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Commons Chamber

Volume 927: debated on Monday 7 March 1977

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House Of Commons

Monday 7th March 1977

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Oral Answers To Questions


British Leyland Motor Corporation


asked the Secretary of State for Industry what representations he has received from British Leyland or the National Enterprise Board in connection with the investment of further public funds in British Leyland.

asked the Secretary of State for Industry when he next intends to visit officially any British Leyland factory.

I have no further plans at present to visit any British Leyland factory. I have nothing further to add to the statement I made on 2nd March.

In the light of the comments made this morning by Mr. Roy Fraser that the attitude of the toolmakers has hardened, does the Secretary of State feel that the situation has worsened since he last spoke to the House? Is he, in conjunction with the National Enterprise Board, laying any contingency plans to keep the specialist car division, Jaguar and Rover, afloat even if the volume car production has to be irrevocably closed?

The NEB is considering the matter and is looking at the situation continually. I have not heard Mr. Fraser's statement, but I can only hope that he and his colleagues will quickly return to work in accordance with the advice given to them over the weekend by Mr. Hugh Scanlon on behalf of the Confederation of Shipbuilding and Engineering Unions.

Has the Secretary of State any estimate of how much longer British Leyland can survive the present dispute before it begins to trade while insolvent? Is he satisfied that the AUEW appreciates the urgency of the situation given that it has taken an extremely long time even to meet its members on strike? Does he think that he can offer any encouragement to the toolmakers to return to work by announcing that no future stage of Government pay policy will be based on the principle of giving precisely the same rise to everyone regardless of skills and responsibilities?

There is no question of British Leyland trading illegally. It is clear that the financial position of British Leyland is deteriorating as a result of the dispute, and I repeat that I hope it ends as soon as possible. It is not for me to pronounce about future incomes policy. My right hon. Friend the Prime Minister, from this Dispatch Box last week, said that it was the Government's intention that phase 3—if it could be negotiated—would be more flexible. I think that that has been made plain to the toolmakers at British Leyland, and it has been fully acknowledged by the AUEW that we are doing everything in our power to get the chaps back to work.

Will my right hon. Friend place in the Library the letter he received last week from the NEB? Quite clearly, after the debate last week the comments of Mr. Urwin cast great doubts on the accuracy of the information given to the House by my right hon. Friend.

The letter I received from the NEB is confidential concerning certain commercial information. It is not in the best interests of British Leyland to lay it before the House. I can tell my hon. Friend that the objective set out in my speech on 2nd March was agreed with the NEB. My understanding was that the main parts of my speech had been agreed unanimously by the NEB, including Mr. Urwin.

Is the Secretary of State aware that suppliers of British Leyland are beginning to lay men off and that unless urgent action is taken unemployment will snowball in the Midlands?

The position at British Leyland is clearly tragic. For the past 18 months or more I have been prepared to back British Leyland and to persuade this House, as best as I was able, to support its long-term future. The £246 million to acquire 95 per cent. of British Leyland for the State, the first tranche of £100 million last August and the Mini replacement programme which I persuaded my colleagues in the Government should go ahead are all being placed in jeopardy.

Moderna (Witney) Ltd, Mytholmroyd


asked the Secretary of State for Industry if he has received an application from Sona Consultants Ltd. for financial assistance for a manufacturing project at Moderna, Mytholmroyd, West Yorkshire.

Yes, Sir. I am pleased to inform my hon. Friend that an application has been submitted to my regional office in Leeds this morning. This application does not, however, contain all the detailed forward trading forecasts which the Department will require to process it. The company has told the Department that it expects to be able to provide the additional information in about three weeks.

In view of the most unfortunate circumstances surrounding this takeover, will my hon. Friend give an assurance that the application will be considered by his Department as a matter of urgency? Secondly, can he say how many jobs will be provided under this proposal and by when? If this proposal is supported, will he also impose a condition to maintain production and employment at this factory? Does he not also agree that these circumstances highlight the need for a revival of Labour's proposals to introduce official trustees in situations of this kind?

Will the Minister bear in mind that if he answers two out of four questions the House will be satisfied?

I shall be as helpful as I can, Mr. Speaker. The Department will consider as speedily as it can what my hon. Friend has said, but it is a complicated application and it is for a considerable sum. Therefore, we shall need to examine the viability and funding completely. The projected employment is 150 persons by 1980, and the total project cost, including working capital, will be just over £4 million. The answer to my hon. Friend's last point about official trustees is that the powers were envisaged in Labour's programme for 1973. We shall have a further look at that.

Manufacturing (Financial Assistance)


asked the Secretary of State for Industry what is his estimate of the total amount of public funds contributed to manufacturing industry for the latest convenient period.

Records of expenditure are not, by and large, maintained so as to distinguish manufacturing industry from other industrial activity, but assistance to manufacturing industry during the period 1974–75 to 1976–77 has been about £6,350 million at 1976 survey prices. This figure does not include support for nationalised industries, industrial training, Redundancy Fund payments or labour market services, which together account for a further £2,582 million at 1976 survey prices.

If my hon. Friend has any particular aspect in mind, I shall be pleased to hear from him.

The aspect that I have in mind will be well known to my hon. Friend. Does not this massive figure of public money contributed to private industry make all the more urgent the need for planning agreements within industry? This is a tragedy which my hon. Friend has constantly failed to answer.

On the contrary, I have tried to answer my hon. Friend on the matter of planning agreements when his Question has been reached, which has not always happened. I hope he will have taken careful note that there is a Question on this subject later on the Order Paper.

Does the Minister agree that it is not only a question of the amount of funds that have been put into industry but rather a question of the use that is made of them? What is his Department doing to make certain that output and productivity in our industry are increased?

That is the whole purpose of our industrial strategy and the National Economic Development Office and the sector working parties. When my hon. Friend considers applications for assistance under the various selective schemes, that is obviously the kind of matter that he always has uppermost in his mind.

Aircraft And Shipbuilding


asked the Secretary of State for Industry what companies in the aircraft and shipbuilding and repairing sectors he expects to be excluded from the provisions of the Aircraft and Shipbuilding Act following the Examiners' decision of 17th February.


asked the Secretary of State for Industry what is his policy towards the nationalisation of the aircraft and shipbuilding industries, in the light of the decision by the Examiners that the Aircraft and Shipbuilding Industries Bill is hybrid; and if he will make a statement.

Will the right hon. Gentleman explain clearly why the list of companies to be cut out, the ship repair companies, does not include the company whose ship repair division accounts for 15 per cent. of the total United Kingdom capacity—Vosper Thornycroft?

Our agreement with the Opposition, through the usual channels, was that the Bill should proceed to Royal Assent in its present form apart from the deletion of the 12 listed ship repairing companies. Vosper Thornycroft's ship repairing activity, as it stressed in its own publicity material, is closely integrated with its shipbuilding activity. It is a division of the listed shipbuilding company and not a separate company.

Is the right hon. Gentleman aware that I visited Vosper Thornycroft ship repairers on Friday and that in the light of the new circumstances the men there are confused and angry with both the company and the Government at their possible exclusion from the list? Does not the right hon. Gentleman appreciate that the incorporation of the ship repairing activities at Vosper's in a massive nationalised shipbuilding company is wholly illogical? Will he consider the proposition not in a doctrinal way but in the best interests of the men who work there and of the industry, bearing in mind that fragmenting off one company seems wholly illogical?

I was specific when I made my statement on the Bill on 2nd March. The agreement that we have reached, which I hope can now proceed, to get the Bill to the statute book as quickly as possible excludes only the 12 listed ship repairing companies. In those circumstances, it would be impractical and a denial of that arrangement if we excluded Vosper Thornycroft's ship repairing activities.

Civil Aircraft Projects


asked the Secretary of State for Industry which civil aircraft projects, including aeroengines, are receiving financial assistance; and what is the amount of assistance project by project.

Total financial assistance given up to 31 March 1976 on projects currently receiving support was £7·1 million on the HS146; £522 million on the RB211; £471 million on Concorde; £245 million on the Olympus engine, and £62 million on capital assistance agreements and on work in Government establishments associated with Concorde. This expenditure was offset by receipts of £297·5 million on the RB211 and £84 million on the Concorde project as a whole.

While I am grateful to the Minister for giving those details, can he say how seriously the Government are pursuing the HS146 project and whether they really see it becoming a civil airliner? If not, what other projects with Europe or our American colleagues have they in mind?

Our seriousness about the HS146 is emphasised by the fact that we rescued that project after Hawker Siddeley had decided to abandon it unless the Government funded it 100 per cent. The latest proposals are being examined carefully. We shall make an announcement as soon as possible, but it will be for British Aerospace to make its recommendations on whether it wishes to go ahead with the HS146. We are pursuing all other possibilities for collaborative arrangements. I have had talks with Boeing, McDonnell Douglas, Lockheed and our French, German and Dutch partners. Every possibility that is available will be pursued to secure projects which will bring jobs to British workers.

Does the Minister agree that it is critically important for both the civil and military divisions of the British aerospace industry to maintain the highest level of design capability in this country? In this regard, is he satisfied that we shall maintain our design capability if the Government proceed with the purchase of the American airborne early-warning system?

Questions about the purchase of the American early-warning system are not for me but for my right hon. Friend the Secretary of State for Defence. However, I agree with the hon. Gentleman that the maintenance of the design capability is absolutely essential for the British aircraft industry that we are determined to retain and enhance.

Derelict Land Clearance


asked the Secretary of State for Industry if he will outline the criteria for specification of land as a derelict land clearance area; how much land has been so designated in Lancashire; and what is the amount of grant paid in this respect in the acquisition and improvement of derelict land for industrial development.

As Lancashire is an intermediate area, it qualifies for 100 per cent. reclamation grants without designation as a derelict land clearance area. During the current financial year, 28 schemes in Lancashire have so far been approved for grant at an estimated cost of £446,000. In two of these schemes the land is intended for industrial use.

Would not an acceleration of the improvement reduce the high unemployment of the area and use other unused resources at relatively low cost? Is there not a need to conserve land which is being used up for commerce and manufacturing at a rate of about 50,000 acres a year?

One of the general constraints on such expenditure is always the limitation of public funds, which the Government must bear in mind. But I take note of the points my hon. Friend has made, and he can rest assured that proper care is being given to the area of Lancashire that he represents.

Power Plant Industry


asked the Secretary of State for Industry if he will make a statement on the outcome of his consultations on the CPRS Report on the electrical plant industry.

When will the consultations be concluded? When will the announcement be made? Can my right hon. Friend assure us that discussions about mergers will not delay a decision on Drax B?

The discussions are being pressed ahead as quickly as possible. I agree with my hon. Friend that the matter is urgent. I have had meetings with the companies concerned, the TUC Fuel and Power Committee and the Confederation of Shipbuilding and Engineering Unions, the unions most directly involved in representing the men who work in the industry. The consultations will be pressed ahead as quickly as possible, but I think that it will be some little time before I can make a definitive statement to the House. However, I can tell my hon. Friend that we want agreement in principle for a restructured heavy electrical plant industry and that we see Drax B as a first component in a minimum ordering programme for the CEGB.

Will the Secretary of State remind his hon. Friend that the CPRS Report stated that the Drax B decision, taken in isolation from all others, would only postpone redundancies in Newcastle and elsewhere for about two years? Will he assure the House that no decision will be taken to oblige the Central Electricity Generating Board to order power plants for which there is no apparent need if that will have the effect of putting up industrial costs for employers in every other industry throughout the country?

What is at stake is whether we should preserve the heavy electrical plant industry. It is clear that if we were not to have a minimum ordering programme, of which Drax B is an essential part, we should probably finish up with no heavy electrical plant industry. The discussions with the companies concerned are going ahead as quickly as possible. I hope shortly to be able to make a statement about the outcome.

Is my right hon. Friend aware that he last used the phrase "as quickly as possible" at the end of February? The end of February has passed without its coming about. Is he also aware that my constituents will welcome what he said about Drax B, but that the redundancies in C. A. Parsons' plant in my constituency are now imminent and that we must have an announcement from him soon?

I can only re-emphasise that I understand the urgency of the situation, but we must get some restructuring of the industries concerned. That is our policy, which is in line with the CPRS Report. I hope that further progress can be made in the days and weeks ahead. It is our view, too, that the National Enterprise Board should be involved in the discussions. I understand that the companies have already had discussions with that body.

Will the Secretary of State, in considering this very difficult matter which is on his plate, bear in mind that any money to provide a power station ahead of requirement must come from somewhere and that as many jobs may be destroyed and as much industrial damage done elsewhere in finding the money as in the solution which some people are urging on him?

I do not see the situation quite in those terms. It is clear that the CEGB will have to order power stations, as will the two Scottish boards, in the 1980s. We are talking about having a minimum ordering programme and preserving an industry which we certainly hope will have an export potential. It is clear that if we let our industry go we shall be permanent prisoners of overseas suppliers. I do not think that the right hon. Gentleman would like to see that situation.

Scottish Council

(Development And Industry)


asked the Secretary of State for Industry when he next proposes to meet the Scottish Council (Development and Industry) in Edinburgh.

I have no plans at present to meet the Scottish' Council, but my right hon. Friend the Secretary of State for Scotland is in close touch with the Council.

Will the Under-Secretary congratulate the Scottish Council Research Institute on the excellent work that it has done on the input-output study of the Scottish economy which shows that Scotland is in equilibrium on the balance of payments? Given that there are no balance of payments constrictions on the Scottish economy, will he ask the Chancellor of the Exchequer to reflate the Scottish economy immediately and to stop any further public expenditure cuts in Scotland?

The hon. Gentleman is following his usual path of separation. The Labour Government do not feel that that path would be beneficial to the working people of Scotland. The working men and women of Scotland face much the same problems as the working men and women of England and Wales. Therefore, it seems to me that the hon. Member's question is distinctly frivolous and hardly relevant to the situation confronting this country.

Is my hon. Friend aware of the strong feelings of the Scottish Council (Development and Industry) about the need to decentralise industry and, therefore, to disperse jobs to places like Scotland? Will he arrange for an explanation to be given to the House as to why the will of the Government and Parliament is being deliberately flouted by the British National Oil Corporation, which has so far provided only 17 jobs in its so-called headquarters in Glasgow? Is not that deliberately flouting Parliament's decision to locate the headquarters in Scotland? Will he also remind the hon. Member for Perth and East Perthshire (Mr. Crawford) and his SNP colleagues that they voted against the Bill which set up the British National Oil Corporation?

I am grateful to my hon. Friend for his remarks. I recognise his considerable ingenuity in putting a question to the Department of Industry which is not its responsibility. I shall draw his remarks to the attention of my right hon. Friend the Secretary of State for Energy.

If there is any kind of equilibrium in the Scottish balance of payments—the facts must be rather dubious—will the hon. Gentleman point out to the Scottish Council that it is overwhelmingly dependent on the British market for Scottish industry? Will he make sure that the Council fully understands that there must be no political or economic impediment in the way of a continuing British market?

I accept some of the hon. Gentleman's points. We are concerned to see that the invidious propaganda of the Scottish National Party does not wreathe a mystique in Scotland which is totally divorced from the reality of the economic situation facing us.

Capital Returns


asked the Secretary of State for Industry how the current average rate of return on capital in British industry compares with the rate of return 15 years ago.

Measured at replacement cost, about one-third of what it was in 1961.

Does the Minister agree that the serious trend shown by that answer goes a long way to explaining the comparatively low level of new investment in British industry today which this year's slightly better prospects do little to alleviate since they started from a very low base last year? What steps is the Department currently taking to impress on other Ministers, including the Secretary of State for Prices and Consumer Protection in his consideration of the next stage of prices policy, the overwhelming need to improve this rate of return?

The best-kept secret from the Opposition seems to be that the world has gone through an unprecedented recession in the post-war period. Therefore, it is not surprising that our profit levels are exceptionally low, just as they probably are in other countries.

I can understand that the Opposition wish to wrap the Price Code firmly around their origination of the policy. I must point out that we have on successive occasions eased the application of the Price Code. The present discussions on it give rise to the further possibility of removing some of the rigidities while retaining some form of price control acceptable to everyone in the country. I do not disagree with the hon. Gentleman's basic argument about the profitability of industry obviously being linked to investment. Nevertheless, I do not think that he can attribute that problem entirely to this Government. The hon. Gentleman should bear in mind that we have just gone through a major recession.

Order. I appeal to hon. Members to try to get back to the old custom of a supplementary question being one question. The answer will then follow.

In the discussions on the Price Code, will my right hon. Friend, instead of being too flexible, be a bit tougher on individual items, especially items in household budgets?

My hon. Friend will appreciate that the Department of Prices and Consumer Protection is carrying out the consultations. I am sure that, from his reading of the proposals put forward by the Government, he will see that an analysis in depth, where profits appear to be unduly high, will be possible under the new régime.

Is the Minister aware that merely to hold unemployment at its present level it is necessary for the private sector to create 13,000 new jobs a month? Is he further aware that the private sector is capable of doing that provided that there is a shift to profits and provided that the Government do not follow the job-destroying proposals of Mr. Jones?

And provided that inflation is overcome and the world returns to a state of growth. I assume that, since the hon. Gentleman wants similar objectives to ourselves, he supports the policy that we are putting forward to achieve that situation.

Advance Factories


asked the Secretary of State for Industry how much advance factory space is currently under construction; and what is the total value of the contracts in progress.

The area under construction in England is 1·5 million sq. ft. at a contracted cost of £13·2 million.

Will the Minister tell us what benefit he sees in spending that amount of money and adding to the 50 million sq. ft. of vacant factory space in the 200 or so unoccupied advance factories which have already been completed?

I am sure that it will have been noted in the North of England that, in a speech last week from the Opposition Front Bench, the Conservative spokesman on Welsh affairs deplored the fact that new factories had been approved for the North of England. The hon. Gentleman asked about the value of such a policy. I should point out that 60,000 workers in England already work in Government-owned factories. I should also point out that, in the nine months between 1st April last year and the beginning of January this year, the rate of letting of advance factories was double what it was the year before and was double what it was in the last 12 months of the Conservative Government. Therefore, I think that our policy is thoroughly vindicated as an investment in the future.

Does the Minister recall that in the last day or so he has written to me about the letting of an advance factory in my constituency? Is he aware of the immense benefit which this programme has in the upland, rural areas where there is depopulation and rural decay? In view of the high level of unemployment over which the Government have presided, will the Minister ensure that upland, rural areas will not lose out in this factory development in comparison with other parts of the country?

I am grateful to the hon. Member for his earlier remarks and for his vindication of my Department because we reply to letters as soon as possible. Of course I take his point, but his criticism about the Government presiding over the highest level of unemployment is unjustified. The Opposition must face up to the fact that we are experiencing the biggest world recession since the last war.

Planning Agreements


asked the Secretary of State for Industry how many planning agreements have now been concluded in the public and private sectors, respectively.

A statement will be laid before Parliament when a planning agreement has been made.

Is my hon. Friend aware that the absence of any planning agreements in either the public or the private sector is an indication of the total failure of the voluntary principle? Is he aware that the failure to achieve planning agreements in the public sector is little short of incredible? Does he agree that the Government's industrial strategy can be seen to be without substance and effect as manifest by the level of investment and employment?

Although I generally agree with my hon. Friend, on this occasion I find it difficult to do so. We are proceeding with the planning agreement policy in both the public and private sectors. We hope to make some announcement shortly. The principle of voluntary planning agreements was set out in "Regeneration of British Industry" and in the Industry Bill. It was endorsed by my hon. Friend by his votes in the House for those policies.

When planning agreements are agreed and an announcement is made, will the Minister tell the House that the likes of the toolmakers at British Leyland will be involved in the discussions prior to the agreements being made? Does he agree that if the toolmakers, who are vital to the car industry, had been consulted a little more the Government would have achieved more flexibility in the prices and incomes policy, which would have meant that the present chaos at British Leyland would not have been with us?

I am interested to hear that an hon. Member who voted for two compulsory incomes policies and has supported his right hon. Friend the Member for Sidcup (Mr. Heath) should now be miraculously converted to a voluntary incomes policy from no incomes policy at all. It is easy for him to change his mind when in Opposition instead of following his Whips when in Government. The whole process of the planning agreement discussions involved workers through their trade union representatives. It is open to the toolmakers at Leyland to take part in the participation machinery at Leyland, just as it is possible for the workers at Chrysler to take part in planning agreement discussions there.

Is my hon. Friend aware that the planning agreement with Chrysler will be welcomed on this side of the House? Is he aware that considerable progress has been achieved already by Chrysler on the basis of the joint reconstruction programme that has been worked out between that company and the Government?

This is a matter about which we hear little from the Opposition because it is one of the many successes achieved by this Government. When we are able to make further announcements on these matters, Opposition hon. Members, whose negativism is becoming the symbol of their party's existence, will once again be shown to be frustrated.

Because the Chrysler company in the United States has made profits and has taken the British Government for a £40 million ride, what do the Government think they can tell Chrysler about running a business?

I am interested to hear that the hon. Member's appreciation of United States capitalism is greater than for the success that he can attribute to British capitalism.

Consett And Stanley


asked the Secretary of State for Industry what expansion he expects to provide for male employment opportunities in Consett and Stanley, County Durham, in the next financial year.

Regional selective assistance offered under Section 7 of the Industry Act 1972 to projects located in Consett and Stanley is expected to provide 240 male jobs in the year ending 31st March 1978. In addition, employment is also expected to arise from the payment of regional development grants and the provision of Government factories.

I am grateful to my hon. Friend. Is he aware that, apart from the constantly high level of unemployment in Consett and Stanley, there is also a continuing loss of jobs in the basic industries such as steel and coal mining on which the economy of the area is dependent? Is he aware that this continuing loss of jobs shows no sign of abating?

I appreciate my hon. Friend's concern. The area to which he referred has special development area status—the highest level of assistance that is available. In Consett and Stanley there have been 19 offers of regional selective assistance amounting to over £600,000 in respect of projects that are expected to cost £11 million. The projects will involve 1,600 new or safeguarded jobs. In addition, there are two advance factories available in Consett. We try to provide every possible incentive to industry to go to areas such as this. It is a continuing problem, but my Department is using its best endeavours to bring some amelioration to the problem.



asked the Secretary of State for Industry whether he will pay an official visit to a factory in the city of Leicester.

Is my right hon. Friend aware that if he goes to Leicester he will receive a warm welcome and will have the opportunity to congratulate the trade unions and management on their resilience and craftsmanship and their success in exports? Will he bear in mind the grave difficulties that exist in the traditional industries in Leicestershire, particularly in hosiery and footwear and even more particularly in those that rely on the home market? Can the Minister do anything to help?

I share my hon. and learned Friend's congratulations for the way in which management and trade unions in the area have withstood the pressures of the recession. I am sure my hon. and learned Friend will be glad to hear that the latest figures show that there has been an increase of about 300 in the number of vacancies in the area over the last year. Last year 35 industrial development certificates were approved, and another seven have already been approved this year. Between them about 2,000 jobs will be created. We have taken action to stop the dumping of low-priced foreign footwear. I am sure my hon. and learned Friend will be pleased that at present in the hosiery industry demand for labour, including machinists, exceeds supply.

Postal Sorting Offices


asked the Secretary of State for Industry how many postal sorting offices in the United Kingdom have been equipped with modem sorting machinery.

As this is a matter falling within the Post Office's field of responsibility, the hon. Member should write to it on this subject.

I thank the Minister for that reply. Is he able to tell me why many of these very expensive machines which have been installed in post offices up and down the country are not being used? I understand that there is a very large installation in London which has been lying idle for many years.

I thought that that was precisely what I was saying. If the hon. Member has any specific instances, he should contact the Post Office.

In view of the anticipated profit that the Post Office expects to make during the next period, will my hon. Friend consider discussing with the Post Office the possibility of keeping down future increases in postal charges?

Much as I admire my hon. Friend's ingenuity, that is a different question.

Is the Minister aware that such answers are not acceptable to the House of Commons? Is he aware that we simply cannot get answers to Questions about the Post Office from a Minister? It would be better to go back to the days of the Postmaster-General. Although it is true that it is necessary for the Post Office to make a profit, does the hon. Gentleman agree that it is now grossly profiteering at the expense of the consumer, particularly on telephones?

Order. I said "Good" because I welcomed the fact that the Minister indicated that the supplementary question was not related to the original Question, and it really applies to what the hon. Gentleman was asking.

On a point of order, Mr. Speaker. I have found with both Questions for Written Answer and Questions for Oral Answer to the Department of Industry that it is almost impossible to get any answer to any Question on the economy of the Post Office. The people are concerned to know whether the Post Office is making—

Order. Perhaps the hon. Gentleman will raise the matter at the end of Question Time.

Ferrous Foundry Scheme


asked the Secretary of State for Industry how much money has now been given out in aid under the ferrous foundry scheme to date in each of the development areas.

Up to the end of February the following amounts, to the nearest £1,000, had been offered to companies in development—including special development—areas:

Northern Region3,149,000
North-West Region31,000
South-West Region57,000
A total of £7¼ million has also been offered to companies in intermediate areas. Actual payments so far have been quite small since they are made only when expenditure has taken place.

In view of the large number of foundry workers who are either unemployed or on short-time working in places such as Denny, Dunipace, Dennyloanhead and Bonnybridge and elsewhere in my constituency, and as this situation is likely to deteriorate with the withdrawal of regional employment premium and the cuts in public expenditure, which will cause the loss of local government contracts, will my hon. Friend consider extending the ferrous foundry scheme to give help to these workers, particularly those in smaller foundries?

The scheme closed on 31st December. Certainly we think that it is a massive scheme of assistance. The fact that expenditure has started only in a very small sort of way and that there is considerable expenditure yet to come would, I should have thought, be an indication of considerable help to the foundry industry.

With regard to the ending of REP, as my right hon. Friend the Chancellor announced, there has been a further expenditure of £80 million on forms of selective assistance. We hope that this selective assistance will make up for and be more effective than the general across-the-board allocation of REP. I recognise and acknowledge the great concern that my hon. Friend has shown, but the foundry scheme has been aimed selectively at improving the efficiency of the foundry industry.

Regional Policy


asked the Secretary of State for Industry when he proposes to hold a review of regional policy.

The effectiveness of our regional policy is constantly monitored.

I entirely accept the concept of regional policy, but is the Minister aware that the present policy involving vast sums of money spread thinly over ever-widening areas is quite unrealistic at present? In view of the appalling unemployment and deterioration, particularly in the urban areas, is not a fresh and more concentrated approach now called for?

I think the hon. Gentleman will be fully aware that my right hon. Friend the Secretary of State for the Environment is conducting a review of the problems of the urban areas, and I am sure that we should await the outcome of that survey.

Indeed I am.

Concerning regional policy, in a period, again, of intense recession there is the difficulty that the long-term underlying structural problems of the traditionally assisted areas can be overlaid by the very heavy unemployment that results from a recession. If we are not careful, we could greatly damage the long-term effect of regional policy if we reacted against what is inevitably a short-term problem of unemployment.

I do not dissent from what the Minister has said, but is he aware that in certain areas, notably of the county of Clwyd, there is a longterm structural unemployment problem? This is an area which, compared with surrounding areas, is without the development area status of, for example, Merseyside and the rest of Wales.

I fully appreciate the hon. Gentleman's point. An application is before me at present from the Clwyd County Council. The hon. Gentleman should be perhaps somewhat relieved that the application is lying on my desk instead of on the desk of his hon. Friend the Member for Harrow Central (Mr. Grant), who wants to restrict the areas that are receiving this assistance.

In the context of an earlier question put by the hon. Member for West Stirlingshire (Mr. Canavan), does not the Minister agree that regional policy has been a disaster as far as Scotland is concerned? Does he not agree that the only way in which Scottish industry can be rejuvenated would be by a Scottish Assembly with full economic powers?

The hon. Gentleman lives in a poly-paradise. He does not seem to recognise that, if it had not been for regional policy—I hope that the nationalists will turn their attention to this matter—followed by Governments of both major parties over the last 20 to 25 years, the situation in Scotland today would be far worse than it is now. I say that as a Welsh Member of Parliament. For years many parts of England have forgone industrial development in order to help my part of the country and the hon. Gentleman's part of the country. The incredible ingratitude and bitterness of the nationalists should be seen for what it is.

Does my right hon. Friend agree that the regional policies pursued by all Governments since the end of the last war have succeeded in maintaining the unity of Britain and that it is good economic policy to ensure that industry is dispersed throughout Britain, including Wales and Scotland? In view of this, although the Government are doing much in the way of selective assistance, will they look again at REP, which has worked well over the years?

I entirely accept my hon. Friend's basic premise. I am sure that most hon. Members—except a few of the frantic fringe—accept that we must have a unified approach to our industrial problems.

As for REP, the successive effects of inflation have meant that its real impact, in terms of cost to a firm, became very marginal. It seemed far better in that case to concentrate money on those really in need, who could be saved by the much higher rate of temporary employment subsidy—I am sure my hon. Friend will accept that it is a very valuable asset for many firms—and to release money for selective assistance, such as the new selective scheme that my right hon. Friend announced earlier and such as the £65 million scheme for the shipbuilding industry announced about a fortnight ago.



asked the Secretary of State for Industry at what proportion of capacity the British steel industry is currently operating; how this compares with the present position of other steel-producing countries in Western Europe;-and if he expects any early improvement in orders and production.

The British steel industry operated at about 75 per cent. capacity in 1976 compared with an estimate of 65 per cent. for the Six using ECSC definitions. Part of the difference was due to production for stock by the British industry, including counter-cyclical stockbuilding by BSC. I do not expect a signifi- cant upturn in demand before the third quarter of 1977.

I thank my hon. Friend for that information. Will he assure us that the policy of ingot stocking will be continued and that the maximum sustainable level of activity will be maintained, particularly by the Corporation's most profitable plant?

I can give my hon Friend the assurance that we regard the stockbuilding schemes that have taken place as having been extremely important in maintaining employment and making sure that industry is ready for the upturn when it comes. Regarding my hon. Friend's latter remarks, we have made quite clear that we cannot accept artificial restrictions on production, although we are very anxious to co-operate with the Commission in an anti-recession scheme which helps all European steel-making countries.

As the industry has a 25 per cent. under-used capacity, is not the Minister particularly concerned? What steps will he take to rectify the problem of the amount of imported steel that is being brought into Britain particularly to meet the demands of the car industry?

As the hon. Gentleman will know, we have taken steps to deal with special imports of certain steels, and we are watching that matter. At the same time, we know that the industry is not yet able to meet certain demands. It is obviously important to the maintenance of other sectors of the economy that the imports should take place. However, Sir Charles Villiers has made clear that he wishes to ensure that the import penetration of steel is reduced as rapidly as possible.

Motor Industry


asked the Secretary of State for Industry what studies he has initiated with British Leyland and the NEB as to the optimum size of a factory in the British motor industry measured by the total number of people employed in such a factory; and how many factories in British Leyland are currently larger than the optimum size.

Is the Minister aware that his reply is rather unsatisfactory? He might put his mind to the fact that it is clear to me that as factories get larger there is a danger of increasing alienation between workers and management. I put this thought to the Minister. It may be that part of British Leyland's continuing difficulties lies in the very large number of people employed in British Leyland factories, and that the Minister, the NEB, and the British Leyland Board should reflect on the cautionary tale of Jack and the Beanstalk.

The hon. Gentleman has raised a question of some importance. However, I am sure he will know from his own studies that there are not unanimous views along the lines he has suggested. If he examines such books as "Economies of Scale in a Manufacturing Industry" by C. F. Pratten and "The Motor Industry: An Economic Survey" by D. G. Rhys, he will find that there are differing analyses. If the hon. Gentleman goes abroad to Germany, he will find that the view held there is entirely contrary to that which he has put forward, and in Japan very much more so. It is not that I dispute the views of the hon. Gentleman, but they are not proven.

Yorkshire And Humberside


asked the Secretary of State for Industry what increase in annual grant he has given to the Yorkshire and Humberside Development Association; and how this compares with other regional associations such as the North-East and the North-West.

As I announced on 18th February, I have doubled the grant aid to the Yorkshire and Humberside Development Association and the North-West Industrial Development Association. The grant to the North of England Development Association has been slightly more than doubled. The new grants for each of the next three years are £30,000 to Yorkshire and Humberside, £135,000 to the North-West and £250,000 to the North of England.

I thank my hon. Friend for the extra £15,000, which is what a doubling means. Is he aware that that is in no way satisfactory to the officers of the association or to myself and my col- leagues who represent constituencies in Yorkshire and Humberside? Without appearing to be too churlish, I must say that it appears to us that those who shout loudest north of the Tweed seem to jump the queue for supplementary Government cash.

I am sure that my hon. Friend does not want to be churlish. Very full and proper consideration was given to the assessment of these grants. I should point out that the North and North-West areas contain special development areas whereas Yorkshire and Humberside does not. This is an indication that their problems are worse than those of Yorkshire and Humberside, and, as a consequence, the grants are assessed on this basis. I know that the Chairman of the Yorkshire and Humberside Development Association has written to us expressing concern. We shall reply to him in the fullest possible terms. We much appreciate the excellent work that is being done by the association in attracting industry and jobs to the area.

Without wanting to enter into a competition to see who might be more churlish with my hon. Friend, may I ask whether he will address himself to the particular purposes of the Yorkshire and Humberside Development Association and, in the light of that, reconsider what he said this afternoon before he sends a final reply to that association? The purposes of the association are fully supported by business, trade in and many social organisations Yorkshire covering a wide area, and by all the Members from Yorkshire and—

Order. It is reasonable to ask the hon. Member to put his question. Fair play. The Minister has given information—

Will my hon. Friend reconsider the reply that he gave this afternoon on behalf of the Government?

I very much appreciate the promotional work that the association undertakes, and I have mentioned that.

My reply to my hon. Friend the Member for Kingston upon Hull, West (Mr. Johnson), who, I thought, was rather less churlish than was my hon. Friend the Member for Penistone (Mr. Mendelson), is that this represents a 100 per cent. increase in public expenditure for the Yorkshire and Humberside Development Association, and not many public or assisted bodies can say that they have received that kind of help.

Criminal Jurisdiction Legislation


asked the Attorney-General whether he will give particulars of trials held under the Criminal Jurisdiction Act of the United Kingdom Parliament and the Criminal Law Jurisdiction Act of Oireactas Eireann.

The hon. Member's Question refers to the Criminal Jurisdiction Act 1975 and its counterpart in the Republic of Ireland, the Criminal Law (Jurisdiction) Act 1976. The Acts came into force on 1st June 1976 and relate only to persons arrested for offences committed after that date. No prosecutions have yet been brought under either Act.

Is it not the case that an extradition must be refused before the second-best procedure, which is the subject of the Question, is invoked? Is the Attorney-General aware that New Scotland Yard is reported to have alleged that wanted terrorists are walking about at large in the Irish Republic, but Dublin replied that warrants have not been sent by the British police to the Garda Siochana? Will the Government look into this as it is clearly a source of friction between the two Governments, who should be and are co-operating in the war against the common enemy?

It is not essential that extradition procedure should be taken before a resort to this Act is followed. On the hon. Member's second point, I will look into this matter. I welcome what he has said about the desirability of very close collaboration between the two nations, and I have no reason to doubt that this is taking place.

Director Of Public Prosecutions


asked the Attorney-General when he next expects to meet the Director of Public Prosecutions.


asked the Attorney-General when he last met the Director of Public Prosecutions.


asked the Attorney-General when he last met the Director of Public Prosecutions.

I meet the Director as often as the need arises. I last met him on 25th February.

When my right hon. and learned Friend met the Director of Public Prosecutions, did he discuss with him the problems caused by lack of control by the public over the rights of private citizens to institute prosecutions, as opposed to civil proceedings? Does he agree that this trend is being exacerbated by an attempt to erode the discretion vested in the Attorney-General in a recent case?

That was not one of the subjects on the agenda at that particular meeting. Certainly I agree that there is a very distinct danger in what my hon. and learned Friend has said. I accept the need for private prosecutions to continue, but what I do not like—and, I imagine, other hon. Members do not like—is organisations making use of the private prosecution system or the analogous civil system in relation to one particular class of offence rather than across the board on all offences committed.

Can the Attorney-General confirm that next week he will make a statement on the report of the Director of Public Prosecutions about allegations of corruption in Birmingham?

I have answered a number of questions about that par. ticular matter. It has been a difficult matter to resolve, and I hope that a definite decision will be taken shortly.

Has the Attorney-General discussed with the Director of Public Prosecutions the possibility of a prosecution of Mr. Tikkoo, the owner of the "Globtik Venus", who raised a mercenary gang of armed people to attack a British ship and her crew? It would appear that Mr. Tikkoo in public statements seems to have committed an act of conspiracy, presumably supported by Opposition Members who are his parliamentary advisers, and the directors of his board.

My only information on this matter comes from the newspapers and the other media. I have asked the Director of Public Prosecutions to consider the matter and advise me whether offences have been committed.

What progress has been made on proposals to reform the prosecution system, and in particular on the proposal to open regional offices of the DPP?

The question of reform of the prosecution system is for the Home Secretary, and questions about this should be directed to him. Needless to say, he seeks my views and those of the DPP when considering the matter.


asked the Attorney General what is the establishment of the office of the Director of Public Prosecutions.

The present complement of the Director of Public Prosecutions is one Director, one deputy director, two assistant directors, eight assistant solicitors, 52 senior legal assistants and legal assistants, and 140 administrative and secretarial staff, making a total of 204.

Is the Attorney-General sure that the complement of the DPP's office is enough, bearing in mind the heavy load placed on that office as a result of company frauds? These amount to at least 28 current cases in which companies are being investigated by the DPP. It takes an inordinate length of time to get these cases to the courts—up to six years, as in the case of the Pergamon outfit.

The needs of the DPP's office depend in part on the matters with which it is concerned, subject to the regulations affecting it. They depend also, in part, on the number of cases which local police superintendents send to the DPP for advice. I am not in a position to reply directly to the question because, as I have said, the whole matter of the prosecution process is one for the Home Secretary, even though I am closely concerned with it.

Can the Attorney-General confirm that there is a serious problem in staffing the DPP's office, in view of the vast amount of work which that office must undertake? Would he agree that it is difficult to attract sufficiently competent people into that office with the salaries that are offered at the present time?

I have said many times that careers in the Government legal service generally are very rewarding, particularly in relation to the type of work carried out. I would hope that more practising members of the Bar would, after a period of time in practice, think it right to apply for positions in the office of the DPP.

Questions To Ministers

I call the hon. Member for Rutland and Stamford (Mr. Lewis) to raise his point of order.

You were kind enough, Mr. Speaker, to say that I could raise a point of order on Question No. 18. My hon. Friend the Member for Buckingham (Mr. Benyon) put a perfectly reasonable Question to the Secretary of State for Industry in connection with the Post Office. I came in with a supplementary question on the profiteering of the Post Office at the present time. The Minister did not answer any questions on this, and you, taking your cue from that, suggested that the Minister could not answer my question.

We are in a difficulty with the Department of Industry. When we put down Questions relating to nationalisation to the Department of Energy we generally receive answers, but when we put Questions to the Department of Industry about the Post Office we do not. The Post Office is an important organisation which charges the people of this country Large amounts of money for their telephones, stamps and so on, and it is suggesting that it will put up prices. Unless we get answers to our questions, we shall have to go back to having a Postmaster-General operating on the Government Front Bench.

It might help the House if I first answer the point of order. There might then not be any other points of order. The Post Office is now a public corporation. The only Questions permitted on the Order Paper are those that come within the limited field for which, by law, the Secretary of State for Industry is responsible. That, no doubt, explains a lot of the difficulties.

Further to that point of order, Mr. Speaker. I was intrigued to see Question No. 18 in the name of my hon. Friend the Member for Buckingham (Mr. Benyon) because I was surprised that it had got there at all. Can you advise how it is that a Question to which the Minister is so ready to say "This cannot be answered because it is not my responsibility, and the Question should be directed to the Post Office" appears on the Order Paper? Why does not the Minister, as he has no responsibility for the subject, redirect the Question before it comes here? As a rule, he has a fortnight in which to see Questions.

I put it to you, Mr. Speaker, that we are in a genuine dilemma about being able to question the activities of the Government in the business of industries for which they are directly responsible, namely, the nationalised industries. If this had been a Question, for example, about how much investment had been made by British Leyland last year in new machine tools, I am sure that we should have received an answer, but on the Post Office, never.

Further to that point of order, Mr. Speaker. Is it not right that this lack of accountability about the Post Office stretches far beyond prices? I seek your guidance on a particularly worrying matter. The Deputy Director General of the Post Office has refused to give me any information about an admitted discriminatory practice in my own constituency concerning the giving of credit to people who live in what the Post Office calls good streets and not to others. I have attempted in many ways to get answers from Ministers in this respect. Is this a question of privilege? If it is neither a question of privilege nor one that I can raise with the Minister, it appears that Members of Parliament are hamstrung in their attempts to get fair play for people in their constituencies.

With reference, Mr. Speaker, to what you said about ministerial responsibility, may I inform you that this morning I was advised that a Question that I put down last Monday for Oral Answer next Monday by the Secretary of State for Prices and Consumer Protection asking what representations he had personally received about the mounting increase in gas prices had been transferred to the Department of Energy? Could you, as the custodian of Back Benchers' interests, advise us how Ministers can be prevented from arbitrarily avoiding Questions the look of which they do not like?

Further to the point of order about Question No. 18, Mr. Speaker. We know how partticular the Table Office is about accepting Questions. Therefore, clearly it is in some quandary with the Department of Industry. Would it be possible for new guidelines to be laid down as to exactly what responsibility for the Post Office is taken on the Floor of the House?

If no other hon. Member wishes to raise a point or order, I shall reply to the matters that have been raised.

First, I say to the hon. and learned Member for Leicester, West (Mr. Janner) that I cannot help him if he cannot get an answer from a public corporation. With regard to answers by Ministers, again I am not responsible and the hon. and learned Member must pursue that as best he can in another way.

The transfer of Questions by Ministers is again not my responsibility. This is a very old system that is adopted—it has operated in the House ever since I have been here and, I think, since long before that—that when Ministers feel that Questions ought to be answered by another Department, they transfer them.

The Question on the Order Paper is there because it deals with one of the responsibilities of the Minister, and that is the approval of capital projects by the Post Office.

Aircraft And Shipbuilding Industries Bill

I call the hon. Member for Christchurch and Lymington (Mr. Adley to raise his point of order.

I apologise, Mr. Speaker, for giving you little or no notice of my point of order. It relates to a letter that was placed on the Letter Board by the Lord Chancellor just before Questions started this afternoon, and it deals with the handling by the Government in another place of the Aircraft and Shipbuilding Industries Bill.

In the light of the Government's decision to withdraw most of the ship-repairing companies from the Bill, you will appreciate, Mr. Speaker, that circumstances have changed substantially. I should like to register the strongest protest at the indecent haste with which the Government are proceeding and Further—

If the hon. Member is raising a point of order he must not make a speech but come directly to it.

My point of order concerns the following phrase in the letter:

"It has been agreed that the Bill, as amended by the deletion of the shiprepairing companies, will go through unopposed."
First, I do not know what knowledge the Lord Chancellor has about what happens in another place. I realise, Mr. Speaker, that you have no jurisdiction over this matter, but, with the present state of the Bill, what happens in another place determines what happens in this House. If the Bill goes through unopposed, as the Lord Chancellor seems to be suggesting, or if there is no time for representations to be made to their Lordships for amendments to be placed before the other place, this House will find itself in the position of being able to do nothing further with the Bill.

For the 2,000 people employed at Vosper Thornycroft's ship repairing company in Southampton, whose livelihood and future are at stake, it is wholly inadequate for the usual channels—I do not except my own Front Bench—to get together and for the Lord Chancellor to write as he did, and for the Secretary of State for Industry to refer to the cosy arrangement mentioned in his supplementary answer earlier this afternoon, saying that the matter has all been agreed.

Would you, Mr. Speaker, therefore make representations to the Lord Chancellor to see that the proceedings in another place tomorrow are not concluded tomorrow but are continued on at least one more day this week, so that there will be time for outside bodies to consult the workers and the representatives of the workers concerned and, if necessary, for amendments to be produced in another place, which, if passed, would come back here?

Further to the point of order, Mr. Speaker. This is a matter of great concern for the Portsmouth and Southampton areas, where Vosper Thomycroft's ship repairing section operates. The arrangement which we Back Benchers read in the newspapers has been made—that certain ship repairing companies will be exempted from the aircraft and shipbuilding nationalisation proposals—did not include the ship repairing division of Vosper Thornycroft.

The letter from the Lord Chancellor, which I have had only a brief opportunity of seeing, refers to the Bill going through "unopposed". That presumably means unopposed by the major parties. But I cannot see how it can possibly be said by any individual that the Bill will pass through both Houses unopposed by every Member of Parliament. Who made this arrangement and on whose behalf? Therefore, in view of the great urgency of this matter to a number of people in the area where Vosper Thornycroft employees work, would you be prepared, despite the complete absence of notice, to accept an application under Standing Order No. 9 for an emergency debate on the subject?

I have listened with care, out of courtesy, to both hon. Members. However, what happens in another place is not my concern. If I started making representations about what happens there, they would start making representations about what happens here, and we should not like that. It is none of my concern.


On a point of order. I am sorry to pursue this point, Mr. Speaker, but the letter from the Lord Chancellor which I read clearly indicates that an arrangement has been made between the Government and the Opposition which is affecting another place. I raised my original point of order with you because the state of this Bill is such that the only items which can return to this House from the other place are Lords amendments. 11;the Bill were at any other stage, I would understand that there was no reason for you to intervene in what the other place does. However, in the circumstances, unless some representations are made to another place, there is no way in which this House can express its views on matters relevant to that Bill and to the changed circumstances since the Government's announcement of their preparedness to delete the ship repairing companies.

I can understand the hon. Member's feelings, but I can only reiterate that the business of another place is their concern. I am concerned with what comes before us in this place.

Questions To Ministers

On a point of order, Mr. Speaker. May I return to the earlier point of order about the Post Office—

Order. I have ruled that that was not really a point of order. [An HON. MEMBER: "Too late"] Order. The hon. Member is very good to try to assist me, but I will try to manage without his help; we might do a little better. As I have already said, I cannot intervene in what happens in another place.

I just wanted to suggest, on a point of order, that Questions which have been accepted by the Table Office in relation to nationalised industries often go far beyond Ministers' legal statutory responsibilities for nationalised industries. I refer particularly to Question No. 22 in the name of the hon. Member for Rother Valley (Mr. Hardy) which asks

"at what proportion of capacity the steel industry is currently operating".
That goes beyond the responsibilities of Ministers. It would help if, where Minis. ters are responsible for matters, the Table Office would take Questions and if where Ministers are not responsible it did not take them.

In fact, the Government are responsible under the Remuneration, Charges and Grants Act for the level of charges in the Post Office. Therefore, it seems to be totally appropriate that the Government should be held responsible for the threatened increase in postal charges, whereas they cannot really be held responsible for the level of capacity at which the British steel industry is operating. Might that not help to solve the problem in which the House finds itself?

I am obliged to the hon. Gentleman. I will consider what he has said. If I find that there is anything helpful that I can say to the House, I will certainly do so. If I find that there is nothing very helpful that I can say, I shall regard silence as golden.

On a point of order, Mr. Speaker. Has your permission been sought by the Ministry of Defence representative to answer Question No. 34 today? If that permission has not been sought, could you ensure that the Written Reply reaches me not in two or three hours but very quickly?

Police Force (West Midlands)

I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration; namely,

"the apparently increasing use of arbitrary violence by the West Midlands Police Force against the Irish community in Birmingham."
I am prompted to raise this matter by the case of a constituent of mine which is but the latest in a long and depressing series of such cases. Mr. John Joseph Girvan, a bricklayer, one evening last week was physically dragged from a telephone booth in Kings Heath and taken to Kings Heath police station, where he was slapped, punched, dragged by the hair and abused obscenely in very specific terms by a number of people whom I can now describe only as uniformed hooligans.

To convey properly to the House the horrifying flavour of this attack on a constituent, it is necessary to say that, within a few seconds of this man being apprehended by those three uniformed hooligans, he was referred to as "an Irish bastard". The language which was used on my constituent during the subsequent eight hours was of the same nature.

I must emphasise that during the eight hours in question this man was, by definition and by law, an innocent man. During that time he was subject to the most hideous humiliations. He was refused access to a lawyer, his Irishness was constantly emphasised by the uniformed hooligans who had him in their custody and he was never for a moment allowed to forget that they had preponderant physical power over him. They did this by slapping, and punching him, dragging him by the hair and physically throwing him into a cell, only to pull him out and throw him in again.

Mr. Girvan was intimidated by threats that he would get a long sentence and rough treatment. He was promised that if he submitted to photography he would be allowed to go. He did so and was not allowed to go. He was, in short, terrorised.

As I said, this case is but the latest of a series in my constituency. We all appreciate that the fabric of the law and the institutions which preserve public order in our society depend heavily on the respect with which the public holds officers of the law and the law enforcement agencies of our community. In Birmingham, the Irish community cannot now see the law enforcement agencies in that light, because they—particularly their young men—are being systematically terrorised by members of the West Midlands police.

This is a matter of extreme urgency to the House. I believe that similar things have happened in other large cities. I therefore beg to ask leave to move the Adjournment so that we may discuss the matter now.

The hon. Member for Birmingham, Selly Oak (Mr. Litterick) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,

"the apparently increasing use of arbitrary violence by the West Midlands Police Force against the Irish community in Birmingham."
As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reasons for my decision. I listened carefully to the representations of the hon. Member. All that I have to decide is whether the business of the House should be changed tonight or tomorrow so that this matter may be discussed. I have to rule that the hon. Gentleman's submission does not fall within the terms of the Standing Order. I therefore cannot submit his application to the House.

Business Of The House(Consolidated Fund) (No 2) Bill


That, notwithstanding the practice of the House relating to the interval between the various stages of Bills of aids and supplies, more than one stage of the Consolidated Fund (No. 2) Bill may be proceeded with at this day's sitting.—[Mr. Bates.]

Orders Of The Day

Consolidated Fund (No 2) Bill

Order for Second Reading read

Motion made, and Question proposed, That the Bill be now read a Second time.

Roads (Huntingdonshire)

3.50 p.m.

I am grateful for this opportunity to refer briefly, under Class VI, Vote 1, Sub-Head A2, to road building in my constituency, especially the carrying out of a major road improvement between Cambridge and Godmanchester along the line of the A604, which has become an increasingly important east-west traffic route between the East Coast ports and the Midlands.

The need to turn this road into a dual carriageway has been under consideration for more than seven years. In my remarks I want to help the Eastern Road Construction Unit, with which I have crossed swords in the past and with some of whose major decisions I am still in disagreement. On this occasion I want to help the unit to get its priorities right, to save money and farmland, and to protect the environment and the quality of life in my constituency, especially in the large village of Fenstanton.

I am glad to see the Under-Secretary of State for Transport present on the Front Bench this afternoon. I am sorry that he has been given such short notice of this debate. I cannot possibly expect a long or detailed reply to the points that I shall be making, but I hope that the hon. Gentleman will bear them in mind. The action taken as a result of this debate will decide what further action I may find it necessary to try to take at a later stage.

Some 15 or 20 years ago a perfectly good bypass, with very wide verges, was built at Fenstanton. Presumably the verges were made wide with a view to the possibility of enlargement at a later stage. Unfortunately, the line chosen for the bypass then split the main part of Fenstanton from its southern outskirts, but the people living to the south of the village were able to maintain contact with the main village because special arrangements had been made for pedestrians and traffic to cross the road.

That bypass has had and still has the great advantage of making the old, long, narrow village street fairly free from traffic. However, unfortunately it is now proposed to turn that bypass into a slip road as part of the arrangements for making the new A604 into a two-lane dual carriageway and, instead of using the bypass as it is and widening it slightly and perhaps straightening it a little, it is proposed to take quite a big loop, bigger than the present loop, which will take up a fair amount of farmland. This loop will be about 300 yards long and it is being extended eastwards from the eastern end of the bypass. It is proposed to do that so as to make the A604 into a straighter road.

It must be accepted that by not having a bypass far to the south—I will come to that possibility in a moment; I concede that that one has gone past—the people living to the south will be even more cut off from the main village than they were before, because with a dual carriageway we must reconcile ourselves to fast and an ever-increasing volume of traffic.

There will be extra expense involved in the construction that is proposed, namely, by turning the present bypass into a slip road and building another bypass immediately adjoining and to the south of it, and by extending it for 300 yards eastwards. I suggest that that will involve unnecessary expense and the unnecessary use of farmland. It would be much better to make the fullest possible use of the present bypass.

It was suggested some years ago by Fenstanton Parish Council that an entirely new bypass well to the south of the whole of the village should be built to avoid disturbance. It might have cost more, and it might have used even more farmland than is now proposed, but now that we see what is proposed, both in the proposals that I have described and in the proposals that I am about to describe as regards the side roads, we must recognise that the route to the south might have been better.

I hope that even at this late stage the proposal that I have described for the line of this trunk road, where it comes along adjacent to where the bypass is, can be dropped. No new notices would be needed, as I understand it, and therefore no delay involved, because the widening of the present bypass could take place under the present trunk road order and, indeed, would save the compulsory purchase of a great deal of land which it is now proposed to take.

My other complaint relates to the draft side roads order as it affects Fenstanton. There are five main matters of complaint that Fenstanton Parish Council has put forward. There are other minor complaints, with which I will not trouble the House.

I cannot refrain from saying that this is one of those rare cases when one could make one's views much more clear to the House if one could only point to a map, but our procedure does not permit that, so I must do my poor best without a map.

The first main complaint is that the Hilton Road is to be shut off completely. That is the road that goes to a village to the south of the southern part of Fenstanton. The closing of that road will have the strange effect that all buses —a considerable number of them—will have to go right into Fenstanton main street, turn round and go right out the same way. Secondly, there will be a great increase in traffic on the High Street and 90 per cent. of it will have to use the eastern exit only.

Next, there is to be a flyover built at the western end of the village. That may be unavoidable, but it will certainly be expensive. Fourth, there is to be a big piece of ground formed between the present bypass and the proposed new line of the bypass that I have described, and this will, in effect, create a sterilised area of no use for farming. This is the sort of land that will lend itself to fill-in development, since one cannot see what other good use could be made of it, but if ever there were a place where fill-in development would be inappropriate this is it.

Finally—this is also a matter of public interest there is at Fenstanton a coach station of the Whippet Bus Company. As a result of the side roads order the buses would have to do 1,000 miles more a year, and this would no doubt increase the cost of the service.

Thus, the side roads order would be an expensive scheme to put into operation. It would create disturbance and noise again in the High Street, which has been remarkably free from both ever since the present bypass was built. 1 hope, therefore, that there can be second thoughts about the whole of this scheme. I cannot believe that it is beyond the ingenuity even of the Eastern Road Construction Unit to think of something simpler and cheaper which will create less disturbance.

I make two constructive proposals. First, any money saved on this scheme could be well spent on matters that have been urgent for years in that corner of my constituency. At St. Ives there is a major road that has to cross a bridge. It is a beautiful little bridge, with a chapel on it, but it is 600 years old, with only one lane of traffic, and it is quite unsuited for modern needs. For the past 15 years one has had to consider what line a relief road and new bridge should take. It has now been decided that there should be one, and that it should go well to the east of St. Ives, but the need is urgent.

My second constructive proposal is far more modest, though none the less essential. The recent heavy rains which have swollen the River Great Ouse to such an extent have emphasised the need for it. At Earith, where the main road into the Isle of Ely crosses the River Great Ouse, there are two bridges, separated by only about 80 yards of causeway between them. Those two bridges were rebuilt in recent years, but, unfortunately, when they were rebuilt the causeway was not built up to a proper level, with the result that the causeway is flooded every time there is any flooding in the area. Any money saved at Fenstanton could be used on that alone, and it would do a great public service.

The priorities, therefore, I suggest, are these: first, there should be a rethinking of what is proposed for the Fenstanton bypass and the side roads; second, there should be a firm declaration as to when St. Ives will have its new bridge instead of the 600-year-old single carriage way bridge now being used; third—this is the easiest, though perhaps the most important in certain respects—the causeway should be built up between the two bridges at Earith.

4.4 p.m.

I am grateful to the right hon. and learned Member for Huntingdonshire (Sir D. Renton) fox raising the question of the improvement of the A604 between Girton and Godmanchester and, in particular, the section relating to the Fenstanton bypass. In company with the right hon. and learned Gentleman, I regret that we cannot have an illuminated screen—perhaps above Mr. Speaker's Chair—on which maps and other matters of interest could be shown to illustrate the roads under discussion. It is difficult to explain what one has in mind without some means of illustration, but, like the right hon. and learned Gentleman, who did it rather well, I thought. I shall do my best to overcome that disadvantage.

The right hon. and learned Gentleman has for many years taken an interest in this route, as I know from having studied the correspondence, and has directed attention in particular to the routes of the A14 and A604 within his constituency. I know that he is concerned about the effect of the Fenstanton bypass and the claim on agricultural land which it will entail, although he very fairly pointed out that the original proposal—which he, among others, I believe, advocated—for a bypass much further south would perhaps have taken even more agricultural land if it had been finally chosen as the route.

Before doing my best to answer the detailed points raised by the right hon. and learned Gentleman, perhaps I should try to put the matter in perspective by saying that the proposed improvement of the A604 between Godmanchester and Bar Hill near Cambridge forms an important part of the new high standard route between East London and the north of England via the M11, part of which is now completed. I refer here to the route via the A604, the A14 and the Al. Part of the M11 has been built, and the section between Redbridge and north of Bishops Stortford will be open for traffic in the spring. We hope to let contracts for the section from north of Bishops Stortford to Stump Cross and the Cam- bridge western bypass—this will be of interest to the right hon. and learned Gentleman—this summer.

The A604 Huntingdon—Godmanchester bypass has been open to traffic for some time, and the improvement of the section between Girton and Bar Hill to the east of Fenstanton is under construction. The part which we are talking about, therefore, will be the last link in a rather important chain of high standard dual carriageway road running basically from the Al in the north down to Last London. It is therefore a very important route.

There is also a certain amount of cross traffic via the A45 which will ultimately go via the Cambridge northern bypass and will take traffic from the Midlands down towards Ipswich. Again, therefore, it is important in considering the justification for the Fenstanton bypass to recognise that there is here an important crossroads and, what is more, a crossroads between growing areas.

Proposals for the trunking and improvement of the A604 between Godmanchester and Girton were published in 1971 and at a public inquiry held in 1972 the Fenstanton Parish Council put forward an alternative route for the Fenstanton bypass to the south of the line now proposed. That was the alternative proposal to which I have already referred, but it was rejected by the independent inspector in favour of the route which we are now discussing.

I assure the right hon. and learned Gentleman that, although he may not like the the route finally chosen, it has been designed to make as little claim as possible on agricultural land and to make the fullest possible use of the existing road. It is only at the village of Fenstanton that it departs from the existing road, so it is clear that an effort has been made to improve matters along the existing alignment, which I believe to be fundamentally right if one can do it without too much demolition of property alongside the road and so on.

The reason for having another bypass as opposed to improving the existing bypass is that, although the existing bypass has wide verges, its alignment is not satisfactory in that it is rather curved for the volumes of traffic which the road improved as I have dscribed will have to take. I think that the estimate is that there will be an increase of traffic of about 87 per cent. up to 1995—a very large increase—and we are talking here of approximately 29,000 vehicles a day. Obviously, those are only approximate figures, and one would not wish to be judged on them, but that is the sort of magnitude. That is why we cannot simply improve the Fenstanton bypass, with its unsatisfactory curves and the roads coming into it from the village, and leave it at that.

This is the sort of problem which we have had with the existing Fenstanton bypass. The road from the village itself goes into the main road, and it is not possible to get rid of that junction without the sort of realignment which we have on the new road. These are basically the reasons why we have to go for the solution proposed. It is really a matter of the volume of traffic expected to use the road once all the sections are complete.

The right hon. and learned Gentleman talked about further isolation of the people living to the south of the village as a result of these additional improvements. One can see that that is likely to be the case. Nevertheless, if we had just improved the existing bypass, the people near it would have complained of the noise of the additional traffic. So it is very much a swings and roundabouts situation, as so often happens with road improvements. While the new scheme may have the disadvantage of isolating slightly further people to the south of the village, people slightly to the north of the village will be grateful for the lessening of traffic noise which they will get with the building of the new bypass.

Members of the Eastern Road Construction Unit met the parish council and villagers recently. I hope that it was a constructive meeting. Judging by the reports I have received, the matter was thoroughly discussed and many detailed questions were gone into at considerable length. There was a thorough airing of the various complaints. There will be a public inquiry into the side-road orders which will provide further opportunities for these detailed points to be raised. So we are not at the end of the road in talking about the problems which will arise from the new bypass.

The closing of the Hilton road would, according to the right hon. and learned Gentleman, bring more buses into he village of Fenstanton. That may well be so, but I do not think that the increase would necessarily be significant. It may be possible to avoid their going through the heart of the village. One wants to achieve that, if it is possible, and one will certainly work towards that end. I understand that schemes are being considered whereby buses approaching from the east in particular may be able to avoid the heart of the village. That point also applies to the Whippet coaches. We could possibly reduce the impact on the village by a sensible scheme which will at least avoid the heart of the village itself.

Whippet Coaches moved into its present site in 1974, well after all these details about the new road proposals were well known—a factor which must be borne in mind when considering these problems.

The right hon. and learned Gentleman raised two other points in this context which I would like to study, and if there is anything further I can add I will write to him. He had in mind, for example, the in-fill problem between the old and the new bypasses, and I shall study it.

The right hon. and learned Gentleman said that we should concentrate effort instead of two alternative schemes. The first of these was the St. Ives bridge. I can see that it is an extremely unsatisfactory road. I know it myself, as I know Fenstanton village and the bypass. Last Monday, I had a meeting with the chairman of the transportation committee of the Cambridgeshire County Council, when we talked about various problems of the county. We went into the question of the St. Ives bridge, and I undertook to look into the matter carefully with a view to making the maximum possible progress, although it is subject to the moratorium that we now have. But I will bear in mind what the right hon. and learned Gentleman has said and what I was told at my meeting last Monday.

The right hon. and learned Gentleman's second alternative concerned the Earith road. That is a county scheme. I accept that a problem has arisen as a result of the improvement of the two bridges, with the causeway now being too low. But it is fundamentally a matter for the county's own priorities. Again, however, it is something that we might take up in the context of the informal discussions that I have had with the county council. My right hon. Friend the Secretary of State for the Environment was also in Cambridgeshire recently, so we are all well aware of the problems in that area, and we will take on board what the right hon. and learned Gentleman has said today.

Factory Closures (Northern Region)

4.16 p.m.

I am obliged to the Chair for affording us an opportunity to raise the question of the Plessey closures. I am also grateful to the Departments of Employment and Industry for agreeing to a deputation from Sunderland meeting the respective Ministers of State tomorrow. shall confine myself to the subject of the closure of the Sunderland Plessey factory, but I share the concern about the position in the North-West.

We have to consider this closure in context, and therefore we must look first at the position of the Northern Region. Along with Scotland, the Northern Region ranks as the region with the worst unemployment, and the prospects are not good. A fairly good indicator are the construction trades. Unemployment among craftsmen in the building trades has increased by 40 per cent. in the last four months. Unemployment in the area is now running at an unprecedentedly high figure in the building industry.

All this re-emphasises the need for a quick decision bringing British Shipbuilders' headquarters to the North-East. Wearside is the worst-hit area in the Northern Region. We are told that this is due to the loss of the traditional industries, but alongside that we now have, in the closure of Plessey, the loss of new technological industries. Unemployment on Wearside is three times what it was in 1966. It is running at the level of 11 per cent. to 12 per cent., and the male unemployment rate is between 13 per cent. and 14 per cent. But I emphasise that the Wearside area is large. Within it are districts whose unemployment figures are much higher than these figures. We have unemployment that is comparable with that of the 1930s.

This is a serious situation, and we welcome the fact that we are to have seven more advance factories, although I must express my concern that the Department of Industry felt that it could not encourage the local authority workshops. I think that these would have provided an aid and should have been encouraged, While we welcome the building of seven more advance factories, we must recognise that we already have seven factories empty. The building of advance factories will not solve our problem, although we welcome it in that it will provide something for the future. We cannot afford to have these factories empty, and we cannot afford to have Plessey's being added to the seven empty factories.

The position of the Sunderland Plessey factory has to be considered in the context of the telecommunications industry, which is largely dependent on the Post Office, which provides two-thirds of the orders taken by the industry. No one can deny that over the past few years there has been an erratic and irresponsible ordering policy from the Post Office.

I should like to summarise. There was a 40 per cent. cutback under the Conservative Government just before the General Election. The cuts were then restored, to a limited extent, but further cutbacks were subsequently envisaged, and there followed the statement by my right hon. Friend the Member for Huyton (Sir H. Wilson). That statement was understood to be sufficiently definitive to ensure that there would be no loss of working in the factories, but since then the programme has been revised four times.

The basic cause has been, first, the economic recession and its effect on the Post Office, secondly, the effect of the increase in tariffs imposed by the Post Office and, thirdly, the swing to a fully electronic switching equipment system and, as an intermediary, the TXE 2 and the TXE 4. The factories are dependent on Post Office orders, and Post Office orders very much affect export orders. Rightly or wrongly, the companies feel that this chopping and changing of ordering, and the way that it has now been imposed, has virtually killed the export potential of the industry.

There has been a dispute between the Post Office, the companies and the unions. The Prime Minister said last week that there would be an inquiry into the Post Office calculations and that Professor Posner would hold the inquiry. That idea is not new. Although it was said last week, the Secretary of State said a few weeks ago that there would be such an inquiry. Not only is it not new; it is inadequate. The terms of reference are not wide enough to deal with the issues at stake. In any case, it is unacceptable locally.

As some of my hon. Friends will know, we had trouble at Greenwells. There was an inquiry in that case, but at the end of the day the redundancies took effect. As an aside, I would say that a nationalised company cheated on the Employment Protection Act by not affording us the opportunity to take advantage of that Act. We are not persuaded that this inquiry will be either very relevant or very helpful. In the case of the Post Office, we have new measuring techniques. These demonstrate that there would be a substantial and growing surplus of capacity. We are concerned not only about the accuracy of the figures but about their validity.

The first point that arises concerns the marketing and pricing policies of the Post Office. The high cost of telephones installation obviously should be drastically reduced in these circumstances. In addition, there must be a promotional policy to increase sales from the Post Office. The case of West Germany has been cited, where an independently-run campaign met with spectacular success. It is all very well producing figures, but we must also consider the assumptions upon which the figures were based. We want to be satisfied that there will be a joint campaign to promote the use of the telephone.

I have already touched on the second matter that arises. It has been argued, it seems to me convincingly, that the excessively rapid transition to the fully electronic system should be revised. The industry should be given time to condition itself to the new circumstances. This particularly affects Sunderland, because we are concerned with the phasing out of Strowger.

The Government should consider this in its proper context. This may be a saving to the Post Office, but overall it is a loss to the country. Figures have been produced in terms of redundancy pay and social and other benefits. That will undoubtedly be more expensive to the country than the money which the Post Office will save according to its own figures.

Apart from that, many other matters demand independent investigation. There is the international trunk-switching contract concerning Ericsson's of Sweden. We were assured that this would have no effect on employment. I do not know how that assurance can now be maintained, but that was the case at the time.

We also have the controversial decision to admit Pye/TMC to the domestic market, and there has been the lateness of the Post Office in following up the fully electronic private exchanges. I am not wholly biased against the Post Office exclusively. We want to know why more research and development money has not been put in by the suppliers.

Most important is export performance. Here again we have a pattern, which has become almost traditional in this country, of an industry failing to remain up to date and competitive and steadily losing ground in our export markets. The United Kingdom is now running fifth behind Sweden, West Germany, Japan and Belgium. We must realise that there will be an intense rationalisation in respect of these markets. We must look ahead and see what will happen in Europe as a whole. If we are to bid for a position in Europe we must have a viable industry, otherwise we shall be squeezed out of Europe as a whole.

The telecommunications industry is having to fight for its survival in extremely difficult circumstances. A new generation of telephone exchanges is coming into operation. They are cheap to assemble and maintain and foreign companies have the edge on us because they are already in production with the systems.

Obviously, Professor Posner's inquiry can make no attempt to deal with these essential questions. It has been officially suggested that there ought to be an export consortium. That is well and good, but it is not enough. We are driven to the position that we shall have to have a single company, probably with the National Enterprise Board having the major holding.

I was concerned about the power station industry when we had a similar sort of inquiry. The present inquiry must be conducted by the Central Policy Review Staff, or a similar body. That is what is needed overall.

We in Sunderland cannot accept the present position that we shall just be put out of work. As was pointed out on Saturday, to some of us who met the trade unions affected, we want a return of the work that has been sub-contracted out of the factory, such as relays being brought in from GEC. We do not want this potential run-down unnecessarily aggravated.

Secondly, the key to this problem is to have a temporary employment subsidy to hold the present position for 12 months. That means that we shall have to persuade Plessey to apply for the subsidy and we shall have to persuade the Government to grant it.

Compared with other regions, the Northern Region is badly off in terms of the temporary employment subsidy. We have lost regional employment premium—a loss of £64 million—which means that we have a good margin within which to work if the intention is to turn to selective aid. If we look to the temporary employment subsidy, oddly enough, we find that in the North we have had only £10 million, whereas, as my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) will know, the North-West has done very well out of it, having had more than £48 million. So this is an opportunity, at any rate, for us to begin to match the North-West.

I am sure that this is a proper use of the subsidy. It would keep the work force in productive employment while the basic structure of the industry was examined and while the Post Office, to some extent at any rate, revised its ordering programmes.

When my right hon. Friend the Prime Minister mentioned this problem last week, he talked about retraining. Retraining could be done under the umbrella of the temporary employment subsidy. There has to be retraining, of course. Sunderland cannot survive unless there is retraining to get on to new work.

My right hon. Friend the Prime Minister also talked about alternative production. If we cannot keep Plessey in being, we have to have alternative production. We cannot see this factory closed. We have suffered too much. We have had the experience of Thorn Electric and Greenwells. Now we have Plessey. This factory must be kept going. Again, if we are thinking of coming in with alternative production, the best umbrella is the temporary employment subsidy. This can be provided to Plessey. The company can be persuaded to apply, and the Government should grant the money.

I regard this as a test case for the Government. They were defeated on devolution, partly because some of my colleagues from the Northern Region felt that, as an assisted area, the region had second-class status. We have to overcome this feeling. I do not think that this charge is made out, because, on recent figures, the Government could show that they have aided the North-East comparatively better than some of the other regions. But the feeling is there, and we are very sensitive to it. Therefore, the keeping of this factory in employment is a test case.

Also coming along we have the Budget, and we hear talk of tax concessions. But the major responsibility of the Government is to deal with unemployment. That must be done before any tax concessions are given. I suppose that this is a matter of about £2 million. We need this money. It can keep in employment a couple of thousand people for a year. We need that, and the Government must show that they have the right priorities and that they will ensure that this factory is kept in work.

4.34 p.m.

I am pleased that my right hon. Friend the Member for Sunderland, North (Mr. Willey) has been able to initiate this debate on what is a very important subject in the Sunderland area and the Northern Region.

In my right hon. Friend's introductory remarks, he very properly laid stress on the heavy unemployment which exists not only in the Northern Region but more especially in Wearside itself. My constituency lies half divided between Durham County and the Sunderland metropolitan district as a result of the last local government reorganisation, and it is fair to say that everyone in my constituency is every bit as much concerned as my right hon. Friend and my hon. Friend the Member for Sunderland, South (Mr. Bagier).

My right hon. Friend dealt at some length with the vacuum which would be created if all the efforts to retain the Plessey factory in his constituency eventually failed. There is already building up in Sunderland a massive reaction, with people realising the extent of unemployment, the special skills which they have acquired in telecommunications and the inordinately difficult problems which they will face in finding suitable alternative employment should the Plessey factory close.

My right hon. Friend also referred to the construction industry, with which I have been associated all my life. We extend a very warm welcome to the statement last week about a programme of new advance factories. Even though there are quite a number of empty factories in the Northern Region at present, we must at all times seek to make provision for the expected upturn in the economy, when we are entitled to expect that more industries will come into the Northern Region, so that we have facilities for them to occupy. In turn, it provides a small but much needed fillip for large numbers of construction industry workers who have been unemployed for a considerable time.

I endorse entirely my right hon. Friend's remarks about the first priority having to be the retention of the Plessey factory, preferably in its existing form. But, if it is to be retained, we also understand fully that it must be responsible for the right kinds of manufacturers.

I recall the lobby on this subject of telecommunications by Post Office workers a few weeks ago. The Post Office Engineering Union advised right hon. and hon. Members by letter that it was its firm intention to support all efforts to retain telecommunications work in the development areas. However, the union also went on to point out at some length that it could not support the investment of public funds to manufacture equipment which already was obsolete.

In this connection, the Plessey organisation, anyway in Sunderland, has deservedly come under criticism. It seems that, although it has seen this development coming for some time, it has not been prepared to reinvest and to retool to meet the new challenge in the telecommunications industry. This is the price which 2,000-odd workers in Plessey's Sunderland factory may be called upon to pay for the shortsightedness or possibly the greed of the Plessey company.

As a public corporation, the Post Office is also entitled to some share of recrimination—I put it no higher than that—because of its ordering policy. We are told that there are considerable hiccoughs in the placing of orders. There is no relatively continuous flow of orders for equipment to the firms which are contracted to the Post Office. But, here again, the firms concerned—and I am sure that this is equally true of Plessey—apparently have been quite content for a long time to feed upon the home market to keep their factories in operation, when everyone knows that in this rapidly developing technological age there are ready avenues open all over the world for the exports which these companies are capable of producing. There appears to have been a wholly inadequate accent on the export aspect of the telecommunications industry in Sunderland.

The problems on Sunderland is accentuated, as my right hon. Friend the Member for Sunderland, North has said, by the fact that a considerable amount of work appears to have been sub-contracted to firms outside the northern area. This is work that the union representatives claim could have been done equally well in Sunderland and may well have saved some, if not all, of the jobs. There is also, as my right hon. Friend also pointed out, the question of materials being bought from GEC and from Plessey's own factory in Northern Ireland, which of course does not meet with the approval of the workers in the Sunderland factory.

Unemployment in the Sunderland area is enormous. The morale of people in the area is at present very low indeed. If another 2,000-plus redundant people from Plessey are added to the labour market in a few weeks time, one can imagine how much more chaotic, difficult and desperate the position will be for so many people searching for all too few vacancies of all kinds. It is imperative that in the 90 days breathing space from last Wednesday, when the announcement was made, the NEB should start busying itself to ascertain just what the prospects are for the retention of the factory and what the NEB can do to assist in rejigging and retooling in order to meet the increasingly difficult challenge of the developing technological age. We must have this breathing space.

My right hon. Friend the Member for Sunderland, North also referred to the temporary employment subsidy. This morning my hon. Friend the Member for Sunderland, South and I went to a meeting attended by a very wide range of local authority representatives, including representatives of the Northern Economic Development Council, representatives of Government Repartments, trade unions, and everyone else who has an interest in employment in Sunderland. The importance of the temporary employment subsidy was referred to at the meeting, but here there could be a difficulty. While the subsidy would certainly be a lifeline in the present difficult circumstances, I understand that it is only the employers who can be held responsible for making an application for temporary employment subsidy. If the attitude of the Plessey management is as intransigent as was outlined this morning and on Saturday at another meeting, I am afraid that the management might not be prepared to make that effort.

In the interests of Sunderland and the interests of the morale of the people of Sunderland I call upon my right hon. Friends in the Department of Industry and the Department of Employment to do everything that they possibly can to ensure that this highly damaging blow does not fall on the people of Sunderland and in particular on the Plessey factory in Sunderland, North.

4.43 p.m.

I am grateful to my right hon. Friend the Member for Sunderland, North (Mr. Willey) for being fortunate enough to obtain a debate at such early notice after the disastrous announcement of the closure of the factory by Plessey last week.

I know that my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) is anxious to speak, but I know that he understands that it may be for the convenience of the House for those hon. Members representing Sunderland to put their views first, and he then hopes to mention the issues that affect Liverpool.

My hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) and I attended a meeting this morning with various representatives from the North, comprising trade union leaders, the development council, the Tyne and Wear County Council, Sunderland District Council, also representatives of the Department of Trade, the National Enterprise Board and the Department of Employment.

The message coming from that meeting load and clear was that this factory must not be allowed to close, certainly not at this stage, for various reasons. There were long discussions this morning on the reasons why the Sunderland factory was in difficulty. One was that it was producing outdated equipment, the Strowger equipment. Another was that the equipment is no longer required because the Post Office has changed its ordering policies and has not maintained the flow of orders to the extent which was expected by the factory. There were other reasons, but all these did not take into consideration the attitude of the people who actually work in the factory.

None of those factors could be laid at the door of the people employed in the factory, who had been taking their intruction from management via the Post Office and, I suppose, via the Government. They feel extremely angry about the treatment they have received. When I asked this morning what discussions had taken place, and what advance notice was given by Plessey, I was very surprised when a local representative of the Department of Trade said that his Department knew nothing about this. The Department knew that the equipment was out-dated and that some changes would he required and that there was a need for new investment in order to produce other equipment, but the representative said that the Department did not know—and I accept that it did not know —that Plessey would announce last Wednesday that a factory employing 2,088 people was to close. I do not want to put this local official across a barrel, but he told me that in his view his bosses at national level in London also did not know.

To me this is an indictment of the Plessey company. Nor is it the first time that I have had trouble with the Plessey company. Two or three years ago I criticised the company's management-staff consultation procedures to such an extent that Dr. Willits, the chairman of that section, came up to Sunderland to see me about it. Last week we had another example of the staff first finding out that they are out of a job when they saw it on television.

These are extremely serious cases. The Plessey factory employs men, women and younger people. We have families with as many as four wage earners all working in the factory. We can imagine the disastrous consequences on their living standards if four members of the same family, all working at Plessey, find themselves without employment. We have to find out where the blames lies. I was abroad last week and heard the story of the closure then, but a Plessey director at the conference that I was attending was able to give me some more information.

I have read newspaper reports stating that the former Prime Minister, my right hon. Friend the Member for Huyton (Sir H. Wilson), said during Questions that he had received some undertakings from the Post Office about forward ordering. I want to find out whether that is true. I do not doubt my right hon. Friend's word, but if what he said is a fact and there has been a drastic change of direction in Post Office ordering, the House should know something about this because time is of the essence. Our unemployment rate in the area is already 13.5 per cent. male unemployed. Perhaps we shall be able to look at the problem better in 12 or 18 months' time. We should have a period in which we can consider redeployment of the staff and carry out an examination to see what is wrong with the organisation of Plessey or the Post Office.

I am grateful to my right hon. Friend the Prime Minister for announcing that there is to be an inquiry under Professor Posner, but, as my right hon. Friend for Sunderland, North has said, we have seen these inquiries before but nothing seems to come from them. It is nice to be promised that the Manpower Services Commission will move in and that we shall have the fullest possible inquiry into alternative job opportunities. We already have quite a number of empty factories, and with an unemployment rate of 13·5 per cent. we are looking for jobs to fill those factories. We just cannot produce the extra 2,000 jobs that are needed. There is no way in which these people can be employed except by the continuation of the Plessey factories which must be kept open. This is a matter of some urgency which should be examined not by Professor Posner and his staff but by the Central Policy Review Staff. It must get down to examining why a nationalised industry is at fault, if it is at fault, and how a large corporation which is responsible for the livelihoods of so many of our people can fall down so badly and drop this bombshell at this time.

I suggest, therefore, that the matter should be referred to the CPRS. That is an urgent requirement. Secondly, the Government must step in to maintain this factory. They must find money to do that. My right hon. Friend the Secretary of State has said that it might cost £2 million or £3 million. I do not know what the cost will be, but the money must be spent to give us the breathing space we need. We cannot possibly accept the 90-day redundancy notice and watch the gradual closing of the factory. We must know the full facts of the situation before that is allowed to happen.

Let us have a full and urgent inquiry by a major body which has the power to act. Further, we have to examine why Plessey's export performance has been so deplorably poor. This factory has an immense turnover, but only 10 per cent. of that turnover goes for export. That seems to indicate that this major company has been cruising along comfortably on a home order policy from the Post Office, and that is not good enough.

We are aware that the equipment made by the Sunderland factory is out of date, but that is not the fault of the people who work there. There should have been a gradual moving over to the production of sophisticated equipment with a more realistic attack on world markets. It gives us no joy to see countries such as Saudi Arabia placing orders for telecommunications equipment in Japan and elsewhere. The recommendation of Sir Raymond Brown of NEDO last year that a telecommunications export order body should be set up and should be considered a matter of urgency, although I realise that this will not save our factory.

The trade union representatives said at the meeting this morning that life was tough, that they know that Plessey has problems and that the demand for equipment is probably low. But their point is that not all the weight should be allowed to fall on Sunderland. A great deal of sub-contracting work has been spread throughout the country because Plessey has been unable to handle it. Some of that work should be brought back to Sunderland. I realise that this could affect factories and sub-contractors elsewhere in the country, but such a move would soften the blow for a town which already feels that it has been tremendously hammered.

The message I bring from the meeting this morning is clear. Tomorrow we shall be meeting my hon. Friend the Minister of State, Department of Employment, with a representative group from the North of England Development Council, from the trade union leaders, from the councils, from Members of Parliament, and from the work people in the factory. We have to decide what should be done about this matter in the first instance, but the underlying aim is to point out that in no way can we accept this savage closure if it is possible for the Government to intervene.

I have mentioned three important points which must be tackled—Government help, the bringing in of the CPRS and the export potential of Plessey. If we can succeed in these points, not only will it do this factory good, it will do the whole industry good. It would give us a year or 18 months in which to retool, rejig and retrain in order to keep the work force occupied.

I know that my hon. Friend the Under-Secretary is actively interested in Post Office matters. He will be interested to hear that over the weekend, with the Post Office announcement of a ½p increase in postage rates to boost a collective overall profit of some £400 million, the people in the North-East have been spurred on to a mood of anger. They have been lashing out angrily and demanding to know whether the Post Office is just a publicly-owned piece of capitalism which has to make as much profit as it can or whether it is supposed to look after the people who work in the industry.

4.56 p.m.

You will know, Mr. Deputy Speaker, that I usually obey the injunctions of the Chair by trying to keep my remarks to 10 or 15 minutes. If today I exceed that time, it will not be to catch up on the time taken by my hon. Friends from North-East England but a recognition of the importance of this debate.

There are no differences between hon. Members from the North-East and those from the North-West on this subject. There are no differences between the workers in Plessey factories on Merseyside and those in Plessey factories in the North-East. We are not fighting each other for a larger share of a smaller cake. This is an occasion on which we each give our own experience and put forward the case of the factories and the people in our own constituencies.

We are, however, engaged in a parallel endeavour. The meeting of Merseyside Members last Thursday was not an attempt to steal a march on anyone from the North-East. Only an extreme optimist would try to do such a thing. My right hon. Friend the Member for Sunderland, North (Mr. Willey) said that Merseyside had done rather better than the North East from the Temporary Employment Subsidy. He gave the amounts at £10 million for the North-East to £48 million for Merseyside.

Yet on Merseyside I am constantly told that if only I made as much noise about things as the North-East Members do, Merseyside might do better. My hon. Friends from the North-East therefore are envied on Merseyside, and no doubt I am envied in the North-East—that is the way of things. We have a common cause for concern, about the employment of those who work in our respective areas. There are no differences between the two sides of the House on the subject. This is not a party political matter.

We have to link our debate with particular parts of the Estimates for 1976–71. To show, therefore, that my comments are relevant, I refer the House to page 128 of the Supply Estimates, 1976–77 Class IV, 15 under the description
"expenditure by the Department of Employment on grants in aid to the Manpower Service Commission".
I was surprised to see there the sum of £410 million, which is an increase this year of more than £1 million. I refer also to page 84, Class IV, 3 Section B under the heading,
"Industrial Research and Development Contracts",
because the telecommunications industry depends very much on research and development.

I take also Class XIV, on telecommunications, and also the section which refers to overseas aid. A great deal of overseas aid ought to be in the form of overseas trade. These are the four sections which I hope will make absolutely certain that my remarks are relevant to the Bill.

The Plessey company is a major electronic engineering company. The Financial Times recently reported:
"Electronics group Plessey is still holding up well to the sharp drop in telecommunication orders from the Post Office. In its third quarter, the group lifted overseas sales to more than half the total. Profits rose from £8,013,000 to £9,650,000, bringing the nine-monthly tally to £27.99 million against £25.02 million."
Plessey is relatively successful, but not wholly so—at least holding its own abroad, although the company has been less successful at home.

On 14th February this year a delegation from Plessey Telecommunications came here to tell their Members of Parliament from the North-East and the North-West of their complaints, fears, anxieties and anger at the threats of enforced redundancies and unemployment in the near future. These were skilled workers, trade unionists, who wanted to continue to work. Members responded in their own way. There was a series of meetings with Ministers. My hon. Friends in industry and employment have been most anxious, careful and diligent in making sure that communications were constant all the way. They know of the continuing discussions and our real concern.

One unique aspect of the Plessey company on Merseyside, compared with any other company there, is that Plessey is the one major company which has never, in the 12 years during which I have been a Member made any attempt to interest local Members of Parliament of all parties in the management of the company, their problems, and hopes. So far as Plessey was concerned, we did not exist. Every other company on Merseyside—Ford, Lever Brothers, Cammell Laird, GEC, United Biscuits, Ogden's Tobacco, whose interest is understandable, Fisher-Bendix, Standard-Triumph, Royal Liver Insurance and Royal Insurance and many other companies large and small have kept close contact with their Members, not only when there was a crisis but to keep us informed of progress, to report and to involve us in their affairs. They had an interest in us and we in them. Their purpose was to continue working and our purpose was to help them to do so. Not Plessey, Liverpool.

Others may have had a different experience in other parts of the country, but this is my complaint. I did not complain too much. After all, there is more than enough work for any MP in the area. I assumed that if we did not hear from the company this was because the company did not need us, and we wished it good luck. Experience showed us otherwise.

The unions at Plessey were not much better. During the Thorn Ericson dispute a delegation came to visit us in November 1976 and again on 14th February, but we did not have the closest possible contracts which ought to exist. After 14th February there was an attempt to have a meeting, but it was not possible in the time available. Then, on 2nd March, I received my first-ever letter from the Plessey management, local or national. The letter, from Mr. M. E. Glynn, Managing Director, Public Telecommunications Systems, I presume went to every MP in Sunderland and on Merseyside. It said:
"It is with great regret that I have to advise you of the decisions forced on us by the continuing falls in changing Post Office ordering programmes. The situation is summarised in the Company's public announcement, issued tonight, and I thought you would wish to have the attached copy without delay.
Obviously, this matter is the subject of consultation with the Trade Unions concerned but should you wish to discuss any questions arising, perhaps you would contact my office so that a meeting may be arranged."
To be fair to the Plessey company, that was appreciated.

It is important that we get on record what the company said to its Members of Parliament in a public statement. Released on 2nd March, 1977 and headed
"Post Office Cuts Force Redundancies in Plessey Telecommunications ",
it said:
"The cumulative effects of Post Office cuts since 1974 will cause a net reduction of about 4,000 jobs and some factory closures in the electromechanical systems sector of Plessey Telecommunications, it was announced tonight.
The Company is issuing formal consultation notices, under the Employment Protection Act, covering a total of about 4,800 jobs but it is expected that by retraining and redeployment there will be new job opportunities for about 800 of the people affected in growth product areas, such as TXE4, Pentex and System X.
Tonight, the Company's management presented the facts to representatives of the Trade Unions concerned at national, regional and local meetings."
There was more, and I am sure that my hon. Friend and other hon. Members will have copies of that statement.

The Plessey company has known about continuing problems for some time, but it has now said to its workers, "These are the problems, this is the solution. How will you help to work out the details?", instead of telling the workers months and years ago that the company was going to have difficulties, how the company saw future programmes, and how it would have to change and organise. In other words, the people who work in the factory should have had the opportunity of providing other solutions at other times. But the decision was announced and the only opportunity the workers have is to object or to sit-in as is being done in Kirkby because they want to keep on working. The company allow only minimal changes in the closures now imposed.

The whole attitude of the Plessey company, public and private, to Members or its own workers is to say " These are the problems, and these are the solutions. The fault, the responsibility, is entirely

that of the Government and the Post Office." The company says that this is where the responsibility for the difficulties lies. Plessey blames the Post Office and then the Government cuts.

It is not as simple as that. The Post Office and the Government have some responsibility, but the main responsibility for the management of its own affairs and its failure to manage them lies with Plessey. It is time that Plessey accepted at least a major share of the responsibility instead of trying to push the blame on to the Post Office and the Government.

My hon. Friend will also have the views of the Post Office Engineering Union, which were put on the record some time ago. That union seems to be taking a more responsible attitude. Everyone ought to base comments and proposals on facts, not assumptions. I am not the most avid reader of The Sunday Times. I often complain about my right hon. Friend the Leader of the House always quoting it and The Times. The number of people in my constituency who read them is minimal. Their influence in West Derby is not too great. More of my constituents read the Daily Mirror and the Liverpool Echo.

In The Times last week there was a letter from Mr. Peter Rodgers, who set out a balanced idea of what the Post Office was doing. One of my hon. Friends referred to the £400 million profit that the Post Office had made. In that paper this neutral observer said:
"The much-maligned Post Office offers some of the best telephone bargains in Western Europe and has an extremely well-organised tariff structure. This remarkable conclusion emerges from what is claimed to be the first full survey of European telephone charges and services.
Your total telephone bill here is about average for Western Europe, but the Post Office does more than anybody else to promote cheap offpeak calls, at anything from an eighth to a half of the levels in most other European countries.
International calls from Britain are also among the cheapest in Europe, on and off-peak, and the PO is the only telephone company to offer a proper system of cheap off-peak rates for international calls.
Rental and connection charges do not look quite so bad when compared with the rest of Europe. Only Belgium, Luxembourg and Portgual charge substantially less for connection, and Denmark charges nearly three times as much. (This does however hide the fact that subscribers a long way from an exchange can be heavily penalised in Britain, unlike most other countries.)
Again, monthly rental charges are about average for Europe, with some countries considerably more expensive—West Germany charges two-and-a-half times as much.
The survey, by the London-based computer and management consultants Logica"
. That was not a survey commissioned by the Post Office.

There have been comments about changes in Post Office charges for letters. In the Sunday Times, which is a useful newspaper to read, even if only occasionally, there was a front-page report this week headed
"Are we really so badly off?"
It compared costs in terms of working time compared with 25 years ago. Iii 1950 it required 21 minutes of the average worker's time—if there is such a thing as the average worker—to pay for the postage of five letters. Nineteen minutes are now required.

It is easy to talk about the Post Office using some of its £400 million profit to help prevent unemployment in Plessey. I went to the Post Office telecommunications headquarters at No. 2 Gresham Street this afternoon, when it was confirmed that there would be 400,000 business connections this year and 1 million domestic connections. The Post Office plans a programme of 1,100,000 domestic connections next year, a record level. There are 40,000 on the waiting list, and the Post Office recognises that that number should take two months to deal with at the most. It is proposing to do all it can, so the suggestion that a drastic reduction in installation charges and othet telephone costs would have a dramatic effect on the immediate position of Plessey, or even the position over the next 12 months, is open to doubt. I think that there is room for adjustments, but they would have a marginal effect at most.

My hon. Friends from the North-East have said that 60 per cent. to 70 per cent. of the telecommunications orders for Plessey, GEC and Standard Telephones come from the captive home market. The Post Office places hundreds of millions of pounds-worth of orders with those three companies each year. It is also providing GEC, Standard Telephones and Plessey with £65 million investment in research and development for System X, which is the real growth area for the years ahead. That investment is one of the best examples I know of co-operation between Government and private enterprise.

I understand that on the electrical-mechanical engineering side the present versions of the Strowger and crossbar systems began before the 1940s. Research and development on the new systems is not a matter of turning something on this year and having the results coming out of the pipeline next year. These are long-term programmes. Plessey has invested a large amount in the TXE4 electronic systems, a great deal of the work going to Huyton. I do not know the full significance of that, but it is a fact that while the company neglected the older part of Merseyside it poured a great deal of money into the newer TXE4 work, which has not been affected to any appreciable degree by the Post Office cuts. System X and TXE4 are the growth areas for the future.

The Post Office tells me that it has six years supplies of the older type of equipment being made at present by the Plessey company. It normally holds three years' supplies, and its present holding is twice its normal reserve. Since November the Post Office management and Ministers have met and met again to talk about the continuing programme. There are times when politicians are not very popular. I think that most of us have stopped hoping that we ever would be popular. In some ways the Post Office is in the same position. If it is regarded as a public service, there are newspaper headlines if it makes a loss. If we then tell it, as Parliament did, "It's your job to act as a commercial organisation, to raise your own capital, to create money for your own investment", we complain if it will not act as another means of rescuing private enterprise. Therefore the Post Office knows that it will not win. But it does not matter who gets the credit or the blame so long as we get something done.

The Government have been pressing the Post Office since long before last November to look at its ordering programme. If it does give help, is it to come out of the £400 million profit this year? We do not refer to the last year or the year before. I believe that Post Office capital equipment is worth £1,000 million. All that capital investment produced a profit last year of £400 million. The Post Office would do better to sell up and put the money in the Post Office Savings Bank, where it would have a better return on investment.

Changes could be made in the Post Office sales policy. These would have a useful short-term effect, but it would be only marginal. Someone told me at my advice bureau last Saturday "I want to put in a telephone for my mother, a widow who lives on her own. I could manage it if it cost £20 or £25, but at £40 or £50 it is more than I can reasonably provide" Perhaps there could be lower charges for some connections that are socially desirable.

My right hon. Friend the Prime Minister said last week that under the Employment Protection Act there was a 90-day delay in making the workers redundant. I believe that during that period something can be done, though it is not a great deal of time. The present position should have been planned for six years ago, and could have been foreseen nine years ago. In the Labour programme for 1973 it was proposed that in such circumstances, rather than wait for a concern to go bankrupt and an official trustee in bankruptcy to be brought in to dispose of the assets, the Government should be able to appoint an official trustee who would be able to keep the situation as it was. All the options would be kept open so that there would be a viable operational unit still in existence while talks continued. My workers in Kirkby are holding on to the factory and carrying on production in the hope that during the 90 days something will be achieved.

Anyone who thinks that the British Medical Association representatives are tough negotiators has not yet met Plessey representatives. There must be co-operation between Plessey and the Government, but the Government must also involve GEC and STC. I do not want another debate such as this in six months' or a year's time about GEC Telecommunications or STC. They must be brought in now. Temporary employment subsidy must be offered, and strong pressure must be put on the company to accept. The company has nothing to lose and everything to gain.

If it is a matter of tax concessions in the Budget or of some of the money being used for the maintenance of employment, I should have no difficulty in arguing with my workers on Merseyside that employment for others must come first. I hope that my hon. Friend the Minister will have a word with my right hon. Friend the Minister of State for Overseas Development. Overseas aid has been flowing back from Egypt to GEC on Merseyside, which has been supplying pole-mounted transformers. That is a good example of taxpayers' money doing a good job in Egypt, right where it is needed, in the village—not for the massive Kariba Dam but following through from that—and coming back to Merseyside to create more employment there.

The Manpower Services Commission is also important, as is the advance factory programme, although it is a tragic irony that alongside the Plessey factory at Garston, which the company proposes to close down, the Government are building an advance factory. The idea is to provide sub-contracting work on Merseyside. The Government have the right to complain that Plessey failed to provide them with any advance information on this matter.

I appreciate that my hon. Friend knows about the unemployment situation on Merseyside. I need not go into detail. If the three parties concerned accept their share of responsibility and are prepared to work together, then I think that within the 90 days available to us, there is some hope of a solution. All we are asking for, whether on Merseyside or in the North-East, is the opportunity to work.

5.21 p.m.

I congratulate my right hon. Friend the Member for Sunderland, North (Mr. Willey) and others of my hon. Friends from the North-East and Merseyside on raising this subject today. The debate has ranged to a large extent on the problem of Plessey in Sunderland and in Kirkby, but it raises the important need for the Government to make additional provision for dealing with unemployment and redundancies following the closure of local factories generally.

Most hon. Members will have had experience of the closures of local factories. We should realise that unemployment in any area affects employment prospects throughout Britain. We in South Wales have plenty of experience of unemployment over the years. It is not good to hear of any factory closing anywhere.

When a factory closes, it tends to have a cumulative effect on other industries. I thought that I knew the circumstances of all local factories in Aberdare and Mountain Ash, but I was surprised to discover that, had British Leyland collapsed, it would have had a serious effect on a number of component manufacturers in my constituency. People tend to think that the British Leyland problem affects 200,000 workers primarily in the Midlands. In fact, it has a major effect on 1 million people throughout Britain, many thousands of whom are in my constituency. Therefore, I hope that the difficulties facing British Leyland will soon be overcome.

Last week it was announced that British Leyland production was 30 per cent. up this January compared with January last year. There was a substantial improvement in the company during that period. I hope that the difficulties can be resolved. If British Leyland fails, the effect on British industry and on component manu. facturers in particular will be tremendous.

The debate has centred on the recent development at Plessey. My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) said that other companies supplying the Post Office could also be affected. For example, Standard Telephones and Cables and GEC supply equipment to the Post Office. Representatives of the Post Office Engineering Union have lobbied Welsh Members on this matter.

Mention has been made of the profit of £400 million made by the Post Office last year because of increased efficiency. I suggest that there should be some new thinking on industrial strategy. We tend to have a situation in industry of all go or all stop. The Post Office having made a profit of £400 million, I suggest that the Government should encourage it to go ahead with the installation of telephones. There are many skilled workers in the telecommunications industry and many people are waiting for telephones to be installed. Therefore, the Government should, at a time of recession, encourage the Post Office to meet all the demands being made for the installation of telephones in houses, offices and factories. They should say to the Post Office "We wish you to plough some of this surplus profit into encouraging demand for telecommunications equipment rather than cutting back".

There is a danger of over-simplifying the problem. We get demands for cuts in public expenditure. Industry is being encouraged to cut back. I believe that at a time of world recession we should call on industry to involve itself in increasing public expenditure if it results in more employment opportunities.

When we get out of the present recession, manufacturing industry will be calling out for skilled workers and it will not be easy to get them. Therefore, during a downturn we should plan to encourage the public sectors, especially those involved in manufacturing, to expand.

The Post Office has considered moving into manufacturing. It is strange that it has been prevented from manufacturing its own equipment. The Under-Secretary of State is knowledgeable on these matters because, in another context, he has close contact with the Post Office Engineering Union. If there is no other way out of the problem, the Government should seriously consider extending public ownership in this area to maintain jobs.

I am glad that this important issue is being discussed early in our proceedings on the Consolidated Fund Bill. Unemployment is the major problem facing the Government. I know that many suggestions have been and are being made to the Chancellor of the Exchequer regarding what he should do in his Budget. I hope that the main emphasis in the Budget will be to try to get this country back to full employment.

Last year my hon. Friend the Member for Consett (Mr. Watkins) introduced the Industrial Common Ownership Bill, which was supported by the Government and the Opposition. That measure gives powers to afford assistance in the formation of workers' co-operatives. That measure may not be applicable to large industries, but it provides for assistance to be in cases where workers are willing to take over the management of small factories. In many instances the factories concerned have good order books and are efficient. Their problems are the result of the financial set-up of the organisations to which they belong getting into difficulties. Therefore, we should have machinery available to encourage the formation of workers' co-operatives.

I hope that the Government will consider setting up a co-operative development agency which, with the National Enterprise Board and other development agencies, could play an, important part in keeping local industries going.

We are concerned with additional provision to deal with unemployment and redundancies. We must seek, in a more positive way, to prevent unemployment and redundancies. The Government are taking many measures and have a catalogue of various things that they have done to encourage industry but I hope that they will look again at the regional employment premium which has played an important part in encouraging manufacturing industries to move into needy areas.

5.30 p.m.

My right hon. Friend the Member for Sunderland, North (Mr. Willey), and my hon. Friends the Members for Houghton-le-Spring (Mr. Urwin), Sunderland, South (Mr. Bagier), Liverpool, West Derby (Mr. Ogden) and Aberdare (Mr. Evans) have spoken eloquently and with great feeling. I need hardly say how distressed the Government were to learn of the declarations of the Plessey redundancies in Sunderland, affecting 2,088 workers and at Kirkby, Speke and Edge Lane, Liverpool, affecting 1,278 workers, because of the massive unemployment in those areas. We know the great hardship that this will mean for many families and the blow that it will be to the pride of the individuals concerned.

My mind goes back to the visit that I made to Plessey in Liverpool before 1974 when that company was campaigning against the possibility of further modernisation by the Post Office. The company specifically said that it had invited me to the factory to see the girls and other workers who would be made redundant if the modernisation programme took place. I have a picture of those girls and other workers in my mind when I speak this afternoon.

I shall clarify the situation from the Government point of view. But before doing that I shall restate the case which Plessey has made and which is supported to some extent by the workers in the Plessey concerns. In a letter to workers and unions about the proposed redundancies within the customer service and installation division the company stated:
"Following the successive cuts by the Post Office in its requirements, it has been necessary for this Company as a major Post Office supplier to examine critically their cumulative effects on its present and future position. Particularly this is because cuts have fallen most heavily upon the labour intensive electromechanical type of equipment which currently forms a substantial proportion of our total output which will become obsolete progressively over the next few years.
The rapid decline in requirements for electro-mechanical switching equipment, the installation of which is labour intensive, is occurring at the same time as a change to electronic and semi-electronic equipment, the installation of which has a lower labour requirement.
As a consequence of the reduction in ordering levels and the change in technology, the present levels of employment in the installation division cannot be maintained. It is therefore proposed that redundancies be effected to reduce the work force to a size consistent with the level of demand existing."
In the company's letter to all district officials, staff and hourly-paid workers involved in manufacturing, the company stressed:
"The rapid decline in demand for such equipment is a reflection of increasing requirements (including overseas) for electronic equipment, the production of which has a considerably lower labour requirement."
It goes on:

"As a consequence of the successive volume cuts and the changes in mix requirements by the Post Office and the changes in overseas demand, it is apparent that the level of employment, and production activity, both in terms of numbers and locations within the Company is higher than can be sustained. In this situation, with the greatest reluctance, the Company must now propose substantial redundancies (including some factory closures) in order to reduce the total work force to a figure which is consistent with the market demand as it now exists and is likely to continue for the foreseeable future; and also to enable the Company to concentrate upon the newer technology and thereby safeguard the position of the work force which will remain."
In its PR handout Plessey, while not mentioning to the Press the fall in export orders, says that it is the cumulative effects of Post Office cuts since 1974 that will cause a net reduction of about 4,000 jobs and some factory closures in the electromechanical systems sector of Plessey Telecommunications.

My hon. Friend has said something which is important about the developing situation and the development of new techniques. Has Plessey said anything to the Government about its intention to develop new techniques in Sunderland or in Liverpool?

I was impressed by the speech of my hon. Friend the Member for Houghton-le-Spring. I am sure that he will wait for me to reach the point where I make it clear that developments are taking place. Those are in Liverpool, but I am not aware of any such developments in Sunderland. However, I shall come to that later.

The company in their Press handout went on to say:
"A reduction in resources is now essential, due to continually changing Post Office ordering programmes, the most important effects of which are:
  • 1. The excessively rapid transition from electromechanical to electronic systems, which has effectively been brought forward by about four years against the Post Office Modernisation Plan.
  • 2. Projected orders for a number of major projects, including a further Crossbar International Switching Centre and additions to the Whitehall Private Crossbar Exchange complex, have been postponed.
  • 3. The Post Office announcement of further cuts last November aggravated an already serious forward situation. Even if the November 1976 cuts are restored there will be no benefit to the industry for at least 12 months."
  • I put the Plessey point of view at length because I want to answer some of the allegations that are being made by the management and by others. First, let me make is absolutely clear that the present situation does not arise from Government cuts in public expenditure. Post Office telecommunications expenditure slightly increased from £916 million in 1975–76 to £917 million this year. The Government have not cut back in real terms in telecommunications investment since the Conservative cuts late in 1973 which were restored to the levels required by the Post Office after the February 1974 election. The Post Office has cut investment only to respond to reduced needs for equipment. There have been no Government-imposed cuts. The Post Office has reduced telecommunications investment only when the demand has been lacking for equipment.

    Incidentally, those who refer to the size of the telecommunications surplus must understand that it is entirely swallowed up to meet some of the cost of the investment. Hon. Members who refer to sums of £150 million, £300 million or £400 million profit must appreciate that on telecommunications alone, £916 million was invested last year. Those are the vast sums with which we are dealing in telecommunications.

    There have been some problems in the past because of the delays on the part of British manufacturers in delivering equipment on time, and problems because Plessey, for example, has been unable to supply modern equipment that is much needed, and the Post Office has been forced, and is being forced, to go abroad to purchase that equipment. Overall, however, the ordering programme has increased year by year.

    The present problems stem, first, from the inability to sell out-of-date equipment abroad. They stem, secondly, from the decision to develop a modern semi-electronic system in place of outdated electro-mechanical systems, a development from which Plessey withdrew at an early stage before it achieved ultimate success, a success which led to the endorsement and support—rightly, in my view—of the right hon. Member for Bournemouth, West (Sir J. Eden) in 1973 when he was Minister of Posts and Telecommunications. I supported him then, because he was right to give that endorsement. It was later endorsed by my right hon. Friend the Member for Huyton (Sir H. Wilson).

    Thirdly, the present problems stem from the reduction in orders when demand fell not only because of the recession but as a consequence of tariff increases which followed the ending of the massive subsidies being paid from taxpayers' money to the potentially profitable Post Office telecommunications. Again, I certainly supported the ending of massive State subsidies, from taxpayers' money, to Post Office telecommunications.

    Fourthly, the ironing out of telephone traffic over the day by means of a varying call charge also reduced the amount of new equipment needed, as it avoided a situation in which a lot of expensive equipment was required to meet rush hour demand for as little as an hour or two hours a day.

    Fifthly, the latest ordering cuts are the result of computer studies which have given the Post Office a measure of actual traffic flows. The Post Office has been able to measure them more accurately than hitherto, and to match capacity to them, exchange by exchange. These studies have shown a large measure of spare capacity.

    Quite clearly, the problem is that the Post Office wants to modernise the system. This is absolutely essential if it is to provide the quality of service that our people want. Certainly Post Office users cannot expect to receive good service from the use of out-of-date equipment. If Britain continues to build up an obsolescent system, it has no chance to improve on a poor telecommunications exchange equipment export record. There will not be orders from abroad in the years to come if the British telephone system has not itself an international reputation for being relatively fault-free, easy to maintain and providing the necessary range of services called for by telephone users, particularly businessmen, throughout the world.

    I want to emphasise this point very strongly. My right hon. Friend the Member for Sunderland, North made a very good speech, but I disagreed with him when he supported the manufacturers' view that chopping and changing of Post Office orders has led to the loss of exports. The loss of exports has followed from continuing to produce out-of-date equipment and stems basically from the failure of a joint venture between the Post Office and manufacturers in the 1960s, when they tried to go directly from a simple Strowger electro-mechanical system to an advanced electronic system. Sadly, the experimental exchange at Highgate Wood failed, and it left Britain without exportable telecommunications switching equipment. That is why we do not have the orders.

    However, when I have spoken to people abroad, they have made it absolutely clear that they will come to Britain to discuss the purchase of British equipment when they get the impression, once again, that the British internal telecommunications system is providing for its own customers the wide range of services that modern equipment can provide. I do not think that we have any hope in the export market until we produce a modern British telecommunications system, and we cannot do that through the continued installation of obsolescent equipment.

    I was making the very simple point that the major supplies are in the domestic market and that this determines the production of the companies, and that is where the fault has been. What my hon. Friend is saying confirms that. There has been a bad ordering policy over the past years and it is reflecting itself now in the inability of companies to meet an export demand because other countries have progressed over us.

    I apologise to my right hon. Friend if I misunderstood him. It has certainly enabled me to stray from my brief and to speak with some degree of feeling on this subject.

    Certainly the Post Office has also faced the discovery that it does not need to instal as many switches as it once thought would be necessary to carry the traffic. If it were to buy this unneeded exchange equipment, the cost would fall on either existing telephone users or the taxpayer. The Post Office does not feel justified in doing this. Rather, it aims for a relatively cheaper and more efficient telephone system, less dependent than at present on borrowing from the Exchequer —because Exchequer money is only taxpayers' money.

    But, of course, the Post Office estimates could be wrong. That is why my right hon. Friend the Prime Minister, following representations from both sides of the telecommunications equipment industry, announced that Mr. Michael Posner, of Cambridge University, had been appointed to consider the assessment that led the Post Office in November 1976 to reduce the future levels of orders for telephone exchange equipment and to report. He will be seeking the views of unions and manufacturing industry and will report as soon as practicable—not that I would want Plessey workers to pin too much hope on this, because the company has made it clear that the restoration of these orders would have no effect for 12 months in any case.

    Even the Post Office estimates are correct, there are further steps it could take. It could reduce connection charges in order to encourage more people to have telephones, and the Department of Industry will ask the Post Office to consider this once again. I emphasise connection charges because although I would not want to prejudge the result of any discussions, it could be that reducing rentals and call charges, while being of little help in increasing demand for equipment, could place an enormous burden on the taxpayer if it were necessary to make good any losses.

    Many people outside the Post Office think that the Corporation could conduct more vigorous marketing campaigns. Some of my hon. Friends have suggested this—wisely, I believe—in the debate today. The Government are prepared to back such initiatives, and I understand that the Post Office is discussing this with those who would be affected by it.

    Sadly, however, these measures will not solve the problem within the 90 days' notice that Plessey has had to give under the Employment Protection Act. I wonder how much notice would have been given had we not passed that Act.

    My hon. Friend has no need to wonder. The majority of workers would have had one week's notice and then the jobs would have gone for ever.

    We would have liked to see a much longer notice given than the statutory minimum with redundancies of this size. When the Secretary of State for Employment learned of the prospect of redundancies and that private manufacturing companies had mainly developed much of their work, which had a future, outside Liverpool and Sunderland in the non-assisted areas—Huyton is an exception—he was most disturbed. He decided that this might provide the occasion for the first major jobs initiative by the Manpower Services Commission. Unfortunately, the problem has been that since the autumn the firms concerned have not been prepared to concede that they would be affected by redundancies. In these circumstances it was useless to mount an initiative without the agreement of management and unions at the plants concerned.

    Is my hon. Friend saying that the companies at that time—and they must have had some knowledge of what was going on—refused to cooperate with the Manpower Services Commission in order to see what could be done? This is the burden of our remarks—Plessey made its announcement suddenly, without any consultation of any substance at all.

    My understanding of the situation is that when we knew within the Department of Employment that because of technological changes and changes in Post Office expectations, this problem would arise, the Secretary of State asked the Chairman of the Manpower Services Commission to examine whether this was the right occasion for the first major jobs initiative on the part of the Commission. Of course the Chairman was only too pleased to help. But when the MSC tried to discuss this with the firms concerned it appears that they buried their hands in the sand and no real discussions could take place. The companies failed to recognise that this situation was imcminent. Certainly the Government took an initiative and the Manpower Services Commission took an initiative months ago, but the response was not there.

    The lion. Gentleman said that the Post Office made its decision in October or November, and reduced its amount of ordering. Presumably from then the Government knew the sort of situation which was likely to arise, and which is now occurring. Is he saying that from then on the Department engaged on a survey to see what could be done through the Manpower Services Commission but the firms concerned refused to co-operate?

    I will be absolutely precise and say what actually happened. The situation has not arisen merely because of the reduction in November. I have spelt that out very clearly. The situation has built up over the years ever since the decision of the last Conservative Administration—a decision which I supported—to go ahead with the TXE 4. The

    situation was aggravated by the discovery of the Post Office that it had spare capacity in switching, and therefore it would need to reduce ordering levels yet again in December. In December the Secretary of State was very disturbed to learn of the possible redundancies. Of course we could only know the overall effect of the decision in terms of jobs. We could not know in which locations and at which plants these redundancies would be declared.

    Given the level of ordering, it was for the companies to determine in which plants the redundancies should occur. It was for the companies to determine whether redundancies should be shared out equally over the country or whether they should shut plants at Liverpool and Sunderland. From the departmental point of view, all we could know was that there was a serious problem. We acted immediately and asked the Manpower Services Commission to mount a jobs initiative. My understanding is—and I think I am right, but if I am not I will let the right hon. Member know--that the chairman involved officers of the Commission in talks with each of the companies concerned. But the companies were reluctant to say where the redundancies would occur; in fact, they were reluctant to admit that their companies would suffer the brunt of the loss of orders. In a sense, the companies put off the evil day and that meant that the job initiative could not take place.

    We regret this situation very much indeed. We are hoping that the same will not occur in the case of Standard and GEC-AEI. If there are to be redundancies in these companies, we hope that we shall have more time to deal with them.

    In the public relations handout, Plessey said that it would call in the Manpower Services Commission. I hope that the unions will assist the Commission in this terrible situation, because to date the unions too have not helped the Commission to deal with the redundancies. We hope that they will in the future.

    The job initiative scheme, to be properly effective would have taken 18 months—

    I am a little puzzled by my hon. Friend's reference to the unco- operativeness of the unions. After all, only five days have elapsed since the notices were issued and the decision was announced. My impression, and that of my right hon. Friend and my hon. Friend from Sunderland, is the reverse. It is that the management has been difficult over meeting the unions. I am not aware that at any time since last Wednesday, or prior to that, there have been difficulties on the union side about the proposed redundancies. I repeat that the decision was not known until last Wednesday.

    I stand corrected on the point of view held by my hon. Friend the Member for Houghton-le-Spring about Sunderland, but I think that there have been difficulties in this connection, certainly on Merseyside. The reaction has been there. They have not wanted to accept the inevitability of the redundancies.

    The major objection of my hon. Friends is that they are concerned about even one person becoming unemployed. They are concerned, too, that redundancy means that jobs will for ever leave Merseyside. A job declared redundant is a job lost. Nobody can come in and take it over, and the total number of jobs available in the area is reduced. There is a real fear that once there is talk about redundancies it means that one accepts sackings and that jobs go for ever. That is the reason for the resistance and reluctance on Merseyside.

    I understand that, and if I were on the shop floor I should be fighting hard and saying hard things about everybody in authority, but we hope that the unions will assist the Manpower Services Commission to deal with these terrible redundancies.

    The Plessey proposals cannot be dealt with by way of a job initiative, because of the time factor. Joint teams from the Employment Services Agency and the Training Services Agency will go into the Plessey factories to discuss what help can be given, and particular attention will be paid by the Training Services Agency to the possibility of using some of the firm's facilities for training purposes.

    My hon. Friend the Member for Liverpool, West Derby mentioned the public trustee. My hon. Friend the Member for Keighley (Mr. Cryer), the Under-Secretary of State at the Department of Industry, on hearing what my hon. Friend had to say assured me that the Department was giving, and would continue to give, careful consideration to the points that had been made.

    My hon. Friend also asked about overseas aid and the use of it to boost our exports, as it were. I shall draw his comments to the attention of my right hon. Friend the Minister of State for Overseas Development.

    The Manpower Services Commission will do all that it can within the plants if it is allowed to do so. In the localities also, particularly Liverpool and Sunderland, the Government and the MSC will seek to alleviate what is a desperate situation. Both Merseyside and Wear-side have been designated special development areas, which means that industries are offered a full range of incentives to relocate or to expand there; for example, regional development grants, selective financial assistance under Section 7 of the Industry Act, and Government factories. Talking of selective assistance, the House may like to know that the £4½ million loans and grants offered to Merseyside during the last two years could provide about 3,800 new jobs. On Wearside, in 1975–76 offers of assistance amounting to nearly £500,000 were given, and that is estimated to involve 1,000 new jobs.

    My hon. Friend will remember that I said that we already had seven empty factories? Seven more are to be built, but that will not deal with the problem that we are facing.

    I appreciate that, and I realise that we have to do everything possible to provide jobs in those factories. But it is better to have factories and try to provide jobs in them than not to have the factories and therefore be unable to try to get the jobs. The Government will do what they can for Wearside.

    I appreciate my hon. Friend's difficulty, because of the situation, but the burden of our message is that we do not want these Plessey factories to close. We have suggested several ways in which the Government can deal with the situation. With respect to my hon. Friend, we are aware of all the opportunities that are available to us as a special development area, but the fact is that we now have a 13½ per cent. rate of male unemployment. Every lost job is a disaster for the individual. The burden of our argument is that we do not want 2,088 people added to the present unemployment figure. The only way in which something can be done is not through my hon. Friend's good offices, certainly not in the short term, but by my mounting a rescue operation of some sort to keep these factories open. That is what we want to hear.

    I shall be up and down like Punch and Judy and be told what I should say before I say it, but I shall do my best. The men from the North-East are very rough.

    They are Punch, and the hon. Gentleman is Judy.

    If I were in the place of my hon. Friends I should be punching as hard at any Judy standing at this Dispatch Box.

    My right hon. Friend the Prime Minister told the House on 3rd March that he had asked the National Enterprise Board, which has a regional director in both the North-West and the North-East, to investigate the investment potential in both areas and to report to the Government on what can be done to offset the disastrous consequences of the Plessey closures. In that sense, the Prime Minister and the Government are determined that we take a close look at what can be done in practical terms to offset the disaster of these closures. My Department is determined to do all that it can to assist.

    My right hon. Friend the Member for Sunderland, North made a specific request about the temporary employment subsidy.

    I am not clear whether the hon. Gentleman is saying that there is still the possibility of a rescue operation for the factories which it is proposed to close M. the North-East and on Merseyside. Or is the hon. Gentleman saying that the Government's action is concerned only with trying to do something to mitigate the disasters that will follow when those factories have closed? In honesty to the men, the women and the families concerned, no false hopes should be held out as a result of the Minister's not using clear language. Is there a hope of a rescue operation, or is the only action that the Government, the Manpower Services Commission and others are likely to take one that will help to deal with the disastrous unemployment situation in those regions?