mr. Stephen Hastings: I shall speak only briefly because I had hoped to move the next motion but I think all hope of that has now perhaps passed by. I regret that because what I had hoped to discuss was perhaps nearer to the crisis that we in Parliament are passing through, whichever side of the House we sit on, than what in the nature of things was bound to be, and certainly was a pretty and discussion of one of the curses of our time since the war—the subject raised by the hon Member for Ormskirk (Mr. Kilroy-Silk).
  I listened with care to the speech by the hon. Member for Norwich, South (Mr. Garrett), and coming from that side of the House it made much more palatable and interesting hearing than perhaps any other I have listened to this afternoon, although I far from agreed with everything he said. He explained that he had experience of management and I would tend to agree with some of his comments about the awareness of British management and the speed of its response. That may be valid criticism, but it is very much overdone in this country, and the fact that we criticise industry so much does us no good abroad.
  I do not know whether by "management" he means that he has been a manager in a team—he talked about service in a large corporation—or whether he has ever had experience of starting and running his own business, being responsible for cash flow and for the people in it, keeping it going week by week. That introduces another dimension and another series of stresses and strains which are near to the heart of the argument and which carry a slightly different meaning in management terms from what he was talking about. He said the reluctance to invest had been the curse of British industry since the war. Many of my hon. Friends would agree with him, but we disagree about the reasons. My hon. Friend the Member for Bridgwater (Mr. King) dealt with this
  1838
  point in an excellent contribution to the debate.
  We see the porblem and the reason for it in so many of the so-called solutions that have been put forward by Labour Governments. When the hon. Member moved from his valid and interesting comments to the solutions, his speech foundered somewhat and we were back listening to the same dreary Socialist concepts. The only answer is control. State bodies and so on. The hon. Member, of course, is an avid planner. He was not in the House when Mr. George Brown, as he then was, came finally to the Dispatch Box with his national plan which had been in gestation for about 18 months. We waited avidly for it. Where did it get us? It took us about six steps backwards. It had no relevance to what we were doing in this country whatsoever, and the same would apply if it were ever tried again.
  Talks between management of big corporations and the Government make sense. They always will. But management cannot be controlled to the extent of having to take decisions against its economic judgment when it is responsible for investment in companies by shareholders and for economic performance. It is not possible. It does not make sense. Management would be totally irresponsible if they allowed themselves to be conned into any such thing.
  Mrs. Audrey Wise: Will the hon. Gentleman explain what consideration, if any, is given to the national interest by managements in charge of such investments?
  Mr. Hastings: In my experience, such as it is, the management of big, middle and even small corporations waste far too much time endlessly wondering what the next Government will do. It inhibits their decisions. If the hon. Lady could find her way into business she would discover that what I say is true.
  The Minister of State made one of the worst speeches I have ever heard from that Dispatch Box, certainly a good deal worse than some of the speeches by his back benchers. When he got away from the manner and platitudes of Speakers' Corner, he was obscurantist and devious. The only thing he got right was his accusation that we did not know where the

  1839
  "Kremlin" was—Millbank or Victoria Street. We do not care. It is what goes on inside that matters.
  In the White Paper of which he speaks, and about which we shall have so much discussion, there is to be a list of firms, and the clouds will be dispelled. The Minister shakes his head. Will there or will there not be a list of firms for nationalisation?
  Mr. Heffer: The hon. Gentleman asks a question and then gives the answer. He says that there will a list of firms. He must await the White Paper. Like most of his hon. Friends, he does not wish to wait for it. Conservative Members wish to speculate all the time about what is in the White Paper.
  Mr. Hastings: The hon. Gentleman has extended the description I gave of his speech. We are not allowed to know what will be in the White Paper. I therefore assume that in the White Paper about nationalisation there is something about nationalisation—surprise, surprise!—and there may well be a list of firms. If there is a list, which we are not allowed to know, will there be discussion at that stage about whether it is a good thing to nationalise this, that or the other firm, or will the discussion be simply about the manner of their execution? It would be handy to know which. That is my first question. We have already had our answer from the hon. Gentleman.
  Secondly, the Minister talks about Court Shipbuilders. This is a serious matter. I am not trying to make a party point, because it is a legislative point of importance to all of us. Was the decision to nationalise Court Shipbuilders taken before the matter was referred to the Industrial Development Board? Was it ever referred to the board? Is not that the purpose of the board under the legislation—granted it is our legislation, and many of us on this side did not agree with it? At least we took the trouble to read it.
  What steps did the Secretary of State take to discover what kind of price might be on offer from other private enterprise companies for the purchase of Court Shipbuilders? Did the Government know that discussions had taken place before they could have taken any decision or before the crisis occurred, and that these
  1840
  talks had probably been going on for some time? What difference is there between their estimate of the commercial price which was discussed and the price the taxpayer is invited to pay for the company?
  Mr. Heffer: The hon. Gentleman must know that under the Industry Act, which was his own Government's Act and under which the matter was dealt with, no company can automatically be taken over. There must be agreement. There was an agreement with Court Shipbuilders. If the hon. Gentleman does not understand the position, he does not know his own legislation.
  Mr. Hastings: Was the Industrial Development Board consulted?
  Mr. Heffer: No. It does not have to be consulted. My right hon. Friend the Secretary of State apologised in the House for possibly giving the wrong impression that he deliberately had not said that in the House. The Board was not consulted. I can assure the hon. Gentleman that no one will run away from that point. In general principle the Board will be consulted.
  Mr. Hastings: It will be consulted after the issue has been decided. The defence of this action is that the company concerned had accepted. Naturally, if the Government give twice what the company is worth it will accept. Who suffers? The taxpayer. What is the merit of going into the Industrial Development Board after that exercise? That is the point, and we shall pursue it.
  The only other contribution of the Minister which irritated me was when he accused the Conservative Party of making outrageous criticisms of Labour and quoted Sir Winston Churchill on one occasion, when he had described the Labour Party as being analogous to the Nazi Party. That was perhaps a flowery figure of speech. But the hon. Gentleman should in no way be under any illusion. There are some of us on the Conservative side of the House who believe that if the policy advocated, not by the Labour Party but by the section of it to which he belongs, were ever a fact in this country, tyranny would be around the corner.
  It is my view that such a dire fate is not in store for us because I do not believe that the country would tolerate it.

  1841
  I do not believe that we could clothe, house and permit 55 million people to live in congested circumstances and organise their lives under this bleak rigidity. It would not work. The Marxist system has never worked anywhere, except in relatively primitive and backward countries such as Soviet Russia where the death it brings is of a different kind. Here we should certainly die if it were ever introduced, but not in the concentration camps or the lunatic asylums—simply of starvation.
  I do not think people want to die in this way and I think they will resist. If this experiment, this conspiracy by a relatively small number of people in the Labour Party and the trade union movement, continues, there will be resistance. Perhaps in the rather desperate stand of the consultants there is a portent. I do not welcome it. I think it simply spells out the fact that power is passing from Parliament, where it ought to be, into other hands and that those who see their freedom and interests threatened are looking to other means to defend them.
  Whatever happens it will not be the installation of the sort of system the hon. Gentleman is talking about. Of that I am sure. Flexibility and speed of response is required to keep this country going and the only source of that is the genius of millions of individuals, not the massive organisms which are advocated by hon. Gentlemen opposite.
  There is no doubt that people will resist out of common sense and that sense of liberty which has stood us in very good stead before and will do so again. The hon. Gentleman pretends that he is not wholly in favour of the system I speak of. He talks of bits and pieces in this curious way. But in fact he is a Marxist, and we know it. Should the efforts of a small group, a minority in the Labour Party, prevail and should in some way the resistance from this side of the House, from the Liberals and elsewhere in the country be flattened, then our fate would be dire. And on this note I finish without apology with a quotation from Solzhenitsyn's most recent book. Very near the end—I cannot swear to the exact words, but these are near enough—he says:
  "Labourites and Leftists of the West, this is not for you. You will never understand or
  1842
  accept what I write until they shout at you 'Hands behind your back' and march you off into our archipelago."
  3.50 p.m.
  Mr. George Rodgers: What has been established in the calmer areas of the debate today is the fundamental problem that British industry lacks investment. What an incredible system we tolerate when the economic health of the nation depends on the whims of individuals and organisations whose motive is not to create employment and prosperity but simply to make a quick and easy buck.
  The consequence of this is that money which should be available for investment in industry is directed instead into areas of sophisticated financial manoeuvring from which nothing emerges which is of value to the community. Lord Stokes, who as far as I am aware is not a paid-up member of the Labour Party, has pointed out that the whole British Motor Corporation has been valued at a lower figure than the monstrous and futile Centre Point building—that ghastly symbol of the ugliness of capitalism, and it is a condemnation of the economic structure on which the employment and welfare of millions of people depend that such an assessment is possible.
  Most Government supporters became politically involved because we resented the moral inadequacies of the social system which existed. It is now painfully apparent that capitalism is not only immoral but is obsolete and unworkable. At one time it could be said with a degree of accuracy that the merchant adventurers in private enterprise took some risks in their search for personal prosperity and that the nation benefited from the incidental spin-off of their activities. Those days have long gone.
  British capitalism is recognised to be the most woeful in the world. Whereas the American capitalist may well invest $100 with the hope of making $10, his British counterpart is reluctant to invest £10 unless there is a fair certainty that he will have a return of £100. It is an open secret that the capitalist concept is in ruins. Even with the support of the previous Government, who by their very political faith were in sympathy with those who controlled the purse-strings of investment, there was a muted response to the plea for investment in industry.

  1843
  Those who claim today that they are appalled at the notion of State intrusion held out the collection plate and hauled in the subsidies. But when the dash for growth was under way, it became apparent that many of the participants were flabby, over-fed and out of condition. We have patched and primed the mechanism of capitalism only to conceal its inbuilt defects. We are using a vehicle which is out of date. It was never designed to serve the whole community, and it carries the seed of its own destruction. Although it makes a pretence of championing competition, it is cannibalistic—it devours its own young—and the end-product is monopoly. It is a monopoly which is fashioned to destroy competition and to concentrate wealth and power within the grasp of a tiny proportion of the community. It is a monopoly without responsibility, unless it be a responsibility limited to an élite and greedy minority.
  In view of the overwhelming evidence that the present system has failed to serve the nation, it is astonishing that there should be such an almighty fuss about the modest—almost timid—proposals which have emerged from the Department of Industry. The Minister of State is treated like the villain in a Victorian melodrama by the Opposition. But what has been suggested to cause such sound and fury?
  It has been proposed that the Government and the major companies of the country should enter into planning agreements to establish harmony on economic priorities, on industrial development and on financial assistance. The criteria would include price controls, the level of home and overseas sales, investment levels and the regional distribution of employment.
  Who is opposed to such a programme? This is what industrial and economic wellbeing is all about. In recent years, we have drifted towards industrial decline, and decline will bring decay if it is not arrested. Now a hand is extended to lead industry from its quagmire. It may me that some of us feel that it would have been more appropriate to have seized it by the throat, dragging it kicking and squealing into the harsh daylight of 1974.
  1844
  It can only be assumed that the clamour and excitement that has been heard from the high priests of private enterprise in response to these most reasonable proposals are an indication of a strange remoteness from reality or an almost incredible stupour of self-satisfaction.
  The National Enterprise Board promises financial support to industry—the very ingredient which has been required for many years—and yet we still hear wailing and gnashing of teeth, seemingly because industry will become accountable to the nation. Yet that has always been so. The investor is always entitled to accountability. The takeover merchants have been busy. They have closed down profitable industries, with all the social consequences, in order to concentrate on safer profits elsewhere. Many units of British industry may yet be grateful to the National Enterprise Board that will save them being gobbled up by the multi-national corporations.
  Therefore, I look to the National Enterprise Board to generate prosperity, particularly in the regions, which have been so long neglected. Because of the nonsense of having to pander to the private investor, we find the most bizarre baits being offered in order to attract investors. In the Central Lancashire new town, I heard the manager of the corporation suggest that the way to secure investment in the area was to invite along the wives of executives and explain what a pleasant area it was in which to live. That is complete nonsense, but these are apparently the methods which have been used to attract industry to a neglected area.
  It is wrong that certain areas should be the poor relation just through geographical chance. We have problems in the North-West. We have fewer teachers per head of the child population, fewer doctors and fewer dentists. We have a smaller number of children going on to higher education, a higher death rate and a more polluted atmosphere. We have a substantially lower income level than almost anywhere else. We have become used to poverty and are too docile about it, but now the young people are angry. The very area which brought about the industrial revolution through the mines

  1845
  and mills is left with scars and dereliction. The wealth created by local people is being spent in more pleasant surroundings, and this imbalance must be corrected.
  Therefore, I have high hopes that the National Enterprise Board will divert funds and factories to the blighted zones which lie beyond the golden triangle located between the Midlands and the South-East. For too long publicly-owned industry has provided a concealed subsidy for private industry. The last Government deliberately held down prices in the public sector and the private sector received the benefit. The cost of this to the Exchequer must be added to the £2 million-£3 million bounty issued daily to private business.
  The independent warriors of free enterprise who so often deny the necesity for Government subsidy to needy individuals do not blush when they accept the golden crutch of State funds. I have to smile at the audacity of hon. Members opposite who curse nationalised industries because they fail to make a profit, which is their yardstick of success, and ^et ensure, when they are in office, that the services of the public industries are available to private industry at below cost. It is no wonder that the previous Government were reluctant to hand back the mines and railways to the original owners, who would have killed the golden goose.
  The country can no longer afford to be restricted by the reins and restrictions of private shareholders. Many progress
  1846
  sive young executives look over their shoulders and realise that they are being obstructed by the system. Capital which should be invested in the plant is being handed to the shareholders.
  I am often asked who would run the industries if the State took them over. The people who run them at the moment would run them—the workers. They are already administering industry, and there is no doubt in my mind that they could run it a darned sight more competently than it is being run now. The Government have made—
  It being Four o'clock, the debate stood adjourned.
  Mr. Money: On a point of order. I take this very briefly in the interests of the hon. Member for Edinburgh, Central (Mr. Cook) who has the Adjournment debate and for whom I have a high regard. It is important to the back bench interests that a large number of hon. Members are still waiting to speak on the motion. Fridays are traditionally hack benchers' days. The Minister of State, who has just left, spoke for nearly three-quarters of an hour and while I was in the Chamber intervened 11 times during other Member's speeches. I would invite the Chair, as has been done on other occasions, to indicate to the arrogant and over-weening Front Bench that these occasions are meant for back benchers and not for long political statements.
  Mr. Deputy Speaker: I am sorry, but the hon. Gentleman is wrong. Those comments are not a matter for the Chair.

ORDERS OF THE DAY

  CINEMATOGRAPH AND INDECENT DISPLAYS BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Mr. Deputy Speaker (Mr. Oscar Murton): Second Reading, what day?
  Mr. Stephen Hastings: Monday next.
  Mr. Deputy Speaker: Has the hon. Member the authority to name the day?
  Mr. Hastings: Yes, Sir.
  Second Reading deferred till Monday next.

  CROWD CONTROL BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Mr. Deputy Speaker: Second Reading, what day? No day named.

  FARRIERS (REGISTRATION) BILL [Lords]
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Wednesday next.

  RATING REFORM BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Monday next.

  HISTORIC CHURCHES PRESERVATION BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Monday next.

  PARLIAMENTARY BROAD- CASTING UNIT BILL
  Order for Second Reading read.
  Mr. Deputy Speaker: Second Reading, what day?
  Mr. Bob Cryer: Friday next. I have the permission of the sponsor of the Bill.
  Second Reading deferred till Friday next.

  HARE COURSING BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Mr. Deputy Speaker: Second Reading, what day?
  Mr. Cryer: Friday next. I have the hon. Member's permission.
  Second Reading deferred till Friday next.

  ABOLITION OF TIED COTTAGES BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Friday next.

  LABELLING OF TOILET PREPARATIONS BILL
  Order read for resuming adjourned debate on Second Reading (21st June).
  Hon. Members: Object.
  Mr. Deputy Speaker: Debate to be resumed, what day?
  Mr. John Lee: Friday 25th October. I have the permission of the hon. Member for Wood Green (Mrs. Butler).
  Debate further adjourned till Friday 25th October.

  RIGHTS OF PATIENTS BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Mr. Deputy Speaker: Second Reading, what day?
  Mr. John Lee: Friday 25th October. I have the authority of the hon. Member concerned.
  Second Reading deferred till Friday 25th October.

  PARK REGULATION (AMENDMENT) BILL [Lords]
  [Queen's Consent, on behalf of the Crown, signified.]
  Read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Shersby.]
  Bill immediately considered in Committee; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

  PRIVATE MEMBERS' BILLS (PROCEDURE)
  Mr. Bob Cryer: On a point of order, Mr. Deputy Speaker. I wonder whether you would draw to the attention of Mr. Speaker the need for reform of the procedures of the House. Hon. Members can call out from a sedentary position and object to legislation, including the Abolition of Tied Cottages Bill, and thereby, without recording their objection, can deny to hundreds of people as the hon. Member for Mid-Bedfordshire (Mr. Hastings) did, in the case of that Bill, the right to live in freedom without fear of eviction. Will you, Mr. Deputy Speaker, draw this system to the attention of Mr. Speaker?
  Mr. Deputy Speaker: Order. Perhaps I should explain to the hon. Gentleman that this matter has been considered by the Committee on Procedure, and that it is not a matter for the Chair.
  Mr. William Molloy: Further to that point of order, Mr. Deputy Speaker. You will recall, Mr. Deputy Speaker, that the hon. Member for Ipswich (Mr. Money)—I regret that he
  1850
  is no longer in the Chamber—rose to speak, on what I am sure he thought was a genuine point of order, to point out that in the debate a certain amount of time had been taken up by my hon. Friend the Minister of State, Department of Industry and that my hon. Friend had made interventions during the speeches of other hon. Members. But at least there was a debate.
  It is a great shame that the hon. Member for Ipswich—this is my point of order, Mr. Deputy Speaker—did not remain to say that the hon. Member for Mid-Bedfordshire (Mr. Hastings), from a sedentary position, assassinated a number of very important Bills. Here I support my hon. Friend the Member for Keighley (Mr. Cryer). The hon. Member for Mid-Bedfordshire then just slipped away from the Chamber. No one will know what he has done. Is it not at least the right of people to know who are the slayers of Bills presented to the House of Commons, which so many support, such as the Farriers (Registration) Bill?
  Mr. Deputy Speaker: I explained previously to the hon. Member for Keighley (Mr. Cryer) that this matter was considered by the Committee on Procedure, and there the matter rests. It is not a matter for the Chair, and it is not a point of order.
  Mr. Ivan Lawrence: On a point of order, Mr. Deputy Speaker. Due to the way in which this matter was put by the hon. Member for Ealing, North (Mr. Molloy), the impression has been given that my hon. Friend the Member for Mid-Bedfordshire, who is no longer present. is some sort of murderer. In fact, most of the slaying of these Bills came from the Government side of the House. It is only right—
  Mr. Deputy Speaker: Order. I do not think that we want to get into a debate on assassination of Bills. I think that we should let the matter rest, because it is not a point of order.

  PRIVATE MEMBERS' BILLS (PROCEDURE)
    ADJOURNMENT
    Motion made, and Question proposed, That this House do now adjourn.—[Mr Thomas Cox.]

  WAGE STOP RULE
  4.10 p.m.
  Mr. Robin F. Cook: I am grateful for this opportunity to raise an issue which affects the daily lives of over 8,000 claimants of supplementary benefit. I appreciate that this number is much smaller than the number which was affected five years ago. Nevertheless, for those who suffer hardship as a result of the wage stop it is small consolation to know that there are fewer who share their fate.
  The second schedule of the Ministry of Social Security Act 1966 provides that, where the entitlement to supplementary benefit of a claimant registered as unemployed exceeds the wage he might expect to get in work, then the benefit paid to him shall be reduced by the difference. What this in effect means is that a number of low-wage earners when they go unemployed receive supplementary benefit payments which are less than the figure which Parliament has decided is essential to meet the subsistence of their famiiles. Thus society ensures that the poverty in which the family lives while the father has a job is fully maintained when he loses it.
  It is widely believed that the function of this wage stop is to prevent supplementary benefit providing any incentive to low wage earners to going unemployed voluntarily, in the hope of rescuing their family from a below subsistence income. If that is one of the functions of the wage stop, then neither the Supplementary Benefits Commission nor any Secretary of State for Social Services has been prepared to defend it publicly. Both have always maintained that the sole function of the wage stop is to ensure that there is equity in the treatment of the unemployed compared with his mates who are still at work.
  I am very doubtful as to the moral basis of this defence. Why is it considered more important to preserve equity between the wage-stopped claimant and other groups in poverty than it is to redress the inequality between him and those who do not live in poverty? Can we ever claim that we are achieving justice in the abstract when what we are doing is creating hardship in practice?
  1852
  But in any event, there is now mounting evidence that in fact the wage stop, far from achieving some sort of equity, actually intensifies the inequalities of our society. I have been fortunate in that I have been able to discuss with the Child Poverty Action Group the cases of over 60 wage-stopped claimants who have come for advice to their local branches in Edinburgh, London, Liverpool and Bradford, and I am bound to say that, if the public at large knew the kind of families who have their benefit reduced by the wage stop, there would be such a widespread revulsion against the practice that it would be swept out of existence.
  Who are the people who suffer from this rule? First of all, they are the long-term unemployed. Precious few workers who fall unemployed are immediately placed on the wage stop. Nearly every worker can produce evidence of recent earnings, and since supplementary benefit levels are so low, they are generally exceeded by his latest wage packet. If, however, he remains unemployed for six months, he is liable to be informed by the Commission that there is no recent evidence of his normal earnings and it has, therefore, assessed them on the basis of the National Joint Council rates for local authority manual workers.
  The A Code is quite explicit on this point:
  "After a labourer has been continuously away from work for six months the relevant NJC rate should be applied."
  Workers other than labourers are transferred to the NJC rate after 12 months. This would not itself be so disastrous if it were not that the A Code also contains the instruction—
  "Never add overtime to an NJC rate"—
  in flat contradiction to the Report on the Administration of the Wage Stop, presented by the Commission, when it then said:
  "The estimate of future earnings must take account not only of the basic wages payable to men in their usual occupations, but also the possibility of overtime, bonus payments, etc."
  Thus there are literally thousands of claimants throughout the country who are wage stopped because in their sixth or 12th month of unemployment their estimated income was reduced to the NJC minimum earnings guarantee, despite the fact that they have never been employed

  1853
  by a local authority and despite the fact that no local authority expects any of its employees to earn only the minimum guarantee—at any rate, for several weeks at a stretch. As an example, Mr. A. of Liverpool, a worker on a car assembly line, earned £40 a week before losing his job as the result of a nervous breakdown. After six months he was wage stopped at the NJC rate of £23 per week.
  What this practice means is that the great bulge of wage-stopped cases are wage stopped because they are among the long-term unemployed. A study produced by the Child Poverty Action Group in 1971 showed that of 18 wage-stopped families, no fewer than 15 had been unemployed for over six months. Of the 52 families surveyed for the 1967 Report, the majority had been out of work for at least one year, and some for several years.
  It may be helpful to remind the House that in other cases the Commission recognises that a household which has been on supplementary benefit for a prolonged period is entitled to a long-term addition to compensate for the effects of surviving for any length of time on a subsistence income; yet the long-term unemployed, after a period are liable to be placed on the wage stop and have their income reduced.
  As well as the long-term unemployed, the disabled suffer most severely from the wage stop. This is what we might expect. The disabled are more likely to be eligible for the wage stop because they normally earn a low wage and because they are liable to periods of prolonged unemployment. All the wage stop does is to reinforce the way society normally penalises disability. Mr. B. from Glasgow was sacked from a job with the railways as a result of partial paralysis, and is registered disabled: he has been unemployed in the seven years since, and for each of those seven years he has been wage stopped. The family of Mr. C. of Birmingham had their benefit wage stopped while he was in hospital receiving treatment for tuberculosis. Mr. D. of Edinburgh was wage stopped while attending an out-patient clinic daily in the early stages of terminal cancer. Mr. E. of Edinburgh is registered as partially sighted, and has been unable to find work for 11 years, for all of which time he has
  1854
  been wage stopped. Of the 52 families covered by the 1967 report, only a third enjoyed good health, and no fewer than 19 were registered disabled. It is, therefore, the long-term unemployed and the disabled who suffer most from the wage stop.
  The third group of households who are socially vulnerable, who require extra generous assistance, but in fact get less because of the wage stop, are large families. Again we can expect such households to be affected by the wage stop because it is precisely the large number of children in the family who give it entitlement to a high supplementary benefit. Not since 1970 has there been published an analysis of family size of households on the wage stop, but it seems more than probable, following the reduction in the overall number of wage stopped cases, that families containing five or more children make up a clear majority of them.
  Survey after survey has shown us that it is exactly the children of such households who are most at risk in our community, who ought to be given positive discrimination to save them from becoming the social casualties of their generation; yet it is they who are penalised most of their furniture has been sold.
  Mrs. H. of Edinburgh keeps her children indoors in pyjamas every evening and all weekend to save their one set of clothes for school. The 11-year-old daughter of Mr. J. of Liverpool shares a bed with her teenage brother because most of their furniture has been sold. Mr. K. of Bradford has 10 children; eight have to attend a special school and three are retarded in their physical development. The entire welfare resources of our community should be directed towards helping such a household. In fact, we have wage stopped it by £8 per week.
  The poverty induced by the wage stop is felt most keenly by both children and parents in the way that it cuts the children off from school companions by preventing them from going along to the football match or the swimming baths. In nine out of the 52 families reviewed for the Commission's own report, the children had refused to take free school dinners because of the stigma they brought at school. In 36 of the families,

  1855
  totalling 137 children, not a single child had had a holiday in the last five years. I am reluctant to believe that there is a single member of this House who is prepared to justify a practice which condemns so many children to such a stultifying start in life.
  But perhaps we can best see how the wage stop reinforces the inequalities of our society in the way it is applied to coloured immigrants. Two years ago there was a major influx of Ugandan Asians, many of whom had to go on supplementary benefit, and some still are. The majority of these immigrants had held skilled or responsible jobs in Ugandan industry and commerce, with a high income. However, the whole function of the wage stop rule is not to bring a claimant's supplementary benefit into line with his past income but to make it reflect what he might earn if he were now to get a job.
  The supplementary benefit officers knew that our society treats the coloured immigrant in such a way that few of the Ugandan Asians would ever achieve the same position in British industry or commerce, and therefore, by and large, they placed these skilled, qualified workers on the NJC rates for labourers and wage stopped them. For example, Mr. Shah taught mathematics at a secondary school in Uganda and held two degrees but was not qualified to teach in Britain. He was classified as a light labourer and wage stopped at the NJC rate.
  At first sight, such treatment seems ludicrously unjust. But if we accept the principle of the wage stop we have to admit that the action of the supplementary benefit officers was logical. The purpose of the wage stop is to ensure that the inequalities between the wages of men at work are reflected by differences in the benefit they receive while unemployed. The wage stop simply ensures that the coloured immigrant, like the disabled, is discriminated against when he is unemployed equally with the way he is discriminated against when at work.
  Of course, there will be those who say that such cases are genuinely distressing, and what we need is a proper system of safeguards to fillet them out from the general ruck. I expect that
  1856
  my hon. Friend will give a variant of that response in his reply by offering to look into any particular case on my behalf.
  But I put it to the House that if this rule is so evil in its effect, can any amount of safeguards or individual reviews really improve it? After all, the whole point of the 1967 report was to establish a proper system of safeguards, and we now have ample evidence that these have proved inadequate. It was that report which recommended the use of NJC rates in order to provide consistency, and that particular safeguard has now notoriously backfired because of the six-month and twelve-month rule.
  The 1967 report also promised
  "a review of all wage stooped cases where there is an element of disability."
  Yet although the review identified over 8,000 such cases, less than 500 had their wage stop removed. Lastly, the 1967 report recommended that in all wage stop cases where there were signs of special difficulty the claimant should be visited at home
  "not less often than every thirteen weeks"
  and that in the course of such visits the officer should assess the need of the family for lump-sum payments to purchase bedding or clothing.
  There is not a DHSS office in the country which could claim to have fulfilled that ambitious follow-up programme. In general, the highest frequency with which wage stop cases appear to have been visited is every eight months. It is hard to blame the commission for failing to match its promise by its performance. As we all know, it is permanently understaffed by about 20 per cent. and yet has to cope with an annual increase of something like 250,000 claimants in receipt of supplementary benefit. At the moment, other supplementary benefit claimants are being visited routinely about every fifth year.
  These very acute work load problems must make us suspicious of any further promise continually to review wage stopped claimants, since the commission patently does not have the manpower to do it.
  In her foreword to the 1967 report, my right hon. Friend the Member for Lanark

  1857
  (Mrs. Hart) who was then Minister of Social Security, said:
  "It is a clear indication of the Commission's intention to administer the law on this subject as sympathetically as possible."
  Yet the fact of the matter is that all the safeguards in the 1967 report and all the good intentions of the commission have failed to prevent the wage stop rule from causing real hardship to some of the most vulnerable members of the community, That being the case, we arc, surely, impelled to consider the abolition of the rule itself. I believe that there are three powerful arguments for so doing.
  First, it is a rule which by its very nature discriminates against the weakest and most vulnerable members of the community. No administrative safeguard can remove this fundamental problem, since inevitably it is the low wage earner and the large family who are drawn within the scope of the rule, yet these are precisely the people we should be trying to help most.
  Secondly, rules such as this distort the whole bias of our social security provision, so that instead of creating the machinery whereby we can actively seek out those in need and extend help to them, we instead devise a system which is designed to make it difficult for those in need to get help.
  Finally, the total number of those on the wage stop is now derisory, less than 5 per cent. of all registered unemployed. I find it impossible to believe that an easing of the hardship experienced by this tiny minority would have the least effect on the incentive to work for the rest of the population.
  Whatever arguments there have been in the mid-sixties for retaining the wage stop, there are now powerful arguments for abolishing it. I hope that my hon. Friend will give the fullest consideration to this.
  4.25 p.m.
  The Under-Secretary of State for Health and Social Security (Mr. Robert C. Brown): I congratulate my hon. Friend on raising this matter this afternoon so that the question of the wage stop rule can be discussed.
  All of us who take an interest in the administration of the supplementary benefit scheme must have reflected at
  1858
  some time upon the substantial responsibility which Parliament has given to the Supplementary Benefits Commission in the Supplementary Benefits Act 1966 to limit the amount of benefit which would otherwise be paid to an unemployed claimant, so that it does not exceed their estimate of what his take-home pay would be in his normal employment. Inevitably, decisions that the amount of supplementary benefit is to be limited are never popular and the exercise of the wage stop rule is therefore bound to be unwelcome to those affected by it and controversial on occasions. As a result, the commission has been criticised, sometimes unfairly, for deliberately forcing people "to live below the poverty line" which Parliament has prescribed as the minimum below which nobody should fall. It is a little unfair that the commission should carry the can for the decisions of this House.
  I therefore want to begin my remarks by recognising fully what is in the statute, namely, that the commission has no alternative but to apply the wage stop to an unemployed claimant when it is appropriate in its judgment, and to pay a tribute to it—which, unfortunately, is not often paid—for its consistent attempts since 1966 to apply this difficult provision fairly and to explain publicly, for example in its published report on the administration of the wage stop in 1967 and in its advice in the Supplementary Benefits Handbook, the very considerable practical problems of administration with which it is faced in trying to carry out the will of Parliament.
  I also want to pay tribute to the local officers of the commission, on whom the burden of operating what, in recent years, has become an increasingly complex provision of our social security system inevitably falls. In doing that, I do not want to be taken as implying that mistakes never occur. Certainly they do, and the commission is the first to admit this. But, equally, the commission is always ready to put matters right, if that is what is needed, and I know that my hon. Friend will get a sympathetic response from Lord Collison, the commission's chairman, if he is concerned about any of his constituents who are subject to wage stop.

  1859
  There is no doubt that Lord Collison is the kindest, most sympathetic and understanding man I have ever known. I know that my hon. Friend will not let his general dislike of the system prevent him from seeking the help which he would get from Lord Collison.
  As my hon. Friend recognises, the wage stop results from the fact that some people's take-home pay is less than the amount of their requirements by supplementary benefit standards. This may happen either because the family is a relatively large one or their housing costs are substantial even after obtaining any rebate to which they are entitled in some cases, both of these factors may be present. We also need to bear in mind that those who are wage stopped while on supplementary benefit are, as it were, only the tip of the iceberg. There are far more people who are working for these low wages.
  By way of illustration of this point, I want to refer to the respective numbers in December 1972, because that is the latest date for which this particular information is available. There were then some 20,000 unemployed people receiving wage stopped supplementary benefit; but at the same time there were also another 40,000 people in two-parent families who were estimated as being in work with take-home pay of less than their supplementary benefit requirements. In other words, we had a scandalous situation in which it would have paid about 40,000 people in employment, whose families would have been better off, if they had given up work and relied instead on supplementary benefit.
  If I may say so, I thought my hon. Friend was a little less than fair in his remarks about the application of the wage stop to Uganda Asian immigrants. The commission was faced with a very difficult problem and it dealt with it, as it normally does, by taking advice from the Department of Employment about the immigrants' employment potential. It is surely not for the commission to determine that it is simply not true that all Uganda Asians were wage-stopped on the NJC basis; a good many undoubtedly were, unfortunately, but this only happened after adequate consideration had established that there was no reasonable alternative.
  1860
  The rest of the trouble is therefore not in the supplementary benefit scheme but in low wages and the neglect by previous Governments of family allowances. This was indeed one of the reasons we included in our election manifesto a number of steps we intended to take towards achieving greater social justice in our society, and I want to mention one which will particularly help to resolve the wage stop problem. This is our commitment to help the low paid and other families in poverty by introducing a new system of child cash allowances for every child, including the first, and payable to the mother. I shall refer to that again later.
  I want to turn now to the effect of this month's increases in social security benefits on the wage stop. The House has approved substantial increases in the supplementary benefit scale rates and, taken on their own, these increases would have the effect of increasing the numbers of people with benefit subject to a wage stop. The number of unemployed people whose benefit was wage stopped had been reduced to as few as 8,000 by April of this year; this was a considerable improvement on earlier years and none of us would want to see the kind of increases which could occur if the improvement in the supplementary benefit scale rates for unemployed people took effect by itself. I am therefore happy to be able to tell my hon. Friend that what we in fact expect to see is a quite substantial reduction below that figure of 8,000 by the time the whole complex of operations of which the benefit up-rating now consists is completed.
  There are two main factors at work to produce this result. The first is the increases in the prescribed amounts governing entitlement to FIS, which my right hon. Friend proposed and the House approved to take effect on 23rd July. These have the effect of increasing the amount with which a family's supplementary benefit requirements have to be compared to decide whether a wage stop is appropriate. As the House knows, we think that the FIS scheme is completely unsatisfactory. In the meantime, however, we have made use of the FIS scheme to help the poorest families and, in the way I have just described, to bring some consequential relief to the wage stop situation. The second factor is a decision

  1861
  which the Supplementary Benefits Commission has recently taken about the application of the threshold increases provided under stage 3 to the wage stop. As my hon. Friend knows, the commission bases its estimate of likely earnings for as many as three-quarters of all wage-stopped claimants on the rates of pay negotiated for labourers by the National Joint Council for Local Authorities' Services.
  The current agreement includes a cost-of-living safeguard provision and the commission therefore decided that the threshold increases must also apply for the purpose of calculating a wage stop when this would be appropriate. However, the commission has also gone a step further and decided that, because the threshold increases covered such substantial numbers of employees, they must apply in all cases for wage stop purposes. This will help greatly to reduce the numbers whose benefit might otherwise have been wage-stopped as a result of the up-rating. I am afraid I cannot give my hon. Friend a reliable estimate of the number who will eventually still have their benefit wage stopped after all these operations have taken place, but they will certainly be much fewer than the numbers involved as recently as April.
  I should like finally to come back to what I have already mentioned as being the fundamental difficulty with which we are faced in regard to wage stop. This is that some people who may never have had the opportunity to acquire sufficient
  1862
  skill, or have had their earning power reduced in some way, have take-home pay which is relatively low in relation to their family commitments. What these people need is an appropriate form of additional family support.
  I have referred to the proposals in our manifesto for dealing with this situation and my right hon. Friend has again reminded the House, as recently as Monday of this week, of our intention to introduce as quickly as possible a scheme of family endowment which would provide a cash allowance for all children, first included. We are pressing ahead with this as fast as we can, and, in the light of that commitment, I can assure my hon. Friend that we shall consider carefully whether there is any continuing justification for having the wage stop provision in the supplementary benefit scheme.
  My right hon. Friend and I dislike the wage stop as intensely as do my hon. Friend and other colleagues inside and outside the House. I am sorry that I cannot at present give any undertaking that the wage stop is to be abolished, but I can say that my right hon. Friend will be re-examining it thoroughly as part of her overall planning for improvements in this area of social security benefits generally.
  Question put and agreed to.
  Adjourned accordingly at twenty-three minutes to Five o'clock.

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