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Aid

Volume 12: debated on Monday 9 November 1981

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9.

asked the Secretary of State for Industry if he will make a statement on the level of his current aid to industry.

The Supply Estimates for 1981–82 provide for support of approaching £2,900 million, including nearly £2,000 million for the British Steel Corporation, British Shipbuilders, BL and Rolls-Royce, and about £900 million to other industry.

Is the Minister aware of the plight of the special steel industries in Sheffield, particularly that of Aurora in Ecclesfield—the finest manufacturer of highspeed steels in Europe—which is to close with the loss of 400 jobs? In February 1981 there was a clear implication that it would receive grant-aid, but that has not been forthcoming. Is the hon. Gentleman aware that that firm cannot compete in fair, competitive trade because of the high import level of special steels from France, Germany, Austria and the Eastern bloc, via Sweden? Is he further aware that Aurora cannot match those imports even if rates, wages, rolling costs and heating costs are excluded?

My right hon. Friend has commented on the special steels industry and the representations made by BISPA. A grant of £450,000 was offered to Aurora in December 1980 under the Industry Act to assist with rationalisation and modernisation, but the offer was not taken up. I shall examine the points raised by the hon. Gentleman.

Is my hon. Friend aware that private industry, for the most part, does not expect State aid? Is he further aware that private industry looks to the Government for a reduction in burdens such as mounting rates and increasing energy costs?

I entirely agree with my hon. Friend. The burdens facing private industry in this recession are a reason why the Government should control public spending to bring interest rates down.

Has not the time come to increase investment in high technology, especially office systems, preferably through the National Enterprise Board, in view of the recently announced strategy of American companies to push into that market as far as possible? Is the Minister aware that American companies are selling hard here already? Such a vast new market should go to British companies. Will the Government look into the matter?

I shall certainly look into it, but the first priority must be to control public spending to bring down interest rates. The scientific and technological assistance programme is at £197 million this year. That is 40 per cent. up in real terms on two years ago. It cannot be said that we are neglecting the matter.

Does the Minister accept that more than £6,000 million in public subsidies has been poured into the British Steel Corporation in the last 10 years? That is just one example. Does the Minister agree that most of that money has been used simply to meet increased operational losses? May we have an assurance that aid to industry in future will not only be more selective but will be used to invest in sound capital projects and not to preserve uneconomic jobs in declining industries?

My hon. Friend makes a fair point. A huge proportion of aid to industry in Britain has gone to the loss-making public sector. That adds to the burdens of the private sector by increasing taxation and putting up interest rates. That is why we must control public spending.

My hon. Friend tells me to do something about it. He will be happy to know that the weekly losses of the British Steel Corporation are now half the level that they were last winter.

It is a pity that the Secretary of State did not answer this question. If he had, he could have perhaps defended the disgraceful statement that he made about British Leyland in Sheffield at the weekend. To make that statement when a major industrial dispute has just finished which will affect the morale of thousands of workers within—

Will the Minister give an explanation of the Secretary of State's statement because it affects British Leyland workers and taxpayers who, having invested hundreds of millions of pounds, are told that their assets will be sold off when they could be used to make a profit?

I can see why the right hon. Gentleman thinks that is a pity that the Secretary of State did not answer the question, because that would have made his carefully rehearsed impromptu more relevant.

Nothing that my right hon. Friend the Secretary of State said at the weekend should surprise the right hon. Gentleman. Indeed, what he said was in line with what was said on 26 January by my right hon. Friend the Secretary of State for Education and Science when he was Secretary of State for Industry. He said that the Government's objective was to help British Leyland to become viable and then to attract private capital into it.