§ Mr. Gryllsasked the Secretary of State for Industry if he will list in the Official Report a summary of the main recommendations of the report from the Sector Working Party Paper on the textile machinery industry listing the preliminary recommendations submitted to date, together with the action taken so far.
Mr. Alan WilliamsThe Textile Machinery Sector Working Party took the view that its full report should not be published but that an abridged version of the report should be made available. This abridged version has recently been issued and a copy is being 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.—With regard to tax relief and stock appreciation, deferred tax should be permitted to be written off.
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 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 representatives on the Morpeth Committee and the Accounting Standards 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.
554WRecommendation.—Assistance to the Industry under Section 8 of the Industry Act 1972 should be introduced as quickly as possible.
Action.—These new arrangements were announced on 13th August 1976.
Recommendation.—A scrutiny should be made of the allocation of public funds to Government research bodies and research associations with a view to determining if a higher proportion of these funds could usefully be directed to the assistance of industry.
Action.—The Department of Industry has prepared a general paper on this subject which will be discussed at the next meeting of the Sector Working Party.
Recommendation.—Some thought should be given by Government, management and unions to the idea of an impartial national body which might assist in determining standards of performance to help remove causes of friction on the shop floor and to improve productivity.
Action.—The Government have noted this recommendation and it will be taken into account in discussions about the pay arrangements for the period after July 1977.
Recommendation.—Consideration should be given to extending the Department's preproduction order scheme to permit machines to be placed with overseas users.
Action.—This matter is at present under consideration. The new arrangements for the textile machinery industry under Section 8 of the Industry Act 1972 include provisions for assistance to projects for the design, development and launching of new textile machinery which goes some way towards meeting this recommendation.
§ Mr. Gryllsasked the Secretary of State for Industry if he will list in the Official Report a summary of the main recommendations of the report from the Sector Working Party Paper on the mechanical handling equipment industry listing the preliminary recommendations submitted to date, together with the action taken so far.
Mr. Alan WilliamsThe first report of this Sector Working Party (SWP), which made a number of recommendations for action by Government, management and unions was published in July and a copy has already been placed in the Library of the House. As the SWP is still considering many of the medium-terms issues raised in their report I am limiting this reply to a summary of the short-term recommendations which involve Government action in some way together with an outline of the action taken so far.
Recommendation.—The SWP urged component suppliers and the industry to study 555W whether their projected capacity is sufficient for both exports and realistic home demand including some displacement of imports. The Government were asked to consider the side effects of such factors as the Price Code—e.g., on the priorities accorded by component manufacturers between home orders at controlled prices and export orders.
Action.—Special powers now exist in the Price Code for price increases which are not justifiable under the other provisions of the code but arc needed in order to alleviate a shortage or threatened shortage of supplies, or are needed to deal with a significant adverse effect on the balance of payments.
Recommendation.—The SWP suggested that heavy crane manufacturers should consult BSC, the major home customer for steelworks cranes, in an effort to smooth its ordering pattern. The Government were asked to examine the possibility of making funds available for the pre-production design work—in advance of the placement of home orders.
Action.—This is a matter within the BSC competence. Its investment programme is expected to reach a record level of £619 million this year, and the Corporation is currently reviewing urgently proposals for major steel investments. The Government will take decisions as quickly as possible on these major proposals when they are received.
Recommendation.—The SWP suggested that ECGD should consider reducing the entry points in the cost escalation scheme so as to enable medium-sized firms to benefit.
Action.—This scheme is currently under review but it is unlikely, for public expenditure reasons, to be available for other than major capital goods.
Recommendation.—The SWP asked the Government to explore the possibility of minimising the exchange risk taken by exporters bidding on contracts which will be executed two years ahead.
Action.—For large overseas projects new provisions came into effect on 1st October 1976 designed to remove some of the obstacles to contracting in foreign currency. Under these new arrangements ECGD guarantees can be expressed in foreign currencies which, in the event of an insured loss arising, would provide full cover against the effects of exchange rate changes.
Recommendation.—As part of the need seen by the SWP for the industry to improve its intake of able people now, Government assistance was requested in the form of increased resettlement grants to encourage skilled manpower to move from areas of labour surplus.
Action.—We have requested more details of shortages of manpower from the industry. The Manpower Services Commission and the Employment Services Agency are reviewing the whole system of aids to the geographical mobility of labour, including resettlement grants and a report will be made to the Commission early next year.