asked the Secretary of State for Industry when he intends to make a further statement on Inmos.

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

I have nothing to add to my reply on 24 March to the hon. Member for Newton (Mr. Evans).

Does the right hon. Gentleman agree that this project is uncertain, to say the least? Does he accept that the real problem is that British industry, generally, is miles behind many of our industrial competitors in the application of chips and chip technology, and that the real need is to concentrate on and plough money into the application area rather than into the production of chips, where we cannot compete?

I agree with some of the implications of the hon. Gentleman's supplementary question, but I am not sure what conclusion should be drawn in this case.

Will the right hon. Gentleman explain the inordinate delay in coming to a decision, one way or the other, from the beginning of this year until now? Is the reason that the Prime Minister resists the proposition that the Government should intervene further in the matter? In view of the enormous intervention by the Japanese Government and the United States Government, does not the right hon. Gentleman think that it is important to come to a decision soon?

I agree with the hon. Gentleman that it is important that a decision by the Government's resolving the issue should be reached as soon as possible, but the issues are very complicated, and have become more so.

Is my right hon. Friend aware that there was some question of GEC buying this company and thereby relieving the taxpayer of any further injections of funds? Can my right hon. Friend report to the House on that matter?

It has been announced in the press that GEC is interested in some possibility of a connection with this company, but the negotations are obviously confidential.

Will the Secretary of State say how much State money has been invested in this project? What has happened to the offers to the development areas with high unemployment that were supposed to be benefiting from it?

The question is really for the National Enterprise Board. I believe that about £25 million has either been invested or committed.

Does the Secretary of State believe that we should have a manufacturing capacity in silicon chip technology, or does he believe that we should import it?

The decision is for those who want to manufacture silicon chips in this country. There is taxpayers' money available, under widely understood schemes, of which they can avail themselves if they come within the criteria, but the decision is essentially for them.

Does my right hon. Friend agree that if a further £25 million is given to this project he will be taking a view about whether there should be various forms of silicon chip marketing and production in this country? He will be going into the market place and ceasing to be a politican.

My hon. Friend is, as usual, right or nearly right. But an inheritance is involved. There is the National Enterprise Board, which the Government have continued with the purpose of making judgments on a limited but important range of business decisions. It has recommended that a second tranche of this initiative, started by our predecessors, should be given.

I remind the House that the eight open questions on the Order Paper today were tabled before I made my statement last week, so I will call them.

asked the Secretary of State for Industry what annual rate of change he expects for 1980–81 and 1981–82 in productivity, output and jobs in manufacturing industry.

Unknowable: the assumptions made for the Financial Statement and Budget Report were published in them. The outcome will depend on world trade, the effectiveness of management, the co-operation and understanding of their own interests of wage earners—in short, upon our competitiveness.

Does not that reply seek to conceal the substantial decline expected in manufacturing industry, in output and in employment? If these forecast falls are judged a success of policy, what would convince the right hon. Gentleman that he is failing? What part is the right hon. Gentleman playing in the discussions with the TUC and the CBI on the future use of North Sea oil revenues for the benefit of industry, and what view does he take upon that important matter?

No, the Government are not shirking the publication of some assumptions on which the Budget was based, but the hon. Member goes beyond assumptions and asks for my personal opinion. The margins of error in this area of forecasting are so wide that my personal opinion is not relevant. I do not have a personal opinion on these difficult matters. We have a dopted certain assumptions for the purpose of the Budget. They have been published. There are regular discussions with the CBI and the TUC and others; and next week, at the NEDC, the subject to which the hon. Gentleman refers will inevitably come up.

Has the right hon. Gentleman noticed that the disastrous loss of jobs in the textile industry has moved into the textile machinery manufacturing industry and that firms such as Muschamps in Oldham and the even more famous Stone-Platts firm, which has been in Oldham for almost 150 years, are to close at the end of this year? Does he intend to stand by and allow that sort of thing to continue?

I know that there are difficulties in a number of parts of the textile machinery industry, but the hon. Member's assumption that the Government can do something about what is essentially the combined effect of management effectiveness and work force cooperation is misplaced.

In view of the likelihood that people in manufacturing industry, particularly middle management, will have to change their jobs more frequently in coming years, will my right hon. Friend require the Occupational Pensions Board to make recommendations as to the way in which people changing jobs in mid-career can fully protect their pension rights in private schemes?

My hon. Friend and I have been dancing a minuet around this difficult subject for nearly 20 years. I shall certainly speak to the relevant Minister about what he has said.

Does the right hon. Gentleman maintain that the Government have no part whatever to play in any of these matters—that the high exchange rate, the historically highest interest rate in our history and the rigid reduction in investment imposed by the Government have no effect upon industry? If so, is he not aware that practically every reliable economist today, along with the CBI and the TUC, deeply disagrees with him?

An alternative policy which interfered with the exchange rate, which sought to hold down interest rates and which subsidised investment further would make matters worse. The basic fact is that large numbers of individuals are misguidedly pricing themselves and their fellow workers out of jobs.

Is it possible——

Order. I had not called the right hon. Gentleman. Mr. Silkin.

I apologise, Mr. Speaker. I am afraid that I was provoked. Is the Secretary of State saying that things could be worse than they are at the moment? If so, he does not know what is happening to British industry in practically every sector.

Yes, things certainly could be worse than they are at present. The adoption of the policies implicit in the statements of the right hon. Gentleman and his right hon. Friends would make inflation, and therefore unemployment and interest rates, much worse.

asked the Secretary of State for Industry what study his Department has made of the recent report by the Small Businesses Administration in the United States entitled " Government Competition: A Threat To Small Businesses."

This report, prepared by a task group established by the office of the Chief Counsel for Advocacy of the United States Small Business Administration, was published in the United States last month. A copy was obtained by the Department last week and is currently being studied by officials.

I thank my right hon. Friend for that reply. When that report is examined, I believe that it will be found to be an indictment of the activities of the American Government in squeezing smaller businesses. Will my right hon. Friend authorise a similar investigation in this country to see whether our small businesses are suffering in exactly the same way?

We are already conscious of what is called the " crowding out " effect on small and other businesses of excessive Government spending, borrowing, taxing and regulating. We do not need convincing of that.

Does the right hon. Gentleman agree that the biggest threat to small business in this country is the high rate of interest that it is required to pay? Will he study the speech that I made in the House in November last year, when I drew the Government's attention to the need for a regional development bank, under which the rates of interest payable in the regions would be less than in other parts of the country, depending on the level of unemployment?

I am interested in the hon. Gentleman's suggestion, but there would be no guarantee that such lower interest rates would not leak into other activities. It is a nice question whether inflation or interest rates are the worst enemy of small businesses at the moment. Certainly our policy is intended to reduce those burdens on small businesses so that they can flourish.

asked the Secretary of State for Industry what is the annual cost of the small firms counselling service.

The cost of the counselling service in 1978–79, the last period for which figures are available, was estimated to be about £600,000.

Is my hon. Friend satisfied with the cost-effectiveness of the service? If so, what areas is the service investigating, what are the guidelines that apply in investigating them and how are counsellors selected or nominated to provide this service?

An early independent evaluation of the counselling in the Southwest shows that, in a sample of 65 clients, about 150 jobs were either generated or saved. Now that counselling is well established throughout the country, we intend to commission a further evaluation by independent consultants. I am also introducing a continuous in-house system of monitoring by following up individual cases. As for the help that counsellors can give, their particular value is that many small businesses, and particularly new businesses, lack a whole raft of management techniques, and the assistance of experienced business men can save many small firms which might otherwise go to the wall.

Does the hon. Gentleman accept that small businesses generally are grateful for the management expertise which this service provides? However, there is a problem on which I should be grateful for his comments. I have come across examples—I am sure that many other hon. Members have seen the same thing—of small business men who are unaware of the services offered in this direction. Will he consider methods of improving the general knowledge of these services?

The hon. Gentleman has drawn attention to an important matter. We are anxious that these services should be more widely known. We have recently introduced a national Freefone number. Those in trouble or with problems can simply dial 100 and ask for Freefone 2444. I am grateful to the hon. Gentleman for the opportunity to advertise that.

Is my hon. Friend aware that these services are provided by banks and management consultants, who give much better value for money than a counselling service organised on public funds?

Perhaps my hon. Friend is not aware of how large a proportion of the work done by the counselling service is concerned with people who are thinking of starting a business. It would be rare to find good value for someone who has not even got a business going in the payment of fees to a management consultant.

asked the Secretary of State for Industry if he is satisfied with the progress being made in attracting industry to the Northern region; and if he will make a statement.

I am confident that the Government's regional and other policies will succeed in promoting industry and employment in the North as elsewhere.

Is the Minister aware that in spite of all the fine promises during the election campaign last year the rate of unemployment in the Northern region, at 9·5 per cent., is the highest in the country? In those circumstances, will his right hon. Friend reverse his monstrous decision to slash the grant to the North of England Development Council? Is he aware that that was the biggest cut of its kind? When will the Government take the problems of the North seriously?

The hon. Gentleman makes a serious point about unemployment in the Northern region. However, if he is fair he will draw the attention of his constituents to the position as it developed during the final years of the previous Administration. Nevertheless, there is a problem, and that is why, particularly, we have concentrated more development aid potential on the North.

If the Minister means what he says about the Northern region, why have the Government decided to end the cost escalation scheme for British Shipbuilders, which plays such a crucial part in employment throughout the Northern region? There is no evidence of any opposition from the EEC. France is continuing such a scheme for its merchant fleet. British Shipbuilders has been singled out for a further reduction in assistance. Why was not the Minister more candid about that decision in the debate a few days ago?

I do not think that I was lacking in candour during that debate. The point is that the amount of assistance to the British shipbuilding industry is considerable, as was noted in that debate. The intervention fund is being used to its maximum and the home credit fund is continuing to be used strongly. Therefore, the largest part of assistance is still available to help a situation which is, thank Heaven, improving marginally.

If the Minister is not lacking in candour, he has certainly been badly briefed. Is he aware that last week 2,300 redundancies were announced in the Northern region? That is not a phenomenon. It is becoming a regular weekly event. Despite what the Minister might say about what happened during the previous Labour Administration's term of office, the period since last May has been disastrous for employment in the North.

I thought that I had been extremely candid in recognising the seriousness of the problems. Of course they are there. However, they will not be wished away. Some assistance through the regional development grant will develop employment in the region. That will help, particularly, the establishment of new businesses. I am glad to say that in that respect there are encouraging signs in the starting up of small businesses. The position is not entirely bad. The hon. Gentleman will know, I am sure, that new jobs have been created in recent years, thanks to the incentives that are available. The future growth prospects of the region depend upon those new businesses.

asked the Secretary of State for Industry whether the National Enterprise Board will be permitted to invest in the field of genetic engineering.

My right hon. Friend will consider any proposals by the board which require his consent. None has yet been put to him.

Does the Minister recall that on 19 July last year his right hon. Friend said that it would be sensible to use the NEB to familiarise industry with new technology? Does he agree that biotechnology is one of the most important of the new technologies now developing? Is he aware that unless there is a massive injection of public funds through the NEB this country will miss out on that revolution, as it has on so many in the past?

I certainly recall the comments of my right hon. Friend on that occasion, and I agree with the hon. Gentleman that this is an important area. I have had the chance to see some of the new technology in the United States. However, problems of this kind are a matter for the NEB.

asked the Secretary of State for Industry what is the status of the current review of public purchasing policy.

As announced by my right hon. Friend the Prime Minister on 28 February we intend to use the policy on public sector purchasing and research and development to help improve industry's performance.

Does that review include consideration of how small firms might be helped by public purchasing policy?

Yes, I can confirm that in the review we are looking at small businesses, along with other businesses. I emphasise that this is a continuing review. It is not something that terminates. It goes on.

Will the Minister also consider the role of public sector ordering in dealing with unemployment in areas where the rate is very high? Will he consider, in particular, the possibility of advance orders for ships in the public sector, particularly for the Robb Caledon shipyard in my constituency, which is in danger of closure unless help is given by the Government?

I understand the hon. Gentleman's point. I can only say to him that at present all concerned are fully aware of the implications behind this question. Speaking specifically of defence, I have had the opportunity of travelling around the country with my hon. Friends the Defence Ministers and looking at a range of issues. Wherever help can be given, it will of course, be provided.

Despite the adherence to absolute non-intervention—which in the modern world is sometimes difficult— will my hon. Friend take up again the question of the Inland Revenue placing with the British computer industry, rather than with overseas industry, the order for what will, I believe, be the largest-ever single computer order when new systems come to be ordered in a year or two?

No decision has yet been taken on that matter, but I certainly take note of what my hon. Friend has said.

I was interested to hear the Minister say that he had had a look around the country with his Defence Department colleagues. Did his visit take him to the Vickers Elswick plant, where in two weeks' time 350 redundancies are to take effect. In this context the Minister has complete control of public purchasing and he could avert these redundancies—the first of 1,600 if he so wishes.

I have not had an opportunity to visit Vickers, though I hope that an opportunity to do so will present itself. In the meantime, as the hon. Gentleman is well aware, part of the problem there arises directly from the Iranian situation. Some of the problems have arisen in an unexpected and unfortunate way for British industry.

Will my hon. Friend bear in mind, however, the problems that he can create for Government Departments when they refuse to take the best buy by not taking into account the aspects of delivery, quality, reliability of spare parts and the standing of the firm? These aspects are of the greatest importance and if my hon. Friend moves from those it will be a direct subsidy, which may well be to the detriment of British industry rather than to its benefit.

My hon. Friend has put the matter into perspective. These facts must be borne in mind. What I have said in no way rules out what he has put forward, and I agree with him.

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

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

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

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

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

Yes, Sir.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

My right hon Friend and I met Sir William Barlow on 23 April.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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