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Schedule 1

Volume 978: debated on Thursday 7 February 1980

The text on this page has been created from Hansard archive content, it may contain typographical errors.

LIMITS ON FINANCIAL ASSISTANCE UNDER INDUSTRY ACT 1972 SECTION 8

I beg to move amendment No. 26, in page 10, line 40, at end insert—

'5. In subsection (8) of that section the proviso shall be left out.'
I shall not delay the House for long. The amendment concerns a matter of considerable importance relating to parliamentary accountability. I aired this issue on Second Reading and I explained the nature of my anxiety at that time.

The purpose of the amendment is to eliminate a proviso inserted in the Industry Act 1972. Right hon. and hon. Members who were in the House at that time will recall that when section 8 of the Industry Act 1972 was going through the House, a large number of my right hon. and hon. Friends were alarmed at its implications. Eventually they prevailed upon the then Government and the Ministers responsible, Mr. Christopher Chataway and my late predecessor, Mr. John Davies, that in any case where the Government proposed to offer to a project assistance amounting to more than £5 million under the terms o section 8 of the Industry Act, that provision should be subject to the affirmative resolution procedure.

I remind my right hon. and hon. Friends that Mr. Chataway said on 31 July 1972:
"under Clause 8 the Government shall have to come to the House to secure an Affirmative Resolution in the case of any project which exceeds £5 million."—[Official Report, 31 July 1972; Vol. 842, c. 257.]
But it has not worked out that way. This is precisely the point that concerns me. At that time the Government very mistakenly were allowed to insert an additional proviso—the one at which this amendment is directed. That proviso was designed to ensure that where
"the Secretary of State is satisfied that the payment or undertaking is urgently needed at a time when it is impracticable to obtain the approval of the Commons House of Parliament; and in that case the Secretary of State shall lay a statement concerning the financial assistance before each House of Parliament."
I really do not believe that anybody who listened to our debates at that time could conceivably have imagined, from anything that was said from the Government Front Bench, that over the next seven years the biggest projects of assistance granted under section 8 would pass through without one word of discussion, explanation or debate in the House.

I cite some examples so that hon. Members will understand what I mean. The first one—

If the hon. Member really wants to intervene, perhaps he might rise to his feet. If he really thinks that I could put in a prayer, he shows lamentable ignorance of the proceedings of the House. One cannot pray against a statement lodged in the Library. The hon. Gentleman should not try to put that one over.

The first occasion that I can trace when this proviso was used as a let-out was in the case of a grant of £10·3 million to the Mobil Oil Company in respect of a fluid catalytic cracker at Coryton, Essex, in 1976. Not one word of explanation was given to the House. When the House resumed in October of that year, a statement was deposited in the Library. Nothing more was heard.

In 1978 the previous Government decided to put the taxpayer into a development by Hoffman Laroche at Dairy in Ayrshire. On that occasion the amount was up to £18 million—more than three times the limit laid down by Parliament. There was no debate or statement in the House. There was not one word of discussion, and the matter does not even appear in Hansard. All that happened was that once again a statement was put in the Library of the House on the ground that the House had not been sitting—most conveniently—when the money was awarded.

The latest occasion occurred only last summer. The biggest-ever grant was given under section 8 of the Industry Act, under the provisions of a section that the House said was to be used only for projects of more than £5 million, subject to affirmative resolution. Once more, a grant of £18·25 million was given to the Dow Corning giant of America, without a word of explanation to the House.

11 pm

Whatever else we intended in July 1972, we did not intend that. That is why I have put down this amendment. I do not think that we can go on in this way. I do not think that this is the way in which the Department of Industry should deem to treat the House of Commons.

My hon. Friends may say that the precise wording of the amendment is unacceptable on the ground that genuine urgency might arise when the House is not sitting. I understand that point. I hope that in reply to this brief debate we may have an assurance that never again will sums of this magnitude be given, in clear contravention of the intention of the House seven years ago, without a proper explanation as soon the House resumes. I hope that an assurance may be given that we shall put an end to the apparent practice of using the parliamentary recesses to squiggle through vast commitments of this sort.

I suggest that this is a matter of some importance from the point of view of parliamentary scrutiny of the Administration—of all Administrations. It is a matter in which Labour Members have no right to take satisfaction. They have misbehaved twice so far. My right hon. and hon. Friends have misbehaved only once, and I hope that they do not misbehave again.

On that basis, I commend the amendment to the House.

I fully appreciate that my hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) feels strongly about this point. He has been persistent in his arguments for some time. His amendment concerns a practical measure which the Government utilise from time to time. I am sure that when he said that the Government might squiggle, my hon. Friend was not suggesting that his and my right hon. Friend would use that measure dishonourably or try to conjure up a situation in which the arrangements to give assistance to a company would be held over until a recess, so that we could take advantage of the absence of hon. Members from the House.

I can only say that I have noticed that the three largest projects of individual assistance which have ever been given under section 8 of the Industry Act have somehow occurred in those circumstances.

The House rises for about one-third of the year, so it is not. surprising that some of these actions are necessary during that period. Glancing quickly at the list of moneys that have been made available under section 8 of the Industry Act, I do not believe that the projects to which my hon. Friend referred are the largest. I am not suggesting that they are not large amounts of money, but it is a slight exaggeration to say that they are the three largest.

May I make a helpful suggestion? So that everyone can be fully aware of what is happening, is it possible to follow the practice of having all the unpleasant statements on the day before the House rises, with no possibility of debating them, and also to arrange, so that everyone can be sure of noting the fact, that all the orders are dealt with the day after the House rises, whenever there is that sort of business?

I believe that my hon. Friend is suggesting that industry should also go into recess for three months of the year. That is what would happen if we were to meet the requirements of the Act in that regard.

As my hon. Friend the Member for Knutsford knows, the proviso has been called into play on very few occasions since 1972, the most recent being that of Dow Corning, when a statement was laid on 22 October 1979. As my hon. Friend will know because of the correspondence that he exchanged with the Department, the circumstances of the case were such that an urgent decision was required during the Summer Recess, and a further delay would have meant that the project went outside the United Kingdom. These are clearly matters during the recess which the Government must take account. We believe that the actions were justified by circumstances and fully in accord with the procedure laid down under the Act.

My hon. Friend asked for an assurance that it will not happen again. It is quite impractical to give that assurance, for the reasons that I have outlined. We cannot disregard the fact, with all due respect to my Friend's view, that during the next parliamentary recess another such opportunity could arise to support investment in the United Kingdom.

We do not expect to make great use of the proviso, but it is an essential part of the Industry Act. We clearly intend that it must be used sparingly, on appropriate occasions. I am sure my hon. Friend will agree that it is not the purpose of the provision to rob the House of its power or authority. However, it enables us to support important investments at whatever time of the year the issue may arise. As I suggested earlier, we do not conjure up opportunities to suit the timing of our sittings, but we have to have the facility available.

I am sorry to disappoint my hon. Friend, but I am afraid that I must invite the House to reject the amendment.

I listened with care to my Friend's reply. I do not necessarily consider that dunning our constituent taxpayers for tens of millions of pounds should always be regarded as an opportunity. I can think of other terms that might sometimes be more appropriate.

I was referring to an opportunity to support investment in the United Kingdom and not to do my hon. Friend out of the opportunity to debate the issue in the House.

I assure my hon. Friend that I shall seize every opportunity for debate, wherever and whenever such a provision is exercised.

I understand my Friend's proposition. I accept that there may be unavoidable circumstances in which it is necessary to act during a recess, but I hope that we shall never again see a situation where the biggest projects somehow go through during a recess and the tiddlers are left to be debated in Parliament. That is not the way that it should be done.

On that basis, with considerable reluctance—[Interruption.] I find it deplorable that right hon. and hon. Gentlemen should regard the expenditure of tens of millions of pounds of taxpayers' money as a matter for hilarity. [HON. MEMBERS: "Vote, vote."] Before that rude interruption, I was about to say that, in those circumstances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.