§ 2.39 p.m.
§ The Secretary of State for Industry and Minister of Posts and Telecommunications (Mr. Anthony Wedgwood Benn)
In common with all other Ministers my task will be to prepare, to discuss and then, subject to Cabinet priorities, to bring before Parliament the proposals put forward to the country by the Government. First, however, I should like to deal with the immediate situation. The main task facing the Government on taking office was to settle the miners' dispute, to lift the energy restrictions and to allow British industry to get back to full-time working by ending the three-day week, which we argued was quite unnecessary. These three objectives have already been achieved. Although we shall never catch up entirely with the production lost during that period—nor will the wages lost be replaced—at least the recovery period has begun.
In looking forward there are some encouraging features which I think the House would wish to know. First, output held up better than was feared, and since many firms gave priority to export customers the loss of exports was less than might have happened. My right hon. Friend the Secretary of State for Energy will be reporting on the resumption of power supplies to industry and the recovery of coal production and oil supplies.
For my part, I can tell the House that the steel industry should be back to near normal by April. Order books are 194 healthy and most of industry should be working normally within a month, although there are bound to be some sectors, heavily dependent on component supplies, whose work programmes were severely disrupted and will take longer. Some bottlenecks of supplies are bound to arise, and there may be cash flow difficulties.
My Department is at the disposal of firms which may be affected and they should get in touch with the regional offices or with the Department centrally if they want help. Some hon. Members have already raised individual difficulties with me where these have arisen in their constituencies, and I hope that other hon. Members who have problems reported to them will also feel free to get in touch with me or my fellow Ministers.
I wish to pay tribute to the co-operation in industry in minimising the difficulties that have been experienced and to those who are now showing such determination in catching up with as much as possible of what has been lost and in getting production back to full swing.
Even though the atmosphere has improved and the immediate recovery prospects are better than might have been expected, it would be totally wrong to underestimate the magnitude of the task of industrial renewal which now confronts Britain, British industry and hence Parliament itself.
The policies which we developed in Opposition and put before the people in the election were designed to meet problems in the national interest. They now have an added relevance, for the mining strike masked the other more fundamental economic and industrial problems to which oil price increases have added an extra dimension. The prospects of national advantage that may accrue through the development of North Sea and Celtic Sea gas and oil are encouraging, but it would be foolish for any of us to suppose that all that has to be done is to mark time until we are saved by an oil bonanza which will return us to an era of automatic prosperity.
Everybody recognises that Britain must concentrate on exports and on building a strong industrial base, without which we cannot furnish those exports. We also need investment in our energy and energy-saving programmes and to secure the 195 living standards and the public service provision to which our people are entitled.
Let me turn to the problems of investment with which my Department is deeply concerned. On the industrial side the main immediate problems may arise from the fact that the three-day week, with its associated cash flow consequences, could lead to some deferment of investment plans. I must tell the House frankly that we cannot now count upon earlier estimates of an increase of 12 per cent. to 14 per cent. in manufacturing investment to be realised this year.
Even if the lower figure of 12 per cent. had been reached it would only have restored the position to that level which we had in 1970, when the last Labour Government left office.
§ Mr. Peter Emery (Honiton)
As the right hon. Gentleman has outlined the matter so concisely, will he give an assurance that he and his right hon. Friend the Chancellor of the Exchequer will encourage profits so that he can get the investment from industry and thus be able to get what he wants?
§ Mr. Benn
If the hon. Gentleman will allow me to develop the argument in my own way he will see that I shall turn to that question. He may also note that the fall in profits in 1974 will be attributable to the three-day week which he and his colleagues introduced in the pursuit of their policy.
Industrialists and trade union leaders have long agreed that our long-term prospects depend on getting investment levels nearer to those that have been achieved by other major industrial countries. We must use what we have better and select what we need in quality, and see that the total figures rise.
The problems of using our existing investment effectively and of getting the level up explain why the Gracious Speech referred to theurgent consultation on measures to encourage the development and re-equipment of industry.These matters have already been touched on in general terms when the TUC and CBI came to 10 Downing Street and were raised when the CBI came to see me, and at the NEDC meeting on Monday. They will be discussed in detail with the nationalised industries, major companies and 196 individual trade unions at almost all the meetings which I shall be having with them.
Investment will also feature very much in the many discussions we hope to have in Scotland and Wales, and the English regions. This explains why high priority has to be given to the stimulation of regional development. My colleagues in the Department and I look forward to these discussions.
As the House knows, there is a dual vulnerability in development areas in the redundancy among managers as well as workers which may occur either through under-investment or the failure to attract new investment. When these companies are also victims of take-overs and asset stripping the problems are intensified.
With regard to the regional employment premium, we shall at least maintain the existing arrangement while considering further possibilities for the future.
It is often argued that we cannot get investment up until confidence has been established. Obviously, the two go together. But I invite the House to consider for a moment just what confidence really is. It has been interpreted in the past simply and solely as constituting political support of the City of London or the international financial community in the Government of the day, and their policies, with the implication that whatever price they might exact in return for that support had to be paid by Governments adopting policies, however harsh, dictated by them.
Obviously, any nation must enjoy international confidence, but if there is one lesson we have learned over the past three months it is that the confidence of working people in their Government and in their own future is also an essential ingredient in national confidence, and for that matter in international confidence, too.
The last Government initially enjoyed the confidence of the City and industry—a confidence gained partly in return for its commitment to policies which were hostile to the trade unions. In the ensuing confrontation, it should be noted, the last Government lost the confidence of working people and then some of its own supporters as well.
This Government put to the electors a new social contract as the main plank in 197 their programme, not only because we believe—[interruption.] If the hon. Gentleman wishes to intervene I shall be happy to give way.
Sir Harmar Nicholls (Peterborough)
Is the right hon. Gentleman aware that he is talking nonsense when he suggests that policies which encouraged the City and industry were against the interest of the workers, because it was recognised that both have to go together? The right hon. Gentleman's father remembered that capital and labour must go together and must not be disturbed by such words as he is using.
§ Mr. Benn
The hon. Gentleman at least amplified the monosyllabic insults he was casting by a rather inadequate forecast of the speech he might hope to make. I hope that the House will allow these matters to be discussed, because the characteristic of the past three months has been a breakdown in confidence in the country, which was due—this is the argument we put forward and adhered to—to the view the Government adopted towards workpeople and their problems over a wide range of policy.
This Government put to the electors a new social contract as the main plank in their programme, not only because we believe in the elements in that contract but because we do not believe that confidence can be restored without such a new contract based upon policies designed to bring about a shift in the balance of power and wealth. The new social contract which we are set upon achieving has implications for industrial policy as well as for taxation policy, housing policy or social policy.
In developing our industrial strategy for the period ahead, we have the benefit of much experience. Almost everything has been tried at least once—[An HON. MEMBER: "Including you.] If the hon. Gentleman will listen to me, he will hear me say that we have the benefit of a great deal of experience which we can draw on in developing our policies.
Successive Governments have tried rigid centralised controls and an abandonment of controls. They have tried restricting expansion to achieve a foreign surplus, and a dash for growth at the expense of a huge payments deficit. Apart from all our macro-economic solutions, we have been through the whole 198 gamut of micro-industrial policies, from propping up lame ducks to killing them off, and back again.
The one constant element throughout this long history of policy has been the fact that these alternatives have been largely centrally decided and imposed and have been seen as problems of economics and management rather than as problems of politics and consent. Indeed, it is a curious paradox that the most rigid and comprehensive armoury of central controls ever instituted over the entire range of the British economy came from a party dedicated to free enterprise and market forces, which, when they were applied, developed in a direction which threatened and weakened the authority of Parliament.
Any constructive long-term industrial strategy must be developed by the longer, slower route of real consultation and power sharing, all done more openly. There is no alternative. I have no intention of repeating the tragedy of the long and damaging confrontation with labour which has occurred over the past three years by setting out on a long and equally damaging confrontation with the CBI and the management of British industry. I am not seeking a woolly consensus that dodges difficult issues or delays necessary adjustments by covering them up, but it is central to my argument that the most difficult industrial issues and the necessary adjustments that everyone in Britain must make can be made only after the most detailed and painstaking joint discussion. It is no use asking people in industry to act responsibly if they are the victims of decisions taken irresponsibly.
People, including workers and managers, are entitled to know the choices before the decisions are made and to feel that those decisions are taken in the interests of the community. Workers up to and including skilled industrial management, and Government, with their even wider responsibilities to the nation, are inextricably bound up together, and the relationship between all three must reflect that reality.
§ Sir Derek Walker-Smith (Hertfordshire, East)
May we take it from what the right hon. Gentleman has just said that he or his right hon. Friend the Secretary of State for Trade—whoever will have 199 the responsibility—will be taking an early opportunity to issue a Green Paper for discussion on the two-tier structure of companies and workers' participation therein?
§ Mr. Benn
As the previous Labour Government introduced the concept of a Green Paper and managed to develop a system of open government that was closed in many areas by its successors, I hope that the right hon. and learned Gentleman will recognise that when we talk about the desirability of open discussion that is in line with our practice, and certainly with our intentions. I cannot speak for my right hon. Friend's Department, because I am talking about my own, but it is part of my argument that if decisions are to succeed they must be reached after full discussion.
Disengagement has been tried and has failed. What we must decide now is the nature of the engagement that there must be, the rules that will govern it, the consultation that will accompany it, and the national purposes it must serve.
In hard, practical terms, there must be as close a relationship between the Department of Industry and the trade union movement as has long existed and must remain between my Department and industrial management. It will be my firm resolve to develop those relationships with the TUC and national trades unions, and through them with workers at the shopfloor level, to the same degree as now exists with the CBI, top industrial management and local management.
Bringing the workers into industrial discussions and planning at Government level alongside management is a much bigger task than might appear, and it will take time. Consultative arrangements on this scale do not now exist. As they come into operation, they will necessarily affect the flow of industrial decisions that have hitherto been based upon the one-sided contacts with industrial management and the City.
It might be argued that if workers who are likely to be affected by a wide range of industrial decisions are really to be consulted before those decisions are reached, the pace of decision making will be slowed down. That is true, but the compensating advantage is that the deci- 200 sions will be more likely to be right and more likely to be acceptable. Arbitrary decisions followed by predictable resistance and long-term frustration constitute an even more lengthy and expensive process. Executive management is just as concerned with this problem.
Who knows what would have happened if some of the skill and energy generated by the Clydeside shipyard workers during their campaign for the right to work had been available more directly to influence Government decisions about the shipbuilding industry, or had been released to serve that industry much earlier still?
In inviting constructive contributions from workers as well as national trade union officers before industrial policy decisions are made—and that is what I am doing—we shall necessarily be obliged to consider very seriously what it is that they are saying to us. It is amazing that in 1974 it should be necessary to make a conscious decision to invite systematically the views of workers in addition to receiving the opinions of those who own or manage our industrial enterprises, with whom consultations will and must continue.
§ Mr. Tom King (Bridgwater)
Will the right hon. Gentleman confirm that those workers in industries affected by the threat of nationalisation will have the right to be consulted on the question whether they wish to be nationalised?
§ Mr. Benn
The hon. Gentleman had better allow me to continue with my speech. If he will cast his mind back over the history of public ownership he will recall that it was the miners and the railwaymen who campaigned continuously for the public ownership of their industries and, indeed, that the policy of denationalisation to which some members of the Opposition were attracted was frustrated by the knowledge that, whatever may be the difficulties in the public sector, the commitment of those who work in the public sector to its continuation is very deep. If the hon. Gentleman will allow me to continue with my speech he will see the answer that I propose to give to the question that he has put.
§ Mr. Cyril Smith (Rochdale)
I welcome the Minister's conversion to the 201 policy of the Liberal Party. Should not one of the policies to which he has just referred also be applied to nationalised industries?
§ Mr. Benn
I am coming to the proposals, but neither I nor my party share the proposals on industrial democracy that the hon. Gentleman has put forward, because we believe them to be a form of window dressing. I hope to carry him with me—[Laughter.]—or perhaps the hon. Gentleman would carry me with him—in considering the need for much closer consultation between Government and the trade union movement in the areas of policy for which Government are responsible. I am not discussing industrial democracy; I am talking about relations between my Department and the trade unions.
I come now to the question put to me by the hon. Member for Bridgwater (Mr. King). The industrial policy proposals which form the central part of the manifesto upon which the Labour Party fought the election were in fact produced after consultation with the trade unions—and others—on the basis that I have described. If the hon. Gentleman had waited, he would have heard me say that. If he looks at the proposals that have been published, for example, on the shipbuilding industry, he will find that they emerged after the longest and most detailed discussion with the representatives of the workers in the shipbuilding industry.
I do not ask the House to accept our proposals just because they were arrived at by that process, or to neglect other interests that have to be considered, but I do recommend the proposals to the House for serious study and consideration, because they embody opinions that this nation cannot afford to ignore or set aside if a coherent industrial strategy is to be evolved.
The provisions of the proposed Industry Act outlined in our programme, and which will form the basis of the Bill—to consolidate and develop existing legislation"—to use the words of the Gracious Speech—contain provisions that Labour thinks necessary for such a strategy. The Bill would, for example, give to the Government, amongst other things, the power 202 to obtain information and to make it more generally available, the power to make industrial decision making more accountable, the power in the national interest to prevent foreign take-overs and the power to put in an official trustee to assume temporary control of any company which fails to meet its responsibilities to its workers, its customers or the community. All this stems from the experience of recent years.
Similarly, the proposal to introduce planning agreements with major industrial enterprises not only meets the requirements of those who work in the firms concerned and those who live in the areas where jobs are hardest to come by but are also clearly in the national interest if we mean to harness our productive potential to the urgent tasks of industrial renewal.
Even the proposals for the extension of public ownership, supposedly so controversial, emerge from those who work in industries where the present structure either condemns them to disorganised decline or hampers their prospects of long-term expansion and development. We are certainly not committed to the forms of public ownership which have been followed in the past, since neither the great public corporations nor the private company status of Rolls-Royce (1971) seem to us to constitute the ultimate wisdom of public sector management. The National Enterprise Board to which the Prime Minister referred yesterday is one such new form of public ownership which merits serious consideration.
As the Prime Minister made clear, the House of Commons will have the opportunity not only of debating and voting upon the Industry Bill but also upon any extensions of public ownership that will be submitted to Parliament for decision through the full parliamentary legislative process.
When the provisions of the Industry Bill are published they will be seen to be founded upon precedents created in many cases by the previous Government, but the provisions of the Bill, by contrast, will tend towards a dispersal of power rather than its centralisation. This, too, will be the keynote of any proposals for real industrial democracy that may in due time come before Parliament. I very much hope that the House will reserve 203 its judgment upon all these proposals until it has had a chance to study them, and that hon. Members will relate what is put before them to their experience in their own constituencies.
My experience, both as a constituency Member of Parliament and as a former Minister with similar responsibilities to the ones I now exercise, has highlighted some of the misuse and abuse of industrial and financial power at the expense of professional managers and workers, and such gaps in the network of public accountability we intend to fill.
This, then, is the way in which I intend to approach my task as Industry Secretary. The proposals that I shall put forward will all be based upon proper consultation, and will be designed to meet the national interest, and on that basis I shall seek the support of the House for them. The issues of public policy that they raise will all be brought out into the open for real debate in public in the House of Commons, where the power of decision lies and must lie.
§ 3.7 p.m.
§ Mr. Peter Walker (Worcester)
I congratulate the Minister, first, on being returned to the House of Commons in what was considered to be a marginal constituency against a diversity of opponents and, secondly, on taking up his new and important Cabinet office. It is said that when Winston Churchill returned to the Admiralty a message was immediately radioed to the Fleet "Winston is back". Unfortunately, two-thirds of what would have been the right hon. Gentleman's fleet sailed off to other commands the moment he returned. I am not certain whether that was at their request or at the instigation of the Prime Minister. One thing is certain: it was not at the suggestion of the Secretary of State for Industry.
It is surprising that such a change should have taken place with no comment yesterday by the Prime Minister and no comment today by the Secretary of State for Industry. When in the past considerable changes have taken place in the construction of Whitehall there has been in-depth discussion with the Civil Service and sometimes White Papers have been published. The fragmentation of the former Department of Trade and 204 Industry in this way without discussion and without consultation will result in some considerable disadvantages to the Government.
I bring this to the Government's attention in the hope that they will be able to overcome the harm which fragmentation will do to the regional set-up of the Department. During the last two or three years there has been a considerable strengthening in the quality and grade of staff at the regional offices, and this has had a considerable impact upon the development of industry in the regions. In the regional offices there is a combination of staff capable of applying the various facets of the Industry Act, who can look after the export potentialities of the region and the industrial development certificate policy and positively encourage small businesses. To weaken those regional offices by splitting them up between three Departments will prove to be a considerable disadvantage.
As Secretary of State for Industry the right hon. Gentleman will find grave disadvantage in not having in his Department information about the export and import substitution potential that automatically comes from the trade side of Government. There were many instances where we applied the Industry Act on the basis of information that we had from the trade side of the Department. That will no longer be available to the right hon. Gentleman.
Likewise, in the development of major industrial investment programmes, it was of tremendous advantage in the Department of Trade and Industry—for example, when we embarked upon the steel modernisation programme—to call in the steel plant managers and link them with the international potentialities of exporting steel plants on the back of a healthy domestic demand. That type of linkage between domestic demand in industry, for which the right hon. Gentleman will have responsibility, and export potential will be severely handicapped by the new structure.
The right hon. Gentleman has mentioned monopolies and mergers and the importance of having a positive policy to pursue the proposals that he has in mind. I presume that monopolies and mergers are no longer his responsibility 205 as they have been moved to the new Secretary of State for Prices and Consumer Protection. In the old Department consumer aspects were looked into by the Minister responsible for consumer affairs; likewise, industrial policies and rationalisation aspects were very much concerned with the industry part of the Department. To have monopolies and mergers firmly with the consumer affairs side of government and not in the right hon. Gentleman's hands will prove a considerable disadvantage.
Another remarkable break-up has taken place as a result of the move without any form of consultation or national dialogue. The right hon. Gentleman will be responsible for the aircraft industry and the Secretary of State for Trade will be responsible for civil aviation. I am sure that the aircraft industry will be quick to tell him that its most important consideration is the procurement programme from the civil aviation side of what used to be the Department of Trade and Industry. Here again is an important break which will prove to the disadvantage of the future development of our economy.
The right hon. Gentleman has said very little about inward investment. I think he will be advised by his right hon. Friend the Member for Manchester, Central (Mr. Lever) that one of the most important aspects of any Government policy over the next few years will be the encouragement of inward investment into this country. The right hon. Gentleman has no international presence in his new post. To have no international presence at a time when we want to encourage inward investment will be a grave and serious disadvantage.
I turn now to the Government's outward investment policies. There may come a time when the Secretary of State for Industry should be actively engaged in encouraging outward investment from this country. The right hon. Gentleman's new Department will not have the strength to carry out that function.
§ Mr. George Cunningham (Islington, South and Finsbury)
Does the right hon. Gentleman agree that the outgoing Government intended that there should be large foreign investment in the energy industry in this country and yet decided 206 to hive off the energy side from the Department of Trade and Industry?
§ Mr. Walker
I know of no decision to have large outside investment in the energy industry in this country. It was not the policy of the then Government.
On all these aspects there is no doubt that seemingly this decision was taken not on the basis of any logic about Whitehall or any improvement in the efficiency of developing commercial strategy, but on the basis of trying to find separate Cabinet posts for three Ministers.
I welcome the Prime Minister's approach in 1974 as opposed to the approach that he made on forming a Government in 1964. We do not know whether this new approach is due to the size of his minority or to the lessons that he learned from the experiences of 1964. It is interesting to note that in 1964 his first task was to maximise the importance of the £800 million deficit, and, having got this out of perspective, his actions in increasing consumer demand soon shattered confidence abroad. He has not made that mistake on this occasion. Yesterday he recited how stagnation, the rising unemployment that took place in the regions during the period of the last Labour Government and the lack of achieving the social service success that he endeavoured to obtain was the price that he paid for the manner in which he handled the situation then.
The Prime Minister was right to emphasise the record export order books of British industry at this time. I am pleased that the Secretary of State for Industry today followed the Prime Minister's example by correctly emphasising the potential opportunities that now exist instead of emphasising that the size and magnitude of the deficit on trade which faces the country has to be met by massive deflationary policies.
Now that the Government recognise the true reality of the deficit on our trade, resulting from a massive increase in the importation of new machinery, vital raw materials and, the biggest factor, the enormous increase in world prices, they must consider the approach that they will bring to the economic scene. There is no doubt that if we had pursued the policies that the then Opposition advocated of going for heavy deflationary 207 policies over the last 12 months, we would have crippled the investment potentiality of this country for a generation. It was right not to pursue that policy.
I hope that the Government will genuinely pursue the twin objectives outlined by the Secretary of State for Industry of exports and investment as the two main priorities.
§ Mr. Dennis Skinner (Bolsover)
As a man who started his business career by running off with the Co-op divi and finishing up in Government, leaving us with a deficit on 31st December of £2,348 million, and rising every minute, may I ask the right hon. Gentleman whether, in his more relaxed way of life, he will now be going back to Slater-Walker to reorganise its many disparate interests not only here but abroad?
§ Mr. Walker
No. I shall be staying here to listen to the eloquent speeches so constantly made by the hon. Gentleman. One would miss his wit far too much if one lost any opportunity of being in the House.
I wonder how the Government hope to give prioirty to exports and investment when they are already advocating having no statutory wages policy. To have a free-for-all in wages, to increase taxation on potential savers in this country and to increase consumer demand by various items of public expenditure in combination is a policy which will be of considerable disadvantage both to exports and to investment.
I hope that the new Secretary of State for Trade will get into perspective the importance of Common Market trade to the future of our export programme. When the previous Labour Government left office our exports to Common Market countries were £2,355 million a year. They are now over £4,000 million a year, comprising nearly a third of our total exports. Therefore, the Secretary of State for Trade, with his hostility to Europe, must be very careful in his negotiations not to endanger that considerable proportion of our trade. Not only is it a substantial proportion, but it is one of the fastest rising areas of our trade. Whereas our exports nationally went up by 26 per cent. last year, our exports to the Community went up by 39 per 208 cent. It was a major contribution to our export drive, and for the Government to negotiate on Europe on a basis that would handicap that trade would be of considerable disadvantage to us.
I hope, too, that, on the question of exports, the Government will pay far greater respect to new markets in the world—such as Iran—than they did when they were in opposition. I say that because these markets in the Middle East will be of considerable importance to our future trade potentiality. The comments made by hon. Gentlemen opposite when we were negotiating trade agreements with Iran were anything but friendly and tended to be hostile to such arrangements, and I hope that there will be moves by the Government to repair the bad reputation which they have in those countries.
I hope that the Secretary of State for Industry will do everything in his power to encourage the maximum increase in export prices because there is an immense opportunity for us to increase and improve our export performance. Our goods are exceedingly competitive in world markets, and it must be in our interests to raise prices to the maximum levels obtainable in those markets. That means that the profits of the companies concerned will rise. When ICI declared record profits recently many hostile remarks were made about them, but I hope that the Government will recognise that a great deal of that increase resulted from exports. It would be disastrous if the Government were to do anything other than encourage the maximum profits from export markets, but so far there is no indication that they intend to encourage exporters in that way.
The Government must encourage investment. The Secretary of State for Industry said that a prime task would be to get far more investment into British industry and re-equip it. The Prime Minister has described himself as the custodian of the manifesto. Fortunately, judging from his speech yesterday, the right hon. Gentleman interprets his rôle of custodian as that of seeing that the manifesto's proposals are kept under lock and key, and we commend him on that decision.
I hope that the Secretary of State for Industry realises that real damage is done to investment by the existence of nationalisation proposals. One cannot illustrate 209 that better than by considering the record of investment in the steel industry. Yesterday the Prime Minister mentioned steel as one of the potential shortages which could handicap future economic growth. Any student of the steel industry will recognise that from 1964 to 1966 steel investment went down from £180 million a year to £50 million because of the threat of nationalisation. During the period after nationalisation the industry was unable to start its investment programme, and that meant that from 1963 to 1970 steel investment was more than halved, and not under me but under you. [Interruption.] I apologise, Mr. Speaker, because you certainly would not be guilty of such policies. The Prime Minister was responsible for the biggest drop in steel investment since the war, and the Conservative Government inherited the problem of the lack of steel capacity.
§ The Prime Minister (Mr. Harold Wilson)
The right hon. Gentleman was most kind to refer to what I said yesterday about the steel shortage. I said that it was due to the three-day week. I cannot understand why no one from the Opposition Front Bench has mentioned that in this debate.
§ Mr. Walker
If the right hon. Gentleman had taken an interest in these matters during the week before the General Election he would have known that long before the three-day week was introduced there was a shortage of steel because of the lack of investment due to his policies. The Prime Minister made it clear yesterday that no nationalisation proposals would be introduced without going through the full parliamentary process. The right hon. Gentleman is well aware that no nationalisation proposal could go through the full parliamentary procedure in this Parliament. He has, by that commitment, shown that during this Parliament he does not intend to proceed with any nationalisation proposals. If that is so, it would be in the interests of encouraging investment in the aircraft, shipbuilding, pharmaceutical, road haulage and machine tool industries if the Government were to make it clear that they have no intention of introducing such proposals.
§ Mr. Laurie Pavitt (Brent, South)
The right hon. Gentleman mentioned the pharmaceutical industry. Is he aware 210 that 75 per cent. of National Health Service purchases are from foreign-owned companies?
§ Mr. Walker
That industry is one of our major exporters, and I believe that if the Secretary of State for Industry consults the workers before introducing nationalisation proposals he will not proceed with its nationalisation.
§ Mr. Benn
As the right hon. Gentleman was associated with the take-over of a number of firms without any pretence of consultation with the people whose futures were at stake, perhaps he will recognise that our proposals for public ownership follow long and deep consultations with the workers involved and that in every case the industry concerned has suffered from private management.
§ Mr. Walker
I still remember the telegram that I received from the shop stewards of Rolls-Royce about the complete lack of consultation by the right hon. Gentleman on his nationalisation proposals. That was to be done without any consultation with anybody, and originally without compensation. We know how shallow is the consultation by hon. Gentlemen on the Government side.
Nationalisation proposals cannot be anything but a discouragement to investment in a number of vital spheres, such as the machine tool industry. I hope that, in the climate of this Parliament, instead of hiding behind the words in the Gracious Speech and saying that the full parliamentary process will be adopted for any nationalisation proposals, the Government will come clean and say that they have no intention of nationalising this industry during this Parliament.
The Government will have to deal with the manner in which they will raise money for their proposals to increase public expenditure. They must face the reality of some of the myths which they created when in opposition about where the money would come from. There was the myth that it would all come from North Sea oil. It was interesting to hear the Secretary of State for Industry say this afternoon that we should have to wait for that and that people must not rely on it too much as it is very much in the future, because during the election campaign, whenever it was asked where the money would come from, it was said that 211 more money would be obtained from North Sea oil. The Government now know that it will be several years before there will be a chance of taxing profits from North Sea oil, because it will not be available for about that period.
The same comment applies to company profits. Another bogy was that the big corporations would be taxed far more than they are now, but, with dividend restraint and price restrictions limiting profit margins at home, the only possible scope for increasing taxation is in company profits made from exports, and that is not the way to encourage people to export.
On the question of capital gains, the Financial Times ordinary index is lower than it was four years ago or 10 years ago, and the Government will not have a great source of revenue there. The fact is that if the Government embark on the heavy increases in taxation which they have in mind they will have to tax savings, and that is not the way to encourage investment.
The Secretary of State will soon discover that with the present problem of liquidity and of trying to compete abroad it is vital to maintain a healthy capital market here. If the right hon. Gentleman does not do that he will lose the confidence of industry, which is vital to his programme to increase investment. In addition, he will lose confidence abroad. I hope that the more commonsense approach to the problem of the right hon. Member for Manchester, Central in his new rôle will influence the decisions that the Government take.
During our three and a half years in office we accepted that the Government had many functions to perform in a modern free enterprise society. The Government have a duty to pursue fiscal policies that will encourage growth. They must help shape the economy so that it is equipped to benefit as fully as possible from the changing pattern of world trade. The Government must set parameters for the protection of the natural environment and improving wherever possible the manmade environment. They have to decide upon the proportion of resources to be allocated to the social services. They have to provide an education system that not only enriches people's minds through- 212 out their lives but opens up more possibilities of equality of opportunity. They have to see that the framework of law in which the corporation operates is equable, open and fully accountable to the nation as a whole. They have to see that the power of the consumer is strong enough to have its proper impact upon the quality and diversity of products.
The Government have to see that forward-looking regional policies are pursued so that the fruits of the new capitalism are not concentrated on any one region but are shared fairly throughout the nation. They have to see that training and retraining facilities for those engaged in industry are tackled to meet the challenges of technological change.
In three and a half years we did bring growth back to the economy; we did help to reshape the economy to meet new challenges overseas; we did bring about a build-up of the major investment programme from which the economy will now benefit.
§ Mrs. Elaine Kellett-Bowman (Lancaster)
Will my right hon. Friend accept the thanks of my constituency for restoring growth to that area by giving it intermediate status?
§ Mr. Walker
It was indeed the regions of the North-West and North-East and Wales and Scotland, where unemployment was rising during the last years of the previous Labour Government, which benefited most from the growth in the economy which we achieved. We devoted far more of the nation's resources to the social services and education than our predecessors did. We prepared the legislation to make corporations more accountable. We substantially improved the power of the consumer and we brought many new jobs and opportunities to the regions most in need of them.
But in all these areas we have much further progress to make, and it is our intention to use such period of opposition as is available to us to prepare for further progress towards the creation of a society enjoying all the advantages from man's enterprise and initiative and harnessing the economic growth he creates to bringing about a better quality of society.
§ 3.32 p.m.
§ Mr. Arthur Blenkinsop (South Shields)
The House has been taken by surprise 213 by the claims of the right hon. Member for Worcester (Mr. Walker) for the work of the late Government and by the suddenness with which he subsided into his seat. It would take someone of the lack of sensitivity of the right hon. Gentleman to refer to the work of the late Government as being a marvellous example of reshaping the economy. I suppose that is one way of describing the results of their term of office, but others might well say that they came very near to killing the economy rather than reshaping it.
The right hon. Gentleman spoke of the desirability of investment, yet one remembers only too well the almost piteous appeals by the right hon. Member for Sidcup (Mr. Heath) to private industry to invest at a time when it was blatantly refusing to do so. One recalls how large incomes were distributed back into high-earning sectors of the community, presumably in the hope that there would be more investment—but the investment was delayed for so long that it proved ineffectual. With all that has happened in the recent past so vivid in our minds, one can only regard the right hon. Gentleman's speech as extraordinary.
I welcome the practical and vigorous nature of the Gracious Speech. It contains a set of practical proposals capable of early implementation, which will have immediate practical impact upon our most urgent needs in the nation. I also welcome the fact that it clearly accepts the need for greater fairness in sharing our problems as well as our advantages in the community. That willingness to accept the need for greater fairness is far greater than has been evidenced in the recent past. The Gracious Speech therefore offers a constructive base on which to work.
I welcome in particular the fact that the Gracious Speech clearly indicates Her Majesty's Government's intention to ensure that proper priority shall be given to the public services, which came under such attack from the last Government, particularly in the damaging announcements by the right hon. Member for Altrincham and Sale (Mr. Barber) who wished to put the whole burden of restrictions and cut-backs upon them.
I hope that such decisions of the last Government will be reversed and that we 214 shall have a new policy towards the public services, including health and education and housing, particularly in the development areas. Under previous Governments, when cut-backs were made in public spending, on most occasions an effort was made to ensure that the development areas would be safeguarded, but under the late Government the development areas were suffering most from the restrictions being imposed.
The housing programme had almost come to a stop. We are faced, particularly in the urban areas, with a catastrophic housing problem because of appallingly high prices and costs and because of the lack of organisation of the private building industry. Even the Conservative Minister responsible had to admit how damaging the situation was.
A new incentive must be given to the public services, even at some cost in personal taxation. We have to face this question openly. I believe that the restoration of some of the taxation at higher income levels must be carried out without delay. We await with interest the Budget statement in respect of that subject. I should welcome proposals of that sort as a means of ensuring that the public services are maintained.
In the public services and their development lies our best hope of dealing with the problems of the lower paid—a problem often talked about by the previous administration—but the best hope of really tackling the problem is by ensuring the steady development of our health, education, housing and transport services. That is clearly the way to even out the income situation.
It is not only for that reason, however, that we should welcome developments in the public services; it is also because, looking at our long-term as well as our shorter-term problems, the better hope for husbanding our own scarce resources and, perhaps, international resources, too, would come from greater attention paid to public service development. We should adopt a cautionary attitude towards private spending—in other words, towards the further release of private spending resources.
One of the scarcest resources in our community is clearly that of land itself. Here we have one of the crucial factors both in respect of housing and other 215 economic development. Like all my right hon. and hon. Friends, we welcome the clear statement in the Gracious Speech indicating the determination of this administration to go forward with proposals for public ownership of development land and to ensure that it is taken into public ownership at existing use values.
Concerning this problem, it is clear that land is crucial in any consideration of our housing position. It is clear, too, that it should be taken into the hands of our major public housing authorities at existing use values. The benefit of that step plainly flows to the local community, as indeed it should. Proposals that we have carried through in the past in trying to tap this reservoir of growing values in land by taxing development value and so on failed partly because the local community has not shared in the benefit of that method as much as it should have done. All too often, the benefit may have gone to the Treasury and there been lost to sight in the development of public resources as a whole through Treasury activities. Local communities have rarely been able to see any distinct benefits, which they should have enjoyed, from the increased values which they themselves have largely helped to create.
I have noticed with interest that my right hon. Friend the Secretary of State for the Environment gave an interesting lecture the other day, when he discussed this question in particular—namely, land values and how we might fairly ensure that increases in those values should be seen to be helping local communities. In that lecture my right hon. Friend indicated his own interest in forms of regional organisation—an interest I share strongly with him. I believe that both the local community and the region within which it lies should share that benefit. One of the tragedies of the present local government reorganisation is that it provides no form of regional authority, which is needed in England, as in Scotland and Wales. The case for a form of regional authority is as clear for Northumbria and elsewhere in Great Britain as it is for Scotland.
I appreciate the difficulties of this subject and the impossibility of suddenly altering the whole of local government 216 reorganisation, which is almost established. It is absurd to talk about changing that now. Nevertheless, on the special question of land values, I hope that an effort will be made to try to establish a regional authority which will ensure that the new land value created will be for local and regional benefit.
It is astonishing to see how the studies made of land use have shown how little is known about the use made of land in different parts of Great Britain. It is high time we established a much more authoritative form of information gathering to keep us up to date in land use. This is a problem to which I hope my right hon. and hon. Friends will attend. It is time that we re-established a Royal Commission on the countryside and its use. It is 30 years since we last had an examination of this problem, and in that time the changes in the use of land and the countryside have been enormous.
I welcome the references in the Gracious Speech to the environment and the care of the environment. Obviously, the urgency of our need today to ensure the full use of our own resources within these islands poses a threat to the quality of the environment. That is nowhere more clear than in parts of Scotland and parts of England. Yet it seems to me that if we examine the proper use of our resources we may well find that in giving new attention to this problem we shall make a considerable contribution towards safeguarding our environment. For example, consider the wastes that we still tolerate in pollution in the air, in water and on land. Despite the progress that we have made, there is still an enormous job to be done to cut out much of that simple waste. This is a problem which, I hope, will be a full-time job for a Minister in the Department of the Environment to examine.
The wider problem of the use of resources will, I hope, be clearly understood by this administration. That was an impossible hope under the previous administration. The whole nature of the kind of society that the previous administration fostered and developed, the private profit-motive, money-making society that it encouraged, was itself the generator of a great deal of waste of major resources. Indeed, one has examples such as that of built-in obsolescence, which is widely known throughout industry as an appalling 217 waste of our resources—not only our own immediate resources but world resources and that is an international problem.
Surely it is time that we considered how best we can counteract this development. Is it not time that we considered some way of developing taxation that would encourage long-life as against short-term products? These are some of the longer as well as short-term issues that I believe the new administration has a good opportunity of tackling, and I wish it well in the operation.
§ 3.50 p.m.
§ Mr. Airey Neave (Abingdon)
I hope that the hon. Member for South Shields (Mr. Blenkinsop) will forgive me if I do not follow his line of argument about resources. I found it interesting, but I wish to refer to two vital decisions that the Government will have to face. I referred to them at some length in the last Parliament. They are, first, the pay and status of Government scientists and their dispute with the Civil Service Department, and, secondly, the choice of reactor for our future nuclear power programme.
I am glad to see the new Secretary of State for Energy on the Front Bench. I congratulate him on his appointment. I understand that he is to reply to this debate. I am sure that he will have had an opportunity to read the report of the Select Committee on Science and Technology in the last Parliament. It was published a few days before the General Election.
That report was the result of an inquiry by a sub-committee under the chairmanship of the hon. Member for Bristol, North-East (Mr. Palmer). He made some important recommendations, to which I should like to refer. First, however, I would refer to the unfinished business, as it were, of the pay and position in the Civil Service of scientists.
I have written to the Minister of State for the Civil Service Department, the hon. Member for Ashton-under-Lyne (Mr. Sheldon), and I should like to thank him for his kind reply saying that he regards this as an urgent matter and hopes to do something about it soon. I invite the support of hon. Members on both sides of the House. Many of them will have received letters from Government scientists both before and during the General Election campaign. During the Adjourn- 218 ment debate that I initiated on 7th February I was certainly encouraged by hon. Members on both sides of the House in attempting to secure a settlement to this long-standing dispute between the CSD and scientists in the Civil Service represented by the Institution of Professional Civil Servants.
Widespread half-day strikes and demonstrations took place last Wednesday as a result of the frustration which this dispute has caused. I have had hundreds of letters from scientists of all grades in the Civil Service—and it is clear that they are moderate people—pressing the need for such action, but their anger is very great.
It is not entirely a question of the pay policy; it is a long-standing dispute. On 7th February I explained in considerable detail the absurdly unjust situation that had been allowed to go on. As I have said, it is not a question of the ordinary growth of incomes, as the Queen's Speech now says, or incomes policy, as we used to call it until 10 days ago. It is the steadfast opposition of certain sections of the Civil Service to allowing the scientific grades to be paid at the same rates as the administrative, professional and technological grades. That is the real issue, and I greatly hope that the new Lord Privy Seal will take this issue in charge very soon.
It was hotly denied to me in the last Parliament—I am making somewhat the same points, but they are important—that there was any prejudice against scientists in the Civil Service Department. If that denial is correct, why has the gap between their salary scales and those of other grades risen on average to almost 25 per cent. in the past two years? The Lord Privy Seal and his colleagues must investigate this matter and have a special review. The dispute began over methods. Since 1971 the Civil Service Department has favoured comparisons with the pay of scientists in industry. I think that those comparisons are false. The IPCS has argued for relativities within the internal structure of government as the basis. That is the system which has prevailed for 24 years.
I warned the two heads of the Civil Service Department in the last Government that their policy would lead to a serious clash between the scientists and 219 the rest of the Civil Service, and it did. The whole dispute is now with the Pay Board, which will probably report before the end of this month. I hope that it will not be abolished before it completes its task, because this is the sort of function for which it is very useful. In this case it would be a disaster if it was not able to report, as the scientists would then be back to square one, where they were in 1971. Meanwhile, I and many hon. Members on both sides have received correspondence to the effect that their standard of living, compared with other grades, has been badly affected, though they have benefited by a 7 per cent. increase under stage 3.
The last Government said that they regarded the scientists' position as "anomalous", as my noble Friend Lord Windlesham told the IPCS on 22nd February. That Government said they were ready to consider "a temporary pay adjustment as and when the counter-inflation policy allowed it." They envisaged a "special review" for scientists. I hope the new Lord Privy Seal and the new Minister of State will therefore take this matter in hand immediately.
The new Government have therefore to solve two problems. First, there is the question of the status of scientists in Government service, particularly in relation to the recommendations of the Fulton Report. The right hon. Gentleman will remember that the Select Committee on Science and Technology particularly recommended that this should be implemented. There is a need for parity for those scientists with other grades in the Civil Service. Finally, there is the question of an interim pay award, the point which I pressed on 7th February, the day before the dissolution of Parliament.
There are 1,300 members of the IPCS in my constituency, and I hope that the Minister of State for the Civil Service will already have met their General Secretary and reached an understanding. If we are to re-establish our industrial position and encourage investment as has been discussed by both Front Benches in the past few minutes, we certainly need a vigorous programme of research and development. We cannot afford to antagonise—for no reason except Civil Service procedures—more than 20,000 creative and brilliant people.
220 I include members of the Atomic Energy Authority. Not only are they dismayed by the attitude of the Civil Service Department in the past few years, but the public preference for American reactor designs by the Chairman of the CEGB —Mr. Arthur Hawkins—is hardly calculated to improve morale in the Atomic Energy Authority or in the power stations construction industry. I declare an interest in that industry, on the boiler-making side.
The Select Committee heard evidence from several quarters with the highest qualifications which totally demolished Mr. Hawkins' case that light water reactors should be installed as part of the nuclear power station programme. But there are reports that he and Sir Arnold Weinstock of GEC, who hold those views and stated them frankly to the Select Committee, still maintain that American light water reactors are cheap, reliable and safe, despite overwhelming evidence to the contrary which was given to the Select Committee. I feel it is in the national interest for the House to have a full debate on the Select Committee's report.
It is essential that hon. Members on both sides should be able to put questions to Ministers before the Cabinet reach their decision. The last Government promised such a debate before the General Election. We could then have had a wide-ranging discussion about the various choices of reactor.
There is time in this short speech to mention only two points of fundamental importance, which I address to the Secretary of State, in regard to the choice of reactor. The first concerns safety—in my opinion, clearly the most crucial. The chief nuclear inspector, Mr. Williams, who gave evidence to the Select Committee, would not pass the American light water reactor as safe without at least two years' investigation to form an opinion on designs which he had not yet received. This is a big factor in the question of delay and cost, since the reactor would probably have to be redesigned from scratch. In contrast, he was prepared at present to clear from the point of view of safety the British heavy water design, the SGHWR, if only the CEGB would order it. Up to now the CEGB has refused to order it, so it has not been built in a commercial size.
221 I said that the safety factor is the most crucial. Sir Alan Cottrell, the Chief Government Scientist, gave the most decisive evidence to the Select Committee, and this should weigh with any Government in deciding this issue. He pointed out the absence of a "leak-beforebreak" feature in the steel pressure vessels of American reactors, which could lead to a dangerous incident. It does not apply to the British reactor, the SGHWR.
The South of Scotland Electricity Board, of which the chairman is Mr. Tombs, wants to order the SGHWR. This was made clear to the Select Committee in the last Parliament. It was required for that board's programme of nuclear power. Whatever Mr. Hawkins and Sir Arnold Weinstock say in the course of the argument, it is a proven reactor. As yet, it has not been built to commercial standards, but it can be. All the expert evidence shows that it is a proven reactor, and it is also safe. The South of Scotland Electricity Board is frustrated from ordering this reactor as part of its future nuclear power programme because it does not believe that it will obtain the back-up support of the CEGB.
The same applies to the Atomic Enegy Authority. After all, the Atomic Energy Authority is developing the SGHWR, and I feel that it should give the board its back-up support. The Secretary of State should consider giving directives to these bodies to enable the SSEB to have its choice. In this way, what is probably the safest and most reliable reactor of British design would be given a chance. Then there would be an opportunity to study its performance, which so far has been extremely good in the 100 megawatt variety.
The Government should continue the talks—I hope that hon. Members on both sides will support this strongly—with the Federal Government of Canada and the Government of Ontario. Those talks should be resumed without delay. Their energy Ministers saw the last Government at the beginning of February—on 8th February, I think—about an exchange of knowledge on the CANDU reactor, which is very similar to the SGHWR and would help us to construct the SGHWR in this country in a commercial size. Since the SGHWR has a pressure tube, not a pressure vessel, it could be manufactured in this country. I know 222 this from my connection with the boiler-making industry.
The talks went quite well with the Ministers in the last Government, but they did not go at all well with the CEGB. The Canadians were very upset about this. The CEGB continued to shout defiance of all the evidence before the Select Committee and all the evidence coming from other sources. Now that the Secretary of State is to take over as Chairman of the Nuclear Power Advisory Board, I hope he will consider giving the House a lot of information about what happens on that board concerning the reasons given for the choice of reactor. He should publish a summary of those reasons, since they are not really confidential. The House should know the reasons before the question is debated on the Floor later, as I hope will happen.
The best course is for the House to have time to debate the Select Committee's report so that the many aspects of this terrible intellectual headache on the choice of reactor may be determined. I hope that the conclusion of the House, and of the Government, will be that British technology has most to offer for the future nuclear programme.
§ 4.5 p.m.
§ Mr. John Stonehouse (Walsall, North)
In his attractive speech, the hon. Member for Abingdon (Mr. Neave) referred to two main points. The first was the remuneration of the scientific Civil Service. I agree with him entirely in this. In the past 25 years the scientific civil servants have played a constructive part in the formation of policy and in the development of industry and they deserve appreciation.
I support the increased secondment of scientific civil servants to civil industry where they would be able to make an even more direct contribution. This would also make it more obvious that their remuneration had fallen out of line with that paid in industry.
I support the hon. Gentleman in his plea for a debate on the Select Committee's report on future nuclear plants in Britain. It would be a tragedy for this country if, having paid so much for research and development into nuclear power, we were left to buy American know-how at considerable expense.
223 I congratulate my right hon. Friend, the Member for Bristol, South-East (Mr. Benn) on his return to the Ministry of Technology—although it now has another name. He carries a great responsibility, because the future of this country's economy will largely depend on the improvements that can be achieved in British industry.
During the past few years we have seen productivity of British industry falling to a frightening extent in comparison with that of other countries—so much so that our ability to pay our way in the world is now in doubt.
The other day I picked up some figures from the Kenneth Fleet column in the Daily Telegraph which bear repeating. The figures for output per person in manufacturing in 1971 are as follows: £5,505 per person in the United States; £4,099 in France; £3,664 in Germany; £2,247 in Japan; £2,139 in Italy; but only £1,752 per person in Britain.
It is a shocking state of affairs when our output per person is so low in relation to our competitors. This is the kernel of our problem today. The reason why our standards are falling so low, why the ability of our people to pay for the things they want is undermined, and why we must have a prices and incomes policy under any Government, is that our productivity is so low in relation to other countries. Frankly, we are not making enough to afford to pay ourselves the incomes that we should have.
The position becomes even more serious with the change in the terms of trade, the increase in commodity prices and the four-fold increase in the price of oil in the past few months. This produces an enormous burden for the economy. Unlesss we can increase our productivity in the short term our position as a manufacturing nation and our position in the international league table will be undermined and likely to drop well below France, and even below Spain and Portugal, in the next few years.
We must, therefore, in the next few years, put the greatest possible emphasis not only on forms of ownership but also on increasing productivity in public enterprise manufacturing industry in every sector of the economy. Unless we do so we face the threat of being unable to pay our way in the world and being 224 forced to borrow more and more from the outside world until North Sea and Celtic gas and oil become available to us. I agree that eventually the condition of this country can be good. In eight or 10 years' time we could be an exporter of oil. We might even become a member of OPEC. But in the next few years we need to build up our manufacturing industry so that we can continue to pay our way in the world. Otherwise, in the years when gas and oil become available we may find that we do not have a modern manufacturing industry to sustain.
We therefore need to put the greatest possible emphasis on the words in the Gracious Speech, which I fully endorse, which relate to improving productivity in industry. I hope that my right hon. Friends will take energetic action to ensure the greatest possible consultation in both public and private industry to assist this achievement of higher productivity. Let us get the message across to the trade union movement that it is only through improving productivity —improving output per man hour—that we can afford to pay ourselves more. We are now a low wage economy. Our wages are far too low. This is the message that I was trying to relay during the election campaign. But we shall not be able to pay ourselves more wages unless our factories produce more.
When American firms come to Britain to invest, they discover that even with the same plant they obtain only about a third of the output that they get in American plants. French industry is producing 1½ times more than we are with similar plant. German industry is producing double. With Yugoslav and Turkish manpower Germany is producing, in many plants, double that of Britain. That is where we must turn our attention if this great nation is to be able to afford to pay its way in the world and pay its people more. They deserve more, but they can get it only if we increase our productivity.
The right hon. Member for Worcester (Mr. Walker) made an important point when he said that British industry is charging too little for its exports. He is absolutely right. Our industrial products are undervalued. One of the reasons is that we have allowed the devaluation of the pound to go too far. 225 The floating of the pound has now become ridiculous. There is a continued sinking of the pound. I therefore argue strongly that the Government should take bold action to fix the parity of the pound, to revalue it, and to hold it to a realistic value, rather than allow it to continue to sink in the way that it has during the last two years.
In doing that we would be able to save on the cost of our imports as our imports of commodities and oil would cost comparatively less if we revalued the pound. It would also bring back a sense of national discipline, because if we had to work in order to achieve a certain parity of the pound I believe the whole of Government and industry would try harder. Although I appreciate the original reasons for floating the pound, the slipping of the pound in recent months has become an easy option. It is an option that we can do without in the next few months.
My right hon. Friend the Secretary of State for Industry has taken over responsibility for the aircraft industry. I think there is a mood abroad that the aircraft industry has been an expensive luxury, and I hope we shall disabuse ourselves of that idea. Our aircraft industry has made a wonderful contribution to our export performance; we are ahead of most other countries. We shall, however, slip back unless we continue to put dynamism into the aircraft industry as we have in the past.
In France, for instance, we have seen how a Government have been able to pull up their country's aircraft industry almost by the bootstraps, after the war, to a position where its export performance has been extraordinary. We could have a better performance from our aircraft industry if we were to put more behind it. For that reason alone I very much hope that the Government will not listen to those who argue for a reduced investment in the aircraft industry. I hope that they will continue to back it, which will make a great contribution to providing this country with the aircraft products it needs, and an even greater contribution to our export endeavour.
§ 4.16 p.m.
§ Mr. Donald Stewart (Western Isles)
I join, somewhat belatedly, with the Prime Minister and other leaders of minority parties in congratulating the 226 hon. Members for Birmingham, Northfield (Mr. Carter) and Bedwellty (Mr. Kinnock) on their speeches in moving and seconding the Address.
I offer my apologies to the right hon. Member for Walsall, North (Mr. Stone-house) for not taking up the theme of his speech, which contained some of the most excellent points made so far in the debate, and I trust that he will forgive my talking along other lines.
The Scottish National Party welcomes a good deal of the Gracious Speech, particularly that part which concerns fair prices for food. The problem of expensive food is mainly a problem for England. Last July the Secretary of State for Scotland gave details which showed that Scotland can support herself and is an exporter of many basic foodstuffs—almost all the beef required, three times the amount of mutton, and so on. Fifty per cent. of fish sold in Britain is landed in Scottish ports. The problem, therefore, is mainly one for England, and one with which a free Scotland would not be faced.
We welcome the freeze on rents and the proposed increase in pensions. Both the Tory and the Socialist Parties have appalling records on pensions in previous terms of office. We welcome also the proposed improvements in the social services; for example, the disability pension.
We welcome what is said in the Gracious Speech about the encouragement of agriculture. It is to be regretted, however, that little or nothing is said about fisheries, and nothing about the Government's attitude toward the forthcoming conference on the law of the sea, which is vital for many fishing constituencies in Scotland.
We welcome the suggestion of financial assistance to minority parties. We are all minority parties now. However, it would have been much better if the Government, together with the Conservative and Liberal Parties, had shown some sense of fairness with regard to the party political broadcasts which had been agreed for the Scottish and Welsh National Parties for the Tuesday preceding polling day. A sordid and disgusting manoeuvre cancelled those at the last minute, and we were glad that the Welsh National Party was able to have the decision in its case overruled by the 227 court. Let it be shown by action that the intention is to be fair towards what are, regarded as minority parties. We shall see what is involved in the promise of financial assistance for them.
The hon. Member for Kirkcaldy (Mr. Gourlay) said yesterday:The people of Britain must face the hard fact that there is no room for third parties."—[OFFICIAL REPORT, 12th March 1974; Vol. 870, c. 115.]What a pity he was not present to proffer that advice to Keir Hardie in his day. Incidentally, the hon. Member for Kirkcaldy does not seem to be here today. He talked about the absence of other hon. Members yesterday; yet today his party is represented by only four of his hon. Friends.
The Scottish National Party regrets that there is nothing in the Gracious Speech about mortgage interest rates, or about returning the steel industry in Scotland to Scottish control. There is nothing about cancellation of lunatic projects such as Concorde, Maplin and the Channel Tunnel, which, apparently, will be allowed to continue to drain away wealth.
On the question of the Common Market, the Labour Government are employing the same tactics of weapon, evasion and smoke-screen to get us out as were employed by the Tory Government to get us in. We have tabled an amendment demanding a referendum on the subject. It will force hon. Members to show where they stand on this issue.
Yesterday the Leader of the Liberal Party, in an otherwise excellent speech, was on weak ground in regarding the recent election as a referendum. Although the then Prime Minister went to the country on what he attempted to make a one-nation election, it had departed from that by polling day. That is entirely different from asking the public to vote on a straight question of whether or not they wish to remain in the Common Market.
§ Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)
The hon. Member referred to the amendment tabled by the Scottish National Party, about a referenrum on the Common Market. That amendment seems to give the impression that contained in the Labour Party 228 manifesto there was a specific promise that if we won the election a referendum would be held immediately. That is not the case. The commitment was to seek to renegotiate and, succeed or fail in our attempt to renegotiate, then to put the matter to the electorate. Is not that a much fairer assessment of the situation? The hon. Member knows the feelings of many of us on the Government side about the Common Market.
§ Mr. Stewart
No. The amendment tabled by the Scottish Nationalist Party is quite clear. I agree with the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) that the Labour Party did not give a hard-and-fast promise that there would be a referendum. Yesterday the Prime Minister talked about "almost certainly a referendum", but did not go on to any firmer ground than that.
As to Scottish oil, we welcome the references made by the Prime Minister to the Norwegian example. We wish to go all the way and have Scottish oil used for the Scottish people in the same way as Norwegian oil is used for the Norwegians. There should be proper revenues, control and rate of development, conditions that so many of the nation concerned will be involved with, because much of the machinery will be constructed in the yards and factories of the country concerned.
As was said by a merchant banker, if we do not have our own government we might end up as the only country to have discovered oil which ends up in a position as if it had never been discovered. As far as we are concerned—and we are backed by international lawyers—it is Scottish oil, and a Scottish Government would have a proper right to that oil.
It was significant that the Leader of the Opposition did not mention the Kilbrandon Report in his speech. We have no interest in the appointment of Lord Crowther-Hunt. The noble Lord could not even agree to the minimum suggestion made in the Kilbrandon Report. Either the Prime Minister is aware of the feeling of the Scottish people or he is contemptuous of it in appointing Lord Crowther-Hunt as an adviser on this subject. We have no intention of wasting the time of the noble 229 Lord or our time in discussing the matter with him.
The government that the Scottish people will enjoy will not be dictated by hon. Members or Kilbrandon; it will be the choice of the Scottish people themselves. That will decide the government of Scotland at the end of the day. The limits and the degree will be decided by the Scottish people, and it is becoming clear that they wish to enjoy the rights and responsibilities of all other nations—the right to make their own decisions.
The time for further discussions is past. Royal Commissions are a stalling device. We have had two of them recently, and we cannot wait any longer. As the right hon. Member the Leader of the Liberal Party said, a Royal Commission is set up in the hope that the problem will go away. The problem of Scottish government is going only one way—the establishment of a government in Scotland responsible to the Scottish people.
§ Mr. James Sillars (South Ayrshire)
If there is legislation creating a legislative assembly in Scotland under a devolution scheme, would the Scottish National Party support it in the Division Lobby? If the assembly were created in Edinburgh, would the party work to make that assembly work or destroy it?
§ Mr. Stewart
The position of the Scottish National Party is quite clear. We would support an elected assembly which brought true decision making back to Scotland. We are quite open and we will not stop there. We intend to go for the same independence as is enjoyed by every free nation.
The Prime Minister said yesterday that some humility was required by both the Tory and the Labour camps, and the garb of sackcloth and ashes is very becoming to both of them. In 1970 it was said that the choice in the election was between the lesser of two evils. In Scotland we have an infinitely better third choice, and the people in Scotland have begun to show that they see the options open to them. We have tabled amendments to the Gracious Speech, and it is for you in your judgment, Mr. Speaker, in due course to decide whether they are acceptable. In the light of that decision we 230 shall decide whether or not to vote against the motion.
§ 4.27 p.m.
§ Mr. Anthony Grant (Harrow, Central)
I am grateful for the first opportunity in more years than I can recall to make a speech from the back benches. I shall not follow up the points raised by the leader of the Scottish Nationalist Party, except to say that one of my responsibilities has been concerned with the health and welfare of the regions, which include Scotland.
§ Mrs. Winifred Ewing (Moray and Nairn)
On a point of order, Mr. Speaker. For the sake of courtesy ought not the hon. Member for Harrow, Central (Mr. Grant) to get the name of our party right?
§ Mr. Grant
Whatever it is—[Interruption.] The reason I used that phrase was that I was not certain of the constituency of the hon. Member who I now realise represents the Western Isles. Nevertheless he knew to whom I was referring. In the course of many visits to Scotland while pursuing regional policies I never had the pleasure of visiting his constituency, but I was glad that some of our policies brought new encouragement and industrial investment to Scotland as a whole.
I congratulate the Secretary of State for Industry and his team of Ministers on taking office. They will find that they will be well served by a loyal and devoted team of officials. I am probably almost the sole survivor of the old Board of Trade and, as such, I pay tribute to the loyal and devoted help and service that I received at all times from officials while I was a Minister. That leads me to one of the Government's first actions, which has been to break up the Department of Trade and Industry. On reflection probably, and perhaps with the advantage of the hindsight that a Minister who served in the Department for three years is entitled to, I may say that the Department of Trade and Industry was probably too large in the concept of Government as a whole. That was to some extent masked by the remarkable capacity of my right hon. Friend the Member for Worcester (Mr. Walker), under whom I was proud to serve, for engendering team work.
231 But although I say with hindsight, and with the luxury to which I am entitled as a back bencher, that the DTI was probably too large, I am convinced that the Government's fragmentation has gone too far. The Government and the efficiency of Government will suffer as a result of this precipitate action.
We all know that this action was taken for political reasons to ensure that the necessary juggling between Left and Right wings in the appointment of Ministers could take place. This action will prove disastrous, and I offer the Government two warnings. First, I ask them to beware of the traumatic effect upon civil servants of too much chopping and changing. The DTI has had more than its fair share of that. Originally it had responsibility for aviation. Shipping was in and out. The Board of Trade had certain functions before the DTI came along and there was also the great trembling empire of MinTech, so beloved by the right hon. Member for Bristol, South-East (Mr. Benn). Now there has been yet another change. All that has an effect upon officials no matter how dedicated they may be. The right hon. Gentleman should bear in mind the use of official time which these changes involve. He must also consider the delay in decision making. It is hard to see how that process could be speeded up if trade is segregated from industry. The functions of the two are deeply interwoven and they are deeply interwoven with our activities in the EEC. The problem of unscrambling them will cause difficulties and in addition the right hon. Gentleman will be saddled with endless interdepartmental committees with all the difficulties they entail.
There are only the haziest references in the Queen's Speech to regional policy. It says thatHigh priority will be given to the stimulation of regional development and employment.I hope that the Government will not start fiddling about with the incentives given to industry to locate in the regions. The one lesson I learned while I was responsible for regional policy was that above all else industry wanted certainty in the incentives. I agree that the Conservative Government made changes and caused uncertainty, but we made it absolutely 232 clear that the incentives would remain firm and decisive for a fixed period. If the Government start fiddling about with them now they will cause uncertainty and a loss of confidence in the regions.
I hope that the Government will not revert to their old disastrous rigidity in their policies towards IDCs. That was certainly one of the most criticised aspects of the previous Labour Government's policies as I discovered when I took over. We created greater flexibility for IDCs which gave greater confidence to the Midlands and to other parts.
§ Mr. Frank Hooley (Sheffield, Healey)
If the IDC policy were abandoned how would the hon. Member deal with the problem of considerable industrial development, say, in the South-East and the West Midlands and a shortage of skilled workers, while in the North-East, Scotland, Wales and the North-West workers are unemployed and without adequate employment opportunities?
§ Mr. Grant
The hon. Member has been out of the House since 1970, but if he had been here he would have realised that the policy I adopted was an IDC policy. We prevented industry which was completely free and footloose and which could set up anywhere from locating in the South-East. But we did not believe that restriction should apply to all small firms which, even if they were prohibited from developing in the South-East or the Midlands, would not have moved to the regions. I plump for flexibility, though I also support the IDC policy.
The whole purpose of regional policy must be to encourage investment, provide employment and improve the prosperity of the less fortunate parts of the country. I believe we achieved a modest success in the years when I was Minister for Industrial Development. In the last year for which I have records there had been greater investment in the regions than at any time for ten years. I look back at that with some satisfaction though I recognise that a great deal more is required to be done. Much of the investment is generated quite properly from within the regions. The Secretary of State for Industry deludes himself if he believes that all the increased investment needed for the regions will come only from within this country. He must attract 233 foreign investment. He deludes himself if he imagines that he will get that investment from abroad by making rude noises about multinational companies.
§ Mr. William Baxter (West Stirlingshire)
I am interested in the hon. Gentleman's reference to investment in industry. Did he or anyone in his Department take a survey of industry which received capital investment to see whether that industry had become more profitable or less profitable, and to see whether our money, which was being invested, was invested wisely and well?
§ Mr. Grant
The policy which we introduced was specifically designed to aid viable industry. This was the whole purpose of the Industrial Development Unit and the work of the Industrial Development Executive. That was made clear when the Industry Act was passing through the House. We can all make mistakes. Nothing was perfect, but our aim was as I have described it.
The Secretary of State for Industry must shed his grave suspicions about the motives of multinational and foreign companies which wish to invest here. Those companies come here to make a profit and to find successful locations for their industries. The Secretary of State, in his suspicions, sometimes reminds me of Talleyrand, who said, "The Czar is dead. I wonder what was his motive?"
If the right hon. Gentleman is not careful he will find that multinational investment in this country is dead, and he will then have a long time to ponder on the motives which first prompted that investment My right hon. Friend for Chichester (Mr. Chataway) and I, during the past year or two, made a number of visits, conducting missions to the United States, to various parts of Europe and to Japan, to attract inward investment from abroad. This was necessary investment which was also demanded by the regions. We found that investors from abroad were, more than anything else, looking for an expanding economy and a reasonable tax system in the country in which they wished to invest. Importance was also placed on good and skilled labour forces and, above all, good industrial relations. Because of the stress on good industrial relations we always took on our missions a representative of the TUC, who worked with us, as part of 234 the team, to encourage inward investment.
Differences which we may have had on other matters disappeared during the course of our activities to attract investment from overseas. I therefore commend to the Secretary of State for Industry a discussion with the TUC about the visits which we undertook. The right hon. Gentleman will then cease to make some of the rude and suspicious noises which he has made about multinational companies. If, however, he perseveres in making these noises it will be to the detriment of this country, and in particular to the detriment of the regions.
The Secretary of State deludes himself if he believes that he can expand regional policy by sitting in his office in Victoria Street, or Millbank, or wherever it is. I doubt that the Government will be in office long enough for the right hon. Gentleman to achieve a total of 70 ministerial visits, which I carried out. Nevertheless, the Secretary of State and his colleagues must get out and about and see what happens in the regions. They should be ready to receive any deputations from the regions which seek to see them. Whatever else people may criticise me for they cannot say that I ever refused to see a deputation from any part of the country. I hope that the present administration will in this respect follow the same course. If they do, they will learn a great deal.
The greatest delusion about which I wish to warn the right hon. Gentleman is that he can solve the problems of our industrial society by juggling with ownership. We have not yet the faintest idea what the National Enterprise Board or the State holding company is all about. One thing which I have learned, and which I hope the right hon. Gentleman will learn, is that the problems in industry are in management, not in ownership. The right hon. Gentleman should concentrate on management, not ownership.
Experiences in nationalised industries have shown that problems in those industries in the regions have been far greater than the problems in the private sector. The right hon. Gentleman may find that some of the greatest problems in the nationalised sector are in management.
235 Finally, I turn to a sector of the economy with which I am particularly concerned—small firms. There are 11: million small firms in this country. There are a number in my constituency. Approximately one person in three is employed in a small firm—more than twice the number employed in the public sector. One-fifth of the gross national product comes from the small firms sector, which provides the best choice in our free enterprise society. Bigness is not necessarily best. Small firms are among the best innovators in our society and by and large they are more efficient than large quoted companies, and are the bulwark of freedom against the monolithic State activity or monolithic industry.
Small firms have demonstrated, in recent difficulties, that they are remarkably flexible, such as in the way they adapted to the three-day working week. Above all, I commend to the Government Front Bench the fact that industrial relations are vastly better in small firms than they are in large industries and in the public sector.
When we were in Government we implemented the vast majority of the recommendations in the Bolton Report, which was commissioned by the previous administration. However, small firms are facing great difficulties, particularly in terms of shortages of steel and other raw materials and in cash flow. We are entitled to know what is to be the Government's policy towards the small firms sector. I do not expect an answer now, but I hope that in the concluding speech there will be an indication of Government thinking on the matter—or that the Government are thinking about small firms. I am quite prepared to give way if the Secretary of State wishes to give an answer now. Is he or the Prime Minister to appoint a Minister with special responsibility for small firms? I shall gladly give way if he wishes to answer now; if not, I shall expect an answer during the concluding speech.
§ Mr. Benn
Allocation of Ministers within my responsibility falls to me, and I have organised this in such a way that my hon. Friend the Member for Oldham, West (Mr. Meacher) will be responsible for the part of the Department that deals with sponsorship of private industry, but for the convenience of the 236 House I shall publish, as previous Governments have done, details of the special responsibilities of Ministers within the Department.
§ Mr. Grant
I am glad to hear that, and I shall follow the activities of the right hon. Gentleman's Under-Secretary with great interest. When I was in office there was not a shred of interest from any member of the Opposition in the activities of small firms—with one exception, namely, the hon. Member for Durham (Mr. Hughes). He was the only Opposition Member who showed the slightest awareness that there were small firms. I am surprised that he has not been appointed to deal with this matter in the present administration—which cannot be described as a Government of all the talents. Surely there must be room for him. However, I hope that he will continue with his activities and that, like me, he will scrutinise the work of the hon. Member for Oldham, West (Mr. Meacher).
§ Mr. Baxter
In the interest of accuracy, it should be pointed out that when the hon. Gentleman was in office his Department met deputations from Scotland concerned with the steel situation as it affected small businesses, including nail works, but those businesses were at a considerable disadvantage through having to go to England to get the steel for their products. This made the cost for Scotland much higher.
§ Mr. Grant
What the hon. Gentleman says underlines the importance of having a Minister and a Department which will operate effectively within the Government to deal with the sorts of problems which I have mentioned.
I want to know what the Government will do about small firm centres. At this state I do not expect the Front Bench to indicate what is to be done about to ration, but I shall seek an assurance that the Secretary of State and the Minister who will be responsible for small firms will make representations about the difficulties which small firms suffer regarding taxation and will fight the Treasury vigorously on this issue. There will no doubt be an opportunity to pursue that question during the Finance Bill debates.
I wish the new team well, but I warn it that I have deep misgivings about its 237 attitude, particularly towards the small firm sector, and I shall be watching it closely on that issue. What is much more important, so will the 6 million-plus people who work in small firms, who will be watching closely to see what the team is doing in their interests.
My good wishes will turn rapidly into ruthless condemnation of the Government if they neglect or interfere with this vital sector of our economy, or seek to damage people who contribute so much that is best in our industrial society.
§ 4.45 p.m.
§ Mr. Arthur Palmer (Bristol, North-East)
As this is the first time I have spoken in this new House, Mr. Deputy Speaker, I hope that I may be allowed to congratulate you on your new position. I am sure that you will preside over our discussions with your usual distinction.
The hon. Member for Harrow, Central (Mr. Grant) made it crystal clear that he was a Minister in the last administration. He argued that it was a pity that, in future, trade was to be separated from industry as a Government Department. I do not know whether he is right or wrong, as I do not have the knowledge to form an opinion, but I am certain that it is a good thing that energy should have a separate Department of State.
I think that I can claim to have been the only mourner in the House at the grave of the former Ministry of Power when it was abolished by my right hon. and hon. Friends. I thought that its abolition was a mistake, and said so. I am glad that it has been revived in a new form under the Secretary of State for Energy, although I think that it is dangerous for any Minister to have such a title.
I congratulate my hon. Friend the Member for Chesterfield (Mr. Varley) on his appointment. I hope that in view of my great interest in the energy question, in particular, he will allow me to suggest four topics that merit the early attention of his Department.
First, energy policy generally needs close examination, in terms not only of resources—important as they are—but of conservation. Energy resources, both in absolute and cost terms, are inseparably linked with conservation under present conditions. Within fairly recent 238 times our country has moved from being a one primary fuel—coal—economy to being a two primary fuel—coal and oil—economy. Now, in terms of primary resources, we are a four fuel—coal, oil, nuclear and natural gas—economy.
It is important that we should have a balance not only in the immediate sense between the use of the primary resources but over a given time scale. I do not believe very much in elaborate White Papers for fuel and power development—we had one in 1967, which was made out of date within 18 months despite all the work put into it—but the country, industry and this House are entitled to much more information about fuel, power or energy policy than they have been having in recent years. I should like to see shorter statements or papers on the Government's energy policy issued from time to time over a one- or two-year period. We need short-term forecasts; long-term forecasts tend to be defeated by events.
My right hon. Friend and city colleague, the Member for Bristol, South-East (Mr. Benn), gave an earnest of his intentions to continue to consult management in industry. He is also to have the fullest consultation with the trade unions and employees—both classes of consultation are of the greatest importance—but I hope that in his enthusiasm for consultation outside the House my right hon. Friend will not neglect consultation within it. Some of us have found that all administrations are deficient in that respect, and that makes for difficulties in the effective working of parliamentary government.
Those of us who have served on specialist Committees over quite a period, as I have, know how difficult it is at times to obtain information from Ministers. If the House, which represents no sectional interest but the whole nation, is well informed, perhaps by that process the country generally will be better informed.
I have talked about the need for a proper balance. The situation will be difficult in the time ahead until the new fuel resources of the North Sea are available to us. We shall all be interested to hear my right hon. Friend's progress in that respect and trust he will report frequently.
239 I turn to the question of conservation. When energy is absolutely short and is becoming more and more expensive, economy in use is essential. Perhaps my right hon. Friend will consider the resurrection of the old National Industrial Fuel Efficiency Service, which was allowed to go into disuse some years ago.
In future, there should be penalties for waste of energy and incentives to save energy in industry. It is absurd for industrialists to tell the electricity supply industry, from time to time, "We want cheaper energy in order to compete with our foreign rivals", when within their own factories and industrial establishments they are doing very little to save energy and thus reduce its cost to them.
In the matter of energy saving in domestic and commercial use, we should be examining the tariff structure in both the electricity supply industry and the gas industry. There is a great deal to be said for turning the normal type of electricity tariff on its head. At present, the more one uses the cheaper electricity becomes. There is a case for a form of tariff which acts against waste; I believe the Electricity Council has studied the matter fairly recently. Under such a tariff, someone who uses too much has to pay for it at an accelerating rate, but it is also possible under such arrangements to make savings and reduce the cost to oneself. Obviously, the idea cannot be taken too far, but it is an interesting and practical suggestion, which quite a number of other countries are looking into. The point is that tariffs for energy should not be geared in such a way as to encourage wasteful use but rather to encourage saving. Those are two practical points on general fuel policy to which I suggest my right hon. Friend should pay attention.
Another problem that needs urgent attention is that of the finances of the nationalised industries. [HON. MEMBERS: "Hear, hear."] Right hon. and hon. Gentlemen on the Opposition benches should not cheer too loudly, because they are more responsible for driving the electricity supply industry to near-bankruptcy than are any previous administration by a policy of financial and administrative interference that has compelled that industry to go steadily into the red side of the balance sheet. That has, regrettably, been extremely bad both for em- 240 ployee morale and for management incentive. I cannot understand what the hon. Member for Harrow, Central (Mr. Grant) meant by speaking of bad management in the nationalised industries. When they have spoken from the Government Front Bench on the annual reports of the nationalised industries, his right hon. and hon. Friends have gone out of their way to pay high tribute to the quality of management in nationalised industries. I do not understand why the hon. Gentleman spoke so loosely about management. The trouble is that management in nationalised industries is not allowed to manage because it is constantly having to deal with politicians, and some of the politicians interfere too much; beyond anything the nationalisation statutes allow for.
§ Mr. Anthony Grant
I was asking the Government not to be so obsessed by juggling for ownership. Their answer to all our problems is supposed to be a change of ownership to bring national industries into the realm of public ownership. All the management problems which may have existed before would still exist with changed ownership. I ask the Government to concentrate on management and not on ownership.
§ Mr. Palmer
My recollection is that the hon. Gentleman suggested that the quality of management in nationalised industries was not particularly good. For that matter, the quality of management in British industry generally is not all that bright either. The quality of management in nationalised industries is equal to that in the greater part of private industry to say the least.
To resume: if we are to have any check on their efficiency we must bring the nationalised industries back to a proper condition of profitability, and fairly soon. Some of us who served on the Select Committee on Nationalised Industries in days gone by—and I include Mr. Austen Albu, a former Member of Parliament—laboured hard and long to secure adequate rates of return on capital in the nationalised industries, so that there could be a proper check on their efficiency and economical management. All that was thrown away by the previous administration, with their unthinking policy of subsidies and badly-applied price control. It is now time that my right hon. Friend brought these industries back to 241 having normal internal checks on their efficiency. It will be difficult for him with rising costs, but it will have to be done.
The third matter that requires my right hon. Friend's attention is the organisation and structure of the nuclear power industry. That has been badly managed by past administrations, both Labour and Conservative. Changes must be made. Five or six years ago the Select Committee on Science and Technology recommended a single national nuclear design and construction company. Regrettably, my right hon. and hon. Friends in the previous Labour Government did not accept that report.
The previous Conservative Government deserve some praise for starting on a better road by establishing in Britain the new nuclear manufacturing corporation—part private, part public, but it is a pity that in it the State should have such a small holding as only 15 per cent. In a more recent report of the Select Committee, for which there was a Conservative majority, it was argued that the State should have a 30 per cent. holding so as to give the Minister greater control. As it is, the nuclear corporation is dominated by one company—the General Electric Company. If there is to be a partnership of public and private ownership, in the national interest, the State as such must hold a fair balance between the competing private interests. It is completely wrong for the GEC to be in its present dominant position, and to have been put there by State intervention. I hope that my right hon. Friend will reconsider the structure of the nuclear construction corporation fairly soon.
Heavy electrical manufacturing and the national bulk supply of electricity is virtually in the hands of two men—Mr. Arthur Hawkins, of the Central Electricity Generating Board and Sir Arnold Weinstock, of the GEC. I do not particularly like that combination, not because I have anything against the two gentlemen concerned—in fact I respect both for their abilities—but for the head of a State monopoly and the head of what is close to a near private monopoly to be able to make key decisions without much check or balance is a situation which merits the attention of my right hon. Friend.
The hon. Member for Abingdon (Mr. Neave), the Chairman of the Select Com- 242 mittee on Science and Technology in the last Parliament, touched on the important question of reactor choice. A decision will have to be made soon. It has already been too much postponed. It is essential that the choice should be a wise one and made generally in the interests of the country and not narrowly. It is not only a matter of employment of technical, scientific and industrial staff; of the use of resources; it is a question of the technical and technological prestige of our country in the world-wide nuclear field.
I was Chairman of the sub-committee of the Select Committee which investigated this matter before the last Parliament ended. Our report came out strongly, as is well known, against any rush to buy American-style light water reactors for the future. That report was firmly based on the evidence given to us, and I hope that my right hon. Friend will not be pushed into any decision before the House has fully debated the subject. The former Leader of the House gave a firm undertaking that no decision would be reached on reactor choice until there had been a full debate by the House on the Select Committee's report.
Apart from the safety argument which the hon. Member for Abingdon advanced, the House should bear in mind that the United Kingdom pioneered the development of nuclear energy for peaceful purposes and it is extraordinary that the CEGB, a great enterprise owned by the nation, should ask us to make a complete U-turn in policy by departing from established and available British technologies and turning to American technologies. At any rate, if that U-turn has to be made it needs more justification than has so far been given. I shall not take the argument much further today because soon, I trust, another opportunity will come.
I understand that the pro-American forces in this matter are regrouping for the attack on the British market and that my right hon. Friend who now has responsibility for our energy policy is the intended target. I have sufficient belief in his ability and strength of character to think that he will not be overwhelmed by the attackers. Therefore, although he has a far from easy decision to make, it is a decision that should be made in 243 the long-term interests of this country, and not to suit private interests. As one with some engineering experience, I have yet to be convinced that we cannot continue to lead the world in nuclear technology by adoption of our own heavy water technology, either alone or in collaboration with the Canadians, if the next stage of the gas cooled system is still troublesome.
§ 5.6 p.m.
§ Mr. Richard Wainwright (Colne Valley)
Not having sat in this place since May 1970, I want first to refer to the regard in the Colne Valley, which I share, for the diligence of the Member in the previous Parliament. The hon. Member for Huddersfield, West (Mr. Lomas) yesterday made certain remarks about Mr. David Clark's absence with which I cannot fully agree. If, on 28th February, we had voted under the system which was established so rapidly in Northern Ireland by the outgoing administration, Mr. Clark might have been in this House as well, as a Liberal Member.
No one could fail to be proud to represent once again such an historic constituency as Colne Valley, which has been represented—to go no further back than some of our own lifetimes—by such Members as Victor Grayson, Philip Snowden—when he was Chancellor of the Exchequer—Glenvil Hall—when he was chairman of the Parliamentary Labour Party—two generations of the Mallalieu family, and which has been nursed, not successfully, by such people as Lady Violet Bonham-Carter, Sir Ronald Walker and Mr. Boyd-Carpenter. It is no matter of surprise, perhaps, that, cradled in that political atmosphere, the present Prime Minister was such an efficient treasurer of the Oxford Liberal Club.
I hope that the hon. Member for Bristol, North-East (Mr. Palmer) will forgive me if I do not follow the terms of his highly expert and specialist contribution, which I am in no way competent to do.
I want to refer to the realistic passage with which the Secretary of State opened the debate on the vital question of confidence—confidence in this country's future amongst those from whom we are already borrowing, confidence amongst those who have it in their power to invest 244 either in this country or in some other part of Western Europe, and confidence amongst those at home with whom the power of private investment, rightly or wrongly, still lies. In contemplating the key question of the stability of our society they can no longer simply look at the Union Jack, which used to be the main symbol of our stability, because, although I am sure that patriotism still motivates every Member of this House, patriotism in this Chamber today is focused in many different directions.
Instead, I should think that the main intangible asset that we could invite observers to consider is our ancient democracy. We have practised democracy for the most part since Saxon times. The question that observers will be asking is whether the British tradition of democracy is genuinely alive or is simply now a matter of form. They will want to know—and some will probably want to examine in detail—whether, with us, democracy ends when the polling booths close or whether we on both sides in this House are trying to push a democratic way of life into all corners of our national affairs.
I am not entirely happy that the Queen's Speech will engender confidence on that score. There is frequent reference in the Gracious Speech to consultation on various important matters, but on the only issue on which the form of consultation is specified the reference is to the Confederation of British Industries and the Trades Union Congress.
On that score I hope that the House will note the remarks of the former Minister, Viscount Watkinson, who is now chairman of Cadbury-Schweppes and deputy chairman of the Midland Bank, when he spoke in Plymouth on Monday of this week. On the issue of consultation with the CBI and the TUC, Viscount Watkinson said thatwhen the hard pressure of events bears directly on manufacturers or trade unionists, then in fact they are not legally bound in any way by decisions of either the CBI or the TUC. This is true, compacts or no compacts. In fact, joint consultation at the top has not proved to be as effective an instrument for solving industrial problems as some people had hoped, and a change of Government will not necessarily improve this situation. It stems from the absence of any machinery to implement national decisions at company and union level.245 The fact is that neither the CBI nor the TUC earns its privileged positions, even in terms of power, because, when it comes to the crunch, neither has any real power. I hope that we shall soon hear from the Government of alternative methods of consultation which will be substantially more realistic.
I suggest that, amongst other things, this means consulting the various bodies constituted of people who really do the various jobs, about which any Government are bound to be concerned, and people who are either already banded together or are in the process of banding together in professional associations which have the public interest as part of their codes of conduct. I should have thought that the Institution of Works Managers—I am speaking of management; I shall come to the shop floor later—the British Overseas Trade Board, the Institute of Management and the Institute of Personnel Management are bodies which should be encouraged to increase their professionalism as rapidly as possible to develop not only codes of conduct amonst their members but strict professional discipline. There is no better way of doing this than by assuring them that they will be consulted in a meaningful way by the Government as they develop both the strength and the influence of their respective professions.
I turn now to the shop floor. I hoped to hear in the Secretary of State's speech a good deal more about the many lessons to be learned from the way that various companies, large and small, tackled the three-day week and the other restrictions on the use of power. The Prime Minister yesterday referred to the co-operation shown by management and trade unions. The co-operation extended well beyond that. In many cases it came from ordinary people on the shop floor, not working through any of the old-established channels of negotiation but making direct approaches to management with suggestions, including hard bargaining, which is perfectly natural and justified, and an indication that if management did not care to listen to those suggestions workers, in my area anyway, would not give up their habit of attending Leeds United's home matches to help their firms with Saturday working.
There is no doubt that, in spite of hardship and loss, during the three-day 246 week there has been a substantial degree of useful innovation in many parts of industry which ought not to be lost sight of now that full power has returned. I think, too, that the methods by which these changes came about would repay study by the Minister. For instance, a widely-quoted example is that of a large and well-known company which is not going back to a five-day week because, by general agreement amongst the majority of its employees, a four-day week of no less than 10 hours a day, paid for as if it were a 49-hour week, is satisfactory to all levels of worker in the company.
If 10 hours a day sounds like a return to the exploitation of Victorian industry, the reply is that the nature of their work—supervising highly automated machinery, with plenty of vending machines, breaks, and other welfare arrangements—satisfies the majority of employees. They would rather do that than have to make five return journeys each week, thus contributing to the traffic chaos and wearing themselves out in the process.
On that score I had hoped for something a little more precise than a reference in the Gracious Speech to the Government's intention to pursue "an active manpower policy," but I suppose the inclusion of that splendid word "active" will be heralded in the next issue of Tribune as a clear indication that Tribune members are not shackled by taking office, and that whereas otherwise the Gracious Speech might have referred to an inert or retrogressive manpower policy, there is this dynamic, daring concept of "an active manpower policy." We shall expect that to be spelled out in more detail.
The Minister was eloquent on the subject of participation—and that will earn him marks from the Liberal bench—but, perhaps for lack of time, which I hope will be remedied on some early occasion, he did not refer to the corollary of worker participation, which must, in our opinion mean worker ownership. After all, except on crunch occasions such as a take-over and a possible loss of jobs, the worker who is offered the arduous business of participation is entitled to reply, "Why should I bother my head if all the resultant assets accrue to the shareholders?" In our view, participation in decisions, extremely important though that is, must 247 be accompanied by wider participation in ownership.
Events since the war have proved—and without saying so in as many words this sentiment informs hon. Gentlemen opposite—that public ownership really means that the industries belong to nobody. What we are after is shared ownership amongst all the people in various ways suited to individual circumstances. The Liberals believe that shared ownership could play a key part in getting a successful statutory incomes policy. In our opinion, a fatal flaw in all the statutory incomes policies which have ground their way through this House and ended up on the rocks has been the simple fact that if the incomes of employees are restrained by law then, under the present system, without any greed or malice on the part of employers, the resultant surplus saved by not paying higher wages ends up in shareholders' funds. Until that fundamental injustice is put right a statutory incomes policy is doomed to failure, essential though such a policy may be.
That brings me to the reference in the Gracious Speech to the redistribution of wealth. It seems to be common ground that in such an unusual Parliament as this it is important that we should try to understand each other and our philosophies. I am able to say that the Liberals share what I believe to be the analysis of society made by most hon. Gentlemen opposite, namely, that for at least 200 years in this country there has been a manifest and fundamental economic injustice underlying the whole of our society.
I say at least 200 years because the injustice became monstrous when this country suddenly industrialised itself against the background of the Enclosure Acts which took away the independent means of subsistence from a great part of our population. They were crowded into our rapidly growing industrial towns, deprived of their bargaining power because they no longer had their common sights on which they could insist, and they were then at the mercy of those who happened to have capital available for the new industries at the time. For 200 years that has been a fundamental flaw in our society which could be compared to the springs and streams under the spoil 248 heaps of the Aberfan colliery—something that has been working away all the time undermining the great mass of our society.
Although the surface of this dangerous situation has, to some extent, been tidied up by the Welfare State, the fundamental injustice remains and has been compounded by the effect of two wars and a great deal of State hand-out of money to the larger companies which has ended up not in the pockets of workers but either in the pockets of shareholders or else in the bankruptcy courts.
This fundamental injustice cannot be remedied by the tax system—one wishes that it could. Hard experience must have taught most hon. Members that the tax system is infinitely capable of exploitation by clever people, no matter how expert the parliamentary draftsmen may be. It is our belief that public companies must be required, in one way or another, to transfer shares in their corporate wealth to their workers, and that that must be done by law. We hope that the Government, although making no reference to that in the Gracious Speech, will eventually produce proposals, at least for discussion, on the redistribution of wealth by that means.
I return to the fact that if that were indicated in terms sufficiently convincing the way would be open for the Government to introduce a new kind of statutory incomes policy which would at last convince the nation that we have a Govern meat willing to tackle the central problem of inflation.
§ 5.24 p.m.
§ Dr. Colin Phipps (Dudley, West)
I hope that the hon. Member for Colne Valley (Mr. Wainwright) will forgive me if, on the occasion of my maiden speech, I do not comment on his excellent remarks.
I understand that in a maiden speech it is customary to pay tribute to one's predecessor and one's constituents and to speak for not more than 10 minutes. Because of boundary redistribution I have two predecessors, and I hope that to do them justice the House will allow me a little more time.
One of my predecessors is, happily, still a Member of the House. I refer to my hon. Friend the Member for Wolverhampton, South-East (Mr. Edwards) part of whose old constituency of Bilston is now in my constituency of Dudley, West. It 249 will hardly be necessary for me to extol my hon. Friend's virtues, as the House will have a continuing opportunity to observe them. However, I pay my personal tribute to him for the help he has already given me and the help he has promised to me for the future. Indeed, he has already gone so far as to pass to me a large file containing his most intractable constituency problems. I am extremely pleased that he is still a Member of this House.
I am equally pleased that my other predecessor is no longer a Member—not because of any shortcomings on his part but because his absence is the necessary condition for my presence. Mr. Fergus Montgomery, the former Member for Brierley Hill, was, I understand, a well-liked and effective Member of this House, and on behalf of his former constituents I should like to wish him every future success, preferably in a Liberal seat.
I am happy to give my unqualified approval to the wisdom and judgment of my constituents. Dudley, West, centred on the town of Brierley Hill, is famous for the manufacture of the finest cut crystal, steel, bricks and pork pies in Great Britain. It will be my continuing pleasure in the coming years to make this House more familiar with these products.
My reason for wishing to speak at this early stage of the debate is that I am by profession an oil geologist and am therefore particularly concerned with energy matters. However, before addressing the House on the subject, I must declare my interest in the North Sea. I am a director of two companies engaged in exploration in the North Sea, a director of a company engaged in supplying services to drilling rigs in the North Sea, and a director of a consultant company advising several other companies engaged in exploration and other activities in the North Sea—all, I am glad to say, British.
I must also declare an interest in the formation of a national hydrocarbons corporation. I was a member of the Labour Party's study group which first proposed such a body in 1967, a proposal which was adopted by the Labour Party conference that same year. The previous Labour Government, I regret to say, did not implement it and I am disappointed that there is no specific mention of such a corporation in the Gracious Speech. However, I understand 250 that its formation is being considered and I should like to make some points in its favour.
The formation of a national hydrocarbons corporation directly involved in the North Sea would provide us with a body of practical expertise at the national call. The staff of such a corporation would always be more expert than that of a Government Department, and it is essential that this country's technical representatives should be as expert and as informed as those of the oil companies.
Oil differs from other minerals such as coal in that the rate of extraction actually affects the ultimate recovery. I will not go into the technical reasons for this, but it means that the maximum ultimate recovery of oil is always different from the maximum profitable recovery of oil, and it is this difference which causes the greater part of the disagreements and arguments between oil companies and the Governments of producing countries. Having represented both sides in these arguments, I assure the House of the extreme importance of expert technical representation for the sake of the national interest.
I believe that a direct national working interest in the North Sea is more acceptable to the industry and of greater benefit to this country than some purely fiscal interest. By vesting all future licences in such a corporation, whereby the oil companies become contractual partners with the corporation in all future explorations, we can ensure that we control which companies are invited to become involved, and in particular we can make sure that many of the one-man promotional outfits, never intending to drill but which have done so well out of trading their interests in the past two years, will be excluded.
In saying that, I do not wish to make the point that small companies do not play an important rôle in the industry. They do. By taking some doubtful blocks and doing initial exploration on them before inviting a larger company to become involved, they often get exploration moving where it otherwise would not take place. However, many of the companies which received licences in the last two rounds never had any intention of spending any money at all. In the sense that they have bartered their interests to other companies, they 251 are robbing the national Exchequer. A national hydrocarbons corporation could also insist on a proper British participation, and thereby of Scottish and Welsh participation, in any licences.
Such a corporation would also ensure that contractors—that is, companies contracted to it—used British goods and services and helped to develop an indigenous British industry, again with special reference to Scotland and Wales. The corporation could insist on such things as joint pipeline networks which would enable fields of marginal economics to be exploited. It could also control unitisation and secondary recovery projects and the offtake and depletion policies best for the national interest.
Finally, such a corporation would be the obvious vehicle to promote British interests in the international oil industry. Existing licences, which may be subject to renegotiation, would also come under its control. As a piece of positive national enterprise, I believe that a national hydrocarbons corporation would yield great benefits to the community. I have pursued its creation since 1966 and I hope to be in this House this Session when it is born. I thank the House for its attention.
§ 5.31 p.m.
§ Mr. Evelyn King (Dorset, South)
It is pleasant to be able to congratulate the hon. Member for Dudley, West (Dr. Phipps) on a maiden speech. Of the many which I have heard, it was in its opening phrases the most graceful and witty, and in its closing phrases it revealed the hon. Gentleman's expertise and knowledge in the field of energy. I assure him that, no matter which side of the House he sits, the House is short of such expertise and knowledge and we shall listen to him with great interest in the future.
During the formation of the new Government, it was frequently said that many decisions were desperately urgent. They were indeed. But in the long eye of history one of the most important of these decisions is one which is rarely mentioned, although it is vitally required. It has already been too long delayed. Far above party politics, it will have a decisive effect on our future. A decision was promised us in March, or possibly 252 April, by the previous Government on the choice of nuclear reactor. I accept that that must now be postponed, and I hope that we shall be given information in the winding-up speech about when the Government's decision will be forthcoming.
There are four ways only of producing electricity—by coal, gas, oil or nuclear power. Too seldom in the House have we had information on the unit cost of each. My information reached me only this afternoon. The cost of producing a unit of electricity from oil is 0.40p, from coal 0.49p, and from nuclear sources 0.48p. The House will realise that these unit costs are close.
Those were the unit costs for 1972–73. Since then, circumstances have changed. The price of coal must clearly advance substantially, the price of oil has rocketed, and we appear, therefore, to be left with the conclusion that the production of electricity by nuclear means is now likely to lead the field in economic terms. I am not sure how far Governments of any political colour have accepted that fact.
That leads me to say somthing about coal. I know how emotional people feel about coal mining. I understand that feeling. But we cannot decide these issues in the context of emotion. On the basis of those figures alone, I find it increasingly difficult to understand a decision that coal production shall be increased. That we need mines already in commission is understandable. There are by-products and many other things for which only coal is suitable. I am less convinced of the need for expansion.
If that be true in the economic sense, it seems to me to be no less true in the human sense. All my life I have been brought up to realise the hardship of the coal miner's job. However, I cannot understand the argument by which at one and the same time hardship is deplored and then the same people demand the creation of more such jobs. There is no sense in that attitude.
I then pick up a point made by the hon. Member for Bristol, North-East (Mr. Palmer), who is not in the Chamber at the moment. I accept the view, and I hope that the House accepts it, too, that the Central Electricity Generating Board has a record of blunders that is 253 hard to equal. This has been heard repeatedly from both sides of the House, as well as from most people who are expert in the subject.
I come now to the nuclear construction programme. Before the General Election, I believe, consideration had been given to spend £5,000 million on 16 new nuclear power stations. The decision is still pending. The big issue was whether the new nuclear stations were to be mainly of United States design or British. For the factors involved I turn to the evidence, first, of Professor Wilson, of Massachusetts Institute of Technology, and the atomic adviser to the United States Government, who would be prejudiced, if at all, in favour of American rather than British designs. That evidence states in no uncertain terms that American nuclear power stations proposed to be used in this country are unsafe.
More important, we have the statement by Mr. Williams, the Chief Inspector of Nuclear Establishments under the British Government, who says that he would be unwilling to pass any American reactor with which he is familiar, at least for a period of two years. Therefore, if orders are to be placed urgently—I believe that they must be placed urgently; the previous Government thought so, and I believe that the present Government have come to the same conclusion—I submit that there is a strong case for the purchase of a British reactor.
I should like to explain briefly the safety factor. In the case of an American reactor—namely, the light water reactor—there is a pressure tube made of 12-inch thick steel 20 ft to 30 ft in diameter. It is fairly widely accepted, first, that this cannot be manufactured in Great Britain because we do not possess the resources or technique to do it. Second, wherever it is manufactured, the possibility of fissure, of escape of dangerous material from that vessel, is always there. In the British reactor, notably the one designed at Winfrith in Dorset, that vessel is not used at all. There are 100 small pressure vessels. The safety factor there is not a problem.
I remind the House that we have spent £100 million in developing that heavy water reactor. That is a sum of money worth thinking about. We have 254 spent years of research in developing British reactors. We have produced from that single station of 2,250 kilowatts, with never an accident, never a criticism, never a suggestion that it is not efficient Any Government would be taking a rash decision—I believe that this is felt on both sides of the House, and there is no party-political point here—if they were to opt for the American reactor. It would deal a heavy blow—I shall not say a death blow to the British nuclear industry. I advert in this context to the position of the British aircraft industry. We have made dreadful mistakes there. If we made similar mistakes in the nuclear industry, the whole reputation of the country in respect of technology will begin to wilt. I am sure that that ought not to be.
Finally, in that context, we have at Winfrith, as we have at all the other stations, a devoted team of nuclear scientists and engineers which has been built up through the years. If we disperse that team, we shall never get it back again.
The second issue is the remuneration of scientists within the Government service. Last Wednesday in my constituency, in two groups of 400 and 200–600 in all—Government scientists, largely graduates, all highly educated, all persons of inestimable value to British industry and to the Government, walked out on a half day's strike. Those people are not natural strikers. They do not do that kind of thing unless they have a grievance which they feel is great.
That brings me back to the question of the miners. I have another figure in my mind. Following the new award, the mining faceworker will earn £2,720 a year. I do not criticise the justice or the wisdom of that or otherwise; I merely state the figure, £2,720 a year. Graduate scientists living in my constituency—one much in my mind has a first-class honours degree—have no chance of earning as much.
We have heard a lot in recent months about relativities. The Trades Union Congress has said that it will not use the miners' award as a means of bolstering up other awards. It may not do so, but I must do so. I cannot accept that for my constituents. I talk particularly about scientists, but I could talk at even greater 255 strength about agricultural workers earning £25 a week, and many others. Such relativities will not be acceptable. Not only is it unfair but, more importantly, it is unworkable.
This is a matter of principle, but I am sure that the Labour Party is sympathetic. It always claims to represent workers by hand as well as workers by brain. I accept that it wishes to do so. It has to consider the question of relativity, and it has to bear in mind that, even if it were to argue that the man who had a hard manual job deserved more than the intellectual, it could be accepted only as a theory. It cannot work in practice because the intellectual simply will not accept it. He will emigrate or find other jobs.
I have a letter which I should like to read. It is a sincere letter which runs to four pages, and I shall not inflict the whole of it on the House, but I want to read one paragraph:In common with other graduates in the Ministry of Defence, I am entrusted with considerable responsibility. In 1972, I carried through a study which was the major factor in a decision whether to proceed with or cancel a proposed new weapon system estimated to cost in the region of £20 million. … At that time I was earning£2,700 a year—precisely the earnings, under the new scheme, of a faceworking miner. The responsibilities are not the same, and, whatever degree of emotion or sympathy one may feel, it is no good thinking that responsibilities can ever be the same. I hope that will be taken into account.
He goes on to tell of his colleagues, also graduates, earning less than the overtime which he was paid, which amounted to 5p an hour. One may compare that with the overtime earnings of a manual worker.
He continues by saying—this is the worrying part which connects with the opening sentences—that he used to work for the United Kingdom Atomic Energy Authority, and states,morale was extremely low, and today it is even lower. Since 1966 I have worked for the Ministry of Defence and have found conditions far better.He continues, but I shall not inflict more of it, except to say that the same applies to the scientific establishments or the 256 Civil Service establishments in which he has worked.
I have in Dorset the United Kingdom Atomic Energy Authority at Winfrith, the Underwater Weapons Establishment at Portland and the Biological Laboratory outside Wareham. We are thick with graduate scientists who make an immense contribution to Dorset in a social sense. Dorset is a rural community which has been revivified by these people. We welcome them. They are people with enormous ability. They can contribute much to this country.
I beg right hon. Gentlemen opposite, who have now so much power in their hands, because they have so long claimed to represent workers by brain and by hand, to consider how, in theory and in practice, these constituents of mine whose plight I have sought to describe will, in fact, receive the just deal to which they are entitled from the new Government.
§ 5.45 p.m.
§ Mr. Eric Moonman (Basildon)
Returning to the House, I have been impressed by both the serious tone of the debate today and the good common sense that has prevailed, and I think that the speech of the hon. Member for Dorset, South (Mr. King) was characteristic of both these things. It may well reflect that, although there are many occasions for Members on both sides of the House to engage in the knockabout of politics, when we discuss the areas of science and technology the tone of discussion is constructive, although the attendance is poor.
I think that the challenge is there for all of us to make sure that such issues as an energy policy should not be relegated to the off-days in the House of Commons. I have no doubt that, with the seriousness of the problems associated with energy, my right hon and hon. Friends will have much to do to make sure that it receives critical attention.
The other thing that strikes me about the House in returning is that we are all regionalists now. I say this with no disrespect to the Scottish National and Welsh National Members. Thus, I should like to make a claim for the interests of the Essex region. One of the disagreeable omissions from the Queen's Speech was that there was no 257 specific reference to the scrapping of Maplin. I know that there have been leaks in the newspapers, but I am sufficiently cautious not to accept such reports as being correct. I hope that in the course of the next few weeks the appropriate Minister will implement what was very much in the minds of electors in Essex; namely, that this is a project we do not want.
The other important omission in the Queen's Speech relates to a specific pledge given by a senior Minister of the Government that the assets of the new towns should be transferred from the development corporation to the local council. I hope that this is just an oversight. I can assure the Deputy Speaker and those Ministers concerned that those of us who represent new towns will not allow the matter to rest for very long.
I should now like to come straight to the point of the debate today. I believe that one or two of the items that were raised by the right hon. Member for Worcester (Mr. Walker) are certainly worthy of further attention. I am referring in particular to the difficulties he stressed were inherent in the way in which energy has now been dealt with, particularly in regard to the splitting up of the Department of Trade and Industry, thus presenting problems to the appropriate civil servants.
I think there is a more fundamental issue at stake. What worries me about the constant restructuring of Government Departments is that we never fully explain the rationale for the splitting up. Apart from the confusion that it must present to civil servants, it is most unfair for people who need to use the Department of Trade and Industry. Hence, businessmen and trade unions have never had the rationale of restructuring explained. Indeed, if it is not clear to hon. Members we in turn cannot do justice to these matters when we are approached by constituents. I would urge my right hon. Friends that at some point before next Monday night, when this debate concludes, some explanation of the rationale behind these changes should be made to the House.
I believe that the major problem we face in a co-ordinated energy strategy for Britain is one of the most formidable tasks facing the Government. Certainly one can say that courage and imagina- 258 tion will be needed as well as management confidence if we are to get the operational system right. Getting it right is the first priority. The failure of previous attempts to get a co-ordinated fuel policy can be attributed to three things: first, the fact that each industry wanted to go it alone; second, the availability of cheap oil; and, third, the fundamental failure by successive Governments to create a Government Department structurally capable of taking account of the demands and resources of industry. Those are the three critical factors which have presented problems to successive Governments since 1960.
The first of those factors would have been less important if the Government had had a co-ordinated energy strategy based on the realities of the situation. But successive reports of Select Committees have shown—I am speaking now in particular of the Committee on Science and Technology, but also of the Select Committee on the Nationalised Industries—that Government policy appears to have been conducted on a blow-hot, blow-cold basis, rotating among the different priorities of oil, coal, nuclear energy and gas, with unusually the oil and industrial lobbies breathing down their necks.
That would not have been so damaging if the Government had shown more skill in fact-finding, and forecasting correctly. But they were so often wrong that the respective chairmen of the coal, gas and electricity industries were driven to pressing their own claims. The result was a considerable battle among all of them.
But by far the most disastrous failure in Government forecasting was the assumption that cheap oil would be available for ever. It is my view that that assumption lies at the root of the unrealistic assessment of the potential of our North Sea oilfields, as the Public Accounts Committee has shown. I believe the Government were misled both as to the importance of the find and as to the relationship of exploration costs to potential profits, as well as about legal safeguards and taxation.
In the light of the new price of oil from the Middle East, the exploration and production costs of North Sea oil become much less important. Indeed, it was possible to tell as long ago as 1970, 259 when, acting on American advice, the OECD surrendered to the first demand of the OPEC group, that higher prices were on the way.
It should have been realised then that the pursuit of a cheap energy policy was a fundamental error. Selling electricity below cost, selling the best power station coal at a lower price than its oil equivalent while at the same time subsidising the pits, yet not paying miners a sufficiently attractive wage to keep them at work, was totally absurd. We may yet live to thank the Arabs for showing us the error of our ways.
The other advantage to the Government following from the oil crisis is the loss by the multinational oil companies of their traditional control. It was said earlier that my right hon. Friend the Secretary of State for Industry tends to exaggerate the dangers and hazards of the multinational companies. I do not overstate these risks but I do say that we are right to look at some of the actions that have been taken by the multinational companies in this country. They have certainly presented some problems to Government.
My approach to this matter is that we should not make the job potential of such companies and their investment impossible. We need to develop a system which enables them to work in this country to their interest and technical competence as well as to the advantage of the nation. Nevertheless, we have to understand that we no longer deal on equal terms with producer countries, and it is clear that the multinational companies cannot be left free to decide whom they will supply with oil, and from where.
Turning to the future, some things may seem straightforward and obvious. But they are crucial, and it will be the great responsibility of my right hon. Friend the Secretary of State for Energy to try to give practical reality to some of these ideas. First, we must have a long-term energy policy that will make maximum use of home-produced fuels. We must use fuel efficiently and reduce waste. This means that from now on the Government must decide what fuel should be used by power stations.
Secondly, help must be given to reviving the coal industry and accelerating new investment. Thirdly, oil must be treated 260 as a reserve fuel for electricity production. How we finally resolve the question of which nuclear reactors to install is a matter for the Minister. I accept what was said by the hon. Member for Dorset, South with regard to the need to maintain British nuclear reactors. Whatever the decision is to be, I hope that it will not mean the end of British nuclear research. Energy research has never been more important. That is one area that needs much greater support and weight than in the past, not only in order to maintain our living standards, but to give it the priority that is needed. A critical report published by the United States Government in the past 48 hours shows that not only do they expect to spend a much greater figure than at any other time in the past, but they have encouraged industry to make a massive contribution.
The figures are interesting. I quote:One area where it is expected that industry will contribute more than the federal government is energy R and D. During the next five years, the Administration …—in the United States—plans to commit about $10,000 million, and the corresponding industrial contribution is estimated to be around $12,500 million. Not surprisingly the bulk of the industrial contribution will be on projects which are most likely to produce useful results in the short and the medium terms.The short point is that there is a marriage of interest between Government and the companies concerned. I hope that one of the tasks of my right hon. Friend the Secretary of State for Energy will be to do just that here. The figures on energy R and D in this country are appallingly low.
In trying to utilise this new raw material, we have to make sure that we get the manpower, particularly the high-level manpower. Some people have said that, should there be a State involvement or State interest or a fifty-fifty interest in North Sea oil and gas, many of the senior executives who now work for the oil companies would disappear—a view which I do not necessarily share. If this is a risk, then I would urge my right hon. Friend to consider the possibility of getting together some of our leading selection consultancy firms to examine leading executives throughout the world to establish rates for the job and ensure we have the competence and skill in which to build the new industry. We should 261 not be prepared to accept second-raters or men who are not able to provide the competence and performance needed to run the industry.
Let us look for a moment at the practical implications of North Sea oil and gas. Our first and most urgent task is to get the North Sea oil and gas into production as well as ensuring that the benefits accrue to Britain. There are various ways of doing this. We can use the posted price device—in other words, by acquiring participation, especially if it is done on the Norwegian principle of participation, in production but not in exploration and by fixing a royalty. This royalty—again following the Norwegian example—should be the subject of special agreements related to the size of individual fields. I am not considering the taxation aspects, which I am sure the Chancellor has in mind.
The Norwegian example of State control was mentioned during the course of the election campaign. I hope that my right hon. Friend, in winding up this debate, will indicate whether he favours this method of control. In some respects the reference to energy in the debate has been a little unreal. Perhaps this will be taken into account in the winding-up speech.
Norway's experience demonstrates that the oil companies will not be frightened off by the determination of Government to safeguard national interest, but they may well be frightened off by Government incompetence. This is the crux of the matter. No one should apologise or worry about the extent to which we operate a State interest in North Sea oil and gas. My point—which I hope will be taken up by other hon. Members on both sides of the House—is that the job must not be tackled in an inept way. We want a really competent and efficient industry.
Finally, I come to the way in which decisions have been made concerning Civil Service incompetence over North Sea oil. Had I time, I would refer to an interesting report in this month's The Banker by one of our new Ministers, Lord Balogh, in which he makes a good point. He shows, with some considerable evidence, the way in which the British Government were misled about the importance of the oil and gas find, about the degree of risk, and about legal 262 safeguards of the nation's interests regarding likely profits. In fact, we got so many of our sums wrong that it is remarkable that we have anything like an industry at all to exploit.
I hope that hon. Members representing the Scottish National Party will understand if I seem less sensitive to their particular concern and natural anxiety about the utilisation of the industry for Scotland. There is an even bigger problem at the moment, which is to get this industry effective, working, and operational.
§ Mrs. Winifred Ewing
Does the hon. Member think that the oil companies will be frightened off by the incompetence of the last Government, which allowed them to get away with £272 million, almost without tax, as the Public Accounts Committee showed? Does that kind of incompetence frighten them or encourage them to come back to see whether they can get away with some more?
§ Mr. Moonman
That is an excellent point. We both share a great concern that the value and performance of this new industry should be shared by the nation. We might have some disagreement about the scale of the nation, but the important point is that substantial profits have been made and now the nation must benefit.
I would not wish to go to the extreme and say that we must tell the oil companies to get out. We have a responsibility to them, since they put a great deal of operational work into it. A marriage here can be worked out. It happened in Norway and in many other countries. But I take the major point that has been raised.
§ Mr. Emery
Certain statements are being made which should be corrected. Not a penny profit is being made on North Sea oil. As yet, no North Sea oil, Celtic oil or oil from the British Continental Shelf has been landed. As regards Norway, taking into account the number of holes that have been drilled compared with our side of the Continental Shelf, and the Norwegian requirement for oil, which can be met five times over by the present discoveries, one sees that the situation there is very different.
§ Mr. Moonman
Part of the answer can best be left to the general debate. The hon. Gentleman wants an argument, but not with me. But I reject the assertion he makes that the oil companies have not been able to have a bonanza. This has happened and it is continuing to happen. We have met in other places, and we both have knowledge of the way in which management should tackle its problems.
The implication of what has happened in Norway is that the Norwegians have created a system involving the State, and it works. I started to outline it, but I wanted to keep my remarks short, and I hope the hon. Member will forgive me for not taking it further now. There is sufficient evidence to show that Norway has already started to exploit this situation, with the co-operation of the oil companies.
In conclusion, the heart of the matter is that we are aware that the need for closer associations between Government and industry is something that many of us forecast 10 to 15 years ago. I have always maintained that this is a marriage which is perfectly acceptable to both sides. What is not understood, perhaps on both sides of this relationship, is that there must be a degree of competence and sensitivity to make it work.
I believe, therefore, that we have learned a great deal, and hone that both previous Governments have learned—the one who are now taking decisions, and the other in the way in which they are able to show constructive opposition. There is no doubt that the Civil Service has maintained its studied ignorance of industrial realities. It has not been able to give weight to the information, and this, therefore, has produced many sums that have gone wrong. This kind of incompetence damages the credibility of government, and this is why we must get not only our Government structure right but our operations structure right, too, within the industry.
We need, perhaps, a new kind of civil servant, but until that moment arrives I believe that we require some way of monitoring the effectiveness of this energy policy. There is no reason why we should not have a Select Committee of the House which would not only examine 264 the different problems of structure that were mentioned earlier in the debate, the difficulties that were stressed about industry and trade, but would go much further than the original Select Committee on Science and Technology was able to do. It would monitor the proposed energy policy and resources.
The Department of Energy is a new Department. It has a greater concentration of technically qualified staff than any other Government Department. We must develop this technical competence and not try to confine it within the boundaries of traditional Civil Service practice. But, most important, we must not strangle our oil pipelines with red tape, ideological conflict and management incompetence.
§ 6.6 p.m.
§ Mr. Geoffrey Pattie (Chertsey and Walton)
I rise from ranks that were a few hours ago both packed and serried with my hon. Friends to address this House for the first time. I am very grateful to you, Mr. Speaker, for allowing me this opportunity so early in the life of this new Parliament.
It is customary for new Members to say something about their constituencies, and the case for doing this is all the greater when both the Member and the constituency itself are brand new. The constituency of which I have the honour to be the first Member of Parliament is Chertsey and Walton, and I therefore hope the House will allow me for a few moments to describe what the constituency comprises.
Chertsey is a name well known in early English history, the Abbey having been founded in the year 666. The Chertsey Urban District Council area which is now within my new constituency was part of the old constituency of Chertsey which was served so illustriously for so many years by Sir Lionel Heald and more recently by my hon. Friend now the Member for Surrey, North-West (Mr. Grylls).
I can reassure Northern Members that Walton is not a part of Liverpool but none other than Walton-on-Thames—a fine town with an excellent football team, Walton and Hersham, which won the FA Amateur Cup at Wembley last April. At the centre of the constituency lies the well-known town of Weybridge. The 265 Walton and Weybridge Urban District Council area, which is now within my constituency, was formerly within the Esher constituency and was served with distinction for many years by Sir William Robson Brown, and more recently by my hon. Friend the Member for the new constituency of Esher (Mr. Mather).
Most of the area, topographically speaking, is very low-lying and is honeycombed with rivers. In addition to the Thames, it was the rivers Mole. Wey and Bourne which overflowed so disastrously in September 1968. If I may remind the House, on that occasion 2,500 acres were inundated and 10,000 houses were badly affected at an approximate cost of £1½ million. Since that time a special study has been prepared designed to prevent a recurrence of such flooding, and Government approval is awaited for this scheme to proceed.
In the last three weeks we have been given a red alert in the area, and, fortunately, I know the language of the Thames Conservancy Board sufficiently well to know what this means. I was therefore able to disregard suggestions that this was some kind of instruction from Conservative Central Office about Communist subversion. Every time there is heavy rain my constituents in the affected area must move their furniture to the upstairs floors of their homes and suffer anxiety about possible damage to their homes. I speak on their behalf when I hope the Government will give the highest priority to the schemes to alleviate flooding from the rivers Mole, Wey and Bourne.
If it were not for the fact that the House is treating me with its customary tolerance and courtesy hon. Members might be asking, "What is an hon. Member for a Surrey constituency doing taking part in a debate on industry and energy?" Well, I have to tell you, Mr. Speaker, that, contrary to popular belief, my constituents do not live only by the turn of the money market or the commissions of the stock market. There are many successful companies, both large and small, operating within the Chertsey and Walton constituency. Some of the larger firms are household names, such as Decca, Plessey, Birds Eye and the British Aircraft Corporation.
With a work force of over 6,000, BAC is the largest single employer in my con- 266 stituency and from time to time that work force has an attack of the collywobbles about the uncertainty of its future. If the House thinks that the British Aircraft Corporation is totally synonymous with Concorde, I would remind hon. Members that parts of the multi-rôle combat aircraft and parts of the Anglo-French Jaguar aircraft are made at Weybridge. In addition, although these are made elsewhere, the BAC guided weapons systems are extremely successful and have earned many millions of pounds in foreign exchange for this country.
With regard to Concorde, I have to own up to something in the region of an unholy alliance between myself and the right hon. Member for Bristol, South-East (Mr. Benn). My end of BAC at Weybridge makes the front half of Concorde and his end at Filton puts it together and makes part of the tail unit. I cannot fly without him and he certainly cannot fly without me.
The approval to go ahead with Concorde was given as long ago as 1962. Since then a lot of money has been spent on it, both in Britain and in France. We now have a superb aircraft which leads the world in supersonic transportation. We British have inventiveness and skills which are unrivalled anywhere in the world but we seem to be peculiarly inept when it comes to developing our inventions and selling them to people abroad. Too often the Americans are allowed to exploit our initiative and technological bridgeheads. What I am most terrified about is that the faint hearts of the so-called quality Sunday newspapers will have their say, that the faint hearts might win the day and will talk us into giving up our lead.
From meetings I have had with the Federal Aviation Administration in Washington and with BAC's rivals at Long Beach in California, no one would be more delighted than the Americans if we, at this late stage, opted out of supersonic transportation and all the spin-off technical knowledge that we have gained.
I am striving to be non-controversial but the House will recall the cancellation in 1964 by the then new Labour Government of TSR2 and its replacement soon afterwards by an American product. Here was yet another case of the British snatching defeat out of the jaws of victory. With certain success just around 267 the corner we gave up and joined the queue of buyers. Many of the present BAC workers worked on TSR2. They fear a repeat of history with Concorde from this Government. That must not be.
The other great fear is the irrelevance of nationalisation, and I was, therefore, extremely pleased to see no mention of that in the Gracious Speech. What the British Aircraft Corporation wants to see is an early Government endorsement of the recent French Government announcement made by M. Guena in Paris on 19th February. In that announcement the French suggested restricting the rate of build to four aircraft per year, to installing an extra fuel tank of 4½ metric tonnes which would increase the range and, therefore, the sales potential, and clearance to build and order material for a further three aircraft, making 19 in all.
This is what we want to hear: a positive commitment, a positive belief in ourselves as a country and also a positive belief in the aerospace industry itself—an industry which earned a record £500 million for this country in 1973. We have a lot to be proud of. Let us hear it for Britain, and let us face the future with confidence.
§ 6.15 p.m.
§ Mr. Peter Hardy (Rother Valley)
I am delighted to take part in the debate, if only because it gives me an opportunity to congratulate the hon. Member for Chertsey and Walton (Mr. Pattie) for a vigorous and most interesting speech. I am sure that many of us on this side would disagree with him both in his comments on public ownership and on certain other aspects of his speech. However, we shall all warmly remember the idea he put forward that in his constituency we have the front half of Concorde and in Bristol the back half, and that this seems somehow to suggest that the parties can work in harmony. Therefore, we look forward to the hon. Gentleman agreeing with my right hon. Friend on a number of issues in the months ahead and to his future participation in our debates.
I shall not take up the hon. Gentleman's other comments, save to say that he could bear in mind that if public money is to be used on the scale that it 268 undoubtedly is used in his constituency, the taxpayers in my area and in other areas represented by hon. Members present this afternoon may feel entitled to have a larger say than they have at present.
My own constituency is involved in the public sector. It has a large number of pits, and for this reason I have taken the opportunity of speaking today to offer my congratulations on, and my constituents' appreciation of, the speedy resolution of the miners' dispute. It is a great pity that it ever occurred. It has presented the country with many serious problems. However, I believe that we can resolve them.
I hope that we shall accept—I am sure that we shall—that the rôle of coal in the future will be much greater than was expected seven years ago. We shall need more coal than the 80 million tons then forecast for the early 1980s. I hope that we shall ensure that we have not merely the volume of coal which we need but the atmosphere in the coal mining industry which will ensure that it can be produced. Therefore, not merely do I welcome the settlement, I hope that we shall have the package deal which will ensure that we have the decade of peace which the industry and this country needs.
It may be argued that the Central Electricity Generating Board, having had bitter experience in 1972 and 1974, is reluctant to see a greater reliance upon coal than it had otherwise envisaged. However, I believe that that greater reliance on coal would be desirable, for a number of reasons which I shall briefly spell out.
First, the CEGB may feel that it cannot afford to increase the number of coal-fired power stations. I believe that an increase would be wise. One reason for that is spelled out in the recent relativities report, which shows that the cost per therm from coal is round about 5p, while the cost from oil is considerably larger. It also makes the relevant point that the costs of electricity produced in the new coal-fired stations are much less than the costs in the older and, therefore, less efficient ones. For that reason, I hope that my right hon. Friend will not be too long in recommending that new coal-fired stations be developed.
269 It would be most unwise to have any great expansion in the provision of generation by oil, largely because we are in danger of seeing great pressure to extract North Sea oil or offshore oil at the fastest possible rate. It might be in this country's interests to pursue a conservation policy in regard to that fuel. It would be wise to accept that we have many more years of coal than we have oil, and for that reason any undue reliance on a great volume of extraction of North Sea oil may be, in the long term, a considerable disadvantage to Britain.
Because of the electricity supply industry's experience there may be great pressure upon the Government to press for the ordering of nuclear power stations of the type to which at least two hon. Members have referred. I am anxious that we shall not see this country incur tremendous expense—excessive and, in my view, unnecessary expense—in pursuing a policy, which is warmly supported in certain quarters of the Central Electricity Generating Board, to purchase the American Westinghouse light-water reactor. If the information that I have is accurate we cannot afford 18 power stations at £300 million each at this time. The economic position of this country is such that we can find other and more worthy uses for that sort of money.
I hope, therefore, from the economic point of view, as well as from considerations of the safety factor, which has already been mentioned, that we shall be reluctant to authorise that sort of spending, especially at a time when many other useful purposes cannot be served with the vigour which many of us would like.
I hope we shall see the coal industry entering a decade of peace with decent terms, pensions, productivity rewards and awards negotiated. I hope that we may see the majority of men in the mining industry who wish to see peace and justice achieving their desires in order that we can rely on the fuel which we possess in considerable quantities and which can serve Britain for a long time. If we do that, I believe we can save a great deal of money, and we can serve the national interest. If my right hon. Friend the Secretary of State for Energy can influence matters will he, in the months ahead, ensure that the Government attract the commendations of people from many 270 parts of the country, not least of those from the sort of areas we both represent?
§ 6.20 p.m.
§ Mr. Hamish Gray (Ross and Cromarty)
Having spent two and a half years in the enforced silence of the Government Whips' Office, I relish the opportunity of taking part once more in debates on the Floor of the House. I will not take up the remarks of the hon. Member for Rother Valley (Mr. Hardy) but I congratulate my hon. Friend the Member for Chertsey and Walton (Mr. Pattie), whose contribution was much appreciated by everyone. We look forward to hearing from him in the future.
I offer congratulations, also, to the Government for certain omissions from the Queen's Speech. My constituency is greatly affected by oil, and I welcome the fact that there is no mention, or even a suggestion, of the nationalisation of any of the oil-related industries. I assure the Government that nothing would do more to damage the investment which is currently taking place in those industries than the kiss of death of nationalisation.
I fear one aspect of the speech, namely, the traditional passage which states thatOther measures will be laid before you.I can only hope that the Government will not be tempted in any way to include any form of nationalisation in those other measures. I congratulate the hon. Member for Edinburgh, East (Mr. Strang) on his appointment as a Minister with responsibility for oil in Scotland. He and I are old adversaries, and I look forward to continuing the battle, but I assure him that I shall be constructive and helpful over oil.
My argument concerns the construction of oil platforms. The subject vitally affects my constituency and is one which has attracted a great deal of thought. In Easter Ross there is considerable development in the construction of oil platforms at Nigg. The company involved there—Brown and Root (Highland Fabricators) Ltd.—is a massive concern which has brought great prosperity to the area and is doing a very good job. There is also the possibility of the construction of oil platforms on the western half of my constituency, and I refer particularly to the site at Drumbuie where there are proposals from two major concerns for the Loch Carron area. The 271 first, and the one which has attracted most public attention, is the proposal to build a "condeep" type of platform at Drumbuie itself. This is put forward by a combine of Taylor Woodrow and Mowlem. The difficulty is that there is considerable objection to the project. That objection, however, relates not to the whole area but only to the Drumbuie site, which belongs to the National Trust and has presented great problems.
There is also a proposal for the construction of a similar type of platform from the Howard Doris Partnership at the Kishorn site, which is near the Drumbuie site. This is thought locally to be a generally more suitable site, but I would not consider trying to influence the House now because a public inquiry is taking place on the Drumbuie application at the moment. Instead, I suggest to the Government, as I would have suggested to my party had it still been in power, that before any decision is taken about the future construction of concrete platforms in the Loch Carron area, a new look is taken at the whole concept of concrete platforms. As will be seen from the technical page of the Financial Times of 15th February last, there is talk of a submarine tank for oil in the North Sea. This is a new concept altogether and a project which could be constructed in shallow water as opposed to the deep water needed for the condeep type. I do not advocate this type of construction; I merely suggest to the Minister that the most careful investigation should be made of it before decisions are taken.
Another method of platform construction has also been presented to us by the civil engineering firm of Alan Grant and Partners. It is known as the CASUB system—the cable-staved submerged buoyant type of platform. This new idea must also be investigated before any decision is taken. I read in the Press yesterday that the Secretary of State for Scotland has decided not to go ahead with any plans for the emergency purchase of land for platform sites and has indicated that he proposes to let the inquiry at Drumbuie continue and to make his decision after that. Nevertheless, the decision that he will ultimately make will be a political one. That is why I want to highlight the particular need for a special investigation of all types of platforms 272 before a decision is taken. The part of Scotland involved in these schemes would need a tremendous amount of infrastructure, but that applies particularly to the development at Drumbuie. It would mean spending millions of pounds, and while I am only too delighted to contemplate such sums being spent anywhere in my constituency I am not anxious to see it spent in an area such as I have described for only a relatively short time. The worst of all worlds would be to see "mini-prosperity" come to the area, last for perhaps two or three years and then, taking things at their worst if these platforms were superseded by submersibles, move away, leaving the area back at square one.
The Queen's Speech clearly states that there will be defence cuts, but we must consider the relationship between those cuts and the investment in the North Sea. If there is to be further investment from Britain and elsewhere, as I am sure there will be, it must be properly protected. Like other hon. Members, I have received a paper by Professor Alan Thompson, formerly a Member of this House and now connected with the Northern Offshore Resources Study. In the article he highlights the problems that might arise in this respect. He outlines three different types of emergency which could endanger investment in these areas. I recommend the paper to the Government for consideration. I have no doubt that stern measures must be taken. We must be absolutely certain that our investment is properly protected, and I ask the Government to bear this in mind when deciding on defence cuts.
The future of the whole of the oil industry, as it affects the Highlands and the North-East of Scotland, can only bring prosperity, and I shall do all I can to co-operate with Ministers in matters affecting my constituency. I shall be helpful in any way I can, provided I have an assurance—which I would dearly like to have tonight—that any possibility of nationalisation of any of the oil-related industries has been permanently shelved.
§ 6.31 p.m.
§ Mr. John Tomlinson (Meriden)
I am sure that the hon. Member for Ross and Cromarty (Mr. Gray) will excuse me if I do not follow him, but I am privileged to have the opportunity to make my first 273 speech in the House and wish to follow tradition by referring to my constituency.
It is not merely the largest in the country; it is also at the centre of England. Many people in my constituency are too modest to say what they already know; namely, that the rest of England revolves around them. Meriden has been well served by its Members of Parliament. The late Chris Rowland served the House and the constituency well and is still affectionately remembered in the constituency by all who knew him for the work he did. My immediate predecessor, Mr. Keith Speed, was also renowned for his diligence in dealing with constituency matters, and this held him in high esteem throughout the constituency.
My constituency has many facets to commend it. There is, for example, the new and extensive development outside Birmingham at Chelmsley Wood and Kingshurst, which, while magnificent, would be much enhanced if we were to get a swimming pool for which we have been fighting for many years. Many electors in my constituency work in the great conurbations surrounding Birmingham to the west and Coventry to the east. Between these two extremes we have a constituency which is tremendously diverse. It contains three coal mines—Baddesley, Daw Mill and Birch Coppice. Miners, and the rest of the community in my constituency, are pleased to note the speed with which the Government have managed to settle the mining dispute, which many of my constituents felt should never have taken place. My constituents are not only pleased that the dispute has been ended so speedily; they they are also pleased that, following the speedy cessation of the dispute, the rest of the country has managed to revert to normal working. My constituency is grateful for Government action which has so far been taken in this respect.
In the centre of the constituency is Meriden village, where some of the world's finest motor cycles are manufactured at the Triumph motor cycle works. I am pleased that we now have a Minister who is prepared to do something about the serious situation at the Triumph works—namely, the arbitrary attempt to close the factory. This has been resisted by employees who are in the process of forming a workers' co-operative, which, it is hoped, will be established. I wel- 274 come the discussions on the co-operative development agency, and I look forward to sympathetic understanding from the Government regarding the problems of the workers at the motor cycle works. It would be a tragedy of enormous magnitude—not only in employment terms but also in terms of national resources which would be lost—if the works closed.
Closure would be particularly tragic when it is borne in mind that most of the production at the works is for export. I look forward to Government support in the months ahead in ensuring that this great venture in industrial participation gets off the ground.
My constituency is also concerned about the balance of payments problem. A number of hon. Members have spoken of the need to improve industrial productivity. I agree with this and with some of the measures which have been suggested to stimulate industrial productivity. I welcome the repeal of the Industrial Relations Act and the measures which will replace it and which will stimulate an atmosphere which will be more conducive to better industrial relations.
The need to expand industrial productivity has been emphasised, but many people in my constituency are also concerned that drastic measures should be taken to promote import-saving industries. In my constituency many people are dependent on agriculture. Stimulation of an import-saving industry such as agriculture is equally as important as stimulation of industries which will lead to expansion of exports. Agriculture is a vital industry to my constituency, and the problems of agriculture, particuarly the present plight of pig producers, have already been brought to the attention of my right hon. Friend the Minister of Agriculture and Fisheries by one of my constituents, Sir Henry Plumb, president of the National Farmers Union. I hope that the Minister of Agriculture will find time to look at the problems of the industry.
My constituents join with me in welcoming the Gracious Speech and the fact that it deals with the real problems which we have to face. Nearly half the people in my constituency live in rented accommodation. Thus, there has been great delight in Meriden over the speedy way the Government have tackled the Housing 275 Finance Act, which has placed unnecessary burdens on many people and led to unnecessary inflationary pressures. My constituents welcome the repeal of the Housing Finance Act, and they are pleased with the Government's speedy action to freeze rents for the remainder of this year.
Proposals in the Gracious Speech for improving pensions are welcome, as are many other measures.
The Gracious Speech contains proposals which will deal with the interests of the whole community and considerably benefit the people I represent. On their behalf I welcome these proposals.
I thank the House for its indulgence and for the way it has received me. I hope I shall have an opportunity to catch Mr. Speaker's eye on future occasions so as to address the House on, perhaps, more controversial issues of concern to my constituents.
§ 6.38 p.m.
§ Mr. John Davies (Knutsford)
I thank you for calling me, Mr. Speaker. Perhaps it has not escaped your attention that in almost four years this is only the second time that I have been able to catch your eye from the back benches.
I compliment the hon. Member for Meriden (Mr. Tomlinson) and the other hon. Members who have made maiden speeches. The hon. Gentleman's speech was interesting, well informed and pleasingly delivered, touching on the controversialities in a most delicate way. No doubt we shall have cause to return to some of those controversialities in a more abrasive sense later.
However, the Gracious Speech and speeches from the Government Front Bench have left me with a sense of uncertainty. I hold my hand when it comes to criticism, but I watch with care and perhaps some little anxiety. When the right hon. Gentleman the Secretary of State for Industry uses that fairly guarded phrase "amongst other things" and then refers to something totally innocuous one's suspicions are slightly aroused. Therefore, my suspicions will not be easily allayed as we proceed to the specifics of the legislation and of other proposals.
276 I wish to deal with three questions which have arisen during the debate and which are pertinent to parts of the Gracious Speech. They refer to consultation—a matter frequently referred to in the Gracious Speech, and in speeches in the House—industrial confidence, and energy, with particular reference to the oil industry.
Here, for the sake of good order, I make the confession that I was a member of the oil industry for many years, as I think many hon. Members on both sides of the House know. I am not now a member, nor have I been for the past 10 years, but I speak with no lack of topicality, in so far as I have tried to keep abreast of events.
I think that I can say with no degree of immodesty that I am an old hand at consultation on both sides of the fence. I have played my part from the point of view of both Government and industry. Therefore, I have heard practically every word which is being used today, and seen practically every form. The Secretary of State for Industry said as much in his speech; he said that there is nothing new in this area of activity.
Consultation is on the lips of all. It is constantly regarded as a means by which decisions can be taken with the least degree of difficulty in relation to those whom they affect. A reference was made from the Liberal benches—I am pleased to see that they are as over-populated as ever—on the subject of the validity of the organisations consulted. The truth is that the validity of organisations depends essentially upon the acceptance by their membership of the issues which they seek to press upon the Government or of the views which they may express to the Government. If those views or opinions do not have the acceptance of their membership, the membership, broadly speaking, will not abide by them. On the contrary, it will totally reject them, and the validity of consultation is then vitally diminished.
Therefore, in considering the form of consultation which the Government can have with such bodies, we must remember that the degree to which they can be considered empowered to discuss with Government the issues which the Government will wish to raise is very important. If Government seek to raise with them 277 issues which they are not empowered to discuss, or if they on their side seek, as happens from time to time, to give expression to opinions which are not a distillation of their membership's views, they run great hazards and cease to be valid organisms for consultation.
Provided there is a broad support for the views of the CBI, the TUC and the many other organisations which Governments regularly consult, it is always possible to carry fairly easily the deviationists in their ranks. That can be done if the solid body of their membership is consistent with their views. I am sure that the Government will remember that in all cases they need to have regard to the backing which any individual organisation can be seen to adduce for the views it expresses.
Equally, the Government must not allow themselves to be led into what I have referred to before as a form of consultation by condescension, which, broadly speaking, simply attaches to a discussion the decisions which the Government have already reached; they seek by use of consultation to give a spurious degree of sanctity of discussion and agreement to something which, in fact, is far from agreed.
Governments are always in the difficulty that they need to conclude broad lines of decision before they enter into consultation, but if they too regularly rely on this empty kind of consultation, without the least background intention of securing change to their own views from the consultation they undertake, they will frustrate its future and damage permanently the validity of their own expression of views.
The question of industrial confidence is also constantly on the lips of Government. In the case of the Secretary of State for Industry the words take on a different tone at times from others. He has a capacity for cooing like a dove today, but he was certainly roaring like a lion not so long ago. Generally speaking, industry will be more impressed by continuity in the form of expression, by evidence of a determination to preserve a consistent attitude in discussion with industry, than with sweet words which may suit the moment from time to time but do not represent the truly underlying spirit of his intentions.
278 The real confidence of industry is, in fact, to be secured only by the realities, not by words. Words, however gentle, do not have for industry the force that facts and experience can and do have. Industry is perhaps slow to respond to promises. It responds to the evidence of things accomplished. If growth is evident, if profitability is accepted and rising, if markets are secured and encouraged, industry gathers confidence and seeks at that moment to invest and expand. No matter how many promises are made of those events, they are suspect to industry until they are seen to be the truth, and they will encourage little investment.
Let the Government bear in mind that the seeds of industrial confidence are these things: consistent expansion, consistent profitability, reasonable taxation, and a view which is continuously expressed seeking to ensure a harmony between Government and industry. That is what is the giver of confidence. Nothing else, no amount of words across the Floor of the House, however gently they may be expressed, will secure it.
My final words are about oil in the context of energy. Few people take adequate account of the time scales involved in oil exploration and exploitation. My recollections of discussions with geologists about the development of gas and oil reserves in the North Sea, if they existed, go back 20 years. It is not at all a recent matter. It was possible to find anything resembling commercial quantities of oil in the North Sea only after nearly 20 years. I believe that the first proof of commercial quantities there became available to us only at the very end of 1971. Therefore, North Sea oil is a very recent addition to our national assets.
Bringing North Sea oil to the point of production also demands time and effort and great capacity. There is no doubt that both in discovery and in production we have been working throughout recent years at the extreme limits of technical competence. As that work has proceeded, the limits have been pressed forward, with great difficulty at times, and they are still being pressed forward.
We are by no means at a point of finite competence in terms of production of oil or gas in the waters on the Continental Shelf around our coasts. As that competence increases, more and more areas 279 of the world come within the range of the expert competence which is generated, and more and more are therefore corn petitors for the expertise from which we have had such benefit and for which we still have so great a need. We should not forget that.
A reference has been made to the acquisition of expert manpower. Expert manpower is a part of it, but it should not be forgotten that the great expertise resides in the large concerns which over years have built up against the background of their total knowledge and their experience world-wide a capacity to handle a variety of different circum-circumstances in exploration which no individual men, however clever they may be, can possibly match.
§ Mr. Frank Tomney (Hammersmith, North)
That is just as it is in coal mining. There is a special awareness in a team that works together. The men are of a special type, not easily trained and almost impossible to recruit.
§ Mr. Davies
I thoroughly agree. Moreover, the sum of that individual expertise taken cumulatively is much greater than the individual expertise. It is useless to imagine that individual people can produce the results that have been produced in the North Sea or in the coal mining areas in Durham and elsewhere.
It is unlikely that it will prove possible to supplant the existing competence of the great concerns by any number of extravagant engagement or recruitment policies. I recall a certain danger, which was evident today, of branding the oil industry as a whole as malevolent and wishing to despoil the country. That is far from the truth. It should not be forgotten that the oil industry working as it is around our Continental Shelf is working on licences which were granted by the two former Governments. The oil companies are, therefore, working strictly within the contractual terms which they were offered. In view of the relatively short period of time that has passed since those licences were granted, the oil industry has played its part in this operation in a remarkably successful way and has honoured its side of the bargain. It certainly does not look for unjustified reward. No responsible per- 280 son in the industry would consider it right to take a ride on the back of prices engendered in the Middle East. That is not its view. As a counterpart to the discharge of its side of the bargain, it rightly looks to the Government to discharge their side of the bargain. The country would suffer greatly in the future if we were dishonourable enough to fail to respect the bargain into which we had entered with an industry which has done nothing to merit the ill will of the Government.
What I have said relates to matters which are at this stage quite imprecise. We have little more than vague suggestions, but many of them give rise to the kind of anxieties to which I have given expression. I sincerely hope that as we see the purposes of the Government evolve those anxieties will not turn into total rejection of the Government's policies.
§ 6.54 p.m.
Mr. Ioan Evans (Aberdare)
The right hon. Member for Knutsford (Mr. Davies) will, I hope, forgive me if I do not take up his remarks. By an ironic coincidence, when I rose to make my maiden speech in 1964 I was preceded by the former Member for Knutsford, Sir Walter Bromley-Davenport.
I take this opportunity to congratulate you, Mr. Speaker, on your re-election to the Chair. The right hon. Member for Knutsford has Welsh connections, as I understand you have, Mr. Speaker. The right hon. Member for Cardiff, West (Mr. George Thomas), who has been appointed Deputy Speaker, also has Welsh connections. With all this I wonder whether there will be a movement towards home rule for England.
I congratulate my right hon. Friend the Secretary of State for Industry. He has given excellent service in the House and I am glad that he is back in the Ministry, because I am sure that he will see that a great deal of progress is made in developing industry. I also congratulate my hon. Friend the Secretary of State for Energy on his appointment to that important post. He has already been very energetic, and I compliment him on his part in settling the mining dispute. The Government have got off to a very good start.
281 My predecessor, Mr. Arthur Probert, served this House well and has retired with a grand record of service to his constituents and to the House and the various committees on which he served. An earlier predecessor of mine in the constituency was Keir Hardie, that great Scottish trade unionist who became leader of not only the trade union movement but the Labour Party. In those days he was prepared, without apology, to proclaim his Socialism, and he is an example to all of us.
Some time ago I wrote to the former Prime Minister suggesting that he should either settle with the miners or resign. I deplored his stubborn attitude in dealing with the mineworkers' application for a just settlement of their claim and accused him of inflicting on the long-suffering people of Britain higher unemployment, a much reduced level of industrial activity and heavy losses of production and national wealth. The letter continued:While you continue to give lip service to national unity you maintain your attack on the mining community. At the same time you encourage your Ministers and the mass media to blame the miners for the economic crisis—the gravest since the war—which has been brought about primarily by your determination to pursue the wrong political, industrial and economic policies. You have been warned for some time—even by members of your own party—that these policies would lead to the damaging effects on the economy which we now witness.If the advice that was given by me and others to the then Prime Minister had been followed he might well have been Prime Minister today. The fact that he was determined to provoke this dispute with the miners has resulted in his now being Leader of the Opposition, with Labour once again in office. I wish the Leader of the Opposition no ill will. I hope that he will remain Leader of the Opposition for many years, because it is better that the Tories should be in opposition and that we should be in power.
I deplore the attack that was made on the mineworkers, the union and the leadership by the Tory Government, aided and abetted by the Tory Press, which was almost united in putting the case for the Government and denying the case for the miners. The Press was helped by the closing down of television programmes at 10.30 p.m. At least one might expect 282 impartiality from the BBC and ITV, but with the switch-off at 10.30 p.m. we were all packed off to bed, and the only way in which we could be aware of the arguments was by reading the Press lined up by the Tories.
The country faced a critical situation. There were certain external factors, but it was primarily the consequence of Tory economic and social policies. The crisis started with the election of a Tory Government in 1970. As a result of the Tory Government's actions the pound was devalued to the lowest ever rate and Bank rate, at over 12 per cent., was the highest ever, and greatly increased the cost of borrowing.
In spite of the promise of 1970 to cut prices at a stroke, prices were rising every day. Under the Tory Government more people were employed in the shops in changing the prices than in selling the goods. Thirty thousand price increases occurred under the Tory administration and food prices alone rose by about 50 per cent. When the Labour Government came into office the balance of payments deficit was running at the rate of £4,000 million per annum.
We should realise that the right hon. Member for Sidcup (Mr. Heath) won the 1970 election on a fraudulent prospectus. He was seeking an excuse and sought to gain a fraudulent fresh mandate to continue in office. For this reason he blamed the miners for problems which were of the Government's own creation.
I believe that this Government have got off to a good start. The miners' dispute has been settled. The men are back at work. They want and are willing to work and have now been given the opportunity to do so for fair remuneration. The three-day week, inflicted on the nation for political purposes, is ended.
I am pleased to note that the Gracious Speech says that an urgent examination of the future of the coal industry will be carried out. In our changed energy situation there must be expansion in the coal industry. The Government must encourage the maximum use of existing capacity. As a nation we must undertake major projects at our coal mines to increase output. We must also open new mines. But to fulfil these tasks the miners' relative position in the economy and in society needs to be revalued.
283 The Government must undo the great harm that has been done by attacks on the miners and the mining community. I shall not repeat the attacks that have been made. However, I refer to what was said by the hon. Member for Birmingham, Edgbaston (Mrs. Knight) about the families of miners being enemies of the State. Were the children of Aberfan enemies of the State? That is a matter that we should answer. It will be a long time before that kind of comment made by the hon. Member for Edgbaston and others will be forgotten by the mining communities.
There is no doubt that psychological warfare has been waged against the miners and their families. Early in the election campaign we heard talk of stopping the benefit being paid to the families of strikers. In our Welfare State we have agreed that if a man commits murder his sin should not be visited upon his wife and children. They can obtain social security benefit. I do not think that anyone would argue against that. Those in need should be provided for. But apparently miners' families were to be treated differently.
In future negotiations over miners' pay we should recognise the psychological barrier to working underground. If a man can earn the same money working on the surface he will not go down the pit. Therefore, he needs an incentive. We must recognise the arduous nature of mining, the special conditions experienced underground, the inherent risks, the health hazards, the special skills and the lengthy training required for the face worker.
As a nation we are agreed that we need coal. To get the coal we need the miners. Therefore, we must pay the rate for the job. There is now general agreement that more people must be attracted to the mining industry. This Government have got off to a good start. Let us hope that this early progress will be continued, because a prosperous mining industry will play its part towards getting a prosperous Britain.
I now turn to other aspects of this excellent Gracious Speech, which fits the situation in which we find ourselves. I particularly welcome the reference to immediate steps being takento halt the increase in rents due in 1974.284 The Opposition, when in Government, were obsessive in their attacks on people who live in municipal properties. Local authorities which did not wish to increase rents were compelled, under the Housing Finance Act, to do so. They would have had to increase rents in April and October this year. Fortunately, those increases have been stopped by an early decision of the Government, which I welcome.
The owner-occupiers' position is to be considered by the Government. In the last three and a half years we have seen a great deterioration in their situation. The number of houses built has greatly diminished and the cost has greatly increased. A £6,000 house has gone up to £12,000 and a £10,000 house has gone up to £20,000. There has been much talk about a property-owning democracy, but young married couples seeking to buy houses of their own have found not only that the prices of the houses have greatly increased but that bank and building society interest has gone up from 8 per cent. to 11 per cent. Many young married couples who have signed contracts to buy houses will be lucky if their grandchildren become the owners of those houses. The Tory Party has much to answer for in that regard.
I am pleased about the proposal to increase pensions and other social security benefits. Great financial difficulties face this country, but in 1945 such difficulties faced the Labour Government. In 1945 Winston Churchill told the American Ambassador Morganthau that Britain was bankrupt. However, that did not prevent the Labour Government establishing the Welfare State, which had been envisaged in the Beveridge Report. If we did it in those days with those difficulties, then, with the difficulties that we have inherited from the previous administration, we can do it again. The pensioner should be given a high priority. We stand by our commitment in that regard.
Finally, reference has been made to a Royal Commission on the Constitution. One consequence of the election is that we have an additional number of Members from among nationalists in both Wales and Scotland. I am convinced that the people of Wales do not want separation; they want to be part of a united Britain. This was shown in the 285 election. Although there may now be two Members who claim to be Welsh Nationalists, the vote given to the nationalists in Wales on this occasion was less than in the 1970 election. In fact, only 10 per cent. of the votes cast were in support of Nationalist candidates. Therefore, when the future constitution is brought before the House, although devolution is to be recognised and supported, I hope that we shall reject any system which will bring trouble to both Wales and Scotland of the kind that we have witnessed recently in other parts of Britain.
§ 7.8 p.m.
§ Mr. Spencer Le Marchant (High Peak)
I do not expect the hon. Member for Aberdare (Mr. Evans) will wish me to follow him except in welcoming him back to this House. I think that I have been living in a different country from him in the last three-and-a-half years. I hope that when he has been here a little longer things will be slightly different from what he described in his contribution tonight.
I particularly welcome the contribution of my hon. Friend the Member for Chertsey and Walton (Mr. Pattie), who spoke so knowledgeably about the aviation industry.
I congratulate the hon. Member for the Western Isles (Mr. Stewart), the leader of the Scottish National Party, on his contribution, and the hon. Member for Meriden (Mr. Tomlinson).
The hon. Member for Dudley, West (Dr. Phipps) spoke with great knowledge about energy. I do not agree with him about the pork pies. My hon. Friend the Member for Melton (Mr. Latham), who made such a good maiden speech yesterday, could certainly say that Melton's pies were better than Dudley's. Indeed, I suggest that Buxton's pies are just as good.
The point made by my hon. Friends the Members for Abingdon (Mr. Neave) and Dorset, South (Mr. King) about the pay of Government scientists is important. This issue goes right across party bounds, and something must be done about it quickly.
My right hon. Friend the Member for Knutsford (Mr. Davies) got to the nub of the whole matter in his great contribution. This, he told us, was only his 286 second speech from the back benches. We need many more, from wherever he speaks.
As a Derbyshire Member, I am delighted to congratulate the right hon. Gentleman the Secretary of State for Energy. His appointment will give, and has given, a great deal of pleasure in Derbyshire.
I propose to say something about the hazards of energy, not the natural ones about which we know in the North Sea, but as a national issue, and that is the uncertainty of the Government's policy. The Gracious Speech leaves so much that has to be spelled out in detail. Confidence needs to be restored to what was a confident situation. The Gracious Speech says that action will be takento ensure that oil and gas from the Continental Shelf are exploited in ways and on terms which will confer maximum benefit on the community".That is what we are told, but what does that mean?
The Prime Minister yesterday spoke about public sharing in the benefits to be derived from activity in the North Sea. What does it mean when he speaks about a hydrocarbon corporation and exclusive buying such as is undertaken by the Gas Corporation? What does it mean when the right hon. Gentleman talks about lowering the costs and assisting passenger transport in remote rural areas? Those are matters which the Secretary of State when he winds up the debate tonight should quantify.
I now turn to the speech made by a junior Minister in the other place, Lord Balogh. I say this with no disrespect. I know how much hon. Gentlemen opposite are against the Government having spokesmen in the other place, and I hope that the noble Lord will be kept to his own Department. His record is not one which endears him to many people in this country, and the situation is not improved when he talks about the Conservative Party forming a Fascist Government. That sort of thing is not in accordance with the feelings of the people of this country.
The noble Lord said that hurried takeover by an inexpert body of men would only further discredit the idea of national oil ownership. Our position is not similar to that of the United States. 287 The Government and the people of this country own the oil. Licences are issued to explore and produce the oil, but after six years half of the acreage is returned to the British Government. Thus, there is already a great deal of control by the British Government. Further, the companies have to be British registered, and all oil has he to landed in Britain. Following that, an export licence is necessary for any amount exceeding 100 tons. The country and the people already have a great interest in this oil; probably something in excess of 70 per cent. goes to the Government in tax.
I should like to see Government investment in the oil industry. The French Government provide about $45 million per year for oil research. There must be renegotiation with the oil companies, but the most important thing of all is to get the oil out. We are talking about enormous investment. The total will be nearer £5,000 million than the £2,000 million that is being mentioned now. Drilling a well costs £1 million. The recent bad weather has cost £2½ million per well. A rig costs about $50,000 per day to hire and, with 60 days out of 90 being non-drilling days, that is obviously extremely expensive.
It is important to remember that there have been 257 drillings in the British sector. So far this has cost £190 million. To date, 80 per cent. of the drillings have been unsuccessful. One of those drills was put in by Shell on a site which it had acquired at auction for £21 million.
We are not in the same situation as Norway. That country has a small population, wonderful hydro-electric power and can quickly become an exporter of oil. We, on the other hand, desperately need oil. The hydrocarbon corporation is not the right answer. It is not the same as the Gas Corporation because in the latter industry there is only one buyer. There will be a mass of buyers for the products that will come out of the North Sea. Vast sums of money are being invested in the North Sea and, as my right hon. Friend the Member for Knutsford said, the element of confidence has to be established because of the amount of money that is being spent. Bankers have to be repaid for the investment that has been made.
288 I do not accept the statement made on the radio the other evening by the Secretary of State for Energy that people would move away from the North Sea where there is a certainty of oil to some area where there is uncertainty. As time goes on the certainty becomes less where the drilling takes place, and, therefore, we have to keep in the North Sea area all the people who are working there now. Let us remember that 56 per cent. of those working at finding the oil represent North American interests—Canadian and American—and we have to build confidence into the industry so that we can get the oil out.
I end by referring to this month's Banker in which the hope is expressed thatthe Labour Party's policy in this field will be speedily and drastically reconsidered".That was written by Lord Balogh.
§ 7.18 p.m.
§ Mr. David Stoddart (Swindon)
I welcome the Gracious Speech. It contains a relevant programme—indeed, it is an exquisitely balanced programme—which I believe the country will recognise and welcome as such.
I congratulate my right hon. Friends the Secretaries of State for Employment and Energy on getting a speedy return to full working. There is no doubt that the three-day week which dragged on so unnecessarily for so long has done this country's economy a great deal of damage, and I am delighted that my two right hon. Friends lost no time in undoing the wrong done by the previous Government.
It was dastardly that the last Government should have sought a confrontation with a section of our people that would lose the country production worth £2,000 million. It was doubly dastardly that at the beginning of January, when the miners were merely not working overtime, the then Government should have imposed quite unnecessarily a three-day week. The fact that it was unnecessary has been demonstrated by the stock figures and other events. The truth was subsequently proved despite denials by former Ministers, including "Jenkins Toothbrush". Indeed, the then Secretary of State has shown clearly that the Government were bent at the time on a confrontation with the miners in order 289 that they could have an issue on which to fight an early election. That is the truth of the matter.
The country is now back on a five-day week, and I believe that the present Government, working with the people instead of against them, can once again put Britain on the road to economic recovery. I sincerely hope that right hon. and hon. Members opposite will play their part in repentance to help the Government achieve this objective.
I want to discuss the electricity supply industry. I agree with my hon. Friend the Member for Rother Valley (Mr. Hardy) that we should consider very seriously what our future power construction programme should be and what types of fuel we should use. I agree that it would be a profligate waste of our resources if we embarked on a large construction programme for oil generation. There are many other commodities for which oil should be used, and we should seriously consider whether it is right to burn oil in power station furnaces, particularly bearing in mind that the world cost of oil will be very much dearer than the cost of coal or nuclear generation.
The Government will also have to consider seriously, when allocating capital resources, whether it is right to go on building power stations at a cost of £100 million to £150 million a time rather than undertaking a greater amount of research into fuel conservation. We have not yet embarked upon a programme of fuel conservation of any note. Yet it is vital to the nation that we should undertake a crash programme of finding out and using ways in which energy can be saved.
I also urge the Government to consider whether the present margin of capacity in the power industry is not too large. One understands that the industry wants a spare capacity of 20 per cent., but in capital terms this means an enormous investment, and the Government should consider whether we could not get by with a smaller margin than the 20 per cent. which the Central Electricity Generating Board says is necessary if it is to run a viable industry.
In considering the types of nuclear reactor which may be employed in this country, I warn the Government not to be 290 too misled by the CEGB and Sir Arnold Weinstock into going for the American light water reactor. I have no faith in the board's judgment because during the whole of the time I worked in the industry I was inundated with papers from the board saying that the advanced gas-cooled reactor was the last thing in nuclear generation, that the board was right and everyone else was wrong. That was why the board went on with the AGR programme—and we know the consequences. I am convinced that the board would perpetrate the same sort of thing again if it were allowed to purchase the American light water reactor, which would also cost the country foreign exchange, which is an element which must be taken into account.
I urge the Government seriously to consider continuing with our own steam-generating heavy water reactor at Winfrith and the possibility of co-operation with the Canadians, who have already made great strides with, and have been successful in getting export orders for the same type of reactor. It seems that our programmes are compatible, and I hope that the Government will give this course urgent and early consideration and reject the idea of going for the American light water reactor.
§ 7.30 p.m.
§ Mr. David Crouch (Canterbury)
The hon. Member for Swindon (Mr. Stoddart) is a somewhat thorny character. I warn his Front Bench that I have known him a long time. On these matters, of which he has considerable knowledge, and therefore speaks with great experience, he may well be a thorn in their flesh. It is no bad thing for any Government Front Bench to have the thorns coming from behind as well as from the front.
The situation we face, of a minority Government, has already begun to produce its pattern in the House of Commons. We are warned that we are in a position of stalemate. But during the two days of debate so far, I believe we have seen a certain force coming from the back benches quite distinct from what we experienced in the previous Parliament. I would not say that the power of the speeches from the Front Benches has been absent or that it has been diminished, but there has certainly been 291 more force from the back benches, distinguished in particular by the outstanding contribution made this evening by my right hon. Friend the Member for Knutsford (Mr. Davies), who made a remarkable speech of counsel to the Government, possibly based on his own three and a half years in the Cabinet. One wondered whether he was drawing on that Cabinet experience as well as his experience in industrial life. He was able to combine in his advice to the present Government counsel from both his Cabinet and industrial experience. It was a very wise contribution.
We were treated, too, to an interesting contribution from the right hon. Member for Walsall, North (Mr. Stonehouse), who warned his own Front Bench that we can only advance at the pace which the country can afford. He talked of the need to advance from a low-wage economy, which I accept that we are today, towards a high-wage economy, but he warned the Government to proceed at the pace which they and the country can afford—again, I say, wise words.
As I said in commenting on the speech and the approach of the hon. Member for Swindon, we shall see more and more in this Parliament the need for independent voices from the back benches, to steady the Government on their course. I am sure that such advice will not be lacking.
The other day I was asked by a friend of mine what was the main difference that I found in the new Parliament compared with the previous Parliament. I commented that it was now much easier for me to attack the Government. Hon. Members on the Government side will find themselves in a more awkward position.
I was one of those Members in the previous Parliament who found the statutory prices and incomes policy somewhat inflexible. I said so on a number of occasions. But towards the end of that Parliament I welcomed the study on the pay relativities between groups of workers. The first report concerned miners' pay. I believe that that study on relativity introduced an element of flexibility into an otherwise inflexible system.
I do not want to fight the last war again and go back a few weeks or months, 292 but I believe that at a time of grave economic and inflationary crisis and pressure, we had to erect a defence against such pressures. That defence was a statutory prices and incomes policy, because we felt that anything else would not be sufficient to hold the dam. As events have developed, however, I believe that that statutory rigid defence has turned out to be more of a Maginot Line, and the Panzer columns of the big unions were able to over-run it. The defence did not hold the attack. It did not stop them. Neither did those fixed defences impress the public, as we have witnessed in the recent appeal to the electorate. I am sorry that it did not, but the public have said that they wish to see another solution applied. They have not given overwhelming support to the Government but they have not given what might be called overwhelming support for the Maginot Line philosophy. They have come down on neither one side nor the other.
The Government must, therefore, be careful as they approach the problem of moving towards a higher wage economy, at a time of grave inflationary pressures. How do the Government propose to approach this orderly progress towards higher pay? We are given to understand that they intend to do so by means of what has been described as a social contract. I am not sure what a social contract means, but the phrase has already formed part of the pattern of this Parliament, and part of the expectation of the public. I understand the Government to mean by a social contract, a contract between the Government and the trade unions. Does that mean that such a contract is an acceptance of that phrase so dreaded by trade unionists, "wage restraint"? If that is what it means, it is progress indeed, and I would be the first to concede it.
I recall putting a question to Vic Feather two years ago, about whether he would not accept that some measure of wage restraint was necessary. His answer was revealing. He said, "You do not seem to realise that that is a dirty phrase in trade unionism", and he meant it sincerely. In other words, they were very delicate grounds on which to try to make progress. But if the Government now mean by social contract that they have found a way of getting some acceptance, 293 even some small acceptance, of the meaning of wage restraint as meaning an orderly progress towards higher pay, then we have made some progress. We can be thankful for that.
§ Mr. Baxter
I am most interested in what the hon. Member is saying about wage earners. Would he not apply the same measuring tape to salaried people, or to directors, or to shareholders? Would he elaborate his argument and show that if it is a dirty phrase for workers, it is equally dirty for those in higher positions?
§ Mr. Crouch
I accept that, and I do not take issue with the hon. Gentleman in that respect. If he will allow me to develop my speech, I think that he will see that I am not being altogether contentious or thorny about this subject, but, I hope, providing some counsel, this time to the Government Front Bench and not to the Opposition Front Bench.
I am sorry that the hon. Member for Liverpool, Walton (Mr. Heifer), who has just been elevated to the Government Front Bench, is no longer present, because I should have liked him to hear these thoughtful reflections of mine on this whole subject of what I believe the social contract to mean. There may be a social contract between the Government and the unions, but what about the employers? What is required of them?
We heard only a murmur this afternoon from the right hon. Member for Bristol, South-East (Mr. Benn) about this subject when he talked about industrial democracy. I should have liked to hear much more about the approach to employers and I say deliberately not the CBI, but employers. Ministers will say that employers should be brought into talks with the Government, but I see it differently. I see the employers having a big responsibility for achieving a new social contract, a social contract responsibility to manage men and women better.
So the employers' contribution is every bit as much as we are to require of the unions if we are to make progress. I believe that we must see a beginning of this fusion of a contract between not Governments and employers, or Governments and unions, but between unions and management, between workers and management, between employers and unions.
294 We understand from the Gracious Speech that the Industrial Relations Act is to be repealed and new laws introduced for new conciliation or arbitration. Perhaps an Act which has become so dusty in its lack of use is due not for repeal but for drastic amendment so that it becomes a valuable Act in the stock of our legislation.
I remember that on Third Reading, after staying up all night when we had 66 Divisions, I said that I did not regard it so much as a framework of law which was necessary, a phrase that my right hon. Friend the Member for Carshalton (Mr. Carr) had used to describe it, but as a scaffolding within which the two sides of industry must build a house, and that that house would not have to rest and rely on the scaffolding, because what we meant by the Act was that the two sides of industry should come together and produce the harmony and the unity for which we so long. I believe that there is a longing to achieve unity and harmony. Perhaps we have made our mistakes, but, in this place above all, surely we can be ready sometimes to admit that we have made a mistake.
Perhaps of the Industrial Relations Act, with hindsight, we can say that the scaffolding proved, unfortunately, to be more than scaffolding, that the building did not take place and that instead we were left with the scaffolding on its own, the two sides of industry not putting brick on brick to achieve the necessary harmony. I therefore hope that the Government will seek to achieve harmony.
I have asked about the employers. To use an old hackneyed phrase, what about the workers? I thought that we were all agreed in all parties that there was to be more participation of workers in management, but there is not a peep about that in the Gracious Speech, although, admittedly, there was a murmur from the right hon. Member for Bristol, South-East about it this afternoon. Was it not worth a sentence in the Queen's Speech?
This is the kernel of the secret of the next stage of industrial relations—I prefer to call it new management. The Government appear still to be looking backwards.
The unions, in my view, have to be brought out of the backwoods of the 295 nineteenth century and must be encouraged to come out. They must be encouraged to shed some of their fears that belong to another age and to drop some of their outdated practices.
The right hon. Member for Walsall, North spoke about the need for us to achieve productivity and said that there was no time to lose. But we must all work together and we have to achieve much better results as a nation. This can come only from unity, working together and cutting out losses and disunity in industry. Our whole future depends now on increasing our productivity and that depends on ridding ourselves of this terrible British sickness of industrial disunity.
There must be more understanding, more new understanding and a new unity and harmony. This surely is the new social contract towards which we should be working. It is not enough for the Government to arrange that there should be an understanding between themselves and the unions, and that the Government and the CBI should have another arrangement, too. The Government should not be standing between the two sides of industry like this. I complained to my own Government about this in the last Parliament.
Government has a much more important part to play, not in between but in the background. The marriage has to be between management and men, between employers and unions. Let the Government by all means be a good marriage guidance counsellor but not the interfering mother-in-law. Much will be required if the two sides of industry are to achieve this progress and harmony. Employers, as I have already said, have to practise better management of the people they employ. This does not just mean to be efficient in management but to have better understanding of the people themselves and what they are doing; a new relationship has to be developed between workers and managers.
We have to break the barriers on the shop floor, not between the chairmen of companies and the general secretaries of unions and various Secretaries of State and the Government. They already have an understanding. They will already be meeting each other regularly. I am sure, 296 if not at No. 10 Downing Street, then elsewhere. It is on the shop floor that we have to break the barriers because that is where the barriers are created.
Unfortunately we live in a divisive society. It has often been said that education in this country produces divisions which continue in later life. I am not talking about the public school creation of social divisions, but the elitism which occurs in our society when some, who are fortunate and able enough to become better educated or more highly educated, come back on to one side of the shop floor as managers and immediately begin to look down their noses at the other men and women who did not have such good fortune. Immediately one has people in different camps; that is a fact in industry. There is a separation which starts from the day that people start earning their living and it is a difficult thing to break down. I speak from long experience.
That is not so in other countries. One finds remarkable differences. I am talking not of Russia but of America. The remarkable thing in America is that these divisions are not there. It is possible to cross the shop floor. There is a meeting of people continuously at low and at high levels of management.
Where do they meet? In the places where it is necessary for them to meet. Facilities are granted in well-run, well-managed enterprises for shop stewards to meet, not only in America but in this country too. Ready facilities are there all the time for people to meet. There is ready access to managers, from the lowest manager, the supervisor, to the shift manager, and so on up the line. We must learn about this type of new contact that has to be developed at that level.
It is not enough for Governments to try to govern and legislate in this matter. A new spirit must be developed. That is why I say, "What about the workers? What about the employers?" They are the key people who must be brought together if we are to solve our problems. It is no longer the parties, or the Government—not even Parliament—that can make a success of the crisis we are now facing: it is the people in our country, given an opportunity to break the barriers and come together.
297 However, the Government have a duty, if those barriers are to be broken, to produce the conditions which will ensure that that happens. One requirement is higher pay. The right hon. Member for Walsall, North mentioned that fact. He was absolutely right. We are a low-wage economy, but we cannot move into a high-wage economy overnight. In the words of the Queen's Speech, we have to make an "orderly growth of incomes" To quote an expression used by my right hon. Friend the Leader of the Opposition which was just as sound, "Our progress must be reasonable and orderly." That is absolutely essential if the Government are to achieve those objectives.
We must today recognise that the unions are a power in the land. They are the power. It is no longer Parliament that holds the power, but it is no use our bemoaning the fact. It is like bemoaning juggernauts on the road when travelling in a Mini. They are dangerous on the road, but they must be contained. They are contained by making them more responsible. I would suggest that the juggernaut on the road, dangerous though it is, is something which one cannot bemoan; one has to accept that it is a fact of life—a transport and economic fact of life. It would be dangerous if it became out of hand, but, responsibly handled, it is perfectly satisfactory and we can live with it.
We have to live with the vast power of the trade unions. Today, they too must live with that fact and must realise just how powerful they are. Today they can achieve what they want, as we have seen recently, but they must now begin to accept the responsibility that goes with that power.
We, as a Government, tried to legislate to achieve that responsibility, but making laws did not work, so we must look for a new solution. The Government have a responsibility and the whole nation will be looking to them to make a move towards breaking new ground. We must move away from the use of strikes to force managements to help their employees get more of the national or company cake.
I chose my words carefully. I did not say, "Help the unions to get more for their members", but "The use of strikes 298 to force management to help their employees get more of the national cake." If we are to move on this road, if we are to achieve some change quickly, we must begin to give the responsibility to those who have the power. Let them take part in the responsibility of the management of their industrial enterprise. Why not joint management councils with workers taking a part? Why not worker-directors? Why has there been no mention of worker-directors?
Let us use the management table and the boardroom to settle disputes in industry. Why do we have the 19th-century habit of all-out strikes, with everybody suffering as a result—even wives, children and other trade unionists? Why did we put up with a situation in which an inter-union dispute could cause hardship and great dislocation to London commuters coming in from the South-East? What a disgraceful business that was. What an old-fashioned way of dealing with modern problems.
The proper way to solve these problems is round the table, with responsibility. If the conversations, discussions and consultations have to be continuous, so be it. That must be the remedy to cure industrial sickness. But management must play its part and take its place, not just through the vague shadowy figures in the CBI but each and every management throughout the country.
There must be a closer identification with the problems on the shop floor, not translating them back to London or some central point, but dealing with them on the spot. Neither should it just be the DTI, or the Department of Employment. These bodies should be kept much more in the background if management and unions are to come together to help solve our problems. We need continuous consultation, rather than just occasional consultation on the shop floor when something is going wrong.
This is a revolutionary approach which the right hon. Member for Bristol, South-East, in touching on it this afternoon, said would take a very long time. But he is the one who was reared in the white-hot revolution; he is the very product of it. He should not be talking about this revolution taking a long time. He and his colleagues in the Government need to do it quickly. They will get 299 great support from the parties on this side of the House if they can achieve a breakthrough.
It is a revolutionary approach in industrial management, not just industrial relations. I emphasise the word "management". Are we to continue with the Sword of Damocles—the threat of strike action—hanging over our heads? Must we go on like this? Must we for ever have this quaint totem to which such regular sacrifice has to be made? Is that what the new worker under the new social contract wants? Is that what his family wants? Would he insist on bringing that totem to the management table and the board table? What is the management table in the boardroom for: to decide when the next strike will take place? Should it not rather be the place where the next wage increase is to be decided and the determination of what the enterprise can afford to pay?
Let the Government consider. Let them consider asking the right hon. Member for Ebbw Vale (Mr. Foot) to tackle this problem. Let him take on board this revolutionary concept. Perhaps he is the only man on the Government side who really can tackle it, and be prepared to sheathe that sword and ban it as a prohibited weapon in our new industrial contract.
§ 7.52 p.m.
§ Mr. John Garrett (Norwich, South)
The constituency I have the honour to represent as a new Member covers the southern part of the city of Norwich, one of the country's great regional capitals. I pay tribute at the outset to my predecessor, Dr. Tom Stuttaford, for the conscientious way in which he represented the interests of the people of Norwich, South.
Norwich may be known to hon. Members as a city of priceless architecture, a heritage which in no small measure is due to the far-sighted policies of its city government, which has placed great emphasis upon the conservation of the fabric of the past while conscientiously planing the development of modern road networks for movement in the city. This same city government has a record second to none for the construction of public housing and for the development of other municipal services. Norwich is a thriving industrial centre with a wide range of 300 industrial and commercial activity. It, and its surrounding hinterland, does, however, suffer from markedly low wage rates, which, on average, are well below the wages in manufacturing industry in the rest of the country. This is due to the relative isolation of the city. Unkind people have unjustly suggested that the city is cut off from the rest of the country by British Rail. But the reason lies also in the structure of industry in the city and in historical factors.
This problem leads me to comment upon an issue of public policy; namely, that the criteria by which regions qualify for Government assistance are too heavily weighted towards unemployment as a measure of need and too little towards low wages and an inadequate infrastructure of public transport and roads. I hope that the Government in formulating regional policy and criteria for assistance to regions, will in future broaden the definition of need to allow for these factors.
I am pleased to see from the Gracious Speech that oil and gas from the Continental Shelf will be exploited in ways which confer the maximum benefit upon the community, particularly in regions in need of development.
Yesterday some hon. Members opposite were frequently moved to exclaim about Scotland's oil. I was tempted to join them with observations on Norfolk's gas. The situation is that the discovery of natural gas off East Anglia has not led to industrial development based on that gas in Norfolk. That important industrial raw material has been piped through one of the lowest wage areas of the country to the Midlands and the South-East, areas which already have more than their fair share of industrial riches. I hope that the Gracious Speech foreshadows a policy which enables Norfolk to claim a share of high-wage, high-technology, energy-based industries.
I was pleased to see that the Government will actively considermeasures to encourage the development and re-equipment of industry.Post-war British industry has been characterised by inadequate investment in new plant and machinery. It has been characterised also by a low rate of industrial innovation, by which I mean the bringing of new products to market. It is 301 galling to observe the number of occasions on which an original British invention has been exploited by foreign industrialists, who are quicker to perceive the needs of the market place.
My industrial experience leads me to the conclusion that we need innovative State enterprise. The Government propose to establish a National Enterprise Board as a vehicle for public ownership. I hope that one of its main objectives will be to create new industry in sectors in which private enterprise has failed or has lagged behind in the exploitation of opportunities.
I have in mind the service industries for North Sea oil and gas, for example—a market which will be worth £500 million a year by the end of this decade, and a market in which the British share is today wholly inadequate.
The world-wide demand for oil and gas equipment and services within a few years is estimated at £1,500 million a year. If we can get into this market now, the export opportunites will be prodigious.
Similarly, I believe that State enterprise is needed to substitute home-produced goods for many of our imports, particularly in the electronic, office equipment and machinery sectors, large elements of which have an adverse balance of trade at the moment.
We have seen from the previous Goverment that we are all interventionists now. I hope that intervention in industry from now on will bring much-needed industrial development to regions such as East Anglia, and will lead to the new industries which this country must create in order to survive.
In industrial relations we have recently seen the failure of attempts to constrain labour negotiations by a legalistic framework. The truth is that industrial relations are human relations. They are about the interaction of management and labour in the attempt to find accommodations of sometimes conflicting, and sometimes mutual, interests. These accommodations can be found only by agreements freely and voluntarily arrived at as a result of bargaining, of give and take, of continual adjustment between management and labour.
302 The Government's rôle should be to provide a conciliation and arbitration service, which is always ready unobtrusively to help the parties to reach agreement. I trust that the reforms set out in the Gracious Speech will herald just such a rôle for the Government.
Industry is ready for an advance towards industrial democracy. A new generation of workers is not inclined passively to accept what used to be called the rights of management. I hope that industrial democracy will advance by means of company supervisory boards on which directly elected workers will have half the membership and which will vet and consider policy issues which affect working people—acquisition policies, diversification policies, location policies, personnel policies, conditions of service and the other things which directly affect the lives of people.
One of the most unfortunate aspects of industry which have been seen recently is the extent to which asset strippers could take productive enterprises and throw the workers out on the cobbles because the property values of the factory were greater than the value of the production from it.
Many managers are now persuaded of the sense of the course of development that I advocate. Until people know that their interests are perceived, understood and cared for by top management, the suspicion and hostility which plague so many areas of industrial relations in this country will continue, to the detriment of our economy and to the fundamental detriment of our society.
§ 8.1 p.m.
§ Mr. Edward Gardner (South Fylde)
One always remembers what for most Members of the House, I suppose, would be regarded as the ordeal of a maiden speech. The hon. Member for Norwich, South (Mr. Garrett) has, in facing his ordeal, acquitted himself admirably. We listened with great interest to all that he had to say and with admiration to the way in which he said it. I congratulate him.
I intend to speak about two events that happened recently in my constituency. They were unusual and significant events which ought to attract the attention of the country, this House and the Government. On 25th January 150 scientists employed 303 at the Springfield works of the United Kingdom Atomic Energy Authority and at British Nuclear Fuels Ltd., Government establishments in my constituency, had an official half-day strike. On 6th March the same scientists, all of whom are employed by the Government service, staged another official half-day strike as part of a national official strike by thousands of Government scientists at Government establishments throughout the country. Both events were unprecedented and both were remarkable if only because of the kind of men and women who were taking part.
The reason for those strikes and the trouble that lay behind them and was displayed by them was the years of delay in settling one of the most provocative anomalies in salary structure within the Civil Service. These scientists, as one of them, a constituent of mine, wrote to me, aresmarting from a very deep sense of injustice.Well they might be.
The case on which they rely, and which has not been acted upon by the previous Government or any other Government, was admirably and most powerfully set out by my hon. Friend the Member for Abingdon (Mr. Neave) in a speech which he made on 7th February—the last Adjournment debate before the General Election. Briefly—I am sure this will be appreciated by everyone here—these scientists are among the elite of the brain-workers in this country. Without their work and their devotion to their researches, major scientific programmes would come to a halt. They would fall apart. These men should be given something more to think about than pay scales. They should be relieved as soon as possible of the anxieties which they have had for the last three years about their comparative wage rates.
Scientists are interested in the theory of relativity, but the relativities in which these scientists are interested have nothing to do with theory and little to do with Einstein. They are the relativities of pay scales. These scientists are employed by the Civil Service and paid by the Government, and from 1947 until 1971 their pay was based and calculated upon what were called "internal relativities". In other words, their pay was compared 304 with and related to the pay of administrative, professional and technological grades in the Civil Service. There was no discrepancy between what they earned and the comparative grades of civil servants.
But for the review of Government scientists' pay in January 1971 the principle of internal relativities was abandoned and in its place was introduced the pay research system. The result was that, instead of the scientists' pay being related to comparable administrative, professional and technological grades in the Civil Service, it was related to pay in outside organisations.
From that moment the theory of relativity as it affected the pay of Government scientists was fair, sensible or realistic. The basis of comparison between Government scientists and industrial scientists which was relied upon was relied upon by way of false assumptions, just as the wages of miners compared with the wages in other industries were found to be based on false assumptions. That was found out late.
But it has been known for years that the assumptions used to compare Government scientists with those who work in industry are based on premises which are not tenable. For example, the industrial scientist specialises mainly in applied research as against basic research. The Government scientist, on the other hand, deals with basic research and applied research and also does project management. The industrial scientist is graded and is called a scientist if he carries out scientific work.
In the Civil Service, once the scientist is graded and called a scientist, even though he ceases to be involved directly in scientific investigation, he will still be treated and paid as a Government scientist.
Most research and development scientists in industry are aged between 26 and 30, and at that age many move into other and more profitable forms of activity in administration and management. In the Civil Service, Government scientists are mostly in their 40s, and they do not move from the work that they have always done.
There are, therefore, important distinctions of function, career structure and future rewards between the Government 305 scientist and the industrial scientist which result in false assumptions when one compares the scientist in both these spheres. The difference in pay is quite startling, because a principal administrative officer in the Civil Service will be earning about £900 per year more than his colleague who is a Government scientist in the Civil Service.
For three years negotiations have been taking place between the body representing the Government scientists, the Institution of Professional Civil Servants, and the Civil Service Department, which was responsible for introducing the pay research system replacing the internal relativities system. At the end of those three years virtually nothing of any benefit to the Government scientists has happened.
These absurd anomalies are still with us. This unreal basis of comparison between their salaries and what is earned by scientists in industry is a continuing source of frustration and bitterness and is creating a smarting sense of deep injustice.
I bring to the attention of the House a letter which was written to me by one of my constituents who is a Government scientist. In one paragraph he sums up the whole case and the consequence of what he and his fellow scientists in the Government service have been suffering over the last three years. He says:Over the three-year period January 1971 to November 1973 the index of retail prices was increased by 27.1 per cent. The weekly wage index increased by 39.9 per cent. Thus the average British worker enjoyed an increase in his standard of living of 13 per cent. Government scientists' pay increased by 12.4 per cent. so they consequently suffered a 15 per cent. decrease in their standard of living.That is intolerable. It is something which must be remedied as quickly as possible, and I plead with the Government, as indeed I should have pleaded with the previous Government, that this is a matter that should be dealt with in the interests not only of the Government scientists but of the nation as a whole.
§ 8.11 p.m.
§ Mr. J. W. Rooker (Birmingham, Perry Barr)
I hope that the hon. and learned Member for South Fylde (Mr. Gardner) will forgive me if I do not refer to his speech. I propose to follow the custom of new Members by referring to my constituency. I represent Perry Barr, which 306 is in Birmingham. It is the northern wedge of Birmingham, and it is the place where I was born and raised and went to school. I am doubly proud to have been elected to serve the electors of that constituency.
There is very little industry in the constituency, and that is strange for such a large industrial city. Basically, it consists of housing, schools and a few shops. Except for half a dozen, most of the houses are post-1930. I suppose for some hon. Members that would be considered modern, notwithstanding that 50 per cent. of council houses still have outside sanitation—a state of affairs to be deplored in the age of Centre Point. I have promised my electors—and I intend to keep the promise, come what may—that I will not support public spending on grandiose schemes whilst outside sanitation exists.
Also in the constituency—and this may surprise hon. Members—there is the Convent of the Little Sisters of the Assumption, which is 400 years old. They do invaluable social work amongst the underprivileged families in the area. There is also—not on the same site, I should add—a seminary for training Roman Catholic priests which is about 500 years old. These are located within the area of the Perry Barr constituency.
Most of my constituents work in the thousand-and-one trades for which Birmingham is noted, but the majority are probably involved in the motor industry. I shall return to this matter later in the remarks I wish to make concerning the Gracious Speech.
The Member I have replaced, Mr. Kinsey, worked hard on behalf of his constituents in Perry Barr and helped them to solve the problems that they encountered in the area. The fact that as a Member of this House he consistently voted against their best interests does not detract from the good work he did within the local community.
Hon. Members may remember that just prior to the General Election Mr. Kinsey achieved some notice, along with the hon. Member for Halesowen and Stourbridge (Mr. Stokes), concerning his remarks about the two-in-a-bath saga. Today we might refer to that as "unisex streaking". I wondered at that time whether I. as a candidate of two and a half years' standing, should comment on that matter. However, I decided that 307 what happens between a husband and wife in their own home ought not to be commented upon by any official or public person. Frankly, I thought it to be impertinent, and I hope that I will not fall into the trap into which the former Member for Perry Barr fell at that time.
Labour candidates fought the election largely on the issues of rising prices and the level of inflation. It is remarkable that on the official notice of poll Mr. Kinsey described himself as a retail trader. I should have thought that he would run for cover from that title, but I nevertheless wish him well in returning to his former occupation of selling flowers to the electors and residents of a Birmingham suburb.
The Gracious Speech refers to proposals on health and safety at work. The Leader of the Opposition said yesterday that many of the Government's proposals had already been before the House and were included in the Queen's Speech last November. I hope that is not so, because I do not believe we should support what the Conservative Government had in mind. The Conservative legislation was based almost completely on the report of the Robens Committee, published in July 1972. The main conclusion of that committee was that most industrial accidents at work are caused by the apathy of the workers. That is something else to blame on them. The accidents are their fault.
It was also said that the prime responsibility for doing something about the problem lay with those who created the risks and worked with them. Yet we lived until 28th February in an employer-dominated society in which those who worked with the risks did not have the capacity to do anything about them. The committee said that there was also too much law on industrial safety at work and that it needed reducing. That of course is at variance with the theme of the legislation on industrial relations and wage restraint introduced by the Conservatives. Nevertheless, I admit that the Labour Government do not have clean hands over wage restraint legislation.
The most frightening remark of that committee, which was taken to heart by the previous Government, was that it did not look upon the factory inspectorate 308 as a law enforcement agency. At the time I considered that to be a treasonable remark. I hope that my remarks will be seen to have an element of constructive criticism or comment in them about what I want our Bill to contain.
We want action to ensure that there will not be 500 deaths a year from accidents in industry. Ten people will be killed this week at work, yet, according to the Robens Report, their deaths must be attributed to the apathy of the workers. We want action to reduce the 30 million to 40 million working days lost every year through accidents. I spent 15 years in industry as a time-serving toolmaker's apprentice and I also served time on the other side of industry, some of it as a safety officer. I know from experience that attempts are made to circumvent the regulations and not to report accidents which take place.
The only way to achieve progress in this respect is for those who work with the risks to have the statutory right to decide whether they will continue to work with them, and that means the safety officer should not be paid by the management but should be a worker who has the statutory right to investigate dangerous processes. When the question of compensation arises it means that we have failed because the accident will have happened and a man may have lost a life or part of a limb. Nevertheless, compensation is important. Our Bill must change the practice whereby serious breaches of the Factories Acts merely end up in a magistrates' court with a £50 fine even when someone loses a hand or a foot. That sort of thing happens throughout industry, and it certainly happens in Perry Bar even though the constituency has little industry there. Such cases may be followed by about four or five years' delay before compensation is paid through the courts when the plaintiff sues for negligence. The compensation is paid long after the time when it was badly needed.
The Bill must ensure that the problems that people from my constituency came across, one of whom died as a result of an accident, are dealt with. There was a struggle for years to establish that there had been an accident even though it was not recorded. The affair was covered up at the time, but an industrial accident 309 happened. I want the Bill to solve problems, such as the one involving Mr. Arthur Faulks, who now has only one lung because of the repeated occasions he was told to work in conditions where asbestos dust was prevalent.
I am opposed to the present rules governing industrial safety and welfare. New legislation is required, and I hope that we shall be able to give those who do the work the power over the process. Legislation planned by the previous Government did not provide for that, but I am hopeful that legislation proposed by the present Government will. If it does not, I shall not remain silent, neither will other hon. Members on the Government benches.
I thank the House for the time it has given to me and for the silence with which it has listened to me. I realise that I may not have made a conventional maiden speech. I did not attempt to do so, for there is an element of controversy in most matters and I did not wish to waste the opportunity to address the House on matters of vital importance to the area I represent.
§ 8.21 p.m.
§ Mr. John Stokes (Halesowen and Stourbridge)
Normally I would have been happy to congratulate the hon. Member for Birmingham, Perry Bar (Mr. Rooker) on his maiden speech, but I have been asked to be as brief as possible, and, therefore, I shall not comment on what he said.
Everyone welcomes the return to full-time working in industry. It is certainly welcomed in the area which I represent. Only time will tell whether the miners' settlement will lead to a further bout of inflation and an acceleration in wage claims. It saddens me that apparently brute force was victorious in that unfortunate dispute. No doubt the lesson arising from the dispute will have been learned by the present Government as well as by the Opposition.
One gleam of light in recent weeks was the level of production which was attained in factories during the three-day working—it was about 75 per cent. and sometimes 80 per cent. of full production. If that can be attained during a three-day week can we not soberly hope for 110 per cent. or 115 per cent. production in a five-day week? I 310 realise that this would test management and workers alike, but there are orders for goods, and exports are desperately needed if we are to start the long climb back to paying our way in overseas trade.
The Gracious Speech mentions methods of securing orderly growth of incomes on a voluntary basis. That must be the understatement of the year. That was exactly the objective which the previous Government and earlier Governments tried to achieve but, unfortunately, they failed.
The central problem for industry, as indeed for the country, is industrial relations. If the Industrial Relations Act is scrapped, what will replace it? Some means must be found, even by this Government, of bringing trade unions within the law and of curbing excesses of union power, particularly in nationalised industries. As my hon. Friend the Member for Basingstoke (Mr. Mitchell) mentioned yesterday there is not the same restraint of wage bargaining in the public sector of industry as there is in private industries, because bankruptcy cannot result. The poor taxpayer has to pay the bill. There must be some limitation on the right to strike in nationalised industries if the life of the country is not to be imperilled year after year.
We know that the public and the vast majority of workers hate strikes. There is nothing in the Gracious Speech about picketing. I hope that the Government will think most carefully before granting pickets greater freedom of action. To do so could lead only to a greater degree of lawlessness and violence.
The Gracious Speech referred to promoting national industrial expansion—splendid words, if they mean what they say. I remind the Government that expansion can come only from new investment, and that investment comes only when the market exists and profits can be seen.
Most people in the part of the world I represent believe most passionately that in this country it is industry alone that creates real wealth. But industry forms an increasingly smaller part of total employment. The public service, the luxury trades such as Bingo, the retail trade, and all the services, all take more people away 311 from industry. Is that trend to be reversed by the new Government? If so, no part of the world will be more delighted than the West Midlands, where there are so many medium and small industrial firms, many of them still family-controlled. Will those owners, entrepreneurs and managers be heroes in the future, as they should be, as they are the only creators of real wealth in this country, or are they to be clobbered by higher taxation, higher interest rates and still more Government interference in one way or another? Time alone will tell.
It is deeds and not words from this Government which will tell the country whether we are to make a go of our industrial and commercial life, and whether those people with the will to win in them—one sees them every day—will be supported by the Government, or whether we shall have to suffer a further period of nationalisation and enfeebling social handouts. It is not that one objects to those handouts to the deserving, but, unfortunately, so often they go to the undeserving. Such things can bring this great country down.
That is the choice which we have to face. I hope that the Government will be aware of the challenge.
§ 8.28 p.m.
§ Mr. Frank Hooley (Sheffield, Heeley)
This has been a rather diffuse debate. In some ways the most interesting contribution came from the right hon. Member for Knutsford (Mr. Davies), because he expressed clearly the good old-fashioned attitude of the British businessman that investing is something one can do when one feels confident and that at other times one does not need to bother about it.
It is a fundamental aspect of a modern technological society, a modern industrial State such as ours, which has to compete in the international markets against formidable competitors, that one must have a high and sustained level of investment year in and year out. It is not something one can just please oneself about if the market looks good. It is necessary to have that investment as a fundamental part of industrial activity.
I am glad that that point has been made forcibly within the Gracious Speech, in which the Government have proclaimed that 312My Ministers will hold urgent consultations on measures to encourage the development and re-equipment of industry.Those matters are fundamental to this country's competitive position in the world and to the growth of our prosperity.
The Opposition's record has been one of failure in this as in most other matters. They began by destroying investment grants, which were a modernised system of Government aid to industry. They went on to create a moneylenders' paradise, in which speculation in property and gambling in land took the place of essential investment in modernising industry. But the consequence of these attitudes and policies was a fall in industrial investment of about 10 per cent. in 1971, a further fall in 1972, and in 1973, when there was beginning to be a slight upturn, we had the absurdity of the confrontation with the miners and the shut-down of British industry with the three-day week. After three-and-a-half years of administration by the Tory Government we had just about got back to the same level of industrial investment that we had in 1970, which was not a particularly good year for British industry.
Another investment problem which I hope my right hon. Friends will tackle—although I suspect that it is more a matter for my right hon. Friend the Chancellor of the Exchequer than for Ministers in the Industry and Trade Departments—is the outflow from the country of capital which should be invested in British industry. The United States has shown that effective measures can be taken to stop the flow of capital overseas when it is far more necessary for investment in industry at home. The United States has used the interest equalisation tax and other fiscal devices which have been highly successful in restraining the outward flow of capital and making sure that the balance of payments at the critical time was turned round in the country's favour. I hope that my right hon. Friends will pay attention to this problem, partly on account of the balance of payments deficit and partly because of the absolute need to raise investment in British industry to a substantially higher level than anything we have seen in recent years.
According to recent figures, the proportion of our gross national product which 313 is devoted to industrial investment is about 18 per cent. Our major competitors like France, Germany and Japan are devoting about 25 or 26 per cent. of their national wealth to this end. That goes a long way towards explaining the deficit on our balance of payments that we have incurred over recent years and the fact that the value of sterling has had to fall to make our goods competitive. I hope that my right hon. Friends will give urgent attention to this problem of investment because it is fundamental to the whole prosperity of our country and to a successful economic policy.
I hope also that my right hon. Friends will forcibly put a stop to the export of capital to South Africa. A Select Committee made scathing findings about the wages paid to workers in South Africa. I do not want to wander too far away from the subject under discussion, but there is a powerful case for preventing further British investment in South Africa, both in the interests of the people there and in our own economic interest.
It is obvious that simply to leave it to private enterprise to provide a sufficient level of capital investment is not good enough and does not work. It is interesting that other industrial countries take the same view. In Italy, France, Sweden. Austria and many other countries there are national Government agencies specifically designed to ensure an adequate flow of funds for industrial equipment and new machinery and to see that manufacturing and other enterprises are kept up to date. Even in the United States, although there is no body designed to channel Government capital into United States industry, that job has been done at second hand by the gigantic expenditure on defence and on the space programme, which has diverted billion upon billion of American taxpayers' dollars to the benefit of the re-equipment of American industry.
I hope that we shall soon see the creation of the National Enterprise Board foreshadowed by the Labour Party's manifesto, which will give us another instrument for providing essential capital for the modernisation and development of British industry. It is essential that this should have high priority. We already have certain instruments for investment in the form of public corporations. These are extremely valuable because they not 314 only supply essential services—telecommunications, transport, steel, power, and so on—but are important purchasers from industry of their own essential equipment. However, they need to be supplemented by another Government agency like the National Enterprise Board which will make it its especial business to channel funds into industry and also to act as an agency for regional development and for the building of new factories and enterprises in regions which lack such features.
Another aspect of industry which is equally important and on which I hope urgent action will be taken by the Government is industrial democracy. This matter has been touched on by a number of lion. Members. It is a curious fact that in this country we accept democracy in local government and in national government and we accept democratic procedures in a vast array of voluntary bodies and political parties—throughout our social life we have systematic elections of officers, committees, and so on—but as soon as we get to the factory gates it is assumed that democracy does not work. Democracy everywhere else, yes—in politics, voluntary societies and all through our social life—but when we get into the factory it is supposed to be invalid, unsound and unworkable. I do not accept that, and I hope that my right lion. Friends will not accept it. We are now getting to a stage where there must be effective democratic control within firms and enterprises over what goes on and their policies.
Reference has been made to consultation not only between management and unions but between the Government, the CBI and the TUC. But consultation has importance in reality only if at the same time there is some system for the exercise of power. I believe that we are now approaching a situation where workers in our major industrial enterprises must be given some real direct power over the working of the firms on which they and their families depend for their livelihoods.
I do not at this stage wish to say anything about the form that that control should take. There have been many suggestions about two-tier boards and representation on boards of directors made up of half workers, half management, and so on. I do not believe that there need necessarily be the same kind of organisation within every enterprise. It will no 315 doubt vary with the shape or nature of the enterprise and the workers involved in it. However, I am convinced that we are getting to a stage where workers in industry need and want an authoritative voice in what is going on in their companies. They want to know the pricing policy, the development policy, and so on. They want to be informed in advance about take-overs and mergers. They are no longer prepared to sit back and wait until Mr. Jessel or somebody else comes along and takes over an enterprise with the intention of shutting it down. The workers need and want an active and direct voice in the policies of their companies. When we get to that position we shall be moving away from industrial strife towards a better understanding and consultation between management and unions.
Over the last few years some trade union leaders and some of my trade union friends have been opposed to this idea of representation on and participation in management. They have taken the old-fashioned view that industry is divided into management and unions and that is it. I do not take that view. I believe that that attitude is changing. Trade unionists are beginning to realise that it is not sufficient to sit-in, to object, or to work-in after a take-over or a shut down is a fait accompli. They want to know what is going on, what the policy and fate of their firm is, and to have a direct voice in it. I hope very much that my right hon. Friend will be able to promote legislation that will give us a genuine move towards effective democracy and effective power in the industrial enterprises of this country.
I now propose to say something about manpower policies. Just as it is essential to achieve and maintain a high level of investment in new equipment and machinery, so is it essential for this country to develop and maintain a high level of investment in skilled manpower. The Labour Government had a good record in that respect from 1964 to 1970. They were spending about £200 million a year on retraining industrial workers and workers of all kinds. The Conservative administration tried to destroy that and severely damaged the system by threatening the levy which was the financial basis of the whole thing and by not giving serious encouragement to training and retraining.
316 We have to get back to a much more sophisticated effort to train and retrain people and make a deliberate attempt to accept that in future many workers will not work in one industry or job from the age of 15 until they retire at 65 but may have to change jobs once, twice or even three times during their working lives. I do not want to elaborate ideas about that. I merely say that unless we give high priority to the whole business of training and retraining we shall time and again run into shortages of the skilled manpower that will be essential once the economy expands.
Those are the three key issues. A high and sustained level of investment must be promoted through the necessary public agencies, there must be progress towards industrial democracy, and, finally, there must be a much more sophisticated, elaborate and more expensive policy of training and retraining the skilled manpower on which the wealth of this country depends.
§ 8.42 p.m.
§ Mr. Hal Miller (Bromsgrove and Redditch)
I am grateful to you, Mr. Speaker, for allowing me to catch your eye and so to make my maiden speech. It will concern the interests of my constituency of Bromsgrove and Redditch, which I am proud to be able to serve. The constituency has been very fortunate in its Members to date—Sir Michael Higgs and James Dance from the Conservative Party and, more recently, Terry Davis from the Labour Party. They established and developed a tradition of service which it will be my first concern to uphold.
In my home we have a Lord Chancellor's purse and a Black Rod, bequeathed me by my forebears, so I am conscious of the traditions of Parliament and one may imagine my pleasure at being here and my determination to uphold that parliamentary tradition, which is the only guarantee of the liberty so dear to the citizens of this country.
My constituency is dependent on industry, largely the same industry, and dependent on it to the same extent, as that of my neighbour the hon. Member for Birmingham, Northfield (Mr. Carter), who so ably moved the Loyal Address yesterday. Both his constituency and mine suffered from the previous Labour Government's commitment to regional 317 development when they were in office in the matter of industrial development certificates and other incentives which resulted so frequently in the relocation of existing industry rather than the development of additional capacity. With a new town we are, of course, more than ordinarily exposed to the effects of Government policy in this respect, and I should welcome clarification of the Government's intentions.
Physical controls, although potentially serious, are only of equal importance to the financial régime, the proposals for which we have to await in the Budget, but I urge the right hon. Gentleman the Secretary of State for Industry and his right hon. Friend the Chancellor of the Exchequer, in framing their detailed proposals, to bear in mind the length of time between making an investment decision and bringing that investment into production.
Nothing is more harmful to investment than uncertainty and constant changes in the ground rules. The one inhibits and the other vitiates investment. Confidence, about which the Secretary of State spoke this afternoon, can be based only on certainty of the Government's intentions and on knowledge that the assumptions will hold good long enough to bring the investment into production.
The industry in my constituency is, in the main, connected with the motor industry. It is central to the economy of the country, and this fact has made it a prey to Governments of both parties intent on managing the economy, often with disastrous results in terms of the employment and the wage packets of my constituents when the brakes are applied with too heavy a foot.
It is a matter for regret that the Gracious Speech makes no reference to motorways. I had hoped for a commitment to re-examine the programme last put to the House in a Green Paper as long ago as 1969. The developments which have taken place since then have made such a re-examination urgent both as to the routes and as to the national priorities, the engineering standards adopted and the procedures for publishing specific proposals for public inquiries and for compensation.
I have had occasion to write direct to the Secretary of State on the more de- 318 tailed proposals—and here I pay tribute to the unflagging efforts of Terry Davis in this respect. But there are matters of general import that I wish to raise now. The first concerns the procedure which allows the publication of details of short stretches of motorway at one time, because once one section has been agreed after an inquiry it inevitably prejudices the remainder, although without a hearing. So it is that the M42 must prejudice the western orbital route in the vicinity of Hagley, although no detailed proposals have yet been published to which residents affected can yet object.
The second concerns the need for some contribution towards the expenses of objectors at a public inquiry in retaining the experts and the advocates necessary to plead their cause and rebut the expertise of the Department. If an inquiry is necessary in the public interest, it would seem equitable that the public purse should bear the expenses of both parties once it is determined an inquiry is necessary. These costs have been aggravated by the incidence of value added tax.
The M42 is planned to run through an area of green belt. I look in vain in the Gracious Speech for an indication of the Government's intentions towards green belt land. We in Bromsgrove and Redditch do not wish to be engulfed in the West Midlands conurbation, and we look to the Secretary of State for speedy confirmation of interim green belt in north Worcestershire. Our fears in this regard have been sharpened by the recently announced decision of his predecessor regarding permission to build in the so-called "green wedges".
If there is a theme which links these remarks, it is that the people want to know, need to know and have a right to know what is happening.
§ 8.50 p.m.
§ Mr. Gordon Wilson (Dundee, East)
I am honoured to be here today to represent the constituency of Dundee, East. Dundee is Scotland's third city. It is probably well known as such to all hon. Members, although there has been a distressing tendency on the part of the Scottish Office and other Departments in recent years to omit Dundee from some of the development maps. I hope that that will not occur in the future. Dundee 319 was known traditionally for jute, jam and journalism. Today, it has a broad section of modern industry covering business machines, watches, printing, and tyres and is involved in the beginnings of oil development, in the Forties field and elsewhere.
I had intended to raise a matter of concern to my constituency arising from an industrial dispute affecting the Timex works, which might have led to the loss of 6,000 jobs. A tense situation had arisen. I am glad to say, however, that there are signs of conciliation abroad in the dispute, and I hope that the matter will right itself naturally. I was encouraged to learn from the Gracious Speech of the Government's intentions to facilitate conciliation industrially. I hope that the Secretary of State for Employment will bear in mind the situation in Dundee.
As I remarked, Dundee has a sphere of the North Sea oil boom, but its participation so far has been small. Approximately 250 jobs have arisen from oil development. That is a small number out of those which have come from oil development around our coasts, and I want to dwell on that issue, albeit briefly, as it is a vast subject.
In Scotland, we are much concerned with what has been happening in connection with the oilfields, perhaps more so than elsewhere in the United Kingdom because that development is taking place on our doorstep, and initially we recognised the importance of oil to a degree that several years ago the Department of Trade and Industry did not.
Second, we are aware that in certain areas of Scotland there are bad effects from over-development. We are becoming aware of the need for conservation, to ensure that the oil industry is controlled so that we do not go from a boom to a bust situation. I was interested in the speech of the hon. Member for Norwich, South (Mr. Garrett) when he said that natural gas had not in itself led to any permanent improvement in the industrial situation in his area. It is manifest—there are examples of this elsewhere—that the mere discovery of oil in itself can leave an area exploited and without potential once the first flush of 320 development has taken place. We must all look out for that danger.
In Scotland, and certainly in the Scottish National Party, we say that one must pay prime attention to the governmental revenues, which by 1980 are likely to be vast, to ensure that the returns from these capital resources—for oil is a capital resource—should be ploughed back into the industrial fabric of Scotland. We want to make sure that the industries we have are not those of the 19th century, or indeed, of the 20th century, but those that will expand in the 21st century.
I have no hesitation in raising the question of oil. The House will hear a great deal about it from the Scottish National Party, because what is happening now is one of the most important events to hit Scotland over the last 200–300 years. If I required any further excuse to raise it, I could mention that I have recently been appointed my party's parliamentary spokesman on this topic.
What has worried me over the last few years is the state of unreadiness with which the United Kingdom has approached the development of the oilfields. It may be known to hon. Members that in 1965 the Norwegian Government began to prepare themselves for the onset of developments in the Norwegian sector of the North Sea. They have taken in hand the development of Norwegian oil in ways which will be for the betterment of the Norwegian people.
We in Scotland have found ourselves defenceless against the commercial and political interests. I need mention only that it is United Kingdom policy to speed up the extraction of oil in order to help the balance of payments, whereas Scotland as an oil-exporting country, just as Norway, would be more inclined to go for conservation so that the benefits were spread over a period not just of 25 years but of 100 years and subsequent generations were not cheated out of their birthright.
If I have to say why Scotland needs primary benefit from development, I point to our lower wages and poorer housing. The opportunities in Scotland are poorer for children. One child in 10 in Scotland, according to a recent report, is bound to fail because of poor social and economic conditions. I believe the figure for the 321 south-east of England is one in 45. Unemployment too, has often been mentioned by Scots in this House.
I shall briefly mention ways in which the Government could attend to Scottish interests. The votes in Scotland show that people in our country are very much concerned with what has been happening in relation to oil and they will be looking critically at the Government's efforts to see how they will be affected.
I suggest, first, to the Government that Scotland should expect to obtain the benefit of orders for equipment, services and use of labour in Scotland. They should be of Scottish origin except when Scotland cannot provide the goods or services concerned or where their provision from Scottish sources would not be reasonably competitive. This is something which the Norwegians have done, and I hope that the Government will follow their example.
One may say that this is protectionism. But the United States requires that the supply vessels that operate off her shores should be manned by Americans and should also fly the American flag, whereas in the North Sea flags of convenience from Panama and elsewhere abound.
Secondly, I hope that the Government will try to entice into Scotland specialist manufacturing processes connected with offshore oil, because the offshore drilling industry is in its infancy and if we enter the industry now there will be tremendous export markets available. This will require Government inducements and Government pressure. The Government may well be helped by the fact that the Scottish votes in the General Election have shown that people are sensitive to the possibility of exploitation and the oil interests may, therefore, wish to take out an insurance policy and try to give greater benefits to those who are likely to be affected.
The third suggestion relates to the transfer of the petroleum department of the Department of Energy. There may be arguments for the transfer of the Department of Energy to Scotland, but the petroleum section should come immediately. The Hardman Report suggested that there should be a dispersal of Civil Service jobs from the centre. This may cause difficulties with existing posts. 322 But where a new Department is created there is a cast-iron case for dispersal of those jobs before they begin. I suggest that Scotland, which is now a centre of the offshore oil industry not only in the United Kingdom but elsewhere, should be considered as the site for that office.
The fourth recommendation is partly related to the Department of Energy. I could never understand, and many industrialists and members of trade unions in Scotland share my view, why the previous administration set up the Offshore Supplies Office in London, with a but-and-been office established in Glasgow set up several months later.
The opportunities which will stem from the oil industry will arise in Scotland, and it makes sound sense that the relevant Government Departments should be located where the action is. I therefore ask the Government to consider transferring the Offshore Supplies Office to Scotland. They are not committed by the decision of the previous Government.
I ask that the Government consider these suggestions I have raised in connection with the oil industry. In the Scottish National Party we have friendly feelings towards the people of England, and we want to make sure that, while we insist upon complete control of the oil industry, we take care of our friends in future years, but it must be borne in mind that the industrial pendulum—the power of the economy—has now swung irreversibly in the direction of Scotland through the discovery of oil. This should be some incentive to the Government to ensure that Scottish interests are not forgotten or ignored, as has happened so often before.
§ 9.1 p.m.
§ Mr. Patrick Jenkin (Wanstead and Woodford)
I have listened to the last two maiden speeches, from my hon. Friend the Member for Bromsgrove and Redditch (Mr. Miller), and the lion. Member for Dundee, East (Mr. Wilson), with great interest and great admiration. Both spoke extremely fluently and had many interesting things to say, particularly the hon. Member for Dundee, East with his comments about offshore oil.
It is a matter of great regret to me that I was unable to hear the other 323 maiden speeches which have been made today, by my hon. Friend the Member for Chertsey and Walton (Mr. Pattie), and the hon. Members for Dudley, West (Dr. Phipps), Meriden (Mr. Tomlinson), Norwich, South (Mr. Garrett) and Birmingham, Perry Barr (Mr. Rooker). I am told that all made interesting, well-delivered speeches, and I am sure that the House looks forward to hearing them again.
I must next congratulate the right hon. Gentleman the Secretary of State for Energy on his new appointment, and I wish him well. It was a little over eight weeks ago that my right hon. Friend the Leader of the Opposition set up the Department of Energy, and as a result my noble Friend Lord Carrington and other colleagues and I had just four weeks before the election began to manage the affairs of the Department. It was a period, moreover, when most of our energy was taken up by the power crisis. It remains to be seen whether the right hon. Gentleman's tenure is any longer, and that may become clearer in a few days.
I was glad to see that the Observer gave the Secretary of State a pat on the back when it saidAs junior Labour spokesman on power during the recent crisis he stood up well to the Conservative Minister, Mr. Patrick Jenkin, who was backed by the resources of Whitehall.I only hope that he will now recognise that it is he and not I who is now backed by the resources of Whitehall and that he will make the necessary allowances. I hope for his sake that he does not share the poor opinion of the officials of the Department which was made so manifest by his colleague Lord Balogh before the election. I cannot help feeling that there must have been some pretty embarrassing confrontations in the Department over the past few days. However, I wish the right hon. Gentleman well.
I should like to say this about his Department: we had already come to the conclusion that to undertake the new tasks created by the new energy situation the Department would need some reinforcement, particularly in the areas of economic advice, scientific advice and outside advice on energy policy generally. 324 I hope that the right hon. Gentleman will not be prevented by the political uncertainty from recruiting top calibre people who, I am sure he will agree, are necessary to advise him. I assure him that any sensible appointment that he makes will be welcomed on this side of the House.
I now turn to the Gracious Speech and refer first to the passage about ending the state of emergency and returning to full-time working. I do not intend to spend more than a moment or two on this subject, because I expect that the subject may generally figure in the debate on Monday.
I would only say that a crucial element in any energy policy over the next few years must be to ensure the certainty and security of energy supplies, and that includes coal. The miners' union has now demonstrated beyond peradventure that it has the industrial power to cause grave damage to the nation's economy. Already, within days of the last settlement, we are reading in the Press ominous words from some sources indicating a determination to press even larger claims next year. It is clear that some elements in the union see no limit to what the union can, and should, demand from the country.
We always saw the long-term review of the future of the industry as the context in which to work out a pay régime which was fair to the mineworkers and recognised coal's enhanced importance in the energy field, but was also fair to everyone else. Failure to achieve that aim could result in a series of mammoth wage claims forced upon the community, which it would be powerless to resist—at least for a few years.
But surely that would engender an irresistible and irrefutable case for ensuring the subsequent swift run-down of the industry as soon as alternative sources of energy were sufficient to allow us to dispense with coal. We probably have hundreds of years' supply of coal underground. It would be a tragic waste of resources if we could not develop them. But it might be the only course open to a nation unwilling to be held to ransom year after year by unreasonable pay demands from those who work in the industry.
When the Government announce—as they promised in their manifesto to do 325 within three months—the results of the urgent examination of the future of the coal industry referred to in the Gracious Speech, they will be judged not only by the realism of their plans to sustain the output of coal, not only by the generosity of the conditions for the mineworkers, including their pensions, health and welfare as we had indicated, but on the measures which it is proposed to ensure the security of the supplies of coal. Without such security there cannot in the long run be a viable coal industry.
I move on to the problem of energy prices. I wish to ask the right hon. Gentleman a few questions, although I recognise that he may not be able to answer them tonight. It may be a matter for the Budget.
The Queen's Speech refers to theefficient use of energy supplies".Do the Government accept the view of their predecessors—I quote from the statement made by my right hon. Friend the Member for Altrincham and Sale (Mr. Barber)—thatAt a time of the most acute energy shortage and in our present financial difficulties, it is anomalous—to say the least—that we are subsidising coal and electricity prices at a mounting rate."—[OFFICIAL REPORT, 17th December 1973; Vol. 866, c. 962.]In one sense that question has already been answered by the announcement by the National Coal Board on Monday of very substantial price increases for industrial coal.
I quote from the National Coal Board's announcement:Industrial and coking coal from the Midland and Yorkshire coalfields will go up by an average of 48 per cent. Coal supplied to these markets by the remaining coalfields will go up by an average of 28 per cent.In the notes it goes on:Revenue from the increases now announced will total about £270 million.I believe it to be absolutely right that these swingeing price rises should have followed very swiftly upon the settlement of the mineworkers' claim. They bring home to the country, as nothing else will, the costs of the settlement.
Perhaps the right hon. Gentleman could answer this question tonight: what proposals are there for domestic coal price increases? Although nothing was said about that in the announcement, it is clear that official guidance was given 326 to the Press on the subject. I quote from The Times of Tuesday:However, Whitehall sources welcome the board's decision to postpone decisions on higher prices for domestic consumers.I can understand why that should be so—but postponed until when? What increases are in the pipeline? Alternatively, is the domestic consumer of coal to be insulated from the effects of the rise in the price of coal?
The second reason why in general it is right that the price rises should take place is that the entire logic of the case presented to the Pay Board and subsequently to the Government by the National Coal Board and by the mineworkers' union, that the changed energy situation required a hefty boost in miners' pay, requires also that coal should be properly priced to the consumer.
I need quote only one sentence from the Pay Board's report:It is clear therefore that, without any benefit of subsidy or protection, coal could now compete with fuel oil with some limited room for manoeuvre.The previous Government had set as their target a reduction of the National Coal Board's subsidy to no more than about £50 million in 1974–75—not, I may say, the complete elimination of the subsidies, as was indicated by the Prime Minister yesterday. We need to know the Government's intention with regard to the finances of the National Coal Board next year. It is essential that we have a clear answer.
The argument about energy price increases goes much further than coal. Of much greater significance for the consumer is the price of electricity, which is affected not only by the steep rise in the price of coal but by the doubling of the fuel oil cost to the CEGB and the South of Scotland Electricity Board. Here, as no doubt the right hon. Gentleman has already been told, the electricity boards are asking for substantial price increases up to the maximum level permitted by stage 3. That would reduce the deficits of the boards to the 1972–73 level.
What is the Government's intention with regard to electricity prices? I listened with interest to what the hon. Member for Bristol, North-East (Mr. Palmer) said about this. He will remember that I 327 previously argued on the Statutory Corporations Bill that it could be right in a period of plentiful supply, when one was seeking to act on the retail price index, to subsidise energy prices in the interests of keeping down the retail price index. I also stated the disadvantages very clearly, and was accused by the Press of brutal frankness. It is now nonsense to go on subsidising energy prices in a period of energy shortage. The Government must come clean swiftly on what they propose to do.
There is another related matter. The electricity boards are pressing for fuel adjustment clauses for domestic tariffs. These already apply to industrial tariffs. The previous Government accepted this in principle, with the introduction to be timed with any overall price increases which might have been decided. What is the present Government's intention with regard to that?
Some increases in gas tariffs are necessary to cover increases in allowable costs, but this will lead to great distortion in the energy sphere unless something more is done to make gas prices more competitive with those of other fuels. Already the Gas Corporation is unable to meet the demands being made upon it, and it has asked to be relieved of its statutory obligation to supply. What are the present Government's intentions here?
I recognise that decisions on pricing must be taken in the overall economic context, and I shall not complain if announcements on these prices have to be delayed until the Budget on 26th March. However, I ask that they be made clear by then.
I turn now to the passage in the Gracious Speech dealing with offshore oil:My Ministers will set in hand urgent action … to ensure that oil and gas from the Continental Shelf are exploited in ways and on terms which will confer maximum benefit on the community, and particularly in Scotland and the regions elsewhere in need of development.Like other speakers in this debate, I welcome the studied absence of any references to nationalisation or even to "full public ownership", "majority public participation", "public owner- 328 ship and control", with which the Labour Party manifesto was peppered.
If this absence represents a genuine change of heart on the part of the Labour Party, it is a great advance.
The development of Labour thinking—if it is not an abuse of language to use that word—on offshore oil, repays some study, because it is not without interest. It started in 1967 with the North Sea Study Group, of which the hon. Member for Dudley, West was a member. That firmly rejected nationalisation. Compensation, it said would present a problem. Indeed, it would! We calculated it at about £1,500 million as at today's prices. The recruitment of specialists would pose considerable difficulties. There would be delays in exploitation and the group said that nationalisation was unnecessary. It was quite right, of course.
Yet by 1973 what did we have? "Labour's Programme 1973" stated:We will bring North Sea oil into public ownership and control.A blunt, uncompromising commitment to nationalisation. The manifesto, although it was toned down a bit for public consumption, had much the same language. It was redolent with phrasea calculated to warm the hearts of the Marxists in the Labour Party.
But during the election a remarkable sea change occurred. It was the Secretary of State himself who gave the first hint of the new line. In a broadcast on 11th February, on Radio 4 PM report, which I do not think achieved a great deal of publicity, he said:There is a lot of confusion at the moment"—He was right there—People do not realise that North Sea oil and gas resources are already in full public ownership, so that what needs to be done now is to have the control of the extraction and disposal and make sure that these vital questions are not left to international companies.Then he was pressed, and he went on:Well, for example, there are several ways of doing it of course, for example, BP"—Then the transcript was a little blurred—I would not rule out the possibility of setting up a national hydrocarbons corporation for financial enterprises.This really was a new line. But, unfortunately, it had not penetrated to the present 329 Prime Minister, because on 13th February he was asked by Ludovic Kennedy on Election Forum:Peter Slade of Wokingham says, "Without any deviation will you name those concerns which the Labour Party propose to nationalise …Kennedy went on:Road haulage, construction, machine tools, North Sea oil".The right hon. Gentleman said:North Sea oil—well—that is obvious, is it not? I mean—that people should take hundreds of millions of money out. Most of them of course have just been given … the sites for a song.He was still on the old line of total nationalisation.
However, by 23rd February the right hon. Gentleman, too, had got the message. Speaking in Leith on that date he outlined a plan far removed from the wholesale nationalisation promised in the manifesto. I do not know how many hon. Gentlemen on the Government benches realise that their policy has changed, but it has—radically. To that extent, we welcome it. It still contains a number of damaging features which we shall want to challenge. But it is not the wholesale nationalisation in the manifesto.
§ Mr. Hooley
Is the right hon. Gentleman not aware that in the light of what has been happening recently in international oil circles, the attitude of many countries on the control of multinational companies has changed drastically? In so far as his party is still limping along with a nineteenth century attitude, they are behind international policies.
§ Mr. Jenkin
But on the whole we welcome the shift in the opinion that has taken place in the party opposite. Why has it happened? Perhaps because of the noble Lord, Lord Balogh. He made his views abundantly clear in a happily-timed article in the Banker which came out earlier this week.A hurried takeover by an inexpert body of men would only further discredit the idea of national oil ownershipand in a footnote:I hope that the Labour Party's programme in this field will he speedily and drastically reconsidered".It obviously was, and he has now been put in charge of it. I hope we have heard the last of this nonsense of bringing the development of North Sea oil 330 into public ownership. It always was nonsense, and we are glad that it has gone.
But then, yesterday, we had a curious passage in the speech of the Prime Minister, of an almost baffling vagueness, where he purported to quote—I have checked and he did indeed quote—something that he had said in this speech at Leith on 23rd February. He said:There could be a United Kingdom Hydrocarbon Corporation with exclusive buying power like the Gas Board. What attracts me—and there must be consultations about this area by area—would be the idea of a separate buying corporation for each area—one for Scotland, or even separate parts of Scotland: one for the North-East … and so on".He continued yesterday—and this is the point of real interest—The words I have just used are the words I used in the General Election. It was on those that we fought the election with regard to gas and Oil."—[OFFICIAL REPORT, 12th March 1974; Vol. 870, c. 82.]If he did, he kept it remarkably dark. The words are in the Leith speech but they were not in the Press handout given to the Press and I had to obtain the transcript of the speech from Transport House. Very interesting it is, too.
But it goes further than that. What was the guidance given to the Press who asked questions about this area by area purchasing corporation? I quote from an article by Peter Harland in the Sunday Times:But I understand that the regional boards proposal has been considered by the Labour Party only very recently, and that yesterday Mr. Wilson was simply 'floating' an idea which attracted him personally—prodded, perhaps, by the Scottish National Party's much publicised 'It's Scotland's oil' campaign.'The Prime Minister is up to his old tricks. This leopard has not changed its spots: back to instant government to government by nod and by wink and by background briefing; government by the small print. It is foolish of the right hon. Gentleman to try to pretend, as he did yesterday, that this was the policy on which the Labour Party fought the last election. I wonder how many hon. Members opposite knew about it?
I cannot comment usefully on the merits of the proposals because their sheer vagueness defies analysis. But I can tell the Secretary of State—and this is a matter of some importance—that he must clear up the doubts at once. 331 The mere suggestion that the companies will not be able to market their products, or will have to sell at an artificial price to be negotiated in the future with the Government, will cause a grave danger of undermining confidence in North Sea operations.
The question of the Government "take" is one thing—and I will come to that later—but the suggestion that the National Hydrocarbons Corporation, let alone a whole series of regional corporations, will have exclusive buying power, such as the Gas Corporation, is already causing some alarm and this must be clarified.
I confess that I have not had time to consult fully, but I was able to arrange for a number of North Sea operators to be contacted—British, American, Canadian and French. The message was unanimous. If the Government propose to establish a monopoly buyer of North Sea oil, or regional buyers, on the model of the Gas Corporation, it will be exceedingly difficult, if not impossible, for these companies to continue to raise fresh capital for the development of North Sea oil. The Secretary of State must state his policy swiftly. It is probably right that there should be consultations, but consultations on the basis of firm plans and not wild schemes dreamed up by the Prime Minister sitting in a hotel bedroom in Edinburgh five days before the election.
The question of a Government "take", by taxation or otherwise, is a separate matter. So are the terms on which the licencees should enjoy licences. It is totally unclear as to what the Government intend and it should be cleared up.
There has been a great deal of ill-informed criticism of what we proposed and it is right for me briefly to outline those proposals. My right hon. Friend the Member for Altrincham and Sale last year accepted the PAC's recommendation on the tax proposals, and the Chancellor will be aware that the necessary legislation is ready, subject to minor drafting details. Similarly my right hon. Friend said the Government are considering the PAC's other recommendations, including the "take" from the operation of the Continental Shelf. How this should be done is a matter on which various pro- 332 posals were under active consideration, as I am sure the Secretary of State's officials will have told him.
Here, too, a number of proposals were in an advanced state of preparation. But the Opposition will not contenance the Government taking a majority share in oil consortia because it is quite unnecessary. It is possible to secure a proper "take" and adequate control by other means.
To the hon. Member for Dundee, East I can say that we in the Department of Energy were considering the establishment of a strong Department of Energy presence in Scotland in order to assume full oversight of offshore operations based on Scottish ports.
But the Government must now announce their plans because nothing is more urgent in the national interest than that there should be no interruption or even hesitation in the momentum of exploration and development.
§ Mr. Moonman
I would not detract from the work done by the right hon. Gentleman in the short time that he was at the Department of Energy, but it is most unfair of him to move on to another aspect of the subject without really telling us what he was thinking about when he was Secretary of State. He cannot have these knock-about politics on what we might do without telling us what he was going to do.
§ Mr. Jenkin
The hon. Gentleman will recognise that some of these are budgetary matters which could affect markets, and it would be wrong of me to give details at this stage.
The Secretary of State seems to have lost his first battle in the Cabinet and it could be a matter of great seriousness. The Scotsman this morning stated:Plans by the former Government to introduce a Bill to acquire suitable sites for oil related developments prompted by the Drumbuie situation have been dropped by Mr. William Ross, Secretary of State for Scotland.I ask the right hon. Gentleman to clear up this matter tonight. Has he been assured that a suitable site for the construction of condeep production platforms will be available in time this year in order to allow completion and installation during the 1975 weather window in the North Sea? Or has he 333 alternatively decided to risk that the normal procedures will get him that suitable site in time?
I should like to remind him of the penalty for missing the 1975 weather window for that production platform. It would be the loss of f100 million-worth of oil, £100 million extra on the balance of payments in 1977 and 1978. When in office we regarded this as a matter of extreme national importance, and the right hon. Gentleman must explain why the Bill has been abandoned.
I fear that I have asked the right hon. Gentleman a great many questions. I hope for some of the answers tonight. For others it would perhaps be right to await the Budget, but tonight or later answers there must be, because the House has a right to know.
The right hon. Gentleman has inherited a key Department where his decisions will have a profound influence on the future course of events in the United Kingdom. If he takes wise, moderate decisions the Opposition will support him. But if he allows the wild men to push him even one-quarter of the way to decisions that owe more to Socialist dogma than to the national interest, the Opposition will have no hesitation in terminating his office and making sure that the tenure of his office is even shorter than mine was.
§ 9.29 p.m.
The Secretary of State for Energy (Mr Eric Farley)
I thank the right hon. Member for Wanstead and Woodford (Mr. Jenkin) for his kind personal remarks to me at the beginning of his speech. I very much appreciate them, and I hope that throughout the period I hold this office I shall always take wise and moderate decisions on these matters.
I join the right hon. Gentleman in congratulating the hon. Members for Chertsey and Walton (Mr. Pattie), Bromsgrove and Redditch (Mr. Miller) and Dundee, East (Mr. Wilson), on their maiden speeches and especially my hon. Friends the Members for Dudley, West (Dr. Phipps), Meriden (Mr. Tomlinson), Norwich, South (Mr. Garrett) and Birmingham, Perry Barr (Mr. Rooker) on their maiden speeches, too.
All the speeches were of top quality and of great value. My hon. Friend the 334 Member for Dudley, West is an acknowledged expert on these matters. We welcome the informed and constructive proposals he made, and I shall certainly take them into consideration.
I congratulate my hon. Friend the Member for Meriden. I remember that in 1964, just after I had been elected for Chesterfield, we shared a platform in my constituency. We are all delighted to see him in the House.
Perhaps I ought also to welcome back to the House my hon. Friend the Member for Aberdare (Mr. Evans) and say how pleased we are that he paid such a fine tribute to his predecessor, Mr. Arthur Probert, who was held in such high regard in the House. We welcome back, too, my hon. Friend the Member for Basildon (Mr. Moonman), who, I know, has used his period outside the House in studying energy matters. He will be extremely valuable to us in these debates.
The right hon. Gentleman asked a whole series of questions, in particular about the construction sites Bill. I can give him some information about that. The House will recall that the previous Government announced their proposal to legislate. The need primarily arose from the situation regarding the deep water site in the Loch Carron area.
My right hon. Friend the Secretary of State for Scotland and I have reviewed the situation, and our conclusion is that the present public inquiry dealing with the Drumbuie site must be carried to a conclusion. My right hon. Friend will give his decision on the planning application in the normal way. We are considering whether there is a need for legislation on a wider basis, but this will not be such as to prejudice the outcome of the Drumbuie planning application. The Government will not, therefore, for the present at least, be introducing a Bill on this subject. I know that the hon. Member for Ross and Cromarty (Mr. Gray), who made a moving speech—I do not think that the right hon. Gentleman was here to listen to it—urged this course upon us. I am sure that if we have not satisfied the right hon. Gentleman we shall at least have satisfied his hon. Friend.
§ Mr. Patrick Jenkin
I am well aware of my hon. Friend's interest in the matter. However, we must press the right hon. Gentleman. Will this lead to a year's 335 delay in the completion of the production platform with the consequences I outlined?
§ Mr. Varley
During the election campaign the inquiry continued. It is now coming to the stage when perhaps it will be completed in a few weeks. Is the right hon. Gentleman suggesting that we should tell the people who have given evidence to the public inquiry which is now coming to a conclusion that we should brush all that aside and say that it has all been of no avail? The right hon. Gentleman should consult his hon. Friend about these matters.
§ Mr. Sillars
Is my right hon. Friend aware that in Scotland, where Labour is clearly the majority party, the decision that he and his right hon. Friend have taken is warmly and widely welcomed everywhere? Is he aware also that we should prefer a 12-months' delay in getting more oil from the North Sea to the despoilation of one of the most beautiful parts of Scotland?
§ Mr. Varley
It was a difficult decision, and the factors which have been mentioned by my hon. Friend have been taken into consideration.
I turn now to other important matters which were raised. The hon. Member for Abingdon (Mr. Neave) and the hon. and learned Member for South Fylde (Mr. Gardner) asked about the Civil Service scientists' pay, and I know that my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) is also interested in the matter. I assure the House of the high regard which the Government hold for these scientists. We have no illusions about the importance of their work for future scientific and technological development, especially with regard to energy.
I remind the House that this is a dispute that has been going on for about three years, and the present Government have been in office for only eight or nine days, but certainly we shall want to turn our attention to this matter. I know that my hon. Friend the Minister of State, Civil Service Department is taking an active interest and concerning himself in seeing whether help can be given in this direction.
The other matter I want to deal with is the one raised by the right hon. Member 336 for Wanstead and Woodford about prices. He asked a lot of impish questions about pricing policy. He rather suggested that, having been in the job for seven days, I should tell the House exactly what we intend to do about the electricity prices, gas prices, and so on.
When I look at some of the figures that have been presented to me I find that all these proposals were before the Government on 7th February. I suspect that they were before the Government a long time before 7th February. I wonder why they were set aside. The then Government were convinced that it was right to charge the right price and energy should not be subsidised, but they were not saying that on 7th February and in the days leading up to 28th February.
§ Mr. Patrick Jenkin
I can assure the right hon. Gentleman that I said it in almost every speech I made in the election and I hope that he will withdraw what he said.
The House can judge exactly what store it can put in that answer. In 1969–70, the last full year of the Labour Government, the electricity industry in England and Wales showed a profit of £64.5 million. The loss for the present financial year so far is £140 million. The figure for the gas industry in the last full year of the Labour Government was £14 million profit, and there is a prospective loss this year of £36 million. It is not this administration which has put those nationalised industries into deficit.
Exactly five weeks ago tonight it fell to me to make the last speech from the Opposition Front Bench in a major debate in the Parliament that was dissolved two days later. In that debate we were discussing precisely the subjects we have been dealing with today. In the concluding moments of my speech I urged the then Prime Minister to allow an honourable settlement with the miners. I vividly remember the bleak and stony look on the right hon. Gentleman's face because he had already sent a cable to the Queen in New Zealand asking her to dissolve Parliament. The warning I gave him that night came too late. Nevertheless, I remind the House of my words. I saidIf he … opts to make a bolt for it the decision will be in the hands of the British 337 people. We on this side are confident that the people of Britain will vote to get Britain back to work."—[OFFICIAL REPORT, 6th February 1974; Vol. 868, c. 1335.]Well, the right hon. Gentleman did make a bolt for it, and the decision was placed in the hands of the British people. Exactly seven days after the people voted I was able to announce the end of the three-day week. Britain is getting back to work.
I am sure the House will be delighted to know that the recovery in the mining industry is going very well. Yesterday, for example, production in the pits was back to something like 72 per cent. of normal. It was curious that when the Leader of the Opposition made his ministerial broadcast as Prime Minister on 7th February explaining why he had called the election he said, according to the report in The TimesNow, I know a lot of people have been asking: What will an election prove?He gave us his answer when he declared that the election would give the British people the chance to say something to the miners. By his own admission he had called the General Election because of the miners, and he lost the General Election. Yet yesterday in his first speech since he lost the election he did not refer once to that strike, the issue which obsessed him and, I think, destroyed him. He did not even make a passing reference to it and that is surprising. Surely it is fitting that the House should be reminded of this tragic and unnecessary dispute, the culmination of the right hon. Gentleman's policies of confrontation in which he was egged on by the right hon. Member for Altrincham and Sale (Mr. Barber) and, perhaps, Lord Carrington too. There is no doubt that the then Prime Minister was determined to have an election. The TUC's historic initiative was brushed aside and for that, judging from the record and from what happened, the right hon. Member for Altrincham and Sale must bear a heavy responsibility. [Interruption.] Of course the right hon. Gentleman has now opted out and left others to pick up the pieces.
It was certainly an unnecessary dispute. It could have been settled before Christmas for far less than the blank cheque which the Leader of the Opposition signed when he set up the Relativities Board on 7th February, promising that whatever recommendation the board 338 made would be accepted and would even be back-dated. By doing that he proved that the dispute was unnecessary.
It was settled last week for a sum similar to what the Relativities Board awarded except that—as I know from my experience in the mining industry—the Relativities Board would not have solved the dispute because it laid down a rigid, unrealistic framework for a settlement.
However, the cost of the award is only a fraction of the cost to the nation of this totally unnecessary dispute. The three-day week cost £2,000 million. During the overtime ban and strike 20 million tons of coal production was lost, at a cost of £150 million. The National Coal Board, which was in a position to break even, is now likely to be in deficit to the tune of £150 million.
Quite apart from other action which will have to be taken by the Government the National Coal Board has had to announce a hefty increase in prices. There is an extra bit of icing on this unpalatable cake. One of the first decisions I took when I went to the Department of Energy last week was to end the "Switch Off Something" campaign, which cost the taxpayer a cool £2 million. [HON. MEMBERS: "Shocking."]
I appreciate that conservation of energy remains essential to this country. I pointed this out in speeches which I made throughout the last Parliament on the world energy crisis. The trouble with the "Switch Off Something" campaign was that it was a political campaign, deliberately carried on throughout the General Election campaign, and aimed at deceiving the electorate into believing that a genuine, serious, and long-term energy crisis was due to a temporary industrial dispute.
The National Coal Board and the National Union of Mineworkers can now look forward to a sure future for the coal industry as an indispensable component in a realistic energy policy. But first certain action must be taken——
§ Mr. Edward Heath (Sidcup)
If the right hon. Gentleman has now finished that entirely distorted account, perhaps we should get the record straight. I agree with him that it was an entirely unnecessary overtime ban and strike by the mineworkers, because they had open to them 339 the fully legal means of dealing with the dispute without either an overtime ban or a strike. But the plain fact is that they were incited at the time by the Secretary of State, assisted by the Prime Minister.
As far as the NEDC is concerned, my right hon. Friend the then Chancellor of the Exchequer and I discussed this fully with the trade unions afterwards at great length, but they were unable to give any undertakings which would back up the initiative which they had taken in the NEDC. These are the plain facts of the case. It was an entirely unnecessary dispute because the mineworkers were offered, on 28th November, a complete review. [Interruption.] If the right hon. Gentleman sticks to the facts he will not be interrupted. The mineworkers were offered on 28th November a complete review of the manning, the investment and the pay of the industry, which they could have accepted. [Interruption.]
§ Mr. Deputy Speaker
Order. The right hon. Gentleman the Secretary of State gave way to the right hon. Gentleman the Leader of the Opposition, who will, undoubtedly, be drawing to a close in a moment.
§ Mr. Varley
All that the right hon. Gentleman has said could have been said in his speech yesterday, but he chose to ignore it. He did not even make a passing reference to the miners' dispute. I do not want to deal with all his points, because I have a great deal to say. The right hon. Gentleman misjudged the miners and the mood of the country in 1972. The trouble was that he misjudged them in 1974, and he has paid the price. That is why he is sitting on the Opposition Front Bench.
I was saying that the National Coal Board and the National Union of Mineworkers can look forward to a sure future as an indispensable component of future national energy policy. I have already 340 told the House of the heavy loss the board must expect in the financial year which ends this month, a loss of around £150 million. In 1972 the Conservative Government had to pick up the pieces of their first coal strike. We have the job of sorting things out at the end of their second coal strike. We have decided to follow their precedent and write off the deficit.
The right hon. Member for Worcester (Mr. Walker) cannot be here, for reasons which he has given me. He will recall that the Coal Industry Act 1973, of which he is so proud, wrote off the deficit that remained after the emergency grant his Government paid to the board in 1972. We believe that the right course on this occasion is to eliminate the deficit completely, so that the board can get off to a clean start in the new financial year. We propose to make a deficit grant that will eliminate the board's deficit at 30th March. That is provisionally estimated at about £150 million. For technical reasons, it is proposed to pay £50 million during the current financial year, leaving the balance for payment in the next financial year. Supplementary Estimates will be laid before Parliament for approval.
This is a necessary first step. We intend to lay the foundations for the confident and forward-looking coal industry that the country needs. Within the next few days I shall be meeting representatives of the board and the coal unions to discuss with them the most effective ways in which we can jointly launch a full-scale examination of the contribution the coal industry can make to the country's energy requirements. We want to agree, as partners, how best the contribution of the coal industry can be ensured. I shall of course keep the House informed of progress in this new initiative.
We undertake that this examination will look at the question of coal's competitive position, its pricing position. We know that in relation to oil it is in an extremely competitive position. We undertake the examination in the knowledge that the new pay settlement has made the industry far more attractive to recruits. I was encouraged yesterday to read Press reports that men were now going back to the pits. That is essential if we are to have a coal industry that contributes to the future of the country.
341 I know that to certain hon. Gentlemen and one hon. Lady who have arrived to enliven our proceedings here the key element in our fuel policy is what I shall carefully describe as oil lying off the continental helf.
§ Mr. Tom Boardman (Leicester, South) rose——
§ Mr. Varley
I would gladly give way to the hon. Gentleman in normal circumstances, but we had an encore by the Leader of the Opposition of his speech yesterday.
From a different standpoint, the Leader of the Opposition got very worked up about that oil in the General Election campaign. I remember the Press conference in which he painted a lurid picture of those innocents abroad—the international oil companies—fleeing like frightened rabbits from the North Sea rich with mineral wealth but menaced by the uncontroversial proposals of the Labour Party manifesto. It was bloodcurdling stuff that he conjured up. Those oil companies, lulled into placid and complacent security by fond memories of Dr. Mossadeq, would be scared out of their wits at the prospect of being involved in the extremism universally associated with my right hon. Friend the Chancellor of the Duchy of Lancaster.
My right hon. Friend the Prime Minister yesterday explained to the House the kind of public participation envisaged by the Government. He said that among other possibilities we had in mind is the arrangement that was adopted in Norway on the basis of a major public holding in the extraction of oil offshore. Anybody who believes that that kind of arrangement is likely to scare off the investment of multinational oil companies can have no idea of the arrangements that oil companies are ready to accept with traditional oil-producing countries.
§ Mr. John Davies rose——
§ Mr. John Davies rose——
§ Mr. Deputy Speaker (Mr. George Thomas)
Order. As the Minister does not give way, the right hon. Member must resume his seat.
§ Mr. Varley
I am always prepared to give way, but as the Leader of the Opposition took up four or five minutes of my speech I cannot give way again.
I want to outline what has been happening in traditional oil-producing countries. Oil has been nationalised in Iran and Indonesia, but investment in the oil industries of those countries goes on. In Abu Dhabi, Kuwait and Saudi Arabia the oil companies have accepted agreements under which the Governments of those States will take a 51 per cent. share of the industry and the oil by 1981. The Kuwait National Assembly regarded this as inadequate, and the Kuwait Oil Company negotiated an agreement providing for an immediate 60 per cent. share in the industry to go to the Kuwait Government, but this, too, has been rejected by the Kuwait National Assembly, and full nationalisation seems to be possible there.
Algeria, Iraq and Libya have all recently nationalised or partly nationalised their industries. Venezuela is considering similar action.
§ Mr. John Davies rose——
§ Mr. Deputy Speaker
All former hon. and learned Members know the custom very well. If the Minister does not give way right hon. and hon. Members must resume their seats.
§ Mr. Varley
Oil production is increasingly coming to represent a partnership between countries owning the resources and the oil companies whose expertise makes exploitation possible. Almost every major oil producing and gas-producing nation in the world except the United States has public participation in production. I have already mentioned the example of Norway. It is Government policy in Australia, and there are precedents in the European Community. The Netherlands, France and Italy all have public participation in gas production. A requirement for State participation is being announced in Portugal—hardly an example of doctrinaire Socialism.
Why should the Conservative Party think so little of Britain that, while all the other oil-producing countries are becoming increasingly emancipated, the Tories want Britain alone to accept a 343 subordinate semi-colonial relationship with the oil companies? Why do they want that? The Tories would shackle Britain as an oil-producing country in feudal claims which are of no interest to the oil companies.
I will quote from that extremist organ of rampant Communism the Daily Mail, which reported on Saturday as follows:North Sea oilmen are not worried by Labour's plans to take a bigger share of their profits. 'We stay', was yesterday's firm message from the international companies drilling in the area. And they revealed that the massive investment of private enterprise money will, in fact, be increased.The Daily Mail quoted the following statement by a director of BP Trading:We are in partnership with Governments of all political complexions all over the world. We are unlikely to be frightened off by anything the Labour Government has in mind. In any case our investment is now too big. It would be too late to stop even if we wanted toIf the Conservatives cannot attain the calm good sense of the Government, at least they could attempt to display some of the self-interest shown by the Scottish National Party.
This oil is an asset beyond price. While it lasts—and by definition it is finite in quantity—it will provide employment for those directly and indirectly involved in its extraction. It will be of tremendous value to our balance of payments and will supplement coal, gas, nuclear energy and imported oil in ensuring our energy supplies.
§ Mrs. Winifred Ewing
I thank the right hon. Gentleman for his remarks, but Scotland has not got a balance of payments problem. The whole trouble with this question is whether the Government will go on with the mad grab of the last Government or will slow it down to a pace which will allow the infrastructure to catch up with it.
§ Mr. Varley
I am coming to that precise point if I can get to it. I believe in what the hon. Lady has said. It is a question of making sure that it comes under British control.
§ Mr. Tom Boardman rose——344
§ Mr. Varley
I wanted to refer to the hon. Member for Leicester, South (Mr Boardman), but I will not do so now because I should have to give way to him. However, on another occasion I shall have something to say about him, because last May he gave the House some information which I thought was wrong.
I wanted to mention nuclear power because it forms an important element in the energy equation. I have written to the hon. Member for Abingdon and my hon. Friend the Member for Bristol, North-East (Mr. Palmer) inviting them, as Chairman and Vice-Chairman of the Select Committee, to come to see me so that we can look into and examine the whole question of the nuclear reactor programme before decisions are made. I give the House, and particularly my hon. Friend, the assurance that the promise that was given that the House would consider these matters before the Government came to a decision will be honoured. I think that the debate is likely to take place before Easter.
It cannot be denied that in approaching these energy problems the Opposition in what they have said today are at best irrelevant and at worst positively damaging. They ended their term of office by putting the lights out all over Britain and left it to this administration to turn the lights back on. They sent Parliament away and governed Britain under the Draconian power of a state of emergency—a form of Government to which they were becoming increasingly addicted. I think that the then Prime Minister was quite besotted with it. He rather liked being the Prime Minister under a state of emergency because he was protected. We have ended that state of emergency.
The then Prime Minister plunged the factories, shops and offices of Britain into the gloomy twilight of a three-day week. We are getting Britain back to work, and today our people are not only getting back to work but, what is more, they have something to hope for.
§ It being Ten o'clock, the debate stood adjourned.
§ Debate to be resumed tomorrow.