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Commons Chamber

Volume 24: debated on Monday 17 May 1982

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House Of Commons

Monday 17 May 1982

The House met at half-past Two o'clock


[MR. SPEAKER in the Chair]

Oral Answers To Questions


Energy Conservation


asked the Secretary of State for Energy what estimate his Department has made of the amount of fuel, expressed in million tonnes of coal equivalent, saved during 1981 by the various Government conservation measures.

It is impossible to estimate the savings attributable to conservation measures alone. I estimate that in round terms a combination of energy price movements and conservation policies was responsible for savings of the order of 10 million tonnes of coal equivalent in the two-year period 1979 to 1981.

Is the Minister aware that, on the most optimistic calculation, the Sizewell station will not feed electricity into the grid until 1992 and should cost about £2,000 million? Would not a more vigorous conservation programme over the next 10 years be more beneficial to the nation, both in energy and in jobs?

I cannot confirm the hon. Gentleman's assertions, but whatever conservation policies are pursued there will always be a need for modern equipment capable of generating electricity cheaply.

Will my hon. Friend admit that there must be something wrong with Britain's energy conservation effort when large sections of the insulation industry are working at well below capacity, when millions of buildings are inadequately insulated and when a large number of people are unemployed?

More than three quarters of a million homes had their lofts insulated in 1981, many of them with assistance from the Government's home insulation scheme, and there is continuing progress on insulation projects within industry. Therefore, I do not accept that my hon. Friend's pessimism is justified.

Gas Prices


asked the Secretary of State for Energy how many letters he has received from the general public on matters relating to gas prices.

My Department has received approximately 350 letters relating to gas prices this year.

Has my hon. Friend gathered from that correspondence that there is considerable public concern, particularly among those who have invested in expensive gas central heating equipment, about the extent to which gas prices have increased? Can my hon. Friend therefore give the consumer any hope on gas prices over the next two, three or four years?

It is not an easy adjustment for people to make, and to that extent my hon. Friend is right. Future legislation will increase the potential for additional supply through competition and must be of help to the consumer.

Will the Government impose any more gas price increases on the domestic consumer before the general election?

The Government's attempt to rectify past problems, which were recognised by the right hon. Gentleman the last time we discussed this matter, will be completed this year. To that extent, one would hope to see the consumer benefit from the Government's courage in going through the process of adjustment.

Is my hon. Friend aware that many people in my constituency and elsewhere in Britain live just outside the 25 yds connecting limit and cannot be connected to gas supplies, even if they live on housing estates? Does he agree that that is a result of the instability of supply caused by low gas prices for several years under the Labour Government?

My hon. Friend is right. More than 25 per cent. of the nation cannot receive gas, which is still a decent buy compared with other fuels, but have to pay 40 to 60 per cent. more for oil and electricity to heat their homes.

Will the Minister be less coy and more forthcoming and admit that the vicious increase in gas prices over the past three years has been the direct result of the Government's policy that prices should be increased by the rate of inflation plus 10 per cent?

I must draw the hon. Member's attention to the comments of the right hon. Member for Leeds, South (Mr. Rees) on the Opposition Front Bench the last time we discussed this matter. His only complaint seemed to be that we had not made the radical adjustment to reality fast enough.

Energy Depletion Policy


asked the Secretary of State for Energy if he will make a statement on the energy depletion policy of Her Majesty's Government.

My aim is to help create conditions that will ensure the efficient exploitation of our national energy resources. That way maximum encouragement will be given to prolonged, high levels of economic production.

Surely my hon. Friend must realise that the Department has had eight years in which to think about depletion policy. Bearing in mind the very high rates of taxation, falling oil prices, and the likelihood that by 1984–85 we shall pass the peak of production, will my hon. Friend assure the House that no further provision will be made for depletion policy, as it is not required? The public are entitled to know the Government's policy.

The depletion policy for oil is that which was given in the House by my right hon. Friend the Member for Guildford (Mr. Howell) when he was Secretary of State for Energy.

The Government are constantly aware of the need to consider future depletion policy, but we have no immediate plans to make an announcement.

Is there not a growing jobs crisis in the offshore supply industry, and a crisis in confidence, leading from the Government's incoherent attitude towards depletion and development? Will the Minister assure the House that we shall have a substantive statement on energy depletion policy, as compared with the nonsense that he has just spoken about depletion, so that industry can plan for the future?

It is very easy to make that sort of pronouncement from the Opposition Benches, but the Government have to bear their responsibilities in mind. The Government cannot authorise annex B's for proposed developments if the oil companies do not submit them. The North Sea is an extremely difficult place in which to work, and technical problems constantly arise. We are having discussions with several companies. I have no doubt that in due course annex B's will come forward and that the offshore supply industry will receive its share of orders.

I readily accept that the Labour Government had no depletion policy either, ever since they entered into the Varley assurances, but will the Minister agree that if the purpose of the Government is to use market conditions to create ideal circumstances for the exploitation of oil, we have the worst of all worlds, with the collapse of oil prices, partly due to over-production, and the very likely starvation of the oil platform yards? Is not the whole matter completely and utterly out of balance?

The hon. Gentleman has got it wrong. With the best will in the world, it is impossible to develop our North Sea resources in a way that will ensure a continuous flow of orders. The Select Committee on Energy will shortly be making known its deliberations on depletion, and it will be interesting to read its comments.

To what extent will my hon. Friend balance a depletion policy against the pressures of normal market forces? Whereas it makes sense to sell oil to our EEC partners and to others, will he consider a cross-channel gas pipeline and link, so that it is possible to buy as well as sell gas, particularly if the EEC countries can obtain cheaper supplies of gas from third countries?

My hon. Friend will be aware that, for example, we buy a substantial quantity of gas from Norway.

My hon. Friend will realise that the demand for gas in Britain at present is not fulfilled. Therefore, it is unlikely that we would consider exporting gas in the meantime. If, however, as a result of our policy—which is to encourage the private sector to explore further for gas—a great deal of gas becomes available, exports will be considered again at that time.

Has the Minister noted that the question refers to energy depletion and not just to oil depletion? Would it not be sensible for the Government to concentrate a little more effort on resources such as sun, wind and wave, which are non-depletable? Will he comment on the absurd recommendations made recently by ACORD, which are contrary to everything that our partners in Western Europe are doing?

It was significant that the hon. Gentleman should have omitted what is probably the most important factor of all, namely, nuclear power, in regard to which we are proceeding with our programme with all haste.

A substantial amount of money is being made available each year for research and development in regard to the other sources of energy that the hon. Gentleman mentioned, but he will appreciate that several of them are not yet at the stage at which they could absorb a massive injection of development funds.

Crude Oil

asked the Secretary of State for Energy what was the total United Kingdom crude oil production and consumption for the last quarter for which figures are available; and how these figures compare with the same quarter a year before.

Provisional figures for total United Kingdom petroleum production and consumption in the three months January to March 1982 are 23·5 million tonnes and 19·8 million tonnes respectively. Corresponding figures for the same period in 1981 are 21·9 million tonnes and 19·9 million tonnes.

In view of those encouraging figures—which again underline the fact that we are now self-sufficient in oil—does my hon. Friend believe that the recent increase in the number of onshore exploration licences which have been granted is justified, particularly in view of the adverse environmental consequences of some of them?

Yes, I would certainly say that the increase is fully justified. My hon. Friend will appreciate that it is essential that we determine the exact extent of our resources for the future.

With regard to the environment, I reiterate that the award of a licence does not exclude the licensee from the normal planning requirements.

Does the Minister agree that our North Sea oil and gas resources are finite? That being so, will he accept that our consumption and production should be level? Is it not a betrayal of future generations of Britons to extract oil so quickly in order to pay for the 3 million unemployed?

I find it very difficult to equate what the hon. Gentleman has just said with the utterances from his own Front Bench a little earlier. He will appreciate that if we were to cut back production substantially, far from increasing the opportunities for our offshore supply industry, we would be removing them.

Does my hon. Friend agree that lower oil prices are bound to lead to reduced activity in the North Sea? Is not the temporary hiccup more than balanced by the enormous advantages, particularly to heavy manufacturing industry, of having lower fuel prices?

"Coal And The Environment"


asked the Secretary of State for Energy when the Government's reply to the report of the Commission on Energy and the Environment, "Coal and the Environment", is now expected to be published.

The Government are still considering the many recommendations in the CENE report on "Coal and the Environment" and our response, which is being prepared jointly with my right hon. Friends the Secretaries of State for the Environment, Scotland and Wales, will be published as soon as possible.

What progress have the Government made in reaching a decision on the recommendation of the commission that applications for opencast coal mining should be determined by the general planning machinery for mineral development, rather than by the Secretary of State for Energy?

I am very concious of the hon. Gentleman's point. That, among the 120 other detailed recommendations, is legitimately taking a considerable amount of time to consider.

Since the environmental objections to opencast mining have been largely removed because the land is usually restored to a much better condition than it was in originally, and since, also, opencast production is cheaper and safer for the miners—they do not have to go underground and risk their lives—why do not the Government go forward with a positive policy of encouraging opencast production by every means possible?

My hon. Friend will know that there is a difference between increases in opencast production since the Government came to office and the particular question at issue in the CENE report concerning the method of controlling the ultimate decision on opencast licences,

Does the Minister recall that in that report it states that because of coal pollution the Durham beaches are the worst in the country? Is he aware that the National Coal Board has made strenuous efforts to improve the position, including spending a lot of money, but now it rightly says that it has reached the end of its resources? Will the Government urgently provide the little extra that is needed?

The hon. Gentleman will be conscious, because of his long and legitimate pursuit of the matter for a constituency interest, that the "little extra" is rather more substantial than he seemed to indicate. The financial implications of the CENE report are a factor in the joint Ministeries' discussions on the matter.

Will the Minister think again about his answer to my hon. Friend? Is he aware that in my constituency about 780 acres of opencast mining is proposed, which involves 15 to 20 years of working, far in excess of any time that any individual Secretary of State or Minister, on either side, will be in office? Therefore, it is essential that, for example, local government, which is permanent, should take this matter in hand and look after the planning permission for these matters.

All of us who participated in the 19 March debate on the subject will be aware of the consequences and difficulties that are involved in the question. Today we are being asked specifically about the changing of the inquiry process, which, to some extent, is under consideration.

Domestic Supplies (Standing Charges)


asked the Secretary of State for Energy whether he will make a statement on his review of standing charges for gas and electricity for those on low incomes.


asked the Secretary of State for Energy if he is yet in a position to announce the results of his review of fuel standing charges.

With my hon. Friend the Under-Secretary of State for Health and Social Security, I am making progress in a thorough review of the effects of standing charges on poor consumers, and ways of alleviating any difficulties. We shall announce the results as soon as possible.

Will my hon. Friend bear in mind that many pensioners pay more in standing charges than they do for fuel? Is that not terribly unfair?

I know of my hon. Friend's tireless work on behalf of pensioners. We are examining carefully the effect on pensioners of standing charges. However, preliminary indications are that while there are people in the plight that my hon. Friend describes, for the average pensioner, and for poor consumers generally, the standing charges represent only about 20 per cent. of fuel bills. In other words, elderly and poor consumers are not necessarily small consumers, and that 20 per cent. compares with 15 per cent. for the average consumer.

Will the Minister confirm that the increase in standing charges for gas has in some cases been over 300 per cent. over the past four years? Will he also confirm that this is part of a trend that is in danger of continuing, whereby the authorities are trying to recoup all the fixed costs from standing charges? If that is the case, it is thoroughly regressive and should be avoided.

The standing charge reflects a genuine distinction in the industry's costs, as was endorsed by the 1979 Price Commission report. On the hon. Gentleman's figures about gas standing charges, I must ask him to bear in mind that before the election of this Government there was a triple tariff in that, as well as the standing charge for gas, there was an enhanced charge for the first 52 therms. If at the time of the last election that enhanced charge had been removed, as it now has been, the standing charge for gas would have been about £6·37 a quarter, not dramatically below what it is today.

Is this not the third Question Time when the hon. Gentleman has been pressed from both sides—there is no party argument about this—on the whole question of standing charges and the imbalance that has arisen between the increases in those charges and the increases in charges for consumption? Will the Minister take into account the impatience that has been expressed by both sides of the House for a review and changes in what has been proposed?

I am aware of the concern, which I share. My hon. Friend the then Under-Secretary of State for Health and Social Security announced the review early this year, showing that the Government had anticipated some of the concern. We shall not take a moment longer than we need to complete the review properly.

I am sure that the hon. Gentleman will be aware that the last thorough and proper review was in 1976 under the Government of which he was a member. It took about 12 months to carry through. The hon. Gentleman should not feel that these issues are easy or that we can deal with them in just a few weeks.

I refer my hon. Friend to the letter to me from the Under-Secretary of State on 18 March, in which I was told that an increase in the unit costs of electricity and gas of about 15 to 20 per cent. could wipe out the standing charge system. Would that not be of tremendous help to people on low incomes?

I am glad that my hon. Friend has made the point. Standing charges bring into each industry about £500 million a year. We are exploring, as the 1976 study did, the impact of adding to the unit costs. It was found then that an increase of that kind, given that many poor consumers are not small consumers, would have borne more heavily upon them than standing charges now do.

Is the Minister aware that there is increasing concern at the Government's complacency about this matter? Does he understand that a single pensioner can spend up to 8 per cent. of his or her pension on standing charges alone, before having delivery of any of the services involved? Will the Government deal with this as a matter of urgency?

I fear that the hon. Gentleman is trying to make a party point, when none is appropriate. We are building on the foundations of the 1976 review, looking at the matter thoroughly. The review was announced less than three months ago. I hope that it will be only a matter of weeks before we are able to say something more substantial to the House. I ask the hon. Gentleman to understand that these matters cannot be dealt with overnight and that we are treating them as seriously as I am well aware both sides of the House would wish us to.



asked the Secretary of State for Energy what effect he expects the differential in price movements of gas supplied to industrial and domestic consumers to have on the future relative demand for gas from these sectors.

The rises in gas prices to domestic consumers have enabled the British Gas Corporation to hold down the price of gas to industry. To the extent that this curbs demand in the domestic market, it will make increased supplies of gas available to industry.

Is it not a fact that, for the first time for many years, the relative prices of gas for different categories of users are rationally and economically defensible? Does not the history of gas prices over the past few years show how unwise it is for Governments artifically to hold down the price of gas and other fuels for political or electoral reasons?

My hon. Friend is right. By the end of this year, at long last, gas prices to both the domestic and the industrial market will be more or less appropriately related to costs. It was grossly irresponsible of the previous Administration to hold down domestic prices for gas as they did. That was a penalty for industry both in making less gas available for industry and forcing industrial prices higher than they should have been. I hope that now we have the relativities on a sensible basis we shall be able to go ahead, to the benefit of the industry and the consumer alike.

Did not the Government freeze gas prices in the autumn of 1979 shortly after they came to power? That being the case, the Minister's comments are political clap-trap.

They are far from being political claptrap. What the right hon. Gentleman is saying is that we did not straight away put right the follies of his Government. I concede that. We have now taken action, and done so.

Do domestic gas prices in the United Kingdom compare with domestic gas prices on the Continent?

Domestic gas prices in this country, despite recent rises, are substantially lower than domestic gas prices in France, Germany and most Continental countries. In some cases they are only half what they are on the Continent.

Electricity Demand


asked the Secretary of State for Energy whether he will make a statement on future electricity demand.

My Department is currently updating its detailed projections of the demand for electricity and the forms of energy. These will be published later in the year in good time for the public inquiry at Sizewell.

Will my hon. Friend assure me that if his figures and those produced by the CEGB show a smaller rate of increase in demand than previously—say over the past decade—he will, nevertheless, concentrate extensively on the nuclear power programme, notwithstanding the higher production costs, in the longer-term interests of the country as a whole?

Will the Minister ensure that, rather than build oil-burning power stations, we shall increasingly go over to coal-burning units? Can the Minister make a statement on the future of the Aberthaw coal-burning plant in South Wales, where there have been certain difficulties in recent months?

The hon. Gentleman will be aware that over 80 per cent. of our electricity is now generated from coal, and it is inevitable and right that by far the largest proportion of our electricity will come from coal. Most oil-fired stations are now used only to cover peak periods. Plainly, the economics of running oil stations now make it impossible to use them for base load functions.

Will not the future demand for electricity be strongly influenced by its competitiveness against other fuels? Is it not therefore most important to continue with the nuclear programme, which will relatively reduce the cost of electricity compared with what it would otherwise be?

I have to agree with my hon. Friend. I remind the House that the CEGB states that of all the power stations on the national grid, that at Hinckley B—one of our AGRs—produces the cheapest electricity. We should bear that in mind. We should also bear in mind that all our operative nuclear power stations are on base load function—in other words, they are producing electricity all the time.

Lead-Free Petrol


asked the Secretary of State for Energy what representations he has received about the provision of lead-free petrol.

I have received a number of representations about this from hon. Members and from the public. My right hon. Friend the Minister for Local Government and Environmental Services is responsible for policy on environmental lead generally, but I can confirm the Government will keep the question of lead in petrol under careful review, along with all the other aspects.

Does the Minister agree with the recent American evidence that lead in petrol could account for as much as 67 per cent. of the lead level in human blood—evidence which contradicts the assessment of British Government experts? In view of the damage caused to children's mental health by the Government's refusal to move more quickly towards lower statutory maximum levels of lead in petrol, will the Government at least consider requiring all petrol stations to have lead-free petrol available for sale to the public as soon as possible?

The hon. Gentleman should bear in mind that Government decisions on this matter were taken only after the advice that we received from our own chief medical officer. The Government decision to reduce lead in petrol to 0·15 grams per litre will reduce vehicle emissions by two-thirds by 1985. That is by far the quickest and most effective way to achieve such an improvement.

I welcome the steps that the Government have announced on lead in petrol. Will my hon. Friend begin discussions with the motor car industry—which is the key to the matter—about how long it will take to change the motor car system to deal with lead-free petrol?

Discussions of course take place between my right hon. and hon. Friends at the Department of Industry and the motor car industry, but lead-free petrol would necessarily be low octane, and thus will not rally be an option for the vast bulk of cars that will be on our roads into the 1990s. Indeed, probably no more than 10 per cent. of the 15 million petrol-driven vehicles currently on our roads could use it.

Will the Minister now answer the question that was asked by my hon. Friend the Member for West Stirlingshire (Mr. Canavan) about the American studies? Have the Government looked at those studies, and do they believe that they are correct? Will the Minister say whether there is any mechanical reason why petrol refineries should not be adjusted before the date that he mentioned?

The hon. Member will recall that in my initial answer I said that the Department of the Environment is in the lead on this subject. Examination of figures such as those presented by the hon. Member for West Stirlingshire (Mr. Canavan), will of course be looked at by that Department.

I am pleased to accept my hon. Friend's comments on this issue, but will be bear in mind that the advice is very conflicting, that many high compression engines in this country will have extreme difficulty in operating on lower octane fuels, and that in any event such a move will lead to much greater fuel consumption for the majority of cars?

My hon. Friend is absolutely correct. What he has said will be noted by those who are in the lead on this subject.

Central Electricity Generating Board


asked the Secretary of State for Energy if he will make a statement on his decision not to reappoint Mr. Glyn England as chairman of the Central Electricity Generating Board.


asked the Secretary of State for Energy when he expects to announce the appointment of the chairman of the Central Electricity Generating Board.

I have written to Mr. England expressing my appreciation of his long and distinguished service to the electricity supply industry. I have decided, however, that it is time for a change. I hope to announce the appointment of a new chairman fairly shortly.

Is the right hon. Gentleman aware that the virtual dismissal of this eminent engineer, who probably knows more about the public electricity supply business than all the race of politicians put together, has caused great resentment within the electricity supply industry? Secondly, is not the the real reason for the virtual dismissal of Mr. Glyn England that he dared to oppose the doctrinaire policies of the Government?

First, the policies of the Government are in no way doctrinaire. Secondly, Mr. England was not dismissed. His five-year appointment simply came to an end. Thirdly, to suggest by implication, as the hon. Gentleman does, that Mr. England is the only man in the electricity supply industry who knows anything about electrical engineering or the industry as a whole——

is to abuse the whole electricity supply industry. I am sure that the hon. Gentleman would be the last person to wish to do that.

Does my right hon. Friend accept the desirability of finding a chairman who will be sympathetic towards improving the efficiency of the industry, giving the area boards far greater independence to produce as well as to distribute, and, above all, seeing that the fuel in our power stations is burnt more efficiently, and raising thermal efficiency by doing more to try to market some of the wasted heat?

I am sure that one of the advantages of having a new chairman with a fresh viewpoint—quite possibly from outside the electricity supply industry altogether—will be that it will allow a fresh impetus, to make the industry more efficient for the benefit of domestic and industrial consumers alike. However, it is premature at this stage to judge the means of achieving that greater efficiency.

Does the Secretary of State accept that the going of the chairman of the CEGB has been rather offensively handled, and that other people who may be attracted to the public service may now draw back in view of the way in which it was done? Now that the Secretary of State says that someone may be appointed from outside the electricity generating service, or the professional side, will he assure the House that, whoever is appointed, it will not be a narrow political appointment?

I assure the right hon. Gentleman that whoever is appointed will be the best man for the job and that it will not be what the right hon. Gentleman calls a "narrow political appointment".

Will my right hon. Friend consider requiring that any future chairman of the Central Electricity Generating Board should be under a contractual obligation to place his resignation before any new incoming Government?

My hon. Friend raises a major question of nationalised industry policy in general, which goes far beyond the limited confines of the question.

Does the Secretary of State realise that Governments come and go, as do Secretaries of State? If the chairmen of the various nationalised industries are to suffer because they happen to disagree with the right hon. Gentleman, and are therefore not reappointed, does that not create the impression that it is not the welfare of the country as a whole that matters, and that any Government will look at the problem simply from their political standpoint, not that of the future of the industry?

It is the duty of each Secretary of State of whichever party and whichever Government to do what he thinks is best for the industry and for the nation. That may occasionally involve a change in the chairman of a nationalised industry. That is a fact of life.

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of all those replies, I wish to give notice that I will raise this matter on the Adjournment next Monday, 24 May, to be precise.

Coal Industry


asked the Secretary of State for Energy if he will make a statement on the phasing of investment in the coal industry.

The phasing of investment in the coal industry, within the annual capital approval set by Government, is a matter for the National Coal Board.

Will the Minister comment on the decision by British Petroleum to withdraw its promised investment in the coal liquefaction scheme at Point of Ayr? Will the Minister give an absolute assurance that the decision will not prevent further Government investment in the scheme? Does he agree that Britain could lead the world in this technology and that a shortage of further investment, at least to replace the BP withdrawal, would be nothing short of criminal?

There is a later question on the Order Paper on this issue. To the extent that the Government might not invest, may I make it clear that the Government offer of £5 million aid is still open and is still contingent upon the National Coal Board securing a significant contribution from private industry? It would be premature to comment further.

Is my hon. Friend aware that that reply, and his reply to my written question last week, entirely fail to explain why the Government do not approach the EEC for an increased stake in this vital enterprise which may be marginal for the United Kingdom but is vital for Europe as a whole?

I accept and understand my hon. Friend's constituency interest in the matter, but, as I explained to him, two points should be made. First, of course, the EEC is already putting up the maximum proportion of aid available from the coal gasification and liquefaction programme of the Community's alternative energy demonstration scheme. Secondly, the Government set great store, as does the whole of the industry—which wishes to see such projects succeed—on a substantial private sector participation. That is a crucial feature of the success of this long-term project.

Coal Industry


asked the Secretary of State for Energy what has been the increase in labour productivity in the coal mining industry over the most recent 12-month period for which figures are available.

National Coal Board productivity last year, as measured by overall revenue output per manshift, was 3·4 per cent. higher than in 1980–81.

Does my hon. Friend agree that this is a satisfactory situation and a great tribute to the miners and all those connected with the mining industry? Does he expect productivity to continue to rise in the current year?

My hon. Friend is right. I took the opportunity at the British Association of Colliery Management conference on Friday to congratulate mining management and the miners on the excellent increase in productivity. We trust that it will continue, as we need such productivity improvements to make up for the sad lack of productivity improvements in past years. That will help the mining industry to retain its markets and obtain new ones.

Will the Minister join me in expressing regret that only one Conservative Member has risen with a supplementary question on this issue, since over the past 10 years Conservative Members have consistently demanded better attendance in the pits? Is it not clear that attendance in the pits is a good deal better than that normally seen on the Conservative Benches?

I am sure that the hon. Gentleman does not want a head count to illustrate the consistent number of hon. Members on the Conservative Benches during Energy Questions. Absenteeism in the pits is down. The hon. Gentleman knows that attendance is the best for 40 years. However, that significant improvement should not mask the fact that between 1974–75 and 1978–79 output per manshift declined.

The figures announced by my hon. Friend are no doubt encouraging, but would they not have been better if the uneconomic pits had been closed in accordance with "Plan for Coal"?

Clearly we are in a period of over-supply, and the inability of the industry to close all of its uneconomic pits has added to the problems of over-supply and made the costing much more difficult for the industry in seeking new markets.

Is the Minister aware that, in communities such as mine, where miners have been breaking production records every week in the past year or two, it is not only their efforts but the capital investment in those pits that has made the difference? It was capital investment derived from "Plan for Coal", established in 1974 and 1979, that got things going. Is it not worrying that there has been a large-scale cut in capital investment in places such as South Wales?

The hon. Gentleman is inaccurate. There has not been a massive cut. Capital investment for this year will be about £886 million. Capital investment totalling £3 billion has been put into the industry since 1974–75. Beyond investment, good management and excellent work by the workers are the important changes in the productivity payment scheme since 1978. Those are crucial factors in improving productivity in the industry.

Combined Heat And Power


asked the Secretary of State for Energy if he will make a statement concerning the progress of schemes for combined heat and power.

The present stage of the feasibility programme is nearing completion. Although some inputs to the consultants' work have been delayed, we n3w expect their report to be completed within about six weeks.

I am grateful for that information. Can the Minister assure the House that between now and the time when those reports are published the Central Electricity Generating Board will take no steps either to dismantle or decommission power stations which, as a result of these studies, might conceivably be used for these schemes? Has the hon. Gentleman asked this question and received such assurances?

The CEGB has a programme of closing power stations that are thought to be no longer economic. I do not believe that that is in any way connected with the report. I know the point that the hon. Gentleman makes. One of the issues that the consultants have to consider is whether existing power stations can be used in the districts under consideration. I do not believe that the point about which the hon. Gentleman expressed anxiety will affect the outcome.

North Sea Oil


asked the Secretary of State for Energy when he expects to announce a new series of licence applications for North Sea exploration.

I am today circulating in the Official Report proposals for a new eighth round of offshore licensing. The formal invitation to apply will follow in a few months' time.

I thank my right hon. Friend for that preliminary answer. Is he confident that small British companies will have a fair chance of making successful applications when the round is promulgated?

In today's climate some small companies may find it difficult to raise the finance needed to participate. However, I hope that a fair smattering of licences will be granted to small companies if, as I hope, they apply. Although some of the blocks will be offered by the auction method, for the first time since the fourth round over 10 years ago, the majority will be offered in the same discretionary way as in most previous rounds. That provides a balance between the interests of the larger and smaller companies.

Does not auctioning mean putting the new North Sea licences, and no doubt the prize licences, into the hands of the multinationals once more? Does not auctioning mean going against the concept of development by small, independent British companies? Auctioning gives power to the big boys, but not to the small companies. How large is the licensed area likely to be in the eighth round? The right hon. Gentleman has not mentioned any acreage.

The hon. Gentleman cannot have been listening with his customary attentiveness. I said that only a minority of the blocks would be offered for auction. I expect about 85 blocks to be awarded.

Will the Secretary of State consider the suggestion of dropping the option of 51 per cent. for BNOC in this round?

The arrangements will be precisely the same, for the reasons discussed in our numerous debates on the Oil and Gas (Enterprise) Bill.

Is the Secretary of State aware that there is considerable anxiety that some marginal fields may not be exploited? If there is not a good response, will the right hon. Gentleman consider reducing the incidence of taxation to ensure that all marginal fields are exploited?

That question has nothing whatever to do with the licensing round, although the hon. Gentleman may be interested to know that the majority of blocks on offer will be in the frontier areas of previously undrilled areas of sea round our shores.

Following are the proposals:

The main objectives are to open up areas in which exploratory drilling has not yet taken place and to provide further opportunities to explore in the established gas province.
I have in mind licensing in total about 85 blocks drawn from the following:
  • (i) a wide selection of blocks in the previously undrilled areas of Unst, Fair Isle and West Orkney Basins, East Shetlands Platform, Forth Approaches, Southern Sub-basin—entrance to Bristol Channel—and the mid-North Sea High—an area between latitudes 55° and 56° North;
  • (ii) a number of blocks between 53° 10' North and 54° 20' North in the southern basin of the North Sea; and
  • (iii) a small selection of blocks in the mature oil province of the central North Sea.
  • I shall be inviting cash tender bids for the blocks in (iii) above; all other licences in the round will be awarded purely on the basis of assessment against published criteria. These criteria will be broadly similar to those for the seventh round. An undertaking along the lines of that attaching to seventh round licences, to allow BNOC an option to acquire up to 51 per cent. of any petroleum produced, will be required.
    I expect the closing date for the eighth round to be towards the end of the year. In the coming weeks I intend to discuss my detailed proposals with those involved. I shall welcome any views or comments from interested parties on the plans I have outlined, with particular reference to areas where they believe special care and attention in the conduct of exploration and development may be needed for environmental, fishing or other reasons.


    asked the Secretary of State for Energy what representations he has received concerning the effects of lower oil prices on exploration and development in the North Sea.

    There is no doubt that lower oil prices have had an effect on licensees' plans for future North Sea developments.

    Does my hon. Friend agree that lower oil prices, higher levels of taxation, and the increased cost of development combine to make marginal fields much more difficult to develop? Given the importance of our marginal oilfields for self-sufficiency in the 1990s, will my hon. Friend consult his colleagues in the Treasury to ensure that some changes are made in the tax regime to help the development of those marginal fields?

    My hon. Friend has devoted much time to this subject and he will appreciate that taxation is only one of the issues involved in any discussion of developments within the North Sea. The postponement of certain developments in recent months has been due more to technical problems and the weak oil price than to the tax regime. However, I accept that the companies have always included the tax regime in their reasons. That is only natural, because they wish to focus attention on their problem with tax.

    "Nuclear Energy—The Real Costs"


    asked the Secretary of State for energy what is his policy towards the conclusions of the report of the Committee for the Study of the Economics of Nuclear Electricity entitled "Nuclear Energy—The Real Costs".

    All contributions to this important debate are assessed on their merits.

    In that case I feel sure that great weight will be given to the report, particularly as the committee is under the chairmanship of Sir Kelvin Spencer, a former chief scientific adviser to the Ministry of Power. Is the hon. Gentleman aware that the report clearly shows that there is a great discrepancy between the findings of the report, the CEGB and the Minister's thinking on electricity prices? Is he further aware that it clearly shows that the production of electricity by fossil fuels will be much cheaper than production by nuclear energy? The hon. Gentleman should take that report into consideration when contemplating his future policy——

    I hesitate to draw the hon. Gentleman's attention to the classic computer concept of "garbage in, garbage out." Obviously, I would not suggest that that applied to the report. However, the assumptions fed into the report will produce results. I should have thought that the CEGB's thorough and full statement of the case merited considerable attention, particularly as the CEGB has an obligation to concern itself with securing an economic supply for the consumer.

    Will my hon. Friend bear in mind that in Sheffield the high cost of electricity is putting steelworks out of production because such costs make them uncompetitive with those supplied with cheaper electricity, whether that electricity is nuclear-generated from France, hydro-generated from France and Norway, or a mixture of both from the New World? Will my hon. Friend ensure that that is considered?

    My hon. Friend is quite right to draw attention to the problems of industry pricing. It is important to remind the House of the CEGB's cost estimates for power stations in 1980–81. Hinkley Point B nuclear power station ran at a cost 22 per cent. lower than Drax, which is one of our best coal-fired stations.

    Does not the Minister agree that this somewhat pretentious report may make doubtful assumptions and, not surprisingly, reach wrong conclusions?

    I very much appreciate the comments made by the hon. Gentleman, who has great experience in this area. Assumptions about coal prices, nuclear capital costs and very interesting assumptions about nuclear fuel cycle costs have been added together to produce what the report seemed to suggest was the required result.

    When considering the costs of nuclear power, will my hon. Friend bear in mind that the cost of building a nuclear power station will be greatly increased if construction work begins before it has been properly designed? Will my hon. Friend ensure that designs are properly prepared before construction work is started, thus making the building costs economic?

    My hon. Friend is quite right. The pre-design work is a key factor in successful construction. Governments of both parties have always said that the building of any form of power station to cost and time is crucial to its economic success.

    Alternative Energy


    asked the Secretary of State for Energy if he proposes to maintain current levels of support for research and development in the field of alternative energy provision.

    As my hon. Friend told the hon. Member for Sheffield, Heeley (Mr. Hooley) on 31 March, I hope that in the current financial year my Department will be able to devote between £11 million and £12 million to research and development into renewable energy sources.

    Is not that serious and disturbing reduction in investment in research and development likely to cause grave anxiety and disappointment? Is the decision to reduce that investment based on the summary of advice from the advisory council dealing with such matters? If so, is the hon. Gentleman aware that it is suggested that there are serious irregularities surrounding that summary of advice, which should command urgent and serious Departmental attention?

    The hon. Gentleman seems to be implying that I have said something new today. On the contrary, I am saying what was said in a parliamentary answer nearly two months ago. While I accept that it is likely that the 1981–82 figures will show that we spent somewhat more that year than this year, I remind the hon. Gentleman that in 1977–78, during the period of the Government of whom he was a supporter, only £1 million was spent on renewables. During the last year in which the Government that he supported were in office, only £2·5 million was spent. He must consider the matter in that context.

    Is my hon. Friend aware that what the Government propose to do in support of research and development of renewables must be about right at this stage? Can he assure the House that the Government will do everything possible to back wind energy, which is one of the more promising renewables, both onshore and offshore?

    I am grateful for my hon. Friend's question. I know of his interest in such matters. We had the benefit of advice from our advisory council on research and development. That advice was in clear terms, copies of which I have placed in the Library, and it is acceptable to the Department. The advisory council placed much emphasis on wind and we are financing, at a cost of about £7 million, a development windmill in the Orkneys to produce electricity.

    Why is the alternative energy research unit at Harwell being run clown?

    I have no reason to believe that it is. We spent about £4 million last year on our energy development support unit and its work is highly valued. I assume that the hon. Gentleman is referring to that unit. I know of no such plans.

    House Of Commons

    Select Committees


    asked the Lord President of the Council whether Her Majesty's Government have plans to make any further proposals relating to the work of Select Committees.

    The Lord President of the Council and Leader of the House of Commons
    (Mr. John Biffen)

    The Government have at present no such proposals. The House has a comprehensive structure of Departmental Select Committees with broad terms of reference and extensive powers of inquiry. How these, and other aspects of the Select Committee system, now develop is primarily in the hands of the Committees themselves.

    Does the Leader of the House agree that it is illogical that the work of the Law Officers' Department should not be subject to scrutiny by any of the departmental Select Committees, thereby preventing the consideration of such topics as legal aid, the work of the Public Records Office and general matters dealing with the courts? Will he, therefore, bring proposals before the House that will enable the Home Affairs Select Committee to oversee the work of the Law Officers' Department, excluding such sensitive areas as the appointment of judges?

    I am grateful to the hon. Gentleman for telephoning my office this afternoon to give notice of his supplementary question, which would otherwise have bowled me neck and crop. I am now refreshed of the history of these matters. I am sure that the hon. Gentleman will reflect that on 25 June 1979 one of my predecessors, my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), spoke on the subject and the House had the chance to debate and to vote on the issue. The House decided against the inclusion of the powers of the Lord Chancellor within the ambit of the Home Affairs Select Committee. However, I shall certainly look at the question and write to the hon. Gentleman with my views on the basis of a more measured reflection than I can give from the Dispatch Box.

    I apologise for the fact that I have not given my right hon. Friend notice of my supplementary question. I have no desire to bowl him neck and crop, or even with a slow googly. Will he accept that part of his statement is not entirely accurate, in that only two of the Select Committees have the power to appoint sub-committees? The development of the Committees could be limited by the decision of the House. If Select Committees wish to appoint sub-committees, will my hon. Friend consider that matter in due course?

    Of course I shall consider that matter, but there are 33 Select Committees and 14 departmental Committees. That makes a real demand on the resources available to the House. To the extent to which we appoint sub-committees, I have to consider that.

    Is the Lord President of the Council aware, to follow the point made by the hon. Member for Honiton (Sir P. Emery), that the work of the Select Committee on Energy, which has no power to appoint subcommittees—the old Select Committee on Science and Technology had unlimited powers in that respect—is being greatly handicapped?

    I have sufficient regard for the membership of the Select Committee to believe that it is able to adapt itself to the current arrangements and still be a powerful influence on the House.

    In view of the few Select Committee reports that are meaningfully debated, the amount of time that they consume and their lack of influence, would not this be an opportune time to review the whole system, perhaps with a view to abolishing the Select Committee procedure altogether?

    I shall not be drawn that soon by so profound a question. I shall merely comfort myself by saying that inquiries into the Select Committee procedure have vindicated the Government's confidence in Select Committees. In all such matters, Select Committees will strengthen themselves by an evolutionary process. We should be pragmatic and cautious in both what we expect and what we require.

    National Health Service

    3.31 pm

    I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,

    "the threatened day of industrial action in the Health Service called by all unions having membership in the National Health Service affiliated to the TUC for next Wednesday 19 May."
    I am a sponsored member of the National Union of Public Employees, which is one of the unions that will take action. I and my family make regular use of the National Health Service, as do most people in Britain.

    The problem is specific in that the TUC affiliated trade unions having membership in the National Health Service intend to withdraw their labour for 24 hours beginning at midnight tomorrow and continuing until midnight on Wednesday. The aim will be to reduce the National Health Service for that day, broadly speaking, to a nation-wide accident and emergency service. Surely every right-thinking person would not wish that to happen in any way. The action has been called against the background of deteriorating care and industrial relations in the National Health Service generally.

    It is agreed on both sides of the House that the matter is important. The Government believe that it is important, because the Secretary of State for Social Services said on 21 April 1982:
    "Over the next weeks important decisions will be taken about industrial action in the National Health Service. The consequences of such action could be very grave."
    Those important decisions have been taken and the position is very grave. I agree with the Secretary of State that that is the correct assessment of the position.

    On top of that, the National Health Service was created by the House of Commons and therefore we have a responsibility to ensure that arrangements are made, through Ministers answerable to the House, for proper provision for our handicapped and sick. That is the danger. The head of the National Health Service is answerable to the House. We all have a duty to provide for the care of the sick and handicapped, and that duty may break down on Wednesday.

    For those who do not rise to the challenge of duty and have grosser minds, I point out that the Health Service is an important institution that has an annual budget of about £12,000 million and a work force of about 1 million. That is a large commitment for the nation.

    The matter is important, because the TUC has largely called the strike. That is unprecedented in my experience of industrial relations. Technically, of course, the individual unions have called the strike, but the TUC has co-ordinated the action. That is exceptionally important because normally the TUC, while not wishing to be impartial in such matters, adopts a one-off approach to disputes in order to maintain its role as an independent negotiator, if necessary. On this occasion it has departed from that normal stance and, whatever the technical and legal arguments, Wednesday's strike will be promoted by the TUC.

    The matter is urgent because the action is due to start at midnight tomorrow and 10 continue for 24 hours. There is no possibility that the decision will be reviewed and retracted before the action takes place unless the House takes action. This is not time to argue the case for the employees' claims, but the Government have offered an increase of 4 to 6·5 per cent., and employees want a 12 per cent. increase. It is a large gap.

    Against the background of those figures, only the most supine and ineffectual group of public workers would wish to accept such an offer without making the maximum possible demonstration, with inflation not yet in single figures. National Health Service employees are neither supine nor ineffectual——

    Order. I have allowed the right hon. Member for Lewisham (Mr. Moyle) to go some way, but he knows that he must not make the speech that he would make if I were to grant the application.

    I take that point, Mr. Speaker. I am sire ply trying to demonstrate briefly that feelings are strong on this matter and that unless the House takes action we shall have trouble in the National Health Service within 48 hours.

    National Health Service employees are neither supine nor ineffectual, and, in those circumstances, they may be said to be setting an example to Britain. A debate tomorrow, if you are disposed to grant it, Mr. Speaker, would allow time for the Secretary of State to come to the House and outline proposals that might lead to the calling off of the industrial action. It would give a strong sign to National Health Service workers that their case was attracting attention in the highest quarters, and any irresponsible action by some of the less responsible elements that there may be in the Health Service would be moderated. If no such action is taken, Wednesday will be followed by similar days of action.

    I hope that I have shown that the problem is specific, vitally important and critically urgent.

    The right hon. Member for Lewisham, East (Mr. Moyle) gave me notice before 12 o'clock midday that he would seek leave to make an application under Standing Order No. 9. The right hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,

    "the threatened day of industrial action in the Health Service called by all unions having membership in the National Health Service affiliated to the TUC for next Wednesday 19 May."
    The House will have listened with concern to what the right hon. Gentleman said, and there is no doubt that he has drawn our attention to a very important matter. However, the House knows that it has given me instructions under Standing Order No. 9 that I must take into account the several factors set out in the order bur to give no reasons for my decision.

    I listened very carefully to what the right hon. Gentleman said, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

    Argentina (European Community Sanctions)

    3.38 pm

    I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing specific and important matters that should have urgent consideration, namely,

    "the implications of discussions with the EEC on trade sanctions against Argentina and related matters."
    The whole House—indeed the whole world—knows that the task force in the South Atlantic is acting in defence not of British interests but of world peace. It is a British problem. It is also, of course, a European problem. For that reason the European Nine joined us in trade sanctions against Argentina. Yesterday a decision on their extension was delayed. Today further discussions are taking place.

    We who are bearing the burdens of the free world are being put on probation. For this reason the House may wonder why, at a time when we should be given maximum and enthusiastic support, we are being blackmailed by our reluctant allies into making concessions on other and unrelated matters.

    It is vital that, before any decisions are made in Europe, other European nations are made aware of the views of the House and of the nation. Otherwise, mistakes could be devastating to European unity. Some decisions may be made tonight, or even tomorrow. The debate should, therefore, take place as soon as possible.

    The following specific matters must be discussed urgently. First and foremost, we must discuss the safety of our Service men. There must be a danger that, with the present negotiations, the operational options will be rearranged to fit in with the perceived requirements of European diplomacy. The lives of our troops and sailors could thus be placed in jeopardy. The House may wonder for what—for sanctions that are notoriously evadable, for sanctions which, historically, refuse to bite?

    The House will also wish to discuss another specific matter—the danger of blackmail. Are we to trade a budget deficit several times the cost of the task force for this ephemeral, conditional, grudging and yet physically empty gesture?

    The House will certainly wish to discuss another specific matter—whether we are to agree to a massive increase in farm prices and further to burden and browbeat the British consumer for what could be a diplomatic doormouse. The debate is happening today in Brussels. The House will also want to debate, before the die is cast, the sham of European solidarity and the reality of national self-interest, so that we can give a clear signal to our Government, this very day, in their pursuit of our interests.

    Finally, I believe that the House should insist that in any package that is agreed a large tranche of European funds must be available for the task force, defending as it is European interests. No package should be acceptable to the House which continues to give 75 per cent. of European funds to European agriculture while ignoring this new and far more urgent European priority. These matters are urgent. They are happening this very day. They effect what is happening in the South Atlantic. They are fundamental. The House must debate them now. Tomorrow may be too late.

    The hon. Member for Northampton, North (Mr. Marlow) gave me notice before 12 o'clock midday that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,

    "the implications of discussions with the EEC on trade sanctions against Argentina and related matters."
    The House will have listened with considerable care to what the hon. Member said. He knows that I have been instructed under Standing Order No. 9 to take into account the several factors set out in the Order but to give no reason for my decision.

    I listened with care to the hon. Gentleman, who is dealing with a matter of great urgency, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

    Welsh Affairs


    That the matter of Education and Training in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for their consideration.—[Mr. Gummer]

    Job Prospects

    3.43 pm

    I beg to move,

    That this House believes that job prospects will be improved if British businesses act with greater urgency to grasp the unprecedented opportunities for growth presented by developments in several fields of advanced technology; and urges Her Majesty's Government vigorously to pursue its policies to remove obstacles to growth and stimulate the development and use of new techniques and products.
    I hope that the motion will commend itself to the whole House, although I accept that there is scope for controversy in some of the matters that are relevant to the motion. I seek to draw three main elements to the attention of the House. The first is the assertion that the exploitation of new technology will improve job prospects both in quality and in quantity. The second is a call for greater urgency by industry to assess and grasp the rapidly developing opportunities. The third element is a call to the Government to take further action to remove obstacles to potential growth.

    I welcome the presence of the Under-Secretary of State for Industry, my hon. Friend the Member for Coventry, South-West (Mr. Butcher) on the Government Front Bench. Not only is his rapid promotion well deserved, because of his personal merits, but, with his practical experience in computers and information technology, his advancement is a great encouragement to all who see the vital part that those industries play and will play in the future of our country.

    Many aspects of advanced technology are relevant to the motion, not least biotechnology and aerospace. I shall concentrate my remarks on the aspect that I know best—information technology. I declare an interest. Most of my working life has involved computers and their applications and I am a member of the British Computer Society.

    It is helpful on occasions such as this to be clear about what we mean by information technology. It is interesting to note, even in the relatively short time of this Parliament, how the definition of information technology keeps changing subtly. The reason is that different aspects of developing technologies have increasing significance as time goes on. Perhaps of most significance is the convergence of a variety of technologies, such as computers, telephones, television, and the use of microelectronic techniques generally. Recently, the importance of these technologies growing together has been further emphasised by the concept of wide band cabling, which enables all those facilities to be connected to one another in one pipeline.

    In history, and in prehistory, most of the great civilisations grew from a type of communications system. In the earliest civilisations that communication, typically, was created by a river bed. The river itself provided a means of communication. At other times the sea, roads, railways and telegraph were the means of communication. Many civilisations were based on slave labour. When we study the immense part that communications systems have played in the development of any society, and the enormous growth and improvement in those systems since the last war, we cannot fail to be impressed by the important potential that they have for economic development and economic power, and even military power, and for the whole spread of human knowledge. We cannot afford to ignore the significance of communications. We must use them to build a civilisation without slaves, where man remains master of the machines.

    It is difficult to express the sheer scope of growth that exists in the possible development of the technologies to which I draw attention. At one end of the scale it is concerned with satellites. At the other end it involves telephones and simple bleepers. It involves improved terminals to communications systems. It also involves television sets and concepts of the type now evolving for offices of the future.

    What is not easy for most people to grasp is the sheer impact that cabling systems of the future will have. British Telecom alone plans to spend £2,500 million a year and more in upgrading and maintaining the basic existing telephone network. In addition, there is enormous scope for cabling for a variety of other purposes. The spread of cables throughout the land will be on a scale and with a rapidity that has not been seen since the growth of the railroads in the early nineteenth century, and perhaps matched only by the spread of electricity during this century. The first part of my motion is concerned with job prospects—a matter that is of fundamental concern to the House at this time. One of the ways in which we deal with many of the problems will be found by grasping the opportunities presented by new technology.

    One of the most useful sources of data is a report from the Policy Studies Institute, which, towards the end of March this year, published the results of a survey in 1981 of 1,200 manufacturing companies. Under the heading:
    "Fears of massive redundancies seldom justified"
    it said:
    "Process applications tend to result in job losses, but usually losses small enough to be absorbed by natural wastage and redeployment. Product applications tend more often to bring increased market share and job gains, and the greater risk to jobs will often be from the reduced market share that could follow from not using microelectronics when competitors are going ahead with it."
    While, in the short term, process applications—where microelectronics are being used to assist in the process of manufacturing—may reduce employment prospects in affected firms, two factors must be set against that. First, without the increase in efficiency and productivity the firms concerned would be liable to decline against their competitors in any event. That in turn would lead to even greater job losses than might occur through the use of the technology, but, by becoming more efficient, they may well enhance their share of the market, and therefore the increased production would counterbalance the reduction in the number employed on each item of manufacture.

    Secondly, the scope for more jobs in the new and expanding firms that supply the new equipment and techniques can grow even more than the losses in the traditional manufacturing areas. What is clear for job prospects is that where firms use new techniques and microelectronics in enhancing their products, that is almost invariably accompanied by increased market share and more jobs.

    Even in my constituency, which outsiders often think of as a delightful rural area dominated by agriculture, fishing and tourism, with a fine university and the world's most famous golf course, at St. Andrews, there is evidence of the trends to which I refer. In the past three years I have watched half a dozen firms come into existence or grow, moving into manufacture and/or services in the mini and microcomputer field. Many of my constituents who work in Dundee and Glenrothes are pionering in world markets. In many cases, these are new companies which have spun off from some of the multinationals which have settled so successfully in the area.

    One new development that came to my attention this month was the birth of a new medium of communication, a publication called Innovation. It is a register of new ideas, mainly created in the universities, which are being distributed to industry generally. I have been in touch with my constituent who founded the firm that set up this register. As a result of its first circulation to thousands of firms in the three weeks since its launch, 40 per cent. of the ideas mentioned in the register—it is about ¼ inch thick—have been followed up by one or more companies. Obviously not all of the ideas followed up will necessarily result in a new product or development, but it is an encouraging indication that, when new ideas are presented direct to people who can make decisions, industry is willing to have a look at them and see whether they can be used. We must build on that because, unfortunately, not all of the picture is as encouraging.

    Scotland is a major world centre of the microelectronics industry. Outside California it is possibly the largest single concentration of that industry. To many hon. Members Scotland may be more famous for fish and chips than for microchips, but I believe that we are now the major European producer of microchips. That is encouraging significant spin-offs from the fundamental industries, many of which came from other places.

    Industry's grasp and reception of the opportunities that present themselves is very mixed. At one end of the scale there are some of the most innovative and advanced companies in the world, but there are others that are all too disappointing.

    I should like to examine some of the companies that have been most directly concerned with some aspects of the new technologies—those companies that form part of the Telecommunication Engineering and Manufacturing Association Ltd. In its recently launched first news letter—which presumably means that there will be more to follow—TEMA said that
    "combined, the turnover of the telecommunications element of these companies"—
    those that form part of its organisation—
    "has risen from £600 million in 1975 to 1,020 million in 1981."
    At first sight that is quite impressive, but when one appreciates what has happened to inflation over that period, it is not so impressive. It suggests that those chaps are holding their ground in their areas of business, but I am not convinced that it means that they are really expanding in the way that they could if they were to take full advantage of world markets. They have the talent and the technology to capture a much greater share of the world markets.

    As someone who believes that the greatest prospect of development in these areas will come from the private enterprise system, I find it deeply depressing that a company such as GEC prides itself on cash balances of over £500 million, but does not seem to be able to think of any way of spending it in the industries in which it is pre-eminent. GEC is involved in a significant range of activities that are central to information technology. At a time when countries throughout the world are finding new products, new methods and new ideas which they can develop and expand, and in some cases corner the market, I find it depressing that one of our greatest industrial companies does not seem able to find ways of profitably investing its substantial resources to that end.

    Even the best of our companies—there are many good ones—must think about growing fast enough to increase jobs to counterbalance those that have been lost in their own companies or elsewhere. The TEMA companies—it is only a small subset of those involved in information technology but a significant one—say that we are moving towards a period of capital intensive development that will be intensive in manufacture. This change is reflected in declining manpower levels in the industry. There has been a reduction from 90,000 in 1971 to 48,500 in 1981. Changes in technology have decreased job prospects. No doubt they have enhanced the quality, but they have certainly decreased the quantity. The scope for development is such that the companies concerned could more than compensate for decreased manpower levels by creating growth in their total business.

    More depressing than the potential supply of certain products is the response of potential users to microelectronics. In the Policy Studies Institute report to which I referred earlier it is said that non-users acknowledge that the scope is not being exploited and that
    "if half the sample are using microelectonics or trying to, at least in some degree, the other half are not … Half the non-users themselves agree there is scope for applications in their kind of business—yet they are not using any, they are not developing any and they are not even planning to do so in the future."
    That is an awful indictment of some sectors of manufacturing industry.

    The Wolfson institure of Edinburgh university, which together with Heriot-Watt university, the Royal Bank of Scotland and the Scottish Development Association, is running Integrated Micro Application Limited, has found that the recession has to some extent had an effect on the psychology of industrialists. It appears that there has been a tendency for them to keep their eyes down, to batten down the hatches and to try to ride out the storm of recession with their eyes shut. That is perhaps overstating the reaction——

    It is a mixed picture. However, more industrialists must raise their sights and find time to plot the growth that will ensure the survival of their companies at least and, better still, buck the trend of the past. If they do not grasp the opportunities that are presented by new technology, perhaps even more in the enhancement of products than in manufacturing processes, they will undoubtedly experience difficulty. If they grasp the opportunities, that will stand them, their shareholders and their employees in good stead.

    I recently visited the Wolfson institute. Does the hon. Gentleman agree that it is an uncomfortable fact that whereas grants are relatively easily available to incoming firms—even to Nippon Electric, which is coming to my constituency—they are not so easily available to established firms that have been in an area for some time? Recently the Scottish Labour group visited Motorola and IBU. The members of the group were told that established firms find it relatively more difficult than incoming firms to get grants. Does the hon. Gentleman agree that that is unsatisfactory?

    The hon. Gentleman has raised an issue that has caused me some anxiety for a number of years. It is not a party political point, because the central problem has been with us for some time. The difficulty to which he refers is greatest where a company changes the way in which it does business, perhaps within the same factory space, and when it is not able to say "We are increasing the number of jobs by X and, therefore, we are entitled to a range of assistance from public funds." The firm may be reorganising and protecting jobs that would otherwise be lost, and at the same time improving the base from which job prospects can grow. To a degree, I share the hon. Gentleman's view.

    I should like to hear more from the Government about removing obstacles to growth. Responsibility for developing new techniques and new products must come from industry, but the Government have a major part to play in removing obstacles that might lie before it, and the hon. Gentleman has mentioned but one, although in a rather different area from the one to which I shall address myself.

    First, I am concerned with the definition of the environment—I mean not the physical environment, but the rules of the game within which the liberalisation initiated by the Government can develop and grow. I understand that there have been substantial modifications to the early regime that was published, but, unfortunately, there has been no up-to-date redefinition of the environment and the way in which the Government see it evolving. there have been substantial changes in outlook and the benefit of experience in areas where that will help.

    Arising from the Government's actions in liberalising the telecommunications regime is the issue of standards. The development process and standards are said by some to lack firm control. So far no new standards have been defined and only two have reached the comment stage. This suggests that the means by which standards are identified and defined are rather too complex.

    When firms want to be able to supply products that comply with standards, there has to be authentication. The Government should perhaps consider more seriously the concept of allowing firms to state that their products comply with specific safety regulations and particular standards, giving them the responsibility of satisfying their customers that these standards have been achieved on the understanding that if they do not they will be subject to heavy penalties, rather than in every case requiring a company to prove that a certain standard has been met, when many of the standards may not be concerned with the business of a regulatory authority, which clearly must be concerned with basic safety.

    It has been put to me that many of the prospects for growth in value added network servics are being frustrated by the specific licensing system. There is an argument for moving to a general licence which provides that one may use value added services and British Telecom's network for any legitimate purpose instead of applying for specific licences. It is suggested that the licence should permit the public network to be used generally for legitimate purposes and that it should be made impossible to use it for activities that are not wished to be undertaken by means of the network.

    On the front page of today's Financial Times there appears an interesting story that suggests that my right hon. Friend the Secretary of State for Industry is thinking along the lines of a report submitted by British Telecom to the Government last week that the organisation of BT should be given overall responsibility for laying all new cable systems to carry cable television programmes, computerised information services and video communications. Presumably it expects to be given responsibility for telephone communications as well. At the other end of the scale we are told that the technology advisory panel—ITAP as it is known—has argued that the private sector should have free range to lay cable systems. I am somewhat torn between them. I am not sure that either is the only solution.

    We have arrived at a crucial matter of principle and policy for the development of information technology. Even if it takes a few weeks—I hope that it will not take much more than a few months at worst—I believe that there is a potential obstacle to growth unless the Government, and possibly the House, come down quickly as to the way in which the cabling networks are to develop and what the physical environment and the rules of the game for organising them will be. I want to emphasise my view that the use of the networks should be seen separately from their provision. One organisation might do both, but that need not necessarily follow.

    I believe that awareness of the opportunities in information technology and the creation of demand by users still has a long way to go. I believe that part of that can be done by straightforward education, some of it by training and some of it by induction by whatever means, or even exhortation. I believe that the speed with which change is taking place almost outpaces the substantial improvement in awareness over the last year or two. That awareness relates also to job prospects in the sense of what people know about the possible scope for jobs. More people would go into that field if they knew that it existed. It comes back to career advice at school. It requires improvements in how the education people, whether at school, further education or university, keep in touch with the developments that are taking place in the wider world.

    We should be aware that not all other countries have taken the same approach to the liberalisation of their telecommunication bases as we have, I believe rightly. It gives this country a great opportunity to develop the techniques and products that will follow from that liberalisation, but other countries are not following the same kind of liberalisation. I believe that we should ensure that there are not equal opportunities to compete for PTT business in this country for companies from countries where our firms are not allowed to compete for such business. I am basically a free trader, I should like to see no such restrictions on trade, but if a country prevents others from bidding for their contracts on a simple straightforward basis, their companies should not be permitted to bid for ours.

    I am glad that the hon. Gentleman is endorsing planning, trade or import controls. Can he explain one of the difficulties to which his speech has given rise? First, he talks about the wonderful policy of what he calls liberalisation. I take it that he means selling off the profitable parts of British Telecom to the friends of the Tory Government. On the other hand, a little earlier he complained about the private sector battening down the hatches, not having any vision and not being able to develop because of the recession that the self-same Government have brought about. How will the selling-off process be a developing process if the private sector that he is relying on is in fact retrenching and not developing?

    I am afraid that the hon. Member for Keighley (Mr. Cryer) allows his prejudices to blind him to the realities and experience of the past. He must know—it probably happened in his constituency, as it did in mine—that when I was elected in May 1979 many people were waiting 18 months for a telephone. Few now have to wait more than a few weeks. That is just the sniff of the possibility of competition. The importance of what the Government have done by liberalisation is not the act of selling off any part of the public industrial infrastructure; it is what they have done by permitting others to offer those services. That is the most significant development.

    I believe that that will ensure that there are many sources of technical and commercial competence. Perhaps even more important, there will be enthusiasm and risk-taking to take advantage of the opportunities that unfold and not to leave them simply to the internal processes of British Telecom. However well-intentioned it may be, there are other sources of initiative and intelligence in the world—thank God, much of it in this country. I believe that that process is much more important than precisely who is involved. I have no objection to part of the operations being done by the public service, but I believe that the greatest opportunities will arise from the greatest amount of private initiative being taken by as many people as possible, including British Telecom.

    I hope that my hon. Friend the Under-Secretary of State for Industry will report progress on a number of initiatives taken by the Government to encourage the advance of information technology. I hope that he will say something about the effect of the CB legislation that has gone through the House. Perhaps he can help me with one local point, of interest. When our hon. Friend the Minister for Industry and Information Technology announced that a second wave of microtech centres was being considered I suggested that an excellent place for one of them would be in Fife. Can my hon. Friend tell me whether there has been any progress towards establishing such a centre in that area?

    The micro processing of application projects was, I believe, one of the best initiatives of the previous Government. I am glad that the Government have built substantially upon that initiative, but I believe that the initial project is due to run out during the next year. I hope that my hon. Friend can confirm that the Government see a continuing need for that project and that a more developed scheme can be expected, possibly with greater emphasis on telecommunications than in the earlier one, when more emphasis was placed on processing.

    I hope also that as part of the business of making more people aware of the opportunities in information technology the House will set an example. I spoke at some length on this subject some time ago, and I shall not repeat what I said. I hope that we shall hear from the authorities of the House something about the progress of the Library indexing system and the word processing developments that have been taking place, perhaps principally in the Clerk's Department.

    When it comes to the type of facilities which hon. Members can use I have come to the reluctant conclusion that it is almost impossible to do a work study project on a Member of Parliament—never mind a group of Members. I say that having tried to do it without much success.

    I have concluded that we need a pilot project in which a number of hon. Members on both sides of the House might participate to see whether we might make better use of some of the areas of information technology. I do not believe that we want to involve a vast number of Members initially, because many will not want to know about it. I think that some do, and I believe that many of us feel that there is scope, particularly in message handling, information provision and the searching for information for those techniques to be helpful. I hope that it will be possible in the foreseeable future to get such a project off the ground. Such a project among a limited number of hon. Members could produce statistics about the use that hon. Members would make of new technology, and that would give us some idea of the cost-effectiveness of such techniques.

    We have seen an explosion of technical and commercial possibilities. Britain leads in many of the relevant areas and we are capable of developing internationally at the front of many others. Many of our suppliers have been extremely competent, but we need to emphasise to all our suppliers that they must keep thinking internationally and should not look for only a narrow, cosseted safe market at home. Potential users still have much to do to provide the demand that would ensure better services and supplies.

    I address myself particularly to the top management of companies. They may be anxious and working hard to keep their companies going through difficult times, but if they are concerned with the long-term development of their companies they must find the time to look at the new prospects around them and to make sure that they are informed of what they can do for their firms.

    My plea to the Government is that they should increase the stimulus for the development of new techniques and that they must recognise the central role that information technology will play in industrial and commercial regeneration. I hope that we shall not regard new technology merely as a new way of solving old problems, useful as that may be. I hope that we will apply even more imagination to seeing how we can improve the lives of people everywhere in ways that have never before been imagined.

    4.22 pm

    I congratulate the hon. Member for Fife, East (Mr. Henderson) on bringing an important subject before the House. It is a pity that there was such a sparse attendance for his constructive contribution.

    Any supporter of a Government who have adopted policies that are primarily, though not entirely, responsible for the obscene level of unemployment is in a rather delicate position when talking about job prospects. However, the hon. Gentleman walked the tightrope with considerable skill and at least he did not fall off.

    The hon. Gentleman did not suggest, and I hope that no other hon. Member will suggest, that the alarming and rapid rise in unemployment is due, to any major extent, to the implementation of new technology. That is not true.

    The hon. Gentleman mentioned many of the important new technologies, but microelectronics—the silicon chip—is the most far-reaching, not least because few industries and jobs will not be affected by microelectronics, and the silicon chip will also have a major effect on our domestic lives.

    Above all, we must reject the view of the pessimists that new technology will inevitably lead to' permanent mass unemployment. We cannot accept that. I agree with the hon. Member for Fife, East that we have to learn to harness the new technology and exploit it, not only to stay competitive, but to secure a better quality of life, including working life, for all our people, higher living standards and more leisure through acceptable—I stress "acceptable"—work-sharing measures.

    There will be dramatic changes in the industrial and social life of our nation. Some jobs will disappear as a consequence of the new technology and many demarcation lines between jobs will have to go as old jobs become obsolete. But new jobs and new wealth will be created by the adoption of new technology.

    I wish to consider the manpower implications, because it is crucial that the Government, managements and trade unions understand those implications. We must consider not only the direct effects on employment and unemployment, but the methods of implementation. We cannot afford to miss the opportunities for development and I agree with the views expressed in the motion.

    However, I underline the necessity to secure change by agreement. That is crucial. There is an increased tendency in British industry towards greater participation and involvement in the decision-taking process at the place of work. That trend is not moving fast enough, but it is taking place, as we see from many of the agreements being made in British industry.

    The SDP has tabled an amendment on industrial democracy for tomorrow's Report stage of the Employment Bill. That way forward will greatly assist the introduction of new technology, but whether or not statutory requirements are imposed, managements would be ill-advised to seek to impose technological changes. They have to be introduced with careful consultation and communication with employees and with the most detailed consideration of the consequences for job security, pay structures and working conditions, including health and safety matters, which are extremely important.

    It is no use planning in the boardroom stratosphere and talking about marketing, the technicalities of the exercise and the financial rewards, while failing to consider the most important resource in any undertaking, which is the human resource. Any undertaking, whether in the public sector or the private sector, that falls down in that respect will deservedly hit trouble.

    I shall not take the time of the House by going into detail on many of the issues that we could discuss, such as the redesigning of jobs, retraining, redeployment, the effects on bargaining structures, wage and salary levels and so on. However, it is no good pretending that job losses will always be avoided. The hon. Member for Fife, East did not make that mistake.

    I hope that sensible firms will follow the example of those that have agreed employment security policies, under which companies and trade unions give undertakings that help to minimise the problems and strike fair and realistic bargains. If the undertaking has good labour relations to begin with, it is halfway there. It will operate in an atmosphere of trust and openness. I hope that in the debates in the House over the next couple of days that attitude will be taken on board more than appears to have been the case hitherto. We do not want counter-productive legislation in this important area.

    The hon. Member for Fife, East only brushed across another important area—training and retraining. Old skills will become obsolete and new ones will be needed. There must be a major training effort by the Government and industry and we need specialist skills to take full advantage of the technological breakthrough that we hope will take place.

    Two years ago NEDO reported a huge shortfall in computer-related skills and expertise in many other technologically based occupations. I understand that the position has not improved much since that report was published. Many firms are too often unwilling or perhaps unable, especially during the present recession, to do the necessary training. It is, therefore, all the more regrettable that the Government have wrecked the industrial training board system. I do not necessarily suggest that changes were not needed but the way in which the Government have gone about it hardly demonstrates their genuine concern for the country's technological future.

    The Manpower Services Commission has recently published its task group's report on training. In part one it says:
    "Prosperity and growth require invention, innovation, investment and exploitation of new technologies. They require the exploitation of new and growing markets to replace those that are declining. They require standards of production and service every bit as competitive, effective and reliable as those of our competitors.
    This cannot be achieved with an under-qualified, under-trained or immobile work force. It cannot be achieved if people resist change or cannot cope with it. Increased productivity means doing new things in new ways. This will require training and for young people entering work it requires proper vocational preparation."
    Those changes have been agreed by the TUC, the CBI and other represented interests. It is unfortunate that, in spite of that, the scheme appears to remain in some jeopardy because of the obduracy of the Secretary of State for Employment who seems to want to introduce an element of compulsion. He does not like that word. Perhaps I should say coercion. He cannot quibble with that. It seems that everyone except the Secretary of State is out of step on the matter.

    The element of compulsion to which the hon. Member for Islington, Central (Mr. Grant) refers is the provision in the scheme whereby a young person who does not wish to take part in the scheme should not therefore be eligible for any type of social security benefit. If we allowed a young person to be so eligible, there would be a contradiction, in that someone of full working age, who was perhaps offered an interview for a job but declined to go, would be ineligible for social security benefit. Following the hon. Gentleman's argument, the young person in those circumstances would be eligible. Is he suggesting, as a general principle, that a member of Society in Britain should have a choice to remain unemployed?

    That is not what I am saying. The hon. Member for Skipton (Mr. Watson) should read the task group report. It points out that employers, trade unionists and educational interests all say that the change is not desirable. It is a change. The benefit to young people of Government schemes is not dependent in the way that the Secretary of State now apparently wants to make it. I hope that the Minister will take note of that. He knows that the Secretary of State takes a self-righteous and self-justifying attitude in the House that threatens to undermine the major step forward for young people. The scheme is by no means the end of the road. We want to see much develop from it. It is, nevertheless, a major step forward. The Government have it in the palm of their hand to achieve the co-operation of industry and the co-operation and support of all hon. Members. The Minister should tell the Caxton House Galtieri to back down in the interests of everyone, especially young people.

    I shall now deal with shorter working time. I know the arguments about higher costs. Workers are understandably reluctant to share wages and salaries to increase the number of available jobs. Extrapolating from one undertaking to the nation, one cannot cut the hours of working without the risk of reducing competitiveness and, therefore, the number of jobs. We must also recognise that the equation is not simple. If it were, we would still be working 50 or so hours a week as we did at the beginning of the century. Some 50 per cent. of manual workers now work a basic 37 hour week or less. Other major industries, engineering for example, work a basic week of 39 hours. There are countless other examples. That process is true of other countries. There, the trend is in the same direction, and they face similar problems—competition especially. But if we are not to be the pace-setters we should not be the laggers. Although new technology might increase unit costs for the reasons that I have mentioned, if offers a means of cutting them and prices and, therefore, of increasing productivity.

    There are many permutations of shorter working time that should be examined more seriously than before. We could consider the nine-day fortnight instead of the four-and-a-half-day week. That approach would be advantageous both to employers and employees. There might be longer holidays, sabbaticals, voluntary early retirement—I stress the word "voluntary"—and we might deal with the vexed question of controls on overtime. Even in the present recession, much overtime is worked in some industries. That is worrying both employers and trade unions. No one is sure how to solve the problem. Perhaps it should be done on an industry-by-industry basis. Some countries have imposed legislative controls.

    I shall quote from a document produced by the TUC as a result of a conference on unemployment and working time. It says:
    "Only by giving greater priority to job security, job creation, reduced working time, greater leisure and more general improvements in the quality of working life can the climate be produced in which technological change is welcomed by workers rather than seem simply as a threat to jobs to be avoided at all costs."
    That is an unexceptionable statement. Most people would support it. It seems evident that manufacturing industry will become more technological. The trend has started and is strong. That is not necessarily a bad thing. Examining the record of agriculture, in 1800, 36 per cent. of the working population were on the land. That figure is now less than 3 per cent. No one would deny that agriculture is a highly productive and important industry. The big switch has been to manufacturing industry. The next big switch, which the statistics show is already happening, is from manufacturing to service industry. No one can assert that there is little to be done in either the private or the public sector.

    Service seems to be a dirty word in Britain. That attitude must change. One does not hear the phrase "public squalor" used much now, but there is still plenty of it around and there is massive scope for job creation in the service industries. New technology can help to provide much of the wealth that is needed to enable that process to take place.

    We desperately need economic growth. We need the right climate for technological change to take place. That does not mean more of the same old public spending cuts that the Government are introducing. Nor does it mean widespread import controls or withdrawing from the EEC—the formula advocated by the official Opposition. Both views are little short of counsels of despair.

    To inject a quick constituency note, unemployment in the borough of Islington, part of which I represent, has risen by 25 per cent. since the Government took office. My constituency is now part of a major unemployment black spot, with 21·8 per cent. of the economically active population out of work. That rate of unemployment is higher than in any other London borough. It is frightening and scandalous. Even so, I can find a bright spot. This week, the local papers reported that we have 70 firms that specialise in information technology in the borough. That must mean jobs. It must be good. However, the conditions in my area are not such as would lead one to expect cooperation over the introduction of new technology.

    How many jobs have been lost in Islington as a result of the high level of rates?

    I do not think that it is possible to give a figure, but there have probably been quite a number. Even more, however, have been lost as a result of the general recession. Although it is difficult to arrive at a figure in relation to the level of rates, there are figures for overall redundancies. From my experience in talking to employers, I have little doubt that the recession rather than the rates has been the greatest problem, although one cannot deny that rates in the borough have been a considerable factor.

    I mentioned earlier the link between jobs and incomes. I believe that politicians of all parties have failed the nation in the redistribution of incomes and wealth in this country. The Government still believe in a private sector free-for-all and arbitrary public sector curbs. The official Opposition cannot even bring themselves to mention incomes but hide behind phrases such as "national economic assessment". It is hypocritically selective to avoid upsetting supporters who will not face the economic truth about the role of wages and salaries in our society today.

    Having failed to deal with the fair redistribution of incomes, we must try hard to avoid a similar failure in what I regard as the necessary redistribution of work, which I believe must take place if we are not to continue to be a nation of haves and have-nots in regard to work. Dealing with this problem will mean taking on some very deep-seated vested interests and it may be every bit as hazardous as dealing with incomes.

    The real message to the Minister is that no Government can stand on the sidelines in this. I therefore welcome the motion and I urge the House and the Government to recognise what I regard as one of the most fundamental and disturbing but at the same time essentially exciting aspects of both economic and social policy. In the inevitably difficult years ahead, I hope that the Government will begin to measure up to the requirements in this respect.

    4.41 pm

    I welcome the debate and I congratulate my hon. Friend the Member for Fife, East (Mr. Henderson) on providing the opportunity to discuss this subject. I certainly recognise that his knowledge of the subject is far more exact than mine, as he has worked in information technology.

    The subject that my hon. Friend has chosen is highly relevant at this time of high unemployment. We must recognise that we can protect jobs only if we use advance technology to the utmost of our ability. As an industrial nation, we must be in the vanguard of technical and technological development. The consequences of not doing so are clear in the history of the shipbuilding industry. At the end of the war, Britain had about 43 per cent. of the world market for ships. We now have less than 3 per cent. We lost our share of the market not because we grasped the new technology but because we failed to make the most of modern technology. Our methods of building ships did not progress as fast as those of our major competitors in Japan and elsewhere. Nor did our working practices match the challenge. The simple result was that we lost the market because we did not keep abreast of developments elsewhere. If we are to save jobs, we have no choice but to become as modern as we can, as fast as we can.

    That gives the lie to the claim of the hon. Member for Islington, Central (Mr. Grant) that the Government are to blame for the loss of jobs. The overriding and most fundamental reason for the loss of jobs is that over the past 30 years we have ceased to be competitive with other countries. As a trading nation, exporting about one-third of all that we produce, we have no option but to remain competitive if we wish to save jobs.

    It does not follow that advanced technology must necessarily destroy jobs, as is so often claimed. That was certainly not the case in the past. In the eighteenth century, there were about ¼ million carters in the United Kingdom. When railways were invented and built at the turn of the century, the carters were fearful that the new railway would destroy their jobs. In the 20 years that it took to build the railways, however, some 2 million workers were employed on this gigantic task of civil engineering, and after the railways had been built some ⅓ million were employed to run them in their heyday. Yet there were still a ¼million carters, cab drivers and bus drivers plying to and from the railway stations. In other words, the new technological advance of the railways released and gave rein to the latent demand for travel and trade.

    Despite the technological changes of this century, there are still twice as many men in work in Britain today as there were 100 years ago. In the past century, technology has created rather than destroyed jobs. Therefore, there is no reason why new technology should not also work now to release a whole new range of jobs. Of one thing we can be absolutely certain. Jobs will be destroyed if, as a nation, we are not in the forefront of that technology. We must decide how we can successfully retain progress at that frontier.

    I believe that there are three basic areas in which we must succeed. First, there is a duty upon Government to provide the correct framework within which we operate and to assess the right level and direction of help For example, the Government have a duty to see that the economy is kept right. Only if inflation is reduced to a realistic level and profits are there to invest can we have the confidence in the future and the money to invest in the new technology.

    The Government must also assess the right level of Government assistance. It is nonsense to believe that they have no duty to provide some help for investment and research in the new technology. Certainly, that has been the plan so successfully followed in the sunrise industries in Japan and also in France. The problem is to promote the right kind of help in the right direction. I understand that about £3,000 million per year is spent on aid to industry, but that about two-thirds of that goes to prop up the old-established industries, those which were once the basic industries, such as the British Steel Corporation, British Leyland, British Shipbuilders and so on. Of course, there is a great argument for supporting those industries. Nevertheless, a substantial sum of money is being used for that purpose. That is in stark contrast with Japan, where most Government aid to industry goes to the modern, developing industries and assistance is not given to industries which saw their heyday in the past. The Government therefore have a duty to see that more help goes to the sunrise industries, and I know that they now recognise this. Certainly, my hon. Friend the Minister for Industry and Information Technology has succeeded in directing more funds into the new industries.

    In this context, will the Government also give more thought to the use and promotion of science parks? By having industries close to universities, this can help to bridge the gap between research and development and the market place, which is necessary if we are to achieve profits from new industries. I should be grateful to know the Government's thinking on that subject.

    Secondly, we must develop the skills to run such new businesses. Robots may do the work, but we need skilled people to provide "food and water" to keep those robots happy in the industrial scene. Nobody would doubt that there are shortages of skills in certain areas. That is very much an area in which the Departments of Industry, Employment and Education and Science should liaise to ensure the right educational background to develop the necessary skills.

    I too should like to make a constituency plea. Lincoln would like a centre for information technology. I hesitate to get in the way of my hon. Friend the Member for Fife, East so I will not ask for an immediate reply today as he has. However, Lincoln has advanced engineering. It has a modern Marconi factory. It is on the frontier of technology. I hope that the Government will consider favourably our plea for an information technology centre.

    Is not one of the most exciting aspects of such developments the way in which the most important advances are taking place in various parts of the periphery of Britain? That can be further advanced by the use of information technology.

    My hon. Friend has a good point. We must not see the problem in the isolation of our small constituencies. We want vigorous development throughout the whole of Britain. Scotland is a marvellous example of new industries going to an area which for some years has been industrially suppressed.

    Thirdly, we must have a successful and progressive management combined with a co-operative, sensible and constructive work force. That does not necessarily concern the Government. The hon. Member for Islington, Central stated the importance of that. A concrete example of what can be done is provided by an advanced engineering factory in Lincoln, Smith Clayton Forge, a subsidiary of GKN. It has invested £10 million in a brand new forge, which is, without doubt, one of the best in the world. It has a tremendous potential for earning export orders and for providing high quality products on time anywhere in the world. That investment went ahead because management and unions worked closely together, even before the building was begun, to see how it would work in practice. The whole business deserves great praise for that. For example, it was agreed that there should be no restrictive practices in the running of the forge. Therefore, it will be an efficient forge from the word "Go". Each shift is a team, and the members of that team are capable of doing nearly all the jobs in the forge. They move around from job to job so that they do not spend all day at one job. The forge is worked with the greatest efficiency and flexibility and everyone appears to be interested and involved in the work.

    That approach enabled the forge to be built. Without such an approach it would not have been built at a time of recession when orders were scarce. When it gets under way it will provide competitive goods on time anywhere in the world. By investing in advanced technology the forge has not created jobs, but it has defended the jobs already there for coming decades. It will ensure that the business will continue in Lincoln, providing opportunities and jobs and helping the community.

    This is a clear example of the most important aspect of coping with the new technology. We must have good management and good employee involvement especially as the new technology inevitably breeds fears. Without that, none of the other requirements can possibly work. Therefore, I was glad to be a sponsor of a Bill introduced by my hon. Friend the Member for Kidderminster (Mr. Bulmer) which provides that all businesses should say in their annual reports what has been done over the past year to help to involve employees. I hope that the Government will give their support to that Bill when it comes before the House.

    To sum up, the Government need to support sunrise industries and to put money behind them. Secondly, we need the skills that will make those new investments and businesses work properly. Thirdly, above all, we need good management, constructive employees and involvement at all levels. Given that approach, I am confident that technology can be harnessed for the promotion of employment and prosperity. As a nation we have a natural resourcefulness and ability, and there is no reason why we should not succeed.

    4.55 pm

    I believe that this is the first time that the Under-Secretary of State for Industry has sat on the Front Bench and I should like to congratulate him on his new post. At least he has been asking questions about this subject from the Back Benches. As we know very well, Back Benchers who ask recondite and learned questions often do not land the jobs. However, the Minister seems to be an exception and I am sure that he deserves the job.

    I take the opportunity to ask the hon. Gentleman some recondite questions. If he does not have all the answers now, I hope that he will write to me. First, what will happen about the Sherfield Committee on Science and Technology? If my memory serves me correctly, there was an undertaking during the Consolidated Fund debate, in answer to the hon. Member for Havant and Waterloo (Mr. Lloyd), that the Government would make recommendations in answer to the detailed recommendations of the Sherfield committee, in which Lord Todd and others played a prominent part.

    I can understand that the minds of senior Ministers have been on the South Atlantic rather than the more arcane matters of science policy. Nevertheless, what is the Government's thinking, and will there be a response before the end of July to the report, on which the Lords involved spent a great deal of time and work? I attended many of the sittings, and they really did work at it. It would be a bit of an insult to them if they were not to get a response, although the Government may not agree to all the recommendations that were put forward. Therefore, my first question is, what will happen about the Sherfield committee report?

    Secondly, I should like to raise the issue of biotechnology, and more specifically, the question—it is a minefield—of patent law. I will not go over the whole saga of Cesar Millstein, his work in Cambridge and the fact that it was not patented. Much of the commercial benefit that will undoubtedly come from monoclonal antibodies will be developed in Japan, France and particularly the United States. I should like to express the somewhat lay opinion that it is difficult to patent a living organism. One begins to wonder whether patent law, which could have served Britain and other European nations well in the last century, is relevant in biotechnology. It is a fast-moving field.

    It is difficult to carry out any kind of sensible patent law in front of lawyers—whatever their other merits—who are not competent because of their lack of training in this field. I speak as the son-in-law of an appeal court judge and I do not run down lawyers, but the truth of the matter is that few people sitting on the Bench can give an informed assessment in patent cases concerning micro-organisms. My hon. Friend the Member for Norwich, South (Mr. Garrett), who is on the Opposition Front Bench, will recollect that he and I, about three weeks ago, went to the excellent John Innes plant breeding research centre in his constituency. It was an extremely interesting visit. Professor Hopgood, Professor Woolhouse and others there made the very same point and confirmed that there is a problem.

    What is to be done about the whole issue of patent law? Has the time come when we can say to the Patent Office and others that patent law in this field is no longer relevant? It would, of course, have to be a matter of international agreement, and I do not pretend that it would be easy, but certainly the question should be asked.

    I want to put a further question about biotechnology. It concerns the use of certain national assets in Britain. I do not know whether the Minister has had a chance yet to go to Imperial College, particularly to the department of biochemistry there, and to visit Brian Hartley and see the enormous machine that was put there by the late Sir Ernest Chain, the greatest man ever in getting industrial funds in this field. Nevertheless, the upkeep of that vast biotechnology unit means that there is a great deal less money—at least in the department's imagination and probably in reality—for other professors at Imperial College in their departments. The important question, which can be repeated in other areas, is whether very expensive items, which for reasons of history have been placed in certain universities should be funded as if they were the national assets that indeed they are.

    Before I leave the subject of biotechnology, I want to refer briefly to the development of certain medicines, and in particular to the very great problems confronting those of us who are interested in kidney failure and renal dialysis. Not only from the work of Mrs. Elizabeth Ward and others of the kidney patients but from the work of the Royal College of Surgeons, it is clear that doctors are having to make the most appalling choices as to who goes on the machine and who does not. The cost of a machine is about £14,000 a year. Those dreadful decisions as to who is to die and who is not have to be made because of the shortage of funds.

    Greater effort in finding drugs and techniques to make dialysis, or its equivalent, a bit cheaper, is an absolute priority. On seven occasions I have tried to bring in a Bill which would enable hospitals to take the organs of anyone who has not contracted out during his or her lifetime, so I speak with a certain feeling on the subject. The question today is not the reform of the Human Tissue Act 1961 but what priority is being given to the various medical and scientific developments which could at least alleviate the problems involved in kidney failure.

    The Association of Scientific, Technical and Managerial Staffs and others of us are concerned about the future of the Genetic Manipulatory Advisory Group—GMAG.I hope it is not true that anyone is thinking of running down GMAG, because it has most important functions—indeed, additional functions—to carry out in health and safety. If biotechniques are to be developed, the public should not be deprived of certain safeguards.

    I am very much against the scaremongering in relation to biotechnology, genetic manipulation and genetic engineering. There is a great deal of scaremongering and many inaccurate horror stories have been produced in the last few months about the dangers of genetic engineering. Genetic engineering could bring about a great deal of good for mankind, but proper consideration will have to be given to safety. I am not sure that Bill Simpson and the Health and Safety Executive are the right people to do it. The role of GMAG in this respect, with Professor Williamson and others, is very important, and I hope that no one will undervalue the importance of GMAG. Some of us will be taking part in a delegation next Thursday to the Ministers concerned with the question.

    I come back to a subject that was raised by the hon. Member for Fife, East (Mr. Henderson), and we are grateful to him for raising it. I speak on a constituency basis. Livingston has the good fortune to have Nippon Electric coming to it, with its formidable reputation, not least in management techniques, but a number of my constituents wonder whether vast amounts of Government money should go to one of the most prosperous firms on the face of the planet.

    Incoming firms, especially those coming to central Scotland—and perhaps to areas such as Lincoln and Norwich, which are developing advanced technologies—are unfairly advantaged in relation to firms which have gone through the heat and sweat of the day and might expand if they had the same advantages as incoming firms. I mention that problem partly in the context of concern about the Scottish Reactor Group and why it seems to have to run down.

    The question of postgraduate and post-doctoral training is urgent. The age profile in many science departments is downright unsatisfactory. There are distinguished departments of physics which have not been able to appoint new posts or to bring in new blood since the early 1970s. The department of physics at Hull university does distinguished work on laser technology and the identification of malignancy in cervical cancers. It has not been able to appoint a new member of staff since 1969. Any Minister answering a debate such as this ought to be able to give some hope that one leg of the stool that we call the dual support system—university academic science departments—will not have to suffer a hardening of the arteries. Some kind of healthy age profile of departments must be maintained.

    I take the opportunity, on a constituency basis, of referring to a training establishment that I believe to be profoundly valuable not only to Scotland but to the north of England. This concerns the proposed closure of Motec at Livingston. Motec is the industrial training centre for the road transport industry training board. The idea is that, because of cuts in the RTIB, there will be only one centre left—that at High Ercell, in Shropshire, on the Welsh border. There is a possible closure of £2 million worth of buildings and £4 million worth of equipment purpose-built. Enormously valuable work is done there for apprentices. The centre provides the kind of training that small garages cannot possibly give. It has a wonderful record of success in the external City and Guilds examinations. It is mad for a technical society to think of closing down a place such as Motec.

    I have been to see the Minister responsible, the Under-Secretary of State for Employment. I have raised the question with the Department of Transport. I have even—most unusually—raised it with the Prime Minister in some detail. The RTIB will be having meetings at the end of the month. Will the Minister, in the full flush of his enthusiasm, please give his attention to the question of Motec at Livingston? I am not asking for an answer today but I ask him to involve his Department.

    Finally, I want to refer to a question which must concern us all. It is a very narrow aspect of the Falklands issue. What will happen to advanced British industry if what started as farce, became an episode, and is now developing into a major calamity, is allowed to go any further? Part of the calamity is the effect on our advanced industries, not least the arms industry, of the loss of South American trade. It could be said that all the other advanced countries are co-operating in imposing sanctions. I wonder. Siemens has told the German Government that it has no intention whatever of breaking its trading links with Argentina. If anyone thinks that the advanced engineering and chemical firms in Italy will impose any kind of boycott or trade embargo, he should think again. I simply do not believe it.

    Furthermore, the evidence of the problem of the technological industry in Britain being disadvantaged comes from people who are no particular friends of the Labour Party. I shall start with Baring Brothers, the bankers. That bank is extremely worried that the links that it has built with South America, financing technically-advanced products, could be jeopardised, not only in Argentina but throughout the Latin American continent. If this folly goes any further, and if anyone were to put a missile or a bomb on the Latin American continent, let there be no misunderstanding that the effects will ripple round the whole Hispanic world. The Colombian ambassador told some of us that if that were to happen, Colombia, in his opinion, would break off diplomatic relations. The Venezuelan president made it clear to our ambassador in Caracas that if——

    Order. I hope that the hon. Gentleman is not going further into a debate which we had last Thursday and which no doubt will take place again. Today we are debating technological matters, and the hon. Gentleman was in order when he was discussing that subject.

    In that case, I shall go back to the subject, to the Bank of London and South America. It is financing, as it has done for many years, advanced technological trading with South America. I speak as one who had the good fortune to lead the IPU delegation to Brazil in 1975. We went to the Embraer aircraft factory at Sao Paulo and also to the space centre outside Sao Paulo. Some people have the impression that South America is not a very advanced place. In Argentina, 37 per cent. of the gross national product goes on industry, which is exactly the same percentage as in the Federal Republic of Germany. In many ways we are dealing with relatively advanced technological societies and trading with them on that basis.

    That is why I am concerned lest, as a result of the Falklands issue, into which I shall not stray, the technological links that have been built up and financed, and which flourish and give employment to people should be jeopardised, not only with Argentina but with the whole of Latin America. It would be an abuse if I were to pursue the matter further, but I cannot emphasise strongly enough that, if this tragedy were to escalate, the effect on the technological and industrial wealth of Britain would be enormous, and would represent both an existing and a potential loss. The irony is that the trade links with Latin America at a technological level were looking very rosy, and were expanding.

    5.14 pm

    I defy anyone to think of a subject that might come before the House on which the hon. Member for West Lothian (Mr. Dalyell) could not raise the issue of the Falkland Islands. I shall not pursue the matter, but I congratulate my hon. Friend the Member for Fife, East (Mr. Henderson) on raising this debate. It is one of those matters that are either shoved into the quiet time, as is happening now, in terms of numbers of hon. Members present, or are debated late at night, but it is one of the most crucial matters affecting the country.

    The effects of the technological changes which the country and the world now face will continue, whatever the Government do. Clearly, they are unstoppable. The advertisement of one of the unions—I forget which—contains the phrase

    "Ignore the chip and your job will go away".
    This kind of attitude that is displayed when discussing the subject ignores the fact that there is a momentum here with which we have to live. The question that we must ask ourselves is: how do we deal with it?—not whether it will deal with us.

    There are some long-term trends which we should remember. There is a danger in dealing with the subject, because it is currently fashionable. We can all get away with the odd quick references in speeches to technological changes, how we can hope to get jobs from the computer industry, and so on, but we have to adjust to the long-term trends.

    Let us consider employment. In this century, the number of people in jobs has continually grown. There has been an even larger growth in the number of people seeking jobs. A study done by the Cambridge economic policy review showed that in the 20 years or so before 1977, about half the increase in the labour force was absorbed in new jobs and about half found its way into the unemployment list, whether registered or unregistered. Long before we started talking about information technology we were beginning to see the effects of substantial changes in the employment pattern, in the continuing increase in the number of people coming on the market. One example is married women. Over 50 per cent. of married women are now in work. We must add to that the number of people coming onto the market—people leaving school, and so on. In the next five years we shall have to find jobs for another 1 million people seeking jobs, while in the past few years about 2 million jobs have been lost.

    It is therefore not surprising that there is much depression about the introduction of new technology. It is particularly valuable that my hon. Friend has chosen this subject for debate, because it gives us the opportunity to consider the main burden of his speech and that of the hon. Member for Islington, Central (Mr. Grant), which is that we tend to talk about technologies in a negative way, as the union advertisement demonstrated. The new technologies, like the old ones, have produced, are producing and will continue to produce many new jobs. They will adapt things with which we have become familiar, such as computerised washing machines. They will produce scope for things that we have not had before, for example, holidays on the moon. In the process they will enable us to give ourselves more leisure and thus switch to new jobs, for instance, in the service industries. All that will be going on at the same time.

    The paradox is that the people who gain are not the same as those who lose. My hon. Friend the Member for Fife, East cited a study that showed—as I fully accept—that a company that adopts the new techniques gains a competitive advantage. Its market share increases, its workers' jobs are safer, their incomes probably rise and their hours of work may fall. Such things happen, but those who are not in that company and who are perhaps on the unemployment register, suffer. The paradox is that although we cannot save our jobs unless we adopt the new technologies—because we shall cease to be competitive—a person cannot necessarily save his job if he does adopt the new technology. That psychological problem is important. It is one of the few areas in which the Government can have an effect. As my hon. Friend the Member for Lincoln (Mr. Carlisle) said, the Government can have some immediate and practical effect, because they are heavy purchasers of technology and can pump money into technology instead of holding up the declining industries. As he rightly said, it is extremely encouraging that my hon. Friend the Minister for Industry and Information Technology has been switching Government aid from the older to the newer industries.

    The Government can do that type of thing. Indeed, only the Government can take a hand in some other matters. Many of the developments that will and should happen are dependent upon hundreds of different decisions by hundreds of different firms. Those decisions are essentially scattered. However, it is the Government who will have to pick up the tab for the social implications.

    I have always regarded new technology as an opportunity. It is ridiculous that we should praise ourselves for the amount of work that we do. We spend more hours at work than almost any other country, except Japan. We expect someone to leave school at 16 and to work until he is 65. Therefore, he is at work for about 50 years. The average expectation of life is 72, so that person may retire for seven years. He will work for 50 years, live for seven and die. We do not wish to encourage that balance of life. Therefore, when we discuss increasing retirement prospects and shortening working hours we should not do so as if such ideals should be hidden away as undesirable. They are not. We should be proud of such ideals and work for them.

    The National Institute of Economic and Social Research has made an effort to work out what has been done with the increased productivity since the war. It estimates that about two-thirds has gone into increased output and about one-third into shorter working time, greater leisure and so on. In other words, about one-third has gone into improved working conditions. If we steered Government policy towards that area we would have a major selling point, particularly for those who are most likely to be affected.

    I wish to draw attention to two factors: first, retirement, and, secondly, the geographical spread of jobs. I am convinced that, like it or not, the country will stagger towards a reduced retirement age. We should be greatly helped if we decided that that was what we wanted to do and if we worked towards that in stages, announced in advance with the maximum co-operation. I understand that at current rates it would cost about £1,800 million a year to reduce the State retirement age for males. Obviously we could not do that at once, but we could work towards it.

    We are a long way from solving the problem of the transferability of pensions. An enormous injustice is done to those who are declared redundant for one reason or another and who then have their pensions frozen or transferred, losing greatly in the process. If people are expected to change their jobs more than once in their lifetimes, we must face the implications both for their families and for them. Private companies cannot do much to help. However, Governments can and should start to rethink how best the new technologies can be used to reduce the retirement age and make it easier to retire earlier.

    Over the years regional policy has been coloured by a good deal of humbug. We pump money round the country, but the fact remains—and will remain—that the greatest single factor affecting the distribution of jobs is the continuing attraction of London as a capital in more than one sphere. That has been illustrated in many ways. 'The case that sticks in my mind is that the Location of Offices Bureau found that 90 per cent. of all relocations occurred within 80 miles of London. That was as far as the companies would go.

    That situation cannot be changed overnight. However, one interesting aspect of the new technology is that people can now conduct similar businesses without physically transporting themselves into the same centre. When the Government and large companies introduce such new technologies, they should ensure that there are centres in different parts of the country. I do not think of the jobs sent to Newcastle where all the clerical jobs will shortly be computerised out of existence, but of the jobs—whether or not managerial—that will remain. If we set ourselves the task now, the new technology can help us in that way.

    I shall not elaborate my argument now. However, I reiterate the essential point that I have highlighted by my examples. It is useless to pontificate about the advantages of the new technology to those who will lose their jobs and who see no chance of finding another one. That would he to whistle in the wind, which will do enormous damage to the introduction of new technologies and to the advantages that the country can reap. It is essential to consider the psychology involved and to find ways in which the Government—in encouraging the introduction of such new technologies—can explain how the people can benefit.

    I shall cite one sad example. The Times undertook a survey of unemployed people below the age of 24. They gave the introduction of new technology as the fourth most important reason for the misery of their lives. The survey covered why those young people thought that they had no prospects of getting a job and why they were unemployed. If the young have got that into their heads now, the prospect of introducing such new technological changes will be endangered.

    The Government can undertake the function of explaining how people can benefit. I hope that they will now begin to think about the advantages that can accrue and begin to sell those advantages to the firms that adopt them, forgetting the side effects.

    5.29 pm

    The Labour Party welcomes this debate and congratulates the hon. Member for Fife, East (Mr. Henderson) on raising the matter. It is a crucial issue of national policy. We welcome the new Minister to what we believe to be an important job.

    We approve of the motion. It would be hard not to. There is clearly a need for improved job prospects through the rapid development and use of advanced technology, for British businesses to grasp those opportunities with greater urgency and for the Government to pursue policies to "remove obstacles to growth" and stimulate the development of new techniques and products. Much depends on how one defines Government action to remove obstacles to growth. The Labour Party has made the point many times that a main obstacle to growth in the use of new technology is the lack of growth in the economy. If the Government take the reduction in inflation as their main objective and use monetarist policies to achieve it, which means restricting credit and cutting public expenditure, growth is bound to come to a full stop. The index of industrial production, which stood at 104·6 in 1979, fell to 88·9 in 1981. It is very difficult to spend money on new technologies and invest in a declining market, as the hon. Member for Fife, East said.

    When the CBI recently considered the restraints on growth and technological advance, it picked out the recession in trade, which is worse in Britain than in any other country in Western Europe—a home-made recession added to the world recession—the high exchange rate of the pound, the inadequacies of Government assistance and difficulties in raising development capital, most or all of which the Government could do something about.

    The motion emphasises job prospects. We agree with that, but it is clear that the sort of new technology that we must foster in Britain must have a high job creation content and a low import content. For that we need a positive plan by the Government because, whether or not they depend on private enterprise to create the technology, the Government must cope with the unemployment and the changing patterns of employment that result from the introduction of new technology. The Government appear to us to have no discernible overall strategy for advanced technology, nor have they given much thought to the effects on employment. The hon. Member for Islington, Central (Mr. Grant) and the hon. Member for Manchester, Withington (Mr. Silvester) said that we can go on spending on new technologies or removing obstacles to their growth, but we must cope with the human effect of the massive unemployment that is likely to happen in our old-established industries, in office employment for the first time, and right across the scope of employment. We do not see the Government preparing in any way to cope with those changes.

    The Government are spending much public money on information technology and we welcome that. On the other hand, as The Economist said on 27 February
    "The university cuts are mortgaging Britain's technological future."
    In addition, it is now clear that the Government are reducing their successful programme of research into wave energy and cutting support for wind, solar and geothermal energies. Biogen, the American world leader in biotechnology, said recently that it would not locate a laboratory in Britain because of cuts in university spending. In robotics, Government funding is so low that we are lagging far behind our competitors in practical applications. In manufacturing technologies, the abolition of the research levies for the furniture and wool textile industries means that centres of innovation are being run down. We should sometimes stop to think not about Concorde or atomic energy programmes—high-spending, massive prestige projects—but about improving our manufacturing processes in such long-established industries as furniture and wool textiles. However, we are running down the research levies and thereby reducing our competitiveness.

    In some areas in which we excel—for example, fibre optics for telecommunications transmissions—we are likely to lose our lead because of the Government's dislike of public enterprise and their refusal to accept the role of British Telecom in providing the infrastructure for the new sunrise industries based on microelectronics. Where we should have a strategy, we have a series of ad hoc decisions and a snowstorm of press releases from the Department of Industry.

    We have known for many years that our national research and development effort is eccentrically distributed. The House will recall the work of Sir Ieuan Maddock, who used to be the chief scientist at the Department of Industry, showing that a remarkable proportion of our national research and development went to nuclear power generation and civil aviation, from which there was a very low return in exports. He used to compare the distribution of our research and development effort with that of Germany, which is heavily oriented towards the machinery industries, or with Japan, where it is heavily swung towards vehicles and electronics. We were spending much of our national research and development on product areas for which world exports were relatively low. Yet the Germans and the Japanese were backing up their export efforts with direct investment in research and development in high growth areas.

    There is no real evidence that that has changed. Today we still need to match our research and development to potential world demand. One of the best examples is the research and development into alternative energy resources. We lead the world in research into wave power, yet the programme seems to have been cut by 30 per cent. At energy questions today it was not clear what had happened to that research programme, but it appears from all the external evidence that we can gather that it is being cut by about 30 per cent. That was made clear at a recent meeting of the Advisory Council on Research and Development, when it became known that the wave energy programme manager had retired prematurely, apparently because he was fed up with the way in which the Government were handling the work.

    Wind energy work will be confined to just two sites in Wales and the Orkneys, with no new work started. Consideration is to be given to closing down the geothermal work presently carried out in Cornwall, and there is to be no further work on solar energy. Perhaps the Minister will tell us about the status of those programmes. Is it true that they are being run down to the degree that I suspect? The new energy process, especially wave energy, could provide tens of thousands of jobs in the equipment-supplying industries, for which a world market is rapidly growing. Yet we appear to be throwing away our lead, and not for the first time.

    One problem in producing a development strategy is the constant discontinuity between the activities or policies of the Department of Industry and those of the Department of Education and Science. We try continually to bring that out in questions, in comments on ministerial statements and in such debates as this. The Economist said
    "Britain's high technology industries risk being left in the cold for lack of qualified manpower†Altogether, some 47,000 student places are being chopped from higher education in a country that already trails behind most of its industrial competitors in the proportion of youngsters it educates beyond age 18; that lags in the share of its workforce doing R and D; that suffers a shortage of the high-technology skills so essential in the sunrise industries.
    According to Mrs. Thatcher, the annual cost of a student averages £5,700, while an unemployed person of student age (living at home) costs the public purse only £1,100 in benefits. Dubious sums, and not only because the marginal cost of extra students can be much less than the average cost. This is a big reason for the Government to turn a hearing ear to any university or polytechnic with proposals for training extra students cheaply. It is true that Britain lags even more appallingly in the number of apprenticeships it offers, but it is now managing both to cut and expand its training in all the wrong places at once."
    We have had the example of Salford university and I am glad that my right hon. Friend the Member for Salford, West (Mr. Orme) has joined me on the Front Bench. Salford university specialises in technology. The University Grants Committee proposes to cut 40 per cent. of the grant and 30 per cent. of the students from an institution that the managing director of GEC-Marconi Electronics Ltd. described as second to none in its contribution to industry in its region. It produces 2,000 electronics engineering graduates a year. The United States of America produces 14,000 and, under present plans, its output of electronics graduates is about to decline.

    I used to quote the example—I do not know whether it is still true—that Britain produces more graduates in Welsh than in production engineering, which gives us some idea of the priorities of our education establishment. NEDO has referred to a massive shortage of skilled people—around 20,000 in computer skills—yet the MSC under its new expansionary programme plans to produce only 5,000 skilled computer people a year.

    One shortage that has been drawn to my attention, which is of great consequence to the schools computer programme, is the lack of lecturers in computing at teacher training colleges. As I understand it, London university's institute of education has no permanent post in this field. Who, then, will train the teachers to show the pupils how to use the small computers that have been dropped on schools all over the country?

    Another example of shortages of newly skilled people is that in 1981 we trained 10,300 engineering apprentices, the lowest figures since records began and one which compares with 25,000 a year in the 1970s. Thus the output of apprentice engineers has halved. Sixty per cent. of German workers have skilled training and qualifications under a formal training scheme whereas in Britain today the figure is less than 25 per cent. There is no plan to coordinate the efforts of the Department of Industry, the Department of Education and Science and the Department of Employment in producing technologists.

    I know that there is a great deal of friction between the Department of Industry and the Department of Education and Science on this issue. The Department of Education and Science is cutting back on the sources and provision of the skilled technologists of the kind we need for the Department of Industry's information technology programmes to proceed. Already there are bottlenecks.

    To its credit, the electronics Neddy has produced a strategy for growth that is certainly needed. A trade surplus in electronics in 1975 of £100 million became a deficit of £300 million in 1980 and more than that in 1981, with the bulk of the deficit in information technology. This strategy, produced by the Neddy with the agreement of all sides within the industry, called for selective assistance from the Government, and a more effective public purchasing policy. It asked that the Government should require multinational companies to produce more information on their activities, including transfer pricing and encourage them to use British suppliers. It also said that the Government should be more willing to support individual projects.

    Perhaps the Minister will give his reaction to this important initiative which was set out in the NEDO document "Policy for the UK Electronics Industry". I understand that the Minister's boss in the Cabinet was not impressed by it. We wish to know why. Reports from the Advisory Council for Applied Research and Development make much the same point. It accepts the central role for the Government in the promotion of new technology, but refers to our national effort as chaotic. The NEDC report on industrial policies in Europe, of October 1981, addressed itself to a comparative study of Government policy towards the new technologies. It examined Britain, France, Germany and Italy and other Western European countries. The report made the following observation:
    "Fibre optics, viewdata terminals, semi-customised integrated circuits, telecommunications networking transmission equipment and radio communications are all areas where the United Kingdom has a good basis for commercial success which may well slip away without positive policy support."
    The report repeated criticisms of our national education and training which have been made for a long time:
    "For over a century our educational system has, in comparison with other countries, been strongly biased against applied scientific and technical training."
    The report spoke of our record on innovation:
    "The United Kingdom seems less able to bring about profitable commercialisation of new ideas."
    The report even repeated what Lyon Playfair was saying in the 1860s but it repeated precisely what Neddy itself had said a couple of years before in "Industrial Performance" of January 1980:
    "Nevertheless, for the most part, the rate of take-up of the new technologies compares unfavourably not only with the USA and Japan, who are in the vanguard of these developments, but with other industrialised countries, such as France, Germany and Sweden and also with newly industrialising countries."
    The main problem in this area today is work on the so-called fifth generation of computers, the expert, knowledge-based systems in which we are as far advanced in Britain at Manchester university, Edinburgh university and Imperial College as anywhere in the world. The Japanese have shown much interest in the work of these three great centres of excellence and the Japanese consider them to be in the forefront of development. The Times said recently:
    "It is not clear if any Government agency has serious plans for harnessing their talents."
    The Government have mounted a study, which will lead to a further study in the summer, of our place in the fifth generation of computing. The Japanese are already setting up an institute for the fifth generation. When will we have a decision from the Government on how they see fifth generation computing and its place in national policy?

    Britain's Government funding for the computer industry is half that of France, one-quarter that of Germany and one-sixth that of Japan. The French Minister of research and technology announced this month that information technology will be given strategic priority in French industrial policy with a virtual doubling of research funding and the creation of 200,000 jobs.

    Our investment in telecommunications last year was £18 per head of population, compared with £30 per head in West Germany, £36 in the United States and £52 in France. Yet expenditure on our new wide band telecommunications network, about which the hon. Member for Fife, East spoke, would enable us to determine the technical specifications for ancillary and terminal equipment. Imports of peripheral equipment, printers and terminals, rose from 60 per cent. of our home market to 66 per cent. in one year—last year. Foreign imports of computers are now running at 80 per cent. of domestic demand. With ICL, Sinclair and Acorn we have the capacity to innovate, yet our home market is being cut away from beneath us.

    Ministers blame the private sector for not responding to technology. The Minister for Industry and Information Technology issues awful warnings. He says "automate or liquidate." I thought that that was a detergent slogan at first. Industry says that the Government are not setting a proper lead. They do not know where they are going. We want priorities and plans from the Government for information technology, robotics, biotechnology, telecommunications and new energy sources. We want all such strategies to be aimed at creating jobs, supported by a coherent strategy for education and training.

    I was appalled at a lunch last week when executives of a leading information technology company talked of their despair over their dealings with Department of Industry officials. The officials were generalist administrators, changing jobs every two years, as usual. They were totally unfamiliar with the technology. I felt as though I was back in 1966, when I conducted studies for the Fulton committee on the Civil Service. I found precisely the same Oxbridge classicists were running Government Departments in what were supposed to be technical areas, changing jobs at two-and-a-half year intervals, and were endowed with the extra special skill of being a generalist—that means knowing nothing about the technicalities of the subject. There is a tradition of the expert on tap but never on top. Major public policy decisions are being made by the mandarin——

    Does my hon. Friend accept that some of us at that lunch thought the attacks on officials were unfair and that they were made out of self-interest on behalf of an American company? Those of us who deal professionally with some of the Department of Industry officials think that they act in the public interest.

    I am saying not that they do not act in the public interest, but that they are not experts. There is plenty of proof of that. One has only to note the intake every year of administration trainees into the Civil Service for top management jobs. They are more socially exclusive as to background, to university and arts degree subjects than they have been since the war. That is a well-known phenomenon. I do not understand why my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) should be so upset about it. I see no harm in an American company pointing out the weaknesses of a Department in relation to strategies for information technology. British companies have been saying the same for donkeys' years.

    What is the Minister trying to do about the talent in his Department which is capable of giving the country a national strategy for new technology? Does the Minister believe that his Department has the capability to meet the demands of the motion? I have strong doubts. I doubt whether Government have the political will to go in for the planning system, for strategy setting for the nation as a whole. I also doubt whether they have put their own house in order to ensure that we have the Civil Service that is capable of governing and managing the information technology revolution.

    I am grateful to the hon. Member for Fife, East for raising this issue. He spoke mostly about information technology. Other hon. Members have spoken about biotechnology and new developments in medicine. The Minister should co-operate more closely and he must ensure that his Department co-operates more closely with the Department of Education and Science to provide the skilled manpower that we need out of our educational system, and with the Manpower Services Commission to ensure that we have the technological skills that we need.

    5.50 pm

    May I endorse the gratitude that has already been expressed to my hon. Friend the Member for Fife, East (Mr. Henderson) for his percipience in putting this subject before the House today? It gives us an opportunity to cast our thoughts upon it, and, more specifically, to review the assumption that has normally carried sway on both sides of the House for the past two or three years, that unemployment can be reduced if only we can get the economy moving again. The classic question seems to be: "Can economic recovery be effective in reducing unemployment?". Very few people tend to look further than that question. For a number of reasons that assumption has been highly questionable for the past two or three years.

    First, this year, 900,000 people will reach school leaving age but only 600,000 people will reach the normal retirement age. Therefore, if we neither create nor remove any further jobs, unemployment is likely to increase by 300,000. Secondly, productivity in Britain is now increasing at a rapid rate—10 per cent. last year—and unless our productivity increase is at least matched by our production increase, the immediate effect will be an increase in unemployment rather than the reverse. Many manufacturing concerns in Britain are operating way below their level of capacity. The latest estimate from the CBI is that 15 per cent. spare capacity currently exists in British industry.

    Thirdly, I turn to investment intentions. When I speak to companies in my constituency that are considering investment over the next six months it seems that, almost without exception, they are considering investment in new machinery that will produce more goods but will employ fewer people to do so. I am not speaking against productivity. All I am saying—this is in acknowledgement of what my hon. Friend has already said—is that productivity increases alone, unaccompanied by production increases, can lead only to an increase, temporary though it might be, in unemployment. Therefore, anyone who says that simple economic recovery will be instantly effective in causing unemployment to fall is expressing a simplistic thought.

    A more sophisticated question, and one that has been addressed in this debate, is: "Can economic recovery, coupled with national initiatives on training and on technological investment, be effective in reducing unemployment?". On the face of it, they can be. That is a much more sophisticated and better question. Certainly, there is a need for training that has been dramatically demonstrated over the past 18 months. When 250,000 job vacancies occur each month and when the Manpower Services Commission estimates that 40 per cent. of those on the unemployment register will have been out of work for 12 months, we have a fair indication that we are lacking in Britain the flexibility that we need in our skills and training in order to make the best of things. We need flexibility not only in skills and training but, as my hon. Friend the Member for Manchester, Withington (Mr. Silvester) mentioned, in the transferability of private pension schemes, in our housing system and so on.

    There is clearly a need for much greater training than has been applied until now. But greater training alone, allied to an increase in economic activity cannot be effective in bringing down unemployment. Training people does not directly create jobs. It may make us more competitive as a nation and, indirectly, lead to the creation of new jobs, but it does not create new jobs itself. Therefore, we are still left with a need for jobs.

    Although I agree with, and deeply respect my hon. Friend the Member for Fife, East, I had a similar thought to some of the sentiments that he expressed with regard to technological investments. The investment in higher technology that Britain now finds imperative cannot be justified on the ground that it will create jobs. It can best be justified on the ground that if we do not take it, we can expect a further loss of jobs. If we are to increase our investment in technology and have the technological drive that he so wisely advocates, one consequence must be that productivity in the United Kingdom will rise faster than would otherwise have been the case. Clearly, that will make us more competitive in the world, but I would emphasise that unless we are able to match in increased production the increases we are now achieving in increased productivity, the consequence can only be increased unemployment.

    The reduction over five years of unemployment from 3 million to 2 million, bearing in mind the structural changes in the British working population, the need of women for jobs, the fact that there are more young people coming on to the labour market than there are old people leaving it, and the increased velocity at which we are achieving productivity gains, means that our production must increase by between 45 and 50 per cent. over the next five years.

    If we are to produce that much extra we must ask ourselves the inevitable question: "Who will buy it?". Secondarily, of course, our domestic market will become the purchaser of that increased output but I do not believe that we can expect to get that increased production unless we anticipate at the same time a large increase in our share of world trade. If we anticipate a 45 or 50 per cent. increase in output, it is naive to do anything other than to base that on the assumption that we can increase our share of world trade by 45 or 50 per cent. as well.

    This year our share of world trade was about £55 billion. It seems a tall order for a nation so heavily based on exports as Britain to increase that share by 50 per cent. in volume terms over the next five years. We already possess 6 per cent. of world trade. I agree that it is a completely laudable target to aim for 9 per cent. of world trade and I would not disagree that we should aim for that.

    However, to base all our estimates and contingency plans for unemployment on the assumption that that target will be met could lead to a dangerous situation.

    If economic recovery alone will not bring down unemployment, and if neither training nor technological investment—necessary though they are—will bring down unemployment, we must examine some change in the structure of Britain's working population. That subject was touched upon briefly by my hon. Friend the Member for Withington and also the hon. Member for Islington, Central (Mr. Grant).

    Three candidates for change immediately thrust themselves forward. It is suggested that we reduce the working week. It is also suggested that we postpone the age at which people enter the working population. It is further suggested that we should bring down the age at which people leave the working population through early retirement. I think that it would be unwise to believe that there are many fruits to be gathered down the lane of the shorter working week. I have yet to hear a convincing argument for the working week to be reduced from 45 hours to 35 hours without the amount of overtime being worked increasing or without hourly costs increasing for some other reason. If hourly costs are to increase, productivity can only come down and, with it, our competitive position in the world. For those reasons I am inclined to disregard those who suggest that the working week should be reduced.

    What about postponement of the age at which people enter the working population? This is the basket that carries most of the Government's eggs at the moment. The new training initiative with £100,000 million behind it has a great deal to commend it. I know that it is intended as a training initiative and not fundamentally as a structural adjustment. However, its effect will be to postpone for one year the age at which people enter the real labour market. I do not think that we can postpone entry for two years. It was right to introduce a postponement of one year but it is an option that, once accepted, is automatically closed. Unemployment is not forecast to fall below 3 million in the next 12 months even though the new training initiative will be coming on stream. Therefore, a repeat of the exercise cannot be assumed to bring down unemployment much below 3 million.

    I find myself echoing the thoughts so ably expressed by my hon. Friend the Member for Withington when he said that there is a great deal to be said for earlier retirement. If it is to creep upon us as an inevitability, as my hon. Friend said, let us adopt it as a policy beforehand.

    I advocate two schemes to the Government. First, they should extend the job release scheme to enable those who wish to retire at an earlier age to do so completely and to enable those who are approaching retirement age to work fewer hours per week in return partly for a reduced rate of pension in the meantime and partly for a reduced wage. That would not prove particularly expensive to the Exchequer and it could prove highly effective in reducing the working population, providing extra jobs and giving some elderly workers the option that they have been seeking for a long time.

    I know that my hon. Friend the Under-Secretary of State who is to reply to the debate is not specifically responsible for all employment and early retirement policies, but I know of the increasing influence that he exercises in Government circles and I ask him to prevail upon his colleagues in respect of my second specific suggestion.

    In his Budget Statement my right hon. and learned Friend the Chancellor of the Exchequer announced a new scheme. He said that he was prepared to make available £150 million a year for any scheme that would take off the unemployment register 100,000 who could be classified as the long-term unemployed. That scheme received neither the attention nor the praise which I believe it deserved. If, as it is customary to presume, it is to be established as a competitor to the community enterprise programme, it can be sure of a great deal of opposition, especially from some of the institutions involved. If, on the other hand, cash is to be given to the community enterprise programme itself, it will be neither particularly new as a scheme nor particularly cost-effective. Successful though the CEP has been, it has been a particularly expensive way of creating jobs.

    There are 160,000 men on the unemployed register who are older than 55 and who have been unemployed for one year or more. I humbly suggest that if each one of those men were given the opportunity for retirement now on a full retirement pension, at least 100,000 would accept. I guess that the incremental cost to the Exchequer of accepting that suggestion would be less than £30 a week for each one. That is precisely the sum that my right hon. and learned Friend the Chancellor of the Exchequer made available in his Budget Statement. That will be the best instrument for taking 100,000 of the long-term unemployed—perhaps the most deserving people—off the unemployment register for the sum that my right hon. and learned Friend had in mind.

    I do not believe that economic recovery alone can be effective in reducing unemployment. I endorse and acknowledge all that has been said about the need for training, investment and new technology. I think that at best those measures will prevent unemployment from increasing, but I do not think that we can regard them as candidates for bringing down unemployment. If we are to reduce it, we must consider some structural means of altering the working population, and by far the best candidate is some form of early retirement.

    6.5 pm

    The hon. Member for Skipton (Mr. Watson) asked who would buy the extra production that is created in the manufacturing sector, and he supports a Government who are trying to impose wage curbs on relatively low-paid workers. He thereby denies ordinary people the opportunity to participate in creating the demand to take up the extra production.

    The hon. Gentleman dismissed the idea of a shorter working week, which would benefit working men and women enormously and which many millions of them seek, because he argues that they will take it up in increased overtime working. Overtime decisions do not rest with the workers. In practice they are management decisions. Many of my constituents have written to tell me that they dare not challenge a management decision on overtime or on other issues—they dare not even join a trade union—because of the power that is exercised by management. Therefore, it is management which needs to consider the necessity of utilising overtime, not the workers, who frequently tell me that they wish to have a shorter working week. I believe that a shorter working week would provide more jobs and would be a sensible reaction to the problems of technology that beset those who work for a livelihood.

    Workers have consistently and continuously accepted advanced technologies. Whenever we have a debate about the railways, for example, the Tories attack railway workers for not accepting new developments. That is not true. They have accepted the electrification of the signalling system, signal box cutbacks, single manning of diesel and electric locomotives in many areas and the use of advanced technologies in the control of locomotives.

    The hon. Member for Skipton knows that in the textile industry new techniques have been introduced. There are now 24-hour shifts and new and improved speeds of spinning and weaving. The result in all instances has been that workers have borne the brunt of attacks by the management and by the organised political party which represents it—the Conservative Party. It is no good Conservative Members talking about advanced technology without accepting the need to take fully into their confidence the workers who have to face the possibility of redundancy.

    The hon. Member for Manchester, Withington (Mr. Silvester) said that workers are not prepared to take kindly to new technologies that will wipe out their jobs unless alternative jobs are available to them. That is right. The right way to introduce new technologies is to take workers into our confidence by sharing decision making and ensuring that there are alternative jobs to those that are diminished by the new technologies.

    Alternative opportunities will develop, because of the production of new equipment to replace the old. However, it is not easy for a worker to accept nebulous notions when he is facing redundancy. Therefore, we must seek the co-operation of workers and let them know what is going on. How can that be done when tomorrow the Government, who utter platitudes about the need for new technologies and increased productivity, will ask their supporters to support the Bill that is designed to sustain the attack on the trade union movement by curbing the rights of ordinary working men and women to organise? The trade union movement will see that as another example of the Government, who represent capital, seeking to exploit working men and women. When workers want to organise, the self-same Government introduce legislation to curb their rights. Naturally, they are suspicious of any scheme that is introduced by the Government to bring in advanced technology that will benefit the capitalist system which they represent and not mankind. At the same time, the nation sees the removal of the training boards. If we are to have a continous development of new technologies—because many new techniques have already been instituted in industry and new ones are being applied continuously—we need more and better training. Yet the Government are cutting back the training boards and, as it were, selling them off to private enterprise. It was the Tory Party which introduced the boards as a telling pointer to the need for some sort of Government intervention in organised training in the 1960s. The Government's action simply does not make sense.

    Higher education is being severely slashed, so that the opportunities for our young people are being cut back. Three of the universities that are being most seriously affected are the former colleges of advanced technology, Aston, Salford and Bradford. They share the common factors of being close to industry and being involved in the development of ideas, new products and new applications in industry by using and developing advanced techniques. They are all close to urban centres and closely integrated with the manufacturing industries. They are at the top of the list for savage cuts organised by the Government through the "independent" UGC. It simply does not make sense, and it shows, as my hon. Friend the Member for Norwich, South (Mr. Garrett) said, that the Government do not have a policy for coping with the introduction of advanced technology. The Department of Industry may have some sympathy for it, but the Department of Education and Science chips away the opportunities for its use and application amongst, and the education of our young people.

    The hon. Member for Fife, East (Mr. Henderson) moved the motion, with which, by and large, we agree, with the exception that job prospects might not necessarily be improved through the more rapid development and use of advanced technology. He pointed out that there is a lack of demand and a failure of private enterprise to create opportunities, which he claims are available. Because of the Government-created recession cutting back on demand, firms do not feel that there is the opportunity to innovate and invest in new techniques and ideas. The hon. Gentleman is quite right to make that point. It is a failure of private enterprise. He then suggested that we should rely on the multinationals, but they have not been of enormous help to this country. We should take a much closer look at the way in which they invest here, the use that they make of their investment and how it fits into a national plan for recovery.

    We cannot expect that from the Government, because they simply do not have a national plan for recovery. They rub along in the hope that private enterprise will pick up the pieces, provided that they can attack the organised trade union movement sufficiently to make it supine and acquiescent.

    Let us consider the matter that the hon. Member for Fife, East mentioned, the manufacture of television sets. People now regard textiles as an old-established and declining industry. Several years ago a multinational, Thorn EMI Ltd., introduced into Bradford the biggest television assembly factory in Europe. It was to take up the skills of the textile workers, with their dexterity, attention and capability to absorb details and close supervision to the assembly of highly complicated electronic components.

    In 1977 Thorn EMI decided unilaterally, without any consultation, to close the factory and put 2,000 people on the dole. The Labour Government had no power—this applies to the Tory Government also—to stop that sort of decision. How can we possibly rely on the multinationals to create the investment opportunities and the jobs that the country so badly needs?

    Thorn EMI, in spite of its adverse decision-making, which has created many redundancies, at least has a record of some research and development. But think of De Lorean. I do not need to go into that any further. I think that the notion that we should compete by offering ever-greater incentives to multinationals to invest in this country at any price is something that we should reexamine.

    The hon. Member for Fife, East also mentioned the requirement for import controls. He said that our manufacturing industry in computer software and hardware faces the possibility of unfair competition. That is right. If we are to have any sort of sensible development of manufacturing industry we must have planned trade so that we can selectively control imports, to allow our investment to prosper and grow. We have to look at the problem of retaliation and take that into account. It is not insuperable.

    The planning of trade grows increasingly throughout the world. It makes energy-saving sense. There is little point in using expensive shipping to carry 50,000 Minis to West Germany so that we can import 50,000 Volkswagens of similar character and style. That does not make much sense. We have to be prepared to select, as we need, for the requirement of our manufacturing industry. If we do not, we shall find a continuing erosion and reduction in the level of skills in this country. That will mean a reduction in the opportunities for people to develop the manufacture and assembly of the increasingly complicated machinery that advanced technology uses. We shall lose on all fronts.

    I want to say a little about the safeguards in the implementation of advanced technology, not just its manufacturing. The hon. Member for Fife, East talked about cables growing all over the nation like some gigantic octopus. He talked about public ownership of the cables and the desirability of having them under private enterprise. It is a bizarre notion that half a dozen private enterprise cable owners should tear up our streets one after another. They could not possibly do it in co-operation, because that would vitiate the notion of competition. It seems to make absolute sense to have the cables under complete public ownership.

    We need safeguards for the new technologies for workers as workers, to make sure that alternative job opportunities are presented to them when new technology erodes jobs. We also need safeguards for workers as people. The new techniques of providing and storing information on computers and linking those computers to terminals where information can be obtained need safeguards. We cannot leave it to chance. There must be some supervision, and the Government's proposals are less than adequate.

    I shall quote by way of explanation from Computing of Thursday 4 March 1982. It pointed out that an MI5 £20 million file has been set up in secret. That is a central Government file, but of course with the new technology the information will be multiplied in company files up and down the country. The article says:
    "A top secret computer system capable of carrying a detailed file on every adult in the country has been set up clandestinely by the MI5 security service … The computers—dual ICL 2980s—were ordered under the counter and paid for without informing Parliament."
    That is standard procedure for this sort of thing.
    "This came at a time when the purchasing agent—the Ministry of Defence (MoD)—was being chastised by a Parliamentary committee for wasting millions of pounds on 2980s bought in the mid '70s.
    Along with the dual processors, which were the biggest in the ICL range, MI5 also has at its disposal a massive 20,000 million bytes of online store in the form of 100 disk drives each with a capacity of 200 megabytes."
    The article went on:
    "Further investigation suggests there are plans, which may already be implemented to some degree, to link MI5's computers to other central government computerised databanks, using national insurance numbers as personal identifiers."
    That has the essence of truth about it, because answers to parliamentary questions that I have tabled make it clear that there are links between Government Departments and MI5. We need safeguards in that area of government. We also need safeguards about the storage of information used by organisations such as the Economic League, which gives details to employers, who use them to blacklist workers. We have had too much research and development on defence and not enough on civilian purposes. Our computer spending is one-sixth of the spending of Japan, which leads the world in the products that people need and want. Japan spends less than 1 per cent. of its GNP on defence, whereas we spend about 5 per cent. of our GNP on defence. We need public ownership of the significant areas of manufacturing industry, so that we can put in the new techniques by, for and in conjunction with the workers. We must expand demand, which means injecting £6 billion to £10 billion into the economy to take up production. We also need early retirement, whatever the cost—it has been suggested that it would cost £1·8 billion. Millions of working men want early retirement and we ought to bring the retirement age for men into line with that for women. We should also move towards a shorter working week, which could be done in conjunction with the workers as part of a planned economy. We cannot expect those actions from the present Government but the next Labour Government will be committed to reduce the level of unemployment and introduce essential planning for the economy.

    6.22 pm

    I wish to make some constituency points about applied technology and Government help for it. I was probably elected to the House because of the failure of the Conservative Government between 1970 and 1974 to look after the interests of technology in my constituency.

    At that time, the famous machine tool manufacturers, Cravens, were situated in my constituency. The firm had an international reputation and needed a relatively small sum from the Government or the banks for its next generation of machine tools. But the Government of the day said "No" and that fine manufacturing capacity disappeared from Stockport.

    Many of the employees went to other firms in Stockport and they tell me that over the following eight years many of their new employers bought from Switzerland and other overseas countries machines that were almost identical to those that Cravens had been developing. That is a clear example of a Government failing to give a little assistance at the right time to a technical, innovating firm.

    We have seen a similar process in the past few weeks. The Stone Platt group has done much innovation in the textile machinery industry. There are some world beaters in the company but the "listening bank"—the Midland—seemed to have not a single care for my constituents and others in Greater Manchester, Lancashire and elsewhere in the country who work for the group and would not put up the extra finance to keep the capacity available.

    The receiver has had to sell the company and bring in overseas bidders. There have been guarantees that jobs will be kept here, but one suspects that the successful technology will be taken to other parts of the world for development. That is a lamentable picture. Neither the Government nor the bank would put up the money to retain that manufacturing capacity.

    The Government have let down my constituents in many other ways. The Prime Minister told me in a written answer last week that in the past 12 months there was more investment by British firms overseas than in Britain. That is appalling. Firms need the money in this country, but we allow it to go for investment overseas.

    Let us consider the intermediate area status of Greater Manchester. The retention of that status would encourage local firms to continue innovating and developing in the area, but the Government have removed that status and inflicted a tragic blow on Manchester.

    The development of Manchester airport would encourage innovators to come to the area, but it is extremely difficult to persuade the Government to recognise the importance of the airport. They seem happier to have developments at Stanstead. I understand that the cost of the public inquiry there equals the likely cost of a feasibility study on a rail link to Manchester airport.

    One of the big attractions of the Greater Manchester area is the service that it receives from its educational institutions, including Manchester university, Salford university, UMIST, Manchester polytechnic and many further education colleges. They all have a high reputation for the services that they provide for industry. There are a number of arrangements for consultancy projects with industry, but many of my constituents who are involved in that work tell me that the fear of cuts in the universities results in more energy being devoted to job protection than to innovation.

    Some of my constituents are even talking about setting up private consultancy firms. That sounds all right, but such people will be taken off the development stage and although they may find jobs for themselves they will not be continuing the co-ordination of innovation in the education institutions. That is what the Government ought to be stimulating, but they have instead introduced cuts which have given those institutions a psychological shock and have caused considerable damage.

    We should be looking not so much to high-technology products as to using high technology to design fairly simple products, particularly for the Third world. Many of the problems of the Third world need sophisticated analysis, but only simple products.

    I was a member of a delegation that visited Bangladesh and we noted that Britain and other countries offered as aid technology that was irrelevant to Bangladesh's problems. The country needed simple innovations, such as a process for drying rice on remote farms. We should use technological innovation to produce such processes.

    We have managed to get computers into schools and in most schools one teacher has become enthusiastic as a result of reading computer magazines, rather than as a result of training, but the rest of the staff does not have a clue about computers. If computer education is to work we need to educate not one expert but all the teachers.

    There is a problem of managerial attitudes in one area in my constituency. I came down from Manchester today on the train with one of my constituents who works for a firm that is a leader in its sphere. It imports a considerable quantity of components from Hong Kong. I discovered that the firm now imports components from Hong Kong, but not because they are cheaper. They can be produced in Britain just as cheaply. The problem is that there appears to be a vested interest among the buyers. It is attractive for them to go to Hong Kong occasionally to make the necessary purchases. That is human nature. If Members of Parliament were asked to go with a delegation to a distant corner of the world, there would be plenty of volunteers. If, however, they were asked to go to a suburb of Greater Manchester, far fewer would be interested. That factor of human nature should be closely examined.

    I stress that the Government are not grasping the need for technical innovation. They are not putting forward the necessary policies. There is an absence of a clear investment policy, which would help my constituency, and a clear commitment to education which would encourage the innovation of the processes involved.

    6.30 pm

    The hon. Member for Fife, East (Mr. Henderson) has raised an important matter. Like my hon. Friend the Member for Norwich, South (Mr. Garrett) and the hon. Member for Manchester, Withington (Mr. Sylvester) I sound a cautionary note about the extent to which new technology will create the quantity of new jobs that the hon. Member for Fife, East envisaged. Because of the shortage of time I shall confine myself to one point.

    It concerns a matter that is under the direct control of the Government—Civil Service employment. I recently asked both the Secretary of State for Employment and the Minister of State, Treasury, who has responsibility for the Civil Service what they thought would be the effect on Civil Service manpower of the introduction of office technology. Neither could give me a satisfactory answer. I was given the usual formula that the cost of producing an answer would be too great. Nevertheless, the fact remains that with the introduction of office technology, many office filing and other routine clerical jobs are like to disappear. That is quite apart from the Government's intention to reduce the size of the Civil Service by the next general election. There must be some calculation of the impact of office technology on labour-intensive departments in the Civil Service. It is unsatisfactory that the Government disclose so little information about their intentions about their manpower. Moreover, the introduction of office technology will render unskilled many existing skilled jobs in the Civil Service. Presumably, it will reduce the status of some jobs and, in the long term, the pay associated with them.

    The hon. Member for Fife, East concerned himself primarily with the higher skills and qualifications that will be required at the other end of the scale. That is why it is rather short-sighted of the Government to continue to press ahead with reductions in the number of opportunities in universities. That is especially important to me as I represent a Glasgow constituency and both Glasgow and Strathclyde universities have fewer places to offer when the number of applicants has never been higher. That is equally true in the further education sector. Glasgow college of technology is unlikely to make up for the shortfall in places that should have been available in the university sector.

    Although I agree with the thought behind the motion that businesses should grasp their opportunities, many businesses are simply clutching on to survival. When he replies, I hope that the Minister will say that Government economic and fiscal policies are being geared more directly to assisted businesses that are already in being to stay in existence rather than to start-up projects which all too often create many jobs in consultancy and paper work, but in the end do not justify their existence.

    6.34 pm

    I assure the hon. Member for Glasgow, Maryhill (Mr. Craigen) and the hon. Member for Stockport, North (Mr. Bennett) that the Under-Secretary of State for Industry, my hon. Friend the Member for Norfolk, South (Mr. MacGregor) will go to bed with Hansard tomorrow night and glean from it those matters that the Department of Industry and its liaison group with the Department of Education and Science should investigate at his behest. I assure the hon. Member for Maryhill that my hon. Friend will give the appropriate attention to the matters that he raised, especially with regard to the two universities.

    I repeat the House's congratulations to my hon. Friend the Member for Fife, East (Mr. Henderson) on the skill with which he mounted the debate. Many of us agree that all too often the House spends its time thinking from week to week, sometimes literally thinking from Thursday to Thursday. It is a rare privilege for hon. Members to be able to sit down and think about the future. I shall return to that theme later.

    It is vital that we occasionally stand back from micro-economic considerations, the ephemeral considerations, and start to think about the type of economy, society, services and politics that will exist for the rest of the century.

    My hon. Friend the Member for Fife, East raised several questions. I shall deal with them in the order in which he delivered them to my in tray. First, the problem of the liberalisation of British Telecom is a central issue of this and, I suspect, other Parliaments. To what extent can we keep a balance between British Telecom's monopoly and the need to maintain a central service, and the requirement to ensure that BT is not a monolith, that it has some proper competition and that the competition is given a fair chance in the markets that BT still monopolises? I take my hon. Friend's point on balance.

    With regard to standards, I am tempted to say that I am delighted to report, but after a few days in the job I am not so delighted to report, that I have responsibility for chat area of endeavour. There is a committee called Focus which is involved in the mammoth task of IT standards. My first act while chairing the committee was to draw a line and to delete 12 of its 15 objectives. Having examined the log jam we decided to take the first three logs in the pile in the hope that we could get something moving. I hope that my hon. Friend will agree that the priority should be in the following three areas: local area networks, open systems inter-connect, and teletext and viewdata. We have appointed project leaders for each of those three. I am the project leader for the third. We recognise the need to resolve the standards issue.

    My hon. Friend also asked about value added network services. Since 1 April, those who wish to supply VANs may apply direct to the Department of Industry, irrespective of whether BT is offering a similar service. In other words, there will be genuine competition. BT is no longer judge and competitor.

    With regard to cables, several hon. Members on both sides, including the hon. Member for Keighley (Mr. Cryer), have referred to public and private sector balance. I hope that there might be unanimity in the House along the lines of "Beware monopolies", be they public or private. I suspect that the hon. Member for Keighley was about to go through a slightly Stalinist twitch when he mentioned the private sector digging up the pavement, while the benign public sector would supply its service in a benign, monopolistic way, to which matter I shall return.

    My hon. Friend the Member for Fife, East also mentioned the need to ensure that there is reciprocity in our trading arrangements and particularly to try to achieve some form of equal treatment among the PTTs in the countries of Western Europe and the West generally. The key word here is "reciprocity". It is true that there are dirty tricks departments in the PTTs of a number of countries—I suppose that we all tend to go for the French, if not the Japanese, in that respect—but we are not completely virtuous ourselves. I shall not suggest areas in which we are less than virtuous. I assure my hon. Friend, however, that we are mindful of the British interest, albeit within the confines of GATT and EEC regulations. I suggest that he should occasionally read the code when he receives replies on that matter.

    My hon. Friend asked about an information technology centre in Fife. Two of the 20 already approved will be in Scotland. We hope to include about 10 more in Scotland in the second wave and to cover the Fife area. Potential sponsors are already in touch with the MSC.

    Lastly, my hon. Friend referred to the possibility of the continuation of the MAP project. I can report that £14 million out of the £55 million has already been committed and we expect the money to last until the end of 1982. The take-up has been very good and a recent survey by the Policy Studies Institute shows that the project has been well received and has been cost effective. Nevertheless—again, a number of hon. Members referred to this—only 30 per cent. of companies in the United Kingdom use or intend to use microchips, so I suspect that there -will be a continuing review, possibly resulting in additional resources in the coming year.

    Many of us have sought parallels between what is happening today and what has happened in the past. I propose a quite simple parallel in considering our international and domestic position in relation to new technologies. In the nineteenth century, the British genius and talent was in importing low-value products, adding value to them and then re-exporting them. We had huge entrepot trading ports, many of which are now in the constituencies of Labour Members—for example, in Liverpool, Glasgow and inner London.

    We seem to have lost the knack in the adding value and re-exporting trick. I suggest to the protectionists and to those with the "not manufactured here" problem, however, that there is nevertheless opportunity here because a silicon chip is a very cheap device. A 64K random access memory can be acquired for about $8. Around that, one can figure a microcomputer. If we imported that, too, it would cost about $2,000. By the time that microcomputer has been fitted with peripherals, the operating system has been written, the British bespoke software has been written and the engineering contracts have been signed with existing users, that $8 chip or the $2,000 import around it would probably earn £9,000 for the United Kingdom.

    Therefore, let us not get too defensive about our current free trading policy. We can still make money in the way that we did in the past. If we capitalise on our continuing genius, particularly in software, there is no reason why we should not get back to that tradition and earn a great deal of money in the process. Scottish engineers and Welsh mining engineers roamed the world in the nineteenth century. I hope that British information technology engineers and software designers will follow them in the late twentieth century. There is no reason why they should not do so.

    I wonder how many hon. Members remember the example of Caxton. The hon. Member for Islington, Central (Mr. Grant) referred to someone—presumably my right hon. Friend the Secretary of State—as a Caxton House Galtieri. No two people could be more opposite than Caxton and Galtieri. The one is a thoroughly reactionary individual—I shall not follow the hon. Member for West Lothian (Mr. Dalyell) into the Falklands debate—whereas the other was a far-sighted, dare I say progressive, forward-thinking importer who had an open mind. The people who were most frightened of Caxton, of course, were the monks in the monasteries.

    In view of the Minister's remarks, I am happy to withdraw the Caxton House part of my assertion in respect of his right hon. Friend.

    The hon. Gentleman has done us all a favour, as I can now delete five minutes of my speech. I know that my hon. Friend the Member for Fife, East will demand in courtesy at least the last two minutes of the debate.

    I was asked to give the Government's "Strategy". This is always a problem when we debate across the great divide. The hon. Member for Norwich, South (Mr. Garrett) and his hon. Friend the Member for Keighley started to give way, if I may say so, to their dirigiste tendencies. This is precisely the kind of area in which one cannot put forward a strategy. I take the analogy of a river. Members of Parliament sit here watching the river. We see the information and the developments flowing by. Occasionally, we may try to dam it. In looking at the myriad developments, the mass of information, new products and new tendencies, however, the most important factor is what is happening up in the foothills where the rain is falling. There are thousands of companies and thousands of individual cerebrums who represent the area up in the foothills, and no Government Department, including the Department of Industry, can read those tendencies in advance and say that this or that is the British Government's strategy and that this is our equivalent of the French approach or of MITI.

    The Government have a strategy. It is to cut 47,000 students out of higher education. How is that a strategy for encouraging high technology? The strategy is to cut Salford university—a university devoted to the practical arts—by 40 per cent., and to cut Aston university. We know what the strategy is. I admit that those are decisions of other Departments, but the Minister cannot simply wave them aside and maintain that there is no point in having a strategy.

    I also asked the Minister specifically about the truth or otherwise about the Government's research work on alternative sources of energy, particularly wave power, being radically reduced. That is another kind of strategy.

    The hon. Gentleman mentions two issues. The first is the responsibility of my right hon. Friend the Secretary of State for Education and Science. I shall report the hon. Gentleman's observations to him and come back to the hon. Gentleman on this in due course.

    On wave energy, the hon. Gentleman has touched a very sore point. At Lanchester polytechnic there is someone whom I regard as the leader in wave energy research, and I, like the hon. Gentleman, am discussing with the Department of Energy how we can pursue that further. Again, I give the commitment to come back to the hon. Gentleman on that.

    I respond to the request for a strategy by suggesting that three areas of analysis must be our starting point for any strategy, whether with a capital "s" or a small "s". I think that the whole House will agree that the older industries will automate and will shed labour in order to survive. The British motor industry, for example, will have to achieve the manning levels of Japanese manufacturers. I do not underestimate or attempt to smooth over that problem. On the other hand, the new industries that we now call "sunrise industries" will come on to the market place and into our industrial scene. I refer here, for example, to the manufacture of computer peripherals and the use of fibre optic cabling, which is a massive innovative venture. Here I pay tribute to British Telecom and its research laboratories and I hope that a genuine partnership between the public and private sectors will take this forward into areas of job creation. In addition, we have a talent for adding value which I referred to earlier.

    Old industries will retrench and new ones will come up. There will also be new services. Several hon. Members have gone into the issue of cable television and how that will affect British Telecom and its relationship with potential competitors. I suspect that the House will return to that again and again The issue is receiving considerable attention in my Department, particularly in the light of assertions made by the private sector suppliers who suspect—in some cases they may be correct—that the might of British Telecom is being used to exclude them from certain sections of the market place.

    This debate is about hyper-efficiency and boosting the wealth creation process. I congratulate my hon. Friends the Members for Manchester, Withington (Mr. Silvester) and for Skipton (Mr. Watson). We must get the psychology of the debate right. That is a legitimate role for the House.

    Those who create wealth and those who distribute it may be the employed and the unemployed of the future. We must find a new language that does not insult anyone or reduce their dignity and that gives people a role to play. Everyone should gain some benefit from the extra wealth generated by the application of the new technologies. Early retirement is one option that has been mentioned. Retraining is another option that the new wealth will allow us to exercise. If we do not go along that line, we simply will have no choice.

    My hon. Friend the Member for Lincoln (Mr. Carlisle) talked about the balance between resources going to old industries and those going to the new industries. He is correct inasmuch as the Government and the Department of Industry have a responsibility to rescue and support older industries provided that they are making a genuine attempt to get back into the game of competitiveness and producutivity. That is surely a legitimate assertion to make. I cannot deny that that policy has tapped a large amount of resources for the older industries. However, if we included the contribution made to public sector purchasing, we would find a massive expenditure—billions of pounds—on the sunrise industries.

    We are all too familiar with "Micros in Schools" programme and with micro-electronics in education, the one providing hardware, the other software for most of our secondary schools and, soon, for our junior schools.

    In annotating the speech of the hon. Member for Islington, Central I found myself likening him to Clive Jenkins and Ken Gill. They have made similar observations to his. Strangely enough, I suspect that many Conservatives would go along with the helpful employment and technology leaflet that was published by the TUC, although the hon. Gentleman quoted a passage that was not particularly helpful. If we can keep the consensus on the new industries, we should not have too much to fear from the senior spokesmen within the trade union movement. However, I am not so sure that those same attitudes would permeate to the chap on the shop floor who must think about individual jobs being threatened by a particular machine. I agree with many of the points made by hon. Members, particularly that made by the hon. Member for Keighley (Mr. Cryer) when he talked about the need for participation at the earliest possible stage. I know that people who sell computers often start off talking to the NALGO representative, simply because they have to.

    This debate has been designed as a challenge to British industry. It is, in terms of the discipline it imposes on the House, also a challenge to the Government and to the House. The hon. Member for Islington, Central talked about the failure of Governments. That may be a serious point. It is certainly a serious assertion to make. However, I suspect that the failure of successive Governments has been one over the past two decades in which Britain has tended to operate a social market economy which has beome more and more social and less and less market. Therefore, it is exceedingly painful to redress that balance and get the wealth creation process going again.

    In a helpful, moderate and gentle speech, the hon. Member for Keighley could not resist bringing in the word "exploitation". I thought that we had almost made it, but at the end he did use the word "exploitation". Should we exploit working men and women—that is the way he put it—or should we exploit the new technology? I ask the hon. Gentleman and my hon. Friends the Members for Withington and for Skipton to consider two visions of Britain in the year 2000. The first vision is one of a country—country A—with low wages, low productivity, a low national income, with people doing squalid, repetitive and dirty work, where there is squabbling over scarce resources and where there may be the political rancour that is occasionally typified in the working of the House. Let them compare that with country B, a nation where people are not doing squalid, repetitive, dirty jobs; where there is a high productivity and a high wage economy; where social programmes that have been mentioned by hon. Members can be afforded; where we have the luxury of deciding whether granny gets the stairlift, the home help and the annex instead of putting her into a home. Those versions—or visions—will be available to us provided that we take the opportunity that my hon. Friend the Member for Fife, East so skilfully put before the House some three hours ago. I have a fond, I hope not faint, hope that with the impetus that he has started in his debate the House can play its part in seeing that it is the second version—or vision—that takes place.

    I congratulate my hon. Friend the Under-Secretary of State for Industry on his successful initial appearance at the Dispatch Box. I am grateful to him for the way in which he has replied to the debate and for his helpful points. May I also thank all hon. Members who have contributed in their several ways to the debate? In many ways they have helped to point up some of the questions in our our minds.

    May I latch on to two points that arose in the debate? My hon. Friend the Member for Manchester, Withington (Mr. Silvester) talked of the way in which information technology progress can reduce the emphasis on the centre and expand the activities at the periphery. The people working at the periphery can be as well informed as the people at the centre. The geographical distribution of jobs and the way in which they are done will be affected as a consequence.

    My hon. Friend the Member for Skipton (Mr. Watson) made an extremely important speech about training and retraining. We should add to that the induction of people already in work whose particular skills do not bring them into information technology. At the end of the day, if we are to increase the market share in order to maintain jobs, as we use better products or achieve greater efficiency, we shall have to place increasing emphasis on marketing. While the emphasis of the debate has properly been on technological considerations—I am particularly grateful to the hon. Member for West Lothian (Mr. Dalyell) for introducing bio-technology and other matters—at the end of the day all the business skills will be required if we are to take full advantage of the opportunities now presenting themselves.

    Question put and agreed to.


    That this House believes that job prospects will be improved if British businesses act with greater urgency to grasp the unprecedented opportunities for growth presented by developments in several fields of advanced technology; and urges Her Majesty's Government vigorously to pursue its policies to remove obstacles to growth and stimulate the development and use of new techniques and products.


    6.59 pm

    I beg to move,

    That this House calls upon Her Majesty's Government to take steps to encourage the establishment of all possible links between the maintained and independent sectors of education at both primary and secondary levels, for the mutual advantage of both.
    In the very short time available, I am afraid that that is all I can say.

    6.59 pm

    I am delighted to reply to the debate, although not at the length that I would like——

    It being Seven o'clock, the proceedings on the Motion lapsed, pursuant to Standing Order No. 6 (Precedence of Government Business).

    Orders Of The Day

    Local Government And Planning (Scotland) Bill

    As amended (in the Standing Committee), further considered.

    New Clause 7

    Fire Escapes In Mulitiple Occupancy Properties

    `Subject to such conditions as the Secretary of State may by order make a local authority shall make a grant in respect of work for the provision of a means of escape from fire from a building which or part of which is let in lodgings.'.— [Dewar.]

    Brought up, and read the First time.

    7 pm