§ 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 fluid power equipment industry listing the preliminary recommendations submitted to date, together with the action taken so far.
Mr. Alan Williams,pursuant to his reply [Official Report, 16th November 1976], gave the following information:
The first report of the Sector Working Party (SWP), which made a number of recommendations for action by Government, management and the unions was published in August and a copy has already been placed in the Library of the House. As the working party is still considering many of the medium-term issues raised in its 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 industry is urged to standardise its seal requirements and to buy in bulk. This was seen as a possible area for strategic investment by seal suppliers with help from Government to increase capacity.
Action.—The seal manufacturers are at present reported to be working below capacity and none has so far applied for Government help in order to increase capacity.
Recommendation.—Government were asked to consider initiating a stockholding scheme for electric motors and steel tubes probably as part of a counter cyclical strategy.
Action.—The Industrial Equipment SWP is examining the future production capacity of the electric motor industry and my right hon. Friend the Secretary of State announced in August the Government's support for the proposal by the 616W BSC for a further £50 million countercyclical stock piling.
Recommendation.—Greater acceptance of dilutee labour by both employers and unions was seen to be needed in areas where skilled labour is short and where pools of semi-skilled labour may exist. It was thought that certain of the larger unions would have to review local implementation of national agreements. The SWP suggested that the training levy exemption scheme should be replaced by training payments based more directly on individual company costs. Direct incentives to individuals to undertake training and re-training were thought to be necessary.
Action.—These two recommendations call primarily for action by management and unions in addition to that by Government. In areas where dilutee agreements exist, Government skillcentres can make available appropriate training arrangements. The SWP has been asked to provide more precise information of any anticipated shortage of skilled labour to assist further consideration of any additional measures.
Recommendation.—The Government and unions were asked to rethink pay relativities—also taking into account fringe benefits, etc.—so that jobs at all levels in manufacturing industry are at least as well or better rewarded than jobs in the public sector, non-manufacturing and service activities.
Action.—This recommendation will be taken into account in discussions about the pay arrangements for the period after July 1977.
Recommendation.—Remove anomalies in the Price Code mitigating against increased investment for the industry in fixed assets or working capital. Consider the case for increased corporation tax relief—related to actual investment undertaken—for manufacturing industry.
Action.—The Price Code was revised in August to permit British manufacturing industry to raise funds needed to finance the high level of activity necessary to increase employment and instill confidence to invest in the future. These changes included increasing the rate of investment relief from 20 per cent. to 50 per cent., giving the industry greater scope to raise profits to generate extra working capital.