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Workers' Co-Operatives

Volume 888: debated on Monday 10 March 1975

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asked the Secretary of State for Industry whether he will publish the guidelines currently being used by his Department to determine the terms under which financial assistance is offered to workers' co-operatives.

Guidelines for assistance under Section 7 of the Industry Act 1972 were announced on 2nd October 1972, and notified to the House on 1st November 1972. The considerations governing Section 8 cases are wider, and both are covered by the Act itself. These apply to all applications for assistance under these sections of the Industry Act 1972, irrespective of the type of company involved. The final responsibility lies with Ministers.

Will the Secretary of State say when, on any previous occasion to that concerning the Kirkby co-operative, the taxpayer has provided 100 per cent. of the capital of a company on the basis that it is non-returnable to the Exchequer whether the co-operative succeeds or fails?

I cannot answer that specific question without notice. However, I can say that this was the first co-operative supported under the Industry Act 1972. I have noticed the bitter hatred expressed by the Opposition to all workers' co-operatives.

Does the Secretary of State realise the importance of having guidelines? Will he explain why two separate cases—Aston Martin and Meriden—were considered not viable, though both had export potential, both were rejected by the IDAB, but the Secretary of State opted for one and not for the other?

No guidelines were written into the Bill passed by the previous Government. The matter was left to Ministers, subject to the advice of the IDAIR, with no obligation to accept that advice. In the case of Meriden, a marketing arrangement had been reached with NVT, whereas in the case of Aston Martin the absence of adequate marketing arrangements played some part in reaching our decision. The latest proposals for support from Aston Martin would principally have benefited the creditors and not the future of the business. It was on those grounds that I felt unable to accept them.


asked the Secretary of State for Industry if he will make a further statement about Government financial assistance to the Meriden Workers' Co-operative.

With the completion of the necessary agreements, assistance has been provided to enable the co-operative to begin production.

Is the right hon. Gentleman still satisfied that the amount of assistance being given will enable the co-operative to reach viability? Is it his intention that it should continue to remain a subcontractor to Norton Villiers Triumph, or does he want it to be something more?

I certainly adhere to the decision that I took and recommended to the House. This co-operative is an important example of what may be achieved by these means.

As the hon. Gentleman knows, the arrangement with NVT is time dated for two years for marketing purposes. I hope that with the launching of the cooperative, which I understand began production today, we may open a slightly happier chapter for the British motor cycle industry.

Does the right hon. Gentleman accept that the Aston Martin workers in my constituency think that they behaved far more responsibly than the workers at the Meriden co-operative? Even at this late hour, will the right hon. Gentleman agree to meet those concerned to see whether the proposals put forward, which involve a degree of worker participation, can be reconsidered to save this famous company?

I have never refused to meet people who have asked, through their Member of Parliament, to see me. That is the practice that I aim to follow. However, the parallel that the hon. Gentleman sought to draw between Aston Martin and Meriden is not a close one. I pointed out in answer to an earlier supplementary question that the marketing arrangements at Meriden are established through NVT. The marketing arrangements for Aston Martin are not so established. All the support in the latest proposal would have gone to the creditors, not to establish the business on a viable basis.

The right hon. Gentleman has already given the House an assurance that the maximum aid to the co-operative is £4·95 million. Will he now answer the question put to him by my hon. Friend the Member of Newbury (Mr. McNair-Wilson), namely whether that is sufficient to make the co-operative viable? If not, what will happen when the money runs out?

It is an old principle as the hon Gentleman knows, that Ministers cannot answer hypothetical questions. I answered the question by adhering to the statement that I made to the House in recommending support of the Meriden co-operative on the basis I proposed. I stick to that view.