asked the Secretary of State for Industry what progress has been made in the introduction of computers into schools.

Progress in my Department's micros in schools scheme is excellent. A total of 2, 300 applications had been processed by the end of 1981 and, with the extension of the scheme to all secondary schools from January this year, large numbers of applications are expected. I am very satisfied with the success of this scheme so far, and we are well on the way to reaching our objective of ensuring that every secondary school has at least one micro by the end of 1982.

I congratulate my hon. Friend on the success of this imaginative scheme. Has sufficient progress been made in the training of teachers in these schools to get the full benefit out of the machinery that is being installed?

My hon. Friend will appreciate that my role is to provide cash for the hardware—the equipment. The role of the Department of Education and Science is to provide the training, and it operates such a scheme. It has allocated £9 million for the training of teachers, because it would be useless to supply schools with microcomputers unless some of the staff were trained to use them. I hope that that training scheme will go from strength to strength.

The Minister will be aware that a few months ago I raised the case of a manufacturer in my constituency who can compete in terms of price, quality and every other respect. Has the hon. Gentleman extended the original list of two names so that other manufacturers can participate in this scheme?

As I said, the scheme is being extended to all secondary schools from January this year, and the two manufacturers who have been selected will cover that extension. I am considering the possibility of extending the scheme to primary schools. In that event, we shall look at other manufacturers as well as the first two.

I congratulate my hon. Friend on the enthusiasm with which he has pursued this programme. Has he initiated any studies on the future use of computerised learning methods through the telephone network by primary schools, particularly those that are threatened in rural areas? If not, will he consider doing so?

That is an interesting idea and I shall certainly pursue it. The support that the Department is providing is available for private as well as State schools.

Does the Minister agree that the work done by his Department is being undermined by the Department of Education and Science, especially by cutting the facilities available for training teachers in computing? Most institutes of education no longer have lecturers in computer studies. In addition, the DES is either unable or refuses to provide sufficient software for the scheme. As a result, the scheme is in jeopardy because, although the Minister is providing the hardware, the teaching facilities are not available.

The hon. Gentleman exaggerates. The Department of Education and Science has allocated £9 million for the training of teachers and the provision of software. That is an essential part of the scheme. I shall draw the hon. Gentlman's remarks to the attention of my right hon. and hon. Friends, because the continuation of the training programme is important.

I join in the welcome that has been given to the scheme. Is my hon. Friend aware that there is concern whether local education authorities are pulling their full weight? It is not just a question of money. Is he satisfied that they are doing as much as they can to ensure that the systems installed in schools are integrated and that there is sufficient provision of software, which need not be terribly expensive?

The practice varies from one education authority to another. Some of those that I have visited do an impressive job co-ordinating the activities of all their schools and providing basic software and common programmes. I certainly encourage all local authorities to move down that road.

asked the Secretary of State for Industry if he will raise the upper limit on the loan guarantee scheme from £75, 000 to £500, 000.

asked the Secretary of State for Industry when he intends to make his first review of the loan guarantee scheme for industry.

The loan guarantee scheme has now been in operation for just under eight months, and I shall be reviewing its operation to date with the banks very shortly. We must look carefully at how it is working before considering major changes of the sort suggested by my hon. Friend.

A review would be useful, but does my hon. Friend agree that whereas research in the United States has shown that new small firms create the greatest number of new jobs, in Britain the existing small firms have the greatest potential for creating new jobs? Is it not therefore necessary to raise the upper limit from the modest £75, 000 to £500, 000, and would we not create more jobs if we did so?

We are anxious to increase the contributions of both new and existing small firms, but an increase to £500, 000 would change the nature of the scheme and greatly increase the potential cost. It is one of those points that I shall be taking into account in the review, but, as my hon. Friend knows, the scheme is going like hot cakes in its present form. Up to the end of last month 1, 839 businesses had been helped with a total of £63·6 million, and the pace is accellerating. I have to take that point into account, too.

My hon. Friend deserves great credit for the way in which he and the Government have administered and expanded the scheme over the last 18 months. In view of the importance of expanding the number of new jobs, will he bear in mind the importance of ensuring that the proportion of new businesses as opposed to existing ones receiving support under the loan scheme is in the majority? Will he ensure that not just a larger amount of money in terms of limit is made available, but that the proportion of new businesses is in the majority?

I am grateful to my hon. Friend for his tribute. The experience so far has been most encouraging. It is difficult for us to be certain that it is directed entirely in the way that he suggests, because we are at the mercy of the response by businesses to the scheme.

Is it not about time that the interest charged on the guaranteed part of the loan was reviewed, in view of the criticism by a number of business organisations, including the National Federation of Self Employed and Small Businesses, the Council for Small Industries in Rural Areas and the Development Commission, that many small businesses cannot afford to take the loans because the interest rates are too high?

It is important to keep stressing that because the banks charge lower interest rates on that proportion of the lending that gets the guarantee the actual interest rates charged are broadly at the same level as the banks would be charging for marginal lending propositions without a guarantee. There is an important factor here. In a scheme of this sort, which is encouraging additional lending, we would be criticised by existing businesses if that lending were to be made at rates of interest well below what they were paying.

Will the hon. Gentleman bear in mind, when he reviews the scheme, that a very small proportion of the money is finding its way to the North of England? Has not the bulk of the money so far spent been allocated to companies in the South and the South-East? If he and the Government are looking to this or any scheme to do with small businesses to make a very large contribution to solving the unemployment problem in the North, they must bear in mind that, while it may make a contribution, it will be very marginal.

As I said, it depends upon businesses making applications for loans. The North also includes the North-Western area.

The Northern region.

The hon. Member for Bishop Auckland (Mr. Foster) referred to the South and the South-East, so it is worth pointing out that the North-Western area has had the highest proportion of lending under the scheme to date. That indicates that there is not a bias in favour of the South by any means. Naturally, I should like to see the North-East increasing its lending under the scheme as well.

I congratulate my hon. Friend on what he has done. Is he aware that a large number of small businesses, although well constructed, are finding things very difficult? Is he satisfied that the proportion between new businesses and existing businesses which have a good foundation is correct?

I am well aware of the difficulties that, because of the world-wide recession, many small businesses are facing. It is encouraging that the balance in the loan guarantee scheme is as it is at the moment. As I said, the situation depends upon the applications being made by new and existing businesses.

Are not bankruptcies and closures among small businesses at record levels? What does the Minister have to say in answer to the recent small business survey, which showed that over 800, 000 jobs had been lost in small businesses since the Government started their monetarist recession?

I would say three things in reply to that. First, the survey was not a scientific survey. Therefore, one must look carefully at the estimate of 800, 000 jobs lost. I should have thought that it was a good deal less, based on the sample itself. Secondly, other surveys show that while many small businesses are folding up at present, just as many are starting up. It is important to stress that aspect. Thirdly, there is widespread evidence that there has been a lower loss of jobs among small firms than among large ones.

asked the Secretary of State for Industry what is his latest estimate of the total amount of public subsidy to be paid to industry this financial year; and how much of this is to be made available to the British Steel Corporation, BL and British Shipbuilders.

Total support for British industry in the current year is estimated to be around £3 billion. This includes the whole of regional assistance to industry, support for small firms, science and technology and many other heads. A little over half of the total sum will go to finance the three industries mentioned in my hon. Friend's question. I regard this proportion as excessive, and it must be reduced as soon as practicable.

As I understand that the British Steel Corporation, British Leyland and British Shipbuilders have shed substantial amounts of labour in recent years—about 25, 25 and 20 per cent. respectively—can my right hon. Friend give me an assurance that in future the amount of public subsidy put into these three nationalised industries will be dramatically reduced and, indeed, that any subsidy that may be necessary will go into investment in sound capital projects, not into the preserving of uneconomic labour?

I have a great deal of sympathy for the point made by my hon. Friend. Much of the money that has been spent has gone into sound capital projects. For example, in the case of BL, I have here a list of nine major capital projects financed over the last five years with a total investment—this comes from a variety of sources—getting on for £1, 000 million. In the steel industry there has been some valuable investment as part of the restructuring. I hope that over the next two to three years we shall see a substantial reduction in the burden that these firms represent to the taxpayer so that we can do a bit more in the new, modern industries where all major industrial countries give support.

Does the right hon. Gentleman agree that the steel, motor car and shipbuilding industries are vital if Britain is to have any future as an industrial nation? Furthermore, does he agree that all these industries have been run down? If this new capital is now to be realised and a return made upon it, should not the Government consider import controls to make sure of it?

I do not think that it would be of any help in encouraging the increasing competitiveness of British industry if we were now to embark upon a wide-ranging programme of import controls as advocated by the official Opposition. As to the essentialness of industries, there is no point in maintaining in perpetuity industries in whatever product, that cannot in the end pay their way. The Government and the boards intend to make these industries viable so that they can contribute to rather than be a drain on the British economy.

I welcome what my right hon. Friend said about making these industries viable, but will he continually remind both managers and workers in them that they are kept going by the grace of the taxpayer and the grace of the profits of those firms which are already viable, and that it is vital that they should realise that there is a limit to how long those in viable industries are prepared to go on subsidising them if they continue to work towards their own destruction, as some of them seem to be doing now?

I am satisfied that the managements in these concerns are aware of that point. The question of how such information is made available to the work forces must be for the managements to decide.

Does the right hon. Gentleman agree that this investment in the public sector has a direct effect on the private sector and creates many thousands of jobs, as we saw recently in the motor car industry? Will he acknowledge that fact?

I certainly acknowledge that fact. That is why I included support for those three major concerns in what I called total support for British industry. However, as much of the support, both in the past and now, goes to meeting losses, my hon. Friends are entitled to draw attention to that point and to say that they wish to see an end to it.

asked the Secretary of State for Industry what Government assistance is at present available to the British aerospace industry.

Government assistance may be provided in various forms. Net public expenditure in direct support for the civil aircraft, aero-engine and equipment industry in 1981–82 is expected to be £251·8 million.

If it is still Government policy to put money into success stories, as it is in France, the United States of America, Japan and West Germany, when does my hon. Friend expect to be able to make a positive and helpful statement about Government support for the A320 airbus?

We have received an approach from British Aerospace about the availability of launch aid, which we are considering. I agree with what my hon. Friend said about the successful record of the British aircraft industry. The Government wish to be satisfied that the project will earn a good return.

Will the Minister look for close co-operation with the Japanese aerospace industry in considering a new launch into the 1980s and 1990s?

The hon. Gentleman is right. The Japanese wish to expand their aircraft industry, and it is possible that collaboration with Japan can take place. However, that is a matter for the Government and a matter of first concern to the companies involved.

Does my hon. Friend agree that, in addition to the figures that he has quoted, the assistance given to the European Space Agency should fairly be regarded as assistance to the British aerospace industry, especially as it moves increasingly into the area of electronics information technology?

My hon. Friend is right. The figures that I quoted did not include £55 million spent on space, which goes largely to the ESA.

asked the Secretary of State for Industry whether he will place a version of the approved corporate plan of BL in the Library; and if he will make a statement.

As BL's corporate plan contains commercially confidential information, it is not publicly available. Copies of BL's report on the corporate plan are available in the Vote Office and in the Library.

I invite my right hon. Friend to congratulate the men and management on their efforts and achievement in introducing new models and modernising production facilities while remaining within their cash flow targets despite recession and rising prices. Will he ensure that Government action does not result in higher prices for raw materials, especially steel, and prejudice the outcome of the corporate plan?

My hon. Friend will know, because he follows such matters closely, that after several years of major loss making by almost all European steel producers, last year the Community embarked upon a plan to restore viability to Europe's steel industry. That plan must inevitably involve an increase in prices. It is fair to say that there can be no future for British steel-using industries if they rely solely upon subsidised steel, as was the position until quite recently.

Is the Secretary of State aware of the serious situation that has developed in the bus and truck devision at Bathgate and at Leyland in Lancashire, which could place that division in jeopardy? Will he intervene and take some action to find out the basis of the problem? Immediate steps should be taken, because thousands of workers are involved. Those of us who have tried to discuss the matter, with both management and workers, feel that some direct action should be taken by the Government.

I disagree with the right hon. Gentleman. This is an unofficial strike by people protesting against the rationalisation of production in the Leyland group. The strike started at Leyland and has now spread to Bathgate. I agree that unless good sense returns quickly, question marks will again hang over that part of British Leyland. The great majority of the workers at the two plants are well aware of that fact.

I welcome the progress that British Leyland has already made, but does not the company have a great responsibility to all British taxpayers in view of the Government's largesse towards it? Is not the best contribution that British Leyland can make to improve its efficiency to the same extent as the private sector?

Yes, and the great majority of British Leyland workers are well aware of that. For example, the cars division, which is connected to a large extent with my hon. Friend's constituency, improved productivity, expressed in vehicles per man year, by no less than 33 per cent. last year. That is a most notable and welcome achievement. Improvement in the productivity and general performance of the company, which is the only way to satisfy customers, will ensure long-term jobs for those who remain with the company.

I must press the Secretary of State on the position at Bathgate and at Chorley in Lancashire. The workers involved are highly responsible and they have co-operated in recent years in improving productivity and output. In the interests of the industry, will the Secretary of State intervene?

The day-to-day conduct of industrial relations must be a matter for the management of British Leyland. That was made abundantly clear by the right hon. Member for Cardiff, South-East (Mr. Callaghan) when Sir Michael Edwardes was first appointed and it has been made clear since then by every Minister who has had responsibility. Nothing would be more damaging to the authority of the British Leyland management than for me to try to take matters out of its hands.

asked the Secretary of State for Industry if, further to his answer of 7 December, Official Report, column 575, he has now studied the Central Statistical Office figures showing that the Northern region now has the slowest industrial growth in the United Kingdom; and if he will make a statement.

Yes. The CSO article examines trends in regional gross domestic product in the decade to 1980. During the first half of the decade the Northern region experienced the fastest rate of growth of GDP per head of all the regions. In the latter half the North slipped from the position of fastest growth to that of slowest.

That answer is not clear. Is the Minister saying that the Government do not accept the statistics simply because they do not suit the Government's case? If the Minister does not accept that proposition, does he accept that the Northern CBI is heavily critical of at least some aspects of the Government's industrial policies? Is it not self-evident that, despite the parrot-like repetition that we hear from the Dispatch Box about what the Government are doing for the region, the North continues to have the highest unemployment rate and that the policies that have been enunciated yet again are a complete failure? Is it not time for a fundamental change in attitude towards the North?

I made it plain that I acceped the article. As it does not suit the hon. Gentleman's case as much as it suits mine, he should consider it with more care. The article points out that the decline in relative growth occurred before the Government took office. The more favourable growth rate in the North in the early 1970s had come to an end by 1976 and that had taken place under the previous Conservative Government. Having said that, I accept that there are massive problems in achieving industrial restructuring of the Northern region. Regional preferential expenditure in the Northern region since we came to power has exceeded £360 million, which is more than anywhere else.

Is not the prosperity of the North-East and other areas that depend largely on the older industries tied to the prosperity of Britain as a whole? Therefore, should we not be grateful for the fact that all Governments have continued to give support to the North-East? Is it not damning to see from the statistics read out by my hon. Friend that national policies were favourable to the North-East in the first half of the 1970s and not in the period of the Labour Government?

My hon. Friend is right. The more that we can pull round the country's economic decline, the more the regions generally will benefit. That is why we have also put so much emphasis on increasing productivity, getting rid of overmanning and dealing with inefficiency.

asked the Secretary of State for Industry, pursuant to the reply of the Under-Secretary of State on 14 December, Official Report, c. 23, if he has any progress to report on the recovery of regional development grant made in respect of the Bathgate factory of British Leyland.

The Department is maintaining contact with BL, and, following the closure of the tractor assembly plant, which I understand will occur at the end of March, the appropriate amount of grant due to the Department will be recovered.

Does the Department have an estimate of the appropriate figure, and, if not, why not?

Until the Department has been given the details of the contract it cannot calculate the figure, but it will allow the retention of grant made on any assets that have fully satisfied the conditions of the grant. The remainder of the grant will be recovered in whole or in part in accordance with the Department's policies, which are consistently applied to all grantees.

asked the Secretary of State for Industry what is his estimate of the current daily cost to public funds of the operations of the British Steel Corporation.

During the current financial year the total external cash requirements of the BSC are estimated to average £2 million a day.

Is not the future of the steel industry in Western Europe likely to lie largely with specialist and high grade steels? Does my right hon. Friend agree that the sooner we can staunch the haemorrhaging of the national wealth as revealed in the figures that he was kind enough to give, the sooner we are likely to establish an economy able to create long-term and viable jobs for British workers?

I am not sure whether I go the whole way with my hon. Friend. I agree that there is a great future for the parts of the steel industry that can add value to basic steel making and get high quality, high-cost products where they can secure viable markets. However, with the progress made by the BSC in improving the productivity of its plants and increasing their efficiency, and the help of the price increases to which I referred in answer to my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), I believe that there will be a long-term future for the BSC as a profitable and viable steel firm. Of course, there is no reason why it should be a public sector company.

Is Britain not now in danger of having a steel industry that may be too small when the recession ends and domestic demand requires much more steel? Are we not in danger of being flooded with steel imports when the recession ends?

The information that I gave to the Select Committee on Industry and Trade was that the BSC is confident that it can meet a 20 per cent. upturn in the market without new capacity. That is quite a wide margin.

Would not the cost of the BSC to public funds be much less if its sales could expand? Therefore, is it not worrying that the United States is considering restricting imports from Europe? Will my right hon. Friend do everything possible with his colleagues in the Government and in Europe to make certain that that does not happen?

My hon. Friend raises an important and disturbing issue. Full details of the anti-dumping and countervailing duty cases are yet to be received and assessed. I attended a meeting of Community Industry Ministers in Brussels on 13 January. We agreed unanimously that it was the United States recession rather than the volume or price of European exports that lay at the root of the American steel producers' problems. We therefore agreed that the members of the Community would work together to mount a robust defence against such action.

Will the Secretary of State make it clear that no less than £209 million is being spent in the present financial year on closing production capacity and putting people out of work? Would it not be more sensible to spend public funds to revive the economy and keep people in jobs?

The hon. Gentleman knows a great deal about these matters and will know that, with the world recession and the downturn in demand for steel, which affects the whole of Europe, there must be rationalisation of production, and, regrettably, that means closures and the attendant costs in looking after the people concerned. It is part of Community policy that the rationalisation should be done fairly, and we get a certain amount of help from Community sources towards the cost.

asked the Secretary of State for Industry if he is satisfied with the prospects for the diesel engine industry; and if he will make a statement.

The industry has been suffering from the effects of the world recession, which has caused a general weakness in the market for diesels. I am, however, confident that, as demand recovers, the prospects for United Kingdom producers will be good, provided that they can be competitive.

Is not the diesel engine industry strategically important to the country? Therefore, do not the Government have a responsibility to intervene to protect it if it becomes apparent that it is being unreasonably undermined?

The Government realise the importance of the diesel industry, but, with one exception, United Kingdom producers form part of large engineering groups or international vehicle manufacturers, so it is difficult to think of a single strategy for the industry. However, my Department has responded to the diesel industry's need by offering selective aid of £12 million over the past year to encourage research and development and capital investment.

Without a strategy, what future is there for factories such as Bathgate?

Bathgate's future is bound up with the future of BL, and BL has a clear view on the way in which it sees itself in the market in the future.

Are there not strong energy conservation arguments for shifting the balance between petrol and diesel more in favour of diesel to encourage the use of diesel engines in motor cars?

The technical part of my hon. Friend's question is more for my right hon. Friend. I would want to encourage the diesel industry as far as the Government are able. As I said, in 1981 we gave about £12 million of selective financial assistance.

Why do we not sponsor the development of a small high speed, lightweight diesel engine to compete with the Italians and Germans? Will the hon. Gentleman suggest to companies such as Perkins that they make the development, so that the Europeans do not dominate our markets with their products?

My Department is in close touch with Perkins, BL and the other United Kingdom manufacturers of diesel engines.

asked the Secretary of State for Industry whether he is satisfied, from the most recent figures for labour productivity in manufacturing industry, that the Government's industrial strategy is on target.

The latest figures suggest that productivity in manufacturing industry was 9 to 10 per cent. higher in the third quarter of 1981 than at the end of 1980. Partly because of this remarkable achievement, unit labour cost rises in the United Kingdom were among the lowest of our competitors. British industry is beginning to get into better shape to beat the competition.

Did not the output per head in manufacturing industry rise by less than 1 per cent. between the second quarter of 1979, when the Government came to office, and the third quarter of last year, which is the most recent period for which figures are available? Can that be a satisfactory situation over the longer period?

I am not sure that I recognise my hon. Friend's figures. The figures that we have for manufacturing industry show that output per head rose by about 10 per cent. and output per hour rose by about 7½ per cent. over the year. Unit labour costs over the past 12 months in this country have risen more slowly than in all our main industrial competitor countries, which is good news. We have begun to recover some of the lost competitiveness of earlier years.

The question suggests that the Government have an industrial strategy. Can the Secretary of State tell us what it is?

I will send the hon. Gentleman copies of some of my recent speeches.

In the absence of any helpful or sensible contributions from the Opposition, will my right hon. Friend accept congratulations, not on behalf of the Government, but on behalf of the managements and work forces, on what appears to be good news, with the country going in the right direction for once?

I am glad that my right hon. Friend gives credit where it primarily belongs, which is to the managements and those who work in industry, who have made what is, by any standards, a remarkable improvement in productivity at a time of considerable industrial difficulty.

Was it a target of the Government's industrial strategy for manufacturing industry to lose 800, 000 people in 18 months and lose 20 per cent. of its output in the greatest slump of the past 50 years? With so many firms having gone out of business, is it not clear that those that remain must be more efficient, and does that not inevitably increase average productivity?

But of course. The hon. Gentleman is right in the final part of his question. It is because we have had a great deal of concealed unemployment, and because of overmanning and inefficient and restrictive work practices, that many sectors of British industry were not competitive. Under the pressure of the recession, firms throughout the country and right across industry have had to become more efficient in order to survive. They have shown themselves able to do so, and it is about time.

asked the Secretary of State for Industry if he will make a statement on the prospects for the bearing industry with particular regard to its self-sufficiency.

I know that the bearing industry has been passing through a difficult period in the current world recession. The reorganisations that have taken place in the industry should make it better placed to match competition in the future.

How important is a strong and self-sufficient bearing industry to this country? If the Government find it to be important, what action will they take to ensure that unfair competition and other activities do not disrupt it in future?

It is obviously important that we should have a strong industry. As I have said, I think that it is better placed than in the past to take advantage of the upturn when it comes. I imagine that when referring to unfair competition my hon. Friend has in mind the undertaking that the EEC Commission won from Japanese producers on price levels of exports to the Community last year. I know that my hon. Friend took a close interest in that undertaking, which followed a case brought by the European trade association that alleged the existence of dumping. We are still awaiting the relevant statistics to assess whether the agreement is being adhered to and what effects it is having on United Kingdom industry.

asked the Secretary of State for Industry whether he expects the Post Office to meet its profit targets in 1981–82.

Yes, Sir.

Do I correctly understand that the target profit figure for the Post Office is £49 million? Although one is grateful for the half-year figure of a £7 million profit, as opposed to a loss of £30 million—an enormous improvement, in which productivity has played a great part—is it not still a little optimistic to hope to achieve the £49 million profit?

The target is approximately that. It depends on the turnover, since the target for the Post Office is 2 per cent. of turnover and we had anticipated a turnover of about £2, 400 million for this year. From the information that I have had from the chairman of the Post Office, it seems that he is on line to make that. As my hon. Friend pointed out, the remarkable improvement of the past six months has been caused by a considerable improvement in productivity in the Post Office.

I am glad that my hon. Friend is satisfied with the profit target. Is he equally satisfied that the Post Office target of next-day delivery is nowhere near being accomplished? If the Post Office achieved that, it might even start to make a profit and we could all make a profit, because our letters would arrive on time.

The Post Office will make a profit. I can assure my hon. Friend that it is running profitably. The November figures show that 88·4 per cent. of first-class letters were delivered the following day, and that is very close to the target. I should like to emphasise the enormous improvement made in productivity. For example, over Christmas, with approximately the same number of cards and letters delivered as in the previous year, about 3½ per cent. fewer hours were needed to handle them. It is a great tribute to the chairman of the Post Office that he has succeeded in making those productivity gains. There has been a gain of about 15·3 per cent. in reducing overtime hours, compared with the same period last year.

asked the Secretary of State for Industry what are the likely effects on Rolls-Royce Ltd. of the decision by Lockheed to cease production of the Tristar aircraft.

The Lockheed decision is obviously a disappointment to Rolls-Royce. The chairman has informed me that in the short-term the impact on planned work load will be relatively small because of the world-wide recession that has already resulted in a scaling down of orders. In the longer term the company will endeavour to offset the loss of Tristar sales, but there is bound to be an effect on employment and profitability, which is currently being assessed.

I thank my hon. Friend for that reply. Will he encourage Rolls-Royce to continue to seek technical co-operation with other aircraft engine manufacturers overseas?

I shall certainly pass my hon. Friend's views to the chairman. I agree with his implication that the scale of the industry is such that collaboration is becoming increasingly inevitable.

Is there any possibility that we shall see Rolls-Royce engines in the successful Airbus family? Is it not a great pity that this European venture is not powered with a European engine?

It is for Rolls-Royce to assess the commercial viability of new opportunities. We have not received any application for launch aid for the RB 500 from Rolls-Royce.

Will the hon. Gentleman reconsider his reply to the hon. Member for Poole (Mr. Ward)? He may conclude that it was an extremely complacent answer, since hundreds of redundancies are to take place in Rolls-Royce factories throughout the country. The Minister's replies to me and to the work force have been singularly unhelpful up to now.

I am sorry that the hon. Gentleman finds my reply unsatisfactory. My hon. Friend the Member for Poole (Mr. Ward) asked me about the prospects for collaboration, and collaboration with the Japanese is, in the first instance, a matter for the management. Obviously the Government keep themselves closely informed and are in close contact with Rolls-Royce all the time, but I cannot say more at this stage.

asked the Secretary of State for Industry what progress has been made in improving the productivity of British Shipbuilders.

Between 1979–80 and 1980–81 productivity in merchant yards rose by 15 per cent. as measured by compensated gross registered tons per man-year. However, overall levels of productivity are still not satisfactory, and British Shipbuilders is determined to make further improvements.

Does my hon. Friend agree that the progress made so far is most welcome? How does he foresee productivity in British Shipbuilders over the next two years and does he believe that BS will then be able to compete effectively in world markets?

Improvements in productivity are mainly a question for the chairman and the board, but the chairman has made it clear to all who work in BS that substantially improved productivity is vital to the corporation's success. Each yard has a productivity improvement plan, monitored at board level against specific targets. A special productivity team has been set up to attack specific productivity problems and its remit has been extended recently. British Shipbuilders is also considering what can be done with the introduction of computer graphics and advanced production techniques. Almost all companies already have productivity incentive schemes in operation and their effectiveness is being reviewed. New schemes are being introduced for the few remaining companies.

Is not the Minister being just a little churlish? Have not the unions and the management made major advances in productivity, getting rid of all sorts of demarcation disputes in the process? Will the hon. Gentleman acknowledge that BS often delivers ships ahead of schedule? I remind him that just before Christmas a foreign buyer sent a telex to British Shipbuilders congratulating it on the quality of the work, which exceeded his highest expectations and

"compares most favourably with the other vessels in the fleet which, incidentally, were built in other countries."

I am happy to associate myself with those remarks. There has been an improvement in productivity in which the trade unions have played a large part. However, there is still a long way to go and productivity must rise way above the levels that were reached before nationalisation, in the days of private enterprise, if the industry is to be successful.

The Labour Government entered into a rather scandalous deal for Polish ships. Does my hon. Friend expect losses to increase because of the situation in Poland and a reduction in charter income?

I have no reason to think so.

asked the Attorney-General what recent discussions he has had with the Director of Public Prosecutions on prosecution policy.

In accordance with my usual custom I have had regular meetings with the Director of Public Prosecutions at which prosecution policy was discussed.

Is the Lord Chancellor considering issuing guidelines to magistrates in areas, such as the Leyland organisation, where work forces are occupying factories in a wholly responsible manner because they are desperate about their jobs and about redundancies?

I have no information on this subject. If the hon. Gentleman's supplementary question is intended to mean that where criminal offences have been committed the Lord Chancellor will be seeking to influence the execution of the magistrates' duties, the answer must be "No".

Does my right hon. and learned Friend agree that it is of the utmost importance that the Director of Public Prosecutions should enjoy full public confidence? Is there not a danger that, after recent cases, there may be doubt on the part of the DPP and his officials about when to prosecute? If that were to be the case, would it not be extremely regrettable? Will he give the House an assurance that the DPP will continue to base his policy on a careful analysis of the evidence and a balanced assessment of where the public interest lies?

I am sure that the Director of Public Prosecutions always applies those principles. The criticism that is usually levelled at him is that he does not prosecute in enough cases.

When the right hon. and learned Gentleman is considering the report of the recent Royal Commission on criminal prosecutions, may I take it that he will take note of recent events in Scotland which illustrate that, private prosecutions never having taken place in the past 70 years, judicial restrictions on private prosecutions may well infringe upon this basic individual right? I hope that he will therefore reject at least one recommendation of the Royal Commission. Will he also consider that it might be a good idea if we reverted to the ancient British system, which is still the American system, and allowed prosecution ultimately to be decided upon by a jury?

There is no judicial discretion in private prosecutions. Certain statutory restrictions are usually imposed by the will of the House. [Interruption.] There are a number of Royal Commission recomendations and they are under constant consideration.

In any discussions that my right hon. and learned Friend has with the Director of Public Prosecutions, will he bear in mind that protection of the public from violent crime must be one of the foremost considerations in his mind if the Government are to continue to have the confidence of ordinary law-abiding citizens?

I have always taken the view that violence is one of the worst crimes in the calendar. When I sat in a judicial capacity I always made certain, so far as I could, that the sentence reflected my views about that crime.

Has the right hon. and learned Gentleman discussed with the Director of Public Prosecutions recently any plans for setting up a national prosecuting service? If he has, what response has he received?

If the hon. and learned Gentleman had read the evidence submitted to the Royal Commission he would have seen my views and those of the Director of Public Prosecutions. We agree that there should not be a national prosecuting system but we were agreed—this emerged in the recommendations—that every police force should have access to local prosecuting systems, which presently does not happen throughout the country. It was suggested also that either the Home Secretary or the Attorney-General should have a say, or perhaps a veto, in the appointment of the senior prosecuting solicitor for each area.

asked the Attorney-General in what percentage of complaints made against the police in the last full year, alleging assault, the Director of Public Prosecution has initiated prosecution of the policeman concerned.

In 1979, which is the last full year for which results are available, the percentage of cases for assault prosecuted was 2·06 per cent.

It is scarcely surprising to learn that the Director of Public Prosecutions prosecutes in only about 2 per cent. of the police assault cases referred to him when cases occur such as the one revealed in yesterday's edition of The Observer. Is the right hon. and learned Gentleman aware that a Nigerian student, who had done nothing wrong whatever, was so badly kicked in the groin by the police that he had to have a testicle removed, yet the DPP accepted without further inquiry that the guilty police officers could not be traced? Surely such cases make a farce of the DPP's role under current procedure?

Of the cases that are reported to the Director of Public Prosecutions as a result of complaints of assault made against the police, many are for minor technical assaults, such as pushing, when no injury has followed. The cases that are the basis of my answer may be those in which there have been a number of complaints involving one police officer, or a number of police officers that are treated as one case. The figure of 2·06 per cent. relates to cases and not individual police officers. I have this morning spoken to the Director of Public Prosecutions about the article that appeared in The Observer. I have asked him to look into it and to report to me.

Some cases may not be prosecuted because there is a lack of evidence or independent witnesses. Will my right hon. and learned Friend indicate the proportion of alleged assaults by the police that are not proceded with because it is found that the allegations are totally unfounded or even maliciously brought?

I do not know the proportion, but in view of the percentage figure I have given, there must be a number of such cases. The conviction rate for assaults by police officers in such cases is considerably lower than the average conviction rate. That may indicate that the Director of Public Prosecutions has prosecuted too many rather than too few.

Will the right hon. and learned Gentleman confirm that of all cases under section 49 of the Police Act 1964, those referred to the Director of Public Prosecutions as disclosing possible criminal offences are usually the most serious? If they are, and if they do not result in prosecutions, they are not dealt with under police disciplinary regulations. Surely this means that the most serious allegations are frequently the ones that result in no action being taken.

I wish that that were so. Unfortunately, discretion lies with the chief officer of police who, unless he is satisfied that there is no prima facie case, has to report the issue to the Director of Public Prosecutions. It is our experience that the chief constable, anxious to avoid any criticism that he is protecting his own men, reports many cases in which there is not even the start of a case against the officer concerned. That is why the figures of reported cases are high and why the figures of those that lead to prosecution are so low.

asked the Attorney-General if he is satisfied with the operation of the Contempt of Court Act 1981.

The Act has been in force for only five months. So far I have not found any problems in operating it.

Will the Attorney-General review the behaviour of certain magistrates now that they are armed with the new power of imprisoning people for contempt in the face of the court? Has he heard of the case in which a man was sent to prison for not standing up straight in the dock?

Quite right.

Secondly, has he heard of the case in which a man was sent to prison for writing a cheque on the carcase of a dead rat, on the ground that his house was rat-infested and he wanted to draw attention to that fact? The right hon. and learned Gentleman knows that it is perfectly legal tender to write a cheque on any substance, however distasteful. Given the recent Home Office report on overcrowding in our prisons, does the right hon. and learned Gentleman think, in retrospect, that it was a mistake to give magistrates the power to add to the prison population for these utterly trivial offences?

The control of magistrates is not a matter within my powers. I read of the case of the man who did not stand up at all while he was being addressed by the magistrate. With regard to the use of unusual documents for cheques, I have heard only of toilet paper being used. This is the first time that I have heard of a dead rat being used.