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Volume 934: debated on Monday 27 June 1977

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Plessey Company Ltd (Wearside)


asked the Secretary of State for Industry if he will make a statement on the report of the National Enterprise Board about the investment potential of the areas affected by the Plessey closures on Wearside.

The report, copies of which are available in the Library, makes a number of useful proposals for action by the Board itself and by my own and other Departments, not only on Wearside but also in the North-East and North-West generally. The Board intends to pursue vigorously the intensified regional activities proposed in the report. It is considering setting up a contracting company to undertake certain activities on behalf of small metalworking companies in the North-East and the possibility of similar action in other industrial sectors in both the North and North-West Regions.

The Government have accepted the recommendation that there should be a widening of the differential in regional selective financial assistance in favour of special development areas. This change will apply to all such areas in the United Kingdom. In those areas we intend to increase from two to three the number of possible interest-free years for Government loans and interest relief grants for suitable viable employment-generating projects. We shall also increase the rent-free periods for Government factories in appropriate cases.

While we welcome publication of the report, and particularly the acceptance by the Government of these recommendations, which we shall study closely, may I ask my right hon. Friend meanwhile to look at the current issue at the Plessey factory, Sunderland, which concerns the implementation of the recommendation or suggestion of the Posner Report that the Strowger orders should be brought forward? I know that my right hon. Friend is favourable towards the suggestion. As it would mean saving hundreds of jobs that are sorely needed in Sunderland, will he do his best to get acceptance of that recommendation?

A good deal of work has taken place already and, if necessary, discussions with Plessey will continue. It was our intention to try to get £3 million of accelerated Strowger orders for Plessey. We understand that there were objections from some other companies which manufactured this equipment. But if my right hon. Friend has any information on this that he wishes to pass on to me, I shall consider the matter further.

Will the right hon. Gentleman say when he hopes to put before the House his findings on the general question of Plessey and the way that the company has been affected by Post Office purchasing policy?

The hon. Gentleman is probably not aware that I appointed Mr. Michael Posner to examine the reasons for the decision of the Post Office to cut back on Strowger orders. It is not for me to say whether that report will be debated. A good many Questions have been tabled, and we have tried to answer them as fully as possible.

Is my right hon. Friend aware how important it is for the Strowger orders to be brought forward? Touching on another matter that he mentioned, may I ask whether he can give us some idea of how many jobs—

I hope that my hon. Friend will allow me to continue with my own question about Sunderland. Can my right hon. Friend give any idea of how many jobs he envisages being created?

Arising out of the discussions which my right hon. Friend the Minister of State has had with Plessey, I understand that 400 new jobs will be created in the North-East as a result of the help under the Industry Act 1972.

Since I saw this report only at 3.25, I am sure the right hon. Gentleman will accept that I have only been able to glance through it. Is he aware that these well-intentioned measures and suggestions will achieve little, if anything, for local needs compared with creating a climate less hostile to enterprise and effort by way of reducing wasteful Government spending and thus being able to reduce the marginal rates of direct taxation for all concerned?

I thought that the right hon. Member for Leeds, North-East (Sir K. Joseph) would give a wider welcome to the report. There are many useful suggestions in it. But no doubt he will want to consider it further. I remind him of the measures that we have taken over the last few years in helping the climate for investment. If we look at the Government's own investment intentions, we see that investment is likely to be up by between 10 per cent. and 15 per cent. this year over last year. If the right hon. Gentleman does not wish to take notice of Government statistics about investment intentions, perhaps he will rely on the CBFs investment intentions survey, which shows that it will be even higher.

Is not this report a sequel to the fact that private enterprise generally and continually over a fairly long period has been unable to provide the necessary investment and thereby the manufacturing jobs, as instanced not only by Plessey but by Courtaulds, which had about £6 million of taxpayers' money to carry out the philosophy of the right hon. Member for Leeds, North-East (Sir K. Joseph) to let the free enterprise tall poppies grow? Is it not time that we, as a Socialist Government, intervened in a positive way instead of having to pick up the pieces after private enterprise has so obviously and abysmally failed?

I want to see the investment climate improved. I agree with my hon. Friend to the extent that private industry should have invested more. Over the last few years, the Government have done their bit by the selective investment scheme and the accelerated investment scheme and also broadly by maintaining the level of investment in public industries. But in this case, concerning telecommunications equipment, the decision was governed by the over-capacity which the Post Office already had and was not prepared to see increased, apart from the £3 million of advance orders, and the technological changes going on in that industry. [Interruption.] Even if it had been publicly owned, the technological changes in the telecommunications industry would have taken place.

In view of the fact that 1,400 workers on Merseyside are likely to be unemployed as a result of the Plessey closures, can my right hon. Friend indicate how many of these jobs will be saved as a result of the National Enterprise Board's report? Can he indicate also what positive action is being taken to bring those workers back to work?

The unemployment position in Merseyside is intolerable, and I can understand my hon. Friend's views on this matter. It must be brought down as quickly as is practicable. I dare say that my hon. Friend has not yet had a chance to look at the report of the NEB, but it has made some useful suggestions. I have ascertained that the NEB has commercial freedom to operate in the regions, including Merseyside, and that there will be no shortage of resources for viable projects.