§ 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 heating, ventilating and air-conditioning equipment industry listing the preliminary recommendations submitted to date, together with 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 on Heating, Ventilating and Air 613W Conditioning Equipment, 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.—The Government and public authorities should make information on future public sector demand and on the marketing strategies of the fuel industries readily available to the SWP and to the companies in the industry.
Action.—The SWP has been asked to specify the type of information required so that Government can consider whether this can be provided.
Recommendation.—The Government should take steps to encourage increases in capacity by manufacturers of strategic components, in particular electric motors.
Action.—Assistance for further investment in the electric motor industry has already been provided under the accelerated projects scheme.
Recommendation.—The Government should consider providing inducements to industry to invest in stocks of strategic components by modifying the price code in order to provide an assurance of improved future profitability. For instance, under the present system it can be seven to eight months before a company can recoup original cost increases, taking account of customer credit periods. An additional aid to improved cash flow would be to base the price code on net profit margins, corrected for inflation, rather than allowable cost increases.
Action.—The Government were not prepared in a period of continuing pay restraint to abandon dual controls on both prices and profits. Nevertheless, the amendments to the controls in the new Price Code should give firms substantially more scope to raise funds. This in turn should improve profitability and cash flow. The price code does not prevent firms from recouping cost increases and in general they can do so at three-monthly intervals.
Recommendation.—Early consideration should be given to the means by which 614W adequate differentials for skilled workers at all levels can be restored.
Action.—-The Government have noted this recommendation, which will be taken into account in discussions about pay arrangements for the period after July 1977.
Recommendation.—Immediate steps should be taken to encourage exports, in particular by encouraging a more flexible approach by the ECGD in providing guarantees covering longer financing periods and in meeting competitive conditions.
Action.—The terms offered by ECGD are already broadly competitive with those offered by foreign credit insurers. A representative of ECGD has offered to meet the SWP to discuss any specific proposals which the industry may wish to make.
Recommendation.—The Government should conduct more stable economic policies in so far as they effect the construction industry.
Action.—The Government will take account of this recommendation in the framing of future economic policies.
Recommendation.—The Government, following full consultation with all interested parties, should devise and implement a medium term national energy policy.
Action.—The Government are working towards developing an integrated approach to energy policy in consultation with management and unions in the fuel industries and through wider public discussion and would be glad to consider any specific proposals which the SWP feels should be taken into account.