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Volume 983: debated on Monday 28 April 1980

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


asked the Secretary of State for Industry when he expects next to meet trade union leaders.

I shall meet representatives of the TUC at the National Economic Development Council on 7 May.

Does the right hon. Gentleman agree with the TUC that the Budget strategy appears to doom Northern Britain to industrial decline and growing unemployment? With these mistaken policies, what hope can the right hon. Gentleman offer to the population of Flint—some 17,000 strong—which is currently enduring the harrowing male unemployment level of 38 per cent.? Surely the right hon. Gentleman's monetarist policies must be reversed.

No, I do not agree with the alternative policies adumbrated by the TUC. The purpose of meeting its representatives on the NEDC is so that there can be a continuing dialogue. The hon. Gentleman must now be sadly aware that had the previous Labour Government allowed redundancies to occur earlier in the Shotton area those who then lost their jobs would have been able, more immediately than now, to find alternative employment. At that time the world recession had not occurred. The hon. Gentleman is aware that there are good prospects in his area for new jobs as businesses show increasing interest in the area.

Will my right hon. Friend make arrangements to estimate the cost of the national day of tomfoolery organised by the TUC for 14 May, and inform the nation of the total amount of wealth lost and what that represents in terms of jobs lost as a result of that action?

My hon. Friend is right to point out the damage that will be done to our competitiveness by the so-called day of action and by all the other obstructions to competiveness that flow from the shop floor and the trade union side.

Will the right hon. Gentleman seek to justify to the representatives and the leaders of the TUC in the Northern region the cutbacks in regional development grants and all the other cuts that are being made in employment support when unemployment there is rising to proportions unknown in postwar years? Will he look again at the question of regional development grants and restore the cuts that were made this year?

No. The regional development grants were withdrawn from areas where unemployment was below the national average and where the economic structure created no especial need for subsidy from the taxpayer. The extra money for which the hon. Gentleman is asking would have to be paid by the taxpayer through additional borrowing or by an increase in taxes. The taxpayer's purchasing power would be reduced and other jobs would be lost elsewhere.

My right hon. Friend has had the opportunity to read the words of the General Secretary of the TUC explaining why the day of inaction has been called. Does he now agree that instead of the grounds being merely weak, as we had previously assumed, they are non-existent?

Was not the Secretary of State's stumbling, rather pathetic defence of his economic philosophy the biggest condemnation of the Government's approach to the economy? Does he agree that company liquidations increased by 66 per cent. in the last quarter over the preceding quarter? Would it not make much more sense to work in cooperation with the trade union movement?

The trade union movement in this country, with exceptions, is encouraging a further loss of jobs through obstruction to competitiveness, including by such manifestations of misunderstanding as the day of so-called action.

Enterprise Zones


asked the Secretary of State for Industry what initiatives he intends to take to attract industry to the enerprise zones.

The Government announced on 26 March a range of measures which we propose to apply in enterprise zones and which we believe will encourage economic activity. The measures include 100 per cent. capital allowances for industrial and commercial building; the abolition of general rates for industrial and commercial property; and the simplification of planning procedures. Details are available in the Library of the House.

Are not local authorities queueing up to take advantage of this adventurous and exciting opportunity created by the Government's positive intervention through the taxation system? Does my hon. Friend agree that it is essential, once the local authorities concerned have been designated, that industry should take advantage of the opportunities so presented? What steps is my hon. Friend taking, and what steps will he take, to make sure that big and small companies are made aware of those opportunities?

The scheme has been well received and the indications are that industry is taking a great interest in the matter. My hon. Friend's question has helped to further that process. The consultations that are taking place with local authorities will help to continue the process of alerting industry.

Will the Government compensate local authorities for the loss of rates revenue?

Will my hon. Friend comment on early-day motion 590, in my name and those of a number of my hon. Friends, which seeks to request that the clearing banks provide finance for firms in enterprise zones on attractive terms to support the boldness and initiative shown by the Government in the creation of such zones?

I appreciate a number of the sentiments contained in the motion, and I am sure that the banks concerned will note my hon. Friend's suggestion.

Has the Minister read the original proposals for this idea by Peter Hall? Does he agree that they were weird ideas, and may we have an assurance that if the Government are going into these strange, mini-Hong Kong schemes, they will not pursue the proposals that Peter Hall put forward, even though Mr. Hall was once a member of the Fabian Society?

As the hon. Gentleman admits, the source of these suggestions is not unknown to him. I think that I detect on the Opposition Benches a growing reservation of positions as hon. Members become aware that this might become a popular development.

Will my hon. Friend consult my right hon. Friend the Secretary of State for the Environment to determine whether, under the derelict site procedures, we could attract into metropolitan areas which might also be suitable for enterprise zone grants from the European Community regional fund?

I shall certainly ensure that that interesting and helpful contribution is made known to my right hon. Friend.

Can the Minister not understand that the Government's continuing to advance the view that some kind of regional Hong Kong sweat shops can be a genuine solution to a deindustrialised economy is starting to sound like a sick joke? When will he come clean on the myth which he is trying to establish and confirm that there is no evidence on either side of the Atlantic that the net number of jobs created by small firms can in any way replace the much larger number of jobs lost by the closure of big firms?

The hon. Gentleman will always produce a carping, green-eyed view on any new initiative that he has not put forward. He is, typically, trying to talk in terms of sweat shops, but there are substantial safeguards about environmental pollution and other matters. The hon. Gentleman should judge this proposal as it develops, as I believe the whole House wishes to do.

Lucas Aerospace


asked the Secretary of State for Industry if he will in future contracts with Lucas Aerospace include a provision that there shall be no victimisation of employees who have taken part in the firm's conversion plans.

No; these are matters to be settled between management and the recognised representatives of the work force within the established legal framework.

Is the Minister aware that his Department is still party to the agreement with the company, its 12 plants and the unions to examine alternative product proposals aimed at maintaining the jobs there? Is he aware that one of the men principally involved in that agreement, Ernie Scarbrow, who is chairman of the shop stewards, is under threat of dismissal through having been too active in seeing that that agreement is carried out?

I understand the hon. Gentleman's point, but I find it difficult to accept the matters in the way that he has put them. Certainly the Department has carried out fully its part of the tripartite agreement of February 1979.

Does not the Minister understand that Ernie Scarbrow has been disciplined for the same alleged crime as Derek Robinson, in that he was merely trying to communicate with the membership that he represents? Do the Government still believe that trade union leaders and convenors have a right to communicate with their membership?

The hon. Gentleman perpetually seeks to come in on these matters, and he has reminded the House of his connection with the Red Robbo case. I do not think that that is a good precedent upon which he should argue this matter. These are matters between management and the established trade union channels.

Black Country Districts


asked the Secretary of State for Industry if he will take steps to promote industry in the Black Country districts of the West Midlands in view of recent closures and redundancies.

The Government's policies are designed to encourage industrial expansion and employment throughout the country.

Is the Minister aware of the deep concern that continues to exist at the never-ending redundancies in the Black Country? Will his Department show some understanding and recognition of the industrial and employment problems that exist in this part of the West Midlands?

The best hope for prosperity in the Black Country, as elsewhere, lies in the measures that the Government are taking to defeat inflation, put the economy on a sound footing and remove the shackles from private enterprise.

Will my hon. Friend confirm that the Black Country is one of the candidate areas for inclusion as an enterprise zone? In view of the apparent schizophrenia on the Opposition Benches. may we know at some time whether the Labour Members of Parliament for those areas which are candidates want the scheme or not?

I am not sure whether that question is addressed to me. However, I recently visited Wolverhampton, and I listened with great care to what the people there had to say about their problems. I was fascinated when the Socialist chairman of the planning committee said that he supported the concept of his area being advanced as a potential enterprise zone as the scheme seeks to undo the damage of years of Socialism.

Small Businesses (Paper Work)


asked the Secretary of State for Industry what reductions in forms, and generally unnecessary paper work, his Department has achieved in order to reduce the burden on small businesses.

The Department has already made savings of over 16,000 statistical forms which would have gone to firms this year.

I am encouraged by that answer, but is my hon. Friend aware that the accumulation of forms that small traders have to deal with remains a severe deterrent? One woman shopkeeper said to me last week " I cannot bear the thought of filling in another VAT form ". Will my hon. Friend continue to act to cut the number of forms and to cut red tape?

I readily accept my hon. Friend's invitation. He will be pleased to learn that decisions taken by all Ministers since the Government took office a year ago have resulted in over 1 million statistical forms being saved. I shall publish details in the Official Report. That is in addition to the saving of 280,000 forms per annum resulting from a review of regular statistical inquiries initiated by the previous Administration and confirmed by this Government. It is still necessary for the Government to collect many kinds of statistical information. However, I believe that our decisions are widely welcomed in the small business sector.

I welcome what has been achieved so far, but is my hon. Friend aware that I hope that he has not put his scythe away and will continue to assess the need for the various forms?

I assure my Friend that it will be a continuing process. I shall be glad to hear from him if he has examples of forms that he considers to be unnecessary.

Will the hon. Gentleman accept that, no matter what the Government try to do for small businesses, their policies are failing? Why will the Government not take the actions that we desire? Is he aware that in the Mexborough district, which covers the Dearne, Conisbrough and Denaby, no jobs have been created since it was made a development area? Does he agree that the Government need do more?

It is for the Government to create the conditions, and for employers and workers in the area to join in enterprises to produce goods that the consumer wants, at a price that he is prepared to pay. The hon. Gentleman suggests that Government policies are failing. However, it takes longer than the hon. Gentleman expects, and even longer than I expected, for changes in policy to produce results.

Does the hon. Gentleman expect us to believe that the Government are creating the conditions for enterprise, with inflation at 20 per cent., the MLR at 17 per cent., VAT a: 15 per cent. and over-valued sterling?

That was not a supplementary question related to the main question, whatever else it was.

Following is the information:


Inquiries stopped

No. of forms saved

Quarterly export prospects survey300 a year
Annual survey of film distributors100 a year
Monthly manufacturers' stocks7,800 a year
Export prices survey (monthly or quarterly)5,000 a year
Shops inquiry 1981150,000 in 1981
Census of employment for1979 and 1980600,000 in each of the 2 years

Reduction in forms sent out

Annual survey of retailing5,000 a year
Annual survey of other distributive and service trades11,000 a year
Annual census of construction2,200 a year
1979 purchases inquiry by manufacturers1,200 in 1980

(i) All the inquiries are carried out by the Departments of Industry and Trade except for the census of employment, which is a Department of Employment responsibility.

Post Office


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

If the dispute in the Post Office is not resolved and telephone bills are once again not paid, what contingency plans are there to avoid the serious impact not only on the Post Office's finances but on the Government's economic policy? What action is being taken to reduce the power of relatively few people to cause disproportionate disruption in industry and commerce?

We hope that there will not be a repetition of last year's dispute. However, if bills are not paid on time, extra cost is imposed on the Post Office and the money has to be recovered from somewhere, either through subsidy raised from taxpayers or by an increase in charges.

The second part of my hon. Friend's question is about problems created by small groups of dissidents who may wish to disrupt the activities of the Post Office. That is a matter for the management. On more than one occasion my right hon. Friend said that if the service to the public is not improved, or if for some internal reason it becomes worse, we shall have to look seriously at the monopoly.

Has my hon. Friend seen this morning's article in the Financial Times, on the management of nationalised industries, which floats the idea that those nationalised industries that are making substantial profits should be relieved of cash limits so that the management can make its own commercial decisions, and, if necessary, raise the money from the market?

Yes, I saw the article and found it most interesting. My hon. Friend will also have seen reference to the group set up under Mr. Ryrie's chairmanship, which will be looking into these matters.

How can the hon. Gentleman tell his hon. Friend the Member for Romford (Mr. Neubert) that the derogation of the Post Office monopoly will assist in the problem that he mentioned? Will the hon. Gentleman accept that the problem is caused not by the Post Office unions, or by small sections of them, but by the Government's tight cash limits? Will he further accept that 60,000 people on the waiting list for telephones for more than six months demonstrates that investment is the problem, not the unions?

I know, and what I hope the hon. Gentleman will agree is that the service provided by the Post Office has fluctuated widely over the past year and has still not regained the position that it should. We therefore have every right to see whether the service can be provided by others.

Rolls-Royce (1971) Limited


asked the Secretary of State for Industry if he has concluded his review of the financial objectives for Rolls-Royce (1971) Ltd. set by the National Enteprise Board; and if he will make a statement.

I shall publish in the Official Report a statement about the company's present financial position and the Government's intentions towards funding the company in 1980.

Has my hon. Friend studied the alarming report published last week by the Public Accounts Committee, which suggests that the RB211 may be heading for viability only towards the end of this century? Will it still be in production then? Are we convinced that the target set by the NEB of a 10 per cent. return for 1981 is within the realms of practical possibility?

The company's report and accounts will be published shortly, and my hon. Friend will be able to draw his own conclusions. A written statement will appear in the Official Report, but I tell my hon. Friend that the company's business is expanding strongly, based largely on the RB211. However, with the weakness of the dollar, there will be added cash needs for the company during 1980. The question is how far the company can raise that cash from the private money market.

Is the Minister aware that his tribute to the RB211 will be welcomed after his hon. Friend's belittlement of it? Will he accept that the problem for Rolls-Royce is not the earning capacity of the engine—and that capacity has been borne out again today by the £50 million order—but the high exchange rate, which is making it difficult for British industry to sell, particularly in the American market?

I have already said that a reason for increased cash needs during the present year is the weakness of the dollar and the high pound. In its onward trading position the company must take properly into account the strength of the pound. Because of the high technical quality of its products, such as the RB211, it should be able to command better prices for them.

Following is the information:

I have considered the Company's five-year forecast for 1980–84 submitted earlier this year and accept it as the basis for short-term financial planning. As a result of the rapid expansion of the company's business and the weakness of the dollar, the company has an additional cash requirement of £180 million in 1980. However, I am satisfied that the company's policies of exploiting the technical successes of the RB211 engine, and aiming for greater commercial profitability, provide a firm basis for long-term viability. The Government accept the company's need to fund the requirement to carry forward its programmes.
As part of the funding, and subject to parliamentary approval, I intend to issue new equity equivalent to certain loans from the Department to be repaid in 1980 and modify the terms of the levy which the Government charge the company to recover the development finance for the RB211 engine. The modification will be confined to the RB211 engines on order at the end of 1979, and will be varied to reflect the effect of the exchange rate on sales income. The levy would be suspended at current exchange rates. For the balance, given the current constraints on public expenditure, and while I recognise that some further injection of Government finance may be necessary, I have asked the company to examine how much it can secure from the private sector.
The longer-term funding requirement duty for the establishment of a new financial duty for the company will be considered in the light of the chairman's report to me on the plans for improving the financial prospect of the company, which I expect to receive in the summer.

Development Area Status (Neath-Resolven)


asked the Secretary of State for Industry whether, in view of the continuing rise in unemployment in the Neath-Resolven travel-to-work area, as shown in the April figures, he will now announce his reversal of his decision to take the areas special development status away.

The assisted area gradings of all those areas affected by the British Steel Corporation's proposals are being reviewed. A decision will be taken as quickly as possible after BSC has given a final decision on the future of its steel making plants, following its consultation with the unions.

Is the hon. Gentleman aware that the unemployment rate in that travel-to-work area is now 9·3 per cent? Is he further aware that when the area had the status conferred upon it in 1968 the level of unemployment was 5 per cent? It is only since the announcement of his right hon. Friend that the area was to be downgraded that the unemployment rate has crept up. What will he do about it?

As soon as the result of BSC's consultations with the unions is made known, we shall review the matter. If that should not result in a steel closure, or if some other change of policy should follow from it, I assure the hon. Gentleman that the relative change in the area of Neath compared with other parts of the country will itself be perfectly good evidence for us to consider a review.