Commons Sitting of 14 April 1975

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

    Employment (Public Sector)
    Mr. Wigleyasked the Secretary of State for Wales what is his policy on the dispersal of jobs in the public sector in Wales away from Cardiff to areas that have suffered from restricted job opportunities and on the centralisation of existing jobs in the public sector; and if he is satisfied with the operation of his policy in this regard.
    The Secretary of State for Wales (Mr. John Morris): I make every effort to ensure that public sector employment is located in the most suitable areas in Wales, but I have no proposals for dispersal of existing jobs away from Cardiff.
    Mr. Wigley: I thank the Secretary of State for that answer. Is he aware that in Caernarvon there has been consider-
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    able loss of jobs in the public sector because of the recent removal of employment in the Post Office, the railways, the gas services and the police? There is considerable anxiety that a further loss of jobs will take place because of the move by the Welsh National Water Development Authority to centralise the offices of the river division in Gwynedd. Will the Secretary of State give an undertaking that he will bring pressure to bear on the water authority to resist any such centralisation?
    Mr. Morris: I am sorry to disappoint the hon. Member. The location of the premises of the water authority is a question for that authority under the terms of the Act. I am always mindful of the need to ensure that if there are Government dispersal policies they will be of benefit to Wales generally. We have already achieved a successful programme and we hope to bring Government jobs to Wales in the future.
    I recently had the privilege of opening a Crown court building in the hon. Gentleman's constituency.
    Mr. Anderson: Swansea and district is grateful to my right hon. and learned Friend for his decision in the previous Government to site the MOT centre in Swansea. If the Chancellor of the Exchequer makes a decision tomorrow to abolish vehicle tax, is the Secretary of State aware that we look with confidence to him for some assistance in compensating the area for any job loss which may be involved?
    Mr. Morris: I am grateful to my hon. Friend for his kind remarks. The MOT centre brought 3,750 jobs to Swansea. I cannot anticipate the Chancellor's Budget. My right hon. Friend and I are always mindful of the employment needs of West Glamorgan.
    Mr. Michael Roberts: Will the Secretary of State confirm that he is aware of the grave employment difficulties facing Cardiff, and will he reject any proposal to take jobs away from the capital city?
    Mr. Morris: I am certainly able to bring comfort to the hon. Gentleman. The Government have a major proposal to bring a large number of Civil Service jobs to Cardiff. This follows the bringing of the Mint to Wales under a previous Labour administration. The hon. Gentleman can be satisfied that plans for the future for Cardiff for Government dispersal jobs are high on our priorities.
    Mr. Ioan Evans: Although we do not wish to take jobs away from Cardiff and if Government Departments are to move away into the Principality, will the Secreof State consider setting up offices at the Heads of the Valleys so that Ebbw Vale and other valley towns can have a greater choice of jobs rather than just the basic industries?
    Mr. Morris: It is very much part of my philosophy on the Ebbw Vale problem that there should be much wider job opportunities in the valleys. My hon. Friend will be aware that the Civil Service jobs we shall bring to Wales will demand huge resources of manpower. Civil Service posts for the Cardiff and Newport areas announced last July will bring no fewer than 7,400 jobs. I am mindful of having wider job opportunities in the whole of Wales.
    Mr. Geraint Howells: Does the Minister not agree that successive Governments over the last 20 or 30 years have neglected job opportunities in the public sector in mid-Wales? Is he aware of the table mentioned last week in Hansard which says that the number of self-employed is extremely high in three counties in mid-Wales? Cardigan came top of the league, followed by Montgomeryshire and Carmarthen. We are worried about the job opportunities for people in the public sector in mid-Wales.
    Mr. Morris: The hon. Gentleman must be totally unaware of the growth of Newtown—a tremendous success story of the previous Labour Government—whereby we have ensured that the rate of depopulation has been reversed. I am mindful of the needs of mid-Wales for any opportunity that arises.

    Newport, Gwen
    Mr. Roy Hughesasked the Secretary of State for Wales if he will visit Pillgwenlly, Somerton and the Marshes districts of Newport, Gwent.
    The Under-Secretary of State for Wales (Mr. Edward Rowlands): My right hon. and learned Friend is always glad to go to Newport but he has no immediate plans to visit these areas.
    Mr. Hughes: With great respect, does my hon. Friend appreciate that the intervention of the Secretary of State is now urgently needed in Newport? These three districts are severely blighted at present and people are living in deplorable conditions there. Will he come and see for himself so that then he can authorise whatever emergency action may be needed?
    Mr. Rowlands: My hon. Friend will know that the prime responsibility for resolving issues in these areas, and particularly their redevelopment, is the local authority. In many cases the people would bitterly resent it if we tried to intervene and interfere with their decisions, but, of course, my right hon. and learned Friend and I are very conscious of the problems of housing and redevelopment in Newport. We have paid a great deal of attention to them in the past and we shall continue to do so.

    Rates
    Mr.Gwynfor Evansasked the Secretary of State for Wales what will be the percentage rise in the rates, including water and sewerage and the parish or community council precept, levied by local authorities in Wales as a whole in 1975–76 as compared with the total poundage of rates levied for the same services in 1973–74; and how this compares with the average rate levied by English authorities.
    Mr. John Morris: First estimates indicate that the percentage rise in Wales for domestic ratepayers will be 63 per cent., compared with 66 per cent. in England, and for non-domestic ratepayers 102 per cent., compared with 86 per cent.
    Mr. Evans: Is the Secretary of State aware that the traumatic reorganisation of local government in Wales not only lessened local democracy in Wales and increased inefficiency but was a significant contributory cause to the staggering rise in rates? Is he further aware that it was the Conservative Government which embodied this reorganisation in legislation but that the original scheme was the brain-child of the previous Labour Government, who outlined it in their White Paper? Therefore, will the Labour Government and the Labour Party accept their share of the responsibility for the consequences?
    Mr. Morris: The hon. Gentleman is absolutely right to say that the present reorganisation is the result of the previous Conservative Government. A number of ideas were proposed and went out to consultation through the Labour Government, but it was a Conservative Government who brought to pass the present system. However, despite the cost of reorganisation—it is difficult to quantify—I think that the hon. Gentleman would not be right if he were to ignore the fact that inflation has played a substantial part, if not the lion's share, in the immense cost of local government. The Government have done a tremendous amount to bring support to local authorities. The rate support grant has been increased from 60½ per cent. to 66½per cent. For England and Wales, that comes to about £2,000 million a year in increased support for local government.
    Mr. Gristasked the Secretary of State for Wales if he will now seek powers to enable Welsh local authorities to lessen the impact of the increases in rates which have recently been announced.
    Sir Raymond Gowerasked the Secretary of State for Wales, in view of the latest evidence of the scale of the proposals by Welsh local authorities to increase rates, water rate and sewerage charges, if he will seek powers to assist
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    the local authorities to lessen the proposed increases.
    Mr. John Morris: No, Sir.
    Mr. Grist: Is the Secretary of State aware that that is an appallingly smug answer? Is he also aware of the furious reaction that there is in Cardiff to the 94½ per cent. increase in rates this year? Will he comment on his hon. Friend's statement earlier that the new water and sewerage rates represent a correction of a gross distortion, bearing in mind that in Cardiff they have risen by 89 per cent. and 366 per cent., respectively? Will he make them rebatable for those in receipt of rate rebates, and will he comment on the effect that they will have on small businesses in Cardiff and other areas, especially in view of what the Chancellor of the Exchequer is expected to do tomorrow?
    Mr. Morris: The hon. Gentleman finds it convenient to forget the lack of reaction on his part to the favourable proposals which I announced in March 1974 and to the very small increases in many parts of South Wales. Indeed, in Cardiff there was a diminution in the rate. I remind the hon. Gentleman that when I brought my measure to the House, all Conservative Members representing Welsh constituencies, including the hon. Gentleman himself, were absent from the Lobby that night. Wales has done very well in the proposals that we have brought forward. We have pumped into local government an extra £2,000 million for the forthcoming year. This is what the increase from 60·5 per cent. to 66 per cent. means. It represents an increase from £3,400 million to more than £5,000 million.
    Mr. Roy Hughes: Does my right hon. and learned Friend agree that the responsibility for the present situation lies fairly and squarely on the last Conservative administration, for placing on the statute book one of the worst pieces of legislation that we have had this century? Now that the people of Britain are having to pay the bill for it, will my right hon. and learned Friend give serious consideration to undoing this legislation in the near future?
    Mr. Morris: I am not sure to which legislation my hon. Friend is referring. There were several bad bits of legislation

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    by the Conservative Party. All I can tell him is that our priority has been massively to increase the amount of support for local authorities—I note the remarks of the hon. Member for Pembroke (Mr. Edwards)—and that has meant major demands on public expenditure.
    Sir Raymond Gower: Is not the Secretary of State aware that this matter is much too serious for him to escape from the consternation and even anger of the public by references to the past? Is he aware that he has to take action to solve a problem whose effect on the public is now exceeding anything that I have seen in 20 years? I hope that he will not view it as a subject for party debate in the House, or for slinging retorts across the Floor. If he does not act, the anger being caused by the grotesque increases—
    Mr. Speaker: Order. This is Question Time, not a time for making speeches.
    Sir Raymond Gower: I have explained the point.
    Mr. Morris: As for party warfare in the House, it is my recollection that it was the hon. Member for Cardiff, North (Mr. Grist) who castigated me for being smug. The hon. Member for Barry (Sir R. Gower) has put a supplementary question that is misconceived. I was referring not to the past but to the future. That is what the 66 per cent. increase in the rate support grant is about. Although Conservative Members are now wringing their hands about the rates position, they did nothing about it when in office. We have set up the Layfield Committee to investigate and to report on the whole subject of local government finance.
    Mr. Roderick: Despite what Opposition Members have said, will my right hon. and learned Friend remind them that Wales received a massive increase in the domestic element of the rate support grant 'last year in order to compensate areas, such as mine, that had had large increases in water charges? Is it not only fair that areas such as Cardiff should help to equalise the load this year?
    Mr. Morris: That was one of a number of reasons for the domestic relief, from which I succeeded in ensuring that the people of Wales should benefit, intro-
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    duced by our measures of last March. Perhaps that was why all Conservative Members from Wales were absent from the Division Lobby on that occasion.
    Mr. Nicholas Edwards: I again put the emphasis on the need to reduce expenditure overall. Nevertheless, does not the right hon. and learned Gentleman agree that rather than waiting for a commission to report, which is bound to take some time, early action is required to give relief to ratepayers? Should not the Government consider the proposals that have been put to them by the Opposition to relieve local authorities by transferring some of their responsibilities to the Exchequer?
    Mr. Morris: The hon. Member cannot have it both ways. He cannot, on the one hand, attack any increase in public expenditure and, on the other, ask for responsibility to be transferred from local authorities to the Government. The money must come from somewhere. We have made proposals to increase the amount of the rate support grant for Wales by £2,000 million next year. Is the hon. Gentleman suggesting that that amount should be increased?

    Water and Sewerage Charges
    Sir A. Meyerasked the Secretary of State for Wales whether he will issue instructions to the Welsh National Water Development Authority to spread increases in the water rate levied by the authority over a period of several years.
    Mr. Rowlands: No, Sir.
    Sir A. Meyer: How can the hon. Gentleman refuse to use the admittedly limited powers which are available to him under the Water Act bequeathed by the previous Conservative Government? Is he not aware that both domestic and business ratepayers have seen their water rates increased by over 400 per cent. during the past couple of years? How can people possibly reconcile this with the expectations aroused in them by the Government's statement that the social contract means that everyone can maintain his standard of living? What possible recourse is there for ratepayers?
    Mr. RowlandsThe hon. Gentleman is completely misunderstanding the issue. He asked me whether we would instruct

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    the Welsh National Water Development Authority to equalise over a longer period. This was a unanimous decision of that water authority. If it had equalised over a period of years the rest of the domestic water users in other parts of Wales would still have had to pay the amount of money that it would have been necessary to raise. The water authority chose to correct gross discrepancies and distortions in charges for 1974–75. Communities such as Anglesey had increases of about 400 per cent. in one year.
    Mr. Wyn Roberts: Will the Minister look into the question of widening the borrowing powers of the authority, as it seems that the present inflexibility is resulting in totally unnecessary additional costs, which have to be borne on water and sewerage charges?
    Mr. Rowlands: The chief executive of the authority made this point to me only recently, and other water authorities in England and Wales have complained quite strongly about their restricted borrowing powers under the Act. We are looking at this matter.
    Mr. Cledwyn Hughes rose—
    Mr. Speaker: Order. I will call the right hon. Gentleman, but he has a Question down on this matter and if I call him now I may not do so for a supplementary question to his own Question.
    Mr. Cledwyn Hughes: I am much obliged, Mr. Speaker. In fact, my Question later on the Order Paper has nothing to do with this Question.
    Will my hon. Friend say when he expects the publication of the Daniel Report, which will, or which should, present us with some solutions to the problems which worry hon. Members in all parts of the House? Secondly, will he and his right hon. and learned Friend bear in mind once again that what will help Wales most of all is the equalisation of water charges throughout the United Kingdom?
    Mr. Rowlands: My right hon. Friend has mentioned the Daniel Committee's Report. That report has only recently been received in the Welsh Office. We are examining it. We hope to publish it as soon as possible.
    Mr. Roderickasked the Secretary of State for Wales what representations he has received on the subject of the increases in water and sewerage charges in some parts of Wales this year.
    Mr. Rowlands: My right hon. and learned Friend has received representations from 10 right hon. and hon. Members, 11 local authorities, the Farmers' Union of Wales, three other organisations and seven private individuals.
    Mr. Roderick: I hope that my hon. Friend will accept that nothing that I say is intended to be a reflection upon the competence or integrity of officials of the Welsh National Water Development Authority, but will he comment on the purchase of cars for the directors of the authority and for their deputies? Will he ensure that they are made aware of the feelings of Members of Parliament, as they should be aware of the feelings of members of the public? This is a totally insensitive action on their part. If cars were to be purchased, they should have been made part of the "perks" of the jobs when those concerned started in them.
    Mr. Rowlands: The purchase of cars is the responsibility of the Welsh National Water Development Authority, but I am sure that the authoritiy will wish to give serious consideration to the disquiet which has been expressed on this matter.
    Mr. Wigley: Is the hon. Gentleman aware of the concern in some parts of Wales at this time of the year, with summer approaching, that not only do they pay an excessive charge for water and sewerage services but that water supplies are not available? Is there not an overall case for making special funds available to the authority to ensure that everyone has available a supply of mains water?
    Mr. Rowlands: The development of these services depends on the capital limitations on the authority. This is one of the dilemmas that we face. The greater the demand for capital allocations, the greater the cost in charges. There is frequently a difference of opinion in this House. Hon. Members ask that the water authority should exercise financial disciplines of all kinds, and then they press for every possible scheme to be made available in their areas.

    Local Government Reorganisation
    Mr. Geraint Howellsasked the Secretary of State for Wales what estimate he has made of the extent to which the recent local government reorganisation has resulted in increased efficiency and better services, or any other advantages; and if he will make a statement.
    Mr. John Morris: Reorganisation has been in effect for little more than a year and it is premature to make an assessment of this kind.
    Mr. Howells: Does not the Minister agree that many people in Wales are dissatisfied with the local government reorganisation that took place last year? Will he consider doing away with the county councils in their present form and reverting to the multi-purpose authority, under the old county boundaries? Is he aware that many people in Wales are worried in case we have an executive assembly with executive powers only, in Wales, which would mean that we should have another tier of government in Wales without legislative power?
    Mr. Morris: I have made my position quite clear about this on previous occasions. The creation of the Welsh Assembly is not in any sense an additional tier of local government. It is bringing central Government closer to the people. I have no plans to change the present two-tier system of local government.
    Mr. Ioan Evans: Does my right hon. and learned Friend agree that the Labour Party proposed that local government reorganisation should have waited until Kilbrandon had reported and we had taken the constitutionally important measure to bring about devolution? We might then have had a different form of local government reorganisation in Wales, which would not have been as bureaucratic as it appears at present, and the additional Government tier would not have involved the increased costs about which people are beginning to complain?
    Mr. Morris: I entirely agree with my hon. Friend that, regrettably and unhappily, the previous Conservative Government tackled the whole issue in the wrong way. They should have settled the issue of the Assembly first and then gone on to local government. However, having said
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    that, the present local government arrangement—whether popular or unpopular—has enormous difficulties already, in terms of carrying out day-to-day functions. I have no plans to interfere with that.
    Mr. Nicholas Edwards: Is it not a fact that in the 10 years prior to reorganisation there was an increase of about 48 per cent. in the number of people employed in local government in England and Wales and that, therefore, we should not put all the blame upon reorganisation but should now give it the opportunity to work efficiently and effectively? Is it not right, therefore, that the emphasis should be placed on cutting central Government and local government expenditure wherever that is possible?
    Mr. Morris: I have noted the hon. Gentleman's remarks about cutting expenditure generally. I have made it quite clear to local authorities that they must exercise the greatest possible restraint in their public expenditure commitments. I make that clear again. As regards staff numbers, this matter is being monitored, and we have told local authorities that they must limit their increases to those needed only for inescapable commitments. I make my position abundantly clear on this occasion again.
    Mr. Roderick: Will my right hon. and learned Friend publish the comparative figures of the numbers of people employed in local government pre-reorganisation and post-reorganisation and warn those, in various parts of Wales, who are anxious to cut back on the number of officers of the dangers of such activity?
    Mr. Morris: Unhappily, this clear and unassailable comparison is not easily made. I have to consider the position as I see it at present and to monitor and ensure that there is no further increase in local government staffs, save for those to deal with inescapable commitments.

    Schoolchildren (Concessionary Travel)
    Mr. Ioan Evansasked the Secretary of State for Wales what representations he has had regarding concessionary travel arrangements for schoolchildren; and what action is proposed.
    Mr. Rowlands: Representations are frequently received from parents regarding arrangements for transporting children to school. My right hon. and learned Friend is considering with my right hon. Friend the Secretary of State for Education and Science the recommendations of the working party on school transport.
    Mr. Evans: Will my hon. Friend look at this matter urgently and sympathetically? Is he aware that as a result of the recent increase in bus fares, many schoolchildren now have to walk to school along busy roads and by swollen rivers and other hazards, and that it is not good for their education to be sitting in wet shoes? There is serious concern about this problem. One mother trying to cope, remarked, "Duw, it's hard."
    Mr. Rowlands: I am conscious that such problems exist. They exist in my own community as they do in every other community. The working party's recommendations have been received with widespread agreement, and long consultations have been going on on this matter.
    Mr. D. E. Thomas: Is the hon. Gentleman aware of the decline in value of concessionary fares for old-age pensioners as a result of the restrictions placed on them in the Government's circular of 23rd December?
    Mr. Rowlands: That is a different question. We appear to have moved from one end of the age spectrum to the other. If the hon. Gentleman will table a Question on the subject I shall be glad to deal with it.
    Mr. Arthur Lewis: My hon. Friend said that he was discussing this matter with the Secretary of State for Education and Science. Are we to assume from that that national aspects are involved? If so, will my hon. Friend bear in mind that well-paid company directors, executives and the like can and do get cars and other allowances for travel, whereas children have to go to the schools to which they are directed, and that it is ludicrous that they should have to pay any fares at all? Should not there be a national scheme whereby all schoolchildren are allowed free travel to and from school?
    Mr. Rowlands: I do not know what the cost of such a scheme would be to the taxpayer. In any event, I do not think that the working party discussed the broader issue of the cars and other expenses of company directors.
    Mr. Lewis: They get them.

    Land Authority (Local Authority Agents)
    Mr. Wyn Robertsasked the Secretary of State for Wales what discussions he has made with local authorities in Wales concerning agency arrangements under the Community Land Bill proposals; and if he will make a statement.
    Mr. Rowlands: Meetings have been held with representatives of the Welsh Counties Committee and the Council for the Principality. I hope that estimates will shortly be available of the potential of each Welsh local authority to act as an agent of the Land Authority.
    Mr. Roberts: How does the Minister propose to distribute the 750 additional staff which will be required under the Bill as between the proposed Land Authority and the local authorities? Is not this a serious underestimate of the number of additional staff who will be required, in view of the fact that capital disposals, especially, will amount to between £50 million and £55 million a year?
    Mr. Rowlands: I cannot answer the first part of the hon. Gentleman's supplementary question until I have seen the position in each county and district authority in terms of staffing. That is why I suggested to both local authority associations recently that they should get together and work out the potential staff required to implement the Community Land Bill. When I have the figures, I shall be in a position to reply more effectively to the hon. Gentleman's question.
    As for the second half of the supplementary question, I do not think that the figure referred to is a serious underestimate. It is the best estimate that we can make based upon the number of transactions. It is a reasonable estimate on the existing assumption that we make.

    Television
    Mr. D. E. Thomasasked the Secretary of State for Wales if he will make a ministerial broadcast on Government policies affecting Wales on all television channels received in Wales.
    Mr. John Morris: I already frequently broadcast on aspects of Government policy relating to Wales.
    Mr. Thomas: We always welcome the right and learned Gentleman's television appearances in Wales, since they are informative and interesting, but will he undertake to appear on television to discuss the change of heart which has overtaken him about the EEC and to point out the specific paragraphs in the excellent pamphlet which he produced in 1971 on the issue with which he now disagrees?
    Mr. Morris: I note the way that the hon. Gentleman has put his point in the House today, and I compare it with the intemperate remarks reported recently, in which he accused me of "gross deception" and "slavish support" and wished that I would "come clean". In those remarks, it seemed to me that he was playing the man rather than the ball. I assure him that at the appropriate time I shall explain further the remarks that I have made already. However, I do not regard as my first priority running to the television studio or the other media. My first duty is to my constituency and then, in due course, to the whole of Wales. I shall do that at a time of my own choosing.

    Fluoridation
    Mr. Cledwyn Hughesasked the Secretary of State for Wales if he will make a statement of his intentions concerning the fluoridation of water supplies in Anglesey.
    Mr. John Morris: After full consideration of representations made by the Anglesey Borough Council and by my right hon. Friend. I have concluded that it would be best, on balance, to leave the existing long-standing arrangements in the island undisturbed pending the independent report on fluoridation from the Royal College of Physicians and a Government consultative document on preventive health generally. Both these
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    documents are in preparation. I am today informing the Anglesey Borough Council and the area health authority of this view and will let my right hon. Friend have copies.
    Mr. Hughes: When is this independent report likely to be published? Is my right hon. and learned Friend aware that what he has just said will be received in Anglesey with considerable disappointment and dismay? Is he further aware that, whatever the merits or otherwise of the fluoridation of water supplies, the Anglesey Borough Council and the great majority of community councils in the county are asking for fluoridation to be discontinued, because they have no confidence in the claims made for it, because they do not believe that it should be imposed on them now by a nominated body and because, after nearly 20 years of the fluoridation of water supplies, Anglesey remains almost the only part of the United Kingdom where fluoride is added to the drinking water? Will my right hon. and learned Friend therefore consider, as a matter of urgency, suspending the fluoridation of water supplies in Anglesey until the report to which he hag referred is published?
    Mr. Morris: I entirely understand the concern that my right hon. Friend has expressed to me and to my hon. Friend the Under-Secretary on more than one occasion, and I share his view of the importance of the strong feelings of local people in this matter, as expressed through locally elected bodies. However, he knows much better than I that it was a local body—the old Anglesey County Council—which introduced fluoridation. I am satisfied that no harm will come from awaiting the documents that I have mentioned and the public debate that may be expected to follow. I must therefore disappoint my right hon. Friend.
    The report of the Royal College of Physicians may be expected later this year. Work is proceeding as quickly as possible on the Government's consultative document and I hope that it will follow shortly after the report of the Royal College of Physicians.

    Housing (Noise Insulation)
    Mr. Michael Robertsasked the Secretary of State for Wales when he

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    intends to publish a list of houses on and near Manor Way and Northern Avenue, that may be eligible for assistance under the Noise Insulation Regulations of 1973.
    Mr. Rowlands: We hope to have the results of the noise studies in May. In the light of these, we expect to make an announcement shortly afterwards.
    Mr. Roberts: Is the hon. Gentleman aware that the effect of widening this section of the Merthyr-Cardiff trunk road is merely to increase the volume of traffic and consequently the volume of pollution? Is he also aware that there is considerable anxiety because of the very long delay in appointing a noise insulation agent?
    Mr. Rowlands: I appreciate what the hon. Gentleman says in his latter question. There were difficulties about securing the appointment of noise insulation agents, but we now hope to overcome them. We are establishing these surveys precisely to see exactly how far the extension and alteration of this road affect the noise problem.

    Cwmbran New Town (Inquiry)
    Mr. Abseasked the Secretary of State for Wales when it is intended to hold the public local inquiry into the proposed Cwmbran New Town (Designation) Amendment Order.
    Mr. Rowlands: A public inquiry will be held only if objections are received to the draft order and are not withdrawn.
    Mr. Abse: On behalf of the Torfaen council and myself, I thank the Under-Secretary for having acceded, despite the present economic difficulties, to our request that the new town's original plan should continue. However, will he give us an assurance that the public inquiry will be held as speedily as statutorily possible, as house building now continuing is likely to end within the next 18 months, unless continuity is assured, with the result that the existing housing problems within the eastern valley will become exacerbated?
    Mr. Rowlands: I assure my hon. Friend that every effort will be made to arrange this inquiry, if necessary, in the light of the issues that he has mentioned.
    Mr. Jeffrey Thomas: Is my hon. Friend aware that considerable disquiet has been
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    expressed that the further development of Cwmbran may have an adverse effect in North Gwent and thus add to its depopulation problem?
    Mr. Rowlands: That sort of issue may be the subject of a future public inquiry, but I can assure my hon. Friend that the designation is very modest. It is needed merely for the land necessary to achieve the target of a population of 55,000—a target established way back in 1968. I can give the positive assurance that it wil not in any way channel away funds or resources vital to the housing and industrial development of Blaenau-Gwent.

    Industrial Production
    Mr. Nicholas Edwardsasked the Secretary of State for Wales by how much industrial production fell in Wales in 1974; and how this fall compared with the fall in the United Kingdom as a whole.
    Mr. John Morris: It is provisionally estimated that for 1974 as a whole industrial output in Wales was 5·3 per cent. less than 1973. For the United Kingdom the corresponding figure was 3 per cent.
    Mr. Edwards: Do not the Government figures show that the fall in industrial production is evidently greater in Wales than elsewhere in the United Kingdom? Does not that factor, together with the rise in unemployment and short-time working, and also the information about new job inquiries and job creation reveal a pretty grim situation as a result of the Labour Government's economic policies?
    Mr. Morris: Surely the hon. Member for Pembroke (Mr. Edwards), who sits on the Opposition Front Bench, should be the last person to put that kind of question. He knows where the responsibilities lie—or at least he should know. The proportion depends substantially on the mix of the economy. Coal and steel—the hon. Gentleman may not know this—play a large part in the Welsh economy. The massive drop in coal production in Wales is a direct result of the confrontation policies which were pursued by the Conservative Government. I am surprised that the hon. Gentleman has the face to put such a question.
    Mr. Anderson: In view of the variation in the situation between Wales and

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    the rest of the United Kingdom, has the Secretary of State tried to assess by contacts with both sides of industry how much more traumatic for Wales, in respect of production, investment and jobs, would be a withdrawal from the EEC?
    Mr. Morris: That matter hardly arises from the original Question.
    Mr. Edwards: In view of what the Secretary of State said, will he give the House the figures for manufacturing in Wales?
    Mr. Morris: The figures for manufacturing I cannot put my hands on now. [HON. MEMBERS: "Oh!"] If Conservative Members table a Question on that matter, I shall be happy to give the House details but for the coal industry the figure is 23 per cent. and for steel it is 21 per cent., and increases are recorded in some sectors, such as food, drink and tobacco, coal and petroleum products, mechanical and instrument engineering, gas, electricity and water. These were not sufficient to counterbalance the sharp falls in the sectors of greater weighting in the index or to counter the influence of coal and steel, which play such a large part in the Welsh economy. Those figures for 1974 are a direct result of the confrontation policies so unsuccessfully pursued by the Conservative Government.
    Mr. Wigley: Does the Secretary of State agree that one of the most important plans of the Government to alleviate the situation lies in a Welsh development agency? What is holding up publication of the Bill to set up that agency—a body which will be welcomed in Wales and which is necessary for the work of the Standing Committee considering the Industry Bill?
    Mr. Morris: I am not aware of anything that is holding up my proposals. Contrary to statements made by the hon. Gentleman earlier in the year, I hope that my proposals, which I shall be publishing very shortly, will be welcomed. That body will play a major part in the regeneration necessary in the Welsh economy. In the interim, we have taken major steps to increase advance factory building and to pump the necessary money into the economy to increase manufacturing potential.

  CIVIL SERVICE

    Government Offices (Dispersal)
    Mr. Hooleyasked the Minister for the Civil Service how many Departments or agencies of central Government have their senior Civil Service staff located outside London.
    The Minister of State, Civil Service Deparment (Mr. Charles R. Morris): Five Departments have their top management located outside London, including the Scottish and Welsh Offices. But many Departments have a substantial number of senior staff outside London. At 1st October 1974, 40 per cent. of staff engaged on headquarters work were located outside London. A substantial number of Government agencies have senior staff outside London.
    Mr. Hooley: I am grateful for that reply, and I am encouraged by its general tone. Is my hon. Friend aware that Sheffield still awaits with bated breath a decision about the future headquarters of the Health and Safety Commission? Will he give some information on that?
    Mr. Morris: I appreciate the encouraging reaction from my hon. Friend over the Government's policies in dispersing Civil Service departments from London. The question he raised on the Health and Safety Commission is still the subject of study, but it is hoped that an announcement will be made in the not too distant future.

    Working Conditions (Report)
    Mr. Goldingasked the Minister for the Civil Service what arrangements have been made for monitoring the implementation of the recently published Wider Issues Report on the conditions in which civil servants are obliged to work.
    Mr. Charles R. Morris: Each Department is preparing a follow-up programme and consulting its departmental staff side not only on the substantive problems and how they are to be tackled but on how progress is to be maintained and monitored. My Department is co-ordinating progress. The most recent and important step forward is the agreement recently concluded with national staff side on the cleaning of Government offices, which

    21
    provides a basis for better standards of cleaning work and thereby improves the environment in which civil servants are obliged to work.
    Mr. Golding: Is my hon. Friend aware that there is dissatisfaction among public servants behind counters at the way in which they are treated? If the public is to get the service and civility it deserves, does he not agree that there must be an improvement in morale in the public service?
    Mr. Morris: My hon. Friend is absolutely right. It is essential that the public should receive efficient and civil service from public servants who work behind the counters at Government Department offices. Equally, the public at large is aware of the abuses, assaults and physical injuries sustained by many civil servants in carrying out their duties in the recent past. I hope members of the public will do their best collectively to bring this situation to an early end.
    Mr. Stott: Will my hon. Friend say what progress has been made in discussions over the extension of flexible hours of attendance in the Civil Service?
    Mr. Morris: My hon. Friend has highlighted an important development in the Government staff side relationship The extension of flexible working hours of attendance is proceeding, and negotiations are being carried out with the national staff side. As of December 1974, 80,000 civil servants were covered by agreements relating to flexible hours of attendance.

    REFERENDUM
    Mr. Tim Rentonasked the Lord President of the Council whether he will place in the Library a record of his discussions with the umbrella organisations concerning the referendum.
    The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): No, Sir. These discussions were confidential.
    Mr. Renton: What representations have been made by the umbrella organisations about those who are being disfranchised by the Lord President's statement that the earliest probable day for the referendum would be 19th June?
    22
    Those people took their holidays early so as to be back in the country to vote, but they now find that they will not be able to do so. Surely the right hon. Gentleman must listen to representations from those people if they are not to be disfranchised simply by the Labour Government's haste to get the referendum through before the Labour Party splits on the European issue?
    Mr. Short: I remind the hon. Gentleman that his hon. Friend the Member for Christchurch and Lymington (Mr. Adley) has tabled a Question on that subject, which will be answered later today.
    Mr. Golding: Is my right hon. Friend aware that, quite apart from the handful of people mentioned by the hon. Member for Mid-Sussex (Mr. Renton), hundreds of thousands in North Staffordshire and Lancashire will benefit from the announcement of the earlier date for the referendum, and they are very grateful to my right hon. Friend?
    Mr. Short: I am extremely grateful for what my hon. Friend said. That is one of the reasons why we have put on the referendum at the earlier date, if we can manage it on that date. However, I realise that there are different views on this matter and I shall beat in mind all the points put in last week's debate. Indeed, a Conservative Member is coming to see me later today to explain his plans, and I shall listen to him.
    Mr. Lawsonasked the Lord President of the Council how soon after the Referendum Bill has received the Royal Assent he proposes to lay the various orders that may be made under the Act.
    Mr. Blakerasked the Lord President of the Council how soon after the Referendum Bill has received the Royal Assent he intends to lay the orders that may be made under the Act.
    The Minister of State, Privy Council Office (Mr. Gerry Fowler): The orders will be laid immediately the Bill receives Royal Assent.
    Mr. Lawson: Will the hon. Gentleman further clarify what his right hon. Friend the Lord President said a moment ago? Will the further discussions which the right hon. Gentleman is to have relate solely to those Britons who live

    23
    and work overseas, or will they also concern the important issue of the situation of those who will be on holiday, whether at home or abroad, when the vote is held? Is it not the case that these people should be given a postal vote, and is not this issue of sufficient importance to override considerations of administrative convenience?
    Mr. Fowler: I am surprised that we do not get the same passion displayed before each General Election. [HON. MEMBERS: "We do."] Then it is rather hard to understand why there is such fervour on the Opposition benches today, since nothing of the kind happened before last February's election. When and if amendments are made to the Bill in its passage through the House, amendments will be made to the order.
    Mr. Lawson: Answer the question.
    Mr. Blaker: Is the Minister aware that his answer just now was just as unsatisfactory as his answers to the debate last week? May I draw his attention again to the problem of Britons residing abroad with the right of abode in the United Kingdom? Last week the hon. Gentleman gave the impression that the problem of registering them was one of time. If so why should not the referendum be put back for a week, until 12th June?
    Mr. Fowler: A week would not solve the problem of timing here.
    Mr. Michael Marshall: In that case, will not the hon. Gentleman simply put back the whole ludicrous exercise for a month or two? The only reason for not delaying it is the convenience of the Labour Party, not the country at large.
    Mr. Fowler: I do not see why Conservative Members are so dedicated to the notion of enfranchising some who are not registered at the cost of effectively disfranchising a large number who will then be on holiday—not all abroad.
    Mr. Gowasked the Lord President of the Council what is his estimate of the number of citizens of the Republic of Ireland, not being citizens of the United Kingdom also, who will be entitled to vote in the forthcoming referendum, if the Referendum Bill printed on 26th March 1975 shall become law.
    Mr. Edward Short: It is impossible to make such an estimate.
    Mr. Gow: How many citizens of the United Kingdom living in the Republic had a right to vote in the referendum held by the Republic about its membership of the Common Market? Will the right hon. Gentleman please carry out research so that he can answer the Question?
    Mr. Short: It is impossible to answer the Question, because the register does not distinguish voters by nationality, and there are no reliable figures. I can give the hon. Gentleman the figures from the 1971 Census returns. They show that there are about 710,000 people living in England, Wales and Scotland who were born in Ireland, and another 521,000 who had fathers who were born there. That is a total of 1·2 million, of whom 35,000 were aged 14 or under in 1971 and will not yet be old enough to vote.
    Mr. Grylls: Is it just that citizens of the Republic living in Britain should have a right to vote but our own United Kingdom citizens, working in Europe for this country, are not allowed to vote, when the Government have told us that this is a unique occasion for the future of the country and everybody in it?
    Mr. Short: As the hon. Gentleman knows, we try to adhere as closely as possible to the normal electoral law—
    Mr. Grylls: It is a unique occasion.
    Mr. Short: I wish that Conservative Members would, just once in a while, allow a Minister to answer a question without interrupting from a seated position. We try to adhere to normal electoral law, under which Irish citizens living in this country are entitled to vote if they are on the register, but British citizens in Europe who have not taken the trouble to register are not. But I said a minute ago that I recognised that there were varying points of view about the matter. I have undertaken to consider very carefully all the points of view put in the debate last week, and I shall do that.
    Mr. Adleyasked the Lord President of the Council what steps he has taken to ascertain the difficulties which might be involved in the distribution of ballot papers to United Kingdom embassies,

    25
    consulates and high commissions for the forthcoming referendum.
    Mr. Edward Short: I would refer the hon. Member to what my hon. Friend the Minister of State and I said in the debate on 10th April.—[Vol. 889, c. 1424 and 1537.] The Government are, however, urgently considering the matter in the light of points made in that debate.
    Mr. Adley: I am grateful to the right hon. Gentleman for that answer, and for agreeing to see me this evening. Will he bear in mind that the amendment which has been tabled to the Referendum Bill is not aimed just at trying to enfranchise people living within the EEC area? That is a misconception, and it would be unfortunate if it took hold in people's minds. Will the Lord President tell his hon. Friend that the reason why the referendum is different from a General Election, and therefore why we want to try to enfranchise the people in question, is that no constituencies are involved in the referendum? We are not electing Members of Parliament. In the right hon. Gentleman's own words, this is a unique occasion. Therefore, there is no reason why people who are abroad and who are not registered in a particular constituency should not vote, provided they have the right of abode in the United Kingdom.
    Mr. Short: I am sure that my hon. Friend realises all that—but I hope that the hon. Gentleman and his hon. Friends who put that point of view will realise the difficulties. Many people who have gone to live abroad have turned their hacks on this country and are living on the Costa Brava, in Malta, and elsewhere. [Interruption.] I am just pointing out one of the problems. Under the hon. Gentleman's proposal they would be allowed to vote, but someone in my constituency who, because he lived in a slum tenement and had been moved during the currency of the register, would not have a vote. There are considerable difficulties. Nevertheless, I have promised to reconsider the whole question. I realise that there is a point of view here, but any scheme which could be worked out would be makeshift, of a Heath Robinson type, and full of holes, and there would be a great risk of bringing our electoral system into disrepute. However, in spite of all the difficulties—it is no good trying to laugh them off, because they are consider-
    26
    able—I promise to examine the matter again.
    Mr. Golding: Is my right hon. Friend aware that we on the Labour benches realise that the quicker the referendum is held the better it will be for the British economy, and that he should not delay holding the referendum in order to give people living overseas the right to vote in it?
    Mr. Short: That is the other point of view. There are these two points of view. As I have said three or four times already, I promise to review the whole situation again this week.
    Mr. Thorpe: I think that everybody realises that there are difficulties. We do not minimise them. We are grateful to the right hon. Gentleman for saying that he will look into the matter. Is he aware that many individuals who are doing a useful job for this country, in Europe and other countries, badly want to vote about something which affects the future of this country? These are people who are not in a tax-free situation but who are working for this country as our representatives. I am sure that the right hon. Gentleman would not wish to minimise their political rights, although many others do. Does not he think that "Heath Robinson" is not a particularly appropriate term for the referendum?
    Mr. Short: It is an inappropriate term for the referendum as a whole, but for any scheme for all the people living abroad it would be very appropriate. The vast majority of the people working in Europe could have registered in this country if they had wished. If they have registered, they can vote by proxy.
    Mr. Grocott: In view of the tremendous interest being shown by Conservative Members in the need to make elections as fair as possible, does my right hon. Friend agree that we should arrange a debate before the next General Election on how to make General Elections much fairer than they are now, and in particular on the way in which the two major parties are financed?
    Mr. Short: There is a case for setting up the Speaker's Conference again before the next General Election. I hope that we shall do so, and that we shall refer a number of matters to it.

    27
    With regard to my hon. Friend's second point, I hope in the very near future to announce the composition of the committee the setting up of which I announced in the House some time ago.
    Mr. Wigley: In view of the comment made by a number of hon. Members that there is a fundamental difference between a General Election and a referendum, in that the referendum results are not on a constituency basis, will the right hon. Gentleman give an assurance that the pressure applied by such hon. Members with regard to people living abroad will not militate against the declaration of the result on a constituency basis if that is the wish of the House at a later stage?
    Mr. Short: It will not do that. I do not think that the votes need necessarily be sent to a given constituency. But that is one of the problems that would have to be sorted out if we worked out a scheme for people living abroad.
    Mr. Blaker: We are glad to hear that the right hon. Gentleman will give consideration to the problem of British subjects living abroad. Will he consider whether, in this unique case, it is necessary to go through all the steps which are rightly considered necessary for a General Election, such as the publication of draft registers, the opportunity for challenge of the registers, transporting the ballot box to the scene of the count, and so on? In a General Election, one vote may make all the difference. Is not the referendum likely to be different?
    Mr. Short: Everyone will agree that it is in the interests of the country to get the referendum over as quickly as possible and remove the uncertainty about British membership one way or the other. But in view of the time factor it would not be possible to go through all the stages the hon. Gentleman mentioned. We should have to short-circuit many of them.

  HOUSE OF COMMONS

    Television Programmes
    Mr. David Steelasked the Lord President of the Council if he will arrange for a videotape viewing machine to be available within the Palace of Westminster so that Members may view tele-
    28
    vision programmes of public interest or controversy.
    Mr. Edward Short: This matter is at the moment under consideration by the Services Committee.

  INDUSTRY

    European Community
    Mr. Rostasked the Secretary of State for Industry what arrangements he has made to obtain the views of industry on Great Britain's continued membership of the European Community.
    The Under-Secretary of State for Industry (Mr. Gregor Mackenzie): My Department has received and continues to receive representations from both sides of industry and its representative bodies on a wide range of Community matters, including the question of membership.
    Mr. Rost: As the Secretary of State for Industry is more concerned to pursue his political prejudices than to represent the views of British industry, which unanimously wishes to stay within Europe, should not the Secretary of State follow his former junior colleague and retire to the back benches to make room for a Minister who is prepared to back up and express the views of British industry and Government policy?
    Mr. Mackenzie: We rather expected a supplementary question like that from the hon. Gentleman. It does not advance the case either for or against membership of the Common Market on the renegotiated terms. My right hon. Friend the Secretary of State for Industry is concerned to ensure the success of British industry and is putting forward his point of view.

NORTHERN IRELAND (GOC's SPEECH)
Mr. Wellbeloved(by Private Notice) asked the Secretary of State for Northern Ireland if he will make a statement on the speech delivered to a public audience on Saturday 12th April by Sir Frank King, General Officer Commanding Northern Ireland.
The Secretary of State for Northern Ireland (Mr. Merlyn Rees): The St. John

29
Ambulance Brigade invited the GOC Northern Ireland some 11 weeks ago to take part in its Annual Medical Conference at Nottingham University. The general theme of the conference was related to the part that the St. John Ambulance Brigade might have to play in urban violence, including such things as football crowds, demonstrations and processions. It was not specifically related to Northern Ireland and the General was asked, with other speakers, including an academic expert, a senior police officer and a doctor, to take part in a symposium and panel discussions.
This was not a conference, seminar or discussion organised by Government or by a political party. It was a conference of people professionally concerned with their jobs. There was no question of the GOC's making an official speech, of giving a Press hand out, or of any Press briefing. Indeed. I understand from the GOC that he spoke from notes and did not believe that any members of the Press were present or that any of his remarks would be reported, let alone reported out of context. He was concerned solely with some of the practical problems that result from urban violence and he had no intention whatsoever of criticising Government policy.
His remarks have caused political embarrassment and the General has expressed his regrets to me that, quite inadvertently, his contribution at what was intended to be a wholly non-controversial conference has, when taken out of context, had such an effect. I accept this position and should add that I have every confidence in the advice which has always been given to me by General King on security matters and, indeed, his tour of duty in Northern Ireland has been extended by six months.
The Government's policy in regard to Northern Ireland was clearly stated in this House by me on 14th January and subsequently. It stands exactly as I have expressed it. This policy has been formed after full consultation with the security forces and with my right hon. Friend the Secretary of State for Defence. I have made clear that the Government's actions with regard to the rôle of the Army and the ending of detention will be, and are being, directly related so far as the Provisionals are concerned to a genuine and sustained cessation of
30
violence. I am fully aware of all the factors that have to be taken into account, which also include the sectarian and gangster-type murders, shootings and bombings that have taken place during the past few weeks. It is of the utmost importance that everything possible should continue to be done to bring those involved to justice before the courts, and this is happening with considerable success.
With regard to detention, I have to take many factors into account. I would repeat what I said on 14th January:
"The crucial point is that only the Government can decide, in the light of the situation as a whole, when to start bringing detention progressively to an end. I am prepared to say now that, if there is a genuine sustained end of violence, I shall progressively release detainees. I do not propose to act precipitately, and any early releases must, and will he, carefully judged in relation to whether the cessation of violence is genuine and sustained."—[Official Report, 14th January 1975; Vol. 884, c. 202.]
That remains my policy.
There is no question, and never has been, of political responsibility for security policy in Northern Ireland resting other than with me. This has never been changed, nor is it at issue now.
Mr. Wellbeloved: Is my right hon. Friend aware that the Press reports of General King's remarks have caused considerable concern both at political and military level? In view of the naïve explanation given by the General to my right hon. Friend, will my right hon. Friend when he next meets the General draw to his attention that at a time when a political initiative to set up the Constitutional Convention is about to begin, with the run-up to the elections, and when the cease-fire is balanced on a delicate knife edge, the General's remarks are particularly ill timed and constitute, in the view of a great number of people, a breach of the normal military etiquette of military commanders? Will my right hon. Friend also bear in mind that there will be a general welcome for his clear statement that he will require a high degree of evidence before signing ICOs? Will my right hon. Friend accept that we welcome his commitment to continue the phasing out of detention at a pace which is commensurate with the general political requirements of the situation and the maintenance and protection of the lives of the security forces?
Mr. Rees: Of almost all the generals I know, I would go so far as to say that Frank King is the least political. The General is fully aware of the effect of what he said, and in that context he has offered his regrets to me. He is aware of the effect it has had politically in Northern Ireland. There is no doubt about that.
Detention is a matter for me. In July last year I announced the phased programme. During the fall of last year there were releases by the commissioners. Since that time 400 detainees have been released. At the same time, when I sign an ICO I do so because of evidence in front of me that someone has been involved in physical violence.
Mr. Neave: Is the Secretary of State aware that the Opposition warmly support the tribute which he has paid to a fine commander, Sir Frank King, who is doing a very difficult job. We are glad that the right hon. Gentleman has accepted Sir Frank's explanation. In view of the anxiety in many quarters at the mounting violence in Northern Ireland, could the House be assured that the ceasefire and the policy of release as a whole will be reviewed so that it does not work to the advantage of the terrorists, some of whom have been retrained after their release from detention in Long Kesh? This is frustrating the work of the Army, particularly on the intelligence side. Will the Secretary of State and his right hon. Friend the Home Secretary also stop transferring convicted prisoners to Northern Ireland from this country while the elections for the Constitutional Convention are actually in progress?
Mr. Rees: There is one point which I must make clear to the hon. Gentleman. There has been some violence from the Provisional IRA in recent weeks, but very little—that is not to say that it could not happen again—and almost all the violence in Northern Ireland is internecine, between the UDA and the UDF. That horrible bomb of Saturday night—if it can be singled out—has been claimed by a Protestant organisation. There is the violence today, when, in the middle of Belfast, an official IRA member standing for the Republican Clubs has been shot by a member of the Irish Republican Socialist Party. The cease-fire on the part of the Provisional IRA should not be mixed up with other sorts of violence
32
not connected with the PIRA. They are distinct.
On the question of the transfer of prisoners, my right hon. Friend and I co-operate in deciding who is to be moved in the context of space and of need. We shall continue to do so, and I shall continue to release detainees. I released five on Saturday and four this afternoon.
Mr. Cledwyn Hughes: Will my right hon. Friend make clear as a matter of principle that the intervention of serving officers, including general officers, in sensitive political matters is against the public interest and must be deprecated in the strongest possible terms?
Mr. Rees: I agree absolutely. It is a wrong thing to do. I have tried to explain the circumstances of the general discursive nature of the minor conference that took place. Although it is politically embarrassing and bad from the point of view of the politics of Northern Ireland, I am absolutely convinced that it was not done with the intention of getting into the political arena.
Mr. Powell: In view of the misconceptions which have been created or confirmed by this unfortunate report, will the right hon. Gentleman confirm that the release of detainees cannot be the subject of a bargain, whether implied or explicit, between Her Majesty's Government and any other person or persons?
Mr. Rees: Yes, I can accept that fully. Release from detention is entirely a matter for me. It involves a value judgment. Perhaps I may tell the right hon. Member for Down, South (Mr. Powell) that in May of last year an assassination squad attempted to assassinate me. I signed an ICO on the Loyalist concerned. I released him some weeks ago.
Mr. McNamara: We accept that the General made an inept remark and that he has now apologised to my right hon. Friend, but is my right hon. Friend aware of the difficulties that the statement has caused in Northern Ireland? Will he underline that the truce or cease-fire, whatever it is called, has not been significantly broken by the Provisional IRA? Does he agree that that has to be understood in this country and in

33
Northern Ireland so that temperatures can be kept down? When the Convention election comes, we do not want opposing parties and opposing groups rushing into their ghettos and achieving the sort of stalemate that we have had in the past few months.
Mr. Rees: I can only say that already today there is a division on sectarian lines. In the electioneering hustings the Loyalists say that I have the Army with one arm behind its back. The Catholics put the matter the other way round and suggest that the General tells me what to do. This has broken almost completely on sectarian lines. That is the sadness of the fact that this matter happened last week.
Mr. Amery: Further to the question raised by the right hon. Member for Anglesey (Mr. Hughes), is the right hon. Gentleman aware that the doctrine of collective responsibility is the seamless robe which applies not only to Cabinet Ministers or other Ministers but to officials and senior officers as well, and that the dispensation given by his right hon. Friend the Prime Minister to certain Ministers to express their own views is bound ineluctably to lead to other officials and senior officers expressing their own views in a way not normally acceptable?
Mr. Rees: I have not discovered Frank King's views on the Common Market, but when I see him tonight I shall ask him.
Mr. Thorpe: Does the right hon. Gentleman agree that what is unfortunate is that this event has happened at a difficult and delicate political moment, and that it involves a General who has given distinguished service for at least the past two years in Northern Ireland, and who no doubt will continue to do so? It is right that security officers should make known their views to the Government of the day, but does the right hon. Gentleman agree that the only people in an official position who can be the critics or protagonists of any political view must be Ministers who are answerable to this House, which has firm control over the affairs of Northern Ireland? Whatever may be the merits of this individual, that point must be made to him now if it is not already apparent.
Mr. Rees: The point has firmly been made. I say from my days at the Ministry of Defence, that, overall, we are lucky in this country that this general rule or convention, call it what one will, is well understood.
Mr. Delargy: My right hon. Friend has agreed that the General made a very grave statement. He has also said that the General was speaking from notes. Yet he has accepted the General's explanation that he was quoted out of context. Will my right hon. Friend explain what he means by the cliché "quoted out of context"?
Mr. Rees: The St. John Ambulance Brigade has a tape of the general discussion. One of my officials has had the opportunity to listen to it. I have not heard the tape but I have the word of the official who did. If we take the question of the release of detainees, it is true that if we return to violence there will be real problems. There is no doubt that there would be real problems in that event. This is a judgment that I have to make.
The General made a mistake last weekend, but I am absolutely sure that it was not done for political reasons. This report has caused a problem, but I think the General's security advice is always of the best—and it is security advice that I want from Frank King.

INTERNATIONAL ENERGY AGREEMENT
The Secretary of State for Energy (Mr. Eric G. Varley): With permission, Mr. Speaker, I should like to make a statement about United Kingdom participation in the Agreement on an International Energy Programme.
Following my statement to the House on 30th October last, the Government signed the Agreement, which accordingly became provisionally applicable to the United Kingdom on 18th November, to the extent possible not inconsistent with United Kingdom legislation. A copy of the Agreement was laid before Parliament in January as Command Paper No. 5826.
As required by Article 67 of the Agreement, the Government intend, before 1st May 1975, to notify the Government of Belgium, as the depository power, of

35
their formal consent to be bound by the Agreement.
The Fuel and Electricity (Control) Act 1973 contains sufficient powers to implement those parts of the International Energy Programme which require governmental direction. The Act is a temporary measure requiring renewal from year to year. I hope to introduce appropriate permanent legislation in the next Session of Parliament, and, if necessary to avoid any gap before that legislation is enacted, to lay an order for the renewal of the 1973 Act.
Mr. Patrick Jenkin: Does this mean that the Government propose to ratify the Agreement, which contains far-reaching supra-national powers, without giving the House even the opportunity to comment on it? How can the right hon. Gentleman reconcile that view of an international agreement with his opposition to the European Community, on which there has been massive opportunity for comment, debate and discussion in the House? Is this not all the more surprising when, as we read in the Press over the weekend, the international discussions which are being taken pursuant to Chapter 8 of the agreement look like going very much wider than the question of energy and comprehending the whole of the developed world's supply of raw materials as well?
Mr. Varley: It might have been interesting had the right hon. Gentleman indicated whether he supported ratification of the treaty. As the right hon. Gentleman knows, the question of debate in the House is one not for me but for my right hon. Friend the Leader of the House. I understand that the Agreement has been laid before the House in accordance with the Ponsonby Rules. There were agreements undertaken and ratified in this way by the previous Government, and nothing is unusual about the way in which we are proposing to do it today. There is no comparison between the right hon. Gentleman's reference to this agreement and the European Economic Community.
Mr. Palmer: Does my right hon. Friend not agree that it would be of general interest to the House, in view of the statement made over the weekend by the Secretary of State for Industry, to
36
know just how far this Agreement limits the sovereignty and the freedom of this country in terms of energy policy?
Mr. Varley: I have not had a chance to study what my right hon. Friend said over the weekend but I shall do so later today—and no doubt I shall read his words with interest. I think that my hon. Friend must be aware that this Agreement is in no way comparable to the provisions of the European Economic Community. The Agreement is designed to run for 10 years. After five years, there will be a general review. Any participating country can terminate it on 12 months' notice after it has been in operation for three years.
Mr. Geraint Howells: I accept the right hon. Gentleman's statement but I must ask two questions. First, how many countries or Governments have signed the Agreement within the EEC and outside? Secondly, what are our responsibilities as a nation under the Agreement?
Mr. Varley: Our responsibilities are fully set out in the White Paper. I know that the hon. Gentleman will take the opportunity to look at the White Paper more closely. Very briefly, the provisions are to secure oil supplies in emergency situations, to co-operate with consumers and producers and to reduce dependence on imported oil. Of course there are many other provisions. The hon. Gentleman asked about the number of countries inside and outside the Community which have signed the Agreement. Eight countries within the Community have signed it but nine countries—the majority of those signing—are outside the Community.
Mr. Powell: Will the right hon. Gentleman confirm that any changes in the law of this country which are necessary from time to time to comply with this Agreement, as long as we remain a party to it, will be made by Parliament in the normal way?
Mr. Varley: Not in the first instance. As I said in my statement, we hope fully to implement the parts of the International Energy Agreement which require governmental direction under the Fuel and Electricity (Control) Act 1973. That lapses this year. I am hoping, in the next Session of Parliament, to introduce permanent legislation which will meet the

37
right hon. Gentleman's point. If that is not possible for any reason, the Fuel and Electricity (Control) Act will have to be renewed by order.
Mr. William Hamilton: Can my right hon. Friend give us a complete and unqualified assurance that nothing in this Agreement or any other that the Government have entered into will prevent us from doing exactly what we like with our natural resources in the North Sea?
Mr. Varley: Yes. Nothing in this Agreement prevents us from—
Mr. Hamilton: Or any other Agreement?
Mr. Varley: Nothing in this Agreement—
Mr. Hamilton: Or any other?
Mr. Varley: My hon. Friend must allow me to answer the question he has put.
Mr. HamiltonI asked the question.
Mr. Varley: Nothing in this Agree-allow me to answer the question rather than constantly interrupt. Nothing in this Agreement—and this is the agreement that is before the House—in any way prevents us from controlling and directing our North Sea oil.
Mr. Skeet: The right hon. Gentleman must be aware that under Article 7(3) there could be a direction on the Government making them export oil to a participating country above the requirements which are necessary for the United Kingdom. Surely this must be an infraction of the sovereignty which as an anti-Marketeer the right hon. Gentleman claims for us?
Mr. Varley: Every international agreement involves some diminution of sovereignty [HON. MEMBERS: "Oh".] I think it is possible for the hon. Gentleman to understand the great difference between this provision and others being discussed at the moment.
Several Hon Members rose—
Mr. Speaker: Order. We must move on.

STANDING COMMITTEE PROCEEDINGS
Mr. Speaker: I said on Thursday that I would give a ruling today on the matter raised by the hon. Member for Newham, North-West (Mr. Lewis) with regard to the mention in the House of proceedings upstairs. In view of the length of the ruling and the pressure on our time today I propose to make the ruling on Wednesday.

NORTHERN IRELAND (GOC's SPEECH)
Mrs. Colquhoun: I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for a specific and important matter that should be given urgent consideration, namely,
whether the House should have adequate time to debate the situation whereby an Army General has taken over the rôle of the politicians and interfered in the politics of this country as Lieutenant-General Sir Frank King, the General Officer Commanding Northern Ireland, has done in commenting adversely on the Government's policy of bringing internment to a swift end.
Whether this act is acceptable or totally unacceptable to this elected Chamber, it is a matter of serious public importance and of enormous importance for parliamentary democracy. It is important for the House to debate the situation. I do not accept that a Private Notice Question and a statement from the Secretary of State is adequate.
If we put to one side the issue of Northern Ireland, I see this as being an issue striking at the heart of parliamentary democracy and parliamentary government in this nation. If any non-elected public servant did this within the British Civil Service there would be a similar outcry. I hope, Mr. Speaker, that you will agree to my request and give the House the opportunity adequately to debate this important transgression by this General who is in command in Northern Ireland.
Mr. Speaker: I am much obliged to the hon. Lady for giving me her reasons in writing as well as for the way in which she has spoken. I have considered this matter carefully. I have also had regard to what has already taken place in the

39
House today. The decision for me is whether I should allow the business of today or of tomorrow to be disrupted by a debate on this matter. I am afraid that the answer is "No".

BILL PRESENTED
  SCOTTISH DEVELOPMENT AGENCY
  Mr. Secretary Ross, supported by the Prime Minister, Mr. Chancellor of the Exchequer, Mr. Secretary Benn, Mr. Secretary Shore and Mr. Bruce Millan, presented a Bill to establish a Scottish Development Agency; to provide for the appointment by the Secretary of State of a Scottish Industrial Development Advisory Board, to make provision for assistance in connection with air services serving the Highlands and Islands; and for connected purposes; and the same was read the First time; and ordered to be read a Second time tomorrow; and to be printed. [Bill 130.]

  STATUTORY INSTRUMENTS
  Ordered,
  That the draft Winter Keep (Scotland) Scheme 1975 be referred to a Standing Committee on Statutory Instruments.—[Mr. Stoddart.

ORDERS OF THE DAY
  SUPPLY
  [14th ALLOTTED DAY], considered.

  DOCK WORK AND PORT REORGANISATION
  3.55 p.m.
  Mr. James Prior: I beg to move,
  That this House rejects the Consultative Document, Dock Work, and the further proposals for ports reorganisation.
  This debate takes place against the background of the publication of the consultative document, the recent dock strike in London, the state of the economy and tomorrow's Budget. I have never been one of those who wished to minimise the problems of the Government. I have generally tried to give Labour Ministers the benefit of the doubt. But I must say that after recent days and weeks I am disposed to do so no longer.
  What is the Secretary of State for Employment doing at the Dispatch Box? Why is he here in view of his known attitude over the European Community? I presume, in view of the right hon. Gentleman's known views about his being overpaid, that he has now taken a voluntary reduction in his salary? After all, he said he was being paid too much. Presumably now that he is doing only half a job—
  Mr. Nigel Spearing: Go and bake some biscuits.
  Mr. Prior: —he has taken a reduction in pay accordingly. [Interruption.] I always used to admire the right hon. Gentleman's integrity, if not his politics. When he sat below the Gangway he would state his views clearly. That is no longer the case. I do not think that many of us ever thought he would prove to be much of a match for those tough negotiators in the unions but we expected the right hon. Gentleman to act with true parliamentary dignity and his usual honour. I regret to see him where he is today. I do not think he should be here.
  The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): Get on with it.
  Mr. Prior: It is no good the Chief Whip telling me to get on with it. I will make my own speech in my own way. I believe very strongly indeed that there ought to be collective responsibility on the part of the whole Cabinet, and I do not any longer respect the right hon. Gentleman, the Secretary of State for Employment, for remaining a member of a Cabinet which is behaving in this manner. It is about time right hon. Gentlemen knew how much we on the Conservative benches and people in the country despise the attitude of the Cabinet. It thinks it can have its own view—
  Mr. Walter Johnson: On a point of order, Mr. Speaker. Is it in order for the right hon. Gentleman to start a debate in this way when what he is saying has nothing to do with the subject under discussion?
  Mr. Speaker: I deprecate personalities and personal allegations. However, the right hon. Gentleman was referring to the Secretary of State for Employment, who is to reply to the debate. I do not think I can rule him out of order.
  Mr. Mellish: Let us hear about the docks.
  Mr. Prior: We will come to the docks. I want to tell right hon. Gentlemen that I do not see how—
  Mr. Arthur Lewis: On a point of order, Mr. Speaker. I cannot and would never seek to disagree with your ruling. May I give you notice, however, in view of what you have said, that I may want to denigrate and question the honesty and integrity of a former Leader of the Opposition and a former Minister and call into question some of their statements and actions? Will I be allowed the same opportunity as the right hon. Member for Lowestoft (Mr. Prior)?
  Mr. Speaker: I deprecate personal attacks or reflections. As regards the hon. Member's question, I shall deal with that situation when it arises.
  Mr. Prior: Perhaps I can deal with that point. I had not noticed that Government supporters were backward in criticising the Opposition. I do not see why Government back benchers should
  42
  resent it when I say what I feel. It is a disgrace to the House of Commons that some Ministers support a policy which is not that of the Government while continuing to be members of the Government. I think that the honourable thing for them to do is to resign. I think that many hon. Members on both sides take that point of view.
  Mr. Arthur Lewis: That is my point. However, many Ministers of the Tory Government said that they were not in favour of the wage freeze. Yet they remained in the Government and caused the confrontation and the three-day working week. Therefore, to be fair, the right hon. Member for Lowestoft must take into account the actions of Tory Government Ministers who remained in the Government whilst they said they were not in favour of the three-day week.
  Mr. Speaker: I hope that in the interests of the debate we can now move off this point. There are to be eight Front Bench speakers in the course of today. I therefore hope that we can resume the subject of the docks.
  Mr. Prior: There is a considerable difference between an hon. Member voting against the recognised wishes of his party and Prime Minister and saying afterwards that he may not agree with every facet of Government policy.
  Today we are discussing the threat of unemployment to dockers and inefficiency in our docks system. In the old days of casual employment the threat was the trade cycle. The system was humanised in the 1940s, and was ended eight or nine years ago when casual employment was abolished. Today the threat is the technology of containerisation. In 1972 that resulted in strikes in the docks followed by the Aldington-Jones recommendations, which boosted the recruitment of dockers in container depots and resulted in a generous redundancy pay scheme for a large number of dockers. Following that, there was a lull in strike activity and there was full employment in the docks.
  In 1975 the trade cycle again turned down. There was new recruitment in the docks in 1974. All the old problems are now once again on the boil. There are fears of loss of jobs and of unemployment, which run very deep in the docks. Those fears are easily whipped up

  43
  by unscrupulous men. That is what happened on this occasion. If evidence was required, the statement made by the Prime Minister in Parliament on Thursday in answer to my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) made that abundantly plain. The Prime Minister said:
  "It is true that for a time the militants got control dishonestly and deceptively and gave false tallies of the numbers who were voting."—[Official Report, 10th April 1975; Vol. 889, c. 1409.]
  He went on to say that he felt that nothing could be done because of the deep sensitivity in the docks at present. I felt that that was a total negation of Government responsibility.
  Let us examine one or two of the men who have been behind the recent troubles, such as Mr. Nicholson, Mr. Billy Powell, Mr. Eddie Prevost, Mr. Light and Mr. Turner. I understand that some of them are members of the Institute for Workers' Control, which aims to overthrow capitalism and achieve complete workers' control of all industry. I would have thought that they were not greatly interested in the workers. They are much more interested in the control which they might exercise thereafter.
  The International Socialists are also stirring this up. I know that some Government supporters will not like this. However, a group of dedicated International Socialists and Communists in the docks have acted in such a way in the recent strike that a large number of decent dockers will lose their jobs.
  I hope that the Government will inquire why Mr. Nicholson has been on the sick list for all these months. Has he been drawing supplementary benefit? Has he been examined by the regional medical officer of the Department of Health and Social Security? If not, why not? This man is able to play an active part in stirring up trouble in the docks, but is unable to do any decent work.
  Mr. Mellish: I know some of the individuals concerned. I think that it is very unfair to use the privileges of the House to make a statement which I doubt whether the right hon. Gentleman would make outside. The employers of Brian Nicholson have never queried the position or been in any doubt. I do
  44
  not see why the right hon. Gentleman casts those aspersions on persons who cannot defend themselves.
  Mr. Prior: I have not found Mr. Nicholson unable to defend himself so far. The employers have said nothing. All employers in the docks know what happens if they say anything. If we cannot raise these issues in the House, where can we raise them? What have I said about these five characters which is so defamatory to their records? I have said that they are International Socialists and Communists. Is there anything wrong in saying that? That is what they are. Some people would be proud of that fact.
  On 1st January 1975, before the dispute began, there were 1,000 surplus dockers in London. Since that time, as a result of the dispute, 1,500,000 tons of cargo have been lost to the Port of London, probably for ever. That represents 15 per cent. of the total cargoes passing through the Port of London. It is likely to mean a further reduction of 15 per cent. in the number of dockers required. That is what Mr. Nicholson and what the Prime Minister calls "militants" have managed to do on behalf of the decent dockers of London.
  There is a great deal wrong with the efficiency of our docks. In London a 12-man gang moves 50 tons per shift. The equivalent gang in Antwerp moves 350 tons per shift. [HON. MEMBERS: "Which cargoes?"] I refer to equivalent cargoes in London and Antwerp.
  Mr. Spearing rose—
  Mr. Prior: The United Kingdom has the worst record for dock strikes in Western Europe. Rotterdam has experienced no major strike for 30 years. Antwerp has not had a strike since 1955, and that strike lasted for only a few days. It is calculated that if dockers worked normally for their full shift, productivity would increase by 25 per cent.
  Mr. Spearing rose—
  Mr. Prior: No, I will not give way to the hon. Gentleman.
  Mr. Spearing: I represent a dock workers' constituency.
  Mr. Prior: I shall not give way to the hon. Gentleman.
  It is not as if the situation were a happy one. It is most unhappy. It would

  45
  not be unreasonable, therefore, to expect that in the present economic situation the Government would come forward with some sensible modernising proposals—sensible, perhaps, until one considers the right hon. Gentleman's attitude to these matters.
  There is no mention in this disastrous document of what should be the prime and overriding objectives—a reduction in the cost of handling exports, efficiency and speed, freedom of importers and exporters to choose how and where goods are handled, and more competition instead of less.
  Mr. MellishI am sorry to interrupt; I know that the Chief Whip should not speak in a debate, but I am a Dockland Member of Parliament and I cannot take much more of the rubbish which we have just heard. I do not know where the right hon. Gentleman got his figures about cargo handling and output. In the dock industry in the last few years the labour has been halved, and this has happened without any disputes. There has been a good deal of injustice. If the right hon. Gentleman wants examples of the most appalling behaviour by dock employers I can give those to him, but I will not do so now because it would not help. Much of the output of our dock workers compares more than favourably with that in other ports. If the right hon. Gentleman wants proof of that, he should ask the ship owners.
  Mr. Prior: The right hon. Gentleman, of course, is right to defend his constituents but he ought to have more knowledge than he has of what is happening in the London docks. If he wishes to know where my figures come from, I can pass to him a copy of Accountancy, which produced those figures some while ago, figures which no other publication has made any effort to refute. It is time that we came out with the facts for a change and faced up to the problems.
  What do the Government intend to do? They have taken the most extreme demands of the Transport and General Workers' Union and have proceeded to put them into this document. They have taken the views of one small section of the Transport and General Workers' Union as against the rest of that union. Proceeding by new legislation, they will
  46
  seek to avoid the need for a public inquiry during which all the points which have been mentioned could come out into the open. That opportunity is denied by having new legislation instead of proceeding under the old Act. The interests concerned will be denied the opportunity of submitting their views to an independent tribunal. If those views could be submitted to an independent tribunal, we might get much nearer to the facts than has so far been possible in this House. The dockers are trying to claw back or obtain jobs which are now being done by other workers who are members of their own union. How unfair can one get?
  Let me read the dockers' viewpoint as expressed in the Port newspaper of 9th April:
  "Some method must be found to put registered men into these places and to phase out the men currently employed there"—
  "these places" referring to work which is not at the moment carried out by official dock labour. Let us have no more mealy-mouthed talk about it. The dockers are after the jobs of their fellow workers.
  Where this did happen under Aldington-Jones and registered dock labour was put into, for example, a container company, Chobham Farm, this is the view of the employers as expressed in a recent report issued by the Advisory Conciliation and Arbitration Service, in paragraph 79:
  "… the company had subsequently agreed to employ registered men for cargo and container handling whilst still retaining its current work force. Those of the original work force who had remained had lost the jobs they had been engaged on since these jobs were now designated as dock work. All attempts by the original work force to register as dock workers had failed—they could not register through the trade union, since the TGWU had a policy of nominating only the sons of registered dock workers, and the employer could not nominate them since he was not a member of the relevant employers' association. Many of the original employees were now still engaged on menial tasks."
  It is grossly unfair, to put it at its lowest, that the thousands of people who at the moment are in work in places just outside the dock area and work in perfect harmony with their employers should now be pushed out of their jobs so that dockers can have them.
  If there is a problem about the employment of "cowboys" in the loading of containers, why could it not be dealt with under a licence, which was one of the

  47
  recommendations put forward some while ago by the port employers, so that it could be done if there was a desire to do so? The truth is that there are no extra jobs available. All that would happen would be that jobs which at the moment are carried out by people who are not dockers would be handed over to dockers, and I do not believe that we should permit such a state of affairs. More jobs would be lost.
  If the right hon. Gentleman had consulted the profession of commodity markets he would have learned why merchants avoid storing goods in premises staffed by dock labourers at the scheme ports. They do so because of the fear of strikes, higher costs, lower productivity and general inefficiency. I am in a position to speak with authority and knowledge because, as a former Minister of Agriculture, Fisheries and Food, I know something about the food distribution problems of Britain. I am aware that our efficient food distribution network is due to the fact that depots and warehouses are outside the control of the docks.
  I now turn to the subject of the non-scheme ports, where there has been great development in recent years. One reason for this is the bad labour at the dock labour scheme ports. They now carry one fifth of the traffic, and in the live years from 1966–71 they increased the tonnage from 45 million to 70 million. The main objection to the non-scheme ports was that in a few cases there were the remnants of casual labour. The National Ports Council's survey, which looked into all this, came to the conclusion that of the people employed in the non-scheme ports 357 were employed casually and 2,553 were regular employees. We are dealing with a situation where the Government wish to bring the non-scheme ports into the dock labour scheme because 357 out of 35,000 dockers have been treated as casual employees.
  In other words, if ever there was a case of taking a sledge hammer to crack a nut, this is it. The only trouble is that when one has cracked this nut, one cracks a hell of a lot else with it. This will only make industrial relations worse. The non-scheme ports would suffer all the worst problems of the scheme ports.
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  If one wants evidence of that, why do not hon. Members opposite take the trouble to ask the dockers of Felixstowe or Shoreham whether they wish to join the dock labour scheme? They do not wish to have anything to do with it at all. Why do we have all this talk from hon. Members opposite about participation? Have they asked the dockers of Felixstowe or Shoreham or other non-scheme ports whether they wish to join the scheme?
  Mr. Eddie Loyden: The right hon. Gentleman will be aware that at the National Docks Conference in 1972 the unregistered ports representatives agreed to the registration of their ports and of their jobs.
  Mr. Prior: We have heard all that before. What we on this side mean by participation is people joining in and saying what they want to do, not just a few people who, by one tactic or another, have got into a position where they can say what they want to do. If the hon. Gentleman goes to Felixtowe—I hope he has been there as he talks with so much authority—and asks the dockers there what they wish to do, he will get a very clear answer. The answer is that they do not wish to join the scheme. They are happy with their conditions of work and pay. In fact, some are amongst the highest paid dockers in the British Isles today. Therefore, there is no reason why they should be taken over and brought within the dock labour scheme.
  In the old days the Labour Party used to say that organisations had to be nationalised or taken over by the Government because they were failing the nation. Now the situation seems to be the other way round. These are the only ports which are helping the nation. It is the nationalised ports which are failing the nation. However, rather than do the right thing, the Labour Party insists that they must be taken over. This is a hopeless proceeding for the future of this country.
  What about the future? I hope the Secretary of State will allow more time for proper consultation with all the interested parties than he has shown any indication of allowing so far. When some of those who will be affected have written to the Department, they have been told to submit their written evidence, if possible,

  49
  within four weeks. The right hon. Gentleman knows that by this document and the legislation he will be taking away the right of objectors to put their cases to proper tribunals. Therefore, he has an even greater responsibility to see that there is ample time for consultation, to see these people himself and not to fob them off with some Under-Secretary in his Department. The right hon. Gentleman has a duty to see these people and to hear their objections. I hope that he will give us an unqualified statement this afternoon that he will be prepared to see the people who wish to put views to him.
  The Secretary of State knows perfectly well—he must have been told by his officials, not by other interests because he has not bothered to consult them at all —that the extension of the dock labour scheme is not the answer. In fact, the scheme makes matters worse rather than better. Indeed, the scheme needs to be made more flexible, not extended, for London. Surely the right hon. Gentleman recognises that the right answer to help the dockers who are bound to be made redundant is to concentrate on providing and making new jobs, not trying to take jobs away from those who already have them. If the Secretary of State comes to this House with a scheme for re-employment or for spending cash to provide new jobs in the docks, we will wholeheartedly support him. We will also wholeheartedly support him if he brings forward a redundancy scheme to thin the industry down to the right size.
  We cannot turn back the clock. We must go forward and provide new jobs rather than try the whole time to take away jobs from some people to give to others. That is no answer to the problems facing Britain. It is not right for us to feel that we are barred from discussing and stating plainly and bluntly the problems in the docks. Right hon. and hon. Gentleman opposite delude themselves if they think that there is no problem here. Much of the problem is caused by the militancy of a few acting against the interests of the many. I believe that we shall have done a duty to this country and to this House by stating these facts as plainly as possible. I shall invite my right hon. and hon. Friends, when the time comes, to reject this disastrous document.
  4.25 p.m.
  The Secretary of State for Employment (Mr. Michael Foot): At one point in the proceedings you, Mr. Speaker, complained that the House would have to endure four speeches from the Front Benches today. I can understand the feelings of any of those—
  Mr. Speaker: Order. I do not wish to interrupt, but I said eight. It is eight.
  Mr. FootFortunately, Mr. Speaker, we shall have to endure only four. We will watch carefully to see whether you endure the whole of the eight speeches. However, I grant that it is a difficulty for the House.
  The motion contains two parts. The right hon. Member for Lowestoft (Mr. Prior) has not referred to the second part of it. I am not complaining on that score. That will no doubt be dealt with by another of his hon. Friends and will be answered by my right hon. Friend the Minister for Transport when he replies to the debate. However, I must start by underlining the fact—I hope to underline it much more severely at the end of my remarks—that this is a most curious motion with extremely serious implications. I should like to spell out to the House at the end of my remarks what I think will be the consequences if the House is unwise enough to adopt the motion.
  First, I will do my best to reply to several of the points made by the right hon. Gentleman. For example, he mentioned, as have others in these controversies, that what should be at stake—I am not denying the importance of the matter—is the efficiency of the transport system generally of this country. The right hon. Gentleman tried to claim, as have others, that the evidence shows that the non-scheme ports have shown themselves to be more efficient than the scheme ports and that that is proved by the general increase in traffic that has taken place over recent years. If the test of efficiency is to be applied in that way, the facts do not prove it because they are neutral on the subject.
  The scheme ports and the non-scheme ports increased their traffic between 1969 and 1973. Some of the non-scheme ports have increased their traffic dramatically: Felixstowe 88 per cent., Harwich 43 per

  51
  cent., Mostyn 76 per cent., Portsmouth 46 per cent., and Shoreham 38 per cent. Those are quite considerable increases. But the scheme ports have also increased their traffic: Immingham 80 per cent., Great Yarmouth 66 per cent., Fleetwood 361 per cent., Sharpness 60 per cent., Southampton 118 per cent., Lowestoft, even with the sour and melancholy presence of the right hon. Gentleman to discourage it, 60 per cent. The 60 per cent. at Lowestoft compares roughly with the average at the other ports.
  The figures show that 30 scheme ports have gained traffic and 17 scheme ports have lost traffic and that 27 non-scheme ports have gained traffic and 13 non-scheme ports have lost traffic in that period. The figures are roughly the same. I am not sure what the goal average on those figures is, but only the goal average between them would test the matter. Therefore, the figures do not bear out what the right hon. Gentleman said. I suggest that people should be a little more careful than the right hon. Gentleman has been in using these figures.
  Mr. Eldon Griffiths: The right hon. Gentleman is right in what he said about percentages. May I give him a fact and ask for his comment? In the non-scheme ports the average time taken to clear goods varies from five to six days. In the scheme ports the average time varies from 13 to 20 days. Would the right hon. Gentleman care to comment on that comparison?
  Mr. Foot: I should like to see, first, how the comparisons are made and, secondly, where the figures are tested. What I was doing—I hope that the hon. Gentleman will not blame me for this —was to take the precise test selected by his right hon. Friend the Member for Lowestoft of the growth of traffic. I was making a comparison in general terms, which I think is a better comparison. I do not claim to be a statistician, but I should have thought that it was a broader and more apt comparison than that made by the hon. Gentleman.
  The complaint made against me by the right hon. Gentleman is peculiar. What Tory Members are saying is that the Government's crime is that we are proposing to take action.
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  I fully agree with what the right hon. Gentleman said about the seriousness of the recent strike in the London docks. It was a most serious and regrettable strike and, I believe, a most unjustified strike. We have to see how we are to avoid such perils in the future.
  I therefore claim that what the Government have done and, despite all the attacks which have been made upon myself, what I have sought to do is to see haw we can take action to deal with these problems. It is not just a matter of having more inquiries. The right hon. Gentleman talked about having fresh inquiries. The dockers have said to me clearly "We have had 17 or 18"—whatever the figure is—"inquiries. What has happened about them?"
  I remind the House of one very important inquiry which was held. It was not conducted by some International Socialist or member of the Communist Party. It was the inquiry into the London docks in 1960 and 1970 by Mr. Peter Bristow, an eminent Queen's Counsellor. He produced a report which made many suggestions for dealing with the problem, suggestions not so different from those we have incorporated into our own document. He called for a new definition of "dock work". He made proposals somewhat along the lines contained in our document, although we have elaborated them further. That was way back in 1969 and 1970.
  Many dockers have put it to me that they believed that the Bristow Report, which came after so many other reports by Lord Devlin and other eminent people, should have been carried into effect. The Bristow Report was presented to the previous Labour Government, who went out of office within a few weeks of its presentation. Thereafter nothing whatever was done about the report.
  Mr. Mellish: The right hon. Member for Lowestoft (Mr. Prior) was in power.
  Mr. Foot: The right hon. Gentleman had not by then arrived at that eminent office, but there were several others. The right hon. Member for Carshalton (Mr. Carr) was there for three and a half years. The right hon. Member for Yeovil (Mr. Peyton) was at the Ministry of Transport. The right hon. Member for Penrith and the Border (Mr. Whitelaw), who is now

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  Deputy Leader of the Opposition, was there for a few months. There was also the right hon. Member for Farnham (Mr. Macmillan). Nothing was done to deal with the dock situation in any radical way.
  Nothing was done to deal with the dock labour scheme. The right hon. Gentleman asserted today that the dock labour scheme is an appalling disaster. Tory right hon. and hon. Members had three and a half years in which to think about the matter and act. Today the right hon. Gentleman did not have a single good word to say for the dock labour scheme. Indeed, he denounced it in every sentence he uttered. Such behaviour is not the best way of going about changing the dock situation. Right hon. and hon. Members who are not so familiar with these matters, like myself, should he more reticent when speaking on these questions.
  If the dock labour scheme was such a disastrous affair as the right hon. Gentleman asserted, why did not the Tories do something about it in their three and a half years in office? They did not propose to do anything. Now they denounce us because we propose to do something about the 20 per cent. of docks which are out of the scheme. If it is such a disastrous scheme, why would they propose to leave 80 per cent. in the scheme? After all, for decades to come that 80 per cent. of docks will probably deal with the mass of traffic coming into and going out of this country.
  As I say, for three and a half years the Tories were in a position to take action but took none. It was not for lack of anybody making suggestions. Mr. Peter Bristow's Report following his inquiry in 1960–70 was there when the Tories came into office in 1970. That proposed action. Then the National Ports Council recommended action and an elaboration of the scheme. Then the Tories had recommendations for action following the Aldington-Jones investigations. I know that some action was taken about severance pay and other such matters, but as regards extending the scheme, which is what we are doing, and seeing how it should be carried into other fields, nothing was done in the whole of that period. Now when we come forward with proposals for action—this is a great
  54
  crime, in this Government, of course—the Tories hold up their hands in horror and say "No, let us have some more inquiries."
  Mr. Prior: What I suggested to the right hon. Gentleman was that at least he should allow those who have objections to an extension of the dock labour scheme the rights they have always had in the past to present their case. This will not happen under his proposals.
  Mr. Foot: If the right hon. Gentleman will preserve his patience for a few minutes, I shall try to explain to him what will happen. I listened to him carefully.
  I said, first, that the Tories had three and a half years in which to take action. Although they claim that the dock labour scheme is disastrous, they did not do anything about it. They can be condemned on that score. On the other hand, if the dock labour scheme is working successfully, why do the Tories make these comparisons? If the scheme is successful, what is the debate all about? If the Tories will admit that the scheme is going well, as many dockers think—not perfectly, of course—we shall have made some advance in this debate.
  I will deal now with the question put to me about inquiries. It is true that under the 1946 Act, and as the dock labour scheme is operated under it, there can be individual inquiries if there is to be an extension of the scheme. That is the procedure in the Act. When we sought to take action originally, because that is what we wanted to do and what we felt was required by the situation in the docks—action, not another inquiry —we considered whether the problem could he dealt with speedily by inquiries under the 1946 Act.
  The more we considered the matter the more we came to the view that, so far from that process being speedy and effective, it would hold up the possibility of action, which is what we are all concerned about, for many years, and it would also hold up the possibility of tackling the problem of the definition of "dock work", which must be tackled at the same time.
  It was no good dealing with one half of the problem and leaving out the question of the definition of "dock work". We had to combine the two.

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  I do not think that the House should object to what we proposed. I am a strong believer in the supremacy of the House of Commons. We said that the matter must be decided in the House.
  That does not mean that the parties concerned will not be able to make representations. Of course they will. We have already sent out 10,000 copies of our proposals to some 400 bodies throughout the country. They will be able to make their representations to the Dock Labour Board, to the Secretary of State —myself—both before the operation and afterwards, but, most important of all—this is where I believe the supreme importance of the House of Commons resides—during the legislative process. When the Bill is going through the House every interested party will be able to see that the case it has submitted will be deployed.
  I cannot see that anybody can object to that, unless the objective is to do away with the dock labour scheme itself. I greatly hope that the right hon. Gentleman will repudiate any such suggestion, because that could have dangerous consequences and would fly in the face of the recommendations of every important inquiry that has taken place into the docks.
  The right hon. Gentleman's speech did not seem to take account of what was reported by those who made the investigations. He seemed to argue that all we had done is to take the views of the Transport and General Workers' Union. Of course we respect the views of that union. Why should we not? It is the union which has had the longest and strongest experience in dealing with this whole matter. However, our views are not based on that alone. They are based upon experience, history and report after report on this subject.
  I could cite many examples, but I mention what was said by Lord Devlin in his report of 1955. It is still valid. At page 18, paragraph 33—I shall not read the whole paragraph, although to do so would not diminish its significance—it says:
  "The fact is that, if the Scheme expired"—
  and that is how the right hon. Member for Lowestoft sometimes spoke—
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  "the first and most urgent task for all concerned would be to devise another one with all the essential features of the original."
  That is not Mr. Brian Nicholson talking, it is Lord Devlin.
  "The Scheme must now be regarded as part of the structure of the industry. It is no use threatening to destroy common property; threats of this sort act as an irritant and disturb the minds of moderate men without deterring the extreme."
  Everyone knows how eager Labour Members are to support moderate men, but it is no use threatening to destroy common property. Threats of this sort act as an irritant and disturb the minds of moderate men without deterring the extreme. Therefore, the right hon. Gentleman is disturbing the minds of moderate men because he and the Conservative Party suggest that we should not proceed with our plans to extend the dock labour scheme.
  We have sought to find a way of dealing with the problems of dockland by methods of peace and persuasion. It will not be easy. No one can be foolish enough to think that it will, after all the recent experience we have had, including the last dock strike.
  Under the provisions of the scheme there has been a reduction in the number of dock workers employed. [Interrupt.] My right hon. Friend the Chief Whip, the right hon. Member for Bermondsey (Mr. Mellish), says that there has been a reduction of 50 per cent. The figures are quite startling. The number of dockers has been reduced to some 30,000 compared with 70,000 or 80,000 some years ago. It would be utterly scandalous for such a reduction to be carried through under the general arrangements of the scheme and then, when the scheme was brought to this House, for anyone to say "Now we will discard it". Dockers would justly regard that as an outrage. The Government had to make up their mind. They had to act on the basis of whether to extend and fortify the scheme or whether to discard it.
  Mr. Prior rose—
  Mr. Foot: The right hon. Gentleman may say that he is not proposing any alterations in the operation of the scheme but that it is the extension of the scheme he does not like.
  Mr. Prior: It seems that the Minister prepared his speech before he heard mine, because so far he has not addressed himself to anything I have said. He has spent the whole time talking about our proposal to get rid of the dock labour scheme, although I never even mentioned it.
  Mr. Foot: The right hon. Gentleman has not followed the argument. If any hon. Members imagine that I came to the House with a prepared speech and did not listen to the right hon. Gentleman, they could not have listened to his speech or mine.
  First, I applied myself to the right hon. Gentleman's claim about the comparison between the scheme and the non-scheme ports. I then applied my mind to what he said about inquiries. I now apply my mind to the implications of his motion.
  The dock labour scheme cannot stay still. Every docker I have spoken to in recent months agrees with this. Many employers wish us to go back on the scheme. It is no good the right hon. Gentleman saying that that is not the case, because it has been advocated in many quarters. Some people say that we have reached the stage where we could abandon the statutory protections of the scheme and return to some other form of collective bargaining. Quite a number of people advocate that, even if the right hon. Gentleman does not. A vast majority of dockers agree that if we are to keep the scheme and make it work effectively we must extend it and ensure that we shall not be undercut by unfair competition from other ports. That is a perfectly reasonable proposition.
  Mr. Kenneth Lewis rose—
  Mr. Foot: I hope the hon. Gentleman's processes of lucubration have gone far enough for him to interrupt with a momentous interruption.
  Mr. Kenneth Lewis: The right hon. Gentleman has mentioned the action he proposes to take. Under that action, if there is a strike it will be "one out, all out" There will be no competition within the docks. Furthermore, at present there are competitive docks which, without any action by the Minister, have better strike and better productivity records. Why does the right hon. Gentle-
  58
  man wish to change that? Some people think that if the Government were to take no action it would be better.
  Mr. Foot: I have already dealt with some of the questions which the hon. Gentleman has raised. I have dealt with the comparison between the scheme and the non-scheme ports. There is no suggestion under the dock labour scheme that if there is a strike in one port, there is bound to be one in another port. The last strike was an illustration of that. The hon. Gentleman does not have accurate facts.
  I turn to the central question on the motion. It is not a question of the Government wishing the House to support their proposals. We ask everyone in the country to study them carefully. They are proposals for action. We want that action to take place as speedily as possible. We know, better than some dockers, that the legislative process takes some time in this House. The dockers are even more impatient than I am to see this legislation on the statute book. It can make a great contribution to industrial peace in the docks.
  I do not say, and no one could possibly claim, that it will do away with all the difficulties. It will not. I am not claiming that peace will be ensured for ever once this consultative document is translated into legislative form. This document provides the means whereby the extension of the scheme and the changes necessary in dockland to bring the docks into conformity with modern technological and industrial conditions can take place. Those changes can take place peacefully by people appealing to a proper system of procedure and by dockers looking to the House of Commons to provide them with some redress. It is no good saying that dockers do not follow these matters carefully. They do. Some of the most serious strikes in the London docks since 1945 have been over the detailed wording of a clause in some new provision. Therefore, they are studied extremely carefully.
  We believe that this document provides a method of making the change in a peaceable and sensible manner. I hope that everyone will study it carefully and make their representations, and we shall proceed to produce a Bill as speedily as possible and present it to the House

  59
  in order that it can become the law of the land.
  I should have thought that the Opposition would at least have reserved their fire until we came to the legislation itself. I say this most seriously. If the motion were to be carried—Heaven forbid!—it would cause a disaster in dockland. I said at the beginning of my speech that I thought that the strike which took place recently in the London docks was unjustified. But if the motion were to be carried, it would almost make that strike retrospectively justified. [Interruption.] Yes, that is what hon. Gentlemen are saying. [Interruption.] It has nothing to do with blackmail. If the House of Commons says—and this is what the motion asks—that we reject this scheme for strengthening and extending the dock labour scheme, if the House says "No" and puts up a bar to that, it is an encouragement to the dockers to do something different.
  I am in favour of the doctrine of the dockers looking to the House of Commons for redress. But it is right hon. Gentlemen opposite who, in their slipshod motion, are interfering with that. A vote for this motion put down by the right hon. Gentleman and his right hon. Friends—they should have been more careful—is a vote for disruption, chaos and despair in the docks. If the news went out from the House of Commons that at the first opportunity we had slapped down the proposals for dealing with the problem, we would indeed have played into the hands of the very elements to which the right hon. Gentleman has referred.
  At the beginning of his remarks the right hon. Gentleman made some references to me. He is perfectly entitled to do so. I am not complaining on that score. However, recently the right hon. Gentleman was making some comments in another sphere.
  Mr. Wm. Ross: Will the right hon. Gentleman give way?
  Mr. Foot: No, I am concluding my remarks. I dare say that the hon. Gentleman will have a chance to intervene in the debate.
  However, the right hon. Member for Lowestoft intervened in another sphere. I
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  gather that he appeared on 11th January 1975 on the radio programme "Desert Island Discs". He was asked the question:
  "What are your feelings about, in due course, leading the party?"
  His answer was:
  "Well, I was Mr. Heath's Parliamentary Private Secretary for the whole time that he was Leader of the Opposition and I think that being Leader of the Opposition is the most difficult job in British politics."
  There is something in that.
  "It's much easier to be Prime Minister than to be Leader of the Opposition. I think that having been with him has taught me that it is a job, perhaps, that I could do if I were asked to do it in a few years' time."
  All I can say is that if the right hon. Gentleman is entering the competition in a few years' time, let him learn from the motion today. If ever a fatuous motion was tabled by an Opposition on the Order Paper of the House of Commons, this one could take the prize. Here is a motion designed to say to dockers up and down the country that this document, which at last promises some action, is to be repudiated by the House of Commons. If the House did that it would be taking a step which would have consequences of the utmost seriousness for the docks of this country.
  4.54 p.m.
  Mr. Ian Lloyd: I should perhaps begin by declaring an interest, which is well known to the House, in that I am associated with a major British shipping company which quite obviously has an interest in the docks and dock work. But in this context I think I can do no better than to read a general declaration of the interests of British shipowners, who have been mentioned in the debate, which I take from the annual report of the Chamber of Shipping of the United Kingdom. It reads as follows:
  "The importance to the United Kingdom economy of an efficient port system cannot be overstressed. We as a country live by our exports and imports. Port delays and interruptions, excessive costs arising from restrictive labour practices, or inefficiency on the part of port management, all undermine the efficiency and economy of shipping services—so dependent upon quick ship turn-round—and this becomes even more vital as ships become more sophisticated and expensive. Shipowners, by reason of their experience of ports worldwide, are in a unique position to appreciate this and to assess comparative performance in this country."

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  This section concludes:
  "Shipowners do not view the extension of public ownership of itself as providing any magic key to the comparative efficiency which is essential to the national economy."
  That is a specific and, indeed, a general declaration of interest.
  I make this further point. Every one of my constituents and every constituent of every hon. Member has a real and specific interest in this matter today.
  Perhaps I may for a moment divert the attention of the House to the origin of this dispute by taking the House back to the year 1957, when the technological device which gave rise to this dispute was first created or produced at Port Newark, an auxiliary port of New York, by a man by the name of C. S. McLean, who invented this device. He was what is known in the United States as a trucker. In the United Kingdom he would be known as a lorry operator. He found that his lorries were being delayed for 10, 15, 24, 48 or 68 hours in Port Newark. The idea occurred to him that it was technologically unnecessary for large lorries to be driven either to warehouses or to the dockside and, piece by piece, physically unloaded or, piece by piece, physically loaded into ships. He thought "Why not lift the back of a lorry straight off and put it straight into a specially designed ship?"
  That was the beginning of containerisation. Mr. McLean said "Let me take a considerable sum of my personal money in doing this. "All of his friends said "You are a fool. You will lose your shirt." He said "No, I shall not." He bought five surplus wartime ships—C3s—and adapted them for the carriage of containers. He adapted a considerable number of his lorries for containers. He started the first major ocean-going container service in the world.
  I was fortunate in visiting Port Newark in 1958. I saw this service, and one which followed shortly on its heels, between San Francisco and Hawaii before I returned to the United Kingdom. At that time the capacity in which I spoke was as chairman of the United Kingdom Committee of the International Cargo Handling Association. I warned everyone—because this was a public organisation—that this device would reach the United Kingdom and extend itself gener-
  62
  ally throughout all our deep-sea and coastal shipping. I made this point impartially. However, I was regarded as being very far-fetched and illusionary. It was said that this was something peculiar to the United States and that it would not spread. But it has spread.
  However, one other piece of information that I returned with is particularly relevant to the argument today. I was told by the employers on both the east and west coasts of the United States that there was one most important consideration in the successful operation of container shipping as it then was. They said "For Heaven's sake keep the loading and unloading of containers outside the docks." That was their specific and unequivocal advice. The reason was simple, namely, that the productivity which they were achieving outside the docks was about two and a half to three times that which was achieved inside the docks.
  Mr. Mike Noble: Small wages.
  Mr. Lloyd: The wages were about the same, and there is no reason why that should not be so. However, the real point is that this is a new technological device, developed to meet a specific need —the tremendous growth of world trade —up against a conservatively-minded mechanism at world-wide ports. In a space of time far shorter than I and many other people anticipated, it has become the major technological method of handling high-value bulk cargo.
  In presenting this document to us with a good deal of enthusiasm, the Secretary of State made some remarkable statements. He said that we should be doing something about this document. If one is making general comments on the basis of the record of this Government over the past year or so, about doing something or not doing something, in this sphere or in any other, I know what my choice would be. The Government are not doing something.
  The Secretary of State asked us to compensate by action. How can we compensate by any legislation in this House for what, essentially, is docker inaction or obstruction? The Secretary of State said that nothing was done by the Conservative Government. Does he know why nothing was done by us? This is one of the most

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  dangerous centres of irresponsible power in the kingdom. The Secretary of State knows it, and he himself is most reluctant to confront and to handle this centre of irresponsible power.
  The right hon. Gentleman said that we had no intention of extending the scheme. That is a fair criticism. Of course, I was not privy to Cabinet decisions on this matter, but I know that there were grave reservations throughout the shipping and docks industries about the implications of the dock labour scheme as it operated in 1971 and 1972.
  What is it about dock work that it must be uniquely defined? Why do we not have to define the work of a compositor, and pass legislation so that the interests of compositors may be safeguarded? Why do we not legislate to define the rôle and work of a nurse, so that nurses may be safeguarded by legislation in this House? This case is not made at all. This is a uniquely dangerous sector of irresponsible power. That is why the House has found it necessary, down the years, to deal with it by legislation.
  The Secretary of State went on almost to ring the roof—which would not be unusual for him—when he said that we were afraid to disturb the minds of moderate men. Who is talking? The Secretary of State for Employment in a Government who, in the past year, have done more to disturb the minds of more moderate men than have almost any other Government in our history. If five dozen immoderate dockers—which is the ratio that we are discussing—are to command the attention of the legislative machinery of this House, as opposed to 5 million moderate men who are not dockers, what sort of balance are we considering?
  The problem is essentially a fundamental and simple one. There is an unavoidable clash in this sphere, as in any other, between progress and security. Progress demands the adoption and widespread implementation of a new technology. Security demands that the process of achieving that change should not be too damaging to the men involved in the old technology. This is widely recognised. But these problems are not solved by legislation. Legislation can only restrain and impede the pace of change. It may be necessary
  64
  that it should impede the pace of change, or reduce it.
  The damage done by change to important and significant groups in society may be considerable. But when the point is reached at which the legislative machine is used to such effect that change is seriously and severely diminished, the price that we pay for security greatly outweighs the advantages that we take from progress.
  If nothing else, surely we have learned that both objectives must be approached simultaneously. Neither one nor the other, if it is allowed to dominate 100 per cent., is likely to be effective, because it will be self-destructive. We cannot say that security shall be the 100 per cent. paramount consideration for any one working group. That security can be achieved only at the price of slowing down the pace of change throughout the rest of the community, and the rest of the community pays.
  Equally, there is no point in saying that a given type of technology should be the overriding consideration in determining our policy. The effect of that would be to produce such obstruction and reaction that no change would be possible. The twin horses must be ridden together. Only then can we make progress. The Secretary of State knows in his heart that we shall not make progress in this area by following this extraordinarily destructive document.
  5.6 p.m.
  Mr. Hugh Delargy: This is a short debate. Several hon. Members wish to speak. Therefore, being a selfless man, I shall make only few brief remarks rather than deliver the speech which I had prepared. However, I want to make one or two points in reply to some of the statements which we have heard so far from Opposition Members. I want also to make some exhortation to my right hon. and hon. Friends.
  We have heard talk today, especially from the right hon. Members for Lowestoft (Mr. Prior), of Communists and International Socialists and a very small gang of people persuading thousands of dockers to go on strike. In other words, they rigged the ballot.
  The chief reason why I intervene in this debate is that I represent Tilbury,

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  which is the largest and most important container dock in the United Kingdom. In addition, it has more than 20 other sheds where conventional docking can take place. Unfortunately, most of them are not being used at the moment. No one quite knows why, but many people make guesses.
  Somewhat belatedly, the workers at Tilbury were involved in the recent strike in London. It is suggested that the voting was rigged. I think that there were about half a dozen meetings, though I was not present at them. But I can say on good authority—of men whom I know and whom I can trust—that at most of those meetings the majority voted to stay out. I underline the word "majority". The majority of men who voted to strike unfortunately were not a majority of those entitled to vote. At the end, when something more like the majority of dockers attended a meeting, they voted to return to work. In Tilbury, they returned at once. Some went back to work that very day. So I hope that we shall not hear any more about votes being rigged.
  It has been said—I have said it myself —that the dockers should have been satisfied with the assurance given by the Secretary of State for Employment about a five-mile corridor where they could work and not the road hauliers. Some people have taken the dockers' refusal to accept that as meaning that they had no confidence in my right hon. Friend. This is not true. My right hon. Friend recently visited Tilbury and there met the employers, trade union officials and shop stewards, and he knows very well that they were as impressed by him as he was by them.
  What makes the dockers suspicious is that they are tired of being given assurances. The right hon. Member for Lowestoft talked about independent tribunals, but over the past 20 years there have been nearly as many inquiries. Most recently, we have had the Aldington-Jones Report, the Report by Professor Hunter and the Bristow Report, as well as the report of the Advisory, Conciliation and Arbitration Service. They have all been expertly and expensively done, but, although all of them were almost totally in favour of the dockers, that was the end of it and nothing else happened.
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  The dockers now want an assurance written into the law.
  Other people do not need such an assurance. There is no need to assure a nurse that a navvy will not do her job, for she already knows that very well.
  Mr. Keith Stainton: It is a fact that the size of the work force in agriculture, coal mining and the railways has declined percentage-wise over some time by more than has been the case in the docks.
  Mr. Delargy: That may or may not be. The hon. Gentleman must excuse me if I cannot see the relevance of that.
  Mr. Stainton: Why single out a tiny minority when it is only symptomatic of a much larger and more general situation in which no other particular protection has been sought?
  Mr. Delargy: I am singling out the dockers because other people are taking the jobs that they think should be theirs. That does not apply in other industries.
  Mr. Ian Lloyd: Over a decade 50 per cent. of the names of commodities in international trade are totally new because they are made by totally new processes and totally new occupations.
  Mr. Delargy: Once again, I do not see the relevance of that remark. These men are saying that containers should not be handled by other people who are brought in from Glasgow, Edinburgh, Middlesbrough or somewhere else just to do that job in London or Tilbury. That is what they ask, and they are not asking too much. That is what the row is about, and that is what the strike was about. Like my right hon. Friend, I think that the strike was unfortunate, but I understood it and I understand the suspicions of the dockers, as will anyone who knows the dockers.
  That is why I urge the Government to implement this legislation as soon as possible. The dockers will not be content with an assurance for much longer. The last time I raised the subject in the House, my right hon. Friend the Minister of Transport told me that I was too impatient, that the legislation needed great preparation, that the drafting was complicated, and so on. I hope that he remembers that I reminded him that there was

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  no difficulty, because several years ago a Ports Bill passed all its stages in the House of Commons and would have become law within a few weeks had there not been a General Election. All we are asking is that that law should be extended and should include the unregistered ports and a firm definition of what a dock worker's work is, as my right hon. Friend has said. If those things are done, I feel sure that there will be peace in the docks for years to come.
  There is an idea of mine that will not please everyone and may displease some dockers in London and not every docker in Tilbury, but it is worth considering. It is that Tilbury should be separated from the Port of London and become an independent port. When we come to the great debate, in which I hope to take part, I shall give my reasons for saying that.
  I repeat that if the Government hurry this legislation and include those matters that my right hon. Friend has mentioned —the unregistered ports and the definition of a dock worker's work—there will be a long era of tranquillity in the docks, and that is important for the whole nation.
  5.17 p.m.
  Mr. Alexander Fletcher: The Secretary of State has restated the intention of the Government to ensure that the coverage of statutory control of the employment of dock workers should be appropriate to modern conditions. That is something that I personally would not dispute—indeed, it is something that my hon. Friends would not dispute—except perhaps to say that some sections of the dock workers have shown considerable reluctance to reveal an equally appropriate awareness of the need to change their attitudes to meet modern conditions and the way in which these affect the industry. I would suggest to the Secretary of State that many of the difficulties with which he has to deal stem from this substantial, if minority, point of view among dock workers.
  The consultative document rightly reviews the benefits that dock workers have received from the employment scheme over the years. Although accepting the need to keep these matters up to date, it seems to me that a review of dock
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  employment should include some assessment of the reasons why some work previously regarded as traditional dock work has gone to other areas outside the main ports and why some ports outside the dock labour scheme have expanded at the expense of ports within the scheme. If the Secretary of State considers that new types of employment have deliberately avoided dock areas, he should be able to state clearly and from independent sources why that has happened.
  I know that the right hon. Gentleman and other right hon. and hon. Gentlemen have criticised the large number of reports that have been presented on this subject, and I do not dispute their criticism, but the kind of report to which I am referring would not be protective of the type of work but would analyse and criticise the ports and the method of work within ports within the scheme and ports not included in the scheme.
  There is nothing to be gained, at least in the longer term, by continually talking of the rights of dockers, on the one hand, without, on the other, stating their duties and responsibilities, particularly in the light of the work that our larger ports have lost to European ports. The Secretary of State might find that an ounce of frankness today would save him a ton of trouble and disappointment in future and that it would be better if he took a more imaginative line on this subject rather than constantly putting on a pair of protective spectacles when looking at every labour problem in the ports. Ministers should look at the situation objectively before yet again seeking a remedy in legislation, in compulsion, in restrictions and in reducing the choice and freedom of movement of management and workers in an essential industry.
  The Government should say why, in 1975, it is necessary to force employers into this scheme, and why it is necessary to force members of one union to make way for members of another union or for a different section of the same union. The only likely result of the Government giving preference to one trade unionist over another must be to set a match to an already explosive situation in inter-union relations. Certainly it will do nothing to improve industrial relations or the essential freedom of other trade unions to negotiate employment for their members.

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  If warehousing and container companies prefer to operate outside the dock areas, they and their employees must have good reasons for doing so. These companies enjoy good industrial relations with their employees, many of whom are former dock workers who have moved voluntarily, without compulsion on either side, into this new employment.
  The Government should be aware of their responsibilities towards companies engaged in warehousing, cold storage and container work, many of which play an important part in the preparation and distribution of food supplies at competitive prices to consumers. I wonder whether the Secretary of State has dared to calculate the inflationary impact of his proposals.
  I should like to comment on the consultative document because I believe it could provide the basis for a further storm of inter-union dispute. What I say may help to answer some of the points which obviously the hon. Member for Thurrock (Mr. Delargy) has difficulty in understanding.
  If it is conceded, as the consultative document recommends, that a specific section of a union has a prior right to replace trade unionists who are happily employed elsewhere in a different, if related, type of employment, why should this principle be confined only to dock workers? Should not the National Union of Mineworkers have a similar claim to the work of drilling for oil in the North Sea? Should not redundant car workers have a statutory right to replace traffic wardens—at the same wage rates as those car workers enjoyed in the car manufacturing industry? This is the sort of dangerous nonsense which the Government are indulging in with the complacency of yet another "peace in our time" approach to industrial relations.
  I am sorry to say to the Secretary of State that yet again this policy is bound to fail. It will not bring peace in our time, or even in the near future, in solving problems in the docks—because a protective policy will not work compared with a fair policy involving competition.
  5.25 p.m.
  Mr. Eddie Loyden: The House will welcome this opportunity to debate the docks if only for the purpose of remedying some of the
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  distortions and misleading statements made by Opposition Members.
  Central to those Opposition arguments has been the challenge whether the consultative document is necessary, or even desirable. The Conservative contributors to this debate have spoken of the long history of troubles in dockland, but, unfortunately, they have not given the reasons for those troubles. It is for the precise reason that the Labour Government wish to alleviate the situation that they have outlined action in the consultative document.
  From the time of decasualisation the docks industry has gone through many dramatic changes. Conservatives well know that during the period of casualisation the conditions and wages in the dock industry were among the worst in British industry. The hiring system that obtained in the docks industry was similar to conditions in a cattle market. Such a system had the effect of squeezing several hundred men into a pen where they were driven to holding up their books to the hirer to show him that they wanted work. If there was no work, home they would go. Dock workers rightly organised themselves in trade unions to fight those conditions. Ultimately it was a Labour Government who ended the casual nature of the industry's work. That was the beginning of a new era in dockland.
  Since those days a number of events have occurred which have caused some concern to dock workers—and I emphasise that they are matters of real concern to those who work in the industry. Opposition back benchers did not mention the fact that most of the work previously was performed on the site of the dock. Since much of that work has now moved elsewhere, men are concerned about their future, and, indeed, about their jobs. The people responsible for the movement of that work were the people who managed a large section of the industry. I worked in the dock transport industry for 28 years, and therefore, I know something about problems in the industry.
  The hon. Member for Edinburgh, North (Mr. Fletcher) mentioned warehousing and cold storage. Following negotiations, the London dockers reached agreement with the cold storage employers. That agreement was to the effect that those employers would not set up

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  cold storage facilities in areas outside the docks. But even the then Prime Minister was unable to find out that the Midlands Cold Storage Company which developed outside the docks industry and employed non-dock labour was part of the same company and that it had closed its operations in the docks industry. Those employers entered into unfair competition against those who were employed in the industry. That was a clear example of the devious role played by employers. By an act of deliberate policy they moved work away from dockland—work which was previously performed within the confines of the docks.
  I should like to get one thing clear in view of what has been said by Opposition Members about inter-union disputes. Inter-union disputes occur only when unscrupulous managers and employers bring about situations where work which normally would be performed in the docks is taken away from the docks. When the practice over the years has involved the transmitting of cargoes from the point of production or manufacture to the dock, the dock worker has not claimed that work as his.
  I should like to refer to "groupage" work, which dock workers claim to be their work—in other words, work involving the stuffing and stripping of containers which do not go from manufacturer to the docks but are loaded at places outside the dock industry, in conditions which are by no means comparable with those obtaining in the docks and at quite different wages. The situation reached such a point that at one time we were stuffing and stripping containers with prisoners. Is it any wonder that dock workers became concerned about developments?
  Against that background dock workers began to seek some form of legislation to protect existing jobs and, if necessary, to bring back work to the industry which had been taken away. The best way to deal with this is by extending the scheme. This does not mean that the dockers are saying that non-registered workers who are doing the job now should become unemployed, except in those circumstances where the employer has established a "cowboy" outfit in order to undermine the position of dock workers and their
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  employment. One reason why they are asking for an extension of registration is so that the conditions that prevail in their industry can be guaranteed outside dockland.
  I turn to the question of the container base versus the registered dock worker. After proper negotiation and consultation with the workers through the trade union machinery, the container base at Aintree on Merseyside ultimately became a registered base. It now employs registered dock workers. That position was not reached without pain, but certainly there was no upheaval for the two sections of the industry.
  The trade union movement and dock workers have proved that, given the right sort of climate and the absence of ruthless employers, they are able to get together and decide these issues to the satisfaction of the parties concerned. The Aintree container base and the Speke container base are examples of where workers have come together and considered a problem, with the result that the problem has been reduced to nothing.
  Mr. Ian Lloyd: In a sense the hon. Gentleman is making a case for the specific guarantee of the dock worker against technological change. Why should the guarantee given to the dock workers be so much greater and more specific than that given to employees in the aerospace industry, and be enshrined in legislation? Many of the aerospace workers had to move under difficult conditions when there was a large decline in our missile industry.
  Mr. Loyden: I do not accept the analogy drawn by the hon. Gentleman. The dock industry has recently gone through a dramatic change. We are talking of an industry where, by acts of deliberate harassment, the movement has been away from dockland. I worked for the Mersey Docks and Harbour Company for 28 years. I know the practice that prevailed amongst the management there. The ports were left in a derelict state. Reinvestment in them was running at a low level. The profitable side of the ports, the cargo-handling side, was being taken over by private enterprise. Is it any wonder that the ports of this country are in such a state that there is a need for massive capital investment to update

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  them and make them competitive with countries where this advancement has already taken place?
  The managers of the ports—I am thinking particularly of Merseyside—were the main customers. Therefore, the customer ran the outfit—for whose benefit? He ran it for the benefit of the customer. We have heard of examples of the 1964 rate for hiring a crane, at 12s. 6d., still prevailing in 1971 and 1972. The people who at that time were in charge of the port authorities and the docks boards were satisfying their own vested interests in the ports and not the well-being of the ports throughout the country.
  That is why the Government are saying that we have reached the point where, first, there is a need to clarify the position of dock workers in relation to their employment. We must not permit the jungle that occurred recently in the docks industry. Before we proceed to the question of public ownership and the establishment and strengthening of the National Dock Labour Board, we must ensure that the definition of "dock work" about which we have heard nothing from the Opposition benches—is established so that dock workers have a clear definition of what their work is. Secondly, we must introduce, through a later Bill, the public ownership of the ports. We must bring sanity into what has virtually become a jungle.
  The debate will be of value. Because of what has been said from the Government Front Bench, it will give confidence to dock workers that the Government intend to carry out what they say about the definition of dock work. It is not going to be an easy job, and nobody here should think that it will be. There has to be a bringing together of the conflicting industries and a solving of the stresses that are present in the industry. If necessary, my right hon. Friend the Secretary of State for Employment should be involved, so that some of the areas of conflict can be hammered out and we can define the future of an industry which not only will become more efficient but must offer greater security to the dock worker. He must work in an industry in which he knows that his future is safe.
  5.37 p.m.
  Mr. Keith Stainton: I feel particularly privileged to be called to speak, because I represent Sudbury and Woodbridge, and however remote and rural that constituency may sound it embraces the port of Felixstowe, to which reference has been made frequently, in terms of praise, not just today but on other occasions.
  However much I agree with the analysis of the hon. Member for Liverpool, Garston (Mr. Loyden), who has just spoken of the turmoil of dock history—and I concede the obscurantism of the ship owners and the port operators in the past—I can look at the matter only through the eyes of Felixstowe dock. I am talking not only about employers but about the whole complex.
  When I was first elected to represent Sudbury and Woodbridge, Felixstowe was a silted harbour with one 1,500-ton coaster lying there. I visited it on another occasion and found that in addition there were a couple of barges. It is now a port which handles 4 million tons of cargo per annum.
  So far as I am aware, there is no body of opinion in Felixstowe, be it management or labour, which is so desirous of achieving what the Secretary of State proposes in the consultative document that it thought to turn out in either of the last two General Elections in any strength to make its views known to me. The proposals were all adumbrated in the last Labour Party election manifesto.
  In the course of my canvassing in Felixstowe and my frequent contact with the Felixstowe dock, I was asked searching questions expressing the anxiety of dockers employed in Felixstowe as to what the consultative document would mean and how it could possibly improve their own status and security. It could be that there is something in the document which assists in guaranteeing employment. We shall have to look at the legislation. It may be that security will be bought at the expense of ossification of traffic. Perhaps some traffic that quite properly should come to Felixstowe will be prevented from doing so—even though Felixstowe can handle it better than Avonmouth—because the interplay of the National Dock Labour Board in the different ports would preclude that.

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  It is clear from correspondence with the Transport and General Workers' Union that there would be an averaging out of the employment factor throughout the region. The guarantee of employment might be underpinned, but we shall have to see what is in the Bill. It must be remembered that I am concerned not about the factual background—I can see all the points and disputes there—but have a legitimate interest to protect a port that has come into being in the last decade. That is not humbugged by other ports' inheritance. We have not got this kind of albatross. We are looking to the future. We do not want to chain ourselves to something that relates to the past and is irrelevant to our prosperity and progress. Perhaps there will be more job security, but there has been no threat to job security so far. One deduces that such job security could come about only by spinning work out among other ports in the estuary or East Anglia generally, or parcelling the work out to different ports in the country, perhaps to the severe disadvantage of Felixstowe's natural and proper rights.
  The second ground on which I, representing Felixstowe, wonder why we have reached this conjunction arises from a circular front the Department of the Environment, signed by J. E. Sanderson of the Ports Directorate. I presume that on this matter I address myself to the Minister for Transport, who is responsible for the organisation of the ports. Paragraph 8, headed "Port Businesses", speaks of the nationalisation proposals for the docks. They follow on from the 1970 Ports Bill. The Minister will recall our encounters over that Bill and our wasted endeavours. The paragraph says:
  "The proposals would also provide for bringing cargo-handling activities under public ownership and control."
  Although that is shorthand, one is entitled to ask precisely what it means, because it postulates a distinct overlap between the two situations. Or is it that one is working within the other? If so, what is the intermeshing?
  Perhaps we have today blundered prematurely into a debate that should properly have been confined to the London situation. But we have arrived at this point, and I hope that I am putting my questions properly and pointedly.
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  Some specific points arise on the document entitled "Dockwork". Admittedly, it is a consultative document, and as it extends to a mere seven pages it cannot spell out many details. One wonders about such matters as specialised cargoes, such as wine. What about bulk liquid storage, tank farms and the like? There is no mention of that kind of topic.
  In relation to the consultative document and the proposals for port or dock nationalisation in the circular from the Department of the Environment, it is most important to stress the grave uncertanties. I hope that I carry both sides of the House with me in this. We have been told by the hon. Member for Garston that there are uncertainties and anxieties among the dockers. They have been waiting and worrying. Equally, there are uncertainties among port owners, ship owners and all those who are involved in the operations of port traffic. The documents, which were promised some time ago, have taken a long time coming, and are still extremely vague, leave the whole matter in limbo for a considerable period.
  For example, the consultative document talks about the five-mile corridor, with appeal, yet the other document provides for bringing cargo-handling activities under public ownership and control. One can read into that something which is not restricted by five miles but extends almost throughout the country generally.
  On behalf of Felixstowe, I repeat my deep concern that there is no apparent demand for these proposals. We are a healthy, thriving organisation.
  Mr. Loyden rose—
  Mr. Deputy Speaker (Mr. George Thomas): Order. The hon. Gentleman has had his turn. Many hon. Members want to speak.
  Mr. Stainton: I give way to the hon. Gentleman briefly.
  Mr. Loyden: The hon. Gentleman appears to be speaking on behalf of Felixstowe dockers. When the Aldington-Jones agreement was reached, it was reached with the consent of scheme and non-scheme ports. That document included the extension of the scheme to cover ports such as Felixstowe.
  Mr. Stainton: I was speaking on behalf of my constituents, on behalf of 20 per cent out of a constituency of 85,000, vastly exceeding in size many of the rotton boroughs of dockers' constituencies, including that of the absent Government Chief Whip, which I believe just about tops the 20,000 mark.
  Twenty per cent. of my votes are in Felixstowe, and I perforce pay close attention to developments in the docks and to feelings at all levels. I am not conscious of any deep or widespread demand by dockers in Felixstowe for the extension of the scheme to Felixstowe. I have discussed the matter quite freely and openly, and I should be only too glad to take part in any meeting organised by the docks or the Transport and General Workers' Union. I am their representative in the House. They knew that the debate would take place today. We have discussed the matter previously. There may well be an ultimate advantage in security or guarantee of employment. But we have still to see that and its full implications spelt out.
  Felixstowe is doing extremely well, and it has done extremely well precisely because it has been free from all those inhibitions that have so constrained and constricted the activities of Liverpool, London and Hull over recent years. That may be an accident of history. I do not care. The fact is that we are a thriving undertaking at Felixstowe. We shall watch the proposed legislation on dock labour and nationalisation extremely carefully, and if it contains anything that does not please us we shall shout out loud.
  5.48 p.m.
  Mr. Walter Johnson: First, I declare an interest as honorary national officer of one of the unions that organise workers within the National Docks Board.
  I am disappointed that there has not been more discussion about the consultative document in the debate, but I am not surprised that the Opposition have not taken the opportunity to deal with it, because they have had no alternative proposals. When they were in Government, they did nothing about the situation in the docks. For the first time, we have concrete, sensible suggestions
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  which are worthy of consideration by hon. Members on both sides of the House. We all want to try to achieve a situation in which there will be peace in the docks. It is ruinous for our economy when we have the difficulties and troubles that we have had in the docks over the years.
  The consultative document, which will receive further consideration, is worthy of much more attention than it has been given this afternoon. I am surprised that the right hon. Member for Lowestoft (Mr. Prior) had the nerve to suggest a lack of consultation over the proposals. On many of the previous Conservative Government's proposals—particularly the Industrial Relations Act—there was practically no consultation. Yet the right hon. Gentleman complains about the lack of consultation on this matter.
  The document explains that the Government took so long in drawing up the proposals because they wished the document to be fully discussed before specific proposals on nationalisation were brought to the House. This consultation is absolutely vital. The Government have not brought forward their concrete nationalisation proposals because they wish to allow time for full discussion of and consultation about the document.
  We all know the difficulty of bringing forward legislation for the nationalisation of other ports, which is bound to be controversial. I ask my right hon. Friend in drawing up the legislation to pay specific attention to the position of the workers within the nationalised industry. This time there must be full representation of the workers on the board.
  I will give an example of how worker representation can benefit ports. I had the honour to go as a representative of the House on a visit to Malta a few years ago, and I took the opportunity of going round the docks and ports. The docks in Malta at one time had the worst strike record of any docks in the world. Since there has been full workers' representation on the board—about six from either side, with the managing director in the chair—Malta has not had one major dock strike. I ask my right hon. Friend to take account of that in setting up the new board. In that way a much better atmosphere can be created.

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  In the set-up of the National Dock Labour Board there is provision for a part-time chairman with non-executive power. The managing director runs the board. I do not want to be unfair to the chairman, who cannot be here to speak for himself, but that set-up gives him the opportunity to opt out of his responsibilities in a difficulty which the organisation of which I am a member has within the nationalised docks section. The chairman says that he has no executive power to intervene in what could be a major dispute. As a result of the action which has been taken by my organisation, there will not be a strike because we have agreed that the matter shall go to arbitration. That is the responsible reaction of my organisation, not the result of the intervention of the part-time chairman of the board. It is wrong that a part-time chairman of an executive board should be able to opt out of his responsibilities when the going gets tough.
  I ask my right hon. Friend to take note of the position of the workers within the present set-up. For example, what proposals are there for the Forth Ports Authority? Will the authority remain in its present position with the power it has at present, will it operate as a separate unit or will it be part of the overall nationalised board? The Tees and Hartlepools Authority and the railway traffic ports could be included in the same proposals. The Government may decide that the Manchester Ship Canal, with which the Manchester Corporation is involved, should be broken up rather than left in its present state. It is imperative that the workers within these groups should know precisely where they stand, and I hope that these questions will be answered when the nationalisation proposals are drawn up.
  The consultative document goes a long way towards satisfying the aims and aspirations of the people who work within the docks. When the proposals contained therein are implemented there is likely to be a period of working together within the docks which will be of great benefit to the nation. I hope that consultation will continue and that the Government will bring forward their nationalisation proposals quickly, because nationalisation is the real recipe for peace in the industry.
  5.55 p.m.
  Mr. Peter Rees: It is true, as the hon. Member for Derby, South (Mr. Johnson) said, that this consultative document must satisfy the aims and aspirations of those, but only some of those, who work in the docks. The criticism that I level at the document is that it is far too partisan a document in that sense. It is directed to the aspirations, ambitions and interests of only one group of workers in and around the docks. To them I shall return.
  It may be said, as the hon. Gentleman and others of his hon. and right hon. Friends said, that the document will achieve peace and tranquility, but I believe that it will be the peace and tranquility of death—[HON. MEMBERS: "Oh."]—yes, the death of vital, energetic, efficient ports, one of which I have the privilege to represent. I am concerned with the document and with any legislation that may follow it because I have the privilege to represent a non-scheme port run—it may surprise Government supporters to know—by a statutory authority of great antiquity and great efficiency.
  Noticeably missing from speeches from the Government side is any emphasis on efficiency or the national interest. The hon. Member for Derby, South said that the Opposition had not studied the proposals. I like to think that I have, and I break them down into two—and that must be non-controversial. First, the proposals are to redefine dock work so that it shall embrace a whole range of activities that have, at any rate to my unbiased eye, only a tenuous connection with dock work as properly understood. Secondly—and this touches my constituents much more directly—the proposals are to extend the national dock labour scheme to non-scheme ports.
  The first proposal must involve the extension of a monopoly. Hon. Members on both sides of the House should be extremely chary of extending monopolies. We should look with extreme distaste and suspicion on any monopoly, particularly on any extension of an existing monopoly. I challenge the Minister to say why he has not referred this redefinition to the Monopolies Commission. Why do we not allow the Monopolies Commission to apply the test of the national interest—not just the interest of the

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  Transport and General Workers' Union —to these proposals? I am happy to stand by the result. If the Monopolies Commission says that it is right in the national interest that this monopoly should be extended, so be it; we must order our affairs accordingly. But I doubt whether either the Minister will have the nerve to do that or the Monopolies Commission would come up with that conclusion—
  Mr. Peter Rest: Or whether the Transport and General Workers' Union would permit it.
  Mr. Rees: As my hon. Friend says, or whether the TGWU, or part of it, would permit it. A point that escaped the right hon. Gentleman is that not all branches of the Transport and General Workers' Union will necessarily find themselves unanimously supporting these proposals.
  The second aspect of the consultative document is the extension of the national dock labour scheme to the non-scheme ports. In, I hope, not too naïve a way, I ask a simple question. I have no doubt that I shall be mocked by the intellectual mercenaries of the extreme Left. Are the non-scheme ports noticeably less efficient than the scheme ports? Do they serve the country less well?
  I look for the answer to that question, in part, in the right hon. Gentleman's own document. Paragraph 12 reads:
  "A number of ports which were previously very small and therefore not covered by the Scheme have expanded significantly because of changes to the patterns of trade and shipping and in the techniques for handling cargo."
  There we have it. It is only the smaller, non-scheme ports, such as I and my hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton) have the privilege to represent, which have had the flexibility, the skill and the forward thinking to adjust to the changes in the pattern of trade. It is all very well for the Secretary of State to shake his head, but why have not the ports of London and Liverpool adjusted? I shall willingly give way to the right hon. Gentleman if he will give a short succinct answer, but I suspect that that is beyond even his capabilities.
  Mr. Foot: I have already read out a list of scheme ports where there has been
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  a considerable extension of trade. That refutes the point that the hon. and learned Gentleman is making.
  Mr. Rees: If we consider the ports through which the greater volume of trade is carried, we find, I suggest, that the larger ports have ossified under the impact of the scheme. It may be that there are other factors, but it can be said without fear of contradiction that the scheme has done nothing to make those ports more flexible in adjusting to changes
  "to the patterns of trade and shipping and in the techniques for handling cargo."
  [HON. MEMBERS: "Oh."] I refer to the right hon. Gentleman's document. If his hon. Friends do not like it, no doubt they will be able to say so when they catch the eye of whoever is occupying the Chair.
  I have the privilege to represent a small and historic port that has expanded considerably. It is now the premier passenger port of the United Kingdom. Even in terms of trade it rates about third or fourth. I am worried that the ill-judged proposals of the right hon. Gentleman may damage its present well-justified position.
  I say with utter confidence that if the national dock labour scheme were extended to Dover the costs of handling freight would increase by at least 50 per cent. What is the real reason for the extension? I believe that it is in deference to the susceptibilities of registered dock workers. Of course we are entitled to consider their susceptibilities. They are an important section of our community and they make their contribution.
  What are the other factors and groups which we should take into account? What about the national interest? What about the consumers? What about the importers and exporters? What about the shipping lines? I heard no reference to any of those considerable bodies. They have been brushed aside in the speech of the right hon. Gentleman and in the speeches of his hon. Friends. It seems that they are of no account. It seems that the docks are to be run by and for registered dock workers.
  The right hon. Gentleman has said that the ports over which registered dock workers have exercised their sway during the past decade or so have been undercut

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  by unfair competition. They have certainly been undercut, but why has the competition been unfair?
  There are considerable practical problems which the consultative document and the right hon. Gentleman have glossed over. I instance the handling of freight, for example. I have no doubt that these problems occur in ports represented by hon. Members from both sides of the House and maybe even in the port represented by the Patronage Secretary.
  Freight is handled in the port of Dover by at least three sorts of unionised labour —namely, the National Union of Railwaymen, the National Union of Seamen and the Transport and General Workers' Union. Even in the Transport and General Workers' Union there are those who carry a dockers' card and there are those who do not. How is the right hon. Gentleman to reconcile the aspirations of those four or five groups? Indeed, is the port of Dover within the scheme and, if so, to what extent? It is in part run by a nationalised industry, British Rail. Is Folkestone to be in the scheme at all? Is Dover to be split down the middle? Is one half of Dover to be in the national dock labour scheme and is the other half to be outside it? These are practical problems which the right hon. Gentleman has glossed over.
  The right hon. Gentleman has told us that there is not to be any inquiry because the time has come for action. Those are fine words but they will butter no parsnips in East Kent. I want to know what representations the right hon. Gentleman is prepared to accept and the time limit that will be imposed. What will move him?
  What kind of advantage does the right hon. Gentleman look for in the extension of the scheme to a port such as Dover? He and his document remain obstinately silent on all the points I have mentioned. I suspect that the only justification for the consultative document and for any legislation that may follow is the ambitions and aspirations of the registered dock worker members of the Transport and General Workers' Union. I suspect that this is just another clause that is being written into the social contract at the behest of Mr. Jack Jones. Perhaps he has been encouraged to make
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  another importunate demand to the right hon. Gentleman as a result of the experience of Mr. Shelepin. For all I know that gentleman may have been organising the docks in Odessa and Leningrad. Maybe we should be drawing on their experience. That is the kind of experience that may get a warm and emotional response from the right hon. Gentleman.
  Over the years I have admired the right hon. Gentleman. I have admired his oratory and I used to admire his principles. I admired them at a distance because I was not then a Member of this House. I admired his defence of a bicameral legislature. I am sad to have watched him bend under the pressures of office.
  Mr. Foot: I am sorry to interrupt the hon. and learned Gentleman. I have never defended the other place in this place. I thought that it was ridiculous to try to make the other place respectable. I hope that the hon. and learned Gentleman will not make such wild attacks upon me.
  Mr. Rees: Perhaps I have not followed the right hon. Gentleman's constitutional theories with sufficient care. I hope that I shall have an opportunity to do so in the near future. I have admired his grasp of history. It may be that he sees himself as a leveller. I must tell him that levellers were followed by military government. But now I must say something different to him. In so doing I borrow the imagery of someone whose oratory and radicalism even the right hon. Gentleman himself would respect. I say that he has ceased to be the watchdog of the House of Lords and has become Mr. Jack Jones' whippet.
  6.8 p.m.
  Mr. John Prescott: Due to the limited time that is available, it is difficult to know where to start in this debate. Many accusations have been made which can be proved to be totally incorrect merely by stating the facts.
  The claim has been made that it has been decided by the Government that the time has come for action and that there has been no representation. It has been said repeatedly by many bodies representing both sides of the industry that something should be done.

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  The right hon. Member for Lowestoft (Mr. Prior) did not spend much time dealing with the issue before us. He seemed to want to get a number of things off his chest. Not all of those issues were pertinent to this matter. We are discussing the extension of a scheme that deals with the conditions of service and the welfare of dock workers. We are dealing with an industry that has had to face considerable changes in technological and social terms. Many of the social changes have had ramifications not only in the docks but in many other industries throughout the nation. In many ways we have witnessed the holding back of industry arising from the difficulties that have faced the dock workers. Many of the dock workers in my constituency have pressed me strongly to urge the extension of the scheme.
  I congratulate my right hon. Friend on introducing this scheme. It is not before time. There are a number of precedents on which he can rely. There is a clear difference between the two parties. On the one hand the Government are bringing forward this measure in an attempt to redefine dock work while the Opposition say that the measure should be delayed. They point to the inadequacy of the scheme. It is not only today that we have seen this attitude. There has been inaction by Tory Governments in the past which has led to total frustration. If there is one industry which has been plagued by history, it is the docks industry.
  My right hon. Friend made a fair comparison of the difference between the two parties. Our approach is to seek a peaceful solution to a difficult problem. Pursuing the policies put forward by Conservative Members would lead to confrontation. We saw what happened when the five dockers went to Pentonville Prison. The solution to that problem found by the then Tory Government was to discover an Official Solicitor whom no one had found before. We seek to deal with the fundamental problems of the dockers.
  It is possible to see the difference in attitude between the parties through their approach to the inquiries that have taken place over the years. We have asked for support and co-operation. The response from the dockers is to the effect that there have been all these reports,
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  co-operation has been given, but nothing has happened. The national dock labour scheme was born in 1947. That was an attempt to regularise the employment situation which was plagued by casual working. It was an attempt to do something to prevent the exploitation of labour in the industry.
  In 1951, with the advent of a Tory Government, there came the Leggett Report which looked into the unofficial London dispute. In 1956 there was another report into the workings of the national dock labour scheme. In 1961 there was a joint industrial review on the conditions and problems in the industry. In 1962 the then Tory Government set up the Rochdale inquiry into the ports. Every one of these reports came to similar conclusions. This was shown in the report of the Devlin inquiry which was set up in 1964. It was made clear then that many of the industry's problems were due to the lack of security in the industry, to deficiencies in management and to the operation of the "blue-eyed" system. Those in the industry know all too well the bitterness that arose from that. There was also a deficiency in welfare conditions.
  All these factors were identified by Devlin, as they had been identified earlier. Tory Governments have done nothing. The industry has done nothing. It is therefore incumbent upon us to impose a solution. The Government are taking the initiative today since the industry has patently failed to do anything. All these reports, confirmed by the Devlin inquiry, show that there were bad industrial relations and bad conditions generally. Devlin reported that there was a failure by the bodies concerned to do anything about decasualisation. Instead, these bodies spent too much time emphasising restrictive practices.
  That is an interesting comment in view of some remarks today. Conservative Members should read some of those reports instead of relying on the consultative document. They should look at the National Ports Council's Report, the Devlin Report or the Rochdale Report. It took years to compile them. All the answers are there and they confirm my right hon. Friend's position.
  The Devlin Report recommended that the first principle must be the preservation of the dock labour scheme. It also

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  recommended an end to decasualisation. The Government sought to do this through a number of measures in which they were supported by the dock workers, who praised their efforts. The results of these efforts were higher wages and better working conditions. As soon as this happened, the dock employers decided to get off the docks and to go where the labour was cheaper—to the small wharfs and the container depots. This was recognised by a Labour Government, who set up the Bristow Committee, which in 1969 recommended that the dock worker extension areas should go to five miles with a secondary recommendation of 10 miles. This principle is what the Government are attempting to implement.
  The then Tory Government could have implemented that recommendation, reached by an impartial body. But they refused to do so. All that we got from the then Tory Government was the theory that the docks should stand on their own and that competition was to be the key. A number of us attacked that policy in 1970 and 1971. The then Government soon got rid of that policy generally, but they kept it for the docks.
  The White Paper dealing with financial obligations created severe problems for scheme ports. When the Labour Party was in opposition I tried to make that point. The non-scheme wharves grew up all over the country. There were a number of them in my area which took millions of tons of traffic away from Hull. A port such as Hull which has spent £20 million of public investment and which has to cover the interest charges on that money cannot compete with such small wharves, where the comparable investment figure might be £30,000, particularly when those wharves receive subsidies for setting up.
  Taking no account of labour charges Hull cannot compete on equal terms if all costs must be recovered. The National Ports Council made it clear that the labour costs in the non-scheme ports were half those in the scheme ports. Further, the non-scheme ports did not have the same good social conditions. The scheme ports had to pay a levy to cover pensions and provide for proper working conditions. whereas the non-scheme ports did not. That made the position even more unfair.
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  What did the Tory Government do? They set up the Aldington-Jones inquiry and the National Ports Council inquiry. Both confirmed the national dock labour scheme. Both said that the other ports should be brought into the operation of the scheme. When Conservative Members talk about efficiency they should remember that it is not just a question of whether it is cheaper to unload in one port as compared with another. There are social costs involved. The authorities in my area are complaining about some of the large lorries which are passing through because some farmer has decided to establish a small wharf.
  Conservative Members should remember that £20 million of public money has been spent on our docks and that we are allowing traffic to be diverted elsewhere to save a few shillings. There is also the conference system which plays off one port against another for the sake of a penny or so. All this disrupts the transport system of our country. The ports are but links between transport systems. We must not think of this in strict efficiency terms. The social costs are just as important.
  This should be appreciated by Conservative Members because the former Tory Government spent almost £50 million on redundancy payments to reduce the dock labour force. At the same time, they were allowing private investment to develop. The dock labour scheme cannot be divorced from the proposal to nationalise the docks. If there is a possibility of these common user wharfs setting up outside the nationalised sector, our problems will proliferate. There will be the same insecurity and its ensuing problems. I hope that my right hon. Friend will tell us how the dock labour scheme will fit, into the nationalised industry. Will it apply to all the people involved in the industry or only to the dockers? I hope that the common users' business will be brought into the nationalisation plan.
  Dockers have made a contribution in the fight against the low wages paid to workers on foreign ships coming to the United Kingdom by withdrawing their labour. In so doing they have broken the contract law. I hope that legislation will be passed incorporating the right of dockworkers to do that, so that they may persuade foreign ship

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  owners to increase the wages paid to their seamen. That is the only way in which we can help the international brotherhood of labour and improve conditions of seafarers and dock workers in Britain and abroad.
  6.21 p.m.
  Mr. Julian Ridsdale: It is a pity that we have not been able to distinguish between the problems of the major ports and of the smaller, efficient. non-scheme ports. The means proposed by the Government to solve the problem of the dock labour scheme for the non-scheme ports will cost the country at least £100 million. That disturbs me, since I am sure that the Government are trying to solve the problem in the wrong way. It is wrong to say that the Tory Government did nothing between 1970 and 1974. The ports industry is capital-intensive, not labour-intensive.
  The objective of the Aldington-Jones Report was to modernise the industry. It included a generous redundancy payment scheme, providing for over £5,000 per head. Within one year of the publication of that report 2,500 dockers accepted the conditions. We wanted to continue that. Having heard the views of all those concerned in the industry, it was realised that imaginative solutions to the industry's problems should be produced. However, in order to do so is it necessary to cut out the efficient non-scheme ports?
  I represent the British Railways port of Parkeston, to which the Government have not extended the dock labour scheme. During the dock strike of 1972 the port remained at work in spite of picketing by Transport and General Workers' Union militants. It is wrong to be vindictive to the non-scheme ports in an attempt to solve the problems of the industry as a whole.
  The hon. Member for Kingston upon Hull, East (Mr. Prescott) spoke about conditions in Hull. Harwich is a privately-owned port. Although the dock labour scheme has not been introduced there, all the conditions recommended in the Devlin Report have been implemented. As a result, workers and employers feel secure. Most of those improvements were introduced before the publication of the Devlin Report. A great number of the workers do not want the
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  dock labour scheme to be introduced in Harwich.
  At non-scheme ports vessels' turnaround is only six days, compared with 20 days elsewhere. The cost per ton is lower at non-scheme ports. The people at the non-scheme ports feel that the Government are being vindictive in not producing imaginative solutions to the problems of the ports industry.
  The Secretary of State should read the excellent report of the Touche Committee, which deals with the problems faced by the continental ports and mentions the subsidies received by them. The Government should attempt to solve the problems of the bigger ports along those lines, at least to see that the EEC competition is fair between the major ports.
  Mr. Eldon Griffiths: Does not my hon. Friend agree that the experience in Harwich and Felixstowe is that men and management work together as a team? Therefore, both productivity and labour relations are good. It is ironic that in the State-owned and publicly-run ports, which are often much larger, there is not the feeling of working together as part of a team. In other words, participation is not achieved by public ownership. Indeed, the opposite applies.
  Mr. Ridsdale: I agree. However, there are good labour relations in the private ports and in some of the British Railways ports. But why are the Government trying to solve the problem in the nationalised sector by being vindictive against the private sector? It will cost the housewife and the country money. The Secretary of State has failed to deal with the problem. The scheme is becoming a number one enemy, not only of the balance of payments but of the British housewife.
  It is important to realise what is happening in the continental ports. Hamburg received extensive help by way of capital grants and free dredging. That port would need to increase its port charges by 78 per cent. to cover its true costs. That is what the Touche Committee said. Antwerp, which is marginally less favoured, would need to increase its charges by 67 per cent., while Rotterdam and Dunkirk would need to increase theirs by 29 per cent.

  91
  Capital resources are scarce. We must try to assist the major ports by ensuring that the proper capital investment is made. The Government must look at the more realistic means of dealing with the problems of the larger ports. The problems must be separated. There is no need to turn on the smaller ports which are running efficiently and which enjoy the best labour relations, besides enjoying competitive costs.
  I trust that the Government will look at the report of the Touche Committee and at other means of solving the problems rather than extend the dock labour scheme, which goes back to Methuselah.
  6.28 p.m.
  Mr. Marcus Fox: I support the motion.
  At the beginning of the debate we listened to the rhetoric of the Secretary of State. We were not disappointed. He made one or two surprising announcements. He agreed with the supremacy of Parliament and thought it inopportune that we should have brought forward this motion before the appearance of legislation. That is a new assumption. We make no apology for bringing this matter before the House on a Supply Day. We believe that it shows the hypocrisy of the Government. Tomorrow we shall hear from the Chancellor. It is not a Budget leak if I say that he will announce a massive deficit in our balance of payments and the need to take action. However, the Government are pursuing policies which will increase our indebtedness. It is no wonder that very few people now take the Government seriously.
  My hon. Friend the Member for Harwich (Mr. Ridsdale) spoke of efficiency. I did not hear that word mentioned by Government supporters. We heard a lot about political dogma and party advantage. We heard much about pandering to the militants but nothing about the supremacy of Parliament. We heard about the supremacy of the docker. If the Government put the national interest first, they would give a decent burial to these proposals.
  It is not, and never has been, our intention to attack the dock labour scheme in its entirety. We are attacking the extension of the scheme. If these two proposals are given a decent burial, there
  92
  will be few mourners—not the exporter or importer, not the man who works in the independent port, not the taxpayer who always foots the bill and who is getting rather sick of it, not the customer abroad who, if these measures go through, will have another reason for finding it more difficult to buy British.
  Our case is simply one of common sense. We find the one-sided attitude of the Government disturbing. It puts the trade union in a very privileged position. The Government seem to have paid scant attention so far—though there may be time for a change of heart—to the port user and the employer. The weakness of the Government's case is instanced by the fact that they are legislating in this matter. They are afraid to seek an extension of the scheme under the existing Act because that would lead to a public inquiry. Hon. Members can imagine what would happen if the Government tried to move into Felixstowe, Dover, Harwich and Shoreham. My hon. Friend the Member for Sudbury and Woodbridge (Mr. Stainton) made this point clear. Would the net result be that industrial relations were better in the larger scheme ports? Far from it. The opposite would be the case. Try as one will, it is difficult to make out a case for the proposal to absorb these ports and wharfs into the dock labour scheme and further to extend nationalisation.
  I should like to refer the hon. Members for Liverpool, Garston (Mr. Loyden) and for Kingston upon Hull, East (Mr. Prescott) to the National Ports Council survey of 1973, in which Mr. Jack Jones played a prominent part. Paragraph 42 of the report, under the heading "Reputation for Productivity", stated:
  "It has proved virtually impossible so far to establish exactly comparable hard factual evidence about the relative performance of different ports. What is certain is that ship-owners and shippers are given to making wide-spread assumptions and assertions about less flexible and so financially more onerous conditions, including overtime arrangements and rates, manning scales, and about the state of industrial relations, etc., at the major ports: in short, the image of the major ports as it appears to many customers, actual and potential, is bad. Both employers and unions at these ports must recognise the effects of these assumptions, even if they challenge their legitimacy. It is clearly in the national interest that some independent assessment be made which would help to prove or disprove these statements and lead to whatever comparisons are

  93
  possible on an inter-port basis, both nationally and internationally."
  This is what the Government are afraid to do. The least they should do before embarking on this course of action is to establish the facts which the nation has a right to know. Could it be that to Labour Members comparisons are odious—indeed, embarrassing—and that the non-scheme ports would come out of this far better than the larger ports?
  Mr. Spearing: I am grateful to the hon. Gentleman for giving way. Many of his hon. Friends have assumed that many of the larger ports are nationalised and State-owned and that the smaller ones are privately run. The hon. Member for Bury St. Edmunds (Mr. Griffiths) in particular made that point. Is not the hon. Gentleman aware that in the Royal Docks, in the Port of London, over half the dockers are employed by private employers? Many dockers on the river are employed by private employers. In fact, private employment has found its difficulties in all sorts of docks, large and small.
  Mr. Fox: I am sure that the hon. Gentleman would not want me to wander down that path. Of course we are aware of those facts, and the situation should be examined as fully as possible. All I suggest is that we should discuss all these anomalies and see which is the best and most beneficial system for the nation.
  Many examples could be given to prove the amount of time that is saved by shippers using the non-scheme ports. I am told by a shipowner in the Baltic timber trade that in six voyages to major scheme ports the average turn-round was 141·95 hours in port. Most of the trade is to the Trent Wharf, and the maximum time taken by any of the shipping, from arriving at Hull Roads to leaving the Trent Wharf, is 60 hours. Is it any wonder that employers and shippers prefer to use the non-scheme ports? As my hon. Friend the Member for Bury St. Edmunds said, taken as a whole the turn-round at non-scheme ports is five or six days as opposed to 13 or 20 days in the larger scheme ports.
  Comparing our ports with our overseas competitors, the situation is far worse. Compared with Antwerp, Liverpool needs to treble its tonnage per gang; London
  94
  needs to quadruple it. To save embarrassment, I shall not bring Rotterdam into the equation. Suffice it to say that every time the London docks are brought to a standstill the dockers in Rotterdam must be drinking champagne. As has already been said, it is estimated that 15 per cent. of the traffic will now move abroad as a result of the recent tragic strike in our docks.
  The Secretary of State on 15th July 1974 intimated his intention to extend the dock labour scheme, and he said:
  "I am taking into account partly the recommendations of the Aldington-Jones Committee. I do not know whether the right hon. Gentleman thinks that its report was a minority report. In its final report the Committee said:
  'It is wrong that the scheme ports should continue to be exposed to unfair competition on terms and conditions of work from certain ports and wharves outside the scheme. In particular the Committee were at one in deploring the practice of casual employment which is still in evidence'."—[Official Report, 15th July 1974; Vol. 877, c. 33.]
  I take it that the Secretary of Statae believes that that situation still applies, otherwise he would not be contemplating legislation.
  I hope that the Minister will tell us what is the up-to-date position, particularly with regard to conditions of employment, wages and pensions. My information is that in the vast majority of these non-scheme ports conditions are as good as they are in the scheme ports. As for casual labour, to talk in terms of 200 or 300 out of a total of 30,000 seems to me to present a very weak case for these proposals.
  Is it not a fact that we in this country are failing to accept certain home truths? For the Secretary of State to tell us that we should be careful of what we say in case we stir up trouble is a very dangerous doctrine. Let me say what I believe to be the case and why the non-scheme ports are more efficient. In the non-scheme ports the men will work week-ends. They will work to suit the shipping and the tides. There are no restrictive practices. The men allow interchangeability between jobs if necessary. They allow interchangeability during all hours between ships. The men will discharge one hold and load another simultaneously. The ships are not undermanned. Under the conditions in the scheme, however,

  95
  ports would require extra men not fully employed. We all know that in London, Hull and Liverpool there is rigidity of hours of work especially at weekends. There is adherence to historic and outworn practices, and rotation of labour across the broad spectrum of activity dilutes efficiency. I am sure that the Minister, if he wishes, can reply to this in full.
  How can the Minister for Transport possibly justify his statement on 20th August 1974 outlining his proposals for public ownership? The right hon. Gentleman said:
  "The Government consider that this scheme would combine the advantages of comprehensiveness, efficiency and flexibility. It would avoid over-complicating the structure of the industry and minimise the diversion of management resources. Ports would continue to compete on service and on price."
  Those are all the old worn-out clichés to justify State control. The public are sick and tired of all these explanations. If the right hon. Gentleman reads his own proposals, he will know full well that the National Ports Authority, which he intends to set up, will be able to dictate to port authorities how to run their undertakings. How can that lead to initiative and competition?
  I move quickly to a constituency point. The Government Chief Whip led me to think of this. I do not suppose that the Secretary of State will support me, but the largest employer of labour in my constituency is the wool textile industry. Times are not easy. That is why the Leader of the House found time to debate that industry a few days ago. A number of Labour Members supported our plea about dumping. I am surprised that they are not in the House now to draw attention to the serious matter of delay in exporting the goods of that industry.
  The wage levels in Ebbw Vale are much higher than in my constituency. I take it that the National Coal Board or the British Steel Corporation is the largest employer in Ebbw Vale. But my constituents have a very low basic wage. What happens? As a good Socialist, perhaps the Secretary of State will support me. My constituents produce the goods on time. The wool textile industry exports about as much as the Scotch whisky industry. That is not a bad record. The
  96
  goods get to the docks on time. Then what happens? Two or three weeks go by and they are still there.
  Mr. Prescott: Which dock?
  Mr. Fox: If the hon. Gentleman wants the evidence, I have a lot upstairs. There is a delay of seven or eight weeks in London, Liverpool and Hull. I challenge the Minister for Transport to deny that. He will know this from the letters he has received from many hon. Members.
  Let me move away from the Secretary of State for Employment. Where is the Secretary of State for Industry? The right hon. Gentleman should be deeply concerned and ought to be here.
  Mr. Eldon Griffiths: He is fighting the Common Market.
  Mr. Fox: The Secretary of State for Industry is always fighting losing causes. Instead of giving subsidies, the right hon. Gentleman should be here opposing this kind of measure, which will delay and hinder our export performance.
  From my experience in the Whips' Office, I know that many Ministers travel abroad and are paired, but they must know that the biggest criticism directed at Great Britain and at buying British is the uncertainty of delivery dates being met. That is where this legislation comes completely unstuck. It will do nothing to help in that respect.
  That is why, in winding up the debate, I ask my right hon. and hon. Friends to support the motion in the Lobby and show our contempt for a Government who pay lip service to a mixed economy, in which private enterprise is supposed to have a place, and yet in practice show themselves to be the most Left-wing administration under which this country has ever suffered.
  6.45 p.m.
  The Minister for Transport (Mr. Frederick Mulley): I do not think that my right hon. Friend the Secretary of State for Employment was in any sense complaining about the Opposition having chosen this or, indeed, any other subject for debate. The debate is welcome because it will clear up a number of misunderstandings. Our complaint is against the attitude to the serious problems of the ports industry which is

  97
  exhibited in the terms of the motion before the House.
  I do not want to follow the right hon. Member for Lowestoft (Mr. Prior) in the kind of compliments that he introduced into the debate. I want to pay a genuine compliment to the Opposition. They are to be congratulated, at least in this area, on consistency. They have consistently criticised and opposed every measure that the Labour Government have sought to take to improve the situation in the ports industry, and when they have had power have done absolutely nothing about it. The motion exactly reflects that attitude today.
  I bow to the master of the art if the clichés of my consultation document offended the hon. Member for Shipley (Mr. Fox), but there were complaints earlier that the word "efficiency" had never come into our consideration.
  First, as they are two distinct and separate matters, I should make clear the difference between the document "Dock Work", my right hon. Friend's proposals which are concerned with the security and conditions of port transport work, and the proposals for the reorganisation of the industry, for which I am responsible, which are concerned with the management, ownership and control of the ports. The two schemes are distinct but complementary. It is recognised in all quarters that in many respects my right hon. Friend's problems are more urgent than mine and should take precedence in legislation, but both are directed to the enormous changes which have occurred in the port transport industry in recent years.
  In the first place there was the Devlin Report, which, in the 1960s, finally achieved the end of decasualisation. I hope that no hon. Member would now seek to defend the system of casual labour.
  There has been a change in the pattern of our trade. The hon. and learned Member for Dover (Mr. Rees) put all this down to far-sightedness on the part of port operators. One significant change is that people are buying more of our goods nearer to us in Europe, affecting the short sea trade, while the volume of deep sea trade, which has been the basic concern of our older ports, has declined because
  98
  of the way the trade between this country and other parts of the world has gone on.
  There has also been the technological development of very large ships—for example, in grain. The practice has been to break down the load into smaller ships or barges, and that has made possible the use of the smaller harbours.
  Mr. Peter Rees: Will the hon. Gentleman give way?
  Mr. Mulley: I have very little time.
  Mr. Rees: I am grateful to the right hon. Gentleman for giving way. I merely want to make the point that the port of Dover was in a position to respond to that demand. But I query whether it would have been able to do so if the dead hand of the dock labour scheme had been laid upon it.
  Mr. Mulley: I shall be coming to that point later. Much as I usually like to give way, I agreed to take only 15 minutes because so many hon. Members wished to speak in the debate.
  There has been another important change—containers and roll-on roll-off. That has meant a great change in the pattern of trade for our ports. Yet the proposition in the motion is that the Dock Workers' Employment Scheme, which has been virtually unchanged since 1947—nearly 30 years, for the majority of which time, sadly for the country, the Conservative Party was in Government—should remain unchanged. The motion says that we should not even look at it. Yet we have before the House a consultative document inviting anyone interested in any aspect to make representations with a view to bringing these practices up to date.
  At the end of the period in office of the 1964–70 Labour Government Mr. Peter Bristow, QC, issued his report. If the proposals in that report had been implemented by the Tories, we might not have suffered the 1972 national dock strike and the present situation in the docks would have been much better. Then there was the Aldington-Jones Report. The report of the National Ports Council on non-scheme ports came in March 1973. Nothing was done to bring the ports up to date.
  My right hon. Friend made a penetrating point when he said that the crime

  99
  that he and later on, I, I hope, will be perpetrating is that we shall be trying to do something. Britain's tragedy often is that for every one person trying to do something there are two people trying to prevent him. This may be reflected in the Opposition's attitude to our efforts in this direction.
  The logic of the matter is this. If 80 per cent. of the port industry is in the scheme and if broadly—here I agree with the hon. Member for Shipley—wages at scheme ports, because of trade union organisation and not for other reasons, are broadly comparable in most cases, what can be wrong with bringing in the other 20 per cent.?
  The Opposition do not want that. It was nonsense of the hon. Member for Harwich (Mr. Ridsdale) to say that we are being vindictive. His solution was massive subsidies for our ports on the lines of continental ports. I should be interested to know whether this is an official Opposition view, because it may have a bearing on the debate which is to follow. If it has been so bad for scheme ports over the past 30 years, why did not the Tories do something about it, when they had power?
  As my hon. Friends the Members for Liverpool, Garston (Mr. Loyden), Kingston upon Hull, East (Mr. Prescott) and Thurrock (Mr. Delargy), with their great knowledge and experience, have indicated, all the talk and lack of action have exasperated and frustrated the dockers and caused them to put more weight on the protection of the scheme than perhaps it justifies. There have been prevarications over the years. This is why it is important to act quickly.
  The legislation which will have to be introduced by my right hon. Friend and myself will inevitably be more complicated than my hon. Friend the Member for Thurrock suggested. As my hon. Friend the Member for Derby, South (Mr. Johnson) said, full consultation is both desirable and necessary in respect of both schemes.
  The hon. Member for Sudbury and Woodbridge (Mr. Stainton) said that in the first consultative document on ports organisation issued last August there was a phrase about port businesses which he
  100
  did not find clear. Any port which is not a statutory port is at law technically a port business. The hon. Member and other Conservative Members who spent so many hours with me in 1970 on another piece of ports legislation will recall that there was the most frightful and fierce opposition from the Conservatives to the concept that port businesses should be brought under any form of public ownership.
  In the last five years one port after another—nationalised and private—has been acquiring the port businesses in its ports and running them because it knows that this is the most efficient way of operating and because the profit is not in the dues and the rest of the port undertaking but in running the port businesses. That is why we have always taken the view that it is essential not only to have the ports as ports within the framework of public ownership but that the major port businesses involved should be similarly owned and should be part of the port undertaking.
  That, broadly, is what my proposals set out to do. Through hon. Members every citizen will be aware of what we do We are carrying out the policy set out in "Labour's Programme 1973" and in our two manifestos last year, namely, that we would bring all the commercial ports under public ownership and control. This means 200 to 300 ports. Clearly it would have been wrong to try to bring these within one enormous administrative umbrella. We seek to retain the ownership where it is already, under public ownership—that is, a nationalised board, a local authority, or a public trust—but we shall also acquire the ports that are now in private ownership.
  As is widely accepted within the industry, we want to extend the powers of the National Ports Council, to which I pay tribute. With its limited powers it has done an extraordinarily good job in its advisory capacity in recent years. We want to build that on to a national ports authority so that we can have central strategic planning of the requirements for our ports industry and yet, through having the quality of local management, retain that initiative which we agree is important in achieving both the representation of the workers in their place of work and also the sense of competition which is often a spur to efficiency.

  101
  If hon. Members have not had the second edition of my consultative document which takes account of the proposals we have had put to us since last August and which was published a few days ago, we shall be happy to send copies to then and to receive any observations about it. Copies are in the Vote Office.
  What is involved in the two schemes will make an enormous contribution to the health, efficiency and better industrial relations in the ports industry, which, we all realize, is absolutely central to our position as a trading nation.
  The Opposition, in proposing that the House should reject the proposals before

  Division No. 166.]

  AYES

  [7.00 p.m.

  Adley, Robert

  Eyre, Reginald

  Jones, Arthur (Daventry)

  Aitken, Jonathan

  Fairbairn, Nicholas

  Jopling, Michael

  Alison, Michael

  Fairgrieve, Russell

  Joseph, Rt Hon Sir Keith

  Amery, Rt Hon Julian

  Fell, Anthony

  Kaberry, Sir Donald

  Arnold, Tom

  Fisher, Sir Nigel

  Kellett-Bowman, Mrs Elaine

  Atkins, Rt Hon H. (Spelthorne)

  Fletcher, Alex (Edinburgh N)

  Kimball, Marcus

  Awdry, Daniel

  Fletcher-Cooke, Charles

  King, Tom (Bridgwater)

  Baker, Kenneth

  Fookes, Miss Janet

  Kitson, Sir Timothy

  Banks, Robert

  Fowler, Norman (Sutton C'f'd)

  Knight, Mrs Jill

  Bell, Ronald

  Fox, Marcus

  Knox, David

  Bennett, Dr Reginald (Fareham)

  Fry, Peter

  Lamont, Norman

  Berry, Hon Anthony

  Gardner, Edward (S Fylde)

  Lane, David

  Biffen, John

  Gilmour, Rt Hon Ian (Chesham)

  Langford-Holt, Sir John

  Biggs-Davison, John

  Gilmour, Sir John (East Fife)

  Latham, Michael (Melton)

  Blaker, Peter

  Glyn, Dr Alan

  Lawrence, Ivan

  Body, Richard

  Godber, Rt Hon Joseph

  Lawson, Nigel

  Boscawen, Hon Robert

  Goodhew, Victor

  Le Merchant, Spencer

  Bowden, A. (Brighton, Kemptown)

  Goodlad, Alastair

  Lester, Jim (Beeston)

  Boyson, Dr Rhodes (Brent)

  Gorst, John

  Lewis, Kenneth (Rutland)

  Britten, Leon

  Gow, Ian (Eastbourne)

  Lloyd, Ian

  Brotherton, Michael

  Gower, Sir Raymond (Barry)

  Loveridge, John

  Brown, Sir Edward (Bath)

  Grant, Anthony (Harrow C)

  McAdden, Sir Stephen

  Buck, Antony

  Gray, Hamish

  McCrindle, Robert

  Budgen, Nick

  Grieve, Percy

  Macfarlane, Neil

  Bulmer, Esmond

  Griffiths, Eldon

  MacGregor, John

  Burden, F. A.

  Grist, Ian

  Macmillan, Rt Hon M. (Farnham)

  Carlisle, Mark

  Grylls, Michael

  McNair-Wilson, M. (Newbury)

  Carr, Rt Hon Robert

  Hall, Sir John

  Madel, David

  Chalker. Mrs Lynda

  Hall-Davis, A. G. F.

  Marshall, Michael (Arundel)

  Channon, Paul

  Hamilton, Michael (Salisbury)

  Marten, Neil

  Churchill, W. S.

  Hampson, Dr Keith

  Mates, Michael

  Clark, Alan (Plymouth, Sutton)

  Hannam, John

  Mather, Carol

  Clark, William (Croydon S)

  Harvie Anderson, Rt Hon Miss

  Maude, Angus

  Clarke, Kenneth (Rushcliffe)

  Hastings, Stephen

  Maudling, Rt Hon Reginald

  Clegg, Walter

  Havers, Sir Michael

  Mawby, Ray

  Cockcroft, John

  Hawkins, Paul

  Maxwell-Hyslop, Robin

  Cooke, Robert (Bristol W)

  Hayhoe, Barney

  Mayhew, Patrick

  Cope, John

  Heath, Rt Hon Edward

  Meyer, Sir Anthony

  Cordle, John H.

  Heseltine, Michael

  Miller, Hal (Bromsgrove)

  Cormack. Patrick

  Hicks, Robert

  Mills, Peter

  Corrie, John

  Higgins, Terence L.

  Miscampbell, Norman

  Costain, A. P.

  Holland, Philip

  Moate, Roger

  Critchley, Julian

  Hordern, Peter

  Molyneaux, James

  Crouch, David

  Howe, Rt Hon Sir Geoffrey

  Monro, Hector

  Crowder. F. P.

  Howell, David (Guildford)

  Montgomery, Fergus

  Davies, Rt Hon J. (Knutsford)

  Howell, Ralph (North Norfolk)

  Moore, John (Croydon C)

  Dean, Paul (N Somerset)

  Howells, Geraint (Cardigan)

  Morgan, Geraint

  Dodsworth, Geoffrey

  Hunt, John

  Morgan-Giles, Rear-Admiral

  Douglas-Hamilton, Lord James

  Hurd, Douglas

  Morris, Michael (Northampton S)

  Drayson, Burnaby

  Hutchison, Michael Clark

  Morrison, Charles (Devizes)

  du Cann, Rt Hon Edward

  Irvine, Bryant Godman (Rye)

  Morrison, Hon Peter (Chester)

  Durant, Tony

  Irving, Charles (Cheltenham)

  Mudd, David

  Dykes, Hugh

  James, David

  Neave, Airey

  Eden, Rt Hon Sir John

  Jenkin, Rt Hon P. (Wanst'd & W'df'd)

  Nelson, Anthony

  Edwards, Nicholas (Pembroke)

  Jessel, Toby

  Neubert, Michael

  Emery, Peter

  Johnson Smith, G. (E Grinstead)

  Newton, Tony

  those to whom the consultative documents have been sent have had a chance even to comment upon them, show that consistency in talking plenty and doing little which is at the base of many of our troubles today and which we inherited from the Conservative Government. I call upon my right hon. and hon. Friends to reject the motion with the contempt that it deserves.
  Question put,
  That this House rejects the Consultative Document, Dock Work, and the further proposals for ports reorganisation:—
  The House divided: Ayes 251, Noes 282.

  Normanton, Tom

  Rossi, Hugh (Hornsey)

  Taylor, R. (Croydon NW)

  Nott, John

  Rost, Peter (SE Derbyshire)

  Taylor, Teddy (Cathcart)

  Onslow, Cranley

  Royle, Sir Anthony

  Tebbit, Norman

  Oppenheim, Mrs Sally

  Sainsbury, Tim

  Temple-Morris, Peter

  Osborn, John

  Scott, Nicholas

  Thomas, Rt Hon P. (Hendon S)

  Page, John (Harrow West)

  Scott-Hopkins, James

  Townsend, Cyril D.

  Page, Rt Hon R. Graham (Crosby)

  Shaw, Giles (Pudsey)

  Trotter, Neville

  Pattie, Geoffrey

  Shaw, Michael (Scarborough)

  Tugendhat, Christopher

  Penhaligon, David

  Shelton, William (Streatham)

  van Straubenzee, W. R.

  Percival, Ian

  Shepherd, Colin

  Vaughan, Dr Gerard

  Peyton, Rt Hon John

  Shersby, Michael

  Viggers, Peter

  Pink, R. Bonner

  Silvester, Fred

  Wainwright, Richard (Colne V)

  Powell, Rt Hon J. Enoch

  Sims, Roger

  Wakeham, John

  Price, David (Eastleigh)

  Sinclair, Sir George

  Walder, David (Clitheroe)

  Prior, Rt Hon James

  Skeet, T. H. H.

  Walker, Rt Hon P. (Worcester)

  Raison, Timothy

  Smith, Dudley (Warwick)

  Wall, Patrick

  Rathbone, Tim

  Speed, Keith

  Walters, Dennis

  Rawlinson, Rt Hon Sir Peter

  Spicer, Jim (W Dorset)

  Warren, Kenneth

  Rees, Peter (Dover & Deal)

  Spicer, Michael (S Worcester)

  Weatherill, Bernard

  Rees-Davies, W. R.

  Sproat, Iain

  Wells, John

  Renton, Rt Hon Sir D. (Hunts)

  Stainton, Keith

  Whitelaw, Rt Hon William

  Renton, Tim (Mid-Sussex)

  Stanbrook, Ivor

  Wiggin, Jerry

  Rhys Williams, Sir Brandon

  Stanley, John

  Winterton, Nicholas

  Ridley, Hon Nicholas

  Steel, David (Roxburgh)

  Wood, Rt Hon Richard

  Ridsdale, Julian

  Steen, Anthony (Wavertree)

  Young, Sir G. (Ealing, Acton)

  Roberts, Michael (Cardiff NW)

  Stewart, Ian (Hitchin)

  Roberts, Wyn (Conway)

  Stokes, John

  TELLERS FOR THE AYES:

  Rodgers, Sir John (Sevenoaks)

  Stradling Thomas, J.

  Mr. Adam Butler and

  Ross, Stephen (Isle of Wight)

  Tapsell, Peter

  Mr. Cecil Parkinson.

  NOES

  Abse, Leo

  Cronin, John

  Golding, John

  Anderson, Donald

  Crosland, Rt Hon Anthony

  Gould, Bryan

  Archer, Peter

  Cryer, Bob

  Graham, Ted

  Armstrong, Ernest

  Cunningham, G. (Islington S)

  Grant, George (Morpeth)

  Ashley, Jack

  Cunningham, Dr J. (Whiteh)

  Grant, John (Islington C)

  Ashton, Joe

  Dalyell, Tam

  Grocott, Bruce

  Atkins, Ronald (Preston N)

  Davidson, Arthur

  Hamilton, James (Bothwell)

  Atkinson, Norman

  Davies, Bryan (Enfield N)

  Hamilton, W. W. (Central Fife)

  Bagier, Gordon A. T.

  Davies, Denzil (Llanelli)

  Hardy, Peter

  Barnett, Guy (Greenwich)

  Davies, Ifor (Gower)

  Harrison, Walter (Wakefield)

  Barnett, Rt Hon Joel (Heywood)

  Davis, Clinton (Hackney C)

  Hattersley, Rt Hon Roy

  Bates, Alf

  Deakins, Eric

  Hatton, Frank

  Bean, R. E.

  Dean, Joseph (Leeds West)

  Hayman, Mrs Helene

  Benn, Rt Hon Anthony Wedgwood

  de Freitas, Rt Hon Sir Geoffrey

  Heffer, Eric S.

  Bennett, Andrew (Stockport N)

  Delargy, Hugh

  Hooley, Frank

  Bidwell, Sydney

  Dell, Rt Hon Edmund

  Horam, John

  Bishop, E. S.

  Dempsey, James

  Howell, Denis (B'ham, Sm H)

  Blenkinsop, Arthur

  Doig, Peter

  Hoyle, Doug (Nelson)

  Boardman, H.

  Dormand, J. D.

  Huckfield, Les

  Booth, Albert

  Douglas-Mann, Bruce

  Hughes, Rt Hon C. (Anglesey)

  Boothroyd, Miss Betty

  Duffy, A. E. P.

  Hughes, Mark (Durham)

  Bottomley, Rt Hon Arthur

  Dunn, James A.

  Hughes, Robert (Aberdeen N)

  Boyden, James (Bish Auck)

  Dunnett, Jack

  Hughes, Roy (Newport)

  Bradley, Tom

  Dunwoody, Mrs Gwyneth

  Hunter, Adam

  Bray, Dr Jeremy

  Eadie, Alex

  Irvine, Rt Hon Sir A. (Edge Hill)

  Broughton, Sir Alfred

  Edelman, Maurice

  Jackson, Colin (Brighouse)

  Brown, Hugh D. (Provan)

  Edge, Geoff

  Jackson, Miss Margaret (Lincoln)

  Brown, Robert C. (Newcastle W)

  Edwards, Robert (Wolv SE)

  Janner, Greville

  Brown, Ronald (Hackney S)

  Ellis, John (Brigg & Scun)

  Jay, Rt Hon Douglas

  Buchan, Norman

  Ellis, Tom (Wrexham)

  Jeger, Mrs Lena

  Buchanan, Richard

  English, Michael

  Jenkins, Hugh (Putney)

  Butler, Mrs Joyce (Wood Green)

  Ennals, David

  Jenkins, Rt Hon Roy (Stechford)

  Callaghan, Jim (Middleton & P)

  Evans, Gwynfor (Carmarthen)

  John, Brynmor

  Campbell, Ian

  Evans, Ioan (Aberdare)

  Johnson, James (Hull West)

  Canavan, Dennis

  Evans, John (Newton)

  Johnson, Walter (Derby S)

  Cant, R. B.

  Ewing, Harry (Stirling)

  Jones, Alec (Rhondda)

  Carmichael, Neil

  Faulds, Andrew

  Jones, Dan (Burnley)

  Carter, Ray

  Fernyhough, Rt Hon E.

  Judd, Frank

  Carter-Jones, Lewis

  Fitch, Alan (Wigan)

  Kaufman, Gerald

  Cartwright, John

  Flannery, Martin

  Kelley, Richard

  Castle, Rt Hon Barbara

  Fletcher, Raymond (Ilkeston)

  Kerr, Russell

  Clemitson, Ivor

  Fletcher, Ted (Darlington)

  Kilroy-Silk, Robert

  Cocks, Michael (Bristol S)

  Foot, Rt Hon Michael

  Lambie, David

  Cohen, Stanley

  Ford, Ben

  Lamborn, Harry

  Coleman, Donald

  Forrester, John

  Leadbitter, Ted

  Colquhoun, Mrs Maureen

  Fowler, Gerald (The Wrekin)

  Lester, Miss Joan (Eton & Slough)

  Concannon, J. D.

  Fraser, John (Lambeth, N'w'd)

  Lever, Rt Hon Harold

  Cook, Robin F. (Edin C)

  Garrett, John (Norwich S)

  Lewis Arthur (Newham N)

  Corbett, Robin

  Garrett, W. E. (Wallsend)

  Lewis, Ron (Carlisle)

  Cox, Thomas (Tooting)

  George, Bruce

  Lipton, Marcus

  Craigen, J. M. (Maryhill)

  Gilbert, Dr John

  Litterick, Tom

  Crawshaw, Richard

  Ginsburg, David

  Lomas, Kenneth

  104

  105

  Loyden, Eddie

  Parker, John

  Swain, Thomas

  Luard, Evan

  Parry, Robert

  Thomas, Jeffrey (Abertillery)

  Lyon, Alexander (York)

  Pearl, Rt Hon Fred

  Thomas, Mike (Newcastle E)

  Lyons, Edward (Bradford W)

  Pendry, Tom

  Thomas, Ron (Bristol NW)

  Mabon, Dr J. Dickson

  Perry, Ernest

  Thorne, Stan (Preston South)

  McElhone, Frank

  Phipps, Dr Colin

  Tierney, Sydney

  MacFarquhar, Roderick

  Prentice, Rt Hon Reg

  Tinn, James

  McGuire, Michael (Ince)

  Prescott, John

  Tomlinson, John

  Mackenzie, Gregor

  Price, C. (Lewisham W)

  Tomney, Frank

  Mackintosh, John P.

  Price, William (Rugby)

  Torney, Tom

  Maclennan, Robert

  Richardson, Miss Jo

  Urwin, T. W.

  McMillan, Tom (Glasgow C)

  Roberts, Albert (Normanton)

  Varley, Rt Hon Eric G.

  McNamara, Kevin

  Roberts, Gwilym (Cannock)

  Wainwright, Edwin (Dearne V)

  Madden, Max

  Robertson, John (Paisley)

  Walden, Brian (B'ham, L'dyw'd)

  Magee, Bryan

  Roderick, Caerwyn

  Walker, Harold (Doncaster)

  Mahon, Simon

  Rodgers, George (Chorley)

  Walker, Terry (Kingswood)

  Marks, Kenneth

  Rodgers, William (Stockton)

  Ward, Michael

  Marquand, David

  Rooker, J. W.

  Watkins, David

  Marshall, Dr Edmund (Goole)

  Rose, Paul B.

  Watkinson, John

  Marshall, Jim (Leicester S)

  Ross, Rt Hon W. (Kilmarnock)

  Weetch, Ken

  Mason, Rt Hon Roy

  Rowlands, Ted

  Weitzman, David

  Meacher, Michael

  Ryman, John

  Wellbeloved, James

  Mellish, Rt Hon Robert

  Sedgemore, Brian

  White, Frank R. (Bury)

  Mikardo, Ian

  Selby, Harry

  White, James (Pollok)

  Millan, Bruce

  Shaw, Arnold (Ilford South)

  Whitehead, Phillip

  Mitchell, R. C. (Soton, Itchen)

  Sheldon, Robert (Ashton-u-Lyne)

  Whitlock, William

  Molloy, William

  Shore, Rt Hon Peter

  Willey, Rt Hon Frederick

  Moonman, Eric

  Short, Rt Hon E. (Newcastle C)

  Williams, Alan (Swansea W)

  Morris, Charles R. (Openshaw)

  Short, Mrs Renée (Wolv NE)

  Williams, Alan Lee (Hornch'ch)

  Morris, Rt Hon J. (Aberavon)

  Silkin, Rt Hon John (Deptford)

  Williams, Rt Hon Shirley (Hertford)

  Mulley, Rt Hon Frederick

  Silkin, Rt Hon S. C. (Dulwich)

  Williams, W. T. (Warrington)

  Murray, Rt Hon Ronald King

  Silverman, Julius

  Wilson, Alexander (Hamilton)

  Newens, Stanley

  Skinner, Dennis

  Wilson, Rt Hon H. (Huyton)

  Noble, Mike

  Small, William

  Wilson, William (Coventry SE)

  Ogden, Eric

  Smith, John (N Lanarkshire)

  Wise, Mrs Audrey

  O'Halloran, Michael

  Snape, Peter

  Woodall, Alec

  O'Malley, Rt Hon Brian

  Spearing, Nigel

  Woof, Robert

  Orbach, Maurice

  Spriggs, Leslie

  Wrigglesworth, Ian

  Ovenden, John

  Stallard, A. W.

  Young, David (Bolton E)

  Owen, Dr David

  Stoddart, David

  Padley, Walter

  Stott, Roger

  TELLERS FOR THE NOES:

  Palmer, Arthur

  Strang, Gavin

  Mr. Joseph Harper and

  Park, George

  Strauss, Rt Hon G. R.

  Mr. Laurie Pavitt.

  Summerskill, Hon Dr Shirley

  Question accordingly negatived.

  RAILWAY INDUSTRY
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pendry]
  7.13 p.m.
  Mr. Timothy Raison: There are by general consent a number of subjects which receive too little attention in this House, and transport is certainly one of them. At present public spending on transport is heading towards the £2,000 million a year mark. The figure in the White Paper on public expenditure for the current year is £1,765 million. That is an enormous sum of money, which at any time would be well worth debating but there are particular reasons why we have decided to have a debate on the railways this evening.
  The fact is that there is growing evidence of a very serious situation indeed on the railway side. What are the ingredients in this situation? First, by any normal standards British Railways are quietly going bankrupt. It is estimated that British Railways will cost the taxpayer about £770 million at least during the next year. Second, there is a serious lack of clear objectives in the railway service, which gives the management of British Railways an ever more difficult job. Third, as we know, pay claims are now being lodged which are clearly beyond the capacity of the industry to meet. It is said that wages alone are reaching the point when they exceed revenue from charges and fares. Fourth, there is, of course, very serious overmanning in the railway system. Fifth, as I am sure some hon. Members will point out, some of the services, the commuter services in particular, face extremely grim conditions. Those conditions, which are bad enough when the services are running so-called normally, are, of course, being repeatedly aggravated by quite unnecessary industrial disputes.
  I do not intend to be polemical in approaching the debate. We do not propose to divide the House at the end of the debate. I acknowledge perfectly well that any Government in power today would have to face up to these very serious problems. Therefore, I shall not make a swingeing attack on the Minister. Essentially, I shall concentrate on asking him some questions about the management of the services for which he is responsible.
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  The first thing one has to say is that under the Railways Act 1974 the Minister was given additional responsibilities. There is no doubt that he has a clear duty to look after the basic principles of our railway system, and it is he who must stop the drift which is taking place at present, either to financial disaster or to allowing the railways to become a burden on public expenditure, which is unacceptable.
  If one looks at the Department of the Environment—I am glad that the Secretary of State is present—one is bound to say that there are other areas, notably housing, where every penny that can be scraped is desperately needed. This in itself is a good reason for trying to stop this ever-increasing subsidisation of the railways.
  The essence of the present situation is that the railways are increasingly becoming a social service rather than a commercial undertaking. I should perhaps add that as a social service they are not actually redistributive, because the Family Expenditure Survey figures show that absolute expenditure on railway fares increases with income. Indeed, it is perhaps fairer to say that the railways bear the mark of an increasing number of industries under Socialism—that they are run not for the benefit of the public but for the benefit of those who work in them.
  The Economist of 1st February pointed out the seriousness of the present situation. It said:
  "The railways have won their battle for a major switch of resources from road to rail: they will get over £500 million from the Government in the next financial year, at 1974 prices. So although they provide only a tenth of Britain's transport, they will get more than half as much public money as is spent on the roads."
  This ignores the very great contribution made to the Exchequer by road traffic.
  I accept, as did my right hon. Friend the Member for Yeovil (Mr. Peyton) in the previous Conservative Government, that there has to be substantial support for the railways. Clearly, they cannot pay their way as a whole. We cannot denude all the rural areas of the lifeline of public transport. We must keep the commuter services going. We must try to stimulate freight traffic on the railways where that makes sense. My right hon. Friend was

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  absolutely right to recognise in November 1973 the need for a sustained investment programme to make these things possible. But the fear is mounting that the situation is getting completely out of hand and that the Railways Act 1974 is providing a bottomless pit of subsidies.
  The first need now is for a coherent policy for transport as a whole. My right hon. Friend the Member for Yeovil, in his November 1973 statement, promised a White Paper which would set this out. Anyone with any memory of Labour Party speeches and Labour Party documents, and so on, would say that there has been a constant refrain on the Government side of the House about the need for integrated transport policy. Over and over again we have heard the cry "When will there be a White Paper?" I believe that the time has now come when we can fling that cry back to the Minister. When will there be a White Paper? When will the Secretary of State come up with some kind of coherent transport policy? At present there is no sign of this happening.
  Why have we not got this? There are probably two reasons. First, I suspect that any integrated Socialist approach would be infinitely costly at a time of something approaching a public expenditure crisis. Second, I am afraid that the railways in particular would not come out well in any objective analysis of comparable forms of transport. I am afraid that the sad truth is that the basis of a move to achieve a major switch back to the railways proves to be based to a great degree on emotion rather than on logic. There are great difficulties facing the railways in providing a competitive servce.
  They may be obvious, but I summarise them briefly. The first is the fact that railways have fixed routes and tend to require road journeys at either end. The second is the fact that with cars at least the passenger is also the driver and that as a result there are far smaller labour costs and problems. The third, surprisingly perhaps, is that the energy situation does not so far seem to have spelt out a real advantage for the railways. The Government's Transport and Road Research Laboratory recently issued a report suggesting that, despite everything, car ownership and use are likely to rise to the end of the century at rates not far different from those anticipated before the energy crisis arrived.
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  I may be wrong. It may be that there are energy advantages for the railways which have not so far been disclosed. But I ask the Minister to set out clearly what the comparative energy costs are between the different forms of transport.
  Fourth, even the environmental factors are mixed. Certainly excessive road traffic in the wrong places is hell. But many of us feel that it is better to face the facts of what is happening and see that we have effective road networks to keep lorries out of town centres and villages, rather than seek to wish away the whole problem.
  I repeat that I believe in a railway system. But it must be set within a reasonably objective overall approach to transport.
  The railways themselves do not wish to have their position based on a sentimental approach. If one asks the management of British Railways, one finds that what they want is to be in a position to manage as a commercial operation.
  That brings me to what is a crucial point. British Railways must be given a clear remit. They must know what we expect of them. That is not the case at the moment.
  Looking back, the error of the 1974 Act was the abandonment of any notion of defining the subsidy element and the switch to open-ended support. I understand the reasons for it. However. I believe that in present circumstances this position is proving untenable. Whether or not the old method of defining the socially needed services in the railways was perfect may be argued. It may be that the Cooper Brothers formula was not right, and so on. It is interesting, incidentally, that the Minister said in his Second Reading speech last year
  "The real trouble about the accounting procedures for individual grant-aided lines was not that they could not be worked out according to the Cooper Brothers formula but that in all public discussions about closure proposals the public were never prepared to accept the very large figures which were always involved".
  What has to be faced now is that under the present system there are signs that Exchequer support for the railways is getting out of hand, and the chief purpose of this debate is to find out what is happening and what, if anything, the Government are prepared to do about it.

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  Recently there have been a number of Press reports indicating that there is great concern among officials, anyway, in the Department of the Environment. There is talk of emergency plans and so on. Parliament is entitled to be told what is going on.
  The 1974 Act provides a variety of forms of support for the railways. I am concerned with three of them today. First, there is the increase in borrowing powers to finance investment. Secondly, there are the compensation or subsidy provisions under Section 3. Thirdly, there are the grants for freight haulage provision.
  As to the investment programme, the last Conservative Government, as I have said, recognised the need for a major investment programme as the only alternative to serious decay or cut-back. We would still like to see that going ahead, though we have to accept that public expenditure considerations must affect its rate.
  I want to ask what is happening on the investment side. Specifically, what changes, if any, have there been since the public expenditure White Paper in January?
  In passing, I might say that in my view the public expenditure White Paper was extremely meagre and oblique in what it said about the railways.
  In the Second Reading debate on 24th June last year the Minister said:
  "For the present year the level of investment will be that set by the last Government, as modified by the then Chancellor last December."—[Official Report. 24th June 1974; Vol. 875, c. 1010–16.]
  What is the position now? There seems to be some argument in the Press as to what the investment position is. May we be told?
  Secondly, we have the problem of the current rate of subsidy. This is the crux of the matter. The position was summed up clearly and effectively by Mr. Colin Jones in the Financial Times of 24th February. He wrote:
  "The most visible sign of strain is the mounting escalation of the railways' deficit. On a broadly comparable basis the total, including grants, rose from just under £80 million in 1971 to nearly £150 million in 1973 and probably to about £250 million to £300 million last year. For the present year the current esti-
  112
  mate is at least £360 million. At this rate, the revenue the railways earn from fares and charges will soon be insufficient—if it is not already—to meet the weekly pay bill; the taxpayer will be paying more in subsidy than in passenger fares; the £1·5 billion that Parliament set aside last year to provide for five years of deficit financing will be exhausted in less than half the time; and, because of the squeeze on public expenditure, a rushed reappraisal of the post-1973 policy towards the railways will become unavoidable."
  If what he says there is true, it exposes a very serious problem. As he says, the sum of money meant to last for five years or so is being expended at a rate which indicates that three years would be an optimistic target. We are entitled to ask what the Minister proposes to do about it.
  Since Mr. Jones wrote his article, there have been reports that the figure of £360 million which he gave for the current rate of subsidy, which was about £340 million in the White Paper, is now soaring towards the £500 million level. I submit that this places the Minister in a position where he must tell us.
  The Minister for Transport (Mr. Frederick Mulley): I can clear up one particular immediately. Although it is not a subsidy, under the 1974 Act there was provision for settling the historic position of the pensions fund, which this year is £97 million. The £340 million, plus the £97 million, plus the £30 million or so which comes from local authorities cause one to talk in round figures of £450 million to £500 million.
  Mr. Raison: I am grateful to the right hon. Gentleman. However, I hope that he will say to what rate he expects the £340 million—the genuine subsidy—to rise if the pay claims that we face come into being.
  Thirdly, we have the freight subsidy. Again, we are entitled to ask what is happening about the grants for freight haulage and about the approach initiated by my right hon. Friend the Member for Yeovil to the 100 big firms to see whether they would be interested in setting up facilities for freight services. This was an initiative which was accepted on both sides of the House, and we should like to hear from the Minister what is the position about this. At the same time, we would like to hear the current position of the Freightliner service. There are

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  signs that it is running into very serious difficulties.
  If the financial position of the railways has become critical, so has the problem of management. I am not critical of the management itself. Mr. Marsh and his colleagues are doing a good job in very difficult circumstances. But they must be allowed to make genuine commercial decisions within the overall strategy. I have a great deal of sympathy with them in their plea for greater freedom over fares and charges. Subsidising fares and charges indefinitely does not help the industry. It does not even help the social contract.
  Mr. Peter Snape: If the hon. Gentleman disagrees with subsidising fares on British Railways or declining to allow the management to raise fares to economic levels, perhaps he will say why the last Conservative Government, with regard to the railways and to every other nationalised industry, prevented their financial management from being adequate for what appeared to many people to be purely electoral purposes.
  Mr. Raison: I will tell the hon. Member. The reason is quite simple. When we were in power, we had an overall strategy for prices and incomes that was a tough strategy and that went a long way towards working. The present Government have a very loose strategy. I am not concerned to argue over the past in the sense that I am not trying to say that everything that happened in the past was perfect and everything that is happening today is imperfect. I am simply trying to say that we are faced with a very serious problem and one of its ingredients is that the people who run the railways, Mr. Marsh and his colleagues, need a greater degree of commercial freedom than they are getting. Whenever Governments try to delay increases of charges, particularly in the context of an incomes policy that allows incomes to soar ahead of prices, they aggravate the difficulties of the railway management.
  The financial crisis ties up with all sorts of other important ingredients—pay, labour relations, overmanning and the grim conditions on some lines. I should like to say a word about these matters, but I shall be brief because I know that
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  a number of hon. Members wish to speak and I do not want to hog the time.
  I come first to pay. Clearly, the current pay negotiations are crucial. It is now accepted that manpower accounts for about 68 per cent, of total railway costs. These negotiations are clearly crucial to the social contract, but I shall not go into that here. They are also crucial to the railways. The Secretary of State was absolutely right when at Grimsby on 21st February he said:
  "Any excessive wage settlements would undermine our efforts"
  to achieve a healthy railway industry. I am sure that that was true.
  I will not go into the negotiations in detail because they are under way and it would not be helpful to do so, but I am glad to note the efforts of the Trades Union Congress to point out to the railway unions the gravity of the situation. I would simply say that this is clearly a moment of tremendous importance to the railways.
  It follows from that that labour relations generally are vital to the solution of the problem. The NUR has on the whole a responsible tradition, and I urge as strongly as possible that in these negotiations it should live up to it. As the Secretary of State points out, it is not only the NUR that has a responsible tradition. The union that the hon. Member for Leicester, East (Mr. Bradley) represents also has such a tradition, one is bound to say.
  However, I cannot necessarily extend that compliment to ASLEF, which I believe the hon. Member for Nuneaton (Mr. Huckfield) represents, because over the past few years there have been a number of occasions when the actions of ASLEF have driven millions of innocent people to sheer despair. If it happens again, ASLEF will be helping to destroy the service that we want to keep going.
  The truth is that public opinion has been driven to intense anger by some of the things that have happened on the railways, especially on the commuter lines, in the past few years. Again, I do not want to go into this in detail, but the railways will have no worthwhile future unless industrial self-discipline improves.
  There was a horrifying list in the Daily Telegraph today of the disputes

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  that have taken place in the London region. On Southern Region there were stoppages in 1973 in February, March, May, June, September, November and December and in 1974 in January, February, June, October and November. The Southern Region has only just seen the end of the signalmen's dispute, which began last October and hit the region almost weekly.
  The Eastern Region—and my hon. Friend the Member for Southend, East (Sir S. McAdden) is here—has been worst hit. In 1973 it had one-day strikes followed by the drivers' and guards' work-to-rule. In 1974 there were the drivers' one-day strike and the overtime ban, which crippled services in January and February. From October onwards the signalmen halted trains in rush-hours, escalating to one-day strikes which ended last month. For the past three weeks services on both the Southern and the Eastern Regions have been cancelled, late or shortened as the railway workshop supervisors staged a work-to-rule and ban on overtime and rest-day working. This is clearly something that cannot go on indefinitely.
  Overmanning is plainly of paramount importance. I do not for a moment underestimate the difficulty, especially at a time of high unemployment, but it has to be faced. In particular, I think that the Railways Board is entitled to ask the Government for real backing in facing it. There has been a good deal about this subject in the Press recently. For example, on 26th March the Daily Mail had an article by the editor of the Railway Gazette that was headlined
  "When 7,000 men are still paid to sit doing nothing and there are 60,000 too many workers."
  In The Guardian of 7th April there was a piece by Dr. Richard Pryke and Mr. John Dodgson, of Liverpool University, who, I suspect, are both well known to Ministers, foreshadowing their forthcoming book on the railways problem, saying:
  "… in spite of reductions in rail employment. BR remains badly overstaffed and the position is likely to be even worse by 1981. It still has about 7,300 former firemen who can be dispensed with, as they have been already by a number of other railways. About 6,000 men are employed as freight guards, many of whom are superfluous and travel along with the
  116
  drivers and 'firemen' in the locomotives. … Where passenger trains have power doors, BR can follow the example of London Transport and dispense with the guard. It should also be possible to greatly reduce the number of drivers by, for instance, speeding up freight trains which only average 22½ miles an hour and by reducing the amount of unproductive time. At present on the London Midland drivers only spend an average of 3¾ hours on the move out of an eight-hour shift."
  I think that British Railways do not accept that everything in the book is accurate, and it may well not be, but it cannot be avoided that the two authors are serious academic contributors, and if the Minister has reason to believe that their statements are wrong he should tell the House tonight.
  Mr. Mulley: I hope that the hon. Gentleman does not expect me to spend all my time reading books, no matter from what source, and correcting the manifold errors likely to be there. I hope that I can follow his earlier advice as to how I should conduct myself. Certainly I take no responsibility for correcting academic errors. I shall have a word to say about discussing industrial relations in newspapers.
  Mr. Raison: It is up to the Minister, of course, but I do not believe that his right hon. Friend the Secretary of State will approve of his anti-literate approach. Statements in the book are serious. I am asking the Minister not to go through the book line by line and clause by clause but to address himself to the crucial problem of overmanning on the railways and to face his responsibilities.
  Mr. Bob Cryer: Some astringent comments have been made about ASLEF. Would the hon. Gentleman accept that ASLEF has accepted many reductions in staffing against its better judgment? Would he confirm that he would oppose any manning reductions that would jeopardise the enviable safety record of British Railways?
  Mr. Raison: I certainly do not think that we should have any manning reductions that would jeopardise the safety record of British Railways. I cannot accept that the record of ASLEF is impeccable. I am not making these comments in a party sense. If I were, we should be having a Division tonight. I am simply saying that by any standards there are grave problems that have to

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  be faced by the Ministers responsible, and it is up to the Minister to tell the House what he proposes to do.
  The Minister must accept that under the 1974 Act he has the ultimate responsibility for the appalling conditions that exist on some of our lines today in East and South-East London and so on. I am sure that some of my hon. Friends will be talking about those conditions later, but I hope that we shall have a serious answer on the problems that I have raised.
  I do not want to be hypocritical. If we are to hold down the subsidy rate, some services are bound to be less than perfect. There is no point in pretending that we can have the best of all possible worlds. But the present policy makes efficient management impossible and overmanning has to be considered. With the money available, the emphasis must be on investment rather than open-ended subsidies.
  Mr. Leslie Spriggs: Is the hon. Member saying that if there were a Conservative Government their policy would be to make 60,000 men redundant?
  Mr. Raison: Of course it will not happen overnight. We must have a Government who will support the Railways Board in attempting to get the matter right. Of course one cannot sack 60,000 men just like that. However, there is a good deal of natural wastage and there have been big reductions over the last two decades. That process must go on, and there is no reason to think that it should not do so.
  Finally, policy must be realistic. It is no good pouring money into aspects of the service which will never attract custom so that there is nothing to spare to provide, for example, an adequate level of service to commuters.
  I hope that we shall have from the Minister a frank statement of how he is approaching this intensely difficult problem.
  7.40 p.m.
  The Minister for Transport (Mr. Frederick Mulley): I know that the House will join me in welcoming the hon. Member for Aylesbury (Mr. Raison) to our transport debates. I think that it is the first time he has taken part in such a debate. I certainly endorse his
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  view that only rarely do we have an opportunity to discuss this very important aspect of our national life. and of course it also has a public expenditure relevance.
  We were all impressed with the searching and responsible way in which the hon. Gentleman began his remarks. However, he got rather carried away by mention of Dr. Pryke. He gave a trailer for a book which I understand will not be available until the autumn. However, I do not propose to await that book before replying to the points to which the hon. Gentleman drew attention.
  The hon. Gentleman raised some serious points, but he cannot have things both ways. He cannot criticise me and the Government for not giving the Railways Board commercial freedom and at the same time say that it is our fault that commuter trains do not run properly or that we have to deal with allegations about overmanning. Clearly there has to be a division of responsibility.
  By the provisions of the 1974 legislation it is quite clear that, although greater powers were sought and although the House is entitled to more information in the new circumstances, it was not sensible for the Minister or the Department to try to run the railways. I receive advice from many quarters, academic or otherwise—and in view of what has been said about my right hon. Friend the Secretary of State being involved in academic matters, I should inform the hon. Gentleman that I had a fellowship in Cambridge and hold degrees from three universities. It can perhaps be said that I take a more objective view than the hon. Gentleman thinks.
  I appreciate that the hon. Member for Aylesbury is new to this area of activity, but I hope he will not take too much notice of what he reads in newspapers, particularly when they mention allegations of overmanning. If there is one industry whose industrial relations are troubled and whose activities are bedevilled by overmanning, it is the newspaper industry. The Daily Mirror dispute in recent days illustrated this only too clearly. This is nothing new in the newspaper industry.
  Fifteen years ago the commercial manager of one newspaper told me that it cost him more to get his newspaper from Fleet Street to the main line station

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  than it cost to get that newspaper from the main line stations in London to Glasgow and other parts of the country. In those days—the situation may have changed by now—some of the newspaper workers were engaged in wrapping string around parcels of newspapers, which was a waste of time anyway because the newspapers were automatically wrapped in brown paper. Therefore, I do not think we should seek advice about overmanning from that quarter.
  Since the 1974 legislation came into force at the beginning of this year, we have entered into full discussions with the Railways Board, although we have made it clear that it is the board's responsibility to run the railways and to deal with the serious points which the hon. Gentleman mentioned.
  The hon. Member mentioned the subject of a White Paper. I am sure my right hon. Friend the Secretary of State for the Environment will wish to issue a White Paper as soon as that is reasonably possible. If the hon. Gentleman will examine the statement made by the right hon. Member for Yeovil (Mr. Peyton) on 28th November 1973, as the then Minister, he will realise that the right hon. Gentleman was in office for over three and a half years and did not produce a White Paper, although the matter had been mentioned on many occasions during his term of office.
  Furthermore the figures given by the then Minister, following a three-year review of the railways in the form of a joint exercise by the board and the Department, were cut within a fortnight. Therefore, although I pay a proper tribute to the work undertaken by the Conservative Government, without which the 1974 Act could not have come into being, the hon. Member for Aylesbury should appreciate that the present Labour Government have had less time than did the Conservative Government to examine all the important issues which have been raised today.
  The basis of the 1974 Act—a measure passed by the House without a dissenting voice—was that the railways needed large and continuing support for the whole passenger network. There is no doubt that public opinion supports the railways. It is equally clear that the running of the railways is a very expensive
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  business. It is highly labour-intensive and nobody can expect to obtain rail services on the cheap. As we have often said, we believe it would be wrong to assume that the workers in the industry should subsidise it. If it is the national view that for economic, social and environmental reasons the railways should be kept going, clearly it is a national responsibility to find the necessary funds.
  We all realise that the extent of subsidy cannot be unlimited. The hon. Member for Aylesbury was right to draw our attention to increasing costs, which in a labour-intensive industry have grown faster than in other sectors. It is likely that in the first year under the legislation the passenger system will require a grant of about £340 million on top of the £30 million from local authorities under the passenger transport executive system. We accept that this involves the Department in exercising adequate control over this expenditure without becoming involved in day-to-day management. We and the board have been working out the budget and a system of monitoring the board's expenditure so that we can have an early warning of difficulties which are likely to upset the budget outturn. It is a form of budgetary control which is familiar to industry; on the other hand, the previous system involved specific grants and, in addition, the previous Government had a non-statutory responsibility in respect of the cash shortfall at the end of the year. These two grants together in 1974 under the old system accounted for nearly £400 million.
  Mr. Raison: Is the right hon. Gentleman giving the House the assurance that the figure of £340 million revenue subsidy is not likely to rise appreciably in the current year?
  Mr. Mulley: No, I can give no such assurance. We are in the process of working out the system. Prolonged industrial disputes are bound to affect our calculations. Does the hon. Gentleman. with his wide contacts in industry, believe that in April any of his business friends would give similar assurances about their budgets and that they could be said to be dead on target at the end of the year? In an uncertain world one has to make provision to deal with uncertainties. However, this is the first year of a new Act, produced as a result of the review conducted by my predecessor. We shall have

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  to see how it progresses. It is clear that the support cannot be unlimited.
  On the question of commercial freedom, the board has increased its fares already by 27½ per cent. in the last year. It currently has an application before the Price Commission—I expect it will shortly be making a statement—for a further average increase of 15 per cent. in passenger fares. It has already increased freight charges to what it thinks the market will bear. As freight is not subsidised in the same way as passengers, there is a probability that freight will be "in the red" this financial year.
  It is not popular to put up fares, but the board has met the needs of a great number of people by the introduction of the old-age pensioner reduced fares and the students' reduced fares during midweek and off-peak. Such provisions will add to the revenue rather than reduce it.
  Another possibility is that the board should seek to reduce costs. I assure the hon. Member for Aylesbury that it is far from easy. There are many hon. Members on the Government benches who have long, first-hand experience of railway operation. It is not easy to see how large savings could be made without drastic surgery of the railways system. Measures such as chopping off the odd line here or there are not likely to produce the sum which the hon. Gentleman clearly has in mind.
  We all regret the industrial disputes that have led to great difficulties for consumers and railway users generally. All railwaymen, not least the leaders of the unions, realise that as well as causing hardship disputes tend to lose business for the railways and, in the long run, affect the livelihoods of their members. The hon. Gentleman was fair and made the point that there was a longer list of disputes in 1973 than in 1974. He will know which Government were responsible in which year. However, no Government can do a lot to deal with wild-cat or unofficial strikes.
  Industrial relations were poisoned during the term of the Conservative administration because the railway unions were chosen as the guinea pig or the first victim under the Industrial Relations Act. Relations are much better now, but they were a problem.
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  The restructuring which has recently taken place, and which rightly was given special priority, led to problems about differentials which are serious matters on the railways. These, together with the size of the settlement, are relevant considerations.
  Mr. Robert Adley rose—
  Mr. Mulley: I must get on. I should have preferred not to make a speech, so that there would have been more time for other hon. Members to speak. However, the hon. Member for Aylesbury reasonably said that he thought it would be right for there to be a speech at this stage setting out the Government views. I should have preferred that there was only one Government speech. Much as I normally like to expose myself to cross-examination, I must consider hon. Members on both sides who wish to speak. I shall soon come to a conclusion.
  I turn to the pay issues. Like the hon. Member for Aylesbury, I do not want to say anything that will make them more difficult. There has already been one meeting and the next is due on Friday. The Government fully support the board in seeking a settlement within the guidelines. The Government fully support the board in pointing out, as it has in very clear terms, that the amount of Government subsidy cannot be regarded as unlimited, and that if the claim rises to an unreasonable level it will present problems concerning the grant on the one hand and possibly future employment for railway workers on the other hand.
  I accept that all the railway unions are being responsible. Over the past 20 or 30 years the railways have had a good record both for industrial relations and for reduction in manpower. In one of the newspapers today there were odd references to 7,000 men. One should realise that the railways have halved their manpower in less than a decade. They have a real sense of responsibility and of dedication. I hope that there will be a satisfactory outcome to the current negotiations.
  The House accepts that the problems of the railways are very long-standing. I should like to hope that by the autumn I could put those problems right, but I

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  cannot promise the House that we shall find the easy and immediate solutions that have been suggested. It is for the railway management and the Government, acting together within the new powers of the Railways Act, to settle the policies and strategies. A debate of the kind we are now having can only do good, because people outside will then realise that maintaining the railways is expensive.
  What must be understood by so-called subsidy—the grant—is the difference between the railways' costs and their revenues. If it is not forthcoming, there will be no wages at the end of each week to pay the people who work. As I have said many times, especially to railway unions, there are occasions when they decide not to work when the pay is there. However, it is certain that they will not work if they are not paid.
  When we talk about cutting subsidies, we have to face the fact that the money has to be found to pay the wages bill week after week because the revenues, even with the increased charges, are not likely to come anywhere near the outgoings in the foreseeable future. Therefore, we must accept that if we want to maintain a railway system of the present character and present level of services, it will be extremely expensive.
  Mr. Deputy Speaker (Mr. Oscar Murton): Mr. Speaker has asked me to point out that in the last debate nine hon. Members who spoke from the backbenches took a total of 94 minutes to make their contributions, which is an average of approximately 10 minutes each. It would be helpful to all hon. Members if the same precedent were continued during the present debate.
  7.59 p.m.
  Mr. Paul Channon: I shall certainly do my best to keep within your 10-minute ruling, Mr. Deputy Speaker.
  I agree with a certain amount of what the Minister has said; namely that the problems of the railways are long-standing, complicated and will not be resolved quickly. However, those of us who represent, as many hon. Members do, large numbers of constituents whose livelihoods depend upon their being able to travel
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  with reasonable certainty and adequate comfort by rail will not be unduly comforted by what he has said.
  In view of the time, I shall concentrate on only one point. I represent a constituency with thousands of commuters who come into London every day. I cannot recall a time when feelings have run higher than they do now. I hope that the Government will bear this factor in mind.
  The Minister and my hon. Friend the Member for Aylesbury (Mr. Raison) have referred to the appalling conditions that have been experienced on British Rail over the past few years, particularly on certain commuter lines. My hon. Friend was right to point out, and the Minister was right to take up, the fact that no one pretends that these are simple problems that can be resolved by an incoming Government with a new magic potion. But the facts remain, and are relevant when considering the future of British Rail and what will happen to it in the context of the present enormous wage demand.
  Not only the railwaymen and the taxpayers are concerned about the result of the pay demand. Those who are perhaps most concerned are the poor people who have to travel every day in conditions of great discomfort, and who will have to pay the increased fares to compensate for the pay increases. In the past two or three years rail fares have risen by an average of about 60 per cent. We have heard from the Minister that there is a further increase in the pipeline, and there may well have to be more increases if there are substantial pay increases.
  I agree that one cannot indefinitely subsidise rail transport, that one cannot keep costs down artificially for an indefinite period. But what one must do, if one is to insist that the rail traveller pays the largest share, is to acknowledge that he is at least entitled to know that his services will arrive. In the past 18 months or two years we have seen on British Rail the ASLEF dispute, which caused appalling hardship to hundreds of thousands of people, if not millions; the more recent dispute by the signalmen; and, in the past week or two, the dispute which has caused the shortening of trains. The total result of all that is that hundreds of thousands of people have had to travel nearly every day in conditions of great hardship.

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  My hon. Friend the Member for Southend, East (Sir S. McAdden) does the journey and knows the lines to which I am referring perhaps better than anyone. Eastern Region has had some of the worst examples of the conditions I have described. Conditions there have probably been worse than anywhere else. More disruption and more inconvenience have been caused.
  These are difficult problems, but I hope that the Government will do their utmost to see what can be done to bring back more industrial peace on British Rail. The poor commuter can do nothing about the situation. His representative in the House of Commons can do precious little. At the end of the day, it is a problem for the management of British Rail, or perhaps in the last resort for the Government. It is intolerable that the people who travel on British Rail have to face the possibility of disputes, which, let us pray, will be avoided as a result of the latest wage negotiation, and have already had to face two serious disputes this year and the ASLEF dispute not long ago.
  My constituents travel to London by British Rail in their thousands. When the service works, they travel reasonably speedily. When it does not work, they spend many hours a day in uncomfortable conditions attempting to get to their work, with the knowledge that after their day's work they have to return in similar conditions.
  This morning I received by chance a letter from a responsible organisation in my constituency, a letter typical of many that I have received in the past two weeks. It said:
  "In addition to the normal situation of dirty, unheated, crowded trains, the commuter has for months now had to endure even worse conditions brought about by the industrial action of first the signalmen and then the workshop supervisors.
  We are told that we should not use our cars. Indeed, the taxes being levied already on petrol and those threatened for people taking their cars into London make it prohibitive to do so. There are only the trains. And they are so bad that, if animals had to travel in such conditions, there would be cries of public outrage."
  [Interruption.] The organisation is not saying that that is normal. It is speaking of the conditions of the past few months in the disputes. If hon. Mem-
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  bers challenge me, perhaps they would care to accompany my hon. Friend and me.
  Mr. Spriggs: Will the hon. Gentleman give way?
  Mr. Channon: I shall finish my quotation from the letter, and then give way to the hon. Gentleman. The letter continues:
  "How can men and women working in London be expected to do an efficient day's work when they have suffered in the morning and are faced with the prospect of another tortuous journey in the evening?"
  Mr. Spriggs: I am grateful to the hon. Gentleman for giving way, because the reference to dirty trains is not accurate. When the trains leave, they are spotless inside and out. If there is any filth in the trains, the public are responsible for it, not the railwaymen or the Railways Board.
  Mr. Channon: I do not wish to make a point about dirty trains. I was quoting from a letter in which that was a small point in relation to the more important matter. The organisation concerned is complaining not about the dirt on the trains but about the shortness of the trains and the intolerable conditions in which people have to travel, almost as if they were cattle, because industrial disputes have led to the number of coaches being reduced. [Interruption.] Hon. Members should not interrupt unless they know the conditions on the line. That is the situation which has occurred in the past few months. If I am interrupted, I shall have to give chapter and verse, but I am trying to be brief.
  What I am saying is the truth. Conditions are very difficult for tens of thousands of people, not only in the part of the country that I represent but in many other parts around London and in other areas where people commute into others of our cities. The problems that I am describing are serious. I hope that the Government will take them seriously, and do what they can to help.
  The solution must lie in better industrial relations on British Rail. When those who are only travellers on British Rail and who are not concerned in the industry look at its organisation and the structure of its trade unions they see complexities of an almost Byzantine

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  nature. The proliferation of disputes seems more rather than less likely. As an outsider, one wonders whether that is part of the problem.
  Whatever the cause of the problem, I do not believe that if the present conditions continue for much longer the British public will be prepared to tolerate them. I hope that, whatever may be the outcome in the next few months, and whatever happens in all the other important matters affecting British Rail, everyone concerned will be conscious above all that the people who matter most are those who travel regularly on British Rail, who have many other financial and other difficulties, and who have been terrified by increased fares in the past few years. They will be terrified still more by the prospect of more fare increases, unless they have the certainty that they will be able to travel on the scheduled services without frequent industrial disputes which make their lives even more difficult than they otherwise would be.
  8.8 p.m.
  Mr. Leslie Huckfield: I have recently been the chairman of an independent committee financed by the magazine Socialist Commentary. The committee, which has recently submitted to my right hon. Friend the Secretary of State for the Environment a report on transport policy, was initiated by him about two years ago. I have been the chairman of this committee of academics, trade unionists and transport specialists for the past year.
  The chief recommendation of my committee is that there should be a national co-ordinating body along the lines of a national transport authority, which should have the overall duty of co-ordinating and integrating basic investment and pricing policy decisions. That is why I am surprised that the hon. Member for Aylesbury (Mr. Raison) has again chosen to talk about the railways in isolation from the overall transport system. I wonder how much longer we shall go on talking in the House about just railways and not about the other parts of the transport system.
  I recognise that the hon. Gentleman has a difficulty, because the Tory Party when in Government pretends to be pro-railway, but when in Opposition it pretends
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  to be pro-road. I can understand the hon. Gentleman's difficulties in trying to match up the various obligations which the Conservative Party builds up for itself whilst in Government and in Opposition. As long as we consider separately the £500 million which may have to be paid to the railways this year and the £1,500 million net gathered in road taxation in various forms, we shall never have a transport policy.
  The hon. Gentleman stands further indicted by the fact that most of the mounting losses which he decried occurred within a period of Conservative administration. He seems conveniently to ignore that after the passage of the 1968 Act and the reorganisation of railway finances, the railways made a profit in 1969 and 1970. After grants and subsidies to unremunerative social services totalling £94 million, which were specifically provided for in the 1968 Act, even in 1973 the loss was only £52 million. Those losses which the hon. Gentleman now decries built up when the Conservative Government deliberately told the Price Commission, and the Price Commission deliberately told the Railways Board, to keep fares down. If the hon. Gentleman decries the mounting railway losses, he should look at the actions of his own Conservative Government, actions taken usually for the most political of motives.
  We have a problem with mounting railway losses and with the financing of the railway investment programme, but these difficulties cannot all be laid at the door of the Price Commission. Some of them have to be blamed on railway management. For example, I cannot understand how it is possible for railway management to say that no sized railway network can ever be made to pay, at the same time carefully omitting to publish the route strategy decisions on which that conclusion is based. We have been told countless times that no sized railway network can ever be made to pay but we have never seen, because they have never been published, alternative route strategies upon which that gigantic, momentous conclusion is based.
  We have been presented with the 1973 interim rail strategy plan. How can the board in submitting an investment programme to the Department of the

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  Environment calculate that the railways will be carrying less freight in 1981 than they did in 1971? Why is it that about 40 per cent. of that original investment submission would not have returned 10 per cent. on capital employed? The forecasts and prophecies made by railway management do not give railway workers much optimism or much encouragement.
  Mr. Gordon A. T. Bagier: Does not my hon. Friend agree that the forecast made by British Railways was based on estimated coal carrying before the oil crisis and before the heavy increase in the amount of coal carried?
  Mr. Huckfield: That is precisely the point I want to make. Although changes have been made in the forecasts for the carriage of coal, steel and basic commodities, the railway freight strategy has still not been published. We still do not know the plans which have been made. What confidence can railway workers have in railway management in the light of the Field Reorganisation Scheme fiasco? In 1968 and 1969 and every year since, railway unions were told consistently and continuously that devolution of power along the lines of the Field Reorganisation Scheme was absolutely essential. It was so essential that the board, after spending £6 million on new buildings and £1 million on new telecommunications and computer systems and telling the unions every year that this reorganisation was intrinsic to survival suddenly, without explanation and without consultation, cancelled it all. What optimism, what confidence and what encouragement can railway workers have with railway management like that?
  One is taken back to the great marshalling yard decision. Whatever became of that? One is taken back to the great decision not to equip railway wagons with air brakes but to stick to vacuum brakes, and now, much later, the brakes have all had to be changed, much more expensively, to air brakes. Look at the great Channel Tunnel fiasco. One minute British Rail management gave a figure of £120 million as the cost of the railway link to the Channel Tunnel, and six months later we were told that the cost would be £500 million. What confidence can railway workers have in a management like that?
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  The hon. Member for Aylesbury has gone away, presumably to take up his interest in roads. He referred to overmanning on the railways. He should remember that in 1948 the railways had a staff of 600,000, by 1963 that had been reduced to 440,000 and it is now down to 190,000, excluding the workshops figure. It is estimated to be 190,000 overall by 1981. That is the railway management's plan.
  I should like to know where is this overmanning? I keep hearing about the number of trains which British Rail cannot run because they do not have the footplate staff. I keep hearing about the number of tickets that cannot be collected at night because there is no staff. I keep hearing about the number of tickets that cannot be sold because there is no staff. Where is this overmanning? Those are the facts. On the other hand, as the hon. Gentleman is new to his duties, I suspect that this is the sort of thing we can expect from yet another academic or armchair railwayman.
  The hon. Gentleman does not know his facts. He should know that in the past 10 years the rate of natural wastage on the railways has been about 15 per cent. per annum. He should know that even to maintain its present complement of staff the railways would have to recruit about 30,000 new men every year.
  I speak as the parliamentary spokesman for the Associated Society of Locomotive Engineers and Firemen. The hon. Members for Aylesbury indulges in the time-worn sport of ASLEF-bashing, conveniently forgetting that between 1955 and 1972 ASLEF was involved in no official dispute, and forgetting that from 1968 the footplatemen had been promised restructuring of their pay but the Railways Board would not talk. I do not want to start any inter-union rivalry, but it is interesting to note that when the workshop supervisors took action a couple of weeks ago, even while that action was taking place the Railways Board talked to the men. If the Railways Board had been as anxious to talk to the footplatemen, some of their working to rule might have been avoided. That was not a strike; it was a working to rule—another example of the fallacy of the overmanning which has been referred to.

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  Why was it that in 1972 and 1973 when the working to rule was taking place British Railways Board could not talk to ASLEF? What is sauce for the goose is sauce for the gander. If we talk to one union we should be able to talk to another. However when we have certain senior sections of railway management saying almost publicly that they hoped that the ASLEF work-to-rule would smash ASLEF, is it to be believed that those senior sections of British Rail management would like to see industrial peace on the railway?
  I understand that railway negotiations are taking place at present and I would not like to prejudice them, but how can we come to a conclusion, before the negotiations have been completed, that the railway unions will obtain an increase of 30 per cent. which will smash the social contract? As far as I know the talks are still going on. As far as I know a conclusion has not been arrived at? However, almost every newspaper and many Conservative Members are talking as though the railwaymen had already obtained a 30 per cent. increase. I say that we should let the talks continue. Let us see what they produce. The railwaymen have a responsible negotiating tradition. Let us see what the negotiations produce rather than what the Press produces.
  My right hon. Friend is one of the Ministers who have managed to get through the eye of the public expenditure needle. He managed to get the Railways Act on the statute book last year. Much credit is due to him for that achievement. I only hope that he manages to get the railway investment submission through as well. I believe that as a Government we should have a much more coherent railway policy. The Conservative Front Bench is right to say that the railways still do not know what is expected of them. That can still be said despite the fact that on the passenger side Government subsidies amount to more than fare revenue. Despite that, the board still does not know what its task is for the future.
  I say in blunt terms to my right hon. Friend that I do not think that we have a transport policy. It is about time we had one. I am not suggesting that the report which I have submitted to the
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  Secretary of State and to my right hon. Friend should in all respects be automatically adopted. I say that the suggestion that has been put forward for a national transport authority to try to co-ordinate all forms of transport investment and pricing policy is one which took a long time to arrive at and one which is worthy of serious consideration.
  When we consider the London-Glasgow situation we see that we have a British Airways shuttle service, the National Bus Company motorway express service and the British Rail Electric Scots service. They are all competing with one another. That kind of competition is not desirable, particularly in terms of energy saving and public expenditure restraint.
  My committee has recommended that we should have a national transport authority which should review annually the economic, the social and the environmental costs of each mode of transport. Given that policy review, it would adjust the costs, the charges, the taxes and the levies on each mode of transport accordingly. We should also have a policy for fares and rates for freight which reflect the costs which they impose. They should reflect the costs that they impose not only upon scarce resources but upon the whole community. For far too long transport pricing and transport policy have been based upon private costs. It is about time that we had a transport policy which counted social costs in terms not only of the community as a whole but of railway workers.
  8.24 p.m.
  Mr. Stephen Ross: I am grateful to be called now, Mr. Deputy Speaker, so that I may follow the hon. Member for Nuneaton (Mr. Huckfield). I have read a great part of his report and I have brought a copy into the Chamber. It is an excellent report on transport which should be read by everyone who is interested in the subject, irrespective of political affiliations. I congratulate the hon. Gentleman and his team on the work they have done. I hope very much that the Government will base part of their White Paper on some of the wider aspects of what is contained in the report.
  The Liberal Party, no doubt along with other political parties, believes that we should have an integrated transport

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  policy. It is that for which we should be aiming, but I am not qualified to say whether it is necessary to set up a national transport authority. I hope that we shall consider integrating our transport policy in regional terms. I hope we shall have more regional government. It seems that Scotland and Wales will be having their own Parliaments, with regional assemblies in England. I believe that we should integrate our transport policy in a way which will not mean setting up a huge bureaucratic body with London offices.
  I find little to quarrel with in the section of the report that deals with the railways. I think that it is a fair commentary on the present situation.
  Mr. Leslie Huckfield: I am grateful to the hon. Gentleman for his praise, but I hope he will not praise the report too much.
  Mr. Ross: I shall try to avoid doing so. I support the call for greater worker involvement and participation in management. That is to be applauded. I hope that that involvement and participation will be introduced without delay and in a meaningful form in spite of the turn-around to which reference has been made.
  The loyalty of the staff of British Rail has been stretched by some stupid decisions at top level. I suspect that management has been pretty abysmal. It seems to be too remote and cumbersome. That is something from which we are suffering generally at the moment. When we consider our national bodies, it seems that we have far too many administrators. It is time we did something about that.
  My hon. Friends and I wish passionately to see British Rail succeed. It is only common sense that they should be able to do so. I congratulate British Rail on the Inter-City services from which I benefit. To travel to Southampton non-stop from London in just over an hour is a very good service. I make use of it two or three times a week. I also congratulate them on some of their fare structures, especially those for old-age pensioners and those that apply at cut rates for midweek travel. I wish that they applied in my constituency. When my constituents go to Ryde Esplanade, they are told that such services do not apply to offshore islands such as the
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  Isle of Wight. No doubt I can do something about that.
  It is a tragedy that we should have the present situation of disputes and unrest on the railways. I have mixed among railwaymen for many years. I consider that they are sensible and responsible people. What has gone wrong? Why is it that signalmen—they are probably the most responsible of all people on the railways—should have taken the action which has been so vividly described to us? I suspect that that action has resulted in part because of some feeling of unrest with the actions of management. It seems that some railwaymen do not see a future in their jobs. They want to know what the future holds for them.
  One or two anomalies have been put before me recently. For instance, on arriving at Portsmouth Harbour passengers are taken on to the boats by means of a hydraulic lift. The man who operates the lift is paid £5 a week more than the man who does the same job at Ryde Esplanade. He operates the same machine but because he is a member of the National Union of Railwaymen he is paid £5 a week less. It is understandable that there is ill feeling when such anomalies exist. It seems that I can do little for the man who is employed on the hydraulic lift at Ryde.
  I hope very much that the leaders of the various unions will moderate their claims if what we are told is true. I hope that a settlement will be achieved that is within the social contract and that both sides will be able to work together. It is desperately important for the future of British Rail that both sides should do so.
  Whatever economies may have to be made, I hope that we will press on with electrification. This seems to be sensible. We should consider cutting back on the advanced passenger train with its attendant high costs. I am not quite sure why anyone wants to go at 150 miles an hour. When we were examining the Channel Tunnel and the connecting link, there were great problems about the noise levels. Some hon. Members may have seen the television film which dealt with the Japanese experience of some of their fast trains.
  The long-term aim should be to have rail transport, passenger and freight, as

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  the normal mode for hauls of 400 miles or more. As members of the EEC, and I trust we shall remain so, we should have an integrated European policy, ultimately with a rail-only Channel Tunnel. That is why I support those who say that we should not abandon the workings that have taken place on the tunnel so far.
  I am not quite sure what the Government's policy is about further closures. I hope that there will not be any, although I know that some are pending. Whatever the Minister does, I trust he will ensure that track and buildings are maintained rather than abandoned. Why not let some of the private operators who want to operate these lines come in and do so? They have proved pretty successful up to now. There has been the example at Ilfracombe. The track is there and people have tried to purchase it. Buildings are being ruined. The sort of obstacles they are facing should be removed so that people can get on with the job.
  I was chairman of a group which tried to reopen some of the lines on the Isle of Wight. I know all the complications that can arise, as they did in our negotiations with Southern Region. In the end we never got off the ground. This is quite wrong. Now we have the situation where we have an abortion of a line which finishes at Shanklin operating with 1927 stock, Piccadilly Line railway trains, pulled out of the Science Museum.
  British Railways should be made to tidy up some of the buildings and railways they have abandoned. They are a scar on the countryside. Why should they be allowed to leave these buildings in their present condition? Why should they not make better use of existing assets, particularly stations? On the Continent they are places of enjoyment where people go to spend an evening. Why cannot we have the same thing here? Why must it be that Nottingham station on a Sunday afternoon is a place to be avoided at all costs? Why must Portsmouth Harbour at ten o'clock at night be such a ghastly place? Why cannot British Rail make some use of their assets? If they cannot do it, they should let someone else do so.
  I make a plea to the Minister about the future of Seaspeed. This comes under the ægis of British Rail. The right hon.
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  Gentleman will have received a letter recently from seven unions working in British Hovercraft in my constituency. This is a matter of great concern to us. Since the Channel Tunnel has been postponed or abandoned, the chance is now there to stretch the two SRN4 hovercraft run by British Rail as well, I hope, as those run by Hoverlloyd. I gather that Hoverlloyd makes substantial profit. British Railways, perhaps because of overadministration—I have had some correspondence recently with the Chairman of British Rail about this—make a substantial loss.
  The right hon. Gentleman has final sanction, and I hope that he will allow me to bring a deputation to see him. We were the first country in the world with this development. It has been allowed to slip back. The United States is building 2,000-ton hovercrafts, and all that we are supplying are the skirts. Now the French, of all people, are taking over where we left off It is important that certain facts should be made known to the right hon. Gentleman. They can be provided by my deputation.
  Mr. Mulley: I am always ready to meet hon. Members and deputations. However, the hon. Member must understand the great difficulties which this causes for me with the board. The board is charged with day-to-day management. Often it is not possible to provide the board with all that it might like to have. If I start telling the board that it should do this or that, I shall be getting into a situation in which, among my other occupations, I shall be running the railways. I would not mind that, but I should not like to look after my constituency and be a Minister at the same time.
  Mr. Ross: I have always felt that I could run the railways—and I do not have degrees, only a few O-levels. I appreciate that this is a decision for British Rail, but there are facts which I should like the Minister to know. The deputation would understand the situation about British Rail.
  I echo the plea for a consensus approach to the railways. They should not be allowed to become a political football. There must be long-term plans for them on which all sides can agree. I hope that we shall very soon have the White Paper and that we can reach an

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  agreed basis. As the hon. Member for Nuneaton has said, the basis is in the article to which he referred.
  8.34 p.m.
  Mr. Peter Snape: As a member of the National Union of Railwaymen I welcome the opportunity to take part in this debate. Like the hon. Member for Aylesbury (Mr. Raison), I feel that we discuss transport affairs far too infrequently, and when we do we usually talk about the money which public transport loses. We do not seem to talk about railways at all.
  I come first to the question of overmanning. The hon. Member for Aylesbury referred to the report published in the Daily Mail on 26th March which stated that there were 60,000 workers too many in British Rail. The report was written by Mr. Richard Hope, who is regarded as an authoritative source. He is the editor of the Railway Gazette.
  I do not intend to indulge in any academic-bashing this evening, although as an ex-railwayman I have no objection to any enthusiastic amateur making a contribution to the debate on the railways. I would not object even to the hon. Member for the Isle of Wight (Mr. Ross) running the railway. Most other people have tried. Why not him? It is always a matter of consternation to railwaymen that everyone, from country people to the man who buys a cheap return to town every day, feels that he knows far more about the railway system and can run it far more efficiently than those who are paid to do so.
  I shall give some statistics concerning the staffing of British Rail and overmanning. If the railway industry suffered from overmanning, we would not find men in the signals grade working an average of 12·1 hours overtime per week. That is the average figure for that grade. My hon. Friend the Member for Nuneaton (Mr. Huckfield) has ably pointed out some of the problems in running British Rail caused by the shortage of footplate men. If the footplate grades are overmanned, it is surprising that it should be necessary for footplate men to work an average of 4·2 hours overtime per week to maintain the present services. Many of those services are inadequate. The railway staff would be the first to say that they should be
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  strengthened, that there should be additional services and that more freight should be carried.
  At the beginning of the Beeching era it was said that the only way to make the railways pay was to sack 50 per cent. of the staff. The sackings have taken place. In addition, most of the facilities have been closed. Yet after 15 years we are further away from making the railways pay than we were when we embarked on the process. The railway unions—which are mostly ignored—pointed out what would be the result of the wholesale closures which took place in the Beeching era. The unions were right. The Tory Government when in office were inept at managing the finances of the nationalised industries, yet they told us which railways in Western Europe paid their way. Frequently they say that British Rail should be more like the French, the German or even the Japanese railways, yet they cannot produce one example of a foreign railway which pays for itself in purely financial terms. The railway industry can make a great contribution in social terms, although that principle has no place in Tory Party philosophy.
  Mr. Mulley: My hon. Friend has made an important point. I neglected to make the point that the subsidies enjoyed by the French and Italian railways are roughly twice those which we expect to give to British Rail, while the German railways enjoy a subsidy nearly three times as great. It is difficult to make comparisons because of the writing off of interest. However, when I meet my opposite numbers at various European bodies I hear that they have the same financial problems.
  Mr. Snape: I am grateful to my right hon. Friend for that helpful intervention. I trust that he will remember the generosity experienced by his continental colleagues next time the Chairman of British Rail calls on him.
  The problems connected with freightliners have been mentioned. Many people have been affected by them in the past few months. I am not alone in feeling that the right means of ensuring profitability in the railway industry's affairs would be to place them under the umbrella of British Rail rather than leave

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  them with the National Freight Corporation, which is an error perpetrated by the Transport Act 1968, a point which I hope my right hon. Friend will remember in the future.
  At present the railway unions are embarking on their annual round of pay negotiations and once again Conservative Members give the appearance of knowing far more about Labour Party policy than some members of the Government. We have heard a great deal about the importance of the railway unions' pay claim to the social contract. Hon. Members opposite may be interested to hear some evidence offered recently by the General Secretary of the National Union of Railwaymen in pursuit of the current pay claim.
  Among the points raised under the social contract by Mr. Sydney Weighell, General Secretary of the National Union of Railwaymen, were, first, the need to maintain living standards. I do not think that even hon. Members opposite would object to that. The second point is the need to improve the position of the lower grade workers. Hon. Members opposite might have something to say about that after all, they quoted a figure of 30 per cent. They seem to think that the attainment of a basic rate of pay of £35 a week would push the country over the precipice of bankruptcy. The next point is progress towards equal pay for women. I do not know whether Conservative Members agree with that principle of the social contract but it is in the contract anyway.
  Next, there is the need to improve sick pay and holiday entitlement. Not even the best friend of British Rail would say that the sick pay scheme at the moment is over-generous to the great majority of conciliation staff employees. The next point mentioned by Mr. Weighell was the need to improve productivity and efficiency. Railwaymen themselves are interested and anxious to improve both, but it is a little difficult to do so when they have to turn traffic away for one reason or another.
  My hon. Friend the Member for Nuneaton said some harsh things about the management of British Rail, and many railwaymen will agree with them. It is demoralising for railwaymen to have to say to different companies "We must
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  turn your traffic away because we do not have the staff, the locomotives or the rolling stock, and in many cases these days we do not even have the line to carry your goods to their destination." Obviously, in such conditions the railwaymen justifiably feel extremely demoralised about the future of the industry.
  I should like to say something in answer to the hon. Member for Southend, West (Mr. Channon) who, like one or two other hon. Members opposite, assured himself of a nice story in a local newspaper and then left the Chamber. He read a letter from one of his irate constituents who used the old familiar phrases about dirty coaches and people travelling like cattle. Probably the only cliché he failed to use was the reference to sandwiches tasting like blotting paper, having spent most of their lives under a glass jar.
  The hon. Gentleman, like many other hon. Members opposite, wants it both ways. He wants the railways to pay, yet he wants greater investment in rolling stock on the Southend line. Does he or, indeed, does the hon. Member for Southend, East (Sir S. McAdden) think that the Southend line is the only overcrowded line in the country? Does he believe that this city is the only city in the country where commuters are forced to travel in discomfort?
  Sir Stephen McAdden: Some suffer more than others.
  Mr. Snape: If the hon. Gentleman wishes to intervene, he is free to do so. Many commuter lines have the same problem. Are hon. Members opposite asking British Rail to invest a considerable amount of public money in rolling stock which will spend 70 per cent. of its working life waiting in a siding for the morning and evening traffic peaks? It is not the responsibility of British Rail that so many firms operate between the hours of 9 a.m. and 5 p.m.
  It is an unfortunate fact of life that rolling stock has to be made available to transport workers both to and from work, but it is not used for the rest of the day. The days when British Rail could afford to have millions of pounds in capital investment tied up in sidings from morning till night are gone. I am sure that the hon. Member for Southend, East

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  would agree with that policy, but he cannot have it both ways.
  Finally, I turn to the question of staffing. It is a fact that in the peak hours all regions of British Rail, but particularly the Southern and Eastern Regions in the London area, cannot run regular booked-service passenger trains. We are back to the problem raised by the hon. Member for Aylesbury of productivity. We have locomotive and footplate men and others tied up all day doing very little other than drive peak-hour trains. It is not the fault of British Rail.
  Sir S. McAdden indicated dissent.
  Mr. Snape: The hon. Gentleman may shake his head, but these are facts. They might be unpalatable in Southend, but they are facts. We cannot expect railwaymen to drive trains when there are no trains for them to drive. We cannot expect British Rail to renew rolling stock and have it standing idle in sidings. These are facts of life. If the hon. Gentleman or his hon. Friend the Member for Southend, West wishes to do anything for his constituents other than provide them with a good story in tomorrow's newspaper, he ought to be pressing British Rail to make greater investment in its commuter stock, which, I concede, has been sadly neglected for a long time.
  British railwaymen are of the opinion that, through their own poor working conditions and relatively low rates of pay, for too many years they have been expected to subsidise the railway traveller. There is a different mood abroad these days. At the risk of being labelled a Marxist, a Trotskyite or any one of those other labels which Conservative Members like to hang around the neck of anyone who gives them the facts about industrial relations, I suggest that if railwaymen are expected to carry on with their present low rates of pay my right hon. Friend can start shutting down the railways next Monday.
  Railwaymen are no longer prepared to work 12 or more hours a day, seven days a week, to subsidise either the commuter or the inter-city traveller. Our railwaymen are entitled to demand a wage comparable with that of other industries. They do not seek comparability, for example, with the mineworkers, despite propaganda to the contrary, but they seek comparability, rightly, with the surface
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  workers, many of whom work alongside railwaymen in collieries. If we are saying that a British Rail shunter must accept, as he now does since the miners' pay claim, £8 a week less than a National Coal Board shunter working next to him, we are providing a recipe for even more industrial trouble in future.
  The social contract is about many things, particularly justice, and Britain's railwaymen no longer want the burden of subsidising British Rail's debt through poor wages.
  8.49 p.m.
  Mr. Roger Moate: Some hon. Members have made fairly astringent criticisms of British Rail's management. I do not sympathise with the management of British Rail in many of the decisions that it has taken. However, in its defence, considering successive Acts of Parliament, White Papers and changes in investment policy that have occurred during the last 10 to 15 years, we should have a great deal of sympathy with the management of British Rail in the difficulties that it has encountered. I criticise many of the policies adopted by British Railways, but I acknowledge that it is to a large extent a shuttlecock of economic policies: it is a victim rather than a culprit. I suspect that many of British Railways' problems arise not because of management but despite the efforts of management.
  I do not intend to deal with the question of overmanning at any length. The hon. Member for West Bromwich, East (Mr. Snape) and his colleagues know much more about this subject than I do. However, I cannot help making comparisons on figures which are available. Statistics which I have studied bear out the assertion that the railways made a magnificent effort over a 10-year period to reduce their total manning levels. From a total of 440,000 in 1963 the staff had been reduced to 250,000 in 1970 but since then the figure has remained constant. In the post-Beeching era there was a massive reduction in staff, but there has not been a reduction in the past four or five years.
  From a recent answer given in Hansard I make a comparison —admittedly, it is the one most favourable to my case—showing that British Railways with about 11,700 route miles have a total staff on all operations, including workshops, of

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  268,000, whereas the French railways with a route mileage of over 22,000 have a total staff of 290,000.
  Mr. Bagier: Rural mileage.
  Mr. Moate: I accept that there are differences between British Railways and French railways, but there seems to be a case for saying that there is substantial overmanning on British Railways. We read that there is a large number of firemen whose services do not seem to be essential and there is a large number of guards on passenger services whose services I do not consider to be essential. We are entitled to ask whether there is not considerable scope for further manpower reduction.
  Mr. Leslie Huckfield: The hon. Gentleman insists that there is a great deal of overmanning, but why is it that the railways cannot be run when the members of ASLEF work to rule but do not go on strike?
  Mr. Moate: It is self-evident that when the staff withdraw their services—
  Mr. Leslie Huckfield: The staff do not do that. They just do not work overtime.
  Mr. Moate: I can assure the hon. Gentleman that the travelling public—commuters in particular—suffer just as much from the pestilential rule book as they suffer from a full-scale strike. There seems to be evidence of overmanning. If there is scope for a further reduction in manpower, it is as much in the interests of the railway staff as it is in the interests of the travelling public and of hon. Members opposite—the members of the railway lobby, as I will describe them—to try to bring that about without any reduction in services. It is as much in the interests of the staff as it is in the interests of the travelling public to get the most streamlined and efficient railway system that we can get.
  When hon. Members seek to defend the interests of their constituents and complain about bad industrial relations and such things as dirty trains, it is depressing when hon. Members opposite, instead of trying to improve the lot of railway employees and of the travelling public, leap to the defence of the staff as
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  though we were making a dreadful attack on the railway unions.
  Mr. Dennis Skinner: Surely the hon. Gentleman understands that we are bound to jump to the defence of those who must work hard for their living. Some would argue that this place is overmanned. There are over 600 in this place. It could well be that some of those 600 are doing a useful job just like many of the railway staff of whom the hon. Gentleman's complaining. It could well be also that many of those 600 have gone home.
  Mr. Moate: The hon. Member for Bolsover (Mr. Skinner) has only just entered the Chamber and has made a typical offensive remark. If he is suggesting that it is only the railwaymen who work hard and that the commuters who travel to and from London do not, it is an offensive and rather pointless interjection.
  Many speeches from Labour Members have given an appearance of total complacency about the present situation, and this is equally depressing. It may be that all is well, that there is no financial problem and that industrial relations are perfect. If so, it is strange that nearly every informed critic in the Press, the travelling public and Conservative Members feel that there is a sense of financial crisis and that British Railways are in trouble. However, there has been not been a suggestion by Labour Members that that is the state of affairs.
  Recently Mr. Farrimond was quoted as saying that British Railways were bust and bankrupt to an extent never before known. It was only the hon. Member for West Bromwich, East who made the slightest concession to the situation when he said that the morale of employees of British Railways was low. Other Labour Members and the Minister have given the impression that the situation is not too bad.
  Mr. R. E. Bean: Where have you been?
  Mr. Moate: We have had two years of disruption on the railways due to bad industrial relations. Recently we have had the signalmen's dispute, the strike of supervisors and the train drivers' dispute.
  Mr. Cryer: The supervisors did not strike. It was a work-to-rule.
  Mr. Moate: I stand corrected. All the working to rules, the go-slows, the inter-union disputes and the strikes we have had in the past few years add up to a major body blow at the railways themselves. It should be in the interests of Labour Members and their union connections to try to improve industrial relations in the railways.
  The simple point is that industrial relations in British Railways are at a pretty low ebb and something has to be done about them. Commuters see the prospect of a major dispute over yet another pay claim, with the possibility—I hope it is no more than a possibility—of even further disruption. The commuter has to stand by and see this happen. He has no control over the situation whatever.
  It has been suggested that British Railways are in more serious financial trouble than ever before. We have had statements that the total Government support this year could exceed £500 million and that the money that was to be allocated over a five-year period will be exhausted in half that time. This is despite the fact that the commuter is facing a massive increase in fares. I do not say that the commuter can be insulated from the true and fair costs of operating the railways. Certainly it is acceptable that the fair and true costs must be passed on to the commuter.
  Mr. Bagier: True costs.
  Mr. Moate: I said "fair and true". If this latest fare increase goes through, the total increase during a 12-month to 15-month period will have been about 43 per cent. to 45 per cent.—over a period when inflation would have been about half of that.
  Mr. Snape: Tell us about the years before.
  Mr. Moate: The commuter is a victim of these circumstances. Although true costs must be passed on, what are the true costs? There is no discipline and no constraint upon a nationalised industry of this kind. There is certainly no parliamentary control over the way this money is spent.
  I deplore the fact that it is now 15 years since a Select Committee of this
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  House investigated British Railways. In effect, there is an open-ended commitment from the Government to support the finances of British Railways. The Government do not exercise any financial displine. There is certainly no market discipline because the long-distance commuter is a captive of the railway. He has no choice but to travel by train. Now we have the phrase that he must have imposed upon him "the costs that the market will bear." He has no choice but to pay whatever is demanded. Therefore, what is happening is that the member of the travelling public is now the victim of circumstances totally beyond his control.
  If there is overmanning and if there are bad industrial relations, there is no way whereby these matters can be controlled. All that the Government have to say is "We accept a 30 per cent. wage claim", and that will be passed on in almost exactly the same figure to the travelling public. We now know that the wages bill of British Railways is roughly equivalent to its revenue, so a 30 per cent. wage claim is likely to mean 30 per cent. fare increases.
  Here we have a deteriorating financial situation, a record of very bad industrial relations and, apparently, an attitude of complacency on the Government benches —that things are going along quite smoothly although perhaps there might be a few troubles. Basically, however. there has been no attempt to deal with this situation. That is certainly the impression given by Labour Members.
  I want to make two particular pleas. The first is that the House of Commons should try to reassert some control over British Railways finance. Second, a public inquiry should be set up into industrial relations on British Railways. That would be in the interests of every person in this country, including Labour Members who say that they are supporting the interests of the unions. British Railways finances are going out of control. The public can see that they are going out of control. The public are prepared to see reasonable financial support, as provided for under the Act of 1974, as long as they can see reasonable working conditions, good industrial relations and trains that are clean and punctual. At present, however, the situation is deteriorating, fares are escalating

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  rapidly and industrial relations are poor. It is about time that the Government and all Labour Members saw the truth of this and tried to do something about it.
  9.2 p.m.
  Mr. Ronald Atkins: The hon. Member for Aylesbury (Mr. Raison) spoke in a very different voice from the voices we heard in 1974 during the debate on the Railways Bill and, indeed, voices used by Conservative Members when in Government in 1973. I hope that it is not a sad retrogression of their views.
  The hon. Gentleman was critical, for instance, of the railways being run as a social service. That was not the criticism last year and the year before. It is very significant that the two services that the hon. Gentleman wants to maintain most of all—I can understand this, he being the Member for Aylesbury —are rural services and the commuter services. All that Conservative Members seem to bother about are the commuter services. These are the most expensive of all the services and they are run at the greatest deficit. The hon. Member has been complaining about deficit financing, yet most of it will be required for these services. If we were to charge the true costs, there would be few commuter services left.
  Mr. Raison rose—
  Mr. Atkins: It is rather remarkable that the hon. Gentleman, who is now present for the first time since the debate began to listen to a back-bench speech, wants to stop a back-bench speech. I should feel more inclined to accept an interruption if the hon. Gentleman had been present for any of the rest of the debate.
  The hon. Gentleman also gives the impression that Great Britain is the odd man out and that we are the only country financing railways. In fact, we are one of the smaller contributors. As my right hon. Friend the Minister has said, we subsidise our system much less than France, Italy or Germany subsidise theirs. In France and Italy the subsidy is over £600 million a year. In Germany it is over £1,200 million a year. The hon. Gentleman will not find commuter services to be better in France—I should like him to board a commuter train to
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  Paris—and even less so in Italy. Today, even in America, with all the advantages which American railways have of running more profitable freight services because they are long-haul, like those of the continental countries, the railways need massive State aid to keep going. A correspondent who travelled recently on the American commuter services said that if any British commuter suffered an attack of British Rail nerves the best antidote for him would be to take a trip on American commuter services. They are very much worse, and we have something for which to be thankful.
  I do not suggest that the management of British Railways is all that it should be. It is still suffering from the Beeching era when the Conservative Government backed Beeching to the full and he introduced a great deal of new management more concerned with building up empires than with expanding the railways. Indeed, their chief concern was to close railway lines as quickly as they built up their administrative empires.
  The demand that we switch more freight to rail is regarded as an emotional one, although it is in line with what every foreign railway is doing on the instructions of their Governments. This is one of our chief demands, and I have no doubt that the Minister sees that. It is shocking that, despite all the debate about this and despite the consensus among the various parties, we should be neglecting freight and even talking about a reduction.
  The Opposition seem to imagine that there is something inherently inefficient about the rail system. It is not so. In terms of labour, energy and everything else, it is still the most efficient way to carry freight and passengers. Per unit carried, it is still the most economical means of transportation.
  The disadvantage with which railways have to contend throughout the world is that the commercial road user has a cross-subsidy from the non-commercial road user and, in this country, from the Chancellor of the Exchequer because about 40 per cent. of the cars on the road are company vehicles which get tax remission. This encourages competition against British Railways.
  A study undertaken by the State transport authorities in the United States some

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  years ago at a cost of $200 million came to the conclusion that the wear and tear on the highways varied according to the weight on the axle to the fourth power. It worked out that 1,000 12-ton lorries were more damaging to the road than 160 million motor cars. This theory, which was based on practical research, has never been denied by any authoritative body.
  Commercial road users are subsidised heavily by non-commercial road users, and this is probably the main reason why railways throughout the world find it very difficult to compete with road services.
  I agree with the hon. Member for Aylesbury, however, that there is a need for greater investment in British Railways, although I do not understand how the hon. Gentleman can hold that view when he disagrees about the financing of the railways. The point is: what are we to do in the meantime? With services running at a deficit, should we allow them to stop, rejuvenate them, and then restart them afterwards without meeting the deficit for this period? Such a policy would be more expensive than keeping them going for a while.
  I was extremely disappointed when the Channel Tunnel project was abandoned by the Government. The rail link proposed under the Channel would have done a great deal to help long-haul freight, which is the basis of freight viability. It would have enabled us to link up with the continental rail system and thereby to get the advantages of long-haul. Much more investment in and much more spending on the railways than is envisaged for next year are needed. That would enable us to use our labour more efficiently.
  Let us not forget that one way in which to increase productivity on the railways is to use the services to capacity. That is very much the best way. A lot of nonsense has been talked about overmanning in the context of how much the rail force has been cut. The silly academic exercise that refers to firemen still being employed on British Railways ignores that, although they are not employed as firemen, they are employed perhaps at firemen rates, because that was one way in which to get the union to agree to reduce the work force as it has
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  been reduced. The hon. Member for Aylesbury does not realise that in the United States, for instance, firemen are still employed in the locomotives as the result of an agreement with the unions made many years ago—although the United States was the first to use diesel locomotives. It is sometimes economic to negotiate in such a way as to ease the burden on the labour force.
  In view of what has been said in recent years in the House and outside about the environment and the need to save energy and make labour more productive, everything points to the need for more investment in and greater use of the railways. If we talked less and provided more money, we should reach that objective, and I hope that we shall see a great improvement in investment in and expenditure on the railways.
  9.12 p.m.
  Mr. Gwynfor Evans: Transport communications are at the heart of the infrastructure problem that is fundamental to the failure to develop, in Wales at any rate, a strong and balanced economy. In Common Market jargon, Wales is a peripheral region, and although it is unusually rich in human and natural resources it provides a classic example of the economic consequences of being a peripheral region of a huge State.
  A part of this situation is that in rail, road and air transport we have a system geared to the metropolitan centre. Ever since I remember, nationalists in Wales, with the support of Welsh railwaymen, have been calling for a Welsh transport board, in the hope that such a board could construct an integrated road and rail system for both freight and passengers that would be designed to serve Wales. My main plea tonight is that we may soon see this board established in Wales to match the coming of the measure of political decentralisation that we are to have.
  If we had done that in the past, our economy would have been considerably stronger and our situation happier. I have no doubt that this board would have encouraged the use of our own fuel in Wales, particularly of coal-generated electricity, and that would have been a lot better for our balance of payments. Rail traffic could have been more actively

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  developed, so easing the congestion on the roads and discouraging pollution and injury to the environment.
  But no Government have attempted it. The attitude of Governments to railways in Wales has been much the same as their attitude to roads in Wales. We still have no north-south Welsh main highway. When we have pressed for that, the Government have said that there was no industry there and, therefore, no need for a road—very different from the attitude in Italy, where the Autostrada del Sole was built through the centre of Italy because there was no industry there. The attitude to railways has been very much like that, and much of our railway system has been destroyed.
  In passing may I say that in the destruction of stations and so on the British Railways Board set an unhappy example to vandals in the destruction of very fine stone buildings in stations that have been closed, and that sort of thing it still going on. I wonder whether it is necessary to pull down the stations at Pontypridd, Bridgend and Neath, which are very good examples of architecture of that type in the last century. I am sure that there are better ways of spending £500,000.
  The British Railways Board reduced passenger mileage in Wales from a figure of 1,500 miles in 1950 to a figure of 665 in 1970. That was done without any proof that the rail system in Wales was losing money. That may sound strange, but it is true. I published two articles on this matter in the early 1960s in a Welsh daily paper and the facts in those articles were not denied by the board. They set out figures showing that at that time the Cardiff region, which extended from Aberystwyth to Craven Arms, was making a gross profit of £13 million. Lucrative freight traffic accounted for 84 per cent. of that income.
  Had there been a Welsh transport board at that time, the story would have a different and certainly a happier one than the situation today. But if it is said that we are losing money on these lines, should we not consider to a greater degree the social costs of closure? I live in a rural area, and in many Welsh rural areas unemployment has been accelerated by closures, depopulation has been caused
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  and closures have added to congestion on our roads and discouraged the development of light industry and tourism.
  The recent closure of the line from Carmarthen to Newcastle Emlyn and Lampeter is an example of that trend. That line runs through the most beautiful country and has a tremendous potential for tourism. But for that closure, Wales could have a circular rail route which would be used by tourists who like to do that sort of thing. In that way we could make excellent use of one of the loveliest lines in Wales running through large parts of central Wales. The line in that area has more than once been under the threat of complete closure.
  It is no good appealing to the British Railways Board, because it has a well-tried technique of running down lines. However, the board failed to close the line in central Wales, but little effort is being made to attract custom to the line and to make journeys in Wales pleasurable. The multiple diesel units now being used are elderly, noisy, shaky, smelly and hot. The railway could be a great attraction to tourists as well as to local users, and it is true that the line is used by local people on a considerable scale. It would certainly assist if the line could be provided with better rolling stock.
  I hope that better provision will be made for north-south traffic in view of the development of the Welsh National Assembly at Cardiff. It should be made possible for people to travel easily to Cardiff from areas in Gwynedd, for example, and for them to carry out business in the city and then to travel easily back home at night. It is easier for people to travel from Dyfed to London than for many people to get from parts of Wales to Cardiff. I hope that something will be done to alleviate the system in future.
  British Rail must respond to the growing national consciousness in Wales in making greater use of the Welsh language, but I shall not expand on that point now.
  I should like to conclude by referring to the complete lack of electrification on the Welsh railways. This is a great scandal. Even the rest of the United Kingdom railway lines are backward in this respect in comparison with other countries. Although Wales is a country which exports coal and also electricity,

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  it has not a single mile of electrified railway. We all know that Switzerland, which has no coal, has an entirely electrified rail system, and railways in Denmark, Austria and Holland are extensively electrified. Why is it that we in Wales have not a yard of electrified railway? I am sure that a Welsh Government would not have permitted this scandal. If we had a Welsh transport board it would have fought very hard. One hopes that the Welsh Assembly and the Welsh Development Authority, which are soon to be established, will have adequate powers and finance to develop the infrastructure of Wales, with the railways playing an important part, in order to implement at last a national development plan for Wales.
  The decentralising of railway transport control is needed with a powerful national elected body to tackle the problems of Wales with vigour, vision and determination.
  9.21 p.m.
  Sir Stephen McAdden: It is an extraordinary coincidence that the right hon. and learned Member for Liverpool, Edge Hill (Sir A. Irvine) should be here tonight when we are having a debate on railways. He will recall that 25 years ago I made my maiden speech in which I advocated certain principles by which the British Railways Board should be guided in the decision which it took.
  Those principles were thought to be rather revolutionary at the time. I suggested that it should be recognised that the railways' job was to conduct passengers and goods from place to place as speedily, efficiently, safely and economically as possible. The provision of jobs for railwaymen was incidental to the provision of the service. In the same way Tesco, J. Sainsbury and Lipton provide groceries for people to buy, and the provision of employment for people stocking the shelves and handing out the goods is incidental. That was thought to be revolutionary, but in my view it was rather simple. I hope that will be borne in mind in future decisions which the British Railways Board may take.
  The board has forgotten that the satisfaction of the needs of its customers happens to be one of its jobs. It seems to concentrate on satisfying the needs of those who work in the industry. It is important that it should do so, but that
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  is not its only job. Unless it satisfies the needs of those who use its services there will be no jobs for the people at present engaged in running the railways.
  The position is not as immediately obvious in a nationalised industry. With an industry which is in private hands, as Labour Members well know, it is enjoyable to indulge in wage negotiations when that industry is making a profit. If an industry is making a profit one knows that one has a better chance of securing improved conditions for the people for whom one is negotiating. However, if one is negotiating with the nationalised industries there are no inhibiting conditions, because at the end of the day the taxpayer will foot the bill.
  In those circumstances we require better industrial relations than we have now. My hon. Friend the Member for Southend, West (Mr. Channon) has presented a catalogue of the troubles from which we have suffered on the commuter line from Southend to London, which makes it unnecessary for me to repeat it. We have suffered tremendously, although we are the people who provide the cash to run the services as best we can and although that line happens to be profitable. We are paying not merely the economic cost of transport from Southend to London but more than the economic cost.
  The hon. Member for West Bromwich, East (Mr. Snape), who laughed uproarously when my hon. Friend said that people were being treated like cattle, should travel on the line, as I do. He would know that people are being crammed into railway compartments because at peak hours when there should be a 12-set train it either does not run or is reduced to a four-set. In those circumstances 20 to 25 people travel in a carriage and there are people standing in the toilets. If that is not travelling like cattle, I do not know what is.
  Mr. Snape rose—
  Sir S. McAdden: I shall not give way. The hon. Gentleman had a great deal to say, and I have only a few minutes.
  Mr. Skinner: The people should have larger toilets.
  Sir S. McAdden: It may be the hon. Gentleman's view that people from Southend should travel by train in bigger and better toilets. He may believe that the

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  people of Clay Cross should do the same. Why does he not say so? If such conditions occurred at Clay Cross in his constituency, he would be the first to complain.
  My hon. Friend the Member for Southend, West did not exaggerate the conditions. Day after day, peak-hour trains were cancelled and 12-sets were reduced to four-sets. People had to travel in insufferable conditions. All that was due not to any disagreement that the railwaymen had with the travelling public but to arguments between the unions. It is unfair that those conditions should occur because ASLEF or the signalmen disagree with the NUR, or because they disagree with the structural agreement and want bigger differentials.
  It always amuses me about the egalitarian party which says that we should all be equal that I have never seen so many class differences as exist between the different grades of workers in the various industries in which they are engaged. There is far more class distinction between an engine driver and a porter than there is between Lord Derby and me. The unions are anxious to preserve those differentials at all costs. Why do they go through the humbug of saying "We are all equal" when they spend the best part of their time seeking to preserve the differentials?
  My hon. Friend the Member for Chippenham (Mr. Awdry) on the Front Bench is becoming restive, I am sure not because he disagrees with what I am saying but because he has a speech to make. I welcome the fact that we have had an opportunity for the first time in a very long while to say a word or two about the railways. It is the first time my hon. Friend the Member for Southend, West and I have been able to say something in the House about the disgraceful conditions in which our constituents have to travel. We pay higher and higher fares for worse and worse service, because trade unions cannot agree among themselves and British Rail is incompetently run.
  9.28 p.m.
  Mr. Daniel Awdry: Ever since I entered the House I have been a member of my party's transport committee. Therefore, I have taken part
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  in many debates on the subject of the railways.
  I say at once to the hon. Member for Nuneaton (Mr. Huckfield) that I am not anti-railway, and never have been. We on this side of the House are certainly not anti-railway.
  Ali hon. Members should sympathise with those who work in the railway industry, because over the years they have had to suffer a great deal of interference by successive Governments of both political parties, with major changes in transport policy. Management is doing a good job in difficult circumstances. I pay my tribute to the Chairman, Mr. Richard Marsh, who has shown considerable flair and imagination in a challenging task. It is easy for us to criticise individual aspects of railway operations.
  Mr. Snape: Or the workers.
  Mr. Awdry: Hon. Members are entitled to criticise those aspects, because we represent the feelings of our constituents, but we should all recognise that an industry of the railways' size and complexity faces great and difficult problems. One which has been mentioned several times concerns long-term investment plans. The hon. Member for Preston, North (Mr. Atkins) made the point that in such an industry those plans must look ahead for many years. I believe that we need 10-year plans rather than five-year plans.
  Let us take, for example, electrification, which was raised by the hon. Member for the Isle of Wight (Mr. Ross). The rate of conversion in Britain has not been high. The hon. Member for Carmarthen (Mr. Evans) said that it was even worse in Wales. In Britain, between 1968 and 1969 it averaged about 200 miles a year. With the present energy situation, more electrification is vital, and decisions must be taken now. I speak with some feeling on this because in my constituency of Chippenham there is a large Westinghouse factory which for many years has manufactured equipment for the railways. Companies like Westinghouse require firm and continuing orders so that they can keep together their specialist teams engaged on particular projects.
  Of course, I realise that Governments have to cut public expenditure—no doubt we shall hear something about that tomorrow—particularly in these times of

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  inflation. I believe that transport is a special case and that an industrial country will not be successful unless its basic transport system is modern and efficient. It is probably false economy to make major cuts in transport investment.
  The second major setback which the railways have encountered—again referred to by the hon. Member for Preston, North —is the decision to abandon the Channel Tunnel. The building of the Channel Tunnel would have given a tremendous boost to the railways, in increased passenger and freight traffic. The possibility of through traffic from Glasgow to Barcelona and from Liverpool to Milan would have been very exciting, and the tunnel would have offered immense opportunities for Freightliner services from all parts of the United Kingdom to the Continent.
  It is tragic for the railways that this opportunity has been thrown away. It is probably not the appropriate time to discuss the implications of the political decision to abandon the Channel Tunnel. It has not been much referred to tonight. I deplore the decision and particularly deplore the way in which the cancellation was handled by the Government. I feel bitter about it because every time the House of Commons discussed the Channel Tunnel project the ratio of those in favour was 5:2. Yet at very short notice and with the minimum of discussion the whole project was abandoned. I hope that we shall find an opportunity before long to have a major discussion and an inquest on the implications of that decision.
  Further difficulties have been caused to the railways by the major changes in transport policy over the years. A major change was the Transport Bill of 1968. I served on the Standing Committee that considered the Bill. In passing, anyone who was on that Committee should have a long-service medal. It was the longest Committee stage in the history of Parliament. The present Chairman of British Railways was on the Committee.
  Mr. Raison: What about the Housing Finance Bill?
  Mr. AwdryThose who served on that Committee should also have a medal.
  It was a controversial Committee but on one thing we agreed, that it would be
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  possible to make the railways pay and to get away from deficit financing. We were all very pleased after the Transport Act 1968 that for two years, 1969 and 1970, the railways actually made a profit. But by 1971 the profit became a loss, and today I very much doubt whether anyone in the House of Commons believes that there is such a thing as a viable railway network.
  That is why last year, with some reservations, we supported the Railways Bill which abolished the existing subsidies for branch lines and made £1,500 million available for the general subsidy of passenger services over a period of five years. Incidentally, the Bill also wrote off £189 million capital debt, which saved British Railways about £15 million in annual interest charges. As I say, we supported the Bill, and we have not changed our tune, which to a great extent follows the thinking of the previous Conservative Government and the previous Conservative Minister. We had certain reservations, of which I will mention two.
  First, we emphasised, as we do today and as my hon. Friend for Aylesbury (Mr. Raison) did in opening, that it was wrong to deal with railways in isolation. The previous Minister, my right hon. Friend the Member for Yeovil (Mr. Peyton) had promised a White Paper to deal with the whole subject of transport. During its period in opposition the Labour Party frequently called for an integrated transport policy. Yet today we have heard practically nothing from the Government of their attitude to overall transport planning. The hon. Member for Nuneaton, having complained that some of us had not stayed, has himself gone. He agreed with the need for an overall transport policy. The hon. Member for the Isle of Wight also made the same point.
  It is disappointing that the Minister said nothing about an overall transport policy. He said that he had not had time to produce one. We hope that such a policy will soon appear. It is time that transport was considered as a whole. On that basis I put in a plea for the development of inland waterways. I believe that they could make a major commercial contribution to transport. At the same time the use of

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  inland waterways would help the country deal with amenity and pollution problems. With modern equipment it would be possible to transport heavy goods traffic to and from the Continent by using canals on both sides of the Channel and by using the same vessels on the Channel. That would eliminate a great deal of labour and handling costs, apart from the many advantages that would accrue in environmental terms. I am sure that insufficient study has been given to the development of inland waterways. I hope that the Minister will refer to that matter tonight and give us a little encouragement.
  The truth is that as a nation we need urgently to review all forms of transport and to produce an overall balanced policy which harmonises commercial and social needs with the needs of safety and a good environment.
  A reservation that we expressed last June—and it has since become a far more serious matter—concerned industrial relations. Several hon. Members have raised the matter tonight and I do not apologise for raising it again. Last June my right hon. Friend the Leader of the Opposition said:
  "The commuter well remembers the almost total dislocation of services last winter during the ASLEF work-to-rule when the passenger was expected to suffer, and did suffer, intolerable conditions. … Before we give this Bill a Second Reading we shall want to he assured, on behalf of the travelling public, by the Minister of Transport or the Secretary of State for Employment that there will be no repetition of those events."— [Official Report, T4th June 1974; Vol. 875, c. 1017.]
  I referred to industrial relations when I wound up for the Opposition on the Railways Bill last year. I also referred to the issue in Committee. When I had the temerity to refer to it in Committee in remarkably mild terms—I am a remarkably mild and moderate man—I was immediately pounced on by Labour Members. I think that they are a little oversensitive about industrial relations on the railways. I realise that it is a delicate subject and I am deliberately not trying to make political capital out of it. However, I make no apology for returning to the subject tonight.
  Of course, the railways are labour intensive. I think that nearly 70 per cent. of their costs relate to wages. I believe the precise figure is 68 per cent. The
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  increase in pay and the salary structure changes which took place in 1974 cost over £200 million. We are told that losses on the railways may reach £340 million to £350 million this year. The Minister rightly said that he did not know what the losses would be. He asked what business would know the extent of its losses so early in the year. Does he think that next year, after another pay increase, the losses will reach £700 million? That figure has been put forward seriously by many experts. It is said that losses in 1977 may be over £1,000 million. It seems that the £1,500 million, which was meant to last for five years, may well last for only three years or less. What control is there? What control does the House exercise? What control does the Minister have over this vast expenditure? He has said very little about the matter tonight. The public are entitled to be concerned about expenditure on such a scale.
  We know that a new wage claim is on the table. The hon. Member for Nuneaton says that we must wait and see what the size of it is before we say anything further about it and that we must be careful about the figures. I should be surprised if the claim were not in the region of 30 per cent. A number of people have said that that sort of increase is quite possible. I believe that it will be a large claim.
  Where will these matters end? Since September 1972 fares have increased for the travelling public by about 60 per cent. Presumably there will be more pressure for increases in the autumn. This will inflict some financial hardship on the travelling public who have already suffered for many months from the disruption caused first by the train drivers, then by the signalmen and recently by the workshop supervisors. The unpleasant fact is that those large increases awarded last year and meant to bring peace to the industry have brought inter-union rivalry and discontent.
  I also believe that no one seriously doubts that some saving can be made on the railways by better productivity and more modern methods.
  Mr. Leslie Huckfield: Where?
  Mr. Awdry: I realise that the number of footplate staff has been greatly reduced since 1962. I remember trying to make

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  the same point in last year's debate and the hon. Member for Nuneaton leapt to his feet and interrupted me. The management of the railways carried out a study six years ago and said that it expected that the total number of employees by 1974 would be 200,000. The size of the force last year was 228,000. We know that management was totally unable to carry out its plans to streamline management, reorganise the regions and boost efficiency. It had to abandon its whole scheme on which it had been working for many months in January because of the opposition.
  Mr. Leslie Huckfield: Rubbish!
  Mr. Awdry: That is true. Yet these problems have to be solved. Is it true —we do not seem to have discovered this during the debate—that 7,000 former firemen are still employed and are travelling in the cabs because there is no job for them?
  Mr. Leslie Huckfield: We must have the truth about this. If the footplate is so overmanned, why is it that when footplate staff do not work overtime the railways grind to a halt?
  Mr. Awdry: I said in Committee that the rule book needs to be looked at. I do not think that the British public understand this. I am sure that we could get better productivity. We could get freight trains to move faster than an average of 20 miles an hour. We could arrange for drivers to spend more than half their time on the move. These are detailed points. The fact remains that there are a number of firemen who are still employed but have no job to do. Why do we have freight guards who are completely superfluous and who, anyway, often travel with the driver and fireman in the cab? Do we need so many people checking tickets at the barrier particularly on Inter-City trains when the tickets are checked again during the journey by the guards?
  Parliament and the public have a right to receive answers to these questions. There has been none tonight. We like the Minister but I feel that his speech was remarkably complacent. He seemed to suggest that it was a problem that we all had to face, that the railways would cost a great deal of money and that there was little—
  Mr. Mulley: I tried to explain earlier that Opposition Members cannot have it both ways. They cannot criticise us for allowing the Railway Board to manage the railways and then ask us to intervene at every detailed point.
  Mr. Awdry: I understand that. Both my hon. Friend the Member for Aylesbury and the Minister have said that there is no bottomless pit of money which can be used endlessly to pump finance into the railway system. I was glad that the Secretary of State for the Environment, who attended our debate briefly tonight, said recently that any excessive wage settlements in the railway industry would merely increase fares, make rail journeys less competitive and ultimately result in a smaller railway industry, with fewer jobs for railwaymen. It is a matter of the highest priority for the whole industry that the unions should understand that it is in their interests to promote a better attitude towards each other and the general public. If this debate has made any contribution to that end, it will have been thoroughly worth while.
  9.45 p.m.
  The Under-Secretary of State for the Environment (Mr. Neil Carmichael): It is pleasant to follow the hon. Member for Chippenham (Mr. Awdry) again, as I did during Second Reading of the Railways Bill on 24th June 1974. We are both interested in the problems of transport, especially those of the railways.
  Last June, by means of the Railways Act, we started what we hoped would be a new basis for the operation of the railway system. We accepted that the previous concept of an essentially viable passenger rail network, with subsidies for a few loss-making lines, was no longer an effective method to use and that instead the passenger network must be looked at as a whole. In so far as the cost of operating that network cannot be met through fares and charges, Government support is required. That support cannot be attributed to particular lines or services.
  We further accept that passenger business forms the main core of the railway system and that the basic cost of track, signalling and the other infrastructure factors of the railways should be charged against it, leaving the freight business to bear only the cost of those parts which it uses. On that basis we expected the

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  business to be able to break even. We also expected it to be able to contain the passenger subsidy.
  As my right hon. Friend, the Minister for Transport said, the position has changed. The railways, like other businesses, have suffered from the effects of the increased costs which they have not yet been able to recover through higher fares and charges. As a result, their financial position has deteriorated. I confirm the figures given by my right hon. Friend. We expect that Government support for the passenger system in 1975 will amount to about £340 million, in addition to which grants from local authorities will contribute a further £30 million.
  One of the problems which has brought the industry to its present state was undoubtedly the restraint that was imposed on the Railways Board by the previous Government. For instance, in 1973 the then Government directly restrained the board from increasing its fares to a level allowable under the provisions of the Price Code, so that increases were held to 5 per cent. on passenger fares and to about 2 per cent. on freight charges. Those increases were not sufficient to contain the on-going deficit, neither did they cover the increases in allowable costs. This is part of the greasy pole which the railways have since been trying to climb. The sums are vast—£340 million this year.
  How shall we be able to contain this large requirement for financial support? My right hon. Friend spoke about passenger fare and freight increases. I shall not deal with those. There is then the question of management action to improve the efficiency of the railways and to cut out activities which give the community poor value for money.
  A good deal has already been said about the British Railways management during the course of the debate. Everyone knows how to run a railway much better than those who do it. The hon. Member for Carmarthen (Mr. Evans) made the point that British Rail deliberately run down a line so that it can be closed. I know of no railwayman who wishes to close a railway line. Railwaymen lean over backwards to keep lines in operation. I have said to some senior members of the railway manage-
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  ment that they are still running the toy railway which they ran as children. However, they do not like to see railways reduced. They are interested in railway lore and in the operation of railways. It is not my experience that British Rail try to reduce and artificially cut down on lines.
  Mr. Stephen Ross: Is the hon. Gentleman aware of a publication entitled "The Great Isle of Wight Train Robbery", which is still on sale at the bookstalls? He will find therein good grounds for backing up what the hon. Member for Carmarthen (Mr. Evans) said.
  Mr. Carmichael: I have read a good many railway books, but that is one I have not read. I am sure that if I discussed this point with some of the people involved I would receive a slightly different slant on the matter. I do not want to appear complacent in any way. I am aware of many of the problems and shortcomings of railway operations and, indeed, perhaps of railway management, but we must not get the matter out of perspective.
  Mr. Raison: On the subject of whether the Government are complacent, may I remind the hon. Gentleman that in the Second Reading debate on 24th June the Minister said:
  "we need to set up a control system which will provide a means by which we can monitor the grant expenditure."—[Official Report, 24th June 1974; Vol. 875, c. 1008.]
  Can the hon. Gentleman say whether that control system has been set up, and, if not, when it will be set up?
  Mr. Carmichael: This is a complicated business. The reorganisation of the grant and the support for the railways was not an easy job, but it is going through and a control system is in course of being set up. I hope to refer to it in future debates.
  The hon. Gentleman raised the question of complacency. I think we are entitled occasionally to have a slight change in emphasis from the continual complaints that one hears about the railways and to show how they have used some of their resources. The resources of the railways have been used much more intensively in the past decade than before. For instance, passenger miles and freight ton miles are at the same level as in 1965 while substantial savings have been made.

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  The number of locomotives has been reduced by 50 per cent. and carriages by 45 per cent. while carrying the same number of passengers and freight tons. Track mileage has been reduced by 25 per cent. Marshalling yards have been reduced by 70 per cent.; wagons by 60 per cent. This is not a bad record. The number of miles per passenger coach have increased from 290 to 420. One result of this has been the intensification of the London-Birmingham off-peak inter-city service from an hourly to an half-hourly frequency without additional vehicles.
  Load factors on British Rail have increased. For example, tons per train have increased by 20 per cent., tons per wagon by 50 per cent. and freight by 70 per cent. Manpower productivity has improved. Train miles per train crew member have increased by 40 per cent. The same volume of business is now being handled with 30 per cent. less stock. I think it is true to say that only the coal mines and the railways could take this sort of reduction in such a short period. The labour force has been halved since nationalisation and there has been a reduction of about 200,000 employees since 1962. On the whole, reasonable relations have been maintained with the unions. Real improvements in pay levels and conditions have undoubtedly been achieved.
  Planning, marketing and operating are now on a commercial basis and have been complemented by the introduction of market pricing. Corporate planning has been introduced, involving five-year business and corporate plans to identify strategic objects, to review long-term prospects and to fit budget and business plans within thils framework.
  The safety record has been referred to. There has been only one passenger death per 130 million journeys.
  Mr. Esmond Bulmer: Besides cataloguing the improvements, can the hon. Gentleman say a word about the work carried out by the Tavistock Institute on participation in the railways? Could he say whether he sees this developing in the next year or two and whether he hopes to see some development before the Secretary of State introduces any measures concerning industrial democracy?
  Mr. Carmichael: As a matter of fact, I am familiar with that work. I instigated it when I was at the Ministry of Transport in the last Labour Government. I think it would require a longer discussion than the one on which we are engaged now. This is a serious matter. I hope, as do my right hon. Friend, the railways unions, and the board, that something will be done to involve people more within the railway industry, perhaps on the lines suggested by the Tavistock Institute. Even so, since then—that was five years ago—a great deal has already been done in this area, though bigger steps may have to be taken. I should like to discuss this matter with the hon. Gentleman in a separate debate.
  Labour relations have been referred to a great deal in the debate. Sometimes I wondered whether the debate hinged almost totally on labour relations within the railway industry.
  In view of the enormous reduction in staff on the railways over such a short time and the big upheavals which have taken place in the transport industry generally, there have inevitably been real and imagined anomalies arising from such a complex and far-reaching review. The Government regret that it has not been possible to settle all the disputes within the agreed procedures and that there has been some resort to industrial action. I appreciate and regret the inconvenience and disruption that this has caused to a large number of people. Nevertheless, it is important to understand that only a relatively small number of railwaymen were involved. The great majority have been working normally and maintaining the high standards expected of the industry. But these disputes should not be allowed to obscure the much improved climate of industrial relations on the railways generally.
  The hon. Member for Aylesbury (Mr. Raison) asked about the comparative energy uses and costs of different models of transport. This is becoming a subject about which everyone is speaking.
  Transport accounts for 26 per cent. of oil tonnage consumed in the United Kingdom. The estimated breakdown between different modes of transport is that rail uses 1 per cent., car and motor cycle 12½ per cent., bus and taxi 1 per cent., and

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  goods vehicles 6½ per cent. It is not a simple comparison to work out which is the best way. Vehicle load, speed, stops, gradients, weather and so on affect fuel consumption in different modes of transport. Generally, larger transport units under fully loaded conditions are more efficient, but in most cases higher speeds consume more energy.
  The broad conclusions are that substantial fuel savings can be made if passengers and freight are transferred from aircraft to land transport and if passengers are transferred from private cars to bus or rail for journeys where public vehicles can be well loaded. For freight, rail transport is more economical on fuel than road transport over the same long-distance routes under fully loaded conditions, but the scope for achieving the transfer is limited. The Government are investigating the possibilities. Reference has already been made to the 100 firms exercise and
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  to the help which has been given under Section 8 of the 1974 Act.
  The problems of the railways are longstanding and I cannot promise the House that any easy or immediate solutions will be found. It is for the railways management and the Government, acting together under the new powers given by the Railways Act 1974, to settle policies and strategies, to decide on whatever action is best suited to securing the Government's objectives of efficient and relatively economic, in the national sense, railways policy.
  This has been a short debate, but many hon. Members have taken part. The fact that at this time so many hon. Members take part in a debate on the railway industry is an indication of the importance that the House places on the—
  It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

  BUSINESS OF THE HOUSE
  Ordered,
  That the Air Travel Reserve Fund Bill may be proceeded with at this day's sitting, though opposed, until any hour.—[Mr. James Hamilton.]

  AIR TRAVEL RESERVE FUND BILL
  Not amended (in the Standing Committee), considered.
New Clause 1

  EXEMPTION FROM CONTRIBUTIONS
  The Secretary of State may, at any time, arrange for the introduction of a scheme under which contributions shall not be payable to the Fund in respect of customers insured against any losses or liabilities by the air travel organiser with an insurer approved by the Department of Trade and no payments shall be made from the Fund in respect of any losses or liabilities so insured; and the terms and conditions of such a scheme shall be such as the Secretary of State may by order prescribe, and any such order shall be contained in a statutory instrument and not be made unless a draft thereof has been approved by a resolution of each House of Parliament.—[Mr. Higgins.]
  Brought up, and read the First time.
  10.1 p.m.
  Mr. Terence Higgins: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Mr. George Thomas): With this new clause we may discuss also Amendment No. 31, in Clause 4, page 6, line 11, after 'to' insert:
  'section (Exemption from contributions) of this Act and'.
  Mr. Higgins: Amendment No. 31 is consequential on the new clause.
  The Bill raises two main political issues. The first arises from the misleading statement by the Secretary of State for Industry as a result of which a large number of our constituents felt that they lost money following the Court Line collapse. That is a matter to which we can return at later stages of the Bill. It is well known that the view of this side was that the Secretary of State should have resigned and that compensation should have been paid rapidly rather than after a delay out of
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  public funds. Instead, the Government have introduced the Bill and suggested the extraordinary solution that for the moment at any rate, pending the report of the Ombudsman, compensation should be paid out of a levy raised on people taking their holiday this year and next—a situation which I have described as bizarre.
  The second main political issue concerns the protection of tourists from loss in future. We well understand and sympathise with the views expressed on this subject, though we cannot help noticing a clear trend which appears to be developing, namely, that the Government should intervene on all occasions and set up a fund financed from a levy which will be used to compensate any who might suffer loss as a result of entering into commercial contracts, whether it be tourists or, as with the latest legislation, insurance policy holders. A number of my hon. Friends have said that they are not sure where the policy will stop and whether in future there will not be a levy on those who buy secondhand motor cars, for instance.
  At all events, the essence of the Government's policy appears to be that the protection must be provided under a Government scheme, even though it may be possible to provide equally effective protection by means of insurance or by some other arrangement made by the private sector.
  The clause seeks to distil many of the points raised in Committee. If a levy scheme is to be introduced, it should at least be open to travel organisers to undertake insurance arrangements to provide an alternative form of consumer protection instead of paying the levy.
  We have advanced this alternative with such determination because we believe that the levy scheme intrinsically fails to differentiate between companies which are efficient and soundly-based and the inefficient operator with inadequate financial resources who may have over-traded. The general feeling we have expressed throughout the proceedings on the Bill has been that if a firm is able to provide cover by insurance rather than by means of the levy, it should, at the very least, have the option to do so.
  In Committee we discussed at length the likely cost. On Second Reading my

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  hon. Friend the Member for Tonbridge and Malling (Mr. Stanley) suggested that the cost per passenger for the average holiday might be 45p as against the sum which we refined in Committee, which could be as low as 35p. In contrast, the Minister has so far been unable to produce a figure of comparable cost under the levy scheme. We remain convinced, and have not yet been persuaded otherwise, that in many cases the Government scheme would result in the cost to holiday makers being significantly higher than it would be under the insurance scheme.
  In Committee a number of cases were cited, one of which was the case of Panorama Holidays. The Minister sought to argue that this arrangement would in some way favour the large operator rather than the small one. We do not accept that. It is clear that sheer size is not a necessary consideration. It may well be possible for the small but efficient operator—one who has prudent management and reasonable financial resources—to obtain insurance on a reasonable basis even though the scale of his operation is not as large as that of some operators. I shall not weary the House with the details, but we went in some depth into the question whether this was so. We stressed time and again that we believe that travellers should be given the option of travelling under one system or under an alternative system, if that could be provided by the travel agent, on an insurance basis and on a basis which was likely to be cheaper than the Government scheme.
  This would present some difficulties for the Government because it would mean that certain companies would be operating and not contributing to the Government levy. However, it is clear that part of the levy will not go towards protecting future holiday makers or those who take their holidays this year or next year. It will go towards financing the compensation for those who suffered last year. Unlike the insurance case which has recently been covered by a Bill introduced in another place, in this case the Government propose to make the claim retrospective.
  If some people are allowed to opt out of the scheme, it will present difficulties for the Government. Furthermore, some
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  who take holidays would not be contributing to the levy and would not, therefore, be contributing towards compensation for those who lost their money in the collapse of Court Line and other companies last year.
  That is the essence of the case we wish to make on new Clause 1. It is an important matter. To some extent it strikes at the basis on which the Government seem to be engaging in various forms of consumer protection. But of course, the important point to bear in mind is which particular group of consumers they happen to be protecting. As in other cases, in this case the Government scheme seems to be cross-subsidisation from one group of consumers to another, in a wholly arbitrary and inequitable manner.
  I hope that having had time to reflect on the matter in the intervening period, the Minister will have considered carefully the clause I now propose and will be prepared to say—which would be the sensible thing to do—that he thinks it is quite reasonable that operators should have the option of covering the matter by insurance rather than the levy if they wish to do so. Similarly I hope that he will agree that those who are travelling should have the option of choosing between an operator who is carrying out his arrangements under the Government's scheme or is making alternative arrangements which, as I have said, may be significantly cheaper than those which the Government propose in the Bill.
  The Under-Secretary of State for Trade (Mr. Clinton Davis): At the beginning of his observations the hon. Member for Worthing (Mr. Higgins) threatened that he would play that oft-repeated and now somewhat broken record about the Secretary of State for Industry. That, I gather, is a pleasure yet to come, although the hon. Gentleman bruited the idea in his opening remarks. I hope that he will not be tempted into that course because we had innumerable discussions about that in Committee. The fact remains, as we had to tell the hon. Gentleman, who seems simply not to have learned, that the Parliamentary Commissioner for Administration is investigating these matters, wholly appropriately. The hon. Gentleman seems to misunderstand the totality of that situation.
  Regarding the hon. Gentleman's doubts about the wisdom of providing protection

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  in certain instances, he played the thing both ways. What he was saying was "Of course we do not oppose this form of protection, but we do not know where it will end." He wants the best of both worlds. But the Opposition have not voted against the principle in this matter. They will not vote against it. Therefore it would be as well for the hon. Gentleman to come absolutely clean on this point.
  I come to the new clause. The hon. Gentleman tried very hard—I give him credit for this—to meet the pertinent objections which were raised in Committee. What he is seeking to do is to enable the terms and conditions of an insurance scheme to be vetted by Parliament. That would avoid, according to him—I suppose that he may be right in some respects here—some shortcomings in the existing insurance schemes. What he has not done is to deal with those shortcomings or to suggest that there is, excepting one or two isolated instances which he mentioned, any effective form of insurance available here.
  The new clause could mean two quite distinct things. Taken in conjunction with Clause 6, the new clause would empower the Secretary of State to wind up the reserve fund and replace it with an approved insurance scheme. I do not believe that to be the hon. Gentleman's aim. In any case, such a procedure would be questionable, and it would be much more appropriate, if that were his intention, for a major change of that character to be introduced by legislation. What I assume is the objective here is to enable a scheme to run concurrently and in conjunction with the reserve fund. Perhaps the hon. Gentleman will clarify that. I would assume that that is the essential purpose of the new clause.
  Mr. Higgins: Clearly, it could be interpreted either way, and one would need to see how the matter developed, as we made clear in Committee. But presumably it would operate perfectly well in conjunction with it. Either alternative is one on which we would be prepared to see a concession from the hon. Gentleman.
  Mr. Davis: It is clear that the hon. Gentleman has not really made up his mind about that. The fact is that I reject the first possible understanding of the
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  amendment because I say that any major change of the character that that envisages should be made by legislation.
  I come to the second concept, and I submit that there are still very serious difficulties which face the hon. Gentleman in presenting his case. He mentioned the possible adverse effect on the reserve fund itself. But I do not think that he comprehended how injurious that would be to the operation of the reserve fund.
  If such a scheme were introduced and adopted by the major operators, the viability of the reserve fund would be seriously prejudiced and greatly reduced. Inevitably, it would be geared to the income from and claims in respect of firms which insurance companies were unwilling to cover—whatever the reason.
  The hon. Gentleman said, as he did on Second Reading and in Committee, that the Government had failed to differentiate between the sound and inefficient firms. He was assuming that the insurance companies would necessarily be able to determine which was efficient and which was not. I do not think that that is right. I believe that the insurance premium which the insurance companies would charge would be much more influenced by the financial backing available to individual air travel organisers than by their efficiency, which they could find very difficult to evaluate.
  Mr. Kenneth Lewis: Surely the whole basis of insurance is to try to assess financial efficiency. It is financial efficiency which makes an insurance company decide on a high premium for one company and a low one for another.
  Mr. Davis: Perhaps it is because the insurance companies find it so difficult to evaluate that question that there has been no comprehensive insurance scheme coming from private insurance companies to cover the very contingencies that we are discussing.
  That is the real answer to the case which the hon. Member for Worthing has presented. He has not been able to produce a tittle of evidence beyond that produced in Committee to show that there is any available insurance to cover anything but the firms which have substantial financing backing. That is what the cases to which he referred really involved. The

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  burden of proof rests heavily upon him. If he cannot discharge that burden of proof and cannot produce the evidence required, his case falls to the ground.
  There is no evidence that the insurance market would be prepared to make general offers of insurance of the type that the hon. Gentleman and his supporters envisage. Therefore, I do not think that the Secretary of State would find himself in a position to give approval to an insurance scheme, and it is clearly undesirable that he should take powers which are unlikely to be used.
  For those reasons and because the Opposition have failed singularly to make a case which can possibly stand up, I urge the House to reject the clause.
  Mr. Higgins: Before the hon. Gentleman sits down, will he address his mind to the question of cost? Contrary to what he said, the Opposition quoted a number of specific cases in Committee giving figures on the basis of which companies were able to insure specific passengers for specific amounts and specific fares. The hon. Gentleman has not attempted to estimate what the cost would be in comparison with the Government's levy scheme.
  Mr. Davis: I dealt with that at some considerable length in Committee.
  Mr. John Stanley: I was not a member of the Standing Committee.
  Mr. Davis: The hon. Member had every opportunity before the debate to read what went on in Committee. Anybody who participates in these debates without having taken the precaution of reading the Hansard for the Committee stage does not do himself justice.
  I recognise that the hon. Gentleman cited Panorama Holidays and one or two other examples, but in each they were firms that had substantial financial backing. That is the crux of the matter. Insurers are not able to evaluate the criteria of efficiency, and inevitably smaller firms would find themselves in an almost impossible situation however efficient they were.
  The hon. Member for Worthing asked me to comment on the cost. I shall do so briefly, although I refer him to what
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  I have said previously. In the very isolated aspects of cover that insurance would provide, it would be immediately cheaper. I recognise that and I have said so before, so I do not know why the hon. Gentleman is so astounded. The hon. Gentleman suggests that the cost would be 35p or 40p. I see the hon. Member for Uxbridge (Mr. Shersby) refers the hon. Member for Worthing to certain passages in Hansard that no doubt contain my observations.
  I accept that in the immediate future payments under the Government scheme would be considerably larger, but our fund would be variable from time to time. It is to be flexible and we shall have to see what develops during the operation of the fund. Therefore, at some stage there may well be no payment due, which could never operate under the hon. Gentleman's scheme, because insurance premiums would be continuing and would have to be met by the firms involved.
  But that is not germane to the main points that I have already made. It does not matter whether it is 35p or £1 or £2 at this stage. What is important is that we should cover the generality of passengers, the travelling public. That is what this is about, and the hon. Member wants to wreck the scheme.
  Mr. Higgins: It is bizarre and absurd of the hon. Gentleman to say that we are trying to wreck the scheme. What we are trying to do is to improve it. He said that he had answered my question about the comparative figures in Committee. Perhaps he would like to give us the Hansard reference for when he produced the figures in Committee. At a rapid glance, I cannot see it.
  Mr. Davis: At a rapid glance, I cannot. However, I caught the hon. Gentleman out in Committee when he asserted that I had failed to deal with an argument and he subsequently had to apologise. On referring to Hansard he will find that I dealt with the subject of cost and, if I recall aright, I referred to the figure of £2 as being a possibility. However, the hon. Gentleman will have to use his hon. Friend the Member for Uxbridge to look up the reference carefully and he will see that I dealt with this argument.
  Mr. Norman Tebbit: It comes a little odd from the Under-Secretary to suggest that it is an essential pre-requisite to taking part in a debate to have read all the documentation. It is not very long ago that in Committee he was suggesting in the circumstances of a strike by the printers, against the Government's social contract, that we did not need any of the documentation, did not need to study it, that nobody needed to worry about these things. It is a different story tonight. But those were the days when the Government were in difficulties because of that strike. Now the Under-Secretary sings a different tune. He should behave with a little more humility and he may get along a little more quickly.
  The Under-Secretary knows why we did not vote against the principle of the Bill. We certainly do not approve of this odious way of compensating those who lost their money in Court Line disaster, but we think it long overdue that the Government should implement their election promises. We believe that those who lost their money on the Secretary of State's say-so should at long last be paid.
  Mr. Clinton Davis: The hon. Gentleman was much nicer in Committee.
  Mr. Tebbit: I would not dispute that I was extremely nice in Committee—so was the Under-Secretary of State. He was then trying to find excuses to give to those who had not been able to read the documentation. Tonight he is being abusive to those who have not had time to do so. That is why I am being a little hard on him.
  What we find so odious about this legislation is the fact that it seeks to perpetuate another of the Government's dogmas. It seeks to lay down the law that bad money should drive out good money and that bad business should drive out good business.
  I should like the Minister to say what was the view of British Airways on the Bill. Was British Airways consulted and did it welcome the principle by which an airline, which could be insured against these risks for a very low premium, will be compelled to pay the same premium as everybody else? Do I understand by the Minister's silence that British
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  Airways was not consulted about this matter? I shall gladly give way to the Minister if he wants to tell the House.
  When we hear stories about the greater liaison which would occur under an enterprise board, or through the nationalised industries by their immediate and quick responses to Ministers, we can assume that perhaps now and again there will be some failure of communication. Was British Airways consulted and did that body give its views? Are we to be given that information by the Minister in the interests of open government? It is very quiet in here tonight. I have found it easier on other occasions to get Ministers to their feet, but tonight things are a little sticky for them. I do not blame them. After all, one of their colleagues moved only a few yards and he got fired for it.
  The Under-Secretary of State said that it would not be proper for the fund to be wound up by order—at least I think that is what he said. Am I correct in that? My goodness, it is getting more and more difficult to get a response from tthe Minister.
  Mr. Clinton Davies: I am always loth to intervene when the hon. Gentleman is on his feet, because it tempts him to go off into even more irrelevant matters. However, as he is on the point of going into something which is wholly erroneous, I should inform him that he will find that I did not say what he ascribes to me. What I said was that if the amendment were taken in conjunction with Clause 6, it would empower the Secretary of State to wind up the reserve fund and replace it with an improved insurance scheme. But I did not assume that to be the Opposition's aim in moving the amendment. I said I thought that a major change of that character would require legislation rather than the course thought to be appropriate by the Opposition.
  Mr. Tebbit: I am grateful to the Minister, but I am still as puzzled as I was before. Clause 6 stipulates that:
  "The Secretary of State may at any time, after consulting with the Authority, the Agency, and persons appearing to him to be representative of the interests of persons … by order provide for the dissolution of the Agency, the winding up of the Fund and the disposal of any assets then standing to the credit of the Fund."

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  In other words, he has power to do this by order, but will not accept our amendment which would make sense of the whole matter.
  Mr. Clinton Davis: What the hon. Gentleman is thinking of is the replacement of the scheme by something different. Of course, the winding up of the scheme is appropriately done by order.
  10.30 p.m.
  Mr. Tebbit: Why it should be wholly appropriate to wind up the whole scheme and replace it with nothing by order, but wholly inappropriate to wind it up so that it may be replaced with the provisions of another part of the Bill by order, must be beyond the wit of anyone other than the hon. Gentleman to explain. I cannot understand it.
  But we are sliding away from the point of the amendment. It is a simple, straightforward and permissive clause—I am not usually on the side of permissiveness—which allows the Secretary of State to allow the financially secure, responsible, well-run firms, the firms of good repute, to get the benefit of a well-managed business, and to allow their customers to have the benefits that should go to a customer who thinks before he purchases and who make sure that he goes to a reputable firm.
  In essence, what will the Bill unamended do? It will merely allow every lame duck and every black sheep in the business to feed in the hon. Gentleman's agency, and feed off the money provided by those who run their businesses well and those customers who think before they buy.
  Mr. Michael Neubert: The Bill already allows exemptions in the categories of holiday maker included in its provisions. The Under-Secretary's contention that we must have regard to the generality of the travelling public must be seen in the perspective that by no means all travelling holiday makers are to be covered. There are substantial exceptions, including those travelling other than on licensed air transport, which could embrace whole classes of holiday makers travelling abroad. The Bill also does not include those who holiday in this country.
  What distinction do the Government see? They appear to regard the most
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  vulnerable element as being the aid flight abroad and back. But that is not the only consideration they have given to preparing the Bill. The same air company might well fly people to the North of England for a holiday in the Lake District and back. Those holiday makers will not be covered by the Bill. Those who fly abroad and back, but spend their holiday abroad a British cruise ship, which could be regarded as part of the United Kingdom in terms of operation and financial resources are included in the Bill. There are anomalies in its coverage.
  It is clear that the Government are trying to ensure that the risks to those most vulnerable, those engaged in inclusive air holidays abroad, are covered by the Bill. Therefore, although there are no exemptions from contributions to be made by those whom the Bill encompasses, there are large exemptions among those who qualify.
  The Government have said that the Bill is necessary because of the failure of the bonding system, which is the first line of defence for travelling holiday makers abroad. We have the Bill because the bond was insufficient at the level at which it was established last year to cover the risk of collapse at the height of the season.
  Another reason is that, closing the stable door after the horse has bolted, we are to compensate those who lost money last summer—not only in Court Line and its subsidiary companies but in a number of smaller companies. That is why, in the first instance, future travelling holiday makers will be required to pay over the odds for their insurance. It is there that the differential lies between the cost of a premium for a self-insurance scheme and the amount of 1 per cent., eventually 2 per cent., of the levy which the Government propose. It is asking future holiday makers to compensate those who have lost money in the past. That is highly questionable. It is proposed in the amendment that companies that are able to arrange it to the satisfaction of the Department of Trade should be allowed to operate self-insurance schemes.
  Mr. Clinton Davis: The hon. Gentleman puts his case moderately, unlike the hon. Member for Chingford (Mr. Tebbit.)

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  I do not know whether he speaks for the Opposition, but is he saying that the Opposition do not favour providing com pensation for all the people unconnected Court Line matter who suffered in the mishaps of last year?
  Mr. Neubert: No, I am not saying anything of the kind, and I am sure the Minister understands that very well. We are discussing the method whereby the compensation is provided. It is questionable whether the clients of any company which goes bankrupt should be compensated by the Government or, indeed, by future customers of the industry. That is the principle that is fudged in this misshapen and misconceived Bill, but that is not the subject of the amendment.
  The Government propose a compulsory scheme of insurance on which all travelling holiday makers within these categories will be obliged to pay the levy. The Minister has acknowledged that the reason for that is that unless all companies are obliged to pay the levy the scheme will not be viable. Let us examine the implications of that. The Minister is saying that clients of good companies with ample and adequate financial resources shall be obliged to prop up a scheme for companies which do not have adequate financial resources. Can he defend that principle to the last in the light of day, or is the principle highly questionable, as we believe it to be?
  It is not for the Government to concern themselves whether there are any such insurance schemes available as an alternative to safeguard the travelling holiday maker. If no such insurance schemes come forward the Government will know that the holiday makers will be covered by their measures. What we seek is that companies that are able to arrange insurance should be allowed to do so.
  The Minister said that apart from the evidence brought forward in Committee there had been no evidence of companies being willing to make available such arrangements. There were certainly statements in the Press to the effect that a Dutch group of insurance brokers would be prepared to offer such a scheme. There has also been a report of Lloyd's being prepared to consider such a scheme. But so long as the Government stick to a compulsory scheme it is unlikely that any
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  company will take the initiative and come forward with an alternative scheme. The Minister has not proved to our satisfaction that efficient companies with the adequate resources would not be able to in the obtain insurance—
  Mr. Tebbit: Does not my hon. Friend agree that one way of discovering whether insurers are available is for the Minister to accept the amendment? We would then see what happened. If no one came forward no harm would be done. If insurers came forward the Secretary of State could refuse to give permission. At least we should find out the truth of the matter.
  Mr. Neubert: It is clear that the Minister has a rooted objection in principle to making any exception whatever. His attitude throughout the passage of the Bill has been totally inflexible. Why cannot he support a reasonable proposal that is in the interests of the holiday maker? In case he should feel that his ministerial career depends upon making no exception, may I draw his attention to the fact that the bonding scheme is now established with an exception—namely, that approval has been given by the Civil Aviation Authority to the "Jetsave" for an escrow scheme which allows a guarantee trust fund to be substituted for a 15 per cent. bond.
  The Minister need have no fear that by accepting the amendment he is establishing a precedent for an exception. If he is prepared to be sufficiently generous to ensure, if necessary, that the Government line that he is advancing will provide cash resources to compensate holiday makers, he may be right to allow exceptions where they can be secured. There is no doubt that the holiday industry would be prepared to come forward with such a scheme.
  Mr. Stanley: I agree with my hon. Friend the Member for Chingford (Mr. Tebbit) that the Minister has not begun to reply to the amendment. I found it disappointing that so little work had been done inside the Department between Second Reading and Report in considering this important alternative. The Minister has developed only three arguments of a sort against the amendment and none of them provides any sort of examination.

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  The first argument is of a purely technical nature and it has been well demolished by my hon. Friend the Member for Chingford—namely, the question of a combination of new Clause 1 with Clause 6. To suggest that it should require legislation to replace the operation of the reserve fund by an insurance scheme when it does not require any legislation to wind up the reserve scheme and to replace it with nothing will not command very much understanding or comprehension by my right hon. and hon. Friends.
  The other two objections that the Minister put forward are of some interest although I did not find either the last bit compelling. He suggested that if the House agreed this amendment it might in some way upset or destroy the viability of the reserve fund as its viability would be prejudiced by the contracting out of the reserve fund of the major operators. I thought that that was an interesting possibility for the Minister to contemplate. He is clearly admitting that the success of the reserve fund is dependent upon the participation of the tour operators that will not collapse and upon the holiday makers who fly with them—in other words, prudent holiday makers are being obliged legislatively to subsidise those for whom there is a real risk of collapse. That is the clear deduction that can be drawn from the Minister's argument that there might be a danger to the viability of the fund if the major operators contract out.
  If the main operators contract out all that he would seem to be saying is that those operators have come to the conclusion that they can provide a better form of consumer protection for their passengers through the insurance market. If we are in favour of consumer choice and the best possibility of consumer protection in the most economic and efficient way, it would seem reasonable to allow holiday passengers to seek protection in the most effective and economic market.
  The final argument that the Minister advanced was that there is a lack of evidence that the necessary insurance cover is available. He will be aware that there is a perfectly satisfactory scheme already in existence to which I referred on Second Reading—namely, the scheme arranged between the Norwich Union In-
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  surance Group and Panorama Holidays. The Minister referred to it in his earlier remarks.
  I now return to the intervention of my hon. Friend the Member for Chingford. Even if not one tittle of evidence existed that insurance cover was obtainable—and that is not the case, as I have already stated—that in itself would not be justification for rejecting the amendment. There is nothing in the amendment, if it were accepted, which would oblige tour operators to seek the necessary insurance cover for their holiday passengers. It is provided clearly in the amendment that if they can come forward with an insurance scheme it will be first necessary for them to obtain the approval of the Secretary of State before it can come into being. There can be no line of argument for rejecting the amendment on the basis that there is no substantial evidence that this type of insurance is regularly used.
  Evidence however already exists that this form of insurance cover is available. This is a further reason why the Minister should consider this new clause. If he does not accept it he is saying that those who travel with the soundest and most responsible firms will pay a significant increase as a direct result of this legislation when it would be possible to obtain the relevant protection at a cheaper price through the private market.
  10.45 p.m.
  Mr. Kenneth Lewis: The House will have gathered that the Minister was not very forthcoming in his earlier remarks. Those of us who served on the Committee know that the Minister was not very forthcoming in the early morning. But he improved and became more benign as time went on. It is early yet and no doubt he will become more benign as we get nearer to midnight.
  The important part of the clause is the first sentence which says:
  "The Secretary of State may, at any time,".
  This does not suggest that the Secretary of State should wrap this fund up tomorrow and introduce an insurance scheme to which all the trade would conform. If my hon. Friends were to suggest that I would say that it was not practical. This fund has been introduced because the Government had to introduce it, partly because of their misdemeanours

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  or miscalculations. I hesitate to say that they misled, although some would say so. They certainly miscalculated.
  Those who lost on Court Line expect their money back and a lot of others are in a similar situation. I should be the last to suggest that there should be any delay in such people getting what they expect from the fund because they were given a promise by the Minister. But this is not the best way in the long term to raise this kind of money. We are to have a Budget tomorrow. I do not know what the Chancellor will say but I imagine that he will indicate very clearly that there is a limit to the financial obligations that the Government can take on. He will be making public expenditure cuts, telling the nationalised industries that they have to make a profit and can no longer have subsidies. This is a new form of intervention which may be justified in the short term. It is not justified in the long term.
  If it is possible to bring this activity back into the realms of free enterprise it should be done. I would not expect Labour Members to rush into doing this but a Conservative Government, when returned, ought to do it. Who knows, given good sense, we may find that the Government decide to phase it out in a year or so and hand the operation over to free enterprise.
  Why would it be easier for this to be handled by the private sector in a year or so than it would be now or a year ago? It is because there has been a sea change in the whole of the business. Bonding has been introduced. We know that, because of bonding, companies that are financially viable will be seen to be so. In addition, there will be improved capital structures imposed upon all companies seeking a bond. We will not have companies offering tours to customers on the basis of a weak capital structure.
  Those who provide the bonds will look at the capital set up. As a result, it will be seen which companies are weak and which are strong. They will be able to provide a form of indemnity on the basis of a premium related to the strength of a company. There will be no weak companies. From now on it will be much easier for the insurance business to back a scheme to take the place of the
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  Government scheme. A scheme covered by insurance and bonding provides a yardstick by which we can determine weak and strong companies.
  The proposed scheme provides a form of feather bedding. Weak companies will not need to worry since they will know that a charge of £2 per head will be imposed by the Government. They will rest on that and say "it does not matter whether we are financially prudent or not." Therefore the Government should take the lifeline provided by Clause 6 and bring in the private sector.
  Mr. Tim Renton: I was struck by the variation of Gresham's Law of my hon. Friend the Member for Chingford (Mr. Tebbit), that bad money drives out good. Indeed Government supporters must learn that there is a Benn's Law, that profitable companies must subsidise the unprofitable, and that the rich must shore up the inefficient. That is what this Bill is about. It will primarily have the effect of helping the incautious travel organiser and the person who flies with that firm at the expense of those who fly with responsible companies.
  I received the impression that the Under-Secretary was more interested in setting up this fund as a further example of Government interference, with more place-men available for the Secretary of State to appoint, rather than in providing protection for the holiday maker at a reasonable cost.
  Two points stand out. The reasonable insurance cost from private industry is likely to be about 35p or 40p as opposed to the £l per centum for the Government fund. That is a substantial difference. It represents a worth while saving for a family of five going on holiday. This proposal should therefore be investigated and not thrown out of the window in the cavalier manner suggested by the Under-Secretary.
  Secondly, it has been said that the private insurance scheme has not been investigated by the Government. They give the impression of simply not having bothered to look into the alternative. The Under-Secretary gave the impression that such insurance might be available only to the large company. However, in the insurance business size is by no

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  means the only criterion. Strong, although small, balance sheets, consistent records of profitability and good management must also be taken into consideration. Those facts might be available to the smaller air travel operator who had operated successfully for a few years. In recognition of this, when he presented his case to the insurance industry he would get a lower insurance premium for the risk that he was trying to underwrite and he would be able to pass on the benefit to the customer. The customer flying with the small and well-run operator would get the benefit of an even cheaper insurance premium.
  The Under-Secretary also said that the new clause would lead to the removal of competition and that it would favour the larger firms only. I doubt whether he has read the article in the Financial Times this morning which pointed out that the present system of bonding plus the enforced Government levy which the Under-Secretary wishes to set up is causing substantial difficulty for some of the smaller companies. The article states:
  "Inquirers at the Civil Aviation Authority today will be told that 30 companies of that original 116 still do not have licences. What is regarded as most worrying about the present position is that it very much favours the larger operators".
  In fact, the present situation of bonding plus the levy suggested by the Government is likely to lead to a diminution of competition and to many of the smaller companies being forced out of business because they cannot afford this double protection which the Government are unnecessarily insisting upon. Protection for holiday makers is a fine political cry in these days of consumer awareness, but it is the holiday makers themselves who are the ultimate victims. It is they who will have to pay not only for the Fund but for the staff of the Civil Aviation Authority, the expenses of collecting the contributions and all the other bureaucratic expenses which will be involved. If the Under-Secretary has any doubt about this, let him through the travel operators, ask the customers which they would prefer to see—the industry making its own insurance arrangements or the blunderbuss of the State scheme.
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  Unfortunately, the real purpose of this Bill, as my hon. Friend the Member for Worthing said, is to bail out the Secretary of Industry. It is robbing Peter to pay off Tony. As an alternative to that, I trust the House will consider the alternative insurance scheme that my hon. Friend has put forward.
  Mr. Clinton Davis: The arguments that we have heard from the Opposition have been extremely ambivalent. Opposition Members did not, in fact, vote against the principle of a Bill which the hon. Member for Romford (Mr. Neubert) describes as misshapen and misconceived. They have got to make up their minds about this. They did not wish to be seen as not wanting to compensate people who had suffered from the difficulties of last year—
  Mr. Victor Goodhew (St. Albans): No, no.
  Mr. Davis: The hon. Gentleman says "No, no'', but that is the ineluctable conclusion of their failure to vote on the Second Reading. They had the chance to vote on a matter of principle, and they chose not to do so. [Interruption.] If the hon. Gentleman wants to interrupt, he may do so but not from a sedentary position.
  Mr. Goodhew: The reason why there is such anxiety about this whole problem is that the right hon. Gentleman encouraged people to believe that there was some substance behind the assurances given, and these have been proved to have been worthless.
  Mr. Davis: The hon. Gentleman rarely rises above the level of the basement, and he did not do so on this occasion. I am sorry that I gave way to him. Hon. Members opposite seek at every conceivable opportunity to introduce an argument which, if it has some relevance, is being dealt with by the Parliamentary Commissioner and by an inquiry under Section 165. All that they sought to do in those summer months was to maximise capital at the expense of the anxiety and distress of holiday makers. However, I will not pursue the argument, because it is the subject of a full and independent inquiry.
  Mr. Tebbit: Will the hon. Gentleman give way?
  11.0 p.m.
  Mr. Davis: No. I want to deal with the principle of the Opposition's argument. The object, so they say, to the concept of a 1 per cent. levy this year which will go up to 2 per cent. after 1st April 1976. What they fail to take into account is that this is in many ways comparable in principle with the operation of the bonding system. If their arguments were right, why have the bonding system at all? Why not rely upon private insurance companies? The fact is that no hon. Member opposite sought to adduce that argument.
  The point is irrefutable. Private insurance companies were not willing to deal with this matter. That is why we have the bonding system. There has been no evidence that, in the generality of cases, we would be in a position to have proper and effective insurance to deal with this matter.
  It is all very well to adopt the fanciful belief that insurance companies somehow or other will rally round if we drop this proposal, but there is no evidence of that. Indeed, hon. Gentlemen have adduced no evidence to that effect.
  I am convinced that if ABTA were able to see this as a matter which would have general application, that argument would have been not simply asserted, but backed by hard evidence from insurance companies. The Opposition have not been able to do that. In those circumstances, I feel that the evidence that they have produced falls far short of that which ought to be available.
  Mr. Neubert: Is the hon. Gentleman aware that prior to the Civil Aviation Act coming into force in 1971 the tour operating industry had made arrangements for a bonding system which was a first line of defence. In moving the new Clause we are seeking only to allow the industry within its scope to regulate its own affairs in the same way.
  Mr. Davis: The hon. Gentleman says that the industry would have introduced its own bonding system.
  Mr. Neubert: It had done so.
  Mr. Davis: Or that it had introduced its own bonding system. Evidently the Conservative Government were not satisfied with it. I do not know the intricacies of thought which went on at that
  190
  time, but the bonding system was introduced by the Conservative Party. The hon. Gentleman must therefore explain that. However, I do not propose to offer him the opportunity now to engage in historical research.
  Mr. Tebbit: May I ask the hon. Gentleman, because he is so much better at giving answers than accepting arguments, whether there is more than one rate of bonding for different kinds of companies or whether the bond is applied universally as his levy would be?
  Mr. Davis: The hon. Gentleman knows perfectly well that it relates to both ABTA and non-ABTA members. The Opposition cannot escape from the argument that if insurance were the key to this matter—
  Mr, Tebbit: The hon. Gentleman has been shot down again.
  Mr. Davis: The hon. Gentleman always likes to think that he shoots everybody down. The House will be aware that he is mostly shot down by his own bullets.
  The argument that the hon. Gentleman adduced about insurance should cover bonding as well. It does not. It is not capable of doing so. That is an argument to which hon. Gentlemen opposite have not given any thought at all.
  It is no use dealing in vague possibilities of insurance companies coming to the rescue. They have not done so. For that reason, I ask the House to reject the clause.
  Mr. Michael Shersby: The purpose of the clause is to provide for contracting out in the case of insurance-covered tours and travel. We seek to secure that
  "The Secretary of State may … arrange for the introduction of a scheme under which contributions shall not be payable to the Fund in respect of customers insured against any losses or liabilities by the air travel organiser".
  In other words, we are trying to introduce an insurance option under approved conditions—conditions, in other words, approved by the Secretary of State.
  We believe that such arrangements would enable the travel operator to insure his customer in accordance with terms and conditions which not only had parliamentary approval but were also subject to

  191
  scrutiny by the Minister and his Department. In other words, the operator would do so as an alternative to using the fund.
  There is no reason why the Government should not accept the clause. It would mean that any customer arranging his travel through a firm which was insured would not have to contribute to levy through the cost of his holiday. The Under-Secretary gave no convincing reasons against this. Surely it is fair to say that most reputable firms would wish to insure rather than to pay the levy. Their customers would get the benefit of insurance, probably on the London market, rather than having to contribute to a Government levy. Would any hon. Member suggest seriously that, for example, Lloyd's is less reliable than the fund? This is one of the crucial arguments on the clause.
  We have heard that the insurance option could cost less—probably only about 35p instead of £1 in every £100 if the levy is at the rate of 1 per cent. Private insurance would certainly be just as reliable as the fund.

  Division No. 167.]

  AYES

  [11.8 p.m.

  Aitken, Jonathan

  Knight, Mrs Jill

  Roberts, Michael (Cardiff NW)

  Atkins, Rt Hon H. (Spelthorne)

  Knox, David

  Rost, Peter (SE Derbyshire)

  Berry, Hon Anthony

  Lawrence, Ivan

  Sainsbury, Tim

  Biffen, John

  Lawson, Nigel

  Shaw, Michael (Scarborough)

  Brittan, Leon

  Le Marchant, Spencer

  Shelton, William (Streatham)

  Brotherton, Michael

  Lester, Jim (Beeston)

  Shepherd, Colin

  Bryan, Sir Paul

  Lewis, Kenneth (Rutland)

  Shersby, Michael

  Buchanan-Smith, Alick

  Macfarlane, Neil

  Silvester, Fred

  Bulmer, Esmond

  McNair-Wilson, M. (Newbury)

  Skeet, T. H. H.

  Chalker, Mrs Lynda

  Marshall, Michael (Arundel)

  Speed, Keith

  Clark, Alan (Plymouth, Sutton)

  Maxwell-Hyslop, Robin

  Spicer, Michael (S Worcester)

  Clarke, Kenneth (Rushcliffe)

  Mayhew, Patrick

  Stanley, John

  Cooke, Robert (Bristol W)

  Meyer, Sir Anthony

  Steel, David (Roxburgh)

  Cope, John

  Molyneaux, James

  Steen, Anthony (Wavertree)

  Costain, A. P.

  Morgan, Geraint

  Stradling Thomas, J.

  Durant, Tony

  Morgan-Giles, Rear-Admiral

  Tebbit, Norman

  Fisher, Sir Nigel

  Morrison, Charles (Devizes)

  Thomas, Rt Hon P. (Hendon S)

  Fletcher-Cooke, Charles

  Neave, Airey

  Thorpe, Rt Hon Jeremy (N Devon)

  Fowler, Norman (Sutton C'f'd)

  Nelson, Anthony

  Townsend, Cyril D.

  Fox, Marcus

  Neubert, Michael

  Vaughan, Dr Gerard

  Gilmour, Sir John (East Fife)

  Newton, Tony

  Viggers, Peter

  Glyn, Dr Alan

  Parkinson, Cecil

  Wainwright, Richard (Colne V)

  Goodhew, Victor

  Penhaligon, David

  Walder, David (Clitheroe)

  Grist, Ian

  Percival, Ian

  Weatherill, Bernard

  Grylls, Michael

  Powell, Rt Hon J. Enoch

  Winterton, Nicholas

  Higgins, Terence L.

  Rathbone, Tim

  Young, Sir G. (Ealing, Acton)

  Hooson, Emlyn

  Rees-Davies, W. R.

  Hunt, John

  Renton, Tim (Mid-Sussex)

  TELLERS FOR THE AYES:

  Hutchison, Michael Clark

  Rhys Williams, Sir Brandon

  Mr. Russell Fairgrieve and

  Jessel, Toby

  Ridley, Hon Nicholas

  Mr. Adam Butler.

  King, Evelyn (South Dorset)

  Ridsdale, Julian

  NOES

  Anderson, Donald

  Bagier, Gordon A. T.

  Buchanan, Richard

  Archer, Peter

  Bates, Alf

  Callaghan, Jim (Middleton & P)

  Armstrong, Ernest

  Bennett, Andrew (Stockport N)

  Campbell, Ian

  Ashton, Joe

  Blenkinsop, Arthur

  Carmichael, Neil

  Atkins, Ronald (Preston N)

  Boardman, H.

  Carter-Jones, Lewis

  Atkins' n, Norman

  Bottomley, Rt Hon Arthur

  Cartwright, John

  The Minister said that my hon. Friend the Member for Worthing (Mr. Higgins) did not deal with the shortcomings of an insurance scheme. Nor did the Minister deal with any alleged shortcomings. I suggest that an insurance scheme would be simple for members of the travelling public to know whether they were properly insured. After all, the travelling public do not need to be spoon-fed I believe that in the longer term insurance will be desirable, anyway. So why do not the Government get down to doing something about it now by accepting the clause?
  Perhaps it would be a good thing in the not too distant future if ABTA and the tour operators got together with the insurance companies and evolved their own scheme. I suggest that an insurance option should be there. I therefore advise my right hon. and hon. Friends to vote for the clause.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes, 88, Noes 122.

  Clemitson, Ivor

  Hatton, Frank

  Prescott, John

  Cocks, Michael (Bristol S)

  Hoyle, Doug (Nelson)

  Radice, Giles

  Cohen, Stanley

  Hughes, Robert (Aberdeen N)

  Roberts, Albert (Normanton)

  Colquhoun, Mrs Maureen

  Hunter, Adam

  Rodgers, George (Chorley)

  Cox, Thomas (Tooting)

  Jackson, Miss Margaret (Lincoln)

  Rooker, J. W.

  Craigen, J. M. (Maryhill)

  Janner, Greville

  Rowlands, Ted

  Cryer, Bob

  Jenkins, Hugh (Putney)

  Ryman, John

  Dalyell, Tam

  Jones, Dan (Burnley)

  Shore, Rt Hon Peter

  Davidson, Arthur

  Judd, Frank

  Skinner, Dennis

  Davis, Clinton (Hackney C)

  Kerr, Russell

  Small, William

  Deakins, Eric

  Kilroy-Silk, Robert

  Smith, John (N Lanarkshire)

  Dean, Joseph (Leeds West)

  Lambie, David

  Snape, Peter

  Dempsey, James

  Leadbitter, Ted

  Spearing, Nigel

  Dormand, .J. D.

  Lestor, Miss Joan (Eton & Slough)

  Spriggs, Leslie

  Douglas-Mann, Bruce

  Loyden, Eddie

  Stallard, A. W.

  Duffy, A. E. P.

  McElhone, Frank

  Stoddart, David

  Dunn, James A.

  MacFarquhar, Roderick

  Stott, Roger

  Dunwoody, Mrs Gwyneth

  Mackenzie, Gregor

  Thomas, Ron (Bristol NW)

  Eadie, Alex

  Mackintosh, John P.

  Thorne, Stan (Preston South)

  Ellis, John (Brigg & Scun)

  Maclennan, Robert

  Tinn, James

  Ellis, Tom (Wrexham)

  McNamara, Kevin

  Tomlinson, John

  Evans, John (Newton)

  Madden, Max

  Wainwright, Edwin (Dearne V)

  Ewing, Harry (Stirling)

  Magee, Bryan

  Walker, Terry (Kingswood)

  Fernyhough, Rt Hon E.

  Marks, Kenneth

  Ward, Michael

  Flannery, Martin

  Marquand, David

  White, Frank R. (Bury)

  Fletcher, Ted (Darlington)

  Marshall, Dr Edmund (Goole)

  White, James (Pollok)

  Ford, Ben

  Millan, Bruce

  Williams, W. T. (Warrington)

  Fowler, Gerald (The Wrekin)

  Morris, Charles R. (Openshaw)

  Wise, Mrs Audrey

  Fraser, John (Lambeth, N'w'd)

  Murray, Rt Hon Ronald King

  Woodall, Alec

  George, Bruce

  Noble, Mike

  Woof, Robert

  Golding, John

  O'Halloran, Michael

  Wrigglesworth, Ian

  Gourlay, Harry

  Ovenden, John

  Young, David (Bolton E)

  Grocott, Bruce

  Palmer, Arthur

  Hamilton, James (Bothwell)

  Park, George

  TELLERS FOR THE NOES:

  Harper, Joseph

  Parry, Robert

  Mr. Laurie Pavitt and

  Harrison, Walter (Wakefield)

  Pendry, Tom

  Mr. Donald Coleman.

  Question accordingly negatived.

Clause 1

  THE AIR TRAVEL RESERVE FUND AGENCY
  11.15 p.m.
  Mr. Clinton Davis: I beg to move Amendment No. 1, in page 1, line 10, after 'Authority', insert:
  '(hereafter in this Act referred to as "the Authority")'.
  Mr. Deputy Speaker (Mr. George Thomas): With this amendment, it will be convenient to consider Government Amendment No. 27.
  Mr. Davis: These are drafting amendments to meet a point raised in Committee by the hon. Member for Christ-church and Lymington (Mr. Adley). The Bill already provides in Clause 7(1) for references to the Authority to have the same meaning as in the Civil Aviation Act 1971, but the amendments make it clear beyond peradventure that such references are to the CAA.
  Amendment agreed to.
  Mr. Clinton Davis: I beg to move Amendment No. 2, in page 2, line 7, after 'include', insert `(a)'.
  Mr. Deputy Speaker (Mr. George Thomas): With this we may take Government amendments Nos. 3, 4 and 5.
  Mr. Davis: These amendments are to give effect to an undertaking given in Committee that a provision for consumer interests to be represented on the agency would be introduced, and we are here honouring that commitment.
  Amendment No. 4, to which Amendments Nos. 2, 3 and 5 are consequential. provides that the interests of members of the public using travel facilities shall be represented on the agency. The appropriate coverage is of course a matter that will be pursued in consultation with my right hon. Friend the Secretary of State for Prices and Consumer Protection.
  We should not necessarily consider representation in terms of particular organisations, a view that met with the approval of the Standing Committee. The important thing is to achieve the right balance of expertise on a body of this kind having regard to its functions. I know that hon. Members on both sides of the House are concerned that the interests of the travelling public should be represented on the Committee, and the amendments give effect to the Government's undertaking in this respect.
  Mr. Higgins: This matter has a considerable history. It was on Second Reading that my hon. Friend the Member for Chingford (Mr. Tebbit) interrupted the Secretary of State for Trade to suggest that there should be representation of consumer interests on the Authority and to our surprise the Secretary of State replied:
  "That is a good point and I should like to consider that"—[Official Report, 20th February 1975; Vol. 886, c. 1582.]
  That was as though the point had never previously occurred to him in the consultations that he had had in the preparation of the Bill. It was a matter that we pursued at some length in Committee and to our surprise, even between Second Reading and Committee stage, the comparatively simple point that we were seeking to make had apparently not been resolved by the Minister concerned, and we had a rather lengthy debate.
  The form of words that the Under-Secretary has now produced is not as elegant as our proposal in Committee and I rather doubt whether these words are as good as ours. I prefer our drafting. But it would be churlish not to accept the substance of what the Under-Secretary has proposed and we are grateful to him for these amendments so that the consumer interest may be effectively represented.
  We shall watch with care to see how the Secretary of State fulfils this undertaking, which I am happy to say is now in the Bill. From time to time in Committee we were disturbed to see that the Minister seemed to think that his assurances were equivalent to a provision in the Bill. It is right that this provision should be in the Bill and I advise my hon. Friends to accept the amendments.
  Mr. Tebbit: I should like briefly to welcome the amendment, as it was I who astounded the Secretary of State by suggesting on Second Reading that the consumer should be represented in a consumer protection Bill. When in Committee my hon. Friends and I put down amendments to ensure that there would be consumer representation, the Under-Secretary brushed them aside. Indeed, he said:
  "First, I wish to correct the impression, which some hon. Members sought to convey, that the Government overlooked the consumer
  196
  interest when drafting the Bill. That is untrue." [Official Report, Standing Committee D. 4th March 1975; c. 48.]
  It may have been inappropriate, but it now emerges that it is necessary to carry out a redrafting exercise to ensure that they should be represented.
  Once again the Under-Secretary of State on an earlier occasion was unwilling to accept an amendment, and indeed brushed it aside. I cannot understand why this provision was not included in the original Bill or why a Government amendment was not tabled in Committee. There was ample time between Second Reading and Committee—and I even managed to give the Minister, despite his protests, a chance of an extra 48 hours between Committee sittings to get the drafting right. Eventually we suggested to him the solution to what he saw as a difficult problem—namely, the definition of who were the "consumers".
  I am glad that he took up our suggestion and defined them in just the way suggested. I am still puzzled at why the Government saw fit to vote down our amendment in Committee, but I am delighted that they have had a change of heart.
  Amendment agreed to.
  Amendments made: No. 3, in page 2, fine 8, after "and'', insert "(b)".
  No. 4, in page 2, line 11, leave out "but the" and insert
  "and the Secretary of State shall also ensure, through the exercise of his power of appointment in relation to the membership of the Agency, that the interests of members of the public using travel facilities provided by persons so engaged are specially represented on the Agency.
  (4A) The".
  No. 5, in page 2, line 16, at end insert in subsection (4)(b)".—[Mr. Clinton Davis.]

Clause 2

  LIMITS ON THE APPLICATION OF THE AIR TRAVEL RESERVE FUND
  Mr. Clinton Davis: I beg to move Amendment No. 7, in page 3, line 1, after "commitments", insert "under or".
  Mr. Speaker: With this amendment it will be convenient to take Government Amendments Nos. 8 and 10.
  Mr. Davis: This amendment and amendments Nos. 8 and 10 are drafting amendments. They reflect the fact that a travel organiser may be unable to meet his financial commitments to a customer either because he cannot repay to that customer money which he owes him or because he cannot provide that customer with the accommodation which the customer has booked because he cannot pay the airline or the hotel. The words "in respect of" might have been interpreted as covering only the first of these two situations. The insertion of the words "under a" removes any possible inadequacy.
  Amendment agreed to.
  Amendment made: No. 8, in page 3, line 37, after "commitments", insert "under or".—[Mr. Clinton Davis.]
  Mr. Clinton Davis: I beg to move Amendment No. 9, in page 4, line 1, leave out from 'Where' to 'in' in line 7 and insert:
  'any money is in fact available under any such bond or security as is mentioned in subsection (6) above for the purpose of compensating customers of the air travel organiser in question in respect of losses or liabilities incurred by them in connection with overseas air travel contracts to which this section applies—

  (a) no payment shall be made out of the Fund in any case falling within that subsection until all the money so available has been paid to or for the benefit of the customers in question or any class or description of those customers; and

  (b)subsection (1) above shall not apply to any losses or liabilities incurred by a customer in a case falling within subsection (6) above'.

  This amendment to Clause 2(7) is intended to do two things. First, it removes an ambiguity in paragraph (a) of the subsection which prohibits payments out of the fund until money available under the bond "has been paid". This could have been construed in two ways, as meaning either paid by the obligor under the bond to those administering the bond or as paid by those administering the bond to customers of the travel organiser concerned. The latter interpretation was what was intended. The amendment, by prohibiting payments out of the fund until money available under the bond "has been paid to or for the benefit of the customers in question", puts the matter beyond doubt.
  198
  Secondly, Clause 2(7) as drafted requires all money available under the bond to have been disbursed before the fund is used. In practice an ABTA or TOSG bond may cover those who book, for example, surface travel or travel by scheduled airlines, which is not covered by the Bill. It is unreasonable to provide that the claims of these passengers should have to be satisfied before payments can be made out of the fund to passengers who are covered by the Bill. The amendment accordingly seeks to provide that only bond money available for compensating passengers who are covered by the Bill shall have to be disbursed before payments are made out of the fund.
  I should perhaps mention that in future the Civil Aviation Authority will require, in the case of those holding ABTA or TOSG bonds, that an amount of the bond money specified in each travel organiser's licence shall be earmarked for the purpose of compensating customers who have done business with the licence holder of a kind which is authorised by the licence.
  Mr. Higgins: Could the Minister say in regard to the last point which he read from his notes under what authority that requirement would be made in respect of the Civil Aviation Authority?
  11.30 p.m.
  Mr. Davis: I think that the authority that the Civil Aviation Authority would utilise here would be regulations which would be made under the main Act. I have not inquired into this, however, and I shall write to the hon. Gentleman about it.
  Amendment agreed to.

Clause 3
  RULES FOR THE PAYMENT OF BENEFITS FROM THE FUND
  Amendment made: No. 10, in page 5, line 27, after 'commitments', insert 'under or' .—[Mr. Clinton Davis.]
Clause 4

  CONTRIBUTIONS FOR THE PURPOSES OF THE FUND BY AIR TRAVEL ORGANISERS
  Mr. Clinton Davis: I beg to move Amendment No. 11, in page 6, line 11,

  199
  leave out 'subsection (2)' and insert subsections (2) and (2A)'.
  Mr. Speaker: With this amendment we are taking also Government Amendments Nos. 19 and 28.
  Mr. Davis: Amendment No. 11 is consequential on Amendment No. 19 to insert a new subsection (2A) to provide for affirmative resolution procedure for regulations made under Clause 4.
  In Committee I undertook to consider how regulations made under Clause 4 could best be brought before Parliament for approval. We have considered whether it would be appropriate to make an order subject to confirmation within a certain period, but if for some reason it did not prove possible to obtain the approval of each House within the period serious difficulties could arise. It might be necessary for the CAA to refund contributions already collected or to obtain additional contributions retrospectively.
  We have therefore accepted a procedure which will require a draft order to receive parliamentary approval before the regulations take effect, although this could result in delay if the order was laid just before a recess. If the purpose of the order was to reduce the level of contributions this could work to the disadvantage of the travel trade, but we have concluded that the difficulties which could result from the alternative procedure would be far greater.
  Amendment No. 28 is consequential on the amendments to which I have referred, which provide for regulations made under Section 26 of the Civil Aviation Act by virtue of Clause 4 to be subject to affirmative instead of negative resolution procedure as provided in the Civil Aviation Act 1971.
  Mr. Higgins: Again, might I check two points with the Minister? The first is on Amendment No. 11. It refers to subsection (2) and then to subsection (2A). I have had difficulty in discovering where that was intended to come, because I could not find what presumably would normally be the case, namely, subsection (2B). Perhaps the Minister can clarify this.
  On the substance of the issue which, I understand, arises on Amendment No.
  200
  19, which effectively means that the regulations will require a positive rather than a negative resolution, that is certainly something which we on this side welcome, because one can seldom recall an occasion when the Government have been prepared to change their mind on this point.
  Mr. Davis: If the hon. Gentleman looks at Amendment No. 19, he will see that it refers to subsection (2A). It is simply an alternative way of dividing the clause. I understand that it is not infrequently done. There could, of course, be (2A) and (2B), but I hope we shall not have a long debate about that.
  Mr. Higgins: It is not a question of having a long debate about it. I am merely seeking to establish whether the drafting is correct. There is no need, therefore, for the Minister to reply in those terms. If we are now inserting subsection (2A), there is presumably a corresponding subsection (2B) later in the proceedings. Perhaps the hon. Gentleman will confirm whether this is so. If it is not, I am not clear why this subdivision is needed.
  Mr. Davis: It is simply a different way of subdividing. One could have subsection (2) and subsection (2A), or (2A) and (2B). I have seen legislation where this has been provided for. I am sorry that it does not meet with the hon. Gentleman's approval.
  Amendment agreed to.
  Mr. Clinton Davis: I beg to move Amendment No. 12, in page 6, line 13, after 'provision', insert:
  '(including in particular any such provision as is mentioned in subsection (2) of that section)'.
  Section 26 of the Civil Aviation Act 1971 contains the powers under which the Civil Aviation (Air Travel Organisers' Licensing) Regulations are made, and Clause 4 of the Bill in effect widens those powers to enable the regulations to be amended so as to require licence holders to make payments to the reserve fund. Section 26 of the 1971 Act has two subsections. The amendment is necessary for technical and drafting reasons to ensure that subsection (2) of Section 26 applies to provisions for requiring payment of contributions, in the same way as it applies to the regulations presently in force.

  201
  Unless the House requires me to do so, I shall not weary it with the technical drafting reasons which have made the amendment necessary.
  Amendment agreed to.
  Mr. Clinton Davis: I beg to move Amendment No. 13, in page 6, line 15, leave out 'calculated in such manner as may be prescribed by' and insert
  'at such a rate as may be specified in'.
  Mr. Speaker: With this amendment we are to consider Government Amendment No. 14.
  Mr. Davis: The amendment is linked with Amendment No. 14. Its purpose is to simplify the provisions of Clause 4, Contributions to the Reserve Fund payable by any travel organiser are to be a prescribed percentage of his turnover. The amendment spells this out instead of leaving it for the method of calculation to be prescribed in the regulations. The percentage will, of course, be prescribed in the regulations and will be subject to variation from time to time.
  Amendment agreed to.
  Amendment made: No. 14, in page 6, line 19, leave out from beginning to first 'the' in line 22 and insert:
  'The rate of contributions to be required from any air travel organiser under regulations made under section 26 by virtue of subsection (1) above shall be fixed as a percentage of'.— [Mr. Clinton Davis.]
  Mr. Neubert: I beg to move Amendment No. 15, in page 6, line 22, leave out 'paid or'.
  Mr. Speaker: With this amendment we are to consider the following amendments: No. 16, in page 6, line 24, after 'facilities', insert 'to be '.
  No. 17, in page 6, line 26, leave out 'the air travel organiser has provided'.
  No. 18, in page 6, line 27, after 'flights', insert:
  'is to be provided by the air travel organiser'.
  No. 20, in page 6, line 43, at end insert:
  'shall be payable by instalments on 1st January, 1st April, 1st July and 1st October in any year, each instalment being based on the total amount estimated to be payable by customers of air travel organisers during the ensuing three months and'.
  No. 21, in page 6, line 43, at end insert:
  'shall be payable in two half-yearly instalments based in each case on the total amount
  202
  paid or payable by customers of the air travel organiser during the preceding three months and on the total amount estimated to be payable by customers of the air travel organiser during the ensuing three months, and'.
  No. 22, in page 6, line 43, at end insert:
  'shall be payable by quarterly instalments in advance based on the total amount paid or payable by customers of the air travel organiser during the ensuing three months'.
  Mr. Higgins: I am sure that it will be for the convenience of the House to take the amendments together, although they raise somewhat different points. Am I right in assuming, Mr. Speaker, that you will be prepared to allow a separate Division on one or other of the group of amendments, depending on how the debate develops?
  Mr. Speaker: I shall be prepared to allow a Division on Amendment No. 15 and on Amendment No. 21 or Amendment No. 22 if need be.
  Mr. Neubert: All the amendments have the purpose of easing the burden of payment by the tour operator in the first instance. It is a feature of the Bill that it requires the levy to be made on the tour operator twice yearly in advance, on the basis of the estimated turnover for the ensuing six months. It is a considerable burden of payment, and it is a source of considerable anxiety to the tour operating industry, which has made representations to us on the subject, both during the proceedings in Committee and subsequently.
  Shortly before 1st April and 1st October each year, tour operators will be required to estimate their turnover for the ensuing six months, and pay in the immediate future 1 per cent. of the turnover to the agency to be set up under the Bill. From 1st April 1976 it will be 2 per cent. of estimated turnover.
  As the money must be made over to the agency before it is recovered from the clients, the levy acts as a tax, albeit a fluctuating tax that descends progressively over the six months. It is a burden on top of many others that have fallen on the travel industry in recent years.
  The first burden is that, with much increased capacity in air holiday traffic, people have tended to book much later than they used to. They used to book

  203
  from Christmas onwards for the following summer, and the tour operating companies benefited from the immediate cash flow of deposits and the interest on them.
  As a result of the collapses of last summer, other facilities that the tour operating companies enjoyed will no longer be available to them. For example, hotels and other contractors abroad who have suffered serious losses as a result of recent collapses will no longer be prepared to allow a time to elapse before payment of bills. In addition, they may require payment to be made some months in advance of the client's departure, instead of on arrival or even at the end of his holiday. Advance payment is becoming increasingly necessary to secure seats on aircraft and beds in hotels. This, too, is tying up a great deal of money in advance. Those burdens are already on the industry. There is the doubling of the bond from the level established last year which proved insufficient. That, again, is a considerable burden on the industry as a whole. Now we have this further turn of the screw, the requirement that the levy should be on the tour operator and recoverable from the client only over a period of six months.
  I will illustrate the extreme burden by taking the largest tour operator's estimated turnover. In the summer of 1976 a levy of 2 per cent. will require a payment, shortly before 1st April, of £680,000 on the basis of a turnover of £34 million in that summer. In the winter season of 1976–77 there will be an initial levy of £320,000 on an estimated turnover of £16 million. On the basis of a £50 million turnover in that year of tour operation the tour operator in question will be required to make two lump payments of £680,000 and £320,000 respectively, making a payment of £1 million inside a six-month period.
  The tour operator will have recovered the amount of the first levy from the clients in that six-month period, but it will be clear to the Minister that this is a tax on the tour operator which will be a considerable burden and may have the effect of achieving what the Minister is trying to avoid, namely, the collapse
  204
  of travel companies in circumstances in which clients lose their money.
  Tour operators lose not only the cash flow which is traditionally customarily available to them as working capital, but under the levy scheme as opposed to the bonding scheme they also lose the interest on that money. That will be a burden on the tour operator and it will be an adminstrative burden on the Civil Aviation Authority which has the responsibility of ensuring that the levy is paid in good time. Unless the CAA is to be staffed up to be able to cope with the two peaks, inevitably it will be seriously overburdened both with bonding and with the insurance levy on two dates in the year, shortly before 1st April and shortly before 1st October. The danger of the CAA's not being able to secure the moneys in time has already been amply illustrated.
  I hope that the CAA will forgive me—it has no chance itself to argue the case—for referring to Western Jet which at this time last year was known not to be able to meet the bond requirements and whose licence was not renewed. The company was able to continue to trade in the ignorance of the CAA, and by the time a refusal had finally been entered against the firm's licence application events had gone so far in July last year that the company went broke to the tune of nearly £250,000.
  'The CAA has a heavy responsibility to ensure that the money is in bond in good time before the company collapses. To that is to be added the responsibility for ensuring that the levy is paid in good time. In suggesting in Amendment No. 20 that the burden be eased by quarterly payments instead of half-yearly payments, we are suggesting that it will be a lesser responsibility for the CAA to secure the moneys for a three-monthly rather than a six-monthly turnover period.
  For these reasons I hope that the Minister will be amenable to a reasonable suggestion which comes from the industry. The industry has grave fears which have been reported in today's copy of the Financial Times by Arthur Sandles, a highly respected correspondent. He has made it clear that the cash flow restrictions on the industry are so serious as to warrant the headline
  "Holiday groups face crisis over 11% cash levy".

  205
  To the 10 per cent. bond is now to be added the 1 per cent. levy. The combination of those two factors, together with the other factors that I have already mentioned, may represent an insuperable problem for many holiday companies.
  11.45 p.m.
  Mr. Kenneth Lewis: I support my hon. Friend the Member for Romford (Mr. Neubert). The difficulties arose which led to the Court Line situation when the industry faced a cash flow problem. If Court Line had had the cash to enable it to carry on business for a few weeks beyond the summer season we would probably not be debating the Bill or the fund.
  I hope that the Minister will recognise that in asking for the levy to be paid six months in advance he is taking the risk of imposing a further burden upon the industry. The increased bonding and the general request by the Civil Aviation Authority to so many companies to increase their capital have been accepted by the industry. I have no doubt that the companies will have to accept these provisions if the Minister insists, but I hope he will realise that he is not making matters easy for the companies. There is the risk that some companies may go into liquidation and that the very thing that he is trying to avoid will happen. It is true that the passengers will be covered, but other people will get into difficulties if the companies go into liquidation. Foreign hoteliers may find themselves owed money, for example. It will not help if we have other collapses on our hands.
  Another matter that the Minister must bear in mind is that not all tour operators are large concerns. There are a number of small operators. The small organiser may not know what his position will be six months ahead. He may know his position three months ahead but he may not know it six months ahead. He may not know what kind of groupings he will have to organise so far ahead. I hope that the Minister has that well in mind. To insist that the small operator must anticipate his position six months ahead and that he must pay out money which he may not have may mean that he will have to borrow from the bank at a high rate of interest. That may place upon him an obligation which may compel him to go out of business. If
  206
  that happens the idea is finished that the acorn of today will become the oak tree of tomorrow.
  The Minister must accept that he has not given us many concessions. No concessions were made in Committee and the amendments which the Minister has put before the House have been very minor. The fact is that he has given us very little. We are now discussing a matter on which he could make a concession. It would not do any great damage to either the CAA or the Government but it would help in the working of the Bill once it becomes an Act.
  Mr. Tebbit: Amendment No. 21 is intended to do precisely the same thing as the amendments tabled by my hon. Friend the Member for Chingford (Mr. Neubert). It merely goes about matters in a slightly different way. It may well be that the Minister will find reasons to prefer one or other of the amendments or even to dislike one amendment more than another.
  In essence, Amendment No. 21 will enable the company to reduce its cash flow problems in that it would be paying six monthly but it would be basing its payments on the previous three months and on the three months yet to come. It would thus have a much clearer and more accurate idea of how much the payments should be and it would have the benefit of the payments which had already be made three months ago.
  All these amendments are put forward with the same idea, which is that if we are to have this Bill it should be possible for companies of all sizes to carry on with their business despite the increased burdens imposed on them.
  Mr. Tim Renton: I support these amendments. There is a further point to be made in addition to those which my hon. Friend the Member for Romford (Mr. Neubert) has raised. Many of the smaller operators are being requested to put up their 10 per cent. bonds in cash. In the past it was normally possible for them to provide these bonds through a bank or an insurance company against the collateral of some of their fixed assets, for example the office building which they might own.
  Such are the uncertainties in the property market, due to the activities of

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  the Labour Government, that increasingly the smaller companies are finding it hard to obtain bonds against such collateral. Instead they have to find cash. This means that, with the 10 per cent. bond and the 1 per cent. levy requirement, they are being forced to put up in cash the equivalent of 11 per cent. of their turnover.
  Few companies in this country can easily bear that sort of demand for cash. My hon. Friend's modest amendment would somewhat mitigate the burden because it suggests that the companies put forward the levy only at three-monthly intervals rather than a bigger bloc every six months. The Minister has said that he is in sympathy with the objective of seeing that as many as possible of the smaller travel operators remain in business. I trust that the Minister will prove this by accepting the amendment.
  Mr. Shersby: Amendment No. 22 together with Amendment No. 21 relates to the basis and dates of payments of contributions to the fund. As proposed in Amendment No. 21, the suggestion is for two half-yearly payments based in each case on the total amount paid or payable by customers of the air travel organiser during the preceding three months and on the total amount estimated to be payable by customers during the ensuring three months.
  Similarly, Amendment No. 22 provides for quarterly instalments based on the total amount paid during the ensuing ensuing three months.
  What my hon. Friends are trying to achieve, and I share their desire, is to make the basis of the levy more precise and to ease the stress on working capital. In Committee and again tonight my hon. Friend the Member for Romford (Mr. Neubert) has stressed the need to ease the burden which the air travel organiser will have to bear in paying the levy. My hon. Friend is right to do this. That is why we have returned to the problem.
  A helpful compromise would be to assess the levy on the three previous months' turnover, in which payments were made by the client to the travel company, while during the ensuing three months it would be estimated. That would make the levy amount more precise and ease the stress on working capital.
  208
  In Committee the Minister rejected that proposal on the ground that the Civil Aviation Authority had a duty to consider whether delay in the payment of contributions represented evidence of financial weakness, and, if so, whether the air travel organiser's licence should be suspended or renewed. The Minister also expressed his concern that quarterly payments would involve payment in July, at the height of the season, and that if the Civil Aviation Authority was forced into the position of having to suspend a licence, the dangers would be great.
  Amendment No. 22 does not provide for quarterly payments at a fixed month of the year. It provides that the quarterly payments should be based on the three months' previous turnover and three months' estimated turnover, thus easing the strain. There is therefore no need to delay the contribution, to allow three months to ensue, and then to assess the amount of the levy. We recommend that the levy should be assessed part retrospectively and part in advance so that it relates more closely to the number of passengers carried. It will not do so in its entirety because it will be prospective to the extent of three months. With the limit of three months in retrospect it will be much more precisely related to the actual amount of turnover achieved by the tour organiser.
  For that reason we believe that the proposal is fair and reasonable. I hope that the Minister will comment on all the amendments and perhaps express a preference for that which might achieve the objective most efficiently.
  Mr. Clinton Davis: The hon. Member for Romford (Mr. Neubert) raised the question of Western Jet. I do not accept all of his arguments on that matter. Nor do I accept that his criticism of the CAA was justified.
  The hon. Member for Rutland and Stamford (Mr. Lewis) often has an appealing and mollifying influence. However, he must not appeal to me by way of tearful blandishment. He must simply produce arguments. I shall not follow the hon. Gentleman into the details of Court Line since his argument also relates to that company's failure. It would be inappropriate for me to comment on it.

  209
  The Opposition argued that payment at six-monthly intervals may place a strain on the cash resources of some tour operators. I recognise that. However, the Bill does not prevent collection at shorter intervals, if desirable.
  There are other reasons why I must reject the arguments of the Opposition. The Government think that it is important and necessary to strike the best practical balance between the viability of the fund and the condition of the trade. The amendment moved by the hon. Member for Romford (Mr. Neubert), if accepted, would create a rigid framework. There would be no room for manoeuvre if the payment period were written into the Bill.
  It has already been agreed that the regulations governing the levy shall be subject to affirmative resolution, and these regulations will include the payment period. It would be possible at that stage for the House to see that the balance was being struck, and I cannot accept that one element should be permanently established now. This is one of the values of my meeting a point which had been raised about the affirmative procedure, so that the House would be able to see the position.
  12 midnight.
  Mr. Tebbit: We are grateful to the hon. Gentleman for accepting the principle of the affirmative resolution, but am I not right in saying that we would not be able to amend such a resolution? It would merely be a case of the House taking or leaving it, would it not? We would not have an opportunity of amending the periods which were laid down in the regulation.
  Mr. Davis: That is right, but the House would have an opportunity of putting forward its view. It would then be for the Government to determine what action should be taken. I agree that the affirmative resolution procedure —indeed, I had certain experience of it recently—is not always the best vehicle, but we have to operate within whatever procedure is available to the House. This has been designed as the way in which we ought to deal with such matters. I was trying to be helpful and conciliatory.
  There is another reason why I submit that the amendment is not acceptable.
  210
  The regulations will not state the dates on which payment should be made because it is intended that new licence holders should be required to make contributions from the time that they are granted their first licence. This is a point that I made in Committee. It is my understanding that the CAA has no power to withhold a licence until a particular date from an applicant who is otherwise qualified to hold one. The amendment would enable a new licence holder to operate up to three months without contributing to the fund. That would, of course, be an impossible situation.
  It was argued, as a secondary argument perhaps, that an appalling burden would be imposed upon certain tour operators. I have always thought that one of the criticisms—we certainly heard it tonight—has been that the reserve fund would encourage unreliable tour operators. That was the whole burden of the argument in respect of the proposed new clause. We have, therefore, emphasised that the bonding system would not only continue but that it would be strengthened, and it would be surprising if this measure of protection had not resulted in some sifting out of companies in the industry.
  As I have indicated before, we expected that there would be some anxiety and difficulty in the period leading up to the renewal date of 1st April. In fact, only 33 operators have failed to obtain a new licence, and the CAA expect these companies, mostly in a small way of business, to be able to provide the necessary security. Therefore, I think that the experience of the CAA in this respect is a matter to be given very careful consideration.
  Mr. Tim Renton: Are not 33 out of a total of, I think, 116 a very large number not yet to have received licences? Secondly, is not the Minister wrong to equate inability to put up 11 per cent. of turnover in cash with unreliability? Many reliable firms would not in the normal course of their business have 11 per cent. of their turnover available in cash.
  Mr. Davis: I think that the real question to be posed in relation to the 33 is: how many of those will not be able to survive? As I have indicated, the advice that I have received from the CAA is

  211
  that most will be able to provide the necessary security. I think we shall have to await developments and see what happens, but that is one of the bases upon which I reject this amendment.
  The hon. Gentleman referred to an article in the Financial Times today. Implicit in that article was that we ought to consider reducing the level of the bonding. That would be a most inappropriate way to proceed. It would throw into dispute the whole purpose of and the necessity to revise the bonding system, which I think virtually the entire House will regard as important, whatever its views on the levy.
  Banks have to maintain a certain liquidity ratio and solicitors have to hold money in client's accounts. While there may be a burden on the industry, we believe that it is necessary. As I have already indicated, the CAA considers that most of the 33 firms which have still not obtained licences will obtain them. That therefore justifies the course of action that we are seeking to take.
  The industry has had ample notice of what we intended to do. It has or should have been able to make preparations. We are starting at the low level of 1 per cent., but the 2 per cent. levy will arise in April 1976. Those are justifiable reasons for proceeding on the basis that we have suggested.
  I turn now to the arguments put forward by the hon. Member for Chingford (Mr. Tebbit.) The hon. Gentleman's purpose is to delay contributions to the reserve fund. We are not prepared to accept the amendment. If an air travel organiser failed in the three months before his contribution was due, it would be impossible to collect it, apart from what might be available in the liquidation. That would be a wholly unsatisfactory way of proceeding. By its nature, it would impose a double burden on the fund with the loss of contributions as well as payments to customers. In effect, payments would be made three months later than if contributions were paid wholly in advance and the build-up of the fund would be delayed.
  I am unable to accept the hon. Gentleman's arguments, but I assure the House that the Government will look closely at developments as they arise. There is
  212
  nothing in the Bill to prevent us from collecting at shorter intervals if that should prove desirable.
  Mr. Kenneth Lewis: I wonder whether the Minister realises the implications of what he has just said. If a company goes bust, because of having to pay the levy in advance, the fund will have to pay the passengers to bail out that company. From what the hon. Gentleman has just said, if a company goes bust because it has to pay the levy in advance, the clients of that company will have a claim on the fund. Therefore, the fund will be pushing out money to clients which it need not have done if it had not demanded the levy in advance.
  Mr. Davis: What the hon. Gentleman said could apply equally to the bonding system.
  Mr. Kenneth Lewis: No.
  Mr. Davis: Indeed that is right. If the hon. Gentleman seeks to qualify that point, I will give way to him. However, that is my understanding of the position.
  Mr. Higgins: In Committee we encountered some difficulty in convincing the Under-Secretary that an assurance or a vague indication of intention was not the same as something written into the Bill. Similarly, we do not think that it is satisfactory to argue that regulations will be made and the House can, if it wishes, then express a view one way or the other upon them, because it is not possible to amend regulations. Therefore, there is a case for writing an appropriate provision into the Bill now, rather than waiting for the Government to introduce regulations.
  I listened carefully to what the Minister said. The arguments on the amendments were deployed fully by my hon. Friends. There is concern about the cash situation. As the Minister said, a balance must be struck between the viability of the fund and the situation of the trade. None the less, provisions to be set out in regulations could be harsh. I believe that the Minister's objections do not apply to Amendment No. 22. Therefore, if my hon. Friend the Member for Romford (Mr. Neubert) will withdraw Amendment No. 15, it will be appropriate for us to divide on Amendment No. 22, which covers the causes of concern spelt out in the article in today's Financial Times.
  Mr. Neubert: In view of what my hon. Friend the Member for Worthing (Mr. Higgins) has said, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendment made: No. 19, in page 6, line 41, at end insert:
  '(2A) No regulations shall be made under section 26 by virtue of subsection (1) above unless a draft of the statutory instrument containing the regulations has been approved by a resolution of each House of Parliament'.— [Mr. Clinton Davis.]

  Division No. 168.]

  AYES

  [12.13 a.m.

  Atkins, Rt Hon H. (Spelthorne)

  Hunt, John

  Rhys Williams, Sir Brandon

  Berry, Hon Anthony

  Jessel, Toby

  Roberts, Michael (Cardiff NW)

  Biffen, John

  King, Evelyn (South Dorset)

  Rost, Peter (SE Derbyshire)

  Brittan, Leon

  Knox, David

  Sainsbury, Tim

  Brotherton, Michael

  Lawrence, Ivan

  Shaw, Michael (Scarborough)

  Bulmer, Esmond

  Lawson, Nigel

  Shelton, William (Streatham)

  Chalker, Mrs Lynda

  Le Marchant, Spencer

  Shepherd, Colin

  Clark, Alan (Plymouth, Sutton)

  Lester, Jim (Beeston)

  Shersby, Michael

  Clarke, Kenneth (Rushcliffe)

  Lewis, Kenneth (Rutland)

  Skeet, T. H. H.

  Cooke, Robert (Bristol W)

  Macfarlane, Neil

  Speed, Keith

  Cope, John

  McNair-Wilson, M. (Newbury)

  Spicer, Michael (S Worcester)

  Costain, A. P.

  Marshall, Michael (Arundel)

  Steen, Anthony (Wavertree)

  Durant, Tony

  Maxwell-Hyslop, Robin

  Stradling Thomas, J.

  Dykes, Hugh

  Mayhew, Patrick

  Tebbit, Norman

  Fairgrieve, Russell

  Morgan-Giles, Rear-Admiral

  Thomas, Rt Hon P. (Hendon S)

  Fisher, Sir Nigel

  Morrison, Charles (Devizes)

  Townsend, Cyril D.

  Fletcher-Cooke, Charles

  Neave, Airey

  Vaughan, Dr Gerard

  Fowler, Norman (Sutton C'f'd)

  Nelson, Anthony

  Viggers, Peter

  Fox, Marcus

  Neubert, Michael

  Walder, David (Clitheroe)

  Gilmour, Sir John (East Fife)

  Newton, Tony

  Weatherill, Bernard

  Glyn, Dr Alan

  Parkinson, Cecil

  Young, Sir G. (Ealing, Acton)

  Goodhew, Victor

  Penhaligon, David

  Grist, Ian

  Percival, Ian

  TELLERS FOR THE AYES:

  Grylls, Michael

  Rees-Davies, W. R.

  Mr. Fred Silvester and

  Higgins, Terence L.

  Renton, Tim (Mid-Sussex)

  Mr. Adam Butler.

  NOES

  Anderson, Donald

  Ellis, Tom (Wrexham)

  Magee, Bryan

  Archer, Peter

  Evans, John (Newton)

  Marquand, David

  Armstrong, Ernest

  Ewing, Harry (Stirling)

  Marshall, Dr Edmund (Goole)

  Ashton, Joe

  Fernyhough, Rt Hon E.

  Morris, Charles R. (Openshaw)

  Atkinson, Norman

  Flannery, Martin

  Murray, Rt Hon Ronald King

  Bagier, Gordon A. T.

  Fletcher, Ted (Darlington)

  Noble, Mike

  Bates, Alf

  Ford, Ben

  O'Halloran, Michael

  Bennett, Andrew (Stockport N)

  Fowler, Gerald (The Wrekin)

  Ovenden, John

  Boardman, H.

  Fraser, John (Lambeth, N'w'd)

  Park, George

  Buchanan, Richard

  George, Bruce

  Parry, Robert

  Callaghan, Jim (Middleton & P)

  Golding, John

  Pavitt, Laurie

  Campbell, Ian

  Grocott, Bruce

  Pendry, Tom

  Carmichael, Neil

  Harper, Joseph

  Prescott, John

  Carter-Jones, Lewis

  Harrison, Walter (Wakefield)

  Radice, Giles

  Cartwright, John

  Hatton, Frank

  Roberts, Albert (Normanton)

  Clemitson, Ivor

  Hoyle, Doug (Nelson)

  Rodgers, George (Chorley)

  Cocks, Michael (Bristol S)

  Hughes, Robert (Aberdeen N)

  Rooker, J. W.

  Cohen, Stanley

  Hunter, Adam

  Ryman, John

  Colquhoun, Mrs Maureen

  Jackson. Miss Margaret (Lincoln)

  Shore, Rt Hon Peter

  Cox, Thomas (Tooting)

  Janner, Greville

  Skinner, Dennis

  Craigen, J. M. (Maryhill)

  Jenkins, Hugh (Putney)

  Small, William

  Cryer, Bob

  Jones, Dan (Burnley)

  Smith, John (N Lanarkshire)

  Dalyell, Tam

  Judd, Frank

  Snape, Peter

  Davidson, Arthur

  Kerr, Russell

  Spearing, Nigel

  Davis, Clinton (Hackney C)

  Kilroy-Silk, Robert

  Spriggs, Leslie

  Deakins, Eric

  Lambie, David

  Stallard, A. W.

  Dean, Joseph (Leeds West)

  Lester, Miss Joan (Eton & Slough)

  Stoddart, David

  Dempsey, James

  Loyden, Eddie

  Stott, Roger

  Dormand, J. D.

  McElhone, Frank

  Douglas-Mann, Bruce

  MacFarquhar, Roderick

  Thomas, Ron (Bristol NW)

  Duffy, A. E. P.

  Mackenzie, Gregor

  Thorne, Stan (Preston South)

  Dunn, James A.

  Mackintosh, John P.

  Tinn, James

  Dunwoody, Mrs Gwyneth

  Maclennan, Robert

  Tomlinson, John

  Eadie, Alex

  McNamara, Kevin

  Walker, Terry (Kingswood)

  Ellis, John (Brigg & Scun)

  Madden, Max

  Ward, Michael

  Amendment proposed: No. 22, in page 6, line 43, at end insert:
  'shall be payable by quarterly instalments in advance based on the total amount paid or payable by customers of the air travel organiser during the ensuing three months'.—[Mr. Higgins.]
  Question put, That the amendment be made:—
  The House divided: Ayes 71, Noes 112.

  White, Frank R. (Bury)

  Woodall, Alec

  White, James (Pollok)

  Woof, Robert

  TELLERS FOR THE NOES

  Williams, W. T. (Warrington)

  Wrigglesworth, Ian

  Mr. James Hamilton and

  Wise, Mrs Audrey

  Young, David (Bolton E)

  Mr. Donald Coleman.

  Question accordingly negatived.
  Mr. A. P. Costain: I beg to move Amendment No. 23, in page 7, after Clause 4(5) insert—
  '(6) This section shall not apply to an air travel organiser incorporated before 6th February 1975 solely for the purpose of organising holidays for persons over the age of 60 years, subject to the Secretary of State being satisfied from time to time as to the security of the payments made by the passengers by the creation of a trust fund, and by the giving of an undertaking by the air travel organiser not to carry any passenger under the age of 60 years'.
  This amendment was discussed briefly in Committee, where the Minister objected to it on the ground that it would be hard to monitor. I have had considerable correspondence with the hon. Gentleman since then, and late last week he agreed to see me and representatives of the people who could be affected by the amendment. That meeting was to have taken place today. However, I received a message at 11 o'clock this morning to the effect that the Minister would not be available, from which I assumed that he intended to accept the amendment; in other words, he had decided not to see me because he intended to accept it.
  This is a matter affecting organisations set up by people over the age of 60. I know of one such organisation, and there are likely to be others. What happens is that elderly people virtually form a club for the purpose of travelling together. One of the largest organisations operating in this way is in my constituency. Since 1951 it has grown until it now caters for 100,000 people. I suggest that some concession should be made for those 100,000, provided that there are proper safeguards.
  The Under-Secretary may argue that these operators do not have a licence. But there is a letter dated 18th February that is on the file and that sets out the position quite clearly. We are discussing whether people over 60 should have advantageous travel facilities. Any hon. Member not supporting the amendment would be saying that he took the view that elderly people should not have that advantage.
  The amendment clearly provides that the concession would not apply to air
  216
  travel organisations incorporated after 6th February 1975. That would prevent a crop of new companies availing themselves of the amendment. It would apply only to those organising holidays for those over 60, subject to the Secretary of State being satisfied as to the security of the payments made by the passengers by the creation of a trust fund, which would give him instant power to cancel if he thought that there was insufficient security.
  The organisers would have to undertake not to carry anyone under the age of 60. Companies now operating are prepared to have their licences endorsed to say that in no circumstances may they carry anyone under 60. This would mean that a wife under 60 could not travel with a husband over 60. [HON. MEMBERS: "Hear, hear."] I am glad of that support. Some of those enjoying these schemes come from the North.
  I may be asked why these people should have special privileges. It is because this section of the community deserve special consideration. Wherever these people live, they are brought to the airport at no extra cost under an arrangement with British Railways.
  The scheme has been introduced because people such as these are able to travel at off-peak times, which is when the airlines want them. Only retired people can take advantage of off-peak travel, and when they do they help the travel industry, the airlines and the hotels, by filling otherwise empty seats.
  The amendment is simple. It would give the Secretary of State all the safeguards he requires, and I urge the House to accept it.
  12.30 a.m.
  Mr. Kenneth Lewis: I have considerable sympathy with my hon. Friend the Member for Folkestone and Hythe (Mr. Costain). He represents a resort that does a good deal for many old people who live there or, indeed, who visit the area. My hon. Friend has a considerable reputation as a Member of Parliament who ably represents his constituency and the interests of tourists

  217
  generally. Nevertheless, I say regretfully to my hon. Friend that I cannot support the amendment.
  I would remind my hon. Friend that age 60 is not the retiring age for everybody but only for women. He is including in the concession people earning £4,000, £5,000 or £10,000—in other words, people in top jobs who are not yet retired. Those people will be eligible to join the organisation envisaged by my hon. Friend as being exempt from levy. Such a practice would not be acceptable.
  Furthermore, the organisation of which my hon. Friend spoke—and it is an organisation which has written to many hon. Members—is a commercial body. It is a body that makes money from travel, and if the amendment were accepted it would enjoy advantages over other travel organisations. It would be able to recruit customers because of the special concession for which my hon. Friend asks.
  Mr. Costain: If the amendment is not accepted, the people for whom I speak will be put at a disadvantage since they will be paying for a service which they will not necessarily receive. My hon. Friend is saying that that category should be penalised.
  Mr. Lewis: I do not accept that they will be penalised. In the first place, if within the United Kingdom they will not pay the levy. It is odd that my hon. Friend, who represents a seaside resort, appears to want people to go abroad—which will mean that they will not go to Folkestone.
  It is impossible to accept an amendment whose effects will be to put certain people out on a limb and give them a specific concession. Surely the next thing that would happen would be that special concessions would be sought for those who were 18 years old or less and were travelling under organised tours. That category would require special care to be taken and would require couriers. I am sure that the ramifications of such a move are clear to the House.
  My hon. Friend made a sympathetic plea, but a plea which in practical terms is not acceptable.
  Mr. Clinton Davis: I succumb totally to the blandishments of the hon. Member
  218
  for Rutland and Stamford (Mr. Lewis). The hon. Member for Folkestone and Hythe (Mr. Costain) tabled a similar amendment in Committee and it was rejected. My Department has made inquiries into the specific matters referred to in his speech and in the correspondence to which he referred.
  I did not intend to extend to the hon. Member any discourtesy in not being able to see him this morning. He gave me fairly short notice of his desire to meet me and it was difficult for me to meet him in view of other commitments. I am sorry that the hon. Gentleman formed the impression that the fact I did not meet him meant that I accepted his amendment. That was not in my mind. However, if there was any misunderstanding I hope he will forgive me.
  The inquiries which we have made lead us to suppose that the company to which the hon. Member referred does not hold an air travel organiser's licence and is not an air travel organiser for the purposes of the Bill. It is the wholly-owned subsidiary of a recognised agent, and it is the parent company which would be required to make contributions to the fund. These may be passed on to customers of the subsidiary. However, it appears that neither the parent company nor the subsidiary company is registered solely for the purpose of organising holidays for persons over 60 and that neither of them would have satisfied the terms of the amendment. The parent company is licensed to provide inclusive tours generally and not simply for those over 60. Therefore, the point by the hon. Member for Rutland and Stamford is correct.
  Mr. Costain: May I point out to the hon. Gentleman that the literature for the tours specifies that people must be over 60 years of age?
  Mr. Davis: But that does not meet the points to which I have just referred the House. If the hon. Gentleman is to persuade the House, he must be able to answer those points.
  As I have indicated, I accept the arguments put by the hon. Member for Rutland and Stamford. The ramifications of accepting the amendment would be enormous, and such a situation is unacceptable.
  Mr. Higgins: As my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) said, we have much sympathy for the views put forward by my hon. Friend the Member for Folkestone and Hythe (Mr. Costain). Invariably when he puts forward an argument he does so after great thought and careful consideration. It is unfortunate that the Minister has not been able to discuss the matter with my hon. Friend. We certainly do not accept some of the arguments put forward by the Minister as regards monitoring the matter.
  As my hon. Friend the Member for Folkestone and Hythe pointed out, the levy scheme creates a number of anomalies. That was why, on the earlier amendment, we suggested that alternatives such as insurance or other protection should be available. I hope that that is a matter to which we may return after the Bill has been considered in another place.
  I must express the view that I do not feel able to support my hon. Friend's amendment, although I realise that some of my hon. Friends may well be persuaded by his arguments.
  Amendment negatived.

Clause 5

  LOANS TO THE AGENCY BY THE SECRETARY OF STATE
  Mr. Shersby: I beg to move Amendment No. 24, in page 7, in first line of Clause 5(1), leave out "subsection (2)" and insert "subsections (2) and (3A)".
  Mr. Deputy Speaker (Mr. George Thomas): With this we are taking Amendment No. 26, in page 7, after Clause 5(2), insert:
  "(3A) Interest shall not be charged on any loan under this section except at such a rate and in accordance with such terms and conditions as the Secretary of State may, after consultation with the Treasury, by order prescribe, and any such order shall be contained in a statutory instrument and shall not be made unless a draft thereof has been approved by resolution of each House of Parliament.".
  Mr. Shersby: The amendments deal with the question of interest on the loan to the agency. Despite the firm assurance given by the Secretary of State during Second Reading, as reported at col. 1583, and despite the lengthy debate in Committee, there is still nothing in the Bill to make it obligatory for the Government to
  220
  make loans referred to in Clause 5 interest-free. That is what the amendments are about.
  I should like to quote from what the Minister said in Committee on 18th March, because it is important for the House to be aware of his explanation on that occasion. He said:
  "Clause 5 envisages that the Secretary of State will make loans to the agency on such terms as he may, with the approval of the Treasury, determine. It provides for repayment of the loans by the agency out of the fund. Rationally, nobody can expect that these terms will fail to specify whether the loan would be interest-free, the date when repayment begins, the rate at which repayment begins, and so on, and, of course, the date by which repayment is to be concluded.
  "On Second Reading this is what the Secretary of State sought to indicate as the proposed terms of the three elements of the package about which I have been speaking. First, an interest-free loan. Secondly. there would be repayment beginning from October 1976. This would be at a rate involving half the agency's net income which would be largely drawn from levy contribution. Before any initial loan payments are made we shall have to determine a repayment date. The Government foresee that this can be within a comparatively short period, particularly since the loan will be interest-free. I spelled that out on two separate occasions and I shall use the same words again.
  "The rate at which loans are repaid will depend on the other calls made upon the fund. It is hoped that from October 1976 half the net income of the fund, that is the income from contributions and interest less expenses and payments against claims, can be devoted to paying off the loan. In these circumstances, a quite large loan of £7 million to £8 million would be repaid by the end of 1978. As I have said, this timetable is purely tentative as it depends on the future turnover of the air travel industry and the number of claims.
  "That is what the Government have in mind. But the effect of the Opposition's amendments would lock into the statute one element of that package. The amendments' supporters purport that they would not otherwise trust the pledge given to Parliament by the Government"— [Official Report, Standing Committee D, 18th March 1975; c. 235–6.]
  As the Minister said then, there are three elements of the package—first, the interest-free loan; secondly, the repayment that would begin from October 1976; and, thirdly, that there should be repayment dates. The Minister said in Committee that it would be wrong to legislate simply for the interest-free element, but why should that element not be specified? The hon. Gentleman has also said that there will be no loans after 1977. If that is so, surely there is Ito reason why the loan should not be

  221
  interest-free, because the loans will run out by then anyway.
  It is in those circumstances that the amendment is necessary. If the hon. Gentleman is not willing to write into the Bill that loans shall be interest-free, at least he can con-le to Parliament with an order for parliamentary approval if he finds it necessary to charge interest on the loans at any time.
  Because there is nothing in the Bill to bind this Government or any future Government on the question of interest, it should be written into the Bill in the way suggested in the amendments.
  Mr. Clinton Davis: We investigated the matter at considerable length and in considerable depth in Committee. The hon. Gentleman has been good enough to quote my remarks on it in Committee, which I think set out succinctly the case upon which the Government rely.
  I referred in Committee to the observations made by my right hon. Friend the Secretary of State that sums lent to the agency from public funds would be interest-free, and I confirmed several times that that was the Government's intention. We hope that it will not be necessary for interest to be charged on loans to the agency. If it were to become necessary, we should certainly wish to carry the House with us in making any revised arrangements. We should have to explain the position fully to the House —the circumstances which had made such a change necessary and all the arrangements entered into.
  I should have thought that that was abundantly clear from the statements I have already made, and I should have hoped that the hon. Gentleman would accept the position as I set it out. But Conservative Members are anxious that the intention should be written into the Bill. For the reasons already mentioned, we say that that is not acceptable.
  I repeat that it is our firm intention that loans to the agency should be free of interest. If circumstances arose in which it became necessary to charge interest, we should feel bound fully to explain the reasons to the House.
  I hope that in the circumstances the hon. Gentleman will feel it appropriate to withdraw the amendment.
  Mr. Higgins: I must emphasise to the Minister once again the extraordinary situation in which he finds himself. On Second Reading his right hon. Friend the Secretary of State said clearly that the loan would be interest-free. We went through most of the Committee stage under that impression, but at a late stage in Committee the Minister suddenly cast some doubt on that, and it is now apparent that in certain circumstances he might decide, contrary to what was said on Second Reading, to charge interest. It seemed right to us to suggest at that time that the position should be made absolutely clear in the legislation.
  12.45 p.m.
  It is no good the Minister saying that we have his assurance. One of the main reasons for the Bill is that a Minister gave an assurance to the House which was not subsequently fulfilled. That is why we need to have the assurance written into the Bill. Nothing could be more reasonable than an amendment which provides that if the Minister decides to charge interest he should obtain a resolution of the House to that effect
  Yet again, the Minister said that if the Government decided to charge interest they would come before the House to explain why. The amendment seeks to ensure not that the Government can charge interest but that they should get the support of the House for so doing. I do not understand why the Minister cannot agree that it is a perfectly reasonable amendment and accept it. As he will not, we shall indicate in the Division Lobby that we do not agree with the view he has expressed.
  Mr. Clinton Davis: Might I put to the hon. Gentleman what he said in speaking of the affirmative resolution procedure? He said:
  "if the Government of the day, of whatever party, resist this kind of amendment it lessens the legislative burden for the Government who follow. If the hon. Gentleman would like to introduce a Bill accepting all the motions for positive resolutions ever made by his Government when they were the Opposition we should be happy to accept that, but I suspect that the Chief Whip, not to say the Leader of the House, would probably have a fit.
  I feel bound to say also that the Conservative Government, when re-elected will probably reverse the procedure. This is not a party point, but it is important that we do not

  223
  burden the House with positive resolution procedures. However, we are grateful to the Minister for his assurance."—[Official Report, Standing Committee D. 13th March 1975; c. 197.]
  That assurance was dealing with another matter. Now the hon. Gentleman has to reconcile himself to his own argument.
  Mr. Higgins: It is not necessary for me to reconcile myself to the argument. It is perfectly sensible to provide for the affirmative resolution procedure on a matter of importance. Having regard to the assurance that was given that no interest would be charged, it is not un-

  Division No. 169.]

  AYES

  [12.49 a.m.

  Atkins, Rt Hon H. (Spelthorne)

  Jessel, Toby

  Rost, Peter (SE Derbyshire)

  Biffen, John

  King, Evelyn (South Dorset)

  Sainsbury, Tim

  Brotherton, Michael

  Knox, David

  Shaw, Michael (Scarborough)

  Bulmer, Esmond

  Lawrence, Ivan

  Shelton, William (Streatham)

  Butler, Adam (Bosworth)

  Lawson, Nigel

  Shepherd, Colin

  Chalker, Mrs Lynda

  Lester, Jim (Beeston)

  Shersby, Michael

  Clark, Alan (Plymouth, Sutton)

  Lewis, Kenneth (Rutland)

  Silvester, Fred

  Clarke, Kenneth (Rushcliffe)

  Macfarlane, Neil

  Skeet, T. H. H.

  Cooke, Robert (Bristol W)

  McNair-Wilson, M. (Newbury)

  Spicer, Michael (S Worcester)

  Cope, John

  Marshall, Michael (Arundel)

  Steen, Anthony (Wavertree)

  Costain, A. P.

  Maxwell-Hyslop, Robin

  Stradling Thomas, J.

  Durant, Tony

  Mayhew, Patrick

  Tebbit, Norman

  Dykes, Hugh

  Morgan-Giles, Rear-Admiral

  Thomas, Rt Hon P. (Hendon S)

  Fairgrieve, Russell

  Morrison, Charles (Devizes)

  Townsend, Cyril D.

  Fisher, Sir Nigel

  Neave, Airey

  Vaughan, Dr Gerard

  Fowler, Norman (Sutton C'f'd)

  Nelson, Anthony

  Viggers, Peter

  Fox, Marcus

  Neubert, Michael

  Walder, David (Clitheroe)

  Gilmour, Sir John (East Fife)

  Newton, Tony

  Weatherill, Bernard

  Glyn, Dr Alan

  Parkinson, Cecil

  Young, Sir G. (Ealing, Acton)

  Goodhew, Victor

  Percival, Ian

  Grylls, Michael

  Renton, Tim (Mid-Sussex)

  TELLERS FOR THE AYES:

  Higgins, Terence L.

  Rhys Williams, Sir Brandon

  Mr. Anthony Berry and

  Hunt, John

  Roberts, Michael (Cardiff NW)

  Mr. Spencer Le Marchant.

  NOES

  Archer, Peter

  Ewing, Harry (Stirling)

  Marquand, David

  Armstrong, Ernest

  Fernyhough, Rt Hon E.

  Marshall, Dr Edmund (Goole)

  Bagier, Gordon A. T.

  Flannery, Martin

  Morris, Charles R. (Openshaw)

  Bates, Alf

  Fletcher, Ted (Darlington)

  Murray, Rt Hon Ronald King

  Bennett, Andrew (Stockport N)

  Fowler, Gerald (The Wrekin)

  Noble, Mike

  Boardman, H.

  Fraser, John (Lambeth, N'w'd)

  O'Halloran, Michael

  Callaghan, Jim (Middleton & P)

  George, Bruce

  Ovenden, John

  Campbell, Ian

  Golding, John

  Palmer, Arthur

  Carmichael, Neil

  Grocott, Bruce

  Park, George

  Carter-Jones, Lewis

  Hamilton, James (Bothwell)

  Parry, Robert

  Cartwright, John

  Harper, Joseph

  Pavitt, Laurie

  Clemitson, Ivor

  Harrison, Walter (Wakefield)

  Pendry, Tom

  Cocks, Michael (Bristol S)

  Hatton, Frank

  Penhaligon, David

  Cohen, Stanley

  Hoyle, Doug (Nelson)

  Prescott, John

  Coleman, Donald

  Hughes, Robert (Aberdeen N)

  Radice, Giles

  Colquhoun, Mrs Maureen

  Hunter, Adam

  Roberts, Albert (Normanton)

  Cox, Thomas (Tooting)

  Jackson. Miss Margaret (Lincoln)

  Rodgers, George (Chorley)

  Craigen, J. M. (Maryhill)

  Janner, Greville

  Rooker, J. W.

  Cryer. Bob

  Jenkins, Hugh (Putney)

  Ross, Stephen (Isle of Wight)

  Dalyell, Tam

  Jones, Dan (Burnley)

  Ryman, John

  Davidson, Arthur

  Judd, Frank

  Shore, Rt Hon Peter

  Davis, Clinton (Hackney C)

  Kerr, Russell

  Skinner, Dennis

  Deakins, Eric

  Kilroy-Silk, Robert

  Small, William

  Dean, Joseph (Leeds West)

  Lambie, David

  Smith, John (N Lanarkshire)

  Dempsey, James

  Loyden, Eddie

  Snape, Peter

  Dormand, J. D.

  MacFarquhar, Roderick

  Spearing, Nigel

  Douglas-Mann, Bruce

  Mackenzie, Gregor

  Spriggs, Leslie

  Duffy, A. E. P.

  Mackintosh, John P.

  Stallard, A. W.

  Dunwoody, Mrs Gwyneth

  Maclennan, Robert

  Stott, Roger

  Eadie, Alex

  McNamara, Kevin

  Thomas, Ron (Bristol NW)

  Ellis, John (Brigg & Scun)

  Madden, Max

  Tinn, James

  Evans, John (Newton)

  Magee, Bryan

  Tomlinson, John

  reasonable to suggest the positive resolution procedure if changes are made. We gave the Bill a Second Reading on the basis of a statement made by the Secretary of State for Trade—not the Secretary of State for Industry this time—which has turned out to be not true. That is clearly a matter of importance, and I advise my hon. and right hon. Friends to support the amendment in the Lobby.
  Question put, That the amendment be made:—
  The House divided: Ayes 65, Noes 106.

  Walker, Terry (Kingswood)

  Wise, Mrs Audrey

  Ward, Michael

  Woodall, Alec

  TELLERS FOR THE NOES.

  White, Frank R. (Bury)

  Woof, Robert

  Mr. David Stoddart and

  White, James (Pollok)

  Wrigglesworth, Ian

  Mr. James A. Dunn.

  Williams, W. T. (Warrington)

  Young, David (Bolton E)

  Question accordingly negatived.

Clause 7

  INTERPRETATION AND SUPPLEMENTARY PROVISIONS
  Amendments made: No. 27, in page 7, line 35, at end insert:
  "the Authority" has the meaning given in section 1(2) above;'.
  No. 28, in page 8, after Clause 7(2) insert:
  '(3) No statutory instrument of which a draft has been approved by a resolution of each House of Parliament in accordance with section 4(2A) above shall be subject to annulment in accordance with section 63(1) of the Civil Aviation Act 1971 '.—[Mr. Harper.]

Schedule

  ADDITIONAL PROVISIONS WITH RESPECT TO THE AIR TRAVEL RESERVE FUND AGENCY
  Mr. Clinton Davis: I beg to move Amendment No. 29, in page 9, line 8, leave out from 'appointments' to end of line 9.
  Mr. Deputy Speaker: With this we can also discuss Amendment No. 30, in page 9, line 23, at end insert:
  '2.—(1) Subject to sub-paragraph (2) below, the Agency shall pay to each member such remuneration and such travelling, subsistence or other allowances as the Agency may deter mine.
  (2) Any determination of the Agency with respect to the remuneration to be paid to any member shall be subject to the approval of the Secretary of State, and the Secretary of State shall not give his approval without the consent of the Minister for the Civil Service'.
  Mr. Davis: The amendment provides for the remuneration of members of the agency to be subject to the approval not only of the Secretary of State but also of the Minister for the Civil Service as is customary. This enables remuneration to members of statutory bodies to be kept under review centrally.
  Mr. Higgins: I do not understand what the Minister has said. He said that because remuneration has to be approved
  226
  by the Secretary of State for Trade and the Minister for the Civil Service this enables the matter to be kept under review centrally. Why has one followed from the other? I should have thought that it would have been kept under review centrally anyway unless the Secretary of State was so far removed from the centre that he did not know what was going on. Given the difference over the Common Market, it may be that that is so. Perhaps the Minister will explain.
  1.0 a.m.
  Mr. Clinton Davis: The Tory Government did so. We are following that precedent.
  Mr. Higgins: That is not good enough. What does the explanation given by the Minister mean? Why should it be controlled centrally by the operation of the two Ministers?
  Amendment agreed to.
  Amendment made: No. 30, in page 9, line 23, at end insert:
  '2.—(l) Subject to sub-paragraph (2) below, the Agency shall pay to each member such remuneration and such travelling, subsistence or other allowances as the Agency may determine.
  (2) Any determination of the Agency with respect to the remuneration to be paid to any member shall be subject to the approval of the Secretary of State, and the Secretary of State shall not give his approval without the consent of the Minister for the Civil Service '.—[Mr. Clinton Davis.]
  Motion made, and Question proposed, That the Bill be now read the Third time.
  1.2 a.m.
  Mr. Higgins: We now come to the Third Reading of the Bill, which we sought to amend in a number of important respects in Committee. There are two matters of concern—the history of the Court Line affair and the future protection of the holiday maker.
  The genesis of the Bill is contained in the statements made by the Secretary of State for Industry last summer during the Court Line affair. Yet not once during the proceedings on this Bill has he seen fit to enter the Chamber, still less to join in the debates or to give any explanation of his conduct.

  227
  I stressed on 20th February, on Second Reading, that Parliament and the people outside were misled by the statement of the Secretary of State in the House. Many of our constituents booked holidays with Court Line under the impression that the assurance of tile Secretary of State, that their holidays would be protected, would be honoured. That was not the case.
  It would have been right for the Secretary of State to have admitted to the House that he had misled the people who lost money as a result, to have resigned, and to have requested Parliament and the Government to support a motion making immediate compensation available to those who had been misled. The Secretary of State was not prepared to do that. It is not possible to construe the remarks of the Secretary of State, which I quoted on Second Reading, in any other way.
  It is difficult to envisage any issue on which the Secretary of State for Industry would resign. Therefore, we now await the report of the Ombudsman. We shall return to the matter at that stage. It ought not be necessary for any man of honour who had made a statement such as that made by the Secretary of State to await the result of that formal inquiry. The Secretary of State is not prepared to resign on this matter. We shall, therefore, have to wait until the inquiry is completed. It is a matter for the Ombudsman, but the Minister may wish to say how much longer we shall have to wait for the report.
  On Second Reading we raised a number of points with the Secretary of State. We believe that the investigations into the Court Line affair must take longer since they must be thorough. That matter was not apparent from the assurance of the Secretary of State for Industry.
  On the second point which we have raised, the question of the future protection of holiday makers, we have already expressed our views. It may be that in another place it will be necessary for members of that House to consider the extent to which an alternative optional scheme for insurance is preferable to the one provided in this Bill, which means that effectively everyone, whether he has a better scheme for protecting consumers or not, will be forced to comply with
  228
  the Government's requirements and will have to provide protection to consumers at a higher cost than might otherwise be the case. As I say, we may return to that matter at a later stage.
  There is a very clear thread in Government policy—a growing tendency for the Government to say that whatever the commercial transaction may be, whether it be in connection with holiday makers or insurance, or in whatever other activity, there should be a form of comprehensive policy, and that cover should be provided not by people acting prudently but by a universal and comprehensive scheme where a levy is raised and a fund is set up. The net effect is to create a situation where the prudent are subsidising the imprudent and where the efficient firms have to subsidise the inefficient firms.
  This is not a matter of party dogma. It has evolved within the Department of Trade. It is a very unfortunate development indeed. Therefore, it is certainly an aspect of the Bill which we greatly regret. The reality of the situation is that the Secretary of State has not taken the action which in honour he ought to have taken. The Government have decided to introduce this matter late at night when it is unlikely to get much publicity, in order to shield him from the legitimate criticism which ought to be made of him, well knowing that if the Bill were to be defeated those who suffered as a result of the Court Line collapse and as a result of misleading statements by the Secretary of State for Industry would not get compensated as rapidly as they otherwise would.
  This is the wrong way of setting about it. I think the House will understand why, faced with the Government's intransigence, it would not be right positively at this stage to vote the Bill down. This is simply because the Government have left us with no option but to do what can be done to help these people. But it is not the right way of doing it. It is the wrong principle on which to operate, and the Secretary of State for Industry will, I hope, in due course be condemned in this House and retribution will finally be brought upon him.
  1.8 a.m.
  Mr. Neubert: At an earlier stage the Minister was unwise enough to say that

  229
  the Opposition had been less than clear in their attitude to the principle of the Bill. He must not be surprised, therefore, if we take the opportunity to explain our attitude, and, in particular, to reinforce the point that we must condition our attitude by the fact that this Bill is brought forward in advance of the Ombudsman's report on the Government's own role and the statement of the Secretary of State for Industry last June.
  That being so, the issue has been befogged and clouded from the start. This matter concerns not only Court Line. It concerns two or three smaller companies which also went bankrupt last year and whose clients are also to be compensated by the fund and the agency which is set up to administer the fund. This makes it very difficult for us to argue the situation in principle, although we have already drawn attention to the apparent anomaly that in the matter of insurance, in the case of the Nation Life company, the Minister takes a different attitude to compensation for people who have lost money through companies going bankrupt. We have not been able to adduce the argument with sufficient clarity because the Bill confuses those issues, and must necessarily do so.
  The public and Parliament ought to be aware that within this apparently slight, innocuous and relatively minor measure are enshrined two highly questionable precedents.
  The first is that the Government, by means of making interest-free loans and allowing the interest at present high levels to be forgone, are making a grant towards the compensation of clients of bankrupt companies. We are used to the Government stepping in and bailing out companies, but I do not know of any other instance where they have come forward to compensate the clients of bankrupt companies, especially at a time when, unfortunately and unhappily, we may expect more companies to go bankrupt. They may be putting themselves on a whirligig of their own contrivance which will be painful in years to come.
  The second highly undesirable precedent is that the Government are requiring future clients of commercial companies, by their payments to those companies, to compensate the clients of other unrelated companies which went
  230
  bankrupt previously. This is the effect of the Bill, for which there appears to be no precedent.
  Last November I asked the Secretary of State for Trade whether he could cite any precedent for such a procedure. To date we have received no evidence that there is any such precedent. Indeed, the injustice of it will be evident not only to the industry, but to people when they come to pay the charge. In all the preliminary information which has been published on the provisions of the Bill. particularly the no doubt agreed statement put out by ABTA after consultation with the Department of Trade, there is no mention that this extra safeguard is to be secured by payment by the client. It will come as something of a revelation to clients to find that they are required to make that contribution and even more of a revelation when they discover that they are required to pay compensation to clients of other companies which have gone bust when they may have made a better judgment as to the companies with which to book. This measure is also resented by the travel industry, because it has suffered most from the competitive, cut-throat policies which led to the collapse in the first place.
  Therefore, the Bill, though seemingly slight, is a very important measure. Indeed, the Minister may be making history tonight by seeing it through its Third Reading. I should point out that Lucretia Borgia and Attila the Hun also made history, and the hon. Gentleman should not necessarily accept that as a compliment.
  1.13 a.m.
  Mr. Kenneth Lewis: I want to quote from a letter which appeared in the Travel Trade Gazette on 4th April, signed by Zvonko Jakopovic, the Director of the Yugoslav National Tourist Office. I will quote only two paragraphs. He writes:
  " We watched the Court Line situation very closely during the spring of 1974, but the statement from the highest sources that the British Government was launching a rescue operation for Court Line's shipbuilding interests which would stabilise the situation in respect of Court Line's interests including holidays booked for this season' was taken as an absolute guarantee by us that the company was financially secure.

  231
  We sent a telex report to the Tourist Association of Yugoslavia in Belgrade indicating that the statement made in the House led us to believe that the business between Court Line tour operators and foreign hoteliers was 'probably safer now than it had ever been'."
  I do not need to quote any more. That was a clear indication from an impeccable source that people overseas thought that the statement made in the House had underwritten the company. Therefore, it was not so much over-optimism on the statement that was made as the Government's failure afterwards to take any action which would take into account what the Minister knew might happen having looked at the company.
  Having had that beef, I should like to put another matter to the Minister. The Bill will compensate people who have lost holidays, but there is little compensation for Court Line employees. I believe that Court Line employees who were abroad at the time of the collapse will get no redundancy payment under the Redundancy Payments Act, whereas those who were working at home will get redundancy payment because, under the Act, the compensation will be paid by the Government.
  I was one of the last to go on holiday with Court Line and was, with others, caught. The employees working overseas were magnificent. They worked without knowing whether they would be paid. Many of them were not paid. They ere prepared to carry on for however many weeks were involved. Some of them carried on without reward for two, three or four weeks because the company had gone bust. Their salary cheques were cut off. Even their salary cheques for the previous month were cut off. Because of a quirk of the Redundancy Payments Act, they now find that they will not even get redundancy pay.
  I ask the Minister to consider the possibility of paying those employees out of the fund the redundancy payments which must be due to them and which, but for a technicality, they would have had and which will be available to their colleagues who were working at home. If the Minister can secure that, there will be a saving grace about the Bill.
  1.16 a.m.
  Mr. Tebbit: On Third Reading we are left with one principle and a couple of
  232
  mysteries. The principle is that reputable and well-run firms, their customers and their employees will carry the can for any rotten "bucket shop" that wants to set up in this business in the future. That is a principle which hon. Members on both sides should decry.
  Two mysteries have arisen during the course of the Bill's passage. We still have unsolved the mystery of the interest-free loan and whether it will really be interest-free. We have had totally contradictory statements by the Minister. He has said nothing to clear up the mystery. He has only made the matter worse by suggesting that the loans will be interest-free unless they happen to be in circumstances where trade is so bad that he decides to charge interest on them to put the final screw on. I have never heard a more absurd argument. It was a totally dishonest and confused argument.
  Another mystery was added to that. At the beginning of our proceedings I asked a perfectly simple question; namely, whether any Minister had consulted British Airways about the Bill, that body being one of the main providers of package holidays, and, if so, what the opinion of British Airways was about the proposed measures. The Minister flatly refused to reply. He still sits there arrogant, unwilling to reply, and unwilling to govern openly or honestly in the way that he and his colleagues promised that they would govern. When he comes to the Dispatch Box later I ask him to say whether British Airways was consulted and, if so, what it said about the Bill.
  1.20 a.m.
  Dr. Alan Glyn: As everyone knows, this small measure is the result of the Court Line affair. Many of us have constituents who would not have put forward their applications and the money for their holidays had the statement not been made by the Minister. It is unfortunate that, although the Parliamentary Commissioner for Administration has not yet reached a decision, we are compelled to pass this legislation in order to help those unfortunate people who have lost money.
  We are passing a measure to protect a small number of people who have had the misfortune to be misguided by a Government statement. I am quite happy and in agreement about that part of the

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  Bill. But the second part of the Bill, which allows or encourages the weaker firms to be subsidised by the stronger firms, introduces an entirely new principle. I am not at all sure that this type of legislation does not encourage the inefficient as against the efficient. The caveat emptor principle is entirely forgotten.
  Although this measure may be a temporary expedient, it should not be taken as a measure whereby the good firms should subsidise those which are inefficient. It is up to the clients and those who participate to make sure that they book their holidays with good firms in the future.
  1.21 a.m.
  Mr. Bob Cryer: I served as a member of the Standing Committee on the Bill. Throughout the debates on the Bill the Opposition have produced a number of deplorable and disgusting attacks on the Secretary of State for Industry, who, when he made the announcement on that day last June, was subject to the scrutiny of the Opposition. The hon. Member for Henley (Mr. Heseltine), in his criticisms on behalf of the Opposition, never even mentioned Court Line, because the announcement by the Secretary of State for Industry was very much concerned with sections of shipbuilding which would go into liquidation very rapidly, and but for the action of the Secretary of State for Industry several thousand people would have been rendered unemployed.
  Throughout the whole period the Secretary of State for Industry has acted entirely honourably. The way that some Opposition Members have behaved smacks of cheap political opportunism of the very worst nature.
  The Opposition have said that the Government have not given concessions on the Bill. However, the whole Bill represents a concession. It is clear that the air travel industry contains many shaky and rickety concerns. Apparently some cannot tolerate an extra 1 per cent. charge without facing financial difficulties. The one and only solution is public ownership. If these firms are so inefficient, why should we prop up like stretcher bearers an ailing capitalist industry? We are not here to do that. We are here to ensure equality in society.
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  We support the Bill because it will bring immediate relief to our constituents. Some of my constituents made payments to Court Line. They supported a private enterprise which subsequently crashed, in spite of repeated assurances by the directors—which are never mentioned by the Opposition—which were given not only to the company but also to the travel agents almost within hours of the company going into liquidation and facing these financial difficulties.
  Let us have a certain balance. We support the Bill, recognising that it is a patchwork operation. We recognise, at the same time, that it will bring relief for past losses and assurance for the future for people who travel on charter flights.
  1.24 a.m.
  Mr. Peter Viggers: I am grateful to the hon. Member for Keighley (Mr. Cryer) for explaining what we were puzzled about earlier.
  As it stands, the Bill has the Government providing the scheme and rules out the private insurance companies. If the Government were seeking, merely to safeguard holiday makers and if the Government believed in a mixed economy, they would allow an area in the Bill for the insurance industry, if it so chose, to provide the cover that the Government are seeking to provide themselves.
  The Under-Secretary said that it would be quite unrealistic to expect the insurance industry to rally round and help. I think that was the expression he used. The proposal that the insurance industry should be allowed to provide some cover is not an attempt to persuade the industry to help. It is an attempt to ensure that the Government do not give themselves a monopoly and that they do not lay the heavy hand of bureaucratic control upon the whole industry. If the Government believe in a mixed economy, it would be realistic for them to allow the insurance industry to provide the cover which it is seeking to put in.
  This Bill tries to do two things. First, it tries to provide cover for holiday makers. That is realistic, and it would be realistic if it were done in the context of a mixed economy and if the insurance industry were permitted to have a niche in it. It also looks backwards and tries to compensate the Court Line holiday makers and others.

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  The Minister sought to put forward several alternative arguments, none of which held water. I suspect that the real reason for the Government not being prepared to allow anyone other than the Government themselves, through this fund, to take part in the protection proposals which they put forward is, first, the argument adduced by the hon. Member for Keighley—because they are looking for the Socialist revolution—and, secondly, that it would be inconvenient for the Government to have to allow the insurance industry a part of the cover because it would mean that it would not be possible for them conveniently and comprehensively to look retrospectively; it would be inconvenient for them to have some cover provided by private insurance and some by the Government.
  Having listened to the hon. Member for Keighley, I am reminded that David Wood wrote in The Times today that the Social Democrats in the Labour Party seemed to lack the will and, indeed, the ability to stop the inexorable march to the Left. We have had a good demonstration of how true that is.
  1.27 a.m.
  Mr. Clinton Davis: Even though I have been depicted as Atilla the Hun or Lucretia Borgia, I have always thought that the motives of the Opposition throughout the whole debate and long before iv during those summer months were entirely suspect. The hon. Member for Worthing (Mr. Higgins) is normally regarded as a moderate—perhaps a little pedantic in his moderation sometimes. But what he did was to follow the rather unpleasant footsteps of the hon. Member for Henley (Mr. Heseltine) and the hon. Member for Bury St. Edmunds (Mr. Griffiths). It is not worthy of him.
  The hon. Member for Worthing has now realised, rather late in the day, that there happens to be a Section 165 investigation into Court Line and that there happens to be an investigation by the Parliamentary Commissioner for Administration. But he does not want to wait for those independent judgments. He wants to join the lynch mob, where there will be no law and no trial—only the impetuous judgment of his right hon. and hon. Friends.
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  If the Secretary of State for Industry is exonerated, the hon. Member for Worthing will owe him a pretty full apology. A spiteful and venomous campaign was indulged in during those summer months. It was wholly unhelpful. Not for a moment was it designed to assist those who had suffered the appalling anxieties of those months. No positive and constructive contribution was forthcoming from the Opposition. However much the hon. Member for Worthing may shake his head in disagreement with what I say, that remains the fact. If he does not accept what I say, he had better read the contributions made by some of his hon. Friends.
  When we came to discuss this Bill, the Opposition were all over the shop. They did not know whether to vote for or against it. They were completely ambivalent in their attitude. We have heard it again tonight in their amendments and in their Third Reading speeches. They lack the courage to back their arguments by a vote on the principle of the Bill.
  The hon. Member for Worthing said that the Opposition regretted the caveat emptor aspect. We have brought forward a Bill which we believe to be right in the interests of consumer protection, but basically the hon. Gentleman regrets it. Nevertheless, he will not vote against it. It will be interesting to see whether the Opposition back their speeches with the judgment that matters, which is a vote.
  During the Committee stage we were even asked to defer the whole Bill until the Parliamentary Commissioner's report had been formulated. What would have happened to the victims other than the Court Line victims, who could not in any sense be affected by any words spoken by my right hon. Friend? In Committee I asked the hon. Member for Romford (Mr. Neubert) and other hon. Members for their view of what should be done about those people, but their silence was deafening.
  As I said in Committee, the hon. Member for Rutland and Stamford (Mr. Lewis) played a more moderate and reasonable part in this whole affair. I regret that, following his hon. Friends, he has sought to talk about Court Line again. However, he made a point about redundancy payments that I undertake to communicate to my right hon. Friend

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  the Secretary of State for Employment. It is not a matter that I or my right hon. Friend, the Secretary of State for Trade can deal with.
  The hon. Member for Chingford (Mr. Tebbit) spoke with that typical moderation that most of us in the House have learned to abhor. It is a remarkable argument that reputable firms will carry the can for the "bucket shops", as he termed them. Under the Bill, the "bucket shops" will be obliged to be bonded. They will have to comply with the Bill's stringent requirements. That argument does not hold any more water than the majority of the arguments that the hon. Member seeks to adduce in the House from time to time.
  I will not deal with the arguments of the hon. Member for Gosport (Mr. Viggers), because they have been rehearsed time and time again when, apparently, he was not present.
  Question put and agreed to.
  Bill accordingly read the Third Time and passed.

  HOUSE OF COMMONS MEMBERS FUND
  Resolved,
  That one tenth of the sums deducted or set aside in the current year from the salaries of Member of Parliament under section one of the House of Commons Members' Fund Act 1939, and one tenth of the contribution determined by the Treasury for the current year under section one of the House of Commons Members' Fund Act 1957, be appropriated for the purposes of section four of the House of Commons Members' Fund Act 1948.—[Mr. Albert Roberts.]

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

  SERVICE UNITS OVERSEAS (SCHOOL TRANSPORT)
  1.32 a.m.
  Mr. Alan Clark: It is my purpose this evening to draw attention to the arrangements that presently govern the transport of schoolchildren by buses abroad. I do so without in any sense wishing to make party political points, as this would appear to be a situa-
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  tion that has subsisted for many years. I propose to deal chiefly with the situation in Malta, but I should like to draw certain general conclusions from that and suggest to the Minister that a code of practice be evolved to deal with situations of this kind in future.
  In Malta these arrangements are made by the Director of Navy Contracts, Supplies Department, Ministry of Defence. The text that governs the arrangements is to be found in a publication entitled "Service Children Schools, Malta". This publication provides certain general regulations governing this in an appendix, and paragraph 5 of that appendix, headed "School Buses" says:
  "The Service children's education authority does not accept any liability for injury to children should accidents occur whatever the cause."
  I turn to the particular case that first brought this state of affairs to my attention. It related to the daughter of one of my constituents, a Miss Nichola Goble. Her father was stationed in Malta, and she was transported to school under a contract made by the person I have identified with a taxi firm run by Mr. Grech. Mr. Grech sold his contract immediately to a Mr. Shenbury, who ran what one might call a cowboy taxi service—without any insurance—and, it appears, driving extremely dangerously, as he was frequently reprimanded by the military police at the post for racing. In due course he had an accident and a number of children were injured, including Miss Goble who was seriously injured. She had one operation and still faces a number of further operations.
  It was found to be impossible for the parents of Miss Goble to proceed against the original contractor or against the subcontractor. The subcontractor disappeared completely, and the original contractor was pursuable only under the law of Malta—a law which severely restricts the damages and procedures available in such circumstances. It is true that Mr. Shenbury had a policy with the London and Lancashire Insurance Company, but that company made it plain that it would not be agreeable to the case being tried under the principles of English law for the good commercial reason that it had insured the vehicle in Malta at a lower premium than in this country simply because awards in the

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  Malta courts are so very much lower. Consequently we are faced with some unpalatable conclusions about the present arrangements.
  These conclusions are, first, that it is a subject of considerable criticism in any event that the Ministry of Defence should contract transportation of schoolchildren out to foreign civilian personnel. Secondly, having taken the decision to contract the work out, should not the Ministry exercise more care and vigilance, particularly as small children are involved? Thirdly, should it not ensure that the contractor is adequately insured. Fourthly, should not the Department prevent subcontracting. Fifthly, if subcontracting is permitted, should the Ministry not ensure that the subcontractor is adequately insured? Should it not also take care to see that the driver of the vehicle has at least the qualities required of a school bus driver?
  Finally, is it not true that the contract did not contain a condition whereby any claim arising out of it would be dealt with in accordance with the principles of English law? Is this not undesirable where it is likely that all the children are the children of Service personnel in this country? Should we not examine the matter of insurance to see that it is made a condition of the contract that the scope of cover should at least he applicable to the English equivalent?
  It is not for me to make specific recommendations to the Minister. His reputation as a humane and conscientious administrator will ensure that he will examine the matter closely. I am sure he will agree that it is desirable that there should be a major and radical change in the arrangements—not only on humanitarian grounds but on the ground that there is a possibility of still more serious and dangerous consequences arising out of this matter, which would be expensive and tragic.
  1.38 a.m.
  The Under-Secretary of State for Defence for the Royal Navy (Mr. Frank Judd): I have listened with great interest to the speech made by the hon. Member for Plymouth, Sutton (Mr. Clark), and I wish to thank him for presenting the various aspects of the case so clearly. This seems an almost exemplary way in
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  which to use the opportunity presented by an Adjournment debate—in terms of the clarity and brevity with which the hon. Gentleman presented his case and in the fact that in basing his case on a particular incident he went on to examine the wider principle.
  May I say how very much I regret that the accident to the bus of one of the Ministry of Defence's contractors in Malta should have resulted in the injuries sustained by Miss Goble on 20th March 1973. I shall say rather more about that in a few moments, but it might be helpful if I first dealt with the policy of providing travel facilities for Service schoolchildren abroad.
  When married Service men stationed overseas have their families with them, and the family includes children of school age, educational facilities are arranged which are comparable, as far as this is practicable, to the statutory requirements laid on education authorities in England and Wales by the Education Acts. So far as the conveyance of children to school is concerned, there is a responsibility to provide transport for pupils who do not live within walking distance of the nearest suitable school.
  In the Services, and in line with these statutory requirements, free travel is provided for children attending Service children's schools or certain civilian schools in areas overseas where the distance to the nearest school or local conditions make the use of transport necessary. Travel is arranged by the most economical means suitable for the purpose, and children would not normally be expected to undertake journeys of longer than 45 minutes if they attend primary schools, or 75 minutes if they attend secondary schools. These times, of course, include waiting and walking.
  In practice, the local Service authorities decide how best to provide school transport overseas in the light of the facilities which are available. If there are suitable Service vehicles available, they would normally be used. If there are no Service vehicles available or if they are insufficient for all needs, local transport may be hired, or, in suitable circumstances, a motor mileage allowance paid to parents who are prepared to use their private cars to take their children to and

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  from school. In the case of Malta, transport for schoolchildren is hired from a local contractor. The hon. Gentleman has rightly emphasised this tonight.
  I now turn to the most unfortunate accident in which Miss Goble was injured and as a result of which she spent about two weeks in hospital. According to the report of the Malta Police—and I quote —the mini-bus which was conveying 13 schoolchildren was approaching Conspicua when it developed a mechanical defect, swerved to its left, mounted the pavement, hit a traffic sign and overturned. Before coming to a halt it careered on its side a distance of 83 feet.
  I must say that this vivid description of the accident underlines how thankful we must all be that the injuries suffered by the children were not very much more serious than they in fact were. Six of the children were injured; they were taken initially to St. Lukes Hospital and later transferred to the Services Hospital at Mtarfa. A board of inquiry convened by the Flag Officer Malta to investigate the accident also concluded that the cause of the accident was a mechanical fault.
  In Malta transport for Service schoolchildren is provided under the terms of the contract between the Ministry of Defence and, as the hon. Member has said, a Maltese contractor, Mr. Grech. Among other things, this provides that the contractor is solely responsible and liable to meet claims and demands for compensation which may be put forward by any person in respect of personal injury. A further provision is that all buses are to be insured in accordance with Malta Government regulations and to cover injury or damage to authorised passengers and their belongings. On the basis of these provisions, Corporal Goble was advised to institute a civilian case against the contractor and the insurance company concerned.
  It then, alas, came to light that the mini-bus involved in the accident had changed hands some months earlier and that the insurance policy for the vehicle was in the name of the previous owner. Not only that; it excluded cover if the vehicle was used for "hire or reward". The insurance company, not surprisingly, was not, therefore, prepared to meet the claim for third-party damages against a
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  policy which it did not regard as valid on the relevant date.
  There is no individual bus company in Malta which is large enough by itself to meet the Services' full demands for transporting Service schoolchildren. In order to fulfil the requirements of the contract, the main contractor, Mr. Grech, had to make use of a considerable number of vehicles other than those which he owned. One of these additional vehicles was the mini-bus, since scrapped, which had the accident on 20th March 1973. Mr. Grech was apparently unaware that the owner-driver, who has, I believe, since gone to Australia, did not have the adequate insurance cover required by the contract with my Department. This is clearly a most unsatisfactory state of affairs both for the Ministry of Defence and for Corporal Goble in seeking to pursue a claim in respect of his daughter's injury.
  We, of course, recognise that, apart from this aspect, it is now more difficult for Corporal Goble to pursue his claim against the individuals in Malta since he is again serving in the United Kingdom. I am pleased to be able to say, therefore, that, while not accepting that the Ministry of Defence has a legal liability under the terms of the contract for the provision of school buses in Malta, my legal advisers wrote to Corporal Goble's solicitors last week proposing that an ex gratia settlement of the claim should be agreed with the Ministry of Defence. I am hopeful that, particularly from Miss Goble's point of view, this matter can now be speedily resolved. We should then, of course, take up the question of financial recovery from the contractor in Malta.
  Mr. Peter Viggers: I am much obliged to the Minister, and I am sure that my hon. Friend the Member for Plymouth, Sutton (Mr. Clark) is also grateful to him for his help, the sympathetic way in which he has approached the matter, and the proposed ex gratia payment. But I am interested in the general principle. The Defence Department is responsible for appointing transport agents, and presumably must feel some sense of responsibility for vetting the insurance arrangements. Will the hon. Gentleman expand on this particular case, and give us an indication of the general principle that should apply?
  Mr. Judd: One of the advantages of representing adjacent constituencies is that the hon. Gentleman and I come to read each other's minds. I was coining to the point that he has just raised.
  I can emphatically assure both hon. Gentlemen that we shall naturally be reviewing the arrangements overseas for transporting Service children to school, and considering what can be done to avoid the sort of circumstances which
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  arose in the case which the hon. Member for Sutton has so properly brought to the attention of the House tonight. I am sure that we all wish again to express our gratitude to him. I emphasise that everything he said will be taken most carefully into consideration.
  Question put and agreed to.
  Adjourned accordingly at twelve minutes to Two o'clock.