§ Question again proposed.
§ Mr. Rathbone
I pick up the thread of this excellent debate on Industry Year 1986, initiated by my hon. Friend the Member for Birmingham, Northfield (Mr. King). I congratulate him on taking the initiative. The importance of the debate is not marred by the attendance. I welcome the Minister to the Front Bench. He has done much for industry, particularly for design in industry, as we were able to mark dramatically in our debate on 21 October.
Industry Year 1986 was initiated by the Royal Society for the Encouragement of Arts, Manufactures and Commerce, an entirely independent body which, from its 18th century beginnings, has provided a link between the applied arts and industry; between academia and the practical. The society was the organiser of the great Victorian exhibition of 1851. Industry Year 1986 is a logical progression. I declare a proud interest as a longtime fellow of the society and as a current member of its council.
As a preamble to other thoughts, I congratulate the society on its initiative. But the society is only as good as the people who belong to it. I congratulate first the President of the society and the patron of Industry Year 1986, His Royal Highness Prince Philip. The director of the society has been in charge of the engine room. I refer to Sir Geoffrey Chandler—an enthusiastic engineer. He would not have been able to achieve all that he has achieved without those who are working with him —he would be the first to admit it — including those generously seconded from industry and finance during the planning period this year.
I want also to mention Sir Peter Masefield, chairman of the special Industry Year Committee and the chairmen of the activity working groups who have done so much work. I mention particularly Mr. Ken Fraser of Unilever, chairman of the publicity working group; the Reverend Canon Dr. George Tolley of the Manpower Services Commission, chairman of the education working group; Mr. Martin Moss of the National Trust, chairman of the design working group, Mr. Michael Robbins of the Museum of London, chairman of the museums working group; Baroness Platt of Writtle of the Equal Opportunities Commission, chairman of the women's working group who was referred to by my hon. Friend the Member for Northfield in the preamble to his speech about the importance of women in industry. I also wish to mention the Bishop, the Right Reverend Dr. Edward Wickham, chairman of the churches working group. I must also mention the chairman and members of the 13 regional working groups and the innumerable county committees.
As with all organisations, nothing would happen without the permanent staff. I lift my hat to the secretary of the society, Mr. Christopher Lucas, and his hard working staff.
Industry Year has its genesis in the many years of seminal consultations held under Kenneth Adams' guiding hand at St. George's House, Windsor, the conference centre associated with the Dean and Chapter of St. George's Chapel Windsor. So the seeds that will blossom in Industry Year 1986 will have been sown in ecclesiastical ground, although hopefully rather less contentious ground than that tilled so thoroughly by hon. Members earlier this week. It was certainly at the St. George's house 1213 conferences that tackling the problems of an industrial country with an anti-industrial culture were discussed and developed, which then led to the thrust of Industry Year 1986.
The aims of Industry Year 1986 are crucial to everyone in this country. First and foremost, it is to create an awareness and acceptance of the fact that our whole quality of life and standard of living are directly related to our industrial success. Thereafter, its aim is to build, through industry, an increase in the links that exist, both before and after going into industry, between people in industry and education.
We must not only expand those links this year but continue to seek opportunities to do so in future. In doing that, industry must learn to express itself better—to itself, to everyone in it and to those on the periphery who depend upon it. British industry has adapted to change and to high technology to a much greater degree than we often admit, but it certainly has not explained how it has done so; it certainly has not shown itself to be proud of its achievements in that area; it certainly has not sung its own praises.
As part of Industry Year 1986, I hope that industry will put to rights those characteristics of reticence and hiding of its candle under a bushel. If it does not, that will breed ignorance, and ignorance breeds misunderstanding and mistrust. Industry must shoulder the task of explaining itself in order to gain the rightful respect of others. Only in that way will it attract the people that it needs to meet the exciting opportunities that will be offered both now and in the future.
One of the greater misunderstandings and concerns is about profit—or, as it is sometimes 'miscalled, surplus. That is a misnomer because it suggests that profit comes by chance rather than by plan, and that when it does come there is no real need for it because it is surplus to requirements. That is certainly not the case.
The term "profits" and what they contribute must be better understood. It is only when making a profit that we can ensure the future commercial viability of the industry or company concerned. But that is not the end of the equation. It is only by taxation of that profit that we can fund our Health Service, our welfare programmes, our education institutions and our community services such as fire police and ambulance. When we think of profit, we must eschew the questioning of the need for profit, however much the debate may continue, as to how the taxes on that profit may be distributed. The need for profit must first be established and accepted by everyone.
The task of producing that profit —of contributing energy and thought to the manufacture of goods and the contribution of services to create that profit —is just as important as the task of using those profits, or the taxes on them, for the good of people in our country and elsewhere. We need to place a special emphasis on the vocation to earn those profits, the vocation to manufacture, and the vocation to invent, to construct and to sell. Without success in those areas, there will be no wherewithal to help those who, for whatever reason, cannot help themselves, and for whom we gather so many of our taxes.
As we encourage, once again, that vocation, so I believe that Governments must seek out economic and fiscal policies that can be consistently pursued over long 1214 periods —not simply through the period of one Government. Sir Geoffrey Chandler, the director of Industry Year 1986, commented on the discontinuities of Government policy during the past quarter of a century. He said:These discontinuities included the experiment with national planning in the mid 1960s; the move towards disengagement in 1970; its reversal in 1972; attempts to introduce a more central role for Government in industrial performance in the mid 1970s; its abandonment and replacement by the industrial strategy; and a renewed focus on disengagement from 1979.That is something that all Conservative Members will have welcomed.
That is a worrying description of our country, and compares tragically with the consistent and determined policies of our major competitors in the United States, Japan and Germany —and even in France, Italy and the Low Countries, despite their national difficulties.
There are those who believe that better continuity will be achieved only when we have a more directly proportionate system of elections. I certainly count myself among them. I believe that there has never been a better moment to establish such continuity by greater proportionality than now, following as it does a healthy period of good, radical Conservative government as a starting block to establish continuity for the future.
But continuity would be encouraged also by a greater meeting of minds and mixing of thoughts—
§ Mr. William Cash (Stafford)
Does my hon. Friend accept that the position in Israel, Italy or the Weimar republic during the 1930s, shows that proportional representation cannot really be regarded as a reasonable prescription for industrial success or prosperity?
§ Mr. Rathbone
My hon. Friend will not be surprised by my negative response to his question. I know that he pursued that matter with the Prime Minister during Question Time yesterday. I believe that then, as now, he showed a misunderstanding of an immensely complicated question. However, I shall not be tempted down that line now but perhaps leave it to another day.
Continuity would also be encouraged by a greater meeting of minds and mixing of thought between industry and Government and education and industry. That is almost certainly the most important on-going activity of Industry Year 1986, and should be its most active and creative legacy. Much has been done between Government and industry and Parliament and industry through the well-established scheme of attachment, from which many hon. Members have benefited. But I wonder whether more could be done to arrange an even more widespread exchange between the Civil Service and industry. Too often such exchanges appear to concentrate on attachments between Whitehall and the City and vice versa. The changes that I am advocating should stretch far wider.
In the other place, recently, it was reported that there is a total of 300 secondments in and out of the Civil Service at present. But of those, only 80 are in the Department of Trade and Industry. Surely there should be more, both proportionately and in absolute numbers. In France and the United States there certainly appears to be greater liaison and exchange between Government and business in the development of individual's career patterns and while those careers develop. I believe that 1986 will be an especially appropriate year for a Government initiative to expand activity on that front.
1215 Training within industry is crucial if we are to attract better people, develop them, encourage them and make them more capable of making major contributions to whatever they set their hands to. The Government have made some strides in that direction. I compliment the youth training scheme, especially in its newly extended version. However, unlike Germany, we have still to realise how training can make a more positive contribution to individual and industrial success. That was measured and found to be the case by the National Institute of Economic and Social Research not very long ago.
§ Mr. Rathbone
The hon. Gentleman falls into the trap of thinking that, because something exists and appears to be good, it should continue for ever. One of the exciting characteristics of the Government's attitude and actions regarding the YTS and other Government-sponsored schemes is that they have been developed as they have proceeded so that they keep pace with the growing and changing demands of industry and of the young people who are to be attracted into them. Let us not fall into the trap of feeling that everything that exists should be set in concrete for all time. That is a trap into which we have fallen too often in the past.
Great steps must be made in improving our training. That was borne out by an excellent leader that appeared in the Financial Times only the other day. It referred to the latest study on attitudes towards training, which was undertaken by Coopers and Lybrand. The leader told a depressing story. It stated that the reporttells a story which is only surprising because it is worse than had been thought. It is not the case that employers and managers recognise their relative disadvantage in training compared with competitive countries and are trying to put it right; instead, they are unaware it exists, are indifferent to training at senior levels and see the training budget as one of the first on which the axe should fall in hard times.That is at least partly the position because training in other countries is not left to the inclination of individual firms. Instead, it is established as a requirement under law.
In West Germany, chambers of commerce with statutory powers administer a training scheme in which only those companies with meisters, or foremen, who are trained to teach their skills as well as practise them, are permitted to take on young workers. In both the United States and Japan, the standard of students entering companies or courses for vocational training is generally much higher, and the skill training is much better.
In France, a levy of 0.5 per cent. on turnover is made to finance training, and the technical schools produce generally good quality candidates. The only scheme like that that we have had in recent years has been represented by the training boards, which were allowed to be phased away a few years ago. I have no voice in support of the so-called industrial training boards. They were used only too often as a budgetary head under which costs could be picked up from some other source for things that were to go on anyway, such as sales conferences and the like. The amount of training done within them was minuscule and I am glad that they have gone. As we are in the process of getting rid of the boards, let us have a Government initiative in their place.
1216 People want to be trained. If one mark is needed of that, it is the success of training courses within the open university, where it is the inclination of the individual that is being tapped. The enthusiasm of the individual is being met and the Government have something there on which to build. For the moment, the carrot is not enough for employers and I fear that there must be some stick. Too often employers blame skill shortages on others. They blame the education system or the Government when the problem stems largely from their own indifference to training and, more importantly, from their failure to make best use of existing staff. The leader that appeared in the Financial Times should be taken to heart by the. Government and by every hon. Member.
Industry Year 1986 is more than a propaganda activity for one year. If it is to be successful, it must be the job of a decade. This year must be a lever for changing attitudes, and the lever must be applied for years to come. We all have a part to play in building the momentum for change. As my hon. Friend the Member for Northfield said, local government and national Government, members of Parliament, other elected representatives, companies and those who work in them, trade unionists, church leaders, community leaders, educationists and, last but by no means least, parents must all be involved.
In my home county of Sussex, the Sussex Federation of Industries has already set up 19 geographic working groups, including special activities at Sussex university, which is celebrating its first jubilee. It happens to be the first jubilee of any of the newer red-brick universities. It is marking its first jubilee by a massive extension of its science park and of its co-operative activities with local, national and international industry.
The university has set up special activities in Brighton technical college. It is establishing a special Gatwick working group, which is organising exhibitions, school visits and the like at London's second major port. There are already 28 special twinning arrangements between schools and companies. There are special activities for business women, and it is crucial that women in business are specially involved and featured during Industry Year 1986. Local members of the Institute of Personnel managers are carrying the message of Industry Year to encourage all those in the companies for which its members work and, we hope, the families of the employees. They are highlighting the true message of the importance of Industry Year.
The task before us is to build understanding and appreciation of industry, and it is one in which everyone has an interest. No one can opt out because our quality of life and standard of living depend on our joint national success in bringing about more positive attitudes. Industry Year 1986 will have provided a bridge. Thoughts and ideas must continue to cross that bridge for years to come. That cannot be too strongly accented now, even before Industry Year 1986 has started. It should be exciting. It certainly is crucial.
§ Mr. Paddy Ashdown (Yeovil)
I enjoyed listening to the hon. Member for Lewes (Mr. Rathbone). I welcome the inclusion in his speech of comments on proportional representation —that desperately needed reform —and its impact on industry. He was right to say that the rather crabbed intervention by the hon. Member for Stafford (Mr. Cash) sprang from ignorance of a complex issue.
1217 That was regrettable. The hon. Member for Lewes might have said also that it sprang from a depressing selectivity in the instances that the hon. Member for Stafford brought to light. The hon. Member for Stafford carefully omitted mentioning the case of West Germany, Norway or Denmark —indeed, every other Western European nation, save Italy, now running a fairer election system and having a better record of industrial growth and prosperity than Britain. This year, even Italy, which was denigrated by the hon. Member for Stafford, has a higher standard of living than that enjoyed by Britain.
The social institutions, political system and above all, industrial scene in Britain are more significantly divided within themselves than in any other western European industrial nation. Britain is tribalised and at war with itself. Extremism runs rampant through the country, in councils, society and industry. Proportional representation, which would not by itself create perfection out of chaos, would nevertheless help to bring about some moderation and stability, which would be welcome.
§ Mr. Cash
I must ask the hon. Gentleman to desist from his exaggerated claims for proportional representation and to bear in mind that political judgments and economic solutions lead to improvements in industrial success. I welcome this debate for that reason. It provides an opportunity for these questions to be considered sensibly.
The right hon. Member for Plymouth, Devonport (Dr. Owen) showed the most extraordinary nerve in giving an address in Staffordshire where my constituency lies, on the anniversary of the Tamworth manifesto in which he invoked the statement by Lord Randolph Churchill —yet another Conservative —"Trust the people", in aid of his argument in favour of proportional representation.
§ Mr. Albert McQuarrie (Banff and Buchan)
On a point of order, Mr. Deputy Speaker. I am sorry to intrude on the debate. At the conclusion of the statement by the Minister of State, Department of Transport, on the Severn bridge, the hon. Member for Gordon (Mr. Bruce) raised a point of order about an article in The Scotsman entitledTwo farm institutes to close".The article referred toa White Paper with green edgeswhich was published yesterday by the Scottish Office. The hon. Member for Gordon told Mr. Speaker that the "White Paper with green edges" was not readily available in the Vote Office. I subscribe to that view. The hon. Gentleman went on to say that no copy was available in the Palace of Westminster for hon. Members to look at.
I have just obtained a copy from the Library. I understand from the librarians that a copy of the "Strategy for Agricultural Research and Development" was placed in the Library yesterday. If the hon. Member for Gordon had made suitable inquiries to obtain the document he would not have been in a position to criticise the Government for something that I had rightly presented to hon. Members.
§ Mr. Deputy Speaker (Mr. Harold Walker)
The House will be grateful to the hon. Member for Banff and Buchan (Mr. McQuarrie).
§ Mr. Ashdown
I return to the intervention of the hon. Member for Stafford. I think that you would call me to order, Mr. Deputy Speaker, if I went too far down his line of argument. I have read the speech that my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) made in the hon. Gentleman's area. No doubt it hurt, and so it should have. After all, the Conservatives to whom my right hon. Friend referred in those days were pursuing precisely the approach that I suggest British industry needs —a one-nation policy, which pulls the nation into a unified structure rather than divides it. My right hon. Friend is right.
I return to the subject in hand. The Industry Year publicity pamphlet aims to increase the understanding of the role of industry and its service to the community. No doubt, we all welcome this, because, as the promotional literature points out, in many ways Britain has an anti-industrial culture. Many of the creative minds who could have a vital part to play in our future industrial prosperity choose not to do so in an industrial context, in the belief that industry is somehow dirty.
The search for pure knowledge is often over-valued compared with the search for ways of applying that knowledge. As the hon. Member for Birmingham, Northfield (Mr. King) said, we are good at inventing but not at applying the inventions to manufacturing. Even the idea that the professions —medicine, law and the like —have a respectability denied to industry relates to a wrong but deep-seated view of the position of industry. The conventions of the House seem somehow to reinforce and include those factors. Queen's counsel are learned, and military gentlemen are gallant. Engineers are plain honourable and business men are honourable but sometimes not even that. That attitude must change. If Industry Year facilitates that change it is to be welcomed. No one can doubt that something must be done for British industry. It is clearly now close to crisis point. A glance at the trade figures makes that clear.
In another place Lord Aldington said:the balance of trade in manufactured goods has changed from a surplus of between £1½ billion and £6 billion in each of the years 1963 to 1982, to a deficit in 1983 reaching nearly £4 billion in 1984. There is no sign of a significant improvement in 1985 —despite the splendid export achievements. If one analyses the classes of industry"— [Official Report, House of Lords, 3 December 1985; Vol. 468, c. 1192.]
§ Mr. Deputy Speaker
Order. Is the hon. Member quoting from the House of Lords Hansard for the last Session.
§ Mr. Ashdown
I apologise to the House, Mr. Deputy Speaker, if I have stepped out of order. The drift of what I was saying is clear enough. It is reinforced, as we are aware, by the latest report produced by the other place.
Across Britain, the industrial base has been devastated since the Government came to power. Industrial output is now 20 per cent. below that of 1979. We have become a net importer of manufactured goods for the first time since the industrial revolution. Whole sectors of our industry have been destroyed. I do not blame the Government for all that. The world position has not been moving to our advantage. However, the Government have stood idly by, 1219 hands in pockets, waiting for that to happen. They seem somehow to believe that it does not matter —Britain no longer depends on manufacturing industry because we have a service industry on which we can now count. It is true that we have a service industry, but the service industry depends in large part on a decent and healthy manufacturing industry. The Government seem conveniently to ignore that fact.
The Government say that we no longer need to be a manufacturing nation because we have the bonanza of North sea oil. That oil will not run out overnight, but the surplus that it gives us will begin to vanish in two or three years' time.
The Government seem to believe that the curious magic of monetary policy means that a new set of manufacturing industries and new prosperity will automatically take the place of our present manufacturing industry without assistance or encouragement. That view was substantially undermined by the House of Lords Select Committee report. The view is not shared by any of our industrial competitors. There is an alchemist, touchstone, belief that all things will come right in the end if we keep our hand off the tiller.
We are now running a massive annual deficit in the new technologies, the area that the Government say is strategically important for the future. All that is done to produce a lower inflation rate. I congratulate the Government on their achievement. It needed to be done and industry has no doubt benefited from it. However, industry is now paying a higher real interest rate than ever before because of the difference between interest rates and the inflation level. That may well be more crippling than higher inflation.
Prices have increased by 75 per cent. since the Conservatives came to power. However, that is still a good record. We still have one of the highest inflation rates of any west European country but the Government's achievement is still significant. If we study the matter a little more closely, we discover that the richer in our society have benefited while the poorer have paid a much higher price. I reminded the House that inflation has increased by 75 per cent. since the Government came to power, but if we consider some of the essential goods that represent such a high element of the expenditure of those on fixed or low incomes we find that inflation has been much higher.
Electricity prices have increased by a quarter more than the average rate of inflation. Water prices have increased by a third more than the average rate of inflation. Gas charges have increased by twice the average rate of inflation. Domestic rates have increased by two and a half times the average rate of inflation. Prescription charges have increased by 10 times the average rate of inflation. Once again, the poor have had to bear the burden and pay the cost, even of that achievement. It is an achievement in a way, because it may have helped industry, wherever the burden is placed.
In evaluating Industry Year, the essential question is how it will help to reverse the worrying decline to which I have referred. The size and importance of the task that we face must mean that Industry Year should be subjected to a little constructive criticism rather than being the subject of vacuous praise. Industry Year is not, as is sometimes claimed by some of the phraseology in the document, the solution to the problem, although it is part of the solution and an important ingredient.
1220 I welcome the fact that Industry Year is looking at the identification of current good practice and how to put it into an attractive and available format. British Industry has many great individual achievements to its credit, and almost all our firms must have lessons to learn in terms of design, marketing, management skills and so on.
In more general terms, I welcome the fact that Industry Year recognises the non-cost factors, such as design reliability, and that they greatly improve competitiveness. In the past we have sometimes fallen down in that area. I hope that Industry Year will encourage us not to do so in the future.
I support the idea of making industry more valued in our culture. However, I must enter a strong note of dissent from some of the ideas set out in the promotional literature, which claims that we arean industrial nation with an anti-industrial culture".That is partly true, so far as it goes.
The promotional literature then goes on to say that this and only this differentiates us from our industrial competitors. That is nothing short of rubbish. It is not only that which differentiates us from our competitors. What is more, it is damaging rubbish, which serves only to prop up the current deadening air of complacency emanating at times from the Department of Trade and Industry and the Treasury, with their view that the Government's "hands off' approach is proving effective and that all we need to do is to bring about a change in industrial or cultural feelings. That concept is totally wrong, and I criticise the promotional literature in that respect.
In the longer term, perhaps the greatest single failure is the failure of investment. It is not only a failure of adequate investment but a failure in the direction of investment. Keith Smith, writing in his book "The British Industrial Crisis", identifies that clearly in saying that our research and development in particular go mainly to three key areas —aircraft, defence projects and nuclear reactors. They account for 55 per cent. of our total Research and Development expenditure. That needs to be corrected.
I recognise that investment has increased, and I congratulate the Government on that achievement. There has been a turn-round in investment in Britain. It is now beginning to climb, but all too late. I do not blame the Government for the long-term decline of investment in British industry, because it goes back many years, but it has taken six years to turn it round. Our investment is disastrously below that of our competitors —a third less than West Germany, half that of the United States and a quarter of that in Japan.
It is not a question of culture but of industrial policy. We need a framework that encourages people to invest, not in the hamburger-style economy that high interests rates create, and not in something that requires a small outlay today for a return in a year or 18 months. Real industrial investment in Britain depends on creating a framework that will encourage people to invest in projects that may not see a return for five, 10 or 15 years. That is what our competitors are doing. There is no impetus to see that in Britain yet.
Our successful competitors have been investing in civil electronics and chemicals, which are growing areas in world trade, while we have been pursuing a variety of essentially blind alleys. Industry Year, based as it is en a consensus between Government, the TUC and the CBI, 1221 may not be able to tackle deep structural problems such as that but there can be no doubt that they need to be tackled if we are to succeed.
Our more successful competitors have had actual Government strategies. There is the well-know example of MITI in Japan. The Germans have not shown our bizarre repulsion for the idea of an industrial policy. If we are to succeed we must learn some of the lessons of success. If the Government have a medium-term financial strategy to govern the nation's economy, why will they not have a medium-term investment strategy? I do not mean an overall planning and detailed agreement of the sort that the Labour party would seek to foist upon us, and has foisted upon us in the past, but a set of outline targets, a framework within which the people who invest in Britain and take the key decisions that ensure our nation's prosperity can work effectively. We should consider raising the profile of the various National Economic Development Council groups, as between them they have a crucial expertise in all the various sectors of British industry.
We need a much more vigorous regional policy. At present, it is sadly starved of funds. I accept the comments of the hon. Member for Northfield that regional policy, as it was structured in the past, is not necessarily the most beneficial way of using the available money. That does not mean that we should let the baby out with the bathwater. The faults in regional policy could be changed. We could have a different style of policy that did not simply shunt jobs from one area of Britain to another, and allowed a decent system of consultation and local decision-making about how to encourage industry in our more depressed areas. The effectiveness of that can be clearly seen by the Scottish experience, but it demands a greater financial commitment than the Government have been willing to show and a new set of ideas.
We could usefully look for ways of complementing a sensible national industrial strategy with local initiative. That has much more far-reaching implications than is sometimes realised. We need a macro-economic framework, but we also need policies that encourage the micro-economy to create jobs. The Government have done a lot in that area, but much more can and should be done. The implications of a decent, lower level micro-economic strategy for investment would be very considerable for the financial sector, which needs to get involved and take decisions at a much more local level.
Another factor that has contributed to our decline and which industry attacks only tangentially is the structure of our industrial relations. In Japan and Germany industry is much more of a partnership than in Britain. However, there are encouraging signs that people are at last learning their lessons in Britain. Nevertheless, the institutionalised conflict that besets certain areas of British industry must be broken down through industrial democracy, allowing for a free flow of information through firms and a real role for all employees in decision taking. We should allow profit-sharing schemes through co-operatives and other ways, which would break down the current pattern of ownership.
§ Mr. Ashdown
I hear the hon. Gentleman saying "Good Labour policy", but it is significant and interesting 1222 that when the Labour party sought to bring that into effect they did it through the discreditable and discredited Bullock report. That provided more power, not for workers but exclusively for the trade union movement, thereby excluding a vast number of workers who create the real profit and prosperity of our nation. That cramped and narrow view still persists because, as we all know, the paymasters of the Labour party are the trade unions and it is they who dominate Labour party policy.
I should like to see the Co-operative Development Agency given a much broader role, including a remit to promote industrial democracy on a broad base and given the funds to match the importance of its job.
Those ideas and policies may not lend themselves to years of implementation, but they would play a vital part in the regeneration of British industry. We must not pretend that the problems will dissolve if we suddenly begin to value industry more highly. They will not. A much more important, successful and committed Government policy is needed to do so.
I was delighted to see that the Industry Year campaign has a women's working group. I read the section of the booklet setting out the group's role with interest and rising enthusiasm. It said:Women now form 40 per cent. of the workforce and over 50 per cent. of the population".I expected the booklet to go on to talk of the valuable role that women should have in future, and outline a new strategy for involving more women in industry, particularly in top management. Not a bit of it. According to the literature, women's prime function in industry is this:as mothers they have a particularly influential role in the decisions their children make about their careers.For that reasona full and active involvement of women in all aspects of Industry Year is essential.That is different from the point made by the hon. Member for Northfield, with which I agree, about the essential role of women and their growing capacity to influence industry. Britain underuses the talents of its women. The approach in the booklet is hardly the way to reverse that trend. I hope that the Industry Year steering committee will look at that section again.
I should like to give a concrete example of the effect of the lack of a Government industrial policy. It is in my constituency, where last week 750 jobs were lost at the major employer, Westland Aircraft. It is a great firm, which has helped Britain in the past. It was praised to the sky when it contributed to the Falklands campaign. When the Government had a crisis, Westland came to their aid.
In certain areas, the Government have assisted Westland, and in some ways significantly. The Department of Trade and Industry has invested a large sum of money in developing the new W30 aircraft. That is an example of a policy that now seems to be vanishing. The aircraft has been sucessfully developed as a result of the Department's intervention. I am grateful and commend it for that. It is a prototype aircraft, which has had some problems, as any prototype will. From that has developed the new aircraft, the W30 1300, a truly magnificent aircraft specifically designed to meet the needs set out by the Ministry of Defence in air staff target 404. It did so better than any of the foreign competitors at one third of the operating cost. It is a great aircraft, in which there is 1223 considerable foreign interest. If only the Government would put their imprimatur upon the aircraft, I have no doubt that many could be sold up and down Britain.
However, when Westland won the competition hands down, the Government simply moved the goalposts and changed the rules. We have allowed that great aircraft to be rubbished by others. Mr. Bristow is happy to rubbish it. There is no word from the Government about how good and useful it was.
§ Mr. David Heathcoat-Amory (Wells)
Does the hon. Gentleman accept that, although the W30 is a good aircraft, it did not win the competition for military procurement, and that air staff target 404 was a preliminary stage before the services made up their mind about which helicopter they required? There was no question of the helicopter winning a competition and then being turned down by the Government. Does the hon. Gentleman accept that?
§ Mr. Ashdown
I accept that in the narrow way in which the hon. Gentleman puts it. The Government put in a sum of £50 million to Westland Aircraft through the Department of Trade and Industry to encourage the aircraft's development. They drew up a target to meet the Army's known requirements. Firms were then asked to put in submissions to meet the target. A British firm applied and met the target fully at one third of the cost. I think that it is fair to say that, in broad terms, a British firm headed the competition with the best aircraft, but the Government allowed it no longer to be required. What sort of policy is that? That would not happen in France. The French would say, "A French firm has got it and will get the orders. It might not be what the services want because they have changed their mind, but they will still get it because it will help our industry and exports." We are not always right to allow service offices to dictate terms down to the last nut and bolt, as they will always want more.
The W30/300 meets the original service requirement in full and at a lower cost than any of its comprtitors. If there had been any co-ordination between Government Departments, the aircraft would have been sold, created prosperity and provided British forces with the aircraft they need. It would have strengthened Britain and provided jobs in my constituency and in that of the hon. Member for Wells (Mr. Heathcoat-Amory). Such lack of co-ordination would not have occurred in our competitors' nations.
Industry Year is a welcome event and I hope that it will succeed in reminding people that we enjoy our prosperity largely because of industry. It cannot make up for a lack of Government industrial policy, but it could complement such a policy. Industry has made a positive contribution to Britian and to Industry Year and I am sure that the whole House wishes it well.
We face bigger problems than the excellent document to which I have referred considers. The price of failure for British industry is severe. The signs are that British industry is failing, not because of lack of commitment or because people are not working but because the Government have no structured industrial policy. We need such a policy if this dangerous decline is to be reversed and if Britain is to become a great industrial nation again, rather than one which is in danger of becoming an industrial has-been.
§ Mr. David Gilroy Bevan (Birmingham, Yardley)
I must compliment my hon. Friend the Member for Birmingham, Northfield (Mr. King) for generating such interest in this subject, which he tackled with great erudition and ability.
I was somewhat alarmed by the speech of the hon. Member for Yeovil (Mr. Ashdown), however. It seemed that he would give his right arm to be ambidextrous in his criticism of the Government. He was clearly wrong. Industry Year requires the multi-dextrous support of all parties. I am pleased that other hon. Members have approached the subject in that way, and not taken the petty party political line of the hon. Member for Yeovil.
Hutchinson's dictionary defines industry as,diligence or the habitual employment in useful work; branch of trade or manufacture.We must not fall into the trap of directing all our comments to heavy industry, necessary though it may be. Nor must we succumb to the arguments that any new service industry must erode the basis of heavy manufacturing. That is not true. In that regard, I commend the Government report entitled, "Pleasure, Leisure and Jobs", which details in full the merits of the leisure and tourist industries. Regrettably, that is the only sector in which jobs have been created during the past few years. It is estimated that about 50,000 jobs a year have been created in those industries, although many of us believe that the true figure is about 100,000. Those jobs were created not to frustrate heavy manufacturing industry but to complement it, because the one cannot exist without the other. During the serious industrial decline in Birmingham, and especially in my constituency of Yardley, there was no competition to replace those industries. We are fortunate that we have been able to focus some of our attention on the development of leisure and tourism, in my case industrial tourism.
I am proud to chair the Conservative party tourism committee and the all-party recreation and leisure industry committee, and I wish to draw the House's attention to the many merits of those industries. For more than 40 years, since the time of the Board of Trade and Hugh Dalton, heavy manufacturing industry has been seduced —the word was used earlier in another sense —away from the west midlands and Birmingham by the positive creation of subsidies in almost every other part of the country. That has weakened the west midlands, which my old school song used to call "the iron heart of England." That heart beats feebly by comparison with its earlier strength.
§ Mr. Bevan
For the benefit of the hon. Member for Yeovil, I do so at an appropriate time. He should realise that, although the song talks about the iron heart of England beneath its sombre robe, that sombre robe has been dispelled. An area of beauty and industry has been created by the emphasis that the Government rightly place on the creation of new industries.
In praise of the lyricism of that song, I should say that, contrary to what the hon. Member for Yeovil tried to claim, the auguries have never coincided as much as they do now. British productivity is high and is increasing. The leisure sector is creating jobs, although every other sector is losing them. Interest rates are coming down for the sixth month in succession and the balance of trade figures are 1225 in the black. If I may be political for a moment, I praise the Government for having created this favourable climate.
I want to draw an analogy with Halley's comet, which unfortunately has not been seen by very many British people. I do not wish to draw too strict an analogy because a comet has to return to earth; it shoots up and it comes down. We are witnessing a convergence of factors, all of which are right. We hope that the ascending level trail across the sky will continue. I am certain that it will.
The Government have provided help for the west midlands. They have helped to restore the balance in Birmingham by the creation of intermediate status for the city, to which my hon. Friend the Member for Northfield referred. This means that the problems connected with our industrial heritage are being dealt with. We are refurbishing the land and resuscitating our old, out-of-date factories.
One periodical states that in my constituency Land Rover has put up for sale two factories, on a total area of 11 acres. Land Rover produces an excellent article and employs many people. It has decided, quite wisely, to rationalise its manufacture and to site it in a new factory: the old Rover works in Lode Lane, Solihull, which is adjacent to my constituency. Nobody criticises the company for leaving those two factories and centralising its operations on one site. However, the old factories will have to be refurbished.
This is when new industries can exist alongside the old. If we refurbish old factories and landscape in those areas where factories are no longer required, we shall encourage industry to return to the area. It will be possible to attract industry back to the area of desolation between Birmingham and Wolverhampton when it has again been made presentable and environmentally acceptable. We shall encourage that to happen if we concentrate upon land reclamation and the service sector and leisure and tourism.
The tourist industry now has a turnover of more than £10 billion a year. It is creating jobs and, as I have said, it is worth some £700 million a year, to the west midlands alone. It is employing more and more people.
I must bring to the attention of the House the great success of the national exhibition centre near Birmingham. Many people are employed there. We hope that the inland free port which we were able to secure for Birmingham will be successful, and there is the contribution of the international station and the international airport with its new terminal to the leisure and tourist scene. Those facilities are attracting more and more people to, and employing more people in my constituency and they bring many advantages.
In November, unemployment in the United Kingdom fell to 13.3 per cent. That is high enough, but we must give credit for the fall. We must note, too, a fall of 1,264 in the number of school leavers out of work in my area. In the Birmingham travel-to-work area unemployment is now 16.3 per cent. Again, that is high enough; only a sliver —.2 per cent. —less than that in the west midlands county area. However, we were pleased to see a reduction in the unemployment figure of 6,877 in October and 3,967 in November. In Acocks Green ward, one of the three wards in Yardley, there is an unemployment rate of 20.4 1226 per cent. In Yardley ward, it is 17.9 per cent. But in Sheldon, the third of my wards, I am delighted to see that unemployment is down to 12.8 per cent.
Why is that? Those three areas are cheek by jowl, yet the unemployment of one is over 5 per cent. less than another and nearly 8 per cent. less than the third. The reason is the development of tourist amenities and the leisure industry which have resulted in a greater take-up in employment, full and part-time. That is a welcome and excellent take-up.
I hope that, in the fullness of time, we shall be able to build upon that in Industry Year 1986 and to do what other enlightened countries do —create industrial and tourist "trails" so that our industrial visitors and tourists are able to go round and see the facilities that exist in industry and in the area generally. Those are the first attractions shown to me and my colleagues when we go on parliamentary delegations overseas. Because of the Government's policy we are now able to look at those matters.
I hope that in Industry Year we shall be able to concentrate on the creation of the Birmingham convention centre in the middle of the town which will add to the urban regeneration that is going on and create in some 50 acres a great new complex to complement the heavy industrial activities of my city.
§ Mr. Bevan
It will not come entirely from the public sector. Hyatt International will build a new 500-bed hotel in the centre. That will be private money. Perhaps the regeneration will be marshalled and triggered by actions in the public sector and perhaps that sector will contribute to the land assembly, but the money will come from both the public and the private sectors.
I recommend hon. Members to read a book produced by Glynwed International, whose headquarters are in New Coventry road, Sheldon, Yardley. The company produced the book, "The Phoenix Partnership —an Urban Regeneration for the Twenty-First Century" after sending a representative to America to study examples of land refurbishment in the United States. The book suggests that refurbishment can be carried out with a revolving fund. Money lent to viable projects would be recycled; it would replace grants and enable the same finance to be reused time and again. Locally based loans would attract further commercial and industrial development and the ripples of economic revival would spread throughout the community.
§ Mr. Campbell-Savours
When the old buck that the hon. Gentleman is giving us —I agree with much of it —is reported in his local newspapers, will it dawn on the reporters that there is a clear distinction between the hon. Gentleman's speech and that of his hon. Friend the Member for Birmingham, Northfield (Mr. King)? The hon. Member for Northfield was opposing public sector investment in recreation and leisure facilities. The hon. Gentleman is proposing it. There is a clear division. Is that division being debated as openly in Birmingham as it is in the House?
§ Mr. Bevan
My hon. Friend the Member for Northfield was careful to define his parameters. He suggested that the application of public funds should be limited and not limitless. I regret what I suspect was the innuendo in the intervention of the hon. Member for Workington (Mr. Campbell-Savours).
1227 We have to consider how funds should be limited and in what proportion the public and the private sectors should make their contributions. The lesson to be learned in Industry Year is that only private money can tackle regeneration and the clearance of derelict areas that have been abandoned because of the industrial scars of the past. After regeneration by local communities, institutions and banks, all involved in local schemes, areas that had nil or negative values have produced land of substantial value.
We are looking for progress in various sectors in 1986. We note that the youth training schemes have been successful. Not only are the training schemes being extended from one to two years, but 75 per cent. of the youngsters who have taken part in the schemes are finding permanent jobs. This is not a cosmetic subscription to industry. Tourism and leisure are not candyfloss industries. They are integral, producing real and lasting jobs. Industry in all its aspects is one and indivisible and all its components have a contribution to make.
§ Mr. Alan Williams (Swansea, West)
I congratulate the hon. Member for Birmingham, Northfield (Mr. King). With his luck in the ballot, he should enter the Irish sweepstake. This is the second time that I have had the opportunity to take part in a debate, thanks to his good offices.
We all congratulate Geoffrey Chandler and his colleagues who are so dedicated to Industry Year 1986. But it is sad that a country responsible for half the major inventions and half the major scientific breakthroughs in the post-war period has to overcome difficulties caused by lack of motivation and understanding amongst youngsters of what industry is about and how important it is.
Geoffrey Chandler and his colleagues have been somewhat sabotaged by the circumstances. The level of unemployment among the young makes motivation difficult. The Government have destroyed hope for most young people.
In one of the publications connected with Industry Year the team asks "What is Industry?" I understand the need to ask, particularly in parts of the country. After all, the north-west has lost 250,000 jobs under this Government, Yorkshire and Humberside has lost 160,000, Scotland 150,000, the north 100,000 and Wales 80,000. What is industry? Youngsters would like to know.
Youngsters hear about the newfangled technology. They would like to know where it is because not much of it is going their way in the regions. Nearly all of it is concentrated in the south of England. Only the screwdriver operations —the unskilled assembly work —goes to the regions. All the up-market, high-tec work goes elsewhere, mainly to the already prosperous south.
The document says that industry is fundamental to almost everything that we do. Hon. Members on all sides will approve that sentiment. But it is a little difficult to reconcile that with the Government's six-month moratorium on all financial aid for high-tec industry. It is difficult to reconcile that with the abolition of capital allowances, cuts in regional development grants and penal interest and exchange rates; it is difficult to reconcile that with the Government cuts that have forced the university grants committee to stop the intake of electrical engineers. Yes, industry is fundamental to almost everything that we do, but Ministers seem to be hard to convince of that.
On the abolition of capital allowances the CBI says: 1228The new system will tend to penalise firms who have heavy investment programmes in hand, undertaken to meet increasing competitive pressures and those using short-life, high technology assets. In addition, it makes no allowance for inflation.It continues:A resolution … at the National Conference which described this new system as a disincentive to investment, was overwhelmingly passed.Yet the Government are paying lipservice to the idea that industry is fundamental to everything that we do.
The Minister and I recently took part in a question and answer session on electronics, against the background of the abolition of capital allowances, cuts in regional development grants and high interest rates. The Government have been told by the electronics components industry that it needs to invest £400 million for the remainder of this decade, which is three times as much as it has been investing. Yet the allowances have been removed.
It is small wonder that the deficit on electronics trade was £2.3 billion last year, and is prophesied by Cambridge econometrics to rise to £8 billion by 1993. Yet that is the industry of the future —we just do not seem to be in it. The Government are doing everything to ensure that we never get into it.
Let us consider state programmes for microelectronics from January 1982 to the end of 1984. Starting from an almost equal position, we increased our aid by 50 per cent. —ignoring the six months moratorium when there was nothing at all —while West Germany increased its aid by 120 per cent. and France by 900 per cent. Those countries did that from the same base of aid to an industry that is so essential to our survival over the whole spectrum of industry, manufacturing and services during the next couple of decades.
The document produced in support of Industry Year 1986, called "Education and Industry" statesYet in Britain we hold industrial activity in low social esteem and the causes of our relative industrial decline are deeply embedded in our cultural attitudes.The aim of Industry Year 1986 is to encourage a better understanding of industry, its essential role".My advice to Geoffrey Chandler and his team is that they had better look to the top rather than the bottom. As the Chancellor said last yearI am at a loss to understand the selective importance attached by …many Opposition Members …to the manufacturing sector." —[Official Report, 9 February 1984; Vol. 53 c. 1009.]There is a good job to be done there. I hope that Geoffrey Chandler is sending the Chancellor that document and making sure that he reads it.
When we were taking regional legislation through Committee, the then Minister of State at the Department of Trade and Industry, who has now moved to the Department of Defence, said that the trouble with the Opposition was that they were dewy-eyed about manufacturing. He is another person who might be interested to receive that document. I do not suppose that he will ever get around to reading it, but I shall gladly send it to him because it is an important document
§ Mr. Rathbone
The right hon. Gentleman's quotation was completely out of context. The Chancellor was referring to the comparison between manufacturing contribution to exports and that of oil and invisibles. That is in no way denigrating what manufacturing is about. The Chancellor was talking purely about the proportion of the contribution to exports.
1229 No Government have attached greater importance to the resurgence of industry, and the adoption by industry of high technology in new forms than this Government.
§ Mr. Williams
If the Government have given such priority to that, it is an incredible failure for them. We have had the first deficit on manufacturing trade since the time of Napoleon. A £2 billion surplus in 1979 was turned into a £4 billion deficit last year. Jobs as well as trade have been lost. According to the Department of Employment, even by early 1984, for every 100 jobs in manufacturing when the Government came to office, we had lost 23. The Germans and the French did not do as badly as that although they had to exist in the same world. They lost 10 each. The Swedes lost eight and the Japanese were employing three more.
If we are witnessing the Government's resurgence, I must tell the hon. Member for Lewes (Mr. Rathbone) that he will be in for some mild disappointment when he examines some of the weaker parts of the Government's programme. If a resurgence is taking place, one would expect to see the results in manufacturing investment.
During the debate on the Gracious Speech, the Prime Minister boasted of a recovery in manufacturing investment. We were told that it was wonderful and that investment had increased by 14 per cent. over last year. That was great. At least there had been an improvement on last year. The right hon. Lady forgot to say that even on the best figures, manufacturing investment is still 21 per cent. below that of 1979. It does not equal any one year from 1974 to 1979 when the Labour Government were in office. The best year, about which the Prime Minister was boasting, is so pathetic that it equals only the level of manufacturing investment that was being achieved in Britain a quarter of a century ago. If only the Government had sustained the level of manufacturing investment at the level that they inherited in 1979, there would be an additional £10,000 million invested in manufacturing.
I hope that the Government and Conservative Members will not tell me that we are seeing success and a Conservative-led resurgence. I know that all things are relative and that by the standards of other parts of the Government's overall performance manufacturing investment might be seen as a success, but I cannot believe that anyone with any objective perspective would be eager to boast about it.
§ Mr. Cash
Will the right hon. Gentleman accept that he is talking about something which has developed over a long period, in respect of which the Labour party, when in Government, bears considerable responsibility? Will he accept also that the object of Industry Year 1986 is to try to change attitudes and to rectify the position in which, for example, the Japanese managed to increase their productivity by 500 per cent. while we increased ours by only 80 per cent. or thereabouts? Is he aware that a severe responsibility falls upon the Labour party for the manner in which it has exaggerated opportunities for employees to obtain higher wages, which by any reasonable standard —the right hon. Gentleman must accept this —do not bear comparison with what is acceptable in other countries?
§ Mr. Williams
I am sure that the hon. Gentleman has a genuine belief in what he is saying, but he is ignoring 1230 all the facts. We are in our sixth year of "successful revolution". I refer to the Conservative Government's revolution. All the terrible features of the previous Labour Administration have been left behind, such as high manufacturing investment. After six years of "glorious Conservative success", the level of manufacturing output is lower than it was in 1979. Indeed, it is lower than it was when the power stations were closed during the three-day week. That is another measure of Conservative "success" on the industrial front.
It was the well-known Socialist chairman of ICI who told the Select Committee in another place that 30 per cent. of ICI's British customers have disappeared since the Government came to office. There are other examples. A document has been produced for Industry Year on further and higher education. It tells us that we must examine the systems of learning that are used in colleges to ascertain how they can be improved to meet the needs of industry. We all agree that training skills are important, but this Government got rid of the training boards. The percentage of qualified workers in our work force is half that in the United States, Germany and Japan. British firms are spending half what the French spend on training and one sixth of what the Japanese spend. The Government have cut centralised spending on proper industrial training, and industry has done nothing to make it good.
Do not take my word for this —let us take another well-known Trotskyite document. On 24 January, The Engineer stated:Britain has three million people out of work and skill shortages in virtually every industry using new technologies. So what are we doing about it? The answer in practical terms is that we're not doing a lot.That statement may be an aberration. One might say that that is just what the engineers say. But the CBI says:Three out of five employers are having difficulty in filling jobs requiring skill, qualifications or experience.Why get rid of the training boards? Why make cuts?
Let us consider the Government's higher educational performance in relation to the needs of industry. One document asks how can further and higher education and industry work together. The answer is with increasing difficulty, because 4,800 fewer students have been admitted to the universities despite the fact that there are more than 7,000 more students with the qualifications needed to enter them. Much of the talent that we say we desperately need to motivate and direct to the national advantage is denied its place in the universities. Just to ensure that we cannot remedy the position too quickly, there have been staff cuts of 4,000 in the universities.
Unbelievably, when one considers the future role of electronics for the whole spectrum of industry and its abysmal performance under this Government, the high-tech universities were hardest hit by the Government's cuts. The EDC has prophesied a shortage of 30,000 information technology staff.
No doubt the Under-Secretary of State will say, "We have put an extra £40 million —belatedly —into the science and engineering side of our universities." That is not really "extra" —the Government have merely taken the money from all the other university departments. In the new era of high-technology industry which involves a dynamic change in technological content and, therefore, in the nature of jobs, we shall need a large number of highly qualified generalists with the ability to move, adapt and adjust; but instead the Government have cut 4,000 university places and are keeping out people of ability.
1231 The background to Industry Year 1986 could hardly be less propitious. Nevertheless, I wish the promoters of the campaign well. What they say is amazingly reflective of and complementary to our "Jobs in Industry" campaign. We recognise, as they do, that the young must be motivated, that they must have the opportunities to be trained and educated and that they must feel that they have an opprotunity to get a job when their training and education has finished. Instead, the Government have seen £40 billion of income flow into the Treasury from the North sea and have wasted it all —£12 billion a year —in paying for the extra unemployment that they have created. They have allowed a further £50 billion to go overseas as a result of their exchange controls.
The trust and pension funds had £4 billion invested overseas when the Conservatives came to Government. There is now over £21 billion invested overseas. The Government have decimated industry and destroyed the regions. They have hardly any credentials which would enable them to sponsor Industry Year unless it is to be a commemorative year.
§ The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher)
I know that some hon. Members still hope to catch your eye, Mr. Deputy Speaker, before the debate closes. I shall try to confine my remarks to the points that have been mentioned and to give some idea of the Government's position on the issues raised by the campaign of the Royal Society fir the Encouragement of Arts Manufactures and Commerce and to set in context some of the wider problems that have been mentioned.
My hon. Friend the Member for Birmingham, Northfield (Mr. King) is to be congratulated yet again on securing a debate on an important subject on a Friday morning. It is a mark of the interest that the House shows in the subject that we have a higher than average attendance for a Friday. The observations made by hon. Members have been of a high quality.
One of the phenomena that I think we unite in identifying, although we may not agree about the solution, is that in 1964 the United Kingdom had about 14 per cent. of the world share of exports of manufacturing and services. By 1979 that share had decreased to about 8 per cent. The CBI, which has already been quoted today, has advised us that each 1 per cent. of the loss of the share of world trade represents 250,000 jobs. Between those years, Britain exported 1.5 million jobs.
Today is not the day to argue about the responsibility of various Governments for that loss. It is, however, highly relevant to the debate. Our objective, like that of the royal society, is to examine which trends were malignant during that period and deterred us from becoming job creators, and which trends we can reverse.
Some key subsystems in the industrial strategy have been correctly mentioned. They include design, quality and productivity. I should like to deal first with my hon. Friend's reference to Sir Adrian Cadbury's paper in which he said that we have been sinking down the international league table.
The royal society and hon. Members have come to the same conclusion, which is that there seems to be a cultural, antipathy of some strength within the United Kingdom 1232 against industry and manufacturing. That is important, because if there is such a cultural antipathy it is one that is not shared by some of our competitors.
A form of economic, industrial and commercial warfare has been raging in the international markets since 1945, and is increasing in intensity. Bearing that in mind, the United Kingdom may have been sending its brightest and best people into any occupation other than commerce and industry —in other words, into the second-tier occupations, which are distant from the front-line trenches of the manufacturing sector. If we have been doing that, and to employ one of the mixed metaphors that sometimes bedevil our debates, I say that, in fighting an economic war, it would appear that as a nation we decided not to enrich the quality of the general staff, the junior officers and the NCOs but, instead, to create the most articulate and able corps of war correspondents that any nation has ever had. We became brilliantly equipped to comment on the problems that were bedevilling us but forgot that the army wished to have the very best recruits in fighting that battle.
I shall not go into the reasons why youngsters at school have made the choices that have caused the problem, but in politics, in industry and in the trade unions we must all do what we can to persuade the 14-year-olds —not the fifth-formers or sixth-formers —in our secondary system that the subject choices they make at that age will determine whether they can go into management in commerce and industry. It may well be that those careers in commerce and industry will become more attractive as the century progresses and as Britain re-enters the international race for market share.
§ Mr. Mark Wolfson (Sevenoaks)
I agree with my hon. Friend that the important factor is to enlighten 14-yearolds as to the importance of subject choice, but I suggest to him that it is not that that will determine whether they can go into industry, but whether industry will be successful. In other words, the problem is not one of gaining entry; it is getting entry of the right, properly qualified, people. Would my hon. Friend agree?
§ Mr. Butcher
I agree entirely with my hon. Friend the Member for Sevenoaks (Mr. Wolfson). Industry and commerce are asking for an increase in the critical mass, male and female, of youngsters who are trainable and who have the appropriate skills, bedrock subjects and abilities to take advantage of companies' management training courses and requirements.
My hon. Friend the Member for Northfield used a very apt phrase when he said that he feared that home economics was put before business economics in some of our schools. It was a pungent and concise way of stating the scale of the problem.
I ask hon. Members in all parts of the House to conduct an experiment when they next visit the schools in their constituency. I invite them to ask for a show of hands on two questions. The first is whether the pupils can define what is meant by profit. Some might have difficulty in defining "profit" in the strict meaning of the word. Some might even think that it was vaguely unpleasant. The second question is whether any of the sixth formers have seen a balance sheet and know what it is. I suspect that the feedback would be very interesting. That is why I am delighted to endorse one of the major objectives of 1233 Industry Year 1986, which is to have much stronger contacts between schools and local commerce and industry.
Several hon. Members have mentioned the need to get more women into industry. The Government gave strong backing to the campaign to get women into science and engineering. The Government have identified themselves with the campaign of the Institute of Directors to pair sixth form schoolgirls with top female managers in commerce and industry, so that the girls can report back to their schools what they have learnt, and perhaps be able to say that commerce and industry is a much more interesting, stimulating and challenging field than they may have assumed hitherto.
My hon. Friend said that many people felt that industry, in the eyes of school leavers and university students, was often seen as dull, boring, repetitive and unhappy. I do not accept that that has always been the case, but we have to reverse that impression, however wide it may be. I also believe that the picture is changing very rapidly.
A rebirth of engineering is taking place. It is not about oily rags, dirt and noise. The engineering industry is transforming itself. We have had this debate before. The so-called sunset industries are now becoming sunshine industries. They are getting into higher added value, into manufacturing systems engineering, and into multidisciplinary approaches, with the fusing together of mechanical, electrical and electronic engineering. The "mechatronics" engineer has arrived. Industry is cleaner, and industrial relations are improving dramatically. Industry is no longer the constant supplier of problems and fodder for our industrial correspondents. I met an industrial correspondent the other day who said that it was a long time since he had had a drink with his colleagues in a certain pub round the corner from the Advisory, Conciliation and Arbitration Service because it is not like it was in the 1970s. They are no longer permanently camped outside, reporting current disputes and the lunacy involved in them. That pub may have lost some turnover but I am glad that he told me the story because it means that sanity is returning.
The right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie) gave a considered speech early in the debate and said that success will be judged on whether unemployment has been substantially reduced. I understand why he makes that observation, particularly as a Scottish Member. I understand why he wishes to see industry make its contribution to the employment stakes. I put this thought to him. In the House we have discussed jobs and job creation programmes on many occasions. Will he not join me in agreeing that the job creation programme, which is the most important programme of all, is defined as jobs created by reversing the erosion in our share of world trade in manufactured goods and services?
I sometimes wonder, when the Government go on, as they rightly do, about productivity, efficiency and markets, whether we should not enjoy a little more support from the Opposition, fixated as they are and we are by the need to create more jobs. It is the job creation programme to which we should be giving the highest priority. I agree with the right hon. Member for Rutherglen when he said that he did not agree with wholesale import controls. He will know that once retaliation and tit-for-tat measures 1234 start in selective import controls, in what the right hon. Member for Lewisham, Deptford (Mr. Silkin) used to call "managed trade", it is difficult to define and control where that retaliatory campaign could end. It may be that as a nation that exports 30 per cent. of what it makes we would find ourselves hurt far more than some of those that we were retaliating against. It is the old parable of the first shot at Sarajevo. One never knows at which point such activity could get entirely out of hand. Therefore, as a nation we must resist, wherever possible, any pressures to move towards import controls here or in other nations.
My hon. Friend the Member for Lewes (Mr. Rathbone) ably congratulated the Royal Society for the Encouragement of Arts Manufactures and Commerce on bringing forward the programme at this time with these objectives. His Royal Highness Prince Philip and Sir Geoffrey Chandler were far-sighted in mapping out the chain of events some time ago. My hon. Friend also mentioned the impact of the anti-industrial culture and said that industry has to express itself better and adapt itself to new requirements. If the debates on industry and commerce have become stereotyped, it may be because the industrialists themselves have not taken time to put their heads above the parapet and address the wider constituency of the nation at large. I fully understand why they have to be concerned with their three-month profit and loss account and balance sheet and running their companies. However, many of our industrialists are a little shy of appearing on the media and reticent about expressing the values of the industrial and commercial lifestyle, to such an extent that it is often parodied, in my view inaccurately, in some of the news we see or read in the media today. Industry and commerce is very little like the stories we see on "Dallas" or our domestic soap operas.
My hon. Friend the Member for Northfield was entirely correct about the way to get over the cultural problem, between the sectors and pillars of society. He said that we should have more secondment between industry and commerce and Whitehall, and in particular we should consider secondment into the Department of Trade and Industry. I agree, and I assure my hon. Friend that we keep that under constant review, particularly in my Department.
Training has to be —there can be no other way —the responsibility of the companies themselves. We have heard much about Japan recently. If one talks to a Japanese industrialist about the national training facilities and programmes, and asks how his company is participating, he looks at one with incredulity. He says, "This is just an integral part of my constant management effort within my own company. I do not need other people to come along and provide me with trained people. I need people who are trainable, whose skills can be enhanced by the training programmes that we have in-house." The Japanese have that obsession and fixation with their training culture.
I shall not refer to the Government's skill shortage exercise, but suffice it to say that the right hon. Member for Swansea, West (Mr. Williams) was not entirely correct when he implied that the additional £43 million had been found from other accounts. Contributions have been made from other Government Departments, but it is additional resource going into those engineering and technology programme courses. They were identified by the industrialists on my skill shortage committee. They got together with the higher education sector and helped to identify precisely where the money should go in the areas of greatest shortage. In my view, the new partnership that 1235 has emerged will be seen as a seminal event, setting a precedent for the links between higher education and the private sector.
The hon. Member for Yeovil (Mr. Ashdown), in his customary style, generally laid about him ambidextrously, as we were reminded by my hon. Friend the Member for Birmingham, Yardley (Mr. Bevan). I have to take him up on this, desperate though we all are to try to keep party politics out of the debate as much as possible. I have to take him to task on his assertion that the Government have stood idly by. That is not so. Neither is it the case that Government spokesmen have said that services can be depended upon to sustain our standards of living.
It is a great shame that somehow in the House we are stuck on a set of tramlines, with a service sector and a manufacturing sector on separate lines, almost in competition with each other. They are complementary. If we are considering the propensity for wealth creation, when we note that 80 per cent. of manufacturing output is internationally tradable, whereas 14 per cent. of service sector activities is, we see that manufacturing gives us a good return for our manpower and investment in the United Kingdom.
§ Mr. Ashdown
The Minister has, more significantly than any other Minister, made precisely those points. He is well known for having made the point about the connection between the service sector and manufacturing industry. However, does he agree that other Ministers in his Department and the Prime Minister herself have somehow given the impression that the service industry will take up the slack where manufacturing industry is in decline? That is an unfortunate impression, which the hon. Gentleman has taken pains to correct.
§ Mr. Butcher
I do not accept that. Others have taken that impression because it may suit their purpose. I was at a meeting of the national assembly of the Engineering Council, when the Prime Minister was particularly supportive of engineering and the manufacturing sector. Because we in the Conservative party dwell on complementarity and integration of the various sectors, some of the comments made have been taken —perhaps deliberately —out of context, for constituency or other political reasons. There is a massive contradiction at the heart of alliance policy and I am surprised that nobody in the media has twigged to it. I watched the hon. Member for Yeovil and his colleagues carefully at their conference. They talked about the head and heart policies of the alliance. The alliance says that, with its heart, it wants to spend on various social programmes and that, with its head, it wants to protect the interests of commerce and industry, an independent deterrent and so on. I wonder whether the cost of the heart policies will make life exceedingly difficult for commerce and industry. I challenge the hon. Gentleman —I shall give way to him now —to tell me how much his heart policies will cost, how he will fund them and how he will protect interest rates from the effects of that expenditure.
§ Mr. Ashdown
I am especially grateful to the Minister for giving way as he related his comments to the effect on industry. I remind him that the detailed proposals in our alternative budget costed social policies and chimed in almost precisely with the CBI's proposals in terms of the extra expenditure needed and how it should be spent. I have letters from the CBI, of which I shall send copies to 1236 the Minister if he would like, which show that the alliance's proposals coincide with those required by British industry.
§ Mr. Butcher
I hope that the House will note carefully what the hon. Gentleman has said. I did not hear him say how he would protect interest rates from the implications of increased expenditure. He will know that, year after year, the CBI puts the level of interest rates at the top of its list of factors that determine business confidence. No doubt we shall return to that debate at another time.
My hon. Friend the Member for Yardley talked of the various sectors of industry complementing each other. He also talked with affection about employers in his area. He is some ways a fortunate Member of Parliament as he has in his area an international airport, a freeport, the Land Rover company and the national exhibition centre. As an ex-Birmingham councillor, I congratulate him and his ex-colleagues in Birmingham on continuing that tradition of looking to the future and bringing forward the imaginative proposal for a convention centre, which will create hundreds of jobs.
§ Mr. Bevan
My hon. Friend has mentioned job creation and the convention centre. Birmingham has more miles of canal than Venice, some adjoining the conference centre. If the canals were developed as part of a job creation scheme, they would provide an excitng scheme for 1986, and I would appreciate comment.
§ Mr. Butcher
I have spent some time on those canals and I can vouch for the fact that they are a major asset to the city. With appropriate programmes, they could be a strong attraction for the many tourists who now visit Birmingham.
The right hon. Member for Swansea, West mentioned the moratorium on support for innovation programmes. As £138 million was allocated to innovation programmes in 1979, would he please note that some £380 million has been allocated in 1985–86, including an element of the Alvey money? The moratorium took place against a total spend of £230 million because awareness of the options and support for innovation arrived like an express train in that financial year. In previous years, there had been slight underspends against lower allocations. The allocation was higher when awareness was roused. The year's spend was consumed almost entirely in the first six months.
§ Mr. Williams
I am grateful to the Minister for that information. However, does he accept that that happened as a result of the Chancellor's proposals and that industry was rushing to get through its investment proposals before the capital allowances were abolished?
§ Mr. Butcher
Several factors were involved, but the major factor, which outweighs that one, was that, at that precise time, most companies were cranking up their investment programmes, having come to the judgment that, for them, the recession had ended. Therefore, it was in their interests, if they wished, to help to discount that growing investment programme, sometimes at taxpayers' expense, through the support for innovation programme. It was a sign of a general, healthy increase in the rate of investment.
I hope that the right hon. Member for Swansea, West will use another debate to explain why he said that industry, especially the high-tech industries, wanted generalists with flexibility. That was an interesting phrase.
1237 However, the position is far more complex than that. Key and specific skills have been identified as being required, but more general skills are also required.
§ Mr. Williams
This is a problem more of articulation than anything else. I was talking about the high-tech era and the work force that we shall need in the future. The essence of my point was that both were needed.
§ Mr. Butcher
Perhaps the last 30 seconds of the debate have produced a happy consensus. This is an appropriate moment for me to resume my seat, to thank all, those who have contributed thus far, and to look forward to the further important speeches that will be made on this important subject. My hon. Friend the Member for Northfield has allowed us to express our support for the royal society's admirable programme in Industry Year 1986.
§ Mr. Deputy Speaker (Sir Paul Dean)
Order. The shortest speech in the debate so far has lasted for 19 minutes. No fewer than 10 hon. Members still wish to speak, and we have only just over an hour left, so may I appeal most strongly for short, sharp contributions.
§ Mr. D. N. Campbell-Savours (Workington)
The longest speech in the debate was made by the hon. Member for Birmingham, Northfield (Mr. King), who knew that many hon. Members wished to speak. It was wrong of him to speak for so long when he could hear objections being voiced around him while he was on his feet.
The Minister said that industry was being cranked up at that time because of lack of investment. That was not the position. It happened simply because the capital allowance arrangements were being changed. Those hon. Members who served on the Finance Bill Committee that year were smothered by information from companies and the CBI saying that that was the case. Companies believed that that Budget created an artificial position, and they asked us to table amendments during the course of that Bill. Indeed, some Conservative Members tabled amendments.
The Minister tried to rubbish the idea of managed trade. To rubbish that principle is to be complacent about what is happening. While we ignore the vital principle of managed trade, others will exploit our markets. That is exactly what the Japanese are doing today.
I congratulate the Royal Society for the Encouragement of Arts Manufactures and Commerce, and especially Sir Geoffrey Chandler and his staff, on the initiative that they will take next year. I welcome any initiative that places more emphasis on industry.
I welcome that initiative to some extent, too, because from the age of 21 I was self-employed, either in the United Kingdom or abroad. Before I became a Member of Parliament I spent all my time running a business. I began in a very small way. I went down the route that today we are advising others to follow. I was the designer, the marketing manager, the advertising manager and I had to organise trade exhibitions. On a number of occasions I exhibited at the National Exhibition Centre in Birmingham. That is why I intervened when the hon.
1238 Member for Birmingham, Yardley (Mr. Bevan) referred to that matter. As a Socialist, I found that it was a thrilling and an exciting experience.
It is very sad that society has always looked down upon those who are engaged in trade. I am told that this is a historical pattern. In the 19th century trade was regarded almost as a second rate activity, while the professions were regarded as first rate. That pattern continues to this day. During the 1970s I went abroad on business. When I met management, particularly in Germany and also in France, I found that their attitude to business was completely different from ours. They had a different attitude to the position that they thought they held in society and on the shop floor. The demarcations in British industry —the white coat for the manager, the separate canteen for the workers and all that nonsense —has been responsible in many ways for what has happened in this country. I want those demarcations to be broken down. During the debate there has been an almost cross-party coalition on the need to intervene.
My period in business, which I remember with great affection, did me a great deal of good. It helped to remove any prejudices that I had about industry. Although I might be very ideological about the way I conduct my politics in this House, I pride myself upon adopting a very objective view towards industry and business. That is why the announcement of this campaign and the identification of three important priority areas, given the constraints imposed upon it by central Government and the limited finance that is available from the Department of Trade and Industry, will be successful to some extent.
The identification of the need to develop an increasing awareness of industry is important. Many people do not understand that this country has to generate wealth in order to provide the essential services for which I, as a Socialist, so vigorously campaign on the Floor of the House of Commons. I object strongly to the attitude that somebody else will pay. Those who sit on the Government Benches address this problem as though only the work force and those who are out of work adopt this attitude. However, it is also to be found among those who do not work but who are well heeled.
The worst prejudices that I have heard spoken in my life about the role of the state have come from the well heeled. They should know better but they do not. They are often articulate but they have never experienced life on the shop floor, so they do not understand what happens in factories. It is possible that half of this country's population has never been inside a factory. They do not know what is happening. Nevertheless, aided by the press, prejudices are built up, dwelt upon and developed and they serve to reinforce the prejudices of previous generations. That must be broken down by the campaign so that there is an increasing awareness of industry.
I can put in no better way than the Minister the link between education and industry. He put it excellently. It is important to educate young kids about industry. They should not regard becoming a barrister, a lawyer, an accountant, or even a Member of Parliament as their goal in life. They should realise that their aim should be to become a good industrial manager. That is where the real excitement lies: to go out into the market, to sell, to produce, to design, to get involved in wealth creation. If we can get young kids to follow that route, it will serve our country well.
1239 I want to pay tribute today to the SATRO organisation in the county of Cumbria which to some extent has been involved in that area over a period of years. There are now 40 SATROs throughout the United Kingdom and the one in my county has been particularly active, thanks to the considerable efforts of Mr. Roger Day, the co-ordinator, who has been asked to help in the promotion of this initiative in the coming year.
However, SATRO in Cumbria has problems. It has a small grant from the Department of Trade and Industry of £350 and an annual grant from Cumbria county council of £4,000. It simply cannot manage. It is disturbed because it has found out that although some additional moneys are to be made available under the Industry Year 1986 programme, none is to go to SATRO operations in Cumbria.
I hope that the Minister will take note of what I am saying and write to me about whether we can re-examine that to ensure that more money is made available. I am not asking for a lot, but the hon. Gentleman knows how tight the budgets are. We are talking about only the lower thousands. He might be able to make some particular concession to help SATRO through its financial problems. It can do so much more if it is given just a little more money.
I am told by way of rumour that Energy Conservation Year, being next year, is being treated within the county as of more importance than Industry Year. If that is so, it means that industrialists might not support the scheme in the way that they should. I ask the Minister to look at that and perhaps, through the regional CBI, to advise industry to take an even greater interest in the matter and not to put energy conservation first.
There is some feeling that the centre at the RSA is consuming the lion's share of the cash. I hope that the Minister will look at that. I am not criticising the RSA. All I am saying is that if it is taking the lion's share it might look at its budgets to see whether more can be given to the regions to support the front-line battle that has to be waged next year on this particular front.
I am grateful for the support given to SATRO by Marchon, British Nuclear Fuels, the British Steel Corporation, High Duty Alloys, Camtex, Leyland, and Eskett Quarries in my county. Perhaps next year we shall be going to them for even more to help us with this important initiative. That is all the more reason why the Government should help us if possible.
§ Mr. Butcher
I wish to put it on the record that the direct grant to the RSA from the Department of Trade and Industry towards the central administration costs for the programme is about £500,000 and another £1.5 million associated with the programme will be given during the year.
§ Mr. Campbell-Savours
I am grateful for that comment from the Minister. I hope that we get our share within the county, and perhaps even more. We have all the machinery set up to make the scheme work. We want to make it work and I hope that we will be given every support.
The third initiative is action in industry. Let me quote something from that because I want to raise a subject which arises directly from the proposals set out in the document for industry in 1986. It says:The success of Industry Year will depend crucially on action by industry itself and its component parts —directors, 1240 managers, trade unionists, employees and the companies or other institutions in which they are involved. All have a contribution to make in explaining the fundamental role of industry in society.Then is says:Companies will be encouraged to develop a statement of principles or code of practice which will spell out their obligations and responsibilities to employees.I want to look at those codes of practice because they are important. If we do not get the codes of practice right we will not attract people to industry and industry will be discredited. It is important that we ensure that the picture that industry paints of activities is one that entices, inspires and attracts.
There have been many developments, particularly over recent months, that have frightened our young people away from industry. Rows in the City, the activities of the Takeover Panel and the revelations of my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) have all caused concern. My hon. Friend has to bring out those matters, because these evils have to he rooted out if we are to present industry in the right way.
A recent report by the Monopolies and Mergers Commission on a takeover bid affecting a brewery in my constituency recommended the closure of two breweries. When young people in Workington hear that an independent organisation, which is responsible, to some extent, for what is going on in industry, has recommended the closure of two breweries, they must feel alienated and think, "Industry is not for me. —We must ensure that these silly mistakes are not made.
There was talk some weeks ago —I am sure that you, Mr. Deputy Speaker, heard it —about Associated British Foods. I am told that that company, which owns more than 100 branches of Fine Fare supermarkets and makes Sunblest bread, is a particularly good firm with a fine track record.
However, we are informed that in 1984 that company made a £2 million contribution to the IRA. Reports suggested that Associated British Foods paid £2 million protection money into a Swiss bank account controlled by the IRA. The payment was traced via Switzerland and New York to a branch of the Bank of Ireland in Dublin. Information suggests that early this year the Government of the Republic passed a Bill to free from the bank several millions of pounds which, it was believed, belonged to the IRA.
Of course, the company is denying that claim. It has denied it today. The company says that it is rubbish. But what will the company say when the truth comes out? how will that affect the way in which people look at industry? When all that happened is finally revealed —we always find out in the end what happened —how will people respond? Surely the reputation of industry will fall.
In statements this morning, the company says that it did not pay £2 million to secure the release of a kidnap victim. That was a careful and selective use of language. I have never suggested that the company paid £2 million to secure the release of a kidnap victim. I say that it paid £2 million protection money. It paid that money after the kidnap victim had been released. The company is playing with words in the statements that it is making to the media today.
I believe that when the Attorney-General answers the questions that I tabled last night he will have to recognise that something that bears investigation has happened.
1241 I am told that Scotland Yard is very angry, because it has been unable to get to the bottom of the matter. Scotland Yard knows that it happened. The security advisers to the company, Control Risks, are just across the road from Scotland Yard. It had the information, but, because of codes of practice in its business, felt unable to come forward.
The point is that money like this is used to kill soldiers in Ulster. What about young people when they—
§ Mr. Deputy Speaker
Order. I am finding it difficult to relate the hon. Gentleman's remarks to the motion, wide as it is.
§ Mr. Campbell-Savours
I am being very careful to keep absolutely in order, Mr. Deputy Speaker. I am talking about codes of conduct of business. Industry Year relates specifically to codes of practice in which companies spell out obligations and responsibilities to their employees. It is about the public relations efforts of industry to ensure that it is seen in the right light and perceived in the right way.
The truth is that Associated British Foods may have broken the law in a number of ways. It may have contravened section 1(2) of the Prevention of Terrorism Act, in relation to the payment of money to the IRA in the knowledge that the money would be used for the purposes of violence, section 243 of the Companies Act in relation to the fact that the company failed to provide full accounts for the purposes of taxation, section 393(2) of the Companies Act in relation to the misleading information that it supplies its auditors as to the use of money which it failed to declare as being contributions to the IRA.
Either we make the law work, or we pull the soldiers out of Ulster. We cannot condone—
§ Mr. Speaker
Order. I must appeal to the hon. Member. Time is getting on and he has already made a long contribution. In fairness to the House and to other hon. Members who wish to speak, he must stick to the motion.
§ Mr. Campbell-Savours
Perhaps I can examine codes of practice; because the motion relates to principles and codes of practice.
Auditors who operate under the Companies Acts are subject to two types of control. They are governed by Companies Act legislation and by professional rules of conduct laid down by the institute of which they must be a member.
The Companies Act 1985 contains two relevant sections. Section 237 states the circumstances in which an auditor must qualify his report on the accounts. This includes cases where proper account of records has not been kept. Section 393 strengthens the powers of the auditor by making a criminal offence of anything whichconveys or purports to convey any information or explanation which the auditors require"—which ismisleading, false or deceptive in a material particular.The guidelines issued by the accountancy profession are more vague. I am dealing with codes of practice which is at the heart of the initiative for 1986. The guideline issued by the Institute of Chartered Accountants in guidance note 1306 on the disclosure of defaults or unlawful acts states: 1242It is an implied term of a member's contract with his client that the member will not, as a general rule, disclose to other persons information about his client's affairs acquired during and as a result of their professional relationship, against his client's wishes. Therefore, where a member becomes aware that a client has committed a default or unlawful act, the member should in principle keep the matter between himself and his client by virtue of the contract. A member who acquires knowledge of the commission of a criminal offence (other than treason), or a default which is a civil wrong, is under no legal obligation to disclose what he knows to a proper authority. There are, however, circumstances in which in spite of the contractual position, a member may be obliged to disclose information to the authorities or may be free to do so if he wishes.That is an important part of the code because if that guideline were exercised in the case to which I have referred and in other cases that will come up in 1986 during Industry Year it would help to ameliorate industry's reputation with the public.
§ Mr. Campbell-Savours
That might be so, and I only wish that it had happened in one particular case. If it had happened I might not be standing here today.The circumstances in which it is envisaged that the nondisclosure principle need not apply are when,
- (a) the auditor is obliged to disclose information by a Court;
- (b) where the client has authorised disclosure; or
- (c) where there is a public duty to disclose information.The 'public duty to disclose' principle is triggered off by: —The code of practice continues:
- (a) an intended criminal offence whether serious or trivial; or
- (b) an intended civil wrong or breach of statutory duty if the damage to an individual is likely to be serious, or if the wrong may affect a large number of individuals".Council therefore recommends that members, even though free to do so, should not disclose past or intended crimes or civil wrongs (except treason), which they are legally obliged to disclose unless they feel that the damage to the public likely to arise from the non-disclosure is of a very serious nature.I believe that the killing of soldiers in Belfast is serious. The funding of that should have been reported by the auditors in the case to which I have referred.
I want to give another example which is not quite the same because it involves an hon. Member of the House. I make it clear that I am not criticising him personally.
A particular contract has been the subject of much public debate. That contract discredits Government and industry. I am arguing that it is important to clean up the show so that people outside know what efforts are being made to make industry enticing during 1986.
The £900 million contract for Nimrod, the early warning aircraft project, went to GEC. The contract is five years behind. The company was beginning to lose a lot of money and was in trouble. What did it do? It hired a right hon. Member of this House to negotiate with the Secretary of State on its behalf. The right hon. Member for Waveney (Mr. Prior) was purchased by GEC's Lord Weinstock. He was simply purchased to negotiate with the Secretary of State for Defence on the question of that particular contract. I find that quite outrageous.
There was a meeting yesterday to discuss these matters. On the one side, there was Mr. Peter Levene and the Secretary of State for Defence, quite legitimately there to represent the Ministry of Defence and the interest of the taxpayer. On the other side were Lord Weinstock and the right hon. Member for Waveney. They were hassling over whether the Government should give £100 million for the 1243 completion of the contract, or £400 million over the next four years for its completion to the required standard. That is unacceptable.
That sort of activity discredits the House. It certainly discredits industry, and we are discussing the reputation of industry in the country. It is wrong that a right hon. Member who represents his constituents in the House and sits on its Committees can be in contract negotiations with a Minister who is one of his own parliamentary colleagues where the public interest is served by securing the lowest possible price and the highest standard.
We must clean up the whole show. We must make this place cleaner than clean. We must ensure that industry is perceived as cleaner than clean. Only then will people be able to say, "I want to go into industry because it stands for all that I represent." Until we achieve that climate, we shall not succeed in the way that the House and the country demand.
§ Mr. Iain Mills (Meriden)
I congratulate my hon. Friend the Member for Birmingham, Northfield (Mr. King), who is known in his constituency and in the House for his vigorous activity in the campaigns that he follows —an example of which is Industry Year 1986 —on raising this debate. I am sure that the hon. Member for Workington (Mr. Campbell-Savours) feels these matters strongly, but I always thought that it was one of the conventions of the House to give a colleague prior notice if one intends to refer to him in the Chamber.
§ Mr. Mills
I understand that the person concerned is the chairman of the company to which the hon. Gentleman referred and has declared that interest. The House has resolved that such an entry in the Register of Members' Interests is the proper way in which to declare an interest. I find it strange that the hon. Gentleman was so critical.
I welcome Industry Year 1986. I spent nearly 20 years in manufacturing industry and I have the honour to be associated with the industrial anti-counterfeiting group, as its adviser. I trained as an engineer and I worked on the drawing board for some years as a designer. Many of the problems which Industry Year 1986 is setting out to tackle are part of the cultural ethic of the United Kingdom. Wealth creators—for example, engineers and those who manage manufacturing and other industries —are somehow seen as lesser beings than those in the professions. That is sad. In Germany, I was called Herr Doktor Mills, in Italy, Ingegnere Mills, and in France, Ingenieur Mills. Those who knew of my profession in my home country thought that I was using spanners and hammers instead of drawingboard skills with my pen, which I hope brought some benefits to the company for which I worked.
Until we change that —my right hon. Friend the Secretary of State for Education and Science has tried in his committees with the Engineering Council to upgrade the wealth-creators —Industry Year 1986 will not be successful. This part of the multi-disciplinary or multi-occupation base is an ideal one in which to advance industry's role and society's attitude to it. I wish that more colleagues had come from the roots of manufacturing industry. Perhaps the House of Commons is too attractive to those in the professions. We can but hope —I think 1244 that my hon. Friend the Under-Secretary of State who comes from industry agrees with me —for future Parliaments containing more manufacturing men and women.
We need a vast shift in the attitude of the country and the Opposition to profit. If Industry Year 1986 is to be successful in promoting understanding in society of industry's role, it must be genuinely accepted that profit is a good and honest motive so long as the profit is honest and good and cleanly and properly made. The creation of an enterprise culture demands the motive of profit. Companies that aim to profit properly and wholesomely will ensure our future in the manufacturing enterprises that we need. We need also a much higher standard of management. I deplore the way in which management standards declined in the 1960s. It is only in the past five years that British management has started to become sharp and professional. Marketing and professional skills are emerging to match those of the Americans and Japanese. This is matched by marvellous achievements in productivity by our companies, not the least of which is the Austin Rover group which covers the constituency of my hon. Friend the Member for Northfield and supplies much employment to my constituency of Meriden. The company's achievements in the car group and in the Land Rover group, which is partly in my constituency, have been an excellent example. To those companies which, in Industry Year 1986, would see the high interest rates policy employed by the Government as limiting, I say that wage settlements must be low as part of the macro-arguments aimed at achieving the right level of the pound, low inflation and success for Land Rover, Austin Rover, Talbot and the other companies that provide many jobs in my constituency.
I congratulate the Government on the extension of regional aid to the west midlands. So far, many thousands of pounds have been spent in my constituency, and I hope that that will continue during Industry Year 1986. I welcome the credit that my colleagues gave to those institutions in my constituency such as the national exhibition centre and the airport. I very much regret the redundancies that have been announced in my constituency at Castle Bromwich by the Austin Rover group and SP Tyres, which was formerly Dunlop. I am concerned about these redundancies and shall closely look into them.
Locally we have a striving and thriving promotion of Industry Year. Mr. Glover, who works for Massey-Ferguson as a senior director, is chairman of the Coventry and Warwickshire sub-region group which is planning excellent activities to promote the year, including video films and school and industry links. The Government have already established, through their technical and vocational initiatives in schools, the type of links that we used to see in technical schools and that which are important if our young people are to understand the joys and challenges of working in industry.
I welcome the extension of the young enterprise programme and the provision of a panel of speakers who can promote and talk knowledgeably about industry. This will further links not only with schools and industry but with higher education. This is imoportant for those at universities and polytechnics, such as the Lanchester polytechnic in Coventry, to establish the delights of working for industry.
1245 During Industry Year 1986, there will be a commitment, which will continue, for major companies to provide specialist assistance and advice to smaller companies. There will be displays in Coventry, which my hon. Friend the Under-Secretary of State —the hon. Member for Coventry, South-West (Mr. Butcher) —and I represent. These proposals show that Coventry has done its bit under the chairmanship of Mr. Glover to ensure that Industry Year is well promoted. I hope that he does not forget the pressures that there are on the green belt around Coventry. My hon. Friend the Minister would not expect me to make a speech without mentioning briefly how appalling it would be in Industry Year 1986 if the many hundreds of acres of derelict land in the west midlands were not developed but, instead, the green fields between Coventry and Birmingham were unneccesarily despoiled. I hope that he will encourage the present initiative, and new initiatives, which will enable derelict land to be brought back into use.
We in the United Kingdom suffer from the cultural identity problem whereby we see wealth creators as less imoportant than others. That is partly because we had our industrial revolution last century. We struggled through the cycle of good economic fortune and recess to build our industrial foundation. We have had time, unfortunately, to forget how important wealth creators —engineers and others in industry —are. Newly developed countries are straight into their industrial revolution. With instant access to western technology their engineers suddenly become the most important people in the country. Their whole thrust in national economic terms is through the developing new industries. Their place in society, their role and their rewards are high.
We are competing with those countries on the basis of a relatively small domestic market which is why the establishement of the European Community is the single most important step towards establishing a large domestic market. We must foster that link. Part of the fostering of that link must be cross-European action against the illicit trade in counterfeit goods.
That is a subject upon which I have become knowledgeable because of my fascination with the many hundreds of thousands of jobs that our industry is losing. During Industry Year 1986 we must encourage the Government to act. I ask my hon. Friend to speak to the Minister of State at the Department of Trade and Industry about the points that I shall make briefly. We wish to see an end to the loss of those jobs from illicit counterfeit goods. They are identical in brand name, packaging and every other aspect except for quality to good British goods produced by big British names.
I want to see the Government introduce criminal penalties for industrial counterfeiting similar to those that exist in the United States. In a recent case, some counterfeiters of £7 million of perfume were arrested. They were acquitted because the law did not allow their conviction. I shall be happy to write to my hon. Friend because the time is short. It was a conspiracy under the Criminal Law Act 1977. The Government are reviewing the matter and it is most important that they introduce penalties that are sufficiently severe to deter that illicit trade.
The United States Counterfeit Act 1984 is a good model. It provides for five years' imprisonment for a 1246 second or subsequent offence of counterfeiting and fines of up to $5 million for a company. I should like to see such a measure introduced in the United Kingdom. I hope that the Government will soon respond to the recommendations in the Nicholson report.
In Industry Year 1986 it would be splendid if the European trade mark office were located in London. It is the last and most important European institution to be established. It will be talked about in Europe for many decades. It is vital to achieve that objective. I chair a committee that has been set up to promote the country's interest in that office. It has reported and identified a splendid site at the old boy's school at Blackfriar's bridge or, alternatively, in the borough of Harrow, should an outer London location be required.
I must apologise to my constituency interests in Coventry and Birmingham, but London is the Government's proposal. It is in the national interest that we shold have that most important European institution. In 1986, it will help to bring jobs and prosperity to our nation. The knock-on effect on jobs dependent upon that office will be considerable. I shall be grateful if the Minister will mention the matter to the Minister of State and to the Chancellor of the Exchequer, to ensure that our bids against Munich, Paris and The Hague are successful.
It is about time that the world achieved, through GATT, a far better approach to the prevention of barriers to trade, the production and sale of illicit and counterfeit goods, and other matters. It will require a degree of determination that has not been shown, unfortunately, since 1979. It would be a superb initiative in 1986, as well as ensuring that we quickened the change in cultural attitudes towards industry in Britain, if we were to achieve better controls internationally on British trade —the furnace of trade —and better opportunities for our goods and our manufacturers throughout the world.
I hope that the debate will be taken seriously and that it will be given wide circulation, with great publicity for my hon. Friend the Member for Northfield in the national press. Unless Britain can re-establish the identity of the industry man —the engineer and the creator of wealth —as holding a desirable position in society, aspired to by young people in our schools and universities, the achievement of an industrial base, such as we had in the past, will be much slower. I wish Industry year 1986 every success.
§ 2.6 pm
§ Mr. John Ryman (Blyth Valley)
I congratulate the mover of the motion, the hon. Member for Birmingham, Northfield (Mr. King), on initiating what has been a good debate, although I was somewhat appalled at the nonchalant complacency of the Minister in dealing with certain aspects of the subject. I want to deal briefly with two specific matters. The first is the role of women in industry. The second is the disgraceful misuse by various companies, particularly international companies, of industrial grants and regional aid in the north-east of England.
I share the views expressed by other hon. Members that women have not been sufficiently encouraged to go into industry. The problem starts at school. The teaching in girls' schools of subjects such as science, which are of use in industry, lags far behind the teaching of science in boys' schools.
1247 The daughter of a family that I know wanted to be an electronics engineer. She was very bright, with all the necessary O-levels and A-levels. When she applied for a university place she was told that there were only two universities at which she could study the subject —Churchill college, Cambridge, and another university —subject first to being accepted for sponsorship by a company. She was lucky enough to get sponsorship and to get a place at Cambridge, but many girls of that age are not able to do so, because the opportunities are very slight.
Women are the greatest untapped source of manpower in Britain, and it ill becomes us not to encourage them to enter industry and take a leading role. The Government have tremendous responsibility for the lack of provision of nursery places because of their asinine policy of squeezing local authorities and putting many obstacles in the way of women who wish to have useful and successful careers in industry.
With regard to regional grants, until the Government were elected in 1979, we had a fairly intelligent policy of special development area status for certain parts of the north east where, because of high unemployment, it was necessary to offer a 22.5 per cent. capital grant for moving new industries into the area to create jobs.
As soon as the Conservative Government were elected in 1979 —indeed, by July of that year —the then Secretary of State for Industry, who is now the Secretary of State for Education and Science —Heaven help us —announced the abolition of special development area status for Blyth valley in my constituency and various other parts of Northumberland and the north east. The result of that was chaotic. As notice was given when the facts had not been examined carefully, much of manufacturing industry in the north east was suddenly without the regional aid programme which it had been budgeting on for several years. Several companies had to reduce their apprenticeship programmes drastically because they relied on the regional aid programme for funding.
It is worse than that, because experience has shown that firms such as Ronson, Courtaulds and Dunlop, before it was taken over, accept and seek large regional grants. When they are in difficulty in other parts of the country, the money from the regional grant is then taken out of the north east to other parts of the country where there is no development area. That is clearly an abuse of public funds.
I have referred that to the Department of Trade and Industry on several occasions, but I have never had a satisfactory explanation or investigation. I have given the Secretary of State and the previous Secretary of State detailed facts about companies in the north east that are doing that. Courtaulds is one of the biggest culprits. It had a factory called Exquisite Knitwear in Cramlington and Ashington. It closed that factory, making many people redundant, and it took the machinery, that had been bought with regional aid money, to the south east of England and the Channel Islands. It was clearly not intended that that money should be spent on machinery in the south east or the Channel Islands.
Before Dunlop was taken over fairly recently, causing massive redundancies in the north east, it shipped some of its machinery bought with the regional aid money to South Africa. That is scandalous. When the facts are drawn to the attention of the Department of Trade and Industry I do not receive satisfactory replies. On one occasion, the Minister and the civil servant concerned asked me if I 1248 expected them to sit on the M1 watching to see if machinery was brought from the north east of England to the south.
There is insufficient monitoring by the Department of money spent for regional development. Grants and loans should be checked carefully. Courtaulds and Dunlop are two of the worst offenders, but a company called English Numbering Machines and various car component companies are also involved. The majority of those are international companies which are American-based. When they get into trouble, they throw hundreds, if not thousands, of men and women out of work in the north east, close factories and take the machinery out of the north east and ship it elsewhere.
There is a very strong case for an inquiry. The Government have pursued an asinine policy of regional aid in the teeth of the opposition and sensible advice that they have received from industrialists, the regional TUC and their own Department in Newcastle. The Department of Trade and Industry has a good regional office in Newcastle staffed by very experienced and able people. The Department in London has ignored its regional advice. That is a serious matter.
Time is short, and I do not wish to prolong my contribution because I know that other hon. Members wish to speak. But it is a scandal, among a wealth of pompous platitudes coming from the Minister, for him to ignore the serious problem of an abuse of regional aid by international companies that come to the north east for the money. They rape the area, and when there is the slightest difficulty in one of their factories in another part of England or abroad, they get out of the north east, throw hundreds of men and women out of jobs, and keep the money that has been advanced to them by the Government because they were working in the north east.
§ Mr. Kenneth Warren (Hastings and Rye)
I declare an interest as an aerospace engineer. I shall try to speak at a pace that will be applauded by those who also wish to take part in the debate, without being supersonic and not heard at all.
I welcome Industry Year and hope that the Government will commit themselves to it wholeheartedly. My experience of industry is that we must operate as a team. I hope that the Government will join the team because, without their help, industry will not get the success that it deserves if it can restore its competitiveness.
I know how difficult it is to carve out a share in the market, hold on to it, make a profit and maintain competitiveness. When I started on the shop floor as an apprentice, I wasted a couple of years of my life, which is often done in the House as well. It took a long time to convince those in charge that we were all in the game together and it's a case not of "them and us", but of all of us working together to try to achieve the competitiveness which, so far, has eluded too much of industry.
It is not a new problem —it has been going on throughout the 20th century. In the past 80 years we have lost over half the share of world exports of manufactured goods that we had originally to people who are not employing better technology or better management but who are looking after the competitiveness of their products. That competitiveness is a factor for the Government as well as for industry.
1249 In Industry Year 1986, I hope that the problems will be tackled by management. It is right and proper that those in industry should expect to receive good wages and salaries for the work that they do. It is not right and proper that management should pay workers for greater output than they achieve, because that leads to job losses and the unemployment that we have. We merely destroy our competitiveness by management's ineffectiveness and inaction. Neither is it right and proper that managers and directors should pay for increases far beyond the progress that they have achieved in the companies where they are responsible not only to their shareholders but to the workers whom they employ.
In Industry Year, the Government have a substantial part to play, rather than just mouthing words. These may be facts that I have tried to tell Ministers before, but I hope that in Industry Year the Government will pay attention once and for all, and do something about it. I refer first to public purchasing policy. There is no policy. The Government are the largest single customer in the whole of the United Kingdom for goods and services. Surely they can draw up a purchasing policy to give specifications not only to stimulate home production but to benefit exports overseas.
Secondly, I refer to the cost of industrial operations. The Government must not just say that rates and taxes are there to finance social services, which we all need. I hope that the Government will constantly and ruthlessly examine their costs of operating in the way that industry has to day-by-day to survive.
I welcome the substantial progress made by the nationalised industries, and I hope that they will play their part in Industry Year. I am delighted at the way in which Rolls-Royce and the twins in Northern Ireland —Short Brothers and Harland and Wolff — the British Steel Corporation and British Shipbuilders have made substantial progress over the past few years on a world competitive scale.
However, the Department of Trade and Industry should not just rest on the laurels of stimulating that achievement and getting in the right management at the top, but try to stimulate new technology. I know that my hon. Friend the Minister is deeply involved in that in his day-to-day work. Will he look at the timing and the way in which the stimulation takes place? The way in which new businesses should be stimulated changes as time goes by. It is no good putting cash into prosperous companies. In government, we must be more entrepreneurial and take the risk with the cash, putting it into companies that deserve the chance, which they would not get unless the Government were there to help.
I ask the Government to re-examine the real values of regional policy. The hon. Member for Blyth Valley (Mr. Ryman) drew attention to asinine regional policy. It is asinine in my part of the country, in Hastings and Rye, where we have difficult employment problems. We cannot get regional aid, yet our enterprises that are struggling to make a profit are taxed to help competitors in other parts of the country. That is nonsense. I am sure that my hon. Friend the Member for Bexhill and Battle (Mr. Wardle) would agree with that entirely. Some of the Government's regional policies are encouraging inward investment. For 1250 example, a foreign company in Scotland is to receive £180,000 for every job that it creates. That is also nonsense.
I hope that the debate will not just set the scene but begin the discussions that will take place in Industry Year, at a time when not enough people in the House are involved in wealth creation. With respect, there is an imbalance of those who are used to the consumption of wealth and how to distribute other people's money to other people.
I have the honour to be Chairman of the Select Committee on Trade and Industry. I hope that, in its report on tourism to be published in January, it will be able to identify new service industry opportunities. That is a nice trailer, but I hope that the Government will not hide behind the growth of the service sector and fail to recognise that it requires only energy and determination on their part to stimulate manufacturing.
The hon. Member for Yeovil (Mr. Ashdown) talked about the Westland saga. I hope that the Government will examine how they participate in industrial restructuring. I understand that the Department of Trade and Industry is the sponsor Department for aerospace, but that the Ministry of Defence has invited Westland's competitors to restructure the company. Such an argument should not be going on in government and I hope that those in government who play Monopoly with companies understand that companies such as Westland are a major British engineering resource that deserve every assistance to survive.
That takes me back to public purchasing policy. Two thirds of the products of a company such as Westland come from a wide range of other companies in Britain such as Racal Electronics, General Electric Company, Ferranti and Smiths Industries. It is not just Yeovil but the whole country that is involved. I am a loyal supporter of the Government, but I do not think that they have got it right when it comes to understanding their role in restructuring.
We have had an interesting debate —it is especially interesting how speeches have got faster and shorter. We are welcoming the start of Industry Year. I hope that it will turn the tide of fortune for Britain's manufacturing industry.
§ Mr. Mark Wolfson (Sevenoaks)
I am mindful of the lack of time and the courteous brevity of my hon. Friend the Member for Hastings and Rye (Mr. Warren) and of the hon. Member for Blyth Valley (Mr. Ryman). I shall try to follow their example.
I welcome Industry Year and the opportunity to speak today. I shall confine myself to that part of the motion which says:that the most talented people are again attracted to work in industry to secure its future".The debate has been wide-ranging but I shall talk only about this matter, of which I have some experience.
It has already been said that Britain has to live by manufactured goods. There are no two ways about that. I do not buy the proposition that our manufacturing base will inevitably decline. I was delighted that my hon. Friend the Member for Hastings and Rye ended on that note.
There is an increasing divide between industries that are modern in outlook and those that are not. The gap between industries that are standing still and those that are moving 1251 forward is growing ever wider, and companies that believe in the future must accept that there is a divide which must be crossed. Making the leap takes real commitment. Change can sometimes be the responsibility of one person —a catalyst —but more often it is the responsibility of a whole team.
I worked for some years in the youth services department of the Industrial Society. One of my responsibilities was to run "challenge of industry" conferences in a wide range of sixth forms. Those conferences have since been developed and similar activities are carried out by other organisations. Their idea was to bring home to sixth formers the challenge presented by the management of people in industry and to combat reluctance to regard industry as an attractive career.
Why are the most talented youngsters uninterested in entering industry? First, there is a lack of understanding of what is involved. Secondly, they fear getting lost in large companies and believe that success will not be rewarded early. Thirdly, it still takes too long to attain major responsibility in many industrial careers. Fourthly, salaries are not good enough. That is especially relevant in terms of attracting people of the calibre of production engineers. It is also tied up with the problem of the status of those who work in industry. Yet those youngsters will be crucial to the future success of British industry.
As some hon. Members have said, industry is still regarded as culturally not necessarily the highest status career to pursue. That attitude must be changed. Above all, the picture of industry as not the most effective driving force in Britain, or the most successful part of British life, must be changed.
During Industry Year I hope that industry will do everything it can to publicise its successes and the difference between companies that are successful and those that are not. A recent survey conducted by the CBI revealed three extremely interesting points. In the 1980s, profitability, productivity and growth have moved forward dramatically in successful companies. The key factor perceived by the industrial managers who replied to the questionnaire was that successful management is the management of people. That ties in closely with attracting the most talented youngsters to the challenge which, in any industry, is the management of people. Those managers who replied rated people attributes as the key factor in whether management would be successful or unsuccessful.
1252 The survey highlighted four essentials to good management: the ability to control costs; the ability to devolve responsibility; the need to pay more attention to customers, products and the motivation of staff; and communication within the company, which is vital, if the challenges of foreign competition are ever to be met. Sometimes good communication networks arise from crises, but it is essential that managers continually explain to their workers what is going on, not merely in terms of organisation within the company but in terms of the problems faced by the company in the outside market. Workers should also be told about the financial position of the company. As many hon. Members said, teamwork is vital to effective management in any industry.
What are good managers required to be? The senior industrial managers who replied to the survey said that good managers are professional, that they maintain high standards, that they can delegate and give employees a clear idea of what is expected of them, that they are friendly, open and seem to be fair. They communicate easily and inspire confidence, they deal with queries and make decisions quickly. They have a "can do" attitude; they show imagination and intelligence and are realistic about strengths and weaknesses.
During Industry Year, industry will put itself across most effectively and will encourage the most talented people in the country to commit themselves to industrial careers, by demonstrating that those are the attributes required from people in industry. They must be effective managers who will ensure that our industry is more competitive than it has been in the past, and that it is in a position to improve our trade, exports and services so that through wealth creation, we can provide the social and educational services that all of us agree are necessary and important. My hon. Friend the Member for Birmingham, Northfield (Mr. King) has given us the opportunity today to pay attention to wealth creation. I am grateful to him for providing the House with that opportunity.
§ Mrs. Virginia Bottomley (Surrey, South-West)
The aim of Industry Year is to improve the attitude of the general public towards industry. I agree with those right hon. and hon. Members who have emphasised the disadvantages for so long—
§ It being half past Two o'clock, the debate stood adjourned.