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Industry

Volume 981: debated on Monday 24 March 1980

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South-West Durham

2.

asked the Secretary of State for Industry what is the Government's policy for attracting industry to South-West Durham.

The Darlington and South-West Durham travel-to-work area is to remain an assisted area.

Is the Minister aware that there are parts of my constituency in South-West Durham where the unemployment rate is now 12 per cent? Does he realise that, now that the area has been downgraded, not only incentives but a large part of the advance factory programme will be lost? Will he now, in partnership with the local authorities, invest in an advanced and nursery unit programme and also in the refurbishment of small units for small businesses?

The hon. Gentleman has raised two matters. The first concerns the level of unemployment in his constituency which is made up partly of the Barnard Castle travel-to-work area, where 319 people are unemployed, and partly of a section of the South-West Durham travel-to-work area, where unemployment in 1979 was 6·8 per cent. which compares with the national average of 5·6 per cent. Therefore, the hon. Gentleman was referring to a small pocket, in relation to the very high figures which he just quoted. As regards nursery units, my Department has just received a report from Coopers & Lybrand Associates Limited relating to small firm premises and we shall be publishing that next month.

Does the Minister realise the seriousness of the situation in West Durham? Statistics and averages are no answer to the men and women who now feel that their only alternative, if they are to secure work and provide for their families, is to move to the South. Is he aware that this is not acceptable? Does he appreciate that unless more regional aid is made available, the cynicism, bitterness and, indeed, anger now growing because of the savage cuts in regional aid will lead to serious repercussions?

We are concentrating regional aid on the areas of greatest need. That means that they will stand out much more than they have done in the past. We really care about the problems of very high unemployment in areas such as Newcastle and other special development areas.

British Steel Corporation

3.

asked the Secretary of State for Industry when next he intends to meet the chairman of the British Steel Corporation.

I do not have a meeting arranged with Sir Charles Villiers at the moment, but we meet from time to time.

When my right hon. Friend meets the chairman of BSC will he draw to his attention the fact that there are many steel workers who now wish to settle along the lines of the offer made by the corporation? Can my right hon. Friend give us some assessment of the damage to job prospects and job security caused by this strike?

I fear that the strike will have jeopardised the size of the industry but I hope very much that when it gets back to work—we all hope that that will happen as soon as possible—it will quickly manage to recover its market share.

Does not the Secretary of State agree that British steel workers have put up a remarkable display of solidarity in supporting what they believe to be their just wage claim? What is more, does he not agree that they are not likely to forget in a hurry those people, including their elected representatives, who have done everything possible to undermine them in the dispute?

I have a high respect for the steel workers. I hope they will recognise that the sooner they get back to work, the better it will be for the future of their own jobs.

Although it is clear that the strike has not gained an additional penny for the steel workers but has lost them vast sums, will my right hon. Friend make it plain that once the strike is over he will be prepared to listen very carefully to anything that the corporation may say about the possibility of a more intelligently phased operation of slimming down the size of the industry?

I shall listen to anything that the corporation may say, but the limitation upon the money available to it from the taxpayer must remain firm.

May I remind the Secretary of State that the gap between BSC's offer and the union's claim is less than £50 million? Using the Minister's figures of some weeks ago, the loss of revenue to BSC at £10 million a week or so now totals £120 million. If we add to that the loss of revenue to British Rail and the National Coal Board, we are discussing a figure four times the amount of that gap. Therefore, was not it extremely stupid of the Prime Minister to say on Saturday that the Government could have avoided the steel strike but did not do so for the sake of the taxpayer?

No. The gap to which the right hon. Gentleman referred is far more about where the money to meet the earnings shall come from than about the size of the earnings. The issue is whether the taxpayer should be asked to meet some of the increase in earnings which, in the view of many people, myself included, should come from the productivity of the steel workers and not from the taxpayer.

But the £200 million of which I have spoken, and which the Secretary of State cannot possibly deny, will have to be found by the long-suffering taxpayer anyway.

The right hon. Gentleman did not ask me a question, but per- haps I may treat his remarks as if they were a question.

It does not follow that the loss imposed upon the Steel Corporation by the strike has to be met by the taxpayer. The Steel Corporation is required, as any private business would be, to take every step that it can, including cutting its overheads—

Alas, if the hon. Member for Feltham and Heston (Mr. Kerr) knew more about the steel industry—I withdraw that, because the hon. Gentleman was Chairman of the Select Committee. He should know, even when he comments from a sedentary position, that steel is a buyer's and not a seller's market. But I was saying that the Steel Corporation will be required, as any private business would be required, to break even by every legitimate means in its power—that is, including cutting overheads, buying better, reducing stock, disposing of non-essential assets and, if necessary, increased redundancies.

Manufacturing Industry

4.

asked the Secretary of State for Industry what is his estimate of the effect of the present exchange rate on production in manufacturing industry.

The present exchange rate must affect our manufacturing competitiveness. But a strong exchange rate should help to contain inflation, and success on that front is important for future manufacturing production.

Does not my right hon. Friend agree that this is having a very severe effect on the profitability of our manufacturing industry? Has he drawn the attention of the Chancellor of the Exchequer to this matter? If not, will he do so?

The Chancellor of the Exchequer is certainly extremely well aware of the effect of the exchange rate upon manufacturing industry. But I repeat that to alter by Government action the level of the exchange rate, even if it were practicable, would endanger the priority objective of reducing inflation, which is equally if not more important for manufacturing industry.

Is the Secretary of State not aware that in one month last year imports of finished manufactures actually exceeded exports of finished manufactures, and that this situation is likely to deteriorate further this year? Will he bear in mind that his monetary policy—to which he adheres and which is responsible for the failure to instruct the Bank of England to intervene in the exchange rate—is a very heavy price to pay for the certainty of the damage that it is doing to our competitiveness and to the export possibilities for British industry?

There is a lag in all these things. I do not want to put too much weight upon the performance of British manufacturing industry at present, but the fact that British manufacturing industry is maintaining and even increasing the volume of its exports, while the volume of imports did not increase so much last month, is encouraging. I repeat that to let inflation rise further, which is what would be involved by seeking to lower the exchange rate, would be more damaging still to British manufacturing industry.

Does the Secretary of State agree that Germany and other countries have shown that it is possible to prosper with a strong exchange rate, and that this can enable the benefit of our prosperity to be spread by enabling higher wages to be paid to our labour, whereas the low exchange rate is needed only if one is concentrating on cheap labour?

I agree with the gist of what my hon. Friend has said. It is true that good manufacturing companies are finding the high exchange rate an intense stimulus to their efficiency.

Is there not a widespread and strongly held view throughout British industry that sterling is overvalued? Has not the Secretary of State been told this by a large number of industrial organisations, including the footwear industry, the textile industry and, most recently, the chemical industry? For the first time for many years, record import levels of chemicals are coming into the British economy, which is surely a disgrace. The Minister's answer would be acceptable if inflation were falling and output were increasing, but is not the reverse the truth in both cases?

As I have said before, there is a lag in these matters, and inflation is still reflecting the loss of control of the money supply by the Labour Government in their last year. I repeat that manufacturing industry recognises that the defeat of inflation, to which the exchange rate contributes, is in its own highest interest.

National Enterprise Board

6.

asked the Secretary of State for Industry when next he expects to meet the chairman of the National Enterprise Board.

When the Secretary of State next meets the chairman of the NEB will he be informing him that it is the intention to go ahead with the Inmos microchip production unit and that the Government will finance it? Will he also further indicate to the chairman that the Government's decision is that the production unit must be placed in an assisted area?

This is a very complex question. I shall make a statement as soon as a decision is reached.

Does my right hon. Friend agree that pressure for direct investment from the NEB in the information technology industry should be resisted, and that, alternatively, there is a role for the Department of Industry in the co-ordination of Government buying schemes and the placing of large contracts with successful British companies in this field?

I agree with the latter part of my hon. Friend's question. As to the former part, the NEB has been given a remit by the Government.

When the Secretary of State meets the chairman of the NEB will he make clear that it is his firm belief that, where the NEB is being forced to dispose of assets, such as in Fairey Engineering, the workers in those industries should be fully consulted about would-be purchasers?

The NEB is required to take into account the interests of the company as well as the national interest in its disposal policy, and it is for the NEB to decide how to carry out that instruction.

As the Government can expect oil and gas revenues of between £15 billion and £20 billion a year within the next three or four years, will the Minister have discussions with the NEB on how best it can make sure that those revenues are channelled into industry and manufacturing and are not squandered simply on higher imports within the next few years?

We must not spend money before we have it. It is the Government's view that such money as is available is better spent by the consumer than by Ministers and officials.

Trades Union Congress

8.

asked the Secretary of State for Industry when next he proposes to meet leaders of the Trades Union Congress.

Does the right hon. Gentleman accept that, if he meets the TUC leaders, some of them certainly would say to him that his industrial policies are needlessly turning some of our workplaces into centres for trials of strength between management and the shop floor? Does he agree that his inflexible monetarist policies are posing a danger to the social fabric of our country as well as bringing about the likelihood of an unemployment figure well beyond 2 million?

I did not notice that the previous Government's industrial policy brought about a situation of unrelieved sweetness and light in every workplace.

When my right hon. Friend meets the TUC will he discuss the apparent difference between the industrial rate of exchange and the financial rate of exchange? Will he make the TUC understand that a neutral monetary policy—monetary control—leaves it to employers and trade unions to negotiate pay increases that are greater than the increase in the money supply? Does he not agree that those increases will lead to reduced industrial competitiveness, and higher unemployment?

I agree that excessive unit labour costs, which result from wage claims that are not accompanied by higher productivity, will destroy jobs.

When the right hon. Gentleman meets the TUC—apart from his philosophical discussions about monetarism—will he hold concrete discussions on selective import controls? Does he not agree that such import controls will save some of our industries from the pressures that they now suffer?

At present, we have some selective import controls. To go further would risk encouraging inefficiency and price rises as well as retaliation.

When my right hon. Friend next meets the leaders of the TUC will he stress the important role that they could play in the application of microprocessor technology to industry? Does he not agree that that technology can substantially improve our industrial efficiency and assist in raising the standard of living of TUC members?

TUC leaders do not need much persuasion. A TUC booklet called "Employment and Technology" was recently published. As I have mentioned in public before, it contained a most encouraging welcome for micro-processing as a new technology. However, I think that some of the conditions attached to the application of those new techniques are misguided.

Is the right hon. Gentleman aware of the sense of dismay that is felt by leaders of the TUC and by the country about the Government's monetarist policies? Does he not recognise that such policies can lead only to a return to massive unemployment? Does he not accept that we shall have disaster areas instead of industrial areas?

The hon. Gentleman has got it entirely wrong. It is long-established common sense that a monetary policy involves moving towards a balance between the growth of demand and the growth of supply. The hon. Gentleman has forgotten that the last leader but one of the Labour Party, the right hon. Member for Huyton (Sir H. Wilson) got it exactly right. He said that inflation, which monetary policy seeks to abate, is the father and mother of unemployment.

When my right hon. Friend speaks to the TUC will he emphasise the need for increased productivity in most of our industries? Does he not agree that if we are to compete and to attain the level of production and employment that all hon. Members desire, there must be a heightening in the level of productivity and a lowering in unit costs? Will he stress that point, above all else, in his discussions with trade union leaders?

To be fair, those trade union leaders attending the NEDC do not need any persuasion. They understand that perfectly well. However, at shop steward level, one finds resistance, because there is fear about the loss of jobs. At that level there is no understanding that higher productivity is a source of greatly increased employment.

When the Secretary of State meets TUC leaders and gives them his ideas on the necessity to curb inflation, will he explain why his Government doubled VAT in the last Budget, thereby increasing inflation to double the figure that existed when they took over?

The right hon. Gentleman must remember that the previous Labour Government complained throughout their lives that the inflation that occurred during their first two years of office resulted from an inherited lag from the previous Conservative Government. We can, therefore, make the same claim now. We inherited rising public expenditure and a rising monetary supply. At present, the country is suffering from the consequential inflation.

Finniston Report

10.

asked the Secretary of State for Industry if he will list the organisations that have submitted their views to him on the Finniston report.

14.

asked the Secretary of State for Industry what actions he is taking both to assess the Finniston report on engineering and also to implement its findings.

The Department is currently seeking views on the key recommendations of the report from over 350 organisations and in- dividuals. Over half of these have replied to date and I expect most of the remainder by the end of the month. Other Departments are carrying out their own consultations. In addition, many unsolicited views are being received.

I do not think it would be appropriate to list the individuals and companies who have submitted their views, whether solicited or not, but I shall place in the Library a list of those representative organisations from which the Department sought comments.

The consultation exercise is being co-ordinated by officials, who are also advising my colleagues and myself on various aspects of the report. As I told the House on 29 January, we intend to reach decisions on the key recommendations quickly and to announce them in the summer.

Will the right hon. Gentleman consider eschewing a noninterventionist view of the report? Does he not recognise that Government intervention is needed if the major recommendations of the Finniston report are to be accepted and carried into practice? Will he further note that there is a shortage of science and mathematics teachers? If we are to have engineers, those teachers are required now.

I note the hon. Gentleman's remarks, particularly those referring to the work of educationists. No doubt my colleague in the Department of Education and Science will consider those remarks. I appeciate the hon. Gentleman's broader point about intervention. I hope that he will use his influence to encourage industry to put its money where its mouth is to ensure development along those lines.

Further to that reply, does my hon. Friend agree that this is a most important report about the future of British engineering and the economy? Will he ensure that the Government implement the report's major conclusions as soon as possible?

I am glad that the right hon. Member for Deptford (Mr. Silkin) has already welcomed the report. I think that the House will recognise the significance of the analysis. There was a great deal of agreement about it. The decisions that flow from it must be carefully analysed.

Does not the Minister agree that there is a great shortage of skilled workers on the shop floor? Does not that shortage flow to a great extent from the trouble that arose in 1973–74 when apprenticeships in many parts of British industry came to an end? Does not the Government's policy of massive deflation encourage the loss of skilled workers, although they will be needed, in the future?

The right hon. Gentleman seeks to widen the debate. The question of technicians is not covered by the Finniston reports, although some people would have liked it to have been. The right hon. Gentleman's arguments are therefore somewhat specious.

Does my hon. Friend realise that some of us feel that it is high time that the House had a debate on this important document? Will he give us a guarantee that a debate will be held before the Government reach a conclusion?

I note my hon. Friend's remarks. However, he will appreciate that the issue has been debated in another place. We shall want to consider that point when we are nearer to reaching our own conclusions.

Does my hon. Friend not agree that the shortage of skilled labour—complained of throughout British industry—is an inevitable consequence of freezing differentials as a result of successive wage controls?

Investment In Industry

11.

asked the Secretary of State for Industry what estimate his Department has made of intended Government investment in industry in 1980–81.

Details of Government assistance to industry in 1980–81 will be given in the White Paper on public expenditure and the Supply Estimates, both of which will be presented to the House on 26 March. It would not be appropriate for me to anticipate the publication of these documents.

Is the Minister aware that the gap between industrial investment in Britain and that in Germany, France, Japan and other major manufacturing countries is terrifying? Does he not realise that Government policies will do nothing to encourage private investment in Britain? Does he not accept that substantial public investment is essential if we are to survive as an industrial nation?

The hon. Gentleman is aware that massive industrial investment has been made in the public sector. He knows that losses are now being made in that sector. The best investment will come from the private sector putting money into projects from which it knows that a profit can be made.

Is not the Treasury right to wish to encourage the State's accretion of funds through the sale of State assets so as to reduce the level of direct Government holdings in industry? What action is my hon. Friend taking to bring that about in the case of British Leyland?

I know my hon. Friend's concern about British Leyland. He knows the Government's position, which is that we should not stand in the way if it were the commercial decision of British Leyland to sell. On my hon. Friend's first and more major point, it will be significantly to the benefit of British industry for certain assets held by the State to be returned to the private sector.

Is not the Minister aware that the biggest fear on the shop floor, not only in British Leyland but in successful manufacturing nationalised industries, such as British Aeropace, is that Government investment in those industries is about to disappear?

Is the hon. Gentleman aware that half of the British Aerospace workers have stopped work today, and that 5,000 have marched on the House this afternoon because they fear that British Aerospace will be sold off to foreigners, or to those who pay most to Tory Party election funds?

The hon. Gentleman would do a great service to British Aerospace and its employees if he did not—as he has done yet again today—perpetuate untruths about the industry's future. He is thoroughly to blame for the anxieties which exist in British Aerospace. The hon. Gentleman is perfectly well aware that in the articles of association there will be a maximum limit of 15 per cent. foreign ownership. That will be safeguarded by the Government retaining 25 per cent. of the shares and their preparedness to vote their shareholding to defend the articles.

As my hon. Friend's answer indicates that a large sum of money is likely to be involved, is there not enormous scope for reducing the amount of money invested by the Department of Industry? Does he agree that the right level of investment by the private sector will never be achieved if the Government continue to pre-empt so much of its money? That is a lesson that the House should learn.

Order. I shall call the hon. Member for Nuneaton (Mr. Huckfield). However, as the House knows, I do not usually call even Front Bench spokesmen twice on one question, especially when many other hon. Members are seeking to catch my eye.

If there were not 5,000 workers from British Aerospace outside the House I should not press my case Mr. Speaker. Will the Minister confirm or deny that there is nothing in the Bill that will prevent the breaking up of British Aerospace, and that there is no provision, if the Bill reaches the statute book, that will prevent British Aerospace being taken over lock, stock and barrel by foreign interests?

I have stated very clearly the safeguards against British Aerospace being taken over by foreign interests. I should like to think that a statement to this effect from the Dispatch Box—which has been made on previous occasions—would be accepted by the House.

The Government have made it clear that it is not their intention to split up British Aerospace. There is allowance for only one successor company to the corporation, and that, in itself, is a safeguard and an assurance that British Aerospace will remain in its present form.

Concorde

12.

asked the Secretary of State for Industry what work on the Concorde project is currently being funded by his Department.

Work on the Concorde project currently being funded by the Department is mainly for the support of the aircraft and engines in service with British Airways and Air France, including, in particular, in-service development, continued fatigue specimen testing, the meeting of warranty claims, and the manufacture of spares.

Because £800 million of taxpayers' money is being spent on the project, will my hon. Friend tell the House whether the Government are seeking to persuade American manufacturers to become interested in the advanced technology developed by ourselves and the French, so that this vast sum will not cease to exist in practical terms when the aircraft ceases to fly? Will he do that to ensure that we shall have a stake in the second generation of supersonic aircraft that will fly within the next decade or two?

Discussions on the matter are continuing between British Aerospace and American manufacturers. There is nothing more that I can add this afternoon.

Is the Minister aware that about 20,000 people turned out yesterday to see Concorde on its first appearance at Edinburgh airport? What is the extent of the warranty claims? Has the Minister figures in his brief?

I cannot answer that question without prior notice. I shall write to the hon. Gentleman.

As this is the supreme example of State entrepreneurship to date, will my hon. Friend contemplate establishing a Select Committee to examine the whole ludicrous story, together with the enormous sum of public expenditure that has been wasted for no purpose whatever?

My hon. Friend is aware that the question of Select Committees is one for the House itself. If he wants a more detailed exposition on the matter, I suggest that he consults his own splendid book.

North-East Lancashire Development Association

13.

asked the Secretary of State for Industry whether he will now meet representatives of the North-East Lancashire Development Association.

My noble Friend will be meeting the North-East Lancashire Development Association on 22 April. My noble Friend the Under-Secretary of State for the Environment and my hon. Friend the Parliamentary Secretary to the Ministry of Transport will also be present.

Is not the Minister aware that there is deep concern across the whole political spectrum in North-East Lancashire that the Secretary of State views the region's problems with such complacency that the association is to be fobbed off with a meeting with Ministers who are not hon. Members of this House? Is he aware that there is even greater concern that one of those Ministers is Lord Bellwin, whose only contribution to North-East Lancashire was increasing unemployment by some hundreds through the closure of firms of which he was chairman?

If the Secretary of State is not willing to meet the representatives, is he willing, at some stage during the next six months, to visit North-East Lancashire so that he can appreciate what damage or success his policies are causing?

The hon. Gentleman refers to complacency. The fact that three Ministers will meet the deputation is a sign that there is no complacency. The Government intend to examine carefully what is said by the deputation.

The hon. Gentleman referred to unemployment in the area. The level of employment will be determined by employers and workers in the way in which they proceed. I am bound to say that there is substantial concern that wage increases not covered by improved productivity are being demanded and granted, and that these will lead to job losses.

Is my hon. Friend aware that I and my constituents are grateful for his visit to Rossendale last year when he made himself aware of the problems there? When considering the representa- tions of the North-East Lancashire Development Association will he remember that the two most important grants that we are anxious should be continued after 1 August 1982 are the industrial grants from the EEC and the derelict sites grant, which is of great value to certain parts of East Lancashire? I understand that no decision on these matters has yet been reached.

I am grateful to my hon. Friend for drawing attention to these matters. He took me to see some of the areas concerned, and I held subsequent discussions with Ministers in the Department of the Environment.

Post Office Corporation

15.

asked the Secretary of State for Industry when next he intends to meet the chairman of the Post Office Corporation.

21.

asked the Secretary of State for Industry when next he expects to meet the chairman of the Post Office.

My right hon. Friend meets Sir William Barlow as the need arises. I myself met Sir William on 20 March and expect to do so again later this week.

When my hon. Friend next meets the chairman of the Post Office, will he seek to persuade him to reconsider the refusal of the Post Office to issue a special stamp to commemorate the opening of the Humber bridge? [Laughter.] Is he aware that despite the recent unfortunate problem, the bridge will be the longest single-span suspension bridge in the world? Opposition Members may laugh, but it will be a great engineering achievement, by British firms.

Perhaps I could use this occasion to express considerable regret about the accident which occurred in the building of the bridge, and about the delay in its completion.

Both the Post Office and my Department receive a large number of requests for commemorative stamps. I am sure that my hon. Friend's remarks will be read by Sir William, but I cannot give him much encouragement.

When my hon. Friend next meets the chairman will he raise with him the increasing absurdity of the Buzby advertising campaign? Is he aware that we now have a Buzby balloon, and that when such a balloon is deflated it produces a sound which approximates very closely to the feelings of many of my constituents about the declining quality of our postal services?

I must congratulate my hon. Friend in giving an indirect raspberry to the public relations section of the Post Office. However, it is entitled to use whatever advertising it wishes, and the Post Office's view is that the Buzby advertisements are increasing traffic and are proving profitable.

Will the Minister discuss with Sir William Barlow the damage being done by the irrelevant application of cash limits to the Post Office telecommunications business? In addition, will he agree that the increase in the calling rate which has been achieved by the Buzby campaign, has been important in increasing profitability in this public service?

In the second part of his question the hon. Member agreed with what I said a few minutes ago. On the question of cash limits, I would like to think that the whole House would support the Government in their determination to observe cash limits as one way of helping to overcome inflation. In the current year the Post Office's cash limits have been put very seriously at risk by the damaging strike last summer, which greatly affected cash flow. I hope that in his position of influence, the hon. Member will try to ensure that such disputes are minimised in future.

When my hon. Friend meets the chairman of the Post Office will he convey to him the views that I have conveyed to my hon. Friend from the Post Office Engineering Union? That union is looking forward to the division of the Post Office, and would like to think that this will occur in the immediate future. Is he aware that its members would like to think that their jobs will be protected by this extra commercial incentive, but they want an assurance that the telecommunications department will not be split further than the one initial split in the Post Office itself?

My hon. Friend is quite right in drawing attention to the Government's policy, namely, that there shall he a split of the telecommunications side from the postal side and Giro. These are very disparate activities, and we are certain that both will benefit from the split. I note what my hon. Friend says about not splitting the telecommunications side any further.

Will the Minister tell the chairman that the Government will not countenance any change in the way that social security benefits are being paid at present? Is he aware that the inept handling of this matter by the Government has brought genuine anxiety to the most vulnerable sections of the community? Will he give an assurance that this nonsense will be dropped?

The alarm was caused by rumours that were spread and intensified some weeks ago. It led to a debate in the House, during which my right hon. Friend and I were ready to give an assurance about the future of the network. More recently it was made abundantly clear that there would be no question of forcing pensions to be paid through a bank—but we hope that that will be an option open to people—and that secondly, the retention of weekly payments will be maintained for those who want it.

Manufacturing Industry

16.

asked the Secretary of State for Industry whether he is satisfied with the level of profitability in manufacturing industry.

Will my hon. Friend agree that one of the features that has distinguished British industry from its competitors in recent years is the low and falling rate of profitability? Will he accept that one of the prices that must be paid for a high exchange rate is further compression of that profitability? Accepting the argument that there will be a lag before Government policies are successful, may I urge my lion. Friend to give the House some idea of when productivity in British industry will improve, in order to restore the competitive balance?

My hon. Friend rightly points out that the profitability of manufacturing industry has been falling over a number of years and has become a long-term problem which reached its crescendo in the last four years of the previous Government.

Will the Minister bear in mind that the manufacturing industries, especially carpets, textiles and machine tools, which have formed the backbone of the industries of Halifax and West Yorkshire for many years, are now in serious difficulty? What specific proposals have the Government to help those industries, particularly in view of the great contribution that they made in the past towards industrial development?

The House is unlikely to forget the contributions made by these industries as long as the hon. Lady is a Member. The question that she raises comes back to the broad ways in which the economy must be stimulated in order to produce the growth that we all seek.

In the representations that my hon. Friend or his ministerial colleagues have made to the Treasury in the last few weeks, have they drawn attention to the fact that one of the major factors intensifying the liquidity squeeze on British companies is the high level of the national insurance employer's surcharge, which was increased so savagely by the former Chancellor of the Exchequer?

As ever, my hon. Friend has put in a timely word to remind my right hon. and learned Friend, the Chancellor of the Exchequer, but I am sure that he is aware of these matters. I did not fully answer my hon. Friend the Member for Loughborough (Mr. Dorrell) on the previous question. It is impossible to say what the time lag will be, particularly given the nature of the long term problem that we face.

Does the Minister realise that the present Government's policies are making private manufacturing industry and investment less profitable than for many years past?

The right hon. Gentleman should bear in mind that the profitability of British industry fell to an all-time low of 2 per cent. during the life of the previous Government. We seek to reverse that trend as a matter of policy.

Is my hon. Friend aware that there are many businesses and industries, especially small businesses, which are in great difficulties at present? They are profitable, but they are threatened with liquidation because they have cash flow problems. Will he ask the Chancellor to have a word with the banks to ensure that they lend money to industry, rather than give personal loans? This is not being done sufficiently at present.

I am sure that the Chancellor will note my hon. Friend's suggestion. There is a good deal of evidence that the banks are being particularly helpful at present, bearing in mind the existing difficulties.

Will the Minister explain how he proposes to increase profitability in the manufacturing industry when his Government are, by savage deflation, destroying demand; by high exchange rates, preventing our exports from being competitive abroad; and by ludicrously high interest rates, driving many companies into liquidation?

As usual, the right hon. Gentleman presents only one side of the picture, and he does so with his usual vigour. He has overlooked the fact that in the battle against inflation it is vital to strike a reasonable balance on wage agreements. I hope that he will lend his weight to that side of the argument as well.

Nationalisation (Compensation)

19.

asked the Secretary of State for Industry what steps he is taking to compensate the companies owning assets nationalised under the Aircraft and Shipbuilding Act 1977; and if he will make a statement.

Compensation is not yet determined for 12 out of the 25 companies. Payments on account totalling £60 million have been made in respect of the 12 companies. Arbitration is in progress concerning three of the companies. The position remains open in respect of the remaining nine companies, effectively involving seven negotiations. These inevitably raise some particularly intractable issues. It would not be appropriate for me to comment further on individual cases.

Will the Minister give an assurance that the Government have not been dragging their feet in this matter? It appears that these negotiations have taken an unconscionable amount of time. Can he say whether the possibility of denationalisation has entered these negotiations?

I assure my hon. Friend that Ministers have not been dragging their feet. It is a highly complicated matter and in some cases there is a difference between what is asked by the previous owners and what the Act appears to allow. This dictates a longer period of negotiation. Compensation payments and denationalisation are separate matters, but it remains the firm policy of the Government to introduce private sector capital into British Shipbuilders at an appropriate time.

Does not the hon. Gentleman understand that, despite what he says, he is trying to denationalise an industry which has not yet been properly nationalised? Does he accept that, on the basis of the replies that he has given today, there is nothing in his Bill, and there will be nothing on the statute book if the aerospace denationalisation Bill gets through, to prevent British Aerospace from being either broken up or taken over, lock, stock and barrel, by foreigners?

I am interested in what the hon. Gentleman says about the companies not being properly nationalised, but I understand that, in law, ownership was transferred on vesting day. In regard to the hon. Gentleman's repeated remarks about the aerospace industry, I can say only that there are none so deaf as those who will not hear.

Shoplifting

43.

asked the Attorney-General in how many prosecutions for shoplifting offences during the latest period of 12 months for which figures are available the Director of Public Prosecution has either undertaken the prosecution or been consulted.

Of prosecutions undertaken by the Director in 1979, eight have to date been concluded where an offence of theft of the shoplifting variety was charged.

It is not possible to give details of cases of shoplifting theft on which the Director was consulted in 1979: this sort of offence is not normally reported to the Director and is, therefore, not a type of theft for which detailed indices are kept in the registry. Those cases which are reported normally involve one or more of the following factors:
the alleged offence was committed by a police officer or a police officer's spouse;
the alleged offence was committed by a public figure;
the alleged offence was committed in addition to other offences which are reportable, for example murder or corruption;
the alleged offence involves an issue of identification;
a private prosecutor wishes to withdraw the summons.

I am grateful for that careful reply. Does the right hon. and learned Gentleman agree that, while the right to bring a private prosecution is an important constitutional safeguard, it can operate harshly against individuals who ought not to be subject to criminal proceedings? Will he further agree that shoplifting is an example of an offence in which the motives and circumstances can vary, from the persistent professional offender to the merely absent-minded? Bearing in mind the recent example of an 83-year-old man who was driven to suicide, will the right hon. and learned Gentleman discuss with the DPP whether those who bring private prosecutions for shoplifting might be asked to consult the Director beforehand?

I agree with the right hon. and learned Gentleman. Wherever there is a public interest aspect, for example the advanced age of the proposed defendant, that is a matter which the Director, when deciding whether to prosecute, would bear in mind. I would welcome that going out to private prosecutors so that, where they felt that there was a public interest aspect, they could consult the Director for his advice.

Although the matter is not my right hon. and learned Friend's direct responsibility, does he agree that there is an obligation on shops and stores to limit the opportunities for shoplifting and that the provision of bag parks is a commendable and constructive action to that end?

Any shop operation that affords an amount of temptation will lead to prosecutions, and sometimes to ill-considered prosecutions when an offence is not intended. It is just as serious for my hon. Friend to leave his wallet in his room when he goes to wash his hands. That is offering temptation to the cleaner who comes to clean his office. The circumstances must be decided on each case.

I hope that my right hon. and learned Friend will follow through the sort of exception outlined by the right hon. and learned Member for Warley, West (Mr. Archer) by circulating private prosecutors so that that matter can be brought before them. Is my right hon. and learned Friend satisfied that the general principle of stores prosecuting offenders is working in the public interest and can he tell us what saving results to the public purse by continuing the present system?

Bearing in mind the shoplifting figures, I believe that it would place an impossible burden on police forces if they had to prosecute such offences in addition to all their other duties. The right of private prosecution has been jealously guarded over the centuries and I should not like to alter it.

Picketing

44.

asked the Attorney-General what representations he has received following his recent statement on the law relating to picketing.

Does not my right hon. and learned Friend feel that some of the more aggressive noises from the TUC and particularly, I understand, from the GMWU over the weekend are not representative of the views of the majority of trade unionists? Will he therefore do all that he can to ensure that the sensible proposals going through the House are pursued in such a way as to retain the support for them of the majority of working people?

The enforcement of picketing laws, whether as they exist or as they will be if clause 14 of the Employment Bill becomes law, is entirely a matter for the chief constables and particularly the police officers at the site. The statement that I made on 19 February was circulated to chief officers of police and no doubt they will bear it in mind when they advise their officers what to do about picketing.

In view of the Attorney-General's repeated statements that primary pickets will retain the right to peaceful persuasion after the passing of the Employment Bill, will he inform the House whether the Government intend to introduce a new clause to the Bill to allow primary pickets the right to stop lorry drivers to persuade them peacefully of the justice of the dispute?

There has been a great deal of discussion about that matter and it has been decided that there should be no right to stop lorry drivers. One of the questions that always occurs to me is what would happen if a lorry driver did not want to stop. Would he be committing a criminal offence? That is the sort of problem that one would face if one went down the road suggested by the hon. Gentleman.

Does my right hon. and learned Friend agree that, even under the existing law, so ably defined by him recently, there are still difficult situations for the police and those who are trying to picket peacefully? Does he agree that it would be a great help if the TUC would go further with the law enforcers in agreeing basic guidelines that could be enforced by both police officers and those operating picket lines?

I said on 19 February that I thought that the guidelines issued by the TUC were sensible. I was sorry to see some comment the other day that tended to suggest that the TUC was withdrawing those guidelines.

Is the Attorney-General aware that in some areas there is automatic fingerprinting of pickets charged with obstruction? Does not that increase tension? Would it not be better to limit fingerprinting to cases where serious charges are involved and not make it automatic, as is the case in many areas? Does he not agree that automatic fingerprinting causes increased tension in those areas?

That is a question which would be better put to my right hon. Friend the Home Secretary.

Police Conduct (Complaints)

45.

asked the Attorney-General if, in the light of the recent Lannon case, he will now make available to interested parties the reports submitted to the Director of Public Prosecutions by the police following complaints about police conduct.

Since the judge in the Lannon case ruled that the family had a right to see the police investigating officer's report in order to pursue a civil action, on what grounds, in equity, can the Attorney-General deny sight of such reports to other families, whether or not they decide to go for the elaborate and expensive procedure of instituting a civil action?

In the case to which the hon. Gentleman referred, the only claim for privilege was for profess- sional legal privilege. In other cases it may be necessary for the Director to consider whether he is to make a claim for privilege upon the class or contents grounds. The reasons for that were given in detail by the Director when he gave evidence before the Select Committee on Home Affairs on 14 February. I refer the hon. Gentleman to the full account. In summary—the reports are confidential—they contain views and opinions of the police officer making the report; the credibility of the witnesses is discussed together with, in some cases, their previous convictions. Details are also given about the suspected police officer which, if the Director decided not to proceed, could lead to a form of public trial without the safeguards of a trial in court. Those are strong public aspect reasons why it should not be a matter of course that section 49 reports should be published.

Is the Attorney-General aware of reports that the team under Commander Cass, which investigated the circumstances of the death of Blair Peach, was anxious—

Order. I wish to help the hon. and learned Gentleman and the House. Hon. Members will be aware that both the Blair Peach and the Kelly case are sub judice at the moment. No one in the House would want to seek to influence in any way the decisions of the coroner's court. It could have a serious effect on people later.

Has my right hon. and learned Friend had a chance to see a replay of the BBC television plays called "Law and Order"? If he has, can he think of any drama series that is more likely to undermine confidence in the police?

I have seen part of the series. I agree with my hon. Friend that it shows not only the police but lawyers and others concerned in the administration of justice in a very unfavourable light when that light is the exception to the rule rather than common form.

Questions To Ministers

On a point of order, Mr. Speaker. Has the learned Attorney-General made any request to answer question No. 47 or to make a statement regarding jury vetting?

Business Of The House

Ordered,

That, at this day's Sitting, Standing Order No. 3 (Exempted business) shall apply to the Motion relating to European Economic Community Convergence and Budgetary Questions with the substitution of half-past Eleven o'clock or three hours after it has been entered upon, whichever is the later, for the provisions in paragraph 1(b) of the Standing Order.—[Mr. MacGregor.]