asked the Secretary of State for Industry when he next plans to chair a meeting of the National Economic Development Council to discuss industrial investment in new assets by United Kingdom companies.

Meetings of the National Economic Development Council are normally chaired by my right hon. and learned Friend the Chancellor of the Exchequer. Investment features regularly in NEDC discussions and may well come up at the next meeting in March.

I thank my right hon. Friend for that answer. Although the existence of a deficit on the corporate account capital account of companies has been a feature for 10 years or more and has somewhat disguised the insufficiency of investment in certain key sectors, what steps might be taken within the NEDC, in conjunction with conversations with the banks, to determine which sectors might benefit from more new investment capital in the future to get growth again?

There is no evidence of a shortage of capital. Investment depends crucially on profitability and, as the Confederation of British Industry pointed out at the January National Economic Development Council meeting, profits of industrial and commercial companies, excluding North sea oil, fell from around 10 per cent. in the years up to 1973–74 to below 3 per cent. in 1980–81 and have recovered only to around 4 per cent. in the current year. Future investment depends crucially on rebuilding the profits of industry.

Has the Secretary of State examined what last week's OECD report said about investment? Will he throw off the Chancellor's shackles and stand up for British industry and for the unemployed? With regard to that report in particular, does he agree with it that we need more public sector investment, that industry needs more help with its costs and that these things should take priority over pre-election tax bribes?

This question is about industrial investment, not about public sector investment. I am bound to tell the hon. Gentleman, however, that the absolute precondition for restoring the prosperity of this country has been the fall in inflation. [HON. MEMBERS: "Hear, hear."] I hope that the hon. Gentleman cheers as loudly as anyone else the fact that inflation is now below 5 per cent.

asked the Secretary of State for Industry what has been the percentage fall in manufacturing output since May 1979; and what is the average change for the other European Community countries in the same period.

Between 1979 and the third quarter of 1982, the latest period for which comparable figures are available, the index of manufacturing production in the United Kingdom fell by 15 per cent. Between the same two periods the index for the European Community as a whole fell by some 7½ per cent.

Is the Minister aware that the considerable difference in the drop in manufacturing output since May 1979 between Britain and other EC countries shows only too clearly the disastrous effect on British industry of the Government's economic policies? Is the Minister further aware, as he should be, bearing in mind his constituency, that the drop in manufacturing output, which is probably now nearer 20 per cent., shows only too clearly the reason for the massive redundancies and the factory closures in the west midlands and the crisis facing that region, as unemployment there is now among the highest in the United Kingdom?

I believe that to be an over-simplistic analysis. If the hon. Gentleman considers the period 1970 to 1980, he will note that the inflation rate in total during that period was 360 per cent., that wages went up by 424 per cent. and that output went up by 17 per cent. That is an awful score within which to face the vagaries of a world recession. I particularly take the hon. Gentleman's point on industrial production, but I ask him again to consider the trends. With regard to increases in productivity, we are now outpacing our European competitors in the main. Of our major competitors, only the Japanese continue to beat us on a world scale.

Will my hon. Friend accept that he have taken the very words out of my mouth? I was about to ask him to confirm that now that we have overcome the problems created by the Labour Government, to which he referred, our productivity is outstripping that of our EC competitors?

The evidence, which is based on the trends, is quite encouraging. Production fell over the year ending the third quarter of 1982 by 1½ per cent. It fell by 3½ per cent. in France, 4½ per cent. in Germany and 9½ per cent. in the United States. The trend is to be welcomed. The basis of the benign telepathy that exists between my hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) and myself, and the consequent concord, is one that will surely be recognised in the House.

The Minister has not said why we are at the bottom of the OECD league. The manufacturing sector now employs only 27 per cent. of those who are in employment. Does the Minister agree that that is reaching a dangerously low level? What will the Government do about it?

Undoubtedly, our future prosperity will depend on the maintenance of a healthy, productive and competitive manufacturing base. We have defects in our economy that will take a long time to overcome. We have been producing goods for which there is low demand and we have not been producing enough goods for which there is high demand. We have been operating and developing a mismatched economy, and it will take a long time to put things right.

asked the Secretary of State for Industry how much of the finance of £50 million allocated to the scheme for converting boilers to the use of coal has been spent.

By 31 January 1983 offers totalling over £14·6 million in grant had been made, of which £1·3 million had been paid out.

Is my hon. Friend aware that our coal conversion scheme has been made much more attractive by the addition of the Common Market loan scheme? As the two schemes have been running together for only about six months and are due to end in March—there has not been much time to put together viable projects—will my hon. Friend consider extending the schemes? Not all the money originally allocated has been used.

My hon. Friend is right. The rate of applications seems to have increased since details of the cheap ECSC loans were announced. A further sum of about £10 million is still under consideration. I hope that many companies are still considering this attractive scheme. Companies with coal-firing projects should submit their applications as soon as possible. We are anxious to receive them. I cannot say what the position will be after March.

I acknowledge that the overall take-up for so welcome a scheme is disappointing. Will the Minister dismiss any suggestion of winding it up? I understand that that has been discussed. Does the hon. Gentleman agree that if the scope of the scheme were widened and it received greater publicity the number of applications would increase?

The scope of the scheme is as comprehensive as possible. The Industry Act 1972 precludes the giving of assistance to bodies such as local authorities, hospitals and schools. However, I think that the scope has been widened considerably. I shall do everything that I can to continue to publicise the scheme, but other considerations seem to prevent a greater take-up. For example, there are still fears in some companies about the effect on coal prices of possible future industrial action. We must try to eliminate those fears.

asked the the Secretary of State for Industry when he last met the chairman of British Aerospace to discuss funding for the A320 Airbus and related issues; and if he will make a statement.

Department of Industry Ministers have regular contact with the chairman of British Aerospace. The A320 project has been among the topics discussed with him. I cannot at this stage make a statement on the question of launch aid.

Does the Minister accept that there is much anxiety among workers in British Aerospace about their job prospects? Is he aware that it seems that much more confidence is being shown in the future of civil avaiation by the French Government than by the British Government? Is it not time that we showed our confidence in the industry and started to take decisions so that we do not miss the bus in the next few months?

I understand that there is considerable anxiety about the future of civil aerospace projects. There are serious uncertainties surrounding the A320. First, the engine is not yet available for the aircraft. Secondly, the market is uncertain, which is why Boeing has delayed its 150-seat aeroplane. Thirdly, we must be satisfied about the viability of the project. General Electric and SNECMA have put forward proposals for a derivative engine—the CFM 56–54—which might be suitable for the A320. The Airbus partners are now considering whether to seek the reaction of the airlines to this proposal. We shall examine that when the partners return to us.

Is it not regrettable that British Airways and other European airlines fail to make any effort to buy a European aircraft that is every bit as good as the equivalent American aircraft now available?

First, British Airways must make its decisions on commercial lines. Secondly, despite recent publicity, no decisions have been made by British Airways about impending purchase of aircraft. Thirdly, we must remember that the A320 will not be available until 1988. I am sure that British Airways will give consideration to the aircraft. The French have not made a final commitment to the aircraft.

Is it not right that the chairman of British Aerospace has been pressing the Government for a decision since the spring of 1982? Does not the inability of British Aerospace to proceed with this main airframe project without public assistance—without Government launching aid—underline the irrelevance of privatisation to the future of the British aerospace industry?

We have said that in principle we are prepared to support an application for launch aid provided that it is shown that this is a commercial and viable project. We have had far too many prestige and political aircraft in the past. It is essential that we know more about the aircraft's engines before we take a momentous decision involving huge public expenditure.

My hon. Friend is quite right in assuming that there is no point in developing an aircraft without having engines to power it. Will he report to the House on the progress of talks between Rolls-Royce and Pratt and Whitney on future collaboration on the RJ500 engine, which is one of those designed to power the new generation of 150-seat airliners?

The discussions between Rolls-Royce and Pratt and Whitney are continuing. They are extremely complex negotiations. I cannot anticipate when I shall be able to make an announcement to the House.

asked the Secretary of State for Industry when he last had a meeting with the chairman of British Airways to discuss the funding of the support costs of Concorde and the purchase by British Airways of new aircraft.

The chairman of British Airways is in regular touch with my right hon. and noble Friend the Secretary of State for Trade on a variety of issues. Industry Ministers have also discussed these matters with Sir John King.

Does my hon. Friend agree that the 200th anniversary of man's first flight is hardly the year in which the Government should pull the rug from under the feet of the Concorde project, which was a major achievement in aeronautical progress, especially when British Airways has said that it is prepared to shoulder the full burden of support costs for flying Concorde as from April 1984? With regard to the second part of my question, which relates to the purchase of new aircraft by British Airways—

Order. We have finished with the first part of the question and we have had enough of the second.

As my hon. Friend said, we put to British Airways the suggestion that it should take over the future costs of supporting Concorde. The British. Airways board replied that it could take over the future costs of supporting Concorde subject to agreement being reached on a number of matters. We very much welcome this conclusion, but we are still considering some of the detailed matters. It is not possible yet to say when a final announcement will be made to the House.

Will the Minister outline the Government's view on supersonic flight? Is he aware that the west country is plagued with Concorde booms night after night for six months of the year? An hon. Member representing a west country seat receives scores of letters about this. Does he agree that this problem outlaws supersonic aircraft for commercial purposes?

Questions about noise are for the Department of Trade and the Department of the Environment.

asked the Secretary of State for Industry how far the small engineering firms investment scheme in 1982 achieved its objectives; and if he will introduce a similar scheme in 1983.

I am in no doubt that the small engineering firms investment scheme is achieving its objectives. By 28 January 1983, 1,393 offers had been made involving assistance of £31 million, of which £8.1 million has been paid out. It is not possible to say, given the other calls on limited funds, whether there will be a new scheme.

Does my hon. Friend agree that in the engineering industry today machines and equipment become technologically obsolete long before they are physically redundant? Does he further agree that the scheme has given small firms a chance to remain competitive and up to date? Will he undertake to reintroduce it as soon as he can persuade our right hon. and learned Friend the Chancellor of the Exchequer to give him the money to do so?

I noted my hon. Friend's second point. There are no further funds for the scheme. There was a limit for this year, which we increased by 50 per cent. I entirely agree with his first point. The scheme was designed to assist small firms to buy technologically advanced capital equipment. As a result of all our evidence and the surveys that we have carried out, I am sure that the scheme has achieved that. I hope that firms that have been made offers but have not yet placed orders will do so, as it is important for them to become technologically up to date as soon as possible.

Does the Minister agree that one of the problems is a lack of knowledge of Government schemes within industry? Why, when the Government hit on a scheme which apparently rings bells and is immediately taken up, do they not allocate a further tranche of money to it?

I agree that there are often problems with making schemes more widely known to the firms that they are intended to help. We are putting a great deal of effort into improving that. However, that is not the case with this scheme. We marketed it well and received a good response. That is why we increased the funds by 50 per cent.

Does my hon. Friend agree that it is astonishing that, when the Department of Industry hits on a scheme that is successful and receives much interest from small firms, it promptly stops it? Does he further agree that that cannot be because of a shortage of money, as the Government had no difficulty in finding £100 million to force the British Steel Corporation to keep open its works at Ravenscraig? Does he agree that the money exists?

There are many other calls on the Department's funds, many of which are of high priority. We increased the amount for the scheme because we recognised its advantages. There remains £22 million for offers that have been made and which, it they are taken up by firms, will have a good impact on the engineering industry and the manufacturing firms that provide the equipment. That sum has still to be used.

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

My right hon. Friend has no immediate plans to discuss with the Post Office chairman the corporation's investment programme, which has risen from £42 million in 1978–79 to £115 million in 1982–83 and is planned to rise to £130 million in 1983–84.

Bearing in mind the improvements in productivity and service to customers, would it not be prudent for the Minister to embark on extra capital investment and expenditure for more new plant and facilities for the Post Office?

There has been a substantial increase in the Post Office's capital expenditure programme. It has trebled since we have been in office. That allows the Post Office to go ahead with its investment programme on such things as letter sorting equipment.

Is the Minister aware that, once again, there is uncertainty and anxiety in rural areas about the future of small post offices and sub-post offices there?

I can give the hon. Gentleman the assurance he seeks. The Post Office, rather than the Government, has to consider the size and scope of the network and the throughput of activity in sub-post offices.

Is my hon. Friend aware of the anxieties of industrialists in my constituency about the last post collection being moved from 7 pm to 5.30 pm? Will he use his good offices to move it more closely to 7 pm, as much business is being lost?

I shall draw my hon. Friend's comments to the attention of the chairman of the Post Office. He will appreciate that such details are for the management of the Post Office. If my hon. Friend is worried about help to industry, he will agree that the announcement today by the chairman of the Post Office that the increase of 1p for first class mail is to be held down to only ½p is a direct contribution by this successful enterprise to reducing the burden of costs on industry.

Will it not become necessary for the Post Office to have more capital expenditure if it is to improve the rate of mechanisation—and, therefore, productivity—and the quality of service to its consumers, to develop new services such as datapost and to speed up the modernisation of the massive number of rural sub-post offices? Does the Minister agree that if sub-post offices are not modernised they will not be able to offer customers the services that they want and will therefore be likely to come under a threat of closure?

I should like to emphasise once again that the Post Office's capital expenditure for this year and next is at the highest levels ever. I take those remarks ill from an hon. Member who supported the Labour Government under whom the Post Office's capital investment programme was about £30 million a year. Next year it will be £130 million.

asked the Secretary of State for Industry if he will pay official visits to Malaysia and Singapore to discuss further industrial co-operation.

I have no plans to go there at present.

Does my right hon. Friend agree that that part of the world is extremely important to high technology industries in the United Kingdom? Does he agree that my right hon. Friend the Foreign Secretary's recent statement about students' fees will create a better atmosphere there? Does he agree that this is a good time to make an effort in that area? Will he reconsider his decision about sending a Minister there?

It is not for me to send Ministers, but I agree with everything else that my hon. Friend said. He will have seen reports in the press this morning of the remarks that were recently attributed to the Malaysian Prime Minister about the marked improvement in relations between Britain and Malaysia and the possibility of Dr. Mahathir Mohamed visiting Britain shortly. I am utterly persuaded of the importance to our commercial effort of the best possible relations with Malaysia and Singapore.

asked the Secretary of State for Industry what is the value of the grants allocated to England from the European regional development fund since its inception.

A total of £209·6 million has been allocated to England from the quota section of the European regional development fund since its inception in 1975.

Does my right hon. Friend agree that that is a significant sum and that the grants bring considerable advantages to Britian? Is he satisfied that the general public are aware of the extent of the assistance from the European Community?

No, I am not satisfied about that. We must continue to redouble our efforts to bring home to the British public just what are the advantages to us of membership of the Community, especially with regard to regional policy. The Government and local and other public authorites take all practical steps to ensure that the grants are widely publicised. For example, we erect signboards at project sites and publish details in British Business. Nevertheless, I accept that we must do more.

Is it not a fact that the sum given by the Secretary of State is chicken feed compared with what is needed by our regions? Would it not be much better if we used our money for this purpose rather than paying thousands of millions of pounds to the EC for the regional development that is badly needed in Britain?

Without doubt, membership of the Community has brought substantial advantages to Britain. Our trade with the community has risen half as fast again in the past 10 years as our trade with the rest of the world. Millions of jobs in Britian now depend on that business. If the Opposition's policy of withdrawing from the Community were ever put into practice, it would be disastrous for Britain.

Being in has been a disaster.

Will the Secretary of State confirm that application has been made to extend the use of this aid to inner city areas in England? If that is so, will there be further finance from the EC, or will existing aid be spread more thinly?

I have noticed the questions that the hon. Gentleman has tabled on the subject. I cannot usefully add to the full and helpful answers that he has received from my hon. Friend the Under-Secretary of State for Industry.

Does my right hon. Friend agree that the substantial regional development fund grants to which he has referred are made infinitely more effective by the large sums that we receive from the European Investment Bank? Is he aware that small firms are especially pleased with the recent scheme to make that money more readily available to small firms at low rates of interest?

I agree with my hon. Friend. I should tell the House and small firms that the recent change in rules allows those firms to benefit from those funds, even though firms are not in the regional areas. The availability is now national.

Is the Minister satisfied with the amount that is coming from the regional development fund? If so, what contribution have the Government made to supplementing it in Yorkshire and the north-east, where it is badly needed because of high unemployment?

We always wish to see a better return from the European regional fund. Part of our purpose has been to seek to amend such things as the common agricultural policy so that there can be a more even distribution of the burden and the benefits of membership. With regard to the allocation of funds to the different regions, large parts of Yorkshire benefit from regional policy. I hope that the hon. Gentleman recognises that.

asked the Secretary of State for Industry how many industrial location inquiries have been directed to his Department's northern regional office, north-western regional office and the Invest in Britain Bureau, respectively, over the past 12 months.

In 1982 the Department's north-east regional office handled 187 location inquiries, and the north-west 254. Over the same 12-month period, the Invest in Britain Bureau handled some 440 inquiries from foreign-owned companies where there was a likelihood of an eventual investment decision.

Will the Secretary of State or the Minister carry out the fullest possible investigation into the arrangements for handling industrial locational inquiries originating from the United States of America? Is the Minister aware that the Northern Ireland Office can sift through those applications prior to their being forwarded to the north-west regional office of the Department of Industry or the northern region? That happens because most of our officials in the consulate and embassy in the United States of America are funded out of the Northern Ireland Vote and not the Department of Industry's Vote. Will the Minister make the necessary changes?

I shall look into the hon. Gentleman's point. If he wants to give me further information, no doubt he will.

From the figures that the Minister gave in his original answer, can he tell us how much development took place as a result of each of the inquiries processed?

All that I can tell the hon. Gentleman is that under section 7, £16 million-worth of assistance has been offered, which is expected to preserve over 4,500 jobs in the north-west and to create nearly another 4,000 jobs. In Cumbria, £1½ million is being spent, which will preserve over 300 jobs and create almost 200 jobs.

asked the Secretary of State for Industry if he will make a statement on the competitiveness of British manufacturing industry as measured by unit costs and output per man-hour in the past three years.

Following several years in which United Kingdom manufacturing industry lost competitiveness, since the first quarter of 1981 it has improved by 24 per cent. Between 1979 and the third quarter of 1982 output per man-hour has improved by 10·1 per cent. Those trends are encouraging.

I welcome that dramatic reversal in the trend of uncompetitiveness, which was entered into in the last half of the 1970s. Will my right hon. Friend confirm that that augers well for Bitish manufacturing industry as the world recession ends? Does he agree that so long as the Government allocate subsidies to industry it is better to allocate them to creating new jobs in new expanding industries than to use them to prop up and preserve uneconomic jobs in dramatically declining manufacturing industry?

I cannot dissent from my hon. Friend's general proposition. Unfortunately, in the real world of politics it is not always easy to adhere to that, tout court. I agree that the trends are encouraging, but there is still some way to go before we can recover the competitiveness that we had in 1975.

How is the factor of exchange rates eliminated from the comparisons to which the Minister has just referred?

The changes in the exchange rates are included in the figures that I have given. It is important to make sure that the benefits endure, by keeping hold of costs. That has not happened when the pound has been devalued previously. The benefit that comes to industry through having a lower exchange rate has been lost as costs have risen to absorb that benefit. We must make sure that that does not happen this time round. That will be to the benefit of British industry recovering its share of the markets both here and overseas.

Why is the manufacturing sector in such a crisis? The Minister must know. Like him, I travel round the country visiting many major companies, which tell me the same story. Since 1979 there has been a disaster. In many cases firms have lost half their employees. I visited Lansing Bagnall, a major vehicle company, last week. It has lost over 2,500 employees. One cannot complain about unit costs of production at a firm such as that. Why is there such a crisis?

The right hon. Gentleman should have come with me when I visited the TI Raleigh company in Nottingham on Friday. That company is bent on putting its house in order. It is recovering its share of the market, restoring its profitability and has introduced new models. It is introducing new production methods. I give it three hearty cheers.

asked the Secretary of State for Industry whether he is satisfied with the progress of his Department's microcomputers for schools programme; and if he will make a statement.

The progress is good. We have provided 6,400 microcomputers to secondary schools. As far as we can judge, every secondary school now has one; we are the first country to achieve this. The primary school scheme began in October last year. So far 6,500 schools have applied out of the 27,000 eligible. Including Europe, the United States and Japan, we are leading the world in the impact we are making on education through the use of microcomputers. This is good news for the future of our young people and of Britain as a whole.

I am sure that the whole country will join me in congratulating my hon. Friend on that progress. [Interruption.] Will his Department look at the provision of microcomputers in special schools? Some expense is involved because the computers have to be adapted to the needs of disabled children. However, it is important to remember that equal opportunities will be given to disabled people through the use of those computers. Can something be done for them?

I thank my hon. Friend for his comments. I was surprised at the grudging way in which the Opposition welcomed the good news. There is no doubt that microelectronics applied to disabled or handicapped children can result in considerable improvements. We are sponsoring several experiments in special schools to ensure that those developments come through and are widespread.

Does the Minister ever visit the schools that are on the receiving end of his microcomputer scheme? Does he find, as many others do, that the Department of Education and Science has undermined the scheme by refusing to provide extra money for software or training? No head teacher will pay for software or training when the money comes out of the capitation allowance for the school, which is being cut. He will not buy software if the children will have to share books.

I visit schools frequently. I assure the hon. Gentleman that I do not receive such comments. The Department of Education and Science allocated £9 million and has just announced that it will increase that sum. From our budget we have allocated an additional £500,000 for educational software.

asked the Secretary of State for Industry what steps he takes to encourage the establishment, to assist the growth and to ensure the survival of the British robotics industry.

The Government provide financial assistance to United Kingdom companies to develop and manufacture new types of robot and to United Kingdom companies to install robots. We also support consultancy studies for robotics. Grants totalling over £8 million have so far been offered by my Department for those purposes.

Does the Minister accept that many of us believe that this is part of a public relations exercise on the high tech side, while, at the same time, most of British industry is falling to pieces? Is he aware that Remek, one of the leading and largest robotics manufacturers in Britain, based in Milton Keynes, is now in the hands of the receiver and that some people have argued that the Government neglect British robotics and encourage only joint Japanese ventures?

I disagree with what the hon. Gentleman has said. A few years ago only two or three companies in the United Kingdom were capable of making robots. There are now 15. There are about six joint ventures between Japanese and British companies and American and British companies. This is not a PR exercise. I want to extend the use of robots and robotic devices throughout British industry. That will help to make it more competitive.

asked the Secretary of State for Industry if he will make a statement on the progress being made on the review of the Government's regional policies.

Officials of the Departments concerned have completed the first stage of the review, which was to examine the working of current regional economic policies and identify ways in which they might be made more effective. We now have to decide what further work we may want to commission. I should like to emphasise that there will be no further substantial changes in the lifetime of this Parliament.

Is the review a cover-up for yet another attack on regional aid? What possible justification can there be for the proposal in the public expenditure White Paper to cut regional and general industrial aid by 21 per cent.? Will the Minister give an assurance that before any conclusions are reached he will consult organisations and local authorities in the regions concerned?

We consult local authorities and other people involved in the regions on regional policy all the time. I have already said that no further changes in regional policy are planned in the lifetime of this Parliament. But, having said that, it is perfectly reasonable that the Government should review regional policy and its effectiveness, about which there is a lot of argument and controversy.

Does my hon. Friend agree that under current criteria the west midlands would qualify for assisted area status, so that he is faced with the choice of either including it or reviewing the policy? In that review, will he pay particular attention to the creation rather than the diversion of jobs—which many suspect the current policy encourages—and the cost-effectiveness of regional policy as a means of assisting industry?

The criteria, of course, include geographical position and access to markets, too, and not just levels of unemployment. I entirely agree with my hon. Friend that cost-effectiveness, and, indeed, the effectiveness of regional policy, are the very things that inevitably any Government must look at.

Does the Minister agree that the only principle that seems to govern the Government's attitude to a review of regional policy is how to reduce the areas given grants and thus save money? Are they not the overriding considerations? Will the Minister tell us that in considering the review of regional policy he will seriously think about the effective role that the Labour-controlled councils, such as the GLC, the west midlands and Manchester, and smaller local authorities, play in creating jobs, some at a cost of only £250 a job and not the £40,000 a job, which is quoted from the Conservative Benches on occasions?

Unfortunately, some of the jobs safeguarded in the public sector by Labour-controlled authorities have been at the expense of jobs in the private sector. The hon. Gentleman talks about cuts in regional policy. We have simply narrowed the area covered by regional policy schemes, which must make sense if they are to be effective. It makes no sense for regional policy to cover nearly half the country. RDGs in 1979–80 were £330 million, in 1980–81, £490 million and in 1981–82, £616 million.

asked the Secretary of State for Industry if he will make a statement on Professor Littlechild's report on British Telecom.

have nothing to add to the statement that I made last Monday, which has received a wide welcome.

Is my hon. Friend aware that the report is particularly welcome for the clear and concise way in which it sets out the options? However, is there not a danger that the RPI minus x formula, which in many ways is the key recommendation of the report, assumes that BT at present has an appropriate level of efficiency and, what is more, that there will not be significant cost reductions in equipment? Should there not be reserve powers for either the Director General or the MMC to look into the cost structure of BT if necessary?

As I am sure my hon. Friend appreciates, this is a most complicated matter, on which we have already spent 25 hours of debate in Committee. I assure him that there will be opportunities for the Director General of OFTEL to examine the cost structure of certain of the charges of BT.

asked the Secretary of State for Industry what assistance is currently available from his Department for the computer software industry.

The software products scheme can provide grants of up to one third of the cost of developing and launching software products. The scheme was relaunched last year with an additional £10 million funding. I am greatly encouraged by the response from industry. In addition, we are continuing to look at ways in which the public sector may draw upon the considerable talent available in the United Kingdom software industry.

In thanking my hon. Friend for that reply, may I ask whether he is satisfied that enough of that aid is going to the smaller software houses and through them into the smaller businesses, which need the aid to compete?

As with industry in general, often many talented people are contained within our smaller companies. There is no restriction precluding the smaller companies from taking advantage of the scheme. The major criteria are an application area and type of software product and not so much company size.

Would not the computer software companies also benefit if the enterprise allowance employment premium—the manpower subsidy introduced by the Government last year to run for six months—were extended to those companies and to all other companies throughout the whole of the United Kingdom in the way that the Department of Employment and the Manpower Services Commission were suggesting only a few months ago? Will the Minister put pressure on the Department of Employment to ensure that the scheme is extended?

The scheme has to stand on its own merits and each application must be looked at on its merits, regardless of location within the United Kingdom or whether the company or the region in which the company is located receives special grants. I shall examine Hansard, and, having clarified the position further, see whether I can meet the hon. Gentleman's point.

asked the Secretary of State for Industry if he will seek to extend assistance under the Industry Act 1972 to service industries.

Assistance is given to service industries through several schemes set up under the Industrial Development Act 1982, which consolidates the Industry Act 1972 and amendments, including for example, under the office and services industry scheme, the coal firing scheme and the small firms loan guarantee scheme. A considerable number of service industries have already benefited from the last mentioned scheme.

Is it not now becoming increasingly clear that, even if there is a major upturn in the world economy, manufacturing industry will not be able to provide many more jobs and that they will have to come from the service industries? Is not the time coming to switch resources from manufacturing industry into the service industries, including, in particular, tourism?

As my hon. Friend will know, tourism is aided through other schemes. I have said that there are a number of service industries that will benefit under the Act. I agree with my hon. Friend that a major source of new jobs will be the service industries. I think that he may have in mind regional development grants, but there are problems about extending them to service industries generally. For example, one must be careful that assistance to one firm is not simply displacing activity by another in the same area. There are also problems in that many service industries are less flexible in the choice of location.

Is not that point equally valid for manufacturing industry? May not grants given to one manufacturing concern displace jobs in another area? Has not the time come to look at service and manufacturing industries together and get a new structure of grants, recognising that many more jobs in the future will be available in service industries rather than in manufacturing?

I have heard what the hon. Gentleman says. That argument has been put forward by a number of people. Regional development grants were designed to increase capital investment and, on the whole, capital expenditure has taken place on a much wider scale in manufacturing than in service industries.

In view of the disappointing reply that the Minister of State gave to question 16, would the Under-Secretary of State read the debate on the northern region last week and consider what was said about small businesses, particularly in the service sector?

I do not need to read it. I listened closely to the entire debate. As I said, I entirely accept that small firms will be a major source of new jobs in the future. That is why we are concentrating a large number of schemes and other forms of assistance on small firms. Nearly all of them apply to the service sector as well as to manufacturing.

asked the Secretary of State for Industry when he expects to come to a decision on the proposals of the Alvey report on a programme for advanced information technology; and if he will make a statement.

As my hon. Friend is aware, the Alvey report proposes an investment by Government and industry of £350 million. Investment on this scale will determine the course of a very significant proportion of the IT industry's research activities. It is therefore imperative that the decisions that we take now are the right ones. For this reason, we have consulted widely with the industries. In the light of these and other consultations we are considering our response to the report and I hope to make an announcement shortly.

Does my hon. Friend feel that his time for response should be of the same order as that taken by the committee to produce the report? Does he appreciate that other countries are moving ahead extremely fast and that a response is urgently required by our industry?

I am as anxious as my hon. Friend that we should reach a decision quickly on this very important programme. As it is the largest co-operative research programme that this country has ever tried, I must consult industry and indeed other Departments. Those consultations are now coming to an end.

asked the Attorney-General what is the Lord Chancellor's policy in considering applications by Ministers to withhold historical documents beyond the 30-year period.

The Lord Chancellor considers applications on their merits in the light of the provisions of section 3(4) of the Public Records Act 1958 and in the light of the policy laid down by section 5 regarding closure after transfer. In considering applications under section 5 of the Act the Lord Chancellor has regard to these provisions and the criteria set out in paragraph 26 of the White Paper "Modern Public Records".

May we know more about the criteria? What possible sense is there in relating all the Foreign Office intercepts that took place during the second world war while refusing to release those that took place between the first and second world wars, with the exception of those that Lloyd George took away and placed in the House of Lords Library? Is it not reasonable to assume that the years between 1919 and 1939 are now history?

I understand the hon. Gentleman's great interest in this matter. The matter has been considered with great care, especially with regard to second world war intercepts. The arguments for exempting security and intelligence-related records from public release have less weight in relation to records of interceptions of messages transmitted by the services of a country with which the United Kingdom was then at war.

Is there any truth in reports that public records dealing with the British Union of Fascists are likely to be witheld for the full 100 years? Bearing in mind that attempts were made a few years ago to withdraw certain Metropolitan police records relating to the hunger marches of 1933 and 1934, which were later countermanded, is there not a case for great vigilance in these matters to ensure that too many exceptions to the 30-year rule are not allowed?

This is very carefully supervised. The matter raised by the hon. Gentleman falls within the responsibilities of the Lord Chancellor, but I will certainly write to the hon. Gentleman about it.

asked the Attorney-General if the Lord Chancellor has any plans to meet the Magistrates Association to discuss sentencing policy for shoplifting offences.

As was indicated in the replies to my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) on 9 June 1980 and 9 March 1981, meetings are not arranged with the Magistrates Association to discuss sentencing policy limited to a single type of offence.

I should make it clear that in future I shall not call hon. Members unless they stand up. Does the hon. Member for Workington (Mr. Campbell-Savours) intend to ask a supplementary question?

Does the Solicitor-General accept that people under stress and the mentally ill should not be threatened with prosecution or brought before the courts for sentencing on shoplifting charges? If the right hon. and learned Gentleman has any sympathy with that principle, will he ensure that all police forces are required to appoint persons qualified to assess the degree of stress or, indeed, whether the person concerned is mentally ill?

I am sure that most prosecuting authorities are well aware of those considerations. There is no question of any special threat being held over the heads of the mentally ill or anyone else. The threat is the same. The greatest safeguard in this respect is the availability of legal aid and advice so that those appointed to assist people may take account of these points in their defence and see that full weight is given to them, either before prosecution is undertaken by making representations to the authorities, or, if there is a conviction, in mitigation before the court passes sentence, which is the point to which the main question relates.

As a fair proportion of those prosecuted for shoplifting are elderly first offenders, do the Attorney-General's new guidelines on prosecuting policy contain clear advice to prosecuting authorities on the advisability of cautioning rather than prosecuting? Does the right hon. and learned Gentleman agree that the sense of shame and disgrace for the elderly first offender far outweighs any penalty that the court may impose?

I entirely agree with the hon. and learned Gentleman on the last point. Anyone appearing at a police station or court for the first time, but perhaps especially an elderly person, may become thoroughly confused. We all want every assistance and indulgence to be given in such cases. Cautioning is indeed referred to in the document mentioned by the hon. and learned Gentleman. It is also referred to in another document, which will soon be available and which I believe will be of interest to the hon. Member for Workington (Mr. Campbell-Savours)—a report of the Home Office standing advisory committee on the prevention of crime. The difficulty is that cautioning can be administered only if the accused makes a clear admission of the offence. That limits its usefulness, but that does not alter the fact that whenever it is available and useful it must be considered very seriously.

asked the Attorney-General how many cases he has conducted before the European Court of Human Rights.

None. I have conducted one case before the European Commission of Human Rights.

Is the court competent to judge cases concerning the discrimination in the level of grant available to individual adult students on the basis of something outside their control; in other words, parental income? If it were to pass judgment on this, has my right hon. and learned Friend any idea what that judgment would be?

An application of that kind would not be within the convention.

Would it be a good idea to have a European attorney-general or public prosecutor who, through a modest amendment of the convention, could prosecute any intentional breach of human rights committed in any state party to that convention?

I note that suggestion with interest.

Did the Attorney-General conduct the Government's defence in the case, which I believe is still before the European court, concerning telephone tapping? If the judgment goes against the Government, will he guarantee to put down an amendment to the Police and Criminal Evidence Bill currently before the House?

I have learnt from hard experience that it is always unwise to answer hypothetical questions.

asked the Attorney-General if the Lord Chancellor is satisfied with the criteria for reimbursing loss of income and expenses to jurors.

The Lord Chancellor is satisfied that the criteria are generally fair in so far as it is possible without giving rise to an excessive charge on public funds.

Following a constituency case, the details of which I sent to the Lord Chancellor, will my right hon. and learned Friend consider sympathetically the case of an unemployed man seeking employment who is called for jury service and thus denied the opportunity to attend an interview for a job? Is there not a case either for loss of income considerations or for not requiring such a person to be called for jury service?

I gladly respond to the first part of the question. I shall certainly look sympathetically at that case. I should like to consider the details with the Lord Chancellor and write to my hon. Friend.

asked the Attorney-General if he will make legal aid available to parents in respect of care proceedings regarding their children.

My noble and learned Friend the Lord Chancellor made clear the Government's intention in this respect on 17 June last year. A further statement will be made shortly.

Is it not intolerable that this absolutely necessary measure that was enunciated in the Children Act 1975 and promised again under the present Government is still not implemented because of arguments over cost? How can the Government find the money to compensate people for closed shop episodes up to 10 years ago that are now over and done with and yet not find the money for legal representation for parents threatened with the removal of their children here and now?

A considerable amount of consultation has been necessary, together with other considerations. However, as I have told the hon. Gentleman, a statement will be made shortly.

Will my right hon. and learned Friend take cognisance of the fact that the view expressed from the Opposition Benches is not confined to that side of the House?

Yes, Sir. I appreciate that.

Why has there been such a delay? Is it the fault of the Home Office in drawing up the rules? Is it the fault of the Department of Health and Social Security or of the Lord Chancellor's Department? As the Attorney-General will know, the Law Society is most anxious that a date for the implementation of this necessary decision should be announced very soon.

The Government are fully aware of the need that exists and of the distress that might be caused to parents, for example, by the absence of these provisions. There have been a number of necessary consultations and I hope that a statement will be made shortly.