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Volume 12: debated on Monday 9 November 1981

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asked the Secretary of State for Industry whether he is satisfied that British manufacturers of motor car components will not be disadvantaged by arrangements with Nissan, relating to the United Kingdom content of cars built by Nissan in Great Britain.

Yes. I am confident that, if it goes ahead, the project will offer a valuable new outlet for United Kingdom component manufacturers if they are competitive.

Is my hon. Friend aware that the largest employer in my constituency is pernaps less satisfied than he is? The firm is concerned to know the percentage of the United Kingdom content. It also feels that it has a right to know how that percentage is to be judged—whether by weight, value or volume—and how it is to be monitored to ensure that those who make the agreement keep it. Will my hon. Friend bear in mind that those legitimate matters of public interest should not be shielded behind so-called commercial confidentiality?

My hon. Friend wrote to me on this matter. He is right to say that, whether the United Kingdom content is calculated by weight, value or volume, it is extremely important and affects the eventual result. I have explained to him that this is a matter of negotiation. Obviously, we have to take cognisance of the fact that the Nissan company has said that it wishes these negotiations to remain confidential. The House will, of course, expect not only a statement, but a demonstration that the assurances obtained by the Government are copper-bottomed.

Is the Minister able to give any further hard information to those of us who represent large numbers of unemployed workers in the regions about where and when Nissan might locate its factory in Britain? Does the Minister realise that in the town of Flint male unemployment now stands at nearly 40 per cent? Can he give my constituents any hope that Nissan might be located on the banks of the River Dee?

I cannot give the hon. Gentleman any concrete information. Clearly, this is a matter for Nissan. The whole project is still the subject of discussions between the company and the Government. I shall make sure that what the hon. Gentleman said today is taken into account.

What effect is the Labour Party's proposal to withdraw this country from the Community having on this proposal?

The Labour Party's proposals are against the project and will endanger it. I hope that the Labour Party will take account of that fact.

Will my hon. Friend look carefully at the advice that he receives in his Department about what constitutes a component? In doing so, will he bear in mind the real danger that unless satisfactory arrangements are reached, other British manufacturers may be forced to look to sources outside this country?

My hon. Friend is right. This point was also made by my hon. Friend the Member for Christchurch and Lymington (Mr. Adley). We are aware of this matter. We hope that the project will come to the United Kingdom, but we want it to do so in a way that will maximise the advantage to this country.



asked the Secretary of State for Industry if he will now restore investment area status to the Ormskirk travel-to-work area; and if he will give the reason for his decision.

The Ormskirk travel-to-work area will retain its intermediate area status until 1 August 1982. There are no plans to remove special development area status from Skelmersdale new town, which lies within the travel-to-work area.

In view of the fact that unemployment in the Ormskirk travel-to-work area has risen by 77 per cent. since the Conservative Party came to office and that it now stands at 21·8 per cent. compared with 12·8 per cent. when this disgraceful decision to remove intermediate area status was taken, will the Minister now reconsider that decision? If not, will he explain why intermediate area status was removed from the Ormskirk travel-to-work area, which has 22·8 per cent. unemployment, and yet has been retained for Kirkham, Lytham and St. Annes, where unemployment at 11·3 per cent. is still lower than it was in Ormskirk two years ago?

As I have told the hon. Gentleman, it should be borne in mind that Skelmersdale new town is also in the travel-to-work area, and a high proportion of the unemployment to which he referred is in the Skelmersdale new town.

Yes. It is nearly 5,000 of the total figures. I point out that that is a special development area.

As we have made clear on several occasions, we take into consideration the possibility of long-term structural decline, comparative to other regions of the country, in making decisions about areas in general. The hon. Gentleman wrote to my right hon. Friend the Secretary of State only last week on the subject. I shall send him a considered reply shortly.

Steel Industry


asked the Secretary of State for Industry if he will make a statement on the future of the steel industry.

I draw my hon. Friend's attention to the major speech that I made about the steel industry to the Conservative trade unionists' conference at Sheffield on Saturday, a copy of which has been placed in the Library.

Although it is splendid news that my right hon. Friend envisages a profitable steel industry after years of horrendous losses, can he assure the House that this will not be achieved by saddling British manufacturing industry with unreasonable prices or by reducing further Britain's percentage share of steel manufacturing capacity in Europe?

The chairman of the British Steel Corporation has made it clear that he wishes to stabilise steel making capacity at about 14·5 million tonnes a year. The corporate plan which he and his colleagues are preparing for presentation to me and my colleagues will be based on that as the central option.

My hon. Friend mentioned prices. He knows that it cannot be healthy for any steel industry—in Britain or elsewhere in Europe—if steel is sold at prices which do not allow a reasonable return to the manufacturers. I commend to my hon. Friend the measures which were taken through the European Coal and Steel Community last June to help to stabilise both prices and the market. That is one of the planks on which the recovery of the British Steel Corporation will be based.

Is the right hon. Gentleman aware that, rather than the prospect of a further 20,000 redundancies in the British Steel Corporation, the future and profitability of the corporation would be better guaranteed if projects, such as a gas-gathering pipeline, had been supported by the Government and if the Government ensured that the British Gas Corporation, for example, placed its orders for gas rigs for the Ruff field in British shipyards?

The figure for further reductions in manpower which the British Steel Corporation is discussing is not 20,000, but about 15,000. This is being pursued by the corporation at each plant through local negotiations and is a matter for the corporation.

As for the gas-gathering pipeline, I have no doubt that the private sector of the oil and gas industry will be able to make arrangements for the great bulk of the gas to come ashore and that this will ensure orders for steel. I am well aware of the importance that the British Steel Corporation attaches to these projects.

The last part of the hon. Gentleman's question should be addressed to my right hon. Friend the Secretary of State for Energy.

Will my right hon. Friend accept the congratulations of the House on his speech at Sheffield on Saturday? Will he take the opportunity to stress its theme to the dwindling number of my constituents who still believe that there is some money in the Treasury cupboard which can be chucked at the steel industry? Will my right hon. Friend especially remind the editor of the Scunthorpe Star that the work force of the British Steel Corporation can have a guaranteed future only if the corporation is made profitable and responds to the pressures of international competition, even though that gentleman continues to deceive himself into thinking that the old ways can still be pursued?

I am sure that my hon. Friend can deal firmly and effectively with the editor of the Scunthorpe Star. The contributions made to the debate about steel and other publicly owned industries by the Leader of the Opposition and his right hon. and hon. Friends show that the editor of the Scunthorpe Star is not alone in the delusion that there is a bottomless well in No. 11 Downing Street which can continue to pour out billions of pounds to support uneconomic projects. There is not, and it is time that everyone realised it.

Will the Secretary of State comment on the proposed Phoenix III involving the amalgamation of Johnson, Firth Brown and the British Steel Corporation works at the River Don? Will he ensure that on this occasion there is full consultation with the workers concerned, who apparently are threatened with massive redundancies if the scheme goes ahead?

Any arrangement between the British Steel Corporation and the private sector must be a matter for the corporation and the firms involved.

Loan Guarantee Scheme


asked the Secretary of State for Industry how many applications under the loan guarantee scheme have been received; and how many have been approved to date, giving the amount advanced.

I am pleased to announce that in the first five months of the scheme, to the end of October, 1,172 guarantees had been issued for loans totalling £41·1 million and a further 34 applications remained to be processed. In addition, a small number of applications have been withdrawn for various reasons and a very few have been rejected on technical grounds.

I thank my hon. Friend for that reply. Obviously, the size of the take-up shows the value of and the need for this loan guarantee scheme. Although my hon. Friend announced an increase recently, the speed of take-up is such that within four or five months he will have to come back to the House for a further increase if it is to be maintained.

Has my hon. Friend any idea of the split in loans between manufacturing and servicing industries? Obviously we want to encourage manufacturing.

Are any checks being made on the guarantee premium percentage being charged to see that it is correct? Or, it is too high—

I agree with my hon. Friend that the response so far has been extremely encouraging. I have said that I shall review the scheme constantly. It was as a result of the first review that the increase in the ceiling in this financial year from £50 million to £100 million was announced. I hope that that will be sufficient.

As for the distinction between manufacturing and servicing, I am glad to tell my hon. Friend that just over half of all loans at present have been to manufacturing industry, which again is very encouraging.

My hon. Friend asked, finally, about the premium. The premium has been set at 3 per cent. to cover bad debts. At this stage we do not know what the bad debt ratios are likely to be. I shall review this matter from time to time. However, it is too early at this stage to do it.

Can the hon. Gentleman explain why we have a much higher premium than any other country operating a similar scheme? Three per cent. is much too high. Will the Minister assure the House that he will exert pressure to get the premium reduced?

It is important to make it clear that the cost to the borrower is 2·4 per cent. It is 3 per cent. of 80 per cent. That makes a difference.

The experience to date and the high demand show that the premium is not an obstacle to people taking up the scheme. In October the demand for loans was higher than in any previous month—and at a time of comparatively high interest rates. That is an indication that the level of the premium is not a deterrent.

We intend the scheme to be self-financing. We need a little more experience of the scheme before we can look at the level of the premium.

Does my hon. Friend accept that the success of the scheme reflects great credit on the Government for introducing it and for recognising the importance of the smaller firms sector? Does it not also reflect great credit on organisations, such as the small business bureau, which have worked quite hard for it during the past few years?

Will my hon. Friend look at the possibility of increasing the maximum amount for any one loan from £75,000 to £250,000? Does he agree that if that were done it would help many medium-size firms which have a good potential for offering new jobs?

I am grateful to my hon. Friend for his kind remarks. I, too, wish to pay tribute to the small business bureau and to people, such as my hon. Friend, for their work in helping us to get the scheme off the ground.

My hon. Friend asks about the £75,000 ceiling. Again, the fact that the demand is so high has to be taken into account. My hon. Friend's point will in due course be part of a wider review which I shall undertake. However, companies and individuals can get up to £75,000 in a loan as part of a wider financial package. We are not talking simply about financial deals with a limit of £75,000.

Will the Minister consider linking the loan guarantee scheme with the facilities available for cheap money through the European Coal and Steel Community? Would not that ensure that money could be made available on a non-secured basis at as little as perhaps 13½ per cent.?

The two schemes are very different. As the hon. Gentleman will know, the ECSC cheaper interest schemes go only to specific parts of the country. There is an obvious difficulty there. However, I should make it clear that under the loan guarantee scheme personal security is not only not required, but is never asked for. That largely deals with part of the hon. Gentleman's question.

Although I warmly welcome the scheme and support my hon. Friend, who wishes to see it extended, is he aware that when many business people approach their banks about the scheme, the banks know nothing whatever about it? That is extraordinary. Will my hon. Friend ensure that the banking system—which has got money coming out of its gunwales—is made fully aware of the scheme so that small businesses, which can take advantage of the scheme and provide employment, can go to the banks in the knowledge that they will be able to help?

I regularly raise this issue with the banks. They have made strenuous efforts to get all the details of the scheme through to all their 14,000 branch managers. As I go round the country I find, by and large, that people are aware of it. If my hon. Friend has any examples where that is not happening, I shall happily take them up.

South Yorkshire


asked the Secretary of State for Industry if he will take steps further to assist industry in South Yorkshire.

I am well aware of the problems facing industry in South Yorkshire, most of which is to remain an assisted area. The Government's policies, aimed at reducing inflation and restoring competitiveness, are beginning to show success.

Does the right hon. Gentleman realise that since the Government came to power the number of jobs available in South Yorkshire has fallen lower and lower while unemployment has become greater and greater? Will he bear in mind that the Government's policies did not stop the Manvers coking plant, from closing? What help will he render to the Wombwell foundry, which is supposed to be a viable plant, but which is in the hands of the receiver? Unless the Government do something, unemployment in Dearne Valley will be greater still.

The Government have done quite a lot to help industry in South Yorkshire. I refer the hon. Gentleman to the 20,000 sq ft factory built for Photo Trade Processing Ltd. at Goldthorpe, the Midland Bank financing of 13 advance factory nursery units, which are being put up at Barnsley, the section 7 grant offered to the Midland Bank computer centre in Barnsley, the improvement of the South Yorkshire navigation canal at a cost of £15·6 million and many other projects. As regards Wombwell, the hon. Gentleman received an excellent letter from the Minister, who made it clear that if a firm wishes to put the foundry back in production—Government help and private money will be essential in that case—we shall be ready to look at an application for help under section 7 of the Industry Act.

Does the Secretary of State realise that the area represented by my hon. Friend the Member for Dearne Valley (Mr. Wainwright) and myself, as well as by others, is the industrial heartland of Britain? Does he further realise that the Government's failure to assist our part of the country has resulted in the recent announcements to close firms such as Redfearns National Glass, Star Paper Mills at Barnsley and many others? While the right hon. Gentleman sits fiddling around and fails to give assistance where it is needed, he is destroying Britain's industrial base.

People are beginning to realise that the future of Britain's industry depends upon our ability as a nation to sell our products to the markets of the world with designs and at prices that the customer is prepared to pay. We never pretended that to get back to competitiveness and to eradicate inflation from our economy would be easy. The road has certainly been painful. Ultimately, it is by being competitive that we shall help industry and provide jobs. The hon. Gentleman is right to say that South Yorkshire is part of Britain's industrial heartland and stands to gain most from the success of that policy.

Foundry Capacity (South-East England)


asked the Secretary of State for Industry whether, in view of transport costs of heavy castings, he is satisfied with the availability of foundry capacity in South-East England.

Yes. There is substantial overcapacity in this sector in the United Kingdom generally. I understand that transport costs of heavy castings are small in relation to the delivered price.

Is the Minister aware of the stated intention of the Ford Motor Company to close the whole of the Thames foundry at Dagenham early in 1984? Is he prepared to intervene, given that that closure would mean at least 5,000 redundancies and cause grave social problems to the surrounding area?

I cannot speculate about individual cases. As regards the hon. Gentleman's general point, there are 65 ferrous and 75 non-ferrous foundries in the whole of the South-East. However, it would be wrong for me to comment on a specific foundry.

Is the Minister aware that the foundry industry faces a crisis not only in the South-East, but throughout the United Kingdom? We understand that Lazard Brothers has recently been making an assessment of the foundry industry's future capacity. Will the Minister comment on that? When are we likely to receive a report?

It is true that there is a problem of overcapacity in the foundry industry. To some extent, that problem was exacerbated by the subsidies and schemes of the previous Labour Government. Lazards is putting forward a scheme, which is primarily one for the industry to help itself. The Department of Industry is looking at it.

The right hon. Gentleman is quite unjustified in that assumption. Lazards has put forward a scheme relating to the sector and we are looking at it.

Since the foundry at Fords is an integrated part of the production of motor vehicles there, will the Department of Industry look on with equanimity if replacement castings have to come from abroad?

I cannot comment on any decision that Ford is about to take regarding its foundry.

British Independent Steel Producers Association


asked the Secretary of State for Industry when last he met representatives of the British Independent Steel Producers Association.

Is my right hon. Friend aware that, as far as I know, the Government give aid for restructuring the steel industry exclusively to the nationalised sector? When will the Government provide some of that money to private sector steel firms in their negotiations and deals with the British Steel Corporation to set up private sector, free-standing companies in overlap areas?

The association asked me to consider financial help to enable the private sector steel industry to restructure itself and to eliminate overcapacity. When I met the officers of the British Independent Steel Producers Association I undertook, without commitment, to look at the situation and to see whether there was any way in which we might usefully meet the private sector's request. The British Steel Corporation put a considerable sum of money into the Phoenix I scheme—the Allied Steel and Wire scheme—and that may have contributed to the success of getting the scheme off the ground.

Will my right hon. Friend report to the House on how subsequent Phoenix schemes are going?

As my hon. Friend knows, talks have been going on for some time in the engineering steels—the so-called Phoenix II scheme. They are commercial negotiations and are, therefore, inevitably confidential to those involved. I hope that my hon. Friend will understand if I do not comment further in public.



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.

National Enterprise Board And National Research Development Corporation


asked the Secretary of State for Industry whether he is satisfied with the progress towards the amalgamation of the National Enterprise Board with the National Research Development Corporation.

Yes. The NEB and the NRDC are working together as the British Technology Group through their existing statutes and their separate arrangements for accountability.

What is the strategy of this exciting new grouping? Will it always invest in small, new high technology companies, for example? Will the shareholdings, as a matter of principle, be available for sale once the companies are established commercial successes?

I see the group having its primary role, indeed almost its exclusive role, in providing new investment to support high technology industry where there might be long lead times and high risks. However, we must recognise that trade and not aid is an important requirement of these industries, as was made clear to my right hon. Friend the Prime Minister and other Ministers when we met an interesting cross-section from the high technology industry at No. 10 Downing Street last week. The British Technology Group has an important role to play in supporting high technology industries. At the moment it is suffering from the awful overhang of the strategy endorsed by our predecessors, which led to substantial losses.

Can the Secretary of State assure the House that in the newly created British Technology Group the standard of entrepreneurial energy and resourcefulness will resemble that of the former National Enterprise Board rather than that of the National Research Development Corporation, which has a rather sluggish record?

I have every confidence in Sir Freddie Wood and those who are working with him—who I met the other day—in the important work that they are doing.

Laurence Scott Ltd


asked the Secretary of State for Industry what financial support under the Industry Acts has been received by Laurence Scott Ltd. of Openshaw, Manchester.

If such an application for aid is sought, will the Minister bear in mind that my constituents find great difficulty in understanding the positive eagerness that this company has for closing down a factory that had an order book valued in excess of £2 million? Will the Minister also bear in mind that its mad escapade with helicopters has not endeared it to my constituents?

The original decision was for the company, in view of all the commercial considerations. Any request for financial assistance will be considered against the usual, standard criteria.

Can the Minister comment on the view held by many people in industry that the Government should re-think their policy towards firms engaged in asset-stripping? Is the Minister aware that the company in question has a deplorable record? Is it not time for the introduction of legislation to impose penalties on companies as well as financial benefits?

The hon. Gentleman will know that the company was engaged in a rationalisation process and that facilities were transferred to other plants within the company.

Will the Minister condemn the action of this outrageously bad employer, which has done so much damage to industrial employment in Norwich and Manchester?

The company is trying, in a difficult market, to pull itself round. I do not think that such remarks help at all.

Greater Manchester


asked the Secretary of State for Industry if, in view of the changes in the employment situation, he will review his predecessor's decision on the loss of assisted area status for Greater Manchester.

On present evidence I am satisfied that the changes in assisted area status, announced in 1979 and due to be completed by August 1982, remain justified. However, we have always made it clear that we are ready to consider new evidence of significant long-term change in an individual area's circumstances, relative to the general position.

Is the Minister aware that Greater Manchester has a higher unemployment rate than Scotland and more unemployed people than the whole of Wales? Is he aware that the position is deteriorating rapidly, despite the actions of local authorities and trade organisations? Is not the July 1979 policy completely out of date, inconsistent and inequitable? Will the Secretary of State meet representatives of the area at an early date to consider these changes?

Ministers are always ready and willing to meet representatives who wish to talk about the status and problems of their areas. The hon. Gentleman's constituency has an unemployment rate that is below the average for intermediate areas. I do not see the case for changing the decision to downgrade the status of his constituency, although I recognise that parts of the Greater Manchester area have considerable problems.

Is it not clear that the situation that prevailed in July 1979 is quite different from that which prevails today? Is the Minister aware that in Tameside in particular there has been an increase in unemployment almost unparalleled in the country as a whole and that manufacturing industry in this area is suffering greatly from the loss of assisted area status? What does he intend to do to restore the modest incentives that used to exist?

The level of unemployment has certainly risen considerably in the Greater Manchester area. The Government, however, must consider not just the current position, but the long-term trend, the effect upon the industrial structure, the state of communications in the area and the likely prospects of the area as a whole when recovery comes. With regard to the right hon. Gentleman's constituency, I repeat what I said to his hon. Friend the Member for Manchester, Gorton (Mr. Marks). In the travel-to-work area in which the right hon. Gentleman's constituency is situated unemployment is below the average for intermediate areas.

Does the Minister acknowledge that this is not just a temporary phenomenon, but that much of the problem is structural unemployment, which cannot be cured in a short period? Will he accept the genuine point made by my hon. Friends, that since 1979 the relative unemployment rates of many regions have totally changed in relation to one another? Do not the figures that my hon. Friends have given show that the examination upon which the Government based their conclusions in 1979 must now be fundamentally revised?

What the hon. Gentleman has said is true of some areas but not of others. The position remains, as we have said, that the Government are always prepared to consider new evidence of significant long-term change, but we must be satisfied that it is indeed long-term change.

Technology Assessment


asked the Secretary of State for Industry if he will establish a public office of technology assessment.

Is there not a strong case for a permanent scientific and technical secretariat to give an early warning assessment of major technological innovations such as computer-based information systems and microprocessor applications? Does the Minister agree that, however well the work of ACARD and CPRS is done, given the limited resources, that work needs to be built on by a far more systematic, on-going and profound analysis if this country is to make the adjustments that are needed?

I think that the hon. Gentleman understates the very important role played by CPRS and ACARD in these matters. As the hon. Gentleman follows these matters carefully, he will have read the admirable series of a dozen or so reports that ACARD has produced and the Government have published in the last year or two dealing with major areas of new technology. This work is supplemented by the five requirements boards in my Department that oversee research amd development and provide strategic advice on the development of science and technology and the need for research and development. I think, therefore, that we are fairly well served in this area. What we need to do is to turn this work into cash in the bank. To my mind, that is our most important task. I do not think that the kind of technology assessment body suggested by the hon. Gentleman would make very much contribution to that.

Can my right hon. Friend assure the House that before answering that question he did not have to look up what the Conservative Party conference said about it, as the hon. Member for Nuneaton (Mr. Huckfield) would expect a Socialist Minister to do?

I pay great attention to what is said at party conferences, but we have a rather different approach to them from that of the Labour Party.

If the Secretary of State is so satisfied, why has his Department done so little in response to the ACARD report on biotechnology?

I believe that the hon. Gentleman is meeting my right hon. Friend the Lord President shortly. I have offered to be present at the meeting, if that would be welcome. I can assure him that we are giving a great deal of thought to the advance of biotechnology. There is an industrial group advising on biotechnology and there are a number of centres of advice within the Government. I fully share the hon. Gentleman's concern that this is an extremely important area of modern technology. I wish to see what further needs to be done to yield the industrial progress that I am sure is there to be won.

Assisted Areas (Regional Aid)


asked the Secretary of State for Industry whether he will include within his general review of regional aids those assisted areas due to lose such status in August 1982.

The Government stand by their assurance that they will review those areas that are due to lose assisted area status on 1 August 1982 after having been downgraded by more than one step. In addition, we have always made it clear that we are ready to consider new evidence of significant long-term change in an individual area's circumstances relative to the general position. Beyond this, the Government's policy continues to be to concentrate regional aid on the areas of greatest need.

Is the Minister aware that that is a most unsatisfactory reply, as the Government continue to refuse to undertake a general review of assisted areas that are losing their status in August this year? Will he admit what is as plain as a pikestaff—that unemployment throughout the country is now far worse than any Minister envisaged when the policy of withdrawing assisted area status was adopted more than two and a half years ago? Does he accept that it would be an outrage if towns such as Blackburn, Accrington and Nelson and Colne, where unemployment has increased between two and a half and three times, lost their assisted area status while Conservative seaside resorts such as Blackpool retained it?

I am not clear why the hon. Gentleman finds my answer so unsatisfactory, as I made it absolutely clear—as did my hon. Friend the Under-Secretary of State when he saw the hon. Gentleman not long ago at a meeting to discuss the subject—that we shall of course consider new evidence of long-term change in the circumstances of an individual area. That has always been the position. I acknowledge that unemployment has risen sharply in the hon. Gentleman's constituency and there are clearly considerable problems.

With regard to the rise in unemployment generally, that is a problem for the whole country. It does not follow, however, that the solution is to increase the number of assisted areas. It is far from clear that that would assist the overall unemployment problem or create any net new jobs. Indeed, the evidence is that more jobs were created in the assisted areas when regional policy was tighter and more sharply and narrowly aimed than it was when we came to office.

In considering new evidence, will my hon. Friend examine the report of the Public Accounts Committee on this subject, in which the evidence from independent research sources, backed up by his own Department, reaffirms that the beneficial effect of regional aid is at best minimal and that the money could be better spent identifying particular areas of need in industry?

I note my hon. Friend's remarks. I shall, of course, look at the evidence to which he refers. It is also important to bear in mind the effect of these incentives on inward investment.

Will the Minister bear in mind that in the past year unemployment in Halifax has risen by 136 per cent.—one of the steepest rates of decline in the country—yet Halifax is to lose assisted area status next year? What help can the Minister offer to all the firms that are throwing people out of work as a result of Government policies? Is he aware that these include manufacturing firms across the whole range of industry, not just textiles, many with national and international reputations for high quality and high exports?

Clearly, I shall consider the hon. Lady's constituency and the points that she has made today. Like other hon. Members, however, she must also consider to what extent the rise in unemployment is a national phenomenon and to what extent it is peculiar to the area. I shall certainly consider what the hon. Lady has said, although her constituency, like others, will clearly benefit from a general upturn in the economy.

Community Enterprise Trusts (Small Businesses)


asked the Secretary of State for Industry if he has any information on the number of community enterprise trusts to assist small businesses that have been formed in the United Kingdom.

As these organisations spring entirely from the community, we have no means of knowing the precise number. But there are at least 50 already in being or in the process of being set up in the country, many of them of very recent origin. I greatly welcome these developments, because I am confident that they are very helpful to small businesses.

I thank my hon. Friend for that helpful reply. Am I right in believing that the Government would welcome the formation of many more of these community trusts? Can my hon. Friend be a little more specific about what the Government are doing to encourage them?

I am grateful to my hon. Friend and I pay tribute to the work that he has done in his own constituency in spearheading and being very much responsible for the setting up of an enterprise trust there. I have visited many of these, and I have taken part in conferences on the subject. My hon. Friend will also know that the organisation Business in the Community has been set up to encourage more of them to be established around the country. Beyond the general welcome that the Government give and the general assistance that, for example, our own small firms service can give to them, I think that there is a limit, because these are essentially examples of local initiative and local self-help. They will wish to remain that way and their benefits stem from that. However, I shall certainly be happy to do anything that I can to assist them in general.

What impression has the formation of these trusts had on the amazingly high rate of bankruptcies among small businesses that have been caused by the Government's policies?

To use the hon. Gentleman's expression, which I do not think is particularly appropriate, it is worth noting that an amazingly high number of new small businesses are being set up at this moment, certainly a great deal more than the number of bankruptcies. That is well worth bearing in mind. The enterprise trusts are helping them to be set up and are assisting those that are growing.