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Mr. Richard Page (Hertfordshire, South-West) : I congratulate the Select Committee and its Chairman on the report, although I do not agree with everything in it. It is rather like the curate's egg--good in parts.
I welcome the opportunity, however, to debate information technology as it is the rope on which our manufacturing industry and commercial activities hang. Coupled with that are the effects of information technology on our balance of payments, whether that means benefits to it or a downside negative. At the moment our balance of payments is negative.
It is a strange fact that, for some reason or other, this country has less investment in manufacturing industry, research and training than any of our international competitors. Why that is so could be the subject of a long, detailed debate, but I do not intend to examine every reason tonight. I know that I tend to sound like a well-worn record as I keep on producing the facts again and again, but I shall continue to do so until something is
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done to put the situation right or I am proved wrong. Obviously, from a national point of view, I hope that I am proved wrong. There have been some significant improvements in our manufacturing investment over the past few years. However, those investments are only now level with those of 1979. In percentage terms against their gross national product, the Japanese invest 50 per cent. more than all the other industrialised nations. We are the lowest of the G7 countries when it comes to investment. That is on the negative side, but on the positive side, we must congratulate the Government on the work that they have done on inward investment, and the way in which they have brought companies' and countries' activities into this country. They have been so successful that even the French, that most chauvinistic of nations, have seen where they have gone wrong and seek to emulate us.I do not know whether the present levels of manufacturing and inward investment are sufficient to produce, in time, an acceptable level of trade balance without, as may shortly happen, demand being beaten down by the single club of high interest rates. My hon. Friend the Member for Hastings and Rye (Mr. Warren) clearly described the size of the problem when he said that, to overcome the present negative balance of trade, this country will have to produce and sell six more Metros every minute.
However, that is enough of the general gallop around the park of my particular prejudices. I shall return to the information technology report and the Government's response. I have some sympathy with the Government over the dilemma that they face. First, they do not want to try to pick winners. I have to smile and welcome the conversion of the hon. Member for Wigan (Mr. Stott) who said that he, too, was apprehensive about any Government's ability to pick winners. His is another of the road to Damascus conversions which are taking place among the Labour party and its policies. If the hon. Gentleman is not careful, the Labour party and the Conservative party will become indistinguishable. I have no doubt that differences will be forthcoming at the next election.
Mr. Crowther : I am extremely obliged. Will the hon. Gentleman tell us to which Conservative party he has just referred : the Government or Conservative Members on the Select Committee?
Mr. Page : When it comes to splits in parties, nobody can beat the Labour party, in which the spectrum of political prejudices is so wide that it has gone round in a complete circle. I apologise for stirring up this minor controversy and I shall return to the other horn of the dilemma. If we did not have fun in these debates it would be time we all went home. However, if the House will quieten down, I shall return to the other horn of the dilemma. There are so few of us here this evening that I hardly think these are grounds for a riot. The Government must also ensure that there is sufficient national progress to combat and defeat international competition, which exists outside the EC. Later, I shall talk about how we must work within the EC to achieve the success which we all want.
The Government's example is not one of the best. I am a member of the Public Accounts Committee and we have in front of us a series of reports from the National Audit
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Office referring to the effectiveness of Government Departments in introducing information technology and computers into their daily operations. It would be invidious of me to go through the reports because they make sad and serious reading. The delay in introducing computerisation into Departments is nothing short of a scandal, with one bright exception : the Inland Revenue. That Department has taken significant steps to introduce computerisation and information technology into its operations. I say that from the bottom of my heart, not because I sent my income tax form in this morning. We face a dilemma. The Government spend more of total funds on research and development in information technology than do our industrial competitors ; on the other hand, our industrial manufacturers contribute far less. The Government must be congratulated on helping to bridge the huge divide between academia and industry by setting up the Alvey programme--£350 million, which has gone into some positive projects. That is a memorable step towards reducing the huge gap and towards achieving what is regarded as standard by almost every other industrial country.I have offered credit and congratulations, but I am disappointed to read in the report that the Alvey project will not be evaluated until the 1990s. We must build our future on the success or failure of that project, so we need information about it. Paragraph 17 of the report states that we have not taken commercial advantage of the work done on these projects. That is a crying shame and it illustrates one of the weaknesses in our industrial structure.
The baton has been taken up by ESPRIT. I am glad to see that more small and medium-sized businesses are involved in that.
I support the Committee's recommendation that more tax aids be given to the smaller companies to enable them to improve and compete. As the House knows, I am a firm supporter of smaller businesses. They have the flexibility and ingenuity to get projects under way while big companies are still bending down to put their boots on. Against that background we must examine what the competition, particularly the Japanese, are doing. The report quotes the Japanese as saying that their information technology industry will be worth £600 billion by the year 2000--for a huge market which the Japanese are targeting for themselves.
What part can we make IT play in the overall game of national economic success and in redressing the negative balance of trade? There is a growing realisation in the United States that if it adheres to its present course in IT it will soon lose out to the Japanese. United States leadership in this field is under severe pressure. Its lead in specialised chips, super- computers and software is being whittled away. My hon. Friend the Member for Havant (Sir I. Lloyd) gave us a devastating and sorry list of the advances being made by the Japanese. Their success has made the Americans aware of the vital necessity of having a large manufacturing base. It has exploded the myth of the 1970s that America could become more prosperous as a service-based economy.
We can learn from these experiences. Only as part of Europe can we stem the tide and start to catch up. Europe is caught in the crossfire between the Japanese and the
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Americans, as they shoot it out at the OK Corral. Only by skilful use of the sheer market size of the EEC can we ensure a revival. Europe used to show a surplus on information technology ; now it shows a deficit. I could list the areas in which we are losing out, but I shall mention only one--the ability to write software. We used to lead the world in this skill, but we are steadily losing our leadership. We shall redress the balance only with the co-operation of all people, all Governments and all industries within the EEC. The official EEC efforts to revitalise high technology on a national framework have been based so far on ESPRIT, RACE and EUREKA. These have been worthy efforts in bringing companies and academic institutions together. The Government are to be congratulated on laying that foundation, and from that flows the recommendations of the Select Committee. Recommendation No. 21, reads :"the Government should plan now to avoid any hiatus in academic research in IT when both the national IT programme and Esprit 2 come to an end."
Simultaneously and in step with that must be the next move, that of international co-operation within the EEC for the introduction of pan- European initiatives away from the protection of small and national champions that operate in a fragmented market. There must be a move towards a larger operation in a larger market. Time is not on our side, but I suggest that what I have said offers the best chance of success of survival for British-based industries in the IT world. 9.21 pm
Dr. Jeremy Bray (Motherwell, South) : Like everyone else who has contributed to the debate, I welcome the report. I support the recommendations and I agree with all that has been said by the advocates of faster progress.
I wish to take the argument one stage further. The hon. Member for Havant (Sir I. Lloyd) made some interesting remarks when he compared information and money. He said that people know broadly how to use money nowadays but they do not say that we can do without the Chancellor of the Exchequer, although to do so would be an attractive thought. The Chancellor does not spend his time telling people that they should use money rather than gold, or beads, or barter. Instead, he is concerned with who does what with money, tax, expenditure, expenditure on what, savings, savings by whom, investment in what and investment for what. As information technology matures, it should be concerned with the use that is made of information rather than the methods by which that use is made. All computer companies nowadays are advertising for sale solutions and not techniques.
The origins of these matters go back far beyond the recollection or reminiscences of the hon. Member for Havant. Before the 1964 general election, I chaired a committee on the uses of information from a more mature information technology industry. One member of the committee was Professor Richard Stone, who was personal assistant to Keynes and a Nobel prize winner. Another member was Teddy Jackson, the director of economics and statistics at Oxford, who rendered Harold Wilson, as he then was, a great service in coming second to him in PPE at Oxford as an undergraduate. We put together the rationalisation of business statistics which led to the common register of business interests, the setting up of the business statistics office and other developments.
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I shall mention two areas in which the Government are suffering because they are not taking the initiative. I am, of course, in favour of the broadband fibre-optic network, but for what? We must face the fact that the PA Consulting Group's technology report, the Zegfel report on the Netherlands and other papers all reach the conclusion that there is not a market for switched broadband in the foreseeable future. There was, however, a caveat in the PA Consulting Group's technology report. It stated that education and training was a potential application area but that the education sector had no money to spend nowadays and that it was not a potential customer. That may be true under this Government, but is it true in terms of the needs of the education system? I am speaking not in terms of the potential of information technology but of needs, efficient ways of raising standards in schools, the introduction of the national curriculum, and so on.I think that the answer to the question is probably yes. Interactive video and broadband access to the best teachers in the country, so that teachers in the classroom can call them up and use their material as needed, is probably the most effective way of raising education standards, in conjunction with many other developments in education. Those methods need to be developed ; the curriculum material needs to be developed. It is an expensive business.
The PA Consulting Group estimates that software development is 10 times as expensive as hardware. The software needs a long lead time in its development. It is no good producing hardware and then trying to develop the software for it, because it will be 10 years before that software is available to exploit the hardware potential. The software must be developed at a stage when the technology is still too expensive to use for its future application. The £6,000 interactive video machine may be far too expensive to use in classrooms generally, even if it is only one for the teacher, but it is essential for the development of the educational methods that will come into use in five, seven or 10 years time, through cheaper machines and on broadband. It is the most efficient way to develop and research the curriculum material, test it in the field, and train people in its use.
We need to go on from there. The work of the Open university needs to be properly organised and integrated with such projects as the medical work at Bristol university, the engineering departmental links within London university, Salford and other initiatives. A number of operations are being carried out but they are grossly under-funded. There is no leadership from the Government or from the Secretary of State for Education and Science-- the once so-called Minister for Information Technology.
The personal computer revolution should be the model for the development of broadband applications. It is a new medium that people must learn how to use, just as they learned to use personal computers by watching their children playing computer games at home. The computers began to go into the schools and the parents wanted to buy them because they thought that they would provide opportunities for the future. If there is good curriculum material in the schools, everyone will also want it in his or her home. Every parent will want it for his child. There will be a willingness to spend the £400 to £800 per household needed for each new wave of consumer electronics, which introduces the new systems.
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By their neglect of information technology, the Government are also damaging the processes of government. If anyone wants to empty the House, to drive out the Members, he should talk about information technology. If he wanted to drive out even those few Members present tonight, he need only talk about Government statistics. The report on Government economic statistics reveals an outrageous neglect, mostly by the Department of Trade and Industry, but also by the Treasury. There is a discrepancy in the national accounts between the records of income and expenditure of £14 billion--3.5 per cent. of national income. The books do not add up.The discrepancy is bigger than the trade gap. It is the stuff on which elections are won or lost, yet the Government are in the dark. They propose only some patchwork improvements to the individual statistical series and so on. The damage was done by Rayner, who missed the point that the biggest users of business information are the businesses themselves ; the Government are but bystanders and watchers abstractors of a tiny part of the information flow that runs in great tides throughout the economy. A modern information system for the economy needs to be based primarily on the uses made by business of its own information.
The system needs to be organised. There needs to be set standards of disclosure, of publication and of access similar to those that are set in the accounting profession. The profit and loss accounts, double entry bookkeeping and so on were invented by the Venetian traders in the middle ages. If the Government do not create the standards and systems, business cannot communicate with itself. Practical steps must be taken. The Government must realise that there needs to be an open system, and that system should be brought into the electronic age. It should be based on the requirement of companies to maintain their databases on-line on personal computers or floppy disks. There must be the appropriate security checks so that the right people have the right access at different levels. It might be a paradise for the hacker to begin with, until the hacker discovers that he can have more fun and make more money by collating the information that people want rather than by concentrating on what he believes to be hypersensitive information that is being kept from people. The data are then available on a consistent basis between the historical record and the projection into the future. It is not Government who build the models, it is the investment analysts, the shareholders, the takeover bidders, the employees, the customers, the suppliers, who, from this system can build up a comprehensive picture of how the economy works, how business works and how their prospects will develop.
The proper posture of information technology is not as a supplicant, not as a master, but as an articulate and powerful servant. 9.29 pm
Miss Emma Nicholson (Torridge and Devon, West) : I welcome the opportunity to follow such a distinguished speaker as the hon. Member for Motherwell, South (Dr. Bray).
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I cannot agree with the report. I urge the House to reject it and to adopt in its stead the excellent White Paper put forward by my noble Friend the Secretary of State.Had it not been for the acidic and arctic exchanges between the Secretary of State and the Select Committee, I would have felt able to draw conclusions as he did, empirically, from the report as it stands. However, I cannot, because when one draws conclusions from this report, one is accused of not having read it. The Minister himself was accused of not having read the report before his statement on 19 April when he talked about dinosaur tendencies. If being a dinosaur is an ability to respond effectively to change, the Select Committee in its report has demonstrated that quality. I must add here, with my respect for the individual members of the Committee, that the Committee's report does not reflect the high intelligence that is undoubtedly shared by all its members. I have sought long and hard for new ideas in the report, but I can find not one.
Let me draw the Committee's attention to three crucial paragraphs where the report fails and where its failure is shown most clearly. Those are the last three paragraphs, Nos. 114, 115 and 116. I have to read the report because one has to be a fundamentalist when dealing with it. One must read the exact words ; one cannot draw conclusions. Paragraph 14 says :
"There is no doubt that the government no longer attaches a high priority to IT as a frontier technology needing sponsorship." I submit that that statement is made as a reflection of ill-considered thinking by the Government, and yet it is exactly the stance that the Government should adopt. A frontier technology? How could IT be a frontier technology? IBM started in the United Kingdom in 1954. I started work in ICL in 1961. IT is most surely not a frontier technology needing sponsorship.
The report goes on :
"Whatever the effect of this on the future of the IT industry it does not fit in well with the objective of promoting the use of IT in the economy."
Of course it does, because frontier technology it is not and it most certainly does not need sponsorship.
The report goes on :
"We recommend that IT matters should be dealt with at Minister of State level in the DTI."
It then says that the Government
"shows no signs of formulating a total policy for the industry", and that the Secretary of State for Trade and Industry should "be made responsible for all aspects of Government policy on information technology and should produce an annual report on its implementation."
Old-fashioned thinking indeed.
But that thinking, particularly the last statement, is based on a complete misapprehension. The misapprehension is identified clearly in the evidence on Wednesday 26 April which we can read at paragraph 1145. That says that the Committee felt that
"a Minister should be responsible for IT (as would be the case in every large organisation and enterprise in this country) at the Cabinet table."
That is completely incorrect. Not all boards have an IT director. Nor do most boards have a director who has a
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specific responsibility for IT in his portfolio. For the most part, IT is included in the finance director's responsibilities, and only to a limited extent.Industry thrives and creativity wells best from the bottom up and not, through imposition in the IT industry, from the top down. A rigidity of thinking runs right through the report, not just as a thread but as an iron rod which reflects dinosaurial thinking and points to an early death for the report.
Let us look for a moment at the size and scale of the industry and on the Government's part and the way in which they have computerised so massively. No other speaker has touched on that. The British software industry alone is currently one of the country's great success stories, but almost everyone has overlooked that. It is growing at a rate of 25 per cent. per annum. What other industry in Britain unhampered by Government intervention is doing that? Hardware sales have been dropping annually. It is also worth remembering that computers currently hold 2 per cent. of all human knowledge. The Government have not held back from computerisation or from holding more human knowledge on computers. I refer to the Ministry of Defence's CHOTS endeavour using 75,000 terminals, which the Select Committee did not know about, and which will be implemented in September. Within three years, the Inland Revenue will be using 40, 000 desktop computers addressing 20 different databases. Twenty million Department of Social Security records are currently being computerised. They will be on line and in daily use, and that will mean any number of word processors on people's desks.
There has also been enormous investment in computerising hospital records, which, God and the suppliers willing, will be completed by 1991. That is perhaps the largest and most interventionist exercise of all, and the one which will have most impact on everyone in the country, because all of us are concerned about our own health. The Department of Trade and Industry is busy putting company knowledge and advice on computers.
No member of the Select Committee has mentioned the tremendous departmental shift to computerisation, whereby the Government are changing from the old system of handing down budgetary control through votes, which we presumably inherited from the 1600s, to the modern system of budgetary control with its concomitant partner--the management information system. In academia there is JANET--a computerised network information which serves all our universities, which also have their own excellent departments of computer science. In addition, the Government are buying in through contracting out- -and if that is not a way of supporting British industry, what is? TAURUS-- computerisation of share registers throughout the country--is embedded in the Companies Bill. There is computerisation in industry, and among individuals in the form of bulletin boards. The tiny amateur network of the British Association of Computer Clubs alone has a network of 20,000 members.
The report does not address some of the real problems. It overlooks what is happening and tinkers instead with old-fashioned thinking and with things that have been and gone. It does not consider properly the question of staffing. Of course there is a tremendous shortage of programmers, and perhaps that is one reason why there is more software intervention and why more self-created software is being
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developed with ADA, which will mean that fewer human beings will be needed. I have already mentioned the crucial importance of women and of middle-aged men in IT and of the lessening need for young people because computing is no longer the skilled and sophisticated profession that it was when I first joined the industry.I draw the attention of the House to another part of the Select Committee's report. I shall not pull through the technology, but I shall pull through some of the report's very old-fashioned thinking, to arrive at a fraction of modern thought. Paragraph 51 contains a clear criticism of universities and the Government for not tempting the brightest
"to undertake higher education in the appropriate disciplines." The really interesting thing about IT is that all its disciplines are eminently suitable for all graduates entering the computer industry. BP, for example, takes graduates from all the disciplines within any university framework, ranging from zoology backwards. The report does not address the key British weakness, which has nothing to do with training , lack of intellectual creativity, or lack of funds. It is the huge, built-in weakness of lack of marketing ability. That is the single largest factor in inhibiting computer development in Britain, and it always has been. The Select Committee's report does not attract attention to computer misuse, which accounts for one fifth of the computer investment--continuing, capital and recurring--in any computer installation. The report does not address the key issue of standards, which must be the thrust of computer usage.
The Government's role in computer and high-technology matters should be minimalist. They are a major user of a high standard. The White Paper is not "sour", as was said earlier, but sane and sensible, giving a framework for growth within which United Kingdom-based IT will flourish. The Select Committee report should be discarded and rapidly buried. I suggest to members of the Select Committee, "Hands off information technology. You are well meaning, but astigmatic interference will throttle it to death."
9.40 pm
The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth) : This has been a fascinating and informative debate, which is not something that one can say about every debate. The hon. Member for Rotherham (Mr. Crowther) gave the game away. Indeed, several cats leaped out of bags this evening. Early in the debate, the hon. Gentleman stressed that the report had been unanimous. He went on to give us, as he was entitled to do, a traditional Labour party approach that laid great stress on what I make no apology for calling good, old-fashioned interventionism. The key to the debate and to understanding the difference of opinion between the Government and the Select Committee is in what the hon. Member for Rotherham said about the unanimity of the report. In his evidence to the Committee, the Secretary of State for Trade and Industry, Lord Young, said :
"I believe there is an honest difference of opinion between us". Let us not try to hide that fact. From time to time, Select Committees produce texts that attract unanimous support from all parties on those Committees, and they should not be surprised if the Government are not able to accept their
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recommendations. That is almost axiomatic and self-evident. I am surprised that members of the Select Committee on Trade and Industry are surprised that there should have been this difference of view between the Select Committee and the Government.My hon. Friend the Member for Leeds, North-West (Dr. Hampson) gave the game away totally in his typically honest way and with his typically honest candour when, at the end of his excellent speech--I made a note of his words and will check them in Hansard tomorrow--he said that the Government must "be more interventionist." That is clear, open and on the record. The hon. Member for Wigan (Mr. Stott) recognises that. This is a major reason for the difference between the Select Committee and the Government.
Mr. Stott : They got it right.
Mr. Forth : The hon. Gentleman says that they--the Select Committee- -have got it right, meaning, I suppose, that we, the Government, have got it wrong. The hon. Gentleman could not have put it better.
Dr. Hampson : I was being ironic about my hon. Friend's use of the word "intervention". The Government cannot have a "hands off" approach. They must nurture, as do every other major Government in Europe, the United States and elsewhere. We are not proposing dinosaur thinking. My hon. Friend the Member for Torridge and Devon, West (Miss Nicholson) and my hon Friend the Minister seem to be somewhat ideological.
Mr. Forth : If I have time, I shall return to the point about what other countries do. We must be a little careful. Many hon. Members have been seduced into seeing what they have thought are attractive elements in other countries' policies, taking the bits that they like. Contributors to the debate have spoken favourably about Japan, the United States and even other European countries. They have suggested that all we have to do is to adopt the good bits, the nice bits or the bits that seem to work well, and all will be well. If I have the time, I shall refute that argument. I do not find it attractive or convincing.
My right hon. Friend the Secretary of State spent a long time with the Committee. I do not know whether it was a meeting of minds. At one point in his excellent speech, he said :
"I believe Government, and I have said so already, has a very real role to set the climate, to set standards, but that the particular technology is not the responsibility of the Government to actually choose and select."
My right hon. and noble Friend the Secretary of State put his approach in his usual succinct and elegant way.
My hon. Friend the Member for Hastings and Rye (Mr. Warren), the Chairman of the Select Committee, made an excellent opening speech. He showed, as always, why a Select Committee is prepared to follow his leadership and to unanimously back his reports. From the nature and tone of his speech, I can understand why that should be so, even though there may be differences between us. It is important to put the record straight immediately on one of his points. My hon. Friend quoted an article in the Financial Times. I want to make it clear that there is no Department of Trade and Industry and Central Computer and Telecommunications Agency initiative as he suggested. I understand from the CCTA that it could, if requested, meet the firms to clarify aspects of particular contracts, but
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in that case, all information and all contracts would be available to all bidders. Each bid for Government contracts is considered on its merits and bids by United Kingdom consortia are not given preference over others.I wanted to make that point clear because several hon. Members have suggested that in some way, either openly or surreptitiously, we could use Government procurement policy to favour British suppliers. Members of the Select Committee on Trade and Industry above all should know that that is not allowed within the European Community. My hon. Friend the Member for Leeds, North-West sought to draw a parallel with bridges in Turkey. One cannot compare the Government's support for civil engineering contractors building bridges in Turkey with the public procurement policy of information technology within the European Community. The parallel is faulty in so many ways that it is difficult to know where to start.
Mr. Wood : This is an interesting point. A number of individuals and companies are concerned that although this country operates correctly with regard to EC policy, other Governments may not take such a pure view. Are the Government taking action to prevent those countries abusing the system?
Mr. Forth : I am grateful to my hon. Friend for raising that important point. The answer must be that if there are members of the European Community who are breaking its rules, flagrantly or otherwise, we should not break them in the same way, but should encourage the Commission to discharge its responsibilities in ensuring that all member states obey the rules equally. Let us not become rule breakers, but let us rather urge the Commission to do the task with which it is charged and responsible--to create the level playing field we all want. I hope that my hon. Friend agrees. I want to give the House some idea of the extent of the Department's useful, productive and correct support for information technology. We give support for consultancy, for example, under the financial and information systems initiative and 2,250 such projects were approved in the first 14 months of the initiative. There are three major programmes for information technology transfer and information standards involving about £41 million of spend over three years. We support the introduction of new technology into schools. There is a £6 million programme and the Department of Education and Science also provides support under its schools initiative. There is support for information technology research and development under the Department of Trade and Industry and Science and Engineering Research Council joint framework for information technology, including the United Kingdom's contribution to the European programmes and that will total over £100 million of publicly funded support for information technology research and development this year. In that context, and in answer to the point raised by my hon. Friend the Member for Hastings and Rye and by the hon. Member for Wigan about the Bide committee, which recommended funding of £300 million in collaborative research and £125 million in the programme on application over the next five years, the Government are spending at least as much as that in collaborative research and development, taking into account spend through the
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European programmes. The Bide application programme was rejected because we believe--we have a consistent view about this right across the board, not just in relation to information technology --that near-market research and product development is best carried out by industry, and not by the Government using public funds.The hon. Member for Wigan referred to INMOS. It is true that industry in the United Kingdom had every opportunity to acquire INMOS when it became available, but the truth was--it may well be a sad truth--that no United Kingdom electronics company was prepared to take INMOS on. The fact that a company from another European Community country chose to do so may say something about its judgment, rather than about that of United Kingdom companies.
I now turn briefly to high-definition television, to which the hon. Member for Wigan also referred. The Government are providing support for that product. We are supporting the work to establish a European standard for the system. Work is being undertaken under EUREKA, and United Kingdom firms are involved in that project. The Department of Trade and Industry is providing support for the necessary service and development. That is something that has been identified and to which measured support under the research and development heading is being given.
Several hon. Members have referred to the IT trade deficit. Much concern has been expressed about that and, of course, the Government are concerned, just as they would about any trade deficit in a country which depends on trade more than any other country. However, there has been a trade deficit in this area for many years. Indeed, there was an IT trade deficit in 1978, in the last year of the Labour Government. Obviously, this is a long- standing problem.
As the hon. Member for Wigan admitted, it is a problem that the other major European countries also face. The Federal Republic of Germany, France and Italy all have trade deficits in computers and communication equipment. In 1987, the United States moved into deficit in this area. Therefore, of all the OECD countries, only Japan has a trade surplus in this area. It should not be forgotten that the United Kingdom has a trade surplus with the rest of the European Community--of over £500 million in 1987. We should not paint too gloomy a picture, because we can point to success.
In her excellent speech, my hon. Friend the Member for Torridge and Devon, West (Miss Nicholson) gave the House some good news and an upbeat picture rather than the doom and gloom that was presented by most hon. Members. We must strike a balance in these matters. We must acknowledge the problems, but also fully acknowledge the success stories. I thank my hon. Friend for doing that and regret that she was the only hon. Member to take such an approach.
I turn now to the fibre-optic network, with which so many hon. Members are obsessed, besotted or dazzled--I do not know which word to use about it. The hon. Member for Gordon (Mr. Bruce) challenged me to give the Government's view on this, and I do so with pleasure. The Government have listened carefully on many occasions to the arguments in favour of promoting a broad band national grid. We have taken into account the views and the many reports that have been made on this subject. We keep a close eye on developments abroad.
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No one doubts the potential benefits that can be offered by modern telecommunications, or that fibre-optic applications will be important. British Telecom already has over 550,000 km of fibre optic in its network and the amount is increasing daily. However, technological choice and consumer choice are also increasing and it is for the market to signal which services or technologies will be the most successful in the future--Dr. Bray rose --
Mr. Forth : I am afraid that I cannot give way again, because I shall have to conclude my speech in about two minutes' time. The House must understand that there is a great difference between recognising the value of technology, which we undoubtedly do, and encouraging, where necessary, British Telecom to do what it thinks is right because it is the expert. As I do, the hon. Member forWgan acknowledged that we have a world lead in that technology. Given that that is the case, there can be no grounds for the Government stepping in with taxpayers' money simply to do something which the market is already doing ably in responding to the needs and demands as they arise. We in the Department of Trade and Industry have a clear view about where we are going.
Many other points were raised in the debate and I shall study the record to see whether hon. Members require answers from me that I have been unable to give in the short time available to me. The importance that we attach to the matter is fairly obvious, not just from the Select Committee's report but from the care with which the Department of Trade and Industry put together its response to that report in the White Paper. Some unflattering things have been said about our White Paper, but I hope that hon. Members will appreciate that the White Paper at least gives full recognition to the Committee--to the importance of its report and to the detail of its work. The Department went to considerable lengths to reply in depths to the report, and it is to be regretted that we were unable to agree.
I hope that the Chairman and members of the Committee will realise that we attach great importance to this matter and will continue to do so. We shall examine carefully all the speeches made today--some of them very expert--to decide whether they should influence the direction that we take in future. I gladly--
Dr. Bray : Will the Minister give way?
Dr. Bray : The Minister has five more minutes--
Mr. Forth : No, because I want to give the Chairman of the Committee the opportunity to wind up.
9.55 pm
Mr. Warren : I shall draw the attention of the House to the points that need answers and explanations. I regret that my hon. Friend the Member for Torridge and Devon, West (Miss Nicholson) has misinterpreted the report. She was the only hon. Member who was not in step, and I suggest that it would be a good idea to look at our recommendation 51, which suggests that IT matters should be dealt with at Minister of State level. That does
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not imply a Minister of information technology. Such a Minister could be responsible for finance, for the bicycle shed and IT. My concern about the Bide report was that there was no reply at all from the Department. I thought that that was rather an insult from a Department which had called upon the members of the Committee to give their best contributions to the report and to serve for two or three years.I am sure that many hon. Members will be surprised to know that, in both the Treasury and the Department of Health, there are Ministers with specific responsibility for looking after IT, just as our report recommended. I am delighted that they are there, and that in both Departments there is clear evidence of progress being made. Many of the Select Committee's problems in compiling the report arose from lack of adequate statistics. I hope that the Government will come up with some better ideas, because many of the statistics with which we had to deal were two to four years out of date. That may account for the fact that we were told by officials giving evidence that the Government did not have an IT policy and then Ministers came along and said that they did. Improved statistics might help us all.
It is interesting to note that the Government have admitted that they do pick winners and that they are picking losers. That is not unusual, but we had always understood that they did not pick winners.
Let me deal briefly with the broad band communication system. I felt that the failing of the Macdonald report was that it did not involve the very people who were likely to be users. It did not even ask the questions of the Ministry of Defence, the prime candidate for becoming a user of that equipment. It did not ask the people in the City who dearly want that equipment. It did not ask people running financial services in Scotland, who know that they must have that equipment if they are to remain competitive. Not only do they want it ; they are keen to invest in it. Industry is not looking for a Government subsidy all the way. I think that the Government should re-examine the matter and try to understand the opportunities that that system would create for those in business.
We have moved a long way tonight towards understanding that the Department of enterprise can become the Department of initiative. I gather that the gargantuan dinosaur of Government to which my hon. Friend the Minister referred is on the Government side and not in the Select Committee. I assure the House that the Select Committee, undaunted and as vigorous as ever, will return as necessary to the subject of IT, because it is fundamental to the future wealth of our nation.
9.59 pm
Mr. Timothy Wood (Stevenage) : I have listened to the debate with interest, and I have heard what I can describe only as a wide range of views. I have reservations about some of the points that have been made on both sides of the argument. Before one comes to any conclusion about solutions, one must examine the causes of the difficulties in information technology.
Over the years, European countries have acted independently and have fought with one another in the development of information technology, but they have not succeeded. Japan has succeeded because it entered world
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competition through consumer electronics and was thus able to build its research base and funding in a way that European countries did not. I hope that the Government will act to ensure that there is co-operation inEurope--The Question necessary to dispose of the proceedings was deferred, pursuant to paragraph (4) of Standing Order No. 52 (Consideration of Estimates).
It being Ten o'clock, Mr. Speaker-- proceeded, pursuant to paragraph (5) of Standing Order No. 52 (Consideration of Estimates), to put forthwith the deferred Question necessary to dispose of the proceedings on Estimates, 1989-90 (Class XI, Vote 3 and Class V, Vote 2).
Question agreed to.
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