Commons Sitting of 22 January 1974

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  HARWICH HARBOUR BILL [Lords]
  As amended, considered ; to be read the Third time.
ORAL ANSWERS TO QUESTIONS
  SOCIAL SERVICES

    Nurses' Pay
    Mr. Pavittasked the Secretary of State for Social Services how many times he met the organisations representing the nursing profession to resolve the dispute over the salaries for regional and area nursing officers ; which organisations were present ; and if he will make a statement.
    The Secretary of State for Social Services (Sir Keith Joseph): I saw representatives of the Staff Side of the Nurses and Midwives Whitley Council three times during the course of these negotiations, including one occasion when a deputation was received by my right hon. Friend the Prime Minister. The Staff Side membership covers 12 organisations and was represented by its chairman, vice-chairman and secretary. Following these meetings, discussions were resumed between the two sides of the council and I have subsequently been able to approve an improvement on the provisional salaries previously announced.
    Mr. Pavitt: How significant was the Prime Minister's intervention in this matter? As the Secretary of State's first pay decision was made under his NHS powers and he made that decision against the wishes of the Nurses Council, will he now be making a similar kind of promulgation? Is he aware that if he does so, although the Nurses Council will acquiesce it will not accept that as being the final word, as injustice will still exist, and
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    will wish to continue negotiations even if he promulgates this fresh decision which, thank goodness, is likely to be a little more favourable than his first decision?
    Sir K. Joseph: My right hon. Friend's interest was great and his intervention was effective. I have been requested by both Management Side and the Staff Side to apply the revised salaries, although the Staff Side has made it abundantly clear, as the hon. Gentleman has said, that it does not accept them for the continuing future but awaits the review promised for 1975.
    Dame Irene Ward: Will my right hon. Friend bear in mind that, as Vice-President of the Royal College of Nursing, I am fully behind the nurses, as I believe he is? May I ask him to remember that if he wants any help with the Treasury, I am the woman?
    Sir K. Joseph: I continually frighten the Treasury with my hon. Friends displeasure if we do not achieve the results that we both want.
    Mr. Molloy: Is the right hon. Gentleman aware that there are some holders of ancillary posts in the hospital service who may not be properly remunerated but who nevertheless receive more in salary than nurses who have extra responsibility? Will the right hon. Gentleman examine that situation to see how it can be rectified?
    Sir K. Joseph: Yes, but the Question is on the subject of the top administrative nursing posts.
    Mr. William Hamiltonasked the Secretary of State for Social Services what is the total salary increase under phase 3 for a third-year student nurse, a newly qualified staff nurse, and a sister, respectively, within the National Health Service.
    The Under-Secretary of State for Health and Social Security (Mr. Michael Alison): This is a matter for consideration by the Nurses and Midwives Whitley Council at the appropriate time.
    Mr. Hamilton: Is the hon. Gentleman aware that this House is getting sick and tired of that kind of answer? Does not he recognise that whatever the increase

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    is it will be considerably less than the forecast increase in the cost of living over the next 12 months, which is commonly recognised to be in the region of 15 per cent.? To reduce the standard of living of the most dedicated public servants in the country is an outrage which should be put right by the Government forthwith.
    Mr. Alison: I cannot comment on the substance of what may emerge from the negotiations about to be set in train. If the hon. Gentleman is sick and tired of my answers, I can only tell him that so long as the Whitley Councils continue in existence, inevitably such answers will continue to follow the hon. Gentleman's questions.
    Dr. Summerskill: Will the hon. Gentleman bear in mind that there are some fully-trained nurses and ward sisters who, after deductions, earn only 60p an hour and that this traditional exploitation of nurses is one factor in causing the serious shortage? If the Government claim to be helping the low paid, they cannot contract out of helping the nurses by shifting the responsibility to the Whitley Council.
    Mr. Alison: I have no doubt that the point made by the hon. Lady, if it has substance, will be presented to the Whitley Council by the Staff Side.
    The House must be encouraged by the substantial increase over recent years in the numbers of nurses, particularly in long-stay hospitals.

    National Health Service Reorganisation
    Mr. R. C. Mitchellasked the Secretary of State for Social Services what recent discussions he has had with representatives of NALGO concerning the transfer of staff from the local government health service to the National Health Service ; and if he will make a statement.
    Sir K. Joseph: I would refer the hon. Member to my reply to my hon. Friend the Member for Petersfield (Miss Quennell) on 14th December—[Vol. 866, c. 221–2.] I am sending him a copy of my letter of 10th December to NALGO. Consultations with the Staff Side are continuing as necessary.
    Mr. Mitchell: Is the Minister aware that there is still considerable alarm and despondency among local government health service workers regarding their future career and employment prospects? Is there anything else that he can say at this stage to alleviate their fears?
    Sir K. Joseph: I respect the hon. Gentleman's judgment. I do not know how recently he has canvassed opinion, but only this month we sent out the latest circular on the protection of employment, which was prepared after long consultation with NALGO and which will, I think, ease the minds of many of the people of whom the hon. Gentleman is thinking.
    Mr. Conlan: Is the Minister aware that in Gateshead the liaison committee set up to consult the staff about the reorganisation has not yet even met, and that many members of local authority health services are so worried about the lack of consultation on salaries and conditions of service that they are applying for and obtaining positions in other sections of local government? Therefore, this side of the health service may be sadly depleted in staff from 1st April.
    Sir K. Joseph: That was, indeed, a fear, but I hope that it has been reduced by the circular issued earlier this month, to which I have referred, and by the promulgation, also this month, of the second-in-line post salaries, which will, I think, show many of the local authority health staff what prospects there are in the reorganised health service.
    Dr. Summerskill: Is the right hon. Gentleman able to give an assurance to the House that by 1st April all the posts will be filled, particularly those of area administrative financial officers, medical officers and district community physicians? These are key posts on which the reorganised National Health Service must rely if it is to work efficiently and successfully.
    Sir K. Joseph: I fully expect that full teams of officers at regional, area and district level will have been appointed by mid-March.
    Miss Quennell: As my right hon. Friend has so recently sent out a circular, will he consider, as a courtesy, letting me have a copy of it?
    Sir K. Joseph: Most certainly.
    Mrs. Renée Shortasked the Secretary of State for Social Services what discussions he has had with NALGO since 17th December on the reorganisation of the NHS.
    Sir K. Joseph: There have been no specific discussions, apart from those taking place in the Whitley Councils on remuneration and other matters, since 17th December, but I am considering comments by a number of staff organisations, including NALGO, on a consultation paper about appeals issued on 30th November.
    Mrs. Short: Does not the right hon. Gentleman think that he should have consulted NALGO right at the beginning of the reorganisation of the National Health Service? He had not done so by 17th December, and I have received a number of representations from NALGO branches, including my own, expressing concern about appointments. Is the right hon. Gentleman aware that NALGO is in such a ferment that there are proposals for strike action, so concerned are its members about the situation in many parts of the country? Should not the Minister get together with NALGO immediately and discuss the matters outstanding?
    Sir K. Joseph: I should like publicly to pay tribute—[Interruption.]—I hope the hon. Lady will have the courtesy to listen to my answer.
    Mrs. Short: I always listen to the right hon. Gentleman.
    Sir K. Joseph: I should like to pay tribute publicly to the continuous and constructive co-operation that the Government have had from NALGO in the consultations on reorganisation, which have been going on for a very long time. It is true that there are some outstanding matters, particularly appeals. It is true that NALGO is not totally satisfied, but it has been very effective in the consultation and has achieved—and perhaps this is associated with the time involved—a great number of improvements for its members.

    Abortion
    Mr. David Steelasked the Secretary of State for Social Services whether he is
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    now able to publish the Lane Committee's Report.
    Sir K. Joseph: The committee's report has been received and it is hoped to publish it as soon as possible.
    Mr. Steel: When publishing the report does the Secretary of State intend to publish simultaneously the Government's views on what action should be taken on the report, or does he intend that there should be a time lag between the two?
    Sir K. Joseph: We are studying the report, but it was received by us literally only a few days ago and I cannot commit myself to an immediate response. As the House is aware, a Private Members' Bill will come forward next month.
    Mr. Redmond: Is my right hon. Friend aware of the deep and sincere feeling about the present position on abortion held by a wide cross-section of the community? Is he aware of the demand for legislation and action rather than merely waiting for a report? Will he give us an assurance that the Government will do nothing to hinder the Private Member's Bill?
    Sir K. Joseph: I must reserve my position on the Private Member's Bill until we have studied the report for which the House and the country have been waitng. It is true that there are strong and sincere opinions, but they are, unfortunately, conflicting opinions.
    Mr. William Hamilton: If the Private Member's Bill measures up to the recommendations of the Lane Committee and fulfils those recommendations, will the right hon. Gentleman give an assurance that he will support it in the House?
    Sir K. Joseph: The hon. Gentleman puts his question very reasonably, but I must ask the House to await the publication of the report.
    Mr. Biggs-Davison: Does not the Question of the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) and his very proper interest in the Lane Report indicate that he recognises the dire consequences of his legislation?
    Sir K. Joseph: I think that my hon. Friend will be eager to read the Lane Report with its thorough assessment of all the implications.

    Maintenance Awards (Non-Payment)
    Mr. Dalyellasked the Secretary of State for Social Services if, before he receives the report of the Finer Committee on one-parent families, he will introduce interim measures to help women who have been awarded alimony by court order and are unable to obtain such an amount.
    The Under-Secretary of State for Health and Social Security (Mr. Paul Dean): As the difficulties encountered by women through the non-payment of maintenance awarded by the courts are within the terms of reference of the Finer Committee, it would not be right to anticipate its conclusions. My right hon. Friend hopes to receive its report within the next few weeks, and consideration of its recommendations will begin straight away.
    Mr. Dalyell: As, on the initiative of the Secretary of State, my hon. Friend the Member for Newark (Mr. Bishop) and I went in the spring to see Morris Finer, the chairman of the committee, I know some of the difficulties. Unless immediate action is taken, cannot this problem be extracted from the rest of Finer, as the woman who has not been given all her alimony, and her lawyer, are at a hopeless disadvantage?
    Mr. Dean: I am grateful to the hon. Gentleman for the trouble he has taken in discussing this matter with Mr. Finer, but he will recognise that this is part of a much wider problem. Under the existing arrangements we try to ensure that women at most risk, namely, those who are entitled to supplementary benefit, receive a regular income, whether or not their maintenance is actually paid.
    Mr. Worsley: Does not my hon. Friend agree that it is tragic that this report has been so long delayed, in view of its extreme importance? Will he give the House an assurance, first, that publication will be expedited and, secondly, that action upon the report will be expedited?
    Mr. Dean: I assure my hon. Friend that the report should be received by my right hon. Friend very shortly and that it will be published as quickly as possible. To be fair to the committee, which was set up at the end of 1969, it had very wide terms of reference and a good
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    deal of research was required, because much of the information it needed to formulate its report was not available.

    Chronically Sick and Disabled Persons Act
    Mr. Molloyasked the Secretary of State for Social Services if he is satisfied with the operation of the Chronically Sick and Disabled Persons Act.
    Mr. Alison: So far as the Act relates to matters within the responsibility of my Department, we are satisfied that local authorities are generally making good progress with its implementation, bearing in mind inevitable resource constraints.
    Mr. Molloy: I acknowledge that the hon. Gentleman is doing his best to see that this first-class Act is implemented properly, but is he aware that some local authorities are laggards, with no sense of responsibility or compassion? Will the hon. Gentleman chase up those authorities and also consider holding a conference of voluntary organisations and local authorities to see what can be done to put pressure on local authorities which are not answering the call of the Act in the way they should?
    Mr. Alison: The hon. Gentleman should furnish the House with specific details of individual authorities which are falling short. He will recall that Parliament placed the implementation of the Act squarely upon the shoulders of local government, and there are local electors who can visit upon those laggard authorities the proper judgment.
    Dame Irene Ward: Is it not time that my hon. Friend's Department let the House of Commons know which local authorities are not implementing the Act in the way we should like it implemented? I am getting a bit tired of local authorities who, having been given a wonderful Act to help the chronically sick and disabled, do not take advantage of it. We ought to know the local authorities which are failing.
    Mr. Alison: My right hon. Friend gave some information to the House on 25th July 1973 about four authorities that had at that time failed fully to implement Section 1 of the Act, but I am glad to say that those authorities have now taken steps to fulfil their obligations.
    Mr. Carter-Jones: When an assessment centre run by a regional hospital board proves that a family needs to be rehoused or to be coped with and told how to live together, if the local authority fails to carry out the recommendations of the assessment centre will my hon. Friend publicly condemn that local authority?
    Mr. Alison: The hon. Gentleman, with his extensive knowledge of the needs of the handicapped and of local government, will I think, on reflection, agree that local authorities have a vast number of pressing and extremely worthy calls for the assistance of the handicapped upon their limited resources, and that it would be invidious to select one particular case without going fully into the background.
    Mr. Astor: Will my hon. Friend say what central Government funds have been allocated to local authorities to help them implement the Act and whether he is satisfied that the money is being used to the full in this way?
    Mr. Alison: Not, I regret, without notice, but I will gladly do so if my hon. Friend will put down a Question. He will know that a great deal of the revenue money comes through the generalised rate support grant negotiations.
    Mr. Alfred Morris: Is the Minister aware that the figures published by his right hon. Friend for 1972–73 reveal some shocking variations in local provision? In contrast to the backsliders, there have been many superb achievements by local authorities. Therefore, in the light of the Secretary of State's figures, what action is the Minister taking to lift the general standard to the level of the existing best?
    Mr. Alison: We had a recent debate on this subject in which the comparative league table showed how dangerous it was to draw rapid and superficial conclusions from some of these statistics. I remind the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) that in terms of the legislation he sponsored the House was clearly determined to place responsibility on local government, and hence on local electorates, for the discharge of the duty laid upon them by this Act.

    Disabled Persons
    Mr. Thomas Coxasked the Secretary of State for Social Services what is the present numbered of registered disabled people in Great Britain.
    Mr. Alison: On 31st March last, 577,577 handicapped people were registered with local authorities in England under Section 29 of the National Assistance Act 1948, including people who are blind and deaf.
    Mr. Cox: Against the background of those figures, is the hon. Gentleman aware of the sacrifices made by many people in looking after disabled relatives rather than forcing them to go into hospital? Is he further aware that, although those people may be receiving some form of social security payment, this does not leave them with much opportunity to pay National Insurance contributions and that this in turn, at a later stage in their lives, may cause them to suffer in terms of the State retirement pension on which they have had little coverage? Will he consider the possibility of franking the insurance stamps of such people to make sure that they have protection?
    Mr. Alison: I shall want to study the specific and carefully prepared supplementary question put to me by the hon. Gentleman, without at this stage giving any commitment. In terms of the broad picture of need that he outlined and the sympathy which I am sure the House has in this respect, I echo what the hon. Gentleman said. The Government have made some attempt to help through the operation of the attendance allowance.
    Sir B. Rhys Williams: When, this autumn, the Department produces its report on the treatment of the disabled, will it include a recommendation for a national disability income?
    Mr. Alison: I am afraid, if I may quote advice given by a party leader on another occasion, that the hon. Gentleman must wait and see.
    Mrs. Castle: Is it not a fact that the Government's recent Social Security Act totally failed to make any provision for the disabled on the lines suggested by my hon. Friend the Member for Wandsworth, Central (Mr. Thomas Cox) and indeed in any other way? Is he also aware

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    that at that time we were telling the Government to produce a great, comprehensive policy of provision for the disabled? When are we to get it and when do the Government intend to take action on this matter?
    Mr. Alison: We must wait for the report in October. The right hon. Lady, with her accustomed fairness, will acknowledge the substantial advances made by the present Government in provision for the disabled.

    Death Grant
    Mr. Goldingasked the Secretary of State for Social Services if he will now increase the death grant to £75.
    Mr. Dean: No, Sir. The death grant will be considered, along with all other claims on the resources available, when this year's review of national insurance benefits is carried out.
    Mr. Golding: Is the hon. Gentleman aware that the cost of dying is an increasing burden on poor families. Is he further aware that when the death grant was introduced in 1949 it covered the cost of a funeral, but that today it falls £45 short of this aim?
    Mr. Dean: I understand the hon. Gentleman's point, but I hope that he will realise that it is a question of priorities. It depends, for example, on the amount of the available resources which we allocate to increased pensions. The cost of the hon. Gentleman's proposal would be an extra £35 million a year. For that sum of money we have been able, for example, to provide over 100,000 attendance allowances for the severely disabled.
    Mr. Fortescue: Will my hon. Friend confirm that men born before 1883 and women born before 1888 are not entitled to death grant? If this is so, will not the Government bring a compassionate approach to this problem, as they did to the matter of pensions for the over 80s?
    Mr. Dean: I confirm what my hon. Friend said and I would remind him, without commitment, that this, along with other competing demands on resources, will be considered in this year's uprating.

    Homeless Children
    Mrs. Knightasked the Secretary of State for Social Services if he will instigate an investigation into the numbers of children under 16 years of age living rough, without parents or guardians caring for them.
    Mr. Dean: I am aware of recent reports that some young people, including perhaps a small number under 16 years of age, sleep rough, but I am not sure that an investigation would help. Local authorities have the power to return children of this age to their parents or to receive them into care and provide accommodation for them.
    Mrs. Knight: Is my hon. Friend aware that a Mr. Henderson, of the Elfrida Rathbone Society, claims that there are 3,000 children, some of them very young, living rough in the Liverpool area alone. Does he agree that such reports need investigation so that they can be acted upon if they are true, and refuted if untrue?
    Mr. Dean: I am grateful to my hon. Friend for putting that point. It is difficult to get accurate figures, but we study with care the reports we receive, including this one. There are some indications that the problem is growing. It is for this reason that local authorities have substantial powers and duties. I pay tribute to the valuable work carried out by voluntary organisations in this field, often with Government support.

    Low-Income Families
    Mr. Hardyasked the Secretary of State for Social Services what arrangements he has made to safeguard the neediest households as a result of recent increases in the cost of basic necessities.
    Mr. Dean: Both supplementary benefit and family income supplement levels were increased in October and since then beneficiaries over pension age have received a special payment of £10. The Government will continue to keep a close watch on the adequacy of benefits.
    Mr. Hardy: Does the Minister realise that the £10 bonus is rapidly fading from memory and that what is fresh in the

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    minds of the old and the poor is the continuing inflation which is taking place? Will he give an estimate of the amount or proportion by which he expects living standards of the older and poorer people in our community to be reduced if the present Government remain in office during 1974?
    Mr. Dean: I am not prepared to speculate on the last point, but I must, in fairness say that since the present Government have been in office pensions have been increased by approximately 55 per cent., whereas prices have risen by 34·5 per cent. In other words, there is a margin of real improvement in the value of the pension achieved by the Conservative Government.
    Mr. Kinsey: Is my hon. Friend aware that many of the most needy families are separated wives with young children to look after and that they are not protected? Will he consult the Home Secretary to see whether dependants can get away from the lengthy process of having to go back to the courts to obtain increases in child maintenance allowances?
    Mr. Dean: I am grateful to my hon. Friend for putting that point. The Finer Committee is studying this matter, but many of these women will be entitled to supplementary benefit. If they are so entitled, we shall ensure that they receive a regular income week by week whether or not the maintenance payment is made by the husband.
    Mr. O'Malley: Is the hon. Gentleman aware that the statement regarding improved pensions under the Tory Government is not true? Is it not the case that already retirement pensions represent a smaller percentage of national average earnings than they did in 1967—seven years ago—but that by the time the next increase comes along they will represent a smaller percentage of those earnings than at any time since the national insurance system came into being? Is it not clear that the best way to help the pensioners is for the Government to give an immediate pension increase of £10 for single persons and £16 for married couples? If this Government will not take that step, then after the election the Labour Government certainly will.
    Mr. Dean: The figures I gave were accurate and, furthermore, they are a
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    great deal better than the record of the Labour Government. Would the hon. Gentleman now like to say how much his extravagant promise to the pensioners would cost, and who would pay for it?
    Mr. Speaker: Order. We cannot have a debate now.

    Hearing Aids
    Sir Robin Turtonasked the Secretary of State for Social Services how many BE hearing aids he has contracted to buy in the first year of the scheme, and how many in subsequent years ; and what proportion of the hearing aids will be imported.
    Mr. Alison: No contract has been placed for imported aids and tenders from potential suppliers are still under consideration. While the rest of the tender exercise remains to be completed, I would prefer, as indicated in the reply my right hon. Friend gave to the right hon. Gentleman on 4th December, not to disclose the number of aids we have so far contracted to purchase.—[Vol. 865, c. 321–2.]
    Sir Robin Turton: Is my hon. Friend aware that the welcome announcement of the new policy last July aroused the expectations of about I million partially deaf people in the country and that the mystery surrounding the implementation of this policy is causing a great deal of disappointment? Is he aware, further, of the suspicion that this mystery is connected with his disregard of tenders from home manufacturers and his overlooking the services of 1,000 trained dispensers in the private sector of the industry?
    Mr. Alison: When announcing the new provisions my right hon. Friend the Secretary of State made it clear, first, that the programme would have to be phased—and therefore I think that many people understood that they would be dealt with later rather than earlier—and, secondly, that the necessity to conduct the programme through the hospital service made it difficult to employ private dispensers.
    Mr. Pavitt: Irrespective of whether hearing aids are imported or supplied by means of local tenders, will the hon. Gentleman bear in mind that it will be just as cheap to have three or four different qualities of hearing aids giving different outputs of clarity, and therefore

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    that he should not stick to one common denominator but should take a variation, whatever his source of supply may be?
    Mr. Alison: The hon. Gentleman came personally to see me to make this point. Certainly we undertake to bear it in mind.
    Mr. Bruce-Gardyne: My hon. Friend will recall that we pledged ourselves to open Government. What is the ground for secrecy in this instance?
    Mr. Alison: At a time when new tenders may be coming in it is not reasonable to indicate what has been selected already from the successful contractor. If my hon. Friend feels very strongly that we should give further information about this, I will consider whether it can be reasonably done within the normal commercial arrangements for considering tenders.

    National Insurance Cards (Illegal Immigrants)
    Mr. Fowlerasked the Secretary of State for Social Services what progress has been made in the new arrangements for preventing national insurance cards being issued to illegal immigrants ; and whether he will make a statement.
    Sir K. Joseph: In the light of further study of the operational implications, I hope shortly to introduce a procedure under which applicants for national insurance cards who have recently entered the country will be asked for their passports or other identity documents ; this procedure would be applied in those areas of the country where difficulties arise over the accuracy of immigrants' personal particulars.
    Mr. Fowler: I thank my right hon. Friend for that reply. In view of some of the fears being expressed about this scheme, will he confirm that it has worked in the West Midlands without difficulty? Will he also confirm that if the scheme is successful it will remove the incentive for the illegal immigration trade, which is the prospect of employment in this country?
    Sir K. Joseph: The answer to the first part of my hon. Friend's supplementary question is "Yes". The answer to the second part is that my Department is undertaking to spread these procedures
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    as I have said, so as better to carry out its own statutory obligations. I cannot predict what the outcome will be.
    Dr. Miller: Does not the right hon. Gentleman realise that this has a most sinister implication? What right has his Department to act as a policeman for the Home Department?
    Sir K. Joseph: There is no question of my Department's acting as a policeman. It has a statutory obligation to issue insurance cards to the particular persons identified in the insurance cards. When an applicant cannot always speak English accurately and there is some doubt about the precise name under which he or she goes, because of the habit of using different forms of names, it is only reasonable to have some procedure for checking. As my hon. Friend the Member for Nottingham, South (Mr. Fowler) said, in part of the country a procedure has been in use for some time using passports to help my Department get the facts right.
    Mr. Powell: How will my right hon. Friend's officers identify which applicants have entered the country recently?
    Sir K. Joseph: My Department reacts to applications from people who seek national insurance cards for the first time.
    Mr. Bidwell: Will not the Secretary of State acknowledge that the retrospective effects of the 1971 Act have made a lot of people illegal who, because of the six months' limitation, would otherwise have been accepted as being here legally? Will he assure the House that his Department will become no party to a situation where such people holding national insurance cards at the moment and working quite happily in the interests of the British economy are in any way hounded by the Department?
    Sir K. Joseph: My Department is in duty bound to establish whether the person applying for a national insurance card is the person whom he or she purports to be and to get the identification correct. It is only if some breach of a law is thereby suggested that my officials have any duty to communicate with the Home Office. The prime purpose of this procedure is for the fulfilment of the statutory duties of my Department.

    Disabled Drivers (Sharp Report)
    Mr. Martenasked the Secretary of State for Social Services if he will make a statement on the Sharp report on disabled drivers.
    Mr. Alison: I have nothing at present to add to the reply my right hon. Friend gave to the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) on 2nd November 1973.—[Vol. 863, c. 31–2.]
    Mr. Marten: Is not this getting rather absurd? Is my hon. Friend aware that this report was originally due or hoped for almost a year ago, and that it was finally delivered to the Ministry some time in October, when we were told that there was a delay over printing? Now it is still delayed. Cannot my hon. Friend get on with this and give us a date for its publication?
    Mr. Alison: I cannot give a specific date, but in view of the very point that he made about the length of time taken by Lady Sharp to deliver her report, my hon. Friend will appreciate the complexity of the subject that she dealt with and the need to consider it deeply as to its implications within the Department before publication.
    Mr. Alfred Morris: Although we accept that Ministers require time carefully to read the report, is the hon. Gentleman aware that disabled drivers and disabled passengers also want to study its recommendations? Is the hon. Gentleman aware, further, of the deeply disturbing accident figures involving his Ministry's three-wheelers? Does he recall that Lady Sharp's report was with the Secretary of State on 5th October last? Why cannot he publish the report forthwith?
    Mr. Alison: I am bound to reply to the hon. Gentleman as I did to my hon. Friend the Member for Banbury (Mr. Marten). It is a complex report and it needs careful consideration within the Department. When it is published, the disabled drivers' groups as well as right hon. and hon. Members will have ample opportunity to discuss it in consultation with the Department.
    Mr. Carter-Jones: In view of the fact that this is a complicated subject, would it not be better to publish the report and have the benefit of feed-back from disabled drivers themselves? Secondly, why is there no consultation with technologists up and down the country who can produce or modify vehicles so as to enable very severely handicapped people to have vehicles which they cannot have now? Thirdly, is the hon. Gentleman aware that many of us are concerned that the very severely handicapped who are not mobile are apparently not covered by the report? Will the hon. Gentleman consider providing vehicles for people who are so severely handicapped that they cannot drive themselves?
    Mr. Alison: On that last point, the hon. Gentleman will want to consider the report when it is published. As I have said already, there will be ample opportunity for disabled groups to consider the report, in consultation with the Department, when it is published, but I believe that it will be to the advantage of the House if the Government have been able to give full consideration to its implications and proposals before presenting it to the House in order to be able to give definitive answers as to future policy.

    Houghton Report
    Mr. Cormackasked the Secretary of State for Social Services what action he now proposes to take on the Houghton Report.
    Sir K. Joseph: As I told the House during the debate on the report on the adoption of children on 9th November last—[Vol. 863, c. 1335–51.]—the Government are pressing forward with the preparatory work for legislation on the report's recommendations. The hon. Member for Plymouth, Sutton (Dr. David Owen) has a Bill concerned with the recommendations which is for Second Reading on 8th February.
    Mr. Cormack: I thank my right hon. Friend for that reply. May I urge on him the necessity for the Government making clear their position on this vital matter as soon as possible?
    Sir K. Joseph: Yes, Sir.

    Group Practice
    Miss Fookesasked the Secretary of State for Social Services whether he will make a statement on the progress of group practice.
    Mr. Alison: In 1966, 30 per cent. of general medical practitioners in England practised in groups of three or more principals. I am pleased to say that by 1972 the proportion had increased to almost 60 per cent.
    Miss Fookes: I thank my hon. Friend for that reply. Has he any further plans to encourage this trend?
    Mr. Alison: Yes. The existing incentives towards group practice encourage, and will no doubt continue to encourage, general practitioners to get together.
    Dr. Miller: What proportion of the doctors who practise in group practices practise from health centres?
    Mr. Alison: One-sixth.

    Health Hazards (Overseas Travel)
    Mr. McCrindleasked the Secretary of State for Social Services if he proposes to introduce legislation requiring travel companies to warn travellers of the risk of contracting tropical diseases in certain countries.
    Mr. Milneasked the Secretary of State for Social Services if he will introduce legislation in order to compel travel agents and tour operators to issue details of health hazards likely to be encountered in overseas travel.
    Mr. Alison: My right hon. Friend sees no need for legislation in this field.
    Mr. McCrindle: In view of potential epidemics from diseases contracted in some parts of the world in particular, and the desire of most people to prevent further compulsory inoculation, is not the proposal that I put forward for legislation a reasonable compromise?
    Mr. Alison: We are satisfied that the existing basis of providing information, widely diffused as it is, is adequate to ensure that the public know all that they need to know.
    Mr. Milne: Is the Minister aware that a lot of unnecessary suffering, hardship and pain could be eased by accepting the proposal in the Question? Will he consult the London School of Hygiene and Tropical Medicine on this matter and reconsider the issue?
    Mr. Alison: If the hon. Gentleman, having alleged that hardship is being caused, will furnish me with specific evidence, I shall gladly consider it and, in the light of that, consider whether I may have to take up the specific point that he made. At present we are satisfied that the advice and information is adequate fully to cover the public.

    Speech Therapists (Quirk Report)
    Mr. Clinton Davisasked the Secretary of State for Social Services if he will now make a statement concerning the Government's policies on the recommendations contained in the Quirk Report on speech therapists.
    Mr. Willeyasked the Secretary of State for Social Services what progress has been made in the consultations on the Quirk Report on the speech therapy services.
    Mr. Edelmanasked the Secretary of State for Social Services when he proposes to implement the recommendations of the Quirk Report in relation to the future of speech therapy.
    Sir K. Joseph: I regret that I am not able to make the statement to which I referred in my reply to the hon. Member for Hackney, Central (Mr. Clinton Davis) on 17th December. [Vol. 866, c. 270–1.] My officials will be consulting with the profession on the implications of unifying the service.
    Mr. Davis: Is the right hon. Gentleman aware that there is grave disquiet in this profession as a result of the uncertainty in which it is placed because it cannot ascertain the Government's views about the recommendations in the report? Are the Government prepared to state what target they have for recruitment to the profession and what steps they are taking to recruit married women and others to it?
    Sir K. Joseph: My officials are consulting the profession on the implications of unifying the service. I shall make a full statement as soon as I can.
    Mr. Willey: Is the right hon. Gentleman aware that the report clearly shows that this profession, which is not properly rewarded, is in short supply in the Health Service, and that this delay will prejudice this position? In view of this serious situation, will he expedite consideration of the report?
    Sir K. Joseph: I have been under pressure from the hon. Member for Halifax (Dr. Summerskill) and my hon. Friend the Member for Maidstone (Mr. John Wells) on this subject. I am absolutely convinced of the importance of the profession, but I regret that I am not yet quite ready to make a statement.
    Mr. John Wells: Will my hon. Friend give an assurance that pay for this particular profession will be improved? Pay is at the root of the recruitment problem.
    Sir K. Joseph: I think that that, as always in the first instance, is a matter for the Whitley Council.
    Mr. Edelman: Apart from the important question of pay, will the right hon. Gentleman bear in mind the recommendation of the Quirk Committee on the urgent need to unify the organisation of these services? Going beyond that, will he also bear in mind the need for combined research by neurologists, linguists and others in related disciplines into the question of human communication raised in the report?
    Sir K. Joseph: My right hon. Friend the Secretary of State for Education and Science has already announced that the Government have accepted a recommendation for the unification of the service.

    Earnings Rule
    Mr. Fortescueasked the Secretary of State for Social Services how he calculates the figure of £130 million given as the cost to the taxpayer of abolishing the earnings rule ; and whether he has calculated the additional amount likely to be collected in income tax in the event of the abolition of the rule.
    Mr. Dean: The cost to the National Insurance Fund, including the loss of contribution income, is estimated to be about
    1438
    £135 million a year. The cost would arise mainly from paying pensions to over 200,000 people who, together with their wives, are not yet drawing pension because they still have regular and substantial earnings. Allowance is made for savings on sickness and unemployment benefit which would no longer be paid. On the basis that the pension would be taxed if paid in full on top of earnings the amount likely to be collected in income tax would be about £35 million.
    Mr. Fortescue: I regret that I heard very little of that reply, but has my hon. Friend taken into account the income tax not paid by pensioners working for undeclared cash because of the earnings rule? Will he bring his sense of social justice to bear on the indefensible anomaly maintained by successive Governments, whereby pensioners with investment income of any size are not subject to the earnings rule whereas pensioners with earned income are liable to have their pensions reduced?
    Mr. Dean: The Government are sympathetic to improving the earnings rule, which has already been improved on two occasions since they came to power. I cannot commit my right hon. Friend or the party to this, but I assure my hon. Friend that his point will be borne in mind along with a great many others.
    Sir B. Rhys Williams: Does my hon. Friend agree that it is wrong that when a man has earned a pension by a lifetime's record of contributions he should lose his entitlement to it because he is continuing to contribute to the wealth of the nation by remaining at work?
    Mr. Dean: My hon. Friend knows that part of the contract in the National Insurance Scheme is receipt of pension for people who are not working. Were we to pay pensions to people who are able to go on working—to their credit—full time it would mean less for the very old, the disabled and the widows.
    Mrs. Kellett-Bowmanasked the Secretary of State for Social Services whether he will facilitate staged retirement by, among other measures, reducing the age at which the earnings rule ceases to apply and also by making more flexible the age at which people wishing

    1439
    to do so may draw their national insurance pensions at the time of the annual pension review.
    Sir M. Worsleyasked the Secretary of State for Social Services what encouragement his Department is giving to the concept of staged retirement ; and whether he will make a statement.
    Mr. Dean: The present arrangements already allow some flexibility in how an individual arranges his retirement. Any changes of the kind my hon. Friends have in mind, in so far as they would involve reducing the minimum pension age or the age at which the earnings rule ceased to apply, would need large resources, and I am bound to say they do not seem to me to command first priority.
    Mrs. Kellett-Bowman: Will my hon. Friend bear in mind the very different demands of different occupations, let alone the very different health patterns of individuals, of which the present system takes so little account? Will he try hard to make the system fit the individual rather than the individual fit the system.
    Mr. Dean: I understand my hon. Friend's point. I think she will agree that the invalidity benefit which is now available within the National Insurance Scheme is a direct response to the need for a long-term benefit for those who have to give up work owing to ill-health before normal retirement age.
    Sir M. Worsley: I agree that progress in this direction could not be fast. Does my hon. Friend accept that there should be some acceptance by the Government that such a concept should be part of the Government's pension policy?
    Mr. Dean: I can assure my hon. Friend that that will be considered. Indeed, there is some move in this direction with the extra 25p for the over 80s. I think that my hon. Friend will agree that occupational pensions schemes will fulfil a valuable function, in that they can be much more flexible about the age of retirement than is possible with a large State scheme covering many millions of people.

  EMERGENCY (TUC PROPOSALS)
  Mrs. Renée Shortasked the Prime Minister when he next plans to meet the TUC.
  Mr. Carterasked the Prime Minister when he next intends to meet the TUC and the CBI.
  The Prime Minister (Mr. Edward Heath): With permission, I will answer this Question and Question No. 3 together at the end of Questions.

  SOLWAY FIRTH
  Mr. Dalyellasked the Prime Minister if he will pay an official visit to the Solway Firth area.
  The Prime Minister: I have at present no plans to do so, Sir.
  Mr. Dalyell: Since the Solway is the site of the Chapelcross, Britain's second nuclear power station, and a potential site for many of our new nuclear power stations, will the Prime Minister tell us about the Government's policy on the import of the American light water reactor? Has not Lord Aldington let the cat out of the bag in saying that we would have to import pressure vessels, a coolant system, and many other components of American reactors from the United States? Is this sensible, given the balance of payments problem?
  The Prime Minister: The hon. Gentleman obviously raises a very important point. It is not possible for me to make a statement on policy at this moment. The Nuclear Power Advisory Board is studying all the possibilities, as the hon. Gentleman, who is well informed about these matters, knows, and various recommendations have been made to the board by those interested in the development of nuclear power. I assure the hon. Gentleman and the House that no decisions of any kind have yet been reached upon this matter, but these decisions are now urgently required.
  Mr. Fry: Instead of visiting Solway, will my right hon. Friend consider visiting Wellingborough and explaining to my constituents that if the three-day week is to be continued there will be equity in

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  the payment of unemployment benefit, so that those who are out of work on Thursday, Friday and Saturday will not be at the disadvantage that they suffer at the moment compared with those who work on Thursday, Friday and Saturday?
  The Prime Minister: My hon. Friend will know that the length of the working week is under urgent consideration. I shall have something more to say about this matter later this afternoon.

  CBI (MEETINGS)
  Mr. Strangasked the Prime Minister how many times he has met representatives of the CBI.
  The Prime Minister: I have had 17 bilateral meetings with representatives of the CBI. In addition, I have had 17 tripartite meetings at which representatives of the TUC were also present including six meetings of NEDC. I have also had numerous meetings with individual members of the CBI on both formal and informal occasions.
  Mr. Strang: Does the Prime Minister accept that the vast bulk of British industry is bitterly disappointed that the Government have not seen fit to take up the statesmanlike initiative of the TUC and use it as a basis for negotiations aimed at settling the deadlock between the National Coal Board and the miners?
  The Prime Minister: I propose to say more about this matter in answer to earlier Questions when I deal with them at the end of Question Time. However, I ask the hon. Gentleman to refer to the broadcast made by the Director-General of the CBI yeterday morning, in which he made it quite clear that he believes in the utmost importance of maintaining the counter-inflationary policy and ensuring that it should not be breached.
  Mr. McCrindle: Will the Prime Minister consider extending the range of talks that he has with employers to include not only members of the CBI but particularly those people who are the providers of financial services in the City whose invisible exports at the moment provide the one ray of light in the trade figures?
  The Prime Minister: There is, of course, a representative group in the City
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  which is dealing with the question of invisible exports and the Chancellor sees it quite frequently when it wishes to deal with these matters.
  Mr. Grimond: The House has heard from time to time of suggestions by the TUC for solving the present economic crisis. Has the CBI made any suggestions? For instance, has it suggested that top emoluments and salaries should be frozen during phase 3 and has it suggested anything for dealing with fringe benefits—payments in kind, pension rights, and so forth, which are by far the most important things for the well paid of this country?
  The Prime Minister: In the talks we have held with the CBI over the last 21 months, the confederation has put forward many proposals for dealing with the economic situation, with industrial relations and with the question of incomes and prices policy. However, it has been the general procedure for these talks to remain confidential and if the parties themselves wish to publish what they have put forward it is up to them to do so.
  On the question of limitations, the CBI has supported the limitation for higher incomes in the incomes policy. Fringe benefits are also matters which the CBI as well as the TUC has frequently discussed and urged upon us. I propose to say something about this matter later, but fringe benefits are an important element of what we, as a Government, said should be discussed between the NCB and the National Union of Mineworkers.
  Mr. Woodhouse: Has my right hon. Friend yet ascertained from the President of the CBI whether the shadow Chancellor, the right hon. Member for Leeds, East (Mr. Healey) was correct in representing him as having advocated price control without wage control?
  The Prime Minister: The right hon. Gentleman was of course quite incorrect—[Interruption.] Perhaps the right hon. Gentleman would like a full copy of the speech by the President of the CBI. What he was putting forward was the possible means of dealing with prices and incomes which have been put forward at various times by various bodies. The suggestion of having no incomes

  1443
  policy but a prices policy was one he rejected. The CBI has always rejected that when talking to the TUC, and the TUC will confirm that to the right hon. Gentleman.
  Mr. McBride: Has the Prime Minister considered the position of the Welsh section of the CBI and its concern for the worsening financial position of its small-firm members? The financial position now is worse than after the Conservative Budget of 1970. What support is to be given to small firms in Wales to help obviate a situation which could create unemployment?
  The Prime Minister: That is not a matter which the CBI has yet raised with me, but it has asked to come and see me to discuss some other matters that I discussed with the TUC yesterday, and it will have the opportunity of putting the facts before me.

SCOTLAND
Mr. William HamiltonQ5. Mr. William Hamilton asked the Prime Minister if he will pay an official visit to Scotland in the early part of 1974.
The Prime Minister: I have no immediate plans for an official visit.
Mr. Hamilton: Will the Prime Minister say whether he will be visiting Scotland before or after the General Election? When he comes will he explain to the local authorities why the vigorous new housing programme promised in "A Better Tomorrow" has resulted in a cut in the total number of new houses built from more than 41,000, on average, between 1967 and 1971 to a likely fewer than 30,000 in 1973—and that at a time when the housing situation in Scotland is probably the most serious and deplorable in Western Europe?
The Prime Minister: I cannot accept the last part of the hon. Member's supplementary question. I have always emphasised the need for the development of private housing in Scotland. However controversial it may be, part of the aim of both Governments of having a satisfactory rents situation in Scotland is that there should be greater encouragement not only for municipal housing but for private housing.
Mr. Tebbit: If my right hon. Friend goes to Scotland will he visit the North-East Coast and ask the companies which are bringing in much needed and scarce investment and technical resources to exploit our oil resources what their attitude would be if they were threatened with nationalisation? Would they be given to bringing in more resources or would they go off and work somewhere else?
The Prime Minister: If they thought there was a serious threat to them they would undoubtedly wish to withdraw the rigs which are there at the moment and use them for exploration elsewhere. It is one of the facts of the world's energy problems and, in particular, oil problems, that there is a great shortage of rigs which are suitable for exploration. It is not possible to have as many as we would like in other areas round our shores. In brief, I do not believe that any proposal for the nationalisation of North Sea oil would solve the problems, first, of exploration on a sufficient scale and, secondly, of a sufficiently rapid production of oil once it has been discovered.
Mr. Douglas: When he visits Scotland will the Prime Minister address his mind to two things? First, how do the Government propose to acquire land for production platform sites? Secondly, when will the Government clear up the matter of the next round of licences and say whether or not they will agree with public participation, if not nationalisation?
The Prime Minister: Both these matters are important and urgent and are receiving immediate attention now.

EMERGENCY (TUC PROPOSALS)
The Prime Minister (Mr. Edward Heath): With permission, Mr. Speaker, I will now answer Questions Q1 and Q3.
Six representatives of the TUC came to Downing Street at 4.30 p.m. yesterday afternoon to meet me and my right hon. Friends the Chancellor of the Exchequer and the Secretaries of State for Employment and Energy. We discussed the possibility of relaxing the restrictions on the use of electricity in industry, the general economic situation and its prospects, and against that background the miners' dispute and the TUC initiative.

1445
On the use of electricity in industry, my right hon. and noble Friend the Secretary of State for Energy explained that, for various reasons which I described in my answers to questions in the House last Friday, stocks of coal at the power stations were higher than had earlier been expected—[HON. MEMBERS: "Oh."] I hope that the House is pleased about that. If there were no significant setbacks, and there was no further reduction of supplies of coal to the power stations, it should be possible to contemplate an early relaxation in the restrictions on the use of electricity. It would be important to give the fullest benefit of any relaxations to manufacturing industry ; and this would depend on savings by domestic consumers continuing at a high level.
We asked the TUC representatives whether, if some such relaxation were possible, they would prefer to see industry move to a four day working week or—if this were practicable—to a live day working week with industry using only 80 per cent. of normal supplies of electricity. The TUC, after our discussions, made clear that it would prefer a five-day week and 80 per cent. of normal use of electricity. This had also been the preference expressed by the CBI at a meeting with my right hon. and noble Friend in the morning.
My right hon. and noble Friend is now considering as a matter of urgency whether the technical problems of a five-day week at 80 per cent. of normal use of electricity can be overcome, so that he may be in a position to take a decision later this week if the coal stock situation and supply prospects justify some relaxation.
Clearly one of the factors in his decision must be the industrial action of the mine-workers and its effects upon coal supplies.
We then moved on to a discussion of the general economic situation, on which I expect to have further meetings both with the TUC and with the CBI. My right hon. Friend the Chancellor of the Exchequer explained the severe problems which exist in the field of domestic economic policy. The shortfall in energy supplies was bound significantly to affect gross domestic product in the first part of 1974. The substantial additional burden imposed on the balance of payments by the increase in oil prices made it the more necessary to take every advantage of our
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competitive situation to increase exports. There would be sizeable demand for new investment, particularly in the development of new sources of energy.
It was therefore impossible to envisage any increase in the volume of resources going into domestic consumption. Indeed, we could well have to be content with the living standards of a year ago, and deny ourselves the improvements in living standards to which, only a few months ago, we have been looking forward. In the light of this change of circumstances, stage 3 of the counter-inflation policy now appeared if anything too generous.
Against that background we turned to the coal miners' dispute and the TUC initiative. The TUC representatives stated that they were prepared to say that the miners were a unique case, that other unions would not use the special nature of the mineworkers' case as an argument in their own negotiations, and that the TUC itself would not come to Downing Street in support of any other case this year. They claimed that in giving this undertaking they would be going further than the TUC had gone before, and indeed could go no further, to ensure that any special settlement for the miners was not followed by excessively inflationary settlements of other claims. Their initiative had been almost unanimously approved by their special meeting on 16th January.
For my part, I made it clear that the Government recognised the significance of the undertaking offered by the TUC and unreservedly accepted its sincerity and genuineness. Nor did we doubt that it could secure the implementation of the specific undertaking it was prepared to give.
But the fact remained that the offer already made to the National Union of Mineworkers was in our view fair, and, in the economic situation facing us, as generous as we could afford. Within the limits of the stage 3 pay code it treated the miners as a special case, and would in fact more than restore their relative position as it was immediately after the Wilberforce award.
The National Union of Mineworkers had resorted to industrial action last November, more than three months before its existing agreement was due to expire. In the meantime 4 million people had accepted settlements within the stage 3

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pay code, and the change in our economic circumstances made it more rather than less difficult to envisage increases in excess of the stage 3 code.
Other groups had the same sort of power as the miners to damage industry, cause hardship in homes, and disrupt the life of the nation. I had therefore to say to the TUC representatives that, if the miners' use of their industrial power was seen to lead to a settlement which was excessive by the standard of stage 3—and the nation certainly cannot afford more—there was nothing in the TUC's undertaking to prevent such groups from following the miners' example and using their industrial power to seek to extort excessive settlements. The TUC representatives agreed that this was the case, and emphasised that there was nothing further they could do by means of their undertaking to prevent that happening.
I made it clear, and the TUC representatives accepted, that the Government were not rejecting their initiative or questioning their sincerity. Indeed, it remains on the table. The TUC and the Government are agreed about that. I expressed the hope that we should be able to build on it in further discussions with the TUC on future developments of counter-inflation policy.
But the fact remains, and the TUC representatives agreed, that in present circumstances their initiative would not protect us again the use of industrial power, by those who might be minded so to use it, in pursuance of settlements at a level which the country cannot afford. That is a risk which in present circumstances we cannot run.
A fair and generous offer has been made to the mineworkers. I will, with permission, circulate details of it in the OFFICIAL REPORT. From that hon. Members on all sides of the House will see that full use has been made of the provisions in the stage 3 pay code which enable us to treat the miners as a special case.
In addition, my right hon. Friend the Secretary of State for Employment and I have made it clear that the Government are ready, as soon as normal working has been resumed, to start immediate discussions with the National Coal Board and the National Union of Mineworkers on the future of the coal industry, on improvements
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in pensions and in provisions for health hazards, and on the pay arrangements appropriate in the longer term to the industry's future and its manpower requirements.
So the Government have done everything in their power, within what they believe to be right in the interests of the country as a whole, to make possible a settlement of this dispute. The TUC has also offered everything that is in its power to offer to limit the consequences of a special settlement for the miners. The fact that we have had to say that it does not go far enough to prevent the dangers we fear does not mean that we fail to recognise the importance of the step it has made, to which I again pay tribute.
But there is a third party involved in this affair, with whom the responsibility for the future now rests—that is, the National Union of Mineworkers.
The offer which has been made to it, together with our proposals for discussions about the future of the industry, responds to its case for special treatment, within the limits of what the country can afford, and provides a basis on which a secure future for the industry, and for employment in it, can be established.
I very much hope, therefore, that the National Union of Mineworkers will recognise this, and will conclude that acceptance of the offer on the basis I have described will do justice not only to the aspirations of the miners but also to the needs and circumstances of our country of which we are all citizens.
Mrs. Renée Short: The House will be grateful to the Prime Minister for making his statement today, even though it is clear that he is not prepared to accept the undertakings given by the TUC on behalf of the majority of trade unions and made by some of the leaders of the largest unions in the country. Can he say how his statement and the position in which he has left the talks help the miners? Is he aware that while the miners are now offered just over £39 a week, all Labour Members, and the rest of the country, believe that the miners deserve to have their claim met in full? Can he tell the House what he now expects the trade unions to do?
Can he also tell the House when he expects to see full-time working in industry and whether he is now prepared to

1449
ensure that industry receives priority in the use of electricity and that non-essential users will be prohibited from wasting electricity in clubs, pubs, discotheques and such places?
The Prime Minister: We assured both the TUC and the CBI about this yesterday when we asked their advice and they said that they thought that top priority must be given to manufacturing industry. We accepted that advice. We agreed. We have therefore asked that domestic consumption should be limited most stringently, and that all the restrictions should remain on domestic consumption. In the further talks which the Secretary of State for Energy had with the Retail Consortium it was agreed that commerce and trade should not have any great relaxation of the regulations at the moment. Everything which is available should go to manufacturing industry. I hope that meets the hon. Lady's point.
On this question of not accepting the undertaking, I have made clear several times in my statement—and this was fully accepted by the TUC—that we recognised its undertaking. We accepted it and recognised its sincerity and the fact that the undertaking, as approved by the full meeting of the TUC, would be observed. What I explained to the TUC and what it accepted, was not that we did not accept the undertaking but that in the two particular respects I mentioned it does not cover the danger to the counter-inflationary policy. This is absolutely fundamental. If there were to be either a completely guaranteed voluntary policy, which we would certainly like to have if the TUC were in a position to organise it, or complete support for the statutory policy, these problems would not arise.
I have explained—and the TUC has fully accepted this—that there is no questioning of good faith in what it has said and what it says it can deliver. The question is about the circumstances which go beyond that. I have always tried to be absolutely fair to the TUC in these discussions. It has said absolutely frankly, "We cannot cover those circumstances." That, too, I have accepted. It cannot cover the circumstance in which other workers claim to be a special case. Such workers would not cite the miners, they would cite their own special circumstances and would use industrial power
1450
to achieve their ends. They could cause damage to the nation equal to that which could be caused by any other group.
Mr. Carter: Is the right hon. Gentleman aware that the country now believes that the three-day week was a botched-up failure? Can he tell the House how he believes industry could have got through to the spring on such a basis? Is he aware that even on a four-day week British Leylands would have gone bust long before then? On that basis, should not industry be allowed immediately to return to a five-day week?
The Prime Minister: All the reports show—and this was certainly confirmed at the meeting yesterday with the CBI and TUC—that the achievements of industry during the past month as a result of special arrangements, mutually agreed between employers and trade unions, have been remarkable. I pay tribute to unions who have forgone their normal rules and regulations and some restrictive practices. Employers have arranged special hours within the limits laid down and as a result production has not decreased anything like proportionately or as much as was anticipated. For this both sides of industry, unions and employers, must have full credit. I believe that the result has been remarkable.
The consultations we had yesterday with the TUC, the CBI, the Association of British Chambers of Commerce and the Retail Consortium were aimed at getting back to as full a working week as possible. As I have told the House, the Secretary of State for Energy is today examining the question of the practicality of having a five-day working week with a limitation on the amount of energy used by manufacturing industry. All the increase will go to manufacturing industry. This will lead to a great improvement in output.
Mr. Tapsell: Since deadlock seems temporarily to have been reached on the wages front, might it not be helpful if greater attention were now given to the other aspect of our policy, namely, statutory control of prices?
The Prime Minister: The CBI has been co-operating fully with the proposals for statutory control of prices. It has consulted the Government about

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the impact of the prices code whereas unfortunately we did not always have the advice of the TUC on the formulation of the wages code. I agree with my hon. Friend that constant attention has to be given to the question of prices. But this was not a matter raised yesterday in our discussions with either the CBI or the TUC.
Mr. Harold Wilson: In that answer, and earlier in his statement, is not the right hon. Gentleman asking the TUC to give assurances about wages that neither the CBI nor even the Government can give about prices? When he used the phrase—and he did so a number of times—that the TUC accepted this and that, did he mean that the TUC agreed with what he said or merely accepted that he had said it? Could we have that stated clearly?
Is it not clear that the right hon. Gentleman is now approaching this grave problem on the basis not of the national interest but of a fetishism about stage 3? Is it not clear, too, that whereas to him inflation is exclusively about wages, and he does nothing effective about prices, for every family in the country it is prices, rents, mortgage interest rates and the rest by which they judge the state of inflation which the Economist this week said would increase by 15 per cent. in 1974? As it is now two months since he had before him a proposal on the coalmining dispute—which could have produced a settlement honourable to all parties, even within stage 3—which was rejected out of hand, without his giving it any consideration—is it not the case that the three-day week could have been averted if he had given one-tenth of the time to getting a settlement on that basis that he has given, instead, to confrontation?
Is it not the case that during these two months he has instead taken measures, I do not believe deliberately, which have strengthened the militants in industry and weakened the moderates? Finally, since the pre-Christmas olive branch of the Secretary of State for Employment asking for a response by the TUC has now had a very strong response, surprising many people throughout the country—indeed, a response which has never been equalled either in
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peace or war—does not his veto of that response confirm that he is, as he appeared to be all along, more interested in political confrontation than in getting the country back to work, to getting Britain out of the mess in which he has landed us?
The Prime Minister: When I said that the TUC had accepted, I meant that the TUC had agreed. The TUC has said frankly all along that it could not make arrangements to cover these aspects of the question. I hope that the right hon. Gentlemen and others will devote their attention to these aspects of the question, because they greatly concern other trade union leaders. Whereas they know that they would not quote the special aspects of the miners' case in another wage application, they would quote the special aspects of their own application. Therefore, the moderate leaders recognise full well the consequences for them.
The right hon. Gentleman repeats his accusation about militancy. Nothing would encourage militancy more than to accept what the hon. Member for Wolverhampton, North-East (Mrs. Renée Short) suggested earlier, that a claim for 31 per cent., involving £130 million, should be met. Nothing would encourage militancy more than that.
The right hon. Gentleman has referred to things we have done since the claim was first brought forward. I have gone to the utmost in meeting the NUM and TUC. I have given hours of discussion to them in trying to find a way to a solution, and I shall continue to do so. The TUC fully accepted last night that what mattered to the Government was to try to find a solution to the dispute. That is our position. We shall go on trying to find a solution.
Mr. Wilson: When the right hon. Gentleman refers to the full claim—which was referred to by my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renée Short)—is he aware that from an early stage in the dispute Mr. Gormley said that the miners were not pushing the full claim and that they wanted the right to negotiate. [Interruption.] Hon. Members must know nothing about the negotiations, if that is the basis of their interruption. I hope that the Prime Minister does, but in view

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of what he has said I doubt whether he does.
The right hon. Gentleman referred to the full claim. Mr. Gormley has made clear several times, and so have I, that what was wanted was the right to negotiate an honourable settlement—[Interruption.] Negotiate, fat-head.
The right hon. Gentleman rejects negotiations in any form outside stage 3. He rejects certain negotiations within stage 3, as he made clear in his letter to me. The Secretary of State for Employment wanted to start negotiations, but was stopped by the Prime Minister, although he has the responsibility.
The Secretary of State for Employment (Mr. William Whitelaw)The Secretary of State for Employment (Mr. William Whitelaw) indicated dissent.
Mr. Wilson: It is no good the right hon. Gentleman shaking his head. He knows the position.
Will the Prime Minister answer the question which I put to him and which he has ducked for two months? When a proposal was put it was already public knowledge. It had been put forward by Mr. Daly in a public statement. The Prime Minister rejected it for reasons which have since proved to be wrong, even in terms of the pay code. Many of us think that the proposal is within stage 3. Is the Prime Minister now prepared to consider it with the evidence which has been produced by my right hon. Friend the Member for Barnsley (Mr. Mason) in researches which he has carried out? We believe that it is within stage 3. Is the Prime Minister prepared to allow the Secretary of State to examine the proposal freely and to allow the two sides to negotiate on the basis of what the miners and my right hon. Friend have put forward? May we have an answer?
The Prime Minister: The right hon. Gentleman can have a full and complete answer. The matter was first raised by the NUM in its discussions with the National Coal Board, and the NUM dropped it. It was then raised by the right hon. Gentleman in a letter to me, sent on the Friday. I assume that the right hon. Gentleman is talking about the question of bathing time. His letter to me was marked "Confidential", and it was not going to be made public. Far from rejecting it hastily, I immediately
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put the matter in hand to be studied fully.
The right hon. Gentleman, in his judgment, made the matter public at a meeting on the Tuesday evening. I therefore had to reply publicly to him. I pointed out what the consequences would be, and I also said that the final decision rested with the Pay Board. The matter has since been discussed on many occasions between the National Coal Board and the NUM. Both were invited to put their views and position to the Pay Board, which is the proper way of proceeding, and the Pay Board gave its conclusion and decision. I know that the right hon. Member for Barnsley (Mr. Mason) has raised the question of the legal basis for these matters, as has the Leader of the Opposition. He also said that he had not taken legal advice about it.
If there is to be a different decision about the custom and practice of the industry, the matter has to be proved, and it has not been proved. The Pay Board has given its decision on the matter.
Mr. Harold Wilson: The right hon. Gentleman has given wrong information to the House in that answer. I do not blame him, because it refers to a matter which took place two months ago and he may have forgotten about it. He got the order and facts all wrong. Is he aware that, contrary to what he said, the miners had not dropped the proposal before I wrote to him? He knows that. He accused me of being responsible for their dropping it. He cannot have it both ways. It was public knowledge before I made it public. I can give proof of that. We will not have the facts twisted by the right hon. Gentleman. He can look up the dates and make a statement tomorrow. He can see who is right. I give him the chance to do that, without blaming him for what he said.
The right hon. Gentleman has misled the House. I do not believe that he did so deliberately. I am giving him the chance to look at the facts and dates and to make a statement in the House tomorrow. Nothing can be fairer than that.
Does he agree that he told me in his letter that it would cost £45 million to £50 million and that in December he

1455
interrupted my speech to make the same point? He then said that it would cost £45 million. Is he aware of what the Pay Board said? He totally miscalculated. Will he get the facts right and allow the Secretary of State for Employment to negotiate on the basis of that proposal, particularly as some of us believe that on the evidence it is within stage 3? If he will not, we shall know exactly what his motives are.
The Prime Minister: The right hon. Gentleman will not help find a solution by adopting that attitude. If the NUM or the NCB wished to pursue this further with the Pay Board—[Interruption.] It will remain a decision of the Pay Board, in any case, because the board decides what this means in the terms of the code.
My right hon. Friend the Secretary of State for Employment discussed this with the NUM when the union saw him. It then agreed to follow the correct procedure—to discuss it with the National Coal Board and together approach the Pay Board, which they did. They were asked for evidence. They produced what evidence they could, and the Pay Board gave its decision. Those are the facts of the case.
Mr. Gardner: Will my right hon. Friend, in any future discussions he may have with the TUC, deal with the allegation, made repeatedly inside and outside the House, that 500 miners are leaving the industry each week because of low pay? Will he remind the TUC, the miners and the country at large, that for more than seven months, before the self-imposed overtime ban restricted earnings, recruitment was running at the rate of 320 men a week, more than half of whom were former miners returning to the industry? If the present generous offer to the miners is accepted, that flow of recruitment can be expected to be restored and improved.
The Prime Minister: I have gone into that question. During 1972–73, wastage in the mining industry, at 104 per cent., was the lowest of the main industry groups, and less than half that for all manufacturing industry. That trend continues. Meanwhile, recruitment is steady. The rate of adult recruitment is up by 35 per cent., and over half the new
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recruits are former miners who are choosing to return. Voluntary wastage has declined since September. As I have told the House before, the peak figure for voluntary wastage came after the overtime ban was announced.
Mr. Eadie: Is the right hon. Gentleman aware that once the House has had the opportunity to study his statement, particularly his mention of his right hon. Friend the Chancellor of the Exchequer, the conclusion of the House and the nation will be that the country has suffered an economic defeat under his captaincy? As he has said that we must consider what we can afford, does he not realise that very shortly the country will want to know whether we can afford him? While we move towards a national coal strike, will he continue to do absolutely nothing?
The Prime Minister: I respect the hon. Gentleman, because of his connection with the industry, but how he could say that the Government have done absolutely nothing is beyond public comprehension. I have paid tribute to what the TUC has done. Could we not now ask the National Union of Mineworkers also to play its part? It has had a better offer than any other part of industry. It has had a fresh offer from the Government to deal with the three things that concern it most—health, pensions and the future of the industry from the point of view of its investment, manning and pay structure.
Can there be a fairer or more comprehensive offer to an industry at a time when, as a result of events in the Middle East, a large part of the Western world has been dealt a blow which has sent it reeling? That blow is producing, as we now see day by day, economic instability in individual Western countries, and the developing countries are finding their reserves and economic position wiped out overnight and cannot see any way through to the future. Is it not possible in those circumstances for all three parties to accept that there is a limit to what can be done in this country, and that only in that way can we solve our problems?
Mr. Ridsdale: Is it not clear that what the country needs now is men of toleration and understanding? Would it not help if the Leader of the Opposition, like his predecessor, admitted that there is

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such a thing as an unacceptable face of trade unionism as well as an unacceptable face of capitalism?
The Prime Minister: I hope that, after what I have said today in Parliament, the National Union of Mineworkers will see that there is a genuine desire to give miners the best possible arrangements within the counter-inflationary policy, which has been approved by the House, and a genuine desire and will to work with it for the whole of the future of its industry. [Interruption.] If the hon. Member for Bolsover (Mr. Skinner) considered the seriousness of the situation, perhaps he might listen. The Government showed their good faith in 1973 by asking the taxpayer to commit £1,100 million of expenditure for the industry, to ensure its future. Our good faith can be judged by that. That arrangement was made by the NCB and the NUM. The Government accepted it, put it to Parliament and carried it through. On that basis of good faith, we should be judged for the future arrangements of the industry.
Mr. Thorpe: Will the Prime Minister expand a little more on the Government's policy in one particular? Are the Government saying that if there were an acceptance under phase 3 there could be immediate talks on pay and other arrangements? If that is so, and if the evidence so indicated, would the Government be prepared thereafter to go beyond phase 3, which might give some significance to the offer, or would the offer have to be within the confines of phase 3, in which case it would be academic? Would the right hon. Gentleman be prepared for such recommendations to be retrospectively dated to 1st March, when the present pay structure expires?
The Prime Minister: It does not expire on 1st March. The present wage agreement expires on 1st March, and what the miners wish, I understand, is a complete review of the internal pay structure of the industry. No doubt they will also wish to discuss its relativity to other bargaining groups. We have said that we are prepared to discuss that with them.
I cannot give any undertakings here at the Dispatch Box about what that negotiation between the NCB and the NUM will lead to. The right hon. Gentleman will understand that, with the
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best will in the world, what we have offered to the miners is what we understand they want, which is to consider these problems, which are internal, and known to those connected with the industry, as well as any points they may wish to put about the external arrangements.
I have told the House that the offer already made to the miners, leaving aside what the Government have proposed, puts them in a better relative position than they had after Wilberforce. Wilberforce was designed to give them back their proper relativity. The offer gives them an even better position than the Wilberforce position.
Mr. William Clark: Does my right hon. Friend agree that trade, commerce and the domestic consumer will willingly accept continued restrictions on the use of energy to give priority to manufacturing industry? What action will the Government take about those politically-motivated councils which refuse to turn off unnecessary street lights?
The Prime Minister: I understand my hon. Friend's point. There is considerable public feeling about the matter. I think that the answer is for local public feeling to make itself felt with the local councils concerned.
Mr. Orme: Does not the Prime Minister agree that in view of the breakdown of the talks, the public uncertainty now spreading throughout the country, and the facts that the Government's policy has now been challenged and that the Prime Minister has told the House this afternoon that his policy is right in his view and that the British public supports it, he has a duty to test that statement with the British electorate? Instead of just sitting there grinning, the Prime Minister has a responsibility, if he believes in open Government, to tell the British people whether he will stop the present election scare. Is he going to call an election? What is he going to do?
The Prime Minister: The election scare is on the Opposition side of the House. The Government have a responsibility to deal with the situation. We are carrying out that responsibility, and that is what we shall do. When the hon. Gentleman talks about a challenge

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to the policy, I repeat that more than 4 million trade unionists have accepted the stage 3 settlements. Such settlements are continuing apace. That shows that by far the greater part of the workers of this country accept stage 3 and are negotiating their own arrangements under it.
There is sufficient flexibilty in the policy for them to meet their own needs, whether in national bargaining or in plant bargaining. That surely shows the massive support for our policy. Four million people have now accepted it. I suggest that the House should maintain its sense of fairness to those 4 million because they negotiated in the context of a policy which was approved by Parliament, that would be accepted in the country as a whole.
Mr. Harold Wilson: The right hon. Gentleman has referred on a number of occasions to those 4 million. Is it or is it not the case that the leaders of all those 4

The N.C.B. Offer (to be operative from 1st March 1974)

(i) New minimum basic rates:

£27·59 for surface workers

…

(+£2·30).

£29·86 for underground workers

…

(+£2·57).

£39·36 for face workers

…

(+£2·57).

(ii) Increased shift payments

…

To be 17p an hour between 8 p.m. and 6 a.m. for everybody (in lieu of 2½p for day wagemen only).

(iii) Increased holiday pay

…

To be paid at time rates prevailing at time of holiday, with minima of £61 for the main 2 weeks and £5·70 per day for the remaining 19 holidays.

(iv) Additional statutory holiday.

(v) Retirement benefits

…

Lump sum at age 65 raised from £300 to £500. Increases for incapacity retirement from age 51 to apply from 1st January 1974.

(vi) Death benefits

…

Benefits to be provided for all deaths in service to apply from 1st January 1974.

(vii) Efficiency payments

…

Up to 3½ per cent. if a scheme is agreed and approved by the Pay Board.

(viii) Threshold clause

…

In accordance with the Pay Code.

(ix) N.C.B. statement of intent to improve sick pay when circumstances permit.

(x) N.C.B. to discuss the implementation of a third week's holiday as soon as circumstances permit.

The Coal Board estimate that the offer (items (i) to (vi) only) would cost about £45 million (13 per cent.). These figures exclude the increased overtime payments resulting from the higher minimum basic rates. In addition all miners enjoy fringe benefits, worth an average of £2·64 per week.

As I have already informed the House my rt. hon. Friend the Secretary of State for Employment and I have made it clear that the Government are ready, as soon as normal working has been resumed, to start immediate discussions with the National Coal Board and the National Union of Mineworkers on the future of the coal industry, on improvements in pensions and in provisions for health hazards and on the pay arrangements appropriate in the longer term to the industry's future and its manpower requirements.

BALANCE OF PAYMENTS
Mr. Healey Mr. Healey (by Private Notice), asked the Chancellor of the Exchequer if he will make a statement on the implications for British economic policy of the
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million workers have themselves accepted, since the 4 million accepted stage 3 settlements, that the miners should be a special case? Is the answer "Yes" or "No" to that proposition?
The Prime Minister: Yes, they have—and they have said frankly that they cannot accept the other points which I have already repeatedly put to the House. These are substantial points which they fully recognise. They told me so at their meetings—that they fully recognise that powerful unions, seeing that one union had been able to get its way by making itself a special case and getting it accepted, could come along with its own special case—not the miners' case: its own special case—and try to achieve the results that it wanted by the same means. They have said frankly that their undertaking does not and cannot cover that position. I hope that the right hon. Gentleman will see the difference there and accept it.
Following are the details of the offer:
balance of payments figures and the floating of the French franc.
The Chancellor of the Exchequer (Mr. Anthony Barber): Yes, Sir. I made a full statement to the House on the economic situation on 17th December

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last. I emphasised the uncertainties relating to the current account of the balance of payments, because of developments on both the supply of oil and oil prices. Since then oil prices have risen still further, and, in fact, have quadrupled during 1973.
The Ministers of the Committee of Twenty, meeting in Rome last week, reviewed the current economic situation and in particular the implications for the world economy of the large rise in oil prices. The committee agreed that countries should not adopt policies which would merely aggravate each others' problems. There was general recognition of the difficulties that would be created, in particular for developing countries, and the need to find orderly ways of channelling surpluses to countries in deficit. The committee considered a proposal by the Managing Director of the International Monetary Fund for a new fund facility, and agreed that this should be explored.
It is too early to say what will be the effect of the decision of the French authorities temporarily to allow the French franc to float, but the immediate effect has been to improve sterling's overall effective exchange rate.
As far as the domestic economy is concerned, I shall take whatever action may be necessary in the developing situation.
Mr. Healey: Yes, but is the Chancellor of the Exchequer not aware that the trade figures which were published yesterday affect a situation which developed before the oil crisis had time to feed through into the balance of payments, and which existed long before the industrial disputes began in the middle of December? Does he not agree that the situation revealed by those figures is extremely grave for the British economy? Does he not agree with the Governor of the Bank of England that they show that before the oil crisis our balance of payments deficit was running, in relation to our national wealth, more than three times as high as it was running under his predecessor in 1964?
Will the Chancellor tell the House what he proposes to do about the situation in two respects? First, does he not now agree with all informed commentators that excessive domestic demand must be a major factor in the extraordinary fact
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revealed by the figures that, in a year when our exporters had extreme price advantages through the devaluation of the pound, the volume of our exports increased less than the volume of our imports? Second, will the Chancellor say when he proposes to introduce the extremely harsh measures to reduce demand which were promised by the Minister for Energy on Friday? Will he assure the House that such measures will be accompanied by essential measures for increasing social justice in this country?
As for the external aspects of our balance of payments problem, does the Chancellor not agree that the decision of the French Government to float the franc at a time when that country has substantial reserves, after a year in which it had a £600 million surplus on its balance of payments, suggests that it is adopting a "beggar my neighbour" policy and that the world may be embarked on a course of competitive devaluation? Is it not the case that the Spaniards devalued the peseta this afternoon? What action does the right hon. Gentleman propose to initiative inside the IMF to reach agreement on this matter?
On the question of financing our deficit, will the Chancellor tell us whether he proposes to increase the amount of public authority borrowing from the Eurocurrency markets at rates of interest amounting to about 10 per cent., which impose an arduous and exceptional additional burden on our balance of payments, or has he approached the IMF or friendly Governments for a loan? Does he believe that the Government's decision to go it alone in the oil crisis is likely to make other Governments more ready to help us in this regard?
Is he aware that no one on the Opposition side of the House is now surprised to learn that he should seek to distract attention from the ruin of his economic policies by provoking industrial unrest or that he should seek to slip out of his responsibilities for managing the economy of this country under cover of a General Election.
Mr. Barber: On the right hon. Gentleman's last point, one of the best things that could happen for sterling, and which would cost this country and the Labour Party nothing, would be for the

1463
right hon. Gentleman to announce that he intends to use his influence to persuade the NUM to accept the existing pay offer and thus enable the country to return to normal working.
With regard to the general question of the attitude of the several countries involved, all of which face additional deficits as a result of the increase in the price of oil, there was, I thought, a general consensus at our meeting in Rome last week that we should not adopt competitive devaluation policies.
As for the franc, the French authorities have made it clear that they intend to maintain orderly conditions in the exchange markets and that it is not their intention to take action which would initiate a series of competitive devaluations. But obviously the right hon. Gentleman is right in the implication of one of his questions—that it is bound to have effects on other currencies. As I said in my statement, for sterling the immediate effect of floating the franc has been to improve sterling's overall effective exchange rate.
With regard to the IMF, I made it clear in the speech which I made at the Mansion House on 18th October that we have a sizeable borrowing capacity within the IMF and that I should not hesitate to use this if necessary. There were some stories in the Press that this was one of the matters discussed in Rome, but that is not so.
With regard to the right hon. Gentleman's point about the effect on our balance of payments of factors other than the consequences of the increase of the price of oil, I made it clear to the House in my statement or in the subsequent discussion in December, when I announced the substantial cuts in public expenditure, that the extra cost of oil to our balance of payments was a severe blow, because our balance of payments was in considerable deficit before the oil situation developed—although there was then reason to believe that, as the effective depreciation of sterling worked through into the balance of payments, the deficit would begin to improve next year.
To be fair, I know that the right hon. Gentleman will not deny a fact of considerable importance if he is looking back
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to that situation—that without the increase in world prices since the middle of 1972 this country would not have been in deficit last year.
Sir Robin Turton: Is my right hon. Friend aware that the figures released this morning by the Bank of England, showing the continued increase in the money supply, are causing grave concern? Will he give urgent and renewed consideration to measures to correct that?
Mr. Barber: My right hon. Friend will recall that in my statement before Christmas I announced, together with the Bank of England, certain measures to make credit less easily available, and I have no doubt they will have their effects.
Dr. Gilbert: Does the right hon. Gentleman still think that sterling is under-valued? How long is it since he last said that it was under-valued, and how much value has it lost since he last said that?
Mr. Barber: I have no doubt—this is certainly recognised by people outside our own islands—that our position is extremely competitive. I should have thought that it was generally accepted that, on that basis, sterling is undervalued. It is worth pointing out—the hon. Gentleman, who always considers these matters sensibly and fairly, will accept this as significant—that while, for the last couple of months or so, we have been in the midst of a severe industrial dispute and have had additional problems of oil prices and shortages of supply piled upon us, the effective rate of sterling against other currencies is no lower than it was last October.
Mr. Skeet: Will my right hon. Friend say what he considers will be the impact of 1974 oil prices on the balance of payments, now that the posted prices have gone up from 3 dollars a barrel to 11·50 dollars? Will he hazard a guess on the trend of world commodity prices and also say what percentage of the GNP is represented by the 1973 deficit, and how that compares with the figure for 1951?
Mr. Barber: I cannot give, offhand, the answer to my hon. Friend's last question, but the effect in 1974 of the increased oil prices will mean an addition to our import bill of about £2,000 million this

1465
year. My hon. Friend will note my words, "an addition to our import bill". There will of course be some offsets which have been pointed out in the past by the right hon. Member for Leeds, East (Mr. Healey)—namely, that we shall have the opportunity of exporting to those countries that are earning these surpluses. Also, in so far as they cannot spend all the money they get, they will be depositing some of their surpluses on capital account in this country and other countries which will be in deficit.
Mr. Grimond: Does the right hon. Gentleman not agree that it is time the Government gave up describing the present situation as arising from the problems of success? Is it not the case that we now face one of the worst economic situations that this country has ever gone through, and that the pound is at its lowest against the dollar that it has ever been? Must we not then give up the idea of growth for growth's sake, fed by inflation, and concentrate such resources as we have upon social priorities? Second, what will be the effect of the floating of the franc upon the common agricultural policy?
Mr. Barber: On the second point, again I am afraid that I cannot give an answer off the cuff. It is self-evident, of course, that there will be certain technical problems similar to those which arose when the pound was floated. I find it difficult to understand the right hon. Gentleman's first point. After all, it would have been relatively easy, ignoring for a moment the oil deficit and thinking of the deficit which arose not because of the increase in oil prices, to have avoided the occurrence of a deficit by adopting the same sort of policies adopted by the previous Government, when they decided not to pursue a policy of economic growth at the sort of level that we have been pursuing. There are arguments for saying that that is what should have been done. But I have been frank with the House, and I said in December that the simple fact is that we cannot in present circumstances, with the increase in the price of oil and the shortage of oil and certainly not with the ban on overtime of the miners, hope to achieve—I think that this has been generally accepted—the sort of growth rates which we have been planning and which we expected to achieve.
Mr. Ridley: The non-oil deficit, although perhaps giving cause for concern, could possibly be covered by borrowing against the event of an upturn later on, but does my right hon. Friend not agree that the addition of a possible extra £2,000 million adverse balance of trade now means that it is necessary to take action to correct the adverse trend of our balance of payments?
Mr. Barber: The general agreement at the meeting in Rome among the world's leading finance Ministers was that, in relation to the deficit which arose from the increase in oil prices, it would not be the right action for Governments to deal with that by deflationary measures or by such means as competitive devaluations, and so on, and that we had to tackle it in some other way. There was a general appreciation, I think, that the idea of a new facility to be introduced by the IMF was by far and away the best way of dealing with the problem. I am sure that that will be pursued, and it has the full support of Her Majesty's Government.
The non-oil deficit, of course, was a matter of concern but it was reasonable to take the action that we were taking at that time—namely, to borrow on public sector account to deal with the situation. The general view was that with the effective depreciation of sterling there was every reason to believe that, but for the quadrupling of oil prices and the industrial action and the shortage of oil supplies, in the second half of this year the current account of our balance of payments would have been improving. The only alternative would simply have been to cut back on growth.
Mr. Fernyhough: The right hon. Gentleman said that Britain was in a very competitive position. If that is so, why was nearly half the £2,300 million deficit on our balance of trade last year with the EEC? Did he discuss with the other members of the Community whom he met in Rome what steps he could take to ensure that they would accept to reduce the trade imbalance between this country and the rest of the Community?
Mr. Barber: The only way in which we can improve our trading balance with the Community, the United States or any other country or group of countries, is

1467
by being competitive and by having the goods available to export. As I said, one of the present problems is that this country, because of the shortage of electricity resulting from the miners' ban on overtime, cannot produce all the goods which in present circumstances it undoubtedly could sell.
Sir D. Renton: In view of the serious effect upon the economies of developing countries of the increase in the price of oil, and in view of the increasing difficulty that we shall have in helping those countries with overseas aid, does not my right hon. Friend consider that it would be proper for the oil-producing countries to use some of their enormous balances to help those countries in these new difficult circumstances?
Mr. Barber: My right hon. and learned Friend is absolutely right to raise that point, which in the developed countries tends too often to be overlooked. When one goes to a meeting like that of the Committee of Twenty in Rome, and sits as I do in that body, always next to Mr. Chavan, the Finance Minister of India, who has to deal with terrible problems, and when one hears from other finance Ministers throughout the developing world of their enormous problems because of these increased prices, one is bound to say that, although we have our problems, their problems—literally problems of life and death—as a result of balance of payments difficulties are infinitely more serious. I and others throughout the developed world agree with my right hon. and learned Friend and hope that those oil-producing countries which are amassing these vast surpluses will take some steps to try to alleviate the problem which has been caused to the developing countries.
Mr. Healey: Is the Chancellor aware that the public, as well as many people in the House, will be surprised and somewhat shocked by his complacency about his own responsibility for the current situation? Is not nearly half the increase in world prices to which he referred due to the devaluation of the £ sterling, which itself arose because of his economic mismanagement? Is the Chancellor not further aware that in the 19 months which have passed since he began to devalue the pound, our balance
1468
of payments position has steadily deteriorated? It has been getting worse quarter by quarter. Is not this largely due to the fact that he has continued to pump additional demand into the economy at a time when it was already suffering from physical constraints?
Finally, when will the Chancellor take the action demanded by the Governor of the Bank of England the other day to deal with the non-oil part of his deficit?
Mr. Barber: Concerning the non-oil part of the deficit, I should have thought that the right hon. Gentleman would have been the first to recognise that the action which I announced in December—a cut of £1,200 million in public expenditure—was one of the largest measures that has ever been taken to deal with demand. It was equivalent to a doubling of the rate of VAT, from 10 per cent. to 20 per cent. I appreciate full well that higher taxes is the approach which a Labour Government would have adopted, because we know that in the past they always turned to that in the first instance, rather than to public expenditure. I believe that it falls very ill from the right hon. Gentleman's lips to criticise the present Government for the action which we have taken on that score when he, of all people, is putting his weight behind his party's proposals for vast increases in public expenditure, which would do this country an enormous amount of harm.

RATE SUPPORT GRANTS
The Secretary of State for the Environment (Mr. Geoffrey Rippon): I will, with permission, Mr. Speaker, make a statement about the rate support grants to local authorities in England and Wales for 1974–75. Details are set out in the White Paper, Cmnd 5532, copies of which are available at the Vote Office.
I discussed the settlement with local authorities last week. It assumes that they will make the reductions in expenditure announced by the Chancellor of the Exchequer in May and in December. Details will be given in a circular. I should emphasise that local authority relevant expenditure in 1974–75 will still grow in real terms by 2½ per cent.

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The present formula for distributing the needs element no longer reflects the true variations in local authorities' spending needs particularly bearing in mind reorganisation. The effect of our new proposals is broadly to give a greater share of the total of the needs and resources elements of grant to the declining city centres. I also consider that there is a real need to correct the balance between the burdens on the domestic and non-domestic ratepayer which was distorted by the last revaluation.
So I propose to increase the total amount to be devoted to domestic relief to £446 million in all—more than double last year's amount. Much of this will go to help those domestic ratepayers who would otherwise suffer as a result of changes in the grant system, reorganisation and the effect of the new water and sewerage charges. In the light of further consultations and subsequent changes in the settlement I have decided on a fixed minimum domestic element of 7p rather than the 10p I previously announced, but the majority of ratepayers will be getting more than 7p and many will be getting more than 10p. Indeed the 7p will apply only in areas gaining under the new grant distribution.
I have decided to propose, subject to the approval of the House, a grant percentage of 60·5 per cent. This compares with 60 per cent. in 1973–74. It would mean a total grant of £3,431 million.
As a result of this redistribution of the domestic element and of the high rate of grant I believe that the percentage rise in domestic rate burdens can be kept to a maximum of about 9 per cent. subject to any exceptional local circumstances. In a number of cases, particularly in the cities, there should actually be a decrease in the domestic rate burden. The average national increase should accordingly be about 3 per cent. But this is on the understanding that local authorities play their part in keeping down expenditure.
Even with these provisions rates can bear hardly on some domestic ratepayers. I have done two further things. I have altered the statutory deductions to lessen the burden on domestic ratepayers in dwellings with a lower rateable value. And in addition over 2 million domestic ratepayers should be helped for the first time through the new rate rebate scheme
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at a cost approaching some £100 million, the cost of which will be borne as to 90 per cent. by the Exchequer.
Mr. Denis Howell: Will not the rate rise for most domestic ratepayers in this country, on the basis of the right hon. and learned Gentleman's statement, the White Paper and the grant order, be a minimum of 9 per cent. or thereabouts? Does not the White Paper use the phrase—I have never heard it previously except in a sporting connection—
"We hope to keep the rate rise down to single figures"?
Is the Secretary of State saying that the Government accept a 9 per cent. increase?
Why has the Secretary of State said nothing about the rate rise to other ratepayers, to industry and commerce, for example? Is it true—as I am advised by local authorities—that the Government accept that the rate rise for local authorities will be about 20 per cent.?
Regarding the Government's hopes of maintaining a national average increase of 3 per cent., would the Minister be surprised at the comment of one of the country's leading local government finance experts who, when I asked him about it a few moments ago, said that that hope was "totally ludicrous"? I believe that to describe the hope as "totally ludicrous" is a masterly understatement. The rate increase cannot be kept down to 9 per cent., and the Secretary of State knows it. Furthermore, neither can the rate of growth of local authorities' expenditure be kept down to 2½ per cent., which the Minister is suggesting, because of the commitments which have already been taken on board by local authorities for the reorganisation of schools which have been built, for staffing old people's homes, and so on.
My second main question is this. As the Government's phase 3 policy, which the House has just been considering for the best part of an hour, is based upon a 7 per cent. increase in basic wages, will not the order accepting an increase of 9 per cent. for domestic ratepayers amount to a blatant breakage of the Government's economic policy? How on earth can that be justified?
Mr. Skinner: It is a special case.
Mr. Howell: This is a very serious matter. It is a special case.

1471
There is another point of tremendous importance. Will not this 9 per cent. increase for domestic ratepayers help to push up the retail price index, which will then help to trigger off the threshold agreement allowed for in phase 3, and, therefore, to that extent, is not this adding to the inflationary pressure in the country as a whole?
Finally, the Secretary of State has now announced a 7p support for the domestic element. But did not the Secretary of State, on Second Reading of the Local Government Bill, announced that the help to the domestic ratepayer would be 10p, and did not the Chancellor, in his Budget Statement just before Christmas, say that there should be no increase in rates? Why have the Government ducked and dived in this manner? Why did the Minister for Local Government and Development tour the country recently consulting every local authority on the basis of an obligation that they would get a 10p assistance for the domestic element when the Government have now reneged upon that promise?
Mr. Rippon: I am afraid that almost everything that the hon. Gentleman said is totally wrong. First, I mean a maximum of 9 per cent. as being proper in ordinary circumstances subject to special local conditions, and local ratepayers will have to monitor their local authorities in that regard. As I explained, in many cases there should be a reduction in the rate bill of domestic ratepayers, for example in Liverpool, Manchester and Newcastle, where they will receive a substantial additional percentage grant.
The reason why I announced this afternoon that I had decided upon a 7p minimum domestic element arose from my consultations with local authorities who favoured a variable domestic element. As a result of this, the 7p will apply only in those areas which are already receiving a substantial additional proportion of the grant. In other areas which have a loss of grant, considerably more than the 10p will be given as relief to the domestic ratepayer. That is why I am able to say that the average domestic increase over the country as a whole should be about 3 per cent. The maximum of 9 per cent. is to be, as far as one can achieve it, a maximum, but the variations below the 9 per cent. will be very considerable
1472
and should result in a reduction in the domestic rate in many areas.
It is perfectly fair to say that non-domestic rates in many areas will rise by between 20 per cent. and 30 per cent., or possibly more. On the other hand, in the cities to which I have referred there should be a reduction not only in domestic rate but also in non-domestic rate. There should, therefore, be considerable benefit to the cities.
The hon. Gentleman will remember that the criticisms which were made last year centred on two matters. First, it was said that we had not taken sufficient account of the problems in big cities resulting from the declining population and the heavy social expenditure, so we paid great regard to that. It was also pointed out that in many areas revaluation had the effect of transferring a higher proportion of the rate burden from the domestic to the non-domestic ratepayer and that we should also put that right. That is the purpose of the settlement which we have negotiated.
Mr. Arthur Jones: Is my right hon. and learned Friend satisfied that this method of distributing central Government funds, with the infinite variety of local circumstances that face him, is the best method that is available? It means a tremendous complication in the distribution of the domestic element because of the recognition of the problems there, and a wide variance between the domestic rate and the rate which will be payable by other hereditaments. Does not my right hon. and learned Friend think a much simpler method would be to introduce differential rating for commercial and industrial hereditaments?
Mr. Rippon: That could certainly be borne in mind for the future. We have made the best settlement we can in present conditions, bearing in mind the difficulties that arise from dealing with so many new authorities as the result of reorganisation. We have said that we regard the implementation of the formula as something to be looked at in the future in a much more flexible light.
If the House considers what was said last year about the problems of inner cities it will realise that it is not unreasonable to redistribute the grant this time so as to give greater benefit to them to meet

1473
their needs. We are also pursuing the same policy in relation to housing.
Mr. Hooson: Stripped of its verbiage, does not the Minister's announcement mean that, with the increase in the water and sewerage rate, these new arrangements will mean an increase in the cost of living of almost everybody? Is the Minister aware that in certain rural areas such as Mid-Wales, which surfer from depopulation and have very low average earnings, there will be a substantial increase in the rates? Exactly what did the Minister mean by "special local conditions" when he referred to the maximum of 9 per cent.? In the present economic climate do the Government regard this as a wise policy to pursue?
Mr. Rippon: What I mean by "special local conditions" is that, although we can make a national settlement which lays down broad guidelines, we must accept that it is ultimately for each local authority to make its own decision on the rates. There may be various local matters such as the size of balances, and so on, which the local authority may have to consider. All we are providing is a structure within which we can say that if the local authorities make the cuts in expenditure for which the Chancellor of the Exchequer has asked and play their part in containing inflation, this should be the result, and local ratepayers can monitor any increase above 9 per cent. with that factor in mind.
To keep to the 9 per cent. in some areas it is necessary to give a larger domestic element than the 10p, and that factor has been brought into account. It will not mean a rise in the cost of living of the sort to which the hon. and learned Gentleman referred for many ratepayers. Many ratepayers, particularly in cities, will be paying lower rates in spite of the increase in wages they may receive. We also took into account as far as we could the problems of sparsity as well as the problems of the big cities.
Mr. Allason: Does not my right hon. and learned Friend feel that this is a time for special generosity, when extreme difficulties will arise from ratepayers coming under new authorities? Although I am sure we all greatly welcome my right hon. and learned Friend's announcement of the doubling of the sum available in the domestic element, is he satisfied that he is being sufficiently generous to
1474
counties which have suffered harshly in Wales and the home counties—particularly Hertfordshire—where domestic rates have risen considerably in the past few years?
Mr. Rippon: I agree with my hon. Friend. That is why we have tried to bring about a generous settlement, which, while recognising the particular problems of the cities, at the same time imposes a limitation on the burdens in the counties and elsewhere.
We have also agreed on a 60·5 per cent. Government contribution which is an improvement on last year's 60 per cent. We shall altogether be contributing £3,431 million out of a total relevant expenditure of £5,671 million. It is against those figures that the Chancellor of the Exchequer's reduction in public expenditure must be set.
We have to bear in mind that if—as we believe we should—we are to help the cities with their special problems both with general expenditure and housing, the counties must accept that that will to some extent throw a greater burden upon them, given the same total expenditure. On the other hand, in so far as we can solve more readily the various problems of the cities with their declining population by giving them more for housing and other matters, areas such as Hertfordshire will not have to have so much overspill or such extensions of new towns as they might not desire.
Mr. Blenkinsop: Is the right hon. and learned Gentleman aware that the local authorities challenge his figures and his suggestion that the rate increase can be kept to a maximum of 9 per cent. unless a drastic and shocking cut is made in essential services, especially in education? Equally, the local authorities do not accept his figure of expenditure growth which they believe cannot be obtained in real terms.
Mr. Rippon: In so far as there are reductions of expenditure and services as a result of the Chancellor of the Exchequer's cuts, the benefits of the reduction in expenditure should go to the ratepayers. They do not get it both ways. As I said, we reckon that there will be real growth in local government expenditure of about 2½ per cent. but in many areas there will be cuts in the level of services provided. The total of £200

1475
million cuts in public expenditure—£81 million in May and £121 million in December—are not unreasonable against a total relevant expenditure of £5,671 million.
Mr. Redmond: May I press my right hon. and learned Friend a little on what he is saying about cities? He mentioned Manchester. Is he referring to the Manchester Metropolitan District or the Greater Manchester County Council? There is a strong feeling in Bolton, which is part of the metropolitan county, that the new county council is being extremely profligate in planned expenditure, particularly on new offices, and there is concern about the precept that would be made on the Bolton Metropolitan District. Will my right hon. and learned Friend explain how this will work?
Mr. Rippon: This is one of the problems of settlement this year since we are dealing with new local authorities in many areas outside London. In the case of the new Manchester District Council, we expect that they should receive about £6 million more in grant.
Mr. Cledwyn Hughes: Is the Secretary of State for the Environment aware that hon. Members from Wales regret that the Secretary of State for Wales has not made a separate statement on the situation as it affects the Principality? Can the Secretary of State for the Environment say whether the Secretary of State for Wales will make a statement in future so that we may cross-examine him on the effect of these proposals in Wales? In the meantime, could he clarify the position? Is it not the case that following the statement and the new policy, officials in the new Welsh county councils, apart from South Glamorgan, will be worse off than they were before—and this at a time when they are to suffer the cutbacks which have been announced by the Chancellor of the Exchequer? Is he aware that the effect on regional policy will be disastrous and most discouraging to the new county councils in Wales, and also to the district councils?
Mr. Rippon: The White Paper is presented by myself and by my right hon. and learned Friend the Secretary of State for Wales. I shall shortly be producing a circular setting out details for England
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and my right hon. and learned Friend will be issuing a circular for Wales.
Mr. Hughes: We want a statement.
Mr. Ridsdale: I welcome an increase in the domestic element, but does my right hon. and learned Friend agree that it would be better and fairer if the education charge had been made a national charge? This would avoid subsidies and make it easier for those who cannot afford to spend large sums of money. For this reason is it not possible, in the case of those who are unable to meet these burdens, for the water rate to be rebateable?
Mr. Rippon: I appreciate that my hon. Friend has been making these points for many years and I have debated the subjects with him before. It has been arguable as to where the burden of education expenditure should lie. This is all public expenditure and has to be met, whether by ratepayers or taxpayers. I should have pointed out that as a result of the transfer of functions the local authorities this year are relieved of £350 million of relevant expenditure. This has occurred because of the transfer of local health and other services and 90 per cent. of the cost of student grants.
Mr. Boscawen: What special measures has the Secretary of State in mind to help those county authorities whose provision has been drastically cut in size as a result of the increased burden which they will have to bear in maintaining adequate administration and services?
Mr. Rippon: I think that it will be necessary to look at the position county by county, but we have borne in mind the difficulties which arise when entirely new authorities are created. Some will receive an additional percentage of the total grant available.
Mr. Armstrong: In view of the spiralling costs and the grave economic situation of the country, is the Secretary of State not being completely irresponsible in pretending that local authority services can be maintained if the increase in rates is to be confined to 9 per cent? I was disturbed to hear the right hon. and learned Gentleman mention the cities in every reply he made to questions on his statement. Is he aware that in the non-metropolitan counties, such as Durham,

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the effect of the built-in bias which he has proudly announced this afternoon will cause consternation in local authorities? Those authorities are faced with the cruel dilemma of whether to cut services, or to put up rates much higher than the Secretary of State would allow them to do.
Mr. Rippon: It is a 9 per cent. increase in domestic rates. Non-domestic rates generally will, as the hon. Gentleman said, tend to rise, except in those cities that receive so much additional grant that they should be able to reduce both domestic and non-domestic rates. Given that the size of the cake does not change very much, we have increased the total grant. Everybody on both sides of the House last year agreed that we would do something to redress the balance between the domestic and the non-domestic ratepayer and also that we would assist the inner cities with special problems. This can be done only at the expense of other parts of the country. By giving a grant of 60·5 per cent. and by doubling the amount of money available for the domestic element, we have limited the burden that will fall on domestic ratepayers in the country as a whole.
Dame Irene Ward: Although I am certain that the Secretary of State has produced a scheme which he thinks is fair and just—and I am sure that he has done his best—I am a little worried about his constant references to cities. I am delighted to know that Newcastle will receive so much benefit because that in turn will benefit the region to which both my right hon. and learned Friend and I belong. But will he define a "city"? I should like to know what will happen to Gateshead, Sunderland, Durham and Tynemouth. Gateshead and Sunderland probably require even more help than do some other areas, and certainly some of these areas would also be defined as "cities".
I do not want the Secretary of State to go away with the idea that everybody in the north of England will be entirely pleased—although Newcastle will be pleased—with the way in which these problems in other areas—areas that ought to be regarded as cities—have been dealt with. Will he kindly tell me how he defines a city, because Newcastle's
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problems from the point of view of employment and similar matters are not as difficult as those in Sunderland?
Mr. Rippon: The difficulty last year was that in grant terms many cities appeared to suffer too great a detriment compared with the rest of the country. We have tried to put that right. I do not know that I can give figures for every part of the country, but I can say that Sunderland should get about £4 million more grant.
So far as metropolitan counties are concerned, the percentage increase in grant for Greater Manchester should be 7·9 per cent., in Merseyside 6·4, in South Yorkshire 1·3, in Tyne and Wear 5·7, in the West Midlands 1·4 and in West Yorkshire 4·2 per cent. Greater London gets an increase of 3·4 per cent. and there is a figure of 3 per cent. weighting to be taken into account, but in Greater London we must have regard to the equalisation scheme which London works out for itself. There will be considerable variations over the country. The cities benefit, the counties on the whole have to pay, but the domestic ratepayer is shielded by the additional provision made for domestic rate element and the additional percentage grant which the Government are making applies to the country as a whole.
Dame Irene Ward: That is no answer to my question.
Mr. Skinner: Is the Secretary of State aware that his announcement today of an increase in rates from 1st April of around 9 per cent., 10 per cent., or perhaps more, despite all his talk today—and let us remember that we still have the Budget to come—must be coupled with the fact that on that same day 70 per cent. of the 5 million council tenants who are not included in the October arrangements will be hammered again by the Government for another 50p increase in their rent? That takes account of the 30 per cent. rent rebate which, according to the Government, will not be affected. Is this not a savage indictment of the Government's policy, in a year when they are talking about no special cases for wage claims?
Mr. Rippon: The hon. Member for Bolsover (Mr. Skinner) is wrong. As I

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tried to explain, I talked about a maximum increase. The hon. Gentleman might at least recognise that the Government have done their best to meet so many criticisms that arose last year about rates in cities. A large number of ratepayers, although they may have had additional wages in phase 3, will be paying less rates. Moreover, there are over 2 million ratepayers who for the first time will benefit from our rate rebate proposals. The hon. Gentleman should think about the way in which some of his colleagues in some parts of the country are keeping many people's rents up when they could go down.
Mr. Elystan Morgan: Does the Secretary of State appreciate that the matters which we are discussing today constitute one of the gravest blows struck at Wales in modern times? Does he appreciate, further, that the proposals will bring about the ruination of Welsh local government? Will he be honest with the House and admit that Wales will be receiving a sum probably in excess of £10 million less than she receives in the current year, accounting for the average rise in prices, and that it means either a diminution of services already at a low level or a vast increase in rates well above the 9 per cent. which he mentioned?
Will the right hon. and learned Gentleman assure us that Wales will not be further discriminated against when it comes to imposing the cuts announced by the Chancellor of the Exchequer last month, and that the poorer areas which are being used to subsidise the cities in this scheme will be made an exception from the Chancellor's cuts?
Mr. Goronwy Roberts: On a point of order, Mr. Deputy Speaker. Before the Secretary of State addresses himself to the Welsh question posed by my hon. Friend the Member for Cardigan (Mr. Elystan Morgan), may I seek your guidance on this point? It is impossible for hon. Members representing Welsh constituencies to probe the position in Wales when the Minister replying to questions is primarily responsible for the English situation. Can you assist me in ensuring that the Secretary of State for Wales, who has ministerial responsibility for this matter in Wales, himself makes a statement and answers questions on Welsh matters?
Mr. Hardy Mr. Hardy rose——
Mr. Rippon: Further to that point of order, Mr. Deputy Speaker. I can help the right hon. Member for Caernarvon (Mr. Goronwy Roberts). I am responsible because the Labour Government refused to transfer the function to the Secretary of State for Wales. I am wholly responsible. As I have said already, my right hon. and learned Friend the Secretary of State for Wales will produce a circular in due course dealing with Wales and the effect on Wales.
As for the question asked by the hon. Member for Cardigan (Mr. Elystan Morgan), he has wildly exaggerated the position in Wales. I can assure him that there will be no discrimination against Wales in the cuts which will be imposed which would affect the 9 per cent. mentioned for the domestic ratepayer.
Mr. Hardy Mr. Hardy rose——
Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. I think that the point has been met. I have allowed supplementary questions to go on for a long time. I think that I should bring this matter to a close as soon as possible. Mrs. Joyce Butler——
Mr. Marks: On a further point of order——
Mr. Denis Howell: On that same point of order, Mr. Deputy Speaker. Although I have every sympathy with my Welsh colleagues, my English colleagues also are seriously perturbed. Is it not the case that the Rate Support Grant Order, about which the Secretary of State has made his statement, is presented to Parliament by the Secretary of State for the Environment and the Secretary of State for Wales? That being the case, is not it reasonable for hon. Members representing Welsh constituencies to expect, when they ask questions which are perfectly in order, that at least the Secretary of State for Wales might try to answer them?
Mr. Deputy Speaker: I realise the interest that there is in this matter, and I have permitted a great deal of latitude on what was not a point of order at all. In any event, it is not for me to tell Ministers who is to answer hon Members' questions.
Mr. Marks: On a further point of order, Mr. Deputy Speaker. Details of

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the rate support grant are usually published in the form of a Rate Support Grant Order, which we are able to debate. They have now been published as a White Paper and not as an order. When shall we be able to debate them?
Mr. Deputy Speaker: I have no doubt that the hon. Gentleman's question has been heard. Mrs. Joyce Butler.
Mr. Denis Howell: Further to that point of order, Mr. Deputy Speaker. This matter is of great importance to the House and to local authorities. The reason why the details of the rate support grant have been published in the form of a White Paper is that the Rate Support Grant Order canot be made until the Local Government Bill which we are to consider later today has been enacted. Quite apart from getting through this House, that Bill has still to go to another place. Therefore there will be a tremendous delay.
As my hon. Friend the Member for Manchester, Gorton (Mr. Marks) pointed out, treasurers normally get this information in November so that they may make their calculations about rates. In view of that, may I at least ask the Secretary of State to say what is the Government's timetable? When will the order be laid before Parliament, and when shall we be able to debate it so that we may give sensible guidance to local authorities?
Mr. Deputy Speaker: The voice of the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) will have carried across the table to the Treasury Bench. I am sure that his question will have been heard.
Mr. Rippon: The hon. Gentleman is quite right about the delay. This new basis of grant depends on the Local Government Bill reaching the statute book. I cannot say when that will be, but I am sure that the Opposition will assist in expediting its passage through the House.
Mr. McBride Mr. McBride rose——
Mr. Deputy Speaker: Order. I have already called the hon. Member for Wood Green (Mrs. Joyce Butler).
Mr. McBride: On a point of order, Mr. Deputy Speaker. I have been listening to the exchanges which have occurred. May I remind you respectfully that it is your duty as Mr. Speaker's deputy to protect the rights of backbenchers? Can the Secretary of State for Wales be persuaded to say when he will discuss these matters in the House?
Mr. Deputy Speaker: I cannot tell the Secretary of State for Wales what he should say in the House.
Mr. Swain: On a new point of order, Mr. Deputy Speaker. Just now in answer to a question from my hon. Friend the Member for Bolsover (Mr. Skinner), the Secretary of State for the Environment made an oblique reference to Clay Cross. It is the only authority which he could have referred to in his reply to my hon. Friend. Clay Cross happens to be in my constituency, and on numerous occasions I have tried to raise matters in this House pertaining to Clay Cross. Each time I have been ruled out of order because the case is sub judice. Tomorrow, Thursday and Friday the Clay Cross case will be heard by Lord Denning, the Master of the Rolls. My point of order is to ask whether it is in order for the Secretary of State to make references, either directly or obliquely, to Clay Cross and to the housing commissioner without taking into consideration the sub judice rule?
Mr. Deputy Speaker: The case must not be prejudiced. But I heard nothing which was prejudicial to it.
Several Hon. Members Several Hon. Members rose——
Mr. Deputy Speaker: We really must move on now. Mrs. Joyce Butler.

RIGHTS OF PATIENTS BILL
5.8 p.m.
Mrs. Joyce Butler: I beg to move,
That leave be given to bring in a Bill to clarify the rights of patients to privacy when receiving hospital treatment under the National Health Service, and in regard to medical experiments on human beings.
The subject of consumer protection as it affects the health service is a very big one, but in this Bill I wish to draw attention only to two aspects which worry a great many people and about which I have received a considerable number of representations.
When people become ill or suffer injury and require hospitalisation, it is an additional worry to many of them to feel that they seem to have lost the right of control over their own bodies. When the hospital is a teaching hospital and they find themselves suddenly surrounded by a group of students and made the subject of a lecture, many of them are very embarrassed and upset by this procedure.
Recognising this, about a year ago, the Department of Health and Social Security issued guidance to hospitals stressing the need to inform patients that they had a right to refuse to co-operate in teaching if they wished. It also stressed the importance of consulting patients about teaching when the teaching was about to take place. Despite this guidance, it is clear that it is not being followed in many cases and that it is quite usual for patients not to be warned or consulted. Sometimes they have pressure put on them, and many are quite unaware of their right to refuse to co-operate in teaching.
Doing as the Ministry recommends and requiring consultation with patients need not be time wasting, and I do not think that it would reduce materially the number of patients available for teaching purposes.
Many people quite like and enjoy being the centre of attention, even when they are in hospital, but the Bill would ensure that those who are particularly sensitive, nervous or unwilling, have the right to refuse teaching if they cannot face it.
Many cases have been drawn to my attention. One concerned an 18-year-old girl who attended as an out-patient for an internal examination. She was quite
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appalled when the doctor came into her cubicle accompanied by a female student and several male students, but she was far too upset to complain. The whole procedure put her off completely.
Another woman, who was admitted to hospital with acute abdominal pains, failed to find out what was wrong from either the consultant or the registrar until, on the fourth day, the surgeon, surrounded by 12 students, told her to lie on top of the bed, to lift up her nightgown, and to lower her pants slightly, whereupon the students proceeded to pressure and prod her and discuss her case and were invited to suggest what was wrong with her. At the end of this procedure the surgeon said the trouble was a ruptured ovary. The point is that she had no idea that this would happen. She had not been consulted and she did not know that she had the right to refuse.
Apart from the embarrassment at the time, this kind of early traumatic experience can prevent people, when they are later ill, seeking the treatment that they should have. This is a serious matter if it has that effect.
Because this lack of respect is often shown to patients, the Bill seeks to write into the law the right of patients to hospital treatment with only those persons present who are necessary to provide the treatment and ensures that a patient's consent must be given before anyone else is allowed to attend.
The second part of the Bill is concerned with what are sometimes called human guinea pigs—patients who are subjected to clinical research investigations.
About six-and-a-half years ago, as a result of public concern about this matter, the Royal College of Physicians recommended that hospitals should set up ethical committees to vet these schemes for clinical research investigation. This guidance was welcomed by people generally, particularly by the Patients' Association, which has done an incredible amount of work in the Health Service for the public. Since then ethical committees have been established by all hospital management committees, except in the few cases where no clinical investigation is undertaken. So far so good.
As ethical committees are necessary not only to safeguard patients but to

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assist and safeguard doctors and reassure the public, their constitution, functions and the procedure that they follow is not just a matter for professional bodies. The community has a vital interest, too.
For this reason, the Bill makes it mandatory for each of the new Area Health Authorities, which will operate on 1st April, to appoint an ethical committee for every National Health Service hospital or group of hospitals in its area. It clearly lays down that the ethical committee's function shall be to consider all aspects of medical experiments on human beings in hospitals, that all experiments which are not intended to benefit the individual patient must be sanctioned by the ethical committee and the patient must consent thereto. All such patients must be genuine volunteers and fully aware of what is proposed.
To ensure that the public view is adequately represented, the Bill requires that one-fifth of the members of each ethical committee shall be lay members not employed in the Health Service. Naturally, these lay members will have to accept the medical assessment of the risks and possible benefits of the experiments, but they could and should take part in the discussions that go on.
It is also desirable that the ethical committees should interest themselves in the methods by which these research projects are to be carried out, that they should see the written consent of the patient concerned, and that they should ensure that the same groups of patients are not used again and again.
I believe that, without hindering progress, an adequate number of lay members on ethical committees would end the danger of bad or wasteful experiments and would help to concentrate efforts and funds in the best possible way.
The House will see that this is quite a modest, but I believe an important, Bill. It provides a charter for patients which will reassure everybody who has to go into hospital, relatives and friends, and the public at large.
Question put and agreed to.
Bill ordered to be brought in by Mrs. Joyce Butler, Mr. Arthur Blenkinsop, Mr. Charles Loughlin, Mr. Laurie Pavitt, Mr. Frederick Willey, and Mr. Dick Leonard.

RIGHTS OF PATIENTS BILL
  RIGHTS OF PATIENTS
  Bill to clarify the rights of patients to privacy when receiving hospital treatment under the National Health Service, and in regard to medical experiments on human beings, presented accordingly and read the First time ; to be read a Second time upon Friday, 10th May, and to be printed. [Bill 71.]
ORDERS OF THE DAY

  SOLICITORS (AMENDMENT) BILL
  Order for Second Reading read.
  5.17 p.m.
  The Solicitor-General (Sir Michael Havers): I beg to move, That the Bill be now read a Second time.
  Mr. Michael English: On a point of order, Mr. Deputy Speaker. I observe that a member of the legal profession is moving the Second Reading of the Bill. I seek your guidance on the question of interests arising. I realise that the hon. and learned Gentleman is a Minister of the Crown, although in his ministerial function he appears in court with the Treasury Solicitor no doubt briefing him from time to time.
  I am sure that the hon. and learned Gentleman will not mind my saying that throughout the whole of his professional life he has been totally dependent on solicitors and, indeed, is not allowed to receive a legal income from other persons except through solicitors, who are the subject of intimate concern of the Bill.
  Some weeks ago, through the Clerk of the House, I gave Mr. Speaker notice that I intended to raise this point of order if the necessary circumstances arose. It should be made quite plain that if, for example, we had a Nurses Bill, as we did a few years ago, we would not except a nurse to move its Second Reading in the House. It would not be impossible, because I believe there is a trained nurse among our colleagues. The same applies to other professions.
  There seems to be a strange belief relating to this particular profession not only that any question of interest should be forgotten, but that it should be reversed and, therefore, that Second Reading of the Bill should be moved by someone with an interest. May I have your guidance, Mr. Deputy Speaker?
  Mr. Deputy Speaker (Mr. E. L. Mallalieu): As for speaking in the House, one would expect—and I am sure it will happen—that those who have interests will declare them. The question of voting may properly arise after someone has voted
  1488
  so I do not feel called upon at the moment to reply to that point.
  The Solicitor-General: It is true that I have the honour to hold the office of Solicitor-General but as the House knows I am a barrister and I say that merely to emphasise what has been perhaps misguidedly raised by the hon. Member for Nottingham, West (Mr. English) in his point of order. I do not stand here as a representative of the Law Society or the solicitors' profession. I speak for the Government because this is a Government Bill. We have inherited it from the Law Society and we have made a number of changes.
  Mr. English: I am grateful to the Solicitor-General for giving way. I do not propose to persist in interrupting him. I hope that he will make it plain that the fact that this is a former Private Member's Bill which has been adopted as a Government Bill is a gross breach of faith on the part of the Government. As he is no doubt aware, the Leader of the House and his predecessor said that they would never make Government time and Government support available for a Private Member's Bill. That principle has now been broken. What is more, all this happens to be unnecessary because, as I understand it, the opponents of the Bill after three years have reached a measure of agreement with the Law Society upon it. This procedure is probably unnecessary but it nevertheless represents a breach of faith and I hope that fact will be made plain.
  The Solicitor-General: It may be almost a record in this House that I was stopped virtually before I had finished my first sentence. The reason this is now a Government Bill—as would be clear to anyone who had considered it—is that it was twice a Private Bill beginning in another place. However, it involves serious matters of public interest, particularly with regard to the fees which must be paid by solicitors to the Law Society in order to enable it to carry out its very important duties, it being very much in the public interest that it should. Any reduction in these fees would after a time have reduced, much to the public detriment, the duties and services rendered by the Law Society.
  We inherited the Bill from the Law Society and we made certain changes.

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  In these we have had the constant and wholehearted co-operation of the Society, and I pay tribute to it for its initiative in originating most of the provisions in the Bill and its support given during the preparation of the Bill.
  The Bill started life twice as a Private Peer's Bill in another place. On each occasion it completed its progress there and when it came to this House it was objected to by certain hon. Members. Of course, they had every right to object to it. However, I believed at the time and I still believe that those objections were misguided. It appears, as may be gathered from what was said by the hon. Member for Nottingham, West, that they were seeking some element of lay participation in the process of dealing with complaints against solicitors. That, I suggest, was a matter more for debate than ultimatum.
  Mr. English: On a point of order, Mr. Deputy Speaker. This is grossly unfair. Of course we would have raised the matter in debate had there been a Second Reading debate. I hope to speak today when there is such a debate. However, the Bill came on perpetually on a Friday at four o'clock when there was no opportunity for debate. That is the basic reason why the Bill was blocked.
  The Solicitor-General: We do not want to continue this for ever. I should have thought that the hon. Member would know that it would be in Committee that these alterations would be made. The Government well understand the complaints about those who appear to be judges in their own cause. The Law Society is a stern judge of its members but it still remains that the professional conduct of solicitors directly or indirectly concerns the public they serve. It is arguable that the public should have some say in determining issues of professional conduct and should make some contribution in formulating the standards which the profession ought to adopt for its wellbeing.
  I will come to that in more detail later, but Clause 9 demonstrates that the Government have accepted this argument because it provides for lay membership of the Disciplinary Tribunal which will replace the Disciplinary Committee, that being the forum which hears complaints against solicitors. I do not believe that
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  it is necessary for me to deal with minor matters in the Bill today but I should be glad to deal with any points of substance on which hon. Members would like further explanation.
  I propose now to go through the various clauses emphasising the Bill's central theme—the furtherance of the public interest and the interest of the profession in the services which solicitors provide. Clauses 1 to 5 deal with admission of a solicitor and certain aspects of his practice. Clause 1 abolishes the rule prohibiting a foreign national from becoming or practising as a solicitor, he being almost unique in the professions in that respect. The fetters were imposed as a result of the Act of Settlement 1700 and it would seem to us—and the Bill represents this—that a foreign national should be qualified to practise a profession in this country. That proposition is recognised by the Monopolies Commission and in the European sphere by the Treaty of Rome so it seems that after some 273 years the bar to aliens who wish to practise the profession in this country will now be removed.
  Mr. Emlyn Hooson: On this most interesting point, will the Solicitor-General say whether there is a reciprocal provision in the Common Market countries for the admission of our nationals to their professions in a similar way? One would imagine that the Government would have sought this kind of arrangement. I know there is agreement in the Common Market Treaty about it but what steps have been taken to ensure that this takes effect?
  The Solicitor-General: The hon. and learned Member has caught me in a position in which I am unable to answer him now. I hope that he will be satisfied if I deal with that point when, with leave of the House, I wind up the debate.
  Clause 3 is important and I commend it most strongly. It removes the existing statutory maximum on the fee which every solicitor has to pay in taking out his annual practising certificate. From these fees the Law Society derives most of its revenue which makes it possible to provide the public and the profession with essential services, notably in legal education, law reform, the handling of complaints, resolving misunderstandings between solicitors and clients, certifying

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  bills of costs for non-contentious work and so on. The present maximum of £20 was reached in 1970 and is entirely inadequate for the Society to continue its activities on their present scale. That was one of the reasons which pressed upon the Government the need to take over the conduct of the Bill in order that it should not be delayed again.
  If those activities were curtailed that would lead to serious disadvantages to the public, law reform and the general improvement of the solicitors' profession. The fact that the statutory maximum will be removed is not a matter of anxiety because the fee is fixed by the Master of the Rolls with the concurrence of the Lord Chancellor and the Lord Chief Justice and the amount therefore will be settled thereafter by the responsible authority. We may be confident that any increases that are inevitable will be fair to all concerned.
  Clause 4 merely enables all practising solicitors to act as if they were commissioners for oaths. It is based on a recommendation of the Law Society and it is heartily endorsed by the Lord Chancellor whom, incidentally, it relieves of the burdensome task of appointing commissioners individually and of the less burdensome task of collecting £10 on the appointment of each commission. It will be of great advantage to the public who are often inconvenienced by the difficulty of finding a commissioner, especially in country districts since the solicitor who is acting for the person who is making the affidavit may not be a commissioner for oaths.
  Clauses 6 to 8 concern the Law Society's powers to intervene in a solicitor's practice to deal with the compensation fund and the professional indemity insurance. Clause 6 introduces Schedule 1, the statutory provisions for the Law Society's intervention in the practice of those few solicitors who apparently are guilty of dishonesty, or where there has been undue delay or some similar failing. The provisions are highly complex but I hope that the House will find the arrangement in Schedule 1, with the division into two parts, helpful. It rationalises and clarifies the law in this difficult sphere.
  For example Part I of the schedule enables the Law Society to act on
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  reasonable suspicion of dishonesty whereas it must now have a reasonable cause to believe. It also enables it to act when a solicitor has failed to comply with the statutory accounts rules or is bankrupt or in prison. It gives it certain powers to apply for a court order that a third party hand over documents in his possession relating to a defaulting solicitor's practice. That closes a loophole in the present law whereby dishonest solicitors—and fortunately there are very few—can evade the clutches of the Law Society by transferring papers to someone outside their firm.
  The compensation fund is the subject of Clause 7. It exists to help the unfortunate few who are damnified by the acts or omissions of dishonest or defaulting solicitors. There is a notable innovation in that when a grant from the fund is refused—and it must be remembered that the grants are discretionary—the reasons for the refusal must be stated. At present grants, if refused, would just be refused and no reasons would be given. A statutory discretion is now required, and that is a discretion which must be properly exercised. Therefore, a person will be able to look at it to see whether it is properly exercised. The removal of the statutory limit on contributions to the fund will also be found in the clause.
  A novel compulsory insurance is provided for in Clause 8. It is an insurance against professional negligence and other civil liabilities and not against dishonest solicitors. The victims of negligent solicitors can themselves have recourse only to the solicitor's pocket and not to the compensation fund. Unfortunately, some solicitors are inadequately insured, and a few are not insured at all. Clause 8 remedies that and makes flexible provisions for a variety of methods of compulsory insurance and appropriate sanctions against a solicitor who fails to comply with requirements which may be in force under the clause. It will be a matter for the Law Society, and the profession as a whole, to decide which of the various alternative methods they will prefer. In the end it will look after those few people who bring a successful action involving a sum which a solicitor is unable to meet by way of damages. The unfortunate litigent or client will still be recompensed in full.
  Mr. S. C. Silkin: I apprecithat under Clause 8 there will be power to compel insurance to be taken out and that this will provide cover for negligence provided that the solicitor has taken out insurance or has renewed it. But there are bound to be cases where for one reason or another that unfortunately has not happened. In those circumstances, will the right hon. and learned Gentleman explain why the compensation fund is limited? It rather looks as though if a solicitor is negligent but uninsured, the unfortunate client will have to whistle for his money and will not be able to call upon the compensation fund to reimburse him for his solicitor's negligent actions.
  The Solicitor-General: The compensation fund was set up by the profession to protect those who had suffered at the hands of dishonest solicitors, their clerks or any of their employees. The clause provides that there should be compulsory insurance to cover those cases in which a solicitor has been negligent and a claim against the solicitor has succeeded.
  There are three ways in which that may be done under Clause 8. There is the mutual fund, which is paragraph (a), the compulsory insurance which is taken out by the society on behalf of the profession which is paragraph (b), or the requirement for individual solicitors or firms to insure, which is paragraph (c). Either paragraph (a) or paragraph (b) would cover the situation which the hon. and learned Gentleman has posed, but paragraph (c) would not. Those three alternatives have been provided for the Law Society to consider, with the profession as a whole, which they prefer. I have no doubt that if paragraph (c) were the one which was to be preferred the points which have already been made would be borne very much in mind.
  Clause 9 is important. In the Acts passed in 1888 and 1919 the Disciplinary Committee was created and given jurisdiction to deal with complaints against solicitors' professional misconduct and related matters. The committee consisted of past and present members of the Council of the Law Society, appointed by the Master of the Rolls. Originally it could report only to the court, but by the Act of 1919 it was given the power to strike solicitors off the roll or to suspend them from practice in
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  appropriate cases. Those provisions were included in the Solicitors Act 1957.
  Jurisdiction generally has been extended considerably since 1919. Clause 9 has changed the Disciplinary Committee to a Disciplinary Tribunal. It was perhaps right to form a committee in 1888 when it had power only to report to the court. The committee will now be a tribunal and it will have an extended membership in that lay members, in the true sense, who are neither solicitors nor barristers, must be appointed. Solicitor members may include any solicitor of at least 10 years' standing.
  There will be a much wider range of solicitor members than now exists. There will also be lay members who must not have any legal qualifications. The committee has always been independent of the Law Society, being appointed by the Master of the Rolls. Under the provisions contained in Clause 9 the tribunal will remain independent of the Law Society. It is proposed that the lay members should be appointed by the Master of the Rolls. They will be paid out of public funds and not from Law Society funds, which might give at least some outward appearance of a connection.
  I am sure that the House will agree that lay members who are brought in to assist should be remunerated and should receive expenses. It must be that the public purse should bear the comparatively small cost which would be involved. Although every tribunal which sits to investigate a complaint about a solicitor must always have upon its board a lay member, such members will be a minority because it is proposed that the tribunal sitting to consider complaints shall consist of three people, two of them being solicitors. They may both be quite young or one may be senior and the other may have 11 or 12 years' experience as a solicitor. There will also be a lay member.
  Lay membership and the eligibility of the relatively young solicitor is an important and fundamental change. I say that without implying any criticism of the present system. The present Disciplinary Committee has a reputation as an impartial body. In my experience it has been a vigorous champion of high professional standards throughout its life. It is right now, from the public's point of view, that changes should be made.

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  They were in a sense initiated by what was said by my right hon. and learned Friend the Minister for Trade and Consumer Affairs on 17th May when he announced that the Lord Chancellor and the Secretary of State for Scotland proposed to discuss amendments. I understand that an answer was given to a Question today to the effect that similar provisions are proposed for Scotland.
  There is another outcome of this which has been foreshadowed in a newspaper article and in an article in the Law Society's Gazette. The tribunal's functions are principally judicial. But it also considers preliminary stages of complaints and there are a number of occasions when complaints are made which turn out to be more in the nature of negligence, or complaints which do not amount to misconduct—complaints nevertheless where the complainant is extremely distressed by what has happened and believes that his solicitor is to blame.
  It seems that a large number of such complaints arise from a misapprehension as to what the Law Society or the Disciplinary Committee can do. The Law Society has the Professional Purposes Committee. Its staff provides an excellent service to the public and is scrupulously fair in dealing with complaints. There is no doubt, and we must face this, that there are a number of occasions upon which complainants are dissatisfied with the manner in which their complaint has been disposed of—when a letter is received from the Law Society saying that the Professional Purposes Committee has investigated the matter and decided that no further action needs to be taken.
  The Government have agreed with the Law Society that even though this dissatisfaction may not be based on any justification it would be wrong to be complacent about it and to say, "This is the fact and the public must lump it." We do not think it is sufficient for the public simply to be assured that these complaints are misconceived and, when nothing further has been done, such complaints have been properly dealt with. We have again the comment that the Law Society appears in such cases to be a judge in its own cause.
  The Lord Chancellor has taken the view, all along with the co-operation of the Law Society, that the time has come
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  for an independent lay element to be introduced into the Society's system for investigating complaints. What is proposed is that there should be what would be called a lay observer to review complaints in certain cases. The circumstances contemplated are as follows. A lay observer would be appointed by the Lord Chancellor to consider those cases in which the complainant is dissatisfied with the treatment of his complaint by the Law Society's Professional Purposes Committee and wishes the matter to receive further consideration. The lay observer's main task would be to consider whether the Society's handling of the complaint had been satisfactory. In discharging this task he would be given full access to the relevant papers.
  If, having looked at all the papers, the lay observer is satisfied with the way in which the complaint has been treated he will so inform the complainant. If he is dissatisfied he will be expected to communicate his views to the Law Society and, if he thinks it necessary, to recommend to the Society such further steps as he thinks it should take. For example, he may advise that the solicitor should be seen again, or ask for further explanations or that the matter should be expounded more fully to the complainant, or even that proceedings should be brought before the tribunal.
  The observer will be free, if he thinks fit, to take before the tribunal a complaint which the Law Society does not consider justifies disciplinary proceedings. The observer will be required to make an annual report of his activities to the Lord Chancellor. Again, so that there should be no suggestion of his acting as an agent or of there being any sort of link with the Law Society, it is proposed that the lay observer will be paid out of public funds.
  Mr. English: As the Solicitor-General will realise, this is of immense importance to me, since although it is in a different form to that which I suggested, this is really the ombudsman I have asked for over the past two or three years. May I ask why this is not in the Bill? The Law Society has mentioned this proposal and the Solicitor-General is now putting it forward. It seems that we are not agreed on the details, but these are Committee points. Is the hon. and learned Member

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  giving us an assurance that this will be done in Committee? Not only is this not in the Bill but his last statement is not included in the Money Resolution. It seems that there will need to be an amendment of the Money Resolution. I take it that this will be moved in Committee because it is all very airy-fairy at the moment.
  The Solicitor-General: The lay observer will not be an ombudsman in the sense that we know at present. If we compare the duties which I have said will fall upon his shoulders and the circumstances in which he will investigate matters, the difference will be clear. I do not want to take up the time of the House any further at this stage.
  It has been considered whether this should be part of the Bill and decided, I think rightly, that it should not. It is an experimental suggestion at the moment, something which will have to be considered after it has been put into practice. It may need changes of all sorts. However it was written into the Bill it might be found, within a few months, that it was not working in quite the way in which the Law Society and the Lord Chancellor wanted it to work. It might not be quite as effective as it could be if there were a free hand to change it.
  The concessions made and the interest shown in this by my noble Friend makes it quite unnecessary that there should be express provisions in the Bill. As for the cost, which will not be very great, it will be borne out of the Lord Chancellor's Vote as an incidental expense relating to the administration of justice and therefore does not have to be included in the Money Resolution.
  These proposals have been made with the fullest co-operation from the Law Society. They are a considerable step forward. They are a recognition of the interest that the public has in those professions and occupations—we have had examples of others over the years—where the allegation is that the profession or occupation is the judge in its own cause. I invite the House to welcome the wholly novel idea of scrutiny by an independent and responsible layman on these occasions.
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  I emphasise that it will not be the task of the observer to give rulings on professional conduct. That is a matter for the tribunal to which everyone, including the observer, will have access. Equally, the observer will have no jurisdiction to determine questions of professional negligence. These again—and this has led to some misunderstanding in the past—are matters for the court.
  But he may well wish to consider the kind of case in which the Law Society maintains that the complaint is one of negligence, for the court to deal with, and not one of professional conduct for the Society, and invites the complainant to exercise his or her remedy in the courts. It is possible to envisage occasions on which the observer might say to the Society, "I want you to reconsider this. It seems to me there is also an aspect of professional conduct here for the Society to consider and if necessary to send to the disciplinary tribunal."
  Clause 11 is a technical one putting beyond doubt the power of the Law Society to supply the Director of Public Prosecutions with information obtained under its statutory power concerning solicitors' accounts, which is obviously good sense and which will speed up investigation and inquiry in cases concerning dishonest solicitors. Clauses 12 to 14 are highly technical, dealing with costs and taxation. Unless the House wishes me I will not deal with them in more detail. They are amendments which are designed to assist the client rather than the solicitor, save in one case. In the past a solicitor in non-contentious business had to get his costs taxed. Nowadays that will not be necessary unless the client raises objection—except in cases of infants and those under a disability.
  The schedules contain the various consequential and minor amendments. The Bill makes a number of major changes in the duties and obligations of the Law Society as well as increasing its income. I invite the House to approve it.
  5.50 p.m.
  Mr. Douglas Houghton: I suppose that my credentials to speak on the Bill will meet with the approval of my hon. Friend the Member for Nottingham, West (Mr. English). I am not a solicitor and I am not a barrister, but it was thought by my colleagues that it was

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  desirable that a layman's point of view on the Bill should be put from the Opposition Front Bench.
  The two forerunners of the Bill ran into trouble. They were Private Members' Bills. As we all know, the House treats Private Members' Bills abominably. Such Bills frequently run out of time or are blocked by noisy or persistent minorities' and other diverse wickednesses can be inflicted on them. Therefore, I do not complain that the Government have decided to introduce a Bill of their own.
  The Bill contains some important recommendations, many of which will be better discussed in Committee. However, we should not give an impression, as I rather think the Solicitor-General did, that we are legislating by leave of the Law Society. We are grateful for the Law Society's co-operation and help but I do not like the phrase "inheritance from the Law Society". I hope that it is not a Law Society Bill. It is a Government Bill, and it is no less important for that.
  My qualifications, if I can call them such, for taking part in the debate are that after years of very hard study and frequent exposition I qualified for the unique status in the eyes of the Law Society of a well-informed layman. In the course of broadcasting for over 10 years on the BBC "Can I Help You?" programme I wandered into most interesting human affairs, including divorce, marriage, bastardy, landlord and tenant matters, noise, nuisance—the lot.
  In the course of that I studied Hill and Redmans "Law of Landlord and Tenant", Wills's "Workmen's Compensation"—a book recently called into use by my right hon. Friend the Leader of the Opposition in another connection—"Williams on Wills", McGarry on "The Rent Acts" and many other works. The question then arose as to whether I was purporting to give legal advice, especially in the voluminous correspondence I had from listeners at the time. Three qualities of my work came under professional criticism: first that it was free, second that it was clear, and third that, on the whole, it was better advice than was available on some matters from a then depleted profession. All were serious criticisms to make of a well-informed layman.
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  After much negotiation with the BBC I was flattered to receive notice that I had been graded by the Law Society as a well-informed layman, and I was permitted to live up to my reputation. Those are my credentials. Over the years I received probably thousands of letters from citizens on legal matters and in particular their relations with solicitors.
  The Bill is partly intended to remove out-of-date limitations upon the entry to the profession and upon what I describe as union contributions. Secondly it is intended to provide better consumer protection. That second object is the important part of the Bill. The limitations on entry which are to be removed have been mentioned by the Solicitor-General. They include the prohibition on non-British subjects being admitted as solicitors. I do not think that the Solicitor-General mentioned the removal of the condition that a candidate must be morally fit to be a solicitor of the Supreme Court. The term "moral fitness" in previous legislation is to be substituted by a reference to an applicant's character, his fitness and his suitability to be a solicitor. This is a more realistic and appropriate test of fitness. We should not get involved with moral issues in considering the suitability of a person for appointment as a solicitor.
  I am sure I can say that the Trades Union Congress is fully in support of the provision in Clause 3 which removes the statutory limitation on union dues. At present the dues can be fixed by the Law Society with judicial consent but shall not exceed £20 a year. This limitation is a grave embarrassment to the Law Society. If it is not removed the society will become bankrupt. It will not be able to function on that miserable contribution, which at present is the maximum prescribed by law. The Bill leaves the fee under the control of the judges, but subject to that judicial control there is no maximum.
  Clause 5 contains an interesting change in the law. Apparently if a solicitor asked for his name to be restored to the roll, it having been removed at his own request, he had to apply to the disciplinary committee. It was an indignity that he had to go before the disciplinary committee, before which he had not previously appeared, to have his name put

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  back on the roll. The Bill provides for the name to be put back by application to the society.
  I turn now to some elements of consumer protection, beginning with that which relates to the greater convenience of the public and which is in Clause 4. It enables practising solicitors to act as if they were commissioners for oaths without appointment as such. This will remove a serious grievance which many citizens have had in scouting around to find a commissioner for oaths. They have gone into a solicitor's office only to be told "We are not commissioners for oaths. We cannot help". A caller who asks where the nearest commissioner for oaths is may be told to take a 24 bus, get off at Trafalgar Square and look around, as it is believed that there is a commissioner for oaths in that area. People cannot understand this.
  What do commissioners for oaths have that other solicitors do not have? No one has ever offered an explanation, except that some solicitors have licences to be commissioners for oaths while others have not. Some solicitors may not want the bother of being commissioners for oaths. When a citizen with an affidavit or declaration that he wishes to sign and declare before a commissioner for oaths pops in to the office and asks "Can I swear to this document?" it can be a disruption of other work, but a commissioner for oaths is under an obligation to provide that service.
  I hope that one inconvenience will not be replaced by another. The clause enables but does not require a solicitor to act as a commissioner for oaths. I hope that there will not be a great deal of contracting out of acting as commissioners for oaths because solicitors find the function a little too much trouble and not sufficiently remunerative.
  The position could be worse if, instead of scouting around for a commissioner for oaths and knowing that when one found him he would do the job, one now had to scout around for a solicitor who would act as a commissioner for oaths. I hope that the Law Society will impress upon solicitors the desirability of their acting as commissioners for oaths under the power the clause will give them.
  Clause 8 deals with professional indemnity, which is very important. It confers new powers on the Law Society, which, with the concurrence of the Master of the Rolls, may make rules requiring payments to be made by solicitors for the provision of indemnity to meet liability for professional negligence. At present solicitors may take out insurance voluntarily, rely on their own resources to meet any award of damages against them, or simply neglect to have insurance or resources and be men of straw when the eventuality occurs. It is important that solicitors are properly covered for indemnity against actions for damages.
  Clause 6 deals with the Law Society's powers of intervention in the affairs of solicitors, the compensation fund and so on. Those powers are fairly drastic. When the society has reason to suspect dishonesty by a solicitor, it can move in in a rather drastic fashion. Even in cases of complaint of undue delay, it will have powers under Schedule 1 to look into the affairs of the solicitor complained of.
  I think that the main cause of complaint against solicitors is delay. It is infrequently negligence. The cause of delay is often overwork and the interruption of the rhythm of activity by urgent cases with which solicitors are asked to deal. Very few solicitors in practice are in command of the rhythm or volume of their workload.
  A number of people complain about the time solicitors take to wind up estates and to deal with matters referred to them. Clients often do not understand the volume of work and the difficulty of completing the task in hand. The Bill provides that the powers of intervention shall apply, with certain reservations, to cases of undue delay.
  The qualifications to the rather drastic rights of intervention are found on page 13 and in line 40 on page 16. In cases of suspected dishonesty the Law Society could, in certain circumstances, require a solicitor's mail to be redirected so that he does not have the opportunity to handle mail which would normally come to him. That right of intervention does not apply in the case of undue delay. The Law Society should have positive rights of intervention where the complaint is of serious delay.
  The present limit of £10 as the annual contribution to the compensation fund is removed. The proposals about the fund appear to remove distinctions between provisions governing the two types of grant that can be made under the fund. The first concerns loss incurred through the dishonesty of a solicitor. The second is made on the ground of hardship, when a grant can be made without proof of dishonesty, where there is simple failure to account for moneys received. Even where there is no financial loss to the client, serious hardship could be caused by default. Clause 7 brings the two types of compensation within the same discipline.
  Before coming to Clauses 9 and 10, I want to refer to a matter which would have been relevant to the Bill if a clause in an earlier version of the Bill had been carried forward into the present Bill. Clause 7 of the 1972 Bill, dealing with the restriction on practice as a solicitor, has been left out, because it was transferred to the Administration of Justice Act 1973, of which it forms Section 4. That clause extended somewhat the right of a practising solicitor who is a justice of the peace to sit as a magistrate in a petty sessional area in which he does not ordinarily practise. I understand that that was an extension of the right of a solicitor to act as a magistrate.
  Section 4 of the Administration of Justice Act 1973 states:
  "Where the area for which a solicitor is a justice of the peace is divided into petty sessional divisions, his being a justice for the area shall not subject him or any partner of his to any disqualification under this section in relation to proceedings before justices acting for a petty sessional division for which he does not ordinarily act."
  In my experience as Chancellor of the Duchy of Lancaster, however, I came across serious disquiet among members of the Bar at having on the bench a solicitor from whom barristers could and did receive instructions. It was possible for them to be appearing in court where on the bench sat a solicitor who in other cases was their instructing solicitor. They did not like it. Neither did I. As I happened to be, as Chancellor of the Duchy of Lancaster, the appointing authority for all magistrates in the County Palatine, I was able to decide for myself whether it was appropriate
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  for a solicitor to be appointed a magistrate.
  I believe that it is not a good thing to mix up the law and the lay magistracy. I would have preferred to see a disqualification of solicitors from being magistrates. I believe that the place of the lawyer is in the well of the court, not on the bench. I realise that that might deprive the bench of the great advantage of the intellect and experience of many solicitors. Nevertheless, we pride ourselves on having a lay magistracy. It would be desirable not to extend the right of solicitors to act as magistrates but rather to restrict that right.

ROYAL ASSENT
Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Act:
Consolidated Fund Act 1974.

SOLICITORS (AMENDMENT) BILL
Question again proposed, That the Bill be now read a Second time.
Mr. Houghton: I come to the disciplinary tribunal. From a consumer point of view, this is perhaps the most important clause of the Bill. The Solicitor-General explained that the disciplinary committee is converted into a solicitors' disciplinary tribunal. The membership is enlarged. It extends to solicitors of not less than 10 years' standing and provides for lay members who are neither solicitors nor barristers and whose fees will be met from public funds.
The interests of the profession are adequately safeguarded. The tribunal will have on it a majority of solicitors, but at least one lay member must be present. For cases, three members—two solicitors and one lay member—constitute the tribunal: there must be a lay member.
This is an advance on previous proposals, and it is to be welcomed. Lay members are put there to safeguard the public interest as well as the professional interest. The prevalent idea, to which

1505
the Solicitor-General referred, is that professional men stick together and will not go against their own kind. We cannot get rid of this idea, because people think that this is how it is. We have to dispel this, I believe, false idea of what professional men do.
That will be best done by the intervention of the laity into the mysteries of professional life. It can be best dispelled by having non-professional members of the tribunal. I do not say that it is essential for this purpose to have a majority of lay members on the tribunal. I think that one watchdog is enough, as long as he will bark ; and if he is not satisfied with the way the tribunal works he can always resign, because his professional life is not at stake: he is a lay member ; he is a free man.
Therefore, although I would have liked to see a tribunal a little more strongly manned by the layman, nevertheless I would not make an issue of the constitution now proposed. We will see how it works out. It is a valuable precedent. I am not aware that this has yet been done in any other profession, though I may be wrong.
Mr. English: It has been done with the Press Council.
Mr. Houghton: Then I think that it should be extended, for all sorts of reasons.
What is proposed in the Bill in that connection has a message to others. Some of us take the view that it is undesirable for a trade union, for example, to have the sole right of discipline over a member against whom misconduct or other default has been alleged when that trade union can, by exercising its disciplinary right, deprive him of the right to follow his occupation. That is a very severe power for any body to have. This is indeed what the disciplinary committee used to have but now the disciplinary committee does not have it in that form because the tribunal takes its place and upon the tribunal there is to be lay or outside representation.
So the message here is to the trade unions also that, when dealing with disciplinary matters involving the possibility of depriving a member of his membership of the union, which would seriously impede
1506
or indeed prevent his following his normal occupation, they should contemplate involving a lay person in the consideration.
When such a concept is mentioned to the trade unions they say "But the doctors do not have this. The lawyers do not have this. The accountants do not have this. Why should we be thought to be less capable of taking an impartial and judicial view of misconduct than the professional bodies?" Here is the message in the Bill as regards the profession of solicitors.
I come to the point which the Solicitor-General mentioned towards the end of his speech regarding the appointment of a lay observer. There is nothing in the Bill about the matter of referral to the tribunal. The lay element comes into play only when cases get to the tribunal. The lay members of the tribunal have no connection with the power of the society's professional purposes committee to refer cases to the tribunal.
I was surprised that the Solicitor-General said it was the Government's view that the proposal to have a lay observer to look at the process of referral, if necessary, before cases get to the tribunal or at cases that are not to be referred to the tribunal was not to be put in the Bill because it was desirable to have experience of this experiment. The Law Society has been conducting its own experiment on this matter over the last 12 months. In those circumstances the Solicitor-General was entitled to be bolder about this proposition, because the experiment had taken place and there is confidence in it.
We know that the proposed lay observer is not an ombudsman, but he would be able to see the papers ; he would be able to express an opinion upon the merits of the case ; he would be able to recommend further steps of explanation to the complainant client or to recommend that the case should be referred to the tribunal. He would be an influential person, as I have no doubt he already is in connection with decisions on complaints which are not referred to the tribunal.
However, these and other points are suitable for discussion in Committee. I emphasise that in all these matters we must seek to strengthen the confidence

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of the citizen in the profession of solicitor.
As the Solicitor-General said, however unjustified the suspicions may be we must try to remove them and provide against the currency of the belief that professional men are birds of a feather or, as Shaw once put it,
"Professional bodies are a conspiracy against society."
That notion should be dispelled.
Perhaps one day we may have a more comprehensive system for the establishment of civil rights. I have heard of a proposal for a civil rights commission which would deal with the various aspects of the appeal of the citizen against bureaucracy, against authority and against those in whom the public place their trust and who occupy a special position protected by the law. No public complaints of the behaviour of solicitors should be completely disposed of within a closed shop. That is my point. It is the point in favour of the lay observer coming into the Bill and of starting him off with statutory authority. The influence of the more objective viewpoints should be brought to bear or be available at every stage when dealing with complaints. Matters of discipline are, of course, to be dealt with by the tribunal.
Solicitors are rightly trusted by the public. They are given by law rights and privileges denied to others and they are protected against impostors, sea lawyers and well-informed laymen. They occupy an exclusive position. They have high standing in society, they are respected for integrity and knowledge. On the whole, the responsibilities and trustworthiness that go with this position are borne with distinction and honour.
We have probably as good a solicitor profession as any country in the world. We are entitled to ask in return for a high standard of professional knowledge, skill and promptitude in business, and when criticisms of undue delay and professional misconduct are alleged against a member of the profession its members should not claim to be complete masters in their own house. This is not a freemasonry—it is a work force, a public and social service which is employed and protected by the public. That calls for a full sense of public responsibility. The Bill moves
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several steps towards its achievement and I hope that it will be possible to advance a little further before the Bill leaves this House.
6.23 p.m.
Mr. Ivor Stanbrook: As one who in the past has expressed criticism of the way in which the Law Society has dealt with complaints against solicitors, I feel bound to give a cautious general welcome to the main provisions of the Bill. My hon. and learned Friend the Solicitor-General showered many bouquets on the Law Society which, I believe with all due respect, it does not deserve, especially in respect of complaints against solicitors. The treatment of complaints by the Law Society is a cause of widespread and acute dissatisfaction among ordinary citizens. I fell sure, therefore, that the provisions of the Bill must represent steps in the right direction. I know personally of cases in which the treatment of complaints by the Law Society has been quite appalling. I hope, therefore, that the new provisions will ensure that such cases do not arise again.
I am interested in the new provisions, especially in relation to the lay observer, but I shall reserve my personal consideration for them to a more appropriate stage. However, I wish to draw attention to Clause 2 which seems to me to be quite extraordinary. It is a big psychological error by the Law Society to propose to delete the requirement as to moral fitness at a time when apparently the Law Society is endeavouring to be even stricter concerning cases of dishonesty among the profession. It is a profession of trust. Therefore why, in this of all the provisions, do we need to remove the reference to the morals of its members? It seems to me to be a sinister provision, almost a confession by the Law Society of its failure to maintain moral standards among its members. I find it objectionable. I hope that there will be second thoughts about it.
6.25 p.m.
Mr. Michael English: I am grateful that the Bill is now being introduced by the Government. There is a long history attached to my interest in the matter. It arose originally from constituency cases, and, as many hon. Members have said before this debate we have all had constituency cases of complaints against solicitors.

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Invariably complaints raise a series of problems. If one has a complaint against a member of some other profession—say an accountant or a doctor—one can go to a solicitor quite readily for his advice. But it is an undoubted fact that some solicitors do not wish to take cases which are brought against another solicitor. I am quite aware that, if approached, the Law Society will find a solicitor for a complainant who wishes to bring an action of negligence, but often people do not realise this. They may go to a solicitor who turns them down and then they think that all solicitors will turn them down, which is not true. However, such an impression can be created.
There are undoubtedly cases of difficulty. The first which brought the matter to my attention was that of a retired business man who decided to build himself a bungalow for himself and his wife to retire to. When he found that he had been paying money and his bungalow was not being built, he went to his solicitor to get something done. Being a retired business man, when he discovered that nothing happened he became suspicious. He recollected that the solicitor concerned was the man who had recommended the builder to him. He looked up the firm of builders and discovered that the sleeping partner in the business was his own solicitor, who obviously was not too keen on pressurising the recalcitrant builder.
Since that example came to my attention the Law Society has changed its rules on conflict of interest between members. At one time there were practically no restrictions on such conflicts, which was reprehensible and which the Law Society has to a degree recongised to be such.
I had discussions with officers of the Law Society at that time and discovered more about complaints that worried me. In the layman's eyes a complaint against a solicitor or any other person might not be something about which it is necessary to go to court. I believe that the Law Society does a good job with the criminal solicitors and the solicitor who needs expelling from the profession. That has never been the real basis of my concern. What has been my concern is what, in terms we put into the Parliamentary Commissioner Act in
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relation to the Ombudsman, one might call maladministration.
We are all human beings. We are all fallible. We can all lose papers or forget something that should have been done on 30th May only to find suddenly that it is June. None of these things is odious. There is nothing reprehensible in saying that a solicitor makes a mistake, just as the rest of us make mistakes from time to time. But these were the things that the Law Society was doing least about.
If one told the Law Society that one's solicitor had stolen some money, it would quickly and expertly deal with the matter. If the complaint were justified, the solicitor would be dealt with in the appropriate way by the disciplinary tribunal. But if a complainant said that his solicitor had made a mistake and that as a result he had suffered delay or financial loss, the Law Society would say, "That is nothing to do with us. Your solicitor is not engaged in malpractice. You should get another solicitor to sue the first one for negligence."
Mr. Clinton Davis: My hon. Friend will be aware of the new provisions in relation to small claims which are supposed to, and I think for the most part do, cut out these formalities. It is not necessary for a party to be represented in such proceedings before a registrar in the county court.
Mr. English: I was coming to this point, but my hon. Friend forgets that I am relating the history of the Bill and of my interest in it. He will be aware that the system he has described did not exist when the first of these Bills was brought forward. Before my hon. Friend came into the Chamber, I think, the Solicitor-General was accusing some of us of having been misguided. I hope to show that our misguidedness has achieved considerable results in the content of this Bill and elsewhere.
At the time of the first of these Bills, one was told that one's only recourse if a solicitor had made a mistake was to recruit another solicitor and sue him for negligence. This was monstrous. By a relatively quick and simple procedure the Law Society would investigate a complaint of actual crookery yet the whole panoply of the law had to be used to

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suggest to a solicitor that he had made a mistake and owed a client financial compensation—which would be paid out of his insurance, as I thought
I discovered at the time that there was some difficulty in insuring solicitors against negligence. That is one of the provisions in this Bill. It is interesting that it was not in the first Bill—although it was in the second and is now in the third. I pointed out to the Law Society that if insurance companies would not insure against possible claims, there was a simple answer on the analogy of the Road Traffic Acts. No one ever fails to find somebody prepared to insure his car if he is legally permitted to drive at all. The reason goes back as far as the 1920s and it is that the Road Traffic Acts empowered the Minister of Transport, as he then was, to insure in default of another insurer being found. I presume that the Secretary of State for the Environment now has that power. As a result, insurance companies insure. They do not want to lose their business to the State, so they make sure, even in some cases at a loss, that they insure everyone who is legally allowed to drive.
I suggested to the Law Society that, if one of its problems was the difficulty of insuring against what I call mistakes but what legal terminology refers to as negligence—it is arguable whether they are the same—they should simply include in the next Solicitors Bill a clause containing similar provisions. I agree with the Solicitor-General that there are different ways of doing this. One of the more essential things is not only to make it possible but to make sure that insurance companies see that it is desirable for them to insure solicitors against their own mistakes.
That is satisfactory and that is one clause that my hon. Friend the Member for Erith and Crayford (Mr. Wellbeloved) and I managed to have included in the second Bill. However, it still did not contain provisions which are now in this Bill, so we objected to that one, too. We wished to do so courteously, so several back benchers of both parties met representatives of the Law Society, both its officers and the members of its Council, chairmen of its relevant committees, to discuss again various possibilities.
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At the time, during the whole of last Session—the Solicitor-General knows that he and I also discussed the matter personally—there seemed to be no movement at all. My back-bench Friends and I are reasonable men who are prepared to negotiate reasonably, but the only response we received was, "No, we will not alter this Bill from what it is". That Bill as it was last Session is now altered and the proof is before us today. It could have been done more easily.
As a result, it contains what my right hon. Friend has correctly stressed—the interesting provision relating to lay members of the disciplinary tribunal. I think my right hon. Friend misheard my intervention earlier. I did not say that this was the first profession for which this had been done, but that there was a precedent in the Press Council. Of course, the Press Council's duties, although not dissimilar, are certainly not exactly the same or even exactly like those of the disciplinary tribunal. It certainly has no power—although it can suggest it—to say that someone should not be an editor or a journalist because of some dastardly thing that he has done. So it is a precedent with a distinction.
Then, in the Law Society's Gazette to which the hon. and learned Gentleman referred, I saw details of this interesting provision for a lay observer. I had suggested to the Law Society that there should be what might be termed an ombudsman. I did not mind that he was to be a layman, although I had thought that a solicitor who was not practising might be better, on the analogy of the Parliamentary Commissioner who is a civil servant who has ceased to be a departmental civil servant.
In the Parliamentary Commissioner's last annual report—not the one that he has just published and which is still being printed but his report for 1972—he refers to just over 570 complaints raised by Members of Parliament on behalf of their constituents. I believe that he has a staff of about 90 to investigate and deal with those complaints. I do not suggest that the majority of the complaints are justifiable ; they are not. But they are thoroughly investigated by a substantial staff.

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I understand from its officers that the Law Society has about 5,000 complaints brought directly to its doors in Chancery Lane. I imagine that there are probably quite a few more scattered about the countryside which are abortively given to other solicitors—"Would you sue my previous solicitor for me?"—and which die a natural death. To deal with those 5,000 complaints, which is, perhaps, eight or nine times the number of complaints against the Civil Service and Government of the United Kingdom, it has a staff which is the reverse of what is required. In round terms to deal with nearly 10 times as many complaints, the society has perhaps one-tenth of the staff. I am talking not of complaints of crookery, with which it deals very adequately, but about the bulk of complaints, which are not of that sort. The Law Society cannot claim that it is dealing as adequately with complaints against solicitors as we are now dealing with complaints against the Civil Service and members of the hospital service.
In the discussions which we had last year the Law Society put a very good answer to me, which I accept. It said that it could not afford to do so and that the Exchequer had more money than the society. That is a fair point. The Solicitor-General has now conceded this point. He is saying that the lay members of the Disciplinary Tribunal and the lay observer should be paid by the Exchequer. So they should. But what he is not saying is that this provision, which is slightly different from my original suggestion—again, to save money, I suspect—which we have been told by everyone is not actually in the Bill, has to a certain extent been worked out. It is a mysterious, vague, amorphous provision.
We are told that the lay observer will be slightly different in that he will not be an ombudsman who can deal with complaints in the first instance but will be a lay observer who can deal with complaints on appeal. If one takes one's complaint to the Law Society, the Professional Purposes Committee will look at it or, possibly, get one of its grossly-overworked staff to look at it. If one does not like the result of that, one can go to the lay observer.
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That is all well and good, but I do not know who will take on that job. Any lay observer faced with the fact that he knows that the Law Society has nothing like the proportion of staff to complaints that the ombudsman has, ought to accept every such appeal because, at the first instance, it must be true of the overwhelming majority of complaints raised with the Law Society that they are not dealt with adequately. I say that in the sense that they are not dealt with as adequately as we now believe that com-paints against even servants of the Crown should be dealt with.
I do not know how the lay observer will interpret his function. Presumably he will interpret it by saying that the whole standard of dealing with complaints must be much lower because there are nearly 10 times as many complaints as there are against the Civil Service and nearly 10 times fewer staff, so it must be proportionately lower—roughly 100 times lower. That is an exaggeration, but it is bound to be some measure of the truth.
It was for precisely that reason that I asked the Minister why this was not in the Bill. I want to ask him again. I hope that if he speaks again, with the leave of the House, he will explain this matter to me. When I had my last discussion with the Law Society, only last week, I understood that it had no objection to the lay observer provision becoming part of this legislation. On that understanding I said that as I understood it—I could not speak for my hon. Friend the Member for Erith and Cray-ford (Mr. Wellbeloved), but I have spoken to him since—I believed that backbenchers of the House who have hitherto objected to these Bills would withdraw their opposition ; and that this was now very satisfactory. I believe that my hon. Friend now shares the view that it would have been satisfactory.
However, the Solicitor-General says that it cannot be in the Bill. He says that we can deal with all these matters in Committee but that this provision cannot be in the Bill—so we cannot deal with it in Committee. I do not blame the Solicitor-General personally. I can only suggest that it is that crusty Tory, the Lord Chancellor, who is literally a conservative with a small "c" in almost any matter connected with the profession,

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who has said, "We dare not put this in the Bill because if we do people will want to look at it exactly and it may cost the Treasury money for a bigger staff for this lay observer" and so on. I hope that that is not the reason and that the Solicitor-General will say so.
It seems to be a disgrace that on something which is most necessary, where the Law Society through no fault of its own but simply because it does not have sufficient resources is at its weakest in dealing with complaints, this provision of a lay observer has been omitted. The Law Society is prepared to agree to it. It has taken three years of negotiation. I give the Law Society credit, because on every point raised by hon. Members it has gone to some trouble to agree with their point of view, although not necessarily entirely.
We are all reasonable men who are happy with half a loaf rather than none in our job. The Law Society has done extremely well. As I understand it, the Law Society is prepared to see this lay observer provision, which is the last of the several things that we wanted in the Bill. Now only the Government are blocking it. Does the House realise that if this Bill had been a Private Member's Bill, as it was last year, it would have gone through on the nod because no one would have objected to it? It would have had the lay observer provision in it because that is what all of us want. But now although the Law Society, formerly in opposition to this provision, is not now, it is still not in the Bill merely because it is a Government Bill.
I can only think that it is the Lord Chancellor who is at the back of this matter. It is an extraordinary thing to do. I am happy to let the Bill go through peacefully if an assurance is given that this provision will be put into the Bill at the Committee stage. I hope that the scope of the Bill will enable hon. Members to move that such a provision be included, but I do not know that that is so. Having looked at the Money Resolution I am certain that its scope will not enable us to do it. That is why it will be done in some mysterious way out of the other appropriations of the Lord Chancellor.
All this is an endeavour to hide an excellent proposal under a mat. If one
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wants to hide something away, one must have a reason. The reason is that it is just a front, a beautiful bluff to say that the Government are doing something. But on looking at it one realises that it is just a genie out of a bottle that has come like a puff of smoke and that it is not real.
If the Solicitor-General will not give this assurance I shall have to consult my hon. Friends and it may be that there will be a Division. I hope, Mr. Speaker, if you are in the Chair later and there is a Division, that you will convey the interesting ruling that Mr. Deputy Speaker gave earlier upon my point of order about interests. There are rules relating to the interests of Members who are voting which are different from the rules relating to the interests of Members who are speaking. I hope that those Members who have interests will be warned if there is a Division to consider whether they should vote.
However, if the Solicitor-General will give the assurance that the provision about the lay observer will be introduced by him in Committee, I would give him the assurance that the Bill will go through on the nod. Otherwise, I cannot give that assurance.
6.49 p.m.
Mr. Clinton Davis: I must first declare my interest. I am a solicitor. I am a member of the Law Society. I am a joint secretary of the all-party Solicitors' Group with the hon. Member for Chippenham (Mr. Awdry). I am also a commissioner for oaths. That is a broad, comprehensive declaration.
Mr. James Wellbeloved: And a Socialist.
Mr. Davis: I am a Socialist and a member of the Labour Party, which perhaps is even more important.
It has been alleged by the hon. Member for Orpington (Mr. Stanbrook), more guardedly on this occasion than on others, that the Law Society is somewhat uncaring about the aggrieved lay client. It is right that impression should be dispelled, because I know of no other profession in which the lay client has the same comprehensive protection, for example, in the taxation of a bill or in requiring the Law Society's certificate

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of the fairness of a bill. That allegation is quite wrong and should not be made.
It is alleged that the Law Society has not given proper attention to complaints of lay clients. Again, that is wrong. That allegation was partially dealt with by my hon. Friend the Member for Nottingham, West (Mr. English), who said that in litigation affecting solicitors the Law Society can appoint a solicitor when other members of the profession may be unwilling to act. My experience is that it is far more common to find a solicitor prepared to undertake litigation of this kind than it is to find doctors prepared to give evidence against another doctor in matters of professional negligence, or architects prepared to give evidence against their professional brothers.
Mr. English: Does not my hon. Friend agree that one reason is that it is all a matter of circumstances? Does he not agree that an accusation that a professional person has made a mistake might be dealt with more easily if it were regarded not as a matter for action for negligence in a court but as a matter to be dealt with by, say, an ombudsman, in the general sense of the word, as a simple statement of mistake with an independent person available to arbitrate on whether or not there was a mistake?
Mr. Davis: I am a little concerned about that proposition because I believe that the courts are the right forum for determining questions of compensation. If one niggles at that proposition, it is difficult to know where to draw the line. That proposition would certainly be wrong for the medical profession, which presumably would be asked to undertake a similar arrangement to that envisaged for the solicitors' profession. I am assured that my hon. Friends are not suggesting that the solicitors' profession should be isolated.
In matters of signal importance, where substantial damages are at issue, it would be wrong to remove a determination of some issues from the jurisdiction of the court. One might ask what is the purpose of law courts if everything is to be dealt with by tribunals.
There is a case for dealing with minor matters by this form of tribunal,
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although the point I made during my intervention has not been answered. Through the new procedures that are available for arbitration in the county courts, it is possible for minor matters to be properly resolved without formality, and that is a significant advance.
Mr. Wellbeloved: I think that my hon. Friend is just about to deal with the number of complaints that are made to the Law Society and the manner in which they are dealt with. He will recall that my hon. Friend the Member for Nottingham, West (Mr. English) referred to 5,000 complaints. I hope that my hon. Friend will deal with that matter.
Mr. Davis: I want to deal with the points as they arise. I am not here as an apologist for the Law Society, although I admire the way in which the Law Society has given its attention to the matters raised by my hon. Friends and has been as helpful as possible to the Government in producing a progressive piece of legislation.
The hon. Member for Orpington opposes the deletion of the words "moral fitness". Having heard him speak on this sort of issue before, I expected it of him. He says that it is all terribly sinister. But it is not the job of the Law Society, in determining an application for membership of the profession, to be a judge of morals. Where would one end? After all, the virility of a proposed solicitor is not of general interest to the public at large. If someone who applies for membership of the profession is found to be mentally unfit or suffering from some similar disability, the Law Society should have power to refuse that application. It does not have that power at present. The hon. Gentleman has ignored that.
As a commissioner for oaths I very much welcome Clause 4. It is sometimes inconvenient to find commissioners for oaths, and people are put to a great deal of trouble in swearing affidavits. So long as it is necessary to go through the pantomime of swearing affidavits and paying fees to commissioners for oaths for that purpose, it is right that the commissioners should be more widely available. The Lord Chancellor still retains a right of veto to the appointment of commissioners for oaths.

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I turn to the argument put forward by my hon. Friend the Member for Nottingham, West relating to complaints, about which my hon. Friend the Member for Erith and Crayford (Mr. Wellbeloved) is deeply concerned. My hon. Friend the Member for Nottingham, West said that there were only five people at the Law Society dealing with 5,000 complaints.
Mr. English: No, I did not say that.
Mr. Davis: I do not want to quote my hon. Friend incorrectly, but my information is that there are 35 people dealing with 4,300 complaints.
Mr. English: Only last week I was told that the number of complaints was 5,000. If someone has since counted them and found only 4,300, or if one figure relates to a different year, I accept that entirely. I quoted the figure that I was given only last week by an official of the Law Society. I am glad to hear that the staff has grown considerably since I first inquired into it. I did not say there were as few as five. I said they numbered about one-tenth of the ombudsman's staff. The ombudsman has about 90 people to deal with 570 complaints, whereas the Law Society has about 35 people to deal with 4,300. My hon. Friend has not in any way ruined my argument.
Mr. Davis: Surely the point of substance is that innumerable complaints made to the Law Society have no firm basis and are unsifted. It is immediately apparent to people who examine them that there is no real basis for complaint in such cases. As far as the Parliamentary Commissioner is concerned, all his complaints are in the first place sifted by Members of Parliament, and by and large they relate to matters of considerably greater substance.
I very much welcome, as I am sure do the overwhelming number of solicitors, the extension of the provisions on the compensation fund and the new provisions that remain to be worked out on professional indemnity. I urge the Solicitor-General to take very much into account the point of substance that was made by my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin) concerning the situation where a solicitor, perhaps through no major fault
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of his own, may not be insured, and where the lay client may have suffered loss. It is only right that the lay client should have recourse either to the insurance fund or to the compensation fund. There should be no lacuna, and I am sure that it would be the desire of the Law Society and of the Government that the situation should be dealt with as rapidly as possible. The present difficulty is that the most appropriate scheme to carry out compulsory professional indemnity has not been worked out.
I turn to Clause 9 and the disciplinary tribunal. It is right that we should pay tribute to my hon. Friends the Members for Nottingham, West and Erith and Crayford, who for many years have proclaimed the need to have a lay element in this respect, and I would not wish to be churlish in offering praise where it is due. I do not know to what degree my hon. Friends' perseverance has led to it, but the fact is that the Law Society has taken a reasonable line on that aspect of the matter. As an experiment it undertook for 18 months to have a lay person involved in the investigation procedure to give greater credibility to the way in which the Law Society attends to complaints. I hope that, just as the Law Society has been the pathfinder in this respect, other professions will respond equally. All too often solicitors—indeed, all lawyers—are condemned as being unscrupulous and uncaring of the lay client's needs and requirements. The way in which the Law Society has dealt with the Bill indicates that that is a quite wrong impression, in just the same way as hon. Members of the House sometimes carry with them a degree of obloquy which is undeserving. And if one is a Member of Parliament and a lawyer, that is regarded as going just too far!
I am pleased to see that Clause 13 extends protection to clients in the taxation of costs. The time scale was too short, and the effect of the provisions will simplify the situation and also give added protection. I am sure that this is something which the House as a whole will support.
I come finally to Clause 14.
Mr. Charles Loughlin: The substance of the difference between those who support the Bill

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and those who oppose it relates to the question of the ombudsman as against the disciplinary tribunal. The disciplinary tribunal insists that there shall be a majority of solicitors present at the hearing but that one person should be a lay person. My hon. Friend has not argued the contrary case as presented by my hon. Friend the Member for Nottingham, West (Mr. English). Can we be told why the legal profession does not want an ombudsman in place of the procedures laid down in the Bill? I have not made up my mind on this point ; I am simply trying to find out the situation.
Mr. Davis: This point was dealt with in the Solicitor-General's speech.
Mr. Loughlin: I was not here.
Mr. Davis: I take the view that it would be wrong simply to have a situation where an entirely lay element in the investigation should be the sole arbiter over what can be extremely complicated issues in respect of which a member of the profession involved—whether it be the solicitor's profession or any other—will have some expert knowledge. In my view, expert knowledge is absolutely essential in determining so many of the issues that come before a disciplinary tribunal. Sometimes difficulties and complexities arise.
Mr. English: I wanted a solicitor ombudsman.
Mr. Davis: My hon. Friend the Member for Nottingham, West says that he wants a solicitor's ombudsman, but I am sure that would not be acceptable to my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin). This is an experimental situation, and one looks to the future with great interest to see how the situation will develop. It is not right to come to final conclusions, and I await the results with great interest.
Mr. W. R. Rees-Davies: The point about the ombudsman is important, but may I try to point out the real issue before us? All disciplinary tribunals in all professions are dealt with by the professions themselves. This applies to the Army, the defence forces, the Bar, valuers, doctors or dentists or even the Civil Service. The
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point is that one should be tried by one's peers in disciplinary matters, and the essence of these discussions is the matter of discipline. Surely the reason why the Bill appears to be going somewhat wider is that a certain element of outside complaints are not wholly professional. That is why there is this half-way house.
Mr. Davis: The hon. Member for Isle of Thanet (Mr. Rees-Davies) has put the point succinctly and carefully, and I totally accept that argument.
Mr. Wellbeloved: I have one small point to put to my hon. Friend. He did not refer to Clause 3, which in my view is of considerable importance because it removes the limitation on the fee charged for the practising certificate. The House is entitled to know what is in the Law Society's mind in respect of the amount of fee it seeks to charge.
Mr. Davis: I am only a humble backbench member of the Law Society and I cannot speak for what the Law Society has in mind. The present statutory requirement is totally unacceptable and insufficient to cover the needs of the compensation fund, and it is important that the Law Society should have greater discretion. I do not think that the Law Society will exercise that discretion irresponsibly—I see no evidence of that—and there are many members of the profession who will investigate the situation carefully and keep it under close suveillance.
I come at long last to my final point. It concerns Clause 14 and the termination of the retainer by the solicitor. This has caused a great deal of injustice to solicitors in the past. Unless there was an agreement in advance specifying that a solicitor was at liberty to withdraw from a case if costs and disbursements were not forthcoming, he had an obligation to carry on with it even if the lay client unreasonably refused to put the solicitor in funds. That is a situation which is being dealt with in order to protect the solicitor. In no other profession or business is anyone expected to offer his services if funds are not forthcoming. This is an important protection for the profession.
I end as I began by warmly applauding the Bill. It will give great protection not only to lay clients but also to members of the profession. If it is enacted

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it will give greater credibility to the activities of the Law Society in preserving and, indeed, improving that important relationship with its lay clients to which I have referred.
7.12 p.m.
Mr. James Wellbeloved: I want first to apologise to the House for not being here at the beginning of the debate as a result of my service on a Select Committee. I regret that I was not present to hear the speeches of the Solicitor-General and of my right hon. Friend the Member for Sowerby (Mr. Houghton).
My hon. Friend the Member for Nottingham, West (Mr. English) has done a great service to Parliament and to the general public in pursuing his course and his cause in such a manner over a number of years and in trying to persuade the Law Society to accept very reasonable proposals designed to improve the way in which the profession deals with complaints against solicitors. In his speech today he has set out very clearly the main issues which concern us. I entirely share his view about the lay observer and I hope that the Solicitor-General will be able to give us positive hope that the matter can be dealt with properly in Standing Committee and thus enable my hon. Friend and others, including myself, not to oppose this Bill in principle on Second Reading.
I am not one of those who take the view that solicitors are out to catch the public. I take the opposite view because I believe that the legal profession is a very honourable one and that almost overwhelmingly those solicitors who are Members of this House bring to bear a great deal of compassion and readiness to assist their fellow Members to understand some of the legal complexities which face Members of Parliament and their constituents. I hope, therefore, that my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis) will not think anything that I or those who have joined forces with me have done is an attack upon the profession and that we have not given matters careful thought before opposing consistently for at least two Sessions of Parliament the Private Bill promoted and presented to Parliament by the Law Society. My hon. Friend the
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Member for Nottingham, West and I did so because we wanted to see introduced into that Bill three vital elements. Two of them have now been included and are reasonably satisfactory, though they do not go the whole way.
We wanted first to ensure that there was a lay element in the adjudication of the society's disciplinary procedures in that it was dealing with complaints against members of the profession, and we wanted to ensure that there was adequate provision for the proper investigation of complaints. The total number of complaints is not in serious dispute. It is in excess of 4,000 a year. I readily accept that a substantial number of them may be quite minor and that many may not be justified at all. However, because they are genuine grievances held by the complainants, they are entitled to serious investigation by a profession with the honour, integrity and standing of the Law Society.
It is clear from the figures that we have of the number of staff employed in the Law Society's investigatory department that there is good ground for believing that the care and attention which 'be public ought to expect for the investigation of complaints may not necessarily be given. I shall not develop that point because it is one which I am sure the Standing Committee will investigate thoroughly in its consideration of the Bill, if and when it reaches its Committee stage. It is no good having a lay element trying to reassure the public that complaints will be dealt with unless the Law Society can show that there is proper machinery to do the job of investigation so that proper evidence can be presented for adjudication.
My hon. Friend the Member for Nottingham, West also referred to the lay observer—the ombudsman. That is an essential element, and we look to the Solicitor-General for some reassurance on the matter.
I see one very hopeful sign in the Money Resolution which refers to money paid from funds voted by Parliament in respect of the lay member. It is clear that it will be open to this House on an annual basis to debate the use to which those funds are put. I believe that the Law Society can look forward in the years ahead, assuming that this measure

1525
reaches the statute book, to regular reviews of the procedure in the course of debates upon the money voted by Parliament for the purposes set out in the Money Resolution. I hope that the Solicitor-General will be able to confirm my interpretation of that possibility. It is an important matter about which we should be clear.
I was surprised that my hon. Friend the Member for Hackney, Central was not able to tell the House the figure in the mind of the Law Society in respect of the fee for the practising certificate. This is an important matter, and as the Solicitor-General has now assumed full responsibility since we are considering a Government Bill, I hope that he will be able to tell us just what is envisaged as being a suitable fee.
My reason for being concerned is not only that the amount of the fee will be reflected in charges by solicitors to their clients. It could also have a substantial effect on the rates of local authorities and other bodies which employ solicitors. It must not be forgotten that solicitors have this rather quaint procedure whereby their trade union, if I may use that description, is the only one which calls upon employers to pay the union dues of its members. Solicitors employed by local authorities have their legal certificate fees paid from public funds.
Therefore, it is legitimate to know, before agreeing in principle to give the Bill a Second Reading, just what sort of burden will be put upon public funds by giving this open-ended commitment to the Law Society to make its own adjudication on the fee that should be charged for the practising certificate. I hope that we shall have some positive assistance on that matter and that it will not be left wide open.
I will not make a meal of this measure today, because I hope that the House, with its usual generosity, will agree that my name should be among those appointed to serve on the Committee, should the Bill be given a Second Reading. The point made by my hon. Friend the Member for Nottingham, West about the lay observer will determine whether the Bill gets an unopposed Second Reading in principle and that again will depend on how far the Solicitor-General goes in his reply.
7.21 p.m.
The Solicitor-General: May I reply, with the leave of the House? First, I should like to deal with the three points made by the right hon. Member for Sowerby (Mr. Houghton). He said that delay is one of the most frequent complaints against solicitors. I am sure that all members of that profession, as well as myself, are grateful for his kind words about overwork rather than negligence often being the cause. I think that has been the case in many offices when we consider the tremendous upsurge of work that has taken place. For example, in just a few years the Bar will have doubled its numbers compared with 10 to 15 years ago.
The right hon. Gentleman's comments about a solicitor being disqualified to sit as a magistrate are not directly relevant to the Bill, but I fully understand what he was saying. I imagine he meant sitting as a lay magistrate from time to time as opposed to sitting as a stipendiary. Such solicitors have proved extremely helpful in the administration of the law. That point was dealt with in the Administration of Justice Act last year. My experience generally has been that solicitors have proved extremely useful, particularly concerning the more complicated prosecutions with which they have to deal. I have not yet come across an instance in which a solicitor was overbearing in any way with his lay colleagues during a hearing.
The right hon. Gentleman said that the disciplinary tribunal, the one watchdog, is fine as long as it barks. He said that his professional life is not at stake. My experience is that when there is a rogue elephant in a particular profession the other members of the tribe are very quick and active to do everything that they can to get him out of the tribe. My experience of the Disciplinary Committee of the Law Society has been that it could never be accused of trying to protect one of its own who appears before it.
Finally, the right hon. Gentleman spoke about being a well-informed layman. On every occasion that I hear him, particularly today, but also through the BBC, I think that the benefit to the public of the well-informed layman can also be described as a loss to the solicitor's profession, which I am sure he would have graced had he chosen that way of life.

1527
My hon. Friend the Member for Orpington (Mr. Stanbrook) repeated the widespread and acute dissatisfaction that he suggests exists against the Law Society. It is a cry that we have heard in this House time after time. We know that there is a personal reason for the vehemence that my hon. Friend shows on this subject.
My hon. Friend spoke of Clause 2 being a change which he described as very objectionable by taking away the phrase "morally fit" and substituting the words,
"the Society is satisfied as to his character and his suitability to be a solicitor".
I should think that that extends and improves the criteria for admission as a solicitor. As it stands, a man with mental instability who had suffered from nervous disorders would not be excluded. But having to satisfy the society as to his character and suitability to be a solicitor is a more stringent test. It was certainly intended to be such by the Law Society and by those responsible for drafting that clause.
Mr. English: Will the conflict of interest provisions apply in a divorce action if the Bill is passed?
The Solicitor-General: I do not follow that point. I have heard a number of comments—I will not say "threats", because that is probably an improper word to use in this House—by the hon. Gentleman about what will happen to me if I vote in the Lobby tonight should a Division be called, but I am not frightened of those threats.
Mr. English: The hon. and learned Gentleman has misunderstood me. I asked whether the conflict of interest rules of the Law Society that prevent a solicitor acting for clients with different interests apply where a solicitor is acting in a divorce action?
The Solicitor-General: I am sorry. I still do not understand the point. I do not think that it arises from the debate. I should like to get on because there is another debate which hon. Members are waiting to get started.
The hon. Member for Nottingham, West (Mr. English) makes comparisons from the last report of the Ombudsman
1528
between the 570 complaints with which he deals with his staff of 90 and those dealt with by the Law Society and its staff. These matters have been dealt with in detail by the hon. Member for Hackney, Central (Mr. Clinton Davis). The complaints that go to the Ombudsman have to be sifted through Members of Parliament. The complaints that arrive at the Law Society, either by post or, as we have been told, in person in certain instances, concern cases some of which are so trivial that they do not require much time to deal with them.
Any advocate, whether a barrister or a solicitor, will know that there are always clients who, when a case is lost, immediately blame their advocate. On occasions they may be right. There are happy exceptions, as I am sure the right hon. and learned Member for West Ham, South (Sir Elwyn Jones) will confirm. For example, a case which one has lost but in which one has put up a tremendous fight may earn more respect, admiration and thanks than a case which was comparatively difficult but which one did win. But there are usually a number of people who will complain, "I know that I was right. I lost. Therefore, my lawyer is to blame."
I turn now to the suggestion about making provision in the Bill for a lay observer. I expressed the Government's views in reply to an intervention in my opening speech. I see no reason at this stage to alter the views that I then put forward.
It is said that the refusal to put such a provision into the Bill is hiding it away and is a bluff. We do not intend it to be hidden away or to be a bluff. I should remind the House that those who were accused of bluffing and hiding it away are the very people, the Law Society, whom hon. Gentlemen opposite have been quick and I think right to praise for the co-operation and consideration that they have given to this matter. The Lord Chancellor will naturally exercise a degree of control, particularly as the payment to the lay observer will come from the Lord Chancellor's fund dealing with the general administration of justice.
Mr. Wellbeloved: I should not like the hon. and learned Gentleman to misinterpret the tributes that we paid to the Law Society. It took three years and

1529
the blocking of two private Bills to get the Law Society to go as far as it has. It is ready to go to the length of making provision for a lay observer, but the Government apparently are now the stumbling block.
The Solicitor-General: There is no question of the Government being the stumbling block. The original initiatives for the Bill came from the Government. It was agreed to by the Law Society. The only question is whether in a wholly new and experimental way we should try to limit what should happen by words in the Bill or whether we should run it experimentally and see whether after a period some sort of change might not be necessary in the public interest. That is why the matter has been handled in this way and that is why I complained about the phrase "hiding it away" and the word "bluff".
It is a cry that has been made so many times, particularly by the hon. Member for Nottingham, West about the ombudsman, the lay observer or whatever one likes to call him, that he should be able to deal with and finalise any claim where there may be a case against a solicitor. The hon. Member for Hackney, Central said, and I am sure that most people would agree with him, that the proper forum for these cases is a court. But even if the provision was made for the ombudsman or lay observer to deal with this it would have to be done by something just like a court.
Often if one has to deal with negligence, whether the solicitor or the client was right, as to what the consequences of the solicitor's alleged negligence were, it will require evidence and witnesses to determine the facts. That could obviously not be dealt with by letter or papers and so we should be substituting our accepted system of justice in the courts with another form of court presided over by the lay observer or ombudsman. In such circumstances I believe that the system we now have is the better system.
Mr. English: There is one vast difference, of course. The court can literally impose punishments or penalties as can the disciplinary tribunal. The Ombudsman cannot. All that the Solicitor-General has said is equally true of the Ombudsman investigating negligence of a civil servant which in certain
1530
cases can be brought into court. The difference is that when the Ombudsman finally makes his recommendation it is only by custom and practice that the Government accept it. We remember the famous row when they did not in which my right hon. and learned Friend the Member for West Ham, South (Sir Elwyn Jones) was a participant. The Ombudsman is not like a court of law which hands down an order saying, "You must do it."
The Solicitor-General: The only other way in which I can see this can be done would be by statute requiring a solicitor to accept an order against him to pay what may amount to thousands of pounds of damages arising out of a decision by a man who probably is not legally qualified. That is obviously undesirable.
I deal finally with the matter raised by the hon. Member for Erith and Crayford (Mr. Wellbeloved) concerning fees for the practising certificate. They are open-ended for the Law Society, he said, and one could understand his fears if what he said were true. He explained to the House, and we sympathise with him, that he had not heard my opening speech. I reassure him that the fees are decided by the Master of the Rolls with the concurrence of the Lord Chief Justice and the Lord Chancellor. The Law Society, therefore, will be able to make representations to the Master of the Rolls about what the fees for the practising certificate should be. In the end it would not be for the society to make a recommendation.
As for the question of annual payments I do not wish to express a final opinion to the House but I understand that the view formed by the hon. Member is probably the right one.
Question put, That the Bill he now read a Second time:—
The House proceeded to a Division——
Mr. English(seated and covered): On a point of order, Mr. Deputy Speaker. Can you guide us on what Members who are either solicitors or barristers should do? Should they vote or should they not?
Mr. Deputy Speaker (Mr. Oscar Murton): I am prepared to give a ruling

1531
on this matter. In 1811 Mr. Speaker Abbot used these words to describe an interest which would disqualify a vote:
"This interest must be a direct pecuniary interest, and separately belonging to the persons whose votes were questioned, and not in common with the rest of his Majesty's subjects, or on a matter of state policy."

Division No. 31.]

AYES

[7.35 p.m.

Adiey, Robert

Hall, Sir John (Wycombe)

Owen, Idris (Stockport, N.)

Allason, James (Hemel Hempstead)

Hall-Davis, A. G. F.

Page, Rt. Hn. Graham (Crosby)

Atkins, Humphrey

Hamilton, Michael (Salisbury)

Parkinson, Cecil

Austick, David

Harrison, Col, Sir Harwood (Eye)

Percival, Ian

Awdry, Daniel

Haselhurst, Alan

Pike, Miss Mervyn

Baker, W. H. K. (Banff)

Hastings, Stephen

Pink, R. Bonner

Batsford, Brian

Havers, Sir Michael

Powell, Rt. Hn. J. Enoch

Beamish, Col, Sir Tufton

Hawkins, Paul

Price, David (Eastleigh)

Beith, A. J.

Hayhoe, Barney

Proudfoot, Wilfred

Bell, Ronald

Hicks, Robert

Redmond, Robert

Benyon, W.

Hiley, Joseph

Rees, Peter (Dover)

Biffen, John

Hill, John E. B. (Norfolk, S.)

Rees-Davies, W. R.

Biggs-Davison, John

Holland, Philip

Rhys Williams Sir Brandon

Boardman, Tom (Leicester, S. W.)

Hooson, Emlyn

Ridsdale, Julian

Boscawen, Hn. Robert

Hornby, Richard

Rossi, Hugh (Hornsey)

Bossom, Sir Clive

Hornsby-Smith, Rt. Hn. Dame Patricia

Sainsbury, Timothy

Bowden, Andrew

Howe, Rt. Hn. Sir Geoffrey (Reigate)

Scott, Nicholas

Bray, Ronald

Howell, Ralph (Norfolk, N.)

Scott-Hopkins, James

Brinton, Sir Tatton

Iremonger, T. L.

Shaw, Michael (Sc'b'gh & Whitby)

Brown, Sir Edward (Bath)

Irvine, Bryant Godman (Rye)

Shelton, William (Clapham)

Bryan, Sir Paul

James, David

Shersby, Michael

Buchanan-Smith, Alick (Angus, N&M)

Jessel, Toby

Silkin, Hn. S. C. (Dulwich)

Burden, F. A.

Jones, Arthur (Northants, S.)

Simeons, Charles

Butler, Adam (Bosworth)

Kellett-Bowman, Mrs. Elaine

Skeet, T. H. H.

Campbell, Rt. Hn. G. (Moray & Nairn)

Kershaw, Anthony

Smith, Cyril (Rochdale) Soref, Harold

Carlisle, Mark

King, Evelyn (Dorset, S.)

Soref, Keith

Chapman, Sydney

Kinsey, J. R.

Speed, Keith

Clark, William (surrey, E.)

Kirk Peter

Sproat, lain

Clegg, Walter

Knight, Mrs. Jill

Stainton, Keith

Cockeram, Eric

Knox, David

Stanbrook, Ivor

Cooke, Robert

Lane, David

Steel, David

Cooper, A. E.

Le Marchant, Spencer

Sutcliffe, John

Corfield, Rt. Hn. Sir Frederick

Lloyd, Ian (P'tsm'th, Langstone)

Taylor, Sir Charles (Eastbourne)

Cormack, Patrick

Loveridge, John

Taylor, Frank (Moss Side)

Costain, A. P.

Luce, R. N.

Tebbit, Norman

d'Avigdor-Goldsmid, Maj.-Gen. Jack

McAdden, Sir Stephen

Thomas, John Stradling (Monmouth)

Davis, Clinton (Hackney, C.)

MacArthur, Ian

Thompson, Sir Richard (Croydon, S.)

Deedes, Rt. Hn. W. F.

McCrindle, R. A.

Tugendhat, Christopher

Dykes, Hugh

McLaren, Martin

van Straubenzee, W. R.

Eden, Rt. Hn. Sir John

McNair-Wilson, Michael

Vaughan, Dr. Gerard

Elliot, Capt, Walter (Carshalton)

Madel, David

Waddington, David

Elliott, R. W. (N'c'tle-upon-Tyne, N.)

Mather, Carol

Walder, David (Clitheroe)

Eyre, Reginald

Mawby, Ray

Walker-Smith, Rt. Hn. Sir Derek

Fidler, Michael

Maxwell-Hyslop, R. J.

Walters, Dennis

Finsberg, Geoffrey (Hampstead)

Meyer, Sir Anthony

Ward, Dame Irene

Fletcher, Alexander (Edinburgh, N.)

Miscampbell, Norman

Wells, John (Maidstone)

Fookes, Miss Janet

Mitchell, David (Basingstoke)

White, Roger (Gravesend)

Fowler, Norman

Moate, Roger

Whitelaw, Rt. Hn. William

Glyn, Dr. Alan

Money, Ernle

Wilson, William (Coventry, S.)

Gower, Raymond

Monks, Mrs. Connie

Winterton, Nicholas

Gray, Hamish

Monro, Hector

Wolrige-Gordon, Patrick

Green, Alan

Morgan-Giles, Rear-Adm.

Wood, Rt. Hn. Richard

Griffiths, Eldon (Bury St. Edmunds)

Neave, Airey

Worsley, Marcus

Grimond, Rt. Hn. J.

Nicholls, Sir Harmar

Younger, Hn. George

Grylls, Michael

Normanton, Tom

TELLERS FOR THE AYES:

Gummer, J. Selwyn

Oakes, Gordon

Mr. Michael Jopling and

Gurden, Harold

Oppenheim, Mrs. Sally

Mr. Marcus Fox.

NOES

Clark, David (Colne Valley)

Marks, Kenneth

Cox, Thomas (Wandsworth, C.)

Mitchell, R. C. (S'hampton, Itchen)

TELLERS FOR THE NOES:

Davis, Terry (Bromsgrove)

Price, William (Rugby)

Mr. James Wellbeloved and

Deakins, Eric

Skinner, Dennis

Mr. Michael English.

Hardy, Peter

Stallard, A W.

Question accordingly agreed to.
This ruling has been followed by all subsequent Speakers. There are many solicitors outside this House and the Bill is clearly a matter of State policy. A motion to disallow any vote on its Second Reading would, therefore, clearly be out of order.
The House having divided: Ayes 168, Noes 10.
Bill read a Second time.
Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

SOLICITORS (AMENDMENT) [MONEY]
Queens Recommendation having been signified—
Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to prevent non-British subjects being prohibited from becoming or practising as solicitors ; to amend the Solicitors Acts 1957 to 1965 ; to make further provision as to the administration of oaths and taking of affidavits, removal from and restoration to the roll of solicitors, the powers of The Law Society to intervene in a solicitor's practice and the termination of a solicitor's retainer ; and for connected purposes, it is expedient to authorise the payment out of money provided by Parliament of such fees and allowances for the lay members of the Solicitors Disciplinary Tribunal constituted under the said Act as the Lord
1534
Chancellor may, with the approval of the Minister for the Civil Service, determine.—[Mr. Fox.]
Mr. Michael English: There can be no reason to exclude from this resolution provision to pay the lay observer and to include provision to pay the lay members of the disciplinary tribunal, except to exclude the one from the scope of the Bill and to include the other within its scope so that if the resolution is passed we shall not be able to discuss the lay observer in Committee. Does the Solicitor-General challenge that assumption? Is not that what the resolution means?
The Solicitor-General (Sir Michael Havers): The case has been put three times and I give the answer for the third time. It is the Government's intention that the proposals for lay observers should be extra-statutory, experimental and open to change as requirements provide.
Question put and agreed to.

LOCAL GOVERNMENT BILL
As amended (in the Standing Committee), considered.
LOCAL GOVERNMENT BILL
  New Clause 1

    RECOVERY BY LOCAL AUTHORITIES OF ESTABLISHMENT CHARGES
    ' (1) In any case where a local authority—

    (a) are empowered under any enactment to carry out any works or do any other thing on or in relation to any land or building, and

    (b) by virtue of that or any other enactment are entitled to recover from any person expenses incurred by them in exercising that power,

    the local authority shall be entitled to recover, together with and in like manner as the expenses which are recoverable as mentioned in paragraph (b) above, such sum as appears to them to be reasonable in respect of their establishment charges.
    No. 43, in Schedule 8, page 68, line 14, at end insert:

    '26 Geo. 5 & 1 Edw. 8. c. 49.

    (The Public Health Act 1936.

    Section 292'.

    No. 44, in page 68, line 23, at end insert:

    '12,13 & 14 Geo. 6. c. 55.

    The Prevention of Damage by Pests Act 1949.

    In section 7(2) the words "two hundred and ninety-two" and the words "for the inclusion of sums in respect of establishment charges in expenses recoverable under that Act" '.

    No. 45, in page 69, line 8, column 3, at end insert:

    'In section 174(2)(6) the words from "which may include" to "and notices" '.

    No. 47, in page 71, line 46, at end insert:

    ' 1969 c. 10.

    The Mines and Quarries (Tips) Act 1969.

    In section 23(1), paragraph (c) excep the final word "and" '.

    No. 48, in page 72, line 42, column 3, at end insert:

    'In section 91(4), paragraph (c) except the final word "and" '.

    Mr. Rossi: The amendments are consequential to Schedule 8. They are necessary repeals or amendments to other statutes if new Clause 1 is to take effect. Local authorities already have the power under certain statutes—in particular the Public Health Act 1936, the House Purchase and Housing Act 1959, the Mines and Quarries (Tips) Act 1969 and the Prevention of Damage by Pests Act 1949—to include 5 per cent. on top of their charges for doing works under those Acts as establishment expenses.
    The local authorities have long since felt that 5 per cent. was an unrealistic figure. They have been urging upon the Government that they be given wider discretion.
    1536
    (2) The provisions of subsection (1) above shall have effect in substitution for any provision contained in any enactment, including an enactment in a local Act, under which a local authority who have exercised any such power as is referred to in subsection (1)(a) above have power to recover any sum in respect of their establishment charges or any clement or elements of those charges.
    (3) In this section "local authority" has the same meaning as in section 34 of this Act '.—[Mr. Rossi.]
    Brought up, and read the First time.
    7.46 p.m.
    The Under-Secretary of State for the Environment (Mr. Hugh Rossi): I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker (Mr. Oscar Murton): With new Clause 1, it will be convenient to discuss the following Government amendments:
    The purpose of the clause is to broaden the power enjoyed by local authorities to add establishment expenses to the costs incurred by them in carrying out works to property on behalf of or in default of the owner, and to recover such costs and expenses from the owner. This is another instance of the Government's wish to give local authorities all reasonable powers that they need without unnecessary fetters being placed upon them. Therefore, new Clause 1 refers to "reasonable" charges instead of a fixed percentage charge.
    Mr. Gordon Oakes: We welcome the clause and agree with its principle. What it is saying is that where

    1537
    a local authority has to expend local money mainly on default powers, because it has had to go in to do something which someone else ought to have done, it is obviously wrong that the ratepayers of that authority should have to pay the establishment charges. Perhaps the Minister can expound a little on some of the difficulties that may be created.
    The great advantage of having a percentage system is that it is fixed and definite and the person receiving the bill knows whether he has been properly charged by the 5 per cent. rule. The difficulty here, when the clause refers merely to establishment charges, is to know how a local authority arrives at its establishment charges in respect of the many departments which may be involved in dealing with a particular default power.
    This may well surprise the individual who has to pay the bill, because he will be amazed at the cost to the local authority of carrying on those default powers. It may be that he deserves to pay ; it is certainly wrong that the ratepayer should pay. I wonder what sort of system the Government have in mind, having rightly rejected the percentage system, for showing how the local authority will, to use a phrase that the Under-Secretary will understand, tax its costs in the event of a dispute involving many departments. I ask this question purely for information and am in no way seeking to criticise the intent of the clause.
    Mr. Rossi: I understand that the term "establishment charges" or "overheads" is well understood in the building and construction industry, and we would expect local authorities to follow professional practice in these matters. Should difficulties arise, there will no doubt be consultations between my Department and the local authority associations to give guidance as necessary.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

  New Clause 3

    EXTENSION OF POWER OF LOCAL AUTHORITIES TO MAKE ADVANCES
    (1) Section 43 of the Housing (Financial Provisions) Act 1958 (power of local authorities to make advances for certain housing purposes) shall be amended in accordance with the provisions of this section.
    (2) At the end of paragraph (d) of subsection (1) there shall be added the words "or

    (e) subject to subsection (2A) below, facilitating the repayment by means of the advance of the amount outstanding on a previous loan made for any of the purposes specified in paragraphs (a) to (d) above".

    (3) After subsection (2) there shall be inserted the following subsection:—

    "(2A) An advance shall not be made for the purpose specified in paragraph (e) of subsection (1) above unless the local authority or county council satisfy themselves that the primary effect of the advance will be to meet the housing needs of the applicant by enabling him either to retain an interest in the house concerned or to carry out such works in relation to that house as would be eligible for an advance by virtue of paragraph (c) or paragraph (d) of that subsection."

    (4) In paragraph (c) of subsection (3) of that section for the words "may provide for repayment being made either by instalments of principal or by annuity of principal and interest combined" there shall be substituted the words "shall provide for repayment of the principal:—

    (i) by instalments (of equal or unequal amounts) beginning either on the date of the advance or at a later date, or

    (ii) at the end of a fixed period (with or without a provision allowing the local authority or county council to extend that period) or on the happening of a specified event before the end of that period.

    and for the payment of instalments of interest throughout the period beginning on the date of the advance and ending when the whole of the principal is repaid".
    (5) At the end of the section there shall be added the following subsection:—

    (5) If it appears to a local authority or count council that the principal effect of the making of an advance under subsection (1) above in respect of any premises would be to meet the housing needs of the applicant, they may make the advance notwithstanding that it is intended that some part of the premises will be used or, as the case may be, will continue to be used, otherwise than as a dwelling: and accordingly where, by virtue of this subsection, a local authority or county council propose to make an advance in respect of any premises, the premises shall be treated for the purposes of subsections (1) to (4) above as, or as a building to be converted into, a house or houses".

    1539
    (6) On the coming into operation of this section, no further advances shall be made by local authorities in England and Wales under section 74 of the Housing Act 1969 or section 41 of the Land Compensation Act 1973 '.—[Mr. Rossi.]
    Brought up, and read the First time.
    Mr. Rossi: I beg to move, That the clause be read a Second time.
    No. 46, in Schedule 8, page 71, line 45, at end insert—

    '1969 c. 33.

    The Housing Act 1969.

    Section 74'.

    No. 52, in Title, line 3, after ' borrowing ', insert ' and lending '.
    Mr. Rossi: The amendments are consequential to Schedule 8 and to the Title. In Committee the hon. Member for Widnes (Mr. Oakes) moved a new clause seeking to give local authorities
    "unfettered freedom to enter into the mortgage market to assist inhabitants to buy their own homes".—[OFFICIAL REPORT, Standing Committee A, 11th December, 1973; c 394.]
    He gave three examples of the situation where such freedom would be helpful. He cited the case where a mortgagor found that he could not meet the interest charges on his current mortgage and faced foreclosure by his mortgagee. He urged that power should be given to local authorities to re-mortgage the property at more acceptable rates of interest.
    The second example was where, following separation or divorce, a wife obtains possession of a matrimonial home under the Matrimonial Homes Act but then finds it necessary to buy out her former husband's interest. She would need a mortgage to do this. The hon. Member felt that local authorities should be enabled to make the necessary advance in such a case.
    The third case he gave was of a power which would enable local authorities to give young married couples on low incomes the same kind of deferred terms as the Government have encouraged building societies to give others to help them with their mortgages. Such power does not exist currently for local authorities. My right hon. Friend the Minister for Local Government and Development was sympathetic to the proposals but felt that the drafting of the clause was too loose. He gave an undertaking to bring forward an amendment covering the matters raised by the hon. Member at a later stage and to give the hon. Member full credit for having raised this matter.
    Mr. Deputy Speaker (Mr. Oscar Murton): With this it will be convenient if we discuss the following amendments:
    No. 22, in Clause 40, page 39, line 6, after ' 34 ', insert
    ', Extension of power of local authorities to make advances,'.
    I am happy to discharge that undertaking on behalf of my right hon. Friend. I do not know whether the House wants me to go through the new clause and to explain its meaning. I see hon. Members opposite shaking their heads, and as we have a lot of business before us I shall leave the matter there.
    Mr. Oakes: I thank the Minister for this new clause and for what he said. I am certain that it will be welcomed by local authorities throughout the country. The new clause which I tabled in Committee was to meet suggestions from local authorities who had found that their powers of granting mortgages were unduly restricted. I readily accept that my new clause would have gone further than giving authorities
    "unfettered freedom to enter into the mortgage market to assist inhabitants to buy their own homes."—[OFFICIAL REPORT, Standing Committee A. 11th December 1973; c. 394.]
    That, however, is what I wanted to do.
    My new clause would have allowed them to buy commercial properties and so on, which was not the intention. This clause does all of the things I wanted in Committee. I want to dwell for a moment on the increasing difficulties in which many local authorities find themselves with regard to the Matrimonial Homes Act, and the perilous position of many divorced or separated wives who find that, although the court has given them possession of their own homes, that possession is rendered useless because they cannot find the money for a mortgage.
    Increasingly local authorities, in their own interests, will have to provide a mortgage for separated or divorced wives. If they fail to do so then, apart from the distress and misery caused to the wife and her family, they will incur an obligation to rehouse that family in Part 3 accommodation. It is nonsensical, when the wife and children could remain in

    1541
    the home which the court has allotted them and when the local authority could advance the mortgage. There are many instances in which a local authority could be of great service in this way.
    The other example I cited is a local case, of a widow whose interest on her mortgage is paid by the Department of Health and Social Security. Although that is secure, the house obviously gets in a state of disrepair over the years and requires money to be spent upon repairs. It does not qualify for an improvement grant because these are not improvements but repairs. Under this clause the local authority could step in and either make an advance for that specific purpose, knowing that its interest was secure, or allow the original mortgage to be called in and readvance on the property to assist that person.

  New Clause 14

    RATING SURCHARGE ON UNUSED OFFICE, ETC. PROPERTY
    ' The following sections shall be inserted after section 17 of the principal Act:—

    "Liability to progressive surcharge in respect of unused office, &c., property

    17A.—(1) If for a continuous period exceeding six months a commercial building is not used for the purpose for which it was constructed or has been adapted, its owner shall pay in respect of that period (the ' period of non-use ') a surcharge additional to the rates (if any) payable apart from this section.

    (2) Subsection (1) of this section shall not apply where—

    (a) the owner has tried his best to let the building, or

    (b) the condition of the building makes it unfit for use for the purpose for which it was constructed or has been adapted, and it cannot be rendered fit at a cost

    10

    which is reasonable in relation to the value of that use.

    (3) Where the owner is in occupation of the building throughout the period of non-use, the surcharge shall be levied in the form of rates by doubling the normal rates for the first twelve months of the period of non-use, trebling the normal rates for the second twelve months, quadrupling the normal rates for the third twelve months,

    13

    and so on progressively while the period of non-use lasts.

    In this subsection 'the normal rates', in relation to any period, means the rates payable in respect of that period apart from this section (taking rates as accruing uniformly from day to day); and where the period of non-use extends through part only of any twelve-month period, the surcharge shall be calculated by reference to

    20

    the normal rates for that part.

    (4) Where the owner is not in occupation of the building throughout the period of non-use—

    (a) the amount of the surcharge shall be the same as it would have been if the owner had been in occupation of the building throughout the period of

    25

    non-use, and

    (b) the surcharge shall be levied in the form of rates of that amount as if they were payable by the owner in respect of that occupation.

    (5) In determining whether or not the owner has tried his best to let the building, regard shall be had to the following, as well as other relevant factors—

    30

    (a) the rent sought, compared with rents of similar properties in the area,

    (b) the other covenants and conditions required by the owner to be contained in any proposed lease,

    (c) whether or not the owner indicated to prospective lessees that he was prepared to let the building in parts,

    35

    (d) the number and resources of the firms of estate agents retained for the purpose of letting the building, and

    (e) the nature and extent of advertising of the building by the owner or those agents

    There are many such instances in which local authorities can operate the powers of this clause to relieve people of a great deal of distress and misery, particularly when they run into unexpected hardship. I thank the Government for tabling the clause and am certain that it will be welcomed by local authorities throughout the country.
    Mr. Rossi: Subsection (5) permits advances to be made for mixed premises which are both residential and commercial. That is to meet the case of the small shop with living accommodation over it. To that extent, perhaps we have gone a little further than even the hon. Gentleman hoped.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.
    Supplemental provisions as to section 17A.

    17B.—(1) A rating authority may serve a notice on the owner of any commercial building requiring him to make a written return containing such particulars as may be reasonably required by the authority for the purposes of section 17A of this Act ; and subsections (3) to (6) of section 82 of this Act shall apply to a notice under this subsection as they apply to a notice under section 82, as if—

    (a) the reference in section 82(3) to the valuation officer were a reference to the

    45

    rating authority, and

    (b) the penalties laid down by section 82(4) and (5) were—

    (i) on summary conviction, a fine not exceeding £400; and

    (ii) on conviction on indictment, imprisonment for a term not exceeding two years, or a fine, or both.

    50

    (2) References in section 17A of this Act and this section to a commercial building are references to a hereditament (not being a dwellinghouse, or a hereditament having a floor space not exceeding 240 square feet and used as a lock-up garage) whose net annual value falls to be ascertained under section 19(2) of this Act; and if during a period of non-use a commercial building is divided into two or more

    55

    hereditaments, the amount of any surcharge imposed under section 17A of this Act in respect of any of those hereditaments shall be the same as if it had been a separate hereditament from the beginning of the period of non-use.

    (3) A surcharge imposed under section 17A of this Act in respect of a hereditament shall until recovered be a charge on the land comprised in the hereditament;

    60

    and for the purposes of the application to such a charge of section 15 (registration of local land charges) of the Land Charges Act 1925 this Act shall be deemed to be a similar statute to the Acts mentioned in subsection (1) of that section.

    (4) Where a hereditament which is not used for the purpose for which it was constructed or has been adapted becomes so used on any day and becomes not so

    65

    used again on the expiration of a period of less than six weeks beginning with that day, then for the purpose of ascertaining any period during which the hereditament has been continuously not so used, it shall be deemed to have remained not so used on that day and during that period.

    (5) A hereditament shall be taken to be used on any day for the purpose for

    70

    which it was constructed or has been adapted if, but only if, not less than four-fifths of it was so used on that day.

    (6) Schedule 1 to this Act (except paragraphs 1, 2(c) and (d), 6, 12 and 14) shall apply for the purposes of section 17A of this Act as it applies for the purposes of section 17 thereof, as if—

    75

    (a) references to paragraph I of that Schedule were references to section 17A of this Act,

    (b) references to a relevant hereditament or a relevant period of vacancy were references to a commercial building and a period of non-use respectively, and

    80

    (c) references to three months were references to six months.

    (7) In section 17A of this Act and this section ' owner ' means the person entitled to possession, and where different persons are entitled to possession of a hereditament during different parts of a period of non-use, a surcharge in respect of that period shall be apportioned between them according to the length of each part and levied

    85

    accordingly.

    (8) In the application of section 17(A) of this Act to the City of London, ' rates ' means the aggregate of the poor rate and the general rate.

    (9) Section 17A of this Act shall not apply to any period before the passing of the Local Government Act 1974" '.—[Mr. Graham Page.]

    Brought up, and read the First time.
    8 p.m.
    The Minister for Local Government and Development (Mr. Graham Page): I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker (Mr. Oscar Murton): There are also selected for discussion the following sub-amendments:
    (c), in line 20, at end insert:
    ' (3A) Notwithstanding the provisions of subsection (3) above, the rating authority may with the consent of the Secretary of State after the first 12 months of the period of non-use levy by greater multiples
    1544
    of the normal rates than those specified above while the period of non-use lasts '.
    (d), in line 38, at end insert;
    '(f) whether or not the owner has made attempts to obtain planning consent to use the building for housing purposes as an alternative to commercial development and, if successful, has advertised the housing accommodation for sale or rent '.
    It is also convenient to discuss Amendment No. 9, in page 18, line 41, 'Clause 15 ', at end add:
    ' (6) Power shall be given to the rating authority to apply to the Secretary of State so as to impose an additional penalty rating of 50 per cent. where a property has remained unoccupied for a period in excess of two years '.

    1545
    and Government Amendment No. 21, in page 39, line 6, Clause 40, after 'II', insert:
    'other than sections (Rating surcharge on unused office, etc., property) and 21 '.
    Mr. Oakes: On a point of order, Mr. Deputy Speaker. May I ask for separate Divisions on sub-amendments (c) and (d) at the appropriate time?
    Mr. Deputy Speaker: Yes, I think that that is in order.
    Mr. Graham Page: I said in Committee when we were dealing with the subject of empty property that it was, on average, as great a responsibility to local authorities as occupied property, and that local authorities should have the power to rate empty property in full. That is dealt with in Clause 15(3)—100 per cent. rating of all kinds of empty property, and the discretion of the local authority to adopt that—apart from that, the keeping of commercial property vacant, with the inevitable result, at present, of an increase in capital values was an affront to society that warranted some penalty. I undertook at that time that if what I had in mind was capable of being drafted into good legislation I would ask the House at this stage to accept it in the Bill. It is here in the new clause. I regret that it takes up so many words, but it achieves its purpose.
    The clause imposes a penal rating surcharge only on any commercial property not used for the purpose for which it was constructed, or for which it has been adapted, for six months, and which the owner has not tried his best to let. It may be that the phrase "tried his best" is new in legislation, but it expresses the intention. Elsewhere in legislation the phrase "used his best endeavours" and similar phrases have been used, but the phrase "tried his best" is good, ordinary English and it defines the occasions when a penalty should be imposed.
    The surcharge will be 100 per cent. of the full rates on the property for the first year of un-occupation, the percentage rising by an additional 100 per cent. for each subsequent year. If I might touch upon one of the amendments to the new clause, I contend that we ought at this stage to lay down the specific penalty. We are laying down a penalty, and therefore Parliament should be specific about it. It would raise considerable difficulties
    1546
    if we gave local authorities, even with the Secretary of State's permission, a right to vary a penalty so that there might be different penalties in various districts. Therefore, we have laid down specifically this progressive increase of 100 per cent. for each year that a property remains unoccupied, provided that the other conditions which I have mentioned apply.
    The surcharge is to be levied as if it were rates, additional to any rates for which the owner is liable in respect of rateable occupation not amounting to use for the purpose for which the premises were constructed or adapted, so that the clause should bite on the owner who puts carpets or curtains into the building. That would be a rateable occupation but not a use for the purpose for which the building was constructed. The surcharge is levied in addition to any empty property rate levied where the rating authority has resolved to adopt the provisions of the General Rate Act 1967, which relate to empty property rating.
    Rating authorities will have no discretion whether to impose the surcharge. The penalties must be definite, and must not be left to the discretion of a rating authority. It would be inappropriate for a rating authority to have such discretion, as this is a matter of national policy and not primarily a matter of recompense to the local authority involved. It will be for the rating authority to decide where circumstances render an owner liable to surcharge. As a form of rates the income from the surcharge will accrue to local government and rating authorities will be responsible for recovering it from the owner.
    There will be two avenues of appeal open to the owner if he wishes to dispute liability to surcharge. Hon. Members who were in Committee will recollect that one of my anxieties when we were discussing the proposal was that we ought to allow the innocent a proper right of appeal against the surcharge. Therefore, in the first place, because the surcharge is in the form of a rate, the owner could appeal against it to the Crown Court under Section 7 of the General Rate Act 1967. Alternatively he could wait until the rating authority endeavoured to recover the surcharge and make an appeal by way of defence to the authority's action for recovery, either as a simple contract debt

    1547
    in the county court or High Court, or as a charge on the property.
    The clause is divided into two new sections, 17A and 17B. It would be wearisome if I went through them in detail. Generally speaking, their drafting is self-explanatory. Section 17A(2) exempts from surcharge any building which is unfit for use for the purpose for which it was constructed or adapted and which cannot be made fit at reasonable cost, and any building which the owner has tried his best to let.
    Subsection (3) deals with the case I have mentioned, of rateable occupation which does not go so far as to put the property into use for the purpose for which it was constructed or adapted. If it is merely put into rateable occupation, without being put into use, the surcharge can be imposed on the owner.
    Subsection (5) provides that in determining whether an owner has tried his best to secure a letting of the property the rating authority must consider, in addition to any other relevant factors, the rent in relation to the levels of rent locally ; the rent that the owner has been asking as compared with local rents ; and the other covenants and conditions which the owner has endeavoured to impose when offering the property on lease. It must consider whether the building is offered for letting as a whole or in parts, and whether it is reasonable perhaps to withhold the letting of parts with a desire to let the whole. It should consider the number and resources of firms of estate agents retained by the owner into whose hands he has put the property for letting, and the nature and extent of the advertising.
    I think that we have included the relevant matters which should be considered. I shall not try to argue against an amendment which has not been put to the House. I say only at this stage that I think we have covered all that is necessary, but I shall listen to the argument on the amendment.
    In Section 17B, subsection (2) is of importance. That defines what is a commercial building for the purpose of Section 17A. The definition we have used there has been used in other legislation. It is, unfortunately, defined rather by
    1548
    cross-reference and exclusion of other properties from a definition given in a section in the General Rate Act 1967. But I am assured that it covers what are generally known as commercial premises and the sort of premises which in common sense we wish to tax by the surcharge.
    The surcharge will be calculated on any part of the original hereditament as if it had not been used from the beginning of that period of non-use, if the property is divided into two or more separate units of occupation and there is an effort by that means to escape from the surcharge
    Subsection (3) makes the surcharge a charge on the land comprised in the hereditament registered as a local land charge, and provides for all that follows from the normal business of registering any charge on property as a local land charge.
    Subsection (4) seeks to prevent the avoidance of the surcharge by making arrangements for short-term letting. It provides that if during the period of non-use the building is used for a purpose for which it was constructed or adapted for six weeks or less, that period is to be ignored in calculating the liability for the surcharge.
    Subsection (5) defines the measure of use which is to be counted as use for the purpose of escaping the surcharge. The figure of four-fifths has been chosen to allow for the genuine user who is unable to put to good use a small part of those commercial premises, but to prevent an avoidance of the surcharge by putting only, say, 55 per cent. to proper use and ensuring that on balance nothing more than the 100 per cent. empty property rate could be levied. Subsection (7) defines the owner for the purpose of Section 17A.
    Subsection (8) deals with a peculiar discovery we made, that the City of London charges not only general rates but poor rates. It obtains its revenue under two headings. If we had not spotted that, we should have had the extraordinary position that people in the City of London would have escaped a large part of the surcharge if they had had commercial property empty. That would have been a nonsense, and I am glad that my advisers discovered that little discrepancy.

    1549
    8.15 p.m.
    Subsection (9) excludes for the purpose of the new sections any period before the Bill becomes law, because it would not have been right to make it retrospective.
    I shall not try to answer another amendment before it is put to the House. I shall listen to the points my hon. Friend the Member for Hampstead (Mr. Geoffrey Finsberg) wishes to make on his Amendment No. 9 and answer them later, with the leave of the House.
    Amendment No. 21 is a Government amendment, purely consequential on the new clause. It is intended that the new Sections 17A and 17B shall be operative from the date of the Royal Assent. Amendment No. 21, to Clause 40, about commencement, provides that accordingly.
    In Clause 21 the interpretation provision has also to come into operation at the same time of Section 17A and 17B are coming into operation at the date of the Royal Assent. Therefore, I ask the House to accept that amendment, consequential on the acceptance of the new clause.
    It has not been an easy matter to draft what I think it is agreed on all sides we should try to do. It is easy enough to say in a few phrases what we want, but the drafting was not easy. I am extremely grateful for the advice I have received. I think that we have the clause watertight now, and that it will cause considerable satisfaction to the public by tackling what I have described as an affront to society, the practice of keeping properties vacant when they could be put to good use.
    Mr. Arthur Jones: Can my right hon. Friend confirm that the definition of the type of property includes warehouse and industrial premises in the word "commercial"?
    Mr. Page: Not industrial premises. We are tackling only the commercial premises. I should have to take advice on whether a warehouse is commercial or industrial, but my impression is that a warehouse used purely for the storage of industrial goods is industrial, not commercial.
    Mr. Deputy Speaker (Sir Robert Grant-Ferris): The two sub-amendments may be spoken to now and dealt with
    1550
    along with Amendments Nos. 9 and 21. But they will not be moved unless or until the new clause is given its Second Reading.
    Mr. Oakes: I am obliged for that ruling, Mr. Deputy Speaker. I asked your predecessor in the Chair for a separate Division on sub-amendments (c) and (d), when the time comes, if necessary. But I appreciate that I do not move them now.
    I welcomed the two previous new clauses introduced by the Government, but the honeymoon must now end. Although I think that the Minister is genuine when he says that to leave property such as Centre Point and other commercial properties obscenely empty in areas of acute housing and commercial need is an affront to society, the clause does little in the way of penalty for leaving them empty.
    The present Secretary of State for Trade and Industry breathed fire and fumes in the House about the unacceptable face of capitalism and the Harry Hyams and Centre Points of this world. He threatened dire things that he would do instantly about such properties. He then left the Department of the Environment and the present Secretary of State for the Environment came in. We heard nothing about the terrible penalties that would be inflicted upon those who leave properties empty in this way.
    Then along came the Chancellor of the Exchequer with his famous Budget Statement in December. There was a great deal of window-dressing. The right hon. Gentleman spent a lot of time talking about the dire penalties that he would inflict on the profits made on such premises, but when we analysed his statement we found that there was nothing that the property developer had to fear from the imposition of taxes. There was nothing in the right hon. Gentleman's statement to persuade the property developer to let or sell his property, because even after paying tax he could make more money merely by sitting on the property and doing nothing with it.
    Now we have the right hon. Gentleman and the Bill hitting the property developer over the head with a feather duster. That is what the clause does. The capital gains on the property far

    1551
    outweigh any doubling, trebling or quadrupling of the rates, because at the current rate of inflation the capital value of the property itself doubles or trebles within the same period as the rates are increased, and there is therefore little pressure on or inducement for the property developer to use his property.
    I should now like to deal with some of the phrases in the clause. I have never before seen in an Act of Parliament the phrase "tried his best". It may be, as the right hon. Gentleman said, that the simpler we can make the legislation and the more we can use ordinary English in it, the better it will be because everyone will understand it, and that includes the courts. But the right hon. Gentleman and I, as members of the legal profession, know that if one uses a phrase such as "tried his best"—which might almost be described as colloquial—in court, one makes a gift to the property speculators.
    The legal advisers of the property speculators will twist those words inside out, because there is no proper legal definition of what is meant by "tried his best". I know of no statute which uses those words, nor do I know of any judicial definition of them. The point will be seized on quickly by the highly-paid professional advisers of property speculators and owners of empty property to defeat the clause even though it does not impinge upon the enormous capital gains being made. The phrase "tried his best" is an almost amateurish way of trying to deal with the problem. I am sure that Opposition Members, without the help of skilled parliamentary draftsmen, could find a more watertight expression than "tried his best". The clause goes on to try to define what is meant by that phrase. Who will make the decision? Will it be the rating authority, the local authority or the valuation court, or will some other court decide whether the owner has tried his best?
    The whole of subsection (5) is fraught with difficulties. I appreciate the right hon. Gentleman's statement that it is difficult to find words to stop the loopholes which these property speculators find in almost any Act of Parliament, in the same way as rats and mice find holes into a dwelling-house. The Government
    1552
    are trying to tighten the legislation, but the use of the phrase
    "the rent sought, compared with rents of similar properties in the area"
    will give rise to difficulties. I say that because very often there are no similar properties in the area. It is, therefore, almost impossible to arrive at a determination of the proper rent because there is nothing with which to make a comparison. The other properties in the area may be old office buildings. We are dealing with a skyscraper and a different type of office building. There are no other skyscrapers in the area with which to make a comparison.
    Paragraph (c) says
    "whether or not the owner indicated to prospective lessees that he was prepared to let the building in parts".
    What is the size of a part? If someone proposes to let five floors at a time, he may have the greatest difficulty in finding a lessee who can afford to pay for such a large chunk of the building. How will this provision be determined? Will it be on the basis of floor space, the number of storeys or the number of rooms? How will this be defined by whoever has to make the decision on whether the man has tried his best?
    The next factor is
    "the number and resources of the firms of estate agents retained for the purpose of letting the building".
    I query the phrase "resources…of estates agents". I do not know what that means. I do not know that the number of estate agents is particularly relevant. It is the activities of the estate agents in trying to let or sell the property that matter. What the people who have to determine whether a man has tried his best have to decide is whether the estate agents—one or more of them—have tried their best to let or sell the property.
    It does not matter whether it is a small firm of estate agents with little or no resources or whether there are one or 20 estate agents. What matters is the degree of endeavour in trying to let the property. A great deal of covering up could be done by estate agents who have the property on their books. When a prospective purchaser came along they could do nothing to advance the claims of the property or to push it in the way they might push other properties. The

    1553
    key determining factor should be the amount of effort that has been put into letting or selling the property, not the number of estate agents involved or their resources. A tiny firm of estate agents could do a better job than a multiple firm in letting or selling a property.
    The next factor is
    "the nature and extent of advertising of the building".
    This is a much better way of deciding what endeavours the owner has made to let the property, but does this go far enough in determining whether he has genuinely tried to let or sell his property? I do not think it does.
    The provision needs to be strengthened, and we shall be endeavouring to do two things in the amendments to which we shall come later. The first is with regard to the penalty levy. Under the clause as it stands, in the first year the rates on the property will be doubled. The next year they will be trebled, the year after they will be quadrupled, and so on progressively year by year. That is the design of the clause.
    8.30 p.m.
    What we endeavour to do in amendment (c) is to say that in certain circumstances it is not enough merely to double, treble or quadruple year after year the rates of property, because the property speculator, just as he can under the Chancellor of the Exchequer's measures, can pay penal rates on property and still find it far more profitable to leave it empty rather than sell it. It does not go far enough in some cases, but we leave that clause in in the general run of cases.
    I am certain that it would be no deterrent to the owners of Centre Point and such buildings to put them under the effect of the clause. It would not secure the letting of a single office or room in an unused building because its capital appreciation was so great and rising so rapidly that it would be no penalty.
    I believe that the right hon. Gentleman is genuine when he says that this is the unacceptable face of capitalism. It is the unacceptable face in our society today. We want to provide that, notwithstanding the doubling, trebling and quadrupling of rates, a rating authority may, after the first 12 months, up-rate the non-use levy by even greater multiples. If it feels that a property is being left empty
    1554
    in the obscene way that some of these properties have been left empty, it should multiply the normal rates after the first year by 10. That is the way to get to grips with the situation. The rating authority could then force a developer to let his property, because he would be paying penal rates.
    In case a local authority acted unreasonably, I have added the proviso that, if it wished to use rating multiples greater than those laid down in the clause, it could do so only with the consent of the Secretary of State. The onus would then be firmly on the Secretary of State, on the man who says that it is entirely wrong for those properties to be left empty as many are today. If the local authority concerned with a building like Centre Point wanted to impose a multiplier of 10 or 15 times the normal rates, it could tell the Secretary of State, who could agree, so as to see what the developer would do when faced with that kind of bill. It would mean that the rates could be adjusted to take account of the capital value accruing year by year to the developer who found it more profitable to leave property unused.
    There are two other considerations which are not included in the clause, the first being the problem of alternative use. Last Sunday there was a peaceful demonstration at Centre Point. I know that things went wrong afterwards, but I have no hesitation in applauding the peaceful side. The breaches of the peace I would not applaud. The peaceful side of that demonstration was basically by people who care and who were concerned that this monument to capitalism should stand there mocking the people in the area, many of whom have no home.
    The second consideration is that there ought to be a way of deciding whether the man has "tried his best" to let his property and whether he has considered letting it for an alternative use such as housing.
    Mr. Geoffrey Finsberg: The hon. Gentleman said that he applauded the peaceful part of the Centre Point demonstration. Does he mean that he gives his approval to people who got in under false pretences by pretending that they were security guards and were thus guilty of deception?
    Mr. Oakes: Yes, indeed I do. They got in peacefully, used no violence and left after their peaceful demonstration had been concluded. I have no time for the people who got involved with the police outside the building afterwards although one could possibly feel the strength of their irritation. But the others focused public attention on the building which has stood empty for so long, and to that extent, and since they used no violence and left the premises peacefully after 24 or 48 hours' occupation, they did a great deal of good.
    What they were concerned with—I am sure that the hon. Member for Hampstead (Mr. Geoffrey Finsberg) agrees—was not whether the property should be double, treble or quadruple-rated. They were concerned not even with its emptiness but with the fact that this huge building has stood there while people in the area have been homeless. Therefore, if the owner is trying his best to let the property, he should say "I have built a big white elephant which I cannot sell. I have tried with estate agents and I cannot use it for commercial development, so I will put in a planning application for housing development." If the application is granted and he genuinely tries his best to let or sell the housing accommodation, he will probably have little difficulty.
    Thus, in addition to the tests relating to commercial development, Amendment (d) would provide for consideration of whether that man had done his best to obtain planning consent for housing and, if successful, had advertised it for sale or rent. The Government should accept this proposition if they want to come to grips with this problem of empty properties, which exist in many other cities than London—almost invariably the areas of greatest housing need.
    The hon. Member for Hampstead asked me whether I approved of what was done by people who did not want to leave that building empty as a provocation to people in the area. One can well understand their annoyance, which led them technically to break the law of trespass. That is all they did in going in and then going out ; they did no damage to the building.
    The Government should consider giving the new clause teeth in the way that I have suggested. As it is, it goes no way towards forcing the developer to do what
    1556
    both sides want him to be forced to do. The amendments will help ; I commend them to the House to give the new clause teeth.
    Mr. Arthur Jones: I am glad to follow the hon. Member for Widnes (Mr. Oakes) because it allows me to deplore immediately his declaring himself in favour of the events of last weekend. I think he agreed that it was trespass and unlawful entry. Approval of such an episode in any circumstances is surely bound to prejudice the whole basis of the law of private property and security against entry. It is a slippery slope, certainly for someone in his position as a member of the Law Society, to support this—[Laughter.] That seems to cause great amusement. I am amused that he should have the effrontery to support those actions.
    The hon. Member's attitude is a dangerous surrender to unlawful behaviour. The slippery slope on which it takes him will not be limited to Centre Point. It cannot do other than involve private residences and property of all descriptions. He would find it difficult to draw a line which the country would consider proper.
    I should be interested to hear my right hon. Friend's definition of commercial property. I noted his reply, that it does not include industrial premises, but what about warehouse premises and shop property?
    Mr. Graham Page: Perhaps I can answer right away the question that I failed to answer when my hon. Friend put it to me earlier. A warehouse is commercial property.
    Mr. Jones: But industrial premises are not?
    Mr. Graham Page Mr. Graham Page indicated assent.
    Mr. Jones: This is jargon. I share the criticisms of the draughtsmanship of the new clause. I take it, then, that it also includes shop properties, which are commercial premises.
    Therefore, the only exclusion is that of industrial premises. One wonders why industrial premises are excluded. If they are erected and not let it can be said that that is a misuse of resources, and the local authorities have to provide local

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    government services for their protection, and so on. Why does this new clause not extend to the whole range of property?
    Mr. Denis Howell: While I am with the hon. Member so far on what is meant by the definition of commercial buildings I would ask whether the definition also excludes flats and residential accommodation. Flats and residential accommodation are being built and left empty so that they appreciate, and they are not caught by the clause, a matter to which, I hope, the House will direct its attention.
    Mr. Jones: I am sure we shall listen to the hon. Member's advocacy and logic later.
    This is a difficulty with which the Government are faced in trying to deal with what, I am sure, is a small problem in relation to property as a whole in the United Kingdom. I know that it is accentuated by one or two properties in London, but we have not heard of the extension of the problem across the country as a whole. I cannot remember that in Committee there was any reference to any property but this one which has been mentioned tonight. To what extent is this a problem throughout the country? What possible justification can there be for dealing with it in this omnibus fashion?
    We are in a period in which a property such as that to which reference has been made can escalate in value, and with no effort on the part of the owner, but what has led to these exceptional increases in values, not attributable to the owners, is Government policy. It is an exceptional situation which has led to the escalation of property values, and over that situation property owners have no control at all and no judgments of it on their part are required.
    What happens when property prices and values are stable? What happens if we revert to a very common state of affairs between the wars when large numbers of properties were developed and left empty? What happens in those circumstances? What happens in the circumstances with which I know that my right hon. Friend is trying to deal by the new clause—that is, the circumstances in which it is impossible to let property?
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    In exceptional circumstances in which, as we have seen in the whole of the postwar period, property development takes place, one can get away with an imposition of the character of this one in this clause, but to generalise over a substantial period of years in this way cannot be wise. It is a reflection of the inadequacies of ODP control, especially where office premises are involved. In trying to hit the office premises the Government, with this inadequate and blunt instrument, are affecting all properties—with the exception of the industrial and domestic, as has just been mentioned by the hon. Member for Birmingham, Small Heath (Mr. Denis Howell). What is to happen to the developer? Will he, by an imposition of this character, be deterred from development, whether he is an office builder or a warehouse developer?
    Is the new clause to apply to local authority schemes? Many local authorities have town centre development schemes. There is no guarantee that upon their completion the properties will be tenanted or required by tenants. What happens to the joint schemes of local authorities and private developers, and which are an increasing part of town centre development schemes?
    This is a grave matter to which the Government have given inadequate attention. They are not having regard to the almost immediate consequences in terms of development and certainly not to the long-term considerations.
    8.45 p.m.
    My other point is one which I raised in Committee. To deal with a problem of this character by means of rating is an absurdity. I agree that vacant properties require services, and to that extent local authorities, properly, should have rights to levy rates on empty properties. That right was introduced some years ago but was not widely adopted because the cost of collection of even 100 per cent. of the annual rate was considered by many authorities not to be worth while as a financial proposition. But why should the income that local authorities will secure if there are many schemes in which there is application of these penal rates of taxation—which is, after all, what it is—to go into the rate fund? Surely this is a Central Government problem and one which is

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    unrelated to local government revenues? What possible justification can there be for associating empty properties—beyond the 100 per cent. rate—with anything to do with local government services?
    I should have thought that a far better avenue for dealing with this problem would have been the new Housing Bill which we are likely to see later this Session. It is most inappropriate for the problem to be dealt with under this Bill. The outcome will be a whole series of arguments about the definitions, which will be quite inadequate, and this will lead to a tremendous amount of litigation in addition to the other consequences which I have mentioned.
    Mr. Michael Cocks: The hon. Member for Northants, South (Mr. Arthur Jones) struggled manfully to put on a progressive veneer, but occasionally such a veneer becomes punctured. The almost Pavlovian reaction to the very mild endorsement by my hon. Friend the Member for Widnes (Mr. Oakes) of an entirely peaceful demonstration to draw attention once again to the problem about which the Government were promising blood and thunder well over a year ago is an example of how any mention of property touches deep springs in the rather withered hearts of Conservative hon. Members.
    I should like to follow up the point made by the Minister when he said that to give discretion in this matter is inappropriate as a matter of national policy. The whole point about the amendment which my hon. Friend the Member for Widnes has touched upon is that it gives a flexibility and means that because of that flexibility it destroys any possibility of a developer making calculations as to his outgoings, in paying the punitive rates suggested by the Government and the appreciation in value which he may expect by leaving premises empty. It produces an uncertainty in his mind which means that he can no longer draw up a cynical balance sheet and decide that it will pay him to leave premises empty for years.
    The hon. Member for Northants, South said that we talk much about Centre Point. He asked how many other examples there were. For years in Bristol
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    we had an enormous block known as Clifton Heights. It stood empty for years. It was the subject of a great deal of adverse comment in the newspapers, because we have a desperate housing situation in Bristol. In the vicinity of Clifton Heights there was no property with which that block could be compared.
    In addition to that matter, there is a weakness in the clause in that it does not deal with blocks of flats. During a recent by-election at Hove there was a great deal of Press comment about a block of 13 flats which had been empty for three years. A number of these flats had been improved through improvement grants provided from public money, yet the flats had never been occupied. The state of play at Hove during the by-election was that the developer and owner of the flats had applied to the planning committee for permission to demolish the lot and to erect a new block.
    There are abuses which need to be tackled. I commend to the right hon. Gentleman, who I know is always open to argument and persuasion, the increased flexibility which my hon. Friend has pressed on him, particularly through the medium of sub-amendments (c) and (d).
    Mr. Sydney Chapman: I very much welcome the clause. I should like to think, in all modesty, that it is at least in part the result of an amendment moved by my hon. Friend the Member for Devizes (Mr. Charles Morrison) and supported by myself, my hon. Friend the Member for Hemel Hempstead (Mr. Allason) and eight Opposition Members in Committee. The clause, complex and complicated as it is, seems to me, although I am not a legal expert or an etymologist, to fit the bill. Whatever its defects, it goes considerably further than did what I considered to be a watered-down amendment moved in Committee by the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) which sought merely power to double the rate.
    When I heard the hon. Member for Widnes (Mr. Oakes) speak of multiplying the rates ten or fifteen times, I wondered whether he had been converted to the view of my hon. Friend the Membr for Devizes and myself by the eloquence of our speeches in Committee and had come

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    to realise that perhaps this clause was the way to deal with an unsavoury and unsocial development which has been referrred to by the hon. Member for Widnes as the Centre Point scandal.
    Mr. Oakes: Yes, I have been converted. My amendment in Committee was far too weak. The amendment moved by the hon. Member for Devizes (Mr. Charles Morrison) was much stronger than is the new clause. When a Conservative supporter put forward a good idea I was converted and was prepared to support it. I prefer the amendment moved in Committee to the clause.
    Mr. Chapman: I am grateful to the hon. Gentleman. I accept his reservations about the wording of the clause to make it watertight. If those reservations are proved then my hon. Friend's amendment is much tougher, but, if not, the clause is adequate.
    Although I was disappointed that sub-amendments (a) and (b) were not taken with the clause, the purport of the amendments was covered when my right hon. Friend said that the new Section 17B(5) more than met what I set out to do in my sub-amendments (a) and (b). If that is not so, what worries me is that someone might be able to let one floor of the building to get round the clause, which would not be a satisfactory solution. Sub-amendment (a) refers to 50 per cent. of the total floor area, but in his remarks about the new Section 17B(5) my right hon. Friend mentioned four-fifths of the building.
    We were invited to comment on possible loopholes. It may well be that the circulation space in a commercial property—by that I mean not only the corridor spaces, but the lifts, staircase circulation and ancillaries such as store rooms and toilets—might of themselves constitute a sizeable proportion of a building such as this. It might be said in a court of law that those parts of the building should be included in the total when only a relatively small part of the office space has been let to a tenant. I put that forward as a suggestion on which it might be necessary to make some explicit statement clarifying the meaning of subsection (5) of 17(B) of the new clause.
    When local planning authorities give permissions, particularly for commercial
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    premises and, of course, office blocks, they base their decision—and I speak as a town planning consultant—on whether to grant or refuse permission on three factors. The first matter is whether a building is in an area, within the development plan of a town or city, which is intended for the use to which the application applies, so that one does not have offices in residential areas or heavy industry in recreation areas. In other words, there must be the land use application test. Secondly, planning applications must be judged on aesthetic or visual merits. Thirdly, in considering applications for office blocks and other commercial premises, few local planning authorities will give permission unless there is a need for them.
    Since Centre Point has been referred to—and I understand that it is owned by Oldham Estates, of which Mr. Harry Hyams owns a substantial part—I refuse to believe that Camden Borough Council or its predecessor a few years before 1964 would ever have given permission for Centre Point if it had known that it was to remain unoccupied for a decade.
    Mr. Geoffrey Finsberg: Perhaps I may tell my hon. Friend that that permission was given by the Labour-controlled LCC, without consulting what was then the metropolitan borough of Holborn.
    Mr. Chapman: The House will be grateful for that information. That building has been left unoccupied for 10 years. If one wanted to make a political point—which I would never wish to do—one would say that if this matter exercises the Opposition so deeply, they could have taken some action before 1970. At least I congratulate my own side, if somewhat belatedly, on taking action now. It is a scandal to have allowed that building to be unoccupied. Surely no hon. Member of this House is naive enough to believe that the owner of those premises had made any real attempt to tenant at least a portion of it in the last ten years. I believe that subsection (5) of the new clause will be a proper way to test whether an owner has made a real attempt to let the building. I accept what was said by the hon. Member for Widnes about the etymology of the phrase "tried his best". I do not know the answer to that but

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    doubtless than can be tested in a court of law.
    In commending the clause to the House unamended, I believe that people who perhaps talk a shade too glibly about the ease with which office blocks could be converted into dwelling units or flats should examine all the technical problems involved. In many cases such a change would mean a complete alteration of the building. I do not say that this cannot be done, but I suggest that it cannot be done merely by a new planning application for a change of use. An office building such as Centre Point—although it has 36 flats in it—in terms of the vast majority of its total floor area is impracticable for conversion into much-needed flats in that part of London unless a great deal of money is spent on it.
    These points apart, on behalf of my hon. Friend the Member for Devizes, who cannot be present for reasons already explained to my right hon. Friend, and as one who supported the original amendment in Committee, I give the new clause every support.
    9.0 p.m.
    Mr. Arthur Blenkinsop: I welcome a great deal of what the hon. Member for Birmingham, Handsworth (Mr. Sydney Chapman) said in his very balanced view of the position. I rise to intervene simply because I am amazed to think that any hon. Member of this House is prepared to criticise these proposals and the seemly and very proper action the other weekend of the enforced occupation on grounds of trespass.
    I am one of many who have trespassed in one way or another on a number of occasions in the past on to private land. I am glad to say that many advances in our legislation have been achieved after mass trespass. They have provided one or two glorious pages in our history. I like to believe that this trespass will lead to an equally glorious move.
    The clause is a faltering step towards the recognition of social values as against the most extreme view of property values. I am a little sorry that the hon. Member for Hove (Mr. Sainsbury) is not with us on this occasion. He made a remarkably impassioned speech in Committee in defence of the property owner and in general opposition to any suggestion of
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    penal legislation in however modest a form. It would have been interesting to have a repetition of that point of view today, however archaic.
    Unless we are prepared to move in this way and to express clearly the predominance of social values over the extreme and out-dated view of private property values, I am sure that we shall see a great many more demonstrations, and it is questionable whether they will necessarily be as peaceful as earlier ones have been.
    I have heard it said that the great achievement of those who ruled this country in the past was that they were wise enough to see the writing on the wall in time to realise that they had to adapt themselves to the obvious public demand of the day. Here we have a welcome and modest gesture towards the attitude that we must take. I hope very much that these amendments will be accepted and that there will be many other ways in which we shall demonstrate in the future in support of the predominance of social values while maintaining public good will in our institutions.
    Mr. Finsberg: I condemn unreservedly the remarks made by the hon. Member for Widnes (Mr. Oakes) joined now, I am sorry to say, by the hon. Member for South Shields (Mr. Blenkinsop), a former Minister of the Crown. If the public are beginning to wonder whether Parliament intends to uphold the law, the speeches by those two hon. Gentlemen clearly demonstrate that the rule of law has little interest for the Opposition Front Bench and many of their supporters.
    The law of trespass is the law of the land. I condemn as much as anybody else the activities of the owners of Centre Point, as I shall show later. But the Opposition do not do their argument any good by encouraging people to break the law.
    Mr. Blenkinsop: I should be interested to know whether in his condemnation of land trespass the hon. Gentleman goes so far as condemning demonstrations against the evils of private ownership of land in certain places such as the Peak District in the past?
    Mr. Finsberg: We are talking about a demonstration that took place last week when people trespassed, having gained access by pretending to be what they

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    were not. The country will draw the inference from what has been said that the Labour Party encourages law breaking.
    I welcome new Clause 14, even though I had tabled my Amendment No. 9 before the Government put it down. I think that I am the only Member in the Chamber who has taken an active part in dealing with the penalty rating on Centre Point. Long before right hon. Gentlemen opposite were talking about it, some of us were taking action to get money in. I shall come to that later.
    I think that the House should support the new clause fully. It carries into effect some of the intentions behind the Unoccupied Property (Increase of Rate) Bill that the House gave me leave to introduce on 23rd May 1972. On that occasion I said:
    "… I hope that my remarks will enable the Government, in their promised review of local government finance, to remedy some of the existing defects and to adopt at least some of the ideas proposed in the Bill."—[OFFICIAL REPORT, 23rd May 1972; Vol. 837, c. 1240.]
    That Bill, amongst other things, called for a penalty rating of up to 125 per cent.
    The Labour Party talks and makes noises, but, as my hon. Friend the Member for Birmingham, Handsworth (Mr. Sydney Chapman) said, when it had an opportunity to take action to amend the General Rate Act 1967 it did nothing. Therefore, the country should again remember that it takes the Labour Party a long time to wake up on this sort of issue.
    On Centre Point I take issue with my hon. Friend the Member for Northants, South (Mr. Arthur Jones) who said that it costs a lot of money to implement the empty rating provisions. On 23rd May 1972, at column 1238 of HANSARD, I pointed out what had been done by the London Borough of Camden. We implemented at the first opportunity—that is, the beginning of the rating year 1968—the provisions of the 1967 Act, and by May 1972 we had collected over £2,138,000 in empty property rates at a cost of less than £85,000. No less than £300,000 came from Centre Point.
    Mrs. Elaine Kellett-Bowman: Hear, Hear.
    Mr. Finsberg: I am delighted that my hon. Friend the Member for Lancaster
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    (Mrs. Kellett-Bowman) is present, because she was a colleague of mine on the Camden Council when the action was beginning to bring money in to the ratepayers.
    Mr. Arthur Jones: My hon. Friend is dealing with properties in Camden of very high rateable value. This is not general throughout the country. He is quoting an exceptional circumstance. I know from my own experience the truth of the remark that I made in my speech.
    Mr. Finsberg: I was not suggesting that my hon. Friend was inaccurate. I said that I believed that he was not perhaps following logically the point that I am making. There are many rural areas where the cost of collection is too high. But in the major conurbations—not merely Bristol and London, but other places where I have seen some of these empty properties—the cost of collection is a small percentage of the amount that can be got in.
    I believe that it is right to do something in order to secure penalty rating for local government in the case of this type of property. But if the aim is to get more than the quadruple or quintuple rates proposed by my right hon. Friend, it should become a matter for income tax and should not necessarily mean that a local authority is fortunate enough because the property is in its area, to get that amount of money. At this stage it is necessary to decide that the balance should go to the central Government.
    It is a good thing that the clause has been introduced. I noticed that the hon. Member for Widnes said in his opening remarks that, having welcomed the two previous clauses, he felt that the honeymoon was over. I am not sure whether the words "honeymoon was over" and his disappearance have any connection but I should like to know whether, cutting away the frills of his speech, he intends to advise his right hon. and hon. Friends to vote against the clause or whether, having led all his troops up the hill by that most eloquent speech, he will decide that the clause is worth while and that he will not vote against it.
    Mr. Denis Howell: I used that expression.
    Mr. Finsberg: Then when the whistle is blown we shall see precisely what the

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    hon. Member for Birmingham, Small Heath (Mr. Denis Howell) thinks. The Opposition should accept with much better grace than their speeches convey the good intentions behind the clause.
    I am certain that my right hon. Friend will be the first to say that no legislation, not even that drafted by parliamentary draftsmen and introduced by him, could be 100 per cent. foolproof without any sort of loophole. But the House does no good by deciding that it wants to widen the issue because there might be a loophole. It is much wiser, I suggest, to let the clause go through and to give the Government an opportunity in 12 months' time to say that the loophole has appeared. Virtually every Finance Act contains provision to stop a loophole, and no Government are inhibited from introducing 12 months later a stopper for a loophole which has been exposed. The clause is good and it will work. If loopholes appear, I rely upon the Government to close them on the basis of evidence and not on the basis of idle speculation. I use that word without intending any pun.
    What happens to a building where the owners have put in a planning application which involves considerable modifications to the interior and where the local authority sits on the planning application? After two months an owner may, if he wishes, take a deemed refusal. By doing so he condemns himself in many cases to waiting nine or 10 months at least for a public inquiry and a further 12 or 15 months for the result of that inquiry. Some local authorities are sitting on planning applications for four or six months. They are saying to the owners that, if they do not like it, they should take a deemed refusal. But such a course would cost money because the case would have to be fought, and in the meantime the property would remain empty. Some councils are doing this for political purposes, and I have given evidence of that fact to my right hon. and learned Friend the Secretary of State.
    If the owner can show that his planning application has been sat on, that he will not take a deemed refusal because of the additional delay and that the local authority is holding up the application for no good reason, will my right hon. Friend exercise discretion to say that the conditions
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    of the clause are not fulfilled and that the owner will not necessarily have to pay the penalty rating?
    9.15 p.m.
    Sir Brandon Rhys Williams: My right hon. Friend, in introducing the new clause, is seeking to respond to overwhelming public demand that something should be done about Centre Point. It is right that the House should take note of the fact that that is not the only example of a place where cubic feet are available which the public is not able to use. It is a wider problem than Centre Point or even a handful of modern office blocks. The same problem can be detected regarding residential property.
    I did not have the advantage of serving in Committee as have most other Members who have spoken. Therefore, if I do not understand fully the issues which have been raised, I hope that my right hon. Friend will excuse me. As I listened to the hon. Member for Widnes (Mr. Oakes) my doubts about the new clause turned into virtually a conviction that it should not pass into law as it stands. I do not like the phrase:
    "the owner has tried his best to let the building …"
    I feel, with my hon. Friend the Member for Hampstead (Mr. Geoffrey Finsberg) that there may well be occasions, particularly when conversions or when planning applications are involved, when the owner may be innocent. I am concerned that local authorities appear not to be allowed to have any discretion when they themselves may be the cause of a building remaining unlet.
    It occurs to me—and it may be that I have not read the clause sufficiently thoroughly—that there is no limit to its application. It can apply to a skyscraper, which is the sort of building very much in the public mind, or to a village shop in a remote community. It seems that the clause could be much improved by excluding small premises and perhaps old premises as well when the Centre Point situation does not apply.
    Commercial property might be left open because of redecoration or modernisation plans, because of redevelopment scheme or because a building might be awaiting demolition. I can think of such a case in

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    a conservation area where there is good cause for demolition, but while the matter is being decided it would be irresponsible to try to attract tenants as the tenancy might be very short.
    I am concerned about the precedent which the clause sets. I think that it bears the signs of having been set down at haste. It is a long clause, but that does not mean that it is well or tightly drafted. I think that lawyers will make a meal out of it. Possibly it might be much improved if in another place the matter were considered at length. That may be in doubt.
    I am concerned about the use of the rating system to achieve this social purpose. I should not complain if people felt that no concessions should be given in a Centre Point situation or in similar instances. In such circumstances, of course, the owner should be called upon to pay 100 per cent. rates as though the building was fully let. There could be said to be a case for the local authority demanding something more than 100 per cent. rates where, upon defiance of its development plan, it was put to expense in another way. If it provided land for office development which was then not made available for such use, it might have to put itself out to find other land which could be so developed. When the point is reached when the rates double, treble, quadruple and so on, I get more than an uneasy feeling that we are misusing the rates because we have not been able to think of anything better with which to solve the problem.
    I am not saying that we do not have to solve it, because public opinion has spoken absolutely clearly. Hon. Members in all parts of the House are agreed that a solution must be found. I would have thought that we could explore the possibilities of compulsory purchase more fully and that, subject to suitable safeguards, that would have given a much more direct weapon to the Government or to local authorities. I emphasise "subject to suitable safeguards".
    Here we find what is a vindictive use of the rating system to impose fines. It may be that our indignation and frustration over Centre Point will make the House decide to approve this clause as it stands or as amended. I am bound to say with regret that I cannot support my right hon.
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    Friend because I do not like the drafting of this clause. He is using the wrong weapon to deal with the problem and I hope that in the remaining time left he will think again to see whether some better solution cannot be found.
    Mr. James Aliason: I should like to declare an interest as an owner and manager of commercial property. I hasten to say that I have no particular interest here since I do not have any empty property. I am glad that the amendment moved in Committee by my hon. Friend the Member for Devizes (Mr. Charles Morrison), which I supported, has grown into this clause, which I trust will have the force of law. In London we have excessive rates for office premises arising from the restriction on the free building of further offices which are so much needed.
    Since 1965 we have had the office development permit system and in consequence there is an artificial shortage. It is made all the worse if we have office blocks in London artificially held back from the market. I find Centre Point and similar office blocks offensive. Consequently we need action. The question is, what is the best form of action? The opposition constantly complain about huge untaxed profits accruing to owners of property, the implication being that someone is making a huge profit and putting it into his pocket.
    But it is untaxed because it is unrealised. While it may be the position that Centre Point has risen in value from £5 million to £50 million, I heard it suggested that as a result of this clause it has dropped by £15 million. That shows that this is the way to move. It is not satisfactory to seek to impose a capital gains tax on unrealised profits, but it is possible to have some form of penal taxation. That is what this is. It is in the form of rating rather than taxation because the rating system is better attuned to locating empty commercial property and then to applying a penal rate to it. That imposition reduces the value of a property, which is a move in the right direction. If these properties are left unlet, they will attract increasing penalties and their value will drop further. Thus we will have fewer empty properties at a time of scarcity. I am happy to support the clause.
    Mr. Denis Howell: We have had an interesting debate on what has come to be known as the Centre Point clause. The Opposition recognise that the Minister has gone out of his way to meet the wishes of those who served on the Committee. We have criticism of whether he has managed to achieve what all of us wished him to achieve, but he has had a good cockshy at trying to meet our wishes.
    The hon. Member for Birmingham, Handsworth (Mr. Sydney Chapman) rather chided one of my hon. Friends about marching forward at a late stage. It is clear that, while my hon. Friend is marching forward, the hon. Gentleman is marching backwards. This is in every way typical of the division between the two sides of the House on these matters. We are dealing, as all hon. Members who have spoken have recognised, with an abuse which gives great offence to most decent people. The ability of people to put up large buildings and see their value appreciate—without genuinely trying to let them—with the eventual hope of reaping a capital appreciation probably gives greater offence than almost anything else in our society.
    The hon. Member for Hampstead (Mr. Geoffrey Finsberg) sounded a rather strident note in the debate. He also said that, when I gave my advise to the House, I should be blowing a whistle. Bearing in mind the effect of the clause on Mr. Harry Hyams, I cannot resist saying that the hon. Member has got the wrong sport. We do not need the blowing of a whistle. Rather do we need a declaration of no contest.
    As the hon. Gentleman knows—I take it from what he said that he served on Camden Council—the firm which got permission to build that block of offices must have engaged in a degree of deception with the planning authority in the first place. I cannot believe that any planning authority would have given permission for the building of Centre Point—or for Centre Point-type buildings anywhere else—had it thought that the prime object of the exercise by the applicants was to obtain capital appreciation on the building.
    Mr. Geoffrey Finsberg: Is the hon. Gentleman aware that one of the major shareholders in Centre Point all along has been the Co-operative Insurance Society?
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    Is he accusing that body of taking part in deception?
    Mr. Howell: I do not know who are the major shareholders in Mr. Hyams's firm. If the Co-operative Insurance Society, which has my investment, is behaving in that way, it is in my view equally to be called to account for not insisting on a proper and more responsible method of investing its money. There may be many other companies, corporations and pension funds involved. I hazard a guess that when they agreed to make an investment for what they thought would be a lucrative return they did not know that they would be involved in anything like this. I do not believe that the Co-operative Insurance Society would have thought that for one moment. But had the society been involved I would have hoped that it made a greater representation about this issue than appears to have been the case.
    I return to the planning point, which is the essence of the matter. No one can erect a building of any sort without planning permission. The case of Centre Point might cause us to examine planning procedures to see whether adequate information has been provided. Where an authority gives planning permission for the building of a Centre Point or similar edifice, if that building is not used for the purpose for which permission was sought I agree that the proper order is a compulsory purchase order. It is not necessary to deal with the matter in the way proposed.
    9.30 p.m.
    A compulsory purchase order on Centre Point is being considered, I understand. We did not wish to pursue the matter, because to a certain extent it must be improper for the House to do so while the reasonable judicial processes of compulsory purchase orders are being conducted outside. Therefore, I will spend no more time on that aspect.
    The hon. Member for Hampstead (Mr. Geoffrey Finsberg) told us that Camden Council had collected from Centre Point more than £300,000 in rates. That underlines our concern. Rates of £300,000 have been paid on an empty building and, as far as I can judge, that has made not an iota of difference to the intention of Mr. Hyams to let the building. Therefore, the hon. Gentleman is saying what

    1573
    we are saying—that, far as the Minister has gone to try to meet us, we are still left with every reason for misgivings about whether super-rating of the premises will meet the situation.
    I also agree with the hon. Member who said that we should not become totally bogged down about Centre Point. There are many other buildings where the same sort of thing is going on. The clause deals only with commercial premises and not with residential properties. Perhaps it should be changed to cover residential properties. There has recently come to my attention the story of a block of flats within a very short walking distance of the House where, as the lease of the individual flats has run out, the landlord has been refusing to re-let them. He has been keeping them empty for long periods because he knows that within four or five years the whole building will be empty and will bring him a tremendous capital appreciation. That is probably in many ways even more offensive than the Centre Point case.
    A number of hon. Members have drawn attention to the phrase "tried his best" in the clause. If a developer can show that he has tried his best to let the premises, he can escape the financial penalties. I do not know where the phrase comes from. I have encountered it only at school. It seems to me to be a headmaster's phrase. That led me to the conclusion that it was drafted by the Secretary of State for Education and Science, and that it has nothing to do with the Department of the Environment, which I have always thought, after my experience there, was able to draft better than that. The point has been made very truly that the lawyers will have great pickings from defending cases under the clause. I hope that better phraseology can be provided in another place.
    We place great store on our two sub-amendments. The first deals with the inadequacy, proved by the experience of the hon. Member for Hampstead, of the financial penalties, even though they go further than anything contemplated in Committee, for which I express my appreciation.
    I shall not advise my hon. Friends to vote against the clause, because we are not marching our troops up the hill and down again. That is what the Prime
    1574
    Minister does every now and again when he decides to have an election and then has to reverse his strategy to take account of the fact that he cannot have an election on the day he has chosen. It is normal that, although we regard the clause as inadequate, we recognise that it is better than anything else we have. It represents a genuine attempt by the Government to meet the wishes of both sides of the Committee. It would be churlish in those circumstances to vote against the clause. We shall, therefore, confine ourselves, if our amendments are not acceptable, to vote for it.
    The first of our amendments deals with the super-rating of these properties. The reason why we want to go further than the Government propose is because the rate of inflation is galloping on under them and because their proposals do not take account of the rate of inflation on empty properties.
    The other amendment, which we regard as even more important, should be a factor when local authorities determine whether there is any willingness to convert empty properties into flats or homes for people. Indeed, in my constituency we know that a number of properties were built because the local authority encouraged developers to build as it believed that there would be a lot of redevelopment. The result is that we now have probably too many empty flats in Birmingham. The answer to the problem is to convert those buildings for the homeless. Such action is desperately needed. The test is whether the developers are prepared to convert commercial premises into domestic residential premises.
    I hope that the Minister will accept sub-amendments (c) or (d). If not, I must ask my hon. Friends to record their support of our case in the Lobby.
    Mr. Graham Page: I am grateful for the constructive debate on the clause. I knew only too well that in embarking on a new idea in legislation I was bound to be criticised. To call it "cockshy" was unkind. I do not think I have made a "cock" of it. I think that it will achieve its purpose.
    The hon. Member for Widnes (Mr. Oakes) said that the new clause does little to tackle the mischief of the empty property and the hon. Member for South

    1575
    Shields (Mr. Blenkinsop) said it was a faltering step. But they have forgotten that this is part of a package. Although it is not an occasion to discuss the other parts of the package here, I must necessarily mention the heavy taxation liability, which my right hon. Friend the Chancellor of the Exchequer has indicated he will impose on capital gains from these properties. There was also the announcement about the Housing Bill which will be before the House in a matter of days and which will include provisions for taking over management of those properties and letting them so that they serve the purpose for which they were erected.
    This is the package—the taxation liability, heavily increased power to take over the management of property and the surcharge rating.
    The phrase "Try his best" has been criticised, although it expresses in decent English, without terrible legal complications, what we intend through the clause. If an owner has not "tried his best" to let property the clause should apply to him. The hon. Member for Widnes asked who would decide whether an owner had tried his best. In the first instance, of course, the rating authority would do so in imposing the surcharge. But there are two ways in which this can be questioned and brought before the court—either by an appeal under Section 7 of the General Rate Act 1967 or by defence to an action by the local authority to recover the surcharge.
    The hon. Member also said that, in many cases, when one is considering the guidance to be given about whether an owner has tried his best, there are no similar properties with which to compare it so as to ascertain a comparable rent. He asked what was meant by it being let "in parts" and asked questions about estate agents. But this subsection is intended only as guidance. It says that "regard shall be had" to those subjects,
    "… as well as other relevant factors".
    These categories are not meant to be exclusive of any other considerations. All the considerations which would help a court, or in the first instance a rating authority and then a court, to decide whether someone had tried his best to let a property should be taken into account. The matters that the hon. Member
    1576
    mentioned would all be relevant and admissible in evidence, I should have thought, if the rating authority's claim to surcharge were questioned in the court.
    On sub-amendment (c), the hon. Member for Widnes said that it was not enough to double, treble or raise even higher in progressive increases the surcharge—that this was an insufficent deterrent. His sub-amendment would enable a rating authority, with the Secretary of State's consent, to increase the amount of the penalty after the first 12 months of non-use of the commercial building.
    I must repeat that the new clause creates a penal surcharge and there should not be a different penalty in one area as against another. Any Secretary of State would also have a difficult job to know how to discriminate, when to give his consent to a special rating of this sort in one area. The sub-amendment suggests no basis on which his discretion should be exercised and leaves the way open for entirely arbitrary action by the Secretary of State in such a situation. Parliament should fix the rates of the surcharge and leave it at that in this part of the package against an owner who is keeping his property empty deliberately.
    Turning to sub-amendment (d), if property stands empty, surely it should attract the penalty. It should not matter whether the owner has tried to switch the use of the property. If he wants to change the use, let him do so ; let him get planning permission and carry out that change. Until he has done so, he should be liable to the penalty.
    Sub-amendment (d) would produce quite the wrong result. It would encourage applications to convert to housing, but applications which perhaps were doomed to failure and were made for that very purpose.
    Mr. Idris Owen: We have been discussing penalties in the context of massive profits, assuming that they are going on ad infinitum, but we are rapidly reaching the stage of stabilisation and perhaps even de-escalation of property prices. If we are thinking in terms of penalties, the interest charges on the capital cost could be penalties in themselves. Many homes built on a speculative basis at the moment are being sold

    1577
    at less than cost so that the small developer can recover some of the capital on which he has to pay fantastic interest charges. To add to that the penalty that my right hon. Friend suggests would drag people into bankruptcy. We must be fair.
    9.45 p.m.
    Mr. Graham Page: I find difficulty in fitting that into what I was saying. My hon. Friend has made a very good speech in his intervention, but perhaps I may continue with the point I was making on the sub-amendment.
    I was suggesting that a phoney planning application might be put in merely to delay the position and escape the imposition of the surcharge. I think it best to leave the clause as it is, and then nothing is weakened. Add the words of the sub-amendment, and an evasion device is built into the clause.
    I must advise my hon. Friends to resist both these sub-amendments and stick to the clause as we have it.
    My hon. Friend the Member for North-ants, South (Mr. Arthur Jones) asked why it did not apply to industrial premises. We do not think that there is a comparable mischief there and we would not wish to extend it to that kind of property. The same remarks apply to residential property, although we have the sort of case mentioned of the flats in Hove. Where a residential property like that is left vacant there is power of compulsory purchase for housing purposes. This might easily apply to the sort of case which has been mentioned and we do not need the penalty in that case ; we have other methods. We are creating this new penalty. I do not think we should extend it to penalise those against whom there is little if any public distrust or antagonism. The ordinary 100 per cent.—mentioned in Clause 15—on empty properties should suffice.
    My hon. Friend the Member for Northants, South also asked whether the new clause applies to local authority schemes or joint schemes between local authorities and private enterprise for building offices in city centres. Of course, a local authority would be liable, as anybody else, if it deliberately kept vacant commercial property which it built, but I think it stretches imagination a little far to think a local authority
    1578
    would deliberately do that. I do not think that that is a very important point for the purpose of the mischief with which we are here dealing.
    The hon. Member for Bristol, South (Mr. Michael Cocks) said that sub-amendment (c) would give flexibility, but I do not think that it is right, when one is dealing with the creation of a new penalty, that one should give that flexibility to the local authority concerned.
    My hon. Friend the Member for Birmingham, Handsworth (Mr. Sydney Chapman) raised points included in sub-amendments which he had on the Paper but which have not been discussed, but I will deal with the points as he put them in his speech. His first sub-amendment, in line 2, after "building", to insert
    "or over 50 per cent. of the total floor area of it"
    is, I can assure him, quite unnecessary. The new Section 17B(5) in the new clause provides for the purposes of the surcharge that a hereditament shall be considered as being used on any day for its purpose if only four-fifths of it were so used on that day. That covers the point with which my hon. Friend was concerned. The same point arises in his second sub-amendment. Section 17B(5) covers that.
    My hon. Friend the Member for Hampstead (Mr. Geoffrey Finsberg) has long crusaded on this subject and has very considerable knowledge of it, and he raised again the question of planning applications for modification of premises, and a local authority holding up a planning application as an excuse for getting out of surcharge. In a proper case it would come within another relevant factor to be taken into account in deciding whether the man had tried his best to let the property. But I should not like to introduce a specific subparagraph on this matter for fear that we would build in what I called just now a "phoney" device or a "phoney" planning application in order to delay matters.
    My hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) also raised the question of residential property. I say again that we can deal with this under compulsory purchase for the purpose

    1579
    of housing if necessary. I would not be satisfied to deal with this subject purely on the basis of compulsory purchase because in many cases that is exactly what the owner wants—someone to take the property off his hands at the market valuation which the district valuer may put at a figure which is quite satisfactory to the owner, who may be quite prepared to get rid of it. We want the property to be used for the purpose for which it was built and the power to take it over for management will satisfy that desire.
    I was grateful to my hon. Friend the Member for Hemel Hempstead (Mr. Allason) for supporting the idea of doing this through the rates. There is every reason to say that the local authority in these cases should have the benefit of the surcharge. This is a form of rating. I

    Division No. 32.]

    AYES

    [9.53 p.m.

    Albu, Austen

    Fisher, Mrs. Doris (B'ham, Ladywood)

    Mackie, John

    Allaun, Frank (Salford, E.)

    Fitch, Alan (Wigan)

    Mahon, Simon (Bootle)

    Armstrong, Ernest

    Fletcher, Ted (Darlington)

    Mallalieu, J. P. W. (Huddersfield, E.)

    Ashton, Joe

    Foot, Michael

    Marks, Kenneth

    Atkinson, Norman

    Forrester, John

    Marquand, David

    Austick, David

    Fraser, John (Norwood)

    Marsden, R.

    Bagier, Gordon A. T.

    Galpern, Sir Myer

    Marshall, Dr. Edmund

    Beaney, Alan

    Golding, John

    Mellish, Rt. Hn. Robert

    Berth, A. J.

    Gordon Walker, Rt. Hn. P. C.

    Millan, Bruce

    Bidwell, Sydney

    Gourlay, Harry

    Miller, Dr. M. S.

    Bishop, E. S.

    Grant, George (Morpeth)

    Mitchell, R. C. (S'hampton, Itchen)

    Blenkinsop, Arthur

    Grant, John D. (Islington, E.)

    Molloy, William

    Boardman, H. (Leigh)

    Griffiths, Eddie (Brightside)

    Morris, Rt. Hn. John (Aberavon)

    Booth, Albert

    Grimond, Rt. Hn. J.

    Oakes, Gordon

    Boothroyd, Miss Betty

    Hamilton, James (Bothwell)

    Oram, Bert

    Bottomley, Rt. Hn. Arthur

    Hamilton, William (Fife, W.)

    Orbach, Maurice

    Brown, Robert C. (N'ctle-u-Tyne, W.)

    Hardy, Peter

    Oswald, Thomas

    Brown, Hugh D. (G'gow, Provan)

    Harper, Joseph

    Palmer, Arthur

    Brown, Ronald (Shoreditch & F'bury)

    Harrison, Walter (Wakefield)

    Parker, John (Dagenham)

    Butler, Mrs. Joyce (Wood Green)

    Hatton, F.

    Price, William (Rugby)

    Campbell, I. (Dunbartonshire, W.)

    Hooson, Emlyn

    Probert Arthur

    Carmichael, Neil

    Horam, John

    Radice, Giles

    Carter, Ray (Birmingh'm, Northfield)

    Houghton, Rt. Hn. Douglas

    Roberts, Albert (Normanton)

    Carter-Jones, Lewis (Eccles)

    Howell, Denis (Small Heath)

    Roberts, Rt. Hn. Goronwy (Caernarvon)

    Clark, David (Colne Valley)

    Huckfield, Leslie

    Rose, Paul B

    Concannon, J. D.

    Hughes, Mark (Durham)

    Ross, Rt. Hn. William (Kilmarnock)

    Conlan, Bernard

    Hughes, Robert (Aberdeen, N.)

    Rowlands, Ted

    Cox, Thomas (Wandsworth, C.)

    Janner, Greville

    Silkin, Hn. S. C. (Dulwich)

    Crossman, Rt. Hn. Richard

    John, Brynmor

    Sillars, James

    Cunningham, Dr. J. A. (Whitehaven)

    Johnson, Walter (Derby, S.)

    Silverman, Julius

    Dalyell, Tam

    Jones, Dan (Burnley)

    Skinner, Dennis

    Davidson, Arthur

    Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

    Smith, Cyril (Rochdale)

    Davies, Ifor (Gower)

    Jones, T. Alec (Rhondda, W.)

    Smith, John (Lanarkshire, N.)

    Davis, Clinton (Hackney, C.)

    Kaufman, Gerald

    Spriggs, Leslie

    Davis, Terry (Bromsgrove)

    Kelley, Richard

    Stallard, A. W.

    Deakins, Eric

    Kerr, Russell

    Steel, David

    de Freitas, Rt. Hn. Sir Geoffrey

    Lamborn, Harry

    Stewart, Rt. Hn. Michael (Fulham)

    Dempsey, James

    Lamond, James

    Strang, Gavin

    Dormand, J. D.

    Lawson, George

    Swain, Thomas

    Douglas-Mann, Bruce

    Lee, Rt. Hn. Frederick

    Thomas, Jeffrey (Abertillery)

    Duffy, A. E. P.

    Lever, Rt. Hn. Harold

    Tinn, James

    Dunn, James A.

    Lomas, Kenneth

    Tope, Graham

    Dunnett, Jack

    Loughlin, Charles

    Torney, Tom

    Eadie, Alex

    Lyons, Edward (Bradford, E.)

    Tuck, Raphael

    Edelman, Maurice

    Mabon, Dr. J. Dickson

    Varley, Eric G.

    Ellis, Tom

    McBride, Neil

    Wainwright, Edwin

    Evans, Fred

    McElhone, Frank

    Walker, Harold (Doncaster)

    Faulds, Andrew

    McGuire, Michael

    Weitzman, David

    Fernyhough, Rt. Hn. E.

    Machin, George

    Wellbeloved, James

    should like to see that go to the local authorities to benefit the rate revenue.
    I think that I have dealt with all the points that have been raised in the debate. I commend the new clause to the House.
    Question put and agreed to.
    Clause read a Second time.
    Amendment proposed: sub-amendment (c) in line 20, at end insert—
    ' (3A) Notwithstanding the provisions of subsection (3) above, the rating authority may with the consent of the Secretary of State after the first 12 months of the period of non-use levy by greater multiples of the normal rates than those specified while the period of non-use lasts '.—[Mr. Oakes.]
    Question put, That the amendment be made to the proposed clause:
    The House divided: Ayes 155, Noes 166.

    Wells, William (Walsall, N.)

    Williams, W. T. (Warrington)

    White, James (Glasgow, Pollck)

    Wilson, Alexander (Hamilton)

    TELLERS FOR THE AYES:

    Whitehead, Philip

    Wilson, William (Coventry, S.)

    Mr. Michael Cocks and

    Whitlock, William

    Woof, Robert

    Mr. Donald Coleman.

    Williams, Alan (Swansea, W.)

    NOES

    Adley, Robert

    Gurden, Harold

    Normanton, Tom

    Allason, James (Hemel Hempstead)

    Hall, Sir John (Wycombe)

    Oppenheim, Mrs. Sally

    Archer, Jeffrey (Louth)

    Hamilton, Michael (Salisbury)

    Owen, Idris (Stockport, N.)

    Astor, John

    Haselhurst, Alan

    Page, Rt. Hn. Graham (Crosby)

    Atkins, Humphrey

    Hastings, Stephen

    Parkinson, Cecil

    Awdry, Daniel

    Havers, Sir Michael

    Percival, Ian

    Baker, W. H. K. (Banff)

    Hawkins, Paul

    Pike, Miss Mervyn

    Batsford, Brian

    Hayhoe, Barney

    Pink, R. Bonner

    Beamish, Col, Sir Tufton

    Hicks, Robert

    Powell, Rt. Hn. J. Enoch

    Bell, Ronald

    Hiley, Joseph

    Price, David (Eastleigh)

    Benyon, W.

    Hill, John E. B. (Norfolk, S.)

    Proudfoot, Wilfred

    Biffen, John

    Holland, Philip

    Redmond, Robert

    Biggs-Davison, John

    Holt, Miss Mary

    Reed, Laurance (Bolton, E.)

    Boardman, Tom (Leicester, S. W.)

    Hornby, Richard

    Rees-Davies, W. R.

    Boscawen, Hn. Robert

    Howe, Rt. Hn. Sir Geoffrey (Reigate)

    Rhys Williams, Sir Brandon

    Bowden, Andrew

    Howell, David (Guildford)

    Ridley, Hn. Nicholas

    Bray, Ronald

    Howell, Ralph (Norfolk, N.)

    Roberts, Michael (Cardiff, N.)

    Brinton, Sir Tatton

    Iremonger, T. L.

    Rossi, Hugh (Hornsey)

    Brown, Sir Edward (Bath)

    Irvine, Bryant Godman (Rye)

    Sainsbury, Timothy

    Bryan, Sir Paul

    James, David

    Scott, Nicholas

    Buchanan-Smith, Alick (Angus, N&M)

    Jones, Arthur (Northants, S.)

    Shaw, Michael (Sc'b'gh & Whitby)

    Burden, F. A.

    Jopling, Michael

    Shelton, William (Clapham)

    Butler, Adam (Bosworth)

    Kaberry, Sir Donald

    Shersby, Michael

    Campbell, Rt. Hn. G. (Moray & Nairn)

    Kellett-Bowman, Mrs. Elaine

    Simeons, Charles

    Carlisle, Mark

    Kershaw, Anthony

    Skeet, T. H. H.

    Channon, Paul

    Kimball, Marcus

    Soref, Harold

    Chapman, Sydney

    King, Evelyn (Dorset, S.)

    Spence, John

    Clark, William (Surrey. E.)

    King, Tom (Bridgwater)

    Sproat, lain

    Clegg, Walter

    Kinsey, J. R.

    Stainton, Keith

    Cockeram, Eric

    Kirk, Peter

    Stanbrook, Ivor

    Cooke, Robert

    Knight, Mrs. Jill

    Stewart-Smith, Geoffrey (Belper)

    Coombs, Derek

    Knox, David

    Sutcliffe, John

    Corfield, Rt. Hn. Sir Frederick

    Lamont, Norman

    Taylor, Frank (Moss Side)

    Cormack, Patrick

    Lane, David

    Tebbit, Norman

    Costain, A. P.

    Le Marchant, Spencer

    Thomas, John Stradling (Monmouth)

    Davies, Rt. Hn. John (Knutsford)

    Lloyd, Ian (P'tsm'th, Langstone)

    Thompson, Sir Richard (Croydon, S.)

    d'Avigdor-Goldsmid, Maj.-Gen. Jack

    Loveridge, John

    Tugendhat, Christopher

    Deedes, Rt. Hn. W. F.

    Luce, R. N.

    Turton, Rt. Hn. Sir Robin

    Dykes, Hugh

    MacArthur, Ian

    van Straubenzee, W. R.

    Eden, Rt. Hn. Sir John

    McCrindle, R. A.

    Vaughan, Dr. Gerard

    Edwards, Nicholas (Pembroke)

    McLaren, Martin

    Waddington, David

    Elliot, Capt, Walter (Carshalton)

    McNair-Wilson, Michael

    Walder, David (Clitheroe)

    Elliott, R. W. (N'c'tle-upon-Tyne, N.)

    Madel, David

    Walker-Smith, Rt. Hn. Sir Derek

    Eyre, Reginald

    Mather, Carol

    Ward, Dame Irene

    Fidler, Michael

    Mawby, Ray

    Wells, John (Maidstone)

    Finsberg, Geoffrey (Hampstead)

    Maxwell-Hyslop, R. J.

    White, Roger (Gravesend)

    Fletcher, Alexander (Edinburgh, N.)

    Meyer, Sir Anthony

    Winterton Nicholas

    Fletcher-Cooke, Charles

    Miscampbell, Norman

    Wolrige-Gordon, Patrick

    Fookes, Miss Janet

    Mitchell, David (Basingstoke)

    Worsley, Sir Marcus

    Fowler, Norman

    Moate, Roger

    Wylie, Rt. Hn. N. R.

    Gardner, Edward

    Money, Ernle

    Younger, Hn. George

    Glyn, Dr. Alan

    Monks, Mrs. Connie

    Gower, Sir Raymond

    Monro, Hector

    TELLERS FOR THE NOES:

    Gray, Hamish

    Montgomery, Fergus

    Mr. Marcus Fox and

    Green, Alan

    Morgan-Giles, Rear-Adm.

    Mr. A. G. F. Hall-Davis.

    Griffiths, Eldon (Bury St. Edmunds)

    Mudd, David

    Gummer, J. Selwyn

    Neave, Airey

    Question accordingly negatived.
    It being after Ten o'clock, further consideration of the Bill, as amended, stood adjourned.

BUSINESS OF THE HOUSE
Ordered,
That the Local Government Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Humphrey Atkins.]

LOCAL GOVERNMENT BILL
As amended (in the Standing Committee, further considered.
Amendment proposed: sub-amendment (d) in line 38, at end insert—
' (f) whether or not the owner has made attempts to obtain planning consent to use the building for housing purposes as an alternative to commercial development and if successful has advertised the housing accommodation for sale or rent '.—[Mr. Oakes.]
Question put. That the amendment be made to the proposed Clause.

Division No. 33.]

AYES

[10.3 p.m.

Albu, Austen

Fitch, Alan (Wigan)

Mellish, Rt. Hn. Robert

Allaun, Frank (Salford, E.)

Fletcher, Ted (Darlington)

Millan, Bruce

Armstrong, Ernest

Foot, Michael

Miller, Dr. M. S.

Ashton, Joe

Forrester, John

Mitchell, R. C. (S'hampton, Itchen)

Atkinson Normen

Fraser, John (Norwood)

Molloy, William

Austick, David

Galpern, Sir Myer

Morris, Rt. Hn. John (Aberavon)

Bagier, Gordon A. T.

Golding, John

Oakes, Gordon

Beith, A. J.

Gordon Walker, Rt. Hn. P. C.

Oram, Bert

Bidwell, Sydney

Gourlay, Harry

Orbach, Maurice

Bishop, E. S.

Grant, George (Morpeth)

Oswald, Thomas

Blenkinsop, Arthur

Grant, John D. (Islington, E.)

Palmer, Arthur

Boardman, H. (Leigh)

Griffiths, Eddie (Brightside)

Parker, John (Dagenham)

Booth, Albert

Grimond, Rt. Hn. J.

Price, William (Rugby)

Boothroyd, Miss Betty

Hamilton, James (Bothwell)

Probert, Arthur

Bottomley, Rt. Hn. Arthur

Hamilton, William (Fife, W.)

Radice, Giles

Brown, Robert C. (N'c'tle-u-Tyne, W.)

Hardy, Peter

Roberts, Albert (Normanton)

Brown, Hugh D. (G'gow, Provan)

Harper, Joseph

Roberts, Rt. Hn. Goronwy (Caernarvon)

Brown, Ronald (Shoreditch & F'bury)

Harrison, Walter (Wakefield)

Rose, Paul B.

Buchanan, Richard (G'gow, Sp'burn)

Hatton, F.

Ross, Rt. Hn. William (Kilmarnock)

Butter, Mrs. Joyce (Wood Green)

Hooson, Emlyn

Rowlands, Ted

Campbell, I. (Dunbartonshire, W.)

Horam, John

Silkin, Hn. S. C. (Dulwich)

Carmichael, Neil

Houghton, Rt. Hn. Douglas

Sillars, James

Carter, Ray (Birmingh'm, Northfield)

Howell, Denis (Small Heath)

Silverman, Julius

Carter-Jones, Lewis (Eccles)

Huckfield, Leslie

Skinner, Dennis

Clark, David (Colne Valley)

Hughes, Mark (Durham)

Smith, Cyril (Rochdale)

Concannon, J. D.

Hughes, Robert (Aberdeen, N.)

Smith, John (Lanarkshire, N.)

Conlan, Bernard

Janner, Greville

Spriggs, Leslie

Cox, Thomas (Wandsworth, C.)

John, Brynmor

Stallard, A. W.

Crossman, Rt. Hn. Richard

Johnson, Walter (Derby, S.)

Steel, David

Cunningham, Dr. J. A. (Whitehaven)

Jones, Dan (Burnley)

Stewart, Rt. Hn. Michael (Fulham)

Dalyell, Tarn

Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

Strang, Gavin

Davidson, Arthur

Jones, T. Alec (Rhondda, W.)

Swain, Thomas

Davies, Ifor (Gower)

Kaufman, Gerald

Thomas, Jeffrey (Abertillery)

Davis, Clinton (Hackney, C.)

Kelley, Richard

Tinn, James

Davis, Terry (Bromsgrove)

Kerr, Russell

Tope, Graham

Deakins, Eric

Lamborn, Harry

Torney, Tom

de Freitas, Rt. Hn. Sir Geoffrey

Lamond, James

Tuck, Raphael

Dempsey, James

Lawson, George

Varley, Eric G.

Dormand, J. D.

Lee, Rt. Hn. Frederick

Wainwright, Edwin

Douglas-Mann, Bruce

Lever, Rt. Hn. Harold

Walker, Harold (Doncaster)

Duffy, A. E. P.

Lomas, Kenneth

Weitzman, David

Dunn, James A.

Loughlin, Charles

Wellbeloved, James

Dunnett Jack

Lyons, Edward (Bradford, E.)

Wells, William (Walsall, N.)

Eadie, Alex

Mabon, Dr. J. Dickson

White, James (Glasgow, Pollok)

Edelman, Maurice

McBride, Neil

Whitehead, Phillip

Ellis, Tom

McElhone, Frank

Whitlock, William

Evans, Fred

McGuire, Michael

Williams, W. T. (Warrington)

Faulds, Andrew

Machin, George

Wilson, Alexander (Hamilton)

Fernyhough, Rt. Hn. E.

Mackie, John

Wilson, William (Coventry, S.)

Fisher, Mrs. Doris (B'ham, Lady wood)

Mahon, Simon (Bootle)

Woof, Robert

Marks, Kenneth

Marquand, David

TELLERS FOR THE AYES:

Marsden, F.

Mr. Michael Cocks and

Marshall, Dr. Edmund

Mr. Donald Coleman.

NOES

Adley, Robert

Buchanan-Smith, Alick (Angus, N&M)

Elliot, Capt. Walter (Carshalton)

Allason, James (Hemel Hempstead)

Burden, F. A.

Elliott, R. W. (N'c'tle-upon-Tyne, N.)

Archer, Jeffrey (Louth)

Butler, Adam (Bosworth)

Eyre, Reginald

Astor, John

Carlisle, Mark

Fidler, Michael

Atkins, Humphrey

Channon, Paul

Finsberg, Geoffrey (Hampstead)

Awdry, Daniel

Chapman, Sydney

Fisher, Sir Nigel (Surbiton)

Baker, W. H. K. (Banff)

Clark, William (Surrey, E.)

Fletcher, Alexander (Edinburgh, N.)

Batsford, Brian

Clegg, Walter

Fletcher-Cooke, Charles

Beamish, Col, Sir Tufton

Cockeram, Eric

Fookes, Miss Janet

Benyon, W.

Cooke, Robert

Fowler, Norman

Bitten, John

Coombs, Derek

Gardner, Edward

Biggs-Davison, John

Corfield, Rt. Hn. Sir Frederick

Glyn, Dr. Alan

Boardman, Tom (Leicester, S. W.)

Cormack, Patrick

Gower, Sir Raymond

Boscawen, Hn. Robert

Costain, A. P.

Gray, Hamish

Bowden, Andrew

d'Avigdor-Goldsmid, Maj.-Gen. Jack

Green, Alan

Bray, Ronald

Deedes, Rt. Hn. W. F.

Griffiths, Eldon (Bury St. Edmunds)

Brinton, Sir Tatton

Dykes, Hugh

Gummer, J. Selwyn

Brown, Sir Edward (Bath)

Eden, Rt. Hn. Sir John

Gurden, Harold

Bryan, Sir Paul

Edwards, Nicholas (Pembroke)

Hall, Sir John (Wycombe)

Hamilton, Michael (Salisbury)

Haselhurst, Alan

The House divided: Ayes 154, Noes 163.

Hastings, Stephen

McNair-Wilson, Michael

Scott-Hopkins, James

Havers, Sir Michael

Madel, David

Shaw, Michael (Sc'b'gh & Whitby)

Hawkins, Paul

Mather, Carol

Shelton, William (Clapham)

Hayhoe, Barney

Mawby, Ray

Shersby, Michael

Hicks, Robert

Maxwell-Hyslop, R. J.

Simeons, Charles

Hiley, Joseph

Meyer, Sir Anthony

Skeet, T. H. H.

Hill, John E. B. (Nortolk, S.)

Miscampbell, Norman

Soref, Harold

Holland, Philip

Mitchell, David (Basingstoke)

Spence, John

Holt, Miss Mary

Moate, Roger

Sproat, lain

Hornby, Richard

Money, Ernle

Stainton, Keith

Hornsby-Smith, Rt. Hn. Dame Patricia

Monks, Mrs. Connie

Stanbrook, Ivor

Howell, David (Guildford)

Monro, Hector

Stewart-Smith, Geoffrey (Belper)

Howell, Ralph (Norfolk, N.)

Montgomery, Fergus

Sutcliffe, John

Iremonger, T. L.

Morgan-Giles, Rear-Adm.

Taylor, Frank (Moss Side)

James, David

Mudd, David

Tebbit, Norman

Jones, Arthur (Northants, S.)

Neave, Airey

Thomas, John Stradling (Monmouth)

Jopling, Michael

Normanion, Tom

Thompson, Sir Richard (Croydon, S.)

Kaberry, Sir Donald

Oppenheim, Mrs. Sally

Tugendhat, Christopher

Kellett-Bowman, Mrs. Elaine

Owen, Idris (Stockport, N.)

Turton, Rt. Hn. Sir Robin

Kershaw, Anthony

Page, Rt. Hn. Graham (Crosby)

van Straubenzee, W. R.

Kimball, Marcus

Parkinson, Cecil

Vaughan, Dr. Gerard

King, Evelyn (Dorset, S.)

Percival, Ian

Waddington, David

King, Tom (Bridgwater)

Pike, Miss Mervyn

Walder, David (Clitheroe)

Kinsey, J. R.

Pink, R. Bonner

Walker-Smith, Rt. Hn. Sir Derek

Kirk, Peter

Powell, Rt. Hn. J. Enoch

Ward, Dame Irene

Knight, Mrs. Jill

Price, David (Eastleigh)

Wells, John (Maidstone)

Knox, David

Proudfoot, Wilfred

White, Roger (Gravesend)

Lamont, Norman

Redmond, Robert

Winterton, Nicholas

Lane, David

Reed, Laurance (Bolton, E.)

Wolrige-Gordon, Patrick

Le Marchant, Spencer

Rees-Davies, W. R.

Worsley, Sir Marcus

Lloyd, Ian (P'tsm'th, Langstone)

Rhys Williams, Sir Brandon

Wylie, Rt. Hn. N. R.

Loveridge, John

Ridley, Hn. Nicholas

Younger, Hn. George

Luce, R. N.

Roberts, Michael (Cardiff, N.)

MacArthur, Ian

Rossi, Hugh (Hornsey)

TELLERS FOR THE NOES:

McCrindle, R. A.

Sainsbury, Timothy

Mr. Marcus Fox and

McLaren, Martin

Scott, Nicholas

Mr. A. G. F. Hall-Davis.

Question accordingly negatived.
Clause added to the Bill.

LOCAL GOVERNMENT BILL
  New Clause 7

    POWER OF RATING AUTHORITY TO USE ALTERNATIVE SOURCES OF LOCAL FINANCE
    ' A rating authority may by resolution operate within its area such financial schemes other than the levying of taxes which may be approved by the Secretary of State and in particular may derive revenue from the purchase, sale, letting and management of property for any purpose.'—[Mr. Denis Howell.)
    Brought up, and read the First time.
    Mr. Denis Howell: I beg to move, That the clause be read a Second time.
    Mr. Speaker: With this clause it will be convenient to discuss new Clause 4—Charging scheme for Hotels in Greater London:
    ' (1) Without prejudice to the foregoing provisions of this Part of this Act, the Greater London Council may submit to the Secretary of State a scheme permitting the levying of charges by that Council in respect of hotel bedroom accommodation in Greater London so as to enable that Council to raise additional revenue.
    (2) On the submission to him of a scheme under subsection (1) above, the Secretary of State shall consider all the circumstances of the case and shall consult with any other local authorities, bodies or persons who shall appear to him to be concerned, and if he is satisfied that the scheme should be implemented either with or without modifications, he may by Order make regulations to that effect.
    (3) Every Order made under subsection (2) above shall be laid before the Commons House of Parliament and shall not have effect until approved by a resolution of that House '.
    Mr. Howell: New Clause 7 deals with alternative ways of raising finance for local authorities. All who study the continuing difficulties of local authorities and the continual frustration of ratepayers realise that the almost total reliance upon rates as the sole means of raising revenue for local authorities is more and more being held in question by ratepayers.
    I do not need to rehearse all the arguments. They are well known. The rating system is totally unfair. It bears unfairly between one family and another and between one house and another. I confess that it has so far been found impossible by most judges to produce a system which improves upon it.
    I do not believe that we have tackled the question as energetically as we should have done. Soon we shall have
    1588
    to move at least in the direction of relating local taxes to incomes. That is not the situation now.
    The present system of property tax—that is what rating is—is more and more being held in contempt by our citizens. Therefore, we shall have to move in the direction that I have indicated. I hope that the Department will put in hand studies on that subject. I am sure that if it proved possible to relate incomes to the finance required for the running of local services, there would be a large measure of agreement right across the parties. I do not think it would become a party situation at all. But that is not a situation with which we can deal tonight.
    10.15 p.m.
    We must confine ourselves to a clause, operated only with the approval of the Secretary of State, which would enable local authorities to consider other ways than the traditional method of rating for raising revenue. It is time that local authorities went into the property business themselves. Many of them are already in it and increasingly they are having to do it by establishing companies and attracting money from private sources as well as using their own money. There is no reason why local authorities should not operate property companies as of right as part of their normal function. The increasing value of sites on which property developers make large fortunes is almost entirely due to the community building up services which enhance the value. It seems to the Opposition that it is totally wrong that property development should be almost exclusively in private hands. The comunity creates the value and it should get a far bigger share of it than at present. An adventurous programme by local government in this direction would be very welcome.
    There should be much more opportunity for local authorities to go in for municipal trading, and the clause provides for that. Yet none of these things is new. They have all been pioneered in earlier days and I pay tribute to the Conservatives and Liberals in this respect. In my city they were pioneered by Joseph Chamberlain, in his halcyon days as a Liberal, and then as a Conservative. Corporation industry developed in Birmingham was probably the first example of the sort of thing I have in mind of a

    1589
    local authority getting hold of the land and developing it. The commercial interest and the value of that to the citizens of Birmingham is now enormous.
    I am sorry that we do not hear more about this side of the work of Joseph Chamberlain. It did not stop with the development of property and assets. He went on to develop some of the finest examples of municipal socialism one can find. I refer particularly to the water, electricity and gas services in the city and to the Municipal Bank. It is possible to enumerate all this pioneering work. There must be plenty of opportunities for new forms of municipal trading to emerge. As I explained, I almost made my debut in local government circles in 1946 by becoming shortly afterwards chairman of the civic restaurants department in Birmingham. That department was handicapped as were all municipal restaurants by an Act which said that restaurants could not make a loss for three years running—they could not take one year with another for this purpose. One of the aims of the Bill is to remove that restriction. Many local authorities were required during the war to provide municipal restaurants because they were essential and because private enterprise could not provide them. However, they were forced to close down their municipal trading departments afterwards. In view of the private restaurants in this country there surely must be a place for municipal trading there.
    We do not wish any of these municipal trading undertakings to be subsidised unfairly by the ratepayers. We want them to trade fairly with private enterprise. If that happens no one could have an ideological objection. New Clause 4 will help London and other local authorities, particularly Stratford-on-Avon and Warwick. This clause promotes the idea of a tourist or bedroom tax. There is much to be said for this. The services provided for tourists are expensive. The demand for water and drainage facilities can increase enormously in the summer. It is reasonable to suggest that tourists should make a modest contribution towards this expense.
    We cannot allow the system of local government in London to be bogged down, as it has been for generations, by a single type of tax. We have to be
    1590
    adventurous in our thinking and new Clauses 4 and 7 will help us to be just that. I hope that the Minister will find those clauses reasonable, and, if he cannot accept them tonight, will welcome them in principle. It may be that the terminology needs to be improved, and we would accept that. I hope he realises that in putting these clauses forward we are providing him and his successors with safeguards for the future.
    Mr. Charles Loughlin: I regret that it has been necessary to frame new Clause 7 so as to include the words:
    "other than the levying of taxes."
    I have been trying to get the Government to think in terms of re-casting the whole of the rating system for some time. At present valuation is based upon a notional rent. In recent revaluations the ludicrous nature of this notional rent has been underlined. It is an archaic system and we ought to reconsider it seriously, irrespective of party.
    I estimate that there are 9 million adults who do not pay any rates. We frequently come across the anomalous situation whereby two retired adults living in a house on a pension have to pay full rates because they do not qualify for rate relief while next door, in an identical propety, there can be four adults in full-time employment, only two of whom pay rates. Any one of the four people living in the second house could be substantially better off than the two retired people.
    Mr. Idris Owen: That is what we did.
    Mr. Loughlin: Conservative Members should listen. I am not scoring party political points. I am trying to illustrate the fallacy of the present system.
    Mr. Idris Owen: I was not being facetious, but merely commenting that that is just the reasoning which we applied to the rent rebate scheme.
    Mr. Loughlin: The hon. Gentleman was not listening. I said that there could be a situation in which two retired people, by virtue of their incomes, could be just outside the scope of the rate rebate. Of course, there are many bachelors, for example, who are using all the services for which rates are levied such as lighting, sewerage and the emptying

    1591
    of dustbins. People in that category may not pay any rates. The whole system of notional rent payments is ludicrous in the extreme. I am sorry that the Bill does not deal with that. Taxes of a local character would be far more equitable than the present system.
    This is a loosely worded clause. It refers to:
    "schemes other than the levying of taxes"
    and then says:
    "and in particular may derive revenue from the purchase…".
    The preceding words give a rather wider remit to local authorities for the operation of financial schemes, subject to the overriding authority of the Secretary of State. If the latter part of the clause is ignored, which might stimulate the adrenalin of some Conservative Members, the first part of the clause would be extremely useful to many local authorities.
    Local authorities could enter into property management. It would be possible for them to build houses for sale. One of the most remarkable features of the past six months—and this applies in my constituency and to an increasing number of other constituencies—is that builders who have built houses as a speculation have been trying to sell them to local authorities. In many cases authorities have had to turn them down because the standard of building was not sufficiently high to meet their standard, which is based on the Parker Morris standard.
    If that is true, if speculative builders can build houses of a lower quality and at a higher price than the local authorities, it would be doubly valuable for the community if local authorities could build houses for sale. They could legitimately earn a reasonable surplus on the houses they were building for sale and yet at the same time provide a higher standard house to the purchasers in the locality.
    10.30 p.m.
    Therefore, even the latter part of the clause would be of tremendous value in two ways. It would enable local authorities to obtain revenue to offset the massive increases in rates that have taken place in the past three years and are bound to take place this year. All local authorities, even though there is a White
    1592
    Paper due in which the Government propose to increase the domestic element of relief, will this year face substantial increases in rates. If a local authority could build houses of the right quality it would doubly benefit in that it could obtain income to offset some of those increases and at the same time build houses to the standard required.
    Local authorities are having to turn down houses built by speculators who cannot sell them in the market, who need a cash flow which they cannot obtain and therefore offer the houses to the authorities. If the authorities have to turn them down on the ground that the quality of building is too low, it is about time they were allowed to build houses for the double purpose to which I have referred.
    I believe that many local authorities could produce schemes in keeping with the clause. In the final analysis the Minister has the right to veto or approve such schemes. Serious consideration must be given to the enormous problems facing the local authorities, which have to find a substantial amount of money for the services that are increasingly being demanded by the ratepayers. There is inequity in meeting the additional costs from the rates, because they apply to some people and not others. About 9 million people escape paying rates. We must get down to the problem of devising ways and means of ensuring that the local authorities have sufficient revenue in one way or another to maintain the kind of standards to which people have become accustomed in the services for which rates are used.
    Mr. Harry Lamborn: As one who was a member of the Greater London Council for many years, I know that members on both sides of the council have examined many alternative methods of raising revenue. During the Green Paper consultations on the Bill, officers of the GLC put forward for consideration various methods of raising additional revenue. The council came to the conclusion that, in a city like London, with vast resources for the visitor, a hotel levy on bedroom accommodation was an ideal method, and that the revenue so raised could be spent on providing more facilities for visitors. The GLC estimated that an average charge of £100 a year,

    1593
    with the more expensive hotels paying more and the less expensive paying less, would yield about £6 million a year.
    Anyone examining our rating system would certainly agree that additional ways of raising revenue are certainly desirable. New Clause 4 would enable the GLC to submit a scheme for levying charges on these lines. This avenue should be explored, and the ideal place for an experiment would be Greater London.
    Mr. Graham Page: I must agree with much of the criticism of the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) of the way in which we raise the money for local government expenditure. No Minister can disregard the criticism that in many cases the rating system falls unfairly on one household as compared with another. We put forward in a Green Paper two or three years ago the pros and cons of various different forms of raising this revenue. The arguments for and against each appeared in the Green Paper, and the comments we had upon each, along with the study made of the subject, convinced us that at that time the difficulties of the system were such that we should not impose such a change on local authorities at the time of reorganisation.
    In a consultation paper issued fairly recently, preparatory to this Bill, it was pointed out that the Government believed that the public would not welcome, at the present time of price and pay restrictions, the imposition of new taxes locally. The Secretary of State said on Second Reading:
    "No one should be surprised that the Bill contains no new taxes to replace the rates, because we made quite clear in the consultation paper published last June why we did not propose to allow local authorities to introduce any new local taxes at this time."—[OFFICIAL REPORT, 12th November, 1973 ; Vol. 864, c. 36.]
    My right hon. and learned Friend went on to say that it was, firstly, at the time of price restraint and, second, at the time of reorganisation, when local authorities would not have been anxious for further upheaval in local administration. But I added to that point in Committee. On 22nd November last I said:
    "I have said on many occasions that although we are retaining the rating system this is not necesarily the end of the story and if
    1594
    there are further sources of revenue, which are particularly appropriate to London"—
    I was dealing then with an amendment relating to London—
    "it may be that it would be proper to introduce them by a private Bill, but certainly our minds are open on that subject."—[OFFICIAL REPORT, Standing Committee A, 22nd November 1973 ; c. 54.]
    Indeed, our minds are open on all methods of raising additional revenue for local government purposes.
    To introduce any new system of revenue at this moment, however, would run counter to those Government statements which I have quoted and would throw local authorities into some confusion, especially if, as in these new clauses, the system were dependent upon the approval of the Secretary of State. There would at once be queries as to what sort of scheme a Secretary of State would approve should the local authorities bring this into their budgets right away, that is, if we introduced it into the Bill at this stage. Again, I am very sympathetic towards any remedies for the unfairness in many cases of the present rating system.
    New Clause 7 takes the matter only a little way, as the hon. Member for Small Heath made clear in his advocacy of the new clause. If I read it correctly and if I understand his argument correctly, he wanted to give the local authorities, first, the power to enter into the property business further than they do at present, and, second, to increase their power of municipal trading.
    Concerning the property business, I should have thought that local authorities are well in it at present, and many local authorities are using their powers very effectively not only in housing developments but in comprehensive developments of town centres, both on their own and in conjunction with private enterprise.
    When further opportunity arises in legislation we shall certainly look to see whether the powers of local authorities are sufficient, and particularly when joining with private enterprise on a company basis, or co-operating in partnership, and so on, we shall look to see whether their powers are sufficient to enable them to do that without too much hindrance.
    There is no general power under legislation at present for municipal trading, but there are many specific powers in

    1595
    both public Acts and local Acts. One would have to go very carefully in giving a general power to trade in everything and anything. If we want to expand the powers in this respect, it would be preferable to be very specific about them and to say exactly in what direction we want them to expand.
    The hon. Member for Gloucestershire, West (Mr. Loughlin) went beyond new Clause 7, very rightly, in his criticism of the rating system, in saying that local authorities should be enabled to raise revenue not just through property transactions or municipal trading, as suggested in the new clause, but particularly by relating their collection of revenue to the income of the ratepayer or the income of the contributor to a local authority's fund. That matter was considered in the Green Paper, from the point of view both of a local income tax and a surcharge on earning householders who were not the direct ratepayers. In both cases the administration is extremely difficult. I do not say that it is impossible. We may still be able to work out a system at least to supplement rates, but it would impose considerable administrative difficulties on local authorities.
    10.45 p.m.
    The new authorities will be taking over on 1st April, with new boundaries and new functions and they will be reduced in number from 1,400 to 400. When those new authorities settle down, I am sure that the House will wish to look again at the system of providing them with funds. In trying this year to apply fairly the rate support grant—and my right hon. and learned Friend the Secretary of State announced this afternoon the formula for distribution, the amount of the grant and how the relevant expenditure should be calculated—I almost despaired of getting a fair system. The number of times the calculations went in and out of the computer was astonishing. I now have no faith at all in computers. I am certain that if the House would let me have a helicopter in which to fly round and throw out the money to the local authorities—£10 million here and £20 million there—I should do much better than the computer. I should know who deserved the money.
    Mr. Denis Howell: I am sure that we all have sympathy with the Minister in his predicament, but does not one get out of the computer only the answer to the intelligent information that is put into it?
    Mr. Page: Yes, I am sure that is so. I think that eventually we got a very intelligent result. I was complaining about the extraordinary formulae that one has to feed into the computer to get the right result. If one needs to make all these calculations in order to get fairness as between one local authority and another and between one ratepayer and another, something in the system itself needs to be remedied. I hope that we shall be able to reconsider this to see how we can improve the law when the new local authorities have settled down.
    The hon. Member for Southwark (Mr. Lamborn) mentioned a hotel tax for London. I understand that the Greater London Council proposes to bring forward certain legislation. In March 1971 the GLC issued a discussion paper on the subject. The yield from such a tax would be fairly small and uneven and of virtually no benefit to local authorities away from the main tourist areas. If we intended to make this a general tax, which would be the only way to deal with it in a Bill of this sort, I do not think it would bring benefit throughout the country. If it would benefit Greater London, it might well be appropriate for a Private Bill introduced by the GLC. I cannot give an undertaking that the Government would give it a blessing without first seeing the proposal. If a local authority which is in the same position as London over the tourist trade feels that a tax of this sort might be beneficial and that it would not be administratively too difficult, I hope that it will bring the proposal before the House in a private Bill. The usual Greater London Council Bill comes before the House every year. Our minds are not closed to this, neither in respect of local authorities which face particular difficulties, such as tourist areas, nor from the point of view of a general amendment of the rating system.
    I do not think that the hon. Member for Small Heath would expect me to accept the clause as it stands, but I hope

    1597
    that I have made enough sympathetic noises for him to withdraw the motion and for him not to press it at this stage.
    Mr. Oakes: We are disappointed that the Government have not accepted the principle of new Clause 7. The Minister referred to the Green Paper. In that document many imaginative suggestions were put forward for alternatives to the rating system—a system which, as both sides agree, is archaic and unfair. We have made these criticisms time and again.
    I appreciate the right hon. Gentleman's difficulties in considering alternatives, for they are difficulties that we share. Perhaps I may explain to my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin) that one of the reasons for our excluding a local form of taxation from the clause was that it was doubtful that such a proposal would have been in order under the Bill. Furthermore, my colleagues and I have searched the various taxation methods—petrol tax, local sales test and all the rest—and have found them to be regressive or difficult in one way or another.
    We have endeavoured in the clause to give power to local authorities to exercise local initiative and local freedom, but subject to the Secretary of State's approval. This would not impose a duty—for we are not seeking to place upon them such a duty—on local authorities, now in the turmoil of reorganisation, to bring forward such a scheme by 1st April 1974. This House is not legislating for 1st April this year or for next year. This Bill will have fundamental

    Division No. 34.]

    AYES

    [10.55 p.m.

    Allaun, Frank (Salford, E.)

    Dalyell, Tarn

    Gourlay, Harry

    Armstrong, Ernest

    Davidson, Arthur

    Grant, George (Morpeth)

    Ashton, Joe

    Davies, Ifor (Gower)

    Grant, John D. (Islington, E.)

    Atkinson, Norman

    Davis, Clinton (Hackney, C.)

    Griffiths, Eddie (Brightside)

    Austick, David

    Davis, Terry (Bromsgrove)

    Grimond, Rt. Hn. J.

    Bagier, Gordon A. T.

    Deakins, Eric

    Hamilton, James (Bothwell)

    Beith, A. J.

    Dempsey, James

    Hardy, Peter

    Bishop, E. S.

    Dormand, J. D.

    Harper, Joseph

    Blenkinsop, Arthur

    Douglas-Mann, Bruce

    Harrison, Walter (Wakefield)

    Boardman, H. (Leigh)

    Duffy, A. E. P.

    Hooson, Emlyn

    Booth, Albert

    Dunn, James A.

    Horam, John

    Boothroyd, Miss Betty

    Dunnett, Jack

    Houghton, Rt. Hn. Douglas

    Bottomley, Rt. Hn. Arthur

    Eadie, Alex

    Howell, Denis (Small Heath)

    Brown, Robert C. (N'c'tle-u-Tyne, W.)

    Edelman, Maurice

    Hughes, Mark (Durham)

    Brown, Hugh D. (G'gow, Provan)

    Ellis, Tom

    Hughes, Robert (Aberdeen, N.)

    Brown, Ronald (Shoreditch & F'bury)

    Evans, Fred

    Janner, Greville

    Buchanan, Richard (G'gow, Sp'burn)

    Faulds, Andrew

    John, Brynmor

    Campbell, I. (Dunbartonshire, W.)

    Fernyhough, Rt. Hn. E.

    Johnson, Walter (Derby, S.)

    Carter, Ray (Birmingh'm, Northfield)

    Fisher, Mrs. Doris (B'ham, Ladywood)

    Jones, Dan (Burnley)

    Carter-Jones, Lewis (Eccles)

    Fletcher, Ted (Darlington)

    Jones, T. Alec (Rhondda, W.)

    Clark, David (Coins Valley)

    Forrester, John

    Kaufman, Gerald

    Concannon, J. D.

    Fraser, John (Norwood)

    Kerr, Russell

    Conlan, Bernard

    Golding, John

    Lamborn, Harry

    importance for local goverment finances for a considerable time to come. The clause gives to local authorities some local options on municipal trading and in particular on property development, because such development within a local authority area is by and large a profit to the community—and that should be so in view of what that community has put into the area.
    There are many different forms of scheme, other than taxation, of which a local authority could take advantage, not only in respect of trading, but in acquiring property, using it, letting it for commercial reasons, and indeed in acquiring property for many purposes which the present law does not allow them to do. We are saying that local authorities would have the power to do this in the clause, subject to the Secretary of State's approval.
    The clause now before the House is a most modest one. We must remember that local authorities face severe financial difficulties. Even to carry on their statutory duties they will need alternative sources of finance. The clause gives local initiative a chance to provide those alternative sources of finance. I am sorry that the Government will not accept the principle of this clause, and I must ask my right hon. and hon. Friends to divide the House.
    Question put, That the clause be read a Second time:—
    The House divided: Ayes 123, Noes 137.

    Lamond, James

    Oswald, Thomas

    Strang, Gavin

    Loughlin, Charles

    Palmer, Arthur

    Swain, Thomas

    Lyons, Edward (Bradford, E.)

    Parker, John (Dagenham)

    Thomas, Jeffrey (Abertillery)

    Mabon, Dr. J. Dickson

    Price, William (Rugby)

    Tope, Graham

    McBride, Neil

    Radice, Giles

    Torney, Tom

    McCartney, Hugh

    Roberts, Albert (Normanton)

    Varley, Eric G.

    McGuire, Michael

    Roberts, Rt. Hn. Goronwy (Caernarvon)

    Wainwright, Edwin

    Machin, George

    Rose, Paul B.

    Wells, William (Walsall, N.)

    Mahon, Simon (Bootle)

    Ross, Rt. Hn. William (Kilmarnock)

    White, James (Glasgow, Pollok)

    Marks, Kenneth

    Rowlands, Ted

    Whitehead, Phillip

    Marquand, David

    Silkin, Hn. S. C. (Dulwich)

    Whitlock, William

    Marsden, F.

    Sillars, James

    Williams, W. T. (Warrington)

    Marshall, Dr. Edmund

    Silverman, Julius

    Wilson, Alexander (Hamilton)

    Mellish, Fit, Hn. Robert

    Skinner, Dennis

    Wilson, William (Coventry, S.)

    Millan, Bruce

    Smith, Cyril (Rochdale)

    Woof, Robert

    Miller, Dr. M. S.

    Smith, John (Lanarkshire, N.)

    Mitchell, Ft. C. (S'hampton, Itchen)

    Spriggs, Leslie

    TELLERS FOR THE AYES:

    Oakes, Gordon

    Stallard, A. W.

    Mr. Michael Cocks and

    Oram, Bert

    Steel, David

    Mr. Donald Coleman.

    Stewart, Rt. Hn. Michael (Fulham)

    NOES

    Adley, Robert

    Havers, Sir Michael

    Owen, Idris (Stockport, N.)

    Allason, James (Hemel Hempstead)

    Hawkins, Paul

    Page, Rt. Hn. Graham (Crosby)

    Archer, Jeffrey (Louth)

    Heyhoe, Barney

    Parkinson, Cecil

    Astor, John

    Hicks, Robert

    Percival, Ian

    Atkins, Humphrey

    Hiley, Joseph

    Pink, R. Bonner

    Awdry, Daniel

    Hill, John E. B. (Norfolk, S.)

    Powell, Rt. Hn. J. Enoch

    Baker, W. H. K. (Banff)

    Holland, Philip

    Price, David (Eastleigh)

    Benyon, W.

    Holt, Miss Mary

    Proudfoot, Wilfred

    Bitten, John

    Hornby, Richard

    Redmond, Robert

    Biggs-Davison, John

    Hornsby-Smith, Rt. Hn. Dame Patricia

    Reed, Laurance (Bolton, E.)

    Boardman, Tom (Leicester, S. W.)

    Howell, David (Guildford)

    Rees-Davies, W. R.

    Boscawen, Hn. Robert

    Howell, Ralph (Norfolk, N.)

    Rhys Williams, Sir Brandon

    Bowden, Andrew

    Iremonger, T. L.

    Roberts, Michael (Cardiff, N.)

    Bray, Ronald

    James, David

    Rossi, Hugh (Hornsey)

    Brinton, Sir Tatton

    Jones, Arthur (Northants, S.)

    Sainsbury, Timothy

    Brown, Sir Edward (Bath)

    King, Evelyn (Dorset, S.)

    Scott, Nicholas

    Bryan, Sir Paul

    King, Tom (Bridgwater)

    Scott-Hopkins, James

    Buchanan-Smith, Alick (Angus, N&M)

    Kinsey, J. R.

    Shaw, Michael (Sc'b'gh & Whitby)

    Burden, F. A.

    Kirk, Peter

    Shelton, William (Clapham)

    Carlisle, Mark

    Knight, Mrs. Jill

    Shersby, Michael

    Channon, Paul

    Knox, David

    Simeons, Charles

    Chapman, Sydney

    Lamont, Norman

    Skeet, T. H. H.

    Clegg, Walter

    Lane, David

    Spence, John

    Cockeram, Eric

    Le Marchant, Spencer

    Sproat, lain

    Cooke, Robert

    Loveridge, John

    Stainton, Keith

    Corfield, Rt. Hn. Sir Frederick

    Luce, R. N.

    Stanbrook, Ivor

    Cormack, Patrick

    MacArthur, Ian

    Stewart-Smith, Geoffrey (Belper)

    Deedes, Rt. Hn. W. F.

    McCrindle, R. A.

    Sutcliffe, John

    Dykes, Hugh

    McLaren, Martin

    Tebbit, Norman

    Eden, Rt. Hn. Sir John

    McNair-Wilson, Michael

    Thomas, John Stradling (Monmouth)

    Elliott, R. W. (N'c'tle-upon-Tyne, N.)

    Madel, David

    Thompson, Sir Richard (Croydon, S.)

    Eyre, Reginald

    Mather, Carol

    Tugendhat, Christopher

    Fidler, Michael

    Mawby, Ray

    Turton, Rt. Hn. Sir Robin

    Finsberg, Geoffrey (Hampstead)

    Maxwell-Hyslop, R. J.

    van Straubenzee, W. R.

    Fisher, Nigel (Surblton)

    Meyer, Sir Anthony

    Vaughan, Dr. Gerard

    Fletcher, Alexander (Edinburgh, N.)

    Miscampbell, Norman

    Waddington, David

    Fletcher-Cooke, Charles

    Mitchell, David (Basingstoke)

    Walder, David (Clitheroe)

    Fowler, Norman

    Moate, Roger

    Ward, Dame Irene

    Fox, Marcus

    Money, Ernle

    Winterton, Nicholas

    Gower, Raymond

    Monks, Mrs. Connie

    Wolrige-Gordon, Patrick

    Gray, Hamish

    Monro, Hector

    Worsley, Marcus

    Green, Alan

    Montgomery, Fergus

    Wylie, Rt. Hn. N. R.

    Griffiths, Eldon (Bury St. Edmunds)

    Morgan-Giles, Rear-Adm.

    Younger, Hn. George

    Gummer, J. Selwyn

    Mudd, David

    TELLERS FOR THE NOES:

    Hall-Davis, A. G. F.

    Neave, Airey

    Mr. Adam Butler and

    Haselhurst, Alan

    Normanton, Tom

    Mr. Michael Jopling.

    Hastings, Stephen

    Oppenheim, Mrs. Sally

    Question accordingly negatived.

  New Clause 8

    VALUATION NOT TO BE INCREASED BECAUSE OF INSTALLATION OF CENTRAL HEATING
    ' No proposal may be made in the case of hereditament which is a dwellinghouse or mixed hereditament within the meaning of section 48 of the principal Act for an increase in the gross value by reason of the making of structural alterations on or after 1st April 1974 which are necessary only for the purpose of installing a system of providing heating in two or more rooms in the hereditament '.—[Mr. Denis Howell.]
    Brought up, and read the First time.
    Mr. Denis Howell: I beg to move, That the clause be read a Second time.
    Mr. Sydney Chapman: On a point of order, Mr. Deputy Speaker. Am I right in saying that we shall be debating another new clause and amendments with this?
    Mr. Deputy Speaker: Yes. We shall be taking the following:
    New Clause 15—Valuation lists not to be altered on account of structural alterations for purposes of fire protection
    and Amendments No. 71, in Clause 20, page 21, line 30, at end insert:
    ' (aa) If and so far as such alterations are connected with the installation of sprinkler fire protection devices or any equipment or any alterations which are undertaken to reduce the fire risks of a building, or '.
    and No. 72, in page 21, line 30, at end insert:
    ' (aa) If a building is extended to provide for the garaging of a private vehicle, and such a structure is totally enclosed, where such a facility did not previously exist, or '.
    Mr. Denis Howell: We must now turn our attention to the question of the installation of central heating and the effect of that on the rateable value of domestic residences. I have an understanding of the reason the Government put Clause 20 into this Bill.
    The effect of that Clause is that any householder who makes a structural alteration to his house to provide for central heating on or after 1st April this year will not have its rateable value automatically increased on that account, but it will occur at the next general revaluation.
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    The Government have included Clause 20 because there is tremendous dissatisfaction among thousands of householders, who says, "We are going to spend part of our incomes on improving our houses by putting in central heating which is to the benefit of our families and in the interests of the country as a whole in a small but essential manner. What thanks do we get from the community for improving our houses by putting in central heating? The Inland Revenue say, ' Because you have improved your houses in this respect the rateable values will be increased and it will cost you more in local rates or taxes.'"
    There has been considerable concern about this matter. Thankfully, many people are putting central heating into their houses to give themselves additional comfort. I suppose that logically they would argue, "Why should we be taxed when we spend our incomes on sensible things like installing central heating when, if we had frittered our incomes away in some other form, we would not be taxed upon it?" That is a reasonable attitude.
    The Government have accepted that argument—I am with them ; I do not quarrel with them about it—until the next general revaluation. But that is grossly unfair to householders who have central heating in their houses and whose valuations have been increased.
    In Clause 20 the Government are saying, "We do not want to impose an additional rating burden upon those who have installed and paid for central heating at this stage. We will do it later." But, by virtue of that clause, they are creating an extremely privileged position for those who go in for central heating as a new venture on or after 1st April this year. I do not think that in equity that can be defended or justified.
    If it is wrong for householders who newly install central heating to suffer an additional tax burden by increasing their rateable values, it must be wrong for those who have already installed and paid for central heating. We seek to remedy that situation in the new clause.
    I am not sure that we have got it right. The Minister appears to indicate some doubt about it. We thought that we had it right in this intricate matter, but on re-reading and with the benefit of further advice it would appear that we have not succeeded in achieving our aim. Nevertheless,

    1603
    the new clause provides the House with an opportunity to consider the principles involved.
    There are different forms of central heating. It seems extraordinary—this is at the heart of the unfairness of the system—that if someone installs a gas hot-air system which requires a structural alteration in his house—I have such a system in my house—his rateable value is adjusted and increased. However, if he installs a form of central heating which requires only the addition of electric plugs in bedrooms into which a night storage heating system can be plugged, that does not bring him within the ambit of increased rateable value and taxation.
    Not only is it unfair that central heating should be taken into account but it is doubly unfair for the people who are penalised because they have purchased one form of central heating as distinct from another. People should be encouraged to go in for central heating because it is in the country's interest that they should. It could probably be argued that many diseases such as asthma, bronchitis and so on would be reduced if central heating was more widespread. I have heard bronchitis described as a typically British disease, and many medical men think that the introduction of more central heating would be a service to health. Central heating should be totally removed from any calculation of the valuation of a house. It is only there because of the archaic valuation laws. They base the rateable value on the notional or hypothetical rent which a house could fetch if let on the open market and it is argued that if a house has central heating that rent will be higher.
    That adds up to the ludicrous situation we now have and the best answer is to instruct the Inland Revenue totally to disregard central heating in determining the rateable value of domestic properties. We hope that is what our clause will achieve. We shall listen with interest to what the Minister says. However, whether the clause is properly drafted or not, the important thing is that we should carry the Government with us in our broad intentions. If the amendment is not quite right I hope that the Government will take it over and produce a form of wording which achieves what I am sure we all want.
    Mr. Sydney Chapman: The House will be grateful to the hon. Member for Birmingham, Small Heath (Mr. Denis Howell) for raising these points in his speech. I have a great deal of sympathy for his clause. The hon. Member has already pointed out some of the anomalies, if not absurdities, of the existing rating system. Many hon. Members will agree with me that the rating system as it affects domestic hereditaments at least is illogical, unfair and out of date.
    I was interested to hear my right hon. Friend's reply in the last debate when he seemed to suggest that he was not in favour of the existing rating system but that no adequate alternative had been found and that in any case this was not the time to put forward a radical alteration to the system when the structure of local government was being changed.
    The clause standing in my name is self-explanatory. It seeks to provide that
    "Where any building or structure is altered, adapted or extended for the purpose of reducing fire risk, the valuation of such a building or structure for rating purposes shall not be altered, in respect of such alterations, adaptations or extensions".
    I need not remind the House of the need to minimise fire risk in all types of buildings. I need hardly remind the House of the tremendous increase in the cost of damage to property and the increased number of fire outbreaks in the past few years. Amendment No. 71 relates new Clause 15 to domestic or mixed hereditaments. I need not explain that further, except to say that whereas hon. Members have spoken about central heating, for example, I have in mind fire sprinkler units and fire doors to minimise fire risks.
    11.15 p.m.
    Amendment No. 72 relates to the garaging of private vehicles. It is for an environmental reason that I ask that garages attached to domestic hereditaments should be excluded from rating valuation. It is a good thing for a person, when possible, to build a totally enclosed garage for the garaging of a private vehicle. We need only to look around council or private housing estates to see how the environment can be adversely affected by the rows of cars which are left on the roads or in the byways.
    If we can improve the environmental scene by encouraging people to build garages where practicable, it is surely wrong to penalise those people by uprating the valuation of their properties. The Under-Secretary of State for the Environment, my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths), mentioned what the Government have done in Clause 20 when speaking in Committee on the motion "That the Clause stand part of the Bill." He said that when minor alterations are effected to domestic or mixed hereditaments there will be no revaluation of the property, at least between valuations. My hon. Friend instanced specifically a garage. If under the proposed Bill somebody extends a house by building a garage on to it, his rating valuation will not increase until the next general valuation.
    That is appreciated, but, with great respect, it is unfair that the property should be valued upwards at any time and in any case I make the plea to my hon. Friend the Under-Secretary of State for the Environment, the hon. Member for Hornsey (Mr. Rossi), who I very much welcome in his new capacity, that the Government should keep an open mind on this matter. As the hon. Member for Small Heath said, it is inequitable and it causes a lot of bitterness among millions of domestic ratepayers.
    However precise the Bill may be from a legal or technical viewpoint, surely it is right that we should try to amend legislation in this House so as to make it to be seen to be fair to all the people. I believe these new clauses and amendments would help to do that.
    Mr. Timothy Sainsbury: I am sure that all hon. Members are fully aware of the tragic loss of life which has occurred in hotels from fire outbreaks in recent times. Hon. Members may not be so aware of the relatively high cost which can be incurred by adopting basic fire prevention provisions. Such provisions for an hotel may well consist of a second escape and, if it is a small hotel, such an escape is often taken over the roof, thereby increasing protection by providing an alternative route. Unfortunately the cost of such work tends to increase every year. I am sure that hon. Members would not wish to give any discouragement
    1606
    to hoteliers, and particularly small hoteliers, in carrying out this kind of work.
    Many of the hotels affected are in scheduled premises or in conservation areas so that there should not be any question of the premises being rebuilt. In many cases, I know of a number in my constituency, the bulk of the accommodation in these residential hotels is taken up by retired persons, people who by reason of their age are most likely to be at risk in the event of a fire. If by carrying out the necessary fire precautions all that the owner gets is an increase on his rate bill we should be, most unhappily, discouraging owners from carrying out such necessary and desirable works.
    Mr. Robert Adley: I support what my hon. Friend the Member for Hove (Mr. Sainsbury) has said. I declare an interest in a large hotel company, not affected in any way by the Fire Precautions Act, and confirm what my hon. Friend has said—and what was said most eloquently by his predecessor the late Mr. Martin Maddan—that the passage of that Act has placed and is placing severe burdens upon hotel owners, particularly owners of small hotels and boarding houses. I hope that the Government will take note of the points made.
    Mr. Rossi: The hon. Member for Birmingham, Small Heath (Mr. Denis Howell) and my hon. Friends the Members for Hove (Mr. Sainsbury) and Bristol, North-East (Mr. Adley) have spoken persuasively on this matter and it is difficult not to have sympathy with the points they have made. It is therefore with some regret that I have to advise the House that I shall be asking my hon. and right hon. Friends to resist the new Clause and the amendments. This is principally because the new clauses do not carry the matter much beyond the stage reached in Clause 20. The hon. Member for Small Heath has referred to Clause 20, the intention of which is to stop the irritation which now exists when someone carries out structural alterations to their property—be it to install central heating or to build a small garage—and then finds the district valuer coming along with a proposal to increase the rateable value.
    Clause 20 is meant to stop that happening between valuations. When the revaluation occurs the district valuer has to carry out his duty and value the property as it is. The criteria is: what is the notional rental value of that property? That criteria is of value in as much as it differentiates between the owner of one property and another, determining the amount of rates one occupier shall pay upon the amenities and facilities he is enjoying. For example, a house with two bedrooms is worth less than a house with three. The person with a larger house has a higher rateable value. By the same criteria the house with central heating is worth more than a house which does not have it.
    In so far as one has to have means of determining how this form of tax shall be related to the value of the property the district valuer has to take into account the various amenities that one house has against another when determining rateable values. It is being suggested by the hon. Member for Small Heath that we should breach that. He says that specifically for central heating.
    The moment that it is done for one thing, where does one draw the line? Is there any reason why one should not say that, having allowed it for central heating, it should not be done for the installation of a bathroom, or for the installation of an inside toilet where previously the toilet was outside, or for building an additonal bedroom or a garage, as my hon. Friend the Member for Birmingham, Handsworth (Mr. Sydney Chapman) said? That is the consideration that has to be borne in mind, and for that reason, with the rating system as it is, it is difficult, if not impossible, to accept a breach of a principle that can be continued in all directions without limit once that is accepted.
    The new clauses do not do what the hon. Member for Small Heath said they do. First, new Clause 8 says that "No proposal may be made". Unfortunately for the hon. Gentleman, the term "proposal" is a term of art relating to an alteration to a valuation list in between general valuations. All that the hon. Gentleman is saying is what Clause 20 says, namely, that for the future the
    1608
    installation of central heating cannot bring about an alteration in the valuation in between general valuations.
    If, however, one were to take the hon. Gentleman's proposition to its logical conclusion, one would find difficulty in seeing why he should have in the new clause the words "after 1st April 1974", because if the hon. Gentleman is arguing that central heating should be disregarded altogether at a general valuation, why should those who have carried out all these alterations at some time in the past be penalised because of a given date? The hon. Gentleman is repeating the words of Clause 20 and is merely positing what that clause says. The new clause carries the House not one whit further. It is superfluous, and for that reason I must invite the House to reject it.
    Mr. Sydney Chapman: I have followed my hon. Friend's argument closely. Does he, on reflection, think that there may be a difference between my new clause and that tabled by the hon. Member for Birmingham, Small Heath (Mr. Denis Howell), in that I am talking about adaptations or devices to reduce fire risks, and that is very different from the amenities of a building?
    Secondly, would my hon. Friend care to deal with my argument, which I put sincerly, about the environmental point of view of a garage? My hon. Friend is not saying, is he, that a house is revalued upwards if it has more trees in the garden than another property nearby? Surely there is an environmental difference that is worthy of consideration.
    Mr. Rossi: I was about to come to new Clause 15 and the amendments. That clause suffers from the same defect as new Clause 8, in that it uses the words "valuation…shall not be altered". That can only mean a proposal, because no alteration is taking place by revaluation. A new exercise is taking place ; in other words, the valuation of the property at that date. When my hon. Friend speaks of alterations, what he is speaking of is the period in between valuations, and Clause 20 already deals with that specific situation.
    Mr. Adley: With regard to new Clause 15, can my hon. Friend confirm that it is not his impression that any work that is required to be done under the Fire Precautions Act and to meet fire risks in

    1609
    accordance with that clause can add to the value of the property if it is an old converted house?
    Mr. Rossi: It could conceivably make it more attractive from a rental point of view, and the moment it does that the question of valuation for rating purposes immediately arises.
    On the question of fire and structural alterations, I think that if my hon. Friends refer to Clause 20 they will see that subsection (1)(b) speaks of structural alterations within a limit to be prescribed by order under that subsection. It is intended that the limit be £30. In other words, structural alterations which do not increase the rateable value of the property by more than £30 will escape under Clause 20 between the valuation periods. This, it is felt, should cover——
    11.30 p.m.
    Mr. Sainsbury: I am sorry to interrupt my hon. Friend, but I assure him that it is not possible to provide one fire door for £30. That is totally inadequate. To enclose the staircase of, say, the average four-storey converted residence which is not a residential hotel is likely to cost a minimum of £200–£300.
    Mr. Rossi: Perhaps I did not make myself clear. I was not referring to the cost of works carried out. I was speaking of the effect that that work had on the rateable value. I am talking only of rateable value, of the order of a £30 increase. It could be that several thousand pounds worth of work is carried out before there is an increase of as much as £30 in the rateable value. This provision will cover both fire precautions—sprinklers—and garages. A double garage might take it outside £30—one cannot say—but the Government's intention is very much to cover the points made by my hon. Friends.
    There is one outstanding point. My hon. Friend the Member for Hands-worth in his new Clause 15 has gone beyond the intention of the Bill, which was to restrict these benefits to dwelling-houses. My hon. Friend wants to extend them to commercial premises. I doubt very much whether his proposal would be much of an incentive to a commercial firm. It would want to install fire safety to preserve its building and its stock, and a small adjustment in rateable value is
    1610
    hardly of significance in that kind of thing.
    For these reasons, I invite the House to reject the new clauses and the amendments.
    Mr. Denis Howell: I should like first to congratulate the hon. Member for Hornsey (Mr. Rossi) on making what I think has been his maiden speech since his elevation to the position of Under-Secretary of State for the Environment.
    Mr. Rossi: That is very kind of the hon. Member, but might I say that I was caught on the Consolidated Fund Bill and was here at about 8 a.m. making my first speech in my present office. But there was hardly anyone here to hear me.
    Mr. Howell: I am sorry that I was not able to offer the hon. Gentleman my congratulations on that occasion but I do so now. I am delighted to know that a period of service in the Whips' Office obviously does not dim the eloquence of Members who suffer that fate. We are glad to have had such a clear and helpful exposition from the hon. Gentleman.
    I must tell the hon. Gentleman, however, that as he went through the reasons one by one why my new clause and that of the hon. Member for Birmingham, Handsworth (Mr. Sydney Chapman) should be rejected, all he did was to prove to the House the complete absurdity of our present rating system. Therefore, his eloquence in that sense will perhaps take us a step nearer the determination of both sides at some time to deal adequately with the matter and put it right. I accept, however, from the hon. Gentleman that, as long as the existing ridiculous system is with us, basing rateable values on the notional lettable value of houses, these anomalies will continue to plague the country and annoy ratepayers generally.
    The hon. Gentleman is quite right in saying that the effect of our new clause would have been to remove liability for increased rateable value for all who install rateable value on and after 1st April by leaving the anomaly for those who have already installed rateable value. That is exactly the anomaly I was seeking to remove. Having thus been assured by the hon. Gentleman that the clause would not achieve all that I would have wished

    1611
    to achieve, and having, I hope, initiated a very helpful debate, I beg to ask leave to withdraw the motion.
    Motion and clause, by leave withdrawn.
    Further consideration of the Bill, as amended, adjourned.—[Mr. Graham Page.]
    Bill, as amended (in the Standing Committee), to be further considered tomorrow.

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

TUNSTEAD QUARRY, DERBYSHIRE
11.35 p.m.
Mr. Spencer Le Marchant: Twenty-five years ago, short of a few days, a previous Member for the High Peak Division, a great conservationist then and a great conservationist today, the noble Lord, Lord Molson, initiated a similar debate. He was criticising, at the earlier hour of 7.18 p.m., the quarrying policy of the Government of the day.
I rise not to do that but to draw the attention of my right hon. Friend the Minister for Local Government and Development to a situation that has developed over the years. It is as important in Derbyshire today as it was in 1949.
In no way am I asking that the matter should be removed from local hands. I suggest that the Government should consider it with the advantage of the enormously greater resources of expert advice available to them than was available to the Government 25 years ago, so that should the case come before them they will be more fully equipped to deal with it than was the then Minister for Town and Country Planning.
I am talking about the application by ICI for an extension of Tunstead Quarry, already the largest quarry in Britain, and the largest limestone quarry in Europe. The Company is applying to develop a continuation of Old Moor, which is very close to it, and partly
1612
outside, but mainly inside, the national park.
I am happy that the company has behaved with the responsibility that one would expect of it. In all ways, going right back to 1950, it has made its intentions abundantly clear. It has consulted local authorities and reported to the planning authorities in March 1970. In April 1971 it approached the Northwest Derby and Peak Park Planning Board, and it went before the Rural Planning Authority in October 1971.
It has also drawn up an impressive plan devised for it by an eminent landscape artist. It plans to spend about £70,000 on trees if its application is granted, and proposes to do all this 12 or 13 years before it would even start using the quarry, so that the trees will have grown up and will not be the sort of eyesore to which we have, sadly, become so accustomed in the High Peak over many years.
A responsible employer, it employs in its quarries about 800 people, but that is no measure of the number of people in my constituency who are dependent on the company. Including the wives, children, pensioners and ancillary people, the number runs into thousands. It is, as it has always been, a vastly important industry for the High Peak.
One must also consider the views of the local residents. As I find from my correspondence, they are unanimous in their strong disapproval of this plan, which will bring the quarry to within 1,000 yards of an old Norman village, Wormhill. The residents there are already very used, as are the people of that part of the High Peak, to the suffering caused by blasting and, during the dry summer, by large quantities of dust all over the trees, which look green no more towards the end of the season. The lorries on the narrow lanes are also a great problem. These people do not want this extension and their views have to be considered very carefully.
All of us who live in our part of Derbyshire suffer from the activities of quarry owners of years gone by. No one realises this more and has more responsibility than not only this company but the other companies quarrying in the area today. They realise that the appalling sights one sees around Buxton and Dove Holes are

1613
a dreadful inheritance for all who live there. It is not unfair for these local people to be suspicious of a vast new plan like this, which they feel will further harm their countryside. We are not dealing with something that can be termed just "local".
Because we are in the national park, I feel that this matter will come to the Minister at some stage. Not the park planning board nor the county council nor the new High Peak authority will be able to deal with it. Extraction of minerals in a national park has been recognised as a national problem for well over the 25 years.
The Minister who spoke in the debate in 1949, said,
"The most fundamental difference from our proposeed national parks is that it is essential, and I think very desirable too, that in our national parks the ordinary rural life, such as farming, rural industry and afforestation, should continue to function…Those areas must be used to maintain the economic life of the community. It may be inevitable that different uses of land should exist cheek by jowl."
He said later,
"It may be necessary to utilise the mineral wealth which lies in those areas for the purpose of ensuring the economic life of our people."
What is most important is that he added,
"The first condition is that it must be demonstrated quite clearly that the exploitation of those minerals is absolutely necessary in the public interest."—[OFFICIAL REPORT, 31st March 1949; Vol. 463, c. 1465, 1466, 1484.]
In winding up that debate, Lord Molson mentioned the importance of lime in the High Peak and the 300 industries which depended on lime. He said that the 50 per cent of the people living within 60 miles of Buxton who depended on lime in their day-to-day lives could not at weekends expect to see no signs of where it had come from.
The next important debate on the subject was in 1952, on a Supply Day, when Mr. Harold Macmillan said,
"While the county councils have a general duty to do what they can to keep a general balance between industrial needs and the development of material resources, on the one hand, and amenity interests, on the other, in those areas which are designated as National Parks, amenity and access are to be given an overriding position. That is really the difference. It is just that which distinguishes the National Parks from the general functions of
1614
the county councils over the rest of the country."
Mr. Macmillan also said in the same debate,
"It is, of course, sometimes necessary, even in National Parks, to make some concession. Reservoirs, hydro-electric schemes, the quarrying of minerals—are we to shut out the whole of Derbyshire, for instance?"—[OFFICIAL REPORT, 14th July 1952 ; Vol. 503, c. 1931–32.]
I suggest that he was clearly pointing out and following un what the Minister said in 1949.
Limestone is enormously important. Its importance to many of our industries cannot be over-estimated. Almost all industries need it. There is a very small amount of limestone in this country and unfortunately it is spread geographically in places of great beauty. There is, first, a relatively large quantity in the Peak District, and there is limestone in the Yorkshire Dales and in Somerset. I am pleased to see my hon. Friend the Member for Wells (Mr. Boscawen) present tonight because he has as much a problem as we have.
My right hon. Friend now has available for him all the committees which have been set up, which were not thought of in 1949. There is the Committee on Mineral Controls, the Stevens Committee, and the Advisory Committee on Aggregates, the Verney Committee. The Royal School of Mines is working with the Institute of Geological Sciences. The Committee under the noble Lord, Lord Sandford, has already reported and we await the printing of that report on mining in national parks. Dorby has reported in the first place. It is not for me to say which of these committees it is correct to use at present. I suggest that a sub-committee of Verney could report on the national interest regarding the extraction of lime, with particular bearing on Tunstead at present.
We are in a very difficult position. We are having to value something that has never been valued. We are having to value something of national beauty, our heritage, against what lies underground and how we extract it. As Councillor Allman, the leader of the High Peak authority, has said, it comes down to what we will pay for a sack of lime.
These are matters which only my right hon. Friend, with advice from the experts who have been appointed, can answer.

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It is vitally important that my right hon. Friend consults these people. When he has consulted them, I am confident that the assertion that was made by my predecessor will not be able to be made again.
11.47 p.m.
Mr. Robert Boscawen: My hon. Friend the Member for The High Peak (Mr. Le Marchant) has done a service beyond his constituency. He has done a service to those who have at heart the wellbeing of the environment in general by raising this important matter of the conflict of interest that exists in certain areas of outstanding beauty between the environment, the interests of the companies concerned and the national interest of winning minerals, road stone or building stone from those areas.
I want to raise two important points. First, I support my hon. Friend in his view that as this matter is of national rather than local importance my right hon. Friend the Minister should be made aware at the earliest possible stage of any application to develop a new quarry or to extend an existing quarry, so that he is able to give advice locally as to the national interests rather than only the interests of the local people.
Secondly, when the local authority receives a planning application to extend a quarry or to develop a new quarry in an area of outstanding beauty, often the national interest in the demand for stone or for the particular material that will be quarried over the next so many years is invoked by the applicant company. Along comes an amenity society which, equally, invokes the national interest. The local authority has to decide the issue although it is in the dark as to what is the national interest.
We in Somerset are fortunate in having a local authority that has gone to a lot of trouble and expense in providing the expertise to discover what are the needs for quarrying in the country as a whole for the next quarter of a century, but that is rare.
In coming to a decision on these planning matters local authorities should be able to call upon all the expertise of the Department of the Environment and the Department of Trade and Industry
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on the national requirements for stone and quarrying in the future, to help them to decide the conflict between the needs of the quarrying industry and the need to preserve the environment.
11.52 p.m.
The Minister for Local Government and Development (Mr. Graham Page): My hon. Friend the Member for Wells (Mr. Boscawen) broadened the point raised by my hon. Friend the Member for The High Peak (Mr. Le Marchant)—very rightly, because the specific case put by my hon. Friend the Member for The High Peak raises a matter of considerable principle, that is to say, the national interest in quarrying in such places as a national park or an area of outstanding natural beauty.
The application by Imperial Chemical Industries, to which my hon. Friend the Member for The High Peak referred, to extract limestone from land near its existing Tunstead Quarry reached the Peak Park Planning Board in November, and the board has it under consideration ICI has agreed to an extension until 15th March of the two-month period for giving a decision, and the planning committee is discussing the matter with the Derbyshire County Council next week, as part of the area in question lies just outside the Peak Park jurisdiction.
As the planning application is at that stage, that is all I can say about the merits of it. If I say more my right hon. and learned Friend the Secretary of State may find himself in the position of being prejudiced by what I have said when he comes to make a final decision if the application comes to him either on appeal by the company should it receive an adverse decision from the board or in the event of my right hon. and learned Friend deciding to call in the application. He can call in the application if it is referred to him by the planning board as constituting a substantial departure from the development plan. I regret that I cannot say anything tonight on the merits of the case because I might prejudice the exercise of the impartial judgment which my right hon. and learned Friend has to apply should the case come before him. Without causing my right hon. and learned Friend any embarrassment, I think I can express the general concern we feel over applications for this type of development in a national park.

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In this case the quarry is on the edge of the national park, but local authorities and Ministers alike are required, by Section 11 of the Countryside Act, to have regard to the desirability of preserving the natural beauty of the countryside. Indeed the House may be assured that whether the decision is taken by the planning authority, the local planning authority or the Secretary of State, all due weight will be given to amenity factors. If it falls to my right hon. and learned Friend to make the decision, a public inquiry will be held at which all apprehensions can be fully ventilated, but if the application is resolved locally, equally the objections and fears will be taken into account.
It is true that both local planning authorities and Ministers who have to deal with these matters—both the Secretary of State for the Environment and the Secretary of State for Wales—during these applications must demonstrate that the working of these minerals is absolutely necessary within the park. Every other area should be considered and the applicants in this kind of development should be prepared to show that the application is absolutely necessary where they are asking for it to be within a national park area.
My hon. Friend asked whether we would refer the case to one of the committees that are now considering mineral workings and the problems of mineral workings in general. It would not be proper to refer a planning application to a specific committee of this sort or for the Secretary of State to take advice on a specific case without taking it in the course of a public inquiry. But it is necessary that any local planning authority dealing with an application should have as full information as is available on the production of minerals, the supply and demand position and any relevant national policies.
A number of lines of inquiry are afoot in respect of aggregate minerals. My hon. Friend mentioned the fact that certain major committees were considering the subject. There is the Advisory Committee on Aggregates, the Verney Committee, which was set up in 1972. That body was to advise on matters relating to the supply of aggregates for the construction industry and it has recently issued an interim report. It may well be
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that the contents of that report should be taken into account in considering the present application. Since the main purpose of Tunstead Quarry is the production of high-quality chemical stone, the work of the Verney Committee may not be particularly relevant to the type of development proposed, although a quantity of lower-grade limestone, which would otherwise be waste, is processed as aggregate or used in the manufacture of cement. But local planning authorities concerned with the production of limestone as aggregate will draw benefit in due course from the work of the Verney Committee.
My hon. Friend also mentioned the Institute of Geological Sciences which is carrying out in Derbyshire a feasibility study to establish procedures for an assessment of national resources of limestone. I hope that this necessarily longer-term project will lead to surveys which in due course will provide local authorities with better information than that presently available about the extent and nature of limestone resources. All these are building up information for both local authorities and my right hon. and learned Friend.
The Department has also instituted a three-year research project by the Royal School of Mines into the environmental implications of large-scale quarrying and open-cast working, and the initial stages of the work, on the results of which the content of further work will depend, is almost completed.
My hon. Friend referred to the committee under the chairmanship of my noble Friend Lord Sandford. Its report, just made and in course of being printed, will be of great help in these problems.
Finally there is the committee under the chairmanship of Sir Roger Stevens, which is expected to report later this year on the legal and procedural framework necessary for proper control rather than on issues of location and policy in the consideration of applications.
My hon. Friend asked whether this application could be called in by my right hon. and learned Friend. Certainly I shall invite my right hon. and learned Friend to look at what my hon. Friend said——
Mr. Le Marchant: I did not say that I should like it to be called in. I was asking for my right hon. and learned Friend to acquaint himself with the whole of this very important subject. At the beginning of my speech I said that I believed that it should be considered locally but that it should be known to my right hon. and learned Friend at this stage because it was such a very important matter.
Mr. Page: To the extent that the application has been made, it is known to my right hon. and learned Friend. But it has not been referred to him by the local authority as a departure from the development plan. If it is so reported, my right hon. and learned Friend will consider whether calling it in is the right procedure. But he could not undertake to investigate this outside the normal planning procedure by referring it to one or other of the committees that I have mentioned, or even by considering it himself before it came before him in a proper fashion in the normal planning procedures. If it comes in that form, almost undoubtedly my right hon. and learned Friend will appoint a public inquiry.
However, it is well within the power of the local planning authority itself to hold a public inquiry, and this might be the kind of case in which a planning inquiry held by the local planning authority before it reaches any decision on the planning application would be a very useful course. At any rate, one way or another this is almost bound to come
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before the public, and the case can be argued not only on amenity grounds but also on technical grounds, including the need for this kind of quarrying, and the need for limestone which must be set against the need to preserve amenities.
I stress again that it is a matter of grave concern to my right hon. and learned Friend and to the Secretary of State for Wales that we should not encroach into the national parks unless it is really necessary.
We come back to the point which was put by my hon. Friend the Member for Wells, namely, what is the national interest in a case of this kind? It is extremely difficult to lay down any rules in advance. One has to look at the merits of each case and to examine each case against the background of knowledge which we have from the various committees which have been set up to investigate this type of development. We shall try as far as we can to balance questions of national interest, and I hope that there will be a full investigation one way or another of this present proposal.
The applicants have gone out of their way to come to arrangements with the local planning authority to make public their intentions so that there is public knowledge of what they intend to do. In the circumstances, I hope that a satisfactory solution will be found.
Question put and agreed to.
Adjourned accordingly at five minutes past Twelve o'clock.