§ The Secretary of State for Trade and Industry (Mr. Cecil Parkinson)
I wish at the outset to apologise to the House. I have a long-standing engagement to attend the graduation ceremony of my daughter and I hope that the House will forgive me if on this occasion I am not here for the whole debate. I assure hon. Members that I shall read the whole report of it and note carefully what has been said. I have arranged for colleagues to be present and to report to me.
I am grateful to the Leader of the Opposition and his colleagues for selecting industry and privatisation as the subject of today's debate. It provides me with a valuable opportunity at an early stage to describe the new Department's philosophy and policy in areas which are crucial to the country's economic recovery.
As the House will know, I have the honour to be the first Minister for nine years to bear the title Secretary of State for Trade and Industry. The last person to bear the title was my right hon. Friend the Secretary of State for Energy, who will be replying to the debate. During those nine years there has been a continuing, rather sporadic, debate about whether the two Departments should be merged.
Critics of the proposal argue that the merged Department is cumbersome and unwieldy. However, the new Department which I head is not tie same as the old Department of Trade and Industry, that huge Department which was run expertly by my right hon. Friend and which included functions now carried out by the Department of 264 Energy. It had responsibility for aviation, airports and shipping—which, quite properly, have been transferred to the Department of Transport—and we have slimmed down considerably the numbers in the Civil Service in the two Departments. There are about one fifth fewer people employed in the combined Departments than there were in 1979. This Government take a much more modest view of what role it is proper for Government to exercise in industrial activity than our Labour predecessors did. As a result, I am convinced that the combined Department is both manageable and of a sensible size.
The arguments in favour of reuniting trade and industry were substantial. It is important that industry's dealings with the Government should be kept as straightforward and simple as possible. The first benefit which I hope that industry will feel from the merger is a reduction in the duplication of effort and time spent in dealing with two Government Departments instead of one.
I always felt that the distinction between trade and industry was artificial; in this country more than in almost any other the two are inseparable. For many British companies, sales at home and overseas are but two sides of the same coin. At home and in overseas markets they face competition from foreign companies. The key to success in both markets is the same—competitiveness—it makes little sense to distinguish between domestic and foreign trade in our departmental arrangements.
Equally important, Government responsibilities in areas which vitally affect industry—such as patents and copyright, insurance and company law—will now be drawn under the same departmental umbrella as industry itself. Speaking as a former Minister for Trade in the old Trade Department, I know that there was a dichotomy of view between the two Departments. We used to look down Victoria street and think that the Department of Industry was obsessed with the problems of the producer but gave little thought to the customer. I know that the view from the other end of Victoria street was different. It was felt that I Victoria street was a comfortable ivory tower in which dwelt a group of people who were devoted to the cause of free trade and who had lost contact with the problems of the producer. I do not accept that either of those views was correct. They were both gross overstatements. However, it would be wrong to pretend that they do not exist. It is important that Government should speak to industry from a combined Department with a single voice. I believe that the new Department will be in an excellent position to stimulate competition in the British economy. I am heartened by the warm response to the merger that I have received from many people in all sections of British industry.
During the recent election campaign Ministers spoke, rightly with caution only, of the signs of recovery evident in our economy. After such a prolonged and deep recession, which has affected a broad sweep of world economies and which was of such complex origins, it is only prudent to interpret the signs cautiously. However, I believe that even the Opposition, in their habitual sullenness about the nation's prospects, will now find it hard to deny that there are good signs in the economy. I have no doubt that during the debate they will try to prove that this is not the case.
I shall tell the House of some of the good signs. Gross domestic product is up by almost 1 per cent. in the first quarter of this year and is now 3 per cent. above the low figure of spring 1981. That is in contrast with the 265 performance of many of our rivals who cannot point to an increase in their gross domestic product. Consumer spending and retail sales are running strongly. Industrial output is 3.5 per cent. higher than at the low point. Manufacturing output is up by 2 per cent. in the first quarter of this year compared with the previous quarter. Car production is up by 13 per cent. in the six months to May and 7 per cent. up on a year earlier. Total housing starts are 23 per cent. higher than a year ago. Private sector housing starts are the highest for 10 years.
§ Mr. Parkinson
The hon. Gentleman speaks about manufactures. May I remind the House that every day £120 million worth of British manufactured goods leave for markets all over the world. I hope that when he makes his completely predictable speech about the first quarter's balance of payments and the trade in manufactures he will remember that there are hundreds of British manufacturers who are doing an excellent job and who are selling their products in markets all over the world. I hope that the Opposition will find time to sing the praises of British industry, instead of perpetually harping on about Great Britain's lack of success. There is success. I know that good news is bad news for the Labour party. That is why so few of its members are present. There is good news and they are going to hear it.
As a further sign of the upturn some hon. Members will have been delighted to learn of General Motors' decision, announced yesterday, to invest £70 million in its Bedford commercial vehicle operation at Luton and Dunstable. It is another welcome sign of confidence in the United Kingdom economy. I can tell from the faces of Opposition Members that they are as pleased about that announcement as I am. The purpose of part of the investment is to introduce a new Bedford van based on a current Japanese vehicle. It will have an 80 per cent. local content at full production. These arrangements, which have been discussed with the Government and have our full support, are an example of the basis upon which, in our view, collaboration with Japan can be of mutual benefit in the automotive sector.
Looking ahead, there is further encouragement in the leading indicators published by the Central Statistical Office and the most recent CBI survey of industrial trends.
The role of Government, and in particular of my Department, is to ensure that industry is not hampered in its efforts to benefit and prosper from the upturn.
I share, with other members of the Government and right hon. and hon. Members, an ambition to see unemployment reduced. My own ambition was well summarised in the leader in The Times yesterday. It stated:If Britain's economic performance is to take advantage of the next two or three years' growth in world output it needs to be reinvigorated by legislation to break down rigidities and monopolies wherever they exist—in the public sector, in trade union practices, in housing, in taxation and in administration.In this country we have accumulated a sorry collection of what The Times calls "rigidities". One such rigidity which has been so damaging to our industrial performance is the division between those who own companies and those who work in them. Another has been the division between what are called the two sides of industry — between management and other employees.
266 One of the most instructive things that I found during my time as Trade Minister travelling around the world promoting our exports was that the successful countries are those which do not waste time on that aspect of the class struggle which is so vital to the existence of the Labour party. The countries which prosper are those where the people are on the same side working together towards a common goal.
The Government have taken important steps to spread the ownership of our industries more widely. They have encouraged share ownership in private industry and made employee ownership schemes an essential part of all their denationalisation programmes. We are determined to carry on with that work because it is what employees want and the results have been extremely encouraging. In doing so, I realise that I am battling against decades of grievous harm done to our industries by the Labour party's mythology and ideas. An essential part of every Labour victory—now an event fortunately to be found in history and, if it carries on as it has been doing recently, never to be seen again — has been to prey on jealousy and division, and to perpetuate class conflict in industry where none need have existed and to set management and other employees against each other.
The damage to our industrial performance from Labour's attitude over the years is incalculable. The loss of markets and so of jobs has been immense. These unfortunate results arose because of countless unnecessary strikes, resistance to productivity improvements, rejection of new technology and unreasonable pay demands, all fostered by an outdated concept of class conflict.
Even during the general election, the Labour party was still speaking the language of industrial class conflict. It ignores entirely the aspirations of the vast majority of people to become less dependent on the state and, in particular, to become owners. It is an aspiration achieved by hundreds of thousands each year. Under the eyes of the Labour party, our society is changing from the state of dependence upon which the Labour party used to thrive and which it wishes to perpetuate.
Doubtless the Opposition are now holding an inquest into their lack of success at the polls. As this Parliament is still so new and we are still full of good resolutions, let me, in the spirit of offering friendly advice across the House, tell the Labour party why it lost. It is because the world to which it is geared has disappeared. The shock of the recession has awakened all those who work in British industry to a few self-evident truths.
§ Mr. Parkinson
People no longer see industry as a place of conflict. They appreciate the urgent need to work together if jobs are to be saved and Great Britain's prosperity to be revived.
§ Mr. Parkinson
I shall deal with those points in my speech.
It is instructive that the Labour party still does not understand that its basic attitude and its preaching of class 267 conflict and about "the two sides of industry" have been at the heart of so many of our industrial problems. We live in a different world from the one in which the Labour party came into existence, but the members of the Labour party talk as if we do not. That is one reason why we have had trouble in industry and have inflicted unnecessary damage on ourselves. That is the central point of the argument that I plan to deploy.
It is because the world that the Labour party addresses itself to has disappeared and attitudes have changed that it is seen by the electorate as an increasingly irrelevant force in British politics. Our policies on ownership have helped to destroy many Labour myths. In housing, we have responded to the desire of millions to own their homes. Many of the 500,000 people who have bought their council houses have already made remarkable improvements to those properties. Pride of ownership is everywhere on display. It is a basic instinct in the British people, and not, as the Labour party pretends, a concept invented by the Conservative party. It is true of housing, and it is true of business. Over the past four years we have enabled an extra 500,000 people to own shares in the companies in which they work. The results have been remarkable. For instance, the National Freight Company's operating profit has been running at about double the rate that prevailed before it was denationalised.
Our emphasis on removing companies from state ownership wherever possible is not, therefore, dogmatically inspired. It is founded on the proven history of improved performance where the workers in an industry have a stake in it and where their efforts can make a difference to their company's results, and so to their own rewards. In the companies that we have already privatised, over 90 per cent. of the employees chose to buy shares in their companies.
The same philosophy underlies our intention to remove British Telecom from public sector control. The improvements in BT's performance, management methods and responsiveness to customer needs are already evident after the limited steps that we took in the last Parliament to increase competition in telecommunications. Those measures have already stimulated the industry to throw off the accountancy and management methods inherited from its days as a Government Department and to develop management systems suited to a major industry operating at the frontiers of technology.
§ Mr. Tim Eggar (Enfield, North)
Is it not appalling how the Post Office Engineering Union has tried to preserve the monopoly of British Telecom, to defend the jobs of its members — so it thinks — and to delay movement in this extremely important area of new technology in telecommunications?
§ Mr. Parkinson
The Post Office Engineering Union is unnecessarily concerned about the Prospects for its members. They are brighter and better as a result of the Government's proposals. I believe that those people will find that as we break the monopoly and the market becomes freer there will be more jobs and more activity, not less.
Privatisation will have major benefits for BT's investment programme. At present 90 per cent. of the investment programme is a straight charge to subscribers. BT must be freed so that it can raise capital on the market, so that the investment programme can be speeded up and 268 so that the burden falling on the consumer can be reduced. The consumer will also benefit from wider choice and improved quality of services and apparatus as a result of privatisation.
There is every reason to hope that BT, freed from state control, will develop over the years into a major force in world electronics and information technology and rank with AT and T, IBM and other international companies. That is the prospect before BT. That is what we as a Government wish to come about. That is what will underpin and encourage the employees in BT and improve their prospects.
The Government's proposals will have other advantages for the some 250,000 people employed in BT. The success of privately owned telephone companies has been demonstrated in the United States, where there has been a huge expansion in telephone networks and in the numbers employed by telephone companies. The creation of a private sector company will enable BT's employees to benefit from a similar expansion of the business in which they work. Of course, BT employees will also be able to buy shares in BT and, I hope, repeat the dramatic performance improvement in the National Freight Company.
The Government's proposals will have advantages for the British telecommunications manufacturing industry. The removal of BT's exclusive privilege and the creation of Oftel will ensure that firms can compete fairly to supply telephone services and telephone apparatus. A huge growth is expected in the telephone service industry, particularly in what are called value added network services. In October last year my predecessor issued a value added network services general licence, which permits service providers to offer, for the first time and with the minimum of regulation, a wide range of competitive services over the public telecommunications networks—from electronic mailboxes, to viewdata, to automatic ticket reservations. It was the first licence of its kind in the world and gave Britain the most liberal value added service regime in the world.
Already 46 service providers, both large and small, have taken advantage of the licence. Under our impetus I confidently expect value added services to become a major growth area in the coming years, and licences to be issued within a matter of months. There are 46 brand new extended service providers offered to a huge range of customers. How is that a threat to BT? There will be more use of the network and more jobs will be generated. Better services will be provided for the customer. However, the Labour party, obsessed with ownership for the public, not by the public, would write all that off and perpetuate inefficiency and institutionalised bad management.
Not only state sector firms can benefit from competition and privatisation. It is our intention to move other state-owned industries, or parts of them, away from state ownership as and when conditions allow. An essential prior step is to restore nationalised industries to viability wherever possible.
I am pleased to report to the House on the excellent progress that some of those industries are making. They absorbed huge sums of taxpayers' money over the years. Such colossal expenditure, diverted from other sectors of the economy, can be justified only by our firm insistence that those industries should make a rapid advance towards self-sufficiency.
269 British Leyland should approach break-even point this year. The Maestro has had one of the best selling launches of any British car. Jaguar has made a remarkable recovery, based on enormous improvements in management and other employee co-operation. Its sales in the United States have doubled. The United Kingdom domestic car market this year has expanded, British cars are holding their share of it and are even beginning to increase it, reversing the trend of many years. It is the biggest ever market and the biggest British share of the market — based not on protection but on better performance by British companies producing better goods. That is the way in which Britain's prospects worldwide will be improved. British Steel is now on course to achieve its target of break-even before interest in 1984–85. I pay tribute to all who work in those industries for the transformations that they have achieved. I only wish that they brought a little happiness to Opposition Benches.
The industrial scene in this country is changing beyond recognition. A further blow at the Labour party's vision of a divided proletarian Britain is being struck by the growth of self-employment and small businesses. By 1981, the last year for which we have figures, the number of self-employed stood at 2 million, or 9 per cent., the highest figure ever. The number of small businesses increased, from 1980 to 1982, even allowing for insolvencies, by more than 20,000. The Government are determined to build on the wise range of fiscal and other measures that are stimulating that small but important revolution. That sector of our economy holds the key to employment prospects. For that very reason, it will continue to have the Government's determined support.
If Britain is to improve her share of world trade, if we are to regain our reputation for quality and expertise in world markets, if we are to achieve higher employment, if we are to attain the higher standards of living and welfare services which we all wish to see, if we are to succeed in achieving a better distribution of prosperity throughout the country and if we are to sustain stable economic recovery and growth to make all these goals possible we must achieve higher productivity, higher efficiency and improved competitiveness throughout industry and commerce.
It is that objective that underlies our economic policy. The control of inflation is a prime duty of any Government to their people, and not least to their industrial sector. Today's level of inflation, the lowest for 15 years, is an enormous benefit to industry. Lower inflation reduces costs and helps competitiveness. It reduces the pressure of wage demands and helps to improve industrial relations. It greatly simplifies the task of corporate planning.
Lower inflation also paves the way for lower interest rates. Interest rates are down 7.5 per cent. from their high point, which is worth more than £2 billion a year to industry.
The Government also have a duty to keep to a minimum the burdens which they impose on industry. We have slashed the cynical tax on jobs imposed by the last Labour Government, with the help of the absent Liberal party. The reduction in the national insurance surcharge, which our prudent economic policies have made possible, is worth a further £2 billion a year to British industry — [Interruption.] I know that Opposition Members who live in an extraordinary world do not appreciate that 270 Government can be an overhead to industry. This Government have removed £2 billion of the burden imposed on British industry by Opposition Members when they were in government. Even if they do not appreciate the consequences, British industry does.
We are pledged to remove from liability to rates all empty industrial property, which will remove an unwarranted burden from industry. It will also remove the eyesores in some of our depressed industrial areas of roofless factories. We shall also legislate to protect ratepayers, including industry, which has been a severe victim, from the excesses of Socialist local authority high spending, and to facilitate the paying of rates by instalments.
These are our policies at home. As important are our policies for international trade. Britain's fate is still inextricably linked to the future of the world's open trading system. Exports today still account for well over a quarter of our gross domestic product, and nearly a third of our manufactured output. Few countries have as much to lose from a return to world protectionism as Britain. Equally, few countries can so greatly influence whether such a reversion in fact occurs. We have a major responsibility to do our utmost by example and by force of argument to maintain the system on which our prosperity depends and which would have been put totally at risk by the Opposition's insistence on the imposition of import controls. We shall continue to give it and the GATT our firm support as demonstrated by our clear commitment to the Williamsburg undertaking against protectionism. At the same time, we shall continue to resist those countries that seek to abuse the system, that demand free trade for their exports but offer a series of barriers to the exports of others.
§ Mr. Parkinson
The hon. Gentleman asks what we are protecting. A third of the jobs in British industry depend on our access to foreign markets. What benefit do we get from the open trading system? A third of the people in this country would be in very severe straits, as their jobs depend on access for our goods to other people's markets. The sooner that Opposition Members wake up to that fact, the better.
Our continued membership of the European Community is essential to our future trading success and so to employment prospects at home. [Interruption.] It does not surprise me that the hon. Member for Kingston upon Hull, East (Mr. Prescott) is the last person in the country to realise that the argument about our membership of the Common Market ended on 9 June. The British people announced once and for all that they preferred to be governed by a party that wishes us to remain a full member of the European community. That is another lesson that the hon. Gentleman should try to learn, although I know he finds learning any lesson particularly difficult. Our continued membership of the European Community is essential. That fact is widely recognised by the British public. Their minds have recently been concentrated by the threat of a Labour Government withdrawing from Europe and destroying millions of jobs in the process.
I pay tribute to the Labour party, whose foolhardy policy did an enormous amount to alert the public to the 271 benefits of continued membership. In particular, it has given us an opportunity to convince the British people of the advantages of being part of a free trade market of 270 million customers, with whom we already do 42 per cent. of our export trade. It is the stimulus of competition with foreign companies for markets both at home and abroad that has alerted our industry to the need for innovation and the harnessing of modern technology. Let me make it clear to the House that I do not see modern technology and our older established industries as entirely separate categories.
Manufacturing industry still accounts for a significant proportion of our gross domestic product, and despite the growth in services, must continue to occupy a central place in our economy. We need buoyant manufacturing output to satisfy home demand to provide employment and to generate efforts to pay for the imports which both industry and private consumers need. Services have an enormous part to play in meeting the changing needs of consumers, and as a major provider of employment. But neither services nor even oil could conceivably generate sufficient overseas earnings to satisfy our import requirements. British industry has, during the past four years, increased its productivity considerably, and it is our aim to ensure that this trend continues.
A vital element in company competitiveness is innovation. If our companies are to survive against foreign competition, they will have to innovate and do it quickly. The Government's role is to make British industry aware of the new technologies and to encourage it to invest in new production techniques, in research and development into new products and processes, and in the development of both new and traditional products incorporating new technology. My Department has built up a series of "support for innovation" schemes over the past few years, to achieve these objectives. The Government are also responsible for a great deal of R and D, for example in the universities and the Ministry of Defence research establishments. We have to find ways of ensuring that industry in the United Kingdom exploits this work, and the spin-off from it, to the full.
The Government have reinforced their commitment to the industries of the future by their decision to go ahead with the Alvey programme for advanced information technology. This will be the largest collaborative project of this sort ever undertaken in this country, involving Government, industry and universities in the development of the technologies required for the next step forward in computing and electronics technolgy.
The question that we must all ask about British industry is, can it in the years ahead meet the demand of customers at home and the world over? That is the right question to ask, since I have no doubt that demand will be there in plenty, and only our ability to meet it is in doubt. The Labour party and the alliance fondly believe that demand is what is lacking and that public money can be poured in to solve that problem. It is a delusion. Demand at home and abroad is already adequate and is growing. Products that are competitively priced will sell now. New products which arrive in the market at the right time will sell now. The right new products will establish demands that were never there before. Customers will be buying goods they never even dreamed of owning.
Sometimes when I listen to the Labour party—it was one of my duties to do so during the election—I wonder whether we inhabit the same planet. The Leader of the Opposition is fond of talking about the need to increase 272 steel production, and coal production, and all production. But what would he do with all that production if no one would buy it? That is the question he never asks himself.
Our approach is to recognise that a firm will not escape bankruptcy for long if it produces what it cannot sell. So the customer must be the starting point. The customer wants better yet cheaper goods, so the Government must help industry to reduce its costs by stimulating competition, ending monopolies, lowering the taxes and burden on industry and maintaining the fight against inflation. To enable industry to reach customers overseas, we must continue our support for the world's free trade system, and if industry is to reach the customers of tomorrow it must be able to develop and harness the most modern technologies.
The Labour party likes to pretend that customers and markets do not exist. It would like to pretend that they are inventions of the Conservative party and that is its central folly.
§ Dr. David Owen (Plymouth, Devonport)
The right hon. Gentleman is making a speech that would be better fitted to his former role as chairman of the Conservative party. He is now Secretary of State for Trade and Industry and would do well not to continue to fight the election, but to face the serious problems confronting industry The right hon. Gentleman should not spend all his time worrying about the rather irrelevant opposition of the Labour party, but should concentrate on some of the genuine and constructive criticisms that have been made about the Government's industrial policy.
§ Mr. Parkinson
I welcome advice from the right hon. Gentleman. May I give him some? He had a very good last Parliament, but he has a tendency towards pomposity.
Our approach recognises the world that really exists and the need to sell what we produce. That way lies a return to economic health and better employment prospects. Our approach is practical and realistic.
The approach that we followed under my predecessors, and which I intend to follow, is helping to lead Britain to recovery. Throughout our first four years in office, Labour argued bitterly that recovery would never come. Throughout the election campaign, Labour kept up the chant of doom and gloom, determined that there should be no good news. No one can doubt that the recovery has begun. Now is the time for us to hold to our course and ensure the benefits to Britain. I commend our policies to the House.
§ Mr. John Smith (Monklands, East)
It is a conventional courtesy to congratulate a new Secretary of State when he makes his first speech to the House in his new post. I am happy to follow that convention, despite the aggressive and shallowly partisan way in which the Secretary of State approached his speech.
I had hoped that I would be able to congratulate the right hon. Gentleman on making the transition from a party caterpillar to a ministerial butterfly, but I am sorry to say that I am unable to do that. The right hon. Gentleman's speech related almost entirely to the election which has now finished and said almost nothing about his view of how his Department should develop or about Britain's serious industrial problems and what any Government would be doing to tackle them.
273 My right hon. Friend the Member for Salford, East (Mr. Orme) will speak later on matters affecting the Department of Trade and Industry. I shall concentrate on the privatisation proposals affecting the energy industries which, until recently, have been almost entirely within the public sector.
A particularly bland passage of the Queen's Speech commits the Government tothe further development of … oil and gas resources".North sea oil revenues—I do not say that North sea gas is unimportant — are at the heart of the politics and economics of our time. It is little known, and was carefully concealed during the general election campaign, that since 1979 the Government have received £20.5 billion in North Sea oil revenues, compared with the £800 million that the previous Labour Government received from the same source during its period in office. We need to ask what the Government have done with that £20.5 billion.
When I was a Minister in the Department of Energy I thought that there would be an interesting debate between the Left and the Right about how North sea oil revenues would be used. I expected that the Left would argue that the money should be used by the Government to pump-prime the economy, to develop our new technologies and to support our social services and that the Right would argue that the money should be given to the public by tax concessions and so on. I expected the classic debate about public choices and private choices to take place.
No one ever thought — indeed, it is scarcely believable—that all that money would go to pay for the cost of the extra unemployment that the Government have created since 1979. I wish that the Secretary of State would do me the courtesy of listening. I did him that courtesy.
§ Mr. John Prescott (Kingston upon Hull, East)
The Secretary of State does not want to learn. He has already shown that.
§ Mr. Smith
I know that the right hon. Gentleman does not want to be reminded that the Government have spent £20 billion to pay for the unemployment that they have created. It is an easy calculation. If we take the cost of an unemployed person at £5,000 a year, which is a moderate estimate, and say that there has been an increase of only 2 million in unemployment, which is another underestimate, we get a cost of £10 billion a year. North sea oil revenues are only £8.5 billion a year, so the Government have spent all that revenue on paying the cost of their own policies, and those policies are continuing. Every pound of North sea oil revenue goes straight to pay the costs of extra unemployment.
When the history of these years comes to be written, it will not be believed that that enormous windfall—the pools win for the nation—was not spent on investing in our new industries and technologies or on improving our social services, or even in giving money away in income tax concessions.
§ Mr. Kenneth Carlisle (Lincoln)
Where does the right hon. Gentleman think that the money for British Steel, British Shipbuilders and British Leyland comes from?
§ Mr. Smith
The money is not coming from North sea oil revenues, because they are paying for unemployment 274 benefits. I wish that it had been possible for that revenue to be invested in the BSC and in the private sector, but that is not happening.
What is worse, the Government have become so dependent on those oil revenues to mask the state of Britain's industrial decline and to pay the costs of unemployment that they are rapidly overproducing North sea oil. The prolific fields in the North sea are being drained by a Government who are dependent on forcing every tonne of oil out of the North sea as rapidly as possible. The result is that in 1985 — only two years from now—we shall hit peak production in the North sea and the production is likely to fall thereafter.
One might think that a prudent Government would try to extend the period of energy self-sufficiency, particularly oil self-sufficiency, for as long as possible. But this Government are not doing that. They need the money so badly that they have to resort to the absurd overproduction of North sea oil. Even allowing for the imports that are necessary to give the mix of oils for our refineries, we are exporting 30 per cent. net of our North sea production. Why should we be doing that when our oil will run out years before it needs to? If there were ever an example of short-sighted Government policy this is it.
The Government have squandered the revenues and now they are wasting the asset. It will continue because they have no alternative. That is how they have been able to get away with such a high level of unemployment. But for North sea oil revenues, the Prime Minister would have had either to cut benefits, which would have led to social revolution, or to increase taxes, which would have prevented her from winning an election victory. North sea oil revenues are at the heart of what is happening. They are being used as sticking plaster to cover up the battered and bleeding structure of the British economy and the political system.
The Government are squandering the asset and abandoning the national control which is crucial to the management of such an important energy resource. The previous Labour Government, of which I happened to be a member, set up the British National Oil Corporation and introduced into a North sea dominated by multinational oil companies—British and foreign, but mostly foreign—a new public corporation which rapidly became successful. It was making hundreds of millions of pounds for the British taxpayer and was exerting wise and sensible control over the future of our oil and gas resources in the North sea.
What did the Government do about the BNOC? They dismantled it and destroyed it. We remember the Britoil fiasco when a large part of the corporation was sold off to the private sector. The production part of the corporation was sold off and it is now in a weak capital position. This means that it will probably be unable to operate effectively in the North sea and will look for easy profits in other parts of the world. With the existing BNOC we are left with the rump of the corporation as a trading arm which cannot make a profit. I invite the Secretary of State for Energy to tell us how many millions of pounds of taxpayers' money the trading arm is losing because of the way in which the Government broke up the highly successful British National Oil Corporation.
The North sea was not dominated by the public sector. Before the British National Oil Corporation was established, it was dominated by the private sector, and the foreign private sector at that. I still argue that while there 275 was Socialist case for the corporation there was also a patriotic case. Socialist partriots could argue the case on both grounds, but even non-Socialist patriots could surely see the sense of getting some measure of control and national leverage over Britain's own resources instead of allowing them to be dominated by foreign multinationals which repatriate the profits across the Atlantic.
We no longer have that control. We do not have our own oil company. If the oil companies say that they are not prepared to develop under our taxation or licensing arrangements, we have to accept their refusal. We cannot tell them that as a result of their refusal we shall allow our own company to develop our own resources. This means that the Government will be forced to bribe the oil companies to keep them in production in the North sea. That is why the proposal appears in the Queen's Speech to abolish all royalties for all North sea fields in future. That must be absurd.
Royalties are the rents which the nation receives for the exploitation of its own resources. I accept that there will be marginal fields for which we shall have to make special taxation provisions. Under the Labour Government's legislation the Secretary of State for Energy has the capacity to remit royalties if it is proved to him that it is desirable in the national interest that that should be done. That legislation is still on the statute book and it could be operated by the Government. Instead, they propose to abolish the rents which the nation receives from its own North sea oil resources. They do not propose merely to consider doing so or to consider the proposition favourably in appropriate circumstances; they intend to abolish royalties.
What will happen if we find a large, successful and profitable new field in the North sea? I know that the conventional wisdom is that there are likely to be smaller fields that are likely to be marginal and less profitable. I have no doubt that there is some truth in that, but it is quite possible that we shall find a large field in the North sea. I note that the hon. Member (Mr. Eggar) is nodding, and he is wise to do so. If we discover such a field, are we to be told that no royalties are to be paid on this great new resource? If that is so, the nation will get nothing in return.
§ Mr. Eggar
I remember that three months ago the right hon. Gentleman supported the Government's decision to reduce taxation levels. To say now flat the removal of royalties will take away the Government's right to get any money from the oil companies and oil fields is a distortion of the truth, and the right hon. Gentleman knows it.
§ Mr. Smith
I sometimes despair of trying to explain things to the hon. Gentleman. I made it clear during the debates on the Finance Bill that because of what I thought was the incompetent way in which the Government had managed our oil industry it was necessary to give a boost to the offshore supply industry. Therefore, I did not oppose the taxation concessions that the Government were offering on that occasion. That shows that I am not prejudiced. If a case can be made out, I will listen to it 276 carefully and reasonably, as will my party. There is a clear difference between a one-off concession to stimulate our beleaguered industry and to give up for ever and a day the royalties to which the nation is entitled from its own resources.
The gas industry features heavily in the Queen's Speech. I think that the Secretary of State for Energy was the Secretary of State for Trade and Industry and President of the Board of Trade when the Gas Act 1972 took its place on the statute book. That Act committed the British Gas Corporation to enter into the production and exploitation of oil. The right hon. Gentleman is now involved with a proposal to do the opposite—to prevent the corporation having any interest in oil. Indeed, it is proposed to force it to sell off such interests.
The history of the Government and the British Gas Corporation is a disgraceful one. It is marked from the beginning by nothing less than vilification of the corporation and its chairman, who had the independence and the sauce to stand up to the present Government and fight for his industry against their policies. They started with an attempt to sell off all the gas showrooms. Which are profitable retail outlets for the gas industry. That was stopped by the effective campaign that was run by the Opposition and the trade unions. The Government then sabotaged the gas-gathering pipeline, the most imaginative venture ever conceived in the North sea. The project would have brought into the nation pockets of gas in the oilfields. Instead, they will be flared or reinjected and lost to the nation for decades, or perhaps even for ever. The project was smashed on the altar of the ideological spasms of the present and previous Government. The pipeline should be revived and it should be run by the British Gas Corporation if the private sector is unwilling to find the money, or the Government are unwilling to support the project.
Perhaps the most devious of all the tricks played by the Conservative party and its Government upon the gas industry was the enactment of the Gas Levy Act 1981. For three years in succession the previous Conservative Government forced up the price of gas by increases 10 per cent. above the high rate of inflation which then prevailed. That created large surpluses in the corporation's accounts. The Government applied a levy under the 1981 Act and took the surpluses back to the Treasury. In other words, there was a tax upon gas consumers. It w as clever politically because the Government raised considerable sums and consumers did not believe that they were paying a tax. The idea was indeed clever, for the odium for the increased price of gas landed not upon the Government but upon the corporation, which had opposed the increases in the first place. It was a marvellous political hit. The Government increased taxation without collecting the political odium for so doing. Secondly, they ensured that the odium landed on the doorstep of the public corporation that they were vilifying every day of the week. The 1981 Act is an interesting example of the Prime Minister's political techniques.
The Government have decided to proceed with the sale of the Wytch farm oilfield in Dorset, which was discovered by the British Gas Corporation. Its then partner, British Petroleum, said that it did not think that there was any oil there and did not want to proceed. British Gas Corporation engineers took a different view. They developed the oilfield, and it is highly successful and profitable. It was developed and maintained by those 277 engineers, and they have ambitious plans for its future. What reward do they get for their enterprise and initiative and for employing British technology to use a British resource for the British taxpayers' benefit? They are told that they have to sell it all off to the private sector.
Why on earth should a successful public corporation be obliged to get rid of an important asset of this kind? The corporation will not even be allowed to get the proper price for it. Unless this Secretary of State for Energy shows more courage and foresight than the previous one, the British Gas Corporation will be forced to sell it at well below £200 million, although the true valuation is likely to be nearer £400 million. In the Gracious Speech we are told that that is not enough. We are told that it is not enough to dispossess the British Gas Corporation of this highly profitable onshore oilfield; we must go further and force it to sell all its oil interests in the North sea in the four fields in which the British Gas Corporation is involved.
Why on earth should the British Gas Corporation be forced to sell off its North sea oil interests? We know that its private sector partners do not want that. We know that they are working happily in a constructive partnership between the public and private sectors in these parts of the North sea. We know that the interests are profitable, and if they are kept on and developed the beneficiary will be the British taxpayer through the profits that come to the British Gas Corporation.
We know that the manoeuvre of disposing of the interests, involving six subsidiary companies of the British Gas Corporation, will be tortuous and cumbersome. Even worse, we know that the dominant partner in each of the fields is an American oil or gas company which has preemptive rights to buy the British Gas Corporation's share. So we are not just forcing the corporation to get rid of profitable assets; we are forcing it to get rid of profitable assets and sell them to a foreign country and foreign companies.
Of all that is in the Queen's Speech that is the most shameful. It betrays the national interest. It defrauds the taxpayer. It serves no useful national purpose. Its only possible justification is the spiteful ideological urge of this Government to dispose of every successful public asset and public corporation. Their attitude to British industry and to the public-private sector division is simple: if a public sector corporation is not successful in their eyes, it is to be vilified and held up as an example of waste and profligacy, even although it is subsidising necessary social purposes such as our transport system. If it is successful it will be treated even worse, as the history of the British Gas Corporation shows — a highly efficient, well-managed, progressive, far-sighted and technologically developed corporation. What does it get for its pain and trouble? All its profitable assets are to be stripped and sold off. What an attitude to take to the way in which our industry is run, particularly to the crucial division between public and private sectors.
We in the Labour party believe that Britain needs a thriving public sector, just as it needs a thriving private sector. I am sorry to say that neither in the private sector, nor in the public sector, with the possible exception of some of our energy industries, are we seeing any signs of success. What appals us is that this Government approach the difficult matter of running a complex modern 278 economy, not with the intention of encouraging successful public and private industries, but with the mean-minded attitude of penalising and seeking to destroy successes when they occur in the public sector.
The Secretary of State maintains that somehow the Opposition want to perpetrate old arguments, and says that we are not prepared to look at new problems in the future, but when we consider what his Government are proposing for the energy sector, how foolish and hollow his speech must sound to any unbiased observer. I remind the new Secretary of State for Energy, who I hope will answer some of these points and give a proper justification for Government policy, that in the Gas Act 1972, when he was Secretary of State for Trade and Industry, the very job that his colleague now has, he obviously took a different view, as did the Administration of the right hon. Member for Old Bexley and Sidcup (Mr. Heath). Clearly, he took a quite different view of the relationship between the public and private sectors. If I may say so with respect, it was a much more sensible and intelligent view, even though it may perhaps not meet the entire accord of the Opposition Benches.
If the Secretary of State has any belief in the principles that he wants espoused, if he has personal and political integrity, his first and most important task must be to change course on the privatisation of our energy sources. He must know in his heart and mind that that privatisation is motivated by spiteful, mean-minded party objectives, and signally fails to recognise the national interest which we on these Benches will seek to defend throughout these debates.
§ Mr. Michael Marshall (Arundel)
In one respect I agreed with the right hon. and learned Member for Monklands, East (Mr. Smith), and that was when he spoke of the development of North sea oil stemming from the overwhelming activity in the private sector. However, he did not go on to say, as he should have said, to put the matter in context, that had it not been for the private sector we would not today enjoy the substantial oil revenues that we do, nor would we enjoy our present position as one of the largest oil producers in the world. Nor would we be enjoying this particular industrial success story. If he had put it in that context, what he said thereafter might have been more relevant.
I expect that my right hon. Friend the Secretary of State for Energy, whom I welcome to his new appointment, will pick up a number of the points that the right hon. Gentleman raised. In passing, might I say that I found it somewhat depressing to hear yet another overtone of the general election being peddled again — the economic illiteracy that relates oil tax revenue to that of unemployment expenditure. The economic illiteracy is so obvious that it depresses me that the right hon. and learned Gentleman, with his experience, still seeks to peddle it after it was so effectively rejected by the electorate. As he well knows, tax revenues go into general funds, and it is no more relevant to talk about oil revenue in relation to unemployment expenditure than to talk about road tax revenue and relate it to road expenditure. The right hon. and learned Gentleman knows that, and it was the view that he had to take when in government.
I shall direct my remarks to the reorganisation of the Department of Industry, a subject that was raised by my right hon. Friend in opening, when he spoke of the merger 279 of the Departments of Trade and Industry. I hope that this move, which I welcome, will be extended. In recent years I have been concerned about the lack of co-ordination in some aspects of Government activity, particularly on overseas sales and procurement. When my right hon. Friend winds up, I hope that he will draw on his past experience as Secretary of State for Trade and Industry and consider some of these matters, because within his own Department of Energy there are certain matters — for example, some of the activities of nationalised industries in overseas selling—which relate to the Department of Trade and Industry, the Foreign Office and other parts of Government.
While I welcome the more effective co-ordination between the Departments of Trade and Industry, problems still remain, even within that range of activity. This Government, like their predecessors, face problems in the turnover of Ministers. We all know that industry finds it particularly difficult to adjust to constant changes of Ministers. That is why I welcome the fact that, within the present team at the Department of Trade and Industry, the Ministers of State who dealt with industry and information technology are both still in post. That will give valuable continuity. I am particularly glad that my right hon. Friend the Secretary of State also brings his expertise in the job as a former Minister for Trade.
I suggest that my right hon. Friend sets himself three goals. The first is the obvious one of greater co-ordination within the two Departments. Secondly, I hope that the attempt to improve our exports sales performance will stretch from his Department and bring in other parts of Government. I do not underestimate the success that we now have in our export trade. My right hon. Friend spelt it out, but the fact that we export twice as much per head of population as a percentage of GDP as do the Japanese, and four times as much as the United States, is worth reiterating. However, it is a situation that can be built upon.
I am one of those who believe that the Government have a major role in co-ordinating and bringing together our business, our industry, our banking and our insurance sectors — the whole apparatus of export trading. In particular, the role of the Export Credits Guarantee Department is important. However, in trying to do that we have seen some difficulties and failures, but the success in recent years has given me some encouragement. For example, there has been the British role in the development in the south China sea. When the right hon. and learned Member for Monklands, East was speaking in his usual biased way he failed to observe that Britain has a substantial stake in multinationals, and were it not for companies such as British Petroleum, a multinational in the best sense of the word, we should not have had such opportunities as that in the south China sea. This is an international trade, and the rather narrow nationalist line that the right hon. and learned Gentleman is peddling would become counter-productive.
Some of the successes that we are having stem from the co-ordination that has been worked out, particularly by the Departments of Trade and Industry, and this can be built upon.
§ Mr. John Smith
Will the hon. Gentleman bear in mind, when he speaks about the south China sea, that when BP operates there it will be dealing with the Chinese national oil company, which is one significant difference 280 from the North sea? The Chinese appear to be more interested in defending their national interest than he is in defending ours.
§ Mr. Marshall
The right hon. and learned Gentleman has completely destroyed his own argument. If the Chinese think that, why are they bringing in BP? They are doing so because it is an outstanding multinational British company that has a high expertise. I declare my interest in Cable and Wireless, which is giving all the support to the communications service in the south China sea. These are two examples of the way in which our international skills and abilities are translatable all around the world, even to countries that have strong state control of activities. The right hon. and learned Gentleman is adrift again.
The third goal that I hope my right hon. Friend the Secretary of State will set for himself is the need to ensure that the "United Kingdom Limited" activities, if I may call them that, are fully deployed and understood throughout all parts of Government, and the House. Let us take, as an example, related Departments. I have already mentioned in passing some energy activities, hut there is also defence. I declare my interest as an adviser for British Aerospace.
§ Mr. Marshall
Yes, another one, and I am proud to declare my interests. The hon. Gentleman is frequently declaring his interests and one can get a little tired of that.
Defence procurement is a vital part of industry and 500,000 jobs are dependent upon it. The ways in which we look at those matters do not go as widely as they might. For example, my hon. Friend the Minister of State for Defence Procurement is doing an excellent job—that is a view across industry and in the House. The good examples, such as the defence satellite procurement programme, where Government were able to bring together major British manufacturers to produce the maximum amount of plant and equipment here, show how things can work in practice. It is interesting to reflect that that development was brought about by what is coyly described in the official jargon as "an interdepartmental group of officials", which those of us who read The Economist will know is the result of the activities of another Cabinet committee that we are not supposed to know exists, but which, thanks to that publication, we read about fairly regularly.
That case used interdepartmental co-ordination that covered a range of some six or seven Departments involving the Foreign and Commonwealth Office, as well as Trade and Industry and Defence, and is a good example of what I am driving at when I talk about building on wider co-ordination than the merger of two Departments. We have to weigh up some of the failures of the past and think about what can be done to avoid them in the future.
One mistake was the purchase of Dutch radar by the Civil Aviation Authority. There is no doubt that, had we had an earlier lead time, as is the case with some of our more skilful competitors, and been able to allow British industry to gear itself up in design terms and to recognise the needs for the future, we could have seen a major opportunity for British industry, not only for civil but for defence purposes. We can also consider what is going on now with choosing between the Harm and the Alarm missiles. The obvious temptation is the purchase of the 281 Harm missile from the United States on the grounds that it can be bought more cheaply off the shelf, and, if rumour has it correctly, it is suggested that this could help our relationship with the United States—that is the Foreign Office view. One sees these arguments, but against that one must recognise that if we do not go in for new technology we are destroying a whole range of activities that are of great significance to our defence capability. Again, that is both a short and long-term argument.
This case is an acid test of whether my right hon. Friend in his new job will be able to bring his influence to bear in that decision. It is an important decision and one about which I am a little concerned because there is a feeling that we can encourage our American allies to go in for greater defence procurement from this country by making some kind of gesture in this regard, but that is doubtful. I understand that they would not be willing to make their technology fully available for servicing. For this particular missile, every part of the servicing would have to be undertaken in the United States—in other words it is an arms-length sale arrangement, not a transfer of technology. The acid test is whether we have a transfer of technology in those matters, and that is how they should be judged. In any case, there is a vital British industrial defence interest at stake here.
There are things that might be done to try to tackle these matters better in the future. I have already suggested, with regard to interdepartmental consultation, ways in which we might look to the future. In the past, bodies such as the National Industries Defence Council have shown a certain lack of cutting edge. There is a tendency for bodies such as that to be "take note" bodies. A clearing house in which major British projects are looked at in the most rigorous way, and in which the industrial interest, the trading interest as well as the defence and manufacturing industry interests are considered, is of the greatest importance. That is why I come back to this idea of a wider forum than is presently available.
This problem is not confined purely to defence. There is also the example of the sale of medical equipment. There is no doubt that there have been useful ministerial visits and active steps taken to support our hospital equipment manufacturing exporters. However, that tends to be in a rather narrow way and is not related to the wider British interests. It is for all these reasons that I feel that we do not always take full advantage of our particular skills. British hospital expertise in both management and equipment is of world standing. However, one hears that when foreign buyers appear under their own initiative here they sometimes get a dusty answer at the Elephant and Castle and are told, "We do not deal in trade here." These are the problems that more effective co-ordination and a clearing house could avoid.
I wish to urge my right hon. Friend that we would do well to look not just at the interdepartmental structure of which I spoke, but at a mechanism that would not only involve industry but would go through the system that I have described to involve the Prime Minister herself. She has shown a great interest, whether in defence sales or other aspects of exports, particularly in China and Hong Kong, where there has been a power station project which is a good example of the effective co-ordination that is necessary.
282 I urge my right hon. Friend and the House to build on some of the successes and to tackle some of the remaining problems. I should like to think that when the Select Committees are reconvened, the Select Committee on Defence might feel that it would be valuable to extend its studies into the whole area of co-ordination on defence sales and procurement across Government. Similarly, when the Select Committee on Industry and Trade is reconvened, I hope that it, too, might feel, in looking at the work of the merged Departments — after all, the Select Committee reflects both wings already — that there is a task to be done in considering the more general question of how all Government Departments, Ministers and all parts of British industry can come together more effectively to build on our achievements and to play a part in the success of our economy, in which I hope we can all join.
§ Dr. Norman A. Godman (Greenock and Port Glasgow)
I regard it as both a privilege and an honour to represent the constituency of Greenock and Port Glasgow. In the past two or three days I have heard several fine, eloquent maiden speeches from both sides of the House and I should be happy just to hang on to some of their coat tails.
I have several reasons for saying that it is an honour and a privilege to represent the constituency. Hon. Members may think that I have rather a strange Scottish accent. I was born in Yorkshire and am the son of what is known in Hull as a fish-house lass. My mother's mother was a fishergirl from Aberdeen. I have lived in Scotland, my adopted country, for many years and a number of years ago I had the good sense and intelligence to marry a delightful lass from Govan.
It is also a privilege to represent the constituency because I am a former shipyard worker—a shipwright by trade. Greenock and Port Glasgow, as hon. Members know, is steeped in maritime history. Hon. Members will readily recall my predecessor. Convention rightly demands that I should pay a compliment to that man, Dr. Dickson Mabon. For a number of years, he served the people of Greenock and Port Glasgow conscientiously, compassionately and diligently. His resignation from the Labour party aroused considerable controversy in Greenock and Port Glasgow and was regretted by many of the people there. However, on the few occasions that I met him, he treated me with unfailing courtesy and politeness and, as I have said, he represented the constituency very competently.
The two towns of Greenock and Port Glasgow are situated on one of the most beautiful estuaries in mainland Britain. I refer, of course, to the Firth of Clyde. For my money, it is much more beautiful than the Firth of Forth or any of the other firths in Scotland. It is certainly far and away more beautiful than the river Humber — my apologies to my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). From Whinhill and Lyle Hill there are magnificent views across the water to the Western Highlands. From every street and almost every window in Greenock and Port Glasgow there are delightful glimpses of the Highlands across the water, or beautiful views of the Clyde.
However, the people of Greenock and Port Glasgow — in stark contrast to the physical beauty of their setting — face many serious economic and social problems.
283 Unemployment is dismally high, at something approaching 20 per cent. Unemployment among teenagers in Port Glasgow stands somewhere between 75 per cent. and 80 per cent. That is an appalling and depressing level of unemployment. In Port Glasgow, fully 34 per cent. of pensioners depend for their existence on supplementary benefit. Outside Glasgow, Port Glasgow has the highest number of families dependent on supplementary benefit. That is a very sad aspect of the economic and social circumstances prevailing in my constituency, and I cannot see much hope for my people in the Gracious Speech. However, we should not give up all hope. The Gracious Speech states, for example—it is, of course, a statement of intent—that the Government willpursue policies designed to increase economic prosperity and to reduce unemployment.That is why I am here—to see that that intention is fulfilled. The Gracious Speech also talks about the Government's intention to promotegrowth in output and opportunities for employment by encouraging industry to be adaptable and efficient".Together, the shipbuilding and marine engineering industries form the economic backbone of Greenock and Port Glasgow. No other community in mainland Britain is so heavily dependent on shipbuilding. In saying that I refer to the whole community and not just to those within the shipyards. We also have a developing local electronics industry. A Labour Secretary of State had the good sense some 30 years ago to persuade IBM to set up a plant in Greenock. However, we are still heavily dependent on shipbuilding and marine engineering.
As a former shipwright, I know that Greenock and Port Glasgow have some of the finest shipbuilding and marine engineering skills in Britain in the companies of Scott Lithgow, Ferguson/Ailsa and John G. Kincaid, all of which are part of British Shipbuilders. The men in those organisations face severe problems. Recent proposals from British Shipbuilders called for about 2,100 job cuts in the next 12 months. If that proposal is put into practice, there will be economic and social disaster in Greenock and Port Glasgow and male unemployment will increase to above 45 per cent.
I remind the House that shipbuilding is important on three levels. It is important at the local community level. In other words, it is important to the communities in which the shipyards are situated, for reasons bat are self-evident and need not be outlined. Shipbuilding is important to other industries and communities, which are often far removed from our maritime communities. British Steel benefits enormously from orders placed by British Shipbuilders, and the electronics and marine equipment industries also benefit from British Shipbuilders. In 1981, British Shipbuilders placed about £580 million of orders for purchases with other companies. Of those orders, 94 per cent. were placed with United Kingdom companies. Of course, shipbuilding is very important at a national level, in terms of supporting our maritime defence requirements and our merchant shipping industry. Shipbuilding is the other side of the maritime coin to shipping. Therefore, on those three levels it is very important.
The Secretary of State for Trade and Industry said that the Opposition should be prepared to sing the praises of British industry, and I am happy to do so. Indeed, I can cite an example, which is a piece of Scottish craftsmanship. I refer to the Iolair, an emergency support 284 vessel built by Scott Lithgow in my constituency. Iolair is Gaelic for eagle, and that is a fitting description of the role that that emergency support vessel plays in the North sea.
That semi-submersible vessel carries out a wide range of functions including scheduled and unscheduled maintenance and inspection of platforms and pipelines. It forms a base for more specialised operations, first aid in emergencies, fire-fighting duties and support and capability for very deep diving by a full saturation diving team. The vessel has four decks and a complement of 224 men. It has four main spaces for generating machinery, workshop facilities, a saturation diving complex and accommodation. There is no doubt that the Iolair is a world beater in advanced maritime technology.
A similar vessel was built for Shell in a Scandinavian yard. It took longer to build and, unlike the Iolair, has experienced considerable technical difficulties on station. The Iolair has recently been depicted on a postage stamp within the theme of works of human genius. That is a deserved honour for the men who built such a technologically advanced craft.
There is a way forward for the shipbuilding industry. There are two main factors shaping this view—first, the predicted increase in North sea activity and, secondly, the fact that the shipbuilding industry, which historically is a cyclical industry, must have bottomed out. Many maritime experts are now saying that an upsurge in activity within the next few years can be almost guaranteed. My local district council of Inverclyde has produced a document arguing that case, and I commend it to the House.
We must emphasise the motto "Buy British and sail British". British shipowners must be persuaded, by financial incentive, to buy British—that is, they must place their orders in domestic yards. They should also sail British and should keep their ships under the British flag and crew them with British seamen. We must encourage the development of an enhanced scrap and build programme. The Government should bring forward orders for the Navy to help such yards as Scott Lithgow. The Government should order on spec from Cammell Laird and Scott Lithgow two BS8000 semi-submersible oil rigs. I am sure that such vessels could be sold while under construction.
The Gracious Speech outlined a proposal to privatise the royal ordnance factories. That proposal owes more to political dogma that to concern for the public good or the economic and social interests of those working in the ROFs or living in the surrounding communities. The ROFs have a long history of service in supplying arms and equipment to the British armed forces. It cannot be said that they are a burden on the public purse. They employ 20,000 highly efficient and skilled people. A good number of my constituents work in the ROF at Bishopton, and are thoroughly disillusioned with what they believe to be the actions of an English Tory Government.
There is no sensible reason for privatising the ROFs. A previous Tory Government, on the basis of the Mallabar report published in 1971, decided to leave them within the public sector under a trading fund. They should remain that way in the interests of the public, the ROF work force and the surrounding communities.
Less than 10 per cent. of the voters in Greenock and Port Glasgow voted Conservative at the general election. That is understandable, given the industrial blight that many have suffered in the beautiful setting of the Firth of Clyde. It may be that the stark contrast between that 285 beautiful setting and the drastic economic and social circumstances of those living in Greenock and Port Glasgow will be lessened if and when Scotland has its own Parliament.
§ 11.5 am
§ Mr. Tim Eggar (Enfield, North)
I was among the last three hon. Members to make their maiden speeches in 1979. I must congratulate the hon. Member for Greenock and Port Glasgow (Dr. Godman) on his speech. It is never easy to address the House at the best of times, but to do so so ably and so soon after arriving here is a considerable achievement. I already have at least two connections with the hon. Gentleman. I examined the plans for the Iolair, to which he referred, and received favourable comments from those who ordered the vessel about the standard of work carried out in the hon. Gentleman's constituency. I suspect that the hon. Gentleman and I will get to know each other somewhat better because I am the only Conservative Member with a royal ordnance factory in his constituency. We may well put opposing points of view when the matter comes before the House.
The House will be grateful to the hon. Gentleman for his kind remarks about Dr. Dickson Mabon. I recognise the feeling in his constituency and within his party about Dr. Mabon, but that gentleman was highly regarded within the House. He was kind to me on a number of occasions and I learnt a great deal from him. The hon. Gentleman has a hard act to follow.
I, like other hon. Members, welcome the amalgamation of the Departments of Trade and Industry, which is a long overdue step. I am slightly concerned that the integration will not be complete. There has already been an announcement that the Department is to have two permanent secretaries of equal standing, and I am concerned that that is a sign that there is a danger that the integration might be cosmetic rather than complete. I would not like the integration to be only at the top of the management tree rather than right the way down to the roots.
The most important part of the Gracious Speech was the way in which it made a strong commitment to improving the efficiency and effectiveness of the public sector, while at the same time making it absolutely clear that the present level of provision for the young, sick, elderly and disadvantaged must be maintained. There was an implied acceptance of the current public expenditure levels. When we set the current level and recognise the uncertainty for economic growth, it is more important than ever that we seek to improve efficiency and effectiveness in the public sector.
Despite the reduction in civil service numbers during the last Parliament and the improvement in departmental monitoring, there is room for considerable improvement. It is interesting to note that during the election campaign every one of the employees of nationalised industries to whom I spoke admitted that there was room for improvement in the efficiency of his industry. That is one indicator—the human indicator, the acceptance by the employees that there can be improvements. The statistics show that during the period of the last Government until November 1982 the increase in the retail price index in the cost of components from the nationalised industries was double the increase of private sector components in the 286 RPI. In other words, if the public sector had managed to match the private sector the rate of inflation would be considerably lower today.
The task of improving the efficiency of the public sector is considerable. There is no simple answer and no easy way. We need a co-ordinated and coherent approach on at least three fronts. First, there must be an increased commitment to increasing competition with the various public sector entities. Public competition policy must be offensive and not defensive. It is for instance difficult to understand why we can have only one private sector competitor with British Telecom. Why must it be limited to Mercury? There is no justification for continuing the monopoly of British Gas showrooms. Action must be taken rapidly.
Competition policy encompasses not only what the House traditionally understands as competition policy—monopoly legislation, and so on—but a definite decision to increase the obligation on the public sector to contract out to the private sector. I should like to see an obligation put on all public sector entities to go out to tender on all areas of services that the public sector offers. The only area that I would exempt from that obligation is policy formulation.
Secondly, alongside an active competition policy must go a firm commitment to the introduction of private capital within the public sector. Apart from the political arguments—I will not seek to deploy them today—the economic arguments for privatisation are formidable. They are best summarised by Mr. Richard Pryke of Liverpool university who used to be one of the foremost believers in nationalisation. He wrote in a recent article:The most likely explanation for the poor performance of public enterprises, is that they are in public ownership. What public ownership does is to eliminate the threat of takeover and alternatively of bankruptcy, and the need which all private industries have from time to time to raise money from the market.In other words, within the nationalised industry sector there are none of the natural stimuli which the private sector accepts as part of its everyday work and operation.
Privatisation is an ugly word and has also become a blanket word. It can cover many different forms of introduction of private capital. It can cover the outright sale to other companies of state assets—for example. Wytch farm. It can cover the flotation of companies—for example, Britoil. It can cover managements buy-ups and employee buy-ups — the National Freight Corporation was the best example. There may be — I hope that the Government will be working on this—a number of areas where the public and private sectors can co-operate in what would then be private sector joint venture companies. No one form of privatisation is right for every single case. Everything must be considered individually. But for the next five years the onus must be on the sponsoring Department to show why the various industries which it sponsors cannot be privatised in one way or another. The presumption must be that there should be an introduction of private capital.
I believe that one of the greatest unrealised costs of the nationalised industries is what one would call single-stream decision taking. If a nationalised industry in its monopoly position takes a wrong decision no other firm in that area of activity can balance out that wrong decision. The cost to the nation of a wrong decision by a nationalised industry is formidable. Particularly within the energy sector, I should like to move towards regional companies, 287 regional distribution and regional generation—regional generation of electricity and regional distribution for the gas industry. There are many advantages in having decentralised decision-taking. I recognise that if we followed that route we might have regional and, I hope, privatised monopolies rather than the present nationalised industry structure. I recognise that the result would probably be the need for regulation, at least in the short term, until we can get competitive pressures involved. I strongly believe that regulation of regional monopolies is preferable to the present position.
There are however a few areas where with the best will in the world it is difficult to conceive of introducing private capital. In those areas we must place increased stress on the appointment of top-quality senior management. We must ensure that, in addition to the EFLs, proper financial performance targets and service performance targets are provided by Departments. The EFLs, while effective, are a somewhat blunt instrument and we need to concentrate in particular on service targets. In the few cases where we cannot introduce private capital our aim should be to try as far as possible to recreate private sector pressures and conflicts so that, within that small area of the public sector that cannot be privatised, we stimulate the ethos that guides the best private sector companies.
Finally, our commitment to privatisation which is spelt out in the Gracious Speech is not so much a matter of political policy as of economic necessity. Unless our public sector is performing well our industry cannot hope to compete with the best in the world. Nor can this or any other Government hope to reduce taxes significantly, given that we are committed now to a level of public expenditure around the current figure. The problems have been diagnosed and the solutions have been identified. It will still require a considerable act of courage and radical action by the Government to carry through the type of reforms that are essential if we are to make the public sector competitive.
§ Mr. Ian Wrigglesworth (Stockton, South)
I do not wish to follow the hon. Member for Enfield, North (Mr. Eggar) in his concentration on the public sector. The public sector is an important part of the economy and I should like to study in greater detail some of the things that he said because they were very interesting, but I think that the hon. Gentleman over-emphasises the importance of the public sector and is more critical of it than is probably justified.
I should like to join the hon. Gentleman in congratulating the hon. Member for Greenock and Port Glasgow (Dr. Godman) on his maiden speech. The hon. Gentleman spoke eloquently, with feeling and experience of his area and of the industries in it. I am sure that we all look forward to hearing more from him about his constituency and about the industries that he obviously knows so well. I should like also to thank him for the tribute that he paid to my former colleague, Dr. Dickson Mabon, whom hon. Members knew as an entertaining and kindly Member. He was well respected on both sides of the House, and I am grateful to the hon. Member for Greenock and Port Glasgow for that tribute.
I shall discuss the Government's industrial policy and look ahead to the way in which it is likely to develop in the new Parliament. I welcome the amalgamation of the Departments of Trade and Industry. I hope that the new 288 Department will lead to the better co-ordination of industrial policy and the better treatment of industry. I share the anxiety that two permanent secretaries remain. Other Departments, notably the Treasury, have two permanent secretaries, but I hope that this does not mean that the two separate offices will operate independently and continue with no change. I hope that the amalgamation will go further. I agree with the hon. Member for Arundel (Mr. Marshall) about that.
In our manifesto we said that it was important for all areas of Government policy, including health and social security and defence, to take into account the interests of British industry when formulating their policies. The new regulations for the payment of sick pay had an impact upon industry, particularly small businesses. It is not enough for the Industry Department, amalgamated with the Department of Trade, to co-ordinate its responsibilities better if damage is caused to industry because other Departments introduce regulations and legislation which inhibit the growth and success of industry.
I hope that at the centre of Government top priority is being given to industry's wealth-creating interests I hope that a Cabinet committee, preferably chaired by the Prime Minister, will ensure that all Departments put industry first and that industry's interests are taken into account in everything that the Departments do. If a more powerful Department leads to that happening within the Government machine, it is to be welcomed.
We will be critical of Government actions which we believe to be wrong. But for too long no consensus on industrial and economic policies has existed between the parties. We hope for a greater consensus and I therefore regret that the new Secretary of State for Trade and Industry seems to find it difficult to throw off his old role of chairman of the Conservative party. He made partisan attacks on the official Opposition that are helpful to no one in industry or trade. It would be better if the right hon. Gentleman concentrated on industry's problems, the opportunities available and the ways in which the Government can help. I hope that the Government will seek to build a consensus. We shall do all that we can to help.
During the election campaign I was happy to congratulate the Government on some of their actions in the past four years. I agree with the Conservative party manifesto reference to new technologies. It calls for partnership in industry, the development of the fifth generation of computers, recommended by the Alvey committee, the encouragement of science parks and the transfer of technology from the universities to industry. It refers to help through public purchasing — a policy which the Opposition advocated for many years—as an arm of the development of industrial policy. My colleagues in the Social Democratic party support such partnership proposals. We also support the Government's small business policy. We should like them to go further, but it is laudable and has done a great deal to help small and new businesses.
What is missing from the manifesto, and what was missing from the Secretary of State's speech, was any explanation of the Government's intentions for older industries. There is no sign that the Government intend to work in partnership with existing industries, particularly those that are in difficulties and decline, in the same way as they wish to work in partnership with the new industries. I applaud the Government's willingness to 289 work in partnership for the development of new industries, but I hope that soon the Government will develop a strategy for helping industries that are not in the bright new "go-go" sectors such as information technology and electronics. Such industries are vital and we want to encourage the Government to do all that they can to support them, but it is equally important to work out a strategy for industries such as steel and shipbuilding, which form the backbone of many parts of the country and of the economy, so that they do not become even more the ping-pong balls of the party political battle.
We welcome the Government's efforts to break down monopolies. Our enthusiasm for breaking the telecommunications monopoly has grown. That has brought about a new air of activity and competitiveness in BT. I worked in the Post Office for a number of years before coming to the House so I know the organisation well. Government action has brought about a new spirit in BT and new services for the customer which would not have come without breaking the monopoly. I support that movement by the Government and hope that it will be extended.
The Government are going further and propose to denationalise BT. I question whether that is sensible and worth while. BT will continue to be the major supplier of telecommunications services for the foreseeable future. There is no alternative and the same sort of situation applies throughout the world. About 85 per cent. of our telecommunications services will continue to be supplied by that corporation. If we denationalise we must put something in the place of public control because of its domination of the market.
What are we to do? We are to create another quango. The Government say that they are opposed to that, but they intend to establish another quango to regulate telecommunications. A network of Government regulations will apply to the industry. One must question whether that is an advantage over the control of BT remaining in the public sector as it is now, and whether the whole performance of selling off 51 per cent. of BT shares will be worth it.
§ Mr. Bowen Wells (Hertford and Stortford)
Does the hon. Gentleman agree that one of the great advantages of taking BT out of the public sector is that it would no longer be subject to public sector borrowing requirement restrictions and it would therefore be able to expand in a more vigorous and commercially sensible way?
§ Mr. Wrigglesworth
Before the last election the hon. Gentleman's Administration proposed Busby bonds, through which private capital could be put into the corporation. We wanted that principle to be extended to other public sector organisations to bring the pressures of private capital to other industries. However, the Treasury killed the proposal stone dead. The hon. Member for Hertford and Stortford (Mr. Wells) should be campaigning for capital put into public sector industries to be taken out of the PSBR. That is the solution. If we always include public sector capital in the PSBR, with all its constraints, investment in some of our fundamental industries will continue to be restricted in a damaging way.
In a moment I shall explain the programme that we think necessary to help the economy grow and to create jobs. It involves investment in some of our public sector industries outside the PSBR.
290 I hope that BT will not become—as the British Steel Corporation has become in the past 30 years, being deeply damaged as a result—a political football. I take BT as an example; I cannot refer to all the proposals the Government are bringing forward for denationalisation. BT above all is the core of the development of many new technologies and services to British industry. If it becomes the subject of repeated nationalisation and denationalisation over the next 30 years, not only will it be ruined, because of the uncertainty that will have been created, but many other industries will be damaged because, as I say, it is such an important core industry for the rest of the economy.
I make the plea which my party and our Liberal colleagues made during and before the election. We must get away from sterile arguments about nationalisation and denationalisation and concentrate—as the hon. Member for Enfield, North did to some extent—on how we can make our industries more efficient, more effective and more productive, so creating more wealth, be they in the private or public sector.
I hope that the Government will continue to support small businesses because it is in that area that one of our major hopes lies for employment in the future. Unfortunately, too many small businesses have found themselves in considerable difficulty in the past four years, and there have been too many bankruptcies. I hope that a change in the Government's general economic policies will reverse that trend, and there are certain steps that the Government could take to help with the growth of new and small businesses.
For instance, we support the loan guarantee scheme that the Government have introduced but believe that the ceiling should be extended to £150,000. The Government should also look into the administration of the scheme by the banks. On Teesside we have an excellent small business club. Over the years I have had close relations with the members, who have had a considerable impact on the thinking of Labour and Conservative Governments.
It has been pointed out to me by them and by others who have come to me with individual cases that there is tremendous variation in the way in which the banks are administering the loan guarantee scheme. Some are helpful, some are unhelpful and some do not understand the rules and regulations. The whole arrangement needs careful examination to ensure that it is working effectively, and a ceiling of £150,000 would improve the effectiveness of the scheme.
We want to see the ceiling of the business start-up scheme increased to £75,000. It is a good scheme, encouraging capital to come into new ventures, and we want to see more of that money—it is the easiest and cleanest form of capital for new businesses, often with fewer strings attached than money from institutions—coming into this sphere, with the ceiling extended.
I hope that the major thrust of Government policy, particularly for the regions, will be in supporting the development and enterprise agencies that are springing up all over the country. In the north-east we had recently the devastating tragedy of the closure of the Consett steelworks. Everybody at that time wondered what on earth would happen to the community in Consett. I do not represent Consett, but the impact of that closure and others, for example, in Hartlepool, on my region generally, was substantial.
291 There is, however, a tremendous success story attached to what has happened in Consett since the steelworks closed. It has been based on the work of the Derwentside Industrial Development Agency Ltd. On Teesside we have the Cleveland enterprise agency and there are similar bodies in other parts of the region, including Darlington and Hartlepool. They perform a tremendous task in developing new jobs and creating new enterprises.
They act as a catalyst, as a root or magnet, for people who want to establish or invest in businesses. They are cost-effective because they operate at local level. They are indigenous, so they are helping to create locally businesses which will not be branch factories and close down or move elsewhere soon after receiving public funds to set them up. They can ensure that the businesses are properly and sympathetically monitored, and they can bring in private venture capital from local institutions, local businesses and local people. That is one way of guaranteeing that the businesses are properly monitored and have the right support as they develop.
We hope that the main thrust of the Government's policies for the development of new businesses and small existing ones will be through development and enterprise agencies at local level. But none of those things will succeed unless the Government accept that what the Secretary of State said at the outset of the debate is untrue and is deeply damaging to British industry.
The right hon. Gentleman said in opening that demand in the economy was adequate. I am sure that many Conservative hon. Members do not believe that, that there is probably not one hon. Member on the Opposition Benches who believes it and that vast areas of British business do not believe it. After all, not only small businesses have been going bankrupt in recent years. So have major industries with masses of capacity available to create products and provide raw materials.
On Teesside, the ICI petrochemical industry has crackers which have not been used for ages. About one half of Monsanto's plant has been closed down for a long time. British Steel Corporation plants throughout the country are working almost at half capacity. All this capacity is lying idle without the demand in the economy to use it. For a Minister to say from the Dispatch Box that demand in the economy is adequate makes one wonder what sort of world he is living in and which business people he is consulting. Demand in the economy is not adequate.
But that does not mean that we can just pour money into the economy and push up demand overnight; the result would be inflation. Supply cannot be turned on just like that. I appeal to the Government, now that they have a clear majority and mandate for the net five years, to relax the monetarist approach they have adopted for the past four years. It is time now for them to get, as we have been advocating for some time, a steady growth of demand in the economy so we can bring some of that capacity back into use and create more new businesses, and so create the jobs that are vital if Britain is to thrive.
Despite what the Secretary of State said about the upturn—it is almost a joke to describe as an upturn what has happened in recent months—industrial output generally, as the Government's economic progress report shows, is down 9½ points since 1979, manufacturing output is down 16 points, construction industry output is down 11½ points and North sea output—the other side of the coin to which the right hon. Member for Monklands, 292 East (Mr. Smith) referred—is up 41 points. That is where the growth has come from, masking the decline in other industries.
The only way we shall overcome that state of affairs is to get demand back into the economy. But all the economic forecasts are pointing in a pessimistic direction, despite the optimism of some Ministers. The London business school is predicting unemployment at over 3 million until 1986; the Cambridge economic policy group gave a horrifying prospect of 4.5 million people unemployed by 1990 on policies at present being pursued; and in my area of Cleveland we have the prospect, if what they are forecasting comes about, of 30 per cent. unemployment by that date unless policies are changed.
Demand will not be created from nowhere. The Government must do something to stimulate it, but I hope that they will not look for tax cuts in their efforts to stimulate the economy. Already we can see what has happened as a result of consumer spending going up; imports are being sucked in, creating jobs for people overseas rather than for people in this country. We want to see Government investment in the public sector, particularly in the construction industry. One in eight of our unemployed people are from the construction sector. The quickest way to put people back to work and stimulate the economy is to invest in public sector programmes that stimulate the construction industry. They are high in labour content and low in import content. Our raw materials should be used to build roads, electrify railways, and build hospitals, schools and houses. The Government could ensure that that happened if they wished to. It would not create inflation. It would create jobs. It would not give rise to balance of payments problems.
I urge the Government to consider the programme that we put forward during the general election and increase demand in the economy so that all that we want to see happen in small businesses and the new technology can be reinforced by growth in some of the major nationalised industries which, despite our hope for the new technologies, remain as part of the backbone of the economy.
§ Mr. Roger King (Birmingham, Northfield)
I am grateful for having been called this morning because one of the first of the new Members to make a maiden speech yesterday was my hon. Friend the Member for Derbyshire, South (Mrs. Currie). She is a constituent of mine and I should not have liked to return to Northfield without having spoken within a couple of days of her speech.
Northfield is on the outer suburbs of Birmingham. I welcome the Government's policy of abolishing the metropolitan county councils. For too long Birmingham has been immersed in this great black country conglomerate of divided authorities. It has lost its identity and, if nothing else, we hope to resume out mantle of being Great Britain's second great city within the next few years.
The House will remember the constituency's late Member Mr. Jocelyn Cadbury who, unfortunately, passed away about 12 months ago. He blazed the Conservative trail in Northfield that constitutents still remember well. No problem was too great for him and he discharged diligently his responsibilities to his constituents.
At the by-election in October Mr. John Spellar was returned to the House as a Labour Member. During the 293 short time that he represented Northfield he discharged his duties competently. I had the opportunity to meet him on the hustings only, but I was aware of his talent and of his adherence to his party's policies. We managed to debate distinctly and succinctly, each putting forward our point of view.
The constituency contains the Austin-Rover plant at Longbridge. The factory employs some 10,000 people, about half of whom live in the constituency. It is one of British Leyland's biggest factories.
I believe that I was returned as the Conservative Member because people recognised the work that the Government had done to revitalise the car industry and the evident dangers of our withdrawing from the European Community which would have led to a reduction in demand for the vehicles being produced. One third of British Leyland's output goes to Community countries. One has only to see the number of Austin Metros with left-hand drive leaving the assembly line to realise the penetration that that model has achieved within the Community and appreciate the danger of withdrawing from Europe.
British Leyland is building up a relationship with Honda, one of its Japanese competitors, and they are now becoming partners. That has already been evidenced by the Triumph Acclaim, which ranks fifth in the British car hit parade. It will no doubt continue to play an important part in British Leyland's output. There are greater things on the horizon. There is the forthcoming design cooperation with Honda on the so-called BL-Honda executive car. I look forward to Longbridge being chosen as the home for this new car. A large number of former BL employees have expressed a desire to return to the job of building cars which they know so well.
Many of us in the west midlands have looked around for new industries. It is an area of a thousand and one trades and we welcome the opportunity that technological advance will bring to introduce sunrise industries. However, I believe that some of our old-established companies still have a vital part to play. The car industry must continue to develop. It is the engine with which we shall pull the coach of our industry. About 700 subcontractors, not just in the west midlands but throughout the country, depend upon a vibrant and dynamic car industry. In the past small companies have relied upon the long production run of the tiniest of components to offset the cost of developing, introducing and investing in new plant and equipment. They in turn, having amortised their costs through the long production runs that the car industry has given, have then been able to embark upon other products and developments to produce goods which are not just tied to the car industry but which are wanted in the United Kingdom and overseas. We must maintain the momentum that is building up within our car industry.
I am delighted to inform the House that at Longbridge, at least, there is overtime and Saturday working to keep pace with the demand for the product. That had not been thought possible a few years ago. Overtime and Saturday working were taken for granted during the late 1950s and 1960s, but had slipped away during the past 10 years or so. The work force can now rely on some overtime to keep up with demand.
We seek to provide not just the cyclical boom that the industry is beginning to enjoy because of the registration 294 number plate change on 1 August, but momentum throughout the year. We do not want to return to the old stop-go principle used by successive Governments as an economic regulator to keep the economy on a straight line.
I hope that the reference in the Gracious Speech to improving the prosperity and employment prospects of our people will lead to the Government considering seriously the 10 per cent. special tax which the motor industry alone has to bear. We see no reason why we should be singled out in that way. A case for it could perhaps have been made two or three years ago when BL's products were not competitive and when any taxation reduction would merely have sucked in vast imports. That is no longer the case. BL's products are first rate and competitive and are finding greater acceptance worldwide. There are exciting products on the stocks at the moment which will be in production within the next 12 months or so. We shall then have a complete model range and will be able to face the competition head on. We look forward to fiscal encouragement to bring that about.
At Longbridge we make three or four car models, but we make engine transmissions for a wider range, assembled at other factories. Therefore, any encouragement by the Government to stimulate production will almost immediately be reflected in job opportunities and prospects in Northfield.
There are exciting developments on the horizon in the motor trade. I said that we in the west midlands are looking for sunrise industries. We already have one on our doorstep. Making motor cars is no longer a simple process of metal bashing; it is advanced casting technology. One can take an engine that weighs 120 lb and halve the weight of it, thanks to advanced casting computerised techniques. It is about electronics, computerisation of the car ignition system, monitoring and so on. It is about combustion technology. Some of the technical improvements on which British Leyland is embarking and now making on experimental cars lead us to expect great and dramatic improvements over the next 10 years or so.
If only we could produce the car of tomorrow in the next two years or so, many of the problems in the west midlands would be solved. It will take time, but I am sure that we want to support the motor industry in its efforts to re-establish itself as a dynamic organisation and a major exporter.
The other aspect of the Gracious Speech that concerns much of our industry, particularly BL, is privatisation. It concerns my constituents immensely. They are worried that privatisation may lead them back to the dark days of the 1960s, when the industry was used by the Government as a stop-go indicator of production, and when the tap was turned off just as production was improving because the country had run into a balance of payments deficit. They are worried that privatisation means exactly that—that somebody private will buy the business and perhaps start to asset-strip. I loathe and detest the word "privatisation". We are talking about denationalisation which, in the eyes of many of my constituents, is totally different from privatisation. The policy of denationalisation—handing back business to the public from the state sector and getting the state off the people's backs—is a recipe for certain success, but I hope that in any denationalisation process that we embark upon the opportunity will be given for the average working man to take part in the investment and management of the company that is being denationalised.
295 We as a party and as a Government have set out, embarked upon and carried out a great policy of encouraging people to become involved in a property-owning democracy. We can go a step further and introduce an era of the business-owning democracy. I look forward ultimately, taking it to its logical conclusion, to the betting shops in the high street being swept away and to high street stock shops taking their place so that if someone in his lunch break wants a flutter on British Rail inter-city shares he can have one. Perhaps that is taking it to too absurd a level, but the opportunity of bringing the business world out of the closet into the high street and into an area where the average man can comprehend what finance and responsibility in business life are all about is to be welcomed.
Birmingham is a city of a thousand and one trades, but alas only about a dozen technologies. We need to invest heavily in training schemes to bring people into technology. Some of our resources are slim, not befitting a city that has played such an important part in our industrial past. I look forward to the Government taking every opportunity and leaving no stone unturned in investing in educational programmes, particularly in the advanced technologies.
We should bear it in mind that new investment costs a lot of money. When companies have produced new products, they want a guaranteed market for them. There is a growing concern in the motor industry that many of the products that it develops, which take a long time to develop, are being copied by other countries. That is called counterfeiting. We take a grave view when people counterfeit the currency of the realm. Just such a bad offence is to counterfeit products that our ingenuity has devised and that our money and resources have backed. That growing trend in some of the emerging far eastern countries is a danger that we should look at closely. We should impose upon the countries that export products to this country that are copies of products made here or handle them in any part of the world the strongest penalties for what is a destroyer of jobs and investment.
We are on the verge of a revitalisation of the Birmingham area and the west midlands. I look forward to the motor industry in particular playing its part in developing and bringing prosperity to the area and in its train sucking in thousands of small companies and businesses, which, if they had all the money in the world, still need the major products of this country with which to bring their production into line.
§ Mr. Dick Douglas (Dunfermline, West)
It is my pleasure to congratulate the hon. Member for Birmingham, Northfield (Mr. King) on his maiden speech, which he made with assurance. He showed a knowledge of his constituency and its products, which are the envy of both sides of the House. He referred with feeling and understanding to two previous Members who represented his constituency. It behoves us all, particularly Opposition Members, to think how lucky we are to be returned to the House of Commons and to remember the difficulties that former hon. Members who stood unsuccessfully in the election will have in securing employment in the difficult circumstances that prevail outside. I congratulate the hon. Gentleman. I am sure that the House will listen with interest to his interventions in subsequent debates.
296 The speech of my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) was in sharp contrast to that of the hon. Gentleman. I share my hon. Friend's interest in shipbuilding. I also share his interest in that I, too, married a lass from Govan. I was born there, and married a lass from there. My hon. Friend referred to the inter-relationship between industries and spoke of the Iolair. One of the important lessons that should be learned by the Government is that the order—in my previous incarnation I played a part in getting it—would not have been forthcoming had we not had a British National Oil Corporation to take a stake in the vessel. As my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said, the abandonment of BNOC, in the strict terms of a public oil corporation, is detrimental not only to our offshore oil production and control over it but to the stake that British industry might have in relation to North Sea enterprises overall.
Perhaps it is trite to say this, but the general election is past and we have to take note of the fact that the Prime Minister has said that the next general election campaign has started. As to industry and private enterprise, we must ask ourselves what is happening to the style of British society. It is arguable that we have become more efficient in some industries but it is extremely doubtful that Britain has become a better or more compassionate place in which to live during the past four years.
The Prime Minister's style has been abrasive, and nothing better reveals the character of that and the new Tory party than the "Panorama" programme that was shown on 13 June. I wish to quote from some of the statements made in that programme. Geoffrey Smith of The Times said:I think in many respects the Conservatives have got away with murder in this campaign.If that is the style that is to be perpetuated in the coming years, then God help our industry, commerce and society. The ironic thing about that programme and about the whole campaign was that the media were being conned. I regret that the Secretary of State for Trade and Industry has departed. During the same programme Mr. Sheldon of the New Statesman said to the Prime Minister:I'd like to address it to you, Prime Minister. In the light of some reports in the past couple of days would you like to take this opportunity of saying to me, doctors, teachers or factory workers that appear in Conservative election broadcasts will be real doctors, teachers and factory workers in their real places of work and not actors appearing in hospital wards school classrooms or factories that have closed down in the last four years?The Prime Minister replied:I think the chairman will deal with that. I am very interested that this is your top priority question.The Secretary of State for Trade and Industry, who was at that time the chairman of the Conservative party, replied:Yes. May I start by saying don't believe everything you read in the newspapers;"—we in the Labour party know that.—there were no actors involved; there will be no actors involved in any of our party political broadcasts and anybody you see carrying out the function or working at a lathe or working in a hospital will be a person doing just that.Mr. Cockerell raised the matter of the voice over. He said:Although this man looks like a clean-cut reporter or even a politician, the actors' directory, Spotlight, reveals the presenter of the Conservatives' party political broadcast as one Jack Mackenzie, professional actor.297 So much for veracity. Later on the Conservative voice of doom on the overplay came from the actor Anthony Quayle. That is the style that will be perpetuated if the next general election campaign has begun. The Conservative party spent £5 million on the election, which was much more than was spent by the Labour party or any other. It must now pay off some people. It believes in helping its friends. Who are their friends as to privatisation? Who is likely to get the benefit from the sale of the oil assets of British Gas? Will it be the nation? Do the nation want or desire that? If that issue had been put during the election, the nation would have turned it down. Who will get the benefit of the dismantling of British Telecom? The Conservative party manifesto says:We shall transfer more state-owned businesses to independent ownership. Our aim is that British Telecom—where we will sell 51 per cent of the shares to the private sector — Rolls Royce, British Airways, and substantial parts of British Steel, of British Shipbuilders and of British Leyland, and as many as possible of Britain's airports, shall become private sector companies.How do the Secretary of State for Trade and Industry and the Government propose to assist British Shipbuilders? There is only one way in which British Shipbuilders—I declare an interest in this matter—could become attractive to the private sector and that is through the naval yards. Is it proposed to dismantle British Shipbuilders by flogging off the naval yards that are subvented by the state through defence orders and leave the rest to rot?
§ Mr. Douglas
The hon. Gentleman said yes. I trust that he will identify himself clearly, as my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) and others have a distinct interest in this matter. Is that what the Tories say to a maritime nation? Will the only part of our maritime strategy relate to defence, which will go to the private sector? That is a startling and revealing probability of which we should beware in the coming months. Not only have we flogged the assets but we are left with an immense problem. I trust that the Secretary of State for Energy will stand well back from being tempted into a conflict with the miners. The Monopolies Commission report, which few hon. Members at this juncture will have digested, is an interesting document. I warn the Secretary of State for Energy that the best miners are miners' sons. People cannot be forced to go down the pit on an interpretation on the industry's future in narrow balance sheet terms. I represent many miners. The sociology of mining communities must be considered. That is an important consideration. If the Secretary of State is tempted—I hope that he will resist it—to pay back old scores, he will cause much damage to the country's long-term energy viability. The most important function of Government in terms of energy is to secure supplies. It may be necessary to do that almost at all costs. We need look no further than OPEC if we wish to undermine the Tory philosophy of a free market. It is absolute nonsense to suggest that there is a free market in oil. The former Secretary of State for Energy scurried around the middle east talking not with OPEC but with the individual state representatives, trying to underpin the oil price. There was no thought of a free market at that time. Why did he do that? First, because the North sea would 298 have been very vulnerable, and, secondly, because there would have been an enormous international banking collapse if the oil price had collapsed to what the "free market" might have determined. We must have a managed market and take a long-term view.
Furthermore, the House must concern itself in spheres other than industry that have been promoted by the Government. I quote from page 28 of the Tory manifesto:We welcome the growth in private health insurance in recent years. This has both made more health care available"—what a joke—and lightened the burden on the National Health Service particularly for non-urgent operations.There may be a mandate theory for it in parts of the United Kingdom, but there is no mandate for it in Scotland. We have resisted the blandishments of private medicine. The Health Service in Scotland is operated because we have devolution on a different basis. No one can suggest that the electorate in Scotland voted for a two-tier Health Service in which access is on the basis of greed. There will be considerable disquiet if that takes place in Scotland. The Scottish people voted for the Health Service that has been built up since the 1940s on the basis of need, which requires substantial public investment. There have appeared in the press in my constituency during the past few weeks great notices expressing public disquiet about the lengthening queues for hospital beds.
It may not have escaped hon. Members' attention that today is the anniversary of Bannockburn. Therefore, I wish to develop the theme of the position of the Conservative party in Scotland. The Tories have not had a majority of seats in Scotland since 1955 and it can be argued that there is a long-term secular trend of opinion in Scotland which must be recognised.
The case for devolution and a Scottish assembly would be weakened if a Labour Government were in power—though they would concede the case — because they would operate an effective regional policy. This Government have abandoned regional policy, so there is no countervailing power through the Secretary of State for Scotland.
I am sorry that the Secretary of State for Scotland is not here. All that we have had from him is pusillanimous posturing. He has strengthened the case for devolution because of the absence of an effective countervailing power in the Cabinet and elsewhere.
We require a forum for debate in Scotland where the Government's policy has to be defended in the area where people feel its effects. Such a forum could involve both sides of industry and it would help us to grow our own entrepreneurs. It would benefit not only Scotland, but the whole United Kingdom. There is an overwhelming argument for it in terms of the good government of Scotland and the United Kingdom.
If the next general election campaign has begun, we must campaign forcefully for such a forum. I have to tell my right hon. and hon. Friends that it may involve making a concession on the number of Scottish Members in the House and on the position of the Secretary of State for Scotland. However, if, because of the Government's obduracy, our case is not conceded and we continue with the present state of affairs, the people of Scotland will be scunnered by Westminster and Whitehall misgovernment.
§ Mr. Deputy Speaker (Mr. Paul Dean)
Order. Before I call the next speaker, it may be helpful if I tell the House 299 that the wind-up speeches are expected to begin at about 2 o'clock. Many hon. Members, including some maiden speakers, still wish to take part in the debate. If speeches are brief, fewer hon. Members will be disappointed.
§ Mr. Hal Miller (Bromsgrove)
I shall heed your advice, Mr. Deputy Speaker, and not attempt to rebut fully the comments of the hon. Member for Dunfermline, West (Mr. Douglas), although he stretched the credulity of the House. The hon. Gentleman was certainly not stretching his recollection when he suggested that the Conservatives manipulated the media and the media manipulated the public. Has he forgotten Sir Harold Wilson?
I also do not understand why the hon. Gentleman seeks to rerun the devolution debate. He is on dangerous ground and his comments were not sufficiently temperate or considered. He will have caused great offence to many United Kingdom Members.
§ Mr. Miller
I remind the hon. Gentleman that Conservative Members have frequently had to endure Labour Governments that were backed largely by Welsh and Scottish Members. Opposition Members should remember that we shall have a lot to say if they start to hammer that anvil.
In view of the need for us to be brief, I shall return to the subject of the debate. I congratulate the Government on merging the Departments of Trade and Industry. I have long advocated such a move because I did not see how one could separate trade from competition, the market and the attempt to satisfy the consumer about which my right hon. Friend the Secretary of State spoke. I congratulate my right hon. Friend on his appointment. In view of his previous experience in the Department of Trade, it gave many of us great pleasure.
My right hon. Friend's speech was not a piece of political propaganda, as suggested by the Opposition. He made some important points about the need to stimulate competition and to preserve a free and open trading system. He also recognised that much of our import requirement will still have to be provided by our manufacturing industry and he referred to the importance of research.
We in the west midlands welcome competition and ask only that it be fair and equal. I wish that I could share the view of the hon. Member for Dunfermline, West that the Government have abandoned regional policy. The west midlands has suffered for many years from regional policies which, as many studies have shown, have had little beneficial effect on the rest of the country.
A table accompanying the study "Measuring Effects and Costs of Regional Incentives" shows that there has been substantial disinvestment in manufacturing industry in the west midlands since regional incentives were introduced. It is also not apparent that the diversion of investment has led to increased productivity or output.
A report on the second year of the monitoring of enterprise zones shows no evidence that higher output has resulted from the creation of those zones or that there has been much additional investment. Indeed, 75 per cent. of firms and jobs in enterprise zones have come from the same counties in which the zones are situated.
The main inducement for firms setting up in the zones has been a substantial additional public works programme. 300 That has been far more of an attraction than the rates relief and capital allowances that have increased firms' profitability.
I argue that regional policy should be operated by the Secretary of State for the Environment. It is a proper environment responsibility to deal with regional disadvantages, such as lack of communications, from which the west midlands also suffers. There have been pointers in that direction, which is why I welcomed the announcement in March by the previous Secretary of State for the Environment about grants for derelict land clearance in the west midlands. That is the proper role of regional policy and I wish the Secretary of State for Trade and Industry to concentrate on industrial and trade policies.
In view of the lack of time, I shall not read out the many figures that I had proposed to quote in support of my contention that regional policy would be best operated by the Department of the Environment. Instead, I move on to competition policy and trade and industry policy.
As I said, the west midlands welcomes the opportunity to compete, and I am glad to report in support of my hon. Friend the Member for Birmingham, Northfield (Mr. King), whose vigorous speech was much appreciated, that we are beginning to get our act together. It may be belated, but there have been important initiatives, including the formation of the industrial development association, the coming together of local authorities and the role being played by the universities.
We want more from the Government, but we realise our own responsibility to get our own act together and to get our show on the road. Our industries have a part to play, especially in training and research and development, and the public have a part to play when making their purchases.
My right hon. Friend the Secretary of State talked about stimulating competition and the role of free and fair trade. There was an announcement in March that an undertaking had been given by the Spanish Government in view of the "self-evident and grotesque disparities", as the previous Secretary of State for Industry termed them, in our trade in vehicles and vehicle parts with Spain. The Spanish Government said that action would be taken to introduce reduced tariff quotas for some classes of motor vehicles. No such announcement has yet been made in Spain and no such action has been taken.
I must serve notice on my right hon. Friend that it is unlikely that west midland Conservative Members will be prepared to leave the matter there. If the Spanish Government are not prepared to take action, we shall have to return to encouraging our own Government to act to ensure that there is fair trading opportunity. The Prime Minister reported that there had been a slight advantage in our trade in components with Spain but the figures for the calendar year 1982 show that the balance of trade in motor vehicles was £113 million against us, whereas the balance of trade in parts in our favour was £0.4 million. I do not think that I need go any further on that subject.
The Nissan project is a prime example of how an unbalanced regional policy, taken apart from other considerations, can lead to a greater loss of jobs in the west midlands, a loss of more jobs than it could possibly create in south Wales or whatever area may be selected for the project. It is reported that a decision is likely to be announced at the annual general meeting of Nissan, which will be held next week. In April I submitted a paper to the 301 Department in which I observed that if a percentage of local content is inserted in the agreement as one of the conditions of grant, great care will have to be taken about the definition of that percentage. It would be comparatively easy to obtain a high British content on that basis—for example, 60 per cent.—without employing one British component in the vehicle. Specific components should be specified in the agreement if the diversion and loss of jobs to which I have referred is to be avoided and if serious damage is not to be done to the project mentioned by my hon. Friend the Member for Northfield, the car that is being developed by BL with Honda. In that instance there is an agreement that the British content will be well above 80 per cent. How can that position be maintained if Nissan is allowed to establish itself in the United Kingdom with a much lower British content figure?
We in the west midlands are especially concerned about the framing of some ground rules for competition between the British Steel Corporation and the private sector. It appears from the recent remarks of the chairman of the National Association of Steel Stockholders that there is still publicly financed unfair competition by way of reduction of rebates being carried out by the corporation against firms in the private sector. I am looking to my right hon. Friend to establish clear lines of policy and demarcation of the boundaries and the role of the corporation, which achievement was not secured by his predecessors. I am all in favour of competition between the public and private sectors, but let it be open and fair. Let there be transparency in the transfer pricing inside the nationalised industries in advance of a movement towards a possible sale of shares on the market. It is most important that there should be proper competitive conditions between the two sectors; otherwise we shall be taking away the money of the taxpayer companies to enable the nationalised industries to compete against them with their own taxes, which is intolerable.
There is still a great deal to be done about research. I should like my right hon. Friend to consider whether more research should not be commissioned in firms rather than in Government research establishments. Apparently Britain has an undue preponderance of its research carried out in those establishments. I would rather see it carried out in firms that are nearer to the consumer. I think that they are more likely to be interested in producing the new products that the market requires. I am not convinced that the case has been made for continuing the preponderance of research that is undertaken in Government institutions. Perhaps my right hon. Friend should consider also the time that it takes a private firm to get Government approval for a research project. It has been represented to me that major firms undertaking research in aerospace and other areas of technology find that by the time they have secured Government approval for a research project the market opportunity has been lost.
I renew my welcome of my right hon. Friend's appointment, and I assure him of my support for the lines of policy that he outlined in a stimulating speech.
§ Mr. Derek Fatchett (Leeds, Central)
I welcome the opportunity this morning to make my maiden speech. I recall my hon. Friend the Member for Greenock and Port 302 Glasgow (Dr. Godman) saying that he would adopt the approach of hanging on on the coat-tails of other maiden speeches. I thought that he did a splendid job this morning, and if my performance on this occasion can be anywhere near as worthwhile I shall be quite happy. I share one interest with my hon. Friend. He talked about the royal ordnance factories. In Leeds, many of my constituents are employees of the royal ordnance factory of Barnbow and I share my hon. Friend's firm opposition to privatisation, particularly of that factory.
I shall follow the conventions by saying a few words of tribute to those who have preceded me as Members of this House. I have a particularly difficult task, in that Leeds, Central is one of those acts of wizardry performed by the boundary commissioners, and I follow five Members of Parliament, some of whom are now back in the House, while one or two have unfortunately departed.
Leeds, Central is a new political creation. As I said, it is made up of five constituencies. I shall not bore the House by going through all the names of my predecessors, except to pay tribute in particular to Joe Dean, who is no longer a Member of the House but who worked hard in the community in Leeds and in the House on behalf of the people of Leeds. I am sure that his contribution over the years will be sadly missed. Many people have already told me that they look forward to the time when he is back in the House as a Labour Member of Parliament for Leeds.
I intervene in this debate because I have a primary interest in industry. Also, and above all else, I fear for the future of industry in major cities such as Leeds. Having listened to the speech of the Secretary of State for Trade and Industry this morning, I simply do not agree with others this morning who have said that it was the speech of a chairman of the Conservative party and that it was an election speech. What worries me is, not that it was an election speech, but that it was made by a Secretary of State who seems to have little knowledge or interest in our great industrial cities. I therefore take this opportunity to talk about my own city of Leeds and what has happened to it over the past few years. It might be worthwhile if the Secretary of State were to take the opportunity to visit Leeds and look at some of the realities that are not drawn by Saatchi and Saatchi.
Since 1979, unemployment in our city has more than doubled. The Secretary of State talked about the need for the Labour party to espouse an attitude of working together. Many of my constituents would be delighted to have the opportunity to work, never mind working together. Every major firm in the city, whether in engineering, clothing or textiles, has suffered significant job loss since 1979. Those industries are the life blood of our city. The Conservative party often talks about the need to create wealth, but in west Yorkshire and Leeds we are seeing a rundown of the very industries that are capable of creating wealth for our people.
In an inner city area such as Leeds, Central, unemployment is now as great as one in three, and often one in four. During the election I was told by an old lady who lives in the city centre, "I now note the people who go to work, whereas in the past I used to make a note of those who did not go to work." That is how bad unemployment has become in some parts of the inner city.
For our young people, the situation is increasingly desperate. We are constantly told that there is a need to create real jobs. For the young people the prospect of real jobs in our northern cities is non-existent. They go from 303 one training scheme to a youth employment scheme, then to another without the chance of finding real work and real training. In some parts of the inner city three out of every four school leavers will not find real meaningful employment. The only meaningful activity for them is to go each week to collect the dole money. Otherwise they spend their time in idleness and boredom.
It is interesting to note that since 1945 all Governments have assumed the responsiblity for the economy and for maintaining full employment—that is, until the election of this Government. This Government have abdicated responsibility for the management of the economy. They told us during the election that they had achieved a major triumph in terms of inflation. They can manage the economy when it comes to inflation, but they cannot manage other aspects of the economy. All other aspects of the economy are not the responsibility of this Government. The Gracious Speech and the Prime Minister's speech opening the debate are a reflection of that ideology and that dogma. What the Government said then, and the path that they have charted for the next five years, show that they will not accept responsibility for managing our industries and economy. In cities such as Leeds we can look forward not merely to more of what we have had in the past few years but to a depth of recession and despair that we have not known since the 1930s.
There is no reason to believe that unemployment will fall. On the contrary, there is every reason to believe that unemployment will continue to rise, and to rise sharply in the northern industrial cities. I noticed that the Secretary of State spoke of housing, but he did not speak about the way that housebuilding under the Government has declined and how, in particular, public sector house building has declined as a result of this Government's policies and their dislike and distaste for local government.
A number of hon. Members have said today that we could make real inroads into unemployment if we were prepared to allow the housing and construction industries to play a real part.
I offer not a novel but a practical suggestion. Leeds has a real and growing demand for council houses and a demand for older houses to be modernised, renovated and repaired. At the same time we have thousands of unemployed skilled building trade workers. With a city council willing to assume those responsibilities and take on the task, it does not need much of a flight of fancy or genius to realise that it is possible to bring together the social demand for houses and the needs and skills of the building trade workers. We could satisfy both sides of the equation. Instead of paying skilled building trade workers to remain unemployed we could give them money to exercise their skills and make a contribution to the community. Instead of spending public money to keep people idle we could spend that money on housing, and satisfy the needs of the young and the elderly.
This Government have always turned their back on such initiatives. They have always said that they are not prepared to trust local authorities, and are content to leave thousands of building trade workers wasting away and not using the skills in which they have been trained. As a result, the country's housing stock deteriorates and the number of unemployed building trade workers grows. The construction industry, like many others, would benefit from a Government that were prepared to assume their responsibilities to manage the economy. The discredited 304 doctrines on market economics that I have heard since I arrived here have never provided the strategy for industry and jobs, and never will.
If we continue on the same path in the future, areas such as those that I represent will suffer greatly over the next five years. It may be the wrong time to make this plea, with a Government and a Conservative party that are somewhat overtaken by the arrogance of an election victory. However, they need to take the course that I have recommended because there are people in the northern cities who are desperate for a change of course and for recognition of the problems that they face. Unless the Government change policies, the 1980s will go down in history as a time when a generation of young people were callously condemned to a life of idleness and some of our great traditional industries fell into terminal decline. My fear for the next few years under this Government is that that nightmare will become a reality.
§ Mr. Bowen Wells (Hertford and Stortford)
I should like to pay the traditional compliments to the hon. Member for Leeds, Central (Mr. Fatchett), who has just made his maiden speech. In my experience it is always difficult to speak well in this Chamber, but he certainly demonstrated his ability in his first speech in the House as well as his confidence and his assurance in putting his views across. He will not be surprised to know, however, that I cannot agree with most of his remarks. Unusually for a maiden speech, his arguments were such that no Conservative Member could possibly agree with them. The hon. Gentleman spoke about the very important issue of unemployment and the problems and difficulties that it poses for our people. However, the British electorate decided that the policies followed by this Government were most likely to cure unemployment quickly, and I sincerely hope that the hon. Gentleman's pessimism is confounded.
However, I would not like to let pass the opportunity of speaking for the first time on behalf of the constituency of Hertford and Stortford without payng a compliment to my predecessor, the former right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith). He was first selected for Hertford and East Hertfordshire in 1938. He served continuously in this Chamber from 1945 until the Dissolution of Parliament this year. He always served the House with great distinction, and was a jewel in the crown of Conservative Members in the almost Mozartian speeches that he made, which always included erudite references to his classical training and to his profession at the bar as a QC. I should like to pay him public tribute for the loyal work and service that he undertook, not only in the House but in his constituency, part of which I now have the honour to represent.
In view of the plea for short speeches I shah be brief, and begin by stating the theme of my speech, which is that one of the principal ways in which we can solve our domestic unemployment difficulties is through the expansion of world trade. There is an unusual opportunity on offer that the Government should grasp if they are to reduce domestic unemployment.
I particularly welcome the reference in the Gracious Speech to pursuing that objective. Her Majesty said:My Government will continue their full support for the Commonwealth. They will play an active and constructive role at the United Nations. They will promote increased co-operation 305 and trade with developing nations. They will maintain a substantial aid programme directed especially at the poorer counties and will encourage the flow of British private investment.That is particularly important and one of the major keys to success in reducing the national problem of unemployment.
I am particularly glad that my right hon. Friend the Member for Hertsmere (Mr. Parkinson) should have assumed the post of Secretary of State for Trade and Industry. He was an outstanding Minister for Trade. He toured the world in company with business men and got them on the inside track of Governments and large overseas industries. He managed to help industry sustain what everybody thought — as he did — was the remarkable export performance of British industry, faced by the serious difficulties of the 1979–81 period. Few people expected British industry to maintain its export lead. It must be remembered that we export more than 30 per cent. of our gross national product. During that period we had a very proud record. The open trading system has not been closed as it was in the 1930s. We are still maintaining a great degree of world trade. To close it and to adopt protectionist measures would bring about the cataclysm of the 1930s. That factor, almost alone, has prevented the deepening of the depression.
We hold an enormous trust and responsibility. We must ensure that unemployment is decreased while the Government are in office, or we shall face serious criticism. The opportunity to do so is within our grasp. Let us examine the difficulties in which our trading partners found themselves during the past four years. Their opportunities to purchase goods from Britain seriously diminished, and we must do something about that. The loss between 1980 and today in the purchasing power of the Third world is about $100 billion. That is a blight on the possible recovery of Britain.
The Third world is also facing increasing unemployment. Although there are more than 30 million unemployed in the OECD countries, which is bad enough, there are 330 million out of work or underemployed in the Third world and 250 million will be added to the labour force in Africa, Asia and Latin America before the year 2000. Although that is an alarming statement, it provides us with an opportunity. Those are the markets that we must command to put our people back in work.
Only two weeks ago in Belgrade, Mrs. Indira Gandhi reminded us that in five years the decline in the growth of incomes in the industrialised countries has meant an overall loss to the world economy of some $2,000 billion — that is not to mention the long-term effects from reduced investment and impairment of future productive capacity or the actual shrinking of incomes in developing countries. She said, "What a tragic waste." Therein lies the opportunity that we must seize. We must try to restore that loss. I am not alone in calling for that and in recognising the difficulties.
The United States is also concerned. Donald Regan, the United States Secretary of the Treasury emphasised that even with a large and affluent market of 250 million people,4 out of every 5 new jobs in US manufacturing were coming from foreign trade.He said that the Mexican debt problem and the resulting collapse of Mexican import demand led directly to a $10 306 billion drop in United States exports to Mexico in 1982 and the possible loss of 250,000 American jobs. There is recognition on both sides of the Atlantic that through international trade we shall find our way out of our difficulties.
The tone of statements from the non-aligned conference in Delhi, the group of 77 in Buenos Aires and even at UNCTAD show a coming together of Third world and industrialised countries' interests in a rare opportunity that Britain must try to seize.
The United States Foreign Secretary, Mr. Shultz, will be partnered by my right hon. and learned Friend the Secretary of State for Foreign Affairs, who did a brilliant job as chairman of the interim committee of the International Monetary Fund, which expanded the IMF quotas.
Mr. Shultz is also recognising the difficulties and the way out of them. In a recent speech he said that the first objective must be to ensure sufficient liquidity in the international finance system, the second to preserve open markets, the third to improve the international monetary system and the fourth to ensure political stability in the developing world. Here we have the largest and most powerful economy in the world and its leaders recognising the same opportunity as is recognised by the group of 77, and the leader of the Indian nation, who is at present the president of the non-aligned movement. Those are the circumstances in which my right hon. Friend the Secretary of State for Trade and Industry and the Chancellor of the Exchequer and my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth affairs will operate. They must not be deterred by the difficulties of the problem.
I was rather depressed by the lack of political will that was displayed in the last Government by senior members of the Conservative party in saying that this problem is too big and too difficult for us to handle. It is of course too big for a single nation, but it is not too big and cannot be thought to be too big for international co-operation to find a solution. I beg our leading Ministers to grab this opportunity offered by the current climate of world opinion. It is through that opportunity that we shall cure domestic unemployment about which the hon. Member for Leeds, Central spoke.
I conclude with a quotation, the source of which I shall reveal later. The speech was made in 1933 to a conference held in London:The fate of generations may well depend upon the courage, the sincerity, the width of view which we are to show during the next few weeks … Have we come to deliberate and decide as though our respective nations were isolated units in the world? Then we shall fail, and a world which looks upon us today with expectation will have to drain the bitter cup of disappointment. Have we come knowing that the permanent good of each is dependent on the permanent good of all, and determined to cooperate in coming to agreements which will make a renewal of prosperity possible? Then we shall succeed and the expectations of the world will be justified. We must not fail.That is a quotation from Ramsay Macdonald opening an economic conference in London in 1933. Those opportunities were missed. It was too late by that time to do anything and, largely through economic stagnation, the cataclysm of the second world war was brought about. We must not fail again.
§ Mr. Terry Fields (Liverpool, Broadgreen)
I am grateful to you, Mr. Deputy Speaker, for your having called me in this debate for this, my maiden speech.
I wish to make it clear from the outset that making my maiden speech is not a formality. Maiden speeches are supposed to be non-controversial but having listened to the cant and hypocrisy from the Conservative Benches it is difficult to keep my temper let alone observe the proprieties of this place. For the working-class people who have sent me down here to represent them, matters in our area are far too pressing and urgent. The solutions that I will be proposing to the problems of our people will be controversial to the Government but not to the people of Broadgreen and Liverpool. Because of those policies we obtained victory in Broadgreen in the general election. I should like to record my gratitude and thanks to the people from all over the country who worked to ensure that we gained victory in Broadgreen.
My first task as a Member of Parliament, apart from dealing with the appalling housing conditions inherited from the Tory-Liberal alliance which ran Liverpool for a decade, was to deal with the closure of the Crawfords biscuit factory, in Liverpool, with the loss of 2,000 jobs, which was announced on Tuesday 14 June. Those circumstances are typical of what has happened to ordinary decent people all over Merseyside. The workers at the factory have had no major industrial disputes since the turn of the century. They have accepted shift change patterns with the loss of £40 a week in earnings. They have adapted to flexible working agreements. They have co-operated in the shedding of 1,000 jobs already and now for their pains and for their co-operation with management they are threatened with the sack.
Unemployment on Merseyside has been mentioned on many occasions in the House, and as recently as 20 April by my hon. Friend the Member for Liverpool, Riverside (Mr. Parry). Since that debate a further 3,555 jobs have gone or will be lost in the area. I am saddened and angered to hear from my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) that a factory in his constituency has been notified today that it will close, with the loss of a further 350 jobs.
Conservative Members talk about privatisation. Let us call it by its proper name — asset-stripping. It is the reward and the rake-off for those who gave £20 million in handouts to the Tories to fight the election. I hope that members of the Post Office Engineering Union and other organised workers will stand up and fight the Government's proposals to close their industries and sell them to private individuals.
Since the Tories came to power in 1979 Merseyside has lost 48,000 jobs. One firm a week has closed its doors. About 12,000 jobs a year are going—that is, 33 jobs every day of the year. Unemployment on Merseyside is currently about 150,000. In some areas 94.7 per cent. of young people are unemployed. That is the grim reality of Tory Britain for the people whom I represent.
The heartless, cynical response from the Government in the debate on 20 April, talking about the demise of the Kraft factory in Liverpool, was to say that such events were unavoidable and involved commercial judgments. What judgment do Tory Members put on human dignity when adults at a factory like Crawfords are reduced to tears of despair and anger because their factory is closing?
308 The Pontius Pilates of the Tory Government attempt to shift the blame from themselves and their system to the world crisis. The truth is that unemployment is not an act of God. It does not fall from the sky, but it is symptomatic of the system that they defend, typified by the world crisis of capitalism and the even deeper malaise of British capitalism. The Government's policies have contributed to the misery of working people on Merseyside. They have no solution for working people.
A Select Committee, chaired by the right hon. Member for Taunton (Mr. du Cann), clearly states that 50 per cent. of unemployment in Britain is the direct result of the Government's monetarist policies. Many people looked to the Queen's Speech for some direction for the millions who are unemployed or face redundancy. We warned during the general election campaign that if the Tories were elected on 9 June closures and redundancies would happen immediately, but in Liverpool we did not expect it to happen so soon. It is no coincidence that the announcement of the closures came after the election result and the return of Labour Members from Liverpool.
There is no hope in the Queen's Speech for ordinary working people. For the Government it is business as usual with policies the same as before. On 5 May in the local Government elections the people of Liverpool ditched the Liberal-Tory ruling alliance and elected a labour-controlled Liverpool city council to fight to reverse the decline of our once great city.
On 9 June the people of Liverpool elected five Labour Members out of a total of six. They had campaigned uncompromisingly on Socialist policies, which the electorate of Liverpool have accepted as the only hope for the majority in society in the face of heartless Toryism. Workers in Liverpool, who have had to suffer longer and harder than workers in most areas from the excesses of capitalist exploitation have turned correctly to a political solution for the resolution of their problems.
The record of this Government and the big business interests that they and the Liberal-SDP alliance represent hold out no hope for the majority of workers. There has been a 29 per cent. fall in investment over the past four years. The patriotism of capitalism has been exposed as a sham. A total of £29 billion has been exported—that is, wealth created by the workers but shunted abroad —aided and abetted by the Tory Government. The living standards of ordinary, decent working people has been driven down, despite officially doctored statistics. I assure Tory politicians that it is no good just reading about it. You have to live in those conditions to understand what the majority of people are going through. It is in those circumstances that small business men have been driven to the wall by bankruptcy.
Despite the Tory victory on 9 June, we give fair warning that a large majority in Parliament will not save the Government when the true effects of their policies are felt by the British people. The Government of 1924 had a majority of 200. Stanley Baldwin thought that he could savage the living standards of ordinary people. Do the Tories now think that they can do the same, perhaps in a more brutal fashion? Baldwin's actions provoked the 1926 general strike. This Government's policies will provoke an even greater reaction from working people. Of that there is no doubt.
Events shape history. The nostalgic yearnings for the 'fifties and 'sixties, when times were good, which moved people to vote Tory at the last election will finally wear 309 thin and the hard facts will emerge. Then the inability of the Tories and their system to satisfy the expectations of workers in their belief that things will turn out right will explode in Tory faces. There are no solutions in the past. Tory policies will provoke a social upheaval in Britain. Neither monetarism nor Keynesianism can solve the problems of working people. You have tried and failed. When will you learn your lesson?
The experience of working people under the Government will teach them that there is no solution under capitalism. Increasingly they will turn to the Socialist alternative and the Labour movement—to the benefits of democratic public ownership based on a planned economy — when the needs of the majority will be fulfilled. Then the mayhem and lunacy of the present system, like Conservative Members, will be cast into the dustbin of history. Ordinary decent people will be heard and the voice of Liverpool—with the message of hope that turning to Socialism will bring — will act as a beacon to the rest of the country.
At the start of the election campaign in Perth, the Prime Minister said that she was giving the British people an opportunity to banish Socialism and Marxism from the land. Others stronger than she have tried and failed. Labour may have been defeated at the election, but Socialism and Marxism have not been, and will not be, defeated in the eyes and hearts of the working class.
My election victory in Broadgreen, which for many decades was a Tory seat and which in the last election was a Tory marginal, refutes the Prime Minister's boast. The victory in Liverpool for working people is the music of the future.
The media and my political opponents during the election, in seeking to denigrate me and the Socialism I stood for, made great play of the label "militant". Let me make my position clear. I wear the badge of a militant with honour, and do not forget that a militant is only a moderate who has got up off his knees. In time, the whole of the working class will arise from their knees, and you will not be laughing then.
§ The Deputy Speaker (Mr. Ernest Armstrong)
I did not want to interrupt the hon. Member while he was speaking, but it might help other newcomers to the House if I said that hon. Members must not make direct reference to the Chair. They must refer to right hon. or hon. Members, as the case may be.
§ 1.4 pm
§ Mr. Kenneth Carlisle (Lincoln)
I welcome the chance to take part in debating this subject and the opportunity to speak following the hon. Member for Liverpool, Broadgreen (Mr. Fields). He is obviously a man of some passion who speaks with great concern about the problems of Liverpool, of which we in this House are very much aware. I must tell him, however, that as well as being a House of passion this is a House for reasoned argument and tradition, and our freedoms and traditions have grown up over the centuries.
He should also be aware that concern for the unemployed is held deeply by hon. Members in all parts of the House, and many of us represent constituencies with high levels of unemployment. We believe that 310 unemployment and creation of jobs can be tackled better by studying the deep-seated problems that create unemployment rather than by dogma.
Mr. Eric S. Heller (Liverpool, Walton)
§ Mr. Carlisle
I shall not. I want to develop my theme. I shall perhaps give way later.
I did not have the courage of the hon. Member for Broadgreen. As a new Member during the previous Parliament it was many weeks before I had the temerity to make my maiden speech. The four years since have been tougher than many of us expected, for a variety of well-known reason's. Our hopes were high then. It is perhaps encouraging at the start of a new Parliament that our expectations are more sober and that there is a greater understanding of the limitations on any Government. My right hon. Friend the Secretary of State mentioned that.
I believe that the electorate understood the basic problems and that we were trying to tackle them and therefore decided to give us a second term. However, I am certain also that having shifted attitudes in the country during their first term in office, the Government have a greater responsibility now to produce concrete results. I welcome therefore the pledge in the Gracious Speech to introduce private capital into nationalised industries. It recognises any Government's inability to run things well. Unfortunately, there were two specific pledges only—British Telecom and the royal ordnance factories. British Telecom was well on the way to becoming private during the last Parliament, so I find the specific commitments somewhat disappointing.
Most of the complaints which hon. Members receive are against monopolies. That is where most people's disappointment lies. I hope that the Government will introduce more urgently a package of privatisation measures if the general principle that competition is good and stimulates efficiency and economic activity is accepted. We have only to look at the success of the National Freight Company to see what can be achieved for the public and employees. The freeing of bus services by the Government undoubtedly increased the choice of people who wished to travel. Now is the time to be bold about privatisation. It was hard to discern that boldness in the Gracious Speech. I am glad, however, that it contained a pledge that the Government would give continued attention to the development and application of new technology.
It is a sobering thought that in 1980 about two thirds of Government money going to industry went to old-established industries such as British Steel, British Leyland and British Shipbuilders and that only one third went to the growth industries. By 1983 the proportion of money going to each side had at last been balanced. If we are to create new jobs, there is a need to ensure that most of the money goes to industries that have an opportunity for growth. It is one reason why the privatisation of established industries which absorb so much taxpayers' money is important. With most Government money going to those industries, growth industries are starved when they should not be.
The existing technology package, which my hon. Friend the Minister for Information Technology has done 311 so much to develop, is excellent so far as it goes. I am glad that there is a continued commitment to it. The initiative for the introduction of robots, the small engineering firms investment scheme, the advice package and the coal-firing scheme are all useful, but the aim must be to put still more into the growth industries and make sure that Government money is effective and that the application of Government money brings out a contribution from she private sector and stirs its vitality.
Unfortunately, the drive for greater efficiency, which we must have if we are to compete, has as a consequence reduced employment in the established industries. That is why I welcome the commitment to training in the Gracious Speech. There is without any doubt a great mismatch of skills. People coming out of the older industries do not have the skills that are in short supply in the newer industries. That is one reason why I welcome the establishment of information technology centres, not only the one in my constituency but the 13C or more that are planned throughout the country. However, there is a greater need to train older people who lose their jobs. I wonder whether the information technology centres, as they get off the ground and become established, can be extended to embrace those people or, if not, whether more funds can be put into the training opportunities programme. Much greater thought must be given to solving the problem of the mismatch of skills.
I am glad that the Departments of Trade and Industry have at last been joined. We must strive to be competitive as a trading nation and we must trade if we are to have jobs. My record shows that I have always supported the open trading system. In the 1930s protection led to a decline in world trade and hence to a decline in jobs. At the same time as supporting the open trading system, we must be tough and stand up for our specific interests. The threat from Japan is an example. Japanese competition is seriously threatening jobs in the Common Market. We do not have the ability to close the gap in time before real damage is done to industry by selective attack from Japan. A good example of the measures that we can take is in the car industry. We have restricted Japanese imports to 11 per cent. of our market. That works well. We can now look to what we hope is a renaissance of the car industry.
The hydraulic and mechanical excavators industry is important in Lincoln. Hydraulic excavators are now replacing mechanical excavators. Not surprisingly, Japan has seized and now dominates that growth area. In 1970, Japan produced fewer than 1,000 units. In 1981 she produced and exported most of them— about 14,000. She had about 35 per cent. of the world market. Those were direct exports from Japan. There was no work content for the importing countries. Without any doubt Japanese activity in that area is increasing. Poclain in France, one of the biggest manufacture's of excavators in Europe, with 7 per cent. of the market, has been saved from bankruptcy recently by a massive subsidy from the Government, but the threat grows and so the threat to well-established businesses here increases. There is a case for making the Japanese, in this market as well as others, stick to a ceiling on their exports to Europe.
The Government have the prospect of at least four constructive years ahead, without the straitjacket of the inheritance of 1979. They must be bold in the introduction of competition and must more effectively support new technology and training rather than the older, less 312 productive industries. They must press hard for the development of a fair and open trading system and stand up to aggressive Japanese competition.
We have a mandate for that policy and the country rightly expects us to produce results this time. Last time, we learnt that it was folly to waste the first 18 months. We must not make the same mistake again.
§ Mr. Deputy Speaker
Order. Two maiden speakers and two seasoned campaigners are seeking to catch my eye and we have 40 minutes before the start of the winding-up speeches.
§ Mr. Tom Clarke (Monklands, West)
I am not certain, Mr. Deputy Speaker, into which category I fall, because I was first elected to the House exactly a year ago today. I shall endeavour to be brief and I hope that the hon. Member for Lincoln (Mr. Carlisle) will forgive me if I do not take up the points that he made.
I wish to speak about Cardowan colliery, a subject that is important for my constituency and a matter of great moment to many of my hon. Friends from Scotland who are as deeply concerned about the proposal to close the colliery and about the future of the coal industry as are millions of other people in this country.
However, I cannot but respond to the disappointing speech of the Secretary of State for Trade and Industry. He seems to have forgotten that he has already been rewarded for his services to the Conservative party. In future, he ought to address himself to the problems that the nation faces in trade and industry.
The right hon. Gentleman said that he was leaving the debate to witness the graduation of his daughter. Without wishing to deny the right hon. Gentleman that pleasure, we hope that his daughter will not share the experience of thousands of young people throughout the country who are graduating and being thrown on the scrap heap because no jobs are available and we apparently have a Secretary of State for Trade and Industry who is particularly insensitive to the problems of those young people.
Twice in recent history, the miners of Cardowan have been threatened with the closure of their colliery and twice they have won famous victories. In 1969 and in 1981, when they were told, as they are being told today that the pit should close and there was no future for them, the miners of Cardowan, with the support of the people of Scotland and the mining industry, were able to persuade the NCB that it was mistaken and that there was a future for the colliery.
The miners asserted their right to work and to contribute to the industry. I believe that their case is just as compelling now and I invite the support of the House for the miners of Cardowan.
On 13 May, Mr. Wheeler, the Scottish director of the NCB, announced that the closure was to take place and that 1,100 jobs would be lost. He announced that Cardowan pit was to close notwithstanding the fact that in 1982 there was a dreadful explosion there and those miners were the heroes of the country. There was every reason why they should have been and there is every reason why the country should respond to the plight facing those men and their families.
Why are Mr. Wheeler and the National Coal Board saying that Cardowan should close? They have said that 313 there is doubt about the resources and that the National Coal Board cannot bear the annual loss of £8 million. I recall the closure of Bedley, and there have been a series of closures since then. When I was chairman of the Monklands district council Mr. Wheeler came to a meeting of that council and explained that there was no cause for worry as most of the miners would find jobs elsewhere, mostly in the Cardowan colliery. Mr. Wheeler assured the Monklands district council that the Cardowan colliery had an outstanding future which would continue for at least 15 years and that the resources extended as far as Coatbridge. I have not heard a satisfactory explanation about what has happened to those resources in this short period. I believe, as do the miners, that there are resources in Cardowan and that we as a nation do not have the right to throw them away. The National Coal Board apparently takes the view that it is not prepared to make the type of investment—in modernisation of equipment, machinery and so on—that is essential to the future of Cardowan, that could ensure that those jobs are saved, and that Cardowan makes its contribution to the mining industry.
The miners of Cardowan have been attempting since the closure announcement to obtain an explanation—notwithstanding their experience, commitment and feelings—for the closure. They have been told time after time that the markets do not exist. They and I find that astounding. We still import coal from as far away as the United States and Australia and even coke from Japan. What right do we have to say to the miners, "Accept the closure. Move along elsewhere to another colliery. Accept the assurances of the NCB that those collieries have a future," when the same assurances were given about Cardowan not so long ago?
The average age of the miners of Cardowan is 33 or 34. Those are young men with young families. Mr. Alec Hogg, the delegate from the National Union of Mineworkers in Cardowan, was in my view absolutely right when he said that his members were refusing to become industrial gypsies, bearing in mind the fact that there is no assurance that the pit to which they move will not face similar problems in the near future.
It has been said that the nation cannot afford Cardowan because it is estimated to be losing £8 million a year. We all know from experience how easy it is to play with figures. The nation pays farming an annual subsidy of £1,333 million a year—I do not object to that as some of my constituents are farmers — so we should not decide the issue of a mine on the short-term predictions any more than we would do so for a farm just because the current climate does not appear to be good or because mother nature temporarily is not smiling upon the resources available. We have no right to tell the miners that they should not have the same claim upon funds as do the farmers, given that mining depends as much upon long-term strategy as it does on short-term predictions. I believe that investment within the industry, and especially at Cardowan, can be justified. I am sure that the House will agree that the miners have given Britain a great deal.
I took exception to the Secretary of State's comments when he appeared to imply that loyalty and patriotism were missing in the miners' ranks. That is nonsense. The understanding between the miners and the nation was shown in 1981 when the then industrial dispute was resolved. I shall refer to the views of the then Secretary 314 of State for Energy and draw them to the attention of the present Secretary of State. The right hon. Gentleman said towards the end of the 1981 dispute:fears and anxiety among the work force arose through rumoured and distorted impressions of what was being proposed. It was against this background that yesterday's meeting took place. At the meeting, three main points were raised —closures, financial constraints and coal imports. I said that the Government were prepared to discuss the financial constraints with an open mind and also with a view to movement."—[Official Report, 19 February 1981; Vol. 999, c. 457.]I regret that we have seen in Cardowan so far an example of a closed mind. It seems that the management is unwilling to consult the industry and to try to draw from the experience of the miners so that an agreement can be reached that is mutually acceptable.
I believe that the Government have gone back on the terms of the 1981 agreement, especially at Cardowan. The Cardowan miners, like the steel workers, those who wish to be involved in the construction industry and those who wish to restore local government to the status that it once enjoyed, are entitled to the right to work. When the history of the previous Parliament is written — unless things change dramatically the same will appear in the history of the present Parliament—the most important feature that will be noted is that the nation had outstanding resources, especially in energy. It is those resources that the Government are throwing away.
I believe that Lloyd George was right when he said that the Lord gave the land to the people. I believe that he did the same with our natural resources, including coal. If the Secretary of State believes that the Government can ride roughshod over the miners of Cardowan or over the mining industry because of the results that were obtained in other parts of the country in the general election, he is much mistaken.
In spite of the introductory speech of the Secretary of State for Trade and Industry, I hope that the Secretary of State for Energy will be more sensitive to our plea on behalf of the miners, and especially our plea for an energy policy that gives miners jobs. I hope that he will be sensitive to the view of the great mass of the British people that we do not want to see Britain's resources squandered. We believe that people count and that their families count, and that the ultimate judgment of any Government's industrial policy is the success that they have in harnessing the nation's resources.
§ Mr. Christopher Murphy (Welwyn-Hatfield)
As the newly elected Member for Welwyn-Hatfield, I am conscious that I am the first representative of this constituency, as indeed I was the last for the seat of Welwyn and Hatfield. The changes instigated by the Boundary Commission have resulted in my losing the privilege of representing Northaw and Cuffley, but gaining that for Wheathampstead.
May I, on behalf of my new constituents, express their appreciation to Sir Victor Goodhew who had the honour before me of serving the village and parish. I know that his considerable contribution to the political life of Hertfordshire will be remembered with both gratitude and affection.
Wheathampstead has already had a long and, I believe, beneficial association with the name of Murphy in an 315 industrial and commercial context. It will be my intention to have a similar association, but rather in terms of the Palace of Westminster and this House.
This day's debate on the Gracious Speech is centred on industrial matters, and it is right to recognise the great importance of economic factors in the recent general election campaign. The results of that election were largely determined by the views of people on which approach to the economy was the most realistic, the most relevant, and the most likely to produce success. The outcome of such deliberation is clear.
Once again, the fundamental concept of freedom was laid before the electorate. On the one hand was the belief in the free market and free choice. On the other hand, to a greater or lesser degree, was the belief in state control and state decisions. Allied to a recognition of the value of freedom was enterprise, which can truly manifest itself only when allowed to be free. This Government have previously shown their positive commitment to free enterprise, and that commitment is endorsed in the Gracious Speech at the start of this new Parliament.
In my constituency we share the real concern for those who are unfortunately without work. At the same time, we share the great pride in developing industries, often making use of the application of new technology. Hope for the unemployed rests primarily with the expansion and creation of companies, large and small, which are prepared to invest in the future and to capitalise on opportunities that present themselves.
The common-sense approach of my constituents recognises the value of the entrepreneur in stimulating the local economy through his enterprise. That common sense also recognises the fundamental truth that personal freedom is preferable to state direction. In this way growth will be promoted, from which comes employment.
Against the background of the highly successful pursuit of policies to curb inflation and of real signs of an upturn from recession, the Gracious Speech is surely right to emphasise the value of competitiveness and efficiency. At the same time it is also surely right to pay due attention to the importance of trade to our nation. That is particularly relevant in Welwyn-Hatfield, as exports from mid-Hertfordshire are substantial.
As its Member of Parliament, it is my aim always to put the interests of Welwyn-Hatfield first. It is undoubtedly in the interests of my constituency, and of the country, that the Government's intentions as outlined in the Gracious Speech receive wholehearted support. That I gladly give.
§ Mr. Stuart Randall (Kingston upon Hull, West)
To start my maiden speech, I should like to pay tribute to my immediate predecessor, Mr. James Johnson, who was undoubtedly held in great esteem and affection by the people of west Hull. I know from the people to whom I have talked in this House that his reputation was great on both sides. His expertise on Commonwealth affairs, particularly African affairs, made him a useful Member of the House.
I regard it as a great privilege to serve as the Member for Kingston upon Hull, West. I look forward with great pleasure to serving that constituency with my hon. Friends from Kingston upon Hull, East (Mr. Prescott) and Kingston upon Hull, North (Mr. McNamara).
316 Kingston upon Hull, West is one of three constituencies that are located on the north side of the river Humber. Hull is regarded by many of us as the northern gateway to Europe. It has a good port. It has access to the airport. Moreover, it has a good road system to most parts of the country. The people of Kingston upon Hull, West are particularly proud of the Humber bridge, although it is not within the constituency. Although there are attractive aspects, such as the entry into the city from the north and along the tree-lined roads from the west, there is also extreme social and economic deprivation in my constituency. I view that with great concern.
Already in the debate several hon. Members have referred to a gap between the north and the south—the relative opulence of the south and the deprivation of the north. Kingston upon Hull, West is one of those deprived constituencies. Some change must take place to heal the division that now seems to be so strong. I see one of my major tasks as the hon. Member for Kingston upon Hull, West to do something about the cruel injustices that exist.
One of the major factors influencing the constituency has been the near destruction of the fishing industry. In the southern part of my constituency there is a road called Messel road, in which until recently there used to be a close fishing community. About 8,000 people were employed in Hull in the fishing industry but now, unfortunately, only a mere fraction of that number are so employed. The people to whom I talk about fishing feel a sense of despair and confusion. They know that in our close inshore, middle and distant waters there are fish to be caught, processed, marketed and distributed and yet my constituency has many people from that industry who are unemployed. At the same time that we have had this devastation of the fishing industry there has been a great growth in poverty. The number of families on family income supplement has doubled in the past four years, as has the number of people on social security payments, and the number of young people on long-term unemployment benefit. It is a bleak picture of my constituency that I bring to the House.
There are some very attractive things about the city, and particularly about my constituency, such as the tremendous interest in sport. I am delighted that the Hull City team was the fourth division champions this year and that Hull FC, the rugby league team, is regarded as the best in the world. The hon. Member for Kingston-upon-Hull, East would disagree, so perhaps Hull Kingston Rovers come second on the list.
What are the needs of the constituency? The dramatic change that has resulted from the almost instantaneous destruction of the fishing industry means that we must have investment in the constituency. We need an ambitious programme to counter the effect of the loss because of fishing. In the short term, we need to get our people back to work by investing in public projects. There are 30,000 people unemployed in the city as a whole and my hon. Friends the Members for Kingston-upon-Hull, East and Kingston-upon-Hull, North and I have worked with the city council drawing up lists of projects that could get a substantial proportion of those people back to work.
We must also invest in high technology industries both in the city and in my constituency. I say this based upon my own experience in industry. I do not wish to sound immodest but I have been in industry for 25 years, before taking my seat. For the first five years of my working life I was a shipyard worker in Her Majesty's dockyard at 317 Devonport, working as an electrical fitter. In the past 20 years I have been in information technology in the banking, steel, motor, computer and telecommunications industries and I have also worked on how we can help small businesses to survive and improve.
I have mentioned information technology because it is undoubtedly one of the major factors determining the future of this country's industrial base. However, we need vision, imagination and the full co-operation of all those involved in the change. I do not want to be controversial and my next remarks are made in a positive way, but I feel that the Government's measures to enhance our industrial base through high technology are insufficient. We need to invest far more heavily and imaginatively than before. After all, we can destroy jobs extremely quickly, but it takes a long time to create new ones. Therefore, there is an inevitable gap that must be filled. We need to invest now. We should have started five years ago because, by their very nature, investment programmes take a long time.
Based on my experience in industry, I believe that the Government have a valuable and profound role to play in enhancing our industrial base through those new technologies. Industry wants Government help. The notion that many people have that civil servants and those in government do not understand what it is all about is misleading. The Government have a role to play. Before becoming a Member of Parliament I managed one of the Department of Industry's projects, in which industry and Government worked together. I saw companies bringing forward their development programmes, enhancing their investments and changing their priorities. Therefore, there is a profound and valuable role to be played in future in that regard.
When talking about investment programmes in high technology people often say, "We'll do that in 18 months time when there are new technological developments." That is the wrong judgment to make, because we have more technology now than we can conceivably cope with. The major factor constraining the development of such new factories—apart from money —is the attitude of people. We must change attitudes. The rate of change of the new technologies is so fast that the boards and management of companies that I have worked with and served need help and guidance from central Government.
If we do not co-operate with the trade union movement, the financial institutions and Government Departments, we shall lose out to foreign competition, leading to more job losses, and as a result we shall lose the opportunity of regenerating the British economy. Any policy for investing in such industries in west Hull must be carried out on a regional basis. The shift to the south undoubtedly militates against places in the north-east and north-west.
Therefore we need an equitable and efficient regional policy so that funds can be directed into those areas. Indeed, Hull, West should be one of them. However, we need money to do that. If we are to have an ambitious and exciting programme to rebuild our industrial base we must have money. I look forward to seeing what history will have to say about the way in which this country's North sea oil assets, which could have been so vital to our new industries, have been wasted.
§ Dr. John Marek (Wrexham)
I congratulate the hon. Member for Birmingham, Northfield (Mr. King) and my hon. Friend the Member for Kingston upon Hull, West (Mr. Randall) on their maiden speeches. I hope that Members will find what I have to say of interest.
At the general election the constituency of Wrexham suffered major changes. Electorally, one quarter of the constituency was hived off to a different area and parts of the old Flint county—the Maelor farming area—and the residential area of Marford and Hoseley were attached to the town of Wrexham. The ITN and BBC figures on the notional majority were wrong. They forecast that Wrexham would be a Labour seat, and it never appeared on any list as a marginal seat. Of course, the people of Wrexham knew better, as did the Labour, Conservative and Liberal parties. We all knew that it would be a marginal seat. At the end of the day, the Labour party won the seat and we hope to make it a safe seat in years to come. I wish to pay tribute to all the workers and helpers that ensured a Labour victory.
It would be wrong of me as a new Member to depart from convention, although I may do so when I have been here for a few years and have better judgment on which conventions are worth keeping. I wish to pay tribute to Mr. Tom Ellis, the previous Member for Wrexham. I disagreed with him on policy—I do not wish to be hypocritical—but I can say without qualification that he served the people of Wrexham and was a good constituency Member of Parliament.
I said earlier that Wrexham had suffered major changes, but I know that the Boundary Commission must get its changes right. The important issues are unemployment and the provision of services, education and housing. Since 1979 there has been disaster after disaster in Wrexham. There have been 1,000 redundancies in the steel making plant at Brymbo. The future well-being of Brymbo depends on the well-being of the car industry in the west midlands. Although we have a modern steel making plant, there have been 1,000 redundancies and there is no hope of a change in that position. The Government have not held out any promise of change.
Unemployment in Wrexham is about 20 per cent., but probably it is well above that figure if all those wanting work register. About 10,000 people want work in the Wrexham area but cannot get it. Having listened to the Secretary of State, I do not think that that position will change. He said that no one could doubt that recovery had begun. Yet he must know, as we all know, that Government spokesmen have been saying that for the past three years. I could supply him with a list of Government spokesmen who, every two or three months, have said that we have turned the corner, that the economy has begun to recover or that we are on a plateau. But all those remarks have fallen to ashes. Unless the Government change their policy, the Secretary of State's words will also fall to ashes.
The privatisation of the telecommunications industry will not be a success in Wales, and we view the prospect with alarm. If privatisation takes place, Wales will face higher charges and a poorer service. The Government's lack of clarity is to be regretted. I want them to say what they mean.
I served on a local authority in Wales, although not on the Wrexham-Maelor borough council. There are 2,000 319 people on the waiting list for houses in Wrexham, yet because of the block grant allocations the council has not built any houses for rent other than one or two sheltered accommodation units. The council has been squeezed unmercifully by Government policies and the Welsh Office. Only two or three months ago the Welsh Office told local authorities what their block grant might be for next year. Until then, allocations came at the last moment and local authorities had to decide their expenditure at the last moment. While I do not have experience of how Government works, I know that one cannot run local authority housing programmes on a year-to-year, hand-to-mouth basis. One needs a five-year rolling programme which so far has not been delivered by the Government.
The Government also say that they wish to penalise high-spending authorities, but they have sold nearly all local authorities into slavery. There are limits on revenue expenditure and draconian powers and penalties should limits be exceeded. The authority on which I served, Ceredigion, exceeded the limits. It sper t at only 78 per cent. of grant-related expenditure. How can the Government penalise an authority just because in 1978–79 it happened to have a year of low spending? How can they penalise such an authority for spending only 78 per cent. of what, on the Government's own figures, it should be spending? The Government should come clean on this. If they intend to penalise high-spending ituthorities— that is an argument into which I will not enter now—why do they penalise authorities that are trying to provide a service to the public and that are not high spender; but are, in fact, spending a great deal less than the grant-related expenditure assessment?
My main priority is the creation of employment in Wrexham. The people of Wrexham wish to see the creation of employment. I identify myself with the speeches of other Labour Members who have made employment their first priority. I resent e implication of the Secretary of State for Trade and Industry that we are worried about it only because of doctrinal policies or because of dogma.
I sincerely wish the Government success in bringing down unemployment. I wish that they would do it, because they are the Government, not us. However, unless they change their policies only one thing will happen— unemployment will increase. I see it as my job and the job of the Opposition to oppose those policies in the House of Commons, and that I propose to do.
§ Mr. Stanley Orme (Salford, East)
This has been an important and significant debate. It is significant because it is the first debate of the new Parliament on industry, energy and the Government's proposals on privatisation.
We have heard six maiden speeches today. It is significant that five of those maiden speeches were from Opposition Members. Those hon. Members come from areas of industrial deprivation as far apart as Glasgow, Leeds, Broadgreen on Merseyside, West Hull and Wrexham in north Wales. The anger that has been expressed by many of my hon. Friends, not least in those maiden speeches, about the Government's industrial policy and the callous manner in which they appear to treat rising unemployment is well merited. That anger was expressed in different ways by my hon. Friends the Members for Greenock and Port Glasgow (Dr. Godman), and for Liverpool, Broadgreen (Mr. Fields), who 320 expressed his anger at the problems that exist on Merseyside, and by my hon. Friends the Members for Kingston upon Hull, West (Mr. Randall) and for Wrexham (Dr. Marek). It would be a compliment to say to the hon. Member for Birmingham, Northfield (Mr. King), who was the only Conservative Member to make his maiden speech today, that it was a good Tory speech coining in typical Tory fashion from the west midlands. I think that the hon. Gentleman will take that as a compliment.
We believe that intervention to regenerate and expand manufacturing must be the Government's first priority. Industry cries out for action, but it seems that the Government will continue to stand aloof from industry's problems and from the 3.5 million unemployed. We are worried lest the new Department of Trade and Industry will ignore the plight of British industry, downgrade its importance and concentrate on divesting itself of industrial responsibilities.
What is to be the new Department's role? I understand why the Secretary of State is not here now, but he did not tell us anything about that role. All that we heard was a re-run of the general election campaign. I hope that the Tories will not accuse us of re-running the election campaign. We heard, not the Secretary of State, but the past chairman of the Conservative party. He did not tell us the role that he will play in the new Department. He certainly did not give the House confidence.
Other industrialised nations recognise that economic decision-making must be co-ordinated. That is why, despite the talk of a world recession, Britain suffered more in the last four years than any of our main competitors — more than France, Germany, Japan, Italy or the United States. It is obvious that many of our partners and competitors intervene in a more widespread, effective and sophisticated way. The free market is not only an irrelevance, but in many industrial areas it is non-existent.
Throughout the debate we have waited to hear about the concrete measures that the Government intend to take to stop Britain's industrial decline. The evidence of the decline is not a fabrication by the Opposition; it is supplied by industry itself. The CBI became sotto voce during the election campaign, but before then it provided the evidence. The Neddy sector working party's evidence shows that the claims about industrial recovery are pure rhetoric. They say that many sectors will be destroyed if present policies are continued.
Investment is falling, industry is becoming less competitive and more of the same can only spell disaster. The policies that have led to that position involve the Government's refusal to expand the economy and bring Britain out of the slump, the failure to invest and the concentration on privatisation—or, to give it its proper name, denationalisation. Such policies have contributed to the creation of a fragile manufacturing sector. All that is on offer to industry is more of the same, yet we are still expected to believe that we are on the road to recovery.
The new Secretary of State must tackle the problems. He takes over the job when, for the first time since the industrial revolution, Britain has a deficit in its world trade in manufactured goods, when investment in research and development is a fraction of that of our competitors and when capital investment in new plant and equipment has plunged. He takes over when essential funds for industry are being channelled overseas and when a growing number of companies are investing their profits outside the United Kingdom.
321 The new Secretary of State takes over when industry is experiencing serious and damaging shortages of skilled labour and when unemploymnt is at record levels. In the face of that decline and decay, the Government's response is to give priority to privatisation — specifically of British Telecom and the royal ordnance factories.
We are promised further denationalisation measures. Where are they to take place? Are they to involve British Leyland, British Steel and British Shipbuilders? These industries need to know what the future holds. They will need more than privatisation to ensure that they are retained in Britain. Shipbuildng is an important industry. Its future viability is essential. The House has a right to know the Government's intentions.
We understand that the Secretary of State is to see Sir Robert Atkinson, chairman of British Shipbuilders, next week to discuss the future. There is talk of 9,000 redundancies, a freeze on capital investment and yard closures. The Secretary of State must make a statement to the House at the earliest opportunity following those talks.
Similarly, the Government must respond urgently to the demands of British Aerospace. Answers must be given about the Airbus and the Alarm missile system. We want decisions and we want to know the details of Government policy. I repeat that the uncertainty which industries face — because the Government will not give a clear indication of their intentions—is almost as damaging as the continued pursuit of the policies of the previous four years.
Nothing has changed since the Conservatives were returned to office. Investment is still falling, output has not recovered and redundancies continue at an appalling rate. We have had an indication in the last six weeks, since the election was declared, of the rising rate of redundancies in British industry throughout the nation.
During those weeks, Racal, makers of electronics, have made 65 people redundant; Findus of Cleethorpes, the frozen food people, have made 1,400 redundant; Black and Decker of London, machine tools, 630; BSC of Hartlepool and Clydebridge, steel, 1,000; Plessey of Liverpool, telephone exhange equipment, 400; Camgears of Hitchin, steering components, 250; Cummins engines, Lanarkshire, diesel engines, 265.
Crawfords of Liverpool, biscuit manufacturers, are reported to be declaring 2,000 people redundant; Grosvenor of Tameside, steel fabricators, 115; Reynold Engineering, Manchester and Bradford, forecast 1,200 redundancies; Birds Eye of Acton, Yarmouth and Eastbourne have reported redundancies in those areas of 430, 920 and 800 respectively; Dowty of Tewkesbury, mining equipment manufacturers, 400; Central Oil, Merseyside, 160; and today we have received news that Schweppes of Liverpool, in the constituency of my hon. Friend the Member for Walton (Mr. Heffer), will be making another 300 redundant.
All that has happened since the general election was declared and many of those redundancies have taken place since 9 June.
§ Mr. Orme
In spite of all that has happened, and in spite of the declining manufacturing sector—1.5 million jobs have been lost in manufacturing alone since 1979 — what do the Government propose? They will intervene in industry, but in one sense only, and that is by way of privatisation, and they make their centrepiece the privatisation of British Telecommunications.
We spent about 300 hours in the last Parliament opposing the privatisation of BT. I warn the Government that the Labour party remains totally opposed to it and will again oppose it throughout this Parliament. The privatisation of BT is based on a purely dogmatic approach by the Government. The argument is about whether the state has a responsibility to provide services to the people, whereas from the Tory point of view it is about profit-seeking and asset accumulation. The Tory Government gloss over that with their talk of expanding freedom of choice. We are interested in providing decent services for the maximum number of people and in giving more people choice not fewer people more choice.
§ Mr. Marshall
The right hon. Gentleman tries to turn the clock back. When he looks at the way the telecommunications industry is beginning to expand with liberalisation, he must appreciate all the new opportunities that there are. This is a step in the same direction. I wish that he would lay aside his prejudices and get on with the things in which he believes.
§ Mr. Orme
As a public corporation BT is required to operate a national service for the community as a whole. It is publicly accountable through Parliament for that. Customers have statutory rights to monitor it. Privatisation will end that public service duty and lead inevitably to a reduction in services. The introduction of private capital will encourage BT to limit less profitable services and run down those services which achieve less than average profits.
There will be a concentration on the most lucrative parts of the telecommunications business for the sake of private shareholders. The most threatened services are those in rural areas. We heard a great deal from Conservative Members in the last Parliament about the threat to rural areas, public telephone boxes, the extension of telephones into the homes of those who currently do not have a connection and residential call charges outside peak hours. In the age of information technology, which the Government purport to advance, there will be a fall in the number of people with access to it.
§ The Minister for Industry and Information Technology (Mr. Kenneth Baker)
Will the right hon. Gentleman please get a new script writer? The accusations that he has made were made in Committee on the Telecommunications Bill earlier this year. He knows that the undertakings that I gave were put in the Bill—the 323 strengthening of the obligations to provide a public telephone kiosk service, 999 and social obligation services are all contained in legislation for the fist time. All that the right hon. Gentleman gives vent to are wild scare-mongering rumours.
§ Mr. Orme
The way that the Minister of State had to change the Bill in Committee gives us r.o confidence that the proposed Bill will serve the people. The Minister had some difficult votes because Conservative Members did not believe what he was saying and putting in the Bill.
The telephone has now become rot just a useful addition to the home but an essential utility like electricity. On the evidence of the previous performance of public companies, the privatisation of BT will be another example of selling public assets for private gain. It will be a direct attack on the jobs of BT employees.
The privatisation of the National Freight Corporation, which the hon. Member for Lincoln (Mr. Carlisle) mentioned, was preceded by massive redundancies. In other cases, large-scale reductions in the work force have been an essential prerequisite for setting up nationalised industries for hiving off.
The Government claim that they must privatise BT so that it can raise capital to fund its investment programme. During the financial year 1983–84 the Government, far from permitting BT to operate through the national loan fund, are requiring it to pay the Government £100 million. It would be sensible to allow BT the opportunity to raise some of its capital requirements and to remove it from the public sector borrowing requirement. That is the way in which to develop a publicly owned British telecommunications industry. That is what can be done.
I should like to ask the Secretary of State a specific question. I should like his assurance as soon as possible that BT will remain a single entity and not be broken up when privatisation takes place. We hear rumours that that will happen.
The other major issue in the Queer's Speech is the privatisation of royal ordnance factories, which are to suffer the same fate, again for no valid reason, either economic or social, other than to shed as much responsibility as possible and increase profits for private speculators. Why on earth are the Government privatising the royal ordnance factories, which are linked directly to the conventional defence industry and are extremely profitable? They have worked well in producing goods both in Britain and for sale overseas. It is ironic that the Government should be considering breaking up and selling off royal ordnance factories at this time The money will come from Government sources. It is Government finance. We shall return to that issue in much more detail.
It is a fearful situation that, when this country's industry needs a positive set of policies to set it on the road to recovery, we have a Government who believe that the least amount of policy is the best and who use profit as the only criterion. We seek urgent answers to the questions that I have raised today. Industry cannot wait. The Government cannot go on ignoring the seriousness of the decline. Despite the election defeat that we suffered, the Labour party will not be deflected from putting our policies to the House as the real alternative to the Government's disastrous policies. This debate is the beginning of that battle against the Government's policies.
§ The Secretary of State for Energy (Mr. Peter Walker)
I join the right hon. Member for Salford, East (Mr. Orme) in paying tribute to today's maiden speeches. It has been a privilege to be here for most of the day and to hear a long series of cogent and lucid maiden speeches. Naturally, I recall when I made my maiden speech. One newspaper paid a tribute to it saying that it was a remarkable maiden speech, made without a note. That journalist did not notice that I had a ream of notes, but my hands were shaking so much and my writing was so bad that I could not read them and I cast them aside. Therefore, I immensely admire the manner in which the maiden speeches were delivered today.
I was delighted to hear my hon. Friend the Member for Birmingham, Northfield (Mr. King), who, in a vigorous and lively way, put cogent arguments about the motor industry. It is good news for the motor industry and Birmingham that the new hon. Member for Northfield will be playing such an active part and making such effective contributions. I am grateful to him for his kind words about Jocelyn Cadbury, who was a personal friend, and whom many of us remember with fond affection.
I pay tribute to the hon. Member for Greenock and Port Glasgow (Dr. Godman), who made an elegant speech and showed an immense knowledge of the problems of the shipping industry and maritime problems, and to whose future contributions we look forward.
I am seldom delighted to hear of any member of the Labour party arriving in the House of Commons, but I welcome the hon. Member for Kingston upon Hull, West (Mr. Randall) who used to be a constituent of mine, and congratulate him on his election and on his excellent speech. It showed immense understanding of the problems in his constituency. Rumour has it that he never rushed to the polling station to cast his vote on my behalf.
The House used to have a tradition that maiden speeches should not be controversial. I kept to that tradition by attacking my own side in my maiden speech, but that was considered by the Whips to be against the traditions of the House. The contributions of the hon. Members for Leeds, Central (Mr. Fatchett) and for Wrexham (Dr. Marek) could not be described as non-controversial, but they were lucid and effective and I congratulate those hon. Members. I missed the maiden speech by the hon. Member for Liverpool, Broad Green (Mr. Fields). Rumour has it that that speech was not lacking in controversy. If the description that I have heard of the speech is correct, I hope that he speaks frequently in the House.
I was pleased that the speakers on both sides of the House welcomed the creation of the Department of Trade and Industry, which was something of an all-party affair. A Labour Government did the study which decided that a Department of Trade and Industry should be created, a Conservative Government actually created the Department, a Labour Government then got rid of it and it was the previous Conservative Government that kept it divided. As both sides of the House made the right decision originally, I am pleased that both sides have welcomed its re-creation. I agree with the views of my hon. Friend the Member for Enfield, North (Mr. Eggar) and those of the hon. Member for Stockton, South (Mr. Wrigglesworth) that it is important that the Department acts effectively and in a unified manner. I have always 325 considered it a nonsense that the two areas should be separated. I know that it is the intention of my right hon. Friend the Secretary of State for Trade and Industry—who much regrets that, for understandable personal reasons, he cannot be present for the whole of this debate—to see that the Department works effectively and sensibly, thereby bringing an overall approach to these problems.
One of the interesting factors put forward in the debate—stated by my hon. Friend the Member for Arundel (Mr. Marshall) and supported by the hon. Member for Stockport, South—was the task of getting the right relationship between Government and industry. That is a delicate and difficult operation. If we do not get that relationship right, we will pay a heavy price. During the time that I was previously involved with trade and industry, I saw countries throughout the world working out a relationship in different ways between Government and industry. In France, it was through the civil service and industry; in Germany, it was through the central banking system and industry; in Japan, it was almost virtually due to a close political relationship and the heads of the major merchant houses; and in America it was due to the procurement programme of both federal and state Governments. All the major economies in the world have different relationships but, nevertheless, relationships. Unless Britain has an effective relationship there will be a danger to our exports and trade. I welcome the fact that the new Department has all the means, ability and talent to forge such a relationship.
Another theme of the debate was the relationship between nationalisation, and privatisation. All the spokesmen from the Opposition party agreed that they were completely against privatisation in any of its forms and that they were much in favour of retaining nationalisation. That has been the great post-war tradition of the Labour party. I am glad to say that until this election we had seen the Labour party dropping its enthusiasm for nationalisation but from the Opposition Benches I am told that it remains an enthusiastic objective.
The hon. Member for Stockton, South has moved to the point of not favouring any more nationalisation, but he is uncertain whether it is better to privatise or to continue with nationalisation in some spheres. I listened to his arguments with no disrespect.
I can claim what I believe to be a unique qualification. At one time or another, I have had ministerial responsibility for every nationalised industry except the Post Office. I do not find nationalisation an attractive or successful way of running industries. I do not say that from a party political, doctrinaire, standpoint, because I know that Labour Members in charge of Departments sponsoring nationalised industries have experienced considerable difficulties.
Because of a nationalised industry's public accountability, there are not only the chaps running the industry, but the chaps in the sponsoring Department crawling over the investment programmes of the chaps running the industry, and the chaps in the Treasury crawling over the chaps in the sponsoring Department who are crawling over the chaps in the industry. If there are people in the Treasury with the divine wisdom to know what to invest in nationalised industries, they should be running the industries and not sitting in the Treasury. We do not have 326 a great number of people able to run those industries. Nationalisation has considerable disadvantages as a method of running major industries.
§ Mr. John Smith
Another feature of the policies of the previous Government and, presumably, of the present Government is that there are chaps crawling all over the nationalised industries' assets to see what profitable ones can be sold. Why on earth must the British Gas Corporation sell its successful oil field at Wytch farm and its successful interests in the North sea?
§ Mr. Walker
I rejoice in the fact that the corporation will be selling those assets. I shall do everything that I can to encourage it.
I implemented virtually the first privatisations when we got rid of Thomas Cook and later Rolls-Royce Motors. The former right hon. Member for Bristol, South-East, Mr. Benn, said that a future Labour Government would renationalise Rolls-Royce without compensation. The Labour party always asks why something that is successful and profitable should be sold to the private sector. The main answer to that is that a business will be even more successful in the private sector, with all the freedoms that it enjoys. Absurd and Left-wing as Labour's programme was for the general election, there was nothing about returning Thomas Cook or Rolls-Royce Motors to the public sector, and I am sure that if the Labour party survives until the next election there will be no demand for Britoil to be returned to the public sector. I hope that there will be such a commitment, because it will be another vote loser for Labour. I shall encourage the Labour party to continue with as many nationalisation schemes as possible, so that we can finally diminish the party to absurd proportions.
If there are areas that can be taken away from the overall supervision of politicians and civil servants and placed into entities accountable to themselves, that is a correct and sensible course to pursue.
The hon. Members for Dunfermline, West (Mr. Douglas) and for Monklands, West (Mr. Clarke) expressed their anxiety about potential developments in the coal industry. I believe that coal is an immensely important industry and has a positive role to play in supplying energy in future. I want it to be a highly successful industry.
The hon. Member for Dunfermline, West, who has taken a considerable interest in the coal industry over the years, knows that when I had responsibility for that industry I introduced the Coal Industry Act 1973, which was welcomed by the leaders of the NUM as the most important Act for the industry since its nationalisation. The measure dealt with pension provisions and redundancy problems, and injected considerable sums for investment into the industry.
I do not know the coal industry as well as does the hon. Member for Dunfermline, West, but when I was responsible for it I had a close relationship with those involved in the industry and visited many collieries and mines. The Leader of the Opposition has constituency connections with the coal industry. I invite him to compare the pay records of Tory Governments for miners with the pay records of Labour Governments. If he does so, he will find the figures embarrassing.
§ Mr. Michael Foot (Blaenau Gwent)
I shall be happy if the right hon. Gentleman ensures that next week 327 Hansard prints the details of the 1974 pay settlement and a comparison of that with the settlement that he did not get in 1972.
§ Mr. Walker
The right hon. Gentleman will recall that in 1974 the pay dispute was due for settlement on 1 March. I agreed with the leaders of the mineworkers that they would get whatever the relativities board recommended. When the Labour Government took office, they settled exactly in accordance with the recommendation of the relativities board. The right hon. Gentleman cannot get any comfort from that.
§ Mr. Foot
I again invite the right hon. Gentleman to publish in the Official Report next week the details of the pay settlement which the then Labour Government agreed to implement and the details of the settlement which he proposed in 1972 which led to the strike in 1972. If the figures are published, everyone will be able to judge.
§ Mr. Walker
I shall be delighted to compare those records and the records of Conservative and Labour Governments on pit closures. Perhaps the Leader of the Opposition would like to see printed in Hansard the pit closures that took place while Labour Governments were in office.
I hope that the House will recognise that it is in the interests of the coal industry to ensure that there is positive investment in new coal resources and in improving machinery. It would be absurd for anyone on either side of the House who knows anything about mining to say that irrespective of the condition of a mine there should be no question of closure. It is in the nature of the mining industry that some mines become uneconomic. Analyses reveal that, of the 120 million tonnes of coal produced by the industry, the 10 million tonnes that are produced most uneconomically create enormous losses running into hundreds of millions of pounds.
It is in the interests of the mining industry and the miners objectively to assess the industry's activities and to ensure that we have a successful industry. That will be my objective. The energy industry is an important part of Britain's economy and 25 per cent. of industrial investment has been spent in the energy sector over the past year. It contributes about 12 per cent. of our GDP. 328 In my new capacity I wish to study the various factors that prevail in the energy industry with a view to ensuring that Britain has a successful and outstanding energy policy.
The package of changes in the taxation system for the oil industry that was produced by my predecessor, who is now Chancellor of the Exchequer, including the eradication of royalties for future discoveries, is a sane and sensible group of measures to encourage development of the oil industry.
The right hon. and learned Member for Monklands, East advanced a rather muddled argument when he said that it was dreadful that we should be getting rid of our oil resources so quickly. When he was challenged by my hon. Friend the Member for Enfield, North and reminded that he supported the Government's tax concessions a few months ago, he replied, "Yes, I wanted to get things going more quickly for the offshore industry." If areas remain unexplored and are not developed, there will be no royalties to be gained in any event. The package that my right hon. Friend prepared will result in activity and development for the benefit of the offshore industry.
It is important that we develop an industry that is capable of exporting the technology of offshore drilling on a large scale throughout the world. In my previous incarnation I set up the Offshore Supplies Office. I have already had talks with those who are running that office. My objective will be to ensure that we have the benefit of the development of the oilfields and a long-lasting industry to take advantage of the future.
There have been many speeches from both sides of the House and during the debate many hon. Members have made their first contribution to our discussions. It has been an important debate. I believe that in energy, industry and trade we shall see the benefits of encouraging enterprise and initiative and sensible and rational investment.
§ Debate adjourned.—[Mr. Archie Hamilton.]
§ Debate to be resumed on Monday next.