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Prime Minister's Office (Policy Unit)

Volume 932: debated on Thursday 26 May 1977

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Q3.

asked the Prime Minister if he will appoint someone with experience of industrial reorganisation and mergers to his policy unit at No. 10.

Is my right hon. Friend aware that there is a welcome on the Labour side of the House for his commitment and that of my other right hon. Friends to involve the NEB, on a permanent and long-term basis, in the restructuring of the turbo-generator industry? Will he confirm that the hold-up up in the announcement of the decision to order Drax B has arisen because Sir Arnold Weinstock still refuses to cooperate in creating a national turbo-generator company and is insisting on GEC control of whatever emerges rather than agreeing to a company which preserves the interests of all those who work in it?

I can certainly say that we intend that the Drax B power station should be ordered. But I very much regret that a battle is being fought out on the Order Paper and by publicity firms on the question how that order should be disposed of. We are here dealing with the livelihoods of thousands of men and with the future of the industry as a whole. It will be for the Government to take the decision. I deprecate references to anybody in this matter when these difficult negotiations are going on. The Government do not have the power to force any restructuring of this industry. The restructuring can be done only by consent. If that consent is not forthcoming, there will be no restructuring. The Government will have to take their own decision and discuss with the CEGB how this order is to be placed. I hope that everybody concerned, including my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Thomas), will understand the implications of what I am saying.

Will the Prime Minister confirm the statement by his own colleague, the Under-Secretary of State for Energy, that if the order is placed it will be put out to competitive tender?

Not at the moment. I do not wish to give cards to any particular group in this matter. We are here dealing with a national interest. There are delicate commercial negotiations going on. I repeat what I said. I do not believe that it is in the best interests of the future of this industry that we should try to—[Interruption.] I ask the hon. Gentleman not to press this issue on the Floor of the House at present.

Will the Prime Minister reconsider part of his answer concerning Drax B? I speak as one who has only lately become involved in the battle on the Order Paper. May I ask my right hon. Friend, in fairness to both sides and to workers in the power industry and both companies—workers whose jobs are threatened—to see that if Drax B is ordered the order should be seen to be fair to both sides and should go out to open tender, and not be handed on a plate to one company and its workers?

I note what my hon. Friend says. I am trying to keep the position as it is. We are at the last stage of negotiations. Whether those negotiations will break down or go through I do not yet know, but I would prefer at this stage just to note what my hon. Friend says and not to give any further information.

There is a growing body of opinion that believes that further industrial concentration into larger and larger units, particularly the nationalised public sector units, is the root cause of many of our industrial problems. Will the Prime Minister seek to promote instead a policy of encouraging small firms and preventing industrial concentration in larger industries, which is exactly the reverse of what he has been doing hitherto?

That is a more generalised question. If I am asked whether I believe that a great many bigger firms can grow out of small firms, the answer is "Yes". We should do our best to encourage that. As for the matter to which this question is related, there is general agreement among the trade unions and the industry itself that rationalisation demands one technology for future power stations, especially if we are to be able to compete internationally. We need a level of production that cannot be sustained if the industry is divided. There is no general answer. We must take each case on its merits.