Commons Sitting of 31 July 1972

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  WALES

    House Improvement Grants
    Mr. Goronwy Robertsasked the Secretary of State for Wales if he will issue guidance to local housing authorities enabling them to exercise discretion in making any hose improvement grant.
    The Secretary of State for Wales (Mr. Peter Thomas): Local authorities are already fully aware of the wide discretion they have in administering improvement grants. It is only in relation to standard grants that their discretion is limited by Statute.
    Mr. Roberts: Is it not a fact that it is precisely in relation to the mandatory standard grants that an increasing number of local housing authorities in Wales are now questioning the operation of the 1969 Act and the related regu-
    2
    lations? Is the Secretary of State aware that while there is unanimous anxiety that the beneficial provisions of the Act should continue, there is also anxiety that they should continue so as to sub-vent the rescue of derelict properties for permanent occupancy rather than for use as holiday homes?
    Mr. Thomas: I certainly appreciate that the question of the improvements of holiday homes with the aid of grants has been a difficult one from the beginning. It has been the view of this Government and the previous one that an improved house is a gain to the housing pool even if it is temporarily outside the regular pool and, as the right hon. Gentleman will know, it has been found impossible to draw up a satisfactory legal definition of what is a holiday cottage since many people retire to cottages which they have formerly used as holiday homes.
    Mr. Cledwyn Hughes: In view of the slight obscurity of that answer, will the right hon. and learned Gentleman consider setting up a departmental inquiry into the working of the Act in the rural parts of Wales especially to ascertain how many local people who are in need of homes might be helped if the Act was operated in another way within the limitations of the existing law? Will he do this as a matter of urgency in consultation with housing authorities in the Principality?
    Mr. Thomas: The Welsh Council is examining this question among other

    3
    housing topics and I expect to receive a report from it in due course.
    Sir B. Rhys Williams: Would it be a helpful suggestion that it should be made clear that the amount given in grant within the discretionary grant is repayable over the course of time in the form of increased rates, so that the local authority is in effect making a loan that appears to be a grant?
    Mr. Thomas: It is very much appreciated that local authorities benefit greatly from housing which would otherwise become derelict being put into good condition. We must not ignore the fact that many people from outside Wales who have acquired these houses have made a great contribution to the resources of the area.
    Mr. Elystan Morgan: Does the right hon. and learned Gentleman appreciate that this is the first the House has heard about the Welsh Council making a study of this matter? Why were we not told before? Does he agree that what is essential is publication of the basic facts showing what percentage of the total grants paid annually by housing authorities is spent on holiday cottages? Does not the fact that the Secretary of State refuses to disclose such information either show insensitivity on his part or show that he is deliberately seeking to foment discord?
    Mr. Thomas: I do not think the hon. Gentleman is being fair because I certainly do not refuse to disclose any information which is at hand. As to the first part of the hon. Gentleman's supplementary question, it is the Environment and Cultural Panel of the Welsh Council that is looking into the question of improvement grants for holiday homes among other housing matters. It has met representatives of local authorities in holiday areas.
    Mr. Gower: Will my right hon. and learned Friend pay particular attention to holiday houses which are remote from centres of population and which would probably fall into decay if they did not receive grants?
    Mr. Thomas: I agree with my hon. Friend. This is one of the points I was trying to make, that many houses in Wales have been saved from dereliction by
    4
    people buying them and spending a lot of money on them, adding to the housing pool and the rateable resources of an area.
    Mr. Roberts: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest opportunity.

    Cockle Industry (Bird Damage)
    Mr. Ifor Daviesasked the Secretary of State for Wales if he will now convene a meeting of the parties concerned to combat the damage caused by birds, namely oyster catchers, in the Burry estuary in order to protect the employment of local people in the cockle industry.
    The Minister of State, Welsh Office (Mr. Gibson-Watt): My right hon. Friend the Minister of Agriculture, Fisheries and Food and I have the views of all interested parties very much in mind. We do not believe that a meeting would be appropriate at this time. Our investigations are however continuing into all aspects of the South Wales cockle industry.
    Mr. Davies: That is a very unsatisfactory reply. Is the Minister of State aware that the cockle industry in the Burry estuary which employs a considerable number of people is under a grave threat from the invasion of large numbers of oyster catchers? Is the hon. Gentleman aware further that the Home Office set up a committee of scientists to look into the situation and to make recommendations? I urge the hon. Gentleman to take action because the National Trust, the Nature Conservancy and the South Wales Sea Fisheries Committee have failed to agree on the issue. Therefore intervention by the hon. Gentleman is essential because the industry is threatened. I urge him to take action.
    Mr. Gibson-Watt: I understand the hon. Gentleman's concern about this matter, especially with regard to employment prospects in the area. I can do no more than repeat what I said in my original answer. Our investigations are continuing.

    Hospitals, Cardiff
    Mr. George Thomasasked the Secretary of State for Wales (1) whether he will make a statement on his plans for the uture use of the Lord Pontypridd Hospital in Cardiff;
    (2) what plans he has for the care of the young chronic sick in Cardiff; and whether he will make a statement.
    Mr. Gibson-Watt: The Welsh Hospital Board last year recommended the closure of the Lord Pontypridd Hospital and the concentration of treatment for the younger chronic sick at Rookwood Hospital when suitable facilities had been provided there. I asked the board to consider further the future of the Lord Pontypridd Hospital and I await its conclusions.
    Mr. Thomas: While offering to the Secretary of State our felicitations on his birthday and trusting that by the time he reaches his next birthday he will have been relieved of the heavy burdens of office, may I ask the Minister of State whether he is aware that the 25 chronic sick who are being cared for at the Lord Pontypridd Hospital are in a gem of a hospital and that it is perfect for the purpose? Will the hon. Gentleman bear in mind that modern thinking is that the young chronic sick should be cared for in smaller units of this nature?
    Mr. Gibson-Watt: I am aware of the right hon. Gentleman's great interest in this hospital. I have visited it myself. I do not think I can add to my original answer. But I am sure that note will be taken of the right hon. Gentleman's remarks.

    Cwmbran (Cancelled Visit)
    Mr. Abseasked the Secretary of State for Wales why the intended visit of the Secretary of State for Wales to Cwmbran Urban Council on Friday 28th July has been cancelled.
    Mr. Peter Thomas: I thought it right to be in the House on Friday for the discussion on the Industry Bill which is of major importance to Wales. This was explained to the Clerk to the Cwmbran Urban District Council.
    Mr. Abse: Why does not the Secretary of State have the courage to acknow-
    6
    ledge that this belated excuse was proffered after the public announcement by Cwmbran Urban District Council that it did not wish him to attend? Is the right hon. and learned Gentleman aware that this council, which has a long history of courtesy as anyone in Wales would expect, has been compelled to reject the idea of the Secretary of State's visit because of widespread indignation about the Industrial Relations Act and the Housing Finance Act? If the right hon. and learned Gentleman has any influence in the Cabinet will he attempt to resume diplomatic relations with Cwmbran Urban District Council by urging his right hon. and hon. Friends to suspend both these unjust Acts?
    Mr. Peter Thomas: The cancellation of my visit had nothing to do with the decision taken by the Cwmbran Urban District Council to refuse to meet me because of its dislike of the Industrial Relations Act and the Housing Finance Act. My office telephoned the clerk of the council to explain my position and to suggest a meeting in London, before I heard of the council's decision. My views on the two matters referred to by the hon. Gentleman were well known to the urban district council when the original meeting was arranged. Although in the past the council has had a reputation for courtesy, in my view it did not act with the normal courtesy among local authorities in Wales. If the council wishes to have a meeting with me to discuss matters which are of importance to those who live in the area, I shall be very happy to meet it.
    Mr. George Thomas: While I express sympathy with the Secretary of State that the wrath of the local authorities is no longer hidden, may I ask him at what stage he realised that the Industry Bill was of significance for Wales, since he was not present during the Second Reading debate and elected not to serve on the Standing Committee—
    Mr. Speaker: Order. What has this to do with a visit to Cwmbran?
    Mr. George Thomas: That is what I am wondering, Mr. Speaker.
    Mr. Speaker: In that case we had better move on to the next Question. Mr. Elystan Morgan.
    Mr. George Thomas: On a point of order, Mr. Speaker. The Secretary of State gave his reason for not going to Cwmbran as being his interest in the Industry Bill. I was asking him at what stage that interest had revealed itself—
    Mr. Speaker: Order. I stopped the right hon. Member for Cardiff, West (Mr. George Thomas) only when he said that he himself wondered what a visit to Cwmbran had to do with the Industry Bill.

    Paediatric Services
    Mr. Elystan Morganasked the Secretary of State for Wales if he will now appoint a paediatric consultant to be based upon Aberystwyth Hospital.
    Mr. Gibson-Watt: The Welsh Hospital Board has no present plans to appoint a consultant paediatrician at Aberystwyth. A second consultant paediatrician based at Carmarthen is being appointed and this will enable an improved service to be provided at Aberystwyth.
    Mr. Morgan: Does not the Minister of State recollect that some months ago Professor Peter Gray, who was chairman of the Advisory Paediatric Committee, gave it as his opinion that the movement of sick children from the Aberystwyth Hospital's catchment area to Carmarthen was wholly unsatisfactory and that there would never be an acceptable standard of service for very many people living in that part of mid-Wales unless a paediatric consultant were stationed at Aberystwyth? Will the hon. Gentleman reconsider this very important matter?
    Mr. Gibson-Watt: Professor Gray's report was very important. He considered that the ideal for the Carmarthen Aberystwyth-Haverfordwest area, would be four paediatric consultants. He recognised that the present approved establishment of two was more generous on a poulation basis than was general in England and Wales. Only a month ago the hon. Member for Cardigan (Mr. Elystan Morgan) welcomed the decision that I was able to give him on 22nd May.
    Mr. Nicholas Edwards: Is my hon. Friend aware that there is equal concern in Pembrokeshire about the paediatric service, partly for the reasons that he has already quoted from Dr. Gray's
    8
    report? Will my hon. Friend bear in mind the need to keep closely under review the new provisions being made for the new district general hospital?
    Mr. Morgan: On a point of order, Mr. Speaker. The welcome that I gave to the Minister of State a month ago was on the basis of mishearing his answer. I beg to give notice that in view of the hon. Gentleman's unsatisfactory replies today, I shall seek to raise the matter on the Adjournment at the earliest moment.
    Mr. Speaker: Mr. Gower. Question No. 7.
    Mr. Gibson-Watt: In answer to my hon. Friend the Member for Pembroke (Mr. Nicholas Edwards)—
    Mr. Speaker: Order. The Minister of State is out of order. Question No. 7.

    Barry Accident Hospital
    Mr. Gowerasked the Secretary of State for Wales what progress has been made in implementing plans for the future use of Barry Accident Hospital; and what staffing arrangements have been made.
    Mr. Gibson-Watt: I have approved the Welsh Hospital Board's proposal to reopen Barry Accident Hospital as a 40-bed general practitioner unit. Medical cover will be provided by local general practitioners.
    Mr. Gower: While thanking my hon. Friend for that reply, may I ask him to bear in mind the anxiety in Barry and the surrounding district at the arrangements for the treatment of emergency and accident cases which may arise in the docks, in local factories and among holidaymakers who come in great numbers during the summer? Will my hon. Friend look carefully at this?
    Mr. Gibson-Watt: Yes, and I assure my hon. Friend that the steps being taken between the hospital board and consultants in and around Barry will help this problem.

    School Leavers
    Mr. Johnasked the Secretary of State for Wales how many Welsh children left school at the end of the summer term, 1972.
    Mr. Probertasked the Secretary of State for Wales how many school leavers there are in Wales at the end of this summer term; and how many of them are expected to register for employment.
    Mr. Rowlandsasked the Secretary of State for Wales what estimate his Department has made of the future employment prospects of summer school leavers in Wales.
    Mr. Peter Thomas: Precise details of the numbers of summer school leavers are not yet available. It is estimated that in all about 27,000 pupils will have left school for employment during the past academic year. The employment prospects for school leavers are improving in line with the general employment situation.
    Mr. John: The Secretary of State must be the only example of animal which has a summer hibernation. Has not he read the unemployment figures for the last month? Does he not realise that unemployment in Wales is now running at over 50,000 and that last month it increased sharply? Does he not realise that the lot of the majority of school leavers this term will be to join the unemployment queues?
    Mr. Thomas: Last month's unemployment figures had special factors which somewhat distorted the situation. The evidence of the past six months is that employment opportunities for young people are improving in Wales. More young people entered employment in Wales in the first six months of the present year than in the corresponding period last year, and more aprenticeships have been taken up in the first six months of this year.
    Mr. Probert: In view of the recent unemployment figures in my constituency, may I ask the right hon. and learned Gentleman whether he is aware that he is in a minority of one and that parents in my constituency are in a state of desperation, wondering what will happen to their sons and daughters in the months ahead? Does he not agree that nothing is more damaging to the morale of young people than to think that they are not wanted by society? Will he therefore persuade his right hon. and hon. Friends to bring in emergency measures, if such measures
    10
    are needed, in training and so on to meet the problems which will certainly be facing these youngsters in the months ahead?
    Mr. Thomas: I agree with the hon. Gentleman that we are all concerned about employment prospects for young people. At this time of the year one always gets additions of school leavers to the employment register which somewhat distorts the figures. The employment prospects for young people are very much tied up with employment prospects generally. The hon. Gentleman will be aware of the measures which have been taken recently and which should have the effect, and show signs of having the effect, of stimulating the economy in Wales.
    Mr. Rowlands: As it is at least 37 years since the right hon. and learned Gentleman was of school-leaving age, perhaps he has forgotten what it feels like to leave school at the age of 15 and walk into the dole queue. Does he realise that we have the best educated dole queue that Britain has ever known and that unemployment not only among school leavers aged 15 but among graduates is at the highest level ever known? Will he say what are the distorting factors of last month's figures? Generally speaking, the school leavers have not come on to the employment exchange lists. This month we shall see this expansion. Will he say where he gets his optimism from? We have not seen any.
    Mr. Thomas: My answer to the Question was that precise details could not be given. I gave an estimate of the number of pupils who would have left school for employment during the past academic year. The hon. Gentleman should pay attention to what I said about the evidence of the past six months.

    Llanelli General Hospital
    Mr. Denzil Daviesasked the Secretary of State for Wales how many letters have been received by him and his Department regarding the future of Llanelli General Hospital; and what replies have been sent.
    Mr. Gibson-Watt: Almost 9,000. The replies have said that the Welsh Hospital Board is, in the first place, responsible

    11
    for the planning of hospital services in Wales and that the board hopes to publish its proposals for the Llanelli Hospital later this year.
    Mr. Davies: The Minister, having received 96 letters, is no doubt aware of the deep feeling in my constituency about the future of this hospital. Is he further aware of the increasing impatience at the delay of the hospital board in publishing the plans? Will he use his influence with the board to ensure that the plans are published by the autumn?
    Mr. Gibson-Watt: There are various factors, particularly the need to plan a hospital service in Swansea and the surrounding areas, which have held up the isolated planning for the development of the Llanelli Hospital. I can assure the hon. Gentleman, however, that the planning is going ahead as quickly as possible, and I shall not overlook it myself.
    Mr. George Thomas: Is the hon. Gentleman aware that this matter has been hanging fire for years? Is he further aware that when I had the honour of being in the Welsh Office I received a deputation about the future of Llanelli Hospital, and I hope he will listen to the plea of my hon. Friend the Member for Llanelli (Mr. Denzil Davies) and ensure that people in Llanelli know by the autumn what the future of the hospital is?
    Mr. Gibson-Watt: The right hon. Gentleman is absolutely right. This is a problem of long standing. I was very glad to receive a deputation from his hon. Friend and representatives from Llanelli. I assure the right hon. Gentleman and his hon. Friend that we are not delaying any longer than necessary.

    Ministerial Broadcast
    Mr. Neil McBrideasked the Secretary of State for Wales when he now proposes to make a ministerial television broadcast in Wales.
    Mr. Peter Thomas: I have no plans to do so.
    Mr. McBride: Is the right hon. and learned Gentleman aware that such a broadcast would inform the Welsh people of any Government plan for a reduction of unemployment this winter? Is he further aware that it would inform the
    12
    Welsh people of any policy for industrial training for people who hope to be engaged in new industries which the Government say they are bringing to Wales? Will the right hon. and learned Gentleman say how much agreement exists on the formulation of the regional plans with the French President who will control the Common Market?
    Mr. Thomas: The Question asks when I propose to make a ministerial broadcast in Wales. So far, no Secretary of State for Wales has given a ministerial broadcast. I have, I am informed given about 38 different broadcasts on sound or television since I have been Secretary of State, and I shall continue to take every opportunity to explain the current political, economic and cultural issues to the people of Wales. I shall hope to give facts in order to correct the distortions which are frequently made by hon. Members opposite.

    Urban Motorways
    Mr. Colemanasked the Secretary of State for Wales when the Urban Motorways Committee will report on matters affecting Wales.
    Mr. Peter Thomas: The Urban Motorways Committee, whose remit covers Wales as well as England, has recently presented its report. It is expected to be published in the autumn.
    Mr. Coleman: The right hon. and learned Gentleman will be aware of the problems suffered by a resident of Gilfach Road and I am grateful to him for his consideration of this matter. But is the right hon. and learned Gentleman further aware that the Neath Borough Council and I have received complaints from those who live in the Melyn areas of Neath concerning hardship which they suffer from dust, noise and damage to properties? Will he do what he can to ensure that the Government legislate with a sense of urgency on the basis of this report? Will he also say whether any compensation element in this legislation will cover those people who are suffering at the present time?
    Mr. Thomas: I am grateful to the hon. Gentleman for drawing the matter to my attention. The Government's own review of compensation is nearing completion, and as soon as the two reviews have been

    13
    considered the Government will announce their proposals in a White Paper. Thereafter legislation will be necessary and the Government have every intention that this will follow as soon as possible.

    A55 (Holywell Bypass)
    Sir A. Meyerasked the Secretary of State for Wales when he expects to he able to publish the route of the A55 Holywell bypass.
    Mr. Peter Thomas: I expect to publish my proposals for the Holywell bypass in the autumn of 1973.
    Sir A. Meyer: When my right hon. and learned Friend publishes those proposals will he bear in mind that this route is very likely to pass through many farms? Will he take account of this fact and ensure that inconvenience to farmers is minimised as much as posisble?
    Mr. Thomas: Yes, I will certainly take account of all these problems.

    Aerial Crop Spraying (Flintshire)
    Mr. Barry Jonesasked the Secretary of State for Wales to what extent aerial crop spraying is used in East Flintshire.
    Mr. Gibson-Watt: So far as I can ascertain, there has been only one case of aerial crop spraying on 60 acres of potatoes in the area this year. This took place at Sealand on 21st July.
    Mr. Jones: Is the hon. Gentleman aware that since the autumn of 1971 Mr. D. R. Gill, of Bridge Farm, Sealand, has lost a considerable number of cattle probably because they ate hay which had been poisoned by aerial crop spraying? Is the Minister further aware that in July, 1970, a number of my constituents were poisoned by aerial crop spraying to such an extent that they are still receiving medical advice? Will he please take decisive action in order that my constituents, their cattle and crops are no longer put at risk by this awful poison from the skies?
    Mr. Gibson-Watt: The Ministry of Agriculture has looked very carefully into the cases which the hon. Gentleman has raised. I was not aware of the effect of human ill health. Perhaps the hon. Gentleman will write to me about it. I
    14
    was aware of the donkeys which were affected, and it was discovered that they did not suffer permanent damage to health.
    Mr. Jones: On a point of order. In view of the unsatisfactory nature of the reply, I wish to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

    Housing Development (Gower)
    Mr. Ifor Daviesasked the Secretary of State for Wales if he will obtain from the planning authority and publish details of each site within the area of the Gower rural district for which planning or outline planning consent has been approved for housing developments which have not been started or completed, giving dates of approval and the number of houses involved, and showing what building progress has been made.
    Mr. Gibson-Watt: Complete information in the form requested is not readily available. I will, with permission, circulate in the OFFICIAL REPORT details of a limited survey carried out by the district council at my request.
    Mr. Davies: I am obliged to the Minister for that reply and the details which he proposes to circulate. I am sure he will find among those details evidence of the anxiety, indeed, the eagerness, of landowners in the Gower peninsula, particularly in the areas of outstanding natural beauty, to release their land for building purposes at inflated land values. Will he therefore consider the reintroduction of the betterment levy to prevent the exploitation of land prices, which is a public scandal in the Gower area?
    Mr. Gibson-Watt: I could not at short notice give the hon. Gentleman that assurance. I merely remind him that the 1968 Act sought to deal with the backlog of consents by providing that they could lapse if they were not taken up within five years. With regard to the provision of land, I draw attention to the fact that the Gower Rural District Council has itself made a positive contribution in this matter by putting on the market a site of three acres at Crofty which became surplus to its requirements.
    Mr. George Thomas: Will the hon. Gentleman bring to the attention of his

    15
    escalation in land prices in the Gower, and will they consider bringing forward proposals to the House to check the profiteers who are doing nothing to in-right hon. and learned Friend this wicked

    CURRENT PLANNING APPROVALS IN THE GOWER AREA AT 27TH JULY, 1972

    Number

    Plan No.

    Location of Development

    Outline or Detailed

    Description

    Approved

    Completed

    Date of Approval

    Remarks

    38/71

    Northway, Bishopston, Stage 2.

    Detailed

    66 units

    66

    28

    9.3.71

    Under construction.

    99/72

    Long Acre, Murton

    Detailed

    61 units

    61

    —

    9.5.72

    Not yet commenced.

    35/69

    Kilfield Road, Bishopston.

    Detailed

    9 units

    9

    6

    25.3.69

    Under construction.

    344/68

    Three Cliffs Park, Pennard.

    Detailed

    127 units

    127

    91

    7.9.68

    Under construction.

    590/71

    Bryn View, Reynoldston.

    Outline

    8 units

    8

    —

    4.3.72

    Under construction.

    329/71

    Applegrove, Reynoldston.

    Detailed

    21 units

    21

    —

    11.9.71

    Under construction.

    139/72

    Opposite Post Office, Llangennith.

    Outline

    14 units

    14

    —

    11.7.72

    Not yet commenced.

    164/72

    Adjoining Industrial Estate, Crofty

    Detailed

    135 units

    135

    70

    19.5.67

    Under construction.

    363/71

    Land at rear of Westbourne View, Crofty.

    Outline

    40 units

    40

    —

    12.10.71

    This site comprising 3½ acres was recently sold by this Council to a private developer (not started).

    491/70

    Station Road, Llanmorlais.

    Detailed

    8 units

    8

    4

    6.2.71

    Under construction not

    Llanmorlais.

    Outline

    4 units

    4

    —

    yet commenced.

    150/68

    Pen y Ian, Penclawdd

    Detailed

    35 units

    35

    18

    27.5.67

    Under construction.

    89/72

    Rear of Station Road, Penclawdd.

    Outline

    25 units

    25

    —

    23.3.72

    Not yet commenced.

    100/72

    Pant y Dwr, Three Crosses.

    Detailed

    57 units

    57

    —

    23.5.72

    Under construction

    216/71

    Bryn y mor,Three Crosses.

    Outline

    69 units

    —

    —

    22.6.71

    Detailed plans awaiting approval by County Council.

    90/72

    Misty Hills, Three Crosses.

    Detailed

    4 units

    4

    —

    11.4.72

    Not yet commenced.

    178/72

    Brooklands, Dunvant

    Outline

    14 units

    14

    —

    5.6.72

    Not yet commenced.

    439/72

    Pen y fro, Dunvant

    Detailed

    48 units

    —

    —

    —

    Awaiting imminent approval of Detail plans.

    468/71

    Fairwood Road, Dunvant.

    Detailed

    4 units

    4

    —

    6.12.71

    Underconstruction-4

    72/72

    Upper Killay

    Detailed

    30 units

    30

    —

    27.3.72

    Under construction-30

    494/71

    Hen Parc Avenue, Upper Killay.

    Detailed

    36 units

    36

    30

    4.12.71

    Underconstruction-6

    79/72

    Edgemoor Close, Upper Killay.

    Outline

    Old Peoples' Bungalows.

    4

    —

    28.3.72

    Not yet commenced.

    702

    247

    SUMMARY

    Number of units completed

    …

    …

    …

    …

    …

    …

    247

    Number of units under construction

    …

    …

    …

    …

    …

    289

    Number of units not started

    …

    …

    …

    …

    …

    …

    166*

    702

    * Includes 101 at outline stage and 65 at detailed stage.

    NOTE:
    The list covers the period from May, 1968, and relates to schemes of 4 or more houses.
    crease the value of their land but are seeking to blackmail the public?
    Mr. Gibson-Watt: I am sure that my right hon. and learned Friend heard what the right hon. Gentleman said.

    Caernarvon (Bridge)
    Mr. Goronwy Robertsasked the Secretary of State for Wales if he will make a statement on the proposal for a new bridge over the estuary at Caernarvon.
    Mr. Gibson-Watt: An application by Caernarvon Borough Council for planning permission to construct a bridge was referred to my right hon. and learned Friend by the Caernarvon County Council as one involving a substantial departure from the approved development plan. On 28th July, my right hon. and learned Friend issued a direction to the county council requiring it to refer the application to him for determination.
    Mr. Roberts: While thanking the Minister for that reply, which I think will give a measure of assurance to my constituents, may I ask whether he is aware that the previous bridge which had to be demolished was a major amenity for the people of Caernarvon, providing as it did access to a safe and salutary area of relaxation? Does he recall that about three years ago there was no difficulty about providing a serviceable Bailey bridge for the purposes of the Investiture? What my constituents want to know is why there has been this protracted delay for the last three years in providing a bridge to replace the one which for generations was a necessary means of communication for the people of the Royal Borough.
    Mr. Gibson-Watt: This is a quite long story and I should be happy to speak at length to the right hon. Gentleman about it. All I can say now is that as there is to be a public local inquiry it is impossible to say when any decision will definitely be given.

    Rent Assessments (Appeals)
    Mr. Abseasked the Secretary of State for Wales what advice he is giving about ways in which development corporation tenants may be made aware of their rights to appeal against new rent assessments; and whether he will make a statement.
    Mr. Gibson-Watt: Housing authorities, including development corporations, will be responsible for publishing provisional assessments of the fair rents of their
    18
    dwellings. Every tenant has a right to make representations to his authority against the provisional assessments within two months of their publication. The corporation has already notified all tenants of these procedures.
    Mr. Abse: Is the hon. Gentleman aware that because of the spurious method of calculation forced by the Welsh Office on the Cwmbran Development Corporation and because of the miserable inbuilt rebate scheme in the Housing Finance Act, at least five out of six tenants in the Cwmbran new town will have onerous, unfair and unjust rent increases forced upon them? In the light of that, in addition to the action already taken will the hon. Gentleman insist that the Cwmbran Development Corporation gives a special notification to every tenant of his right to appeal individually and collectively in order that the tenants may challenge the intended unjust rents in Cwmbran?
    Mr. Gibson-Watt: I cannot accept everything that the hon. Gentleman has said. The development corporation will in the first instance provisionally assess the fair rents to be charged. Tenants will be able to make representations to the corporation, which may then reassess the rent or confirm it as previously assessed. The corporation must, within four months of publishing its original provisional assessments, submit them to the rent scrutiny board which will either confirm the rents or substitute others.
    Mr. McBride: Is the hon. Gentleman aware that, subsequent to what he said must be done, the rent scrutiny board may alter the provisional rent assessment and that no matter what representations are made to any local authority or new town its determination—a determination made by a non-elected body—is final?
    Mr. Gibson-Watt: I think that this matter was discussed in considerable detail in the Committee of which the hon. Gentleman had experience.

    Economic Progress
    Mr. Elystan Morganasked the Secretary of State for Wales if he remains satisfied with the progress of the Welsh economy since June, 1970; and if he will make a statement.
    Mr. Peter Thomas: I am never satisfied but present trends, in Wales as elsewhere, are encouraging.
    Mr. Morgan: Whether or not the Secretary of State is satisfied, does he agree that there do not seem to be any bounds to his complacency? Nothing that he has said at the Dispatch Box during the last two years suggests that he appreciates the gravity of the situation which has led to unemployment in Wales being 50 per cent. higher than it was in June, 1970, and to 38,000 redundancies in two years, which is about three times the number of new jobs created in Wales in that period. Does the right hon. and learned Gentleman realise that for us on this side of the House the acid test of his sincerity in this matter is his willingness to prepare a development plan to meet the needs of Wales and not to repose in windy banalities?
    Mr. Thomas: It is untrue to suggest that I am complacent. I have frequently told right hon. and hon. Gentlemen opposite, both in the House and in the Welsh Grand Committee, about the difficulties that we are facing and have faced. Unemployment in Wales is, of course, still too high, but I see no reason why we should be pessimistic because, looking back over the last three months as a whole, there has been a marked improvement.

    Out-Patient Facilities (Barry)
    Mr. Gowerasked the Secretary of State for Wales what provision has been made for hospital out-patients at Barry until out-patients' facilities become available at the Llandough Hospital, at Penarth.
    Mr. Gibson-Watt: I am currently considering a proposal from the Welsh Hospital Board to continue the outpatient facilities at the Amy Evans Memorial Clinic instead of transferring them to Barry Accident Hospital as originally proposed. I will inform my hon. Friend as soon as a decision has been taken.
    Mr. Gower: Can my hon. Friend give the House any idea of the approximate timetable for the provision of alternative facilities at Llandough Hospital, Penarth?
    Mr. Gibson-Watt: Plans for the new out-patients' chest department at Llandough are well advanced, but it is too early to forecast a date for completion of the full out-patient facilities.

    National Health Service Reorganisation
    Mr. Probertasked the Secretary of State for Wales what progress is being made between his Department and local authorities on the preparation for the reorganisation of the National Health Service in Wales.
    Mr. Gibson-Watt: Local authority and other associations are currently being consulted about the issue of a circular inviting local authorities and health authorities to set up informal joint liaison committees to prepare for the change-over and about the first recommendations of a joint working party dealing with collaboration after 1974.
    Mr. Probert: Is the hon. Gentleman aware that with the operation of the Housing Finance Act—and we have recently heard of some of its implications—and with the reorganisation of the local government service, the need to implement the Government's proposals for the National Health Service by 1st April, 1974, is adding the last straw to the camel's back and that the staffs and administrators of local government and other associations will be forced into a state of desperation and chaos? Will he therefore consider asking his right hon. and learned Friend to impress upon the Cabinet the need to consider wisely a postponement for at least 12 months of the coming into operation of the reorganised National Health Service?
    Mr. Gibson-Watt: I am aware of the problem raised by the hon. Gentleman but I could not agree to delaying the matter for 12 months. I hope that the joint liaison committees will be able to start work in the autumn, and the Welsh Office will assist in inaugurating them and will give guidance as needed.
    Mr. John: Did I hear the hon. Gentleman aright? Did he say that he was proposing that the organisations should meet upon the basis of what, at the moment, is only a consultative document on the National Health Service? Will the hon. Gentleman accept that we on this

    21
    side of the House are grossly dissatisfied with the provisions in that document for public participation and representation in the running of the National Health Service after 1st April, 1974, and that we want a full opportunity to debate it before the proposals are finalised?
    Mr. Gibson-Watt: I note what the hon. Gentleman says. I am sure there will be an opportunity. He will also agree that it is common sense for the Welsh Office to work out this proposal and help the various authorities concerned so as to lead to discussions in the joint liaison committees on the future of the National Health Service.

    Industrial Development Certificates
    Mr. Denzil Daviesasked the Secretary of State for Wales whether he remains satisfied with the operation, in relation to the Welsh economy, of the system of granting industrial development certificates; and if he will make a statement.
    Mr. Peter Thomas: Yes.
    Mr. Davies: I am rather surprised at the right hon. and learned Gentleman's answer. Does he realise that in the first quarter of this year almost 10 times as many IDCs and consents have been granted for London and the South-East as compared with Wales, whereas the figure in previous years has been five or six times as many? Does the Secretary of State agree that this is out of all proportion to the unemployment problems in the two areas, and has not the time come for the Welsh Office to exercise much greater control over the issue of the certificates?
    Mr. Peter Thomas: As the hon. Member appreciates, a change in IDC policy was announced by my right hon. Friend the Secretary of State for Trade and Industry when he introduced the Industry Bill. The hon. Gentleman will also appreciate that IDC control, which is an essential part of our regional policy, is complementary to the Government's policy of incentives for investment in the assisted areas and that once the Industry Bill goes through those incentives will be more generous than ever before.
    Mr. George Thomas: Is the Secretary of State aware that there is grave an-
    22
    xiety at the weakening of the IDC policy by the Government; that there has been a fall in the number, although an increase in terms of sq. ft., this quarter compared with the corresponding quarter last year? Is he further aware that unless he is able within the Cabinet to get a much tigher control of IDCs for Wales, our unemployment figures will get worse?
    Mr. Peter Thomas: I do not agree with the hon. hon. Gentleman that there has been what he describes as "grave anxiety". I agree that misgivings have been expressed. The Government have made it perfectly clear that the change in IDC limits will be looked at, and in the light of what one discovers in conjunction with the new regional policies one can decide whether they should remain or be changed.
    Mr. Gower: Is not encouragement to be derived from the fact that while there is heavy unemployment in some areas like the Midlands, the Welsh economy, and particularly the smaller and newer companies, has remained remarkable resilient in all the circumstances?
    Mr. Peter Thomas: On Second Reacting my right hon. Friend made the Government's IDC policy quite clear. He said that what the Government are trying to do was to balance the need for a tough IDC policy against the risk of excessively strict control for prosperous areas which might shut out new projects or encourage their removal abroad.

    Hospital Beds (Merthyr Tydfil)
    Mr. Rowlandsasked the Secretary of State for Wales what will be the bed allocation in existing hospitals in the Merthyr Tydfil constituency after the completion of the new Gurnos District Hospital; and whether he will make a statement.
    Mr. Gibson-Watt: Decisions have not yet been taken. The Welsh Hospital Board will shortly consult locally about hospital provision in the area consequential on the building of the new hospital at Gurnos.
    Mr. Rowlands: Is it not an astonishing situation that the new Gurnos Hospital is under construction yet the Government and the Welsh Hospital Board are still unable to explain to my constituents and other people in the area

    23
    what is to happen to existing staff and to existing hospitals in the Merthyr area? Surely the situation should be clarified as a matter of urgency as the present situation is giving rise to grave disquiet and uncertainty among a large number of people.
    Mr. Gibson-Watt: I can assure the hon. Gentleman that bed numbers will be determined only after full public consultation. I understand that the Welsh Hospital Board will shortly issue a booklet outlining the factors to be taken into account in the service and inviting the views of the public.

    Port Container Facilities (Swansea)
    Mr. McBrideasked the Secretary of State for Wales what requests he has received from the British Transport Docks Board for his assistance in investigating the factors which would result in a fuller utilisation of the roll-on, roll-off facilities in the port of Swansea.
    Mr. Peter Thomas: None.
    Mr. McBride: One never ceases to be amazed at the sins of omission of the right hon. and learned Gentleman. Is he aware that this facility which could assist so materially in promoting commerce, trade and employment in Swansea is not being utilised to the full? Will lie say that the Government will help in furthering market research which has been made into the possibility of products being carried between Swansea, and the autonomous part of Nantes—St. Nazaire; the possibility of an inter-Celtic service between Swansea, Cork, St. Nazaire and Vigo; and the possibility of securing a roll-on, roll-off service for the Spanish fruit and vegetable trade? Can he say something about that, and can he do something for Wales?
    Mr. Thomas: I never cease to be amazed by the hon. Gentleman. He talks of my sins of omission but then asks me what requests I have received from the British Transport Docks Board. The answer is "None". The operation of Swansea docks is entirely the responsibility of the British Transport Docks Board.

    Dee Estuary Scheme
    Sir A. Meyerasked the Secretary of State for Wales whether, in view of
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    the decision not to construct a nuclear power station on Deeside, he will now accelerate a decision on a Dee Estuary scheme.
    Mr. Barry Jonesasked the Secretary of State for Wales if he will now make a further statement on the Dee crossing scheme.
    Mr. Peter Thomas: As I indicated in the reply I gave on 10th July to the hon. Members for Liverpool, Wavertree (Mr. Tilney) and Flint, East (Mr. Barry Jones), I hope an announcement will be made before the recess.—[Vol. 840, c. 1155–6.]
    Sir A. Meyer: Is my right hon. and learned Friend aware that this is very good news indeed? Is he further aware that people in North Wales were beginning to lose belief in this ever-receding mirage, when there was always some reasons why a decision could not be reached? Is he aware that we are all very pleased with what he has had to say?
    Mr. Jones: Will the Secretary of State assure us that he will make an announcement to the House? Will he further asure us that if there is a Dee crossing it will mean that in East Flint there will be alternative industry, taking into account the rather dubious future position of the Shotton steelworks?
    Mr. Thomas: There are many complicated aspects of the proposals and I must ask the hon. Gentleman to await an announcement.

    Local Government Bill
    Mr. Johnasked the Secretary of State for Wales what further plans he has for consultations with Welsh local authorities regarding the Local Government Bill.
    Mr. Peter Thomas: There will be consultations with local authorities on the detailed implementation of the Bill.
    Mr. John: Is the Secretary of State aware that in view of the inadequate time available for the Welsh part of the Bill on Report, and in view of the present unsatisfactory nature of many of the boundary proposals, particularly the three-way division of Glamorgan, not only matters of detail but matters of principle must, even at this late hour, be canvassed?
    Mr. Thomas: I think there has been adequate time for consultation with local authorities. The hon. Gentleman knows that the reorganisation of local government in Wales has been discussed for many years, and one is fully aware of all the points which have been put forward by local authorities.

    LEGAL AID (INCOME LIMITS)
    Mr. Clinton Davisasked the Attorney General what steps he will take to expedite the consideration by the Legal Aid Advisory Committee of the income limits of eligibility for legal aid.
    The Attorney-General (Sir Peter Rawlinson): The committee is already fully aware of the urgency of this matter.
    Mr. Davis: Is not the Attorney-General prepared to be a little more forthcoming about this matter? Is he aware that when he was last questioned about it he said that he was not aware when the Legal Aid Advisory Committee would be in a position to publish its report? Does he recognise that in regard to the Legal Advice and Assistance Bill it is absolutely imperative that the position should be made clear now? Is he further aware that the Standing Committee was informed that it was desirable to await the further report of the Legal Aid Advice Committee before making Amendments to the Bill? We are now told that the advisory committee's report is not available. Is not this a scandal?
    The Attorney-General: I am surprised at the hon. Gentleman. The 21st report was received on 14th June. Since then the committee has had two meetings. It appreciates, as it said in its 21st report, that this is a matter of urgency and it is to consider this and a range of other related problems. The advisory committee is continuing to meet and is well aware of the urgency of the situation.
    Mr. S. C. Silkin: Is the right hon. and learned Gentleman aware that all the figures in the Legal Aid and Assistance Bill were out of date even before the Bill was published and that by now they have all been completely gazumped? When can we expect legislation bringing those figures up to date?
    The Attorney-General: I leave those matters to the advisory committee. The committee has made the report and recommendation and is meeting and me must await its report.

    COUNTY COURTS (WORKING CONDITIONS)
    Mr. Clinton Davisasked the Attorney-General what research is undertaken by his Department into the working conditions for lawyers, litigants and staff in county courts; and if he will make a statement.
    The Attorney-General: A sum of £0·5 million a year has ben specifically allocated to county court new building and improvement work over the next five yars. In addition to the separate schemes represented by this, county court provision will be included in a dozen or more major court-centre developments planned for the next 10 years. The design requirements of county courts are kept under review by the Department of the Environment and a great deal of work has recently been done on the design of large court centres incorporating both Crown and county courts.
    Mr. Davis: Can the right hon. and learned Gentleman inform the House about the present conditions at, for example, Shoreditch County Court, where the conditions for litigants, lawyers and the registrar are quite intolerable on certain days? When three courts are busy, between 80 and 100 people crowd into the registrar's court, and despite the heroic efforts of the registrar to deal with the situation it is obviously most unsatisfactory. Will the right hon. and learned Gentleman look into this matter in order to try to assist this county court out of its present difficulties?
    The Attorney-General: The hon. Gentleman asked a Question about the research which is being undertaken. I do not know the position regarding the Shoreditch court, but major schemes including county court provision are taking place in Leeds, Liverpool, Merthyr Tydvil, Newcastle, Coventry and Teesside. Subsequently further major schemes including county courts are provisionally planned for Bolton, Bristol, Luton, Manchester, Norwich, Nottingham and Sheffield. It is a matter of great importance

    27
    that there should be proper and adequate accommodation and I well appreciate that.
    Sir Elwyn Jones: On a slightly different point but one which is I hope not lacking in relevancy, is the Attorney-General aware of the concern of county court officers at what they fear will be a deterioration in their conditions of service following the restructuring of the courts under the Courts Act?
    The Attorney-General: That is another matter which does not arise out of the Question.

    SMALL CLAIMS (COUNTY COURT PROCEDURE)
    Mrs. Sally Oppenheimasked the Attorney General if he will commission an inquiry into the influence of the County Court (New Procedure) Rules, that came into force on 1st March, on improving the ability of the consumer to enforce small claims in county courts.
    The Attorney-General: My noble Friend has already caused inquiries to be made of the county court judges and registrars as to how these rules are working. He is also in touch with the National Citizens' Advice Bureaux Council on some aspects of the matter. As the rules apply only to actions begun after 1st March, it is too early to form a concluded opinion but preliminary reports indicate that they are having the desired results, in particular by bringing the parties together at an early stage of the action when the real issues can be ascertained in an informal atmosphere and a satisfactory settlement can often be reached.
    Mrs. Oppenheim: Is my right hon. and learned Friend satisfied that although the procedure is cheaper and simple, it is sufficiently informal to encourage ordinary people to bring their small claims to court and that, if they do, they will find professional assistance and advice readily accessible? Is he satisfied that these courts are not still being used chiefly as debt collection agencies for small firms?
    The Attorney-General: The County Court (New Procedure) Rules were introduced only recently and apply only to
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    actions begun after 1st March. Preliminary reports indicate that they are being successful, but it is early. I shall bear in mind what my hon. Friend has said.
    Mr. S. C. Silkin: I realise that the date of introduction was fairly recent, but is there any evidence that the new procedure is helping in the case of really small claims, for a £1 or £2 for example, for damaged or inadequate goods?
    The Attorney-General: I cannot tell the House with regard to a particular sum such as that but, as I have said, consultations are taking place and the registrars and county court judges are being consulted. Undoubtedly this informal atmosphere and new procedure is, on present evidence, working well. However, we shall see whether any improvements are needed.

    ALIMONY
    Mr. Dalyellasked the Attorney General what information he has received from the courts on the level of fines or prison sentences given to men who have failed to pay alimony granted to women under court order.
    The Attorney-General: As I have told the hon. Gentleman on previous occasions, failure to pay maintenance pursuant to a court order is not an offence for which a fine or prison sentence may be imposed. Dishonest maintenance debtors may still be committed to prison under the Debtors Act, 1869, upon the application of the creditor, and 1,683 such applications were made in the High Court and county courts in 1971. Information as to the average length of time spent in prison by debtors is not readily available.
    Mr. Dalyell: Nevertheless is not the Attorney-General's office sensitive to the fact that, while it is true that there are many men who are, perhaps, in no position to pay, a great number of women feel that their erstwhile partners are getting away with it scot-free more or less while they are having very severe financial hardship and the difficulty of bringing up families?
    The Attorney-General: The hon. Gentleman asked about fines or prison sentences, and fines or prison sentences

    29
    do not follow from prosecutions. There is none such save under Section 30 of the Ministry of Social Security Act, which prosecutions are brought by the Department of Health and Social Security. But the fact that some 1,683 women nave made aplication shows that wives are pursuing those persons who persistently evade payment. Now that the Department makes its records available to the court, however, every effort is made to trace recalcitrant husbands.
    Mr. Nicholas Edwards: While it may be true that many wives make application, is it not equally true that on very many occasions the people against whom application is made fail again and again to appear before the courts? Is it not about time that action was taken to try to bring to an end this deplorable state of affairs?
    The Attorney-General: Certainly that happens, but the provisions of the attachment of earnings orders have recently been introduced and we hope that this may be the most successful way of getting the money for the wife, which is what is needed. But as the House must realise, it is very difficult to trace husbands who persistently change their employment and conceal their whereabouts. We find it very hard to trace such people, but every effort is made to trace them.
    Sir Elwyn Jones: Is the attachment of earnings procedure working satisfactorily? What is the state of play on that matter? Is the right hon. and learned Gentleman aware that there are complaints that some of the women who have been abandoned in this way do not get full co-operation from the Inland Revenue and other authorities in the tracing of defaulting husbands? Will he look into this matter, which is causing a great deal of dissatisfaction?
    The Attorney-General: The records of Inland Revenue are not available but those of the Department of Health and Social Security are available. As the right hon. and learned Gentleman will appreciate, as he was a Law Officer at the time, the Finer Committee was established in order to go into the whole of this matter and TO make recommendations. That committee has been engaged in a very complex and difficult inquiry but it hopes to report sometime in 1973.
    Mr. Dalyellasked the Attorney-General on how many occasions in 1971 he took criminal proceedings against people who persistently refuse or neglect to maintain a person for whom they are liable, and for whom supplementary benefit is paid as a result of such refusal or neglect.
    The Attorney-General: None, Sir. All such proceedings are instituted by the Department of Health and Social Security. As to the number of them in 1971, I would refer the hon. Gentleman to the answer given him by my hon. Friend the Under-Secretary of State for Health and Social Security on 25th July.—[Vol. 841, c. 260.]
    Mr. Dalyell: Is the Attorney-General aware that Morris Finer, who is leading the committee, is desperately short of staff and that his report will therefore be unnecessarily delayed? Is the Attorney-General's office aware of a feeling that whereas some lawyers are doing their very best in these complex cases, very many solicitors are treating these cases in a somewhat lackadaisical manner? To be blunt about it, there is nothing in it for them. An enormous amount of work is involved. It is a very unsatisfactory situation.
    The Attorney-General: The hon. Gentleman asked about criminal proceedings and those are the proceedings which are brought by the Department of Health and Social Security. I should be surprised to learn that solicitors do not take such matters very seriously, because anyone who has had experience of the obvious distress caused to wives in such situations would be a very unfeeling person if he did not take the matter seriously.
    Mr. Kaufman: Is the right hon. and learned Gentleman aware that this matter, which affects constituents of hon. Members on both sides of the House, ought to be treated with more sensitivity and a greater sense of urgency? Is he aware that the problem does not stop short at tracing husbands who have left wives? Even when they have been traced, it is not possible to get them to attend the court. Why cannot the procedures be made similar to those for divorce so that when a certain number of notices have been served a person has to pay whether or not he has attended the court?
    The Attorney-General: The difficulty is in finding these people, who change their employment and move from place to place. It was because of all these very complicated difficulties that the last Administration asked Mr. Finer to undertake this inquiry. It is because of the complexity of the matters involved that it was then believed—and is still believed—that an inquiry into all these considerations had to be undertaken. My hon. Friends, as well as hon. Members on the Opposition side, are well aware of these difficulties.
    Mr. Kenneth Lewis: Is my right hon. and learned Friend aware that many people think that the use of social security benefits in many of these cases is an abuse? Social security should be aid because it must be paid, because the women concerned are in financial trouble otherwise. Would it not be easy to ask employers to ensure that the numbers of the national insurance cards of these women are made available as they go from one employment to another?
    The Attorney-General: Records of the Department of Health and Social Security are made available. What are not available are Inland Revenue records.
    Mr. Paget: On a point of order, Mr. Speaker. May I refer to Question No. 31 without reading it. Will you be good enough to refer that type of Question to the Select Committee on Procedure to see whether there are means of controlling the Order Paper? My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) may have perfectly good reasons for not being here, but the kind of damage caused by a Question of this sort being on the Order Paper, particularly when there is no opportunity to answer it, is obvious.
    Mr. Speaker: I will certainly consider the point which the hon. and learned Gentleman makes.

NORTHERN IRELAND
The Minister of State for Northern Ireland (Mr. Paul Channon): With permission, Mr. Speaker, I will make a statement.
At four o'clock this morning the security forces in Northern Ireland moved
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in strength into a number of areas which have been used as bases for murder, intimidation and the destruction of property. Before these activities began, my right hon. Friend the Secretary of State issued at 9.30 p.m. last night a general advice and warning to the population to assist the security forces and protect themselves by keeping off the streets.
The operations met with little resistance, and I am glad to be able to tell the House that known casualties were in all the circumstances extremely light. Two civilians were killed and two injured. These were people who, in spite of the warning issued, were present on the streets in the early hours of the morning.
It is a matter for great regret that there were any casualties at all, but it is a tribute both to the discipline and moderation of the troops and to the good sense of the population at large that these extensive operations were successfully carried out at so little cost.
As a result of these operations all barricades, Protestant and Catholic, have either been removed or are being urgently taken down.
The sole aim of the operations is to see that everyone in Northern Ireland enjoys the full protection of the law. Where such protection does not exist, law-abiding people are exposed to such savagery as we saw on "Blood Friday" in Belfast, and to brutal and indiscriminate murder, assault and intimidation. Our purpose is not to act against any section of the community but to protect all, and to restore as soon as possible the ordinary conditions of life.
Last night's military operation was by no means an end in itself. There can be no military solution to the complex problems of Northern Ireland; but political representatives cannot hope to discuss the future openly and without fear if the rule of law is defied by any section of the community. Even today, a bomb outrage at Claudy, in County Londonderry has claimed a further six lives, thus underlining yet again the urgent need to free the population from the oppression of terror.
The policy of Her Majesty's Government continues to rest, as it always has done, on two objectives first, the restoration of peace and the destruction of the

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capacity of the men of violence to terrorise the community; secondly, to engage in constructive discussion as to how the political, social and economic aspirations of the whole community can best be met.
Mr. Merlyn Rees: Is the Minister of State aware that, following the response of the IRA in the last ten days of killing or bombing and of the restruction of the centre of Derry, for example, there was an inevitability about this morning's military action? There was a calculated risk, and the House will be glad that the advance publicity and the strength of the response and the discipline of the troops have led to such a very small number of deaths.
Now that the occupation has taken place, what comes next? Is the hon. Gentleman aware that the IRA wanted a military response and that it is our responsibility to ensure that we do not, by our actions in the area, drive the Catholics as a whole into the arms of the IRA again? It is our job to ensure also that the political initiative that the hon. Gentleman talks about is not put at risk. Are steps being taken, not just to occupy, but to ensure that weapons and gelignite do not reach the IRA? Is attention being given to policing the area, because in the long run it is not the Army's role to police such areas?
Is the hon. Gentleman aware that hon. Members on both sides of the House expect action against all private armies and their weapons? Is he aware, for example, that I am informed that in today's Belfast Newsletter there is a photograph of four UVF members in training; all are armed and one with an Armalite rifle? Both sides in this dispute must be disarmed if there is to be peace. Is the hon. Gentleman aware that there is fear, which has been present for a number of weeks now during the truce, of sectarian murders and that it is vital that this be dealt with?
Finally, the hon. Gentleman has made clear what is certain and what we on this side of the House will support; namely, that there is no military solution in the long run to the problem of Northern Ireland. Is it not urgent now not only to talk about the political future but to use the mood of expectancy which has
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arisen in the last few days and for the Government to make proposals which will lead to elections in the North next year?
Mr. Channon: I am grateful to the hon. Gentleman, as I am sure the House will be, for his remarks, and in particular for what he said about the discipline of the troops, which has been generally recognised as being magnificent.
I entirely agree with the hon. Gentleman about the need to ensure that weapons and gelignite do not get into the wrong hands. I note what the hon. Gentleman says about this matter.
As to what the hon. Gentleman says about other illegal activities in the Province, my right hon. Friend has made it perfectly clear that he intends to prosecute with impartiality all illegal activities, from whatever source they may come, in so far as it is a matter for him to prosecute them. My right hon. Friend intends to pursue those who commit illegal acts, no matter from what section of the community they come.
I entirely agree with the hon. Gentleman about the very serious and tragic wave of sectarian murders which have taken place during the past month or so. They come from both sections of the community. My right hon. Friend is ensuring that the police are pursuing this matter with the greatest possible urgency.
I entirely agree with the hon. Gentleman also that, as I said in my statement, no military solution is possible to the complex problems of Northern Ireland. My right hon. Friend intends to pursue urgently the political talks which he has already been engaged in; he will pursue them further with the utmost urgency to try to find, if it is possible, a political framework in which all the people of Northern Ireland can find a peaceful future.
Captain Orr: Is my hon. Friend aware that I am sure that I speak for the vast majority of the people of Ulster when I say that we warmly congratulate the forces of the Crown upon the skill, precision and humanity with which they carried out the duties this morning? Will my hon. Friend give an undertaking that there will be no withdrawal from the areas which have now been occupied by the Army until such time as arrangements

35
are made for some kind of interim policing of the areas and until it is possible for peace-loving people in the areas to go about their business freely and openly and conduct their political activities in a democratic manner?
What has happened to the members of the IRA? We appreciate the necessity for a warning to be given to the population, but has my hon. Friend any idea whether the members of the IRA are across the border? If that be so, what steps are being taken to prevent their return to Northern Ireland and to prevent the kind of incident that happened at Claudy this afternoon? Is my hon. Friend aware that the sooner a decision is made about the political future for Ulster that now follows the better; the sooner the interregnum comes to an end the better it will be for everyone?
Mr. Channon: I am grateful to my hon. and gallant Friend for what he, too, has said about the troops. As to the undertaking for which he asks, I think he will agree that it is far too early for me yet—these events took place only about 12 hours ago—to give an undertaking of that kind, but I note what he says. Already, steps have been taken to start some form of police presence in these areas, and our aim is to restore them to normality in all senses of the word.
As for where the IRA have gone, even if I had full knowledge on that matter I am not sure that I should be wise to tell the House exactly what information I had, but, since he raises the matter, my hon. and gallant Friend can be assured that the Government of the Irish Republic are in no doubt about our views on this matter and have been well aware of them for a long time.
Mr. David Steel: Now that the operation has been successfully concluded, and since the Minister's statement reasserts that there can be no military solution to the problem of Northern Ireland, is it too much to hope that those in Ulster who describe themselves as loyalists will exhibit that loyalty by giving full support to the Secretary of State for Northern Ireland in his attempts to bring about reconciliation and a political solution? Second, will the Government now consider again whether it would be wise to
36
begin an area by area programme of impounding arms held in private hands?
Mr. Channon: I note what the hon. Gentleman says in the second part of his question. As to the first part, I am sure that there will always be criticism, and it is right that there should be, because these are very difficult and complex matters; but I am sure that the vast majority of the House at least, and, I believe, the vast majority of people in Northern Ireland, understand the difficult problems in which we are engaged and realise how all of us must try to work now towards a political solution which will be acceptable to the overwhelming majority of the people.
Mr. Maude: Since the military operations in the no-go areas are clearly designed to restore rather than to reduce civil rights in Northern Ireland, will my hon. Friend agree that the extravagant statement issued today by the Civil Rights Association shows that it has become more a propaganda mouthpiece for the Sinn Fein and the Provisional IRA than a genuine movement for constitutional reform?
Mr. Channon: I certainly agree with what my hon. Friend says inasmuch as one of the purposes of the army's action last night was to restore these areas to normality. It will result in restoration of civil rights rather than a reduction of them, and they will have their full civil rights. I give the clear undertaking for which the hon. Member for Leeds, South (Mr. Merlyn Rees) asked earlier, that there is no question of trying to act against one section of the community. We are trying impartially to restore order in all parts of the community and to restore to people their normal civil rights, to free them from the intimidation of terror and the gunman under which they have laboured far too long.
Mr. Stallard: Will the hon. Gentleman accept that I particularly welcome his statement about there being no military solution, for that is what I and a number of others have been trying to establish for a long time, but will he accept that I—I can only speak personally—see this exercise today as attempting to impose a military solution? I think that, because of pressure from Northern Ireland and from hon. Members on the Government benches behind

37
the Secretary of State—[HON. MEMBERS: "Oh."] I think that this has been the result of Right-wing pressure, and I fear that the Government are embarking along the road which has already destroyed moderate opinion in Northern Ireland, and I do not share the optimism of those who see it as a success. On the contrary, I think that it has put us back many months, and a lot of hard work will have to be done to bring us back to the position we were part way to achieving. What I hope—
Mr. Speaker: Order. The hon. Gentleman must put a question.
Mr. Stallard: Will the hon. Gentleman accept that there seem to be two different approaches to the two different communities, in spite of what he said, with one approach to the Catholic community while, on the other hand, there are pictures of the Army in joint patrols with the UDA on the Protestant side? These pictures have been widely circulated. Will the Minister now take on board the impression given that there are two separate approaches to the two different communities?
Mr. Channon: The hon. Gentleman is entitled to his point of view, but I must refute what he says. My right hon. Friend's policy and the actions of the Army are not the result of two different approaches to the two communities. In fact, it is widely recognised by the majority of right hon. and hon. Members that during the past three months my right hon. Friend has been engaged in the very difficult task of trying to assure both communities in Northern Ireland that he wishes to act impartially in the interests of both. There is no attempt whatever—indeed, it would be foolish to try—to impose a military solution, but no one could indefinitely contemplate a situation in which terrorists and gunmen were operating without let or hindrance from a number of areas which have been used as bases. Such a situation was intolerable, and was the more seen to be intolerable particularly after the events of Bloody Friday. No one could have tried more than my right hon. Friend, by patience and determination, during the past three months to get the barriers down somehow. In view of that situation, my right hon. Friend was reluctantly driven—rightly driven, I believe—to the
38
decision which was taken to mount the military operation last night.
Rev. Ian Paisley: Will the hon. Gentleman take it that all right-thinking people in Northern Ireland will welcome the end of all no-go areas, especially the areas which have harboured those who have engaged in this campaign of crime, murder, anarchy and bloodshed? Will he convey to the Army the congratulations of the people of Northern Ireland, and their relief that the operation has not caused the bloodshed and death which many of us expected might be caused? I think that that was a fear widely felt among right hon. and hon. Members.
Has the Minister's attention been drawn to the statement by the Prime Minister of the Republic of Ireland that this action by the Army was on the brink of madness? What prior knowledge or information was fed to the Prime Minister of the Republic about the action to be taken by the British Army? Further, what steps are being taken to see that no forays of IRA men come across the Border, since the Claudy incident today, in which a young child of nine and five other persons were brutally murdered, occurred in an area adjacent to the Border where these men can escape to freedom and the sanctuary of the Republic?
Mr. Channon: I am sure that the whole House will agree with the hon. Gentleman in his tribute to the troops, and I think that it will agree also about the need for an end to all no-go areas in Northern Ireland, whoever may be behind them. That is one of the purposes of the whole operation. I note the hon. Gentleman's views about the Border. I have not seen the statement to which he refers. [HON. MEMBERS: "What statement?"] I have not seen the statement which the hon. Gentleman alleges was made, and, in view of that, it would, I think, be unwise to comment.
Mr. Hamling: We appreciate what the hon. Gentleman said about talks, but will he now reply to the question asked by my hon. Friend the Member for Leeds, South (Mr. Merlyn Rees) about the long-term proposals which his right hon. Friends have for constitutional, political and economic reforms which they will put directly to this House and which will form the only conditions for ultimate peace?
Mr. Channon: As regards economic matters, my hon. Friend announced last week a series of economic measures to try to help Northern Ireland in its grave economic and employment difficulties. As regards the long-term political and constitutional future of Northern Ireland, it is my right hon. Friend's hope to hold a conference of the parties concerned in Northern Ireland, so that a conference of the people of Northern Ireland may try to determine their future rather than that there should be some solution imposed upon them by the British Government. This conference may or may not have a successful conclusion, but surely the attempt is worth making, and that is what my right hon. Friend is engaged in trying to do.
Mr. Powell: What measures will the Government take to ensure that the malefactors who have temporarily quitted the scene of their misdeeds do not return to resume them?
Mr. Channon: My right hon. Friend will know perfectly well that every effort will be made to bring to justice the malefactors who have escaped detection, at least at this moment, and every energy will be devoted to trying to achieve that.
Mr. Foley: The Minister has been very lucid about the immediate steps taken by the Army in the no-go areas. He has been less than clear about the next stages. Will he explain what proposals the Government have for policing the former no-go areas of the Creggan, the Bogside and Andersonstown? Will they be policed by the Army, a combination of the Army and the RUC, or by the RUC, or is some other arrangement to be made?
Mr. Channon: The operation was concluded only a few hours ago and I am not in a position this afternoon to give any long-term answers to these problems. I have already said that some measure of animal policing is under way in these areas and it is the Government's aim to try to restore them to normality at the earliest possible moment.
Mr. Speaker: There will be a debate later today on Northern Irish affairs and it will be fairly wide-ranging, and, therefore, I shall allow only one or two more questions.
Sir J. Langford-Holt: My non Friend the Minister and the hon. Member for Leeds, South (Mr. Merlyn Rees) have quite rightly stressed that the military operation is not an end in iteslf Will my hon. Friend assure the House that my right hon. Friend the Secretary of State will direct his attention to the sin of both religious bodies in Northern Ireland, which has been practised for many years, in that they bring up their children to hate, distrust and despise the children of the opposite religion?
Mr. Channon: My hon. Friend has made a very wide statement. I have met many people in Northern Ireland who would not agree with him.
Mr. Harold Wilson: My right hon. Friends and I associate ourselves with what my hon. Friend the Member for Leeds, South (Mr. Merlyn Rees) said both as regards the need, which I think the Minister accepts, not only for maintaining but for redoubling the political initiative, and also the need to avoid anything that might be regarded as the hounding of civilians, particularly if it were selective and sectarian. Will the Minister give further thought to and discuss with the Secretary of State the point raised by more than one hon. Member this afternoon about the private holding of arms? Does the Minister recall that in the debate on 6th April last year we raised float this Front Bench the question whether there should not be an almost total ban on arms in Northern Ireland, that all existing gun licences should be withdrawn and that there should be mandatory prison sentences for anyone caught with guns in his possession, whatever section of the community he may come from?—[interruption.]
Mr. Mellish: Why not?
Mr. Wilson: I include explosives, of course. When we proposed this a year last April we said that one advantage would be that the security authorities could then freely enter any house where there was reason for suspicion without its being felt that the authorities were going only to houses of one religious or political persuasion. Some estimates, particularly in the light of illegal smuggling of arms on both sides, would suggest that the figure I gave then of 100,000 arms privately-held in Northern Ireland

41
must now be about 150,000 of arms alone. Should not the whole lot be impounded, because this is as much a part of the United Kingdom as Manchester, Birmingham, Liverpool or Leeds? It is not the fact that about 10 per cent. of the population in these cities hold arms legally or illegally.
Mr. Channon: I am grateful to the right hon. Gentleman for his opening remarks and certainly I confirm that it is our intention to proceed as fast as possible with political measures. I repeat the undertaking that I have given other hon. Members about the treatment of civilians. The Army has been scrupulously careful in these operations to treat civilians with the minimum inconvenience possible. As for the arms, this is a complicated matter which has been discussed over a number of years but I shall certainly undertake to discuss the matter with the Secretary of State at the earliest opportunity.
Mr. Wilson: The question of arms is a difficult matter. It is 16 months since the suggestion was first put forward from this side. I do not wish to press the hon. Gentleman today. He must report to the Secretary of State. But can we be told what are the difficulties, because it is clear that the cause of deaths in Northern Ireland is malevolence and evil allied with weapons? If the evil and the malevolence cannot be stamped out immediately, at least something can be done about the weapons.
Mr. Channon: I undertake that I shall urgently consider the matter with my right hon. Friend and I shall give the right hon. Gentleman an answer at an early and convenient opportunity.
Mr. Deedes: Will the Minister accept that at least one consequence of today's operation may well be to impose much heavier responsibilities on the Republic?
Mr. Channon: I think a heavy responsibility rests on all responsible people in Ireland at the present time, because the activities of the Provisional IRA threaten the security and lives of people in all parts of the island.
Mr. McNamara: The Minister's answer about the policing of these areas in the future left a lot to be desired and made us wonder what the Government's contingency plans were. Is the Minister aware that long before the Provisional IRA took over the Creggan and the Bog-side, and before it was active in Andersonstown and other parts of Belfast, the RUC was not accepted there by the minority population as an impartial police force in the way that the police force in one of our cities would be accepted? It is therefore incumbent upon the Minister to reassure the minority not only about arms held legally or illegally but about policing. There should be adequate consultation with community leaders in these areas about the re-introduction of police forces on a credible basis so that the minority can feel that the police are no longer their enemy, as they were long before the Provisional IRA came in, but that they can be trusted like the English bobby. When will that happen?
Mr. Channon: The House recognizes that the question of policing is extremely complicated and is one of the most difficult matters which faces us in Northern Ireland. My noble Friend the joint Minister of State is in Londonderry at this very moment, I believe, and is having wide-ranging discussions with representatives of the people there. I am sure these are among the matters which will be discussed. The operation was concluded at only about 7 o'clock this morning and no long-term plans can be laid. There is some policing at the present time. I shall draw my right hon. Friend's attention to the points raised by hon. Members this afternoon.

BUSINESS OF THE HOUSE (SUPPLY)
Ordered,
That, in the case of the Question which under the provisions of paragraph 11 of Standing Order No. 18 (Business of Supply) Mr. Speaker is directed to put at Ten o'clock, he shall this day put such Question forthwith as soon as the House has entered upon the Business of Supply.—[Mr. Higgins.]

ORDERS OF THE DAY

  SUPPLY
  [29TH ALLOTTED DAY],—considered.
  Mr. SPEAKER proceeded, pursuant to the Order this, to put forthwith the Question, That the total amount outstanding for the year 1972–73 be granted out of the Consolidated Fund for the purposes defined in the related Votes.

  CIVIL AND DEFENCE ESTIMATES, 1972–73 (OUTSTANDING VOTES)
  Question,
  That a sum not exceeding £9,669,643,700 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for Civil and Defence Services for the year ending on 31st March, 1973.—[Mr. Higgins.]
  put and agreed to.
  Bill ordered to be brought in upon the foregoing Resolution by the Chairman of Ways and Means, the Chancellor of the Exchequer, and Mr. Higgins.

  CONSOLIDATED FUND (APPROPRIATION) BILL
  Bill to apply a sum out of the Consolidated Fund to the service of the year ending on 31st March 1973, and to appropriate the supplies granted in this Session of Parliament, presented accordingly and read the First time; to be read a Second time tomorrow and to be printed [Bill 187.]

NORTHERN IRELAND (ELECTORAL LAW)
3.59 p.m.
The Minister of State for Northern Ireland (Mr. Paul Channon): I beg to move,
That this House takes note of the Electoral Law (Northern Ireland) Order 1972.
The Electoral Law Order which the House is being asked to discuss this afternoon is very important. Even after the dramatic events of the past few hours, I still think it is important that this House should give some scrutiny to the question of electoral law in Northern Ireland and the conduct of elections for the local councils with which the order deals.
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As the House knows, under the system of local government proposed originally in the Macroy Report, there is to be a whole new structure of district councils coming into operation next April.
The order falls into two parts. Apart from article 4, with which I will deal in more detail later, the order deals with the general rules relating to local elections. In this it follows very closely the Electoral Law Bill which was before Stormont at the time of prorogation. That Bill had received its Third Reading in the Senate of the Northern Ireland Parliament on 23rd March, 1972, and it only awaited the consideration of Senate Amendments and the Royal Assent before becoming law. Article 4, which is a special new article which has been inserted into the order and is different from what was in the original Bill, deals with the specific arrangements for allowing proportional representation in these local elections.
First, I will deal with the various points in the order not relating to proportional representation and article 4. Those matters may be of less interest in the House this afternoon, but perhaps I had better deal with them briefly as they constitute an important matter. The legislation dealing with electoral law in Northern Ireland is contained in four Acts of Parliament, of which the principal Act is the Electoral Law Act, 1962. This provides for all electoral matters dealing with franchise qualification, registration of electors, and the conduct of elections for both the Stormont Parliament and local government.
The existing electoral law in Northern Ireland is now generally on identical lines to that applicable in Great Britain for both Westminster parliamentary and local government purposes. In Great Britain the relevant legislation is provided in the Representation of the People Acts and various regulations under them. The restrictive franchise qualifications which were applicable to local government franchise in Northern Ireland were removed and, as in Great Britain since the amending Act of 1970, all persons who are entitled to be registered as electors to vote at Northern Ireland parliamentary elections are likewise now entitled to vote at local government elections.
Adopting the reduction in voting age introduced in 1969 in Great Britain, the

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age of voting was lowered to 18 years, and the additional business qualification franchise, which previously applied to parliamentary elections for the then 48 territorial Stormont constituencies as well, was abolished, as were the four seats comprised in the Queen's University constituency which then existed by provisions contained in the Electoral Law Act, 1968.
Also in 1968 the British practice of having in operation a permanent Parliamentary Boundary Commission for the Northern Ireland parliamentary constituencies was introduced. Such a Commission, on similar lines to the Commissions operating for the Westminster parliamentary constituencies, has been established. Now that the local government boundaries in Northern Ireland have been determined and prescribed, this Commission will be in a position to carry out its review and give its consideration of any recommendations necessary for a revision of the existing Stormont parliamentary constituencies.
As I have already mentioned, the Northern Ireland Government before prorogation had embarked on a complex and detailed major reorganisation of the structure of local government in Northern Ireland based upon parliamentary acceptance and endorsement of the report on local government presented by the Macroy Committee. The existing local authorities, comprising the county councils, county borough councils, borough, urban and rural district councils, will be abolished with effect from 1st April, 1973, and replaced by the establishment of 26 new-type district councils comprising the large Belfast district council with 291,000 electors and 25 provincial councils. These 25 provincial councils are of equitably average size taking into account geographical and other considerations. Legislation for all this was passed before prorogation.
Mr. Dick Leonard: May I ask, as a matter of information, whether the boundaries of the Belfast district council are the same as the existing Belfast city boundaries?
Mr. Channon: I believe that to be right. If I am wrong I will seek an opportunity to correct myself.
Rev. Ian Paisley: Is it not a fact that the new district council
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for Belfast takes in a larger area than is at present administered by the Belfast city council?
Mr. Channon: In view of what the hon. Gentleman has said, I had better read to the House at a suitable moment exactly what the Belfast district council takes in. If the hon. Gentleman will give me a few moments, I will give him a detailed answer to the question.
The boundaries of these new districts and their proposed single ward electoral units were drawn by an independent local government boundary commissioner, Mr. F. A. L. Harrison, Q.C., who was appointed for this purpose in 1971 by the Governor of Northern Ireland under the provisions of the Local Government Boundary Commissioner Act, 1971. This Commissioner produced what is generally recognised as very satisfactory delineations of boundaries for the new district council areas, together with the ward units to be contained therein. These ranged from 15 in the smaller district council areas to a maximum of 51 wards in the Belfast district council area. The provisional and then final considerations of the Commissioner were examined in detail by the public, including the political parties, and, where necessary, public revision hearings were held. The Commissioner recently made his final recommendations to my right hon. Friend, and these were promulgated and prescribed by an Order in Council on 30th June. These boundaries are not strictly relevant to the order as they are contained in the regulations under the Local Government (Boundaries) Order, Northern Ireland, 1972. These ward and district council boundaries have generally been well received and accepted in Northern Ireland as being fairly and equitably drawn and suitable to the structure of the district councils.
As a result of this restructuring and reorganisation of local government it is necessary to postpone until this year the holding of local government elections which should, in fact, have been held in the triennial year of 1970. This has been both necessary and logical as it would obviously have been absurd to hold further elections to the existing councils, which were elected in 1967 when the restructuring process was being dealt with, as it was unlikely that candidates

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would have been willing to stand for councils which had only a very limited life. Therefore, the existing councils have already been in operation for five years, and it is certainly time for new elections as the whole political situation has changed and the structure and powers of local government are to be different.
The restructuring programme for the form of local councils was completed, just prior to the proroguing of the Stormont Parliament, by Northern Ireland legislation contained in the Local Government Act, 1972, providing for the new type of district councils.
As drafted, the present legislation provides for elections to the old type councils. Therefore, the House will see that it is both necessary and urgent to introduce amending legislation so that the electoral and related procedures for these new councils can be prescribed and elections held before the end of this year.
Mr. Michael McNair-Wilson (Waltham-stow, East): What date is envisaged for the local elections?
Mr. Channon: My right hon. Friend has not come to any firm conclusion on the exact date for the holding of the local elections, and it would therefore be foolish of me to make a prophecy this afternoon. Unless subsequent legislation takes place, they must, by Statute, be held before the end of this year. As soon as my right hon. Friend is in a position to announce a date, I am sure he will wish to do so.
As it is necessary for the existing councils to vacate their offices with effect from 1st April, hon. Members will realise that it is desirable that the new type of councils should be elected in advance of that date so that they may have an opportunity to establish themselves, to appoint staff, and to take over fully the duties and functions of the local authorities which are to be transferred to them. Indeed, the time limit allowed to the new Northern Irish councils is considerably less than it has been in the rest of the United Kingdom.
Perhaps I may now deal with the point raised by the hon. Member for Romford (Mr. Leonard). The new boundary for the proposed Belfast district council takes in some of the areas of County Antrim
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and County Down adjoining the county borough boundary. The hon. Member for Antrim, North (Rev. Ian Paisley) is right to point that out. If he wants further exact details, I can let him have them.
At the prorogation of Stormont, a Bill had reached its final stages to provide for the holding of district council elections in 1972, and to establish a centralised new type of electoral machinery under an independent Chief Eelectoral Officer for Northern Ireland, who would be responsible for carrying out his designated functions directly to Parliament through an appropriate Minister.
There are several points of discussion in Northern Irish Parliament. I shall limit myself to the four major points. The first was the appointment of the Chief Electoral Officer. I think that this was generally welcomed in Northern Ireland, and will be generally welcomed in this House. It is my right hon. Friend's intention, subject to the agreement of Parliament to the order, to appoint Mr. James Jones to be the Chief Electoral Officer. He came to Northern Ireland in 1955 from Her Majesty's Stationery Office, London, to join the Stationery Office in Belfast, from which he retired as Director in March, 1971. His appointment has been widely welcomed.
The second point raised in the Northern Irish debates on the issue was the limitation of expenses for candidates for the local elections. Under existing law there is no limit on the expenses which a candidate may incur at an election to a local authority in Northern Ireland. Article 13 of the order limits those expenses by applying with modifications the provisions of Sections 39–52 of the principal Act relating to the limitation of expenses of candidates at parliamentary elections.
At parliamentary elections a candidate may incur personal expenses not exceeding £100, and these are not taken into account for the purposes of the overall limit. The article proposes that the personal expenses of a candidate at a local election shall not be limited as such, but shall be taken into account for the purposes of the overall limit. Whereas the limit for a candidate at a parliamentary election is on a per capita basis calculated on the number of "electors in the

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constituency" the limit for candidates at local elections is fixed by the order at £300 for a candidate at an election to the council of the city of Belfast and at £100 for a candidate at an election to any other district.
In determining what should be the appropriate amounts to be prescribed for maximum expenditure for candidates at local elections, careful and detailed consideration was given to the electorate sizes of the proposed local wards when compared with the electorates contained in the related Northern Ireland parliamentary constituencies, with a weighting being given to the fact that a local candidate will be required to pay his own postage for election material out of any limitation of expenditure prescribed, where as a parliamentary candidate has both free postal facilities and also the right to additional expenditure covered by the £100 personal expenses allowance. On this basis, the figures proposed of £300 maximum in respect of a ward of some 7,000 average electors in Belfast, and £100 maximum in respect of a ward with an approximately 2,000 average electorate in the other district council areas, are considered to be realistic.
These limitation of expenses provisions will not apply to the first local elections in 1972, as they will be held on the basis of proportional representation, with single wards grouped for that purpose into large district electoral areas.
Mr. A. W. Stallard: Can the hon. Gentleman explain the reasoning behind the deposit required for local government elections?
Mr. Channon: I shall be coming to the question of deposits very shortly.
In the 1972 local elections each candidate will be permitted to expend a maximum of £100 by way of personal expenses, plus a total capitation allowance of 2½p for each elector on the register for the district electoral area.
The third matter of controversy was the question of voting hours.
Mr. Dick Douglas: The hon. Gentleman said that the wards would be grouped Has this grouping the approval of Mr. Harrison?
Mr. Channon: I shall he dealing with all these points in a few minutes. I am trying now to deal with the whole question of the order, leaving out proportional representation for the moment. I shall come to the specific point in three or four minutes if I am not interrupted further. [Interruption] There is plenty of time, but a number of hon. Members wish to speak. [Interruption.] If the House wishes me to curtail this, I will.
Mr. Merlyn Rees: We are saying that the debate is about proportional representation, and that we are interested in the details.
Mr. Channon: I am grateful. But before coming on to proportional representation I shall deal with the two other matters of substantial controversy in the debates at Stormont.
One was the question of voting hours. Article 14 provides for voting hours to be from 7 a.m. to 10 p.m., the hours of poll for Westminster parliamentary elections. It was thought right that in Northern Ireland the local election pattern should follow the hours of voting for the Westminster elections. This was a change from the original intention when the Bill was introduced. It has been done because, with the introduction of proportional representation, and to provide for uniformity of all types of elections in Northern Ireland, it is considered advisable for the polls to be open until 10 p.m. As the law stands, the hours of polling in Northern Ireland for local authority elections are from 8.30 a.m. to 8.30 p.m.
The only other point of substantial controversy at Stormont was the question of deposits, to which the hon. Member for St. Pancras, North (Mr. Stallard) referred. Under existing legislation, a candidate for a local election to a council of a county, county borough or borough has to lodge a deposit of £25, and a candidate for an election to urban and rural distrist councils a deposit of £10. Article 10 now provides for a uniform deposit requirement of £15 for candidates to the new district councils.
Mr. Leslie Spriggs: Why should there he a deposit at all?
Mr. Channon: I shall try to show why we have come to this conclusion.
When the Bill which the order replaces was first introduced into the Stormont

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House of Commons, it was intended to abolish the deposit requirement, thus bringing the Northern Ireland law on this matter into line with that in Great Britain, where no deposits at local elections are required. Following strong objections in Parliament and from local authorities, the then Northern Ireland Government introduced in Committee an amending Clause providing for the £15 deposit. This was accepted on a Division. Some hon. Members of this House took another view, but, fortunately, they are not with us at the minute. [Interruption.] They are not far away, I know.
The view taken at the time was that the amount of deposit should in no way deter any candidate from standing for election but that it might act as a deterrent to persons lodging nominations merely for the purpose of disrupting the electoral machinery awl confusing the electorate. It was thought that it would prevent any body or organisation implementing a campaign to prevent elections by making numerous nominations in each electoral area. The decision to maintain a deposit requirement for local elections was welcomed by the majority of Members at Stormont and by the representative bodies of local authority opinion in Northern Ireland.
In view of the decision to conduct these first local elections on a proportional representation basis, thus providing for larger electoral areas than would have been the case if single-member wards had been used, and having regard to the circumstances presently prevailing, my right hon. Friend considered that, at least for these 1972 elections, a strong case exists for this deposit provision to prevent any attempt being easily made to disrupt them by swamping each electoral area with candidates.
Hon. Members need not be alarmed about the deposit provision, because to save his deposit under the new proportional representation system a candidate will have to obtain only a quarter of the quota. Hon. Members will know what that means. A candidate has to receive only a very small proportion of the vote to retain his deposit. I find it inconceivable that, except in the most extraordinary circumstances, any genuine candidate would be likely to lose his deposit in local elections held under
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proportional representation. The House need not be alarmed about the question of the deposit. There is no genuine fear that any serious candidate in any area will be disadvantaged by the provision of this very small deposit. The question can be reviewed again in future.
Mr. Maurice Foley: Stormont was discussing local government reform, but there is now no Stormont. In the context of the proposals for local government reform, will the hon. Gentleman deal not just with the nuts and bolts, such as deposits and boundaries, but with the kind of powers and competencies that he sees the local councils fulfilling. Will he indicate the real powers he will give to the new local councils so that they can effectively do a job in the improvement of community relations?
Mr. Channon: I should like to answer the hon. Member for West Bromwich (Mr. Foley) fully about that matter. He has made a strong point about the existence of Stormont. However, this debate is related to the electoral law—whether there should be proportional representation and whether the electoral law should be changed.
Captain L. P. S. Orr Captain L. P. S. Orr (Down, South) indicated dissent.
Mr. Channon: My hon. and gallant Friend seems to be disturbed.
Captain Orr: On a point of order, Mr. Speaker. I want to make quite certain what we can still debate. Although the debate may be on a Motion to take note of the electoral law order, I hope to be able to deploy quite a few arguments as to why we should not take note of it now—in other words, why we should not proceed with legislation about the nuts and bolts of district council law before we discuss what will be the main structure of local government in Northern Ireland.
Mr. Speaker: I will rule as the speeches are made. However, as I indicated earlier, I think that this should be a fairly wide debate.
Mr. Channon: When my right hen. Friend was appointed Secretary of State at the end of March he had to take the big decision whether to go ahead with local government reform. He took a

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great many soundings from people involved in the matter about whether the procedure should go on. There were three courses of action open to my right hon. Friend: first, to abandon the reforms; secondly, to go on with them; and, thirdly, to postpone them. There was general agreement amongst the people to whom we spoke that the last thing wanted was postponement. That was felt to be the worst solution, leading to widespread uncertainty, with no one, for example, knowing who they were going to work for. We all know the complications of introducing a system of local government, and it was felt undesirable to interrupt it in the middle and postpone it. Therefore, my right hon. Friend decided that postponement would be wrong.
Then came the question of whether to go ahead with the reforms in the situation we were facing or to announce that we were proposing to abandon them. The House would have thought it odd if we had decided, having pressed for years for local government reform in Northern Ireland, to abandon our proposals. The majority of right hon. and hon. Members have taken the view that it is right to have reform in local government in Northern Ireland. The Northern Ireland Government had proposed these reforms and they had received wide acceptance. The House would have thought it extraordinary if at the last minute we had decided not to go ahead with the programme of local government reform.
Local Government reform can stand on its own even in the present situation with Stormont prorogued. If and when a new situation is created, no doubt the whole structure of local government and many other things will have to be considered, but as at present, with Stormont being prorogued, my right hon. Friend thought it was right that we should proceed with local government reform. I shall not outline to the House the whole structure of the district councils. That was dealt with entirely by a Measure passed by Stormont before prorogation took place. If another view were now taken we would have to repeal that Measure.
The order provides for the elections. My right hon. Friend thinks it right to go ahead with the decision to have elections. The last local councils were elec-
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ted in 1967 for a three-year term. It is now getting on towards the end of 1972. Local government reform is pending. Surely, if it can possibly be done, it is in everyone's interest that there should be local council elections in Northern Ireland in 1972. To achieve that it is necessary to pass this order, which had reached all but its final stage in Stormont before prorogation.
Captain Orr: On the question of timing, my hon. Friend will be aware that his right hon. Friend the Secretary of State said on the 29th June:
"It should be remembered that after the plebiscite there will be the local government elections."—[OFFICIAL REPORT, Thursday, 29th June, 1972; Vol. 839, c. 1688.]
As article 4 of the order refers to 1972, can my hon. Friend give us some idea when the referendum will be held?
Mr. Channon: I cannot give that answer this afternoon. As my hon. and gallant Friend knows, provision for the plebiscite legislation will have to go through the House. I am not in a position to say when that legislation will be introduced. Obviously, it could not be brought before the House before the summer Recess. The security situation must have the full consideration of my right hon. Friend at the present time. It is our hope that the plebiscite will take place before the local government elections, but I cannot say more than that now. My right hon. Friend will be anxious to take the necessary legislative steps as soon as possible. I can give no undertaking to the House. It would be out of order for me to go further. It will be a matter for consideration when the plebiscite Bill is put before the House.
Rev. Ian Paisley: Do I understand from what the hon. Gentleman is saying that the plebiscite will take place before the district council elections?
Mr. Channon: I can give no undertaking about that matter. As I said, legislation must be introduced before a plebiscite can take place. My right hon. Friend has given a pledge to the people of Northern Ireland that he will introduce a plebiscite. That was made clear, at the time of prorogation, in a statement by my right hon. Friend on 24th March.
Mr. R. T. Paget: Under the Northern Ireland (Temporary Provisions) Act, 1972, has not the Secretary of State the power to legislate by order for a referendum?
Mr. Channon: No. My right hon. Friend has no power to do such a thing. Legislation would have to be passed by Parliament.
Captain Orr: My hon. Friend said that he could not give an undertaking, but the Secretary of State has already done so. The Secretary of State has said that local government elections will be after the plebiscite.
Mr. Channon: With respect to my hon. and gallant Friend, I, too, have a sheaf of quotations which I could quote back at him. I cannot go further this afternoon than to say that I cannot give any indication of the timing of this matter. It is still my right hon. Friend's intention that an early plebiscite should be held. The necessary legislation will be introduced. I am not in a position to give an undertaking about the exact timing.
Mr. J. Enoch Powell: When my hon. Friend says that he, too, has a sheaf of quotations which he can quote back at my hon. and gallant Friend the Member for Down, South (Captain Orr), does he mean by that that the Secretary of State has contradicted himself on this matter?
Mr. William Molloy: Petty.
Mr. Channon: No. My right hon. Friend has not contradicted himself.
If the House will allow me now to turn to the question of proportional representation, I should be delighted to do so.
When my right hon. Friend arrived in Northern Ireland, he received many representations from several quarters in the Province to the effect that when these local government elections were held it would be right to hold them under a system of proportional representation. A large number of individuals have made representations about this matter and many of the political parties have specifically asked for it. I do not think
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that any of the political parties have objected to having these local government elections under proportional representation, especially since the system of having both Northern Ireland parliamentary elections and local elections by proportional representation using the single transferable vote system was provided for in the Westminster Acts of 1919 for local government and 1920 for the Stormont Parliament.
The local elections in 1920 were held using the single transferable vote system, as were the Stormont parliamentary elections of 1921 and 1925. Hon. Members may have received that interesting booklet dealing with the local elections in 1920 and the elections to the Belfast city council in 1920. The then Government in 1922 proceeded to introduce a Bill to repeal the provisions of the 1919 Act as to applying the principles of proportional representation to local government elections in Northern Ireland and to provide for the re-drawing of local government boundaries and their ward or district electoral division contents.
I need not go into the history of that Measure. Those who have studied Northern Irish history will know of its complicated passage. The Royal Assent was given to the Bill in late 1922, and the next local government elections were postponed until 1923. Since then they have been conducted on the single vote system. The Government of Ireland Act, 1920, while prescribing a proportional representation system for the Northern Ireland parliamentary elections, provided that neither the system of voting nor the boundaries of the then prescribed constituencies for the Stormont Parliament should be changed for a period of three years after the Act came into force.
So, the Stormont 1921 and 1925 parliamentary elections were conducted on the basis substantially of constituencies laid down in the 1920 Act and by the proportional representation method of voting. In 1928, however, the then Northern Ireland Government decided to revert to the practice of having a single majority vote. In 1929 a Measure was enacted to deal with this. I need not weary the House with all the details of the parliamentary constituencies which where then decided. The House will know that the single transferable vote is not unheard of in this country because the university

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seats until 1945 also conducted elections where there was more than one member using the single transferable vote system.
Once the Government had come to the conclusion that proportional representation would be desirable, there were many types of proportional representation which could have been picked. The advantages of the single transferable vote are obvious. First of all, this system is the best way of achieving the aims of proportional representation.
Mr. Michael English: Rubbish.
Mr. Channon: The hon. Member will no doubt advance an alternative system.
Secondly, there is the precedent of the Northern Irish parliamentary and local elections held in the 1920s, and so it is not a new procedure for Northern Ireland. Thirdly, this system also has the advantage of similarity in the United Kingdom because of the university seats.
Mr. John Wilkinson: Did the Government take into account the question of precedents being set, because those of us who represent multiracial constituencies like my own, where there are not only many races but many religions, will be aware that this legislation could set a precedent? For example, the Sikhs will say that no Hindu will vote for them and the Muslims will say that a Sikh vote is not possible for them, and some English people will not even vote for the immigrant candidate. Has my hon. Friend considered this?
Mr. Channon: The question of proportional representation relates only to the local elections in Northern Ireland in 1972. There is no suggestion in this order that proportional representation should subsequently be used for local government elections in Northern Ireland. Should some future Parliament decide to go on with the experiments, that will be a matter for it. This is purely an experiment, and it is included in article 4, to which I shall come, which deals with local elections to be held in 1972. It is in no way a permanent arrangement for proportional representation, either of parliamentary or of local elections in Northern Ireland.
Mr. Leonard: The hon. Gentleman has given us three reasons why the single
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transferable vote system is a good idea for the Northern Ireland elections. Will he agree that a fourth reason is that this is the system used in the remainder of Ireland?
Mr. Channon: That is rather a weak reason, because that system has not met with universal approbation in the Republic of Ireland where it has been used for some time. I think that that is for different reasons. It is true that it is used in the Republic, too. If hon. Members would like—I have wearied the House for too long already—I can give a detailed description of the single transferable vote and how it operates, and how the elections are conducted.
Mr. Gerard Fitt: We know that.
Mr. Channon: I imagine that hon. Members are well aware of the details.
Mr. Foley: Will the hon. Gentleman explain how it came about that in the early Acts establishing the Government of Northern Ireland proportional representation was included? What were the reasons for ignoring it and getting rid of it and what are the Government's reasons for re-introducing it now? Is it not a fact that their reason for re-introducing it is the abject failure of the last Government at Stormont to pay any attention whatever to the rights of the minority in the North?
Mr. Channon: I do not think that it would be very fruitful for me to go into the histories and controversies of the past. I know the views of the hon. Member, and no doubt other hon. Members have different views about this. I note what the hon. Member said. [Interruption.] My hon. and gallant Friend the Member for Down, South points out that the question of proportional representation was mentioned in the Green Paper put out by the Northern Ireland Government. I have not heard of any substantial objections of any kind to its introduction at present from the political parties.
It entails certain complications which I ought to explain to the House. The first is that the boundaries have already been drawn on the basis of a singleward. They must not be grouped into suitable electoral areas. If the House is agreeable and

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passes this order and it becomes law in due course—[Interruption.]—on Friday, I hope it will then be put up to the Chief Electoral Officer as soon as he has been appointed to undertake the task of grouping single member wards into suitable electoral areas. [Interruption.] The hon. Member for Belfast. West (Mr. Fitt) must not be too alarmed about anything to do with this. The whole purpose of proportional representation is to ensure that basically results will not be very much affected by particular grouping of wards. The hon. Member or any other hon. Member need not be alarmed about this, although I dare say there will be people in Northern Ireland who will show alarm. I hope that no one in the House will voice this, because the whole purpose of proportional representation is to see that no matter how the grouping is done it makes no substantial difference to the outcome.
Rev. Ian Paisley: My constituency includes the Island of Rathlin. It is an isolated island, cut off from the mainland, and there are only approximately 100 people on it. Will this be taken into consideration when there is this regrouping so that each ward will have equal numbers?
Mr. Channon: I will ask my hon. Friend the Under-Secretary who is to wind up the debate to deal with that detailed point.
The Chief Electoral Officer will be required to make public provisional proposals as to the grouping of these wards for each district council area. A period of 28 days will be allowed for consideration of these proposals and for the making of objections. The Chief Electoral Officer will carefully consider any objections and representations and make his final recommendations on the grouping to my right hon. Friend the Secretary of State. Thus I hope that by approximately the end of September my right hon. Friend will be in a position to prescribe the groupings by way of regulations. That will be one of the urgent tasks put by my right hon. Friend to the Chief Electoral Officer.
His second important task will be to issue to every householder in Northern Ireland a comprehensive booklet dealing with the introduction of proportional
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representation for the 1972 elections. The booklet will explain in lay terms the principle of proportional representation, the manner in which a ballot paper may be marked and, for the information of the electorate, the manner in which the count is to be made. I hope that that will be a readable and useful document which all those interested will study.
Arrangements will be made by the Chief Electoral Officer for comprehensive training in all aspects of conducting a proportional representation type election for the electoral staff of the local authorities who will be responsible under the Chief Electoral Officer for the conduct of the 1972 elections for each of the 26 district councils.
These regulations will be made under article 4 of the order. The House will see that article 4 relates only to having on this one occasion special provisions for the local general elections to be held in 1972 and for having on this one occasion proportional representation by the single transferable vote. I believe that these local elections can play an important part in Northern Ireland.
I think that the introduction of proportional representation for these elections will, under the very special circumstances that exist in Northern Ireland, be of interest and value. They have been pressed upon us from many quarters. A number of hon. Members were anxious to have proportional representation for these local elections. Many people in Northern Ireland have also expressed this view. [Interruption.] We do not have the benefit of the advice of the Liberal Party on this occasion.
This is a once and for all occasion. It cannot be subsequently reintroduced unless specific legislation is brought forward to that effect.
My hon. Friend the Under-Secretary of State will be pleased to answer any detailed questions about the workings of the order and give further explanations that may be necessary about the proposals in relation to the electoral law order. Naturally, we shall study carefully what is said in the course of this debate.
I hope that right hon. and hon. Members will take note of the electoral law order, debate it fully, and, subsequently, before we rise for the Summer Recess, pass it so that arrangements can be made

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for the local elections which I believe to be urgent and in the interests of the people of Northern Ireland.
4.43 p.m.
Mr. Merlyn Rees: Under the Temporary Provisions Act which this House passed a few months ago it is possible for orders to be debated and to go through this House in 1½ bours. The Electoral Law Bill, which had not had Senatorial approval but which had been through Stormont, is one such measure. However, as the Minister explained, the special provisions in Article 4 for the local general elections to be held in 1972 make the Bill, now translated into an order, a fundamentally different document. A major change is made in the order. The Minister of State will recall that we put to the Government the view that when new matters were introduced in an order, especially fundamental matters, the 1½ hour procedure would not be suitable. Hence this debate.
At the outset, I want to thank the Government for making available a full day's debate on this matter. However, we do not apologise for asking for it. One part of the United Kingdom is introducing proportional representation. There has been considerable political discussion about proportional representation going on for many years. At one time I thought that it was a matter of fundamental principle to the Liberal Party. When it comes to the crunch, not only are the Liberals not here after twelve o'clock it seems that they are not here after four o'clock, either. However, we thank the Government for arranging this debate, and we on this side of the House are glad to see that proportional representation in the form of the single transferable vote is the form that has been chosen.
We want to make it clear first that we are discussing this proposal in the context of Northern Ireland. The hon. Member for Bradford, West (Mr. Wilkinson) raised a point about this. It is not new in the context of Northern Ireland. But it is important, given the sectarian problem of Northern Ireland and the fact that, since Northern Ireland became a province in the form in which we now know it, there has always been an alien population which was not in the Government. In this
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sense, proportional representation is important.
I accept that in the days of the Nationalists in Northern Ireland, because of this alienisation, even when they were elected, they preferred not to take their seats not only in Stormont but in some local authorities. In the context of the future, it is vital to lower the community barriers in order to obtain the growth of participatory politics. In order to get an acceptance of government, it is vital to get a wider range of people with a wider range of views playing a part in the Government of Northern Ireland.
We see no reason for proportional representation here. Those who believe in it are entitled to advocate it and entitled to be absent when it is advocated. However, my concern for proportional representation is concentrated on the needs of Northern Ireland. As I understand it, proportional representation has been asked for by moderate parties, by the Northern Ireland Labour Party, by the New Ulster Movement—in addition to the strong views about it held by my hon. Friend the Member for Belfast, West (Mr. Fitt) for the SDLP. What is more though not dealing with local government, proportional representation was one of the possibilities advanced in the Faulkner Government's Green Paper.
One reason why I have always been against proportional representation in terms of national government is that I have felt that it led to weak government. I still feel that that is true. However, in Northern Ireland, especially in local government with its committee situation, that is not so relevant.
The single transferable vote is the form that we prefer. There are weaknesses in it. But we prefer it because in the circumstances it has to be introduced quickly. The Minister of State has told us the history of it, and it has a history in Northern Ireland. He has explained how it works. He has explained the multi-member constituency, and I shall come back to that. He has told us that it will be decided by the Chief Electoral Officer. I think that we shall want to probe more deeply into how it will work.
The Minister of State told us by implication—quite properly he felt that he did not want to go into it in great

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detail—that the candidate must obtain a quota. The hon. Gentleman spoke about a seven member constituency and said that the quota would be just over one-eighth of the vote, and that the elector would be invited to vote by numbering his prefences. There would be no gain in "plumping. That would only ensure that the other votes that he might have given would not be spread round the other candidates.
I put one question to the Minister of State straight away. It concerns the excess of votes under the single transferable vote. What system will be used for disposing of excess votes?
I put my mind to this question over the weekend. In an explanation of it—it does not matter which one, because I found it in practically everything at which I looked—I found this:
"The excess of votes for a candidate above the quota is transferred to the other candidates in proportion to the next preferences of all those who voted for him."
The Minister of State might have said that there will be a training course for those who are to work the scheme. These excess votes, as I understand it, may be dealt with in this way: either all the votes can be transferred at partial value or a proportion of the votes can be transferred at full value. Which scheme are we to have in the North of Ireland? Is there to be a total transference of partial votes or a partial transference of full votes? We ought to know.
I come back to the order. The Minister has told us that it is in force only for 1972. We might have views about transferring the idea to a wider field, but the Government have decided that it is only for 1972. What it means is that if we are to use this scheme in the local authority elections—and I have not checked whether these elections are annual or triennial, but I suspect that it will not be for another two years before we have to apply our minds to this matter—
Mr. Channon: They are every four years. However, as they will be held so late in 1972, the next elections will be in 1976.
Mr. Rees: I accept that. The Minister said they were triennial, but in fact they
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are every four years because of the particular circumstances of this year.
Mr. Channon Mr. Channon indicated dissent.
Rev. Ian Paisley: Surely the Minister of State should tell us that the idea is that the district councils are to be elected for four-year periods.
Mr. Rees: I accept that it is every four years. It does not weaken my argument. The important point is, how are these areas to be decided by the Chief Electoral Officer? So far as the urban areas are concerned it is one thing, but in the rural districts, taking the number of members per constituency, per division or whatever it is to be called, there will be a lower number of people in the area concerned. What instructions is the Chief Electoral Officer being given in this respect?
Take Lisburn for example. I am informed that the average electorate is 2,087. If a multi-member ward were created, consisting of wards 10, 11, 12, 13, 14 and 15, which make up the town of Lisburn, the average electorate would be 2,376. On grouping the seven rural areas consisting of 4, 5, 6, 7, 8, 9 and 23 the average electorate would be 1,842. There is a variation of over 500. Yet this arrangement could be defended on the ground of geography. It has been put to me that it would be more equitable to take one of the members from the rural wards and add it to the urban wards. This would give 2,086 electors to the urban wards and 2,144 to the rural area, and this would be much more defensible. Would the redrawing of the boundaries allow this when the Chief Electoral Officer puts forward his scheme?
On the question of the deposit, given that in local authority elections in this country we have worked on the basis of no deposits, it is very difficult to argue in favour of deposits in the North of Ireland when this House is considering the same issues there. I understand the argument which the Minister has put forward about the swamping of the electoral paper in certain circumstances, but surely this is the whole purpose of the single transferable vote. If there is to be a swamping of the kind that he is concerned about, the single transferable vote would attend to this. As to the loss of deposit—
Mr. Leonard: I have been following my hon. Friend very carefully. I wonder whether the point he made is valid. If there is to be a single transferable vote system, it means that there will be a larger number of names on the ballot paper anyway. If there are seven vacancies, there could be 24 or 30 candidates. It does not seem to me that the introduction of the single transferable vote will ease the problem. Indeed, it could make it worse.
Mr. Rees: If there is swamping to that degree I can see my hon. Friend's argument, but a deposit of £10 or £15 is not enough to stop swamping of that kind. If the deposit were much greater, there would be force in that argument. In considering the loss of deposit, is it the Government's intention that, given that there is to be a party list, the loss of deposit would be governed by the performance of the party or the performance of the individual? There might well be people who would lose their deposits, but because of the party list would it not be more appropriate to consider it from the point of view of the performance of the party?
Mr. Douglas: No.
Mr. Rees: I am asking the question. I am not deciding it. I am seeking information. Could the Minister tell us on what basis the loss of deposit will be determined?
Rev. Ian Paisley: Is the hon. Gentleman aware that when the Bill was first presented in Stormont there was no question of a deposit? It was only after pressure from the Government benches that the Clause referring to deposits was written in. The Bill never envisaged elections of this sort under proportional representation. Therefore, it would have been wise for the Government here to have taken a second look and to have done away with the deposit.
Mr. Rees: We debated that point on a previous occasion and we noted the hon. Gentleman's absence, as well as his earlier views expressed in Stormont a few months ago. The point is still relevant. This is an appropriate time to put the general question to the Minister. Today we have a general debate which can run widely, but we are talking about proportional representation and about the
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order in advance of the debate on Friday. Suppose the view is generally held in this House that there should be no deposit, will there be time to amend the order before Friday or are we, because of the space of three days, making a fait accompli in this respect, or are we merely having an exercise in stating our views here without having a chance of getting the order amended? Could the Minister tell us that? Can it be altered or are we wasting our time in raising the matter?
Mr. Douglas: The Minister said, I believe, that the loss of the deposit would be related to the candidate receiving one-quarter of the quota. It depends very largely on the size of the electoral areas. That one-quarter could be a very large vote indeed.
Mr. Rees: I am grateful to my hon. Friend. In fact, I had given way to the Minister in order to find out whether we were wasting our time.
Mr. Channon: No debate in this House is a waste of time. In fact, it is possible to amend the order if it is the will of the House that it should be amended.
Mr. Rees: I am grateful to the hon. Gentleman. I was beginning to think, judging by the look in the hon. Gentleman's eye, that that was not the case.
How will by-elections be run? As the order stands there will be an ordinary non-PR election for a by-election, but if we pump for the principle of proportional representation, should there not be proportional representation when it comes to the by-elections? If small parties form coalitions on local authorities with a majority of only one, it needs only one poor chap for some reason to have to give up his seat—there could be a vacancy because of death—and the result is a one-member type by-election.
The Minister said that staff would be trained. I hope that arrangements will be made for advice to be given to people acting as agents for the various candidates. It is sometimes bad enough with a single member count. In some of the elections it will need a slide rule to get a true result.
My hon. Friend the Member for West Bromwich (Mr. Foley) raised the question of what the functions of local authorities

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would be. The Minister said that the local authority reform Act had gone through Stormont. As I understand it, there are to be area boards for a number of functions, and there will be elections from the district councils which will be administered on the basis of members who have been elected by proportional representation. Now there are to be elections by district councils for those members who are to attend and vote and play their part on the area boards.
This is rather like the situation of the Senate in the Northern Ireland governmental system in relationship to the House of Commons. They vote by proportional representation by the Members of the House of Commons for the Members of the Senate. There will be some strange results on the area boards in relation to the district councils unless there is proportional representation in the voting of the members of the various district councils for the area boards. I hope that the Minister will put his mind to that problem, because perhaps one-third or a quarter of the members of the area boards will come from the district councils.
The shape of the ballot paper is important. Anyone who is not just a member but is an agent at local elections learns a great deal. Real problems arise when there are a large number of names on the electoral paper. One can work it out mathematically to show the advantage of name Ackenschmidt rather than Zachariah.
Mr. Powell: Aaron.
Mr. Rees: The hon. Gentleman's Biblical training is greater than mine. Ackenschmidt is a variation of the name of a famous wrestler whose name began with "H" rather than "A".
A ballot paper with 30 or 40 names in alphabetical order would be about 18 inches long and confusing to the electorate. Why not arrange the names horizontally? Why not list the candidates alphabetically under party labels. Under Labour, there would be Mr. L., Mr. S., and Mr. or Mrs. V.; Under SDLP there would be Mr. M., Mr. P. and Mrs. R.; under Unionist there would be Mr. A., Mr. C., Mr. D., Mr. E. and Mrs. F., and so on. By doing it that way one would
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show the party labels and underneath them the names of the various candidates. This is not a frivolous point.
Earlier in the debate there was some questioning about the fact that we were looking at the nuts and bolts of the order which we shall be considering on Friday. Unless we look at the nuts and bolts in advance, we shall leave it to the Chief Electoral Officer to decide the issue. I am sure that he is an admirable person in every way, but he used to work for Her Majesty's Stationery Office, and that is why I raise the issue. The Chief Electoral Officer will obviously know a great deal about the size of the paper.
Captain Orr: How much paper would be used if there were 50 names?
Mr. Rees: I am sure that the Chief Electoral Officer could answer that at the flip of a finger. It is not a question that I am able to answer.
What about the cost of PR? Running a local election is often a grave problem to rural councillors. That may be one reason why rural councils often have elections for which no candidates put themselves forward. They consider perhaps the local penny rate needed for the election, and decide not to stand. That is why rural elections are often non-elections. Cost is the deciding factor. Who will bear the cost of these elections in Northern Ireland? Will it be borne by local councils?
Another important consideration is the location of polling stations. All of us, in our local ward parties, have had discussions about the location of the polling booths. It makes a difference where a road is, where a section of the population lives, where a school is sited and so on. We have all been through this kind of thing. The location of polling booths is particularly important in the context of Northern Ireland where people are grouped by religion, with slight overlaps. I warrant that it would be asking too much now, and would still be asking too much in a few months' time, to suggest that Catholics and Protestants should vote in areas to which they do not normally go. I do not know how the problem can be dealt with other than by increasing the number of polling stations. That

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will be expensive, and I hope the Minister will put his mind to the problem.
The Minister mentioned poll cards. I think he said that the free poll card which we have for national elections is not to be used for local elections. In recent months I have spoken to a number of people in Northern Ireland. One person told me that in the thick of all the murder and shooting that goes on he had been going out every night canvassing to get people to join a political party. It occurs to me that in some areas this might be a dangerous thing. It will be difficult for people to canvass and knock on doors in some areas in order to make the name of the candidates known.
Given the problems in Northern Ireland, I think that it is important to have a free delivery of poll cards. I know that we cannot have our arguments both ways. One minute we argue that the election should be on the same basis in this country as in Northern Ireland, and five minutes later we lean on another elbow and put the argument the other way. But the whole problem must be looked at according to the need of the situation, and that calls for the use of poll cards.
Those are the nuts and bolts questions that I wanted to put to the Minister, and I am sure there will be others.
There is no mention of a plebiscite. If there were to be a plebiscite this would be the appropriate and, indeed, about the only way of providing for it. I think that it would be appropriate for something about a plebiscite to appear in the order. In any event, if I am on a weak point this is a broad debate, and I am at the moment looking for a hook on which to hang some remarks on a plebiscite.
The Secretary of State and the Prime Minister in the early days of the initiative talked about a plebiscite—of that there is no doubt at all. Our view on this side is that there may well be an occasion when a plebiscite would be a sensible but that at present it would only help further to polarise an already polarised community. Another view put to me very firmly is that a plebiscite would reassure the Protestant population of the North, and on that I make only the following aside. Given the happenings of the last few months, it is very difficult to reassure the Protestant population in the North
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of Ireland: even our discussions on the Northern Ireland (Temporary Provisions) Bill were not enough. Frankly, I do not believe that there is much one can do, and certainly not by a plebiscite.
We believe that the majority of the people in the North of Ireland do not want to go into the South of Ireland. That is clear, and no one can gainsay it or argue against it. That being so, to prove that attitude by a plebiscite is merely to prove the obvious. It is a fact of life which everyone in Northern Ireland in the last three months or three years has had to take into account. If it were not so, the problem would not have arisen. We think that to have a plebiscite in this circumstance and at this time would be wrong, though we do not say that a time may not come.
If one had a plebiscite, what questions would one ask? I have so far taken half an hour just asking about the nuts and bolts of the order, about the shape of the ballot paper, and so on. What questions would be asked? The only question that one can ask that gets one anywhere is that needing the simple answer, "Yes" or "No". But it would still merely tell us what we already know. In our view, therefore, there is no point in having the plebiscite. It is not that we do not take into account the strong views expressed by the minority and the majority in Northern Ireland—
Captain Orr: I am obliged to the hon. Gentleman for giving way. I am interested in his views on the referendum. I understood that until fairly recently his party was in favour of the plebiscite—[HON. MEMBERS: "No."]—It was included in the package. Can the hon. Gentleman tell us why a referendum would polarise views in Northern Ireland when local government elections would not? It surely makes sense to have the plebiscite first and then one can have local authority elections without questions about the order or anything else.
Mr. Rees: The whole point of local government elections on PR is the aid which will be given to some moderate parties, and so on, which will do the opposite of polarisation. That is why we have been putting forward that argument.
Another factor which should he brought to the notice of the House is that

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when the local elections come in December we shall say, "Here is the order. There will be PR." But have hon. and right hon. Members noticed that these will be the first local authority elections fought on the basis of one man, one vote? There are bound to be very great changes in the representation resulting from the elections. That change should be taken into account, because many people, on both sides of the community split, who have been elected year after year may find themselves for the first time not elected. There will be profound changes at the end of the year.
We on this side hope that the elections later this year will give a status to parties which wish to play a role not only in local government but also in any further legislative assembly which may come out of current discussions. I have not made up my mind firmly, but the best analogy I know is that of the Greater London Council and the way in which it is run. That does not mean reducing Northern Ireland to a lower status by any means, particularly when one looks at the budget of the Greater London Council and at the work which it does. The great advantage that the GLC has is that it is not based on the parliamentary process, which finds it very difficult to flourish in a split community. It is based on a committee-type system. Although at the moment, we are not discussing the future form of government, it is relevant to have at the back of our minds the thought that if these local elections get off the ground and work well, there will be a pattern on which the legislative-type system can work.
I have here an article written by Mr. Erskine Holmes, Chairman of the Northern Ireland Labour Party, and published in Community Forum in 1972. Mr. Holmes wrote:
"…I would like to be able to convince all those other elements in Northern Ireland politics who could loosely be termed 'the centre' that we all must face up to the logic that P.R. spells coalition and it is time we accepted the challenge which that poses to us."
It might well be said that the idea of sectarian parties, coalitions and PR is not British, but Mr. Holmes made the following fundamental point:
"Our introspection"
—and he is referring to Northern Ireland:
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"has blinded us to the fact that Northern Ireland is normal by European standards and that it is British politics which are exceptional."
It may be because our way of conducting politics in this country is exceptional that we may not have looked at the problems of Northern Ireland in the right way. We have asked, therefore, for proportional representation, which will be a major break-through and, in our hope, will release moderate opinion to vote for those parties which are prepared to work the system.
We are talking about the mechanics of elections. We can talk about the mechanics of elections until we are blue in the face, or red in the face, but the events of the last three years, culminating in the events of the day, show that mechanics are not enough. We have to get the mechanics right, but before the mechanics contained in the order will work properly we must have a situation, which I hope will be here before the end of the year, in which the people of Northern Ireland can, without fear, put numbers against their candidate, and the candidates against whom the people put their numbers will be those who are prepared to work for a peaceful solution in a country which has had too much trouble over the last 50 years.
5.19 p.m.
Mr. Rafton Pounder: I very much agree with the concluding sentiments expressed by the hon. Member for Leeds, South (Mr. Merlyn Rees). The spirit of his speech, which certainly asked many questions, ended on a note with which everyone in Northern Ireland, of whichever community in that Province, would agree. We want only those who are prepared to work for peace.
I am not enthusiastic about the draft order, particularly article 4 thereof. The hon. Member for Leeds, South expressed the sentiment towards the end of his speech that PR for the district council elections could very easily be a dry run for PR for a future Stormont election. Therefore, in the context of proportional representation, we are discussing rather more than just the district council elections to be held in the near future. One's doubts about the relevance of the order and what it is aiming to do must also be set against the context of Stormont being in suspended animation at present.

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I have a relatively open mind about the single transferable vote. I have yet to be convinced whether it is a good or a bad system. We had it previously, some 50 years ago, for Stormont and local government elections. It is reasonable for someone to argue that all we are doing is returning to an established practice that existed at the time of the formation of the State. Where I take my stand on this matter is that, although there were differences—we know that this was so until relatively recently—between the local government electoral practices in Northern Ireland and those which pertained in the rest of the United Kingdom, the system which operated in Northern Ireland was that of the pre-1948 British system, which allowed business votes, and the franchise was restricted to the resident occupier and the spouse of the resident occupier. But those differences have now been swept away, thank goodness. Our electoral practices for local and national government are exactly the same as those for any other part of the United Kingdom.
But now, before we have got used to the standardised electoral practices, we are being asked to create yet again a divergence of the electoral practices between Northern Ireland and the rest of the United Kingdom.
As a Unionist, I believe that the cornerstone of Unionism is the maintenance of British standards in Northern Ireland. It is as simple as that. One of these must be similarity and comparability of electoral practices. But some people believe that PR is intrinsically a good voting system. They may be right, although I have my doubts about it.
My hon. Friend the Minister of State referred to this at the beginning of his speech and we were all sent a copy of the booklet "PR—Urban Elections in Ulster 1920", produced by the Electoral Reform Society, a society whose openmindedness on the subject of PR is not well known. Certainly we could do without the society's preface in its publication about elections in Northern Ireland. But what is very valuable are the statistical tables contained in the booklet. Because of a delayed aeroplane flight some time ago, I was able to settle down to work out certain statistics.
There were 60 seats—and still are—for the Belfast City Council. But in 1920 there were only three seats where
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parties which would have won on a direct voting system lost their seats under PR. It is interesting to note who the beneficiaries were. In one case it was the official Unionist Party, in another case it was the Unionist Labour Association and in the third case it was the Belfast Labour Parity. The losers were Sinn Fein, which lost two seats, and the Nationalist Party, which lost one seat. Far from supporting minority parties, it could be argued that on that occasion PR assisted the majority parties.
To be absolutely serious about this matter, taken on the 1920 basis, only 5 per cent. of the Belfast seats were affected party-wise as a result of PR, taken on the umpteenth count as distinct from those who were leading on the first count, which is the only way in which one can operate any such comparison.
Some have said that the Unionist Party has reason to be apprehensive of PR. That is not so. Any reservations that I may have are not based on that. From the straw polls that have been undertaken, the evidence is that the Unionist Party, Province-wide, would do every bit as well under PR as under the single vote system.
However, I am unhappy that we in this House in looking at the order—particularly in view of Article 4 and the new section to the order—are trying to create, not for good democratic reasons but, perhaps, for rather ignoble reasons, a new voting pattern in a part of the United Kingdom. I apologise for my phraseology, which could be neater. As I see it, however, the object of imposing PR at present is to try to weaken the position of the majority party in Northern Ireland. Some may say "That is what we want to see". But we should realise what a dangerous principle we are establishing if we pass legislation which tinkers with the democratic principle of whatever the franchise system may be in order to try to weaken the majority party which has been elected by the wishes of the majority of the population.
Mr. Paul B. Rose (Manchester, Black-ley): Would the hon. Gentleman agree that it is a democratic principle that a minority of people in the city of Derry are able permanently to keep control over that city in spite of the fact that they are a minority? Would he agree that, in achieving proportional representation, this

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is the first time for 50 years that the people of Derry can begin to run Derry?
Mr. Pounder: I do not know whether the hon. Gentleman was present when I began my speech but I said that at last we have got the practices standardised vis-à-vis elections at local government and national level in Northern Ireland and the rest of the United Kingdom. I hold no brief whatsoever for the activities of the former Corporation of Londonderry and I never have done so. The hon. Gentleman will know that my views and the oft-expressed views of my hon. Friend the Member for Londonderry (Mr. Chichester-Clark) are in complete accord. Proportional representation does not make a difference. The Harrison Boundary Commission had a look at the structure in Londonderry. PR is not a relevant argument in that context. There is a danger in the dictum of consciously and deliberately trying to alter the franchise in order to weaken the position of the popularly supported majority party.
I turn directly to the order and to certain specific questions. I notice that we are to have these elections held in every fourth year. I am not saying that that is wrong, but why are we to have a change from three years? We should bear in mind that we are not talking about just the tail end of 1972 as election time but that the order says clearly that the elections are to be in 1972 and at every fourth year thereafter. So we are establishing a set four-yearly pattern. I do not object to that but I should like to know the reason for extending it from three years.
Unlike the hon. Member for Leeds, South, I welcome the retention of a deposit system. I would have kept it at its existing figure of £25, because there is a grave danger that one could have a multiplicity of only quasi-relevant candidates. This should be resisted. Anxiety was expressed by the hon. Member about the loss of deposits and the quota system of voting. To cite one small part of my constituency from the famous PR booklet, the electorate was 17,014, the votes cast were 10,635 and the average needed to get elected was 1,330. A quarter of 1,330 is 332 votes out of an electorate of 17,014. So we are not talking in terms of very great hardship regarding saving
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a deposit. I took those figures at random from my area but I have no doubt that similar patterns could be found elsewhere if one waded through all the statistics.
I notice that the existing system has been retained for filling a vacancy on a local authority within 21 days of its falling vacant by reason of death, resignation and so on. As we are making so many changes to local government structure in Northern Ireland, and bearing in mind the problems we have had, certainly in my constituency, with by-elections for the local council, perhaps 28 days should be the period rather than 21 days. I realise that a vacancy has to be filled as quickly as possible but there are considerable administrative problems in mounting an election from cold in 21 days, choosing candidates, and so on. Unless there is Holy Writ to prevent consideration of an extension of seven days, I advocate 28 days.
I had not realised that by-elections were not to be held on PR. This only adds to the anomalies and complexities.
As the whole rating structure is being reconsidered, and as much of what was done by local authority rating will now be done centrally by Stormont, almost certainly the cost of these elections will come out of the general Exchequer rather than the local exchequer. If I am wrong about that, I should be glad to be corrected.
Belfast had 60 seats spread over 15 wards. These were reduced by the Harrison recommendations to 52 single-member wards. The single-member wards will go by virtue of the order. The order refers to grouping not less than four and not more than eight single-member wards together.
There could be sizeable district electoral areas in Belfast if more than four were grouped, because the electorates would then be about 20,000. We should try to keep government as local as possible and district electoral areas as small as is reasonable.
I regret that election postage is not to be paid. This has caused great difficulty in local government elections. I hope that this matter can be reconsidered.
We are, in a sense, talking in a vacuum. This order and all the other orders which have been consequential on the McCrory

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Report have been based on the assumption that there will be a Stormont of some form. It seems to be putting the cart very much before the horse to prorogue Stormont and go ahead with all these changes to take effect on about 1st April next.
By all means let us pass the legislation, but let us think carefully about going ahead with district council elections when the powers of these councils are restricted to bins, baths, parks and cemeteries. Eighty-five per cent. of the rate-borne expenditure in Belfast is to be transferred to Stormont, leaving 15 per cent. at maximum of present functions being retained. It is crazy to transfer these functions to an authority which is temporarily prorogued, unless Westminster is prepared to assume the local authority responsibilities for the 26 district councils.
The plebiscite was not written into the Temporary Provisions Act. It was wished on Northern Ireland by, and based entirely on, the Prime Minister's statement of 24th March. Whether one wants a plebiscite is obviously a matter for argument. The undertaking was given that a plebiscite would be held. Then my right hon. Friend the Secretary of State went further and said:
"It should be remembered that after the plebiscite there will be the local government elections."—[OFFICIAL REPORT, 29th June, 1972; Vol. 839, c. 1688.]
These undertakings having been given, it will be regarded as a gross breach of faith by the majority community if the plebiscite is shelved. I realise that the timing is difficult. Timing is difficult for the district council elections and for any elections in Northern Ireland. We cannot go on running away from elections and from the exercise of the democratic voice merely because of the danger that life may be a little difficult, whatever the election date may be. If the plebiscite is not held, that will be seen by the majority community as an apparent backtrack on an undertaking which was considered to have been made in good faith and to have been binding.
If no plebiscite is held, or if district council elections are held in advance of a plebiscite, those district council elections will be converted into a miniplebiscite. It would be naive to pretend
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that it would be otherwise. The local issues which should predominate in local government elections will be subordinated to the issue—"If we cannot have the plebiscite, let us make this election into a plebiscite". Not only will the issues which should concern the voters not be properly discussed, but there could also be some interesting results, to put it mildly.
I hope that my right hon. and hon. Friends will proceed with the haste which is necessary for a plebiscite. All the major parties in Northern Ireland, representing the vast majority of the electorate, have independently said "We want a plebiscite". There may be good reasons for not holding it for a month or so, but let it be held before the district council elections. I realise that all the nuts and bolts have to be considered. However, I hope that there will not be a mad rush to hold district council elections until the future of Stormont has been decided, otherwise not only shall we have no regional administration and no regional parliament but we shall have virtually no local government and we shall be grossly under-represented in terms in which that is normally understood by British standards of local government.
5.37 p.m.
Mr. A. E. P. Duffy: I join with the hon. Member for Belfast, South (Mr. Pounder) in congratulating my hon. Friend the Member for Leeds, South (Mr. Merlyn Rees) on his speech.
I was intrigued by one point in the hon. Gentleman's speech when he appeared to be a little surprised that the interval between elections should be as long as four years. This may be significant. Are there not grounds for reducing the term of office and the interval between elections? We are all aware of the electoral malpractices of the last 50 years in the North of Ireland. It was inevitable that those malpractices should have led to the stultification of political life in many areas. For example, how many electoral contests have been held in Derry since the war? In other areas also there has been simply no case for putting forward opposition candidates. Hence candidates have had no incentive for putting forward programmes.

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This has meant that not merely Derry but also other electoral districts have had no opportunity to choose candidates and programmes. A necessary political stimulus has been non-existent. An important training ground in the municipal sphere for young politicians has been absent. The system as a whole has suffered because it has been deprived of vitality. Paralysis must have spread across some parts of the Province.
It is easy to say where the responsibility for this lies and that the political debilitation which has resulted is the responsibility of this or that part. However, we all want to be forward-looking this afternoon and to be concerned for the revival of the health of the system and the restoration of vitality. One way in which we can do this is to make for more elections. One way of doing that is to look again at the tenure of councillors and ask whether we could not bring the practice envisaged in the order into line with what I imagine we have all had experience of in Britain and reduce the period from four years to three years.
I am sorry that proportional representation was abolished in Northern Ireland for local elections in 1922 and for parliamentary elections in 1929. Even if there had been no accompanying injustices of any kind, that action alone would have revealed a complete lack of sympathy with minority rights and, therefore, with the future of democracy in Northern Ireland. At worst it was a party manoeuvre, at best it was a psychological blunder, because above all it has made for a frozen condition in much of Ulster's political life. Anything that threatens to break that mould and provide conditions wherein genuine co-operation and real progress can become a reality, as the basis upon which a true community can be built, must be considered. This is why many of us will be looking closely this evening at the proposed proportional representation system.
Theoretically, under the single transferable vote system of proportional representation, the larger the constituency the more proportionate the representation but there are practical limitations to the principle. Ideally the whole country should be treated as one constituency. This was done for the 1925 Southern
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Ireland Senate general election, with the result that there were 76 candidates and a ballot paper more than 8 ft. long—which I imagine, comes as another surprise to my hon. Friend the Member for Leeds, South, for otherwise he would, I imagine, have mentioned it himself. My hon. Friend will not be surprised to know however, that a booklet had to be issued to the electors giving the biographical details of the candidates as a voting aid.
Those who are experienced in local elections in North America know that there always are such factors to be contended with, yet the elections are not rendered impossible. Citizens cope and there is no widespread evidence in North America of demands for reform in this respect. We must recognise nevertheless that we may have to find an equitable solution between the theoretical and practical claims of PR.
When proportional representation was in use for Stormont and when it was first used for elections to the Dail Eireann, there was a tendency to have large constituencies returning seven, eight or nine Members apiece. Such constituencies in Southern Ireland, where the PR system has continued in use till this day, were found, to be cumbersome and the theoretical advantage of increased size to be outweighed by practical considerations of manageability. Hence over the years the PR system has been modified in Southern Ireland as a result of experience gained from its use since 1921. The size of constituency or electoral district found to be most convenient from the point of view of electors, the Members elected and physical size of the area to be represented has been found to be one returning three, four or five Members apiece.
I realise that there are objections-some have been put forward already and doubtless we shall hear of others—but surely such a change in voting technique for this purpose, for this one occasion, is a small price to pay for an attempt to secure harmony in the North of Ireland.
I was glad to hear about the background and qualifications of the chief electoral officer since his contribution is clearly of crucial importance. But I was sorry that the Minister could not dwell also on the equally important contribution which will be made by all those persons who will be appointed to assist

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the chief electoral officer. However, I was pleased to hear my hon. Friend the Member for Leeds, South say a word about the registration of electors and about the publication of the annual register. We know in this country of the difficulties which attend its annual publication and the extent to which it is subject to query and to protest. I imagine that conditions could not possibly be more difficult for registration than they will be during the next few weeks in Northern Ireland, given the recent movements of population.
I hope that thought will be spared also for the use to which the register may be put and for the mechanics of electioneering. I am mindful of the plea on that matter made in the debate in Stormont earlier in the year.
The conduct of elections and the business of curbing illegal practices will call for the most scrupulous application of the law in future in Northern Ireland, and two problems in particular will demand more attention than most. One has already been mentioned by my hon. Friend, namely, the siting of polling stations. The other is the problem of impersonation.
The siting of polling stations is important not only as a matter of convenience, as in this country, but because it may make for danger to the elections. A polling station may be sited in such a way as to discourage opposition in rural areas.
I realise that it has been said that two can play at impersonation, and that is true, but on balance it seems to have been of the greatest assistance to the party in power because the party in power has usually had the best organisation.
I hope that the Minister will look again at the question of a candidate's deposit. I am not convinced that it is necessary. I was much more impressed, when I read the account of the debate in Stormont, by the argument of the hon. Member for Antrim, North (Rev. Ian Paisley) and I add to it, if I may, that election expenses themselves may well provide a sufficient deterrent to irresponsible candidatures.
I welcome the extended hours of polling but I wish to say a word about the eligibility of electors. Will the Northern Ireland register still differ from the practice in this country in excluding
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natives of the 26 counties who lack seven years' residence in the Six Counties? Much is rightly said about the desirability of parity between British practice and practice in Northern Ireland. I could understand objection being made on this score if I were convinced that it would constitute a problem, but the Safeguarding of Employment Act reduces the number of such persons to a minimum and where they are likely to be more numerous will be in certain border areas, particularly in centres of communication such as Derry, Strabane and Newry, where they are unlikely crucially to effect the character of local representation. Although they may reinforce it, I do not see how they will change it.
The psychological impact of such a change would be considerable and probably very beneficial. It will come eventually anyway, with EEC membership.
Mr. Merlyn Rees: My hon. Friend has worried me a little, though I recognise that he may be right. Is it not a fact that anyone working in the North of Ireland—I see the point about reduced numbers coming in because of the legislation to which my hon. Friend referred—would in practice be entitled to vote on the same terms as if he lived in Liverpool?
Mr. Duffy: No, not if such persons lacked seven years residence. On the other hand, if they go into the South, like people from this country who go to the South, they are able to vote in the same elections. All I am calling to the attention of the House is the need—
Mr. Leonard: Reciprocity.
Mr. Duffy: Exactly—the need for reciprocity. The psychological impact would be considerable and it would be a gesture well worth making.
Hon. Members must not delude themselves into thinking that the present nuts and bolts approach will be sufficient or even that the introduction of PR will be more than a marginal contribution unless there is also a community of interest, a minimum consensus.
How far does the essential basis for consent run in Northern Ireland? Is there an adequate political infrastructure? The recent study of Northern Ireland by Professor Richard Rose of Strathclyde University entitled "Governing without

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consensus" is a warning against too much reliance on any such answers. His survey suggests that Ulster lacks a stable majority which either supports or rejects its Government. According to his findings, it appears that Ulster lacks a middle-of-the-road majority on which moderate men can build a conciliatory coalition. His survey was completed just a month before the onset of the present strife with the civil rights march in Londonderry in 1968. How much more deep-rooted must Ulster's divisions be today? In The Guardian today there is a brief report of a recent statement by Mr. Maurice Hayes, who unhappily confirms, and he should know after his experience and his seniority in office, a lack of community of interest in Northern Ireland.
If today's troop deployments will bring the activists on both sides to their senses and allow meaningful talks that can help stimulate such a consensus to take place, the Secretary of State's gamble may come off. I hope, however, that the right hon. Gentleman realises he has undertaken brinkmanship of a peculiarly complicated and potentially explosive kind. Such military action is unlikely to be painless and there will almost certainly be suffering for innocent people who have had to put up with too much of it already. The concensus basis for the forthcoming elections may be totally absent. Possible casualties of present military activities—if the right hon. Gentleman allows himself even to appear to be departing from his own declared objective of absolute impartiality—would therefore be not only the Secretary of State's policy of conciliation and political initiative but, obviously, the local elections that structure and provision of which we are discussing.
5.53 p.m.
Mr. James Molyneaux: This major reshaping of local government was begun as far back as 1966, over two years before the so-called civil rights agitation plunged the Province into a state of confusion anud turmoil from which it has not yet emerged. The reshaping of local government was therefore a reform in the very best sense of the word. It was part of a continuing process pursued by successive coalition Unionist Governments with the aim of improving the lot and the quality of life
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of all people in Northern Ireland. They made some other experiments, such as the nationalisation of road transport, which did not contribute quite so much. It was not and is not part of the so-called reforms of the past four years which were rightly regarded by all the subversive elements in Northern Ireland as attempts at appeasement, and which were openly rejected by, for instance, Mr. Michael Farrell in his famous statement:
"We don't want reform in Northern Ireland—we want revolution in Ireland."
The failure of that policy of appeasement was writ large across the map of Northern Ireland in the early hours of this morning.
The order raises questions of sequence and timing because the new edifice of local government was designed to be built on parliamentary administration at Stormont. It has very little resemblance to the proposed structure of local government which is being introduced in England and Wales. It consists of relatively small, relatively powerless district councils. All the important services, like education, health and welfare, roads, rating, and motor taxation, are to be concentrated and centralised in Stormont and responsible not to elected councillors but to elected Members of Parliament at Stormont. It makes no sense to proceed with these drastic changes while Stormont is in abeyance. It is like trying to furnish and decorate a house before even the foundations of the structure have been provided. In the same way it is totally mistaken to legislate for proportional representation in local government without first deciding on the method to be used in local elections for a future Stormont Parliament which will control local government.
There is no sense in having one electoral system for local government and another for the Parliament in Belfast and the Parliament at Westminster. Before we start to discuss the future of parliamentary democracy in Northern Ireland, surely it would be wise to decide who was qualified to talk. It would be very rash to assume that the present Stormont Members—with some exceptions—reflect the views of the Ulster electorate, because so much has happened over the past three and a half years since the February, 1969, election and so artificial

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were the issues on which that election was fought that the composition of the new Parliament would be very different from the composition of the present Parliament.
Now it seems that the plebiscite is to he pushed out of the way, mainly because certain people would not like the answers it would provide. The obvious alternative would be to have a Stormont General Election. Unlike a plebiscite, it would not require legislation. It would enable the people to express their wishes on the constitution through the ballot box and it would also produce authentic representation which could speak with real authority so that any settlement arrived at as a result of the talks would have a degree of permanency.
There is a specific problem affecting an area in County Fermanagh. There has been an unpopular proposal to join the Churchill polling division to that of Garrison. Will the Minister ask the Secretary of State to take into account the views expressed in writing of over 80 per cent. of the electorate in that area? They have put forward some sensible commonsense suggestions and we would like them to be taken into account.
My main objection to the proposed change to proportional representation is that it has caused and will cause endless confusion. It is possible that the electorate will be asked to vote in local government elections on proportional representation and within one month to be asked to vote in a General Election for this Parliament, using what will now be regarded as an out-of-date method under the Representation of the People Act. That should be borne in mind. That kind of complication is surely not in the best interests of democracy.
Another very valid objection is that it is a departure from British standards of parliamentary democracy and procedure and it would seem to be providing in advance very useful ammunition to agitators in the future who would then claim they had a right to the same practices and standards as those to which we in Great Britain are entitled. Their claim would be particularly valid if Eire in the meantime succeeded in getting rid of proportional representation, something it tried and failed to do but which no
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doubt one of these days it may succeed in doing.
There is another undesirable aspect of proportional representation, particularly in local government. This point has been made in another context from the Opposition benches. At present, many councillors are local people representing comparatively small wards of perhaps not more than 500 electors. The political or religious views of the councillor are of little account. He is supported by people of all faiths because they know him, he has worked with them, he is a neighbour and he has given service to the community. The proportional representation system—as my hon. Friend the Member for Belfast, South (Mr. Pounder) suspects, probably rightly, introduced for the purpose of subverting the normal processes of parliamentary democracy—will destroy this local contact. The proposed system of multi-member wards, confronting the electorate with a vast ballot paper of blocks of candidates sponsored by various bodies bearing divisive labels, will have an adverse and opposite effect to and from what is intended by the promoters of this idea of proportional representation.
My hon. Friend and others have extolled the virtues of proportional representation. I wonder why Englishmen are so unselfish. Why are they determined to withold its benefits, if there are any, from their own countrymen? Will it be said that Northern Ireland is a special case? Special cases in this Chamber have a habit of becoming a general rule, as we saw not so long ago. It may be said that it is unnecessary in Great Britain.
My hon. Friend the Member for Bradford, West (Mr. Wilkinson) pointed out earlier that Great Britain has minorities. We have a large minority, which unhappily is not represented here at the moment as so often happens. I refer to the 2 million Liberal electors who over the past 50 years have had no hope of ever forming a Government. For that reason, I suppose the United Kingdom has been misgoverned for 50 years. Are they to be for ever deprived of the right of proper representation which, under proportional representation, would presumably amount to 40 Members and not the six absentees they have at the moment?

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What of the Scottish and Welsh Nationalists who secured a bit of a look-in in the news over the weekend? In Great Britain there are roughly 500,000. They too are unlikely to be able to form a Government in the foreseeable future. Should not they have these enormous benefits conferred upon them?
I share the objections of most hon. Members in this House to proportional representation as a principle, but I am willing to be converted, first, if it can be shown to be in any way superior to the existing system and if it will make any significant change and, secondly, if we are so convinced, if it is resolved to extend the practice to the whole of the United Kingdom.
6.4 p.m.
Mr. Dick Leonard: I strongly regret the rather churlish reception given by the hon. Member for Antrim, South (Mr. Molyneaux) to the proposals for proportional representation contained in the order. The Ulster Unionist Party in Northern Ireland bears a heavy responsibility for the collapse of democratic rule in the Province in the past. We can only hope for greater success in future if the hon. Gentleman's party is prepared to enter into the spirit of the arrangements which are proposed today. It will bode ill for the future of Northern Ireland if the Ulster Unionists are not prepared to approach these proposals with a more open mind than the hon. Member for Antrim, South has shown today.
I warmly welcome the order, but I should like to utter one or two words of warning to the Government. These words are spoken in, I hope, an entirely constructive and friendly way. They are in no sense designed to cause any difficulties for the Government.
Over the years a large number of words must have been spoken in this House on the pros and cons of systems of proportional representation. Though I believe there are strong arguments in favour of proportional representation as a system, there are also a considerable number of drawbacks. I do not think that in principle the case for proportional representation has been made in such a way that it is equally applicable in all countries and at all times. One has
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to take into account many other circumstances in any society that one is considering. But I believe that there are certain circumstances in which there is an imperative need for a system of proportional representation to be introduced if peace, justice and harmony are to flourish.
I retain the view that the present Anglo-Saxon plurality system is the best for parliamentary elections in Britain. This is because we have hitherto been a pretty homogeneous society without having minorities of a religious, linguistic or national character which have felt themselves alienated from society and so discriminated against that they have been cut out of the mainstream of political life. It is no accident that proportional representation was first introduced, and has been most successful, in those democratic societies which have such minorities: in Denmark in 1855, at a time when there was a large German-speaking minority in Schleswig-Holstein, in Switzerland in 1891, and in Belgium in 1899.
Because Northern Ireland does have a strong religious minority, which has felt itself alienated and discriminated against in the past, a more proportional system than the Anglo-Saxon plurality system is highly desirable. The system proposed is that of the single transferable vote. I wish the Government would use this term more frequently, instead of just talking about proportional representation. I do not want to split hairs, but the single transferable vote will not result in proportional representation; it will result in more proportional representation than the system which it is designed to replace. This is not a damning criticism of the single transferable vote; it is not a criticism which could be applied to this system rather than to many others.
I should like to refer to the view of Professor Douglas Rae of Yale University, one of the world's leading authorities on electoral systems, who, in his book "The Political Consequences of Electoral Laws", says:
"All electoral systems tend to award more than proportionate shares of parliamentary seats to parties with large shares of the vote, and to award less than proportionate shares of seats to parties with smaller shares of the vote."
The single transferable vote undoubtedly leads to more proportional

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representation than the plurality system which exists in Britain, the United States, and other Anglo-Saxon countries. Equally, it will lead to less proportionate representation than party list systems in Israel, the Netherlands, and a number of other countries. It can be described as being about half-way between the two types of systems—more proportionate than the Anglo-Saxon system, less proportionate than the party list systems.
But one feature of the single transferable vote system is that the larger the number of candidates to be elected for each electoral area, the more proportional the system becomes. Article 4(4) says:
"The Chief Electoral Officer shall make and publish proposals regarding district electoral areas and the wards which those areas are to contain and in doing so shall regard five, six or seven, as being the desirable number of wards in any district electoral area unless the total number of wards in a district or geographical considerations make another number more suitable for any particular district electoral area."
I hope we can receive an undertaking from the Under-Secretary that guidance will be given to the Chief Electoral Officer that in all normal circumstances five should be the minimum number of councillors to be elected for any area, and that if there is to be a variation in the recommended numbers of five, six or seven the variation should be in an upward direction rather than downward, because the whole purpose of introducing a system that is meant to be more proportional will be defeated if the number of councillors to be elected for an area is much less than five.
We should be playing with fire if we tried to oversell the system, if we tried to raise expectations that we shall not be able to satify. For example, the idea should not get around in Northern Ireland that any party which secured 15 per cent. of the votes would be guaranteed 15 per cent. of the seats, because that will not be the case. For an illustration we can see what happened in the elections in the 1920s under the single transferable vote system. In the 1921 Stormont election, for instance, the Unionists received four more seats than they would have been entitled to on a strict mathematical division of their votes and the Sinn Fein four fewer seats. The Unionists, who were mathematically entitled to 32 seats in Stormont, received 36, and the Sinn Fein received only six instead of 10.
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My second point is that a guarantee is needed that no future Northern Ireland Government will be able unilaterally to reverse the proposals we are discussing or to change to another system without the express agreement of this House. I know that the order applies only to the elections to be held this year. It would be fatal if the belief spread in Northern Ireland that the concern of this House that there should be a more proportional system will lapse with the election which will take place this year. The people of Northern Ireland must be assured that the House will have a continuing responsibility for the arrangements, because it has happened before that the Northern Ireland Government have gone back upon the decision of the House as to the type of electoral system that should be used in Northern Ireland. In the 1922 settlement there was an implicit understanding that proportional represenation would remain in both the North and the South of Ireland. It has remained until this day in Southern Ireland, but in Northern Ireland the Government of Lord Craigavon lost very little time in the 1920s in scrapping the system. Only one set of local elections, in 1921, and only two elections for Stormont were held under proportional representation.
In his book "The Government of Northern Ireland" Nicholas Mansergh comments that
"The peculiarities of the situation appeared to demand some such system of election."
some such system as proportional representation—
"The minority, embittered by the partition of the country and resentful of government by their traditional opponents, were naturally sensitive to the smallest infringement of their rights. In such circumstances the Government displayed a frankly aggressive attitude in abolishing P.R. for local government elections in 1922 and for parliamentary elections in 1929. Even if there had been no accompanying injustices of any kind, this action revealed a complete lack of sympathy with the minority outlook. At the worst it was a party manoeuvre; at the best a psychological mistake."
Mr. John E. Maginnis: Is not the hon. Gentleman arguing against his own case? He said earlier that at the 1921 election the Unionists received four more seats than they would have been entitled to on a proportional basis.
Mr. Leonard: The point I was making was that neither the single transferable

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vote system nor any other system will give exactly proportionate representation, but there is no doubt that—as the hon. Gentleman will see if he reads the reports of debates in Stormont at the time—the Unionist Party thought that it would do much better if it abolished the system of proportional representation and all the minority parties thought that they would do a great deal worse. Whether or not its belief was well-founded, there is no doubt that the Unionist Party believed that it would improve its representation considerably by abolishing PR.
Mr. Stanley Orme: In fact, in the 1929 Election following the abolition of PR, the Unionist Party's representation in that Assembly went up from 32 to 39 seats.
Mr. Leonard: I believe that to be so.
We know that there were other injustices accompanying the abolition of PR in particular, that a degree of gerrymandering was introduced into elections in Northern Ireland which was a disgrace to the good name of this country, going far beyond any exercises in the same direction which we have known in Britain proper at least since the 1832 Reform Act.
An example of the effect of this gerrymandering is given in Mansergh's book. In an election for the Omagh Town Council 5,000 Unionist voters suceeded in electing 21 councillors, and 8,000 Nationalists elected only 18. So an area with a large majority of Nationalist voters fell under Unionist control. My hon. Friend the Member for Sheffield, Attercliffe (Mr. Duffy) has already mentioned the city of Derry, where a similar scandalous state of affairs was allowed to continue for a very long time.
Mr. Maginnis: That was under the ward system. The matter can be argued the opposite way. There are even wards in Belfast where Unionists are underrepresented in the same way as the hon. Gentleman is trying to show.
Mr. Leonard: There are two points at issue. One is whether it is better to change over to proportional representation, and the other is whether the Anglo-Saxon plurality system as administered in Northern Ireland was administered with the same degree of fairness and scruple as
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it was on this side of the Irish Sea. I have no doubt that it was not. That strengthens the case for having a system of proportional representation in Northern Ireland, under which the drawing of electoral boundaries is much less important, because it is much more difficult to gerrymander under that system than under the Anglo-Saxon plurality system.
The point I want to make very strongly is that the House must reserve for itself in future the right to confirm or vary the electoral arrangements for Northern Ireland, the arrangements which we are discussing and those which it is to be hoped we shall discuss in the not-too-distant future for the restoration of some form of representative government for Northern Ireland as a whole. The matter is not one which can be handed over to any representative assembly in Northern Ireland which may be produced to replace Stormont, if the minority in Northern Ireland is to gain any confidence that in the future its rights will be respected.
The Chief Electoral Officer will have a difficult but essential task to fulfil in the arrangements which we are now discussing. There is no precedent in British law for the appointment of such an official, although many Commonwealth countries have appointed similar officials. In India there is an election commissioner, an independent official, who has presided with great authority over parliamentary elections at both federal and State level for the last 25 years.
No citizen of Northern Ireland could hope now to fulfil this difficult role and be accepted as being completely impartial by every party and faction in the Province. I doubt whether any English, man could do so, whether Protestant or Catholic. If one claimed to be an agnostic, the first question asked by an Irishman would be "Are you a Catholic agnostic or a Protestant one?" We have been told that Mr. James Jones has been appointed. I take it from his name that he is a Welshman.
Mr. Douglas: He is a Scotsman—an excellent choice.
Mr. Leonard: I hope that Mr. Jones will be more acceptable in Northern Ireland than an Ulsterman or an Englishman might be. I hope, too, that when

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he is considering the appointment of his staff he will consider approaching the Indian Government to see whether they are prepared to second a senior official from the election commission, a body which has built up a great deal of experience over the years. A Moslem, Sikh or Hindu might find it easier to satisfy all factions in Northern Ireland of his impartiality than an English agnostic.
The question of deposits has excited some controversy in the House. I am not happy about the provision for deposits in Northern Ireland local elections. However, I accept that there is the threat, given the lack of respect for law and democratic process which exists amongst many elements in Northern Ireland, of attempts to sabotage the elections by flooding the ballot papers with frivolous candidates. The Government are right to take steps to try to prevent such sabotage.
There is one anomaly which might occur because of the provision as it is now written in the order. As I understand it, a deposit will be forfeited if any candidate fails to get more than a quarter of the quota in the electoral area for which he is standing. That figure will vary as a proportion of the total vote according to the number of candidates to be elected from that area. If the electoral area returns seven members, the quota will be one-eighth of the first preference cast plus one vote. A quarter of that would be one-thirty-second of the first preference cast, which would be about 3 per cent. If an electoral area returns five members, the quota will be one vote more than one-sixth of the first preference cast. In that instance, to save the deposit one would have to get one-twenty-fourth of the first preferences about 4 per cent. of the whole.
It would be preferable to write in a percentage figure, which might be 2 per cent. or 3 per cent., which would apply to all first preferences in every electoral area irrespective of the number of candidates to be returned. It would create a sense of injustice if a candidate in one area had to forfeit his deposit while a candidate in another area with a lower percentage of the first preferences retained his deposit.
I congratulate the Government in introducing an enlightened and beneficial order. I hope that it will ensure that
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local elections in Northern Ireland take place under conditions of fairness for the first time in 50 years, and that it will prove to be a seed from which future tolerance and peace in Northern Ireland may grow.
6.25 p.m.
Rev. Ian Paisley: We have before us an important piece of legislation dealing with the machinery of democracy in Northern Ireland. There are many features about the order which take the form of the Measure which was sponsored by the Stormont Government in the Stormont Parliament. Some of those features I wholeheartedly welcome, and they have been welcomed by many hon. Members.
I welcome the appointment of the Chief Electoral Officer. It is long overdue in Northern Ireland. All hon. Members will agree that animosity has been engendered by the preparation of electoral lists. On occasions there was deliberate discrimination and the dropping of certain eligible poeple from the lists. When I first fought the Bannside constituency, a man who was 70 years of age was on the list and had a vote. It was known that he worked and voted for me, and when the list came out for the next election he was deliberately dropped.
That is not an isolated case. That sort of thing was happening all over Northern Ireland. I welcome the strict supervision of electoral lists that there is to be and that the chief electoral officers will have the job of seeing that everybody who has reached the age of 18 and is eligible to cast his or her vote for the candidate of his or her choosing is on the electoral list. That point needs to be stressed. It will be welcomed by all right-thinking people in Northern Ireland that at least the preparation of electoral lists has been taken out of the political arena and brought into the open where it can be seen that justice is being done.
I also welcome the fact that the order deals with local government election expenses. Under the old system a person could spend as much money as he pleased to get elected to a local government authority. That was ridiculous. Many candidates spent at least £1,000 to get themselves elected to the Belfast City Council. It was entirely wrong. I am glad that parliamentary candidates will

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have to submit their expenses and that their expenses will he limited.
The deposit will not have the effect which many hon. Members think it will have. If people seek to upset the electoral system and fill up the ballot paper with candidates, then £15 a candidate will not deter them. As the number of votes which will make them lose their deposit will in many cases be small, the deposit will not be the deterrent which many hon. Members think it will be.
My party will not make heavy weather about proportional representation. Under any system of election the majority in a district will be successful in getting their candidate elected, no matter what system of election machinery prevails. However, proportional representation destroys the personal relationship between the individual member and the people whom he represents in multi-member wards. When seven people represent a large area, the people cannot look to one person as responsible for representing them and bring their views before the local council. I think that in such circumstances there is the destruction of the personal relationship between the member and the constituency he serves.
There is one matter which gives me great concern. Although it will not be shared by many hon. Members, I feel that I would be lacking in my duty if I did not mention it. There is grave unrest in Northern Ireland about the promise, given by the Prime Minister and emphasised by the Secretary of State, that a plebiscite will be held to deal with the question of whether Northern Ireland is to remain part and parcel of the United Kingdom. When the Secretary of State was pressed by the Opposition about the timing of the plebiscite, he was adamant in saying that it would come before the local government elections. That was clear, and HANSARD will bear me out.
The hon. Member for Leeds, South (Mr. Merlyn Rees) mentioned today the Northern Ireland Labour Party and gave a lengthy quotation from one of its members. The Northern Ireland Labour Party has said that the plebiscite should take place before the local government elections. The Alliance Party has said the same. So have other parties. As
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the hon. Member for Belfast, South (Mr. Pounder) has said, if we do not have the plebiscite before the district council elections, those elections will be turned into a plebiscite, which is the very thing that the House says that it wants to avoid. [Interruption.] We in Northern Ireland who know the feeling of the people there have a right to state their view. If we do not hold the plebiscite first, the local elections will not be fought on the issues on which they should be fought.
The whole purpose of the IRA campaign of terror was to take Northern Ireland out of the United Kingdom. Surely the people of Northern Ireland have the right now to the fulfilment of the promise that the plebiscite would come first. They did not ask for that promise. They did not agitate for a plebiscite. It was promised to them in the so-called initiative of Her Majesty's Government. Surely now they have the right to say "Give us what you promised." Let us state before the world where we stand.
I do not believe that the result of such a plebiscite would be a foregone conclusion. I believe that the vast majority of the minority would say that they want to remain part and parcel of the United Kingdom. There seems to be a feeling in the House that the entire minority want to cut themselves off from the United Kingdom. I believe that having the view that they wish to stay in the United Kingdom registered in a plebiscite would be a vital step forward to peace and progress and some sort of normality in the situation. This is an important point and the House should not miss it at this moment.
Many people may say that we should press ahead with the district council elections and have proportional representation. I believe that proportional representation should not be over-sold, that people should not be led to think that by proportional representation we shall have a panacea for all the troubles in Northern Ireland. That will not be the case. The great issues of the moment will still have to be discussed and will still have to be dealt with. The Government should have regard to what they are doing in postponing the plebiscite. If Northern Ireland is fit to have district council elections, it is fit to have a plebiscite.
Mr. Orme: Does not the hon. Gentleman feel that he is trying to over-sell the plebiscite and that he has a responsibility in this matter? Does not he feel that to hold a plebiscite at present could be highly dangerous to the elections which both sides of the House want this year?
Rev. Ian Paisley: It is never highly dangerous for the people of a country democratically to have the right to express themselves on a burning issue. The hon. Gentleman and his right hon. and hon. Friends wanted a plebiscite on British entry into the Common Market because it is a burning issue. In Northern Ireland we have a burning issue that has divided the community, that is the talking point throughout Northern Ireland. Surely the people of Northern Ireland have a right to express themselves about it.
Mr. Russell Kerr: The hon. Gentleman tells us that this is a burning issue. Would not he confirm that we would have a conflagration?
Rev. Ian Paisley: No. I believe that a conflagration can be largely avoided if the people of Northern Ireland have the opportunity to say democratically what their future is to be. This House should know the feelings of the ordinary people of Northern Ireland. By that I do not mean just the feelings of the official Unionists, or any other brand of Unionist. The issue goes right across the board to include the Alliance Party, the Northern Ireland Labour Party and other parties.
The hon. Member for Romford (Mr. Leonard) said that the Northern Ireland Government had changed the voting system envisaged in the 1920 Act. It should be put on record that the Act gave them the right so to do because it contained a provision entitling them to change the system if they wanted to. In Southern Ireland the Government would like to change the system but are tied to the referendum—plebiscite, if hon. Members prefer the word. There was an attempt to destroy proportional representation but it failed.
Mr. Leonard: I did not contest that the Northern Ireland Government had the legal right to change the system. They did it by Act of Parliament in Stormont in a perfectly legal manner. I
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suggested that they did not have the moral right to do it because it was understood at the time of the settlement in 1922 that Catholics in Northern Ireland would feel apprehensive, in the same way as it was understood that Protestants in the South of Ireland would feel apprehensive. It was implicit in the agreement that proportional representation would be adopted both North and South in order to reassure the understandable fears of both communities. I am challenging not the legal right to change the system but the moral right.
Rev. Ian Paisley: I go along with the hon. Gentleman but I thought that he more or less stated the case in such a way as to put some sort of blame on the Northern Ireland Government for doing it. It should be remembered that, under the proportional representation system, in the first Parliament of Northern Ireland the minority did not take any part but withdrew completely from parliamentary life. It should be remembered that the Unionist Party then divided itself into a Government party and an Opposition party in order to carry on parliamentary business. However, I am not labouring the point. If I misunderstood the hon. Gentleman, I apologise. But I thought that for the record it should be stated clearly that the Northern Ireland Government had a legal right to change the system—a right given them by this Parliament. If the United Kingdom Parliament had wanted to keep proportional representation for ever, it could have stipulated as much in the Act. So the United Kingdom is really to blame. Let the United Kingdom take a wee bit of the blame for the Irish problem.
6.39 p.m.
Mr. Michael English: The House is in danger of concentrating on the issue of the plebiscite when we are supposed to be discussing the electoral system for the district councils. I understand that hon. Members opposite wish to do so but that is not what the principal subject of the debate is supposed to be. I share the view of my hon. Friend the Member for Leeds, South (Mr. Merlyn Rees) that no one on this side of the House is against the plebiscite in principle. As the hon. Member for Antrim, North (Rev. Ian Paisley) has said, some of us were pressing for a

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plebiscite on another issue. But, clearly, a plebiscite must be a matter of the most delicate timing in a situation such as that which exists in Northern Ireland.
By merely discussing the question of timing—which hon. Members opposite are inclined to do—they are, clearly, forgetting the principal object of the exercise. If the object of the exercise, as my hon. Friend the Member for Leeds, South said, is merely to prove the obvious, what is the point of doing it at this stage?
Presumably the sort of question that should be asked—and this needs to be clearly decided—is, "Would you prefer that the place in which you live should leave the United Kingdom and be part of the Republic of Ireland, or not?" It seems clear that a plebiscite will serve no useful purpose if it merely relates to the totality of the counties of Northern Ireland. It will serve a useful purpose only if broken down into districts—and even polling districts—when at last one would be able to see the difference that Carson and Craig made in the days before the First World War, and during that war, when the present area of Northern Ireland was created, when two counties were added, the majority of the inhabitants of which were Catholics, to the four counties with a majority of Protestants. If that is the purpose of the plebiscite, nobody who has advocated it has yet said so. We must make clear for what purpose we want the plebiscite.
Mr. Kevin McNamara: Would not my hon. Friend agree that if we are having plebiscites on what is or is not to be part of the United Kingdom, 50 million people on this side of the Irish Sea might like to be included?
Mr. English: I do not know whether people in any part of the country on this side of the Irish Sea would like to move the place in which they live outside the United Kingdom, with the possible exception of a small portion of Wales—but I do not think that they want to move into the Republic of Ireland. That was the way in which I phrased my question. I was very careful about it, as my hon. Friend will see when he reads the OFFICIAL REPORT.
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I turn to the subject that we are primarily discussing. I share the views expressed by my hon. Friend the Member for Romford (Mr. Leonard). This order declares as the law something that is an impossibility. It says
"Any contested election … shall be according to the principle of proportional representation, each elector having one transferable vote."
Like nearly every hon. Member except a small group of people who are not present to advocate one of their distinctive views—the Liberals—I believe that for the purpose of the Government of the United Kingdom the British plurality system is most appropriate, because it produces two strong parties, either of which is capable of governing—something that proportional representation systems like that of the Weimar Republic before the war failed to do, and something at which we see the Netherlands not readily successful today.
The single transferable vote system is not a proportional representation system. Virtually every hon. Member who has referred to it has said that. I hope that the Government will stop calling it a proportional representation system for exactly the reason expressed by my hon. Friend the Member for Romford. The people might believe that it is, but they will find out after the election that the results do not represent any exact proportion. The different parties will represent the people in an obscure proportion.
A single transferable vote system gives any surplus of votes from the votes of the highest candidates and the lowest candidates to people who are moderate in the view of the original first preference voters. That is not necessarily desirable in the Irish situation. The immoderates on both sides—we all know about their views, and the views of this House are quite plain about them—will be precisely the people who are excluded by the single transferable vote system. There may be arguments for that, but I do not share them, because I believe that in a situation like that in Northern Ireland a representation of extremists, however small it may be, gives them a legal channel—the possibility of becoming elected and a platform upon which they may legally express their views, without having to resort to bombs and explosives,

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or the other means to which they have been resorting.
By the single transferable vote system we are discouraging the possibility of extremists being elected, whereas a proportional representation system would elect everybody in exact proportion to the votes cast. A true proportional representation system is therefore desirable. I do not oppose the order; I realise that the single transferable vote system may be better in the Northern Ireland context than what has gone before. The Government have clearly realised this fact—I believe that they have introduced it only because of time, as my hon. Friend the Member for Leeds, South has said. But if they intend it only for this election I hope that they will assure the House that they will undertake to study two things: first, the results of the elections under this system, because I believe that they will be extremely strange, as they were, in some cases, when the system formerly applied; and, secondly, what sort of truly proportional representation system is appropriate for Northern Ireland.
If the Minister wants my thoughts on this matter, I suggest that we should have something much more akin to the system that is used for the election of the Dutch Parliament—the list system. It may not be appropriate for the election of the Parliament of a sovereign State, but it may be appropriate in the context of a local government election, such as this. I say that because, first, it represents everybody's views in precise proportion to their size, and, secondly, it causes a person to realise that when he casts his vote he is not necessarily casting it against something that he deeply believes in. A supporter of the Labour Party may be a fervent and passionately devoted Unionist. We should therefore probably get a small Irish Unionist Labour Party.
There is a whole series of possibilities, and if we construct the system aright we can ensure that the whole population chooses the people they want. It would be salutary to both Catholic and Protestant in Northern Ireland to know that a Unionist who did not believe in discrimination against the Catholics, and said so, had a greater chance of being elected than an extremist.
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It is possible to construct such systems to ensure that voters are represented by the people they believe in.
I suggest also that if we are going in for this electoral system then the abolition of something of great use and moment in our present electoral system—only mentioned by the Minister—the single-member constituency—is odd, because the single transferable vote system can be applied to single-member constituencies. If we are to abolish them, why did not we go in for entities such as the whole city of Belfast and elect a truly representative council? Instead of that we have created strange, artificial constituencies of five, six or seven wards, voting for five, six or seven members. I suggest that a true proportional representation system for this election would be best for Northern Ireland and best, therefore, for the United Kingdom as a whole.
6.48 p.m.
Mr. J. Enoch Powell: I am glad to follow the hon. Member for Nottingham, West (Mr. English) because he and I have recently, in a different context, been allied in support of the proposition that there is no substitute for legislation and, where the United Kingdom is concerned, no substitute for legislation by this House.
There is a respect in which this order marks a definite phase in the administration under the Northern Ireland (Temporary Provisions) Act. This is not actually the first order laid before the House which has not also, in its totality, been through the normal stages in the Northern Ireland Parliament; but it is the first order containing a major provision which has had no prior legislative consideration by any other Parliament. We are therefore today being asked, not indeed to approve, but to consider, in the form of delegated legislation—in non-legislative form—what is a new legislative proposal and a legislative proposal of great and far-reaching importance. That has come out with every speech as the debate has proceeded.
We not only labour under the disability of not having a Committee stage; we also recognise the disability of having no Report stage. My hon. Friend the Minister of State was challenged by the hon. Member for Leeds, South (Mr.

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Merlyn Rees) as to whether the Government would listen to any of the views put forward, however strongly, by the House during this "take note" debate. With some evident reluctance, my hon. Friend got to his feet and said that the order could be altered before it was presented for a "Yes" or "No" at the end of this week. One then realised at once what was the difference, even so, between proper legislative procedure and such amendment as my hon. Friend was prepared—at any rate theoretically—to consider.
This House, when it legislates, is not satisfied, after points have been made in discussion, after new vistas have been opened up, to be told that the Government will take note of them but that the form in which it may do so must be taken or left. It is as well we should realise that we are now facing one of the consequences which were pointed out when the Northern Ireland (Temporary Provisions) Act was passed, namely, that we are usurping in terms of delegated legislation, with all its weaknesses and inconveniences, what ought to be a function for proper law-making.
My hon. Friend the Minister of State endeavoured to tell the House that this was an isolated matter which could be kept completely encapsulated within the range of this order, namely, the local government elections in Northern Ireland in 1972. There is no hon. Member in this House who can compete with my hon. Friend for the appearance of innocence. No one can make propositions to the House with the bland innocence of which my hon. Friend is capable. Yet one felt that even he almost dropped his mask when he sought to tell the House that we were only considering the Ulster local government elections of 1972. Every speech which has followed has shown quite clearly that we are considering a great deal more than that.
Are we not considering subsequent local government elections in Northern Ireland? The very grounds on which Article 4 of this order is commended to the House are not grounds, agree with them or not, which any hon. Member thinks will disappear in four years, eight years or 12 years. If they are valid at all, they are valid for local government in Northern Ireland as far ahead as the eye can see. Let us recognise that what
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we are doing, in this one debate and by delegated legislation, is taking a decision about the appropriate franchise for local government authorities in Northern Ireland.
It does not stop there. One hon. Member after another has pointed out that the same arguments which apply, if they do apply, to local government elections in Northern Ireland would have scarcely less force if it were a question of again electing a legislative assembly for Northern Ireland, and scarcely less force when it comes to Northern Ireland sending representatives to this House whether under the present system or any future system. So it is not only local government in Northern Ireland, nor only 1972, but the representation of the people of Northern Ireland, and one of the most basic facts about the representation of the people—the form of the franchise and the exercise of the franchise—which is before the House in this, in practice, one and only debate.
The matter does not even stop there. The question—I must heed the warning of the hon. Member for Nottingham, West—of a single transferable vote in elections was discussed at some length in the Green Paper of the Stormont Government. I have read and re-read with attention the arguments urged on both sides in the relevant paragraphs, where it was put forward as a subject for discussion. I cannot find one of them, one way or the other, which is not just as relevant to elections in Great Britain. There is not a single argument there which, though admittedly against a background of different circumstances, could not be urged one way or the other in respect of Great Britain. Perhaps unawares, several speeches—ah! Perhaps it is an accidental but at least it is a fortunate apparition that at least there should be one attender from the splinter party in the United Kingdom Parliament. Aptly enough I was just saying when the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) entered the Chamber that several speeches have betrayed a realisation that in his decision we cannot fail to be stating something doing something, which is of relevance to the franchise of the United Kingdom as a whole. In other words, this afternoon the House of Commons has been engaged in one of the most important debates in

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which it can engage. It finds itself taking, admittedly in a hole-in-corner way, for one election in local government in one part of the United Kingdom, the sort of decision which it ought only to take in legislative form for any part of the Kingdom.
I have referred so far only to the scope of the decision; but every speech has opened up new vistas as to the content. The whole speech of the hon. Member for Leeds, South illustrated how, once one raises the question of the single transferable vote, all kinds of subsidiary matters have to be discussed and decided, which will affect its application, which will influence its fairness, and which ought to be maturely considered before a change is made in the system.
If I may, I will refer only to one such consideration which has featured in only two or three speeches and yet I think is of great importance. It was mentioned by the hon. Member for Antrim, North (Rev. Ian Paisley) and one or two others. It is the fact that the single transferable vote destroys one of the most important characteristics of representation, namely, the personal identification of one representative with one constituency and with the inhabitants of that one constituency. I imagine it has been the experience of many hon. Members, in that overlap which occurs in Great Britain between the functions of parliamentary and of local representatives, that their constituents have been reluctant to approach, as they should have done, their own local councillors in cases where there were several councillors representing the same ward and where there was therefore no unambiguous responsibility of one councillor to all the electors in that ward. In my experience there has been an equal embarrassment on the part of a Member of Parliament in suggesting that a constituent should go to one councillor rather than to another.
If that has occured under a system in which there are three councillors for one ward as has commonly been the case under our local government system here, how much more difficulty would there be with the system of the single transferable vote which is being proposed for Northern Ireland, where there could be no possible identification between an individual elector living in a particular
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village and the person, whatever might be his political views, to whom he had the right to go with any local concerns or difficulties?
Mr. Leonard: I see the force of what the right hon. Gentleman says. But will he consider the position of a Catholic—or, for that matter, a Protestant—in Northern Ireland if he has only one representative who may not be of the same faith? If there are seven representatives to whom he can go there is a strong possibility of there being someone of his own faith and even of his own political persuasion to whom he can go. Many of us represent constituencies where more people have voted against us than for us, and they may have many different views. Is there any strength in this counter-argument?
Mr. Powell: That may be so, and can envisage circumstances such as the hon. Member for Romford (Mr. Leonard) describes. That does not alter the simple argument that I was putting forward, which is that the consequences of the single transferable vote are far-reaching and that before introducing such a change, even in the context in which we are asked to do so by this order, there should be far more consideration and far more exploration than have been possible. There ought to be at least a Committee stage and a Report stage before we proceed to approve such a change. So my first reason for saying that I do not believe that Article 4 ought to be in this order is that Article 4 does what ought not to be done by order.
There are other reasons, too. They are reasons which relate not necessarily to the desirability of a change of this sort or to some other form of proportional representation—
Mr. Merlyn Rees: Before the right hon. Gentleman leaves the phase of his speech that he has been developing with such force during the past few minutes, may I put this point to him? He will recall that we on this side of the House made the point that because of the important and peculiar nature of proportional representation, there was an extra day's debate. On the occasion to which the right hon. Gentleman referred the Minister made the point, in however general a fashion, that

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the views of this House would have to be taken into account.
The right hon. Gentleman has spoken about the new vistas which are opening. May I draw to his attention a vista which has been opened by the strength of his own argument? Article 4(4) says:
"The Chief Electoral Officer shall make and publish proposals …"
Accepting that the Government of the day are in some real difficulty, given the nature of the problem which has arisen since the temporary powers legislation, does the right hon. Gentleman think that it might partially meet his point if the proposals that the chief electoral officer makes under Article 4 (4) come to this House as a Statutory Instrument under the affirmative procedure so that, however admirable the proposals of the chief electoral officer, at least we in this House are able to look at a number of issues, including the siting of polling booths, which normally are dealt with by local authorities? Would that meet the right hon. Gentleman's point? Perhaps the Government would take it into account in the spirit in which we have all dealt with it today?
Mr. Powell: I am very much obliged for the hon. Gentleman's intervention because it strengthens my case. It was when he made that very point in his own speech that the forcible contrast struck me between the proper legislative procedure and that which we have here. The proposal that the hon. Gentleman has made is one which ought to be put forward in the form of an Amendment in Committee. The Government should have an opportunity to consider it before they come to debate it. The Government should be able to hear both sides in the Committee, and both sides of the Committee should be able to consider, before they debate it or vote on it, what their preliminary view is to be. Then, when that debate in Committee has taken place, there should still be the opportunity for the Government to reflect, to consult and to come forward subsequently with their proposals.
I agree with the hon. Member for Leeds, South: his point—in its limited scope—is a valuable one, but the importance of it is to illustrate once again
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that what we are doing for Northern Ireland in this order is what we should only do for any part of the Kingdom in any circumstances by legislation in this House.
I return to my other reasons for rejecting Article 4. The argument is put forward that time presses, that this is too urgent a matter to brook delay for legislation and that if we are to have these local government elections—as we must, under the change in local government which has already been promulgated in Northern Ireland—we must make this change now. I do not believe that we must. I believe on the contrary that we do harm in the present situation by making this change now in the electoral system in Northern Ireland.
I say that for two reasons. It dissimilates administration in Northern Ireland from that of Great Britain at the very time when it is desirable to assimilate it in every possible respect. This point has been made in the debate already. After long campaigns have been conducted in Northern Ireland to secure there the same franchise and the same procedures as those prevailing in Great Britain, we are now asked deliberately to make them different again. I believe that it is undesirable, counter-productive and potentially dangerous, especially now, to introduce differences between the systems of administration and representation in Northern Ireland and those in Great Britain.
There are all too many voices on this side of the Channel which would persuade this House and the Government that the people of Great Britain can forget about Northern Ireland, that it is foreign, that it can be left out of account as far as possible. When we in this House deliberately introduce a system in Northern Ireland which we would long hesitate before introducing in Great Britain, we strengthen one of the factors in the current situation which anyone who, whatever his other views, desires to see a return of peace and stability in Northern Ireland must regard as most dangerous.
My last point, derived from immediate circumstances, is this. I go almost as far as the hon. Member for Antrim, North in saying that inevitably the introduction of a change in the electoral system will

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be regarded as a panacea; it will attract entirely undue hopes and expectations. Over and over again those who have studied this matter have pointed out in this debate that the difference in the actual representation of minorities which the single transferable vote will bring about in Northern Ireland is negligible and may in some cases even be negative. I say that it is dangerous to make this change, because it will nevertheless be widely regarded as liable, even likely, to bring about a different representation and thereby for its part to transform the political situation in Northern Ireland. From disappointment and misunderstanding will spring rancour and a sense of having been cheated. Those in Northern Ireland who hitherto have refused to take part in the political process, those who have declined to be involved in government in Northern Ireland, have not done so because they were not satisfied with the form of representation either in local government or at Stormont or in this House. They have done so because they profoundly rejected the status of Northern Ireland as part of the United Kingdom. We shall not bring any sort of remedy if we pretend, or allow others to pretend, that that basic factor in the situation in Northern Ireland will be altered by anything that we are prepared to do in amendment of the franchise.
So this act is not only something which ought not to be done in this way; it is something which ought not to be done at this time. It can contribute nothing positive to reconciliation and to pacification. It may well contribute negative elements of misunderstanding and of disappointment, and also the dangerous sense that step by step, piecemeal, those who wish to deny to the majority the rights which the majority will insist upon having will get their way.
7.11 p.m.
Mr. Dick Douglas: I have listened with great interest to the arguments put forward by the right hon. Member for Wolverhampton, South-West (Mr. Powell). In some ways I reluctantly agree with many of his arguments.
I hope that my hon. Friends on the Front Bench will not think ill of me if I speak against article 4; they might
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well think more ill of me if I were to speak against Clause Four. Nevertheless, some of the arguments put forward by the right hon. Gentleman would have greater force if his own statements, during the weekend in particular, indicated some of the temperance and tolerance which he has advocated today and did not give rise to a degree of expectation on the part of the majority which might exceed their realisation.
I suspect that some of the right hon. Gentleman's statements during the weekend are capable of putting into the minds of the majority that there is perhaps a possibility of a return to the status quo ante, and that they would get back into power in a Stormont which might have not only the power of the old Stormont which is now prorogued but a greater degree of power.
Mr. Powell: Perhaps the hon. Gentleman, who has been so very courteous, would permit me to interject that for years past, in Northern Ireland itself, I have been advocating the complete integration of those six counties into the administration of the United Kingdom and into representation in this House. One of my reasons for doing so was that it offered the prospect for participation, on party and not national lines, in the politics of the United Kingdom.
Mr. Douglas: The right hon. Gentleman's views are well known and they are quite respectable views, but they do not answer the problem of Northern Ireland at the present time.
I do not want to follow that argument too far because we are really dealing with the calibre and state of democracy in Northern Ireland in the United Kingdom. When we were discussing the European Communities Bill and a proposal for a referendum was put forward by some hon. Members, I took the view that one could not look at that kind of proposal in isolation, that one could not put into a United Kingdom context a form of proportional representation, the single transferable vote, and treat that in isolation.
We are awaiting the report of what we must reluctantly call the Kilbrandon Commission, because of the demise of Lord Crowther. It may very well be that the implications of this form of proportional representation will have

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some form in the proposals which may emanate from that Commission. As a Scot, I shall resist this type of proposal for Scotland, and I do not see any good reason why I should wish it on Northern Ireland. I am reluctant to propose for other people a form of representation that I would not necessarily accept for myself. I say that in the knowledge that people in Northern Ireland, particularly the Northern Ireland Labour Party, have desired the introduction of this form of electoral reform.
By so doing, one would be in danger of creating the view in Northern Ireland that everyone starts equal in the race and everyone gets a prize. That is not what elections are about. Elections are about winning and losing. One takes the responsibility of winning, and if one loses an election one takes that responsibility as well, in challenging the established power. The disease in Northern Ireland has been cooking the books and the reluctance of those who were in power to accept that other people could take power through political processes in Northern Ireland. These are the things to which I have objected during my 20 and more years' association with Northern Ireland.
Those who argue for a single transferable vote take the view that one caters for minority parties, that one can get multi-parties in a constituency, but they deny—and this is an important point made by the right hon. Gentleman—that one has a distinct Member of Parliament for a geographically defined area. This is important to me in our system. The danger in Northern Ireland is that people assume a responsibility which is not theirs for an ill-determined area, that everyone will share in the electoral processes but that no one will have the responsibility of looking after the area.
It is important to discuss this attitude of mind in relation to democracy. It is not about voting. It is about the form and nature of representation of people in an area. I stood as a candidate in an election; there were four candidates altogether. I represent people of all parties and of no party in my constituency. A few months ago my hon. Friend the Member for Salford. West (Mr. Orme) and I visited Belfast, including the Shankill Road area. We were taken
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round by John McQuade. The thing that characterised his attitude was that he represented the constituency and he was known in the constituency.
Therefore, I am not wholly enamoured of the idea of introducing the proportional representation system. One of the points that I put forward to those who support the system, and particularly members of the Liberal Party, is: does this enhance the calibre of the men who come forward? That is important. Is there any evidence that the single-transferable vote or any other form of proportional representation will enhance the calibre of people who stand for election? I am not saying that we in this country are better as representatives, but I say that if one argues the case for proportional representation, one has to show that in other countries which have the single transferable vote they have a better calibre of member and that such members take a deeper interest in their constituencies. I have no comprehensive knowledge of this, but my knowledge of other countries where that system operates does not lead me to believe that they have better representatives of the people or that they are more mindful of the needs of their constituents. That is another reason why I am dubious about the wisdom of wishing this on the people of Northern Ireland.
I turn to another issue on which I might be at odds with others in the House. I am opposed to a referendum in principle. I am not opposed to a referendum when it suits me, but I believe that the people who promote a referendum know the answer. They know the answer at the end of the road. The hon. Member for Antrim, North (Rev. Ian Paisley)—and I say this with respect to him—desires a referendum because he knows the answer. It is not in doubt. Some of his colleagues indicated that perhaps some of the minority would vote to he retained as part of the United Kingdom.
The danger of holding a referendum in Northern Ireland now is that it would stir up sectarian strife. There is a real danger of that happening in the present situation, and I hope that the Minister will give a clear indication that the first thing that we shall try to promote in Northern Ireland is the establishment of law and order and that the attitude to-

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wards a referendum will be reviewed in the light of the local government elections.
The prize is the holding of local government elections in an atmosphere of peace and law and order. If the hon. Member for Antrim, North is correct, and the local government elections become a referendum—I hope that they will not—then perhaps the need for a referendum as he understands it will disappear.
Rev. Ian Paisley: Is not the hon. Gentleman aware that it was not the people of Northern Ireland who called for a referendum? One of the points put to the Stormont Government by the Government here was that they should hold a referendum. The Stormont Government accepted that, but they did not accept that responsibility for law and order should be taken over by the British Parliament. The right hon. Gentleman the Prime Minister, when he announced his so-called initiative, put forward the idea of a referendum as soon as possible, and that was confirmed by the Secretary of State for Northern Ireland. The people of Northern Ireland therefore have a right to ask the British Government to honour their pledge and give them what they said they were going to give them.
Mr. Douglas: I am aware of that, but I do not accept it. The Prime Minister must answer for his statements, and I shall answer for mine.
I hope that people on this side of the Irish Sea will argue strenuously for a political solution. I hope that the prominent members of the SDLP, some of them in this House, will agree that that should be the aim. I hope, too, that John Hume will retract his statement that because of the British Armys actions the round-table political discussions are in danger. We must push ahead with finding a political solution to the problem. If the people of Northern Ireland were to say that they wanted proportional representation, that would be another matter. I see very little evidence of the desire for it, but if the Government argue that this will produce a more conciliatory attitude, then I may reluctantly not oppose the order. Certainly I am reluctant to wish on another part of the United Kingdom something that I should not accept for my own constituency or my country.
7.24 p.m.
Mr. Carol Mather: I followed the remarks of the hon. Member for Clackmannan and East Stirlingshire (Mr. Douglas) with great interest, and I agree particularly with his view that law and order must be restored. This is the essential climate in which any elections or other constitutional arrangements have to take place.
I hope that it will not be out of place in what has been called a wide-ranging debate to congratulate the Government on the decisive action they have taken to achieve that and the exemplary way in which the armed forces carried out their task. The first priority has been achieved, and the Government have provided the climate in which we can move on to the next phase.
I should like to cast my remarks in a slightly wider context than the order, although the order is central to them, and discuss, first, the order of priorities for achieving various things in Northern Ireland and the climate in which one hopes to get them done. Various things need to be done, but the climate and the timing are important.
By all means carry on consultations about the constitutional future, but I think that the conference will give rise to difficulties. It will be difficult to reach agreement, and at the end of the day the Government will have to lay down what is to happen. There are three essential constitutional processes which have to be gone through. First, there have to be the local government elections which we are discussing today. Secondly, there must be regional parliamentary elections, or Stormont elections, whatever one calls them, if Stormont is to be reconstituted. Thirdly, there is the plebiscite. We must get these things in the right order if we are to get the best possible foundation for the future of Northern Ireland.
There are, of course, other matters to consider at the same time. There is the Crowther Report and what it will suggest. Should we wait until we get the report, and will it say anything specific about Northern Ireland? There is the question of direct rule, and whether it will come to an end. There is the further consolidation of law and order. There must be a follow-through to the present operations. Finally, there is the outcome of the constitutional conference, if it takes place.

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All those factors seem to point to the possibility of the local government elections being delayed. I wonder whether the best men will come forward for election to the district councils if they do not know whether there is to be a regional government. I wonder whether they will decide to enter for the district council elections before they know whether they will be able to stand for the regional government elections. There will be that element of uncertainty. As most of the powers of the districts are being transferred to the central Government in Northern Ireland, would it not be best to settle the question of a regional parliament first and decide whether or not it will be reconstituted? But before settling even the question of the regional Parliament should we not consider the plebiscite which is to provide the real foundation for Northern Ireland's future?
I suggest that all those factors should be considered in the following order: first, there must be a consolidation of law and order; secondly, there should be a referendum; thirdly, a decision should he taken about Stormont, whether direct rule is to continue, or whether there is to be some form of regional government; fourthly, the local government elections should take place.
I wonder whether there is not an essential conflict in having proportional representation, in that it will give more power to minority groups and to the moderates but at the same time power will he taken away by the order and passed to the central Government. I wonder whether the two things are in conflict.
In discussing the order we should be discussing not whether it is going to go through but rather when it is going to go through and the timing of the local government elections. The people of Northern Ireland have suffered greatly during the last few months and years. They have suffered a great shock, and it is up to us to see that they get off again on the right foot.
7.30 p.m.
Mr. Gerard Fitt: In supporting the order, with its intention of using PR in Northern Ireland elections, I am mindful that on both sides there may be many hon. Members who feel
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that this may be the thin end of the wedge. I do not think they have any reason for that fear because Northern Ireland, as we have seen in a very dramatic way over the last three or four years—indeed, over the 50 years since its inception as a State—does not bear any comparison with other regions in the United Kingdom. That is why it is so important that it should be treated in isolation.
I have heard many hon. Members, particularly on the Government side, expressing the wish that somehow, some day and in some way Northern Ireland might be totally integrated with other parts of the United Kingdom. That idea cannot have much validity in the minds of reasonable, understanding hon. Members. But what we are trying to do by this order is to bring about some semblance of normality and to seek to establish or improve democratic institutions which have been singularly lacking throughout the existence of the Northern Ireland State.
I recognise that PR may in a sense not bring about the changes which are so necessary, but it will give an opportunity to the voice of moderation. Its introduction will in effect isolate extremists, and people who have a particular interest in bringing normality to the troubled area will have a better chance of being elected. The position at local government level, and at central Government level at Stormont when it existed, was that a candidate only had to be a Protestant in a Protestant constituency, mouthing the outdated slogans of 1690 and of the Apprentice Boys, to be assured of election. On the other hand, and I say it with regret, throughout the years there have been Opposition politicians with no political philosophy but who only had to adopt the slogans in reverse to be assured of electoral success.
The result was that because of the electoral situation then obtaining we had one extremist sitting on one side and another sitting on the opposite side, both of them voicing their sentiments daily in the now discredited Stormont. Both undoubtedly had influence on ordinary decent people in their constituencies and built up emotions to such an extent as to fuel the fires of hatred and hostility which had tragically got us into the present situation.

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There are people in Northern Ireland, aged at most 45, 50 or 60, who have never in their lives voted in a local election because they never had the tenancy of a house. Perhaps they were not married and they lived with parents, or had been married but could not get a tenancy from a bigoted local authority and had to live in lodgings. Such people have never had the opportunity of casting a local government vote at all. I agree with the Minister of State that it will be necessary to engage in a publicity campaign, although I do not feel that it will be all that necessary because the people of Northern Ireland are no fools when it comes to the casting of a vote. If they have a vote, they are very eager to cast it—on too many occasions on one day, which can lead to certain problems.
In introducing the order the Minister of State seemed to have the idea that PR is the ultimate answer. I support its introduction, but the whole idea can be defeated. In the city of Belfast, for instance, because of Stormont legislation we have had one-member wards. Now it appears that four or five such wards will be grouped together and PR will be used to fill the four or five seats. To a certain extent I agree with the hon. Member for East Stirlingshire (Mr. Douglas) that it will mean that a member will not represent a definite geographical area but will also have to represent the other wards included for the purpose of PR. One of the most important things to be decided will be the grouping together of the wards and their geographical location.
Certainly in Belfast it will be very important to make sure that those who vote under the PR system are not intimidated from going to a certain polling station to cast their votes. Intimidation can in certain circumstances apply equally to Protestant and Catholic alike. For example, two of the most explosive roads in Northern Ireland—Shankill Road and Falls Road—are in my constituency of Belfast, West. Some of the voters in Shankill Road have to traverse what they would call hostile territory in order to vote in the Falls Road area, and voters in the Falls Road area are in a similar but reverse position. It is important that people living in such areas will have an opportunity to vote at polling stations where they will not be intimidated.
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One wonders whether the electoral officer will be prepared to listen to representations from valid interests, and certainly from political representatives. Sir Richard McCrory, when drawing up the 26 district councils, listened to the elected representatives and also to other parties who did not have elected representatives at that time but who had something to say. In the matter of an election, on which the whole concept of democracy depends, the electoral officer for an area, whoever he may be, should be prepared to listen to recommendations, though he does not have to accept them, because one political party may want a polling station in an area where it will get maximum support while the opposing party will argue in the same way for a different site. The polling stations should be situated over a widely accessible area, with no intimidation, and the inclusion of five or six wards in an electoral area gives reason for the introduction of PR.
Unfortunately in Northern Ireland, and it has become even more apparent over the last two or three tragic weeks, we are going back to the ghetto system. There was a time in the last 10 or 15 years when Catholics were able to buy their own homes on mortgage in a Protestant area, and when Protestants were able to get a mortgage and take up residence in a Catholic area. But with the polarisation that has taken place, resulting in the movement of population—I cannot refrain from saying that this to a large extent particularly affects the Catholic people in Belfast, though Protestants have been affected as well—that situation no longer holds good. One can say, "Those who live in this particular ward are all Catholics and may be inclined to vote a particular way" or "One is a Protestant and will vote in the reverse direction". We shall have to be very careful in grouping together the wards to make sure that democracy prevails and to make certain that those who want to vote will have all the necessary help to do so.
This evening one of my hon. Friends, although disagreeing with PR, said that Northern Ireland was in a unique situation and that PR could be taken as a political rather than a military solution. We all accept that political movements must begin to take place in Northern Ireland before we can hope for normality to return to the area.

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Mr. Speaker said that the debate could be widened. I am reluctant to widen it to any great extent. I want to limit my remarks. I cannot, however, refrain from widening it to this extent. I understand that in another place the Secretary of State for Defence said that fewer deaths had taken place in Derry today with the breakdown of the barricades because of the policy of conciliation that had been brought about by the present Government since direct rule was introduced four months ago. I hesitate to contradict those those sentiments of the Secretary of State for Defence but I should be less than honest if I did not say that that policy of conciliation is in grave jeopardy.
We in the Social Democratic Labour Party have tried desperately over the past few weeks to bring about a process of reconciliation and to take whatever steps we could to ensure that talks would take place in which we would be involved as elected representatives, talks which we hoped would lead to an eventual political settlement. But the actions that took place in the early hours of this morning and, I understand, into the early hours of this evening—I do not want to say anything which will cause trouble or further heighten or escalate the existing tension—have caused a serious feeling of discontent in areas of Belfast which the Minister of State knows so well, such as Dock, Ballymurphy, Turf Lodge and so on. This is particularly so in the Bog-side because of the approach of the military this morning.
Let me make it quite clear that I want to see every barricade in Northern Ireland brought down. Barricades are indicative of a sick society. There is something wrong with a society in which people have to barricade themselves against security forces or against those who may be opposed to them in matters of religion. From that point of view, and because I want people to learn to live together, I want to see the barricades brought down.
Barricades were erected in Bogside and Creggan because of particular incidents in 1968 and 1969 and because the people had withdrawn their consent to accept the rule of the security forces. Over the past few weeks we have seen the erection of
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barricades in Belfast, the UDA barricades as they became known. The Minister of State must have heard from many sources in Northern Ireland that the existence of the UDA barricades caused very serious concern because of the brutal, horrible assassinations that have occurred in Belfast, especially in recent weeks. Many Catholics felt that other Catholics would approach these barricades in a car and would be stopped and that the next thing would be that their bullet-riddled bodies would be found. That has happened all too often, even within the past day or two.
But we must look at the approach of the Army this morning. The Army used its great strength, its tanks and guns and the other armour at its disposal to take down barricades in the Bogside and Creggan. I have said that I want to see all barricades taken down. But why was not the same approach used to the UDA barricades? Why was it that the Army and the UDA men in uniform seemed to be acting with a great deal of camaraderie? Why did they seem to be acting in collusion? Why was absolutely no force used in bringing about the dismantling of the barricades in the Unionist no-go areas? It may be that the Army thought that was the easiest way out. I understand that the Army did not want to do anything which would increase tension and bring about further deaths. But there is a feeling in Northern Ireland at present that the Army, under the aegis of the Government, has once again resorted to the quest for a military as opposed to a political solution. I accept that the Minister of State says that that is not so. But in Northern Ireland the feeling is that pressure has been applied to the Government which has led to instructions being given to the Army that, at all costs, it must not antagonise the majority.
The Secretary of State must agree with me that many of the recent assassinations and horrible murders which have occurred were not committed by either wing of the IRA, the official wing or the Provisional wing. I am bitterly opposed to all extremist organisations. I have made that clear. I do not need to keep restating the case. But I warn the Minister—
Mr. Channon: For very understandable reasons, the hon. Member was unable to be present earlier today when I made a statement about this matter. I tried to assure the House about this. I shall not deal with all the points the hon. Member raises, as I am sure that that would be out of order, but I cannot accept all of them. I want to make it absolutely clear that my right hon. Friend and the Government have made it perfectly clear that we do not think it is humanly possible to solve the problem in Northern Ireland by military means. It must be solved by political means. That is what I have tried to explain to the House this afternoon. I very much hope that all hon. Members—I am sure that the hon. Member for Belfast, West (Mr. Fitt) is included among them—will do their utmost in these very difficult circumstances in assisting the process of the extremely difficult task of finding a political solution. That way lies the only possible hope.
Mr. Fitt: I would hope now that it would be clearly evidence that the Army was acting in an impartial way, that it would take very active steps to prevent the daily intimidation taking place in Belfast, and that if an Army presence is needed in a so-called Unionist area it will be there. I hope that the whole might of the British Army will not be sent to exclusively anti-Unionist or Catholic minority areas. If that is the picture that is seen it will not make for a de-escalation of the tension or help in the process of reconciliation.
In the present situation in Northern Ireland there is serious reason for discontent in the minds of the people, who see the British Army once again as an occupying force going through the usual repression. I urge the Minister to impress upon his colleagues that the next 24 to 72 hours can be a very dangerous time. If the Army acts in the right way there can be hope of talks bringing about a correct solution. If the Army acts in the wrong way there can be no hope of a solution.
7.49 p.m.
Mr. John E. Maginnis: Earlier today Mr. Speaker intimated that we could have a reasonably wide debate and that those hon. Members who failed
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to catch his eye during questions after the statement could ask their questions and make their comments during the debate. I intend to take up that position.
First, I ask my hon. Friend the Minister of State to convey to his right hon. Friend the sincere congratulations of all right-thinking people, not only in this House but throughout Northern Ireland, on his decision to remove no-go areas, no matter of what denomination, throughout the whole of the Province. When history comes to be written about this period, perhaps my right hon. Friend will be referred to as William IV.
This evening we are debating electoral law in Northern Ireland. To the minds of many hon. Members this is part of the initiative introduced here in March. The question of re-drawing boundaries and re-structuring local government was started back in 1966, but only now are we reaching the final stages. It was introduced not by this Government but by the Stormont Government of Captain Terence O'Neill. The blueprint was contained in the report of the review body under the chairmanship of Sir Patrick McCrory.
The Government have stated their intention of adhering to the programme and have said that April, 1973, will be when the new arrangements come into force. Many hon. Members have pointed out that this is putting the cart before the horse, because when the McCrory Report was accepted Stormont was operating. Sormont is now prorogued. The question is: will Stormont be restored before April, 1973; if not, who then will take responsibility for local government?
The Minister of State said that Article 4 is new in Northern Ireland electoral law. This is the provision concerning proportional representation. I have an open mind on this question, except that I believe it to be wrong for Westminster to impose proportional representation on the Northern Ireland electorate. My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) referred to the Green Paper introduced for discussion by Stormont in which reference was made to proportional representation. I know that this question was under active consideration throughout the whole of my constituency by people at grass roots who brought experts down to

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explain to them how proportional representation worked. In the not-too-distant future the Northern Ireland people might have accepted proportional representation under their own steam, but they will now have a grouse in that it is being imposed on them by an Order in Council from Westminster.
The hon. Member for Belfast, West (Mr. Fitt) said that he was in favour of proportional representation and that it would reduce tension. The hon. Gentleman's speech will not serve to reduce tension, because he sought to rake over all the old embers. Wise counsels must prevail during the next week or two so that the efforts by the Army to restore law are not negatived.
I want to clear up once and for all the argument whether Stormont reversed the decision of the Westminster Government under the 1920 Act regarding proportional representation. The 1920 Act provided that PR would apply in Northern Ireland but that after three years Stormont had the right to decide what form of representation should prevail. Stormont exercised that right.
South of the Border, people have been trying for years to rid themselves of PR. It is a very cumbersome method. This Measure about electoral law is mainly about people, not about Members of Parliament, because in the end it is the people who count. Already there has been confusion. On top of the scrapping of the old local government system the multi-member constituency will come into effect under the new system.
I wish to endorse the point which was made by my right hon. Friend the Member for Wolverhampton, South-West and by my hon. Friend the Member for Antrim, North (Rev. Ian Paisley). Relations between the elected representative, either at local government level or at central government level, and those he represents are of the utmost importance. However, when a member of the public wishes to make a complaint to any of the members in a multi-member constituency it will be a question of one member passing the buck to another, because one member will say "My colleague who lives in so-and-so will probably have a better knowledge of your case than I have."
In any part of the United Kingdom the electorate has difficulty in deciding which
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avenue of redress to pursue, whether to go to the local representative or to the parliamentary representative. Northern Ireland had the additional hazard in that, in addition to parliamentary—that is, Stormont—and local representatives, there were also the Westminster representatives.
When proportional representation was originally applied in Northern Ireland, only one local goverment election took place on PR and there were two elections for Stormont, with no significant difference in the resulting representation for the main parties. It was discovered that under this system the "Don't knows" usually vote for some obscure person. One party which secured a seat in Parliament was the Unbought Tenants. The Northern Ireland Labour Party did better under PR than under the ordinary system of voting. With those two exceptions there was, and will be, little change.
Despite all the shouting about the changes which will be brought about as a result of PR, the good sense of the people of Northern Ireland will always prevail and they will elect those whom they want to represent them rather than adhere to any particular voting system.
This discussion comes before us because of the Northern Ireland (Temporary Provisions) Bill introduced following the prorogation of Stormont. My hon. Friend the Member for Chigwell (Mr. Biggs-Davison) sought leave to introduce a Bill to provide for a referendum in Northern Ireland. I was one of my hon. Friend's main supporters. I believed then that it was right that the Border question should be taken out of politics and that the local political light should be on issues, not on whether we remained within the United Kingdom.
A significant fact most hon. Members have overlooked is that under the Government of Ireland Act, 1949, Stormont had the right to stay in or opt out of the United Kingdom. Over the past three or four years both the Leader of the Opposition, when he was Labour Prime Minister, and my right hon. Friend the present Prime Minister have said publicly that the people of Northern Ireland had the right to decide their political future. This was not so. If Stormont had so decided it could have joined the Irish Republic against the wishes of the majority of the people of Northern

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Ireland. This is why the Prime Minister decided that a plebiscite was necessary.
On 24th March my right hon. Friend gave this solemn pledge in the House which, as it will take only three minutes to read, I shall now read again so that we can understand what it means:
"This Government, and their predecessors, have given solemn and repeated assurances that the position of Northern Ireland as part of the United Kingdom will not be changed without the consent of the people of Northern Ireland. We have decided that it would be appropriate to arrange for the views of the people of Northern Ireland to be made known on this question from time to time. We, therefore, propose in due course to invite Parliament to provide for a system of regular plebiscites … about the Border, the first to be held as soon as practicable in the near future and others at intervals of a substantial period of years thereafter.
"These plebiscites will be in addition to, but not in substitution for, the provisions in the Ireland Act, 1949, which require the consent of the Northern Ireland Parliament to any change in the Border. This position is not prejudiced by the temporary prorogation of that Parliament.
"We hope that this arrangement, while leaving open the possibility of a change in the status of the Province if the majority so wish, will both confirm that no such change will be made without their consent and provide, in the intervals between plebiscites, a greater measure of stability in the political life of Northern Ireland."—[OFFICIAL REPORT, 24th March, 1972; Vol. 833, c. 1862.]
That was reaffirmed by my right hon. Friend the Secretary of State on 29th June, 1972. He is now in some doubt about whether he can carry out that plebiscite because of the situation in Northern Ireland. I should have thought that, with the Army now in complete control, this was the best time possible to hold a plebiscite, and I hope that it will not be delayed. Legislation will have to be passed through the House, and I know that many hon. Members will be glad when that day comes.
There is opposition to the plebiscite from the hon. Member for Leeds, South (Mr. Merlyn Rees) and many of his hon. Friends, and perhaps even some opposition on this side of the House, but let it be understood—
Mr. John Biggs-Davison: My hon. Friend will have noted that when I sought the leave of the House to introduce a Bill providing for a plebiscite there was no opposition whatever. In fact, there was the greatest cordiality.
Mr. Maginnis: I am grateful to my hon. Friend for that intervention. Over a good many years now there has been a great deal of talk about opting out by what is known as the minority in Northern Ireland. The hon. Member for Belfast, West has constantly claimed on radio, on television and in public speeches that 40 per cent. of the people of Northern Ireland have opted out of the system. The plebiscite will show whether that claim was well founded. Throughout the world, the various media believe that 40 per cent. of the people of Northern Ireland do not want to belong to the rest of the United Kingdom. This is totally wrong.
Here are some of the latest figures, taken from a poll in Northern Ireland last July. I am sorry that the hon. Member for Antrim, North is not present at the moment, for it is not generally known or accepted that there is a small minority of Protestants in northern areas who would favour a united Ireland, and that 4 per cent. of his constituents, a throw-back to the old Liberal Party, would favour a united Ireland.
I favour a united Ireland, provided that it is in the United Kingdom. I have made that absolutely clear, and I believe that all loyalists would do the same. I have said it in the House and in speeches outside, and I echo the words of the late King George V, in opening the Stormont Parliament, when he expressed the hope that the day would come when both Parliaments would be back within the Parliament of Westminster.
Apart from the small minority of Protestants who favour a united Ireland, the really significant figure is that only 24 per cent. of what is termed the minority would say "Yes" to a united Ireland. Those figures should be made known so that people not only here but throughout the rest of the world are not misled into believing that 40 per cent. of the people of Northern Ireland have opted out.
I wish every success to the initiative now taken by the Army. Let it be followed rapidly by talks, if we have to have them, but above all, let us realise that what we need to stabilise the position in Northern Ireland is a return of the democratically-elected Parliament of the country so that we may get back to democratic processes. The sooner that

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day dawns, the better for all, and the sooner will peace, order and stability return to the Province.
8.7 p.m.
Mr. Maurice Foley: I welcome the order as a modest step forward, modest in the sense that any political activity is better than the stalemate of confrontation and hostility. We must regard the order in that context. We must not look at it on its own but have regard to the three essentials—a peaceful situation with normal political activity, the resolution of communal divisions and movement towards a political solution. Those three needs are interrelated.
There is some unreality in our discussion of the order in the context of what is happening now and the absence of information available to the House, but I shall direct my attention to the three elements I have isolated—a peaceful situation, the prerequisite for making progress, normal political activity and the resolution of communal disorder, and an effective political solution.
By a peaceful situation we do not mean just the absence of killing. The reality is that there are 21,000 British troops in Northern Ireland and the major so-called no-go areas are totally occupied. In his statement this afternoon the Minister of State refused to go further than the reality at this moment: that the troops are there.
However, I do not believe, and I imagine that not many people in this country or in Northern Ireland will believe, that the army will embark on an exercise of this magnitude without knowing the next step. Our troops are in the Bogside and the Creggan. Will they stay there? Are they in the Shankill Road? Will they stay there? Are they conducting arms searches in all these areas indiscriminately? Is it the intention that they should do so? Did the Army give 48 hours' notice to the IRA to leave? Is that why things were so peaceful? We are delighted that these areas were occupied with the minimum of casualties—there is no question about that—but we are entitled to know, having put the Army in this situation, what the next step is.
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To what extent has there been forward thinking about what happens? Does the Army withdraw? Do the police move in? Which police? Who will be trusted in the Creggan, the Bogside or Anderson-town? Will the RUC dare to go there on their own ever again?
These are basic questions which one must ask in the context of the first prerequisite, the need for a peaceful situation, and without answers one must question whether this step, a momentous step taken by the British Government—Mr. Faulkner himself would not take such a step over 12 months ago—
Mr. Stanley R. McMaster: The main reason why Major Chichester-Clark and Mr. Brian Faulkner resigned was that they could not get the Army to agree to go into the Bogside as they wished it to.
Mr. Foley: That is so, but the Stormont Prime Minister was involved in the security situation and security decision-making, and he was unable at that time, or unwilling, to take the step which the British Government have now taken.
Mr. Biggs-Davison: No. Does the hon. Gentleman suggest that Mr. Faulkner himself could have imposed his will on the Security Committee and insisted that the Secretary of State for Defence deploy the forces of the United Kingdom against the no-go areas? The hon. Gentleman must know better than that.
Mr. Foley: All I would say is that, somehow or other, Mr. Faulkner managed to get internment and alienated an awful lot of people in Northern Ireland—
Mr. Biggs-Davison: The hon. Gentleman should not slide away from the issue.
Mr. Foley: I do not want to slide away from it. All I am saying is that the decision taken during the past weekend is momentous, and it was not taken during the time when there was a Stormont Government.
The amount of information that has been supplied to this House since action was taken is very limited. If we are talking about moving back to normality, we are entitled to ask the Government to what extent, going beyond the immediate, beyond today or tomorrow, they

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can indicate to the areas being occupied for how long the Army is there and who is to replace it when it moves out. This is essential. The Government must make up their mind. Do they intend to do nothing about the arms situation, legal and illegal? These are matters of profound importance if we are talking about returning to normal political activity. We expect answers either today or before the House rises for the recess.
The procedure suggested in Article 4 of the order promoting modest and normal activity is the single transferable vote. I have no personal experience of any other voting system than our own and it is a sad commentary that in a situation where Britain ultimately has the responsibility we have to devise some kind of scheme in order to isolate extremism from our political processes. The purpose of Article 4 is to try to devise a system in which the two communities can learn to live and work together, to discover what they have in common and to push to the fringe the elements of extremism in both communities. We are talking about structure. In debates on Northern Ireland people have advanced positive ideas about what the structure should be and about how to give it life. We should not waste the time of Parliament talking about structure if it is meaningless and if there is nothing for it to do.
Does the Minister see the local councils playing a dominant and prominent part in effecting good community relations at local level? Does he see them acting as some form of consumer council in terms of the gas, electricity and other services in the area, or what are they for? If they have no function, why establish them? If they have functions, let us try and build them up as much as possible.
On the movements towards political conciliation we are entitled to ask what will come next. Does the Secretary of State intend to proceed with his dialogue with the various political parties? Have they all indicated their willingness? To what extent is there a sense of urgency that these meetings should take place and that there should be some form of planning? People will be required to put forward their ideas long before the local elections get off the ground.
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There has been ambiguity over the referendum. I want to clear up the matter for the Opposition. We support the idea of a referendum. The argument is about when it should take place. In so far as the House has now arrogated to itself the responsibilities for Northern Ireland, I and my colleagues who have visited the Province feel that we are as much entitled to address ourselves to the situation there as anyone else. The motivation of those who are pressing for a referendum is either that they do not believe in the Government and that they still believe there will be a sellout in terms of a united Ireland, or they are willing to risk sectarian conflict in order to bolster up their sagging morale.
Captain Orr: Will the hon. Member accept that there is a third version: that Governments should keep their word?
Mr. Foley: I asked the Secretary of State whether, in the consultations with the political parties, he would ask them to propose the kind of questions which should be put in the referendum and whether he would consult them as to the timing, and he replied "Yes" to both questions. It is all in HANSARD. I am consoled with that reply. In view of the ambiguity I would like a clear expression of view from the Minister of State, or from the Under-Secretary about the referendum. Is it a matter of timing rather than of principle?
Mr. Channon: I can assure the hon. Member of this: the Government's pledge to hold a referendum as outlined by my right hon. Friend the Prime Minister last March still holds.
Mr. Foley: I am glad that that has been cleared up.
Will the Government say that there has been no change in their policy of peaceful conciliation and reconciliation and that there is no question of partiality in dealing with one community or the other? The fact that there are so many British soldiers in Northern Ireland is a sad commentary on a situation which did not simply happen over the last three years but developed over many years. We would be doing ourselves a disservice if we pretended that the root cause of the problem in Northern Ireland was a handful of gunmen holding

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the people to ransom. There is something much more profound than that in the views held in Northern Ireland. Methods that have been used can be questioned. There are strongly-held views and beliefs in a united Ireland and I would have thought that the most important thing was to achieve peace and economic stability for the whole of Ireland and the whole of the British Isles.
8.22 p.m.
Mr. Philip Goodhart: I have heard most of the debates on Northern Ireland in the last two years and I believe that this has been the best-tempered of them all. The fact that within 24 hours of the Army taking over the no-go areas we could have a good-tempered debate on Northern Ireland, and a debate that attracted remarkably few people, is the best tribute possible to the way in which that operation was carried out. We hope that it will continue. The ending of the no-go areas was an essential foundation to the good nature of the debate. Many of us would have found it odd to discuss the nuts and bolts of local government elections in Northern Ireland while a substantial part of the Province was not under the control of the forces of law and order but was under the control of the gunmen. The ending of the no-go areas was an essential foundation to any sensible discussion of the nuts and bolts of local government.
I give a qualified welcome to the Government's proposal for proportional representation. We know that proportional representation tends to produce weak Governments and coalitions. That is why it is wholly unsuited to elections for Westminster. At the same time, what is suitable for elections to a Westminster Parliament need not necessarily be suitable for elections to local government authorities in Northern Ireland. It is a paradox, but it is at least arguable that weak local authorities are what are wanted at this moment.
Proportional representation has one positive virtue when two communities living cheek by jowl in areas which cannot easily be separated are, at least for a while antagonistic to each other. The larger areas which proportional representation makes possible make it easier to draw boundary lines which are reason-
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able. If there is tension and argument about the drawing of every boundary for every ward and whether Catholic or Protestant houses are excluded or included, then there is positive merit in having a large constituency made possible by a form of proportional representation. However, there seem to be substantial demerits. One is the complexity of the system that has been proposed. I thought this was brought out very well by the hon. Member for Leeds, South (Mr. Merlyn Rees). This is a complicated form of the single transferable vote and, indeed, of proportional representation.
I recall that in the Armed Forces one used to have things called TEWTs—tactical exercises without troops. Now it seems that we are to have things called CEWVs—counting exercises without votes. After looking at the system proposed in Article 4 one understands how necessary this will be. It is an immensely complicated system. In electoral matters complexity is to be avoided, if not at all costs, then certainly high on the light of priorities.
Mr. Leonard: Is the hon. Gentleman aware that when this system was used for Stormont elections in the 1921 General Election only 1 per cent. of ballot papers were invalidated and only 2 per cent. in the 1925 General Election? That does not seem to suggest the system was so complicated that the great majority of voters were unable successfully to cope with it.
Mr. Goodhart: It is not complicated from the point of view of filling in the paper, but it is immensely complicated to understand the result at the end of the voting process with the business of voters wholly transferring part votes or part transferring whole votes.
I wholeheartedly agree with my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) when he expressed strong reservations about the desirability of introducing proportional representation into the voting system of this country in this way. Certainly there are precedents of 50 years ago for the use of proportional representation in elections for Stormont and local government in Northern Ireland. Although this system was used 50 years ago, it does not detract from the fact that it is now a major alteration in the

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voting system of the United Kingdom. Why stop at 50 years ago? Going back 400 years we find ample precedents for the divine right of kings. However, we surely would not wish to reintroduce the divine right of kings, by order, into this Parliament merely on the argument that this had been the practice in the past. When there is a major change in the voting system of the United Kingdom there ought to be a Bill before the House. Even a day's debate is not really good enough.
I give a warmer welcome to the other part of the Government's electoral package for Northern Ireland—the referendum. The hon. Member for Leeds, South suggested that there was no real reason to hold a referendum at this time because we all know what the answer will be. We know that the Protestant majority in Northern Ireland wish the constitutional link between Northern Ireland and the rest of the United Kingdom to continue. However, we do not know how many members of the Catholic minority want this link to continue. One of the most important things to flow from holding a referendum would be the opportunity of putting this question fairly and squarely to the Catholic minority. To get the result fairly and squarely on paper we need the answer broken down into constituencies, and even into polling districts, as the hon. Member for Nottingham, West (Mr. English) suggested. It is wholly desirable that this should happen.
I do want to see a global result announced for Northern Ireland. I also hope the referendum will show the balance in every constituency and, indeed, every polling district in the whole of Northern Ireland. Given the tensions of the last two or three years, it would be foolishly optimistic to think that a referendum or, indeed, local government elections could be held without cries of "Cheating" and considerable intimidation. I am perfectly prepared to see observers from the Commonwealth—after all, we are part of the Commonwealth—and from the European Economic Community, which it seems we are soon to join, coming in to see how the referendum is held. On this we have absolutely nothing to hide.
I also expect that there will be substantial areas in which there will be intimidation during the referendum cam-
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paign. The Government should make it plain as soon as possible that no change in the constitutional bonds that link Northern Ireland to the rest of the United Kingdom can be contemplated until at least 51 per cent. of those on the register, not just those voting, cast a vote in favour of there being such a change. Otherwise, I fear there may be substantial attempts to keep people from casting their votes.
I fear also that there may be a degree of intimidation in the local government elections that will be held when we pass the order. I fear that with the ending of the no-go areas a degree of IRA activity will be pushed into the border districts, and that it will be particularly difficult there to hold local government elections freely. I do not expect my hon. Friend winding up the debate to tell us about the consultations going on with the Government in Dublin about the control of the border, but I hope that at this moment it is being made plain to Mr. Lynch in Dublin that the IRA is now a greater threat to him than it is to us.
8.31 p.m.
Mr. Frank McManus: The hon. Member for Beckenham (Mr. Goodhart) said a peculiar thing, that the results of the referendum or plebiscite should be announced for smaller areas, and that we should not just have a global result. An hon. Friend and I exchanged glances and smiled then, and I am sure that we were thinking exactly the same thing. No doubt the hon. Gentleman was driving at the theory that I believe is going ground in the corridors of power, the repartitioning notion—in other words, that if there is an overwhelming result in favour of unification in one part of Northern Ireland there is a wee piece to give to Mr. Lynch. The theory is that Newry, which is a trouble spot, Derry, which is a thorn in the side, and most of my constituency could conveniently be removed and then we would perhaps have a bit of peace and quiet in the rest of the Province. Only in a House like this could such a solution be put forward. It baffles the imagination that anybody should think of solving the Irish question by repartitioning the Six Counties, because the first partitioning was an absolute disaster. Any further partitioning would only make the disaster even more ludicrous.

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I favour proportional representation, as I have always done. I welcome the fact that it is to be introduced, at least in the up-coming local government elections. I ask those who decry it as a very cumbersome system to take heart, because it is not as bad as it sounds. It is a bit difficulty, but it can be carried out successfully with a certain amount of practice. Heaven knows, there are enough highly-paid civil servants in Northern Ireland who do not do an awful lot most of the time. Let them do something for their money for a change. Let them count the votes.
But let no one pretend that the issue of proportional representation is central to the problem in Northern Ireland. It is a good idea and will help in the long run. It is a good system and a fair system, probably suited to the peculiar conditions in Northern Ireland. But it will not solve any of the problems of Northern Ireland. Unless the Government reach a proper appreciation of what the problems in Northern Ireland are all about, proportional representation or any of the other so-called reforms that they think of introducing will have only a marginal effect.
I understand that Mr. Speaker said this could be a wide ranging debate. I intend to take Mr. Speaker at his word and for a few moments range a bit wide from the mark. I hope, Mr. Deputy Speaker, that you will bear with me because I will do so for only a short time.
If proportional representation or any other reform is to have any effect, the Government must have some appreciation in future, because they clearly have none at the moment, of the real problems which confront Northern Ireland. Since I came here two years ago I have tried to convince the Government that their whole approach and policy are wrong. I have tried to point out that the problem in Northern Ireland is the existence of the Northern Ireland State. I have tried to show that the Northern Ireland State is an unnatural entity, born of the threat of violence, which can survive only through continued use of violence, corruption, discrimination and gerrymandering. I have tried to point out that the present problems spring inevitably and naturally out of the State of Northern Ireland.
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The present troubles, which have brought about the dissolution of Stormont and this order, stem from 1969. "Trouble" is an historic word in Irish history which refers to periods of upheaval and unrest. But let it be recorded that in the present round of troubles the first shots were fired by the RUC heading Unionist mobs in an attack on minority areas. Let it also be recorded that the first explosions, according to the then Prime Minister, Captain O'Neill, were caused by so-called loyalists. Let it further be recorded that the first evidence of mob violence was caused by Orange Unionist mobs when they wounded and intimidated thousands of people in the city of Belfast. Let it also be recorded that the present troubles are merely a major manifestation of what has been happening in Northern Ireland since its unnatural birth.
I have tried on a number of occasions to point out to the Government that the only way to solve the Northern Ireland problem is to confront the forces which created and maintained the State of Northern Ireland. I have tried to point out that if the British Government are ever to solve the trouble they should say to the Orange Unionist power groups "Enough. You will no longer be allowed to pervert and prevent the true development of all Ireland." But that advice was disregarded. I have tried so often to show that no military solution is possible, yet over the past two years military repression has increased and intensified. Almost exactly a year ago the crime internment was committed and the repression, torture and brutality which followed lack equal or parallel outside Nazi Germany.
The so-called political initiative created the pretence that a new course was being followed. The Secretary of State cynically involved himself in peace talks with the Provisional IRA while his Army was consorting and conspiring with the armed and hooded UDA to prevent 16 families taking possession of houses to which they had been granted legal tenances, thus creating conditions whereby the truce must break down.
The remainder of my remarks will be exceptionally brief.
Refusing to act on adequate warnings, the Army was primarily responsible for what is now called "Bloody Friday".

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Acting on the excuse of "Bloody Friday", the Secretary of State, having publicly shed some crocodile tears, decided to embark on a campaign of military repression against the minority community on an unprecedented scale. Once again the threat of violence from Orange Unionism was responded to by the Army in the traditional fashion, "When the Orangemen object, bash the Catholics."
The invasion of the no-go areas last night marks, in my solemn opinion, a turning point in Anglo-Irish relations. The rumble of tanks in the streets of Belfast and Derry will be heard in Dublin, in Cork, in Brussels, in Rome—in the streets of every city in the world which loves freedom and justice. The vampires of the Tory Unionist regime were denied their gallons of Fenian blood last night due to the good sense of the minority community and of the IRA. The Secretary of State gambled recklessly on that good sense because when he ordered the invasion of the no-go areas his Army went prepared to shed as much blood as might be necessary to obtain its objective.
Therefore, what is there to talk about with such a man? Most of these things I have argued in vain. Those who have no power can only protest. Therefore, until the Government change their policy of military repression, until they give some indication that politically they are prepared to confront the political issues at the centre of the Northern Ireland problem, I have no other option but to withdraw in protest from this House which gives its authority to the militaristic repression by the present Government.
8.41 p.m.
Captain L. P. S. Orr: I do not think that the House would expect me to agree with the interpretation placed upon the activities of the Army this morning and later by the hon. Member for Fermanagh and South Tyrone (Mr. McManus), who has just left the Chamber. I do not think that even he with his eloquence can create a myth that will have the remotest effect upon opinion throughout the world. The skill, ability and humanity which the Army has shown in the operations it has just conducted will stand for what they are. I do not think that the hon. Gentleman's interpretation of my right hon. Friend's reaction to the events of "Bloody
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Friday" will stand up at all. One thing on which I would have agreed with the hon. Gentleman was his reference to the possibility of a referendum being used to further the argument for a re-partition of Ireland. If there is one thing on which Irishmen could agree, it is that this would be an absolute nonsense, if anyone, indeed, ever thought of doing it.
I agree that it would be interesting, not only for historians but for observers of the Ulster scene, if, when the referendum is held, the results can be shown in as small packets as possible. It would be an error to depart from the global results—for counties or constituencies—because to do so would not give a true overall picture. But it would be interesting to see the results, for example, in Belfast broken down into polling districts.
I come now to what I regard as the most crucial issue of the debate. The first factor is that of timing. What we are discussing is an order to deal with the electoral law for the elections to the district councils, but we are doing it in the absence of any idea of what is to be the main structure of local government in Ulster. We do not know what is to be the principal authority. We do not know yet who is to appoint the area hoards. We do not know what the authority of the area boards is to be. Yet we are to proceed now to the election of the district councils and are setting out the electoral law under which those district councils are to be elected.
My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) put his finger on the essential point. I would agree with the hon. Member for Fermanagh and South Tyrone that the adoption of a proportional representation system for the local government elections in Ulster is not going to be of any great significance, one way or another. Those who think that it is are deluding themselves. But it will be significant for the rest of the United Kingdom. This is a constitutional innovation in the form of a draft Order in Council. Its effects will not be so profound in Ulster as they are elsewhere but I am certain that the door to the single transferable vote system having been opened in one part of the United Kingdom, it will be opened wide in many other contexts, particularly in the light of the report of the Royal Commission on the Constitution.

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The question dominating the minds of the majority—I think that I can speak for the vast majority—is whether Her Majesty's Government will keep their word to the majority of the people of Northern Ireland. What was their word? It was not simply that there would be a referendum. The people of Northern Ireland did not ask for a referendum; they were satisfied with the guarantees under the Act of 1920 while Stormont existed. While their own Parliament existed the guarantee was that the constitution of Northern Ireland would not be changed without the consent of the Parliament of the United Kingdom. When the Stormont Parliament was prorogued there was substituted for that guarantee a guarantee by the Prime Minister himself that the referendum would be held in Northern Ireland. Every indication was given that the referendum would be held early. We were told that it could not be held before September, and we were told a good deal else about it.
On 29th June the Secretary of State, referring to the hon. Member for Leeds, South (Mr. Merlyn Rees), said:
"The hon. Gentleman is perfectly right on the question of a plebiscite. The plebiscite was promised in the first instance in my right hon. Friend's statement when the new situation was created. I believe that it is needed at an early date as a reassurance to the majority community. Assurances given by this Government, and indeed by both parties in the House, have proved in many cases to be not enough. I beg those who still have doubts"—
the Opposition had expressed doubts—
"to believe that the clear offer of an early plebiscite must add to those assurances which have been constantly given by me, by the hon. Gentleman, and by right hon. and hon. Members in all parts of the House, and which are very important to the majority community."
My right hon. Friend went on to say:
"It should be remembered that after the plebiscite there would be the local government elections."—[OFFICIAL REPORT, 29th June, 1972; Vol. 839, c. 1687–8.]
Those are the key words, because if the local government elections are to be held after the plebiscite it follows that anybody who understands the rudiments of the English language that the plebiscite must precede the local elections. If that is not a plain pledge I do not understand what the English language means. These
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are words that have been noted by the majority of the people of Ulster. In the last few years they have become so accustomed to people telling them one thing and doing another that they will not lightly forgive this. If the referendum does not precede the local elections the credibility of Her Majesty's Government in Ulster will be gone for ever. Let there be no misunderstanding on that point by the Government. The Ulster people did not ask for this referendum; it has been pledged to be held before the local government elections.
Those elections may not be all that important, but it is important that the referendum issue should be out of the way before they are held if these district council elections are to be held upon local issues as they should be. If we do not hold the referendum on the plain issue of "Do you or do you not wish to remain part of the United Kingdom?", then the local government elections will be the first opportunity that the people of Ulster will have to declare their position with regard to their allegiance to the Crown. If that is the issue in the local government elections, then they will be totally meaningless as local government elections.
Not only is the word and honour of the Government at stake, but there is also good practical common sense in proceeding to the referendum before the local government elections. The hon. Member for West Bromwich (Mr. Foley), who, I am sorry to say, has now left the Chamber, asked all the right questions about the military situation. The Army has with great skill, humanity and good sense occupied certain areas which were not occupied before. What we really want to know before we can make a sensible judgment about the situation is the answers to the questions put by the hon. Member. They are simple questions.
I was sorry that the Minister of State was not able to give me the pledge I asked for at Question Time. It was a simple pledge, that the Army, having dominated these areas, would continue to do so until something had been thought out about how they were to be policed in future. All I was asking for was that the Army would not immediately, or even within a week or two, withdraw

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from these areas, but would wait until such times as the peace-loving people of those areas had been given some guarantee that there would be no return of the IRA on to their backs. Even in the most tightly-controlled of the no-go areas there are decent people who wish to make their views known in a democratic manner through the ordinary political machinery.
The next question is: what steps will be taken to prevent the IRA from returning from across the Border, if that is where they are? It is difficult to ask my hon. Friend to give me answers which prejudice the security arrangements which might be in being, and I do not expect him to do so. I do not even ask him to tell me, if he knows, where the IRA are. But it would be useful if I could have some guarantee that at least every effort will be made to prevent the IRA from returning in force and from carrying out the kind of operation that it did at Claudy this morning.
What the people of Northern Ireland really want, fundamentally, is two things. First, they want a guarantee that the perpetrators of violence, whether from the IRA or anywhere else, will never again in the foreseeable future be allowed to dominate the Ulster scene. They want to know that that is the firm resolve of the Government. Secondly, they want to be assured that before any other procedure is instituted they will be permitted to express their views upon whether they wish to remain part of the United Kingdom. They wish to do that by referendum before anything else happens.
Finally, for heaven's sake let Her Majesty's Government make up their minds as soon as possible about what is to be the political structure of Northern Ireland. It is an illusion to think that agreement upon this by everyone is possible. There will not be agreement between those who wish to remain citizens of this Kingdom and those who do not. There can never be agreement upon that. Let Her Majesty's Government lay down the broad parameters. Let them lay down the limits. Let them set out what are and what are not the options in the situation. Only then will there be a swift move towards agreement on the nuts and bolts of the situation.
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I have to reserve my position about this order. I do not like the idea of such a Measure containing a provision like the present article 4. I am not sure what my attitude will be on Friday. It may be that my hon. Friend the Under-Secretary of State will be able to help hon. Members when he replies to the debate.
8.55 p.m.
Mr. Stanley R. McMaster: Like my hon. Friend the Member for Beckenham (Mr. Goodhart), I feel that this has been perhaps one of the most fruitful of our many debates on Northern Ireland. It must be pleasant for some listening to our proceedings who perhaps come from my part of the world to hear so many Ulster voices raised in this House.
This has been a wide-ranging debate in the course of which the vast majority of hon. Members have referred to the security situation in Northern Ireland. I include among them the hon. Member for West Bromwich (Mr. Foley), who I hope will return, and the hon. Member for Fermanagh and South Tyrone (Mr. McManus), who I expect will not return. What is more, the hon. Member for Belfast, West (Mr. Fitt) referred in some detail to it. For that reason I hope I shall be forgiven if I preface my remarks with a few comments on the recent events in Northern Ireland. They have been very significant.
I agree with much of what my hon. and gallant Friend the Member for Down, South (Captain On) said a moment ago. If it had not been for the speech of the hon. Member for Fermanagh and South Tyrone, I might have had to make a fresh point. I did not expect to find myself in agreement with him of all people. However I was largely in agreement with him, and I hope that my hon. Friend the Under-Secretary of State will take note of that because the Government do not seem prepared to face the basic question: what is the problem.
This House continually addresses itself to the possibility of solving the Northern Ireland situation. However, one has only to listen to someone like the hon. Member for Fermanagh and South Tyrone and to study the terrible casualty lists of the past three years to understand that the real problem facing Northern Ireland is the existence of a small group

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of dedicated Republicans who are determined to stop at nothing.
This country has a great reputation for fairmindedness. But it will never achieve a solution to a difficult, intransigent situation like Northern Ireland unless it is prepared to face facts. For my hon. Friend the Minister of State to pretend, as he did in reply to questions following his statement, that one side was as bad as the other and that the Army had to act against both was to attempt only to deceive this House, the country and himself about the true nature of the problem.
The hon. Member for Fermanagh and South Tyrone made no bones about the matter. He is dedicated to the Republican issue and he knows himself to be in a minority. But it is Members like him and the hon. Member for Belfast, West with whom I take issue. It is basically the IRA: whether it be the Official or the Provisional IRA matters little. It is this body which has been shooting and killing throughout Northern Ireland.
The hon. Member for Belfast, West pointed out that a certain number of Catholics had been killed recently. However they have not been killed only recently. Throughout the past few years we have had news of girls in Catholic areas having their heads shaved. Others have been found with hoods over their heads and bullets in the backs of their necks with the word "IRA reprisal" written on them. Terrible tragedies have been caused because they were seen talking to a soldier. The IRA has been afraid of one thing above all, and that is of being betrayed by its own people. Therefore to pretend, as my hon. Friend did, that because a certain number of Catholics are killed one can assume that they have been killed by members of the UDA is neither honest nor correct.
I do not wish to labour this point as the debate is on electoral reform, hut I should like to say with all the force at my command, in answer to a question put by the hon. Member for West Bromwich, who asked what the Government would do next, that the Government should face the problem of eliminating the IRA from Northern Ireland. They should not say that they are going into the Bogside and the Creggan in order to protect the minority there and that the next stage is
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to reconcile the two sides of the population in Northern Ireland. This is to miss the main function of government. The main function of government is to bring peace and justice to Northern Ireland, and I heavily emphasise the word "justice".
If one really wants to reconcile the two sides of the population, one must pursue the guilty men of the Irish Republican Army who have murdered and pillaged throughout the last three years, who have caused over 450 deaths and many thousands of terrible injuries. Anyone who has visited the hospitals in Northern Ireland and has seen the young girls and children mutilated, with limbs missing and sometimes the sight of an eye missing, must realise that it is the primary function of government to bring to justice law-breakers—people who are guilty of murder, treason and anarchy, Only when they are seen to have been brought to justice will the two sides be able to get together and be prepared to accept one another.
It is important to stress the necessity for seeing that justice is enforced in any community. Unless there is justice, these bitter wounds will last in the minds of both sides. Indeed, they have become worse as a result of the delay. I should have liked to see the action which the Government have taken—and on which I congratulate them—taken three months ago or even two years ago. This action could have been taken without any fear of loss of life, if it had been taken with sufficient determination and resolution, at any stage since the original troubles arose in August, 1969, and when the barricades were first put up. The barricades should never have been allowed to be erected. The IRA has used every month of the intervening three years to prepare and strengthen its position.
I should like to know, as my hon. and gallant Friend the Member for Down, South said, how many of the IRA have been captured in the last 24 hours and whether the Government intend to carry on and capture every one of them. I should like to know also how many escapes have been made across the border and what precautions the Army will take to see that those men do not return to Northern Ireland. We are only beginning the struggle in Northern Ireland for the reoccupation of the no-go

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areas. We shall see a lot of atrocities committed in the next few months unless these guilty men are put away for a considerable period where they can no longer menace the innocent populations, both Catholic and Protestant, who do not approve of their methods and aims.
I should like the police to return as quickly as possible and the men of the RUC restored to their former dignity and their morale restored thereby. I should like these men of the police force of Northern Ireland allowed as quickly as possible to resume their day-today patrols in the areas which we have come to know as no-go areas. It is only by phasing out the Army as quickly as possible, letting the troops take over guard duties and getting the ordinary policeman back on the beat that we can properly restore the rule of law in every part of Ulster.
I agree very much with what was said by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) and my hon. Friend the Member for Beckenham (Mr. Goodhart) that proportional representation is a major Change in our law and therefore it is not appropriate that it should be slipped in in a Measure dealing with Northern Inland which will not be thoroughly debated by the House.
There are many sides to the question whether proportional representation is a good and useful reform for the electoral system of this country. Those who are opposed to it advance as part of their argument that it is a system which, at any rate initially, is difficult to understand. This applies particularly to those areas which it is supposed to help, the ghetto areas, where a complicated system of voting may not be easily grasped by the average man in the street.
Secondly, it leads to fragmentation of the representation of the electorate either in local government or in Parliament, and I regard that as bad for democracy. I always understood that one of the great weaknesses of the French system of government was the great fragmentation that occurred and the fact that the Government rose and fell almost at the drop of a hat. Where there is fragmentation the Government depend for their strength on coalitions, and coalitions are fundamentally weak. I favour—because I think that it leads to strong, positive Government—the bi-party system
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which is established so strongly in this House. Proportional representation should be looked at very carefully before it is accepted for any part of the United Kingdom.
Thirdly, those opposed to proportional representation argue—I think with good reason—that it tends to weaken the close relationship between a public representative and his ward or constituency. On the other hand, it may be said that the experiment should be tried in Northern Ireland because of the failure of the existing systems in Ulster properly to represent every type of opinion. There are many wasted votes. There are many areas in which one party is particularly strong and another is particularly weak, and the votes of the strong party are wasted. These are deep and important arguments, and I feel that they should be considered carefully before proportional representation is tried in Ulster, particularly in the present difficult circumstances.
Because time is short I shall make only one or two points on the question of a plebiscite. I feel that a plebiscite will miss its main point if it is intended by regular plebiscites to settle the border issue. It will have exactly the opposite effect. It will tend to keep it alive. It might be said that we should have just one plebiscite, and there is strength in that argument, but I am apprehensive that it might set a precedent. A plebiscite will not remove the border problem. The electors will always first ask a candidate his feelings about the border before voting for him. The question of where Ulster stands in regard to the border issue is best decided by a General Election.
None of the provisions we have here can be properly accepted before the Northern Ireland Government is restored. The entire McCrory proposals were based on the premise that an Ulster Government should be in existence at Stormont. Without some indication tonight of the Government's intention in regard to Stormont, I feel that we should not accept any of these provisions.
9.10 p.m.
Mr. Stanley Orme: The House will agree that this debate has been conducted in a very sombre mood and against a backcloth of the general Northern Ireland situation—and not least

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the events of 4 a.m. today and subsequently. I will return to the broader political argument later. First, I want to deal with the proportional representation argument or the single transferable vote argument because, strangely enough, the debate has divided itself into two halves, the first being largely devoted to the single transferable vote while the second half tended to move to the broader political issues affecting Northern Ireland.
I am no advocate of the single transferable vote in elections in the United Kingdom. Many hon. Members, including my hon. Friend the Member for East Stirlingshire (Mr. Douglas) and the right hon. Member for Wolverhampton, South-West (Mr. Powell), made this point but I do not think anyone in the Chamber felt that by discussing the single transferable vote for Northern Ireland we were opening the back door to its introduction into the United Kingdom. The fact is that certain very reputable institutions in this country—some major trade unions—use the single transferable vote in their elections.
Perhaps the one factor that underlines the point I am trying to make is that the Liberal Party, which in all election campaigns throughout the country advocates this form of vote, has seen fit to give us only a fleeting visit throughout the whole of our debate, and no attempt has been made by any Liberal hon. Member to participate. This underlines the point that in talking of this electoral system for Northern Ireland we are talking of a very special case.
The right hon. Member for Wolverhampton, South-West, with his blinding logic, again tended this afternoon to destroy many of the arguments in favour of this system of voting and complained that we might be raising the expectations of the people of Northern Ireland. I thought that our job was to raise political expectations there—something that has so far first been diminished and then completely eradicated. That is why we have direct rule. That is why it was found necessary to suspend Stormont. That is why we are in such a difficulty. That is why in towns and cities in part of the United Kingdom of which we are talking them are at the moment 22,000 British
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troops with tanks, heavy guns and the rest. The hon. Member for Bradford, West (Mr. Wilkinson) mentioned earlier that the Sikhs or the Indians in his constituency might demand direct rule, but he is not in touch with the reality of the present situation in Northern Ireland.
We have to look at PR. My hon. Friend the Member for Nottingham, West (Mr. English) was slightly pendantic in his earlier argument. To meet his susceptibilities I shall refer to the single transferable vote. We might all argue about the creation of the State. We heard what the hon. Member for Fermanagh and South Tyrone (Mr. McManus) said about that. But when it was decided that Ulster, which was reduced from nine counties to six counties, would remain part of the United Kingdom PR was introduced. It was introduced because it was recognised then that an in-built majority had been given control of those six counties and that, willy-nilly, that majority would control. History has proved that. For over 50 years the Unionist Party has controlled the Province. But PR was introduced. It operated in the local government elections in 1920. It was abolished in 1922 for local government and in 1929 it was abolished for the elections to Stormont.
I quote an authority who has done a great deal of work on this matter. Mr. Robert A. Newland has said:
"Powerful but myopic political leaders in Northern Ireland, who should have known better, found the Single Transferable Vote too sophisticated for taste."
They abolished it for the local government vote in 1922 and the last general election under it was in 1925. Mr. Newland—this is only part of the argument—continues:
"The simmering frustration which this engendered at last came to the boil in the Civil Rights Campaign which has now exploded into blind and obscene violence."
No one claims that the single transferable vote would have maintained a situation of perfect harmony because all hon. Members recognise that there is a minority which genuinely wants political unity with the South and a majority which rightly wants to remain within the United Kingdom.
I deal now with the arguments about the plebiscite. Unless they are careful some hon. Members on the Government benches are likely to get their wires

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crossed and to create imaginary problems. The present Government and the Opposition are not in favour of making any changes on the border to which the people of Ireland as a whole, and in particular those in the North, do not agree. There is no question of tricking or forcing the Protestant majority into a united Ireland against their will, as much as that may be desirable and as much as many may want to see such a unity created.
No one can ask the Government for a political solution at present as there is no easy political solution. We are looking forward to some form of detente which can be arrived at in the North whereby normal political activity can be restarted and the fierce arguments on both sides can be waged whereby it will no longer be necessary for 22,000 British troops to be in the Province and the use of the bomb or the gun will not be necessary for any manner of persuasion. This is what we are searching for.
This interesting and fascinating debate on the single transferable vote is but a tiny part of the answer. There are some fundamental arguments connected with it. This is why the right hon. Member for Wolverhampton, South-West got it wrong. We are a long way from the attic, so to speak. We are only in the basement of the political argument.
If something could cut across the sectarian line and achieve a break in the political structure, much would result. All of us are guilty of the two-to-one equation, of saying "For every two Protestants in the police force"—or the Civil Service or whatever it may be—"there must be one Roman Catholic". We shall get away from the equation only if we find a new political approach.
We have been talking about the Falls Road and the Shankhill as two very emotive places where there appears to be little give. In the 1920 election, in the Falls the Nationalists got two seats, Sinn Fein got two seats, the Labour Party one seat and the Unionists one seat; in the Shankhill the Unionists got five seats, the Labour Party got two seats and Sinn Fein got one. This shows that there can be cross currents and that Unionists, with a second preference, might vote for a Labour candidate and that Republicans might do the same. This could help to
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create a better situation. This was why the Unionist Government abolished the system in 1922.
Mr. Powell: How does the hon. Gentleman think that those results would have been different with the single transferable vote?
Mr. Orme: That was the single transferable vote.
Mr. Powell: How would the results have been different with the direct vote?
Mr. Orme: There would have been a complete block of Unionists on one side and a complete block of Nationalists on the other.
Another argument is that this system would militate in favour of independents and that "flat-earthers" would be elected in the Shankill and the Falls. Nothing could be further from the truth. This system would help smaller political parties, but they would have to be organised parties. If it brings about a break in the monolithic structure on her the Protestant side or the Catholic side, it will be in everybody's interests.
If there is not a minimum of five seats per constituency, difficulties can arise. With five it would be impossible for one party to get a majority.
Mr. Channon: I entirely agree with the hon. Gentleman about the general run of cases. There are one or two exceptions where, I suspect, though it is not for me to say—it is for my right hon. Friend and the chief electoral officer—it may have to be four.
Mr. Orme: I thank the hon. Gentleman. The question of ballot papers has been raised. The crucial question of polling districts and stations, which was dealt with by my hon. Friend the Member for Belfast, West (Mr. Fitt), will have to be taken into account. When are the elections likely to take place? It would be useful to know the date. I realise the difficulties, but, if we cannot have a date today, perhaps we may be told on Friday.
My hon. Friend the Member for Leeds, South (Mr. Merlyn Rees) raised a point on Article 4(4), suggesting that a report to the House on constituency developments might be useful. It might, indeed, help to meet the genuine point raised by

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the right hon. Member for Wolverhampton, South-West about adequate discussion of these matters in the House, though I must say that I regard them as so urgent that they should be discussed as soon as possible.
These are only steps—"one small step", was it, in Neil Young's words—but we must make a start. In looking to the future of democracy in Northern Ireland, the Minister must look also at the Special Powers Act, the ending of internment, the question of oaths, the rights of the majority and the rights of the minority. The need for economic development is urgent. We welcome the £30 million which is to be devoted to this purpose. This is extremely important. It shows keenness on the part of the Government to get economic development under way, and we fully support it.
In the difficult problems which we shall now face—I have in mind here the speech of my hon. Friend the Member for Belfast, West—I hope that the events of the last 24 hours will not rupture the talks which are about to take place. These talks are essential. I noted the courageous statement made by John Hume yesterday evening—or early this morning, was it?—to the effect that, while he criticised the use of troops in the Bogside and the Creggan, he nevertheless laid the blame firmly at the door of the provisional IRA. I wish that my hon. Friend the Member for Fermanagh and South Tyrone had, perhaps, done the same in regard to what happened in Belfast on Bloody Friday.
The political statement by the SDLP is extremely encouraging. It is positive, and it represents a developing political point of view. To the Unionist Party, one must say that it is about time that it came forward with ideas for political developments in a new situation, contributing to the progress which we hope will be made in the talks and the working out of some form of assembly for the North.
Everyone recognises that we shall not go back to the original Stormont. Those 50 years are behind us. But we must look forward now not to the next 50 years but, possibly, to the next five years, with the difficulties to come and the drift towards civil war and sectarian violence, which, my hon. Friends know, if it really
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broke out with a vengeance could not be kept on one side of the Irish Sea. At all costs we must prevent that.
I listened carefully to the Minister of State when he made his statement this afternoon following the movement of troops into the no-go areas. Many of my hon. Friends have strong doubts about the situation, and we will understand that. We want his word now that the Army will act impartially, underwritten by action. We want, if we can, to see an end to the bombers. We want to see an end to the masked men of the UDA. We want to see those people off our streets. We want to see an end to the murder squads.
We want the Minister to bear in mind the sensitivity of the Catholic community at the present time, and it would be our wish to urge upon the Army that it remember that it is there in a holding position. It is there, and can only be there, on a temporary basis in the present state of affairs.
The Minister has been asked what contingency planning there has been for further developments. Thought must have been given to the type of policing which must follow in the no-go areas. This is crucial. Sometimes a situation of this kind calls for exceptional action. It might, perhaps, be necessary for members of the British police forces to be used along with others for a limited period. I make these suggestions to the Minister as valid contributions to the argument because we accept that there is no simple or quick solution. He must now go forward to political action. He has said, and so have we, that there is no military solution to the problem.
There is not a great deal of time for a political solution and what time there is could easily run out. Some people, like members of the SDLP, will be under great pressure from certain sections of the community to withdraw from the talks, but I hope they will stand firm and take part. I believe they will now be encouraged not just by words but by example and by the action of the Minister.
As my right hon. Friend the Leader of the Opposition said this afternoon, one example might be to call in all guns, registered or otherwise, which exist throughout the community. It seems

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udicrous that 104,000 licensed guns exist in a community of that size.
Mr. Biggs-Davison: I sympathise with the point that the hon. Member is making but how would he like to be a farmer living near a border which was not sealed, in a position isolated from his neighbours, without even a shotgun in the house?
Mr. Orme: The hon. Member and his hon. Friends have been saying that there is only one rule of law and that that must be carried out by the British Government. In view of that, he cannot now introduce a double standard as he is seeking to do.
Mr. Biggs-Davison: I ask only for the right of self-defence for people—[Interruption.]—and I mean Catholic or Protestant. I ask only for the right to have a licensed firearm for purposes of self-defence for those who live in a lonely situation.
Mr. Orme: I hope we shall soon get away from such circumstances. We do not want a United States-type situation imported into the United Kingdom.
It is against the background of the argument for the single transferable vote, which we regard as a positive but small step forward, and it is against the background of the need for a political initiative that the Opposition on Friday will support the order and support other political reforms within the context of how and when the Government introduce them. In this sombre debate there is a ray of hope. It is not a great deal, but we must grasp hold of it because the alternative is too terrible to contemplate.
9.34 p.m.
The Under-Secretary of State for Northern Ireland (Mr. David Howell): I begin by congratulating the hon. Member for Salford, West (Mr. Orme) on his first appearance at the Dispatch Box, at least on Irish affairs. He is extremely well-informed on these matters and makes great efforts to keep himself well informed. The House looks forward to many further speeches of the kind we have just heard.
The debate, like other debates which we have had on Northern Ireland affairs on questions of basic and important administration, takes place yet again under the shadow of dramatic events in
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Northern Ireland, particularly those which began in the dawn hours of this morning. But despite that, as a number of hon. Members have pointed out, minds have been concentrated wonderfully on the complexities of electoral law and we have had some extremely stimulating and constructive speeches on the various aspects of the matter.
I should like to turn to a question which arose at the beginning of the debate when the matter of the procedure by which we are looking at this important issue was raised. This time we are going one better than the short debate procedure on the Order in Council, the 1½ hours and then the "chop"; we are having a full day's debate. As my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) rightly pointed out, this is not good enough. I agree that it is not good enough. Of course, by its very nature the title of the Act which legitimises our actions, the Northern Ireland (Temporary Provisions) Act, illustrates that we are in a temporary, unsatisfactory situation in which we are all trying—indeed, this is the whole thrust of my right hon. Friend's efforts—to move towards political and constitutional developments which will provide a better and improved means by which the people of Northern Ireland can govern themselves. We therefore recognise that, although time is given, the situation is not satisfactory. However, it is obviously better than the 1½ hours for the order which will be debated at the end of this week, and it has provided the opportunity for a variety of views and observations to be advanced.
The hon. Member for Leeds, South (Mr. Merlyn Rees) quite rightly pointed out that there has been quite a warm welcome from a surprising variety of viewpoints in Northern Ireland for proportional representation, or—I must bow to the opinion of the hon. Member for Nottingham, West (Mr. English)—not pure proportional representation if we are talking about the single transferable vote. I hope the hon. Gentleman will forgive me if I slip back shoddily into calling it proportional representation. I recognise from the viewpoint of the purist doctrine this is not pure proportional representation; it is merely more proportional than other forms of representation which exist in some areas.

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The hon. Member for Leeds, South also talked about the ward groupings and how the Chief Electoral Officer would go about his business. I should like to go into this matter in some detail, because it is important and there was misunderstanding about the way this would happen.
The grouping of single member wards into suitable electoral areas will be carried out by the Chief Electoral Officer as soon as possible after his appointment, which we hope will be in the middle of August. He is required to make public provisional proposals about the grouping of these wards for each district council area. A period of 28 days will be allowed for consideration of these proposals and for the making of objections. The Chief Electoral Officer will carefully consider any objections and representations and make his final recommendations on the groupings to my right hon. Friend. Thus, the Secretary of State will take the ultimate decision in these matters, not the Chief Electoral Officer. That must be made clear. So, by approximately the end of September my right hon. Friend will be in a position to prescribe by way of regulations the precise groupings.
Mr. Merlyn Rees: I am grateful to the hon. Gentleman for making that point clear. If an election is to take place in December, is it not appropriate that the final decision of the Secretary of State should be put to the House in the form of an Order in Council so that the House may look at it, bearing in mind that with local authority ward arrangements, and so on, it is eventually a decision for an elected organisation, a city council, or whatever it may be? I realise the difficulty in terms of timing, but if it is the end of September perhaps something could be done which would assist the House.
Mr. Howell: I am grateful to the hon. Gentleman for his recognition of the difficulty in terms of the timing. The timing is very tight indeed. Nevertheless, I certainly take note of his point and will convey it to my right hon. Friend. However, as the hon. Gentleman rightly recognises, the timing is extremely tight.
Now we come to another matter of some complexity, the surplus votes. I understand that the matter at issue is whether, when we come to deal
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with the surplus votes accruing to any elected candidate, it is just the surplus or a proportion of the votes that is reallocated to other candidates. It is the second method that we propose to try in Northern Ireland, the method by which all votes are distributed proportionately. I believe that it is called the senatorial system. I acknowledge the point made by my hon. Friend the Member for Beckenham (Mr. Goodhart), that it is undeniably complex to administer, but another hon. Member rightly said that from the point of view of the voter the complexities have not been found formidable wherever this method has been tried and that it is possible to carry out this voting system with a suitable degree of simplicity. But for the administration there are complexities, of which the question of the distribution of the surplus votes is one.
The deposit is to be based on a quarter of the quota. There were differences of opinions expressed on the matter, but we believe that that is about right.
When there is a resignation or death in a single ward within a group of wards there will be a single-member by-election. That is the simplest and most straightforward way of doing it.
Mr. Leonard: There is a slight ambiguity in what the hon. Gentleman has just said. Surely under the proposed system the elected member will represent the whole group of wards, so that if he dies the vacancy will be for the whole group and not one single ward among them?
Mr. Howell: That is not necessarily so, because the intention is that with the guidance of the electoral officer, or, if that does not appertain, on the proposal of the Chief Electoral Officer, within the group of wards a particular councillor should be allocated to a particular ward, ideally the one he lives in, so that there would be some linkage between a particular councillor and a particular ward. That goes some way to meeting the criticisms rightly voiced by my right hon. Friend the Member for Wolverhampton, South-West and others, that the system moves away from the very important personal link between the individual elector and his councillor. Although it can be argued that it moves away from the purist doctrine again, this

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has virtue in meeting the problem of my right hon. Friend and the practical problem of how to organise by-elections.
Mr. Orme: The Alliance Party made representations to some of us today on this point. Who is to decide who goes in what particular ward? It could be a terrible political decision. I ask the hon. Gentleman to reconsider the matter.
Mr. Howell: I am quite happy that it should be looked at again. That is the purpose of the debate. The present view is that the problem can be dealt with by the electoral officer agreeing with the councillors elected. If that cannot be done, if it turns into great difficulty, we shall look at the question again. I know that my hon. Friend the Minister of State will deal with it again on Friday.
Mr. David Steel: What is wrong with the alternative vote in single-member constituencies in that case?
Mr. Howell: That happens to be a completely different system to the one we propose, which is a single transferable vote system.
Mr. Powell: As my hon. Friend has kindly said that he will look at this point, may I put to him again the difficulty which is thrown up by a by-election? I can quite understand that an individual councillor can be allocated nominally, and indeed for practical purposes, to an individual ward, but it seems impossible that if he dies or retires he, who has been elected by the entire area, should be replaced by an election in a particular ward.
Mr. Howell: We shall certainly look at the matter again, but at present we take the view that that is the only practicable, way of doing it.
Mr. Merlyn Rees: I realise the difficulty, but I return to the point about an order that we made earlier. This problem proves that if there are difficulties in orders the report to the Secretary of State of the Chief Electoral Officer must be presented to the House in some form or other so that it can at the very least have a look at it.
Mr. Howell: I have said that I take note of the point which the hon. Member
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for Leeds, South has made sincerely, directly and now with great emphasis.
I now turn to some other questions which the hon. Member for Leeds, South and other hon. Members asked. Election by proportional representation or single transferable vote to area boards is in practice not on. It would lead to very great complexities not only for the administrators but for the public. The hon. Gentleman talked about the shape of the ballot paper, which is an important matter. It will be looked at carefully by the Chief Electoral Officer and careful note will be taken of the points which have been made today, particularly the point made by the hon. Member for Sheffield, Attercliffe (Mr. Duffy), that we do not want to end up with an 8 ft. ballot paper, which would not be suitable for our purposes. The cost of the single transferable vote system will be approximately £100,000, which will probably be borne centrally and not by the local authorities. The siting of polling stations is another important matter. The Chief Electoral Officer will prepare a draft scheme which will be examined closely. I recognise the difficulties.
I now turn to the point to which many hon. Members referred, which, strictly speaking, is not within the order which we will discuss at the end of the week, but which is relevant and of great importance, namely, the plebiscite or referendum. The matter was mentioned by my hon. Friend the Member for Esher (Mr. Mather), the hon. Member for Antrim, North (Rev. Ian Paisley), who was kind enough to tell me that unfortunately he cannot be here for the end of the debate, and my hon. Friend the Member for Beckenham, who is something of a pundit on referenda. The question raised was the present attitude of Her Majesty's Government towards the plebiscite. It is our hope that it should take place before the local elections. My right hon. Friend the Secretary of State is anxious to take the necessary legislative steps as soon as possible.
My hon. Friend the Member for Belfast, South (Mr. Pounder) raised a number of questions. He asked why we should change the period from three years to four years. Having examined the matter carefully, we believe that the four-year

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period is about right. It gives a longer time for the authorities to settle down and makes sense in administrative terms. My hon. Friend made the point about district electoral areas in Belfast becoming very big. We agree that there is that danger and we shall have to watch the situation carefully. My hon. Friend also asked about free postage for election addresses. We have looked at the matter and it is our view that it would be too expensive.
Captain Orr: I am a little puzzled by what my hon. Friend has just said about the referendum. My hon. Friend says that he "hopes", yet my right hon. Friend the Secretary of State said that it would happen before the local government elections. If my hon. Friend the Under-Secretary hopes that it will happen, when can we expect the legislation to give effect to it?
Mr. Howell: I can only repeat that my right hon. Friend the Secretary of State is anxious to take the legislative steps. I repeat what he said on 14th July:
"…it is only a question of its timing which is affected by the security situation."—[OFFICIAL REPORT, 14th July, 1972; Vol. 840, c. 2034.]
That is the position taken up by my right hon. Friend the Secretary of State and I cannot go further.
The hon. Member for Attercliffe raised the question of qualifications for voting. This is a complex subject and there is some confusion about it. The hon. Gentleman mentioned the seven-year provision. It is necessary under Northern Ireland election law at present for anyone who is a British subject but was born in Northern Ireland to have resided for seven years continuously in the United Kingdom to qualify to vote. Whether this is a good or bad practice, or desirable or not, I will come to later. But that is one practice. The other practice relates to the question of citizens of the Republic of Ireland, and it is more straightforward. Citizens of the Republic, if they were not on the register in Northern Ireland in 1962, cannot be included to vote in Northern Ireland, unless of course they apply for British citizenship.
It may be said, and rightly, that these are difficult and complex arrangements.
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The Government take the view that they need looking at again and it is hoped, with the convening of the Electoral Law Advisory Commission in due course, to examine these questions, particularly the seven-year provision.
Mr. Duffy: When the matter is looked at again, will the hon. Gentleman bear in mind the desirability of establishing reciprocity all round, not only on the ground of equity but on the ground of future policy-making?
Mr. Howell: I do not wish to go further than I have. I have indicated that all these complex questions, particularly the seven-year qualification, will need examination when it has proved possible to convene the Electoral Law Advisory Commission.
The hon. Member for Romford (Mr. Leonard) reminded us of the example of Schleswig-Holstein, but I was always told that that is a matter to be avoided because of its complexity, so I shall do so. The hon. Member also said that the single transferable vote system was not pure proportional representation. He and the hon. Member for Salford, West rightly raised the question of ward groups being at least five members. That will be the figure aimed for except in one or two instances where it will prove in practical terms impossible. In general terms, however, the aim will be to have groups of five or more.
Mr. Leonard: Will these places be in Belfast or in another part of the country?
Mr. Howell: They will be outside Belfast.
The hon. Gentleman also asked whether proportional representation or the single transferable vote will be reversed. That takes me to an issue also raised with great eloquence by my right hon. Friend the Member for Wolverhampton, South-West and many others. In speaking of these proposals, which will become law if the House accepts the order at the end of the week, my right hon. Friend the Member for Wolverhampton, South-West, with his beam of logic penetrating into the future, saw them as leading from one thing to another. He said they could not stop where they are and he saw them step by step, from his point of view, leading

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inevitably downwards to worse things and greater things. That may be his way of seeing the situation but the fact remains that what is proposed in the order, and what will be the legislation if the House accepts the order, is that proportional representation or the single transferable vote should be provided simply for the local elections in 1972.
It may rightly be argued that this will lead to a new view of things. Of course it will, Each event allows one to judge by experience how to proceed. When the matter has been tried and some of the complexities have been noted, together with the advantages and disadvantages, a judgment will be made of its relevance for future constitutional and political development in Northern Ireland.
Perhaps we should also apply what I am saying to the point made about the need for long-term plans, particularly following the dramatic events of last night. Of course the Government have plans and policies but it would be very unwise if we were not constantly to adapt them to unfolding events, because events have a material effect on what is being done.
Mr. Douglas: The hon. Gentleman is saying that the Government must adjust plans to the unfolding of events. He discloses an attitude of mind in doing so which suggests that the most important priority is to have the plebiscite first and the election afterwards. Would he not adjust his plans and programmes to changing events?
Mr. Howell: The hon. Member is divining subtleties in my attitude of mind of which I am not aware. I thought that my remark disclosed a commonsense view. If the Government had a wonderful idea or policy but events developed in an unforeseen way, not to adapt and adjust it would lead to disaster.
Mr. McNamara: The Minister said that following last night's events, plans which are ready will unfold. What are the plans for the future policing of these areas?
Mr. Howell: I can only repeat that what develops and what is done will be adapted and influenced by events. Any intelligent policy must exist in the first place. My right hon. Friend has con-
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stantly reiterated what his overall strategy is, and the main prong of his policy—flatly against the absurd propositions put forward by the hon. Member for Fermanagh and South Tyrone (Mr. McManus)—is to seek a political solution. That is his strategy. I make the obvious statement that all these matters have to be modified in the light of the way in which things turn out and events shape up.
I think I have covered most of the points that have been raised. If I have not covered detailed points they can be put to me by letter. We shall be covering detailed points on the aspect of STV or PR when the order comes before the House. It remains for me to make the point that came up again and again in debate that we are at a critical and important stage in the development of our policy. It is literally and metaphorically true to say that the paths to peace are being cleared both in respect of the UDA and the IRA.
Hon Members on the Opposition side asked again and again for it to be made clear that the security forces would be impartial in their attack on the forces of lawlessness. That is certainly so. My right hon. Friend the Secretary of State has given direct and explicit instructions that barricades will come down wherever they may be found. They will be taken down if those responsible do not take them down. That action will be carried out impartially by the security forces, who insist on imposing a framework of public protection of law in the situation that has prevailed, which is unacceptable to the citizens of Northern Ireland.
I agree with my hon. Friend the Member for Beckenham that the action taken last night—this is outside the question of law reform but it was raised in the debate—was necessary. I go further and say that it had become possible, and was only possible, as a result of very difficult decisions and very controversial policies pursued over the past months with great courage and determination by my right hon. Friend. That action became necessary and may be the precondition and the reason why we have been able to have an amazingly constructive although sombre debate this evening.
Our objective remains to achieve a political solution based upon a sound economic and social foundation within a

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framework of lawful protection of the public and people of Northern Ireland. We are determined to achieve that goal.
Question put and agreed to.
Resolved,
That this House takes note of the Electoral Law (Northern Ireland) Order 1972.

NORTHERN IRELAND (HEALTH AND SOCIAL SERVICES)
9.58 p.m.
The Minister of State for Northern Ireland (Mr. Paul Channon): I beg to move,
That the Health and Personal Social Services (Northern Ireland) Order 1972, a draft of which was laid before this House on 11th July, be approved.
The draft order is another in the important series of measures stemming from the reorganisation of local government and other services in Northern Ireland. It will provide a new administrative structure for the personal health and personal social services in Northern Ireland, and its provisions follow closely those of a Bill which, following presentation, lapsed on the prorogation of the Northern Ireland Parliament.
I would emphasise that, unlike the other orders, the structure proposed in the draft order derived only in part from the reorganisation of local government. Throughout the United Kingdom there is recognition that the existing division of the personal health services into three compartments—namely, the hospital and specialist services, the family practitioner services and the personal health services provided by local health authorities—does not best meet the needs of patients today or enable the most efficient and effective use of resources. There is a Bill already before Parliament to integrate the Scottish Health Services and Measures are promised to do the same for England and Wales. The draft order contains comparable provisions in regard to the Health Service in Northern Ireland.
It being Ten o'clock, Mr. SPEAKER interrupted the Business.

BUSINESS OF THE HOUSE
Motion made, and Question put,
That the Industry Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Hawkins.]
The House proceeded to a Division—
Mr. HAWKINS and Mr. Fox were appointed Tellers for the Ayes, but no. Member being willing to act as Teller for the Noes, Mr. SPEAKER declared that the Ayes had it.
Question agreed to.

NORTHERN IRELAND (HEALTH AND SOCIAL SERVICES)
Mr. Channon: As I was saying a few moments ago, the order deals with the reorganisation of the health and personal social services and many other matters. The reorganisation of local government in Northern Ireland also meant that a new base had to be found for the personal social services at present provided by local welfare authorities—[Interruption.]—and the draft order proposes this.
Mr. Speaker: Order. More silence, please.
Mr. Channon: Health and social services need to be planned and delivered on a co-ordinated basis and this will be facilitated by the single administrative structure. At the same time, care must be taken to protect the professional autonomy, both of the health and the personal social services, and the administrative structure will include adequate provisions to this end.
The draft order effects a radical re-organisation of services and is, I emphasise, the product of consultations and discussions over several years with the many interests concerned. Generally there is firm support for the concept of a unified service, although with so many differing interests one could hardly expect complete unanimity. There is, however, a wide measure of agreement and eagerness to have the new machinery set in motion.
Before I go into some of the details I am sure that I would be expressing the views of all hon. Members if I were at this stage to pay tribute to the doctors, nurses, ambulance drivers and all those associated with the Northern Ireland

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health and social services for the almost incredible work they have done, in particular over the past three years. Like so many other sections of the community they carried on working regardless of the appalling conditions, and no words of mine can express the appreciation that the country owes them for their work under the trying circumstances in which they have been placed.
Mr. James Molyneaux: My hon. Friend refers to the work of ambulance drivers, nurses and so forth. Will he bear in mind the necessity for fair and equal treatment of the various grades of ambulance and transport drivers attached to the hospitals board? Many have not been on what is known as "stand-by" duty and as a result have been deprived of special payments. I should be grateful if these pay scales could be evened out.
Mr. Channon: Perhaps I might look at the point that my hon. Friend raises. I shall write to him about it when I have had a chance to examine the situation. Certainly the work done by ambulance drivers has been remarkable.
I do not think that the House will expect a detailed account of the order and, in view of the limited time available, perhaps it will be best if I highlight those aspects of it which are of special interest. The order brings within the direct responsibility of the Ministry of Health and Social Services for Northern Ireland the hospital services, the family practioner services and the school health and other personal health services provided by the local health authorities. It also transfers to that Ministry the existing functions of local welfare authorities in terms of personal social services other than the child care and adoption services which transfer to the Ministry of Home Affairs. The provisions in Part II of the order indicate the main functions of the Ministry of Health and Social Services. Its general duty as stated in Article IV is the provision upon which everything else hangs.
Provision is made in Part III for the establishment of Health and Social Services Boards which will undertake the area administration of services on behalf of the two Ministries. For what are hoped to be good administrative reasons there will be four such boards. There
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will be wide-ranging consultations about appointments to the boards, and their membership will be broadly based to reflect the various interests in their areas. About 30 per cent. of the membership of each board will be nominated by the district councils in its area. About another 30 per cent. will reflect professional interests. The balance will be appointed after consultation with such interest as the universities, industry and commerce, the trade unions and voluntary organisations.
The House knows from previous debates that the new administrative structure must come into operation on 1st April, 1973, to synchronise with the dissolution of the existing local health and welfare authorities. This raises problems, in view of the fact that local government elections in Northern Ireland for the new district councils cannot be held for some months. It means that district council nominees to the Health and Social Services Boards cannot be appointed until some time later. Accordingly, paragraph 3(3) of Schedule 1 enables the majority of members of boards to be appointed as soon as possible after the making of the order and to proceed with essential actions which really cannot wait such as the advance appointment of key staff.
Generally speaking, each board will be responsible under the two Ministries for providing or securing the provision of a comprehensive range of health and personal social services in its area with the exception of certain regional specialities such as neurosurgery which can only be provided at one centre to serve Northern Ireland as a whole. They will be required to act in accordance with regulations made or directions given by the Ministries and will have to prepare schemes for the exercise of their functions. It seems likely, for example, that a board's area will be sub-divided into districts for the local management of services. The boards will appoint district officers to operate as an executive team and to be responsible to their chief officers at the board's headquarters.
Apart from the 30 per cent. membership which will be district council nominees, it is important to secure further community participation in the services and to ensure that the boards are responsive to local needs and views. Each

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board will be required to appoint district committees whose function will be to represent the interests of the public in their districts. Their membership is likely to include local members of the board, district councillors, representatives of voluntary organisations and other people with an interest in the health and personal social services. The district committees will not have executive powers. But they will have important consultative and advisory functions and a vital rôle in energising voluntary effort in their district.
Part IV deals with the central machinery for the new structure. The Northern Ireland Health and Social Services Council will be established to advise the two Ministries on major policy matters. It is also possible under Article 24 to enable the appointment of specialist central advisory committees for any profession or professions or for a particular service. Under this provision, committees will be appointed to replace the existing Standing Medical and Nursing Advisory Committees, and other specialist committees will be appointed as necessary, including one for the personal social services.
Another important feature of the new central machinery will be the Central Services Agency for the Health and Social Services which will be appointed to provide certain common services on behalf of the Ministry and the boards. The functions of the Agency are not detailed in the order but will be conferred by direction of the Ministry. It will provide, for example, the payments machinery for the independent contractors in the health services and will be the base for advisory appointments machinery for senior hospital medical and dental staff. The Common Services Agency to be established under the Scottish Bill is fairly similar in concept.
The essence of the new administrative structure is that there should be a single tier of authorities at area level responsible under the Ministeries for the functions of both planning and management. The creation of the Central Services Agency will in no way be a breach of this principle. It will have no authority over the management activities of the boards. Its membership is likely to be representative of the boards and of the practitioner professions.
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A further central body to be established is the Staffs Council for the Health and Social Services. This Council will have functions in relation to recruitment selection, appointment and training—other than professional training—procedures for certain staff in the health and personal social services.
The reason why this order is so long, apart from these measures which I have outlined, is that it also consolidates existing legislation and it will be extremely useful because it will contain the whole legislation in this field.
Part VI of the order provides for the administration of the family practitioner services by the Health and Social Services Boards. This is very largely a re-enactment of existing legislation.
Part VII provides for co-operation between the health and personal social services authorities and various other bodies. Many instances of the need for co-operation could be adduced, but as time is so short I shall refer only to two. The Health and Social Services Boards will be responsible for the general surveillance of the health of their populations. This will include, for example, responsibility for the prevention and control of communicable diseases and for certain sea and airport health matters. On the other hand, the new district councils will be responsible for a wide range of environmental health services such as street cleansing, refuse disposal, the control of air pollution and the enforcement of food and drugs legislation. The boards and the district councils will need to enlist each other's help in these matters. The other instance of co-operation to which I would refer relates to voluntary organisations, and the Ministry of Health and Social Services would be empowered to make arrangements for the provision of services by these organisations or to give them assistance.
Part VIII, which is more controversial, defines the duty of the Ministry of Home Affairs in relation to child care and adoption services. I should mention at this point that there has been criticism by some social work interests of the dichotomy of responsibility for the personal social services as between the Ministry of Health and the Ministry of Home Affairs. This division of responsibility reflects the fact that while, in general,

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personal social services are closely related to health services, the child care element is linked with functions and services of the Ministry of Home Affairs, such as the courts and the probation service, arising from the legal framework within which child care is provided. I do not think that in practice this should cause immediate difficulties, since steps have been taken to ensure the necessary liaison between the two Ministries in the administration of personal social services.
It has been suggested, however, that there should be a greater measure of integration, both at departmental level and in the field, to bring under one administrative framework a fuller range of personal social services. This is certainly the trend throughout the United Kingdom, but the House will reflect that the different patterns of recent development in England, Scotland and Northern Ireland indicate that the issues are by no means clear cut, and that the extent of such integration needs to be carefully considered in relation to particular services such as probation, hospital social work and education welfare.
I have discussed this problem with my noble Friend the Joint Minister of State and the Departments concerned, and generally we intend to undertake a review which needs to be in greater depth than the timetable of the current reorganisation of local administration would permit. We intend to undertake a review, which can best be initiated when the massive task of implementing the new structure has been completed.
Meanwhile, I should stress that the new boards will be undertaking a substantial range of personal social services, and their establishment will not prejudice any greater measure of integration which may be agreed upon for the future.
I need not deal in detail with Parts IX and X, but if any hon. Members have questions I shall try to answer them. The same applies to Parts XI and XII which contain various financial, miscellaneous and administrative provisions, most of which are based on existing legislation.
I must say something, especially in the presence of my hon. Friend the Member for Antrim, South (Mr. Molyneaux) about the Special Care Service. I have met
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representatives of the special care committees including my hon. Friend, and they have expressed most forcefully their fears that under this order the special relationship which they have, including the close liaison between the hospitals and parents of patients, would disappear. Nothing could be further from the aim of the order. I have therefore set up a working party of representatives of the special care committees and officials of the Ministry of Health and Social Services to consider how best special care services can be administered under the area board structure set up by this order. I should emphasise that the House agreeing to this order will not inhibit discussion or implementation of the recommendations of the working party.
This is a far-reaching measure which makes fundamental changes in the organisation of the health services in Northern Ireland and, in addition, brings the personal social services within the same framework. I think the House will agree that as medical science advances and as the health and social needs of the community change, it is necessary to have an administrative structure which can quickly adapt to the changing demands and changing needs.
I believe that the proposals in the order will establish such a flexible structure. I also believe and hope that it will enable the best possible service to be provided for patients and persons in need within the resources available. As someone who has had some brief acquaintance with the services provided in Northern Ireland I have a profound admiration for the work that has gone on in these areas.
No one can quarrel with the objectives of the order. It is an urgent order because, with the reform of local government, it is essential that these duties should be regularised in time for next April. I hope, therefore, that after I have tried to answer any questions which hon. Members may wish to put to me the House will agree to approve the order so that the essential element of reorganisation can go ahead and we can, in reasonable time, provide a sensible framework with for the organisation of the health and personal social services, for that, I am sure, is the wish of all hon. Members, and it is certainly the wish of all thinking people in Northern Ireland.
10.18 p.m.
Mr. Merlyn Rees: This is a fundamental measure and yet, as I understand it, it has not been discussed at Stormont. I understand that there was a Green Paper in 1969, a consultative document in 1971—a similar pattern to that followed in this part of the United Kingdom—and that the order was debated for 22 minutes recently in another place. I do not apologise for coming back to the question, because I know that the Government are concerned about it. The order illustrates again the nature of the parliamentary problem which faces us as a result of direct rule.
A major measure which would normally have a Second Reading, a Committee stage, and so on, is being discussed for 1½ hours at this time of the night. We accept that the problem arises from the direct rule temporary provisions, but on every occasion on which this happens we must remind ourselves that if this situation is likely to go on for very much longer, certainly in the next Session both sides of the House will have to work out a proper method for dealing with this type of legislation.
The Minister explained that the order is based on the changing pattern and the integration that is taking place in the various parts of the health service. It is also based on local government reform. There is one question that I have to put to the Minister. From discussions that I have had with my colleagues who have shadow responsibilities, I have learned that there is a different system in Northern Ireland from that in Scotland and in England and Wales. It has been explained to me that area health boards in Northern Ireland will also take over the work of the local authority service; that the local authorities in Northern Ireland will not have such, let us say, important work to do as have local authorities in the rest of the United Kingdom. I should like to be given some justification for the different structure. We do not ask for the health functions in Northern Ireland slavishly to follow what is done in England and Wales and Scotland. There must be a short explanation for such differences.
The essence of the order is in the social service boards, of which there are
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to be four. On the other hand we recently passed an order creating five educational advisory boards. This is something similar to the position even earlier than the 1870s in this country, when there was a proliferation of education boards, highway boards, and the like which were eventually brought into the local government structure. Is it sensible to have one number of boards for education and libraries and another for health and social services? For example, the health and social service boards are responsible for the medical and dental inspection, supervision and treatment of school children, yet education will be under a different number of boards. Why has it been thought necessary to have a different number of boards?
All of us quite properly are given to saying "Hear, hear" when reference is made to the incredible work people in the health and social services are doing in Northern Ireland—the work of the ambulance men and nurses in a wartime situation. We should transfer our concern to some of the real staff problems that exist. The staff need reassurance that there will be no redundancies as a result of reorganisation but rather that career prospects will improve. Can we have that assurance?
I understand that in seeking to maintain status the Interim Staff Commission is reducing eligibility, and therefore competition for posts in the new structure. Is not this unsatisfactory? It has been put to me that the Northern Ireland section of the British Association of Social Workers has completely rejected the salary scales propesed as being too low in comparison with those in other services. I also understand that it is meeting tonight to consider the matter. Since the reorganisation will involve more responsibility all round, will not this be fairly reflected in salary scales?
As with a previous similar order, this order removes the declaration of allegiance. As the Minister will recall, we discovered on that occasion that people taking this sort of post in Northern Ireland not only had to take the oath of loyalty to the Crown but an oath of allegiance to the Government. As we have said before, it asks a litle much in this country for at least 50 per cent. of

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the population to take an oath of allegiance to the Government. I would not take an oath of allegiance to the right hon. Gentleman the Member for Bexley (Mr. Heath). The hon. Lady the Member for Lancaster (Mrs. Kellett-Bowman) evidently disagrees, but it really is asking a great deal. Would the hon. Lady take an oath of allegiance to my right hon. Friend the Leader of the Opposition?
Mrs. Elaine Kellett-Bowman: Is it asking a lot to expect more than one of the hon. Gentleman's colleagues to be present for such an important debate? To have only two Members on the Socialist benches seems to me to express complete contempt for a very important concept.
Mr. Rees: The hon. Lady has not been present all day, when we have had a large attendance of hon. Members discussing Ireland. She is the last person who should come into the Chamber and act in that sort of silly way.
Mrs. Kellett-Bowman Mrs. Kellett-Bowman rose—
Mr. Rees: I shall not give way any more. On the Opposition side of the House we manage Irish affairs in a bipartisan way. Thank God the hon. Lady keeps out of Irish matters.
Mrs. Kellett-Bowman: She is not keeping out of them at present.
Mr. Rees: The order removes the declaration of allegiance. The hon. Lady's Government is removing it. We are thanking the Government for doing so. When on a previous occasion we discussed the education order, we found that the oath was being removed for officers but not for teachers. Does that mean that in dealing with health and personal social services, the oath of allegiance will affect health and social workers and that it is being removed only for officers? We ask again when the Promissory Oaths Act, 1923, will disappear.
I notice that paragraph 5(4) states:
"The Ministry may permit any person to whom this paragraph applies to use for the purposes of private practice, on such terms and conditions as the Ministry may determine, the facilities available at accommodation or premises provided under this Article".
This is the rôle of private practice. Is the rôle of private practice greater or
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smaller than it is in the rest of the United Kingdom? There are limitations and disadvantages of waiting lists, bed shortages, queue jumping and so on. Does the Ministry pay the costs and pay for the consultant's time, and so on?
I notice that paragraph 7(2), concerning the prevention of illness, care and aftercare states:
"The Ministry may recover from persons availing themselves of any service provided by the Ministry under this Article, otherwise than in a hospital, such charges (if any)"
and so on.
Paragraph 8 deals with the care of mothers and young children. The charges are in respect of services. At the time when people need the service a charge is put on them. There are arguments against charges. There are charges on page 14 under the heading "Ancillary services". I do not think that in the rest of the United Kingdom there are charges for ancillary services. Are there to be any exemptions? Why is there a difference—if there is a difference—in Northern Ireland on the question of charges?
Paragraph 12 is concerned with family planning and states:
"The Ministry shall make arrangements, to such extent as it considers necessary, for the giving of advice on contraception, the medical examination of persons seeking advice"
and so on. What is meant by the phrase
"to such extent as it considers necessary"?
Is this different from the system in the rest of the United Kingdom?
The Women's Institute in this country is in favour of a full family health service within the National Health Service, referring, as I understand it, to England and Wales. What does the order mean when dealing with family planning in the difficult context of Northern Ireland?
Paragraph 33 raises a question about amenity beds. The paragraph states:
"which is not for the time being needed by any patient".
This is a Utopian situation. Are there beds in Northern Ireland which are for the time being not needed by patients under the health service? That is what it says. What is the situation in that respect?
On page 25 I notice that travelling expenses are paid for not only patients

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but for relatives visiting hospitals. Does this happen in this country? That may or may not be a good idea. But I do not believe that this is done in this country, certainly for relatives—a term which would need further definition.
I could ask many other questions. I shall understand if the Minister sees fit to write to me on a number of questions, because some of them are esoteric. There is the question of disabled persons on which my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) will no doubt wish to address you, if he succeeds in catching your eye, Mr. Deputy Speaker.
The order will go through, but we must be sure that the arrangements in the future for dealing with such legislation are better than this. The best arrangement is surely to have a Northern Ireland legislature which is supported by all the people of Northern Ireland and which can deal with such matters. Until that time comes we must use this procedure. I make no apology for raising some of the smaller issues which I have raised.
10.31 p.m.
Mr. James Molyneaux: As the hon. Member for Leeds, South (Mr. Merlyn Rees) said, this is the first example of inadequate scrutiny and discussion of a major Measure. This order was printed as a Bill just before Stormont was prorogued but it was not considered by Stormont. The order contains no sectarian issues. It is concerned solely with the modernisation of the health and welfare of the people.
Many interests are involved. The customer—the patient—must come first. Then there are the administrators—doctors, specialists, nurses, and welfare workers. All these interests must be taken into account. In the normal parliamentary processes, all these interests would have been safeguarded and their views represented and discussed at various stages of debate. In the normal course of debate, Government Amendments would have been introduced to correct obvious deficiencies. I suspect that the necessity to re-write the Bill as an order provided an opportunity to introduce such improvements.
In all fairness, I pay a sincere tribute to my hon. Friend the Minister of State
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and the staff of the Northern Ireland Office at Dundonald House for their patience and understanding of the genuine views put forward by interested bodies. If we have not yet succeeded in our various points, at any rate we still travel hopefully.
The most general fear is that the proposed structure will become impersonal and that many people will be estranged from the administration. My hon. Friend indicated that 30 per cent. of the personnel of the area boards will be nominated by district councils. I ask him to look at this matter again to consider whether this is a healthy balance. How will the nominations be made? There has been evidence of rushed decisions. Admittedly, very short notice was given and a short time allowed for nominations. In some cases, hurried meetings were properly convened and decisions properly made. There are other examples of nominations having been put forward sometimes by salaried officers, with very odd results.
One major matter is the protection of the interests of existing staff. These dedicated officers can be relied on to cooperate and to give of their best, but they have legitimate fears for their future, particularly those in the middle and senior grades. They are told that assurances cannot be given at present because parallel legislation is to be introduced and adopted in Great Britain. As this legislation has not been tabled and will be different, and as it will in any case not take effect until 1974, how can it be used as a precedent? In my view, the order should secure for officers of any grade a right of transfer to the new service on lines similar to those embodied in the Health Services (Northern Ireland) Act, 1948.
In fact—this is my reservation—the order appears, first, to deny statutory right of transfer to all officers; second, it gives the right to retention of existing terms and conditions of employment for so long as the Ministry deems appropriate; and third, it appears to exclude from the compensation provisions any officer who is not transferred.
Also, there are important superannuation problems. There will be a special problem for officers in the older age group who will be affected by the reorganisation and regrouping of hospital

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services, and in many cases they may suffer down-grading.
I am grateful to my hon. Friend for his expressed concern on the question of child care and for his assurance of deeper examination of this complicated problem. I suggest that there is need to move slowly until we see how the new arrangements in Great Britain work out in practice.
My hon. Friend the Minister of State would probably be surprised if I omitted any reference to the Special Care Service. As a member of his working party, I could not with propriety say publicly whether we agree or disagree, but as vice-chairman of a Special Care hospital management committee I may, I hope, at least state our aim. This is simply to prevent any fragmentation of the service. It is interesting that only yesterday the Mind Campaign came out clearly in favour of a unified authority for the mentally handicapped. In my view, only such a unified structure can permit the flexibility which would allow us to switch patients, staff and resources to gain the maximum advantage.
One must remember the all-important need to protect the interests of Special Care patients. Normal patients in a general hospital have their full faculties, and in any case they are there for a comparatively short time. But special care patients are particularly vulnerable and need the protection of people with real authority such as they have at the moment in the hospital management committee. There is an even clearer parallel in education: if it is considered that normal children in a school should nave the safeguard of a school management committee, how much greater is the need for protection of the interests of mentally handicapped children.
We cannot be satisfied with some form of casual visiting committee. There must be a body with real power, and a body deeply involved, including perhaps—indeed, I delete the word "perhaps"— including representatives of parents' organisations.
In the short time at our disposal, we are doing our best, within the straitjacket imposed by the Order in Council procedure. The product will not be perfect. I beg my hon. Friend the Minister of State to give an assurance that this
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Measure will be regarded as a broad framework within which compromises and modifications will be permitted in the course of recasting the whole structure of the health and welfare services over the coming years.
10.39 p.m.
Mr. Alfred Morris: In comparison with the order on electoral law, this order may appear of minor consequence. In fact, however, it is one of fundamental importance. Unlike other discussions on Northern Ireland, we are concerned here much more with the munitions of peace than with the munitions of war.
The proposal to improve co-ordination of services will be widely welcomed. As the House knows, the division of responsibility for personal health and social services in England has come in for criticism. There was, for example, strong criticism of this division of responsibility at the British Medical Association's recent annual conference in Southampton. The Minister would do well to look at John Roper's report of the conference in The Times of 20th July. He will find much of value in what the medical correspondent of that newspaper had to say about the BMA's deliberations. I accept that the order is well designed to secure effective co-ordination. My principal concern is with the personal health and social services available to the long-term sick and severely disabled. There is no Northern Ireland equivalent of the Chronically Sick and Disabled Persons Act, 1970. It may be argued that the order gives powers to provide all the services for the disabled vouchsafed for the disabled in England, Scotland and Wales by the 1970 Act. The draft order is, however, so much more general than the 1970 Act that it provides nothing like the same degree of encouragement and direction. Apart from the provision of invalid vehicles under Article 30, all other services would have to be provided under the Minister's general duty under article 4(b)
"…to provide or secure the provision of personal social services in Northern Ireland designed to promote the social welfare of the people of Northern Ireland."
This goes nowhere near resembling the force of the very specific provisions of the Chronically Sick and Disabled Persons Act, 1970. Section 1 of that Act imposes

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a duty on local authorities to draw up a register of the disabled. The detailed listing of what authorities must also do under the Act would inspire them significantly to improve the lives of their disabled people. I understand that the Minister has asked for papers from all Northern Ireland Departments which would have powers under the 1970 Act on provisions for the disabled. He will recall that I have already put to him a number of Parliamentary Questions on the matter. My hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) also has taken a very special interest in seeking to apply all the provisions of the 1970 Act to Northern Ireland.
There is, of course, very little time tonight, and very little material, on which to base an informed assessment of the legislation. As Lord Shackleton said in the House of Lords:
"We ought not to pretend that we are giving it proper consideration."—[OFFICIAL REPORT, House of Lords, 27th July, 1972; Vol. 333, c. 1549.]
My hon. Friend the Member for Leeds, South (Mr. Merlyn Rees) recalled that the order was debated for only 22 minutes in the House of Lords. I hope it can be said that at least the House of Commons gave rather more time to a Measure of fundamental importance to the people of Northern Ireland.
Westminster is now in direct control of the policies underlying the personal health and social services in Northern Ireland. May I take it that the Minister will not miss this opportunity to ensure that all the new provisions available to the long-term sick and severely disabled in England, Scotland and Wales will now be made available, as soon as possible, to the long-term sick and disabled in Northern Ireland? I am certain that if he can give that assurance, he will earn the gratitude of hon. Members on both sides.
10.45 p.m.
Mr. James Kilfedder: I echo the words of the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) whose interest in this subject is well recognised. It is a matter of regret that little time is given to detailed discussion of the order. Indeed,
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it is regrettable that there is no representative of the Republican parties in the Chamber when we are discussing a Measure which is for the benefit of all people in Northern Ireland.
I intend to make only a brief intervention in order to deal with a constituency matter. There is widespread belief in my constituency that the Ards and Bangor hospitals are to be run down. It is believed that the Ards Hospital will in the long run become largely a geriatric unit. This impression has been created as a result of remarks made by representatives of the hospitals authority at a meeting in Bangor in February, 1971. However, the then Minister of Health at Stormont, in May, 1971, denied there was any truth in these rumours, and he promised that the Ards Hospital would continue as a general hospital providing a wide range of specialities. I should like an assurance from my hon. Friend that the Ards and Bangor hospitals will remain and be allowed to expand, because this is of vital importance to my constituents.
I regret that a large part of County Down has been linked with Belfast under the reorganisation. There are to be four areas in Northern Ireland. Three of them will be made up each of 250,000 people, but the Eastern Area is to be composed of Belfast and the greater part of County Down with a total population of about 750,000 people.
I accept that there are advantages in larger units. For instance, it is easier to get able people to staff the hospitals. In that sense there is justification for linking, for instance, the Ulster Hospital at Dundonald with the Ards and Bangor hospitals. But according to the North Down Area Plan, published not so long ago, my constituency is expected to have 180,000 people within a few years. The local people in North Down have grown up with their local hospitals in Newtownards and Bangor, and it would be a great pity if these two hospitals were diminished in importance as a result of the link up of part of County Down with Belfast. In my opinion, the facilities provided by these two hospitals should be expanded and allowed to grow with the growth in population which is expected in the area. The danger is very real, because in cases of emergency patients would have to be moved from County

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Down to a hospital in Belfast through the congested streets.
Most of the representatives on the Eastern Area Board will be Belfast-based and Belfast orientated, and I fear they will have an in-built bias against the growth of Bangor and Newtownards hospitals. I should like an assurance from my hon. Friend that this will not be allowed to happen. It must be recognised that there is a real danger of this bias operating because the Eastern Area Board will provide a whole range of medical specialisms for Northern Ireland as a whole. This will concentrate attention on the hospitals in the city of Belfast, draining attention and potential away from the remainder of the area covered by the Eastern Board.
Concern is also felt by people in my constituency who are connected with the medical profession that midwives and nurses as a profession do not appear to be included at the top management level. Can we not have the appointment of a chief administration nursing officer on the same level as the three principal officers? The nurses and midwives represent the largest single group of professional employees on the staff of the area boards, and it is essential that a suitably-qualified nurse should be appointed to the position of chief administration nursing officer. Such a person would be able to help in formulating nursing policy, which is at the very centre of the personal health side of the functions of the area board. There should also be a midwifery officer at area board level, so that the board would always have ready to hand a person it could approach about the many problems that arise in connection with the midwifery services.
That is all I wish to say now, except to emphasise once again to my hon. Friend the fear in North Down that in the long run it will suffer when the life blood of the hospital service in County Down is drained away to Belfast. This must not be allowed to happen.
10.52 p.m.
Mr. Channon: I thank the House for the reception it has been kind enough to give to the order.
I recognise the unsatisfactory nature of the parliamentary proceedings in which we are engaged. I fear that this is an inevitable feature of the present parlia-
182
mentary situation. We are well aware of the unsatisfactory nature of the proceedings, and I note the views of the hon. Member for Leeds, South (Mr. Merlyn Rees), which he has expressed on many other occasions. He will know of the proposals of my right hon. Friend the Secretary of State, which will go some way to ease this very difficult situation. At the same time, the House is good enough to realise that in the present situation it is essential that the order should become law at an early date so that we can go ahead with creating a new structure for the area health and social service boards. Confusion next year would be very much against the best interests of people living in Northern Ireland. That is the last thing that any hon. Member wishes, and therefore I hope the House will allow the order to be passed tonight.
If I do not cover any points raised in the debate, I shall write to the hon. Members concerned about the points in question.
I can assure my hon. Friend the Member for Down, North (Mr. Kilfedder) that there is no change of mind by either the Ministry or the hospitals authority about the hospitals in the Ards and Bangor area. The statement by the former Minister of Health and Social Services still remains the policy of the Ministry of Health and Social Services. I hope that that statement will go some way towards allaying my hon. Friend's anxieties.
The hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) rightly raised the question of the Chronically Sick and Disabled Persons Act, and reminded me that he asked a Question about it some time ago, as did his hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley). In answer to his hon. Friend I gave an undertaking that I would consider whether legislation in Northern Ireland on the lines of that Act was required. I have now had the chance to examine the situation, certainly in relation to the personal social services.
The powers contained in this order will enable anything to be done in Northern Ireland in relation to the personal social services referred to in the Act for which I am, temporarily at any rate, responsible. The bodies responsible for such services will be the area boards, which

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will be the agents of the Ministry. The difference is that the order does not make the provision of all these services mandatory in the same way as it would be elsewhere under the Act. The boards will be the Ministry's agents and will have adequate powers to provide such services, however, and what I am prepared to do is to give an assurance that I will arrange for directions to be given to any board which is unwilling to provide any service whose provision is mandatory in other parts of the United Kingdom. I believe that this will go some way towards meeting the point put by the hon. Gentleman in relation to the personal social services.
It is true that some services under the Act are not directly the responsibility in Northern Ireland of the Ministry of Health and Social Services and are not therefore covered by this order. I am in close touch with my colleagues responsible for these other Ministries to establish what the situation is and whether it is necessary to promote corresponding legislation in relation to those services. I am examining the matter at present and I am sure that the hon. Gentleman will keep on pressing me about the topic. I hope to be able to give him a firm answer on the other points in due course. But I hope I have in effect met his point about the health and personal social services even if it is being done in Northern Ireland in a slightly different way from the rest of the United Kingdom.
My hon. Friend the Member for Antrim, South (Mr. Molyneaux) rightly again raised the question of special care. I am grateful to him for serving on the working party, to whose report I am looking forward. This is not obviously the time to go into it, since it is a matter for consideration.
My hon. Friend also asked why there is to be only 30 per cent. representation of district councils on the new area boards. This was the lower figure recommended by the Macroy Committee as being within the acceptable range of local council representation. The health service is very different from the education service, where the figure is to be 40 per cent. It is generally recognised that in education there has been a much closer local connection than there has been in the case of the health and personal social
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services. It was felt that 30 per cent. would not be unreasonable.
Some people have argued to me that this itself is an advance in the amount of democratic representation upon area boards compared with what exists at present. But I note what my hon. Friend has said and I am grateful for his tribute to me—not deserved—and to the staff of the Ministry of Health and Social Services, which is deserved. They have done a remarkable job in getting such a wide range of agreement on all these topics, considering the diffuse and technical nature of so many of them. I thoroughly endorse my hon. Friend's tribute to them.
Mr. Merlyn Rees: Since 3.30 we have been debating proportional representation on the district councils. The question arose of how the district councils' representatives on the area boards are to be selected. As we are, as it were, crossing to the other side of the river now, could the hon. Gentleman assure us that the question of proportional representation on the senatorial rules procedure will he looked at by him, because it will be odd if we have proportional representation on district councils but not for the representation of councils on the area boards?
Mr. Channon: I will look at any suggestion the hon. Gentleman puts to me, but there are difficulties in what he proposes. On many area hoards, both health and education, some district councils will have only one representative. If that is so, I fail to see how we can direct them to proceed by the method of the senatorial system of proportional representation.
I think I am right in saying that it will be up to those district councils that have more than one representative to decide how to choose them. I should have thought that no honourable method would be closed to them, but I shall examine the question. The hon. Member will appreciate that some difficulties are involved.
The hon. Member asked me a number of questions, and I shall try to deal with most of them. First, he asked about staff. It is the intention to deal with staff in precisely the same way as in the rest of the United Kingdom. The standard transfer terms that apply throughout the United Kingdom will provide for officers

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to transfer to new employing authorities and to enjoy the same terms and conditions of service until they are served with a new contract of service. This will be the same throughout the whole of the United Kingdom, and if the terms were improved throughout the rest of the United Kingdom I see no reason why they should not be improved, if necessary, in Northern Ireland.
There will also be a staff commission for health and personal social services in Northern Ireland. Its terms of reference are, among other things, to advise what steps are necessary to ensure the smooth transfer of staff employed in the health and personal social services to the proposed area boards, and I very much hope that this matter will be resolved in as efficient and friendly a way as possible. It is extremely complex. The staff commission will have an important role to play. The intention is that the conditions of transfer should be the same throughout the United Kingdom. The hon. Member will probably know more than I do about the detailed proposals for Scotland.
The hon. Member also asked why there were a different number of boards for the education and the health services respectively. Having been given responsibility for both Ministries, that was the first question that I asked when I arrived in Northern Ireland and was confronted with these two massive pieces of legislation, much to my dismay. Consideration was given to the possibility of having five boards, in line with the Ministry of Education—and if I read the Macroy Report correctly it would have preferred a parallel number of boards for both services.
To create a fifth area board for health would have meant splitting up the proposed Eastern Board into two, and having a separate board for Belfast and another for North and East Down. My hon. Friend may think that that would have been a happier solution, but there would have been great difficulties. North and East Down contributes to the major Belfast hospitals not merely for regional but for all specialities, and this will continue, because the natural flow of communications from North and East Down is into Belfast. That is why it was decided to
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have four rather than five area boards in this case.
I shall write to the hon. Member on the question of the rate of salary of social workers when I have had a chance of examining the matter. On the question of private beds, charges, and family planning, by and large these provisions merely repeat the existing law, and in virtually all respects are consolidating. I do not think that there are any new points—but if there are I shall write to the hon. Member. On the question of charges, the situation is the same as for the rest of the United Kingdom. There are no separate rules for Northern Ireland. It is right to say that travelling expenses in Northern Ireland are more generous than in the rest of the United Kingdom. I shall give the hon. Member details of them.
I have explained in relation to other orders that my right hon. Friend felt that there were already sufficient anomalies in relation to the oath of allegiance and he did not wish to add to them. The whole question is exceedingly complex, and highly controversial. In spite of the hon. Member's persuasion I do not think that he would expect me to launch into a series of full-scale pieces of legislation in this matter, which would be highly controversial and not necessarily productive. All that my right hon. Friend is determined to do is not to increase the anomalies, and there are many in this field.
If I have not dealt with the points raised by hon. Members I will certainly write to them. I do not think, in relation to family planning, that there are significant differences from what is proposed in the Scottish Bill. I am told that they are similar to provisions in Clause 8 of that Bill, but if I am wrong, or the hon. Member has a detailed point to raise, I will write to him.
I have dealt with amenity beds charges and with travelling expenses, and with the question of the various boards.
The Macroy Report argued that certain services should be regarded as regional and vested in the Ministries; for example, water, sewerage, arid planning and things like them, and that the development of personal social services should be for the Ministry of Health and Social Services. There are 26 district

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councils in Northern Ireland and it was thought right that responsibility for personal social services should be vested in the Ministry of Health and Social Services who would devolve functions to the area boards.
The future structure of the Health Service is comparable with that for the rest of the United Kingdom, except that in the situation of the personal social services which is different because of the very different structure of local government proposed in Northern Ireland.
Nevertheless, as I said when I first moved the order and subsequently, what astonished me, coming afresh to the subject, was that, on so complex and difficult a matter, there should be a wide range of agreement—not total agreement on all aspects, but a measure of agreement on, the major restructuring of the personal social services.
This is a major achievement, and I am not sure how well this will be achieved in the rest of the United Kingdom. This reform of personal social services will be of benefit to people in Northern Ireland and of benefit to the further advancement of the personal social services.
In many respects Northern Ireland is ahead in this field, in administrative structure, and in many things, and we should pay tribute to that.
In the light of the discussion and of my undertaking to answer points raised, and in the interest of future progress with these services and of the people of Northern Ireland, I ask to the House to allow the draft order to be made.
Question put and agreed to.
Resolved.
That the Health and Personal Social Services (Northern Ireland) Order 1972, a draft of which was laid before this House on 11th July, be approved.

INDUSTRY BILL
As amended (in the Standing Committee), further considered.
Clause 1

  GRANTS FOR BUILDINGS, MACHINERY, PLANT AND CERTAIN WORKS
  11.8 p.m.
  Mr. David Steel: I beg to move Amendment No. 44, in page 2 line 34, at end insert
  'but must so designate as a special deevlopment area any development area in which average industrial earnings have been more than 15 per cent. below the average industrial earnings for Great Britain as a whole for a period of five consecutive years'.
  We are at that point in the Bill which gives the Secretary of State power to order and designate special development areas. It goes with the extra inducements which the Government permit for industrial development in the special development areas.
  The Bill urges the Secretary of State to exercise his powers and to
  "have regard to all the circumstances actual and expected, including the state of employment and unemployment, population changes, migration and the objectives of regional policies."
  My right hon. Friends and hon. Friends and I wholly support this part of the Bill, as we do the Bill as a whole, but we should point out to the Government that it is our experience that in certain parts of the country, development areas such as my constituency and South West England, where, in a development area, a special development area is designated, with all the higher incentives that that involves—it means 2 per cent. on grants for machinery and for buildings, and more particularly on the five years rent-free provision for Government-built factories—these are inducements of particular interest and of material difference to small industries which may wish to set themselves up, perhaps having been refused an indiustrial development certificate in some overcrowded part of the country.
  I believe that the special development areas by and large have been created because of very high and severe unemployment, and that is wholly right and proper. Those areas are on the search

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  for large-scale employers who will come into the area and who will provide a large measure of employment but they tend, unfortunately, to suck into them also the small independent factory owner or the person thinking of setting up a small branch factory, employing anything from 30 to 100 persons. This makes a negligible contribution to the relief of the high unemployment, but a small unit of that size could make a substantial contribution to certain rural areas or small towns in Scotland, England and Wales.
  What I have felt for some time is that there could be some form of discrimination when dealing with special development areas or incentives for the urban industrial areas with a limit, whether in square footage or number of persons employed, below which those incentives could not be made available. The smaller units would then be encouraged to go to places where they could make a substantital impact on the social and economic fabric of the community.
  Within the terms of the Bill there is an opportunity to go in that direction by writing in a provision stating among the factors which the Secretary of State had to consider was the question of the level of earnings in any part of the country. It is interesting that the average wage levels throughout the country vary very much from one part to another. This is shown in the abstract of regional statistics. The average weekly earnings for manual workers aged 21 and over last year was £26·2. That figure conceals a wide regional variation. In the Coventry belt the average weekly earnings were £31·80p; in Merseyside £28·9p; in Greater London £28·3p; South Humberside £28·8p. These were at the high level. At the other end of the scale, in the southern area of the South-West Region the figure was £22·5p; in the western area of the same Region £21·9p; in the North-East of Scotland £22·2p; and in the Borders of Scotland—and here I declare my obvious constituency interest—the lowest figure of all, £20·50p. That is a strong contrast with the Coventry belt with average earnings of £31·80p.
  This is a serious national problem which successive Governments have tended to ignore. Average levels of earnings available from region to region have a marked effect on the pattern of employ-
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  ment and industrial development and in particular make an impact on school leavers and others deciding whether to take up employment within a region or to go elsewhere to seek their fortune.
  It is because I believe that the Government should pay more attention to the very substantial variations in the levels of earnings from region to region that I move this Amendment requiring the Government to designate as a special development area any part of Britain which falls seriously below the average earnings level throughout the country as a whole.
  I hope that the Government will accept that this is a constructive Amendment and that it will be welcomed in the Minister's reply.
  11.15 p.m.
  Mr. J. Bruce-Gardyne: I oppose the Amendment. I do not think that it will serve the purpose that the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) suggests. He has argued that his constituency and others like it—my own included—will witness, as the Bill is drafted and as the present differential incentives are constructed, the vision of small firms which may he better suited to areas such as those that we represent going to special development areas. If that is so, I cannot see that the hon. Gentleman's Amendment serves any advantage in this context, and I thought that his main case had nothing to do with the Amendment at all.
  On the whole, I think that the extension of special development areas in the last two years has been misconceived. Special development areas were designed to deal with the special problems of communities where the essential industry was mining and the mines had been closed; in other words, areas where by definition that was no alternative industrial employment. Arguably, the incentives offered by special development area status were of value in this context. But we have now established a series of new special development areas of a different character. The whole of the Glasgow conurbation, a large area of Teesside and Tyneside and similar areas where there are very substantial variations of job opportunities and industries available have been made special development areas. I do not think that the special

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  development area status is at all well conceived for areas of this type.
  One of the most important special incentives offered by special development area status is the availability of the 30 per cent. pay roll subsidy to incoming industry. In an area where there is already substantial industry established, such as the special development areas of Clydeside, Teesside and Tyneside, the incentives offered by special development area status are highly discriminatory against established industries. They offer to incoming industry the opportunity either to undercut the established wage structures or to absorb the subsidies into their pricing structure and under-price the established industries.
  I have always argued against much opinion in my own part of Scotland that although many parts of Tayside have had levels of unemployment comparable or even higher than those prevailing in the Glasgow special development area, if we were given special development area status we should suffer from precisely the complaint which has been voiced in the Clydeside special development area, namely that existing established industries were finding themselves discriminated against through the pay roll subsidy in favour of incoming industries.
  Mr. David Steel: Would not the hon. Gentleman accept that one of the objects of this exercise is to improve the level of wages in areas such as those which he and I represent? If the inducement of Government rent-free factories for five years plus the operation of the subsidy resulted in more industry going to those areas with the result that wage levels rose, surely this would be to the benefit of the economy as a whole.
  Mr. Bruce-Gardyne: I do not think the best way of improving the level of wages in these areas is to provide a discriminatory subsidy to incoming firms. Even in the case of the incoming firms there is by no means necessarily an assumption that this would lead to the payment of higher wages. Obviously, it could have that effect, but it is within the judgment of management as to the end to which they put the pay roll subsidy. All I am saying is that it has a highly discriminatory effect in an area where there is a substantial variety of industry already established.
  The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): While the comments that my hon. Friend is making are wholly justified in connection with the previous regional incentives, the bias in favour of incoming industry disappears under our new proposal.
  Mr. Bruce-Gardyne: I do not think there is any proposal in this Bill to eliminate the pay roll subsidy, which is the most important of the discriminatory incentives embodied in the special development area legislation. If I am wrong about this, perhaps one of my hon. Friends will correct me, but, so far as I know, there is no provision in this Bill to correct that discrimination.
  Mr. Grant: If my hon. Friend is referring to REP, I should point out that it is, of course, to be phased out.
  Mr. Bruce-Gardyne: I am not referring to REP. The provision that I am referring to is the provision in the special development area legislation of a 30 per cent. pay roll subsidy, and this is not altered by any provision in this Bill. Is my hon. Friend saying that I am wrong?
  Mr. Grant: With respect, I think my hon. Friend is wrong.
  Mr. Bruce-Gardyne: I hope that when my hon. Friend answers the debate he will explain how it is that the existing provisions governing special development area status have been changed.
  Mr. Nicholas Ridley: Is my hon. Friend referring to the operating grant for incoming industry, which is 30 per cent. of the pay roll?
  Mr. Bruce-Gardyne: Yes, I am.
  Mr. Anthony Grant: That goes.
  Mr. Bruce-Gardyne: My hon. Friend says that it goes. I am not sure under which provision of this new legislation that goes, but perhaps my hon. Friend will be able to clear it up.
  I turn to the underlying argument behind the Amendment, and that is that those areas which appear to suffer from very substantially below national average wage structures should be interested in, seeing the level of wages in their area

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  brought up at least to the national average. Of course, I accept that there are two sides to this argument. I suppose that the best argument that could be advanced for eliminating the wage differential between different parts of the country is that those parts of the country which suffer from relatively low average wage rates, such as the area represented by the hon. Member for Roxburgh, Selkirk and Peebles, are unattractive to service industries and have a relatively low purchasing capacity which discourages the large multiples from moving in.
  I can see the force of the argument, but there is the countervailing argument that the effect of national wage negotiations in squeezing out the differentials in wage rates between different parts of the country may have had the effect of discouraging development in areas such as those represented by the hon. Gentleman and myself because, while it may be true that relatively low purchasing power can have the effect, at a certain level, of discouraging the implantation of service industries, on the other hand, the availability of a somewhat lower wage structure may in itself serve as an incentive to incoming industry, and particularly labour-intensive industry.
  Mr. David Steel: Do I understand the hon. Gentleman to be advocating as one of the inducements to come to the Borders or Tay side—because the hon. Gentleman is aware of the level of wages in his area—the low level of wages now prevalent? If he is, I find that a pernicious argument.
  Mr. Bruce-Gardyne: What I am saying is that there are a variety of incentives which may be offered to incoming industry in an area where labour is available, and that among those may be the consideration that labour is available somewhat more cheaply than in other areas.
  I accept that one can deal with this problem of the effect of national wage negotiations, particularly by monopoly trade union power, in a variety of ways, including the one which we argued on Friday afternoon with which I am very much enamoured, namely, the idea of a congestion tax for employment in areas of excessive development. All I am saying is that I question whether the acceptance of the Amendment to establish
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  special development area status for areas which at any given time had average wage levels substantially below the national level would be in the interests of those areas themselves.
  Once again we have seen that the major effect of establishing various gradations of discriminatory incentives for incoming or established industry in particular areas is not to satisfy the areas that receive them but to inflame the discontent of the areas which do not.
  The conclusion that I have drawn for a long time is that, on balance, we do more harm than we can do good by the attempt to devise various neatly patterned and more and more complex system of graded incentives for different geographical areas of the country. I believe that we would be better advised to concentrate on a policy which identified areas of genuine potential growth and dealt with the underlying problems of those areas, instead of trying to devise more and more elaborate schemes of differential incentives which do not satisfy those who receive them but infuriate those who do not.
  Mr. Edmund Dell: The hon. Member for South Angus (Mr. Bruce-Gardyne) is right in saying that the whole concept of special development areas has been changed under this Government compared with what it was under the previous Administration. The concept of special development areas was changed at the time at which all development area differentials were severely downgraded in the October, 1970, clean sweep of the regional policies of the previous Government, and we now have the after-effect of that, in that we are maintaining that new concept of special development area at a time when the whole of that changed regional development policy is being reversed. One of the effects is that existing development areas, many of them with very serious problems, which have not been upgraded, find themselves discriminated against. The Amendment suggests a specific criterion by which special development areas are to be declared. My forecast is—and I hope that I am wrong—that the Government will not accept the Amendment, but if they do not accept it they should inform us by which criteria they proceed in nominating special development areas.

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  I have many times brought to the attention of the Government the existing facts in my constituency and the development area with which I am concerned. I have drawn attention to the fact that unemployment in my constituency has doubled in the last two years, and that long-term unemployment—unemployment for longer than eight weeks, which is perhaps the most serious measure of the situation—has, in respect of men, trebled, and in respect of women, quadrupled. I have asked the Government to declare a special development area on Merseyside. I have had no reaction. I put it to the Secretary of State for Employment and the Secretary of State for Trade and Industry, and I had no reaction from them.
  11.30 p.m.
  I have asked why this change in circumstances is not sufficient to achieve the object of declaring a special development area of Merseyside. The Government know of the rundown in employment in the shipbuilding and in the ship-repairing industries. The Minister for Industrial Development is kind enough to receive a deputation, including myself, next Thursday. These are the facts of a most serious worsening of the position in the development area, yet the Government have not reacted to the proposal to establish a special development area on Merseyside. They should do so.
  Therefore, if the Government react by saying that the Amendment is not acceptable, they should make clearer than is at present the case the criteria which they adopt for scheduling special development areas, and should say why, given the very serious set of circumstances I have outlined to them, they are not prepared to declare a special development area on Merseyside.
  Mr. Antony Grant: The right hon. Member for Birkenhead (Mr. Dell) is right in one sense, which is that I shall be inviting the House to resist the Amendment, but he is wrong if he imagines that I shall designate Merseyside a special development area in the course of this debate.
  Mr. Dell: I did not ask that.
  Mr. Grant: Perhaps I can first deal with the point raised by my hon. Friend
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  the Member for Southern Angus (Mr. Bruce-Gardyne). I entirely agree that there was substantial criticism—and I know that he was in the forefront in making it—of the unfair bias, as it was argued, of the incentives which favoured incoming industry as opposed to existing industry in special development areas. This arose over the operational grant, and it was just because we took note of those criticisms from both sides that we have in the Bill sought to avoid that discrimination. The operational grant goes out with the repeal of Section 4 of the Local Employment Act and is replaced by Part II of the Bill. It is the Government's intention that this bias should disappear.
  Mr. Bruce-Gardyne: To get this matter absolutely clear, is the operational grant, so-called, the payroll subsidy in the first three years, payable neither to incoming industry nor to established industry?
  Mr. Grant: Yes. The incentives we offer in the Bill are equally payable to existing as well as incoming industry. That is what I am saying.
  Mr. Ridley: My hon. Friend has said that the incentives were available to incoming and existing industry. Does that mean that the operating grant will be paid to either or that it might be paid to both?
  Mr. Grant: It will be paid to neither, but both sections will be available to take advantage of the incentives in the Bill.
  I listened carefully to what the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) said regarding the significance that should be attached to low earnings in determining whether an area should be given SDA status. I sympathise with much of what the hon Member said, even though I am not prepared to go as far as the Amendment proposes. It seems to be mistaken to require, as the Amendment requires, the Secretary of State to designate an area as an SDA solely on the basis of a particular statistic relating to that area. That would seem to be wrong. I accept that often low earnings accompany high unemployment and a declining or stagnant population. But that is not always so.
  For example, taking a hypothetical situation, let us suppose that the average

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  industrial earnings in an area were 15 per cent. lower than the national average. Would it be right to grant it SDA status without question—which is what the Amendment would mean—while denying that status to someone else where, perhaps, earnings were a point or two higher but unemployment was much worse? Such a decision would be hard enough to justify even though there was no question that the average earnings statistics were not a completely true reflection of relative living standards. But statistics are inevitably influenced by such factors as the age structure of a locality and its industrial complex. In short, we could be putting too much weight on a single consideration measured in a particular way.
  For those reasons I believe that it is much better to rely on the formula proposed in Clause 1(4). This requires the Secretary of State to
  "have regard to all the circumstances actual and expected, including the state of employment and unemployment, population changes, migration and objectives of regional policies."
  This wording would clearly include the general prosperity and living standards of an area along with all other relevant considerations, including those specificcally mentioned.
  Therefore, although I have sympathy with the thoughts behind the Amendment, it would be impracticable. For that reason, I invite the House to resist it.
  Mr. David Steel: On the basis that the Minister has said that he viewed my remarks with much sympathy, I accept the argument that it is difficult to lay down a specific criterion. But I hope that the Minister will accept that the levels of wage earning in a particular region ought to be one of the criteria which are taken into account. Therefore, if my noble Friends in another place seek to move a more moderate Amendment on that basis, I hope that the Government would be willing to accept it.
  The Minister will agree that there is a clear distinction between the point raised by myself and that raised by the right hon. Member for Birkenhead (Mr. Dell), who asked about the designation of a particular area. Under the Bill as drafted, quite clearly the Secretary of State has power to take account of the state of employment. How he uses that power
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  is a matter of discretion, but it is clearly stated in the Bill. What I complain about is that it is not clearly stated in the Bill that one of the circumstances which the Government shall consider is the level of wage earning in a particular region. I am anxious that that should be considered.
  I accept the Minister's criticisms of the Amendment as drafted. I hope that the Government will look sympathetically at a more reasoned Amendment proposed in another place by my noble Friends.
  On that basis, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.

Clause 2

  QUALIFYING PREMISES
  Mr. Bruce Milan (Glasgow, Craig-ton): I beg to move Amendment No. 2, in page 3, line 12, after '(inclusive)', insert
  'and Minimum List Heading 876 of Order XXV'.
  Mr. Deputy Speaker (Miss Harvie Anderson): I think it will be for the convenience of the House to take at the same time Amendment No. 3, in page 3, line 16, after 'research', insert and development'.
  Mr. Millan: Our proposal would insert research and development services into the list of qualifying activities. We had a debate about this in Committee, when the Under-Secretary was able to give the assurance that most of the research and development establishments we had in mind in one way or another be covered by the Bill or otherwise be eligible and in receipt of Government assistance. It seemed doubtful, however, whether all these establishments would be so covered and the Under-Secretary promised to look at the matter again and, if necessary, see that the change was made on Report.
  As the hon. Gentleman will recollect, it was my hon. Friend the Member for Barrow-in-Furness (Mr. Booth) who was particularly interested in the point, but he is not able to be with us tonight. [HON. MEMBERS: "Where is he?"] he happens to be ill, as was announced to the House on Friday. I hope the Minister will now

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  be able to assure us that he has looked into the matter and that there are no gaps in provision relating to these establishments.
  Mr. Anthony Grant: As the hon. Member for Glasgow, Craigton (Mr. Millan) said, in Committee we agreed to look again at research in the context of the coverage of the regional development grant system to see whether any serious gaps remained after allowing for the assistance available for research from other Government sources. I said that we would look carefully at the speeches that were made to see that that was the case.
  As Clause 2(2) is drafted, scientific research relating to any qualifying activity is itself a qualifying activity. This research will, therefore, be eligible for grant whether or not it is conducted on the same premises as manufacturing, mining or construction.
  A great deal of assistance is available for research relating to non-qualifying activities from the research councils—agricultural, medical, science and environmental—and other Government Departments direct. As far as we have been able to establish—and we have looked carefully at those—it is unlikely that any worth while scientific research conducted outside the public sector in these activities would go without Government support from one source or another, either under the Bill or from separate sources.
  The suggestion was also made in Committee that the definition of scientific research should be broadened to include things such as statistics, economics and market research. We have considered this possibility and we have come to the conclusion that it would not be practical to define research in such a way as to qualify only research of this kind which is relevant to qualifying activities or the broad objectives of the Bill. My conclusion, therefore, at this stage is that we should see how Clause 2 operates in practice. The provision is broadly worded and should bring in a very wide range of research of the kind which the hon. Member and his colleagues would wish to be supported in the assisted areas.
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  I can, however, assure the House that any deserving research project in an assisted area which for some reason did not receive either regional development grants or other Government support would certainly be considered for selective assistance under Clause 7. If a serious gap appeared in the future we could, of course, extend by order the coverage of the regional development grant scheme. I think, therefore, that the position concerning research is fairly well bottled up.
  Mr. Millan: The closing sentences of the Under-Secretary's reply are very helpful—namely, that there is a possibility of selective assistance or of later amendment by order of the definition of qualifying activities.
  Mr. Dick Douglas: I wonder whether my hon. Friend accepts that the Minister's closing remarks somewhat circumscribe the definition of scientific research and seem to me to limit the definition as it appears in the interpretation Clause, Clause 6.
  11.45 p.m.
  Mr. Millan: I cannot answer for what the Minister understands to be the interpretation of "scientific research" in Clause 6. In Committee we were assured that, rather against what I would have thought was the common sense interpretation, the definition was in very wide terms. We must accept that.
  On the understanding that, as the Minister said, if it should transpire that either the definition or the description of qualifying activities is deficient the Government will look sympathetically at means of putting matters right, by means either of selective assistance or of an order to vary the activities, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Anthony Grant: I beg to move Amendment No. 4, in page 3, line 17, at end insert:
  '(cc) the repair or maintenance of any machinery or plant designed for use in any manufacturing or mining process, or in the processing of scrap and waste materials, or in any activity described in heading 500 of the Standard Industrial

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  Classification (construction of buildings, roads and bridges), and
  (cd) repairs of the kinds described in heading 370 (shipbuilding and marine engineering), 383 (aerospace equipment manufacturing and repairing), 384 and 385 (locomotives, rolling stock and railway equipment) and 500 (buildings, roads and bridges) in the Standard Industrial Classification, whether or not also within paragraph (cc) above, together with the maintenance of anything the repair of which is included in this paragraph, and.
  Mr. Deputy Speaker: With this Amendment we are to discuss Government Amendment No. 5 and Amendment No. 47, in page 3, line 40, leave out subsection (4).
  Mr. Grant: In Committee we agreed to reconsider the treatment of repairing activities in the Bill. One of the problems to which attention was drawn in Committee was that the standard industrial classification does not deal with repairing in a consistent way. As a result, a number of relatively unimportant repairing activities are mentioned in the orders which qualify for grant, while the great majority of repairing activities are not specifically mentioned at all.
  The effect is that, as the Bill is drafted, only a very narrow group of repairing activities would qualify for grant. We consider that most repairing activities should not qualify for grant. I had in mind the repair of consumer goods such as domestic appliances and shoes, the great majority of vehicles and general purpose plant of a kind which is used widely in non-qualifying activities. Repairing activities of this sort are usually conducted locally and, as in the cases of services generally, we would not be justified in paying grant on the plant and and buildings involved.
  We are, however, proposing an exception in the case of the plant and machinery designed for use in manufacturing, mining and building activities proper. The repairing of this plant and machinery is so closely connected with the manufacturing process itself as to justify special treatment.
  I must make it clear that we think it right to interpret this exception narrowly. Thus, only assets used in the reparing of plant and machinery of a kind which in practice is used almost entirely for the qualifying purposes will attract grant. Plant which is designed for a multiplic-
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  ity of purposes and which accordingly used on a major scale in non-qualifying activities will not.
  I have no doubt that the bulk of the plant used in manufacturing processes of the kind with which the hon. Member for Glasgow, Craigton (Mr. Millan) raised, will in practice benefit from this provision. The Amendment makes it clear that in this context the maintenance of plant and machinery will also qualify. In practice, it is difficult to distinguish between repairing and maintenance and I have no doubt that we should make no attempt to do so.
  The second part of the first Amendment deals with the anomalies arising from the treatment of repairing in the standard industrial classification to which I have already referred. Thus, the repairing of ships and boats, marine engines, aircraft, locomotives, railway rolling stock and buildings will remain as qualifying activities, but the other repairing activities specifically mentioned in the standard industrial classification will not.
  I see no justification for paying grant on assets used in the repairing of the excluded articles, which, in the main, are consumer goods—books, china, organs, and so on—but the repairing of ships and the other items I mentioned will remain eligible for grant, because it is in their case akin to manufacturing, and we believe that it should be a qualifying activity in its own right.
  In most cases, these repairing industries have a high degree of mobility and may, therefore, be attracted to the assisted areas by the availability of grant.
  I am grateful to the hon. Member for Craigton and to my hon. Friend the Member for Cheadle (Mr. Normanton) for drawing this matter to our attention in Committee.
  Mr. Tom Normanton: My hon. Friend the Minister has been realistic in trying to bridge the gap and clear our minds on the kinds of activity under the general heading of repairs which would be eligible, and I think that his definition may well be appropriate. However, I have one or two specific questions to put.
  Will such activities as the following fall within the terms of the Amendments: the construction of and repair of containers for transhipment of goods, and the construction of, and repair of, road tankers

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  for haulage purposes, of commercial vehicles and of coaches? Also, will the repair of heavy machinery and plant, including heavy electrical generating machinery, qualify?
  Mr. Millan: I welcome the Government's reconsideration of the matter. I shall not go through the detail of the Amendments now, because, as the Minister appreciates, it is virtually impossible for the layman, or, indeed, for anyone, to know whether the Government have got things absolutely right. The decision to define qualifying activities in terms of the standard industrial classification has given rise to a number of difficulties, and this is one of them.
  The Amendments are a substantial improvement, but it may well turn out in practice that the Government have not got it right yet. I assume, therefore, that the undertaking which the Minister gave on the previous Amendment will apply here also, so that if representations are made hereafter that a particular activity should he included, the Government will be willing to look at the possibility of amendment by means of an order. The hon. Gentleman could readily give such an undertaking. If he gives it, I shall advise my hon. Friends to accept the Amendments.
  Mr. Grant: I can confirm that we have the power to alter by order, if necessary, and we will certainly look at the matter to see whether it is working out and, if it is not, we shall use that power.
  I always hesitate to give what I regard as free legal advice off the cuff, but as I understand my hon. Friend the Member for Cheadle (Mr. Normanton), some of the items he mentioned related to non-qualifying purposes, mostly to transport activities, in which case they would not qualify. I refer to containers, coaches and so on. But the heavy machinery to which he referred, if it relates to a qualifying activity, does qualify. I cannot help him more than that at this stage.
  Mr. Normanton: I was not referring to transport but to activities relating to the manufacture and repair of items of equipment used in transport activities. The activity itself is clearly not included.
  Mr. Grant: Transport is not one of the qualifying purposes but if one of the items
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  to which he refers relates to a qualifying activity it will be eligible for grant.
  Amendment agreed to.
  Amendment made: No. 5, in page 3, line 40, leave out subsection (4) and insert:
  '(4) Subject to paragraphs (cc) and (cd) of subsection (2) above, the repair or maintenance of any articles shall not be a qualifying activity, and in the case of the activities described in the said Classification, other than those mentioned in the said paragraph (cd), this subsection applies whether or not repair or maintenance is mentioned in the Classification.'—[Mr. Anthony Grant.]

Clause 5

  SUPPLEMENTAL
  Mr. Bruce-Gardyne: I beg to move Amendment No. 8, in page 5, line 32, leave out
  'the asset is provided or'
  Mr. Deputy Speaker: With it we shall take Amendment No. 9, in page 5, leave out line 33.
  Mr. Bruce-Gardyne: The purpose of the Amendments is to provide that under the terms of subsection (2) the Secretary of State would be entitled to make payment of the grant only when he was satisfied that the expenditure on the qualifying asset had been defrayed. This was a point which I raised on Second Reading and which I have pursued subsequently in correspondence with the Minister. I am concerned to ensure the avoidance of fraud.
  As I understand the old system of investment grants, it provided that investment grants should not be payable unless an invoice to prove the purchase of the qualifying asset was first produced. I had reservations about that grants system, but this requirement was at least a restriction on the possibility of abuse and, to put it bluntly, fraud. Notwithstanding that provision, I know of a case not 100 miles from the constituency of my right hon. Friend the Minister for Industrial Development, concerning a splended mansion complete with ballroom and heart-shaped swimming pool, entirely equipped from investment grants paid under the last Labour Government supposedly for the development of industry in Scotland. This was an instance

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  where the procedures were correctly followed, but some extremely smart accountancy work ensured that the asset changed hands so fast the responsible authorities were unable to keep up with them. At any rate, it suggests that even the old system was not foolproof.
  We appear to be moving to a system which is even less foolproof and, to my mind, shrieks to the heavens for some smart manipulation by individuals wishing to take advantage of the taxpayers' largesse under Part I of the Bill, because we are saying that a grant will be payable at any time
  "when, in the opinion of the Secretary of State, the asset is provided"
  whether it is paid for or not.
  12 midnight
  I have pursued this matter in correspondence with my right hon. Friend, who has in practice underlined the point, because, in a letter to me on 7th June, he said:
  "But it makes it quite clear that I have to be satisfied that the asset is provided or the expenditure defrayed as the case may be… For example, applications will need to he supported by a report from an independent accountant confirming that expenditure has in fact been defrayed, or in the case of plant and machinery, evidence, such as a delivery note, that the asset has been delivered to qualifying premises."
  I ask the House to note "delivered"; not necessarily "paid for".
  "Under Clause I of the Bill, I have also to satisfy myself that the expenditure has been incurred by the applicant, which in most cases will mean that the asset has been purchased by him."
  "Clause 5(2) is based on the arrangements for paying building grants under the Local Employment Acts which allowed grant to be claimed in full once the building was provided and the total costs were ascertained.
  This is some improvement on the investment grants system as, under the Industrial Development Act, 1966, investment grants could be made only when the expenditure became payable, with the result that where an asset was purchased on credit, grant could be claimed only as and when payment of the instalments became due."
  That does not seem an unreasonable proposition. We are now saying that if an asset—perhaps a very expensive asset—is purchased on hire purchase the whole of the grant will apparently be payable at the latest when the first instalment is paid. That seems almost an open invitation to fraud which I think we would be
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  better advised not to include in the provisions of a Measure which, in all conscience, provides relatively limited supervision of the way the taxpayers' funds are to be expended. Therefore, I hope my right hon. Friend will give the House a clearer explanation tonight than any we have had to date why this subsection has been drawn so widely and in appearance so generously for the purpose of applicants for the investment grant.
  The Minister for Industrial Development (Mr. Christopher Chataway): To avoid any possibility of doubt, I should make it clear that there is no ballroom or heart-shaped swimming pool in my establishment in my constituency. If the suspicions of my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) harden into anything firmer, it will be a very serious matter which my Department would wish to investigate fully.
  I appreciate my hon. Friend's anxiety to ensure that the arrangements in the Bill are absolutely watertight and that there is as little opportunity for fraud as we can devise. However, these Amendments would needlessly complicate the payment of the regional development grant to an applicant who was acquiring an asset on credit terms.
  We are following the long-established practice under the Local Employment Acts rather than the practice that was adopted for the investment grants. Experience of the former investment grant scheme under which the grant could be made only when the expenditure became payable by the applicant showed the disadvantages of spreading out grant payments in that way. It led to considerable administrative inconvenience and expense, and no saving to the Revenue. Therefore, in the Bill we are following the arrangements for paying building grants under the Local Employment Acts, which enabled grant to be claimed in full once the building was provided and the total costs ascertained. Subsection (2) will enable grant to be made on the whole cost of the asset once the Department is satisfied that the asset has been provided—that is, delivered to or completed on the site—and that the applicant is under an obligation to pay for it. That is a straightforward arrangement which should work to everyone's advantage.
  My hon. Friend fears a situation in which the purchaser of a qualifying asset

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  pays the first instalment and then pays no more. But, as he knows, there are obligations to repay grant if the grantee does not continue to use the asset for the stipulated purpose for a certain period, so that exactly the same safeguards apply where an asset is purchased on credit as where an asset is purchased outright.
  Mr. Bruce-Gardyne: Surely the position is not quite on all fours. Suppose I purchase an asset costing £1 million, which I agree to pay for in 10 annual instalments of £100,000. I pay the first instalment and then receive the qualifying grant of, say, £200,000. Therefore, I am in pocket to the tune of £100,000, which I never was under the old arrangements, because I could receive the grant only once I had either paid for the qualifying asset or paid the instalment which attracted the grant. I am £100,000 in pocket, and then I depart with my £100,000 beyond the confines of the United Kingdom. I do not think that whatever provisions there may be for recovery of that payment would serve any useful purpose under such circumstances.
  Mr. Chataway: My hon. Friend's hypothesis is fairly far-fetched, because he must remember, that if it were his intention to do that, he would probably have to provide a good deal more than the qualifying asset, as he would probably be establishing a factory in the process and would be involved in a good deal of expenditure which was not qualifying. There is no departure from past practice here, because this is the arrangement which has prevailed under the Local Employment Acts for many years. There is no evidence to suggest that applicants who had arranged to pay over a period of years for assets that qualify under those Acts were any more likely to default on their payments because they had received the full building grant.
  On the other side of the argument, it will be clear to the House that there is needless administrative work involved in the regular checking and paying of grants by instalments. We are simply learning from experience and making an arrangement which is more satisfactory.
  Mr. Millan: I am not terribly happy about the right hon. Gentleman's reply.
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  I am not sure what the subsection means, particularly the phrase "…whichever is the earlier". Does this mean that in every case the payment is on the earlier event, that is, whether it is the provision of the asset or the defrayment of the expenditure? Or does it give flexibility? In other words, in a particular case where the Department may feel a certain amount of doubt about an applicant who has provided an asset, but who has not yet paid for it, does the wording of the subsection mean that despite that doubt the grant must be paid whenever the asset is provided? Or does it give an element of discretion? I hope that it gives an element of discretion, that all the phrase does is to define the time beyond which a payment could be made. Or does it mean that the payment would be made on the date of the earlier event? The former interpretation is respectable but the latter would possibly be open to a certain amount of abuse.
  Where the grant is paid on the provision of an asset without the asset necessarily having been paid for, is it the intention of the Department to ask for later evidence of payment? I read the provisions on hire purchase in Clause 6 to mean that the grant would be payable by instalments. The right hon. Gentleman is saying that the grant will always be payable in one lump sum to save administration. That is an odd argument. Substantial sums of money could be involved where the cost to the Exchequer of paying the grant in one sum must outweigh any possible administrative costs of payment by instalment. In every case is a lump sum to be paid, or in particular cases will the grant be paid by instalment? In general, I have no objection to the subjection if it merely gives flexibility, but if it means that the practice will always be to pay grant at the earliest possible opportunity, and always in full, there may be certain cases where there would be substantial disadvantages which would outweigh the administrative advantages referred to by the right hon. Gentleman.
  Mr. Douglas: During the Public Accounts Committee's investigation of the payment of previous forms of investment grant, some evidence was given relating to the fact that the expertise gathered by the Department in administration was to be shared at the end of the

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  investment grants procedure in 1958 with the Treasury. I am anxious to know how the right hon. Gentleman is to avail himself of the experience during previous incarnations of the investment grant and how he is to operate in terms of supervision between his Department and the Treausry. The Bill allows for an estimated increase in public service manpower of about 500. Are some of them to be employed in administering the new grants?
  12.15 a.m.
  Mr. Ridley: Is there a distinction between buildings and movable plant? My right hon. Friend said that the provision was taken from the old building grants. I can understand that a person could not default and take a building with him to the Bahamas, but in the case of a highly expensive piece of machinery which might be small enough to fit into a suitcase there is no reason why he should not order the machinery, take it to the Bahamas on delivery, not having paid for it, and collect the 20 per cent. grant from the Government.
  If it is not necessary to pay for the item before he receives the grant it would appear that that can be done. Is my right hon. Friend satisfied that this provision is secure against that sort of thing, bearing in mind that with investment grants a person had to produce an invoice before he got the grant?
  Mr. Kenneth Warren: I do not think that the person referred to by my hon. Friend would have to go to the Bahamas. If he had ordered such a small piece of machinery it could be moved to another part of the country which is not in receipt of the aid that we envisage.
  Mr. Chataway: I hope that I can set at rest some of the anxieties that have been expressed. It must be said that no scheme can be totally proof against deliberate fraud. There have been a number of prosecutions under the Local Employment Acts and the investment grant system. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) says that it would be possible for somebody to decamp to the Bahamas. That may be so. My hon. Friend the Member for Hastings (Mr. Warren) says that the machinery could be moved to another part of the country. There are
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  provisions for checking, both under the Local Employment Acts and under these procedures, as there were under the investment grant provisions, to ensure that the assets purchased are still being used for the purposes for which they were bought. It would be extremely unlikely that anybody would succeed in getting away with the fraud that my hon. Friend suggests.
  The hon. Hember for Glasgow, Craigton (Mr. Millan) asked whether this was mandatory or whether there was a discretion to the Secretary of State. I can tell him that there is a discretion and that we would watch carefully the working of the arrangements. As is required from the Secretary of State under Clause 1, it will be necessary to show evidence that the asset has been acquired, and if it is acquired on credit that will normally be evidence that a first payment has been made.
  There would not necessarily be a saving to the Exchequer if the payments were made in instalments over the years, because then the payments would include interest payments. If the purchaser were purchasing on credit and the cost were being met in instalments by the grant the Exchequer might have to meet the interest payments involved. There is not necessarily any saving, quite apart from the administrative expenses involved in paying in instalments.
  Mr. Millan: That does not seem to be accurate, because capital expenditure under Clause 6 is defined specifically in terms only of the capital element in hire-purchase payments. Surely under no circumstances will people be paid a grant on interest payments.
  Mr. Chataway: That is the provision in the Bill and it is framed in that way because that is our intention. I may be wrong, and I shall tell the hon. Member if I am, but I believe that under investment grants, in payment of instalments, interest was included.
  The main point I make to the hon. Gentleman is that certainly the Secretary of State has discretion and that we shall watch very carefully the way in which Clause 5(2) works out in practice. We shall be prepared to make changes if it seems that there are any disadvantages in the matter.

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  I can tell the hon. Member for East Stirlingshire (Mr. Douglas) that we are anxious to learn from the lessons acquired during the administration of investment grants, as from the lessons of building grants.
  I was asked about inspection. It will be the practice, as it always has been under previous Administration, for visits to be paid by enforcement officers to ensure that assets are being used for the purposes for which they were bought and to ensure that repayments are made wherever they cease to be so used, so there are manpower implications in that and the hon. Gentleman is correct in drawing that to our attention. I hope the House will be prepared to accept that we are following the best practice.
  I take the point that we need to watch carefully to ensure the minimum possibility for fraud, here as elsewhere and if some other dangers were arising, the Secretary of State has power to make changes in this subsection.
  Mr. Ridley: The Minister should watch the cases in which a firm buys instruments of small size but large value, paid for by industry over a period. Would it not be better to consider the Amendment, which would save the necessity and the expense of policing the operation?
  Mr. Chataway: I think not. Even if one were to pay the full grant only where the total cost of the asset had been met, it would still be possible for those bent on fraud to sell an asset immediately afterwards, so there is obviously a continuing need, what ever system one adopts, to ensure that assets are being used for qualifying purposes. It would not be the case, if one accepted the Amendment, that there would be a significant reduction in the need to police the system. If we were to accept it, we should find that additional administrative expenditure was involved, which from past experience has seemed unnecessary in the case of investment grants, and which from our experience of the building provisions we need not incur.
  Dame Irene Ward: I certainly appreciate all the arguments, but is it not rather sad, too, that all we have to talk about is people desperately wantting to help in the unemployment prob-
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  lem, and in the creation of new industries, being likely to commit frauds? Should we not prefer just to get on with this and if my hon. Friends want to divide the House, to do so, but for heaven's sake do not let us get into a long argument as if all concerned who were getting help were longing to commit fraud. I do not agree with that. I think that we have a jolly lot of very good people who are trying to help the nation and the economy and we had better forget about people who commit frauds.
  Mr. Bruce-Gardyne: I had no intention of suggesting, and I do not suggest now, that my right hon. Friend had anything to do with the heart-shaped swimming pool to which I was referring. Neither I nor any of my hon. Friends have heart-shaped swimming pools, more is the pity. Having said that, and accepting entirely what my hon. Friend the Member for Tynemouth (Dame Irene Ward) says about the "jolly lot" of people who would be benefiting from Part I, I am bound to tell my right hon. Friend—I hope he will not take it amiss—that I have heard more convincing answers to arguments in this House. My right hon. Friend made the analogy between the arrangements under the old Local Employment Acts procedure and the regional development grant procedure. The point is, that, if I recall correctly, the figures given by the Under-Secretary show that the average rate of grant and loan to individual enterprises under the old Local Employment Acts was running at about £32,000. Now we are talking in terms of regional development grants which could be up to £25 million or more on a single project. That is totally different.
  If we are talking of seven-figure sums, as we may be, it is a very attractive proposition to get double the outlay on the initial down payment on an asset from the Government and then to abscond. In his reply to my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), my right hon. Friend seemed to suggest that we were on all fours with the previous system under investment grants where six-tenths of the money that had to be found had to be provided by the taxpayer before he could obtain the grant. Here we are talking about the position in which theoretically,

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  and perhaps not so theoretically, someone can lay down one-tenth of the cost of the asset and get a 20 per cent. grant next day. Under the terms of this subsection he would have to lay down nothing at all; it merely says that the Secretary of State has to be satisfied that the assets will be provided. He may not have paid anything at all.
  I hope that my right hon. Friend's confidence in the innate honesty and reasonableness of our fellow citizens, and my hon. Friend's confidence as to their
  "jollity", and the enthusiasm they will show for making good use of the money, will be justified. I have a feeling that once again human nature will let us down. However, my right hon. Friend has perhaps greater confidence than I in the innate honesty and reliability of our fellow citizens and other entrepreneurs from overseas who may qualify for this largesse. I hope that his conviction will turn out to be justified rather than mine. On that basis, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Anthony Grant: I beg to move Amendment No. 10, in page 5, line 37 leave out subsection (4).
  Mr. Speaker: With this we can also discuss Amendment No. 12.
  Mr. Grant: This Amendment and Amendment No. 12 would require any order made under Clause 3 which would change the rate of grant in any respect to be approved by a Resolution of both Houses of Parliament. This arises out of our discussions in Committee about the order-making powers under Part I.
  I undertook to look carefully at all that was said. After considering it, I have concluded that alterations in the rates of grant are of sufficient importance to justify applying the affirmative procedure. For the rest, I believe that the negative Resolution procedure is adequate, and the Amendments retain it.
  Question put and agreed to.
  12.30 a.m.
  Mr. Anthony Grant: I beg to move Amendment No. 11, in page 5, line 43, at end insert:
  'including, in the case of an order under section 3(2)(a) of this Act, amendments of subsections (2), (3) and (4) of section 2 of this Act'.
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  This is a drafting Amendment. We recognise that in the light of experience a case may be made for adding some other types of repairing to the qualifying activities by an order under Clause 3(2)(a). In that event, I am advised that some consequential rewording would be required to Clause 2(4), and the Amendment seeks to do that.
  Question put and agreed 10.
  Amendment made: No. 12, in page 5, line 43, at end insert:
  '(6) Any power conferred by this Part of this Act to make orders shall be exercisable by statutory instrument and, except where subsection (7) below applies to the order, the statutory instrument shall be subject to annulment in pursuance of a resolution of either House of Parliament.
  (7) The Secretary of State shall not make an order under this Part of this Act which varies all or any of the percentages specified in the Table n section 1 of this Act (whether or not it also provides for other matters) unless a draft of the order has been approved by a resolution of each House of Parliament'—[Mr. Anthony Grant.]

Clause 7

  SELECTIVE FINANCIAL ASSISTANCE FOR INDUSTRY IN ASSISTED AREAS
  Sir Brandon Rhys Williams: I beg to move Amendment No. 57, in page 8. line 5, after 'assistance', insert:
  'to institutions constituted in accordance with conventional banking principles with the object of encouraging industry in assisted areas'.
  It may be for the convenience of the House if I read the first few lines of Clause 7 as it will be if my Amendment is accepted:
  "(1) For the purposes set out in the following provisions of this section the Secretary of State may, with the consent of the Treasury, provide financial assistance to institutions constituted in accordance with conventional banking principles with the object of encouraging industry in assisted areas where, in his opinion—

  (a) the financial assistance is likely to provide, maintain or safeguard employment in any part of the assisted areas, and

  (b) the undertakings for which the assistance is provided are or will be wholly or mainly in the assisted areas."

  It will be apparent that this is a major Amendment and not merely a minor matter of verbal improvement. By it I am trying to draw attention to the fact

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  that I believe the means by which financial assistance for industry in assisted areas is granted could be organised on a totally different basis from that envisaged in the Bill.
  My right hon. Friend may have detected that there is on my part a certain hostility to the Bill as it now stands. But I assure him that I recognise that it is answering a real need. I am not hostile to it in a Second Reading sense. However, I think that it is in need of much improvement and that, as it has come from the Committee, the improvements which have been made are not wide enough.
  The Bill anticipates the regional problems which will follow if we make strides towards monetary union in conjunction with our prospective partners in the European Community. It is an earnest of the Government's intention to grapple quickly with unemployment. I am certain that right hon. and hon. Members on both sides of the House will applaud that. It shows that the Government recognise the need for measures to accelerate industrial reorganisation somewhat as under the IRC. But I feel that my right hon. Friend is making a fundamental error as to the means of giving this financial assistance.
  I recognise that it is the intention to give Parliament control over the very large expenditure which is envisaged in the Bill. But it appears to me that parliamentary control over very large areas of the Department's work in the dispensing of these grants and loans will be largely nominal. We in this House have a duty to protect the taxpayer from the excesses, enthusiasms and errors of the Executive. However, in passing this Bill, especially in the way in which it is being dealt with on Report, Parliament is abdicating its responsibility.
  We are introducing a system for controlling the expenditure of the Department which, putting it at its mildest, seems unlikely to be effective. Many of us are concerned that the Civil Service is taking power from Parliament more and more with each year that passes. In this Bill, it is not merely taking power from Parliament. It appears that the Department is proposing to take power from the banking system as well.
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  My right hon. Friend has noted in The Times on 28th July an article about Rolls-Royce, entitled "Rolls-Royce: the illusion and the reality" by Joe Roeber. It is an interesting article dealing particularly with the problems of that company. It closes with a few lines which the House should consider:
  "… It cannot be disputed that the whole mess has arisen from the confusion that lies between the illusion of private freedom and the reality of public involvement. If, instead of making fierce ideological noises—only to subside a year or so later—the Government properly analysed this problem, it will have made a real contribution to the economic management of the country."
  The problems which we are trying to tackle in this Bill arise from the fact that we have a mixed market economy which is not working. It is not a theoretical and perfect market economy of the sort that one reads about in Ricardo and Adam Smith. Therefore, there has to be an element of Government interference. I am not trying to argue, as some hon. Members perhaps are, that the Government ought not to interfere at all in the way in which industry is managed and financed; but one would have hoped that Clauses 7 and 8 could give us a more inspiring insight into the thinking of my right hon. Friend in this immensely important field.
  I should like to state briefly some of the reasons why I think the Government should interfere in the financing and management of industry. It must be established that there are real problems before we can go on to see how they should be tackled. British industry is particularly uneasy in a time of continuing and very high interest rates. The interest rate structure in this country is not of our own choosing. It is imposed upon us because London is one of the world's greatest capital centres, and interest rates in London have to be influenced by world trends in the price of capital.
  It might be pointed out that the German economic miracle took effect largely in a time of historically very high interest rates, and it might be argued that British industry should be able to achieve an economic miracle in spite of the interest rates which are in force now. Possibly it is the climate of rapidly declining profitability now afflicting British industry which also makes it especially discouraging to investment to have to overcome

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  the brake put upon investment by high interest rates. So here is a special reason why the Government should interfere.
  It is also perfectly proper that the Government should take into account social considerations. In the academic systems labour is perfectly mobile, but we know that in this country it is not, and we would not wish the Government to bring too much pressure to bear on labour to move to the places where the jobs are. The social consequences would be insupportable in Central London, for instance, and the South-East. The Government have got to do a lot of catching up with the problem of retraining. This has been neglected for too long in this country, and until we are really organised to make labour more mobile, through retraining and acquiring new skills, we shall have problem industries and problem regions where Government assistance is essential.
  Possibly the most important reason why the Government have to act at this time is reflected in the policy of, I believe, Montague Norman before the war with regard to the banking system, in which he insisted upon a division of function between the clearing banks and the merchant banks. To this day it is the policy of the Bank of England to insist that there should be two different types of banks. The clearing banks do not encroach too far into the function of the merchant banks and the merchant banks are not expected to link up—too openly at all events—with the clearing banks. We do not, therefore, have the advantage which American and German industry have of a banking system which is able to carry out the work which the Bill is seeking to do.
  I am particularly aware, having had some years of experience in personnel management in industry, of the need for specially expert pressure to be exerted to secure the reorganisation of senior management. I do not think that Clauses 7 and 8 tackle all these problems in the right way.
  Why is it right that the Government should act through the banking system and not through the Department's own resources? We have a satisfactory precedent in the setting up, in 1945 I think it was, of the ICFC. That body has advanced more than £200 million to about 2,300 British companies.
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  As I recall the history of the ICFC, it was recognised at the end of the day that clearing and merchant banks were not meeting the need for finance for small companies, but instead of yielding to the temptation to interfere directly, Sir Stafford Cripps called the Bank of England and the heads of the City banking institutions together and told them to set up a subsidiary which would be able to provide the finance for small companies. That was the right way to tackle the problem as time has proved, and my Amendment is trying to draw attention to the fact that this alternative still exists if the Government choose to use it.
  By acting through the banking system the Government would cause the minimum amount of disturbance to the balance in our mixed economy. They would be able to make use of the exercise of trained, up-to-date and expert discretion in handling loans and grants. They would be able to maintain the confidential tradition of business; and, of course, there would be what there cannot be in a system which is too closely linked to politics, continuity of policy. It may be said that what I am arguing for is a kind of sheltered banking system for problem industries and regions.
  I should like to show why it is wrong to act through the Department. First, once again if we refer to history, we see what happened about the management of nationalised industries. Perhaps we can remind ourselves of the hopes that were expressed, that when problem industries were brought under parliamentary control their problems would evaporate, that the wisdom and sincerity of Members of Parliament could be directed to disposing of their difficulties and that the nationalised industries would be happy and profitable thereafter. The history of the nationalised industries shows how ineffective parliamentary control has become, and must become by the very nature of the difference between political life and business life.
  I think, too, that industrial and commercial risk-taking require the kind of experience and temperament which are unlikely to be found in the Civil Service. A man is attracted to a career in the Civil Service for precisely those reasons which make him less likely to be a success in exercising judgments in the commercial

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  and industrial field. If a man joins the Civil Service and finds that he has a flair for industrial management, now that the Civil Service has transfer ability of pension rights I imagine that he will leave the service and make his way in industry rather than hope to find his way into a place, perhaps in the Department of Trade and Industry, where, under the Bill, he might be able to exercise his talents.
  Also, if Parliament intervenes openly in the way in which loans and grants are handled there will be no more secrecy. Inevitably, if Parliament investigates the circumstances which have justified some of the payments envisaged the confidential atmosphere will evaporate altogether, and there will be a total lack of the speed and finesse that are necessary in handling the financial problems of large and small businesses.
  12.45 a.m.
  I know that my right hon. Friend has recognised these difficulties, and has therefore sought to introduce safeguards into the Bill in order to overcome the obvious disadvantages. First of all, we have the new appointments of the Minister for Industrial Development and the Secretary of State for Trade and Industry. I know that the whole House welcomes those appointments and has absolute confidence in the Ministers' judgment, perspicacity and integrity in their very important responsibilities. But one wonders who in due course may come to fill their places, particularly if there were a change of Government. As an hon. Friend comments, that is a worry. It is a worry that so much power may be put into the hands of Ministers without there being any effective parliamentary control.
  There is also the appointment, which again we welcome, of the Director of Industrial Development. The Government could not possibly have found a person better suited or qualified than Mr. L. V. D. Tindale, whose success as general manager of ICFC makes him specially suitable to assume the responsibility which it is proposed to put on him. But, once again, if he is attracted back to the City, as no doubt he will be, how do the Government propose to replace him?
  W read of the Industrial Development Advisory Board. My misgivings about
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  that arise from what I read in page 5 of the White Paper where it says:
  "The Minister will be advised by an Industrial Development Board which will comprise within its membership prominent persons in industry, banking, accounting and finance, and international industrial investment with particular emphasis on relations with Europe."
  Obviously we applaud that, but anxiety arises when we read:
  "The Board will be available to advise on industry-wide problems and priorities, and to consider specific major cases for selective assistance."
  My right hon. Friend on Friday did not entirely satisfy the House that loans of £1 million would never involve the risk of taxpayers' money being wasted, even though he saw insuperable difficulties in bringing those loans to the attention of the House. In the Committee, as I read it, reference was made to the Public Accounts Committee, the Select Committee on Nationalised Industries and other Select Committees, including the Select Committee on Expenditure, and the Comptroller and Auditor General. I am certain that all these bodies and people will play a very important part in making sure that the taxpayers' money is not wasted if the Bill is enacted, as seems inevitable. But that work will tend to be of a retrospective character, and will also deal only with this or that particular aspect of the operations of the Department which is being brought to their attention. I cannot express too much confidence that no waste of taxpayers' money will occur in spite of the pressure of all those bodies.
  The Minister also said in Committee that hon. Members could depend on Question Time, Adjournment debates and other debates to probe into what the Department was doing. Considering the breadth of the field in which the Department will act I do not think that hon. Members will have very much opportunity of investigating in depth what the Department is doing, even if they make full use of the facilities of the House.
  Then we have the regional boards as a safeguard. They do not appear in the Bill, so they seem to be a sort of non-statutory barrage balloon tethered in the various regions, or perhaps Aunt Sally's; but will they have power without responsibility or responsibility without power? I am left uncertain as to which, but I

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  cannot feel that they will have a very big part to play in safeguarding taxpayers' money from waste or misuse.
  In effect, the Bill raises a constitutional issue. How is expenditure to be controlled in a democratic system? In the European Parliament and in the American system it is controlled through the restriction of the money supply and not by the direct management of the functions of the Executive. But in the British variant, of which we were proud in the days when we read Dicey's work on the constitution, the heads of the Executive also sit as Members of this House.
  It is the Department of Trade and Industry, however, which seems to have made the biggest dent in the doctrine of ministerial responsibility. The Department abandoned it, in effect, over the V and G affair. I said about that unhappy affair that the civil servant who seemed to be so unfairly criticised was being asked to make bricks without straw. But, after the passing of the Bill, the Department will not be making bricks without straw. It will have the bricks and the straw, and Parliament will be giving it effective discretion to build whatever it likes.
  The House has been patient with me. The Amendment may well be faulty in the choice of words. If the Secretary of State was impressed with my argument, however, he would be able to perfect it in another place. If he declines to accept my line of thought, I feel certain that the Bill will contain a major flaw which the passage of time will make painfully apparent.
  Mr. Anthony Grant: My hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) has made an extremely interesting speech. It covered such a wide range that it was, perhaps, more of a Second Reading speech than a speech for Report stage.
  I can best help the House by confining my remarks to the Amendment. My hon. Friend says that he is not hostile to the Bill in any real sense but that he seeks to improve it. But I am afraid that in my judgment it is not a question of the Amendment being faulty in its wording. It is not fundamentally the right approach. I shall give the reasons for that view.
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  First, I was glad to hear the tribute paid by my hon. Friend to Mr. Tindale, who came from the ICFC. My hon. Friend was extolling the virtues of the ICFC, and I agree with him. But it is fundamentally a different body from that which my hon. Friend proposes to insert into the Bill, because the ICFC is not aided by funds from the Secretary of State. My hon. Friend seeks to take the provision of regional selective assistance in the assisted areas out of the hands of the Secretary of State and put it in the hands of a banking institution instead. Therefore, the institution he seeks to set up, unlike the ICFC, would be in receipt of taxpayers' money direct from the Secretary of State.
  I believe that the organisation we are proposing in the Bill, the industrial development executive, which is designed specifically to be an amalgam of the outside banking expertise, of which my hon. Friend is quite rightly in favour, with Government, is a better vehicle, for reasons which I shall explain, than an entirely outside body as proposed by my hon. Friend.
  First, if we are to achieve the best use of resources to improve our economic performance and regenerate the regions, it requires, as my hon. Friend will recognise, that the combined resources of the Government and the public and private sectors of industry are working together. On the Government side, therefore, close liaison is required. This needs to maximise the advantages resulting from the improved co-ordination between Government Departments. The sort of exercise one has to envisage in the regions cuts across a whole range of Government Departments when dealing with the infrastructure, new towns and the whole range of activities which the Government have to carry out in the regions. In those circumstances, it is fairly clear that all these can be co-ordinated only through the Government and not by merely an outside banking organisation.
  My hon. Friend has referred to the need for continuity of policy. I suggest to him that another need is that policy should be a developing thing and that there should be a degree of flexibility and an ability in the Industrial Development Executive, the vehicle which is to carry out the new policy, to influence the

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  Government at an early stage in adapting to changing needs. This can far better be done by an organisation such as the Industrial Development Executive, which is a combination of the Government, the Civil Service and outside expertise. That is another reason why I believe that the system we propose is better.
  Again, when one considers the general cohesion of administration, the administration of regional development grants by the Government has never been challenged. This has always been carried out by the Government as opposed to an outside body. It is not very practical in the regions for the selective assistance to be administered entirely separately by a separate body divorced away from the Government administration.
  Perhaps the most telling point against my hon. Friend's Amendment—I think that he recognised this and expressed his concern—relates to the problems of ministerial responsibility and accountability. The very fact that my right hon. Friend was appointed as a Minister to take charge of the Executive provides an assurance that the policy it pursues will be acceptable to Parliament. My hon. Friend's proposal of an outside body would not have this advantage. There would be no such safeguard in the case of his outside body.
  The serious points of concern about accountability quite rightly posed by my hon. Friend would apply with even greater force to the proposal he makes in his Amendment. In addition to the parliamentary control over policy to which I have referred, the inclusion of the Industrial Development Executive within the Government provides for much stricter parliamentary control over the disbursement of its funds than there would be from an outside body. All the expenditure has to be voted annually and accounted for. Unlike an outside agency's expenditure, the industrial development expenditure will come within the purview of the Comptroller and Auditor General and, of course, the Public Accounts Committee. Whether those are adequate is another matter but the Industrial Development Executive comes within our purview, whereas the outside body proposed by my hon. Friend would not.
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  In addition, as regards expenditure under Clause 8 of the Bill, which we debated at considerable length on an earlier occasion, the specific limits to the expenditure are incorporated specifically to provide opportunities for parliamentary debate before a new tranche of expenditure can be used.
  For all these reasons, I believe that the proposals we have put forward of an Industrial Development Executive—a combination of the expertise drawn from the banking world, of which my hon. Friend is quite rightly praiseworthy, and the Government, with the controls and the accountability which have been pressed upon us during the course of our debates—are a much more effective vehicle than the entirely outside body proposed by my hon. Friend. Therefore, fascinating though my hon. Friend's speech was and greatly though I agree with much of his philosophy, I regret that I must advise the House to resist the Amendment.
  1.0 a.m.
  Sir B. Rhys Williams: I recognise that if the form of words which I seek to introduce were to be adopted it would have to be worked out in much greater detail than has been possible for a back bencher. I thank my hon. Friend for his sincere analysis of the problem. He has made it clear to the House that he understands the difficulties in the choice the Government have made and the difficulties which would have confronted them if they had made any other choice. In the light of my belief that at any rate my point has been seriously considered, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Adam Butler: I beg to move Amendment No. 56, in page 8, line 25, at beginning insert:
  'Subject to the following provisions of this scection'.
  Mr. Speaker: With this Amendment it is suggested that we should discuss the following Amendments: No. 15, in page 8, line 30, leave out from 'including' to end of line 31 and insert:
  'an acquisition effected by the Secretary of State through another company, being a company formed for the purpose of giving financial assistance under this Part of this Act'.

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  No. 17, in page 8, line 40, leave out subsections (4) and (5) and insert:
  '(4) The Secretary of State, in giving financial assistance under this section in the way described in subsection (3)(a) above, shall not acquire any shares or stock in a company without the consent of that company'.
  Plus sub-Amendment (a), leave out from beginning to 'shall' in line 2 and insert:
  '(4) Financial assistance shall not be given under this section in the way described in subsection (3)(a) above unless the Secretary of State is satisfied that it cannot, or cannot appropriately, be so given in any other way, and the Secretary of State, in giving financial assistance in the way so described'.
  Plus sub-Amendment (b), leave out 'without the consent of that company' and add:
  'unless he has—

  (i) obtained the consent of that company; and

  (ii) given to that company an irreversible undertaking that he will dispose of the acquired holdings, other than to an agency or institution in which he already has, or at a future date will have effective control, and that he will do so at the earliest opportunity after the ending of those conditions or circumstances which gave rise to his decision to acquire the said holdings'.

  Amendment No. 58, in page 8, line 43, leave out 'without the consent of the company'.
  Amendment No. 18, in page 9, line 5, leave out subsection (6).
  Amendment No. 21, in Clause 8, page 9, line 29, leave out subsection (2) and insert:

  '(2) Financial assistance under this section may, subject to the following provisions of this section, be given in any of the ways set out in subsection (3) of the last preceding section.

  (3) The Secretary of State, in giving financial assistance under this section in the way described in subsection (3)(a) of the last preceding section—

  (a) shall not acquire any shares or stock in a company without the consent of that company, and

  (b) shall not acquire more than half, by nominal value, of the equity share capital of any company.

  (4) Where financial assistance is given under this section by acquiring shares or stock in a company the Secretary of State shall dispose of the shares or stock as soon as, in his opinion, it is reasonably practicable to do so; and before making the disposal the Secretary of State shall consult the company'.

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  Plus the sub-Amendments thereto:
  (c) leave out lines 4 and 5 and insert:
  '(3) Financial assistance shall not be given under this section in the way described in subsection (3)(a) of the last preceding section unless the Secretary of State is satisfied that it cannot, or cannot appropriately, be so given in any other way, and the Secretary of State, in giving financial assistance in the way so described'.
  (a), in line 7, leave out from 'company' to end of line 13.
  (b), in line 8, leave out 'more than half, by nominal value, of' and insert 'a controlling interest in'.
  (d), in line 11, leave out from 'stock' to end of line 13 and add:
  'at the earliest opportunity after the ending of those conditions or circumstances which gave rise to his decision to acquire the said holdings, and to effect such disposals after consultation with the company'.
  Amendment No. 22, in page 9, line 32, Clause 8, leave out from 'section' to end of line 34.
  Mr. Butler: Amendment No. 56 as such is clearly a drafting Amendment which introduces the provisions which it is proposed should limit the giving of financial assistance under the Clause. It is of equal relevance to Clause 8. I shall speak particularly to sub-Amendment (a) to Amendment No. 17 and to sub-Amendment (a) to Amendent No. 21.
  I refer initially to Amendment No. 58 in the name of my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams), the intention of which is to prevent the taking of shares by the Government on behalf of the taxpayer. Doubtless my hon. Friend will expand on this point. This is a laudible aim. I do not believe that any of my right hon. or hon. Friends look for a permanent extension of State shareholding whether by the front or back door. This is in contrast to the wording or intention of Amendment No. 18 in the names of right hon. and hon. Members opposite which shows their intention clearly.
  However, I am sure that my hon. Friends have read the Committee proceedings where I acknowledged that there were occasions when the taking of shareholding by the Government would be necessary. It is conceivable, for example, that in certain circumstances a loan would be inappropriate and might over-strain the financial liabilities of a

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  company. I suggested in Committee that a company might welcome a temporary State holding as an indication of a commitment by Government to meet the cost escalations—that is, the over-run beyond original expectations—which have so characterised, and which might continue to characterise, advanced technology projects. Such projects, apart from a long period of gestation, contain essentially a high risk element. It is because of their features that they do not attract money from the private money market.
  I will not expand on this theme beyond saying that hon. Members may argue that if the money market, with its shrewdness and nose for a profitable return on its investment, is not prepared to advance money in these circumstances neither should the Government on behalf of the taxpayer. The answer to this is that the magnitude of some of these investments is literally beyond the money market's resources, and the search for essentially short or—at the most—medium turn returns, which is the hall mark of the money market, automatically acts as, at best, a restrictive caution and, at worst, a brake on investment in advanced technology.
  If the House accepts the principle of share acquisition by the State, it is essential to our philosophy on this side that such share shall not be controlling and it shall be temporary. In Committee, my right hon. Friend acknowledged and accepted that any shares should be sold back as soon as practicable, and for that we are most grateful. His new Amendment in respect of Clause 8 proposes that a majority shareholding shall not be permitted, and this also is welcome. We should have liked to see the same restriction in respect of Clause 7, but I accept that circumstances may require otherwise. All that my sub-Amendments do is carry the restriction one stage further and propose writing into the Bill the assurances given by my right hon. Friend in Committee; namely, that the taking of shares, when this is necessary, shall be a measure of last resort.
  It is necessary to make the Secretary of State the arbiter of whether the money can be provided by other means, by loans or grants, for instance, and I hope that this requirement, which is combined with
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  the requirement to sell back as soon as possible, will be acceptable not only to the Secretary of State but to those of my hon. Friends who have shared some disquiet on this whole subject.
  Mr. Dell: I rise at this stage because the right hon. Gentleman did not, though I had expected him to wish to speak now to his Amendments within this group. If he wishes to do so, I shall give way. I am sure that it would be of assistance to the House if he explained the Government's Amendments, but, if he does not wish to do that, I shall continue.
  As the right hon. Gentleman is not rising—
  Mr. Chataway: I do not want to cause the right hon. Gentleman any distress. If he feels, and the House feels, that it would be convenient if I intervened at this point, I am happy to do so.
  In the Government Amendments, we seek to give effect to assurances which were given in Committee. Amendments Nos. 15 and 17 are, in effect, drafting Amendments, making certain that in all circumstances the Secretary of State, acting directly or indirectly through a financing company, shall not acquire any shares or stock of a company without the consent of that company.
  Amendment No. 21 gives effect to the undertaking which I gave in Committee that the Bill would be amended to prevent the Secretary of State taking a majority shareholding in any company under Clause 8.
  There may be circumstances in which the Government, a Conservative Government, will think it right to take a controlling interest in a company outside the assisted areas. It is possible that there could be another situation, such as that which arose over Rolls-Royce, in which there appeared to be no alternative and where over-riding needs either of defence or of the national interest made it imperative to maintain that company in some shape or form. But if that arose the Secretary of State would now have to bring forward fresh legislation.
  Mr. R. J. Maxwell-Hyslop: May I give my right hon. Friend the opportunity to correct himself? Surely, the undertaking which he gave was not that the Bill would be amended but that

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  he would introduce an Amendment? There is a difference.
  Mr. Chataway: I accept my hon. Friend's correction. I had hoped that this would be an acceptable Amendment to the Government side of the House at least, and all the indications that I have been given to date suggest that it is an Amendment which many of my right hon. and hon. Friends feel should be made.
  I would recommend that the Amendment moved by my hon. Friend the Member for Bosworth (Mr. Adam Butler), sub-Amendment (a) to Amendment No. 17 should be accepted. It will have been clear from the speeches made at earlier stages of the Bill by myself and by the Secretary of State that it is the intention that equity participation shall only be embarked upon where the Secretary of State is satisfied that assistance cannot appropriately be given in any other way. Therefore, my hon. Friend's Amendment is acceptable and is useful because it spells out clearly what has been the expressed intention of the Government in this respect.
  I believe that there is value in my hon. Friend's sub-Amendment (c) to Amendment No. 21 which again ensures that equity participation shall only be undertaken where no other form of assistance is possible. I realise that a number of my hon. Friends, perhaps including my hon. Friend the Member for Kensington, South (Sir B. Rhys Williams), will doubt whether there are any circumstances in the Bill in which it would be right for the Government to take an equity shareholding.
  Mr. Bruce-Gardyne: Before the Minister goes on with the point, it might save time if he explained why the terms of Amendment No. 21 are applied to Clause 8 but not to Clause 7. Why do the Government feel it desirable that they should not have the power to acquire more than half by nominal value of the equity shareholding of any company under Clause 8 but not under Clause 7?
  Mr. Chataway: I am happy to deal with that point at this stage. As I made clear in Committee, the Government believe that there can be circumstances in the assisted areas where it will be right for the Government to acquire, perhaps only temporarily, a majority share-
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  holding in a company. One can envisage a situation in which a company which is an important employer in an area already suffering very high unemployment is in financial difficulties. It may be that the company has been extremely badly managed. It may be that it is facing overseas competition which it is unable to stand. The company goes into liquidation and the Government must decide whether they would be justified in letting the company go completely and immediately, perhaps causing very high rates of unemployment. If that company were to be reconstructed and set on its feet, it could be that the only way in which that could be done would be for the Government to take a controlling interest. The Government might do that with a view to bringing about an orderly rundown in the firm's activities, gradually reducing their scope until it was viable. Or it may be the situation in which with competent management it would be possible to put the firm on its feet and float it off again. So it is felt that in the assisted areas it is right that the Government should have the power, principally with rescue operations in mind, to take a majority interest. The Secretary of State and I have made it clear that that is a last resort. I need not stress that point again.
  1.15 a.m.
  I think there will be doubts among some of my hon. Friends whether, outside the assisted areas, there is ever a justification for taking an equity share in a company. Those who believe that it is never justified outside the assisted areas to assist private companies will a fortiori believe it entirely wrong for a Government to invest by way of equity; but those who, for example, have read the recent and valuable report of the Expenditure Committee will have seen listed in paragraph 19 some of the circumstances in which the great majority of those who gave evidence to the Committee from the city, industry, all quarters, consider that in these days it is necessary for a Government to intervene.
  Given that that is so, will there eve be circumstances in which a Government, however reluctant to take control and get involved by way of equity participation, would be justified in proceeding in that way? My hon. Friend the Member

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  for Bosworth has given the House a fair indication of some of the circumstances in which it would be right to do so. There are cases in which the gearing of a company may mean that if it is to be given assistance it will be necessary to do so by means of equity. If the company is already carrying as much debt as it can, to assist the company it will be necessary to do so by means of equity. Again, there may be situations in which it would be right to assist, perhaps in an area of high technology where high risks are involved, and some equity participation will be the only commercially sensible way of ensuring to the taxpayer a return commensurate with the risk that is being undertaken.
  I hope my hon. Friends will feel that these Amendments are worth supporting and that they represent substantial safeguards for both the House and the taxpayer.
  I emphasise that it is not the Government's intention to use these powers to extend the public sector. It has been clear from what has been achieved with the I.R.C. Portfolio that there is no reason why holdings should not be disposed of. There is no reason to believe that, by supporting companies which, for one reason or another, qualify, we shall inevitably be holding those shareholdings on any permanent basis.
  I do not believe that the Bill would be a very convenient vehicle for right hon. and hon. Gentlemen opposite, if they were to come into office. Those who have had the pleasure of reading their latest policy document will have noticed very sweeping proposals for nationalisation and for extension of the public sector. A Bill which ensures that an equity participation can be taken only with the consent of the company involved, which makes it clear that the Secretary of State is under an obligation to sell his holdings as soon as possible and which prevents the Government from taking a controlling interest in any situation outside an assisted area, will not be much good to a party which is bent on the kind of nationalisation proposals that have recently been outlined.
  Mr. Maxwell-Hyslop: The difference between an assisted area and an unassisted area is very often merely that
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  the circumstances have not yet happened. An assisted area is where disaster has happened, and unless my right hon. Friend takes these powers in the case of a large company it may be that another area will need to be an assisted area. The distinction between the two can be very artificial. Using the powers could prevent a new area becoming an assisted area.
  Mr. Chataway: I take my hon. Friend's point, and the fact that we have the Clause is in part a recognition of the argument he is deploying. None the less, I think the differences between the two justify the somewhat different treatments described in Clauses 8 and 7.
  It will be clear from what I had said that I would not recommend to the House the Opposition Amendments, because they are directed towards an exactly contrary objective to that which I have outlined.
  I turn to sub-Amendment (b) of my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) to Amendment No. 21. He suggests that instead of talking about a majority holding in Amendment 21 we should refer to a controlling interest. I understand his point, which is that a shareholding less than 50 per cent. can in many circumstances be a controlling interest. We can think of circumstances in which a shareholding of 5 per cent. can be a controlling interest. But the Amendment is not feasible, first, because of the difficulties of definition, and, secondly, because there could be continued room for argument during the course of changes in the construction of a company as to whether the Government shareholding was nominally a controlling shareholding or not. If there were a sale of shares between two other shareholders it might be argued that that had changed the Government's position, without any action on their part, from a controlling to a non-controlling shareholding. I understand my hon. Friend's desire for perfection—it is what I expect of him—but I hope he will recognise that something a little short of perfection is necessary in this case.
  I have complete sympathy with the objectives my hon. Friend the Member for Cheadle (Mr. Normanton) has outlined for his sub-Amendment (d) to Amendment No. 21, but I am advised that the words he has suggested do not

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  go significantly further in their effect than the words we have already agreed to write into the Bill. He is anxious, and we are anxious, that it should be made clear that the Secretary of State is under a duty to sell as soon as is right and practicable, and those words are already included within the Bill. I know that it was my hon. Friend's intention to give them an even greater effect, but I believe that that would not be achieved by his Amendment.
  By sub-Amendment (b), my hon. Friend the Member for Cheadle wishes to ensure that the Secretary of State has to obtain the consent of the company and is under an obligation to sell as soon as possible. This is a form of words which again would perhaps impose a somewhat firmer obligation, but I believe that the wording of the Bill suffices. In addition, sub-Amendment (b) is subject to a number of drafting difficulties.
  Our purpose in the Bill is to assist and strengthen private industry, to enable private industry to operate in a number of areas where without some Government support the job would either not be done or would have to be done by nationalised industry. In most of our high technology industries, if we are to compete with industries abroad receiving Government help, the job can only be done, if we do not help private industry, by nationalised industry. The Bill is designed therefore to help private industry operate in areas where, as I say, it would not otherwise be able to do so and to meet social needs which would otherwise only be met by nationalised concerns.
  That there should be a difference between the Amendments submitted from the two sides of the House is hardly surprising. I hope that the House will accept the Government's Amendments and Amendment No. 56 and not the others.
  Mr. Dell: The right hon. Gentleman spoke as though the object of all the Amendments was to prevent the Labour Party from using the powers of the Bill when next in Government. But if that were the object it would be absurd because, as the Secretary of State said on Friday, the next Labour Government can introduce the necessary legislation, using this Bill as far as it goes, reversing the
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  Amendments which the right hon. Gentleman now feels it necessary to make.
  It was clear from the moment the Bill was introduced that it would put power into the hands of the next Labour Government to use for purposes different from those which a Conservative Government would use them for. The Bill is being amended not from fear of the Opposition and what they might do with its powers but because the Government have been surprised to find considerable pressure from their own back benchers, who evidently do not trust the Government to spend public money wisely under the Bill. Concessions are therefore being made in the hope of conciliating them into believing that with these additional controls the Government might conceivably spend wisely.
  I have considerable doubt as to whether, given this instrument, the money will be spent wisely, just as I continue to doubt whether there is in the Bill sufficient control in the hands of Parliament over the way the Government will spend the money. The Amendments as I say are an attempt to conciliate hon. Members opposite who are critical of this complete departure from the principles on which the Government came to office. One might ask why, given the reversal of policy on so many points, given the acceptance that it is necessary from time to time for the Government to intervene in industry—and intervene far more widely than the Secretary of State suggested even at the initiation of his radical policy—there should be these special restrictions on the acquisition of shares.
  1.30 a.m.
  The position is that no one will buy the shares which the Government acquire if the company in which the Government invest is not a success. The only circumstances in which those shares will be saleable is if the company is a success. Here, by definition, we shall have a situation in which the investment of public money in a company by way of equity has achieved its object—it has enabled assets to be restored to profitability, or it has raised the profitability of those assets—and yet, for some reason unexplained, having made a success of this task, which so many hon. Members opposite believe cannot be done under public ownership, a vaguely worded requirement in the Bill provides that at the point of success the

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  shares must be sold as soon as reasonably practicable.
  In the circumstances, that cannot be anything else but dogma. There is no other justification for it. If hon. and right hon. Gentlemen opposite were taking up their ancient position and arguing that the acquisition of equity by the public could only have deleterious effects on a firm, presumably they would oppose the Government's taking equity under any circumstances. But to argue that the Government can take equity and then, when the thing is successful, to require that if the shares are disposable they have to be disposed of, means simply that the taxpayer is to be sacrificed to dogma.
  Mr. Adam Butler: I am not sure that the right hon. Member followed my argument, which I put both in Committee and a few moments ago. Does not he agree that in the situation where a State shareholding is taken as an indication of the commitment of the Government to stay with a project it does not necessarily imply that the public partner company is unprofitable?
  Mr. Dell: I think that I understand the hon. Member's point. I am not saying that the company is necessarily unprofitable, but whether the effect of the Government's investment is to convert assets from unprofitability to profitability or to increase their profitability, this investment has achieved its object, and I can see no reason, other than dogma, why, at that stage, the shares have to be sold.
  There could be a commercial element in it. In certain circumstances the Government might wish to sell because of their judgment of the public interest. They could take up that position and argue justifiably that that was not dogma. But what is written into the Bill is dogma, because it provides that the Secretary of State must sell where in his opinion it is reasonably practicable so to do. That is dogma; no commercial judgment is left to the right hon. Gentleman. If, in his opinion, it is reasonably practicable to do so, he must sell the shares.
  There can be no justification for taking that position in logic, once the Government have departed from the argument that public ownership is in any case
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  necessarily deleterious to the interests of industry. They cannot take that position any more. They have nationalised Rolls-Royce themselves, but, having changed that, they should change the whole lot and not, in any attempt to conciliate dogma and back benchers, introduce these requirements into the Bill at the last minute.
  The requirements are effectively that this must not be done without the consent of the company. That was in the Bill to start with, although I would like to know what the Government will do if they find a recalcitrant company which does not want investment put in by the Government. Why a company should decide the manner in which the investment is to be made, I do not know. There is also the requirement that investment should not be more than half the total.
  The right hon. Gentleman said that he cannot accept that requirement in respect of assisted areas, and that even outside assisted areas it might sometimes be necessary to take over more than 50 per cent., but when it is necessary outside assisted areas he will introduce special legislation, so the Government are going through this process of legislation to enable them to assist industry outside the assisted areas but are placing this limitation on their action.
  When we were asking for greater parliamentary control over the Government, they were saying "No. It would prevent speed of action", but here they are prepared to prevent speed of action, although the right hon. Gentleman admits that it might be necessary and would be necessary in assisted areas, under Clause 7.
  The hon. Member for South Angus (Mr. Bruce-Gardyne), who intervened and asked for what possible reason it is justified to introduce these provisions in respect of Clause 8 but not in respect of Clause 7, did not receive a satisfactory answer. If it is sensible to do it in respect of Clause 8, it is sensible in respect of Clause 7; but it is nonsense in respect of either Clause. There is no difference between the two, as the hon. Gentleman tried to suggest.
  In Committee I asked what these words, so readily accepted from the hon. Member for Bosworth (Mr. Adam Butler), "that in the opinion of the Secretary of State it is reasonably practicable", really meant. The only comfort I take is that

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  those words are meaningless. I take it that if the Secretary of State thinks it would not be wise to sell a public holding, he would hold that in his opinion it was not reasonably practicable to do so, taking account of all the interests involved, and he might take account of the interests of the taxpayer who invested the money in the first place.
  If these words mean something and are not just thrown at Conservative back benchers in the hope that they will allow the Bill to pass, I believe they are dangerous because they mean that a public investment will not be exploited in the public interest; dangerous because they could mean that the Government would be required by this provision into this legislation to sell to what would often be the most likely purchaser of such shares—another company in competition with the company the Government had assisted, and which might, therefore, establish a monopoly or dominant position in the market.
  There is nothing in the legislation to prevent that. On the contrary, if the words mean anything, they are a specific instruction to the Secretary of State to ignore his responsibility under the Monopolies and Mergers Acts and to sell where it is reasonably practicable to do so. My only hope is that this means nothing at all.
  One thing we know is that these Amendments are offered in an attempt to conciliate Conservative back benchers. Why they should do that I do not know and perhaps they will not. As I understand it, the basic opposition of hon. Gentlemen opposite is that the Government cannot do this sort of investment successfully and wisely. If that is their position why they should accept that the Government can do this because it is 50 per cent. of the total equity of the company and why they should not insist on a nil figure I cannot understand. It shows how easily they are swayed.
  Mr. Normanton: After listening to the right hon. Member for Birkenhead (Mr. Dell) on the question of political dogma I must confess that even at this late hour I am almost tempted to indulge in the same. I will not offend my hon. Friends and keep them up by indulging in the exercise, other than to say in clear and unequivocal terms that Clauses 7 and 8
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  even when amended will stick in my gullet. I say that not with a view to being offensive but just to reinforce a point of view which I expressed in Committee and last Friday.
  Having said that, I am unrepentant and I will continue to be so, about the basis of the participation of the Government in equities in private industry. I will not pursue the argument for one minute further and will try to be constructive in asking a number of questions. I have great misgivings as to how these Amendments will operate in practice.
  The Amendments which have been accepted ensure that the consent of the company is one of the prerequisites of participation in the equity or the taking of equity in a company. This is put extremely crudely. I hope there will be some clear guidelines given, and a clear set of rules laid down to establish what is meant by the term "consent of the company." Does it mean the board of directors of the company? Does it mean a company in formal general meeting and by a show of hands or by a poll taken at such a meeting? Does it mean that there should be a requirement that in the general meeting the company will be required to amend its articles, to increase its borrowing powers, to increase its authorised capital?
  These are not frivolous technicalities, they are very much the essence of what is involved in the meaning of "consent of the company." Such a phrase can in certain circumstances be taken—and could be within the terminology of these Clauses—to be the decision of 2 per cent. or 3 per cent. of the quoted holders. If I were to have 5 per cent. of the equity of, say ICI, I would believe that I could remove the board; I could make more appointments to the board and so arrange affairs that I could truthfully claim, although not by a poll at an annual general meeting, that I controlled that company. Any decision taken by me would therefore fall as I interpret it, within the definition of "consent of the company."
  I earnestly hope that my hon. and right hon. Friends in dealing with these Amendments will make this clear and leave no doubts in the mind of private industry as to what is meant and the way in which this Clause will be operated. There are situations when the consent of

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  the company is something which automatically falls into the category here, for example, where a bank may threaten foreclosure. Through demanding settlement of an overdraft a bank can in practice bring about a situation where freedom of decision is totally denied to shareholders of the company.
  There are also situations in the case of private non-quoted companies where very different requirements will operate where the transferability of shares is limited and restricted by articles which are quite different from those applying in public companies. Here again, I hope that my right hon. Friend will be prepared to give some form of assurance that this kind of problem will be spelled out clearly and unequivocally for industry as a whole.
  1.45 a.m.
  I have two last points which relate to the Amendments and about which I feel strongly. There is a major difference between the problems which may face the Secretary of State when trying to consider taking over a large public company and those facing him when taking over an industry made up of a series of small companies. Can my right hon. Friend assure us that private industry, especially that vast sector of industry which is made up of small and medium size private companies, will not be discriminated against in practice in favour of large companies? I hope that he will do that. Certainly the Minister of State is responsible under the terms of his portfolio for the interests of small companies. I hope that we can have the assurance from my right hon. Friend that in no way will this Bill be used to promote the interests of large public enterprise concerns at the expense of and to the detriment of small companies. At the end of the day, this vast number of small companies are the seed corn for numerous growing enterprises.
  Lastly I refer to the question of equity. Equity is thought by many to be the sole means by which industry is financed. It is not. It never has been and never can be. The acquisition of 50 per cent. of the equity of a company is probably not in itself likely to provide sufficient funds to enable a doubtful company to be revived. What is clearly required in most
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  situations of this kind is loans, secured and unsecured, and debentures. Those are not provided for in this Measure, although there are references to stocks. If there are references to stocks, presumably debentures and perhaps convertible stock, why is the emphasis on equity?
  However, I am grateful to my right hon. Friend for the way in which he has clearly taken careful note of the concern and anxiety voiced in Committee, in this Chamber on Friday, and consistently from this side of the House about the departure from the fundamental belief of many of us that the Government should stay out of industry. We are grateful for the way in which my right hon. Friend has listened to our appeals. On the basis of small mercies, perhaps the matter is better left there.
  Mr. Douglas: It would be very interesting to discover just what it is that sticks in the gullet of the hon. Member for Cheadle (Mr. Normanton). However, perhaps I ought not to attempt to spoil his digestion too much. He enunciates a doctrinaire, dogmatic view which is rightly expressed from the benches opposite about certain parts of the Bill. The Minister has endeavoured to present one or two baubles to those of his hon. Friends who are opposed to the Bill. However, they are not all that meaningful when they are subjected to examination. Nevertheless, they are concessions aimed at undermining public accountability and a proper use of public funds.
  We are told that public funds can be used in a variety of ways under Clauses 7 and 8 to prop up ailing industries and to assist the development of industry generally. But it is now suggested that under Clause 8 there is some limitation to the use of public funds. Great stress is laid on the contribution of public funds to equity in companies, and there is some Plimsoll line in terms of equity which reaches the 50 per cent. level and no further. Of course, this is fallacious, as hon. Members opposite know. The Minister has conceded that it is possible to get effective control of companies without having more than a 50 per cent. equity in them.
  The Minister referred to paragraph 19 of the excellent Sixth Report from the Expenditure Committee. Let us see what it says. I do not wish to quote it all, but

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  no doubt the Minister will interrupt me if he thinks that I am quoting unfairly. After dealing with the general situation, the final sentence of the paragraph states:
  "In such situations it was considered that the free operation of the money market does not always meet national needs."
  I think the Minister accepts that. But by the Amendments which he is accepting we get an interpretation of national need. Under Clause 8 national need is acceptable up to 50 per cent. of the equity, but no further. Then he went a bit further and said, "If we wanted to go further than 50 per cent. this would require legislation." I want to know the form that that legislation would take. I want to know why it is not acceptable to him to write into the Bill a provision for taking action by means of a Statutory Instrument subject either to the affirmative or negative procedure. Why is that not acceptable? Would it take some of the tinsel off the bauble that he is offering to his hon. Friends? Would not the Minister introduce such a provision either in a manuscript Amendment or in another place?
  The Minister makes these concessions and gives the impression that it is quite acceptable to use the public purse to bolster up and develop industry, but when the industry becomes efficient in commercial terms, when it is "reasonably practicable", he intends to hive off certain sections of the industry. I appreciate that he would take commercial advice in doing so, but, as I understand it, there is nothing in the Bill to ensure that he will be accountable to the House in any way except in the form of an annual report.
  The Minister is taking power to use public funds to bolster up industry. He is reluctant to provide effective control, but once an industry is on its feet he can sell it off when he determines to do so and when his advisers think it is "reasonably practicable" to do so. That is not acceptable to us on this side of the House. This Bill is generally acceptable to us, but I caution the Minister that there are many of his own hon. Friends who, although they expressed acceptance on Second Reading, now view the Bill with extreme caution.
  Therefore, it is in essence a Measure which would be eminently acceptable to
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  us, albeit slightly amended. We would have little difficulty in using it in ways that would be suitable to our purposes. I am suggesting that the Minister might make our task a little easier by introducing a procedure by which if it were necessary to go over the 50 per cent. level in terms of equity this could be done by introducing a Statutory Instrument for consideration by the House.
  Mr. Bruce-Gardyne: The hon. Member for East Stirlingshire (Mr. Douglas) was being a little mischievous. He should not go around saying that the Opposition would make appropriate use of the Bill. To do that is to stir up anxiety which I am sure the hon. Gentleman would not wish to stir up.
  The right hon. Member for Birkenhead (Mr. Dell) accused some of us of exposing our dogmatism. I shall not be dogmatic. I think that there has been a great deal of unnecessary alarm and despondency about this group of Amendments, on both sides of the House. The hon. Gentleman and to a lesser extent the right hon. Gentleman are concerned that the Government will dispose of equity shareholdings under the provisions of the Amendments which they are accepting and thereby deprive the taxpayer of a profit which he might otherwise enjoy. They need not worry about this. I do not think that the institutions to be financed under Clauses 7 and 8 are the kind of institutions that will offer the prospect of a commercial return to the taxpayer, not for a moment. There is no danger of that.
  I am a bit dubious about the likelihood of equity shareholdings, having been taken, finding a ready market, for precisely that reason, but, equally, I do not entirely share some of the anxieties that have been expressed by hon. Gentlemen opposite, because if one accepts the proposition that under Clauses 7 and 8 we are to have an open-ended commitment to public expenditure, and in practice an open-ended extension of the public sector, the form in which that extension occurs is of limited significance. In reality the distinction between an equity shareholding and loan capital of one kind or another as is on offer under Clauses 7 and 8 is basically that the equity capital will be provided to concerns which are unlikely even to be able to finance prior charge capital.
  Mr. John Biffen: Public dividend capital.
  Mr. Bruce-Gardyne: Yes. That is all there is to it. The difference is that no interest or dividends of any kind will be paid.
  I do not think that we should be too much concerned about the fine distinction between whether one is extending the activities of the public sector by means of prior charge capital, or by means of equity capital. The end result is much the same, except that the taxpayer is likely to get a worse bargain if the extension occurs in the form of equity capital.
  2.0 p.m.
  For that reason I do not wish to add very much to what my right hon. Friend said about my own modest Amendment on the question of whether one went for half or for a controlling interest in taking equity. As I argued on Friday evening, I accept broadly my right hon. Friend's argument that this piece of legislation might not be. terribly well suited to the purpose of a Labour Government, but what my right hon. Friends perhaps need to consider from time to time is the attitude they would adopt in the hypothetical and I believe unlikely eventuality of the party opposite being in a position to introduce legislation of its own choosing.
  The point that should concern us is the evidence we have had of the embarrassment which a party in opposition may find itself in if its actions in Government can be adduced and taken down and used in evidence against it when a successor Government of an opposite persuasion introduces legislation which is perhaps not totally dissimilar from that which it favoured when in Government.
  My reason for suggesting that one should limit oneself to a controlling interest rather than a 50 per cent. interest under the terms of Clause 8 was simply that this was perhaps a small marker; that my right hon. Friends might have a point at which they could say, "Well, at least our integrity and orthodoxy is intact", if a moment came when Members of the present Opposition produced their own ideas along the lines of this present legislation.
  This is not a matter of dramatic importance. We should in all fairness accept, and I think that members of the
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  Opposition would be well advised to accept, that basically there will be occasions when under Clauses 7 and 8 the extension of the public sector under the Bill takes the form of an equity holding rather than the provision of loan capital in one form of infrastructure or another, the reason being quite simply that the firm is not in a position to pay prior charge interest rates.
  Sir B. Rhys Williams: I listened carefully to all that my right hon. Friend and others had said. I remain convinced that it would be for the good of the Bill if the power to take equity shareholdings was excised, perhaps in another place. I hope that the Minister will have seen some of the difficulties that lie ahead, from what has been mentioned tonight.
  It seems to me that he has a point when he says that there will occasionally be firms where the gearing of the capital makes it dangerous or unsuitable to advance further loans, but if such firms have the prospect of becoming reasonably profitable they should be able to look after themselves, particularly with the benefit of free depreciation and Government help in the offing. But if there are quite exceptional circumstances where the Government wish to intervene in a company by taking shares, they can always obtain the approval of the House, as they did in the case of Rolls-Royce.
  I believe it is pregnant with danger to write into the Bill a power to invest in equity shares. If the Government insist on going ahead with this, they ought to take certain decisions as to what their rôle will be in the future as shareholders. Do they intend to be absentee shareholders of the kind I am constantly complaining about, or will they seek to intervene in the management of the firm, using their shareholding to threaten the management? Will they take an active part in the selection of directors or is it intended that they should act as a sleeping component in the capital plan? The House is entitled to ask my right hon. Friend to express his view as to the way in which the Government will act as shareholder if he insists on the power to take that rôle.
  Mr. Normanton: If the Secretary of State were to appoint the board of a company, would it not be logical to expect that the House would be able to

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  question the Secretary of State about the management of such companies? As I read it, these companies would not be in the same category as, for instance, a nationalised industry. The board would be directly appointed by the Secretary of State and answerable to him. Would my hon. Friend care to bear that in mind? Perhaps my right hon. Friend the Secretary of State might be prepared to comment.
  Sir B. Rhys Williams: I am grateful to my hon. Friend for adding that question, which I should have asked myself. It seems to suggest yet another anxiety lying ahead, that is to say, the extent to which the House ought to feel it incumbent upon itself to intervene if it is responsible for public money in the form of equity shareholdings.
  As to the point raised in subsection (6), I have tabled a separate Amendment, in which I am joined by the right hon. Member for Bristol, South-East (Mr. Benn). It is not very common that we have precisely the same thing in mind, but here we have. It is to delete what seems a hastily drafted subsection which puts a rather indeterminate obligation on the Minister to dispose of the shareholding when it is "reasonably practicable" to do so. One can always get rid of one's shares at a price, so it is always practicable to do so. The interpretation of the words "reasonably practicable" seems to have very much the appearance of a minefield lying ahead of my right hon. Friend.
  I am impressed by the argument that it might be inadvisable to sell if the Government went in because the capital structure of the firm was all wrong and the only way to put it right was for the Government to go in. In what circumstances would the Government be able to get out again? The Stock Exchange will be full of rumours as to what might be in the Minister's mind, and that is likely to affect the price of the shares. Regrettably, the private sector of our mixed economy has something of the atmosphere of a casino. What will be the effect on the Stock Exchange of the likelihood of the Government's buying and selling of equity shares?
  In the next Session I hope that the Government will introduce their big pensions Bill, which will, among other things, set up a huge public unit trust. This Bill seems a minor foreshadowing of that,
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  because it gives the Secretary of State the right to run an open-ended unit trust of his own. Unfortunately, for technical reasons, I am unable to press my Amendment to a Division. The Amendment has the effect of taking from the Minister the power he is seeking in the Clause. But I say in the strongest terms that the subsection ought not to appear in the Bill. I hope that the Minister will consider seriously whether he might not delete it in another place.
  Mr. Warren: I approve very strongly of Amendment No. 21, and particularly the subsection (4) contained in that Amendment. In that subsection I do not see the fears of the hon. Member for East Stirlingshire (Mr. Douglas) about hiving off. The merit of disposing of shares as soon as possible is surely the ability to keep the amount of aid which is available rotating among a number of industries and companies which need that aid. We do not want to see the aid locked up permanently in particular companies. We want the aid to give individual companies the ability to get up to a self-sustaining momentum so that they can look after themselves and not be dependent for ever on the taxpayer.
  What is more important than whether we have equity is the standard of communication between the companies which benefit from the aid and the people in the Government who are responsible for administering that aid. The degree of communication will ensure that there is, I hope, a high standard of maintenance of accountability for the way in which the money is invested and used.
  My hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) should get an answer tonight to his comments about whether the Government will be an absentee shareholder or a sleeping component of the aid programmes. We do not want to be left in the position that there are so many diverse interests for which the Government are responsible that everything is milked down. I hope that this aid will not be considered as a permanent prop for decaying industries or companies. I hope with my hon. Friend the Member for Cheadle (Mr. Normanton) that the primary concentration will be on smaller companies. These are the places where there is the best chance of growth.

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  The right hon. Member for Birkenhead (Mr. Dell) commented on whether we had doubts about public ownership. At this late hour I do not want to open up a debate on this. I merely say that the historical experience of the last 25 years is that the nationalised industries have turned out over and over again to be the weak sectors of the economy. They have not been good examples of how to deliver goods on time at a price that the public can afford. In many cases they have been repositories of bad labour relations.
  In terms of nationalising Rolls-Royce, it was not an end in itself to nationalise Rolls-Royce. It was a means of saving a strategic industry with an important export commitment. We have to distinguish between our determination to try to reduce unemployment, which is surely the heart and motive of Clauses 7 and 8, and the Bill, which I would never regard as a means of investment in industry to give the best possible return. That is not what we are here about.
  With so many constituencies represented by Labour Members which stand to benefit more than any other part of the country from the Bill, it is remarkably surprising that even at this late hour only four hon. Members opposite, gallant men I know, are present when there should be at least 100 if not 200 of them. This is a remarkable reflection on the real interest and dedication of the party opposite to the Bill.
  Mr. Dell: Would not the hon. Member agree that if there were 100 or 200 of my hon. Friends present, the Government would lose many Amendments on the Bill?
  Mr. Warren: That is hypothetical. Hon. Members on the Opposition side are not likely to press Amendments to Divisions tonight.
  2.15 a.m.
  Mr. Millan: Despite the Minister's criticisms of our Amendments, all that they would do is to restore the Bill to its original state. They seek to emphasise the Government's original intentions. The Government have succumbed to pressure from some of their back benchers. Many hon. Members opposite were perfectly happy with Clauses 7 and 8 as they were
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  originally drafted. A small number of hon. Members opposite objected to Clauses 7 and 8 for doctrinaire reasons and the Amendments tabled by the Government in Committee and these Government Amendments are part of the Government's conciliatory approach to their back benchers.
  I doubt whether the Amendments will mean much in practice. It was plain from the Minister's highly defensive speech that, even if the Amendments are carried—we have considerable objections to them—the purpose of Clauses 7 and 8 will not be seriously damaged.
  We object to two points in particular about the Government Amendments. First, they will provide that under Clause 8 it will not be possible for the Government to take more than a 50 per cent. shareholding in any company. The Minister's arguments as to why this is a reasonable proposition for Clause 8 but that something else is reasonable for Clause 7 were weak. One hon. Member opposite argued that as we were dealing with similar circumstances it was absurd to draw artificial distincts between Clauses 7 and 8.
  Rolls-Royce was partly in assisted areas and partly outside assisted areas. It would be absurd for the Government to argue that, if the whole of the Rolls-Royce establishments had been in assisted areas, it would be in order for the Government to use their powers under Clause 7 to take a 100 per cent. shareholding without any special parliamentary procedure and without a separate nationalisation Measure whereas, because Rolls-Royce had some establishments in assisted areas and some outside, it was necessary and desirable to have a separate nationalisation Measure. Because of the large sums and important issues involved, it was a good thing to have a separate nationalisation Measure for Rolls-Royce. A manuscript Amendment is to be moved to provide a certain amount of parliamentary procedure for assistance under Clause 8.
  Whatever may be the arguments about parliamentary procedure and whatever the merits of having a separate nationalisation Measure in a case like Rolls-Royce, there can be little argument in favour of the distinction the Government draw between Clauses 7 and 8. We on

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  this side recognise that there are many circumstances in which it is reasonable and indispensable that the Government should take a majority holding. There is nothing wrong with that. We take the view that there are many situations in which the only adequate way to safeguard the public interest is by taking the majority equity holding. It is doctrinaire to say that in no circumstances should there be anything like a majority holding, although that is the point of view of hon. Members opposite, or that there should be a majority holding only in Clause 8 cases with a special additional parliamentary procedure.
  Therefore, we object to this weakening of the Bill in this important regard, although we think that in practice it will probably not make much difference. We object even more to the proposal that any shares which are taken up shall be disposed of as soon as it is reasonably practicable to do so. Hon. Members opposite are not saying that it is wrong for the Government to get involved in private industry or to assist private industry—if that were a point of principle, one could respect it, even if one disagreed—but they say that it is all right in certain circumstances to put Government money into private industry so long as the Government get out as soon as possible, regardless of the national interest.
  There will be nothing in Clause 7 or Clause 8 about the public interest. The requirement will simply be that the Government shall dispose of their holding
  "as soon as … it is reasonably practicable to do so"—
  I am not altogether sure what that means—and that obligation is to over-ride the public interest. It is a monstrous suggestion. Hon. Members opposite are quite willing to help private industry in circumstances where, without Government help, private industry would go bust, but as soon as the industry is on its feet again, the Government will dispose of their shareholding regardless of the public interest.
  Mr. Normanton: My sub-Amendment (b) to Government Amendment No. 17 would meet the point, would it not?—that the Secretary of State shall dispose of the shares
  "at the earliest opportunity after the ending of those conditions or circumstances which
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  gave rise to his decision to acquire the said holdings".
  Mr. Millan: The hon. Gentleman is expressing clearly what the Government are doing. He says, in effect, that it is all right for Government money to go in when private industry needs it, when the circumstances are such that it is unlikely to be an immediately profitable investment from the public point of view, but, as soon as it becomes a profitable investment, or potentially profitable, it must be got rid of. That is exactly what I am objecting to.
  Govan Shipbuilders, which is to have £35 million of Government money, is a good example. Incidentally, that will be a 100 per cent. shareholding, because nothing is going in from private sources at present, and Lord Strathalmond has made clear that he sees very little prospect of private money coming in. All the money is being supplied by the Government, and yet, at the end of the day, as soon as there is any real sign of profitability, there will be the requirement to dispose of their shareholding.
  Mr. Bruce-Gardyne: Is the hon. Gentleman asking the House to accept that a time will come when private shareholders will be interested in taking an equity shareholding in Govan Shipbuilders?
  Mr. Millan: I am saying the very opposite. The money is being put in by the Government. The first Part of Government Amendment No. 21 about a 50 per cent. shareholding is absurd in such circumstances. Then, if there is any possibility of profitability, the shareholding is to be disposed of. We object to that.
  There are even worse examples. Harland and Wolff has had large sums of Government money put in already, and more is committed, but there is still a considerable private equity shareholding.
  Large sums of Government money are being put into Harland and Wolff to keep the company going, and when it becomes profitable a large element of the profits will go to the private shareholders who are not at the moment supplying the capital to maintain the company. That is an abuse of the use of public funds. It is neither the principled argument that Governments should not get involved, nor is it what the Opposition would like to

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  see, Government involvement but always with due regard to the public interest on profits and in every other way.
  Government money will be going into the company under conditions which will mean in practice that if those conditions are discharged that public money, the taxpayer's money, will be wasted. It will be wasted in the sense that when profitability looks as if it will arrive the benefits of public investment will be handed over to private enterprise. For those reasons, we very much deplore the weakening of the Bill.
  Mr. Chataway: I shall not weary the House by restating the case I put forward earlier, but I shall answer specific points raised by my hon. Friends. My hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) asked about our relationship with companies in which we had an investment. We shall certainly monitor the progress of companies in which we have an investment of any kind. Where there is an equity shareholding, as for example in the case of the 10 per cent. equity shareholding in ICL, a director is often appointed. But I regard the most important means of monitoring and controlling the investment of the Government in any company as reposing in the system of reporting which is instituted by my Department. The fact that we now have the expertise from finance, the City and business within the Department on short-term secondment, which is of a type that has not been available to Government before, should assist us in the execution of policy under the Bill and in our monitoring.
  My hon. Friend also asked about the effects of selling the Government's investments. The hon. Member for Glasgow, Craigton (Mr. Millan) and a number of others made heavy weather of this, because the Government will, of course, take account of the circumstances in selling, and "reasonably practicable" can mean that. If shares are sold when the company is profitable naturally the taxpayer will benefit. The selling of the Industrial Reorganisation Corporation portfolio should reassure those who believe that the Government cannot sell. I do not think
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  that my hon. Friend the Member for Kensington, South has noticed, as a result of the sales that have taken place of the IRC portfolio, on the advice of Rothschilds, that the market has been disrupted in the way he fears. I do not think there will be disruption in the future.
  My hon. Friend the Member for Cheadle (Mr. Normanton) asked me three questions. I think that he recognises that equity by no means bulks large in this operation. We made it clear that the taking of equity would be done only in exceptional cases. He was anxious that I should take account of a number of factors in preparing guidelines. I take note of what he said and I shall bear it very much in mind. Perhaps his most important point about which he was most anxious was that medium and small companies should not be discriminated against. I can assure him that this is my intention and it is the intention of the Under-Secretary who has special responsibility for small firms. I hope on that basis that the House will be prepared to accept the Amendments.
  Amendment agreed to.
  Amendment made: No. 15, in page 8, line 30, leave out from 'including' to end of line 31 and insert:
  'an acquisition effected by the Secretary of State through another company, being a company formed for the purpose of giving financial assistance under this Part of this Act'.—[Mr. Chataway.]
  Amendment proposed: No. 17, in page 8, line 40, leave out subsections (4) and (5) and insert:
  '(4) The Secretary of State, in giving financial assistance under this section in the way described in subsection (3)(a) above, shall not acquire any shares or stock in a company without the consent of that company'.—[Mr. Chataway.]
  Amendment made: as an Amendment to the proposed Amendment, in line 1, leave out from beginning to 'shall' in line 2 and insert:
  '(4) Financial assistance shall not be given under this section in the way described in subsection (3)(a) above unless the Secretary of State is satisfied that it cannot, or cannot appropriately, be so given in any other way, and the Secretary of State, in giving financial assistance in the way so described'.—[Mr. Adam Butler.]
  Proposed Amendment, as amended, agreed to.

Clause 8

  SELECTIVE FINANCIAL ASSISTANCE: GENERAL POWERS
  Amendment proposed: No. 21, in page
  9, line 29, leave out subsection (2) and insert:

  '(2) Financial assistance under this section may, subject to the following provisions of this section, be given in any of the ways set out in subsection (3) of the last preceding section.

  (3) The Secretary of State, in giving financial assistance under this section in the way described in subsection (3)(a) of the last preceding section—

  (a) shall not acquire any shares or stock in a company without the consent of that company, and

  (b) shall not acquire more than half, by nominal value, of the equity share capital of any company.

  (4) Where financial assistance is given under this section by acquiring shares or stock in a company the Secretary of State shall dispose of the shares or stock as soon as, in his opinion, it is reasonably practicable to do so; and before making the disposal the Secretary of State shall consult the company'.—[Mr. Chataway.]

  Amendment made: as an Amendment to the proposed Amendment, leave out lines 4 and 5 and insert:
  '(3) Financial assistance shall not be given under this section in the way described in subsection (3)(a) of the last preceding section unless the Secretary of State is satisfied that it cannot, or cannot appropriately, be so given in any other way, and the Secretary of State in giving financial assistance in the way so described'.—[Mr. Adam Butler.]
  Proposed Amendment, as amended, agreed to.
  Amendment made: No. 60, in page
  10, line 5, leave out '£250' and insert '£150'.—[Mr. Chataway.]
  Amendment proposed: No. 61, in page 10, line 6, leave out 'two' and insert 'four'.—[Mr. Chataway.]
  Dame Irene Ward: May I ask for an explanation? Are we to have no explanation why this has happened?
  Mr. Deputy Speaker: It is not for me to say what explanation there shall be.
  Amendment agreed to.
  Amendment made: No. 62, in page 10, line 9, leave out '£150' and insert '£100'.—[Mr. Chataway.]
  Mr. Chataway: I beg to move, as a manuscript Amendment, in page 10, line 13, at end insert:
  (6) The sums which the Secretary of State pays or undertakes to pay by way of financial assistance under this section in respect of any one project, shall not exceed £5 million, except so far as any excess over the said sum of £5 million has been authorised by a resolution of the Commons House of Parliament:
  Provided that this subsection shall not apply where the Secretary of State is satisfied that the payment or undertaking is urgently needed at a time when it is impracticable to obtain the approval of the Commons House of Parliament and in that case the Secretary of State shall lay a statement concerning the financial assistance before each House of Parliament.
  Mr. Millan: On a point of order, Mr. Deputy Speaker. May I ask whether it will be in order for me to move an Amendment to the manuscript Amendment? You will appreciate that this is quite an important manuscript Amendment which arises out of the discussion that we had on Friday of last week. At that time the Secretary of State said he would look at the points which had been made, but the indications were that the Amendment would be made in the other place. Instead of that, we are faced with a manuscript Amendment. I do not object to that, and I do not object particularly to the Amendment, but I should like to move an Amendment to it, because I think it can be improved. This is the last occasion on which we shall be able to do that. Will it be in order for me to move such an Amendment?
  Mr. Deputy Speaker (Mr. E. L. Mallalieu): I cannot select Amendments to Amendments in the House.
  Mr. Millan: Can you explain why, Mr. Deputy Speaker? It is extraordinary that at this late stage of the Bill we are faced with a manuscript Amendment—and I repeat that I make no complaint of that—and that there is nothing the House can do about it. If the Amendment had been made in the other place, the Lords Amendment would have come here and we could have agreed or disagreed with it. We could also have moved Amendments to the Lords Amendment and have had them considered.
  I genuinely have no objection to the moving of the manuscript Amendment, and have told Ministers so, but you are

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  telling us, Mr. Deputy Speaker, that we do not have the right to move an Amendment to it. That seems to me extraordinary and unfair, not just to Opposition hon. Members but to any hon. Member who may feel that, while the Amendment is perfectly acceptable so far as it goes, it could be improved or at least that we should discuss ways in which it could be improved. My own proposed manuscript Amendment would not bite at the heart of what the Government propose, but it would improve it in some important respects.
  Mr. Deputy Speaker: The hon. Gentleman is regretting that I have not the power to do these things. It is the Standing Order; c'est malheureux mais c'est comme ca.
  Mr. Millan: That is very interesting, Mr. Deputy Speaker, but I hope that when we get to the European Parliament we shall find that standing orders do not preclude us from doing this. What I do not understand—
  Mr. Deputy Speaker: Is this still on the point of order?
  Mr. Millan: Certainly, Mr. Deputy Speaker. Although you say you have no power to accept what I am suggesting, you seem to have power to accept the manuscript Amendment in the first place. That is rather remarkable. What you are saying, perhaps is that it is only Mr. Speaker himself who has the power to do that, but he is not here now. I am not clear how it is that in Mr. Speaker's absence the manuscript Amendment is acceptable to be discussed but not my Amendment to it.
  Mr. Deputy Speaker: The manuscript Amendment was accepted by Mr. Speaker. He alone is entitled to accept Amendments in the House.
  Mr. Dell: Further to that point of order, Mr. Deputy Speaker. Is it not intolerable that a manuscript Amendment should be introduced in circumstances in which it is not possible to amend it? If it were in the hands of Mr. Speaker early enough for him to decide that it could be called, surely arrangements should have been made to enable the Opposition to consider the Amendment in time to submit any Amendment to it that we
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  thought desirable? As it is, it appears to me that the interpretation of the orders of the House, which you are understandably stating to us, deprives us of the right which is invested in the House to consider Government proposals. This should not be the case. If it is the position, the Government must now move the Adjournment of our proceedings so that we can consider the matter at a time when Mr. Speaker can consider Amendments which the Opposition wish to make to Amendments which the Government introduce at the last minute.
  Mr. Millan: Further to that point of order, Mr. Deputy Speaker. The manuscript Amendment—about which I make no complaint—was handed to me after the proceedings had started. Hon. Members opposite had it distributed to them as well. Having considered it, which was difficult as we had to be in the Chamber, we decided that we wished to move an Amendment to it. By that time Mr. Speaker had left the Chair and I therefore approached you instead. If Mr. Speaker had still been here and had said that he could not accept my suggestion, I would have had no complaint, but we are in considerable difficulty, since I have not been able to speak to him either in the Chair or anywhere else.
  The Parliamentary Secretary to the Treasury (Mr. Francis Pym): Did the hon. Gentleman tell the Minister?
  Mr. Millan: I have not told the Minister. If my Amendment to the manuscript Amendment had been ruled out of order, to have approached the Minister about it would have been irrelevant. If it had been ruled in order, then, as a matter of courtsey, I would have informed the Minister to see whether it was acceptable to the Government. But as Mr. Speaker has not been in the Chair since the point arose, it has not been possible to discuss it with him. You, Mr. Deputy Speaker, are now saying that I have no right to move it, and I think that in the interests of back benchers that cannot be right. Manuscript Amendments by Ministers are normally accepted by Mr. Speaker and I do not see why in such cases hon. Members should not be allowed to move Amendments to them.
  Mr. Deputy Speaker: I fully understand the difficulty but the rules are as

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  I have stated. The manuscript Amendment was available, as distinct from the hon. Gentleman's proposed Amendment to it, long before Mr. Speaker left the Chair. I sympathise with the hon. Gentleman. It is a hard point because he could not necessarily be expected to consider the matter on the spur of the moment. But I have stated the rules and I am afraid that there is nothing that can be done about the matter.
  Mr. Dell: Further to that point of order.
  Mr. Deputy Speaker: Is it the same point?
  Mr. Dell: Yes.
  Mr. Deputy Speaker: I have ruled that it is not possible to do anything about it. I have given a full explanation and that should be sufficient.
  Mr. Dell: I wish to make a comment on a point of order.
  Mr. Deputy Speaker: Order. There are ways and times at which to make comments and this is not one of them.
  Mr. Chataway: This manuscript Amendment follows an undertaking given by my right hon. Friend on Friday when we discussed a group of new Clauses dealing with this matter, which was also discussed in Committee. My right hon. Friend proposes that under Clause 8 the Government shall have to come to the House to secure an Affirmative Resolution in the case of any project which exceeds £5 million. That can be any kind of assistance amounting to £5 million, a loan or a guarantee of liability incurring £5 million.
  2.45 a.m.
  The House will therefore recognise that this is a substantial addition to the degree of parliamentary control that is written into the Bill. The Science and Technology Act, passed in 1965, contains no requirement for the Government to obtain an affirmative, Resolution, and the Civil Aviation Act, 1949—used by successive Governments—similarly requires no such step. We now have written into the Bill narrower tranches than were previously proposed, so that the Government must obtain the permission of the House
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  after the first £150 million is expended, and thereafter for each £100 million.
  As a result of the general arrangements in the Bill we have total parliamentary accountability, in the sense that the Public Accounts Committee, the Comptroller and Auditor-General and every other Select Committee is brought into play in a way in which it would not have been if an organisation such as the IRC were entrusted with these responsibilities.
  I recognise that there is room for argument, and that some may say that this should apply to Clause 7. As the Secretary of State explained on Friday, there was considerable difficulty about that. Some may argue that even smaller projects should require the House's consent—but a balance has to be struck. These are substantial constraints, and they will no doubt sometimes mean that it will be more difficult to act, simply because there are problems in finding parliamentary time for an affirmative order. It will mean some further overloading of the parliamentary timetable, or some addition to it.
  I realise that even at this late stage, the hon. Member would have liked to make changes and is not able to do so. I am sorry about that, but I hope that the House will feel that this is a reasonable suggestion.
  Mr. Millan: I welcome this Amendment, but before commenting on it I want to say one thing as a matter of fact, arising out of your last comments to my right hon. Friend the Member for Birkenhead (Mr. Dell), Mr. Deputy Speaker. It was true that the manuscript Amendment was made available to me some time ago, and that it was also made available by the Minister's Parliamentary Private Secretary to hon. Members opposite, but there was no general notice anywhere to hon. Members that there would be a manuscript Amendment. Therefore, my right hon. Friend was not aware of this. Amendment until a good deal later than I was—in fact, when I had the opportunity of discussing it with him. By the time that my right hon. Friend was aware of it Mr. Speaker had left the Chair. I make this point because this matter should be pursued, since it raises questions of general interest to back benchers, not just in this situation but in others.

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  In a sense I feel the more strongly about it because the Amendment, by itself, is quite acceptable to me. The change that I should have liked to make was to eliminate the reference to approval being required only for the excess over £5 million, which is an unusual way of expressing it. I do not see why the Amendment should not, in terms, provide for parliamentary approval for the whole sum involved.
  There is a certain significance in that, but I shall not pursue it now, because it will make little difference whether I pursue it or not, but I did not quite understand why this wording has been prepared in this way and why one does not have to come to Parliament for approval of the whole sum rather than for the excess over £5 million.
  Mr. Bruce-Gardyne: I sympathise with the hon. Member but in reality, would he not accept, if the Minister is required to obtain approval by affirmative Resolution for the excess, by definition he will in practice obtain the approval of the House for the whole project?
  Mr. Millan: In practice that might be be so, but in fact it would not. If approval were not given for the excess, it would not prevent the Minister from paying up to £5 million in substitution for the sum for which he has not obtained approval. In practice it would be unwise and unlikely that the Minister would do that, but other wording would be better than the wording we have here. In practice it might not make much difference whether we have this wording or another.
  This matter was considered in Committee at some length and was also considered last Friday. It is fair to say that Ministers, in Committee and last Friday, tended to exaggerate the difficulties which would be involved in a matter of this kind. One looks at the manuscript Amendment in its simplicity, which I welcome, and remembers with irony the arguments put up in Committee and last Friday, because the proviso in this Amendment is very like that in new Clause 8 discussed on Friday.
  The limit of £5 million is a good deal more than most hon. Members had in mind. Indeed, £1 million was the figure
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  which hon. Gentlemen on both sides had in mind for this kind of parliamentary approval, but, having established a principle, even though only at a level of £5 million, it has been worthwhile to press these matters on the Government.
  I am glad the Secretary of State appreciated the feeling about this on both sides of the Committee and we appreciate that the Minister has brought it forward so promptly despite the procedural difficulties. It is better that it should be done here than in another place. I should like to express the thanks of my hon. Friends for what has been done.
  Mr. Biffen: It would be inappropriate if this significant Amendment were made without at least a note of gratitude from these benches to my right hon. Friend for what has undoubtedly been a welcome gesture to those of us who throughout have been concerned about and have argued for greater parliamentary accountability.
  I am delighted that this gesture has been made and it is not without significance that my right hon. Friend the Minister for Industrial Development contrasted it with the terms of the Science and Technology Act, 1965. That Act also received its Committee stage on a Friday and the two are a contrast in parliamentary scrutiny.
  Comparing this legislation last Friday with the scrutiny given on the other Act in 1965, the comparison reflects favourably on the behaviour of this Parliament. We may give ourselves a modest August present or near-August present.
  Mr. Douglas: It is August.
  Mr. Biffen: It was a close-run thing at any rate. I hope that the further reflection of my right hon. Friend may lead him, when the Bill gets to another place to reconsider the difficulties which have hitherto prevented him from extending this formula and also covering Clause 7. It would be quite unnecessary and uncharitable, and counter-productive, to pursue this any further at this time, and I conclude as I started by saying, "Thank you very much indeed."
  Mr. Dell: I, too, welcome the Amendment. The precedent which it follows is the precedent of the Industrial Expansion Act and the answer to the hon. Member

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  for Oswestry (Mr. Biffen) is that we did not have to be pressed hour after hour, in Committee and on the Floor of the House, to introduce an Amendment such as this giving more adequate parliamentary control. The provisions in that Act went beyond this Amendment. In so far as this follows the precedent of the Industrial Expansion Act and as the Government are following so many of the other precedents in that Act, I do not see why I should deny my welcome to it.
  I regret that evidently this Amendment was circulated to hack benchers opposite but not to hon. Members on the back benches on this side so that we did not have an opportunity to consider it.
  Mr. Deputy Speaker: Order. I ought to intervene here to say that the manuscript Amendment was in the Vote Office a long time ago, before Mr. Speaker left.
  Mr. Dell: It may have been in the Vote Office but no means at all was used by the Government to bring the existence of this Amendment to our notice. Consequently I had not seen it and was not in a position to consider whether I wished to move any Amendment to it. This is a totally unsatisfactory position. If the Government are discussing these matters with their back benchers, since we raised this in Committee it would have been a matter of simple courtesy to raise it with us, too.
  It is true, as the hon. Member for South Angus (Mr. Bruce-Gardyne) said, that in practice if the Government foresee that there will be invesment in a project exceeding £5 million they may in any case bring that before the House. Nevertheless they might, under the terms of this Amendment, commit themselves to a certain sum below £5 million and then in effect pre-empt any control which Parliament may have. I do not account this sort of control as very effective, given the operation of the parliamentary system, but I do not see why we should deliberately make it less effective than it might be by wording it in the way the Government propose, in respect only of the excess over £5 million.
  However it is an advance, and as such I welcome it. I only regret that the Government did not see the need for such an Amendment earlier because then the House would have had an appropriate opportunity to consider it in Committee
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  or on Report instead of having it thrust at us in this way, having to take it or leave it.
  Amendment agreed to.

Clause 9

  INDUSTRIAL DEVELOPMENT ADVISORY BOARD
  Mr. Biffen: I beg to move Amendment No. 26, in page 10, line 17, leave out 'section 8' and insert 'sections 7 and
  8'.
  I understand that with this we are also discussing Amendment No. 28, in page 10, line 26, leave out 'section 8' and insert 'sections 7 and 8'.
  3.0 a.m.
  Those of my hon. Friends who are making a re-acquaintance with this Bill for the first time since Second Reading may not realise that it has acquired an entire new Clause. In Committee we added new Clause 9 which concerns the Industrial Development Advisory Board. That body will have a watchdog function over the expenditures of my right hon. Friends under Clause 8.
  As with a great deal else in the Committee where one was concerned with safeguards, we are indebted to my hon. Friend the Member for Bosworth (Mr. Adam Butler), who was responsible for the new Clause. I think that he will agree that the anxieties which had been expressed by a number of interests outside this House led to the development, and some of those anxieties were expressed in lurid forms. I have in mind especially the comments of Mr. Michael Clapham of the CBI, who said:
  "No reasonable citizen would invest in a company whose Articles were so loosely drawn, and we, as citizens acting collectively, would be unwise to approve them … Without some such amendment the Bill would confer a degree of political patronage undreamed of since the Reform Bill of 1832."
  Even by the standards of protest from trade associations, that is language which errs on the side of the harsh. New Clause 9 is helpful corrective and apparently has had a considerable impact in assuaging the fears expressed by the CBI.
  The purpose of my Amendment is to extend it beyond Clause 8 to cover Clause 7 as well. This comes back to a point which has been made repeatedly this

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  evening and was made especially on the series of Amendments included with No. 56 which questioned the validity of the distinction that we have tried constantly to draw between Clauses 7 and 8. It is a distinction which has become increasingly difficult to sustain, and I am certain that that was the view of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop).
  We can draw a distinction, of course. We can say that Clause 8 is limited in time and in the finance which is made available to my right hon. Friends, whereas Clause 7 has no limit either in time or in the amount of finance that can be expended under its provisions.
  The regulating bodies foreseen in Clause 7 are the non-statutory regional advisory boards. The very nature of those boards will make them evangelists for public expenditures in their areas. Therefore we might be less than discreet if we were to regard them as satisfactory regulating bodies. I hope, therefore, that the Industrial Development Advisory Board which is set up under Clause 9 can have its limited but useful powers extended to cover Clause 7 as well as Clause 8.
  That conclusion is all the more reinforced by the recent publication of the Sixth Report of the Expenditure Committee. In consideration of regional policy, the Committee had some fairly important and challenging comments. I quote only from paragraph 265 of the Report:
  "… we examined some broad aspects of social and regional assistance."
  That is precisely the kind of expenditure which will be made under Clause 7. The report continued:
  "We consider that far too little information is available to Government on the effectiveness of regional incentives. Large sums are being spent with inadequate knowledge of how far they are contributing towards the desired objectives or whether the money could be better spent on alternative means of reaching them."
  I think that the political reality is that there is as likely to be a non-fulfilment of objectives under Clause 7—the regional aspect of the Bill—as there are likely to be those conditions under Clause 8. Therefore, I think it would be a modest but useful amendment if the advisory board could have its powers extended to that extent.
  Mr. Chataway: I am happy to accept both these Amendments. In Committee, as my hon. Friend said, we wrote into the Bill provisions for the National Advisory Board. It had always been intended that the regional boards and the national board should play an important rôle. The primary responsibility for advising on Clause 7 will rest with the regional boards, but the national board will be concerned with regional strategy as a whole and with some of those very large cases that fall to be dealt with in the regions. Therefore, it is entirely reasonable that my hon. Friends should press us to recognise this in the rôle that is to be played by the national board.
  I would not, however, wish it to be thought that this in any way diminishes the importance of the regional boards by virtue of the fact that they are not written into the Bill. We have explained on previous occasions why they have not been. The fact remains that the regional boards have a vital rôle to play.
  My hon. Friend was right to say that Mr. Michael Clapham had criticised the Bill in somewhat robust terms at an earlier stage. He wrote the other day to say that he was well satisfied with the changes and that his expressions of public approval would receive the same publicity as the earlier criticisms.
  Sir Harry Legge-Bourke (Isle of Ely): Does not Clause 8(1) bring in Clause 7 anyway?
  Mr. Chataway: Clause 8(1) refers back to Clause 7. But the point at issue is that, as the Bill stands at present, the board would have a statutory responsibility only in relation to national schemes—Clause 8 schemes—and not Clause 7 schemes in the regions.
  Mr. Douglas: I noticed that when the hon. Member for Oswestry (Mr. Biffen) was prefacing his remarks with a quotation, he quoted from a newspaper.
  Mr. Biffen: No.
  Mr. Douglas: He was quoting from a Press release then?
  Mr. Biffen: To get the record straight, I was quoting from the Press release

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  issued by the Confederation of British Industry, which was headed:
  "Excerpts from a speech to be made by Mr. Michael Clapham, President of the Confederation of British Industry at the annual luncheon of the CBI South Western Regional Council at the Grand Hotel, Bristol, on Thursday, 15th June, 1972."
  Mr. Douglas: I am grateful to the hon. Gentleman for that information. I take it that I have the same Press release, which says on page 2:
  "The CBI will of course be proposing some amendments to provide guidelines for the use of the money and requirements for reporting the return on it."
  I am therefore interested to know whether the CBI saw the manuscript Amendment before hon. Members did.
  Mr. Chataway: The answer is "No".
  Mr. Douglas: I am grateful to the Minister for that information.
  Perhaps the right hon. Gentleman will tell the House what stage has been reached in the setting up of the national and regional boards. The Minister is giving the national board power to review the assistance given under Clause 7. I do not know whether the non-availability of personnel on the national and regional boards will in any way hold up schemes that are likely to be in the pipeline. It is therefore appropriate, even at this early hour in the morning, to ask the Minister whether he can report to the House the state of progress in the setting up of these boards.
  Mr. Chataway: I do not want to trespass too much on the time of the House. I realise that it would be difficult to go all the way that the hon. Gentleman asks, but I hope within two weeks to announce all the members of the national board. We are making good progress with the regional boards, and I assure the hon. Gentleman that there will be no hold up in the implementation of the Bill because of any delay in appointing members to the boards.
  Mr. Bruce-Gardyne: I welcome my right hon. Friend's decision to accept the Amendments, not least because I do not find what my right hon. Friend said in Committee at column 609 about the composition of the regional boards totally reassuring. I have some sympathy with the argument advanced by my hon. Friend about the attitude which the re-
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  gional boards might be expected to adopt, and therefore I am glad that the Industrial Development Advisory Board is to have its remit extended to Clause 7.
  I must, however, enter a caveat before we leave these Amendments. It is that we should not assume too readily the ultimate powers of the Industrial Development Advisory Board contained in Clause 9(4), which is the nub of the issue. In other words, the board can, in effect, oblige the Secretary of State to come to the House and explain a disagreement when it arises. Where the Secretary of State decides to act in a manner which the board thinks is undesirable, we should not imagine that these fall-back powers provide an unlimited assurance.
  It is proposed that the authority of the board should be extended to Clause 7. One must, therefore, ask what attitude the board would have adopted to the Upper Clyde escapade. One can imagine that, ideally, it would say, rather as the Hill Samuel report said, "If you wish to do it you must explain your reasons to the House of Commons, as we do not think it is commercially justifiable".
  But I wonder. I suspect that the gentlemen whose names my right hon. Friend will be announcing, as he has said, shortly as members of the board—those on the famous lists of the great and the good—will be as human as their fellows have been in previous times. There is always the knighthood ahead, or the life peerage, and there must be some reservation about the extent to which they will be prepared to press their doubts to the point of obliging my right hon. Friends to come to the House, against their inclinations, on a point of dispute.
  I enter that brief caveat that we should not expect too much of these boards, but for what they are worth, and for what it is worth, I welcome these powers being extended from Clause 8 to Clause 7.
  Amendment agreed to.
  3.15 a.m.
  Mr. Dell: I beg to move Amendment No. 51, in page 10, line 22, after 'in', insert 'regional problems'.
  Mr. Deputy Speaker: With this Amendment the House can also discuss Amendment No. 27, in page 10, line 22,

  267
  after industry', insert trade union affairs'.
  Mr. Dell: I am not at all sure that I would not have been well advised to ask some hon. Member on the other side of the Chamber to move the Amendment. Hon. Members are being so incredibly successful with their Amendments and the Government are accepting them so readily that it might be better if I were to whisper the arguments in their ears. For example, the Government have just accepted the Amendment moved by the hon. Member for Oswestry (Mr. Biffen), but when I asked in Committee why Clause 9 would not apply to Clause 7 I was given a whole list of reasons, as will be seen in column 612 of the OFFICIAL REPORT, why it should not be done. Now it is to be done.
  The point of the two Amendments is the qualifications of the members of the board. Subsection (3) says:
  "The members of the Board shall include persons who appear to the Secretary of State to have wide experience of, and to have shown capacity in industry, banking, accounting and finance."
  Those gentlemen are to advise the Secretary of State on his functions under Clauses 7 and 8.
  We think that the qualifications are not adequately inclusive. For example, as we suggest in Amendment No. 51, there are regional problems, but there is nothing in subsection (3) to suggest that the members of the board shall include persons with experience of regional problems. Yet the right hon. Gentleman has just accepted an Amendment which gives the Industrial Development Advisory Board a similar status in relation to Clause 7 as it has to Clause 8.
  Were the coverage of the Industrial Development Advisory Board under Clause 9 to be limited to Clause 8, it might have been an argument that there was no need for some member of the board with specific experience of regional problems, but now that the right hon. Gentleman has accepted his hon. Friend's Amendment there is even more reason than there was before that there should be someone with such experience. We did not know when we put down the Amendment that the right hon. Gentleman would reject the arguments reported in column 612 of the Committee Report
  268
  in order to accept those of his hon. Friend tonight, but now he has done so I hope that he will realise that the implication of that acceptance is that he should accept Amendment No. 51.
  Amendment No. 27 refers to experience of trade union affairs. I do not know whether the Minister has assumed that the words
  "… wide experience of … shown capacity in industry …"
  shall be taken as including experience and capacity in trade union affairs. In the wording of the subsection it does not look like it. The grouping of words there,
  "industry, banking, accounting and finance"
  seems to imply that the Minister was thinking of the management of industry rather than people with experience of trade union affairs. Therefore, we should like to see that qualification as another which the Secretary of State will have to take into account in making appointments to the Industrial Development Advisory Board.
  I hope that the right hon. Gentleman will be as amenable to these Amendments, from the Opposition side of the House, as he has been to Amendments from the Government side.
  Mr. Chataway: The right hon. Member for Birkenhead (Mr. Dell) will know of the acute anxiety I have displayed throughout the Committee and Report Stages to accept Amendments wherever possible from both sides of the Committee and the House. I hope that the right hon. Gentleman will recognise that his advocacy in Committee was at least half responsible for my acceptance of the previous group of Amendments.
  But, try as I may, I do not feel able to recommend these Amendments to the House. That is not because I am out of sympathy with what the right hon. Gentleman argued, but because the Amendment to insert "regional problems" poses a difficulty. What kind of person has a knowledge of all regions? If one talks about regional problems in general, presumably one is not looking just for someone who comes from, for instance, the North-East, but for someone who knows of all or a large number of regional problems. If one interpreted it as the problems of one region, there would not be a great deal to be said for being wider an obligation always to

  269
  appoint such a person to the national board. Those are qualities that we would look for, among others. But as this is a statutory obligations, I hesitate to write in that quality.
  On the point about trade union affairs, I am advised that "industry" means management, trade union affairs and everything else. Therefore, I would not particularly recommend to the House that those words should go in, though I am happy to reassure the right hon. Gentleman that our interpretation would be experience of all sides of industry and not just of management. I have explained previously that it would not be our intention to appoint anyone in a representative capacity, but for appointments to these boards we should certainly be looking for people with experience of trade union affairs.
  Dame Irene Ward: I am certain that the appointments which will be made will be very satisfactory in that those concerned will have the necessary knowledge of the regions and regional problems. As the right hon. Member for Birkenhead (Mr. Dell) asked about trade union representation, I should like to know whether some members of my sex will be included. The knowledge and experience of regional problems among women is of very great importance. My right hon. Friend says that these will be people with a regional knowledge. May I express the hope that he has not forgotten that women certainly have a knowledge of regional problems? I hope that note will be taken of that and it will be acted upon.
  I am a very good feminist. I do not always argue for women. I have always thought that men have much better experience of an overall problem. This stems from their experience and knowledge in commerce, trade, travel and all the things necessary to develop a sound economy. Women are much better at filling in the detail, however, and attending to the human angle, which can very often be overlooked by men of great experience of world affairs.
  I hope, therefore, that this will be remembered and that in due course I shall know that my right hon. Friend has realised the importance of regional problems by including both men of experience, integrity and knowledge and women who can add the human element which
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  men, in their desire to serve the big economy and the big world, are apt to forget about.
  Mr. Chataway: While I take note of what my hon. Friend said, there is perhaps a difficulty in hoping for too many women on the boards which are concerned principally with financial appraisal. Bank accounting and finance is an area in which one may be forced more often than in other areas to appoint males. I entirely accept, however, what my hon. Friend said about the importance of women being involved in the administration of the Bill. She will be heartened to know that, for the first time ever, we have a lady as a regional director in one of the regions, the North West.
  Mr. Dell: I am grateful to the Minister for what he said about Amendment No. 27. It is obviously more important that such an appointement should be made than that it should be written into the Bill, and that is evidently the right hon. Gentleman's intention. As to regional problems, I had in mind somebody with experience of the nature of regional problems not necessarily in a specific area.
  However, I will not press the Amendment because I am ever hopeful that the Minister, particularly as a result of his answer on a previous Amendment and the expansion of the boards' coverage in Clause 7, will think further about it. I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Millan: I beg to move Amendment No. 52, in page 10, line 23, at end insert—
  '(4) The Board shall make an annual report of its activities, and the report shall be published and presented to Parliament'.
  The Amendment would insert into Clause 9 an obligation on the part of the Industrial Development Advisory Board to make an annual report of its activities which would be published and presented to Parliament. I assume that this is intended and also that it is intended that the Scots, Welsh and regional boards will also make annual reports. I am not sure why it should not be written into the Bill because it is normal, particularly in a Clause of this nature, that when a board of this sort is established provision for an annual report is written in.

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  I shall look forward to hearing the Minister's reply. On a previous occasion he mentioned that there would be annual reports. All that the Amendment does is to write this into the Bill.
  Mr. Chataway: It is certainly the intention that the regional boards as well as the national boards should have the opportunity of reporting. I suggested in Committee, and I thought it met with widespread agreement, that it would probably be more convenient if this were to be done in a single document rather than with separate publications. In so far as the Amendment implies that it would be a separate report, I would on balance be against it. I reaffirm to the House that it is the Secretary of State's intention to include in his annual report opportunities for such further commentary by the national board and the regional boards as they see fit.
  3.30 a.m.
  Dame Irene Ward: I am glad to hear what my right hon. Friend has said. I hope that the report or reports will say a great deal about what has gone. Over the years the constructive proposals to deal with regional problems which I and others have made to various Secretaries of State have been wonderfully received but we have not heard another word about the proposals. Although Dr. Reed, the Chairman of the Northern Economic Planning Council, came to London and made some good proposals to the then Secretary of State for Employment, the present Leader of the House, we have heard nothing about whether action has been taken. If the report is to be of benefit to the regions and is to be the follow-up of work which has been done, I hope that regional details will be included in the report.
  Mr. Millan: In view of what the Minister has said, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Amendment made: No. 28, in page 10, line 26, leave out section 8' and insert 'sections 7 and 8'.—[Mr. Biffen.]

Clause 11

  CONSTRUCTION GRANTS
  Mr. Millan: I beg to move Amendment No. 29, in page 12, leave out lines 2 and 3.
  Since tabling the Amendment I have received a letter from the Minister stating that, even without the Amendment, he is sure that the position is taken care of. I was concerned about the words in lines 2 and 3, because it sometimes happens that a shipbuilding contract can be switched from one shipbuilder to another or from one shipowner to another. This can happen in genuine circumstances where there is no question of trying to evade the conditions being laid down by the Government in the Clause with regard to construction grants. I have, however, had an assurance from the Minister that these cases will be covered by the Bill, but it will do no harm for the Minister to put that assurance on the record.
  Mr. Chataway: I am happy to confirm that we do not see any risk that the shipbuilder who delivers the ship will be deprived of grant if he has taken over the contract to construct the ship from another shipbuilder or if the shipowner assigns to another shipowner the right to receive delivery of the ship. In Committee I undertook to double-check this point for the hon. Gentleman, and I am glad to give this assurance.
  Mr. Millan: With that assurance, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Douglas: I beg to move Amendment No. 30, in page 12, line 23, after 'installation', insert:
  'not covered by the provisions of subsection 12 of this section'.
  Mr. Deputy Speaker (Mr. E. L. Mallalieu): I suggest that it will be convenient to discuss at the same time the following Amendments:
  No. 34, in page 13, line 17, leave out paragraph (a), and
  No. 35, in page 13, line 38, at end insert:
  '(12) In respect of any ship which on its delivery forms part of Her Majesty's Navy in the right of Her Government in the United Kingdom or is held by any person on behalf

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  of or for the benefit of Her Majesty in that right, grant may be paid where the contract was subject to competitive tendering and where any percentage of the contract price falls to be treated under subsection (2) above as payable in 1972, 1973 or 1974, and the rate of grant shall be the following percentages of the sum so treated, namely—

  (a)if the relevant year is 1972, 7½ per cent.;

  (b)if the relevant year is 1973, 3 per cent.;

  (c)if the relevant year is 1974, 2¼ per cent.'.

  Mr. Douglas: Our purpose here is to draw attention once again to the plight of yards engaged in naval shipbuilding. Since our debate in Committee, some of us have received a letter from the Minister indicating his willingness to have the position of naval shipbuilders looked into by the consultants Booz-Allen. However, I feel that we should still press for these companies to be brought within the scope of the tapering grant system, albeit at the reduced level specified in Amendment No. 35.
  The foreword to the new publication of "Jane's Fighting Ships" last week has this to say:
  "The stark truth is that the strength of the Royal Navy has fallen below the safety level required to protect the home islands, to guard the ocean trade route for the world-deployed British mercantile marine (still the largest in the world), to protect the vast commercial and financial interests overseas, and to meet NATO, ANZUC and other treaty commitments."
  That expression of considered view indicates that we are in grave danger of running down our naval shipyards and not giving them the assistance necessary to compete effectively to produce the sophisticated vessels needed to meet our defence requirements.
  I know that the Minister is concerned about this matter, for he would not otherwise have brought these yards within the consultants' survey. But unless the consultants report very soon, or unless the yards have some sign that the pressure on their cash flow position will be relieved in the same way as it is for other shipyards, they will be in difficulty.
  In Committee, we did not lay full stress on the export potential of the naval shipbuilding yards. If we do not give them assistance, we shall lose orders to overseas competitors. I recognise the difficulty of the Ministers position, and I accept that he regarded his arguments in
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  Committee as refuting the case which we made. But I urge him to be aware of the plight of these yards and to think again. If he refuses to accord them the reduced form of tapering grant such as we propose in Amendment No. 35, he may find himself in the not too distant future having to take some of the additional measures which he has to hand under Clause 8 for some of the yards. I do not wish to be thought a prophet of doom, but their cash flow position is very difficult.
  Dame Irene Ward: I am glad that this matter has been raised, because I come from a famous naval shipbuilding area. I do not want to enter into the problems of the industry as they will be affected by the Bill because I am not competent to do so. There is no doubt that our Navy is falling below strength. I do not know and do not suppose I ever will know whether this is because the Minister of Defence has lost a battle with the Treasury. The problem with making representations in the House is that Ministers always have to pretend that the policy they are advocating is their policy, and hon. Members never knew if the Minister's true policy has been suppressed by the Treasury. I am therefore always interested when any publication such as "Jane's Fighting Ships" comes out with knowledge and experience in the way that the recent edition has.
  I hope that, if the Minister is unable to do anything on the Amendment, he will talk to the Minister of Defence to see if he is in trouble with the Treasury. If he is, those of us who are interested in the Navy, who believe in it and who know how necessary it is—we have the most wonderful Navy in the world—could press from both sides of the House to ensure that it is built up to a better standard of equipment and ships and with more men than at the present time.
  Mr. Chataway: I shall take to the Minister of Defence the offer of assistance from my hon. Friend the Member for Tynemouth (Dame Irene Ward) in any trouble he may have from time to time with the Treasury. I think he will probably be glad of it.
  I have had a number of conversations with my hon. Friend the Minister of State for Defence Procurement on the problems which we discussed at some length in Committee, and which have been raised

  275
  again tonight. I know that he is extremely well-informed on these matters and that he is aware of the difficult problems involved. But the basis for the shipbuilding grant is that the merchant shipbuilding industry has had to face a great deal of subsidised competition. Things are different in the building of warships, because some major contracts are allocated without competitive tendering and in no case do warship builders have to face fierce competition. So they are in a fundamentally different situation. While I recognise that there have been problems, I do not think that the case has been made out for the extension of the shipbuilding grant to the warship builders.
  The Minister of State for Defence Procurement is considering various measures which in future contracts would reduce the extent to which shipbuilders will have to provide in their fixed price quotations for the possible risks of long-term contracts and I hope that these changes will be of assistance. As the hon. Member for East Stirlingshire (Mr. Douglas) has mentioned, I have decided to include warship builders within the long-term study of the shipbuilding industry by the management consultants that we have appointed. While I know, therefore, that he will be disappointed that I am not able to accept his Amendment, I hope the hon. Gentleman will recognise that measures are being taken in this sphere and that he will not feel it necessary to press the Amendment.
  3.45 a.m.
  Mr. Millan: That is not a satisfactory answer. It is welcome that the warship builders are being included in the long-term study being carried out by Messrs. Booz-Allen, but we are dealing with what are likely to be substantial sums of money being paid to merchant shipbuilders, and there is unlikely to be anything coming out of the long-term study which will compensate the warship builders for what they will lose compared with the merchant shipbuilders by being excluded from the assistance being provided in the Bill.
  We tried to meet some of the points made by the Minister in Committee. For example, the Amendments which we are now discussing would apply only in a
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  case where there had been competitive tendering. We appreciate that where contracts have been allocated the circumstances may be rather different from the normal merchant shipbuilding difficulties. However, in cases of warship building where there have been competitive contracts—we have seen nothing in what the Minister told us in Committee and nothing in the letter that he has written to some of us in the last few days to controvert this—we still feel there is a lot to be said for including the naval ship-builders in the provisions of the Bill.
  I do not know whether my hon. Friend will wish to press the Amendment, but, having considered carefully what was said in Committee, we see no reason why this kind of proposal relating only to competitive contracts should not have been included in the Bill.
  Mr. Douglas: I am not at all happy with the reply I have received from the Minister. I take it that, with the pressure which has been exerted from this side of the House and by his hon. Friend the Member for Tynemouth (Dame Irene Ward), he will be appraised of the difficulties of the naval shipuilders. Therefore, even before the consultants have reported to him, I hope that, in discussion with his hon. Friend the Minister of State for Defence Procurement, he will examine carefully what might be done in the interim and put proposals before the other place to assist the naval shipbuilders. In the circumstances, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Bruce-Gardyne: I beg to move Amendment No. 31, in page 12, line 28, at end insert:
  "or such lesser percentage as may be required to enable Her Majesty's Government to subscribe to any international agreement to limit subsidies to shipbuilding'.
  Mr. Deputy Speaker: With this Amendment it will be convenient to discuss Amendment No. 32, in page 12, line 29, at end insert:
  'or such lesser percentage as may be required to enable Her Majesty's Government to subscribe to any international agreement to limit subsidies to shipbuilding'.
  Mr. Bruce-Gardyne: The purpose of these two Amendments is to provide that

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  the working subsidy provided under subsection (3) for the shipbuilding industry, not in the current year, but for each of the next two succeeding years, should be adjustable downwards to take account of any international agreement which may be reached about the scale of subsidisation of our overseas competitors in shipbuilding. I have regarded the subsection as arguably the most pernicious in the whole Bill, because I have never been convinced by the argument of my right hon. Friends that the purpose of what might be called the inflation subsidies to the shipbuilding industry was simply and solely to put it on a par with subsidised shipyards overseas.
  There is a clear implication in all that was said, particularly by my right hon. Friend the Secretary of State when he was announcing the special form of assistance for Upper Clyde shipyards, that the inflation subsidy incorporated in the Clause would be designed to enable other shipyards to compete, and to compete in inflation, with the Upper Clyde, enjoying as it will an open-ended subsidy from the taxpayer. The implications are ominous. I have never been able to see how once we become involved in the process of cross-subsidisation from one part of British industry to another we can stop at one particular industry.
  In other words, what we read in subsection (3) we shall have to see extended to all sorts of other industries, for precisely the same reason, that where we have offered a taxpayers' subsidy to assist it in meeting inflation, and in particular wage inflation, other industries will have to be treated alike. All that we have been told about the potential uses of Clause 8 have only gone to underline those anxieties. My right hon. Friend the Minister for Industrial Development made clear on Friday afternoon that this was precisely the sort of purpose for which Clause 8 could be used.
  Therefore, in the Amendment I am seeking to underline that the purpose of the subsection is, and must only be, to put shipyards in this country on a parallel basis of subsidies with yards overseas, and at the same time to give my right hon. Friends every incentive to come to an agreement as rapidly as possible on the reduction, and preferably the elimination,
  278
  of the existing Dutch auction in shipbuilding subsidies.
  In Committee my right hon. Friend said:
  "In framing our proposals for the construction grants scheme, we naturally took account of such international developments, and the rates of grant for 1973–74—the 4 per cent. and the 3 per cent.—conform to the new policy on shipbuilding aids now under consideration in the E.E.C. draft directive and the broad aim of the arrangements being discussed in O.E.C.D.… I am anxious to ensure that a stop is put on the escalation of subsidies in shipbuilding. It is extremely important internationally and in the interests of shipbuilders everywhere that an agreement should be reached. The explanation about the 4 per cent. and 3 per cent., therefore, is that they conform to what we hope will be the agreement shortly to be reached."—[OFFICIAL REPORT, Standing Committee H, 13th July, 1972 c. 787.]
  I want to confirm my right hon. Friends in well-doing. In the light of the words which my right hon. Friend spoke in Committee then, there should be no reason why he should not accept the Amendment. If he felt unable to do so, our suspicions about the precise purpose and objective of these construction grants could inevitably only be strengthened.
  Mr. T. H. H. Skeet: My right hon. Friend the Minister for Industrial Development has been conscious of the future of the shipbuilding industry. One of the greatest drawbacks has been the subsidies which have been paid internationally. One or two international agreements have been entered into, and the OECD has already been referred to.
  The matter goes back a few years to when the German and the Benelux countries decided that they would not enter the subsidy war. France and Italy have gone along the other way, and at one stage Italy had a subsidy of about 30 per cent. A recent edict from the Community has brought this down, and Germany has come down to between 5 per cent. and 6 per cent. in overall subsidies. The figure is roughly the same for the Benelux countries. France was formerly at about 10 per cent. and is now down to about 5 per cent. Italy has receded from 18 per cent. to 10 per cent.
  While it is apparent that subsidies are falling, when we enter the EEC I see great difficulties ahead of us. The Anglo-Saxon countries are prepared to eliminate these subsidies completely, recognising, as one of the essential features of selling

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  ships, that one cannot do it by escalating subsidies but only by reducing subsidies and having fair competition. But France and Italy are running independently.
  It is essential to comply with the directives of the Commission; indeed we will be obligated to do so. But the wider setting of the OECD should be closely followed in practice, since it encompasses the world. That would be the ideal solution. What chance has my right hon. Friend of reaching agreement on these matters? Does he envisage further reductions in subsidies? If we do not have these reductions by 1974, when the shipbuilding industry will be in its worst period of crisis, there will be a clamour for subsidies to be increased once again. That will be an unfavourable trend and we should take the right steps now.
  Dame Irene Ward: I oppose the Amendment. I always enjoy listening to people talking who do not really know anything about the problem—I say that with respect to my hon. Friend the Member for South Angus (Mr. BruceGardyne). In Committee, my right hon. Friend the Secretary of State must have been in a conciliatory mood and seems to have had a lot of people against him, because what he said then was not helpful either. In a better frame of mind, he would have phrased his comments much better. Perhaps my hon. Friend the Member for South Angus would get in touch with the head of our research department, a man of great ability and knowledge who really knows what is going on in shipbuilding.
  When the late Vice-Admiral Hughes-Hallett was in this House, he made supreme efforts to deal with the shipbuilding problem but the nigger in the woodpile happened to be France. He told us that it was impossible to find out what methods the French were using to subsidise their shipbuilders. Indeed, we used the Secret Service to try to penetrate the system operating in France, but it was unsuccessful. I beg my right hon. Friend on this occasion to take note of what I say, since I have been engaged on this problem for many years. We have a long way to go.
  If we could have non-subsidisation British shipbuilding would easily top the world, but we are not in that position. It is very nice to have these cosy conversa-
  280
  tions, thinking that the shipbuilding countries of the world will do away with subsidisation. I am afraid that they will not, and that my hon. Friends who have spoken do not know much about shipbuilding. I always like to hear landlubbers talking about ships. I say that they are on the wrong track. Many people in the House know what is going on. Although it may not be necessary to do so, I advise my right hon. Friend to be very careful not to get involved with people who do not know what they are talking about.
  4.0 a.m.
  Mr. Ridley: No doubt I shall be accused of not knowing anything about shipbuilding, or what I intend to talk about. Just as my hon. Friend the Member for Tynemouth (Dame Irene Ward) was candid enough to admit that she knew nothing about naval shipbuilding, I do the same on this occasion, in order to placate her.
  I want to question one thing—the bland assumption that all our competitors are subsidising shipbuilding far more than we are and that therefore it is right, natural and proper that we should match them and, indeed, exceed them. As I understand it, the only countries that are paying higher subsidies than we are, before the Bill becomes law, are France, Italy and Spain, who are small producers of ships. The main competition comes from the Scandinavian countries and Japan, and to some extent Germany. But the suggestion that we are being outflanked by heavy subsidisation throughout the world is wrong. We should avoid using that argument.
  As my hon. Friend the Member for Bedford (Mr. Skeet) said, European subsidies are falling. Due to pressure started in the OECD and pushed forward by this Government, who made a strong plea that subsidies should be reduced worldwide, they have been reduced, and the countries who used to subsidise are subsidising less. Therefore it is slightly unfortunate that at this time we should greatly increase the subsidies that we are paying. It weakens our hand in OECD, and it will weaken our hand in the Common Market if we say that all other countries must reduce their subsidies when under the Bill we are increasing ours.
  Dame Irene Ward: We could keep quiet. We do not need to announce it in Brussels or anywhere else.
  Mr. Ridley: Before spending tens of millions of pounds it is usual at least to announce it in the House, in the form of a Bill. We shall probably not be striking many chords tonight, because it is almost four o'clock in the morning. It is the next best thing to keeping quiet. No one will take much notice of this debate.
  The bulk of this money will find its way into the hands of the Shipbuilding Industry Board, dispensing in such grants about £60 million. For that the taxpayer is getting a covered berth and a big dock in Belfast, which could probably have been put together for one-tenth of the sum expended. The rest of the money will go into losses, wages, commercial inefficiences, and the rest. I question where this money will find itself. It will be found more difficult to exact capital assets in return for this money, because I see nothing in the Bill demanding accountability or that there be plans to provide capital assets, working capital, new yards or new machinery.
  I doubt very much whether we shall see more or improved shipyard facilities at the end of three years as a result of this Clause. That is a pity, and the least quid pro quo for which the House can ask is that, each year, in respect of these large sums of money, they should be asked to get a management consultant to make a report on organisation and administration and for that report to be put into the hands of the Government and for the Government to publish it, if they think fit, because, if money of that order has to be spent, we need to know that it is spent on efficient concerns and in the best way possible to improve the efficiency of those concerns.
  I hope that we will have something of this sort from my right hon. Friend because this is a concomitant of receiving large sums of public money under an Act of Parliament, so that we can be satisfied. After all, we have to justify to our constituents raising the taxation to pay for this, and we might have to face increased taxation as a result of the Bill. I do not know how many thousands it will put on the Exchequer over the years, but we have to justify it and
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  to prove that it will be well spent. I hope to hear something positive in that direction from my right hon. Friend.
  I commend my hon. Friend's principle even although the wording may not suit my right hon. Friend. The interests of this country are not to increase shipbuilding subsidies, but to get others reduced. If anything in the Bill stands in the way of that policy, it is very short-sighted indeed.
  My right hon. Friends have been quick in getting the 10 per cent. principle through in the first year. That is the big one, but there are the 4 per cent. and 3 per cent., and the great damage to our commercial shipbuilding interests, is not worth it if this Bill stands in the way of reduction in other countries. I hope that my right hon. Friends will regard this as negotiable and that it will be so in the OECD. I hope nothing will be said in Paris at OECD to stand in the way of the levelling down of the subsidies throughout the world, because it has been a nonsense in the past and it is disturbing at this time, when the world shipbuilding industries are moving towards a levelling down of subsidies, that we should start to increase the pace.
  Mr. Chataway: My hon. Friend the Member for Tynemouth (Dame Irene Ward) is right, I believe, in urging that it will not be easy totally to abolish subsidies in the shipbuilding countries of the world. She recalls the late Vice Admiral Sir Hughes-Hallett, my constituency Vice-President for a while. She reminds us all that this is not something we have been trying to do for only a few months, but is a battle that has been going on over many years.
  My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) gave a list of some countries which he believed were subsidising shipping on a considerable scale. It was not an exhaustive list. The United States, according to my information, is now subsidising by up to 50 per cent. My hon. Friend the Member for Bedford (Mr. Skeet) was probably right in suggesting that there are subsidies on a substantial scale being paid at the moment. That we want to see them reduced and abolished is absolutely right. Therefore we welcome the new directive

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  of the EEC, which will limit subsidies for 1973 to 4 per cent. That is exactly in line with what we are proposing.
  As for 1974, when we intend to move to 3 per cent., we believe this to be in line with Common Market thinking. We have had discussions with OECD and our need to introduce this temporary assistance has been fully understood and has not given rise to difficulty. The OECD has under consideration a general arrangement for the progressive removal of obstacles to normal competitive conditions in the shipbuilding industry. We are extremely anxious to make progress within the OECD and the EEC in this direction.
  What we want to ensure is that the removal of subsidies is not unilateral but multilateral and, so far as we can ensure it, universal. My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) said that if we were quite convinced about what we were doing and the subsidies stood in the way of international agreement why not accept his Amendment? I can reassure him that we are quite convinced that the rates we propose for next year and the year after represent a thoroughly realistic target at which to aim with shipbuilding subsidies. It would be misleading, if by accepting this Amendment I were to give the impression that we had any new proposals to table within OECD, or that we were urging a steeper rate of decline in subsidies than we have previously indicated we were satisfied with, or if by accepting the Amendment I were to suggest that I think there is a possibility of moving down faster than this. More important, if I were to accept the Amendment I would be removing a certainty that is of some value to the shipbuilding industry. The industry has the certainty, once the Bill is passed, that grants will be paid—10 per cent. this year, 4 per cent the year after and 3 per cent the year after that. If for a purely cosmetic reason and without believing that the Amendment would lead to any different conclusion I were to accept it, I would simply run the risk that for no benefit I would be importing an unnecessary uncertainty for shipbuilders.
  Mr. Bruce-Gardyne: My right hon. Friend made it clear a few moments ago that while his prediction of 4 per cent.
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  rate was based on the recommendations of the Commission and therefore was pretty safe for next year, the choice of the 3 per cent. for the year after was much more a matter of judgment and guesswork. Supposing there were to be an international agreement within the EEC or OECD to limit the maximum permissible level of subsidy under this type of arrangement to 2 per cent. Is he telling the House that he would feel obliged to resist the agreement along those lines to, retain a 3 per cent. margin for the British shipbuilding industry?
  4.15 a.m.
  Mr. Chataway: I regard that as an extremely hypothetical question. If the Commission were to withdraw its directive stipulating 4 per cent. next year and to agree that it should be zero per cent., we should face another situation. I regard that as unlikely. I regard the situation that my hon. Friend describes in 1974 as unlikely. In such a matter as this, one has to proceed on the best estimate that one can make.
  We have been involved closely in discussions in the OECD and in the Common Market. I think that this represents what we believe to be a realistic de-escalation of subsidies. So for the possibility which my hon. Friend believes to exist of getting 2 per cent. instead of 3 per cent.—and I do not believe that it exists—it is not worth while accepting his Amendment, which would import as unnecessary uncertainty for the ship builders.
  Mr. Ridley: Surely it is far more important that we should be in a position to reduce to 2 per cent. if that is the international agreement than the inconvenience of accepting an Amendment, which is really what my right hon. Friend argues. He may not like the wording, but if he accepted the principle, surely it would be much better to have it in the Bill so that the shipbuilding industry was in no doubt that if international conditions made it possible my right hon. Friend would reduce the subsidy in accordance with our agreements.
  Mr. Chataway: At this hour, clearly I am not explaining myself very well. It was not that it was inconvenient to accept the Amendment. That was not the basis of my argument. It was that by stipulating that the subsidy would be at 10 per

  285
  cent. this year, 4 per cent. the year after, and 3 per cent. the year after that, one was providing a certainty on which ship builders could plan. I do not believe that 2 per cent. is more likely to be achieved in 1974 than 3 per cent. These are realistic estimates, and the balance of advantage lies in going for this degree of de-escalation of subsidies and this degree of certainty.
  Mr. Bruce-Gardyne: My right hon. Friend has not entirely alleviated my anxieties. To some extent, he has compounded them. He has made it clear that notwithstanding attempts to come to a more rational system of limitation of subsidies internationally, we shall be bound to drag our heels to the extent that is required to conform with the terms of the subsection. I agree with my hon Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) about the undesirability of such a posture.
  Nor are one's anxieties alleviated by my right hon. Friend's comments about cross-subsidisation between different yards in this country, or going on to other industries. I can only express the hope that we shall not regret the limitations which will be imposed upon us by the Clause and find in a year or two that we are obliged to resist agreement on a more sensible system of shipbuilding subsidies internationally. If we do, we shall have cause to regret this night's work.
  Amendment negatived.
  Mr. Douglas: I beg to move Amendment No. 33, in page 13, line 12, after 'fit', insert:
  'but having due regard to the terms of contract between the shipbuilder and customer in relation to the date of delivery of the ship or mobile offshore installation'.
  These words which I propose should be inserted supplement the powers which the Secretary of State takes under Clause 11(8) which states:
  "The Secretary of State may make the payment of a grant subject to such conditions as he thinks fit.…"
  I wish the Secretary of State to have
  "regard to the terms of contract between the shipbuilder and customer in relation to the date of delivery of the ship or mobile offshore installation."
  I realise that in strict legalistic terms my suggestion in relation to the Secretary of State's power may not be strictly
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  accurate, but the intention, I trust, is fairly clear and ought to be acceptable to the House.
  I listened with great interest to the so-called experts on shipbuilding speaking to the previous Amendment. I think it was the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) who mentioned three countries—France, Spain and Italy—which were subsidising their shipbuilding a little more than we subsidise ours. I was amazed to hear the suggestion that these are not very substantial shipbuilding nations. Let me quote from the supplement to The Motor Ship of July, 1972, which states:
  "Back into third position after nine months is France which increased its order book"
  —and I must emphasise that this is in a time of stagnation in terms of the world merchant fleets—
  "during the quarter by over ½ million tons d.w. to 94 vessels aggregating 8,407,020 tons d.w., a tonnage almost identical to a year ago.… Included in the present figure is an order placed by the Shell Group with Chantiers de L' Atlantique for a total of one million tons d.w.… The return of France to third position has displaced Spain to fourth…"
  And these are inconsequential countries! We come after Germany; we are sixth in this league table. I accept that Italy is somewhere down the league.
  I welcome the Government's proposals to give these tapering grants. I think they are sensible in relation to the position that the United Kingdom occupies at the present time. This situation will not get easier. Other countries, particularly Spain, are building new yards.
  I should like to quote from Fairplay International Shipping Journal of July, 1972. This is what we are likely to be faced with in consequence of expansion on the part of some of our own domestically-based companies operating internationally:
  "… A & P Appledore International will be able to undercut Japanese prices for v.l.c.c.s. by as much as 10 per cent."
  That is the degree of competition which the United Kingdom shipbuilding industry will face. We may have debates on whether we ought to have a British shipbuilding industry. There are many reasons why we should have a United Kingdom shipbuilding industry, and I ask the right hon. Gentleman to pay particular attention to the terminology of the Amendment.

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  I know that the Minister desires to help the industry. I suggest that he has power under the Clause to exercise his discretion about how these grants will be paid. I ask the right hon. Gentleman to pay particular regard to the contract between the shipbuilder and the customer. I know that he made certain overtures to us in Committee and resisted the points that we made, but I hope that, having taken cognisance of some of the arguments that I have put forward this evening, having noted the expert advice which is no doubt coming from his Department about the state of the shipbuilding industry, and having recognised that there is a slump in world orders and that any shipping company may be in difficulties in completing its orders, for reasons which may not be of its own making, he will respond favourably to the intention of the Amendment.
  Mr. Chataway: There are great difficulties about accepting the Amendment. I have sympathy with the hon. Gentleman's intentions, and we went into this in some detail in Committee. The difficulties to which I referred then still exist. First, if one were to try to base a scheme such as that suggested by the hon. Gentleman on force majeure one would be in a difficult area of definition. It would not be possible to have force majeure clauses in contracts between shipbuilders and their customers, because they vary a great deal.
  Secondly, the Amendment would cause some difficulties to the industry, because some shipbuilders stand to benefit from delays in construction this year, since delay would bring into 1972 for 10 per cent. grant work which would otherwise qualify in 1971. A proposal of this kind cuts both ways. It means that some will not qualify for grant at all, whereas they would have qualified for 10 per cent., as well as enabling others to be helped along the lines which the hon. Gentleman has in mind. The principal difficulty is that one would be forced into trying to determine whether a delay really was outside the responsibility of the shipbuilder. The hon. Gentleman has one or two particular difficulties in mind, but this is not a possible means of assistance.
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  Another objection to the Amendment is that it does not do what the hon. Gentleman wants. I have not stuck on the drafting objection to the Amendment. I assure the hon. Gentleman that we have looked carefully at this, but it just is not possible to accept the Amendment.
  Mr. Douglas: In view of the Minister's reply, and in view of the arguments that we have put to the right hon. Gentleman, reluctantly I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.

Clause 12

  INTERPRETATION OF PART III
  Mr. Anthony Grant: I beg to move Amendment No. 36, in page 14, line 10, after 'ship', insert 'other than a tug'.
  The Amendment provides that the minimum qualifying size for tugs for construction grant and credit guarantees shall be 500 brake horsepower. In Committee the hon. Member for Goole (Dr. Marshall) argued the case of this limit for tugs and cited two examples from his constituency of difficulties being experienced in the industry because of the lack of harmonisation with the EEC, and my hon. Friend the Member for Haltemprice (Mr. Wall) made representations on the same point.
  We accept that the qualifying limit for tugs should be in line with EEC practice, and for that reason, and with thanks to the hon. Gentleman and to my hon. Friend, I hope that the House will accept the Amendment.
  Mr. Millan: We are grateful to the Minister for looking at the points made in Committee, and we are pleased that he has been able to find an acceptable solution.
  Amendment agreed to
  Amendment made: No. 37, in page 14, line 13, at end insert:
  (aa) a tug is of the qualifying size if it is of not less than 500 brake horsepower;'.—[Mr. Anthony Grant.]

Clause 13

  AMENDMENTS OF LOCAL EMPLOYMENT ACT 1972
  4.30 a.m.
  Mr. Millan: I beg to move Amendment No. 38, in page 14, line 43, at end insert:
  '(4) In the said Act, subsection (2) of section 5 shall cease to have effect'.
  This Amendment deals with a matter raised in Committee at which the Minister said he would look again. Section 5(2) of the Local Employment Act, 1972, provides that whereas the Secretary of State has power to provide premises in a development area or an intermediate area for occupation by undertakings carried on or to be carried on there, this power does not apply except to industrial buildings. We said in Committee that with the increased emphasis on encouraging service industries and office employment in the development areas it no longer seemed sensible to have this restriction on the power of the Secretary of State—that he might just as well wish to acquire and have available for occupation an office building or a building that could be used for some service industry, and the building would not then be an industrial building.
  We were not trying to involve the Secretary of State in running offices, hotels, and so on, as I think he feared when we put down that Amendment. Our purpose was simply to give the Secretary of State the power to have that kind of building available as well as the industrial building. That is our purpose now, and I hope that the Amendment will be accepted.
  Mr. Anthony Grant: As the hon. Gentleman says, a very similar Amendment was considered in Committee on 13th July. The hon. Gentleman made it clear then, and he certainly has made it clear now, that it is not his intention that the Government should become involved in running hotels, shops and other non-idustrial premises but rather that they should be able to provide commercial premises for letting. It was on this basis that my right hon. Friend agreed to look again at the proposal.
  I am advised that by Section 5 of the Local Employment Act the Secretary of
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  State already has power to acquire land in order to provide commercial premises. On occasion, non-industrial premises, such as post offices, are erected on industrial estates. What the Secretary of State may not do is to acquire existing non-industrial buildings, such as hotels, and run them as such, or let them to others. He may acquire such premises, though, if he wishes to redevelop the property to provide, for example, a new factory estate. The present powers in the Local Employment Act are sufficient to meet the intention which I understand lies behind the Amendment.
  As my right hon. Friend made clear in Committee, we are certainly averse to taking the additional power if, as it seems possible, it would extend the field of Government as landlord of a variety of enterprises such as shops and hotels. But I do not believe that that is what the hon. Gentleman wants. The Government's central rôle is to provide factories, and both sides are probably agreed on this point. I hope that what I have said about the Secretary of State's existing powers will reassure the hon. Gentleman.
  Mr. Millan: I am not quite sure that the powers go as far as I would like them to go. I understand that what the Minister is saying is that the powers exist to acquire a building for redevelopment. What I am not clear about is whether the powers exist for acquisition in order to have available premises for letting as commercial premises—
  Mr. Grant: Yes.
  Mr. Millan: The answer to that point being "Yes", I am quite happy that that should be so, and I hope that the powers will be used in that way. With that assurance, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Millan: I beg to move, Amendment No. 54, in page 15, line 23, after 'State', insert 'to own land or'.
  The Clause deals with powers of the industrial estates corporations. In Committee a number of my hon. Friends made the point that as well as having power to manage or develop land, there were circumstances in which it would be desirable that the industrial estates corporations have a general power to own land.

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  That was the purpose of an Amendment moved in Committee. The Minister said that he would look at the matter again. This Amendment gives him the opportunity to do so. I am not quite sure about the circumstances in which an industrial estates corporation would wish to use this power, but there seems no particular reason why it should not have the power to own land, and that is what the Amendment would give it.
  Mr. Anthony Grant: As my right hon. Friend explained in Committee when the similar Amendment was proposed, since 1960 the Government have been the authority who acquire the land which the estate corporations require. The land acquired is leased to the corporations concerned. This system has worked satisfactorily for the purpose of the factory programme, but it is arguable whether it gives rise to unnecessary administrative and legal work.
  My right hon. Friend said that we were examining the functions of the corporations. One of the points we were looking at was the possibility of simplifying the relationship between the corporations and the Department.
  But after further consideration we have decided that amendment to this end is not needed. Considerable public funds are provided for the purchase of land for factory building and it is important to ensure adequate control over their expenditure. If the estate corporations were to be allowed to acquire land freehold, that power would have to be made subject to the direction and control of the Secretary of State and, in practical terms, the corporations would have no more freedom than they have now under the leasing system.
  On a drafting point, to ensure adequate control we should need Amendments more complicated than the rather simple change proposed in this Amendment. However, I assure the hon. Gentleman and the House that we believe that he has a good point and that there is a case for endeavouring to speed up the process of factory building, if necessary acquiring advance land very speedily. That does not mean that I support the view of acquiring great land banks, but of speeding up the process of factory building.
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  With regard to simplifying the procedures between the Department and the corporations, my advice is that it will be possible by administrative means to do this without the need for legislative changes, and that is the course that we shall adopt.
  Mr. Millan: I am glad that the Minister has recognised that there is a genuine point here. I am also glad to have his assurance that he feels that this can be dealt with without changing the legislation. With that assurance, I beg to ask leave to withdraw the Amendment
  Amendment, by leave, withdrawn.

Clause 16

  ANNUAL REPORTS
  Mr. Chataway: I beg to move Amendment No. 39, in page 16, line 37, leave out from beginning to 'year' in line 38 and insert:
  'For the financial year ending on 31st March, 1973, and for each subsequent financial'.
  Mr. Deputy Speaker: With this Amendment it will be convenient for the House to discuss Government Amendment No. 41.
  Mr. Chataway: This gives effect to an undertaking I gave in Committee. The Committee was anxious to ensure that the report comes out as soon as possible. I undertook to look at that carefully. The nearest analogy is other reports that were published under the Local Employment Acts. Those reports come out in November or thereabouts. There was, however, a practice of laying the report in dummy at the end of the parliamentary recess, and that apparently enables the publishing of the report to go forward. That was why the hon. Member flawed me in Committee about producing one which was dated July or August.
  We are here dealing with a reporting exercise which will be more complex than that under the Local Employment Acts. There will be a good deal more to cover. I am anxious that it should be full. In Committee we went into a number of the things that the report must cover. I agree with the hon. Member for East Stirlingshire (Mr. Douglas)—in case he might feel it unnecessary to move his next Amendment—that it must

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  include full information about construction credit guarantees and the work of construction grants. It has, therefore, to cover a very wide range.
  In setting a six months' time limit within which the report has to be produced, one is therefore being realistic. One is setting a considerably better target than was achieved under the Local Employment Acts. I hope that by saying that it must be in by the end of September, that will enable debate to take place, if necessary, in the autumn and will mean that it will be a very full report that will be available to the House.
  Mr. Normanton: I welcome my right hon. Friend's Amendments but wish to put to him three questions. First, as to the work of the Industrial Development Advisory Board, who will answer in the House for the operation of the Bill? Secondly, who will answer concerning the investments, if one might euphemistically call them investments, which my right hon. Friend's Department will make on the advice of the board, and who will answer parliamentary Questions on this subject?
  My second question—
  Mr. Deputy Speaker: Order. The hon. Member is hardly in order to ask those questions on this Amendment.
  Mr. Normanton: With respect, Mr. Deputy Speaker, I was presuming that the Amendment related to advising the House of the progress of the Bill when it becomes an Act and reporting on it. In that context, I hoped that my right hon. Friend might be able to comment along the lines I had suggested to him.
  Mr. Dell: There is, of course, another analogy, and that is the IRC. I regret that the Government are taking six months to make their report whereas the IRC was able to do it in four months. It is a bad sign and a very poor note to strike at the end of discussion of the Bill.
  Amendment agreed to.
  Mr. Douglas: I beg to move Amendment No. 40, in page 16, line 43, at end insert:
  'and in particular showing the total amount of construction credit guarantees given and the proportion thereof relating to the United Kingdom flag fleet and the total amount of construction grants given, together with any
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  proposals for the modification or extension of the scheme'.
  I shall be brief because in speaking on a previous Amendment the Minister gave me an indication that in broad general terms the details I have specified will be incorporated in any reports. I ask, however, that
  "the proportion thereof relating to the United Kingdom flag fleet"
  be given. I know that the construction credit has to apply to United Kingdom registered companies and to ships built in United Kingdom yards.
  4.45 a.m.
  This is a small probing Amendment. Is it intended that these credits be given specifically for ships which will be registered in the United Kingdom and come under the United Kingdom flag? I hope that the Minister can cheer us a little at this hour by saying when he expects to announce the results of his discussions with the Chamber of Shipping and the Shipbuilding and Ship Repairers National Association as to the form of assistance he might be giving to the shipping industry in relation to replacement of investment grants by other forms of assistance.
  Mr. Chataway: That statement will be made before the House rises. I can give the hon. Member for East Stirlingshire (Mr. Douglas) the assurance for which he sought in relation to home credit guarantees, which can be given only in respect of United Kingdom owners' orders in home yards and for ships coming under the United Kingdom flag. That meets exactly the point the hon. Gentleman raised.
  Mr. Douglas: With that full acceptance of the intention of the Amendment, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Amendment made: No. 41, page 17, line 5, at end insert:
  'not later than six months after the end of the financial year to which it relates'.—[Mr. John Davies.]
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed.

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodhew.]

DISABLED PERSONS (VEHICLES)
4.47 a.m.
Mr. J. P. W. Mallalieu: Keeping the Under-Secretary of State out of bed at this late hour in the morning is a very poor return for the courtesy which both he and his Department have shown me in recent weeks over the very important matters which I want to raise.
The first matter affects people who are suffering from muscular dystrophy or those who are born thalidomide babies. At present the Department provides for these sufferers an unpowered chair which can be used in the home but cannot be used outside. This means that many of them, perhaps most of them, are virtually confined to their homes or to their gardens if they have such. These chairs have to be pushed. In some families there are two sufferers, and it is difficult to find people who could take them out and push two of them.
The price of these chairs is about £150 each. There are available on the market powered chairs costing about £190. If the Department could provide one of these for these sufferers, the opportunities for enjoying leisure in what for some of them unhappily is bound to be a fairly short life would be greatly expanded. Unhappily, the Ministry has so far failed to provide such powered chairs, and one of my purposes in raising this matter now is to ask the Under-Secretary to think again.
My second main point concerns disabled people who have retired from work. In the debate on 21st February this year, the Secretary of State said:
"There has so far been no campaign for the elderly disabled, and yet they are just as poignant as the disabled of working age and disabled children".
I agreed, and I am gratified, as, I am sure, the whole House was, that the Secretary of State decided that people who were unable to work because of chest or heart complaints would in future be allowed to retain their vehicles even after they
296
had stopped work. That was a great help to some of the elderly about whom the right hon. Gentleman spoke so movingly.
But, unfortunately, in the same debate the Secretary of State announced another move which has brought despair to another section of the elderly. He said:
"Vehicles will continue to be issued to people with some, though severely limited, walking ability if they need them to get to full-time work, but on cessation of employment the vehicle will be surrendered instead of, as hitherto, left with a person permanently once he has qualified for it."—[OFFICIAL REPORT, 21st February, 1972; Vol. 831, c. 924–35.]
I regard that as a bad decision. It is rather like giving a man an artificial leg while he is at work and then taking it away when he retires. The withdrawal of these vehicles affects his opportunity for enjoyment in leisure retirement, and that opportunity for enjoyment in leisure retirement is, in my opinion, at least as important as the opportunity which the vehicle gives him to go to work.
To deprive these people of vehicles to which they have become accustomed during their working time is to sentence them to confinement in their older years, and, indeed, in many instances to make their retirement a misery.
I could just understand the decision if there were a shortage of such vehicles. But I gather that the shortage is not of vehicles but of money. I do not believe that the Under-Secretary, the Secretary of State or any of the civil servants in their Department wanted to take that step. I genuinely believe that their concern is to do the best they possibly can for the disabled. But I suspect that they have been told that if they give with one hand they must take away with another.
These Treasury dictates are, as I well remember, a commonplace of Government, and sometimes they may be justified, though I wish to goodness that, when Cabinets find themselves faced with a global sum for total expenditure, they would not try to match the difference between that sum and the estimates they receive from Departments by telling them all to cut by a flat rate of, say, 10 per cent., which, unhappily, is what happens much too frequently.
Those Treasury dictates are sometimes understandable and correct but this one,

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if it is a Treasury dictate, certainly is not correct. I understand that Baroness Sharp is at the moment looking into the workings of the Department, especially in this area, to see what anomalies there are, to find out the gaps and deficiencies. She will eventually make recommendations and I hope that her report will be published. I hope, too, that before the report is written the Under-Secretary will make it his business to point out to Lady Sharp at least the two aspects I have mentioned tonight.
In any event I press him to go back again on this to the Treasury if he cannot give a favourable answer tonight. I am quite sure if he does that he will get the most wholehearted backing from all hon. Members.
4.57 a.m.
Mr. David Crouch: I shall not take more than a minute in intervening in the debate. I stayed on to do so because, like other hon. Members, I have a special duty towards the disabled in as much as I am an officer in Kent of the Disabled Drivers' Association. I am constantly reminded of my duty because of the many disabled drivers I meet, and I congrateulate the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) on raising this important subject, even at this late hour. The Government are facing crises on the economy, on industrial relations and on civil disorder in Northern Ireland, but they are also faced with the human problem which is the subject of the debate. The Government have a good record in recognising how vitally important this matter is to the disabled, and in looking after them it has done much in the last two years in the allocation of vehicles.
There is one area in which I hope the Under-Secretary will press on the Secretary of State the need for further consideration and further generosity, and that is in the allocation of four-wheeled vehicles to some disabled persons. This applies particularly to mothers who need to have their children or some other person to accompany them when they go to work or go shopping and when they take the children to school. That is one area where the Secretary of State should continue to battle for greater generosity from the Treasury.
4.59 a.m.
Mr. Tom Normanton: I, too, offer my congratulations to the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) on initiating the debate. The Under-Secretary granted an interview to two of my constituents 10 days ago. They were two children, one aged six and the other 12, named Felicity and Stephen, both suffering from muscular dystrophy. To see the way those children were able to lead a fuller, richer life within the limitations imposed upon them by an ill stroke of fortune was an inspiration and encouragement for all who saw them. Those two children were running up and down on the Terrace of this House and around the building. With their electrically-powered chairs they were able to do what many fully fit people might find it difficult to do.
The point is that the number of cases which fall into the category to which the hon. Member for Huddersfield, East has referred is not great. It is believed to be of the magnitude of about 10,000. As the hon. Gentleman pointed out, this is not a matter of there being 5,000 new cases every year; that is the measure of the total requirement for chairs as far as can be anticipated.
The requirement is clearly for the provision of a chair with three basic essential requirements. First, it must be collapsible and capable of being carted about both in a car and about a building or house; secondly, it must be transportable and capable of being lugged by hand by perhaps one or two people; thirdly, it must be rigid, rugged and stable.
I realise, as my hon. Friend did when he saw the two children to whom I have referred in their invalid vehicles, that there will never be the possibility of providing a perfect vehicle. There will always be some technical problem which will prove insuperable.
Although Baroness Sharp is conducting these investigations, I hope and pray that time will not be lost in making provision always on the basis, "We must find something still better", all the time losing something which is priceless to these sad and tragic cases. The big contribution we can make to these cases in the short space of life left to them is the opportunity in their own ways to be free from the inhibiting influence of being

299
utterly and completely dependent upon parents. The provision of a stable, power-operated chair—the kind which my hon. Friend saw in this House only 10 days ago—is also a considerable contribution to the long suffering, tragic cases of the parents. Neither parents nor children in this case should be overlooked.
I earnestly hope that my hon. Friend will press the Treasury as hard as he possibly can to make such provision for these sad and tragic cases.
5.3 a.m.
The Under-Secretary of State for Health and Social Security (Mr. Michael Alison): I am glad that the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) has succeeded, albeit at a latish hour, in raising a very important subject, as is witnessed by the presence of my hon. Friends the Members for Canterbury (Mr. Crouch) and Cheadle (Mr. Normanton) who took part in the debate.
I am obliged to the hon. Member for Huddersfield, East for his courtesy and the tone in which he spoke tonight, and I hope he will allow me at the outset to dispose of one point which my hon. Friend the Member for Canterbury raised. I am not certain whether my hon. Friend spotted that my right hon. Friend, when he announced the new scheme on 21st February, included in paragraph 6 a new category: that mothers who qualify for a vehicle will be able to have a car instead of a three-wheeler if they have the care of young children. The requirement that they must be in sole charge of the children will be removed. Therefore, we have made an improvement specifically in the direction my hon. Friend was seeking.
In order to clarify the main point at issue raised by the hon. Member for Huddersfield, East—the problem of the disabled who cease work—it will be helpful if I first remind the House of the basic principles of the scheme my Department administers to provide personal mobility for those whose ability to walk is severely restricted.
According to the nature and extent of the disability and some other related factors, those who qualify for invalid three-wheelers or cars, or the new £100 allowance, as the case may be, fall into one of three basic categories.
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The first category consists of those who have had both legs amputated, at least one of them above the knee. The second category is made up of those who are virtually unable to walk. Here I should like to leave for a moment my main theme to elaborate a little about this category: the significance of my doing so will be apparent a little later on.
Prior to the new scheme which my right hon. Friend the Secretary of State introduced in February of this year, when he announced a number of improvements in the arrangements we are discussing, this second category consisted solely of those who could not walk because of a locomotor disability—that is, something which mechanically in the back and locomotor mechanism prevents any sort of movement—a disability sustained, for example, as a result of polio, paraplegia or rheumatoid arthritis. Those disabled by a non-locomotor condition—for example, a weak heart—who none the less were handicapped to a precisely comparable degree, were totally excluded from this second category. The reason was quite uncomplicated: simply that the money resources available would not permit their inclusion—not that the claims of the non-locomotor disabled were any less deserving than those suffering from a locomotor disability.
Although I am very much obliged to the hon. Gentleman for sparing us in the Department of Health and Social Security the thunder and lightning he brought down on the Treasury, there is a real problem of priorities in this area of financial resources, because by the peculiarities of the way in which the provision of mobility for the disabled has grown in this country in rather a Topsy way, we must always bear in mind when making further financial provisions available for those whose mobility is very restricted that we make no provision for those who are totally immobile, perhaps like the blind or the completely paralysed, or those whose disability is so extreme that they can make no pretension to be able to control a vehicle. Anything we do for the less disabled places in even more stark isolation those whose disability is so total that they cannot come into the category of even a pretence at mobility. This is why we asked Baroness Sharp to look at the totality of the question rather than going on building piecemeal on this

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narrow element of partly disabled, partly mobile.
I return to my main theme. The third category of disabled people we help are those who can walk a moderate distance but need a vehicle in order to get to and from work, and this is the group with whom we are particularly concerned tonight. Here I might mention in passing that the majority of those who qualify for our help are found to be within the first or second category, and for them the work criterion is not relevant. For those who are eligible, in category 3, a vehicle to get to work must be necessary. Several groups—those, for example, who work from home—cannot be eligible because their need is not for a vehicle to get to work.
It has never been the specific intention that a person should continue perpetually to enjoy the benefits of the invalid transport service regardless of whether or not the conditions giving rise to eligibility remain unchanged. In some cases, including obviously all those in the first category, there can be no such change and, in very many others, change—that is, improvement—is unlikely. But where a change has taken place and the individual concerned has brought this to the Department's notice—and the most obvious example here is the category 3 person who ceases to follow employment—the benefit has been reviewed. I use the word "reviewed" rather than "withdrawn" because one must bear in mind that in many instances the walking ability of a disabled person found eligible in category 3 will inevitably deteriorate to the point where the person becomes eligible in category 2. Very often disabled people start in category 3, but before the vehicle comes to be removed when they cease employment they have already, alas, deteriorated to category 2, and so keep the vehicle. In these sad cases of further deterioration there is naturally no loss of benefit in the shape of the vehicle.
There are two reasons why, following the review of the invalid transport service which preceded the changes announced in February, it was decided that the Department should itself initiate action to check that the conditions of eligibility continued to be satisfied rather than to leave the initiative to come from the disabled person.
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The first is on grounds of equity. This can best be illustrated by a simple example. A person, say, aged 50, could be found fully eligible in category 3, including being in full-time paid employment, and could cease to be so employed a month later and never resume work. Under our former arrangements, he might well have continued to benefit by way of a vehicle or car allowance until death, perhaps in his later 60s, several or many years later. An exactly similar individual even possibly marginally more disabled, but not employed and never able to get a job, applying for a vehicle just shortly after he had ceased employment, perhaps through retirement, would be ineligible at the outset and remain so. Here would be two people of precisely comparable degrees of disability, one just qualifying before he stopped work and able to keep his vehicle indefinitely, and one disabled just after retirement and not getting a vehicle. It was an inequitable situation from the start.
Such an inequitable situation cannot be justified. We had to face up to the stark choice. We either found the resources by a cutback elsewhere, dropped the employment condition altogether and simply extended the service to embrace the less severely disabled people in category 3, or withdrew benefit when employment ceased. In considering the allocation of resources, the question we had to face all the time was that we were thinking of making marginal improvements in the range of those who are really comparatively mobile, less seriously disabled, in all three categories, whilst behind the most seriously disabled category there are the great mass of people such as the blind and the totally paralysed who are usually well behind in terms of the allocation of vehicles and other appliances.
The second reason was the need to use our resources to the best advantage. I am sure there is agreement in the House that, regrettable as this may be, the many deserving claims for help inevitably are greater than the resources at our disposal to meet and that it is therefore essential that we should channel our resources to those whose need for assistance is greatest. Admittedly, this is not always an easy undertaking. In reviewing the invalid transport scheme, we were conscious of a number of anomalies including the

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specifically limited ambit of the second category of eligibility.
The significance of my earlier remarks will now be apparent. Purely for financial reasons and no other, severely disabled people unable to walk could come in or out of category 2 simply by reason of the nature of their disability rather than from limitations which resulted from it. In order to remedy, especially this, but also other anomalies, we had to find extra money. At the same time, we were quite certain in our own minds that it would be a wrong order of priorities to devote more resources to this particular service—the narrow range of transport service—pending the outcome of the more fundamental review which Lady Sharp is now undertaking.
Accordingly, the changes announced by my right hon. Friend in February included a number with the aim of achieving some savings in order to help finance the very worthwhile extensions. One of these was the more systematic check that people in category 3 continue to satisfy the criteria for that category if they are to continue to derive benefit.
Although it is an over-simplification, for the balance sheet is rather more tentative and complicated, the withdrawal of benefit from category 3 people who have ceased to be eligible for help has helped to finance the extension of the service to the non-locomotor disabled in category 2—heart and lung cases—who, in equity, ought always to have been helped. Simply stated, we are helping more of those who cannot walk at all rather than those who can walk a modest distance but no longer need a vehicle to get to work.
The other point that I should like to make, apart from the specific question of deterioration, is that the circumstances of
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individual cases will be taken fully into account before a decision to withdraw benefit is reached. We shall do so with the utmost care, attention and sympathy, and stretch as many points as we can, within the regulations, to avoid unnecessary hardship and duress. If, for example, an unemployed person clearly has reasonable expectations of very quickly resuming full-time paid employment, benefit will not be withdrawn. Incidentally, retirement, as such, is not the determining factor; it is ceasing, for whatever reason to follow full-time paid employment. The aim will be to administer the check in a considerate manner and with maximum sympathy. I will gladly review the circumstances of any case brought to my notice where there appears to have been any failure on the Department's part to do so. I shall always be glad if my hon. Friends will bring individual cases like this to my attention. Nevertheless, I would not wish to seek to hide the fact that in some instances benefit will, quite properly in the circumstances, be withdrawn. The decision to take this course was not reached lightly but in all the circumstances it was clearly the right and proper one to take.
I am sure that Members on both sides of the House will agree that our record in this field—as my hon. Friends the Members for Canterbury and Cheadle have said—is one of steady progress of which we can be justly proud. To mention one or two developments—
The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at seventeen minutes past Five o'clock.