House of Commons Hansard Debates for 6 Jul 1989

Column 523

a personal desire to see a wide band communication system developed that can take voice and data so that the country can be as competitive as it needs to be in developments that go beyond 1992 for use in the financial services sector, for example.

Miss Emma Nicholson : Will my hon. Friend give way?

Mr. Warren : I hope that my hon. Friend will forgive me if I choose to continue with my speech. I am sure that she will catch the eye of the Chair in due course.

Miss Nicholson rose --

Mr. Warren : I give way to my hon. Friend.

Miss Nicholson : I remind my hon. Friend of Britain's enormous success in using the Packet switching system to such effect through the introduction of Mercury, which has brought competition to British Telecom. We now have one of the largest customer databases and international data transmissions in the world. We have been enormously successful with British Telecom and Mercury in the use of the Packet switching system, and this has brought exactly the result that my hon. Friend is seeking.

Mr. Warren : With respect, it has not. It does not allow for the sort of communication systems that will be required in the next decade in Britain and throughout the rest of Europe and the western world. The fact is that it is not a wide band system. I shall be more than delighted to give my hon. Friend a private lecture on the subject on another occasion. I hope that she will accept for the moment that the problem is that we do not have communication systems that are adequate to meet the expectations of those who want to compete--whether they be in Scotland or Ireland--with the rest of the European community.

In today's edition of The Times there is a fine article that draws attention once again--this has been repeated over and over again in the national and technical press--to the number of skilled employees that will be required. The National Computing Centre Ltd. believes that the present shortage of 19,000 staff will rise to over 35,000 within a year. We are talking about those who are well skilled and well trained in the art of information technology. It must be recognised that it is an art and not only a science, especially when the proverbial bugs are running around inside the equipment. We have a trade deficit problem and it is not confined to information technology goods. It is an enormous problem that stretches across manufacturing industry. The deficit is running at £17,000 million a year. I worked out late last night--I hope that I got the zeros right--that it amounted to about £50 million a day, or £33,000 every minute around the clock. To offset that, we shall have to export and sell six more Metros a minute.

The two major components of the trade deficit are, surprisingly enough, German motor cars, which account for about £5 billion-worth of imports a year, and information technology, the imports of which amount to about £2.5 billion a year. In third place is the importation of material that is required by the paper industry. We have a major problem and the Committee sought to adress it. It is one that cannot be wished away by selective statistics. It is an enormous problem and it does not matter what other countries are doing. It can be mastered, however, by the talents and resources that are to be found within the

Column 524

United Kingdom. That could be done if I could only persuade the Government to be drawn into collaborating, co- operating and seeking to close the gap.

I ask the Government to examine their track record. When the Committee tried to identify the Government's work in this area, it was disappointed to find that reports such as that produced by the Bide committee in 1986 received no response. One of the recommendations was that work should be undertaken on a fail-safe system for British Rail. If that recommendation had been adopted in 1986, some of the recent rail crashes--I do not like to

speculate--might have been avoided. That applies as well to some that might yet come. To reject the work of so many over such a long time is not conducive to persuading more people to come forward to collaborate with the Government on inquiries which they may wish to initiate.

The reaction to the Committee's report has perhaps been better than the reviews which the Government were prepared to give us. I shall refer to some of them. The Cranfield Technology Institute stated : "We support each of the 52 recommendations."

There was a response from IBM, which read :

"I congratulate you on the accuracy with which you have pinpointed the most critical issues."

The Electronic Engineering Association commented on an "able, interesting and well-written document on the current state of the IT industry in the United Kingdom."

The professor of computing at the university of Kent reported : "I was pleased to read that the Committee was trying to shake up the system."

We are still trying to do that.

The Hoskyns Group said :

"Excellent the task now is to ensure that the report is not buried alongside Bide and Coopers."

The British Computer Society said that the report

"gives Government a real opportunity to simultaneously improve the effectiveness of its own operation and the performance of United Kingdom industry."

The comment that I really like, Madam Deputy Speaker--and I am sure that it will appeal to you--comes from the female managing director of a computer company which my right hon. Friend the Prime Minister visited. She said :

"I don't know if she will go back and give the DTI a handbagging about the report but I feel she should."

When my hon. Friend the Minister replies, we shall find out whether he is suffering from the slings and arrows of outrageous handbags. The Government's track record is not a happy one. The National Computing Centre was asked by my right hon. and noble Friend the Secretary of State if the report would give him some idea of skills requirements for several years hence. The industry had invested £100, 000 of its own money in the report, which was started in January 1986, but no reply has been received. The DTI may well run into some difficulty with those who are anxious for a partnership to develop with Government if nothing happens after all their efforts. We had high hopes that the report and the White Paper would guide us towards a partnership that needs both the help and the interest of Government and that looks upon Government as a major customer.

The Committee's work was not to pick winners or losers. Nevertheless, the PA Consulting Group--which is used extensively by the Government--said in a report entitled "Winners or Losers" :

Column 525

"No one seems to know what to do as far as IT is concerned". An article in "The Management Edge" by David Harvey stated : "Corporate systems in two thirds of UK companies will not withstand the competitive strains imposed by the single European market. The warning comes as the countdown to 1992 reduces the room for any serious preparation to be carried out."

Because of the downturn in engineering orders this year, the Government-- who are a major market-maker--must tell us what they propose to do. They say that they will not intervene, but I could list several Government interventions by the DTI, beginning on 8 February. For a Department that does not want to intervene, it is a remarkable somersault. Its most amazing intervention--of which I happen to approve--occurred on 19 June when it launched the open systems technology transfer programme at a cost of £12 million. In doing so, it must have picked a winner. It could have picked another one, but it did not. Of course, I cannot refer to the winner because that would be unfair to the loser. To my regret, during the past few years in information technology there has been a remarkable propensity, especially by the Ministry of Defence, to pick losers--to the tune of £1 billion in a recent project.

The Government cannot claim that they are not in the business of picking winners when not only do they pick a winner but they spend £1.8 billion of taxpayers' money each year to sustain their IT requirements. The black knight of intervention has stealthily come among us. That is evident in the recommendations of the report that have not been accepted. Time and again we can enumerate and cross-check interventions against the report's recommendations, although those recommendations have not been accepted in the White Paper. I feel that there has been, perhaps, a slightly sinister change of policy.

A report in the Financial Times on 26 June by Mr. Alan Cane stated :

"Concern that British computing services companies are not yet geared to competing successfully against foreign companies for large contracts has prompted a Government initiative' that comes close to contravening the spirit, if not the letter, of international directives on open competition."

Companies are being invited to receive quiet, informal advice from the DTI. One of the bidders is quoted as saying that the DTI "is saying that they will put extra votes your way for an all-British consortium."

Neither my hon. Friend nor I is an interventionist, but that is something of a volte-face by a Government who, apparently, do not believe in intervention but who, in fact, are surreptitiously encouraging it. Companies are being encouraged to discuss their bids with the DTI and the CCTA, which in turn will give information to help them win contracts. That is a change of policy. I am not saying that that is wrong, but the Government's policy on intervention should be publicly stated.

I know that many other hon. Members wish to speak in the debate, Madam Deputy Speaker [Interruption.] I have known you for a long time, Mr. Deputy Speaker, and I really did not expect to see you clad in such a manner. You will no doubt understand my problems in Committee when hon. Members laugh at me--although it is normal to laugh at the Chairman.

Column 526

The task of developing IT understanding is colossal, but it is something from which the Government cannot escape. I welcome collaboration provided that it is creative and promotes Government understanding that they cannot avoid being a player in the market place. It may sound like Powellite philosophy, but the Government say that they will not intervene in the buying decisions for £1.8 billion equipment, yet they are buying between 10 per cent. and 20 per cent. of total output for their own civil and military uses.

The Government and the DTI do not have to set themselves up as judges on the merits of the people and the products in the IT marketplace. However, they must understand that their process of choice is antiquated and expensive. Indeed, major suppliers say that it costs them three times as much and takes them three times as long to bid to Government as it does to comparable outside enterprises. Because the Government are the largest single buyer, spending billions of pounds each year, their choice affects the operation of the market place.

I have a rather worrying personal concern that in a country built on talent and surrounded by opportunity the Government do not recognise their unique duty of leadership by constantly seeking to open new areas of prosperity for our nation. That is the inherent challenge of the Committee's IT report and the reason that we have selected it for debate tonight. We want the Government to accept their duty and to act. I hope that my hon. Friend the Minister will respond with understanding.

7.38 pm

Mr. Stan Crowther (Rotherham) : I am happy to follow the Committee's distinguished chairman, the hon. Member for Hastings and Rye (Mr. Warren). He has not left a great deal for other Committee members to say. I appreciate the splendid way in which he advanced the Committee's views.

Because of the short time available for this debate, I shall be brief-- although I intend to concentrate on a matter of crucial importance to British industry. I felt that the hon. Gentleman was displaying his customary generosity when he suggested that the Government had misunderstood the Committee's report. The alternative is that they understood it perfectly well, but reacted in an extraordinarily stupid way. It may be that they have misunderstood it. Perhaps I should be as kind as the hon. Gentleman.

The Select Committee spent a vast amount of time on the inquiry. There were 15 sittings in the House and we took many thousands of words of written evidence as well. We travelled around the world talking to people in Japan and all the way across the United States. We then produced a report containing 52 recommendations which was warmly welcomed by the industry. The hon. Member for Hastings and Rye has quoted a few of the comments that we have received from the industry, but they are merely a few out of a vast number of comments that we have received, all extremely complimentary to the report. Unfortunately, the report was dismissed peremptorily by the Secretary of State. It is sad that he should have reacted in such a way. I emphasise that the report was unanimous. Every member of the Committee agreed with every recommendation in it. I do not intend to deal with its technical

Column 527

aspects--other hon. Members are much more qualified than I am to do that--but I want to make one or two comments on the political aspects of this matter.

This is not a matter of party division. Again, I emphasise that the report was unanimous. The argument between the Select Committee and the Secretary of State on this matter goes to the heart of the ideological divide in British politics today. It is entirely a question whether a British Government have a duty to make decisions and to implement policies which are positively in the interests of British industries and British companies.

This is the only Government in the industrial world who make a virtue of neutrality in that matter. They are certainly the first Government in British history who have taken the view that it does not matter whether British industries sink or swim and that it is nothing to do with them. I know of no previous Government of any party who have taken that view, but that seems to be the well-established policy of successive Secretaries of State for Trade and Industry, of whom we have had a large number in the past 10 years--about eight.

Those Ministers have all claimed a great attachment to what they call market forces. I am not against market forces, but we need to remember that market forces do not come down from heaven. They are not created by some extra-terrestrial body. They are very much created and conditioned by Government policies--for example on energy costs, interest rates, exchange rates and, in the particular context of the matter that we are discussing, public procurement. Let me refer briefly to the Government's response to our report on that matter of public procurement. They said :

"The Government do not consider that public procurement should be used as a policy instrument to pull through technology."

We never suggested that it should be an instrument to pull through technology. All that we were suggesting was that in their public procurement policy it would not be a bad thing for a British Government to pay some attention to British industry. That may have been a misunderstanding, but if it was it was a serious one. Government policies on matters such as education, training and research in the area that we are debating are of enormous importance in conditioning what turn out in the end to be market forces. For example, no one can seriously dispute that the success of the United States IT industry in the civilian field owes a great deal to the enormous amount of taxpayers' money which the Department of Defence spends on research--a perfectly proper use of the taxpayers' money. I am not necessarily suggesting that the Ministry of Defence should adopt the same policy here ; I merely mention that as an example of the way in which Government expenditure can be used to benefit the economy, obviously including the private sector.

Those are ways in which market forces are determined by the use of Government policy and resources, and I would like to see that happening here. However, the Government's response to the report, effectively saying that that is not their job and has nothing to do with them, is unfortunate.

The Ministry of International Trade and Industry in Japan clearly, openly and obviously devotes its policies entirely to the promotion of the Japanese national interest. Nobody makes any secret of that. If the Japanese have

Column 528

tended to open the Japanese market to foreign imports more than they have in the past, it is only because they perceive that to be in the Japanese national interest.

In the highly competitive world in which we live, I see nothing wrong in any Government adopting that policy. But the British Government's attitude, as we perceived it during the inquiry, as during many other inquiries, is that, although they want British industry to make the best possible use of information technology, it does not matter much to them where the equipment comes from ; whether it is made in Britain or imported. They do not care much about the future of Britain's indigenous IT manufacturing industry. The hon. Member for Hastings and Rye pointed out the appallingly high trade deficit in that area. We and the Government should be worried about that.

The Government have said that they are not prepared to make use of their enormous purchasing power to assist in and encourage the development of the British IT manufacturing industry. They are wrong to say that. I hope that they will think again about what we have said in our report. Again, I emphasise that this is not a matter of an ideological difference between parties. The report, like all our reports, was unanimous.

I do not want to be told about our international obligations under EC rules, the general agreement on tariffs and trade and all that kind of thing. I see that the Minister nods, so I fear that I may be told about it. lest I shall be told about it, let me say at once that I have heard it all before. I also know that other Governments, who are similarly bound by identical rules, manage to find a way of protecting the interests of their own industries and of making sure that their own industries develop in the competitive world in which we live.

I never quite understand why we should be the only ones who say that there is nothing we can do because of the international rules. When we talked to people in Japan, the United States and throughout western Europe--yes, even in the EC--we found a very different attitude. The Minister knows perfectly well that there is not another Government in western Europe who will sit supinely back and see its own industries destroyed by competition from outside if there is something that can be done about it. There is something that the Government can do, but I am afraid that they are refusing to do it. Where there is a will there is a way and it is up to the Government to find the way. It is time that we had pro-British policies from the British Government.

7.48 pm

Sir Ian Lloyd (Havant) : I am glad to hear that the hon. Member for Rotherham (Mr. Crowther) has joined the comparatively select band of those who have been to Japan, the United States and elsewhere in Europe to look specifically at the information technology industry. Rather like those astronauts who go into space and never see the world in quite the same way again, hon. Members who have shared that experience never quite see the problems in exactly the same light again.

This is an old stamping ground of mine, but I feel something of an interloper in what is a vital and important argument between my hon. Friend the Member for Hastings and Rye (Mr. Warren) and my noble Friend Lord Young representing the Government. The hon. Member for Rotherham has touched on the crucial and sensitive aspects of this vital debate.

Column 529

I am indebted, as I am sure are the House and the country, to my hon. Friend the Member for Hastings and Rye for having produced a remarkably comprehensive and interesting report which deserves, and I hope will continue to receive, the closest possible scrutiny. I have read not only the report but the Government's White Paper in response to it. Before commenting on both, I think it fair to say that the interchange between Select Committees and the Government provides a crucial fulcrum on which the balance between Government policy and the views of its critics can be weighed. It is very much in the public interest that that should be done seriously and openly, as it is this evening on the Floor of the House.

I congratulate the Government on responding positively and constructively to certain parts of the report. On reading the White Paper, I particularly welcomed the recognition in paragraph 5.14 of the significance of the international trading market. Recalling the remarks that had been made about Japan, I never forget for one moment that whatever may be Japan's success on one side of the coin, it depends on the other side of the coin, which is the virtually completely free access that Japanese products have to the OECD world trading market. Neither the Japanese nor anyone else should be allowed to forget that. Therefore, I welcome also the Government's emphasis on the general agreement on tariffs and trade and on access to international markets. Whatever happens, it is important that our policies result in such access.

Before giving my critical reactions, I shall set the scene. Since I last spoke on the subject--which was quite a while ago--the cost of semiconductors per function has fallen by 75 per cent. It has fallen by half since the report was printed. The size of the information technology deficit has increased enormously and the scale of the IT industry in the United Kingdom, in Europe and worldwide has expanded at a prodigious rate. The world economy now benefits to the tune of the massive figure of 400 billion dollars. About 15 years ago, I said that by the end of the century, IT would be the world's largest industry. Now I believe that that target will be exceeded and that if IT is not already the world's largest industry, it will be within the next few years.

I very much regret that Britain has sold to France one of its most outstanding examples of information technology, the transputer. United States' investment in microelectronics in 1986--the latest year for which we have figures--reached the colossal equivalent of £60 billion. The figure for France was £8 billion. In 1987, Japan's output of information technology products was 97 billion dollars. By comparison, the total for the EEC was more or less a comparable figure, while that for the United Kingdom was only $22 billion, or one fifth of that for the Community.

Japan's research and development expenditure now stands at 6.9 billion dollars and is second only to that of the United States, which spends nearly 20 billion dollars. Japan's expenditure is now double that of the United Kingdom, at 3.1 billion dollars. It is a matter of the greatest regret that not one United Kingdom firm features in the list of top 10 companies in respect of computers, telecommunications or semiconductors. Japan completley dominates the export market for consumer electronics, with a 63 per cent. share, compared with 5 per cent. for the

Column 530

United States--which is an interesting figure, because it represents a very rapid change from a position of dominance--and 4 per cent. for the United Kingdom, with 27 per cent. for the whole of the European Community.

A specific and significant statistic is that relating to installed robots, upon which so much of industry's performance depends. The figures are most alarming. The total number of installed robots in Japan is 82,500 ; in the United States, it is 25,000 ; in Germany, 12,000 ; in France, 5,000 ; and in the United Kingdom, 3,600. If one reflects on those statistics, one draws at all points the conclusion that the diffusion, of microelectronic technologies is now the main driving force of all the OECD economies. The greater the diffusion, the greater the growth rate, the greater the prosperity and the greater the market dominance. The correlation is very clear and very specific.

I turn to research and development, and hope that I shall interest the House with two technical examples. The first transistor was developed in 1955 or 1956. I recall holding a copy of one in my hand in the House. It had four gates. Today's commercial integrated circuits have 1 million gates. Laboratories are producing circuits with 4 million to 6 million gates, and the cutting edge of science is what are known as gigaflop systems having 1 billion gates. That stage has not yet been reached, but in the field of molecular electronics the cutting edge of science is getting very close.

At the Carnegie Mellon centre in the United States, work is continuing on 400 megabit optical random access memories, which means having 400 million devices on one small memory chip. Even more exciting is the use of that device in super-computers using what is known as bacteriorhodopsin. That extraordinary material is found in the photosynthetic apparatus of bacteria on the shores of San Francisco, and it can be used as a bistable optical switch--that is, as a semiconductor, because it can signal either on or off --with the phenomenal switching speed of 1 million millionths of a second. When used with laser technology, it offers the prospect of computers that can operate thousands of times faster than the comparatively small number of supercomputers that currently exist throughout the world. A combination of semiconductors of that kind with polymer surfaces presents the possibility of developing artificial vision for computers before the end of the century--and we should reflect on what that could mean for humanity.

I refer to two other important developments. Fujitsu has produced the first Japanese to English translation system--and what a shame that that was done in Japan--using a 32-bit personal computer. The price will be around £2,200, and the expected revenue is around £45 million in three years. The questions I ask are, why not us, and why not here? Even more depressing is that the first Josephson junction processor has also been produced by Fujitsu. It is based on the prototype developed by a brilliant young Englishman, Dr. Josephson of Trinity college, Cambridge. Again I ask the questions, why not us, why not here? When considering British information technology policy, we cannot escape asking such questions, whatever may be our arguments about the right method of dealing with the problems involved. Only this morning I heard that a young scientist in Hong Kong is close to developing a computer that will recognise spoken Mandarin, and the possible market for that is 1 billion Chinese.

Column 531

Mr. Timothy Wood (Stevenage) : My hon. Friend mentioned a number of fascinating developments and quite properly asked the questions, why not us, why not here? Is he suggesting that companies or the Government should have played a part?

Sir Ian Lloyd : I shall not escape that question. It is important and I shall try to answer it directly.

It has been pointed out that the United States car industry has installed three super-computers. In the same article, we were told that Nissan has installed two which are so much more powerful than the three available to the whole of the United States car industry that they will be able to design, develop and crash a motor car without even building a prototype. Does the British motor car industry have access to that technology? If not, why not? Where does the responsibility lie?

These machines cost an enormous amount, between £7 million and £15 million. There are a few hundred in the world and only three in the United Kingdom, but they are of the utmost importance. I am glad to say that Europe is not asleep. The European sub-micron silicon initiative involves a £2.7 billion programme and the intention is to increase the present density of integrated circuits by 10, to increase their size by 2.5 times and to extend the elements of memory from 40 million to 200 million-- still well below the figure that I gave earlier--and the elements of logic from 2 million to 10 million. The world market for super-computers has been estimated to be £100 billion by the year 2000. Those who support the JESSI programme--the European sub-micron programme--say that, with luck and if we do it properly and get it right, Europe's share may be £17 billion. Paragraph 5.5 of the White Paper "Information Technology" states : "The Government have no plans to require the creation of a national broadband network based on fibreoptic cable."

I contrast that with what is happening in Japan and the United States. In Japan, it has been stated that the intention is to create a fully integrated digital communication structure using broadband fibre-optic microware.

I hope that the House will forgive me if I quote fairly extensively from Senator Gore's speech on the so-called Gore Bill in the United States. He said :

"High-performance computing is the most powerful tool available to those who, in an increasing number of fields, are operating at the frontiers of imagination and intellect. The nation which most completely assimilates high-performance computing into its economy will very likely emerge as the dominant intellectual, economic, and technological force in the next century."

I fully concur with that judgment. Senator Gore went on : "If the United States is going to be a supercomputer superpower in the 1990s, we had better start building a high-capacity, national research and education network today."

He argued :

"A national network with associated supercomputers will cluster research centres and businesses around network interchanges, using the Nation's vast data banks as the building blocks for increasing industrial productivity, creating new products, and improving access to education."

How, he asks, is this to be done? Now we come to the centre of the debate. Senator Gore said :

"Can we rely on the market system to provide this kind of infrastructure? We certainly couldn't where the Interstate Highway System was concerned I believe that the Federal Government must again be a catalyst Clearly, the

Column 532

technological spinoffs and productivity gains would be enormous, from a network that would cost the Government less than one Stealth bomber."

Senator Gore went on to develop in some detail what he hoped the Bill would do for the United States. He spoke of

"putting in place a three gigabit per second"--

not 3 million, which is our standard--

"national research and education computer network by 1996 ... including a National Digital Library projects like neural networks ; basic research and education ; stimulating the development of hardware ; enhancing the development and distribution of software".

Senator Gore said :

"This bill would also authorise $1.75 billion over 5 years, fiscal years 1990 through 1994, to carry out the purposes of the act. The investment is tiny and the payback enormous".

He said :

"the only long-term deficit solution is to get away from short-term thinking, look to the future, and invest in the people, technologies, and equipment that will ensure our standard of living and increase productivity."

That is what is happening or is about to happen in the United States and Japan. [Interruption.] My hon. Friend the Minister does not think that that is happening. Doubtless he will reply in due course. If I am wrong, I stand corrected. If it is not happening after what has been put forward, I should be surprised if it does not happen fairly soon. If this or something like it does not happen fairly soon in Japan, I shall be even more surprised.

We come to the question : how is this to be done? I am coming to a sensitive matter. I have just read the exchanges with Lord Young when he appeared for the second time before the Trade and Industry Committee and answered probing questions on ministerial responsibility. I disagree with both parties, which puts me in a difficult position. I do not disagree with the objective of my hon. Friend the Member for Hastings and Rye (Mr. Warren)--it is extremely sound--nor do I agree with Lord Young's attempt to play down the significance of this ministerial post. It has been played down, largely on the ground that everyone now knows about information technology and everyone now uses it and therefore there is no need for central responsibility. It is like saying of the Treasury, "Everyone knows about money and we really do not need a Chancellor of the Exchequer." I acknowledge that the analogy is imperfect. I can claim some responsibility for this debate because I put up a paper in 1978 that developed the concept of a Minister for Information Technology. I was delighted when my right hon. Friend the Prime Minister came to power in 1979 and appointed the present Secretary of State for Education and Science to that post. While he was Minister for Information Technology, we made much progress. He was one of the few hon. Members, and certainly one of the few right hon. Members, with a clear appreciation of what this was all about. While he was in that position, he drove things forward and we were conscious that the nation had as the Minister for Information Technology someone with a grasp, determination and understanding of information technology. Alas, ambition and other things beckoned and the sad clothes of the Minister for Information Technology were dropped, like Cinderella's, into the wastepaper basket, and my right hon. Friend moved on to other and better things. As a result, the nation may have missed out, even if it has gained in other ways.

Column 533

Mr. Crowther : Does the hon. Gentleman agree that during the reign of that Minister for Information Technology we developed a considerable trade deficit in that business?

Sir Ian Lloyd : That may be so, but the reasons for the development of the trade deficit, in both the United Kingdom and western Europe as a whole, and in the United States, are deep-seated. This is the obverse of the remarkable sense of vision, determination and organisation--almost unique in the history of the industrial world--that was displayed in Japan. I came across it for the first time in 1970, when a Japanese Minister of State with specific responsibility for information technology told a visiting delegation from Europe that information technology in Japan bore the same relationship to industrial power as coal did to industrial power in the 19th century. I have never forgotten that, just as I have never forgotten the vigour, force and conviction of that man's statement. What are the solutions? There are many, but I favour one particular solution. I am sorry to have to say that I disagree with my noble Friend the Secretary of State for Trade and Industry and I probably disagree with many others. We need this focus. If the whole record is in any sense a judgment of whether this decision is right or wrong, I believe that that record is wholeheartedly on my side and no one else's. I stick to that judgment because I have made it on the Floor of the House for almost 25 years. Events are what count and events have proved me increasingly right.

As a country, we cannot afford to fail in this area. We must think much harder and we must be more effective. We must see a national and European leadership emerging in this sphere. Our science, our inventiveness and our technology are all equal to the challenge and I have every confidence in them. However, our institutions are not, and I have less confidence in them.

Senator Gore talked about talent and determination. We have almost a superfluity of talent and the very best talent in this country is second to none. We have rather less determination. Let us put talent and determination together. When we have done so, let us use them. 8.10 pm

Mr. Malcolm Bruce (Gordon) : I will not attempt to follow the hon. Member for Havant (Sir I. Lloyd) with the great deal of technical knowledge he has revealed. However, I hope that he will agree that one does not have to have that degree of technical knowledge to be able to approach this subject and to recognise its importance. The information technology industry, regrettably, has its own technology, terminology, statistics and jargon, as many industries do. As a result, many people tend to shut it out, and to think that it is not for them and not terribly important.

However, the advent of the development of information technology can be compared with the invention of the printing press, the railways, and the internal combustion engine all rolled into one. It is--or represents when used and developed properly--a major leap forward in the way that we organise our business, the means of production and our daily lives. It has already had a substantial impact, but I suspect that its eventual impact will be far greater. There are some simple, practical aspects of information technology to which we can all relate, given our everyday experiences of the past 24 hours. The habit has built up

Column 534

over generations that people congregate in great cities. I do not believe that that development will be fundamentally reversed, but technology can enable a more sensible balance of time and place to be organised. Many of us use new technology every day when communicating with our constituency offices. I and many other hon. Members have word processors and fax machines at home to enable us to communicate between our homes and secretaries. Those are simple examples of information technology, but they have made an enormous difference to the speed with which information can be transferred. With the development of super- computers, not only speed, but volume and sophistication, come into play as well. They are all important and have substantial implications not only for the economy, but for society as a whole.

However, there are still many casualties within the system and part of the reason for that is that information technology has come upon us so quickly. It still remains true, for example, that companies buy hardware before they have considered fully what they want to do with it, and before they have considered their software requirements and intercommunicability, not only within their own company, but with their customers and the companies from which they purchase. Much has been learnt, but the learning curve is expensive.

It is interesting that a survey last year said that the most important priority among British management was upgrading existing systems. I realise that that is partly a reflection of the speed of technology, but regrettably, it is also a reflection of the mistakes made in earlier purchasing decisions. Members of the Select Committee on Trade and Industry will remember in particular the Bank of America, which we visited, where there were substantial errors and the Committee judged that the bank was continuing to make errors in buying information technology systems.

It is interesting that a survey carried out by Amdahl when our report was in its early stages pointed out that attitudes in British management towards information technology lagged behind those in other European countries and especially in West Germany. One of the problems was that we did not spend much time in training our executives in the use of information technology. The survey said : "In Great Britain, the least amount of time is spent learning : for example it is believed that only 9 per cent. of British managers often' attend internal presentations or seminars on Information Technology, whereas it is 19 per cent. in France, 29 per cent. in Italy and 36 per cent. in West Germany".

That is symptomatic of the problem. The survey also showed that the British position was mixed :

"Expectations are high and there are some excellent success examples There are some notable exceptions but there is clearly a great deal to do in improving attitudes and understanding if full benefit is to be gained in the years ahead."

There are problems in attitude in British management, which the Government are entitled to say are not wholly their responsibility. However, I find it odd and the Committee collectively found it offensive that the White Paper was not a counter-statement, but a rather cavalier rebuttal of a serious piece of work which involved a great deal of evidence taken from a wide variety of sources and which made common-sense recommendations. The Government impugned many of the recommendations in a way that did not represent what the Committee had said. What offended me was that the Government criticised us for

Next Section

Home Page