Office Equipment (Hansard, 18 November 1976)

Mr. Alan Williams

, pursuant to his reply [Official Report, 16th November 1976; Vol. 919, c. 551], gave the following information:

The first report of the Sector Working Party on the Office Machinery Industry, which made a number of recommendations for action by Government, management and unions has already been placed in the Library of the House. The following is a summary of the main recommendations put to Government together with an outline of the action taken so far. Recommendation.—Consideration should be given to the employment of consultants—probably with Government aid—to examine the scope for joint procurement by the industry and, where buying benefits would result, the feasibility of rationalising and standardising some component requirements. Action.—The Government are prepared to sponsor research into the scope for joint procurement and have invited the SWP to suggest areas for further study. Recommendation.—Where the shift from an electro-mechanical to an electronic based industry results in particularly radical rearrangements of factory operations, the Engineering Industry Training Board and the Manpower Services Commission should consider giving help towards meeting the full costs of providing in-plant training and retraining of semi-skilled and skilled workers. Action.—The SWP is to consider this further to identify the areas where help is needed. Recommendation.—Government should consider the scope for easing the financial position of companies by allowing the writing-off of deferred tax liabilities arising from tax relief on stock appreciation. Action.—The Chancellor of the Exchequer, in his Budget Statement, announced that stock appreciation relief would be continued in broadly the same form for a further two years and made clear his intention to introduce a permanent scheme of relief as soon as possible. Thus for the great majority of companies stock relief implied a deferral of tax into the indefinite future. At the same time there has now been a great deal of discussion within the accountancy profession on how far deferred tax should be shown in company accounts and the Government have contributed to this through their representative on the Morpeth" Committee and the Accounting Standard Committee. As a result the Accounting Standards Committee has now deferred the Implementation of the accounting standard, which would have required full deferred tax accounting, pending a thorough review. There is every prospect that the eventual outcome will be satisfactory to all concerned. Recommendation.—The Price Code has been held to be a disincentive to invest in this " high risk" industry because of particularly low profit reference levels, and accord' ingly should be reviewed. Action.—The new code gives firms sub stantially more scope to raise the funds needed 731W to finance a higher level of activity, to increase employment and to instil the confidence needed to invest for the future. A number of changes in the code will ease the problems of firms with low profit margin reference levels. Recommendation.—The Government, in consultation with the industry, should consider establishing a more satisfactory statistical information base to identify what types of office machinery are now manufactured in the United Kingdom and in what quantities and in which markets they are sold. Action.—The SWP has been invited to suggest specific improvements in the statistical coverage of the industry. Recommendation.—The scope and use of Government assistance for new product development should be increased. Action.—Details of the existing facilities for Government assistance in this area have been provided to the SWP and suggestions on how these might be modified have been invited. Recommendation.—Selected vital areas of United Kingdom electronic infrastructure should be strengthened. Action.—The Government are currently considering what action should be taken in this area. Recommendation.—Consideration should be given by the Government to the provision of incentives to encourage investment in marketing as well as in the build-up of assets. Action.—The Government are considering what support for investment in marketing can be given under the Industry Act 1972. Recommendation.—The Government should consider how to mitigate the disincentive effects of higher personal tax levels in the United Kingdom which are resulting in the loss of key marketing personnel overseas. Action.—This recommendation has been noted. The point will be taken into account in the framing of future budgetary policy and in discussions about the pay arrangements for the period after July 1977. Recommendation.—The relative benefits of United Kingdom export finance systems should be reviewed, with international comparisons where appropriate. Action.—The facilities offered by ECGD are already broadly comptitive with those offered by foreign credit insureres. A representative of ECGD has offered to meet the SWP to discuss any specific proposals that the industry may wish to make. Recommendation.—Government purchasing policy should be reviewed with the object of encouraging the strengthening of the United Kingdom-owned sectors of the industry and stimunting the developments of new products. Action.—Meetings are being arranged with HMSO anti other public sector purchasers to explore the scope for improvements in present purchasing policies. Recommendation.—Tariff anomalies which ham United Kingdom manufacturers should be alleviated. 732W Action.—The Government have obtained a temporary suspension of the import duty under the common Customs tarff on some electronic components which are not currently made within the EEC and is seeking to have this suspension extended.