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Volume 35: debated on Monday 17 January 1983

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Manufacturing Industry


asked the Secretary of State for Industry what are the latest figures available for the output of British manufacturing industry; how these figures compare with the corresponding figures in January 1979; and if he will take steps to increase the output of British manufacturing industry.

In the three months August to October 1982 the index of production for manufacturing industry was 88·3 compared with 105 in the first half of 1979.

Recent steps taken to help industry become more competitive include the further cut in the national insurance surcharge, measures on energy prices and the ending of the deferment in the payment of regional development grants. All these measures will be of direct benefit to manufacturing industry.

Does the Minister accept that the output of manufacturing industry is a fair reflection of the state of the economy, and that the fact that output today is probably at its lowest for 15 years is a true sign that the Government are presiding over the destruction of our industrial base?

We have the deepest recession that Europe has seen for 30 years. I am not sure which solution the hon. Gentleman advocates. Is he advocating that we should now have a two-stage depreciation of sterling, as advanced by the Opposition? If so, will he tell us how that will be achieved without a rise in interest rates?

Will the Minister answer the question and tell us what the Government are going to do about the problem? Is it not a fact that manufacturing output is down by more than 20 per cent. since 1979? Is not our manufacturing output lowest when compared with the major OECD countries? It is not a matter of world recession. We want to know why Great Britain is the worst developed country with regard to manufacturing industry.

Over the past year manufacturing output has fallen in the United Kingdom by 1·5 per cent., in France by 3·5 per cent., in Germany by 4·5 per cent. and in the United States by 9·5 per cent. This country entered the recession before other countries, but, as a result of the Government's anti-inflation policies, British industry is now more competitive and efficient. We are now seeing the benefits, because we are not suffering the drop that other countries are. We are well positioned to take advantage of the world upturn when it comes.

Synthetic Fibres


asked the Secretary of State for Industry whether he will consult the trade unions in the United Kingdom synthetic fibres industry before finalising his response to the proposed agreement among the major European producers of synthetic fibres to cut capacity within the European Economic Community by half a million tonnes.


asked the Secretary of State for Industry if he will estimate the effect on the British textile industry of the proposed agreement among the major European producers of synthetic fibres to cut their capacity within the European Economic Community by half a million tonnes.

The agreement between the major European synthetic fibre producers to reduce production capacity was in fact signed last October. It is not an inter-Government agreement and it would therefore be inappropriate for me to consult the trade unions about it.

I do not anticipate that the agreement will have any effect on the British textile industry, which will still be able to obtain the yarns and fibres that it requires.

If there are to be reductions in jobs and capacity in the synthetic fibres industry, what assurance can the Minister give that those reductions will be shared equally by all companies and countries, and that countries such as Spain and Portugal, which are privy to the discussions but not signatories to the agreement, will not build up capacity before they enter the EC?

The purpose of the agreement was that the European producers should join together voluntarily to try to reduce the substantial over-capacity in the industry. We do not expect any further reductions in capacity in the United Kingdom. We shall be looking for reductions in Spain and Italy.

Will the Minister take heed of what happened in the Common Market over the agreement to rationalise steel production? We carried out rationalisation, but our EC partners did not. Will the Minister ensure that he does not fall into that trap? If he does, it will not just decimate the synthetic fibres—

Order. We are already beginning to have arguments instead of questions. We must have questions.

Order. I have no doubt about the importance of the question. I am worried about the interrogatory part.

I shall try to answer the assertions. The point that I should like to stress again is that this agreement is an attempt by the companies in Europe to rationalise and to reduce their capacity. The Governments are not involved in this matter. I understand that the companies would expect to see reductions particularly in Italy and Spain rather than in this country.

Is not the problem that neither this Government nor the Community have any idea of the size or shape of the textile industry that they want? Would it not be better to decide that and then give the incentives and the long-term perspective, which would allow the industry to plan ahead?

If the hon. Gentleman reflected upon what he was asking, he would appreciate that it is unrealistic for any Government to try to set an ideal size for any particular industry. Whether an industry is too small or too big must depend on factors outside those that Governments can influence.

Does my hon. Friend accept that many European countries are subsidising the yarn spinning end of their industries? Would it not be to the advantage of British yarn spinners if European Governments agreed not to subsidise over-capacity? Does my hon. Friend believe that the agreement that has been achieved is sensible?

I certainly agree with the last comment of my hon. Friend. The agreement that has been reached is eminently sensible. We have made the strongest protest to the Italian Government over the way in which they have been subsidising and maintaining capacity in an industry which, on a European basis, has substantial over-capacity.

Is the Minister aware that in any industry such as the British textile industry, where 210,000 jobs have been lost since 1979, there is bound to be considerable worry among the trade unions and the work force? Bearing in mind that in negotiations with the EC we always get the neck of the chicken, will the Minister give us a real assurance that the Government will protect the British synthetic fibre industry?

I congratulate the hon. Gentleman on joining the industry team on the Labour Benches.

I assure the hon. Gentleman that I discuss these matters with the trade unions in the textile industry. In fact, about six weeks ago I had a meeting with the British Textile Confederation, and I take its views on board. I assure the hon. Gentleman that the interests of the British textile industry are strongly protected in all the negotiations in Brussels.

Video Recorders And Tapes


asked the Secretary of State for Industry if he will take steps to encourage the manufacture of television video recorders and tapes in the United Kingdom.

I share the hon. Member's concern that the United Kingdom production of video tape recorders has only recently commenced. My Department was able to offer assistance for that project and stands ready to help other new ventures in this field and in the manufacture of video cassettes. We have already taken steps to ensure that potential investors in this sector are fully aware of the Government assistance that is available.

I thank the Minister for that reply. Does he recognise that the extent to which we have become more and more dependent upon imports of high technology goods of this nature is an extremely alarming aspect of the British economy? Were not about 2 million video tape recorders imported into the country last year, giving us the highest number of videos per household in the world?

I confirm that about 2 million video tape recorders were imported into Britain last year and that we certainly have the highest penetration of usage of any country in the world. We are clearly concerned that last year none was made in this country, but next year at least 200,000 will be made as a joint venture between a Japanese company, Thorn-EMI and AEG Telefunken at a factory in the south of England.

Is my hon. Friend aware that Fidelity Radio, in the London area, manufactures television video recorders? Would it not be a good thing if we heard more of that company and less of the Japanese? Does he agree that the Fidelity mark is as good as any mark that is imported?

Yes, indeed. At the moment Fidelity is the only domestic manufacturer of video tape recorders, and it makes very good ones.

In view of the ease with which the Japanese were able to pirate the 3D camera, which was developed by Timex in Dundee, does the Minister agree that steps should now be taken by the Government to try to break the monopoly that Japan has over such high fidelity products to regain and to build up jobs here?

Basically, video tape recorder technology is Japanese, with the exception of the Philips equipment, and it is up to them to decide which companies to license. We stand ready to assist companies in Britain that want to enter licence agreements with Japanese companies. Indeed, later this week my right hon. Friend the Secretary of State will be discussing with various Japanese companies the possibility of further investment in this country. We are already the recipient of the largest flow of overseas Japanese investment in manufacturing plants.

Do we not now import more Japanese video recorders by value than Japanese cars? Even under the scheme mentioned by the Minister, shall we not be lucky to have 5 per cent. of our home market in domestically produced video recorders next year? If so, should not the Government take a positive attitude on import substitution and on the creation of jobs in this country in this fast growing technology rather than simply say that it will all come right in the end? Must they not take a positive attitude towards creating such an industry if we are to survive as a technologically advanced country?

Yes, and we have a positive attitude. We have a whole series of measures to encourage investment in this country by high technology companies. In fact, this morning I opened a robotics factory in Shropshire. That is an American investment. We have similar support for the video recorder industry. If the hon. Gentleman is asking me to employ similar measures to those of the French, who route imports through Poitiers, I must tell him that such policies would be self-defeating. Sony has already said that, as a result of that, it will not build a factory in France. I remind the House that behind the video recorders sold in Britain those are about 20,000 shops that sell video cassettes, and that about 15 million to 20 million video cassettes are manufactured in Britain. That would not happen if we imposed import controls.

London Borough Of Ealing


asked the Secretary of State for Industry how much in total grant he is making available to industry in the London borough of Ealing; and if he will make a statement.

Industry in Ealing qualifies for assistance under a variety of schemes run by my Department. Since May 1979, 16 individual offers have been made under the Science and Technology Act and section 8 of the Industry Act 1972 involving grants of £868,000 for projects involving innovation, energy conservation and coal firing.

Those grants are welcome. Is my hon. Friend aware that Ealing is not an assisted area and does not receive industrial grants on the same scale as assisted areas? Is he further aware that assisted areas, are drawing jobs away from unassisted areas, such as Ealing—for example, Hoover was drawn to Scotland and Wales, where it could take advantage of assisted areas facilities—and that is to the detriment of workers in such areas? Is it not most unfair?

I am aware of those problems, and my hon. Friend is very active in putting them forward. He and I have corresponded about them. I know of the efforts that he is making to retain jobs in Ealing and to achieve restructuring to provide new jobs. As a result, unemployment in Ealing is 3 per cent. lower than the national average. That is an indication of the success of my hon. Friend's efforts, and it makes it difficult to give it assisted area status.

Steel Industry


asked the Secretary of State for Industry if he will make a statement about the future prospects for the British Steel Corporation.


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


asked the Secretary of State for Industry when he next plans to meet the chairman of the British Steel Corporation to discuss future plans for the industry.

I have nothing to add to the full statement made by my right hon. Friend the Secretary of State on 20 December 1982.

Does the Minister agree that neither the corporation, the steel industry as a whole, nor the country is assisted by the current conspiracy imminently to introduce a further and major measure of steel privatisation? Would he accept that if this goes forward, evidence is or should be in the Government's possession to illustrate that such a development would drastically and seriously further reduce our steel industry capacity and also clearly lead to a major increase in the amount of steel imported into this country?

There are two problems. First, there is an excess of capacity in several areas of the products of the British Steel Corporation where they overlap with the private sector, and rationalisation is needed there. Secondly, there is a difficult area of competition between the public and private sectors. To see that the private sector is not damaged by subsidised competition from the public sector we think that an element of privatisation in those areas is absolutely essential. There has to be a clear boundary between the private and public sectors.

Is the Minister aware that, despite the decision to keep open Ravenscraig, more than 3,000 jobs in the Scottish steel industry have been lost during the past six months? Will the Minister tell Ian MacGregor that we have had enough of the steady haemorrhage of jobs from the Scottish industry and that, if further redundancies are being considered, it would be better to make Ian MacGregor redundant when his contract comes up for renewal later this year?

Obviously, I cannot agree with the hon. Gentleman. Mr. MacGregor has done an excellent job as chairman of the British Steel Corporation. He has given the corporation some hope for the future, which it has not had for a long time. The hon. Gentleman referred to job losses, which are to be regretted, but the corporation has been uncompetitive and overmanned for some time.

With regard to Llanwern, will the Minister tell the chairman to forget about the privatisation of essential services, if only because the previous move towards private contractors led to fiddling on a massive scale? Does the hon. Gentleman agree that we need an early decision giving the go-ahead for the Concast plant, because any long drawn-out suspense on that matter can only lead to further demoralisation of the work force?

The provision of the Concast plant at Llanwern is a matter for the management of the corporation, which has not yet made such a proposition. I repeat that we have always made it clear that as much of the corporation as possible should be privatised. Had that happened earlier, there would be more jobs in the British steel industry than there are today.

Recognising that in the Government's statement before Christmas there was an instruction to ensure that steelmaking should continue at five plants rather than at three or four, when the Government receive the details of the corporate plan from the corporation, will my right hon. and hon. Friends in the Department of Industry ensure that Mr. MacGregor's plan does not involve less steelmaking at plants that were not under threat of closure than might otherwise have been the case?

We have always made it clear that, although the statement implied that the five-plant configuration should persist for the time being, decisions about the make-up of individual plants and the steel made there must be a matter for the corporation. However, I shall consider what my hon. Friend said.

How much do the Government expect to pay to Lazards for Mr. Ian MacGregor's performance-related transfer fee? Does he agree that if Ministers were judged on the same basis, they would all be on the free transfer list and that it would be difficult to find a taker for them?

No payment has yet been made. The matter must be decided by the review body that considers Mr. MacGregor's remuneration.

Is my hon. Friend aware that, although the Government have shown great courage in supporting some of Mr. MacGregor's courageous decisions, there are still some painful decisions to be made? Does he agree that the deferment of a decision on Ravenscraig—for that is what it was—means that there is an even heavier reckoning to come?

It is correct to say that some painful decisions have been taken. I have no doubt that, unless the world-wide outlook for steel improves, painful decisions lie ahead in the longer term. However, we have taken painful decisions. Manpower has been reduced from 186,000 to 90,000. Installed capacity has been reduced from 26 million tonnes to 21 million tonnes and manned capacity is only 14 million tonnes. Although my hon. Friend's note of realism is correct, many tough decisions have been taken by the Government.

Is the Minister aware that many departments of the special steels group in South Yorkshire have been run down and demanned to the point where they cannot possibly be profitable? Is that not deliberate policy as a preliminary to the privatisation of what remains of the corporation's special steels division at a figure far below the true market value?

The hon. Gentleman is not correct. We wish to see a better position for the special steels sector, which is why we have pressed in Europe for an extension of EC arrangements on some special steels. We recognise the difficulties faced by the industry.

Does my hon. Friend agree that perhaps the most important determinant of the prospects for the British Steel Corporation is the competitiveness of our major steel-using industries, such as motor cars, shipbuilding and machine tools? Does he further agree that to try to build a future for the steel industry without considering the competitiveness of those industries is to live in cloud-cuckoo-land?

My hon. Friend is absolutely right. That is why the chairman of the corporation has said that it is wrong to believe that the problem of the British steel industry is imports. The problems of the British steel industry are high costs, lack of competitiveness and a decade of high inflation. Those problems have destroyed British industry, especially the steel-using industries. Until we become more competitive, the demand for steel will be low.

Is the Minister aware that since the Secretary of State made his statement on steel in late December, several hundred more jobs have been lost in Scotland and 600 in Hartlepool, which is one of the largest areas of unemployment in the United Kingdom? When will such bleeding of the industry stop? As my hon. Friends have said, if we do not stop it we shall not have a viable industry. I support the demand by my hon. Friend the Member for Newport (Mr. Hughes) for an early statement about the Concast plant at Llanwern. Such a statement must be made as soon as possible.

I have already said that the management of the British Steel Corporation has not yet put a proposition to the Government. The right hon. Gentleman is perhaps reflecting the views of the local management rather than of the corporation. We have always made it clear that manning at individual plants is a matter for the corporation, notwithstanding the Government's involvement in the decision on the five major integrated sites.

West Midlands


asked the Secretary of State for Industry when he now expects an improvement in the industrial position in the west midlands; and what increase in industrial activity is to be expected.

There are no official forecasts relating solely to the west midlands, but Industry Act forecasts predict a rise of about 1·5 per cent. in United Kingdom output in 1983, which will benefit the economy of the region.

Is the Minister aware that at least 1,000 jobs a week are being lost in the west midlands and that unemployment in that region has been rising faster than in any other part of Britain? When will we see an industrial revival and recovery in the west midlands instead of constant redundancies, closures and the return of mass unemploymentf?

I agree that industry in the west midlands is in a difficult position. The Treasury forecast is that total output this year will increase by 1·5 per cent., which will obviously benefit the west midlands. The introduction of the small firms engineering scheme has benefited the west midlands by £6 million. Much of the aid that has gone to British Leyland, Rolls-Royce and the aerospace industry has benefited the west midlands. However, I recognise that the area faces difficult problems.

Despite the measures taken by my right hon. Friend's Department, will further help be given to those who start new businesses, which are urgently required to replace older industries, in that area? Is my hon. Friend aware that bank lending is still limited and that interest rates are still quite high?

As my hon. Friend knows, a wide range of measures are available for the start-up of new industries and to help existing small businesses. Further decisions will no doubt be considered, but I must not anticipate what my right hon. and learned Friend the Chancellor may do in his Budget.

Has the Minister forgotten that one of his hon. Friends told us that the west midlands would see the results of the Government's policies by the end of 1979? Is he pleased with the results?

The west midlands will benefit as British industry becomes more competitive. The motor industry and the steel-using industries will benefit most from our policies to reduce inflation.

Will my hon. Friend consider the need for industry in the west midlands to become more competitive, and the means to help it to become more competitive, by removing discrimination against it in trade inside and outside this country? Will he further consider the need to give the west midlands a better technological base, with research and training facilities?

I understand precisely what my hon. Friend is getting at. We have made several changes in regional policy which benefit the west midlands by removing discrimination against it. My hon. Friend will have noticed the references made by my right hon. Friend the Prime Minister to a review of regional policy.

I know that my hon. Friend is extremely oncerned about Spain. He knows that we regard the present position as grossly unfair, stemming as it does from an archaic agreement. My right hon. Friend the Prime Minister has made it clear that we expect changes in the situation, and the Commission has made a fresh approach in this connection.

Manufacturing Industry


asked the Secretary of State for Industry what is the most recent figure for output in manufacturing industry; and how this compares with the figure for the same month in 1979.

In the three months August to October 1982 the index of production for manufacturing industry was 88·3, compared with 101·9 in the same three months in 1979.

Does my hon. Friend agree that output in manufacturing industry will rise only when the demand for its output is increased? To what extent does he expect demand for manufactured goods to increase as a result of the recent welcome change in the exchange rate of sterling?

The recent sharp drop in the value of sterling—it has dropped against the deutschmark and the French franc by about 12 per cent. in 10 weeks and by about 19 per cent. against the yen—will improve the competitive position of many British manufacturing firms that export. They must now make the most of this change in the value of sterling.

In the light of the Minister's reply and the fact that 2 million jobs have been lost in manufacturing industry in recent years, are not the Government showing scandalous complacency about manufacturing industry? Is the Minister satisfied that for the first time since the industrial revolution we are importing more manufactured goods than we are exporting?

The hon. Gentleman exaggerates. Throughout the Western world the share of each economy's output that is devoted to manufacturing is declining in terms of employment. In my view, that will continue for some time to come and it would be quite unrealistic for any Minister not to agree with that. We have many measures, in the Science and Technology Act and in the Industry Act, to support and encourage British manufacturing industry.

Will my hon. Friend say whether there is a section in his Department that keeps a close watch on our existing manufacturing enterprises being transferred to other nations by appallingly high subsidies, which appear to be in breach of almost every international agreement? Will he look, in particular, at the remarkable case of the transfer of Timex operations from Dundee to France and find out whether the subsidy offered is in breach of the rules, as appears to be the case? Will he consider having a section to watch this matter carefully?

We monitor changes of that nature, particularly dramatic ones such as the one my hon. Friend mentions. I have already asked for an inquiry to be put in hand into the nature of the incentives that were offered to part of the Timex company's operations to set up a manufacturing unit in France. If the incentives exceed those that are approved in the Common Market, we shall make the strongest possible protest.

There is to be a debate on Wednesday, when the Chancellor and the shadow Chancellor will speak. I should like to make clear that the adjustment—

—in the value of sterling creates for British companies that are exporting an opportunity to export more. To that extent, the adjustment in the value of sterling will benefit British companies that are involved in the export of goods.

Steel Castings


asked the Secretary of State for Industry to what extent heavy manufacturing industry uses steel castings made in the United Kingdom.

In 1981 heavy manufacturing industry used 116,046 tonnes of steel castings from United Kingdom foundries, equivalent to 95 per cent. of its total requirements.

Will the Minister guarantee that that will be maintained in the next 18 months to two years, because many manufacturing firms in Stockport would like to buy British but find it extremely difficult to do so? Many of those firms are extremely worried that, because of the present Government's attitude to the British Steel Corporation, it will be increasingly difficult to buy British in the future.

Currently, the steel casting industry is working at about 60 per cent. of its capacity. I should also point out that we exported about 30,000 tonnes of goods in this connection, and imported only 5,000 tonnes. The industry is coming together on rationalisation schemes, and that is very much in line with the decisions that it is making.

Will my hon. Friend say how the rationalisation scheme promoted by Lazards is progressing and to what extent it will retain capacity to manufacture heavy castings, which were once a main feature of Sheffield industry?

It would be premature to disclose the present position on the scheme that Lazards is operating. However, I can say that funds of about £800,000 have been allocated out of the total of £7·8 million that we envisage for the scheme. I shall keep my hon. Friend informed of developments that affect Sheffield.

Would not the steel casting and steel rolling industry be more protected if the Government were to reject the minority Goldstein document to the Serpell report, that suggests that the British Steel Corporation should import track products and other products relating to the uses of British Rail? Does the Minister believe that that will have a major bearing on future working in the steel industry in my constituency, as it will in the constituencies of many hon. Members on both sides of the House? Will he reject Goldstein totally out of hand, because he was not bright enough to address himself to the real issues in the steel industry and, secondly, because his fee was fat and too large?

Tempting as it is, it would not be wise to discuss the minority report to the Serpell report. That is a matter for my right hon. Friend the Secretary of State for Transport.

British Aerospace


asked the Secretary of State for Industry what recent discussions he has had with the chairman of British Aerospace; and whether the future work programme was discussed.

I and my colleagues in the Ministry of Defence have regular contact with the chairman of British Aerospace. The future work programme has been among the topics discussed with him.

How much longer is the Minister prepared to lie back and allow British Aerospace to be sabotaged by the fictitious accountancy that is now distorting prices so much that the chances of the BAC 146 succeeding are quite remote? When will the Minister write off at least £200 million of the development costs which rightly belong to his colleagues who are answerable for defence charges? Is that not the way to proceed and thus give a chance to British Aerospace?

I reject the hon. Gentleman's accusation about fictitious accountancy. I shall refer his comments to my right hon. Friend the Secretary of State for Defence.

Does the Minister agree that aerospace, more than most industries, needs to collaborate and work closely with the Government of the day? Does he further agree that, with the developments in the agile combat aircraft, the airbus, the variants of the Coastguarder and the medium-range turbo aircraft for Europe, British Aerospace and its workers have fulfilled their share of the bargain, and that there now needs to be a sense of urgency on the part of the Government to give the aerospace industry a long-term perspective and a chance to compete with the Americans?

I agree with the hon. Gentleman that the workers of British Aerospace should be congratulated on their recent record. They have increased productivity, and they have done their best to meet the objectives that the management set for them. The hon. Gentleman is quite right in saying that there are a number of areas in the aerospace industry where close co-operation with the Ministry of Defence and, on occasion, with the Department of Industry, is necessary. We have honoured our commitments, going back to 1978, on a rate of return of 5 per cent. I believe that we have also been consistent on launch aid. We recognise that there are occasions when special measures are required.

Following the failure of the Arianne launch in September 1982, and with it, sadly, the British Aerospace Marecs B satellite, for which we are the prime contractors, can my hon. Friend say when its replacement will be launched? Will my hon. Friend confirm that British Aerospace is doing a magnificent job for satellites in Britain?

The French have a problem to resolve, but we are hoping that it will be in the spring of this year.

May I take this opportunity to congratulate British Aerospace and other leading contractors on the British satellite aspects of this programme for choosing that part of the programme that has the best commercial rate of return.

The Minister is congratulating the work force of British Aerospace, but is he aware that it is now faced with considerable redundancies? I am particularly thinking of British Aerospace at Manchester, which is deeply involved in the civil airline projects. Would it be useful for the Minister seriously to consider creating some kind of window whereby British Aerospace could purchase one or two 146 planes to help the industry during this difficult period?

It would be unwise to make statements from the Dispatch Box on forward-order decisions. I agree that in recent years some parts of British Aerospace's productive capacity have been under great pressure. I know, as will the hon. Member for Coventry, North-East (Mr. Park), that one of the sites that has been affected is Bitteswell. I fully understand the anxiety of the hon. Member for Manchester. Blackley (Mr. Eastham). However, I do not think that he will expect me to give such a commitment this afternoon.

As British Aerospace is the major producer of high technology, high added-value products for which there is world demand, as it has had acknowledged successes and has the prospect of more exports, in particular the A320 airbus and the agile combat aircraft, why are the Government dragging their feet on launching aid, particularly when it is well known that many jobs are now threatened in the industry, which should be expanding?

The Government are not dragging their feet on launch aid for the airbus. Britain's position is similar to that of the Germans. The French have allocated money in advance from public sector funds, but Britain and Germany are waiting to be satisfied that the project will provide a proper commercial rate of return. Britain, through the Ministry of Defence, is discussing collaboration on the agile combat aircraft with the German and Italian air forces.

Companies (Equity Purchases)


asked the Secretary of State for Industry what advice and assistance are available from his Department for managers purchasing the equity of a company which previously employed them.

My Department does not provide any advice or assistance specific to these management buy-outs. However, companies being set up in this way can apply where appropriate for assistance under the various schemes operated by the Department provided that they satisfy the standard criteria. Managers can also obtain advice and information from the Department's small firms centres.

Has my hon. Friend noted the truly excellent results of the National Freight Corporation? Is he aware that the only regret of its employees in my constituency and elsewhere about the change of ownership is that some of them did not buy as many shares as they might have done? Will my hon. Friend assure Conservative Members that he is giving every encouragement to management within nationalised industries to buy out parts of those industries?

I have indeed noted the encouraging first 32 weeks' results of the National Freight Corporation. In a sense, that was a staff buy-out rather than a purely management buy-out, and it is one of the most noticeable in the recent trends. My hon. Friend will know that, from small beginnings only a few years ago, many management buy-outs are now taking place with many advantages, not the least of which is to preserve viable units which are much better outside the nationalised sector when the employees and the management have a positive stake in the operation. He will know that changes in the Companies Acts and fiscal legislation have made it easier to achieve such buy-outs, which we shall always encourage where appropriate.

If the Minister is so keen on management buy-outs, why is he not more keen on helping co-operatives to set up and develop? Why has he cut the funding available for the Co-operative Development Agency and made so little public money available for the setting up of that particularly important type of small business?

The hon. Gentleman should realise that there are various ways in which economic activity can take place. The management buy-out is extremely important and it has produced many excellent results in recent years. Under the Government the management buy-out approach has started to take off. We had a full debate on the funding of the Co-operative Development Agency and there was a wide welcome for the new remit that I gave it, the results of which have been encouraging.

East Midlands


asked the Secretary of State for Industry what steps he is taking to improve the industrial position of the east midlands; and what increase in activity he expects thereby.

In a difficult world-wide economic climate our policies are helping industry in the east midlands and elsewhere by reducing inflation, acting on industrial costs which are outside the control of industry and encouraging innovation and the use of new technology. Appropriate areas of the east midlands also receive assistance through assisted area and enterprise zone status, derelict land clearance designation and inner city policy. Between 1982 and 1983 total output in the economy is expected to increase by 1½ per cent.

Is the Minister aware that managements and work forces in the east midlands regard the Government's efforts to help them as puny and useless? The devasting decline in industrial production in this once so prosperous area is continuing, not least in the city of Leicester, with awful effects on employment. When will the Government produce something other than the sort of platitudes that the Minister has just placed before the House?

The Government have produced a great deal more than platitudes. I mentioned specific areas of assistance. The hon. and learned Gentleman will know that since May 1979, under sections 7 and 8 of the Industry Act 1972 and the support for innovation schemes, nearly £38 million has gone to assist the east midlands. I strongly question the initial general remark of the hon. and learned Gentleman, because I find wide support in industry for the Government's main strategy of reducing inflation and other industrial costs.

Is my hon. Friend aware that in reality industry in the east midlands welcomes many of the Government's measures, especially the reduction of inflation, the cut in the national insurance surcharge and the many measures to help small businesses? Is he also aware that in a recession industry cannot cope with increased public sector costs? Therefore, will he impress upon nationalised industries and other public sector enterprises that they simply must not raise their prices this year?

I know that that is the response of many in industry. As my hon. Friend will know, unemployment in the east midlands is below the national average as a result of the efforts that have been made by industries and their work forces.

My hon. Friend will also know that, as a result of the success in solving some of the nationalised industries' problems, there will be a standstill on both gas and electricity prices this year. That is widely welcomed by industry.

On a point of order, Mr. Speaker. In view of the unsatisfactory reply to my question, I beg to give notice that I shall seek to raise the matter on the Adjournment as soon as possible.

British Leyland


asked the Secretary of State for Industry if he will place an edited copy of BL's corporate plan for 1983 in the Library.


asked the Secretary of State for Industry whether he has now received the new corporate plan for BL; and if he will present it to the House.

British Leyland's 1983 corporate plan is at present being studied and the Government's decision will be announced in due course. At that time I expect to be able to make available to the House a report by British Leyland on its recent performance and details of the corporate plan.

In view of the widespread concern at reports that British Leyland is proposing to get 30 per cent. of its components from abroad, will the Minister tell the House whether he has had any discussions with either British Leyland or the component industry? Is he satisfied that our component makers are unable to meet BL's requirements? If so, will he consider a scheme to ensure that they can produce satisfactory components?

That is understandably an issue of some controversy in the west midlands. British Leyland has taken a tough stance with the component suppliers, because it has been charged with breaking even at the earliest possible opportunity. I am delighted to say that the signs are that it will do so in 1983. Having said that, we should encourage component suppliers, not just in the west midlands, but elsewhere, to approach the Department of Industry to see whether there are any ways in which the Department's various schemes can help them to reduce their costs to produce components at a price that meets British Leyland's demands.

Does the Minister accept that his reply does nothing to reassure either management or workers in the west midlands? The long period over which they have had the corporate plan for British Leyland has given rise to considerable uncertainty, not only on the issue raised by the hon. Member for Bromsgrove and Redditch (Mr. Miller) but on British Leyland's structure. The time that is being taken is having a major effect on the work force and the structure of British Leyland—

Order. The hon. Gentleman is taking up all the time available. I was hoping to call two more questions.

When will the Minister make a statement about the projected break-up of British Leyland? When will he make an official statement, rather than issuing a statement abroad, about the Honda link?

There is no question at this stage of a projected break-up of BL. It is charged with breaking even, and hopes to do so in 1983. It is also charged with making profits and introducing private sector capital at the earliest possible opportunity.

The news is not all bad. The hon. Gentleman, of all people, should know that the increase in productivity at Longbridge has been especially spectacular and that Cowley is improving dramatically, with another 1,000 jobs being created there. Jaguar is doing excellent work in both quality and volume. We are confident that the new style of management at BL will continue and that the job prospects of its workers will be enhanced.