Commons Sitting of 20 January 1975

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

    Power Station Coal Stocks
    Mr. Martenasked the Secretary of State for Energy what is the level of coal stocks at power stations compared with a year earlier.
    The Secretary of State for Energy (Mr. Eric G. Varley): Coal stocks held at power stations in Great Britain on 11th January were 13·1 million tons as compared with 13·7 million tons at the corresponding date in 1974.
    Mr. Marten: I am grateful to the right not be—a cessation of coal production, copy of that reply before Question Time—no doubt inadvertently—by placing it on the board.
    If the present weather continues and if there were to be—as we hope there will not be—a cessation of coal production, for how many weeks would the coal stocks last?
    Mr. Varley: If there were to be a cessation of coal production it would be difficult to estimate how long Stocks would last, but I hope that there are and will be continuous harmonious industrial relations in the coal mining industry, and I know that the whole House shares that wish. Existing coal stocks at power stations are about 5 million to 6 million tons above the critical level. Undoubtedly the abnormally mild weather during December helped to balance the situation. In addition, I say a big "Thank you" not to you, Mr. Speaker, but to the Almighty for answering my prayers.

    Electricity Bills (Payment)
    Mr. Gouldasked the Secretary of State for Energy whether he will give a general direction to electricity boards to introduce savings stamp schemes for their consumers who would prefer to pay electricity bills in this way.
    The Under-Secretary of State for Energy (Mr. Alex Eadie): Arrangements for the payment of electricity accounts are matters for the boards themselves in consultation with their consultative councils. All boards operate some sort of easy payment scheme for consumers who find it difficult to budget for quarterly bills.
    Mr. Gould: Does my hon. Friend accept that consumers on small fixed incomes who are able to pay their bills in this way find it more convenient and less embarrassing than other forms of special arrangement that might be made for them? Does he agree, therefore, that it is unfortunate that this arrangement or facility is not available to consumers throughout the country?
    Mr. Eadie: I note what my hon. Friend says. A number of alternative schemes are operated throughout the country—for example, the provision of monthly budget accounts, weekly or fortnightly prepayment schemes by bank or Giro standing order, agreement with the local authority to include the cost of electricity in the tenant's rent, and the provision of a prepayment meter. The discretion is entirely with the board concerned.
    Mr. Mike Thomas: Does not my hon. Friend agree that any form of payment arranged for small consumers that avoids their having to pay the exorbitant rates charged by prepayment meters is preferable to the prepayment meter scheme?
    Mr. Eadie: My hon. Friend has raised this question repeatedly. My right hon. Friend has given the matter sympathetic consideration and will try to inform the House further. The best scheme is that which suits the tenant in relation to his income. I repeat that the discretion lies with the board concerned.

    Petrol Pricing
    Mr. Hicksasked the Secretary of State for Energy if he will introduce a

    995
    two-tier system of petrol pricing in which there would be a basic weekly allowance of petrol at a preferential rate.
    The Under-Secretary of State for Energy (Mr. John Smith): As has already been announced, a two-tier pricing system for petrol involving the use of coupons is being considered.
    Mr. Hicks: Cannot the Government show more urgency? Is not the Minister aware that in rural areas such as Cornwall public transport is often nonexistent and thus ownership of a motor car is necessary for essential journeys such as getting to work? Is he not also aware that in country districts the average level of earnings is below the national average and that there are a large number of people living on retirement income and other forms of fixed income? Cannot the Government help these people?
    Mr. Smith: Everybody in the community has to suffer to some extent from the unavoidable increases in the price of petrol. However, we understand and appreciate the problems of people who live in rural areas. But the problem is not confined to those who live in rural areas. There are shift workers living in town, for example, who have similar problems. To look into the matter carefully we must assess how the scheme would work and what its impact would be. I assure the hon. Gentleman that we are looking carefully and urgently at the matter. In that context it is not fair to accuse us of showing a lack of urgency.
    Mr. Nicholas Edwards: Is the Minister aware that, in addition to the points made by my hon. Friend the Member for Bodmin (Mr. Hicks), there is particular concern among the disabled in these areas, particularly where there is no form of public transport? The disabled simply cannot cut down on their mileage and they are facing very grave hardship.
    Mr. Smith: We will bear all these points in mind. There is a difficulty about starting to make exceptions from a simple scheme. Once an exception is made for one category it leads to an argument about an exception for another category. I take the point about the disabled. We may be able to assist them
    996
    in other ways than by reducing the price of petrol.

    Oil Conservation
    Mr. Adleyasked the Secretary of State for Energy if he is satisfied that his recently-announced measures will conserve as much oil as he has envisaged.
    Mr. John Smith: As my right hon. Friend made clear at the time, it is not possible to estimate with any precision the energy saving flowing from the interim package which he announced on 9th December. My right hon. Friend is satisfied that these measures can make a valuable contribution, and he intends to extend and reinforce them in future.
    Mr. Adley: Is not the Minister aware that the position of rural dwellers as first highlighted by my hon. Friend the Member for Bodmin (Mr. Hicks) must be compared with the comfortable conditions of city office workers and people with oil central heating who live in a comparatively warm temperature of 68 degrees which is considered by the Government to be adequate? Will not the hon. Gentleman realise that the country faces an economic crisis because of the oil situation and that unless the Department sets an example and takes firm action we shall not save as much oil as we otherwise would?
    Mr. Smith: In common with many who have criticised the Government's energy-saving campaign, the hon. Gentleman has not put forward one single constructive suggestion.
    Mr. Adley: Sixty-eight degrees!
    Mr. Smith: In civil offices and defence offices the Government have in hand a programme of energy conservation. The House would benefit if hon. Gentlemen, in considering the Government's proposals, while by all means criticising them, at the same time put forward constructive suggestions.
    Mr. Lipton: Does my hon. Friend have any figures showing the extent to which the cause of oil conservation is being supported by the inhabitants of Christchurch and Lymington? Are they backing Britain in that part of the world?
    Mr. Smith: That is perhaps a question for the hon. Member for Christchurch and Lymington (Mr. Adley) to

    997
    answer. There is a serious aspect to this matter. Everybody must co-operate in the energy-saving programme, and the Government are about to embark upon an extensive publicity campaign so that everybody at home and in an industrial capacity can get together to save the maximum amount of energy, which costs us so much at the moment.
    Mr. Charles Morrison: While expensive publicity campaigns may be all very well, if the Government are really serious about the need to conserve energy should they not cut down the amount of lighting on motorways? It is ridiculous to have lighting the whole way from the outskirts of London to Maidenhead on the M4.
    Mr. Smith: The hon. Gentleman referred to an expensive energy-saving campaign. We hope that the energy-saving campaign which we are about to promote will give value for money. If it can attract considerable savings and produce the right public spirit, it will he money well spent. The lighting of roadways involves my right hon. Friend the Minister for Transport, and there are different considerations here. We must balance road safety with energy saving.

    Energy Conservation
    Mr. Rostasked the Secretary of State for Energy when he expects to announce his further proposals for energy conservation.
    Mr. Gryllsasked the Secretary of State for Energy when he proposes to announce additional measures to conserve energy.
    Mr. William Hamiltonasked the Secretary of State for Energy what further plans he has for economising in the use of energy resources.
    Mr. Varley: I am today launching a major publicity campaign to bring home to consumers the need to save energy and to explain how they can do it. I shall be bringing forward further proposals to extend and reinforce my energy-saving programme at the appropriate time.
    Mr. Rost: While welcoming the Government's belated repentance after years of dilly-dallying, and the restoration of the previous Conservative Government's campaign to conserve energy by pub-
    998
    licity, may I ask whether the right hon. Gentleman does not agree that voluntary restraint while it is essential, will not be enough? Has he seen the excellent report just published by the National Economic Development Office which contains first-class recommendations? When shall we see real proposals in the short, medium and long term?
    Mr. Varley: The hon. Gentleman has referred to the Conservative Government's "Switch Off Something" campaign. That was designed to encourage people to cut off electricity and was motivated by the industrial action at that time. The major publicity campaign on which we are embarking will be a sustained campaign and directed not only at electricity but at all forms of energy.
    As to the second part of the supplementary question about the National Economic Development Office report by Dr. Eden, I have studied that report and it does not conflict with the measures which I announced on 9th December. Dr. Richard Eden is a member of the Advisory Council on Energy Conservation which I set up last year.
    Mr. Hamilton: Will my right hon. Friend give an assurance that he will not be introducing such radical proposals as cleaning one's teeth in the dark? Will he give some kind of direction to commerce, shops and other people to stop the continuous night lighting of their premises? Does he appreciate that nobody on this side of the House accepts the philosophy of rationing energy by the purse and that if there is to be rationing it ought to be rationing physically rather than financially? Finally, can my right hon. Friend say what steps he is taking to encourage individuals and commercial concerns to improve the insulation of their premises?
    Mr. Varley: I agree very much with my hon. Friend that much more can be done. Direct energy consumption under Government control represents only 1 per cent., and it depends on what can be saved in the household and in industry. With regard to rationing by the purse, I am sure my hon. Friend will also accept that rationing by coupon does not necessarily mean cheap petrol or cheap energy.
    Mr. Grylls: I thank the Secretary of State for the advance copies of answers

    999
    to Questions before Question Time. I only wish that his Department were as prompt in saving energy as he is in sending answers before Question Time.
    Is the right hon. Gentleman aware that the country would take him and the Government seriously in saving energy if the Government set an example in switching off floodlighting on public buildings and actually reducing the temperature of schools and other sorts of public buildings much more dramatically than is now done? I hope that the right hon. Gentleman's announcement will mean action this day and not tomorrow.
    Mr. Varley: As I said on 9th December, the Government are not so proud as to believe that their measures are necessarily the best. This is a very complex issue. The only way to save energy dramatically is by rota cuts and rationing—in short, misery. While some of the measure advocated by the hon. Gentleman have not been ruled out, it is necessary to see how the measures which were announced last month work out and to see whether they can be reinforced. If they can be reinforced, I shall certainly reinforce them.
    Mr. Dalyell: On 9th December my right hon. Friend referred to a study which was being carried out concerning the lead content of petrol, balancing the environment with the energy question. Can he say how the study is progressing?
    Mr. Varley: The study is continuing. Work is being pressed ahead on it, and as soon as we are in a position to announce the conclusions I shall let the House know how it is going.
    Mr. Patrick Jenkin: My hon. Friend the Member for Derbyshire, South-East (Mr. Rost) has been pressing a number of measures on the right hon. Gentleman which he might impose in the context of energy conservation. Indeed, he is to be congratulated on that. Does not the Secretary of State recognise that his announcement last month was greeted with dismay by many people on all sides of the political spectrum for its inadequacy? Will he now really get ahead? The campaign is something, but will he get ahead and examine urgently a number of the measures which my hon. Friend suggested, particularly that relating to motorway lighting, which would make a considerable public impact?
    Mr. Varley: If one turned out all the street lights and all the lighting on the motorways it would save only about 1 per cent. of all the electricity generated. One has to take into consideration the safety and security aspects. The right hon. Gentleman ought to get his facts right. Certainly, as we have said on many occasions, if practicable proposals are put forward we will implement them.

    Electricity and Gas Showrooms
    Mr. Michael Marshallasked the Secretary of State for Energy whether he will give a general direction to the gas and electricity authorities to combine their present showroom facilities.
    Mr. Eadie: This idea has been examined before and found inappropriate but is now being reconsidered.
    Mr. Marshall: I thank the Minister for the partial encouragement in that answer, and I, too, thank him for sending me an advance copy of it in good time. Will he, however, look at the matter in the widest possible sense, because there is here the question not only of possible economy but of direct energy saving? Will the hon. Gentleman consider this proposal also in the context of the advertising being done by these two nationalised undertakings, which also can cause a serious waste of resources?
    Mr. Eadie: I am grateful to the hon. Gentleman for what he says. He will know that this question has been under examination over the past 20 years, but even in the last report no firm recommendation was made. It is fair to say that there has been resistance to any such proposal, especially from the consumers' councils, which, after all, have to be considered. They do not like showrooms to be closed, because these premises are used for other purposes—for instance, the payment of bills. However, the hon. Gentleman is quite right when he makes the point that some forms of advertising would be undesirable in today's conditions. I imagine that he and other hon. Members have noted the relevance of much current publicity for energy-saving efforts, and, as I have said, the whole matter is now being reconsidered.
    Mr. Palmer: Will my hon. Friend assure the House that it is not the present Government's intention to proceed with

    1001
    the policy of the previous Conservative Government, which was to close these publicly-owned facilities altogether?
    Mr. Eadie: I am glad to take this opportunity to allay my hon. Friend's fears. Any studies in relation to energy saving would certainly be motivated entirely by other considerations.
    Mr. Gow: What progress has been made in combining meter readings for both gas and electricity at the same time?
    Mr. Eadie: This question has been considered in great depth in the past. No conclusion was reached because, from the standpoint of possible savings—I assume that that was the point of the hon. Gentleman's question—it was agreed that any saving would be very marginal, if anything at all.

    Electricity and Gas Prices
    Mr. Mike Thomasasked the Secretary of State for Energy whether he has been able to take steps to protect small consumers and poor consumers in the current round of electricity and gas price increases.
    Mrs. Renée Shortasked the Secretary of State for Energy what proposals he has to help poorer consumers meet increased costs of gas and electricity.
    Mr. Eadie: The position of small consumers will be borne in mind when the electricity industry's price proposals are considered. In the case of gas, recent increases have been formulated so as to bear most heavily on the larger domestic consumers.
    Mr. Thomas: I greatly appreciate what my hon. Friend has been able to do in this matter and I am sure that small consumers will appreciate it, too, but I wonder whether the very small consumer, and especially the small consumer with a prepayment meter, slipped through his net, since it appears to me that the increase for these people has been above 30 per cent. rather than at 12 per cent. Has my hon. Friend studied the situation in Ireland where there are pensioners' rebates for energy consumption, and has he looked also at the position in Japan where a progressive tax is operated?
    Mr. Eadie: My right hon. Friend the Secretary of State has told the House that
    1002
    he is carrying out an examination of this matter. I refer my hon. Friend to Hansard of 18th December, cols. 482–3. There are difficulties here. I am sure my hon. Friend will agree that the problem is easier to state than to resolve, but, as I say, it is being carefully examined.
    Mr. Patrick McNair-Wilson: Assurances are not enough for the small and poorer consumer. How do the Government reconcile allowing these prices to climb indiscriminately with a background of massive food subsidies, since it is these energy consumers who are hardest hit?
    Mr. Eadie: Assurances are valuable when they are specific, and my right hon. Friend has given an undertaking to report to the House and to make a statement on this matter. As regards energy-pricing policies, I am astonished that the hon. Gentleman should hang his hat on this aspect of the matter, because I thought there was agreement on both sides of the House that the sooner we returned to proper pricing in relation to energy the better it would be for the country.
    Mr. Jim Marshall: Is my hon. Friend aware that many small and poor consumers would prefer to pay for their gas and electricity as they use them through the prepayment machines to which he referred earlier? Is he aware also that there is a long delay in the provision of these meters by the electricity and gas boards? Will he bring pressure to bear on the boards to expedite the provision of these prepayment machines?
    Mr. Mike Thomas: And to reduce their prices.
    Mr. Eadie: I take the point made by my hon. Friend the Member for Leicester, South (Mr. Marshall). The matter has come under attention from time to time. If my hon. Friend has any information regarding specific areas where there has been delay, I shall try to assist him in contacting the area board concerned, which, after all, has complete discretion in these matters.

    Fuel Prices (Rural Areas)
    Mr. David Steelasked the Secretary of State for Energy if he will now set up a departmental committee to monitor the effects of price increases in fuel in

    1003
    rural areas which have a comparatively low average earnings level.
    Mr. John Smith: No, Sir. Data are already available for expenditure by households in rural areas, broken down by income ranges.
    Mr. Steel: The hon. Gentleman will be aware that since I tabled the Question I have had an Adjournment debate on the subject. When does he expect the study of two-tier pricing for petrol to be complete? Is there a target date for it?
    Mr. Smith: I am afraid that I cannot give a date. We are considering the matter as speedily as we can, and as soon as any conclusion is reached the House will be informed.
    Mr. Patrick McNair-Wilson: As we now have it confirmed that last year's rate of inflation was 19 per cent. and not the figure given by the Chancellor just before the last election, and as we know that Government taxation now represents a very significant part of the increase in petrol prices, when will the Government come forward with a firm plan to help those in rural areas for whom a car is a necessity, not a luxury?
    Mr. Smith: I said in reply to the hon. Member for Bodmin (Mr. Hicks) on Question No. 4 that we cannot totally exempt people in rural areas from the effects of these price increases. The hon. Gentleman is properly concerned about our rural areas, as all hon. Members are, but I think that that concern ought to be directed on a much wider front because, as I have already said, people in urban areas are often in considerable difficulty as well. We have to look at the whole picture in devising a scheme. That is one of the complications which demand that we consider it carefully, because a half-baked scheme which did not work properly would be worse than a well considered scheme, if we decided to adopt it when our deliberations were concluded.
    Mr. Gordon Wilson: As Scotland is a country with many remote areas, does not the Minister think it appropriate that there should be a lower rate of petrol duty in Scotland, especially as Scotland is soon to become an oil-exporting country?
    Mr. Smith: I do not think that that would be appropriate. The hon. Gentle-
    1004
    man should remember that long before Britain becomes an oil exporting country, and Scotland, as part of Britain, shares in that, the British taxpayer will have put a great deal into providing the infrastructure and all other things necessary to get the oil out.

    Petrol Prices (Rural Areas)
    Mr. MacGregorasked the Secretary of State for Energy whether he will introduce a scheme for petrol vouchers for specific groups in need in rural areas.
    Mr. John Smith: I have the problems of those in rural areas very much in mind, but there are others who are equally affected by the rise in petrol prices. To attempt to provide relief to special groups would be administratively difficult and costly, would be seen as discriminatory and would encourage petrol consumption at a time when the utmost economy is essential.
    Mr. MacGregor: I recognise the need for the utmost economy, but may I reinforce the point by reminding the Minister that longer journeys are more necessary in rural areas than in most other areas, not only to and from work but for other essential purposes, and that there is simply no alternative employment or transport available? I urge the Minister to recognise that not only hardship but real damage will in many cases be caused unless he comes forward with a solution soon.
    Mr. Smith: As I have already made clear, the Government are fully aware of the problems of people living in rural areas, especially among those who have to use a car to get to work. But it is difficult to isolate rural consumers from other consumers of petrol in any effective or clear way, and any solution will have to be on a more general basis which will help rural people among others.
    Mr. Arthur Lewis: On my hon. Friend's last point, will he consult the Chancellor of the Exchequer to see whether, since most business people enjoy tax rebates and assistance with their cars and petrol, there should be a general allowance to all income tax payers? All that would then remain would be for a special scheme to be made for pensioners and others who did not come under the tax scheme.
    Mr. Smith: My hon. Friend has recognised that this is a matter for my right hon. Friend the Chancellor, and I shall certainly bring it to his attention.
    Mr. Skeet: Does the Minister accept that a voucher system would be a rather expensive method for the motorist? Is he aware that those with company cars would derive considerable advantage? Before introducing any such scheme, will he take account of the view of the 32,000 retail outlets?
    Mr. Smith: We shall consult all appropriate people with experience before we introduce any scheme. The hon. Member mentioned company cars. There is now quite a lot of feeling that some people with company cars are abusing the system by using them for personal purposes and thereby getting relief from VAT. I hope that the companies which have control over this will stop it.

    Crude Oil (Petrol Conversion)
    Mr. Ridleyasked the Secretary of State for Energy what percentage of a barrel of crude oil can be made into petrol.
    Mr. John Smith: Taking United Kingdom refineries as a whole, this normally lies between about 10 and 15 per cent. The actual figure depends upon a number of factors including the type of crude oil, the refining processes employed and the demand for naphtha as a petrochemical feedstock.
    Mr. Ridley: May I offer my gratitude to the Minister for having given me the Answer first on a piece of paper—
    Mr. Speaker: Order. May we have a comprehensive expression of gratitude? This is the fourth time that this has happened.
    Mr. Ridley: Nevertheless, Mr. Speaker, I am grateful and I hope that it may become standard practice. It will be very welcome.
    Why is it that the Government seek to levy tax on 10 or 15 per cent. of the contents of a barrel of crude oil and leave the other 85 to 90 per cent. untaxed? Is it because they have a hate against the private motorist, who seems to be bearing the whole brunt of the tax on oil, and why is this prejudice so evident?
    Mr. Smith: The hon. Member is not giving a fair summary of the position. People who use oil for domestic heating have had increases which have almost doubled the price of their oil during the last year. The Chancellor has loaded the tax on to the private motorist because this is an area where economies can be made without affecting our industrial effort.
    Mr. Hall-Davis: At a time when recession is clearly biting in those industries which are closely linked with the use of petrol, and since the purpose of the restrictions is to right the balance of demand, is it not worth considering whether there should be a more general onslaught on import levels and an easing of the onslaught on petrol? Is not this advisable if we are not have undue and perhaps avoidable unemployment and recession?
    Mr. Smith: The hon. Gentleman's constructive approach indicates the problem of balancing conflicting considerations. An energy conservation programme which bites too deeply might affect our industrial effort and make us worse off than we were orginally. That consideration must be borne in mind by those demanding more extreme measures. I shall bear in mind what the hon. Member said, but my right hon. Friend the Chancellor was right in his judgment that in present circumstances the use of petrol by the private motorist is an area in which economies can most easily be effected.

    North Sea Oil Policy
    Mr. Hannamasked the Secretary of State for Energy what representations he has received from the oil extraction firms engaged in the North Sea since the Government published their proposals for oil revenue taxation and North Sea participation.
    Mr. Varley: I am in continuous consultation with the oil companies about all aspects of North Sea policy.
    Mr. Hannam: Does the Secretary of State agree that the Government have made a grave error of judgment in not completing the consultations before presenting to Parliament the hasty and ill-prepared Oil Taxation Bill which is based on oil revenue rather than on profits? Will not the Government change their

    1007
    mind, admit their error and change to an excess profits tax rather than a foolhardy tax which will deter development and exploration in the North Sea?
    Mr. Varley: I do not accept the hon. Gentleman's strictures. All the oil companies with interests in the 12 commercial oilfields have been seen and informed of the general lines of Government policy, and my right hon. Friend the Paymaster-General made a statement to the Standing Committee last week.
    Mr. Skinner: Will my right hon. Friend say whether the Paymaster-General's statement on the preservation of profits for the North Sea oil companies is compatible with the social contract and, perhaps even more important, whether it can also be reconciled with my right hon. Friend's attempt to get a large and significant slice of the £4,000 million of which he spoke before the last election?
    Mr. Varley: I can give my hon. Friend an absolute assurance that we stand by the policy we outlined in our manifesto and by the policy I announced to the House in July.
    Mr. Norman Lamont: Is the right hon. Gentleman aware that many people think that there is considerable validity in the point made by the hon. Member for Bolsover (Mr. Skinner) and that great confusion has been caused by the Chancellor of the Duchy of Lancaster's statement that the 51 per cent. participation will not affect oil company profits? People cannot see the point of taking a 51 per cent. stake in those companies. The confusion has been compounded by the right hon. Gentleman's refusal to answer the question by the hon. Member for Bolsover—the same question as was asked from the Opposition Front Bench last week.
    Mr. Varley: If there is any confusion, it is in the hon. Gentleman's mind. The companies are examining the terms that we put to them and they have promised to come back and discuss them with us further.
    Mr. William Hamilton: Since some of the oil companies have threatened to get out of the North Sea, will my right hon. Friend say whether they have indicated where else they could go on less tough terms than the Government are now suggesting?
    Mr. Varley: My hon. Friend is on to a strong point. Every major oil-producing country, with the exception of the United States of America, has gone in for participation. Of course, we have always made it plain that there will be a continuing rôle for the companies in the North Sea, and far from exploration activity declining I hope to show in a later answer that it has been stepped up. There is a great deal of difference between exploration activity and development activity.
    Mr. Patrick Jenkin: Further to the reply to the hon. Member for Fife, Central (Mr. Hamilton), may I ask whether the right hon. Gentleman is aware that the United States Government are proposing to lease 10 million acres of the outer Continental Shelf during 1975? Does he accept that he would do well to listen to some of the warnings which are now being expressed by the oil companies? Does he recognise that there is a need to come clean on the "no gain, no loss" suggestion by his right hon. Friend, and that, contrary to what he himself has said, neither the oil industry nor the Opposition know what he means or how it can be achieved?
    Mr. Varley: The proposal was fully outlined in July when I made my statement to the House. The negotiations and the discussions that we are having with the companies are confidential and the House would not expect me to go into the details of them. At an appropriate stage I shall come to the House and provide the information that it requires.

    North Sea Oil and Gas Production
    Mr. Tim Rentonasked the Secretary of State for Energy to what extent the rundown in North Sea activities is affecting the Government's programme to bring oil and gas ashore.
    Mr. Alexander Fletcherasked the Secretary of State for Energy what are his latest estimates of North Sea oil production for the years 1975, 1976 and 1977, respectively.
    Mr. Varley: Though there have been suggestions that some companies may not build up their North Sea activity to the levels originally envisaged, activity is in fact now at a higher level than ever

    1009
    before. I will be publishing revised figures in the annual Brown Book but my present expectation is that by 1980 oil production will be within the range of 100 million to 140 million tons, as indicated in the 1974 Brown Book.
    Mr. Renton: I find the Secretary of State's answer very surprising. Is it not a fact that expected orders for production platforms are now something like 50 per cent. down on six months ago? For example, orders for non-essential equipment for the Claymore field have been delayed, and on the basis of the Government's present proposals only five or six fields in the North Sea may ever be developed.
    Mr. Varley: It depends where one starts in looking at North Sea oil and North Sea exploration activity. An examination shows that the slippage which took place did so under the last Conservative Government. Mr. Tom Boardman, who was Minister for Industry at the time, announced in May 1973 that we were going to get 25 million tons of oil from the North Sea in 1975. Last March I told the House that that estimate was down. The hon. Member should know that there are now four sites in the United Kingdom for the construction of steel platforms and six for the construction of concrete designs. Three of these were announced only a few days ago by my right hon. Friend the Secretary of State for Scotland.
    Mr. Lambie: How much Scottish oil will be refined in Scottish refineries? What steps is my right hon. Friend's Department taking to increase the refinery capacity in Scotland, to refine more Scottish oil?
    Mr. Varley: There is enough refinery capacity for 150 million tons of oil a year. That is plenty at present, but I can tell my hon. Friend, who I know takes a great interest in these questions, that over a time refinery capacity will be built up in that country. However, it is too early to say by how much it will be increased.
    Mr. Fletcher: The Minister did not answer my Question, which related specifically to the years 1975, 1976 and 1977. If he cannot forecast production for this year and the next two years with some
    1010
    confidence, is he not deluding himself, the House and the country by sticking to a target date of 1980 for self-sufficiency in oil?
    Mr. Varley: No, Sir, I am not deluding myself. The companies are operating on the edges of technology. There has been some slippage during the winter and last autumn because of the severe weather conditions. All these matters—technical problems and labour troubles—add up to difficulties, but the 1980 perspective holds good.
    Mr. Patrick Jenkin: Is not my hon. Friend the Member for Edinburgh, North (Mr. Fletcher) absolutely right in that in the face of the faltering progress of our North Sea development the right hon. Gentleman is displaying complacency which is terrifying? Will he now recognise what the Government's policies are doing in creating uncertainty and doubt in an area where there should be the maximum certainty, enterprise and incentive if we are to go anywhere near achieving the target about which he has told us?
    Mr. Varley: The right hon. Gentleman wants maximum surrender. The British people would not have a proper share and stake in their own oil if the matter were left to him. Ever since the present Government came into office, the right hon. Gentleman has had a vested interest in seeing that this country should fail. I hope he will get out of that soon.
    Several Hon. Members rose—
    Mr. Speaker: Order. Question Time is not a time for debate.
    Sir Bernard Braine: On a point of order.
    Mr. Speaker: We will have the point of order at the end of Question Time.
    Later—
    Sir Bernard Braine: On a point of order, Mr. Speaker. During Question Time the Secretary of State for Energy said, within the hearing of many hon. Members, that ever since the present Government took office my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) had had a vested interest in preventing public participation in the development of North Sea oil. The words may have been used loosely but

    1011
    they nevertheless have a very clear connotation in this Chamber. They reflect upon the integrity of my right hon. Friend. It was an uncharacteristic remark by the Secretary of State and it might have been but a slip of the tongue. I hope that you can afford the Secretary of State the opportunity to withdraw and to apologise to my right hon. Friend.
    Mr. Speaker: In my view, if it was a reference to a vested financial interest that is one thing, but if it was a question of a vested political interest it is a different thing. Perhaps the Secretary of State will clarify.
    Mr. Varley: I did not in any way imply that there was a vested financial or commercial interest, Mr. Speaker, but I did imply, of course, that there was a vested political interest in the continued carping by the right hon. Member for Wanstead and Woodford (Mr. Jenkin) at our policy.
    Mr. Jenkin: I accept the Secretary of State's apology in the sense that it was offered. Perhaps I can, by way of further explanation, assure the right hon. Gentleman that, following a briefing from his own Department, which I was grateful to have, I spent a fair part of the last recess trying to reassure companies in Canada and the United States that wiser counsel would prevail and that they would be able to continue to operate in the North Sea.
    Mr. William Hamilton: Further to that point of order, Mr. Speaker. Can the right hon. Member for Wanstead and Woodford (Mr. Jenkin) make it clear that it was the oil companies which paid for his journey to America?
    Mr. Jenkin: Further to that point of order, Mr. Speaker. If the hon. Gentleman will read the statements I made at the first and fifth sittings of the Committee's proceedings, he will see exactly what I was up to.

    Gas Prices (Scotland)
    Mr. Teddy Taylorasked the Secretary of State for Energy what was the percentage by which domestic gas prices per therm in Scotland exceeded the average price in England and Wales in the most recent annual period for which
    1012
    figures are available; and what were the comparable figures five and 10 years previously, respectively.
    Mr. John Smith: In terms of average revenue the percentages were 27 per cent. in 1973–74, and 23 per cent. and 21½ per cent., but this basis of comparison exaggerates the difference in tariffs, which has been reduced from 1st January.
    Mr. Taylor: Does the Minister agree that it is monstrous and totally unjust that, according to his own figures, Scottish housewives should be paying more than one-quarter more for their gas than the average housewife in England and Wales? What reduction in the differential will stem from the welcome move on 1st January? Will the hon. Gentleman say that it is the Government's firm intention to achieve a British price for British gas instead of letting the Scots suffer from this aspect of home rule?
    Mr. Smith: I shall find out the exact figure as it affects the differential and write to the hon. Gentleman about it. The recent increase in domestic gas prices in Scotland was only 7 per cent., as against the United Kingdom average of 12 per cent. The tariffs are a matter for the British Gas Corporation. The hon. Gentleman no doubt took some interest in the matter when he was a member of a Conservative Government which had an opportunity to do something about it. Under the present Government the gap is narrowing considerably.

    Power Station Proposal (Connah's Quay)
    Sir A. Meyerasked the Secretary of State for Energy what reply he proposes to give to the request by the Central Electricity Generating Board to construct an oil-powered power station at Connah's Quay.
    Mr. Eadie: In accordance with the statutory procedures, the board's proposals are being advertised and the views of the local authorities concerned are being sought. My right hon. Friend will consider the application in the light of any comments which may be received.
    Sir A. Meyer: In view of the world oil shortage and the emerging failure of the Government's programme for getting oil out of the North Sea, is it wise to allow the station to be constructed as

    1013
    a solely oil-fired station? Should it not be dual-purpose at the very least?
    Mr. Eadie: All matters, including any objections, would be considered in any inquiry. The question whether the station should be solely oil-fired would be one of the matters to be considered.

    Energy Saving (Domestic Premises)
    Mr. Jesselasked the Secretary of State for Energy what further action he is now proposing to encourage the saving of energy in houses and flats.
    Mr. Varley: Energy saving in houses and flats will be one of the main targets of the publicity campaign which I am launching today. I have no proposals at present for specific new measures but am keeping the matter under review.
    Mr. Jessel: I welcome the announcement of the publicity campaign, which is long overdue, but why has the right hon. Gentleman no more specific proposals? Is it not time we had a sustained and vigorous attempt to persuade the public to switch off heating and lighting, which in many houses are still used to excess?
    Mr. Varley: There is a great deal in what the hon. Gentleman says. When he has had time to consider the publicity campaign and the publicity material provided—I shall gladly send him a copy and all the information concerned—I think he will realise that a good deal is being done.
    Mr. George Cunningham: Will my right hon. Friend consult my hon. Friend the Minister for Housing and Construction about the matter, because the present rules which require a form of heating in living rooms but not in bedrooms cause an awful waste of energy in council-built accommodation?
    Mr. Varley: I was not aware of that. We hope to have discussions on the matter with local authority associations very soon, and that is one subject which will be on the agenda.

    Coal (Tripartite Plan)
    Mr. Hardyasked the Secretary of State for Energy if he will state the
    1014
    present position in regard to the implementation of the tripartite plan for coal.
    Mr. Eadie: On 4th November, in reply to a Question by my hon. Friend the Member for Nottingham, West (Mr. English)—[Vol. 880, c. 41–2.]—my right hon. Friend made a statement in which he summarised the general conclusions of the final report of the tripartite coal industry examination. The Government are playing their part in implementing the recommendations of this report. In particular, a Bill to facilitate mining developments and to provide for the Government's contribution towards the cost of the National Coal Board's pneumoconiosis compensation scheme is to be introduced shortly.
    Mr. Hardy: I welcome my hon. Friend's answer, particularly the last part of his final sentence. May I ask him, however, to take this opportunity to reaffirm his confidence that Britain will, over the next decade at least, maintain a capacity to produce an annual tonnage of coal in excess of that produced in 1973 or 1974?
    Mr. Eadie: I give my hon. Friend the assurance that, arising out of the tripartite investigation, the NCB and the unions are confident that they will make sure that the mining industry is able to make a substantial contribution towards meeting the country's energy requirements.
    Mr. Dempsey: Can my hon. Friend comment on the NCB's intentions concerning the closing of uneconomic pits? If we are to preserve coal as a form of energy, and to be less dependent on oil, does not my hon. Friend agree that the remaining few pits in Lanarkshire should be continued, even though they may be uneconomic for some time?
    Mr. Eadie: I am aware of my hon. Friend's great knowledge of the matter. There will be pit closures, because the mining industry is an extractive industry. What is significant, arising out of the inquiry, is that more searches for new coal reserves are going on in Britain than there are searches for energy in the North Sea. We are looking for new reserves to sustain an increased coal production. In that climate, there is no need for fear over the point my hon. Friend raised concerning pit closures.

    Energy-Saving Campaign
    Mr. Laneasked the Secretary of State for Energy whether he is satisfied with the progress of his energy-saving campaign; and if he will make a statement.
    Mr. Duffyasked the Secretary of State for Energy if he is satisfied with the response to his recent statement on energy conservation.
    Mr. Varley: It is too early yet to make any assessment on a programme of measures designed to achieve results over a period of time. I believe, however, that as my campaign begins to build up some energy savings are being made.
    Mr. Lane: In view of the importance of keeping the public involved, which has been mentioned several times this afternoon, will the right hon. Gentleman give his full support to the appeal for good housekeeping, both industrial and domestic, that was made in The Times on Saturday by the Chairman of his Advisory Council on Energy Conservation, Sir William Hawthorne, who happens to be one of my most distinguished constituents?
    Mr. Varley: Yes, I can give a positive assurance to the hon. Gentleman.

  OVERSEAS DEVELOPMENT

    Commonwealth Development
    Mr. Hooleyasked the Minister of Overseas Development what progress is being made with her suggestion for a Commonwealth Conference on Rural Development; and if she will make a statement.
    Mr. Goodhartasked the Minister of Overseas Development when she will meet Commonwealth Ministers responsible for development to discuss food production.
    The Parliamentary Secretary to the Ministry of Overseas Development (Mr. John Grant): In the absence of my right hon. Friend, who is unwell, I have been asked to reply.
    Following the suggestion my right hon. Friend made to her Commonwealth colleagues at the World Food Conference
    1016
    last November, she confirmed to the Commonwealth Secretary-General in December the Government's willingness to host a meeting of Commonwealth Ministers in London from 4th to 12th March this year. The Secretary-General issued invitations a few days before Christmas and an outline agenda and tentative programme have been circulated.
    Mr. Hooley: Is my hon. Friend aware that this is an extremely welcome initiative as the provision of food is now the major problem facing many developing countries? Will he say whether in general the reappraisal of our aid programme is being made in the light of the world food crisis?
    Mr. Grant: The conference itself will bear heavily on that matter. As my hon. Friend has mentioned, the initiative arises from the World Food Conference. We are not reappraising our aid programme on food but we are in general seeking to pursue a policy which will ensure that our aid programme is directed in particular towards the poorer developing nations. We hope that the Commonwealth conference will further that aim.
    Mr. Goodhart: In view of the critical shortage of fertilisers in many countries following the increase in oil prices, will the Minister say what has happened to the proposal that there should be a Commonwealth scheme for increasing and sharing fertiliser production?
    Mr. Grant: The Government have done a good deal on fertiliser projects. We are a net importer of fertilisers. The details are matters for my right hon. Friend the Minister of Agriculture, Fisheries and Food. This is precisely the kind of question that we would expect to be raised at the Commonwealth Ministers conference.
    Mr. Spearing: Does my hon. Friend agree that Britain's response to the world food crisis is a matter not only for our right hon. Friend the Minister of Overseas Development and our right hon. Friend the Minister of Agriculture, Fisheries and Food but for many other Ministers and Departments? Has a comprehensive statement been made by the Government concerning all policies in all Departments, or has it still to be issued?
    Mr. Grant: I think that that is a matter for my right hon. Friend the Prime Minister.
    Sir Bernard Braine: The Commonwealth conference may help food-deficit countries in the long run, but is there not an appalling short-run problem? It is a fact that this year millions of people will die of starvation. Does the Minister think that 25,000 tons of fertiliser for the United Nations emergency programme—that is scarcely one ship load—is an adequate contribution? Will he give an assurance that this matter will be considered again?
    Mr. Grant: The 25,000 tons has already been supplemented. As I have said, this is a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food. I will ensure that my right hon. Friend considers further what the hon. Gentleman has said.
    Mr. Michael Marshall: If the conference takes place, will the Minister ensure that at least a part of it is devoted to the topic of supplying spare parts for essential equipment used in rural development? Further, will he ensure that our own house is put in order by supplying essential spares for grounded helicopters in Bangladesh?
    Mr. Grant: I hope that the hon. Gentleman has not believed all he has read or seen on the television screen in that respect. If he was among the Members who wrote to my right hon. Friend or myself, he will know that there is another side to the story.

    African, Caribbean and Pacific Countries
    Mr. Blakerasked the Minister of Overseas Development what progress has been made in concluding an association agreement with the ACP States.
    Mr. Roperasked the Minister of Overseas Development if she will make a statement on the present state of the negotiations on the European Development Fund and on the new convention with African, Caribbean and Pacific countries.
    Mr. John Grant: Ministers of the EEC and ACP countries held further discussions for three days last week on the terms of the new convention. They dis-
    1018
    cussed the trade régime, rules of origin and agricultural access, the proposed scheme of commodity stabilisation and financial and general aspects.
    Progress was made towards resolving several difficult outstanding questions. The size of the European Development Fund has not yet been agreed.
    Ministers will meet again in Brussels on 30th January with a view to initialling an agreement to be signed in Lome in February.
    Mr. Blaker: Is it not one of the striking facts about the negotiations that a a unity of view is held by the African countries which have been taking part? Is it not clear that Mr. George Thomson was absolutely right when he made the point that since we joined the Community more has been achieved in creating solidarity between the French-speaking and English-speaking former dependent territories in Africa than was achieved in the 15 years of the Community's existence before we joined?
    Mr. Grant: I shall not comment on Mr. Thomson's remarks. It is fair to say that there has been a striking degree of unity between ACP countries as a whole in the negotiations.
    Mr. Roper: Is it the case that under the convention more than 90 per cent. of the exports of the 46 ACP countries will in future enter the Community countries of the Nine duty-free? Will the Minister tell us what progress has been made with my right hon. Friend's proposal that there should be a second development fund to cover countries outside the 46 ACP countries?
    Mr. Grant: Under the original Community offer about 95 per cent. of ACP exports to the Community would benefit from duty-free and levy-free entry or reduced levies. But some further improvements—notably the terms of access for beef—have now been proposed and will be discussed further at the next conference. Secondly, my right hon. Friend has been pressing hard her proposal in Brussels. It will be discussed further by the Ministers concerned.

    Crown Agents.
    Mr. George Cunninghamasked the Minister of Overseas Development what

    1019
    formal inquiries are to be conducted into the affairs of the Crown Agents to establish responsibility for the situation revealed in her statement of 18th December.
    Mr. John Grant: The present position is that the Government await the report from the Chairman of the Crown Agents to which my right hon. Friend referred in her statement of 18th December. My right hon. Friend intends to make a further announcement after that.
    Mr. Cunningham: Does my hon. Friend recall that in her statement of 18th December his right hon. Friend said that she would be considering what form any further inquiry would take? Will he tell us something about the form of the inquiry even if he cannot say anything about its timing at this stage? Without asking my hon. Friend to comment on Press reports over the weekend, may I ask him to confirm that a member of the staff of the Crown Agents has been suspended pending investigation and that certain papers are being considered by the Director of Public Prosecutions?
    Mr. Grant: Yes. To the first part of my hon. Friend's question I cannot add to what I have already said. I think that my hon. Friend will give credit to my right hon. Friend for the diligence with which she has pursued the whole matter of the Crown Agents, both in opposition and in government. I think my hon. Friend will accept that she will take the right decision at the right time and that she will keep the House fully informed.
    Secondly, I can confirm that a member of the Crown Agents staff has been suspended and that certain papers have been sent to the Director of Public Prosecutions by the Board of the Crown Agents. I cannot comment on the nature of those papers or on the name of any individual involved.
    Mr. Dykes: I appreciate the efforts of the hon. Member for Islington, South and Finsbury (Mr. Cunningham). I once wrongly described him as exaggerating this whole affair. I hope he will accept that I withdraw that suggestion. Does the Minister agree that on 18th December his right hon. Friend made it clear that there was no question of criminal charges being raised?
    Mr. Grant: I cannot add in that respect to what I have already said.
    Mr. SkinnerDoes my hon. Friend think it is about time that severer and stricter instructions were given to the Crown Agents regarding their investments? Is it not right that we should take into account a number of ventures over the past several years ranging from their investments in slum property to the ill-faced Stonehouse-Bangladesh venture and the recent developments that have been referred to by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham)? Will he give an assurance that following these developments instructions will be given on future investments?
    Mr. Grant: My right hon. Friend has made it clear that there is considerable change in this respect—that the new board she appointed will act in accordance with her directives. She explained in her statement of 31st July that the board would be responsible to her for the organisation and general administration of the Crown Agents' business. She has, of course, reserved the right to give it further directives from time to time.

BUSINESS OF THE HOUSE
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): With permission, Mr. Speaker, I will make a short Business Statement. I apologise for not giving prior notice.
Following representations to postpone tonight's debate on EEC documents R/1746/73 and R/2268/74 on value added tax, I have agreed to do so, particularly as I have now been informed that the issues involved will not be brought before the Council of Ministers for decision until the autumn.
Mr. Peyton: We raised the matter with the right hon. Gentleman when he announced the business for this week, and I am grateful to him for his consideration and reaction.
Mr. Arthur Lewis: In view of the last few words of the statement, is my right hon. Friend aware that we would rather that the interests of the House predominated and that the business of the

1021
House should not be altered simply because it suits the EEC or falls in with its plans?
Mr. Short: The Council of Ministers will discuss these documents later in the year. Other relevant documents might well be available by that time, and it seems sensible to defer our debate until then.
Mr. Spearing: Although there may be other documents, is it not a fact that what my right hon. Friend has told us would have been known to the Government last Thursday? Can my right hon. Friend confirm that these documents would open the way to further harmonisation of value added tax, which is not, I believe, the policy of the Government or of the Labour Party?
Mr. Short: These documents deal with value added tax and there is a certain amount of harmonisation in them. But it does not in any way affect zero rating of certain things. That is one of the points in our renegotiations.
Several Hon. Members rose—
Mr. Speaker: Order. We must move on. We cannot discuss these documents now.

CHANNEL TUNNEL
The Secretary of State for the Environment (Mr. Anthony Crosland): With permission, Mr. Speaker, I will make a statement about the Channel Tunnel.
When the present administration took office in March 1974, a Channel Tunnel treaty and various agreements had already been concluded. A Hybrid Bill had been introduced by the previous administration to enable them to ratify the treaty by 1st January 1975, as required by these agreements. The present Government reintroduced the Bill with the intention of meeting this ratification deadline. However, the incidence of a second General Election in the course of 1974 affected the timetable, even though the House agreed in November that the Bill should be reintroduced at the stage which it had reached before the Dissolution.
By that time, however, it had become clear that we would not be able to meet the deadline for ratification of 1st
1022
January 1975. Moreover, as I told the House on 26th November, the estimated cost of the proposed high-speed rail link had so increased that the Government felt unable to proceed with it. Accordingly, I proposed to our partners—the French Government and the two Channel Tunnel companies—that the whole timetable should be put back to enable alternative lower-cost rail options to be thoroughly examined. This would have meant taking the final decision on whether to build the tunnel in the summer of 1976, instead of the summer of 1975 as previously envisaged. At the same time, I requested our partners to give us some latitude over ratification.
Naturally, our partners expressed concern at these developments, but they all indicated their willingness to discuss ways of carrying the project forward. At the French Government's suggestion, we explored with the companies the possibility of a short standstill agreement designed to protect the interests of all the parties during a negotiating period lasting into the spring.
Unfortunately, the companies rejected this proposal. They felt obliged in the interests of their shareholders to take advantage of our inability to ratify the treaty by 1st January, and to claim that the Governments had abandoned the project. On 2nd January they served notices of abandonment which expire tonight.
Notwithstanding these notices, the companies on 9th January put forward to British and French officials a scheme for continuing the project. This scheme did not, in the Government's view, provide a reasonable basis for negotiation. It would have given phase II shareholders the right to withdraw their money at a premium now. It would have given the shareholders who remained the right to withdraw their money at a premium if for any reason the project were abandoned before main construction began.
Also, the timetable proposed—a new Hybrid Bill in autumn 1975 to complete all its stages by summer 1976, with an effective commitment to be given in October 1975 that construction would start by the end of 1976—was quite unacceptable to the British Government.
I have therefore regretfully informed the French Government that I see no alternative to accepting the companies' claim that the present arrangements have

1023
been abandoned. Nor, in the current economic circumstances, and in the light of the Government's first determination to control public expenditure in the difficult years which lie immediately ahead, do I see the slightest prospect of the tunnel being taken over as a directly Government-financed project. The project will, therefore, be run down as soon as possible. However, the studies, plans and works will be preserved in the best possible state so far as practicable in case the tunnel scheme should be revived when circumstances are more propitious. Nothing will be done which might prejudice this possibility.
I shall be considering with those concerned the implications of this decision for the development of our conventional transport links with Europe.
Mr. Channon: Is the right hon. Gentleman aware that he has made a very serious statement with very serious long-term consequences for this country? Can he answer the following questions?
First, why has the right hon. Gentleman made this statement today, contrary to the specific assurance that he gave to the House in his statement on 26th November 1974, when he promised that the House would have the fullest opportunity for a debate before the final decision was taken and that the decision remained completely open until the House had expressed its view? Why has the right hon. Gentleman come to the conclusion that he has announced this afternoon?
Secondly, is the right hon. Gentleman aware that the Government set up the Cairncross Committee a few months ago with the object of making an impartial review of the whole progress of this project? How can the Government decide to abandon it several months before the Cairncross Committee has even reported? What has led the Government to this view?
Thirdly, is the right hon. Gentleman aware that his attempt to attach responsibility for this state of affairs to the shoulders of the companies rather than the shoulders of the Government is a wholly unworthy and shoddy attempt on his part? Is he aware that what he has cited as the alleged activities of the companies concerned are precisely their rights
1024
under the agreement signed with them by the British Government? Is it not the case that the companies exercised only what in fact were their rights in the agreement reached with Her Majesty's Government? Can the right hon. Gentleman confirm that the Government themselves have put forward no alternative proposals whatever?
Does the right hon. Gentleman also agree that the environmental consequences of his decision, particularly for Kent, will be extremely serious, often with a doubling of traffic, with the environmental damage resulting from that?
Finally, has the right hon. Gentleman estimated what it will cost the country not to build the Channel Tunnel? What will be the cost in environmental terms, in terms of extra road traffic and particularly for British Railways? Is it not the case that his attempt to blame the companies is merely a shoddy pretext for a decision that has been maliciously taken by the anti-Europeans and Left wing in the Government?
Mr. Crosland: Let me first answer the question about the Left wing and anti-Europeans. Many of my best friends are members of the Tribune Group. To judge by the weekly attacks on me in Tribune, they do not share the hon. Gentleman's view of my susceptibility to pressure. The hon. Gentleman's question about anti-Europeans was ludicrous and disgraceful. Of course that does not come into the matter at all. His remarks have not helped the objective that he and I have in common—enabling Britain to remain a member of the Community. I am happy to say that the French Foreign Secretary made a much more statesmanlike remark when he said that, while he regretted this decision, it would have no effect on Britain's relations and Britain's co-operation with France and Europe.
The hon. Gentleman asked why I had made a statement today. I have done so because today is the date on which the notices of abandonment presented by the companies run out, and, therefore, a statement has had to be made.
The hon. Gentleman asked me about the Cairncross Committee and the cost of not having a Channel Tunnel. This, of course, is the point of the matter. The hon. Gentleman knows perfectly well

1025
that what I wanted was a year's postponement during which time we should have the Cairncross study and the phase II study and be able to examine alternative rail options, which would have helped the House to come to a rational and mature decision as to whether it was more costly to proceed or not proceed with the tunnel. It was that proposal for a year's postponement that was rejected, and that is why we are in this situation today.
The hon. Gentleman is quite wrong to say that I blame the companies. I do not blame the companies. They are acting within their rights in taking these steps and no moral blame attaches to them, nor did I imply any in the slightest degree. I merely stated the fact that it happens to be the companies and not the Government which have given notice of abandonment.
The hon. Gentleman mentioned the effect that this development would have on the environment of Kent. No doubt Kent Members of Parliament will be expressing their views, but I know that there are many who take precisely the contrary view.
Dr. Edmund Marshall: Having chaired the Select Committee that considered the Channel Tunnel Bill, may I assure my right hon. Friend that I believe his decision now to be correct in every respect? Does he agree with me that it was the wrong kind of tunnel in any case, and that if ever in future another tunnel is planned, it ought to be a straightforward rail tunnel—that is, for long-distance through trains—without any associated terminals for handling road traffic?
Mr. Crosland: I have always taken the view, as my hon. Friend knows, that the main case for building a tunnel is the boost that would be given to rail by linking the British and Continental rail systems direct, and I still take that view. My personal view is that at some point in the future we shall want a direct electric fixed link with the Continent. I believe that at some time, probably in my lifetime, a tunnel will, therefore, be built but I certainly believe that for a number of reasons, partly those my hon. Friend gives, but also many others, the present project is now dead.
Several Hon. Members rose—
Mr. Speaker: I am in a certain difficulty. It is clear that many hon. Members want to ask questions. I have had notice of an application to move the Adjournment of the House under Standing Order No. 9 from the hon. Member for Liverpool, West Derby (Mr. Ogden). I must tell the House that at the moment I am disposed to accept that motion if the hon. Member gets the leave of the House. It would seem much more satisfactory to have three hours of debate rather than about 40 minutes of questions now. I shall therefore call the hon. Member for West Derby to make his application under Standing Order No. 9.
Mr. Ogden: Thank you, Mr. Speaker.
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,
the announcement made by the Secretary of State for the Environment today that the British Government have unilaterally abandoned the Channel Tunnel project.
I submit that it is a specific matter and that it is not only important for the Channel Tunnel developers, the shareholders and others but even more important for the environment, for industry, for regional development and many other considerations.
Further, I stress the specific pledge given to the House by the Under-Secretary on 11th November 1974 when he said:
"Parliament would, however, be given the opportunity to vote on so important a question before any such final decision was taken."
That pledge was repeated a few seconds later:
"we still have the Report stage, Third Reading and the proceedings in another place. After that, Parliament will still be given the final decision as to whether the project as a whole should continue".—[Official Report, 11th November 1974; Vol. 881, c. 136.]
That is an important matter for the House. Employment, regional investment, British Railways investment and, not least, compensation charges are urgent and vital matters that should have the consideration of the House. For those reasons among others, I beg to ask leave to move the Adjournment of the House under Standing Order No. 9.
Mr. Heath: On a point of order, Mr. Speaker. May I ask you to elucidate one

1027
matter? If you now proceed to grant the application under Standing Order No. 9, as you have suggested you will, would that be an end of the questioning of the Secretary of State at this time? If so, would not this create a precedent? I do not recall a similar incident.
Would you take account of the fact that, whereas when a statement is made by a Minister, a considerable number of back-bench Members have an opportunity to ask questions, in the course of a three-hour debate there is a considerable limit on the number of Members able to put a view and ask questions? May I draw your attention to the fact that in this instance only one question has been put by a back-bench Member on the Government side, following my hon. Friend the Member for Southend, West (Mr. Channon), and no question at all from a back-bench Member of any party on this side of the House? May I ask you to consider this matter, because your action today may well establish a precedent?
Mr. Speaker: I indicated that I was in a difficulty. It was quite clear that we could have 40 or 45 minutes of questions to the Secretary of State, and I thought that it would be more satisfactory as I intended to allow the application under Standing Order No. 9 if I were to say so. But what I have done must not be taken as a precedent. I hope that it will be regarded as something that I have done in the particular circumstances of this case.
I have made my decision, and I must ask whether the hon. Member has the leave of the House to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should be given urgent consideration, namely,
the announcement made by the Secretary of State for the Environment today that the British Government have unilaterally abandoned the Channel Tunnel project.
I am satisfied that the matter raised by the hon. Gentleman is proper to be discussed under Standing Order No. 9. Does the hon. Member have the leave of the House?
The leave of the House having been refused, Mr. SPEAKER called on those Members who supported the Motion to
1028
rise in their places and, not less than Forty Members having accordingly risen and Mr. SPEAKER having directed that the urgency of the matter so required, the Motion stood over, under Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration), until Seven o'clock this evening.
The Prime Minister (Mr. Harold Wilson): Further to the point of order raised by the Leader of the Opposition, Mr. Speaker. While what you have done may well prove to be for the benefit of the House in that there will be a debate this evening—and it is important that it should be this evening and not tomorrow in view of the circumstances—may I ask whether your decision and the leave given by the House means that there will not be any further questions today? I thought that the point made by the right hon. Gentleman was a perfectly fair one. Obviously, you were trying to save the time of the House. On the other hand, it would be possible for some hon. Members who might not get into the debate to put some questions. The debate may be better informed if some fairly obvious and straight questions are answered first. Does your ruling mean, since the debate will be better as a result of a short period of questions, that you are now precluded from allowing such further questions? I am not sure about the rules of the House on this point.
Mr. Speaker: I will be guided on this matter by the wishes of the House. If it is the desire of the House that there should be questions for, say, another 15 minutes—[HON. MEMBERS: "Hear, hear."] If that is the general view I will agree. I must warn the House that such questions must stop after 15 minutes because I have to protect the other business of the House.
Sir John Rodgers: This is the first time that in agreeing with the Secretary of State I have been classed with the anti-Europeans. Is the Secretary of State aware that not everyone in Kent regards the abandonment of this project as an environmental disaster? Far from it. Now it has been abandoned, may I ask the right hon. Gentleman to give urgent consideration to improvements of the M2 and M20 and one or two other roads?

1029
Will he also provide, as urgently as possible, a bypass for Dover?
Mr. Crosland: The hon. Gentleman reflects the opinions of Kent environmentalists more accurately than his hon. Friend the Member for Southend, West (Mr. Channon). This decision will have no effect on plans for the M20, which would go ahead, tunnel or no. The Maidstone-Folkestone route will be announced shortly.
Mr. Michael Stewart: Does my right hon. Friend recollect that there are several pieces of land belonging to the London borough of Hammersmith and badly needed for housing which have been withheld by his Department or British Rail because of the tunnel project? Will he please make sure that these pieces of land are made available to Hammersmith as soon as possible?
Mr. Crosland: Yes, Sir. I can see no reason at all why that should not be done if the reason for holding the land was the Channel Tunnel project.
Mr. Stephen Ross: Since I hope to catch your eye later in the debate, Mr. Speaker—[Interruption.]—may I put some brief questions? Who is to pay for the work to date? Will the French Government pay half? Is the right hon. Gentleman aware that I welcome his comments on saving public expenditure? May I express the hope that this is not restricted to the Department of the Environment? Will the Cairncross report and the alternative rail studies ultimately be made public?
Mr. Crosland: The exchange of letters of 17th November 1973 makes it categorically clear that in these circumstances the financial liabilities as a result of abandonment are shared 50–50 between the two Governments. I have not finally decided about the Cairncross report but it is my strong preference that it should be published.
Mr. Wellbeloved: While the reasons for the Secretary of State's statement will be understood and supported by an overwhelming majority in the House, may I ask my right hon. Friend to say a little more about the grave problems that will face South-East London and Kent as a result of the heavy volume of commercial traffic that is slowly but surely destroying
1030
the last vestiges of decent living standards for those living in this area? Is my right hon. Friend aware that there is an urgent need for a Government statement on the road programme for South-East London and Kent?
Mr. Crosland: I will certainly consider whether a statement should be made on that wider issue. I should point out that the Channel Tunnel, as it has been conceived so far, would not have given an enormous amount of relief from heavy commercial vehicles.
Mr. Peter Rees: Is the right hon. Gentleman aware that his statement has raised more questions for East Kent than it has answered? May I remind him that there are roads other than the A20 and M20 in East Kent? Will he consult the county council as a matter of urgency to see how far the whole road system in East Kent needs to be improved to take the inevitably increased volume of traffic which will follow this decision? Will he also consult the interested parties to see how far over the next decade the port facilities in East Kent, particularly the port facilities at Dover and Richborough need to be improved to take the increased volume of traffic which will arise as a result of his decision?
Mr. Crosland: Yes, I shall be happy to do so.
Mr. Palmer: Does my right hon. Friend appreciate that this decision will be deeply regretted by British engineers because the Channel Tunnel would give many opportunities for demonstrating the strength of British technology in many areas? Although circumstances may have forced this position upon us, may I ask my right hon. Friend to give an assurance that in principle the British Government are still in favour of the Channel Tunnel?
Mr. Crosland: No, Sir. I cannot give that assurance, which has never been given by this Government. What the Government have consistently sought to do is to keep open the options of either building or not building until we had a sufficient volume of evidence and information on which to base a sensible and rational decision.
Mr. Crouch: The point I wish to make to the right hon. Gentleman is so

1031
pertinent and crisp that it does not merit a speech later on. Mine is a simple question. I believe that I heard the Secretary of State say that the M2 and M20 would proceed as planned and connect with Dover. Is he aware that the system of road connections from this country to Europe is so bad that he should assure us that the M20 will proceed with even greater urgency than is already planned?
Mr. Crosland: The M20 will proceed as planned.
Mr. Snape: Can my right hon. Friend tell the House exactly how much his disgraceful decision will cost the British taxpayer? Will he come clean and admit that the course of action the companies have taken was provided for in the agreements, was predicted in the newspapers last year and has been brought about by the lukewarm approach of himself and his Department?
Mr. Crosland: I regret to see this marked fissure in the ranks of the Tribune Group. The cost to the British taxpayer of abandoning now will be about £20 million. The decision to bring the project to an end has not been through any lack of desire on my part to keep it alive; indeed, I have tried extremely hard to keep it alive. However, we are presented with terms which the companies had every right to put forward to the Government but which in the Government's view are not acceptable.
Sir D. Walker-Smith: Can the right hon. Gentleman say whether his view as to the apportionment of the liabilities arising is shared by the French Government? Have they accepted it?
Mr. Crosland: I do not know whether they have accepted it but this is quite firmly in the agreements. The legal advice I have had is that those agreements are watertight.
Mr. Leslie Huckfield: As one who has consistently opposed this project since its inception, may I now congratulate my right hon. Friend on his foresight, particularly since he has explained the avaricious financial gymnastics of the companies involved? In a situation when only 25 per cent. of existing ferry capacity is being used, would it not have
1032
been folly to commit £2,000 million of resources to a project when 80 per cent. of the beneficiaries would have been holidaymakers with cars? Will my right hon. Friend liaise with his right hon. Friends to ensure that these resources are diverted to the re-equipment of British industry and to the building of the houses, hospitals and schools which the nation so desperately needs?
Mr. Crosland: I am, naturally, grateful for congratulations at any time from any source, though my approach to this matter differs markedly from that of my hon. Friend. I do not share his view about the "avaricious financial gymnastics" of the companies. I repeat that the companies are fully within their rights under the agreements to behave as they have done. The wider economic issues to which my hon. Friend has alluded will be discussed as part of the implications of abandoning the project.
Mr. Rathbone: Will the Secretary of State give the same reassurance with regard to East Sussex County Council as he gave about Kent? In particular, will he consider how quickly he can announce the relief schemes, which have been far too long awaited, for various parts of Lewes, particularly South Street, and will he make additional sums available to build the necessary link roads in connection with the East Sussex County Council to help the Port of Newhaven?
Mr. Crosland: I cannot today give assurances on particular road schemes, but, as I said at the end of my statement, we shall discuss with all the authorities and operators concerned the implications for other modes of transport of the decision to abandon the building of the tunnel.
Mr. Alan Lee Williams: In view of my right hon. Friend's statement, which I personally welcome, will he consider making a positive statement about the seaport at Maplin, because it seems to me very important if we are to remain competitive within the EEC?
Mr. Crosland: That is a most interesting question, but it does not arise on this matter. I stress to my hon. Friend that, as he probably already knows, the Port of London Authority has not put to me detailed proposals for the Maplin seaport.
Mr. Churchill: Is the Secretary of State aware that his statement will be greeted with disappointment by industry in Manchester and North-West England which has been looking forward to being able to switch a higher proportion of its exports to Europe to the freightliner system? What estimate have the Government made of how many millions of tons of freight which would have gone by rail had the Channel Tunnel been built will now have to go by road, and what will be the additional cost in motorway expenditure?
Mr. Crosland: It is quite impossible to make any such estimate for the simple reason that we do not have a detailed and concrete plan from British Railways for an alternative rail link, and until we have such firm proposals it is impossible to make any assessment of how much traffic might be transferred.
Mr. Stoddart: Is my right hon. Friend aware that many right hon. and hon. Members will feel that, if he has succumbed to anything, he has succumbed not to pressure from the Tribune Group but to common sense in cancelling the project? Will the resources released be used for the improvement of the railway network and the re-equipping of the railway stock of locomotives, wagons and carriages?
Mr. Crosland: My hon. Friend, as usual, shows sound judgment in these
1034
matters. Generally the resources released as a result of not building the tunnel will find their way into investment in other forms of cross-Channel traffic—in other words, ports, roads to the ports, hovercraft, ferries, and so on.
Mr. Ridsdale: Does the right hon. Gentleman agree that we have every chance of winning the battle for exports if we make proper use of the facilities at our East Coast ports? Will he make sure that investment in this respect is not cut but is increased?
Mr. Crosland: I am most anxious to see a dramatic expansion in the trade from Grimsby, although, unfortunately, it is hard to get by rail from Grimsby to King's Cross, as I discovered on Saturday when the British Rail engine drawing the train struck a cow and was so bruised by the encounter that it stood motionless for four hours a mile outside Lincoln Station. Subject to such difficulties, yes.
Dr. M. S. Miller: Is my right hon. Friend aware that his statement will be warmly welcomed by my constituents who, for the last two years, have been living in mortal fear that the Government would take seriously my suggestion that the United Kingdom entrance to and exit from the tunnel should be situated in East Kilbride?
Mr. Crosland: That is a most interesting suggestion.

ORDERS OF THE DAY

  LOCAL GOVERNMENT (SCOTLAND) BILL
  Order for Second Reading read.
  Mr. Alick Buchanan-Smith: On a point of order, Mr. Speaker. May we have an assurance that, due to the change in business, the debate on this Bill can continue for three hours after ten o'clock?
  Mr. Speaker: The Standing Order provides for that contingency.
  4.5 p.m.
  The Secretary of State for Scotland (Mr. William Ross): I beg to move, That the Bill be read a Second time.
  This Bill is the last of four Bills in the programme of local government reorganisation. The main Scottish Bill—which became the Local Government (Scotland) Act 1973—followed the passage of the corresponding English Bill in 1972. Then there came a subsidiary measure, mainly on financial matters, for England and Wales—the Local Government Act 1974. A further Bill was required for Scotland, and most of it was worked out in consultation between the Scottish Office and the local authorities in 1972 and 1973. So the Opposition might have been expected to introduce a very similar Bill to the present one if they had remained in government last March.
  Of course, with the Opposition's change of attitude to rating since going into opposition, and the present Government's decision last summer to set up an inquiry into the whole question of local government finance, some may say that we should defer all action until a more radical review of local government is possible. But let nobody deceive himself into thinking a radical change can be implemented quickly. The legislation required to implement any changes might well be complex—indeed, it is almost guaranteed to be so—requiring time to prepare and consider. Therefore, we should not deny to local authorities and ratepayers those improvements which can help them in the short term and can be made without prejudice to long-term changes.
  1036
  So long as rating continues to be a major source of local finance, there are two changes which are important. The first is a proper system of rate rebates, so that the charge is moderated in relation to the individual ratepayer's ability to pay it, and this has already been achieved under the Act of 1973. Secondly, rate rebates need to be complemented by a proper instalment system enabling each individual's liability for rates—that is, for the net amount after deduction of any rate rebate due to him—to be paid in equal instalments throughout the rating year. This has proved extraordinarily difficult, even where rates are paid with rent.
  Every consideration of instalments and rebates comes back to the problem that at present the individual's liability for rates under the present system is not known before, at earliest, July and in many cases not until October or November, half way through the local authority year—which means that any instalment or rebate has to be provisional for half the year, followed by an adjustment. To deal with this problem we must make a radical change to the Scottish rating system so that the rates due for each year are known at the beginning of the year.
  Under the Act of 1973 the new local authorities are expected to prepare their budgets for each financial year and determine the rate poundage before the end of the previous year. But that is not enough. The levying of rates on individuals depends upon the valuation roll. For the last 120 years the rule has been that a new valuation roll for each year is prepared at the beginning of that year and finalised some time later. So rates cannot be levied with any accuracy until the adjusted roll is in the hands of the rating authority.
  It now appears to be generally accepted that in future a new valuation roll should be made up only after each revaluation. Naturally, during the period for which it was in force, the roll would have to be continuously updated, to take account of new construction and other material changes.
  The effect of the first few clauses of the Bill, together with the change of financial year, to which I shall refer in a moment, is that the valuation roll

  1037
  which will be made up under the present law during the coming summer—that is, the roll as at 16th May 1975—will remain in force until 31st March 1978, with changes being recorded in it as necessary. Then the next revaluation would be given effect to in a new roll which would be published early in 1978 and which would be in force from 1st April 1978 to 31st March 1983, subject again to the recording of changes.
  These new arrangements could have have applied to the present local authority financial year which runs from mid-May—the Whitsun quarter day—in one year to mid-May in the next. But it had been envisaged that the local authority financial year would be brought into line with the Government's, and on further reflection it seemed that it would be best to make the change immediately. Clause 18 provides for that. To eliminate any doubt, I confirm that this does not affect the date for the transfer of functions from old to new authorities. The old authorities go out of office and their present financial year ends on 15th May 1975.
  The new authorities have been in existence—at least in shadow form—since 7th May 1974, and the clause provides that for accounting purposes their first financial "year" will run from that date to 31st March 1976. However, they will be fully operational, and will levy rates, only for the last 10½ months of that year, from 16th May 1975 to 31st March 1976. For this shorter period, of course, the monthly or weekly amount of rates to be paid by any ratepayer should be the same as in a full year, which means that rate poundages should be proportionately less than of those for a full year. In the same way, the rate support grant order for 1975–76 has been worked out for a full year and then scaled down for the 10½ months.
  Clause 4 deals with the arrangements for appealing against a valuation and introduces a new system of valuation appeal committees to match the new local government structure.
  Clauses 5 and 6 deal with the special arrangements by which the operational properties of the public undertakings listed in Schedule 1 are valued for rating purposes. Normal methods of assessment are not practicable in these cases and it is necessary to prescribe valuation formulas for them. Valuation formulas
  1038
  are at present prescribed for certain of them.
  Clause 6 confers power to make regulations, after consultation with the interests concerned, replacing any of the existing formulas I have mentioned by a new one.
  The new rates instalment scheme is introduced by Clause 8. It provides for rates to be paid by 10 monthly instalments in each year. This leaves the month of April for issuing of demand notes and the making of necessary arrangements; the first instalment becomes due in May, and the last instalment is payable in February. This leaves the following March for catching up with arrears and should help to reduce the amounts outstanding at the end of the year on 31st March.
  Of course, these instalment arrangements do not apply where the rates are payable with rent, and other ratepayers may choose to pay a single sum in October or, with the agreement of the rating authority, make other arrangements for payment. The subsidiary provisions on rating in Clauses 7 and 9 to 11 amend the existing law in relation to the other provisions of the Bill.
  Clauses 12–15 and Schedule 2 relate to grants. Schedule 2 aims to improve the rate support grant system, which has served us reasonably well since 1967, giving greater flexibility as to the expenditure by reference to which the aggregate amount of grant is determined, and introducing an improvement in the distribution of the resources element.
  I should mention particularly paragraph 5 of the schedule, which contains a new provision spelling out our undertaking to make special assistance available to local authorities which need to undertake exceptional expenditure as a consequence of oil developments. While the paragraph is expressed as relating to extraordinary expenses in general—not mentioning oil—the intention is to give assistance under it only to authorities affected by oil developments.
  We considered whether the special assistance should be given by means of a specific grant outside the rate support grant system, but the expenditure in question is so closely tied in with ordinary rate-borne expenditure that it seemed better to deal with it within the rate support grant system, by adding to the aggregate amount of grant in respect of the extra

  1039
  expenditure, and then making a special distribution of this extra to the authorities concerned.
  Clause 14 provides for the termination of most specific road and transport grants, At present these are paid at various rates and are subject to detailed and differing central Government control. They have been introduced piecemeal over the years and so result in anomalies and discrepancies. Some types of roads and transport expenditure are assisted by the Government at the rate of 75 per cent., other types at 50 per cent., some at 25 per cent. and others not at all. In place of the specific grants, rate support grant is to be extended to cover all current expenditure incurred by local authorities on roads and transport in their areas. By avoiding the detailed controls and the tendency to bias inherent in the present specific grant system, it is hoped that the new arrangements will allow the regional and islands councils a greater degree of flexibility and will facilitate a comprehensive approach to transport planning, especially in the cities and towns.
  Clause 15 provides for other specific grants to be discontinued and absorbed in rate support grant, as and when possible, although we have not anything in mind in this regard at present.
  The rate support grant order for 1975–76 has, of course, had to be prepared before the Bill could be enacted. This means that we have been able to give effect in the order only to those changes which can reasonably be anticipated. For example, we have been able to allow for the reduction of the period covered to 10½ months. After all, the effect on the order could be corrected by an increase order in a year's time if by any mischance the Bill was not enacted. We have also been able to provide for the absorption of road and transport grants into the rate support system.
  Other changes by or under the Bill will have to wait until 1976–77—for example, the inclusion in rate support grant of expenditure on concessionary fares and the new arrangements for resources element.
  The present arrangements for calculating the resources element cause much uncertainty for local authorities—both when preparing their budgets and throughout the year—about how much the grant will be worth. Uncertainty is inevitable so
  1040
  long as the net relevant expenditure of every authority enters into the calculations which determine each authority's share of grant. So, instead, the Bill provides for crediting a readily-determined sum of additional rateable value to each qualifying authority and calculating the grant as the product of the credited amount and the rate poundage fixed by the authority for the year. However, as I have said, the grant for 1975–76 must be calculated in the old way—as a proportion of relevant local expenditure. After grants, the Bill contains a number of financial provisions of different sorts. Clause 16 and Schedule 3 consolidate the existing law on the borrowing and lending of money by local authorities with necessary minor amendments. However, we have doubts about the form of the schedule. I hope in Committee to bring forward an improved and somewhat shortened version of the schedule. It is far too detailed at present and it is probably not appropriate to put it in fixed statutory form.
  Clauses 17 and 18 amend the 1973 Act. The first fills a gap in that Act; the second I have already referred to in regard to the financial year.
  The House will expect an explanation of Clause 19, which deals with the question of default. In the first place let me remind hon. Members of the purpose of an interim audit report in Scottish law. It is the first stage in a process designed to determine whether a loss or deficiency has occurred and, if so, who was responsible, and, if possible, to recover the amount of the loss or deficiency from the person or persons responsible. A surcharge is not a punishment. It is simply a means of recovering money which the courts will enforce. The Act of 1947 therefore requires the whole ascertained amount of the loss or deficiency to be surcharged on those concerned. After that it is up to the appointed auditor to pursue them by all possible means to secure the recovery.
  The previous administration seemed to have recognised that these provisions of the Act of 1947 could give rise to unfair and anomalous situations. Their 1973 local government Bill provided that the Secretary of State, when considering audit reports on the accounts of the new authorities and recommendations on the reports by the accounts Commission,

  1041
  should take account of all the circumstances of the case and the means of the individuals concerned before deciding whether, and how much, to surcharge—a very considerable flexibility and latitude and discretion for the Secretary of State. Of course that Bill, which became the 1973 Act, applied only to the new authorities and, therefore, did not extend this provision to the existing authorities. We have decided that it is right to do so now. The wording is necessarily slightly different but the effect is the same. Like the 1973 Act, the clause allows a surcharge to be waived by the Secretary of State either partially or wholly, after consideration of all relevant information.
  What is done in Clause 19 is, of course, different from what may be proposed for England. The reason for this is that the audit arrangements are quite different, and the Scottish Housing Act was very different from the English Act and the procedure under it in relation to authorities which failed to implement the Act also was different. In Scotland, every local authority eventually complied with the Act, though some were late in doing so.
  In Scotland the issue dealt with in audit reports concerns what occurred in certain areas before the authorities implemented the Act. In these areas the rents were not increased as soon as the Act intended. The Exchequer was not affected because subsidies in Scotland did not depend on the rents charged. But this delay resulted in more being contributed from the rates towards the cost of housing than would have been the case if the Act had been implemented on time. There is no question of the ratepayers having to pay more in the future. The question is solely whether any of what has already been paid from the rates can be recovered from the councillors concerned, because, unlike the situation in England, the accounts are squared each year and rates levied accordingly.
  The wisdom of the Conservative administration in seeking to remove anomalies for new local authorities is well seen by the difficulties which arose under the 1972 Housing Act for the old authorities. As I have already said, if the Secretary of State is satisfied by an audit report he must make a surcharge for the full amount involved. His latitude is very limited indeed, and on the latter point he has no latitude or
  1042
  flexibility at all. However, if no audit report is submitted no surcharge can be made. In other words, the situation depends entirely on the auditor. If he makes a report, the Secretary of State virtually has to act. If he does not make a report, the Secretary of State cannot act.
  The situation over the 1972 Housing Act was that the estimated loss of rent income was about £4 million, compared with total rent income of about £80 million in 1972–73. In many areas the auditors, who are wholly independent in the exercise of their professional judgment, did not see fit to make reports on these losses, and, in consequence, well over half of the losses cannot even be considered for recovery from councillors in those areas for the benefit of the ratepayers. But audit reports were made in other areas for amounts totalling some £1·4 million out of this total of £4 million, and if the Secretary of State is satisfied that a loss in terms of the 1947 Act has been incurred, he will be obliged to surcharge the whole of this sum on the councillors concerned, numbering 227, to the tune of £1·4 million. The facts of none of these reports have yet been fully established. There are questions of interpretation of law which may have to be referred to the Court of Session.
  Having explained the matter at some length, I hope that all hon. Members, recognising that there is no possibility of recovering sums of this order, will agree that the sensible course is to apply to these cases the procedure which Parliament has already enacted for the future. Of course, it is not possible to say at present what decisions would be taken in individual cases, for the simple reason that it will be necessary to establish the full facts and to consider all the information available.
  Mr. Malcolm Rifkind: With regard to this repugnant clause, will the right hon. Gentleman inform the House whether this was done on the advice of the Lord Advocate? If that is the case, what was the advice, and was it the same as the advice given by the Attorney-General in a not dissimilar situation?
  Mr. Ross: I assure the House that this matter can be dealt with by my hon. Friend the Under-Secretary of State when he comes to wind up the debate. But the

  1043
  Lord Advocate has been involved in this matter and it would be wrong for me to make assumptions about any advice he had given.
  Mr. Teddy Taylor: Is the question of the £20,000 in respect of Clydebank included in the £1·4 million and will the right hon. Gentleman say something about that aspect of the matter?
  Mr. Ross: I do not think I wish to say anything about that aspect at the moment. If there is anything that requires to be said, my hon. Friend will deal with that matter when he replies.
  I now turn to Part II of the Bill. This marks an important extension in Scotland of the principle of public accountability in administration by providing for the appointment of a Commissioner to look into complaints against local authorities and certain related bodies. His appointment, following on from those of the Parliamentary Commissioner for Administration and the Health Service Commissioner, means that most of the major fields of public administration in the country will be subject to a system of independent review by a person with full powers to seek evidence, examine witnesses and establish the facts behind a complaint. The exact scope of the Commissioner's work and the procedure he is to follow can be examined further in Committee.
  The Commissioner will be appointed by the Crown with a general brief to look into complaints of maladministration. He will be able to look into the whole range of local administration, with only the few exceptions listed in Schedule 5, for example cases where the complaint could have been dealt with by a court of law or an appeal to a Minister or tribunal; matters concerning criminal investigation; local authorities' commercial activities—for example, transport undertakings—and their internal staffing. Under Clause 24 the Commissioner's field of action can be extended by an Order in Council removing items from the list of exceptions, but cannot be reduced.
  The Commissioner's main weapon will be publicity, rather than compulsion. Whenever he makes an investigation he will prepare a report setting out his findings which the authority concerned must
  1044
  make available to the public, and where he finds maladministration proved he must satisfy himself that the authority is taking effective steps to put matters right. If not, he will prepare a further report, which again the local authority will have to publish.
  The Commissioner and his office have to be housed and serviced. Clause 22 provides for a body designated by the Secretary of State to pay the salaries and expenses of the Commissioner and his staff, to provide them with accommodation, and to publish the Commissioner's annual report on his work, and for the body's expenses to be recovered from local authorities under a scheme made by the Secretary of State. I hope that it will be found possible to designate for these purposes a body which is already in existence to deal with local authority matters.
  Part III contains formal provisions and minor amendments of enactments.
  The Bill deals with a variety of matters of varying degrees of importance but in total of considerable importance to local government. It is wholly useful and largely—apart from probably one clause—a non-controversial measure. I commend it to the House. I hope that it will be found possible to pass it into law in the short period left before local government reorganisation takes place.
  4.30 p.m.
  Mr. Alick Buchanan-Smith: I think that I may be in order if I first commiserate with the Secretary of State about his voice this afternoon. It sounded rather quieter than usual. I doubly commiserate with him because we are reaching a certain season, towards the end of January, when I know that he is particularly active in certain spheres. I hope that his health, at least concerning his voice, may return by next week so that on the three occasions when he has to use his voice for purposes other than political he has returned to his full strength.
  Apart from that, there is not a great deal else on which I want to congratulate the right hon. Gentleman or to commiserate with him. What I found particularly disappointing in his speech was his rather cursory dismissal of any real intention on the part of the Government and the Labour Party to seek a radical reform of the rating system and of local government financing generally. As all

  1045
  hon. Members are aware, particularly with the tremendous escalation of rates throughout the country, there is serious anxiety and concern among people in all parts of the country—this is not confined to Scotland—who are worried about the burden of rates and whether rates is really a fair system by which to raise local government finance.
  The right hon. Gentleman made a slightly unfair criticism of the Conservative Party. He said that we of that party were late converts to the view that there should be a radical reform of local government finance. But he missed the point that at least we are converts to this need. That is the point that matters.
  In recent years one of the problems which have beset both major parties when in power is that we have all been too ready as politicians to say—we have said this in the House and outside it; members of the Labour Party have also said this—that the present system of local government finance has its deficiencies, and yet every time we have carried out a review of the system we have, in the eyes of the public, rather lamely said that there was no better system to put in its place. What has been lacking is the will and determination to find such a new system.
  I am glad to be able to stand here today—as I was glad during the General Election campaign in October—and say that we as a party are committed to finding a radical solution, of the kind which the right hon. Gentleman rejected, to the whole question of the rating system, particularly concerning domestic ratepayers. As the House knows, we were committed within the lifetime of a Parliament to abolish the domestic rating system and at the same time, as an interim measure, to transfer the cost of teachers' salaries and to increase the Exchequer grants in respect of police and fire services. Therefore, under our proposals the domestic ratepayer would have seen immediate relief of the tremendous rate burden and a firm commitment to seek new means of financing local government.
  One thing which discouraged me in what the right hon. Gentleman said was his rather timid and very limited approach to the whole question of the reform of local government finance. Indeed, even in the evidence given by the Labour Party to the committee that is now studying this question, one does not see any radically
  1046
  new ideas. In certain areas, particularly in relation to agricultural land, one even sees the case for extending rating as we know it. That is being advocated once again. Therefore, the Labour Party is disappointing in this respect. In its evidence, not only has it accepted a continuation of this method of local government finance, through the rating system, but it is even talking of extending it still further. Therefore, I condemn the right hon. Gentleman's timid approach to this matter.
  Having said that, at the same time I appreciate and accept the need for this Bill at present, in certain respects, in order to deal with local government finance as a consequence of the Local Government (Scotland) Act 1973. I have spoken of the longer-term more radical reforms which I hope may prove possible. We view the Bill against the background of growing concern in Scotland about the burden of rates. The city of Glasgow District Treasurer has quite recently forecast an increase in rates of about 30 per cent. That must strike great worry into the hearts of many ratepayers in that area. We also have the worry in other areas of Scotland where rates are relatively low, the old local authority areas on the boundaries of authorities where the rates are higher. People there are desperately worried as to what their position will be when the reorganisation comes into effect in May. There is the case of Monifieth, on the edge of Dundee, with a rate of about 53p in the pound, whereas in Dundee the rate is just over 100p in the pound. There is great worry on the part of ratepayers in that area about what will happen as a consequence of the reorganisation of local government. Again, in Aberdeen the rate is about 87p in the pound, whereas in the landward area of Aberdeenshire it is about 70p and in my constituency in Kincardineshire it is even lower still. I must declare an interest as a ratepayer of Kincardineshire. I share my constituents' concern. What will happen to our rates after May as a result of the reorganisation?
  That is my first question to the Minister of State. I hope I am right in assuming that the discretion that is given to the Secretary of State under Schedule 2(7) will be used to cushion the effect on ratepayers in Monifieth. Kincardineshire and other areas throughout Scotland, who

  1047
  otherwise will have to pay a very greatly increased rate simply as a consequence of the reorganisation of local government. It would be a great relief to ratepayers of those areas if the Minister of State could reassure them on that point.
  But there is an even deeper point than this about local government finance, to which a number of my right hon. and hon. Friends will be referring today. That is the general worry at present over the rate at which the expenditure of local authorities is increasing. It is absolutely true that one element of these increases arises purely as a consequence of inflation. Yet what is worrying many people is that, although some of the increase is due to inflation—and some of it, I hope, to the cost of improved services—there is great anxiety that some of the increases now proposed may be related to inflation and may not be related to improved services. With certain local authorities ratepayers are worried whether extravagance is taking place.
  A real effort is needed—I say this in no party political sense—on the part of the Government and the new local authorities, when they announce what the new rates will be and the rate poundages for the coming financial year, to explain how those are arrived at, how much is of an inflationary nature and how much is due to improved services, so that the ratepayers in Scotland will be able to judge whether the increases are justified. I do not say that in any destructive sense; rather I say it in an entirely constructive sense. Unless these matters are explained to ratepayers in Scotland, the reorganised form of local government in Scotland will get off to a very bad start, leaving a sour taste in the mouths of many Scots.
  One point which perhaps needs explanation concerns the staff appointments of the new district and regional authorities. Perhaps there are good explanations lying behind some of the salaries being offered. I am worried that there is not sufficient explanation of the new posts or of the salaries at which they are being advertised. A number of those posts carry great responsibility but, nevertheless, there has been a great deal of criticism. There is a risk of many of our new reorganised local authorities in Scotland getting off to a bad start. Perhaps the Minister could say something about it when he winds up.
  1048
  One or two of the new authorities have attempted, in a fairly mild way, to show that the total salary bills of the new authorities are comparable with the sum of those paid by the authorities which are being absorbed. Such reassurance is helpful, and I wish much more could be given more widely throughout Scotland so that ratepayers might be reassured about what they pay for.
  Mr. Tam Dalyell: Hear, hear.
  Mr. Buchanan-Smith: The hon. Gentleman supports that point, which I have made in no party sense.
  It is important that some explanation should be given because Scottish ratepayers are very anxious to know whether proper economy is being exercised in local government.
  Economy is now probably of greater importance than at any other time in recent history.
  I have dealt with the general aspects of rating. They are important in relation to the background against which we view the Bill.
  Turning to specific aspects of the Bill, I should first like to deal with the more mechanical clauses in relation to the payment of rates. First, I welcome the introduction of the system of paying rates by instalments, which will introduce flexibility into the Scottish rating system. However, will additional staff be required to process the new system?
  I agree that computerisation may be the answer. However, people in Scotland would like to know, in relation to the staff required and in relation to the computerisation programme of local authorities, whether the physical resources are available to give effect to the new proposals.
  Secondly, whilst payment by instalments is clear in relation to local authorities, I should like the assurance that where rates are paid through another body, such as the SSHA, or through a development corporation the same facility of payment by instalments will be equally available to those ratepayers.
  Reference was made to the 10½-month year in 1976. The Secretary of State hoped that the rate poundage would be proportionately lower for that period. I stress that the 1010½-month year could be a

  1049
  good excuse for hiding increases. Many ratepayers will be unaware of the 10½-month year, thinking that there will be 12 months in the 1976 rating year. I trust that Scottish local authorities will not charge higher rate poundages than appropriate. The 10½-month year could provide a smokescreen for higher rates.
  The revaluation due in 1976 will be postponed until 1978 to give time for greater unification of the areas coming together. I understand that the assessors are seeking from the Government an assurance that in 1976 they should not be required to make any adjustment to the valuation roll, to reduce their work because of the heavy burden caused by unification. Reports of that have appeared in the Press, including The Scotsman today. I understand that such a request has been made to the Government. That proposal could have a material effect on the ratepayers.
  If for one year there is to be a moratorium on the adjustment of the existing valuation roll, present ratepayers will have to carry the whole burden because the new ratepayers—for example those occupying new houses—will be left off the valuation roll. That is a curious suggestion. Perhaps the right hon. Gentleman will say whether that recommendation has been made to him. If so, what response does he intend to make? If it is intended to accept the suggestion, the effects on the existing ratepayers could be serious.
  I now turn to two major areas of the Bill, one of which gives me cause for concern, while the other gives me cause for hope. The question of transport, the proposals for which are contained in Clause 14, causes me concern. During all the period I have been in Parliament, I have represented a rural constituency and I have never seen greater concern than has now been expressed about rural transport.
  Last week the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) obtained an Adjournment debate on this matter. The attendance at that debate demonstrated the concern which is felt by people in Scotland. I accept that in removing specific grants for transport services the Minister is seeking to iron out some of the existing anomalies. I accept that what is proposed in the clause is of a reforming and improving nature.
  1050
  However, I am worried that the loss of the present specific grant element will mean that transport finance will be submerged in the rate support grant. I am worried that local authorities, at a time of economy, may try to cut back on such matters as transport. I am thinking particularly of the rural areas, where this matter may not be given so much urgency when it is submerged with the other services such as housing, which the local authorities may regard of greater priority and political importance.
  That is the present worry. I express my concern over it. As the hon. Member for Roxburgh, Selkirk and Peebles said last week, the question of rural transport is a worrying one because of the high cost of petrol. There are very great increases in the basic cost of petrol, and on top of that there is the increase in VAT. Then we have the worry about the co-ordination of the different local authorities in subsidising bus services in rural areas. I believe that the Scottish Bus Group has to deal with about 150 local authorities. I hope that the reorganisation in May will ease this situation. My county council in Kincardineshire is at loggerheads with the various town councils about what should be subsidised and, indeed, whether there should be any subsidy. To some extent that issue will be ironed out by reorganisation.
  The whole question of rural transport is important. I was disappointed that in a letter to me 10 days ago the Secretary of State rejected my suggestion that there should be a review of rural transport. There are ways by which help could be given. It was said in last week's Adjournment debate that such a review was taking place in England and Wales. If there is a need for a review in England and Wales, there is an equal need for a review in Scotland. I ask the right hon. Gentleman to think about it again. My concern about it is all the greater because of the Bill and because the question of transport services is submerged within the main area of the rate support grant.
  Even though this element is submerged in the main rate support grant, I hope that in future the Secretary of State will still use his discretion to make grants in this area of transport in exceptional circumstances. That would be a great reassurance to people. The matter of transport is greatly worrying people in

  1051
  rural areas. I hope that the Secretary of State can give an assurance that he will keep a watch on the whole question of rural transport.
  The second area in which I extend a welcome rather than express concern is in relation to the oil development areas. I speak not only as a Front Bench spokesman but also in my capacity as representing a constituency in an oil development area. I greatly welcome Clause 12 and Schedule 2 in relation to the special help which is promised. There is no specific mention of oil in the Bill, but I accept the Secretary of State's assurance—this follows from Circular 84/74—that this is to apply to oil-related development.
  This is specifically related to oil at present, but has the right hon. Gentleman any other purpose in mind for the future? The schedule is drawn in a very broad way. It may be a good thing to have discretion for the future, but it draws attention to itself because of its broad nature. It would be a reassurance to those where other developments may take place to know that the power is here and that the Secretary of State is prepared to use it in relation to other developments and not solely in relation to oil.
  I cannot resist the temptation of saying that there is no obligation on the Secretary of State to do this. I hope we can have an assurance that he none the less intends to use the powers contained in Schedule 2. Anyone representing an oil development area knows that there is great need for them. Last year the County Convener for Invernessshire, which is not as dramatically affected by oil development as some other counties, spoke of increases of about 10p in the pound as a result of the extra infrastructure the county was having to provide. The Finance Convener of Aberdeenshire County Council put it rather more dramatically, as The Scotsman reported last July. He said that they had had a pat on the back from Lord Hughes but not cash on the table.
  I hope that these local authorities can see some cash on the table. In Aberdeenshire an increase is threatened of from about 15p on the domestic rate to about 17p on other rates. This demon-
  1052
  strates the burden which ratepayers in these areas are being asked to bear.
  I do not complain about the short timetable. The local authorities were asked for a quick response to Circular 84/74. They were given till 9th December to state what their needs would be in 1975–76. It would be helpful if the Minister of State would tell us what reactions he has received. I have seen only Press reports. It would be helpful if the Government would give some indication of what is the expected rate increase or expenditure increase and precisely to what extent they will be able to put cash on the table to help ratepayers.
  I come now to the narrow definition in the circular of the kind of development and service which will qualify for the extra help. In Committee and on Report of the Offshore Petroleum Development (Scotland) Bill my right hon. and hon. Friends sought to restrict the scope of that Bill to the exploration and extraction of oil, which we thought would be perfectly adequate to cover the whole question of oil development. We were told that it did not and that a much wider definition was needed. We had to use "exploitation" instead of "extraction" because the developments involved went far wider than just exploration and extraction. The definition of oil development work in the circular is given as "exploration and extraction"—the exact words which my right hon. and hon. Friends sought to write into that Bill.
  I ask for an assurance from the Minister of State that the restrictive use of these words—I use his own comment—in the circular will not lead to any restrictions on local authorities in covering the normal type of expenditure which they have come to know in these areas is necessary in providing all the supporting services for offshore oil development; and also that any service that is positively incurred in relation to North Sea oil will qualify at least for discussion as to its eligibility for this grant.
  Schedule 2(5) states that in assessing extraordinary expenses where services need to be provided the expected income of the authority from oil-related developments for that year is to be taken into account. It is fair that, if a local authority is to qualify for help, any income

  1053
  should be taken into account in assessing how much help it should be given.
  But I am much more worried about the circular which refers not only to the income for the year to be taken into account, as the schedule does, but also to the rate income expected to result. It is worrying because the problem here is not of a long-term nature. In areas like the city of Aberdeen and the counties of Aberdeenshire, Ross and Cromarty and Inverness-shire, in the longer run the rateable value will increase. The problem is not so much one of income in the longer term; it is a problem of income in the shorter term, this year and next year, until these new developments have taken place and begin to yield rates.
  The circular refers to the rate income which is expected to result, and I hope that because there will be an increase in income in four or five years local authorities will not automatically be disqualified from help in the short term. As the Convener of Aberdeenshire County Council said, what the ratepayers want to see is cash on the table. I hope the Minister can give us some reassurance on that point.
  My final point concerns the most controversial part of the Bill, Clause 19. The Secretary of State went to considerable lengths to try to justify this clause and its inclusion in the Bill. I was surprised that the right hon. Gentleman could not answer the question whether the matter of the £20,000 fine was included, and I look forward to hearing the Minister on this point later. If the council concerned is to get away with a fine imposed in the proper course of the law, it will make the Bill and this clause in particular even more offensive than they are at the moment.
  The right hon. Gentleman went to considerable lengths to say that the 1973 Act gave discretion to the Secretary of State to be flexible in such cases. I agree. This is a principle which was introduced by the Government of which I was a member. I do not disagree with that principle. What is of concern to us on this side of the House, however, is the retrospective nature of this provision. This is the really serious criticism that I make of Clause 19. It is retrospective. It helps people who have broken the law of the country as it was at a particular time.
  1054
  It is one thing to change the law in the future. It is quite different to bail out those who, in full knowledge of the law, sought to disregard the law as it stood. Clause 19 is a shattering comment on the Government's view of the rule of law.
  In introducing this retrospection, the Government are including an incitement to others to pick and choose which laws they may observe. It is action such as this of a retrospective nature which brings politics and politicians into disrepute, particularly when the help which they give is intended to help those of a particular political colour who took certain action because of their dislike of the political colour of the then Government. The present Government are bailing out a minority of their own political persuasion who oppose the law because they are vocal and are members of the Labour Party. I believe that this is offensive to the rest of the community who may be less vocal but are just as important—that is, the majority of ratepayers in the rest of Scotland.
  Therefore, while I welcome many parts of the Bill, and while there are parts which I hope we can improve in Committee, in Clause 19 the Government have spoiled what could otherwise be a very useful Bill.
  5.5 p.m.
  Mr. David Steel: I begin by echoing what was said by the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith). I am disappointed that we have yet another piece of legislation perpetuating and, indeed, accepting the perpetuation of the rating system. The hon. Gentleman said that at least his party had been converted on this issue. That is true, but I remember many occasions when a Conservative Government were in office when we asked for changes in the rating system and received no answer at all.
  The hon. Gentleman said that he had been converted, but there is a difference between securing the conversion of an Opposition and the conversion of a Government. The Tory Party is occasionally willing to be converted when in opposition but not when it is in government. However, we welcome converts in any part of the House.

  1055
  When the effects of reorganisation on the level of rates are felt in the next couple of years, the public revolt against the rating system will be stronger than it is already. It is no answer to say that the Government already have one inquiry into local government finance. We ought to be looking ahead and seeing whether, as an interim measure, we could relieve local rates of a proportion of the burden of teachers' salaries and whether, in the long run, we could replace this ancient property tax with a more equitable system of local income tax.
  The Bill contains a number of miscellaneous provisions which it is perhaps more appropriate to consider in Committee. I welcome very much the step we are taking in the Bill to set up a Commissioner for Local Administration, but I plead strongly with the Secretary of State that, as we are a year behind the English experience in this matter, we should be ready and willing to learn from their experience in setting up this system. I hope he will look sympathetically on amendments to this excellent part of the Bill which will allow complaints to the local government commissioner to come other than through a local councillor.
  My colleagues in England tell me that there is provision in the legislation for the ombudsman to accept complaints other than through a local councillor where he is satisfied that no local councillor is willing to make a complaint, but it is a cumbersome system. One of the duties of a Member of Parliament is to be a local ombudsman where injustice is perpetrated by a local authority, and it seems to me to be a proper extension of that rôle that a Member of Parliament should be able to submit to the commissioner any complaint that he receives about a local authority where a local councillor may not be willing to do so.
  The hon. Member for North Angus and Mearns made some kind remarks about the Adjournment debate on transport, and I do not wish to go over that as I have had the advantage of making a speech on that subject last week. There is, however, one matter that I should like to take up. From the reply to that Adjournment debate I understood that the inquiry into transport in rural areas was a United Kingdom inquiry. The hon.
  1056
  Member for North Angus and Mearns understood differently. I should like this matter cleared up this evening. If the hon. Member is right—he usually is—there is something wrong here. I believe that there should be Scottish Office participation in the inquiry, or else the Scottish Office should have its own inquiry.
  The problems of transport in rural areas are more extensive proportionately in Scotland than they are in England and Wales. If we are having no part in this inquiry, steps should be taken to put that right. If I was wrong in believing that there would be Scottish Office participation in the inquiry, I hope that the situation will be remedied. The problems of rural transport are greatly aggravated by Clause 14, by the future rate support grant cutback and by the effect on the ability of local authorities to subsidise rural transport, and it is unfortunate that this matter is not treated with the seriousness with which it is treated in England and Wales.
  We on the Liberal bench, too, take strong exception to Clause 19. My party, perhaps more than any other, has always had a rooted objection to retrospective legislation. I shall not rehearse the matter at length, but our objection is simply that if people are willing to pursue their political views to the point at which they come into conflict with the law, that is something for which they may, in varying degrees, be admired, according to the extent of one's sympathy with them, but if they do it in the belief that their friends in high places will subsequently change the law, they do not deserve such admiration.
  We hear a good deal nowadays about the sovereignty of Parliament. I think that the sovereignty of Parliament is occasionally dented or pushed about by those outside who manage to persuade people inside subsequently to make changes in the law which Parliament had previously passed. It is a bad principle. It is a clear issue of principle, and we could probably argue about it all night without convincing one another either way, but we on this bench stand firm on it.
  I hope that under the terms of the Long Title, which allows for minor amendments to the Local Government (Scotland) Act 1973, the Government will regard with sympathy an amendment

  1057
  which I hope to be able to move, either in Committee or on Report, to remove from the 1973 Act the requirement on the Secretary of State to make a police amalgamation scheme for the Lothians and the Borders. I shall not trouble the House with this at length tonight because I am sure that there will be an appropriate occasion, but I am sure that it would be right for the Scottish Office to reconsider this matter, because there have been two significant changes since the 1973 Act was framed. No doubt, it will not surprise the Secretary of State to hear this view expressed.
  First, both regions have now come into being. There have been elections, and they have their democratically elected councils, which they did not have when we framed the 1973 Act. Both councils have said that they do not wish to proceed with the amalgamation scheme. Each is content to have its own police force. There is, therefore, a good democratic case for asking why one should go ahead and force two reluctant democratically elected local authorities into an amalgamation scheme which they do not want.
  Mr. Dalyell: The hon. Gentleman knows that there has been a great deal of discussion. Does he dispute the professional police view about the advantages of amalgamation?
  Mr. Steel: I am sure that the hon. Gentleman will wish to be fair. I take it that he refers to the professional police view as expressed by the Scottish Police Federation. That federation has never made any specific comment on this particular amalgamation, although the hon. Gentleman is right to suggest that the federation in general terms prefers large forces to small. I acknowledge that, but I come now to my second point, which I hope the hon. Gentleman will for his part accept.
  The second change is that before the 1973 Act was passed police opinion in the Border area, where it was canvassed, was in favour of the amalgamation scheme, but police opinion recently canvassed throughout the force—it was done in November—is now very much against it. The view of the police, of police officers on the ground, as well as of the public authorities in the area is that they would be better off with a separate police force.
  1058
  I hope to have a later opportunity to go into that in detail. I merely give advance warning now of an amendment which, I believe, it would be proper to make in the Bill. It would end a bone of contention between the two authorities—in fact, they are now both agreed—it would prevent the higher level of expected expenditure, certainly for the Borders area, and it would end an element of undemocratic procedure in the sense that, of necessity, a joint board is always less democratic. I hope, therefore, that it will be possible to accept an amendment of that kind in the appropriate part of the Bill.
  5.14 p.m.
  Mr. Peter Doig: I was pleased to hear the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) say that the Opposition had now been converted to the need for a radical change in the rating system. I listened carefully to hear what he meant by that, and it turned out that all he meant was that expenditure on teachers and the fire services should be met by the Government. He suggested no other change.
  I do not call that a radical change. It would make little difference to the present system, and it would certainly not reduce any of the unnecessary expenditure now experienced, which could, on the other hand, be cut by a radical change in the system. The hon. Gentleman should think again about it. If he cares to read some of my speeches on the subject, he will realise what a radical change would be. A radical change would be to abolish the rating system altogether. That is what is needed.
  Mr. Buchanan-Smith: I said that it was our intention to abolish the domestic rating system.
  Mr. Doig: If that is what the hon. Gentleman said, I did not hear it, but I may have misheard. All I understood from his speech was that he wanted to put expenditure on teachers' and the fire services directly on to the Government.
  Why should we abolish the rating system? In the first place, more than half of all local authority expenditure is met from Government sources anyway, and in some places the percentage is higher than that. Thus, the Government are already meeting half the cost, but

  1059
  we still keep in being an expensive rating system. We hear a good deal about the alternative of a local income tax, but a local income tax would still cause substantial expenditure, and duplicated expenditure, because we already have an income tax system in Great Britain. It would be far simpler to continue raising revenue on the present national basis, but adding to it the amount of revenue required to finance all local government expenditure. I realise that a large sum of money is involved, but it is a large sum of money being raised now. The only difference would be that it would be raised in a different way.
  What would be the advantage of raising it in that different way? First, as I say, unnecessary expenditure would be saved. Under the present system, we have surveyors of rating, with large staffs, who go out and measure premises, attach to them mythical values per square foot, and then, after a lot of complicated calculations, arrive at gross annual values for the various houses, shops, factories or whatever they may be. It is a stupid and farcical system.
  We then have appeals against those assessments, entailing further expenditure. There have to be valuation appeal committees, and then there has to be a land valuation court to deal with arguments arising in relation to appeal committee decisions, and so on. It is a ridiculous system, and it raises the money in an unfair way.
  It would be cheaper if the money were raised through national taxation, and it would be fairer as well. Under the present taxation system, the Government do not raise all their revenue from income tax or any other single tax; they spread it out in the fairest way possible. Local government revenue could be collected in the same way. It would be much cheaper because we could do away with the assessors, appeal committees and the rest.
  I have already said that such a system would be fairer. At present, a good many wage earners who are not householders and pay nothing towards the rates are quite capable of doing so. If it were done on a national basis, they would have to meet their fair share according to what they could afford.
  1060
  It would be fairer in several other ways. Under the present system, a person who improves his house is financially penalised for so doing. The Secretary of State for Energy has suggested that people should install central heatting and double glazing in their houses in order to save fuel. That is what the Government want, and it would at the same time provide more comfort. But what happens if someone makes these improvements? One of my constituents did both: he installed central heating and double glazing. The central heating increased the rateable value by £15 which meant that my constituent paid an extra £18·30 a year in rates. His double glazing caused the rateable value to rise by £8. It cost him £203 to have it installed and now he pays an extra £9·76 a year in rates. That is greater than his total saving in fuel. Where, therefore, is there an incentive to carry out improvements so long as this archaic rating system operates? We are setting one Government Department against another. One wants to save fuel and the other imposes a financial penalty on anyone who follows the advice of the first. These are examples of anomalies which show up the faults of the system. I have a letter here which gives all the details.
  When the hon. Member for North Angus and Mearns speaks about a radical change, he should consider a truly radical change, and that would be total abolition of the rating system. The Bill does not abolish that system, and neither Front Bench advocates its complete abolition. We therefore have to make the best of it. Under it could arise the case which was explained by the Secretary of State where an auditor could decide to impose a surcharge on a councillor where the auditor feels that the councillor has not complied with the Act. On the other hand, my right hon. Friend explained that the Secretary of State had discretion in certain cases by which he could reduce the surcharge. He went on to give the global figure of cases at the moment and the number of councillors involved. I calculate that if the total sum was averaged out, each councillor would be surcharged £4,830—[Interruption]. I admit my calculation was a rough one and I could be wrong.
  However, it is clear that very large sums are involved in this surcharge. Some

  1061
  MPs have had to pay surcharges that lasted for years, although that ceased recently. Many other councillors will go on paying surcharges for years to come. Not all the surcharges arise from a defiance of the law. A surcharge must have the approval of the auditor, and it is clear that some auditors do not give the matter a great deal of thought. I can remember the case in Dundee. The dispute concerned a committee fixing a sum for rent in a housing scheme and the council refusing it because it would be out of line with other housing schemes of a similar nature in the same district. It cost a great deal of money to have a public inquiry. At the end of it the then Secretary of State wrote to me asking for reasons why I should not be surcharged. Judging from my right hon. Friend's explanation, the auditor at the time must have considered that this was an appropriate matter to be surcharged upon—a question of judgment and no more by an unpaid group of councillors.
  I could have been surcharged if the Secretary of State had decided to approve the surcharge. No doubt some Tory Secretaries of State would have done that knowing that only Labour councillors were involved. The opposite could also happen. There could be the case of a Labour Secretary of State having to decide whether or not to surcharge a group of Tory councillors—although it would be unlikely that it would be on the same sort of issue. A councillor could be surcharged because he made a mistake.
  If councillors are to run the risk of being surcharged thousands of pounds because they may have made an error of judgment in an unpaid job it could lead to difficulty in getting councillors in the future. My right hon. Friend the Secretary of State should take that into account. If I were starting out again in life, knowing that I was liable to be surcharged to the extent of about £20,000 if I made an error of judgment—and in the case in which I was involved it was not even an error of judgment, because I think I was right—I would never stand for the council. I would never have allowed either of my sons to do so either. It represents a terrible risk for anyone to take. It would be amazing if we ever managed to get anyone to serve on coun-
  1062
  cils if they had a threat like that hanging over their heads.
  I am sorry that the Bill does not impress me greatly. Many things are wrong with it, although I am slightly hopeful about one or two aspects. One hopeful point is that valuation appeal committees are to be appointed by the sheriff rather than by the Secretary of State. I hope that this improves matters. I can remember appealing on three points against a valuation on my own house. The first appeal committee rejected all three aspects. I paid the rates until the next revaluation and in a different valuation court made the same three points and was upheld on all of them. The case was taken to the Land Valuation Tribunal in Edinburgh where again my case was upheld. All this suggests that the first valuation committee was not very good. This sort of thing is happening all the time. I know of many people who have put the same argument to different valuation committees and ended up with totally different results. It is time that the committees were a little better instructed on what they should do and what they should look out for, and I hope that sheriffs in the future will do better than Secretaries of State have done in the past.
  5.28 p.m.
  Lord James Douglas-Hamilton: I am grateful for the opportunity to speak in the debate. We do not by any means condemn every clause of the Bill. It contains certain Conservative proposals. Clauses 21 to 32 in particular relate to the creation of the office of ombudsman, and that we particularly welcome. The last Conservative Government believed that it was essential to create a Parliamentary Commissioner who would review local government procedure. In October 1972 the Conservative proposals were outlined in a consultative document issued by the Scottish Development Department.
  Another matter we welcome appears in Clause 12 and Schedule 2(5) which refer to grants to assist certain areas in Scotland. The Secretary of State mentioned that the proposals were related primarily to areas affected by oil developments. There is, however, tremendous feeling among all the political parties in Edinburgh that the outer city bypass

  1063
  should be started and completed as soon as possible to relieve congestion in the city and to ensure that heavy lorries do not use side streets. I hope that when the Lothian Region councillors apply to the Scottish Development Department on this point in due course they will receive a sympathetic hearing.
  The first matter on which we fundamentally disagree with the Government concerns rates. I entirely agree with the hon. Member for Dundee, West (Mr. Doig) that what is required is a far more radical change. I should be happy to send him a copy of the Conservative election manifesto, which stated that the rates would be totally abolished within the next five years, or the lifetime of this Parliament, if we won the election.
  We are also still pledged to transferring the cost of teachers' salaries, up to a certain number of teachers for each local authority, to the central Exchequer. I understand that the Labour Party gave evidence to the Layfield Committee that that proposal should be adopted. It seems to me that its evidence to the committee is more radical than the Bill.
  We do not feel that the Bill goes far enough. We are very much in favour of increasing grants for expenditure on police and fire services in order to relieve the rates.
  Obviously, rates in various parts of Scotland will differ greatly once the Housing Rents and Subsidies Bill is enacted. We want to act fairly towards all ratepayers and ensure that rates do not differ widely from area to area.
  I wish to deal in particular with what the Secretary of State said about retrospective legislation on illegal payments by councillors. Under Section 201 of the Local Government (Scotland) Act 1947, if any councillors authorise payments out of the general rates fund for purposes which are not permissible the auditor must report to the Secretary of State for Scotland, who shall surcharge the councillors concerned. I was not clear what the right hon. Gentleman meant when he said that the auditors had not reported. It seems to me that under that section they are required to report. If they have not reported when they were supposed to do so, I shall be grateful to know the reason why.
  1064
  The newspapers in Scotland are not always correct, but the Scottish Daily Express has estimated that on or about 27th November 1974 the total lost as a result of the refusal to implement the Housing Finance Act was about £1,431,931. I should be grateful if the Secretary of State could confirm that that is an accurate figure.
  Mr. David Lambie: My right hon. Friend has already done that.
  Lord James Douglas-Hamilton: Was it in the region of 24 local authorities that were defying the law in Scotland, and will the ratepayers of those authorities have to make good the sum which was lost?
  Mr. William Ross: They have already done that.
  Lord James Douglas-Hamilton: And when the Clydebank Council paid fines of up to £20,000, was not that sum paid out of burgh funds quite improperly?
  Does not Clause 15 mean that the Secretary of State can indemnify any councils or councillors in Scotland which defy or break the law? If the clause becomes part of the law, how can any Government expect any councillor or council to be deferred sufficiently by the threat of a surcharge? The right hon. Gentleman said that a surcharge was not a punishment. When I was a councillor, if I had been faced by a surcharge I should certainly have regarded it as a penalty.
  The hon. Member for Dundee, West spoke about certain errors of judgment. If the hon. Gentleman charged the Clydebank councillors with having committed an error of judgment, they would strongly disagree. I understand that they said that what they did was thoroughly deliberate, because they passionately believed in it as a matter of conscience. I was in court both times when Lord Wheatley made a pronouncement on the subject, using words to the effect that if the law was defied certain consequences were likely to follow.
  The trouble with the Bill is that if the law is defied there may be no consequences. That would set an extremely undesirable precedent.

  1065
  Many people in Scotland are self-employed people who strongly resent having to pay a great deal more on their insurance stamp. If they feel that certain others can get away with defying the law, with no come-back or penalty, they, too, may feel entitled to take the law into their own hands. We strongly oppose anyone taking the law into his own hands. However much we may sympathise with the self-employed who are paying out a great deal, and with ratepayers who have to cope with soaring rates, we support the law. The whole point of the rule of law is that one must obey laws one dislikes until they are changed through democratic means by Act of Parliament.
  Our party strongly supports the rule of law. Civilised government is possible only as long as it is recognised that nobody can be a law unto himself. All persons are bound to obey the law of the land. No one has the right to take the law into his own hands. Law and freedom go in partnership. If the one is destroyed, the other will be destroyed and anarchy will be the result. Respect for the rule of law is indivisible. If one part of the law is brought into disrepute, encouragement is given to those who seek to defy other parts of the law.
  The great strength of British Governments for centuries has been that no responsible political party has given encouragement to lawbreakers. All of them have held that the law is supreme and can be changed only by Act of Parliament. There is all the difference in the world between mitigating a penalty and removing it altogether.
  5.36 p.m.
  Mr. George Reid: I am well aware that it has often been said that, whereas taxes are paid in sorrow, rates are paid in anger. Given the escalating costs of local government in Scotland, there will be many angry and hostile ratepayers in that country. The high level of salaries paid to local government officials, the general dissatisfaction at home and in the House with the reformed system of Scottish local government, and the uncertainties about the rôle for local authorities caused by the arrival of a Scottish assembly, will do little to temper that anger over the next year.
  1066
  I appreciate that the Bill is primarily a piece of enabling legislation, tidying up the loose ends left by the 1973 Act. My main regret is that there has been no attempt simultaneously to tidy up the whole amorphous area of local government finance and to consider other potential sources of revenue.
  In May we shall have sweeping changes in the geographical areas and powers of local government in Scotland, but without similar fiscal reforms in the system which has obtained since Stuart times. Without wide fiscal reforms, the freedom of decision of the new local authorities will be cramped. In effect, a seventeenth-century, purely notional system of local property tax will be perpetuated. There will be doubts a bouts the future financing of local authorities through the Scottish assembly. I believe that the regions will be favoured at the expense of the districts.
  I appreciate that rating levels, rate collection systems and the application of rate support grant do not have the glamour or appeal of that new Lochinvar who has arrived on the scene, the Commissioner for Local Administration. I welcome his arrival for two reasons. First, the smaller the number of councillors, and the larger the geographical area they cover, the more remote people will be from their own councillor. To some extent the old personal ties will be removed. It will be difficult for a person with a sense of grievance to have a genuine hearing. In those circumsaances a final court of appeal is obviously to be welcomed.
  Secondly, I welcome the Commissioner because local authorities in future will be big business. The Scottish Press is already full of dark talk of local Mafias, power bases and empire building. Whether or not those insinuations are true remains to be seen, but at least it is proper that the machinery for investigating those complaints should be to hand.
  I hope that the Secretary of State will examine experience in England and allow a freer approach to the Commissioner. I hope that he will seek a rôle for him somewhat wider than the mere propagandist rôle he discussed earlier in the debate.
  The second provisions which will clearly attract most attention and interest are the so-called "waiver" powers under

  1067
  Clause 19 which are reserved for the Secretary of State. In general I accept them, although I have reservations about any form of retrospective legislation. I am well aware that in recent years there has been doubt in local government as to where legitimacy lies. Does it lie through the ballot box, with councillors having a definite obligation to the people in their own community who elected them in specific local circumstances, or does it lie along narrowly defined statutory lines, a distinction of which the people of Clydebank are aware?
  Clause 19 is probably a realistic assessment of the situation. It allows for a full review of local circumstances and information about the means of any person against whom a charge may be laid.
  Mr. Rifkind: Does the hon. Gentleman accept that in taking into account all the circumstances it might be desirable to ensure that the person who committed an illegal act had knowledge at the time that this act was illegal?
  Mr. Reid: There are circumstances which should be considered at that level. But let us also remember that there are differences in the audit and housing systems in Scotland which have a bearing on this situation. While retrospection may therefore, have to be engaged in, it should not be engaged in too willingly.
  Mr. Teddy Taylor: Will the hon. Gentleman make quite clear what he is saying? Is he in sympathy with the Clydebank councillors for what they did?
  Mr. Reid: I am saying that it was a difficult situation, and that there is some difficulty about the question where legitimacy lies between people who have obligations to their electorate and the narrow statutory confines which are placed upon them.
  The "waiver" clauses, while they attract most attention in the Bill, will not have as much impact on the daily life of Scots as the financial, rating and grant provisions. I shall comment briefly on some of these matters without straying into fine detail which may be the subject of amendments in Committee.
  In the valuation procedure we have an end of a tradition which dates back to
  1068
  1845—namely, the abolition of an annual valuation roll and its replacement by a quinquennial roll. It makes sense, in this changed circumstance, to allow assessors to make alterations to rateable values at any time. All hon. Members will be well aware of situations in which householders have taken a substantial time to declare improvements in their properties, or situations in which industry have been rated at less than true sums because of error.
  What interests me is the simultaneous change in rights of appeal. Quite clearly there will now be continuing work for local valuation appeal committees instead of frenetic activity in the autumn of each year.
  I am concerned with the way in which that will work out in practice, given the size of some of the regions, especially Strathclyde. In Strathclyde the chairman is likely to be drawn from the Glasgow Valuation Appeal Committee. For Glasgow that is quite satisfactory. But in the case of remote districts, and even Renfrew and Inverclyde, it would be destructive of local autonomy if the chairman or deputy chairman were not locally connected. It is desirable that the model scheme should provide for the appointment of chairmen and deputy chairmen drawn from members of each valuation appeal committee and that such chairmen should all be deputy chairmen of the panel.
  Likewise it is difficult to see how, in Strathclyde, one secretary and an assistant could cover the meetings of valuation appeal committees covering 19 district areas. Undoubtedly, many assistant secretaries are called for.
  I should welcome some clarification of Clause 10 as it affects district councils, development corporations and the SSHA. I am not clear whether this clause merely gives power to rating authorities to make arrangements or makes it mandatory on a district council and development corporation to co-operate if the rating authority wishes to make an arrangement. Can it mean that the bodies who do not want to collect rates can put their houses on missives covering a period of a year or more? Some clarification on that point is necessary.
  Earlier I referred to the likely imbalance caused by distribution of the rate support grant, with regions favoured

  1069
  at the expense of districts. Hon. Members will have received representations that the needs element should be allocated between the two in proportion to respective shares of reckonable expenditure, giving districts approximately 14 per cent. of the available grant.
  There is a clear need for a more equitable system of distribution as the proposed district allocation makes no attempt to measure the needs of the various districts. Various methods have been suggested, such as density weighting on the basis of wards, factors for population increase, a fixed sum per head of population, plus a percentage of expenditure net of specific grant. I recognise that the distribution of the needs element poses problems. However, I hope that that is an area which Her Majesty's Government will examine again. Where there is a political will a financial way can be found.
  What is totally wrong is the refusal to continue the specific relief granted last year under which ratepayers suffering an increase of more than 20 per cent. were relieved of 60 per cent. of the excess. That was not a special one-off measure. Quite obviously it was intended to ease English and Welsh authorities through their year of local government reorganisation. It is right and proper that Scottish authorities, at a time of roaring inflation and when they are going through a similar transition, should have the same relief.
  That again reflects the basic problem of being tied, conservatively, to a traditional system of finance. With a Scottish assembly waiting in the wings it is now time to start considering new methods. We should be looking for a wider tax base, which grows with incomes. We should be investigating a local income tax, a local sales tax, a local VAT, a local payroll tax, a local vehicle duty, and surcharges for earning non-householders, in which category I believe there are between 600,000 and 700,000 persons in Scotland.
  By all means let us keep our options open, but let us welcome the local finance opportunities which a genuine devolution of power to the Scottish assembly will bring. As part of that process surely we should consider the shift of police, fire services and education to central Government. At present, too many anomalies exist in those areas. For example, there are the different attitudes of different
  1070
  authorities to whether in-service training should be fully paid. There are the current ludicrous proposals from some quarters in Strathclyde—a region which has the highest rate of illiteracy in Scotland—that there should be no further recruitment of remedial teachers until the recruitment of general purpose teachers reaches a satisfactory level. There is the equally absurd suggestion that there will be no teacher recruitment at all in Dunbartonshire until Lanarkshire is brought up to scratch.
  Those are the areas where there is a clear imbalance between national policy and local need. I make no pretence of my dislike of the reformed system of local government. The ideal model for Scotland is an assembly with broad strategic powers, an increased number of all-purpose authorities and strong community councils. I recognise that the present back-to-front botch-up has to be made to work in the short term and that the Bill will go some way towards that. Ultimately a new model will have to be introduced, and by that time I trust that we shall find a more equable and democratic system of local finance.
  In this country all powers not specifically granted to local government are reserved to central Government. In Norway the reverse is true. That may well prove a starting point for genuine democracy at all levels in the new Scotland.
  5.48 p.m.
  Mr. David Lambie: I shall take up some of the matters raised by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid). On Clause 19 I must declare an interest. My father, Treasurer Lambie, and my wife, ex-Provost Mrs. Netta Lambie, could be involved in the consequences raised by the clause if it is accepted tonight. I must make it clear that I am not speaking on behalf of my father. He is against the clause. He has been through local government since 1929. He will be in local government until 15th May. He has been a provost, a bailie, a treasurer, a convener of the finance committee and a convener of the planning committee. The only thing that he has not done is to serve a gaol sentence for carrying out his policy in local government.
  My father was hoping that he would end his career in local government by serving a period in Barlinnie Prison for

  1071
  the principles in which he believes. At one stage in the Court of Session he thought that Lord Wheatley was going to send him to gaol. He was involved in a case of contempt of court. Unfortunately he was not gaoled because Lord Wheatley adjourned the court and beat a hasty retreat. He did not want to be the person who would gaol my father.
  In speaking with this interest, I also speak with conviction on behalf of the 500 or more councillors involved in opposing the Conservative Government's Housing (Financial Provisions) (Scotland) Act. In addition to the 273 councillors indirectly involved, 227 were directly involved, and when the roll of honour is written in the history of local government during this period the names of these men and women will be writ large. I am proud to be associated with them and all those councillors throughout Scotland who stood up against the Conservative Government.
  My right hon. Friend the Secretary of State for Scotland has stated that the total loss in rents was about £4 million, while the reports submitted by the auditors originally put the loss at about £1·4 million. I regard that not as a rent loss or a rate loss but a rent gain to the tenants involved in these towns, brought about by the actions of the Labour councillors.
  The Opposition often talk about the ratepayers. They should not forget that 80 per cent. of householders in Scotland are tenants. Whether they be in council houses, in Scottish Special Housing Association houses, in new town development corporation houses, or in ordinary rented property, 80 per cent. stay in rented accommodation. The overwhelming proportion of rates are paid by council tenants in Scotland. I put it to those who, speaking as they do with English accents, do not know the people and the traditions of Scotland that they should remember that in comparison with England, where council tenants are in the minority, the overwhelming majority of Scottish people stay in council housing and, therefore, contribute the overwhelming proportion of the rates.
  Only the rump of the Tory Party in Scotland is left in this House because the ratepayers got fed up with the policies of the Conservative Government. I am
  1072
  proud to be associated with Saltcoats, Clydebank and Cowdenbeath, whose councillors stood up to the Conservative Government when that Government were attacking their tenants. It would be disastrous for local government if we ever reached the stage when local councillors elected by the local people were not willing to stand up and be counted against vicious acts which they think have been imposed on their people by the Government of the day, whether that Government be Conservative or Labour.
  Mr. Teddy Taylor: If this is a matter of great principle and not just a question of party politics, can the hon. Gentleman explain why his father and others implemented the Tory Act and imposed the rent increases?
  Mr. Lambie: The hon. Gentleman must recognise that at the end of the day the power of councillors and local councils is limited in resistance against the actions of an all-powerful Government. The reason why the councillors had to capitulate eventually was the lack of support from the Labour and trade union movement in Scotland. However, the Labour and trade union movement gave an assurance that the Act would be repealed at the first opportunity, and we are grateful to my right hon. Friend the Secretary of State for Scotland and to my right hon. Friend the Secretary of State for the Environment for putting through that repeal now. The Government are carrying out their promise to the rent payers of Scotland. I am glad that the Tory Rent Act is finally to be removed from the statute book.
  The Opposition have talked about retrospective legislation. Those of us who sat throughout so many long hours in the Standing Committee considering the Housing (Financial Provisions) Bill will recall that one of our main objections was that it introduced retrospective legislation on grants and subsidies. Under the measure, the first subsidy was to be the residual subsidy, but in this the then Government were breaking agreements which had been made since the end of the First World War between Governments and local authorities on housing finance.
  Local authorities throughout Scotland, from the end of the First World War, built

  1073
  houses in agreement with the Government for guaranteed sums of money by way of subsidy over periods ranging between 40 and 60 years. Most of these agreements have not been fulfilled so far, yet the Conservative Government, many lawyers among them, introduced retrospective legislation to break the agreements, which had been made between local authorities and Governments of all colours—not only Labour but Liberal, National and Conservative. Local authorities embarked on large house-building programmes on the basis of guarantees given to them by the Government of the day that they would have subsidies covering periods of 40 to 60 years.
  In the Act the Conservatives started the process of phasing out these subsidies. That is why we called the Act a piece of class legislation and a vicious attack on the people of Scotland, both in council and in private rented property. This was why the Labour and trade union movement in Scotland campaigned actively against the Act, and why it told councillors wherever possible that if they could get the support of the local people they should stand up and be counted on the issue of opposing implementation of the Act.
  I am therefore proud to be associated with the Labour Government's decision now to introduce Clause 19 of this Bill and repeal the Conservative attack on councillors who were prepared to stand up against the vicious Housing (Financial Provisions) Act. I am disturbed by only one small thing in this context. Clause 19 contains the words
  "the Secretary of State … may … if he thinks fit …".
  I hope that my right hon. Friend will stand firm and carry out the policy of the Labour and trade union movement in Scotland in all cases and give the people of Scotland some say again in the determination of rent levels.
  5.59 p.m.
  Miss Harvie Anderson: I do not seek to follow the remarks of the hon. Member for Central Ayrshire (Mr. Lambie), many of which will be greeted widely with the contempt they deserve. I, too, regret having to perpetuate the rating system as set out in the Bill. I wish to speak briefly, so I shall not go into the detail, but, overall, I wish to express alarm at the burden
  1074
  of rates and my concern that the likely increase has been aggravated by local authority spending.
  There are three particular facets of that. Much of local authority spending is, of course, statutory and much is desirable, but accumulatingly a burden is being placed on many that they simply cannot bear. I intend to quote only one example, but it is a good illustration. It concerns a man who has been retired for about 10 years and who on retirement bought his own small, comfortable dwelling-house. That was in 1964 when the rates were £66 3s. 3d. Ten years later the figure was £168·72, yet his pension had not stretched as the rates had been stretched.
  That illustration could be repeated not hundreds but thousands of times in my own area. Such instances alert my ever-increasing concern about what is to happen under the new local authorities that have just been set up.
  The new authorities cause me deep disappointment. I fully agree with the recommendations to which I subscribed as a member of the Royal Commission on Local Government in Scotland, but three factors have changed dramatically since the commission's proposals. First, there have been what I regard as the wholly unacceptable regional changes in our recommendations. They were made by the Government of the day, and I feel no shame in saying that I know full well that it was my own Government that made those changes. They dramatically altered the intention behind our recommendations. I deplored those changes then, and I continue to do so.
  Secondly, there is now the widely accepted—though not by me—proposal for a Scottish assembly. Whatever one's view, that undoubtedly substantially alters the position, especially of the regions as envisaged by the Royal Commission during our full three years of deliberation.
  Thirdly, there is the weight of bureaucracy and the disgraceful agreement on salary increases for the huge new establishments in both region and district. I mean that the establishment of the posts is far too big. The establishment has been agreed in a way that I hope the Minister will explain to the hard-pressed ratepayers.

  1075
  How does it come about that at this time of limitation posts have been extended and many more people are employed, often to do only the same work, and in almost all cases, practically without exception, people are doing the same work for vastly increased salaries under the umbrella of the idea that is acceptable and permissible because of a change of title? I avoid the temptation to be led into using some of the extraordinary titles that have been developed in this connection.
  All these are serious worries for every ratepayer. It is tragic that the new local government structure, designed to improve the operation of local government, which, I am the first to agree, was long overdue, should have been abused in this way.
  So the present rating system becomes still less appropriate as a means of supporting local government. The Glasgow district rate has been mentioned, and I have quoted an example of my own area. It has been suggested that the Glasgow district rate will increase by 30 per cent. If that is so, I dread to think what will happen to those thousands of people who have only limited resources to meet that demand.
  Schedule 2 refers to relief for domestic ratepayers, and there is a reference to those who, I suppose, will be categorised as needy. I am now talking of domestic ratepayers rather than authorities, which have already been mentioned. It is exceedingly difficult to identify the needy to whom rate relief should be given because there are thousands who are retired, independent and on their own and may not fall into a category definable as needy but for whom the hardship resulting from these dramatic increases is serious. Their problem should be on the consciences of all of us as we go forward with legislation of this kind.
  At the same time, I must mention that the Secretary of State said that the first year of operation would cover a 10½-month period. I profoundly hope that in their instructions to the new authorities Ministers will ensure that that period is not used to cover a substantial rise that might not otherwise be apparent at first sight I have my grave suspicions about the working out of this provision.
  1076
  Finally, I must mention Clause 19. It is utterly intolerable that there should be retrospective legislation to indemnify those who have simply and plainly broken the law. My noble Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) has already expressed better than I can our distaste for any infringement of the law. He who seeks to absolve any person or persons from complying with the law strikes at the roots of democracy itself. If there is one place above all others that should support democracy, by not only passing the law but standing firmly by it, it is Parliament and this Chamber. I therefore utterly deplore this attempt to enable people to get away with breaking the law upon which the whole framework of our country rests.
  6.8 p.m.
  Mr. Dennis Canavan: If local government is to be good government, it must be as local as possible and as democratic as possible. There must be local representation and local participation. There must be local decision making and local responsibility and a certain element of local financing.
  In recent years many people experienced in local government in Scotland have expressed concern about what they would call the erosion of the rights and liberties of local government. We have seen, for example, conflict between central Government and local government over the implementation or non-implementation of comprehensive education. Also in education we recently saw how the Government could override the rights of local authorities in the provision of free school milk.
  Still more recently we saw what has previously been described by my hon. Friend the Member for Central Ayrshire (Mr. Lambie), namely, one of the most vicious anti-working-class pieces of legislation that we have ever seen, the Housing Finance Act 1972. Apart from its financial implications, that Act breached an important principle in that local authorities were prevented from charging what they considered to be a fair rent for their own tenants. However, there has recently been introduced a Bill, which we hope will soon be passed, to restore that freedom of local authorities to decide what rent to charge. It is important that local

  1077
  authorities receive the power and the resources needed to exercise that power. I hope that the Bill will go some way towards the provision of these resources.
  Recently in my part of Scotland there has been concern about reorganisation of local government. Many people are dreading its coming into effect in May. It is not just the size of the local authorities which concerns them. It is not just the remoteness, although that is an important point. Part of my constituency is to go into the Central Region, while part of it is to go into the Strathclyde Region. The difference in attitude is quite amazing between those who are to go into the Central Region, who are fairly happy with their lot in a compact geographical set-up, and those who are to go into Strathclyde Region, who are most upset.
  The other day my local newspaper, the Stirling Observer, for which I do not have a great deal of respect—but I congratulate it on this point—reported that it could not find one person in the Strathblane area who wanted to go into the Strathclyde Region. The boundaries commission is investigating the possibility of a small area in my constituency round about Strathblane—at present in the Central Region—being transferred to Strathclyde. Why is there such opposition? I have discussed this with many constituents who are going into the Strathclyde Region. Apart from the provision of services, finance and such things, many of them fear that there will be a great increase in the rates as a direct result of reorganisation.
  I hope that the proposals in the Bill concerning an improvement in the rate support grant arrangements will help to alleviate this anxiety. My neighbouring constituency Member, the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), referred to the possibility of a conflict between a Scottish assembly and local authorities. I do not see a great deal of conflict there provided that the rôles are clearly defined. There is a distinct possibility of a conflict, however, over such matters as finance, resources and decision making, between the future Scottish development agency and a large planning authority like Strathclyde.
  I welcome the proposals dealing with oil development, referred to in Clause 12
  1078
  and Schedule 2. The rate support grant will be increased by sums related to the extraordinary expenses incurred in connection with offshore oil exploration. I hope that the combined effect of the Oil Taxation Bill and this Bill will be that the oil companies will pay indirectly for the whole infrastructure and support which is needed as a result of this new and developing industry being introduced over a short period of time. It is placing demands on local authorities in terms of the provision of housing, schools, roads and the entire support system needed to deal with an increase in population and industrial development.
  Mr. T. G. D. Galbraith: Is the hon. Gentleman saying that merely because these are private industries they should contribute towards the infrastructure costs? Would the same argument apply to the steel industry which is being developed at Hunterston in view of the infrastructure required there?
  Mr. Canavan: I would suggest that it applies more strongly to private industries because they are reaping profits from the development of a project like North Sea oil. They are using local resources. The whole point of legislation such as the Oil Taxation Bill is to plough a good deal of those profits back, so that the Government can distribute them at a local level. No such legislation should be required for publicly-owned industries.
  I welcome what my hon. Friend the Member for Central Ayrshire said about his own family and Saltcoats Town Council generally. I, too, have a local authority in my constituency, Denny Town Council, which resisted the vicious Housing Finance Act. It did so in good faith. It is not good enough simply to say that because a law is passed it therefore demands acceptance. [Interruption.] There is such a thing as provocative legislation. It was most unfair of the then Secretary of State to expect the councillors of Denny or Saltcoats or Cowdenbeath or Clydebank to do his dirty work for him. He had the power to put in a commissioner to implement his dirty Act. For some reason he refused to do that.
  Miss Harvie Anderson: Is the hon. Gentleman saying that my Member of

  1079
  Parliament is not prepared to obey the law of this land?
  Mr. Canavan: I will repeat to my constituent, the right hon. Member for Renfrewshire, East (Miss Harvie Anderson), what I have said, namely, that there are certain pieces of legislation which are provocative. The last Conservative Government certainly introduced quite a few pieces of such legislation. There is nothing wrong in councillors, who are elected democratically on a local manifesto, sticking to that manifesto. That is why I applaud what my hon. Friend the Member for Central Ayrshire said.
  Mr. Lambie: My hon. Friend should surely make the point that all these councils were Labour-controlled. The majority of Members of Parliament representing Scottish constituencies are Labour Members. This was an Act imposed on the Scottish people by the English Tories. There is one thing we cannot stand, and that is an English Tory.
  Mr. Canavan: I am grateful to my hon. Friend for supporting me. I welcome the last paragraph of the Explanatory and Financial Memorandum, which will I hope become a reality. It says that:
  "The changes in financial arrangements will in some respects make for the more effective and economic deployment of staff and, in the longer term, provide scope for small savings in public service manpower."
  It is most unusual nowadays to have a Local Government Bill which says this.
  Although I disagreed with the right hon. Member for Renfrewshire, East in her recent interruption, I fully endorse what she said during her speech about the abuse of certain promotion schemes in local government and the excessive salaries which have come about as a result of reorganisation. In many cases what happened was that a person transferred from one room to another had virtually the same responsibility. Although he was to have responsibility over a wider population, he was also to have more people to assist him in exercising that responsibility. Yet the salary was doubled or trebled in some instances. It is interesting to note that in many cases there was not much competition for the jobs. I know of several cases when only one or two people were inter-
  1080
  viewed because the Local Government Staffing Commission had it all carved up so that only those within a certain area could apply. When a teacher applies for a promoted post he may have to put up with competition from all over Scotland, indeed from all over the United Kingdom. But often the only competition which a local government officer had came perhaps from one of his junior assistants.
  I welcome the proposed establishment of a commissioner. The terminology is perhaps a little unfortunate. Again, it is reminiscent of the Housing Finance Act, although the rôle of the commissioner, under this Bill will be somewhat different from that of the commissioner referred to in that Act. The wording is perhaps reminiscent of colonialism. I shall not argue too much about the terminology as long as the man does his job. We all know what he is supposed to do; he will be a sort of local authority ombudsman. Allegations of injustice are often made against local authorities. Sometimes we, as Members of Parliament, are asked to take up such cases. Unfortunately, we in Parliament do not have the necessary power or resources to carry out an investigation into such allegations as the ombudsman will be able to do.
  There is another aspect of the Bill which slightly disturbs me. A recent facet of so-called democracy is that more and more people are being appointed to posts which carry considerable power. I wonder whether the method of appointment is perfect and whether it can be improved. Clause 21 (2) provides:
  "Appointments to the office of Commissioner shall be made by Her Majesty on the recommendation of the Secretary of State after consultation with such bodies representing local authorities as appear appropriate to the Secretary of State. …"
  With all due respect to Her Majesty and to the Secretary of State, I wonder whether that is enough by way of public accountability. I should like more appointees to be responsible to an elected body such as Parliament.
  Another example of this relates to the valuation appeal committees. Clause 4(2) provides that
  "… members of the panel shall be appointed by the sheriff after consultation with such persons as he thinks fit".

  1081
  I wonder whether it is satisfactory to appoint a valuation appeal committee member simply on the basis of whether a sheriff considers him to be fit. Perhaps the Minister will explain the situation when he concludes the debate.
  This is an important principle. More and more direct appointments are being made by Secretaries of State and various other people. For example, the members of health boards and even of health councils are not directly elected. Are we going to see more and more people being appointed ex officio members to such bodies as school councils and possibly even community councils? I hope not. I should like to see the maximum possible number of elected representatives on such bodies. That would lead to true public accountability and would help to make local government representative of the people and answerable to the people.
  6.23 p.m.
  Mr. Iain Sproat: I do not think that during my relatively short membership of the House I have ever heard a more abominable principle advanced from the benches on either side than that advanced by the hon. Member for West Stirlingshire (Mr. Canavan), namely, that anybody has the right to disobey the law simply because he disagrees with it or finds it—in the undefined word of the hon. Gentleman—provocative. We find almost every piece of legislation introduced by the present Government provocative, but we would not dream of saying that that alone was justification for not obeying it. I hope that the Minister of State will take the opportunity to rebut the abominable principles advanced by the hon. Members for West Stirlingshire and Central Ayshire (Mr. Lambie).
  Mr. Canavan: Will the hon. Member explain why so many English local authorities—previously it has happened with Scottish local authorities—which are Conservative controlled are deliberately dragging their feet over implementing plans for comprehensive education?
  Mr. Sproat: There is a distinct difference between dragging one's feet and breaking the law, but if any Conservative authority were to break the law I should unite with hon. Members opposite in condemning it. It is absolutely incumbent on any Government to reassert the authority of Parlia-
  1082
  ment. Clause 19—no doubt we shall have the opportunity of discussing it in detail in Committee—allows people who have defied the law to get away with it. The Government appear to be supporting, tacitly if not implicitly, people who have broken the law, and that is wrong.
  Let me temper those words of criticism with a few words of welcome. I welcome the provisions regarding the local ombudsman. We put forward this suggestion when in government in a consultative paper in 1972, and I am pleased to see it in the Bill. Local government is becoming more and more complex and therefore it affords more opportunities for error and unintentional injustice. It is good that a local commissioner should be able to deal with such matters. I hope that in Committee we shall have the opportunity of taking into account English experience as a result of the legislation passed in England.
  Clause 12 and Schedule 2, relating to help for oil-affected areas, very much concern my area. I am by no means as happy as my hon. Friends the Members for North Augus and Mearns (Mr. Buchanan-Smith) and Edinburgh, West (Lord James Douglas-Hamilton) about this matter. I hope that they are right in giving their more or less unqualified support to what is proposed, but there are one or two matters which I should like cleared up. My hon. Friends and I have been pressing for a considerable time for aid for these areas. Therefore, we welcome what is proposed on a largely non-party issue. A huge extra burden is being placed on ratepayers in the north-east of Scotland and in parts of the Highlands for development which will benefit all the United Kingdom and therefore central Government support should be given.
  However, the proposals in the Bill have caused considerable suspicion in Conservative Party and Labour Party circles in Aberdeen. As drafted, they are regarded as unsatisfactory and inadequate. At the moment the Secretary of State simply "may" take account of the situation in the oil-affected areas. I should like an obligation to be placed on him to take account of it.
  I do not object strongly to this, but it is extraordinary that the Bill contains

  1083
  no mention of the question of North Sea oil. One is therefore compelled to refer to the Scottish Development Department's Circular No. 84/1974, paragraph 5 of which states that
  "It is proposed that the grant distribution should take account of such other increases in the grants receivable (including the needs and resources elements of rate support grant) and of rate income which can be expected to result from oil-related developments. Authorities are therefore asked to include in the summary return a statement of the estimated growth in population and rateable value attributable to such developments".
  We must consider the definitions of "net" and "gross" with regard to that paragraph. Gross is what is being paid out now. Net is what will come in. But it is unfair to the local authority to be expected only to receive from the Government what is defined as net expenditure when net expenditure is calculated to include future receipts about which we do not know.
  The Minister of State, Scottish Office (Mr. Bruce Millan): If the hon. Gentleman will look at the tables attached to the circular he will find that that is not so. Local authorities are being asked to estimate the increased rating value in 1974–75 and 1975–76.
  Mr. Sproat: I am extremely relieved to hear that. There is a misunderstanding that future receipts are supposed to be calculated.
  Secondly, will the Government give a more precise definition of the services that will and will not qualify for Government aid. The circular states that there will be no help for such oil-related activities as petrochemical works or oil refineries. That is wrong. We should regard the wealth potential of oil as a totality. We hope that petrochemical works and oil refining will bring benefit to the community, and they should therefore qualify for Government aid if local authorities require to increase their infrastructure to advance those aspects of oil.
  Again, we want a definition of what is meant by "100 per cent. oil-related". I understand the Government's argument that one cannot expect to get Government money for something that is not oil-related. On the other hand, improved roads, houses and schools will not be
  1084
  specifically and totally related to oil. For instance, would a lorry park in Aberdeen—for which we are pressing and which has become an urgent necessity because of oil developments, qualify under the Bill for total Government support? Would the Aberdeen local authority be able to ask the Government for the total cost of a lorry park? If not, what percentage of the cost of a lorry park would qualify for support?
  No doubt we shall grill the Minister more closely in Committee, but perhaps at this stage he will give the guidance for which I ask.
  6.32 p.m.
  Dr. Jeremy Bray: I wish to ask my right hon. Friend some questions about how in practice the Commissioner for Local Administration machinery will work. I have represented an English constituency as well as a Scottish one and I am not sure that the English experience will necessarily be a good guide to how the machinery will work in a Scottish context, although I welcome the appointment of a commissioner.
  My experience is that Scottish local representatives personally have to carry a larger load of case work than do many English local representatives. Secondly, the party balance in many Scottish local authorities is different from that which applies generally in England. Thirdly, the relationship between the elected representatives and the officials is different, in that Scottish elected representatives expect to intervene to a much greater extent.
  If we bear those differences in mind in asking what are the matters open to investigation, it seems to me from reading the Bill that if the commissioner develops his work in one particular way most housing cases might be open to his review, including a large range of questions on the letting of houses and repairs, so that virtually a dozen cases a week might be handed on to him by councillors. A large range of educational questions may fall to be dealt with by the commissioner, questions about school buildings, repairs to schools, the zoning of schools, the schools to which individual children are sent, and grants to students—for example questions about the responsibility of local authorities for

  1085
  Open University students. School staff seem to be excluded.
  The objective should be for the machinery to work in a sufficient number of cases to influence the specific individual cases and to influence by precedent how that local authority handles that type of problem in general, but not to work in so many cases that the ends which the commissioner is intended to serve are defeated. The machinery of the commissioner and of local government might be so bogged down as to make the institution unworkable.
  What is the scope of "local authorities"? Are community councils and school councils included? Will their members be able to refer questions, or are the councillors likely to be able to exert political pressure upon individual elected representatives of the local authorities?
  Clearly, a great deal will depend not on the Bill or on the commissioner's intention but on the practice of local councillors as they develop the practice within the framework of their own political activities in the council. It is established practice that no pressure is put upon an individual Member of Parliament on his choice of matters to refer to the Parliamentary Commissioner. In local government the sheer number of cases is likely to be so vast that it will be difficult either in general or on any specific council for the individual councillor to be left to develop his own case law about which matters he passes on and which he does not. I should like to see the principle enshrined that in the last resort the individual elected representative decides which cases to refer to the commissioner.
  I should be grateful if my right hon. Friend will say whether he regards the commissioner's power to consider a matter which has not been referred to him but has been referred to a council and then shelved as likely to be adequate to deal with a sufficient number of cases to make the institution fulfil the purpose for which it is intended. In my view it will be so because of the many channels of communication by which matters can be drawn to the commissioner's attention if not formally referred to him.
  6.36 p.m.
  Mr. Malcolm Rifkind: There have been several in-
  1086
  teresting contributions to the debate, but the House will be especially grateful to the hon. Member for West Stirlingshire (Mr. Canavan) for his useful definition of the difference between private and nationalised industries. He said that the difference was that private industry made profits. If that is the view of the Government on the desirability of extending the rôle of public ownership throughout the economy, the two sides of the House are closer than we previously thought.
  Mr. Canavan: What I said was that it was far easier for the Government to take and distribute to the community the profits of publicly-owned industries, whereas for private industry certain additional legislation was needed, such as the Oil Taxation Bill.
  Mr. Rifkind: That is a useful contribution to be made by an hon. Member who supports a Government who have recently declared their belief in not supporting nationalised industries and not interfering with their day-to-day administration. We understand that the new policy is that if the nationalised industries make a profit they should be allowed to keep it.
  The Bill, like the curate's egg, might be good in parts but, unlike the curate's egg, it is inedible and indigestible. The Government have lost a golden opportunity to reform the rating system. They told the House not long ago that they had appointed the Layfield Committee to investigate local government finance, yet by introducing the Bill they are apparently prejudging the committee's findings.
  The Secretary of State referred to the Conservative policy of transferring the cost of teachers' salaries to central Government responsibility. I am sorry that he appears to have been so modest in that respect. In evidence to the Layfield Committee the Labour Party, albeit belatedly, recommended that the cost of teachers' salaries should be transferred to the central Exchequer. If that is the view of the Labour Party, it is surprising that the Government should not have used the opportunity of the Bill to implement that part of their policy. We cannot say that it is not relevant to the Bill as a whole. We all know that Clause 19 is not relevant to the Bill as a whole.

  1087
  If it is now the Labour Party's view that the Conservative policy at the last election, two or three months ago, is correct and desirable, it is surprising that that policy is not introduced into the Bill.
  The other important point to consider is that we have lost this opportunity to abolish the rating system as a whole. One of the main objections felt by many people to abolishing the system is that it might interfere with local government independence. Their view is that if local government must rely for all its resources and functions on central Government it will not have independence of action. I shall be interested to hear the Government's reply on this point. I should like to know how the Minister will reconcile this view with the Government's recent White Paper on devolution in Scotland and Wales. The White Paper says that it is the Government's present policy for assemblies to be financed by block grant from the United Kingdom Exchequer. If that is Government policy in respect of assemblies, we must assume that this will not prevent those assemblies operating in an independent and effective fashion. If assemblies are to be financed by a block grant from the Exchequer, why do the Government believe that local authorities should not be financed in an equally attractive way?
  There is another part of the Bill which I find acceptable, namely, the facility to enable ratepayers to pay their rates monthly. I hope that the arrangement will be extended to the nationalised industries, such as the electricity and gas undertakings, to encourage consumers to make payments on a similar basis. Clearly the same degree of hardship applies to many members of the community in respect of their gas and electricity bills as it does to their rates.
  One further acceptable part of the Bill lies in the appointment of local ombudsmen. I am sure that nobody would object to that proposal. However, there is something a little ironic in the fact that the Government, for the first time, seek to enable an independent inquiry to be made into matters of maladministration and yet also seek to introduce a clause which will encourage the Government to condone and approve such acts of maladministration on a massive scale. It is unfortunate that the birth of the local
  1088
  ombudsman should coexist in a Bill which, in Clause 19, gives what can only be described as a rogue's charter to all who wish to encourage defiance of law and illegal acts.
  I should like to make three general points on Clause 19. First, I was sorry that the Secretary of State did not choose to give me a direct answer to a question which I asked him during his speech. I specifically asked whether, in drafting the clause, he had sought the advice of the Lord Advocate. He replied that the Lord Advocate was well aware of the clause and that we were not to presume what his view might be. But I asked whether he had been asked for his advice, and not whether the Lord Advocate was aware of the clause. No doubt all hon. Members are aware of the clause, but we should like to know whether the Government, in drafting a piece of legislation with such serious consequences in terms of administration and respect for law in Scotland, had the courtesy to consult the Law Officers about their views. This is a matter of considerable importance.
  We know that in the southern half of the United Kingdom—England—the Labour Party, before the last election, consulted the present Attorney-General with a view to similar legislation. We also know that the Attorney-General's view was that such legislation would be inimical and contrary to the country's interests. Yet we now know that the Labour Government rejected his advice. I hope that we shall be told, in the Government's reply to this debate, whether the Lord Advocate and the Scottish Law Officers were asked for their advice. If they were not asked for advice, we should like to be told why. This is a matter of immense importance to the Scottish people.
  The second important matter which arises on Clause 19 is a general point. The Secretary of State in his introductory speech referred correctly to a provision in an earlier Conservative Bill which would have given the Secretary of State power to consider all the circumstances of an individual case and, where appropriate, to alter, reduce or do away with any surcharge that might have been made. We do not object to the general law. We accept that there may be circumstances in which the Secretary of State, in respect of the country as whole,

  1089
  accepts the desirability of waiving all or part of a surcharge which might otherwise have been made.
  There have been cases in which an individual councillor has done something illegal, but with no deliberate intent to break the law. In such a situation, nobody would insist that that person should suffer the full rigours of the law. There may be cases in which an individual councillor, having been carried away by strong convictions, has done something which, subsequently, he has regretted. But the clause is not concerned with that type of person. The clause has a specific purpose, and refers to a particular date. It is a retrospective clause, going back to September 1973. It is solely and directly concerned with the position of councillors who broke the law of the land.
  With respect to the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), it was not a question of finding out whether the law had been broken. These councillors, as was proudly proclaimed by the hon. Member for Central Ayrshire (Mr. Lambie), knew perfectly well that they were breaking the law and, with the exception of that hon. Gentleman's father, do not now wish to take the consequences of that act.
  The hon. Gentleman—whose general speech was encouraging, in agreeing that people should take the legitimate consequences of their action—said that he hoped that the Secretary of State would make no exceptions in regard to the waiving of surcharge. Remembering that the hon. Gentleman began his speech by saying that his father should be allowed to go to prison, it is a pity that the hon. Gentleman should spoil such a declaration of principle by coming to such a petty conclusion. I think that the hon. Gentleman's father and all those who acted like him thoroughly deserve to be sent to prison. [Interruption.] I make no apology. That is not a case of one councillor mistakenly breaking the law or taking an action on a single occasion. This was a cool, calculated defiance of the law on successive occasions, despite appearances before the courts and despite repeated indications that they were defying the law. These were acts committed by a large number of councillors.
  Having examined the provisions in this Bill, I almost feel sorry for the two
  1090
  Shrewsbury pickets. At least those pickets hold no public office and have no public responsibility. They are quite unlike the magistrates of Saltcoats or Clydebank and have taken no public oath to observe the law. Again, unlike the magistrates of Saltcoats, Clydebank and Clay Cross, they do not sit in judgment on their fellow men or sentence them having determined guilt. The two pickets took certain action and they are suffering the consequences.
  I find it nauseating that in Clause 19 the Government are encouraging people to defy the law. It is regrettable that a Bill, which in general is non-controversial and which will do much to improve the administration of Scottish local government, has been spoiled by the inclusion of Clause 19. I hope that the Minister in replying to the debate will give careful consideration to all the points which have been made. I hope that he will tell the House what advice was sought by the Government before they decided to include this iniquitous clause in an otherwise generally acceptable Bill.
  6.49 p.m.
  Mr. John Robertson: The hon. Member for Edinburgh, Pentlands (Mr. Rifkind) can make some claim to be whiter than white but he should not extend his innocence either to his hon. Friends or to the Conservative Party. On the subject of Clause 19, local authorities were required to anticipate the law and to take resolutions that were contrary to the then existing law in order to operate the timetable of the Tories' then Housing (Financial Provisions) Scotland Bill. If they wished to operate that timetable they had to take a decision at least one or two months prior to that legislation becoming law. What would the hon. Gentleman say about a local authority which took a decision which it had no right to take in anticipation of a law which had not yet passed through this place?
  Mr. Rifkind: Its position would be exactly the same as the position of those who have paid taxes in anticipation of a Finance Bill which has not yet attained the consent of the House. In the event of that housing legislation not having been passed, no doubt the rent would have been repaid just as the tax would be repaid.
  Mr. Robertson: The hon. Gentleman may satisfy himself with that kind of approach to the question, but it would hardly have done if he had been a member of Paisley Town Council. That council was in the position, on the best legal advice it could get—and fairly expensive advice from a very well known member of the Scottish Bar—that it was not entitled to come to a decision, at a meeting held on the first Tuesday in June, in relation to a Bill which was not yet through Committee. On the basis of very expensive advice it did not take that decision in that month, but it took a decision that when the Bill became an Act it would implement the provisions of that Act.
  Unfortunately, although it is all right to take the decision, there arises the problem of implementing it. Implementation of the decision to raise the rents in Paisley meant that the council had to recall every rent card in the burgh. It had to programme a computer. That could not be done until the end of December. The council was left with the decision on whether to apply increases which would have been applied over six months over a period of six weeks, or to make an appeal to the Secretary of State, saying "Give us some time, find some way in which we can operate your Act and not break the law." But no relief was given. The result is that Paisley's councillors were found to be in the wrong and that they could be surcharged to the tune of £250,000, not for obviously breaking the law—they took the decision—but merely for an inability to operate the decision. That was the fault.
  This was the fault of central Government. The Scottish Office at St. Andrew's House has never been noted for introducing very prompt action following the passing of a Bill into law. If grants are to be paid to local government it takes more than a couple of weeks for local government to get them. Sometimes local government is lucky to get them within a couple of years.
  The leaders of the Tory Party in the House knew of these difficulties. They received a deputation from Paisley Town Council and the problem was put to them, but they would not alter the date when the Bill became law, although it could not be operated in the circumstances. Therefore, let us not have all this selective in-
  1092
  dignation about people breaking the law and getting into trouble. Particularly when dealing with a Tory Secretary of State for Scotland, one can get into trouble without trying. [Interruption.] My hon. Friend the Member for Central Ayrshire (Mr. Lambie) need not worry. I am sorry to say that it is not always just Tory Secretaries of State with whom one can get into trouble without trying. I am not blaming the present Secretary of State for this because if I remember aright he, along with many of my hon. Friends, especially in Committee, pointed out to the Tories what the effect of the passing of that previous Bill would be, and the Tories had no reason for not knowing what might happen. But they went on with it.
  Ever since there have been council houses, especially in Scotland, the Tory Party has had a kind of neurosis about council house tenants. They have never quite been able to restrain themselves. Council tenants have been called second-class citizens. I could read out a catalogue of names used to describe council house tenants by Conservative Members, but it would take too long.
  We have here the poor, innocent Paisley councillors, whose only wish was to operate that legislation but who now find that they may be surcharged to the tune of £250,000. I wonder whether hon. Members of the Opposition know of the old saying about taking bricks up a hill. It will be a dreadful job for all the councillors put together to find £250,000. The councillors might have a better time at Her Majesty's expense.
  This is not a major Bill. One would like to see a major Bill dealing with the whole question of rating, its philosophy and so on. The old idea was that the house that a man built and the ground which belonged to him gave some indication of his substance, and that one could tax him accordingly by making a valuation and levying a rate. Those days are long gone, yet we seem unable to change the method of determining who is to pay rates and how much they are to be. Very often now it is those who are least able to afford the rates who are liable to pay the most. One thinks particularly of people living in cities such as Glasgow. If an ordinary worker in Glasgow with four or five children in his family must get a bigger house, he must, therefore, pay more rates, and he suffers. This is

  1093
  obviously wrong. A reform of the system is long overdue. We have been talking about it in the House for at least 14 years to my knowledge. It is time that it was done. Perhaps this Bill is not the vehicle for that.
  However, the rating system and local government finance should have been reformed at the same time as the local government reorganisation was introduced. If that had been done, perhaps the new form of local government might have made more sense. We envisaged large local authorities having more autonomy, more power of decision and more freedom from central Government. Although their size has been altered, their functions, rights and powers of decision have not altered. They are exactly the same kind of bodies as we had previously. When we do revise the rating system let us also revise the relationship between central Government and local government. That would apply even if we have a devolved Parliament in Edinburgh. A new relationship in the spreading out of democracy and decision making must be achieved. However, I doubt whether it could be done through this Bill.
  There is another aspect of the Bill which worries me—valuations and appeals against them. Much more thought must be given to that matter. It is very difficult for the private citizen to buck the findings of the valuation department. I have had it in mind on many occasions to appeal, but when I have seen what is involved and the amount of time and trouble necessary, I have always shirked it as being far too complicated and difficult. No help would be given to me—
  Mr. Speaker: Order.
  It being Seven o'clock, and leave having been given to move the Adjournment of the House under Standing Order No. 9 (Adjournment of specific and important matter that should have urgent consideration), further Proceeding stood postponed.

  CHANNEL TUNNEL
  7.0 p.m.
  Mr. Eric Ogden: I beg to move, That this House do now adjourn.
  I move the adjournment of the House under Standing Order No. 9 for a specific and important matter which should have urgent consideration; namely,
  the announcement made by the Secretary of State for the Environment today, that the British Government have unilaterally abandoned the Channel Tunnel project.
  I thank you, Mr. Speaker, for allowing the motion to be put to the House, and the House for its agreement. I apologise to my Scottish friends for interrupting their business. This was no deliberate intention of mine, but it is one of the perils in the House.
  The time to influence this decision may be limited until 12 o'clock tonight, but the matter is not irrevocable at this stage. The mathematical chances of the Government being persuaded to change their decision between now and 12 o'clock are not for me to calculate, but at least they are sufficient for me, and those who support the Channel Tunnel project, to try to persuade the Government to change their mind.
  I declare, at the beginning, my faith in the Channel Tunnel project. It is a matter which has had setbacks over the 200 years of its history. Today's business is neither the first nor the last setback to which the tunnel has been subjected. As a co-chairman of the Parliamentary All-Party Group for the Channel Tunnel, I am determined to continue to work for this project in the years ahead as I have worked for it in the last 10 years.
  I hope that one day the present Secretary of State for the Environment will accept an invitation to ride behind a railway engine through a fixed-link Channel Tunnel, between the United Kingdom and Europe. Whether that day will occur in 1980 or 1985, whether my right hon. Friend will be old and grey, as he thought this afternoon, or whether his hair will still be dark and curly, I do not know. I am certain that the invitation will be extended to him and hope that he will be able to accept it.

  1095
  My intention is not to restate all the arguments for or against the Channel Tunnel. Most of the arguments that have been made against it were made against the Mersey Tunnel in the 1930s. By the time we came round to the second Mersey Tunnel in the 1960s, no one who had opposed the digging of the first tunnel underneath the Mersey was opposed to the digging of the second. I am not asking for a second Channel Tunnel at this stage. The arguments made against the project are not new to the House.
  I repeat my own belief that, for the people on Merseyside, the Channel Tunnel is as important as the Mersey Tunnel. The tunnel will be an asset to Merseyside and to the north-west of the United Kingdom, not only for employment and trade but for leisure communications and other requirements, and will be as important as any section of motorway ever was for the United Kingdom.
  Had the land between Europe and Britain never been flooded we would not have heard the arguments against, first, a mule track, then a road track, then a railway link, and, finally, a motorway. We do not often talk about the profitability of the M1, yet we often talk about the profitability of the Channel Tunnel.
  The Labour Government are pledged to invest in the Merseyside, the North-West Region, and in British Rail, which is a nationalised industry. The Channel Tunnel would provide an opportunity for the use of British Rail's advanced passenger trains and freightliners, which ought not to be allowed to disappear. For the ordinary British people, to whom I belong and from whom I came, a fixed-link Channel Tunnel would be a growing asset for their work, employment and leisure
  There has been opposition to the project because of its cost. However, any argument about the tunnel on the basis of cost applies to any alternative system. I do not see how the money so-called "saved" by the abandonment of the project will enable 7,000 tunnel sections to be used for building hospitals or schools, or that the money so-called "saved" on this project will automatically be made available for any of the other projects which both sides of the House support. My hon. Friends and I
  1096
  do not argue for an alternative use of the money, and we have to bear in mind interests and vested interests.
  The arguments made against the Channel Tunnel were made against the Mersey Tunnel in days gone by. No one has been prepared to support an alternative, fixed-link rail or road system, or bridge. No one else has been prepared to put his money where his mouth is.
  In criticising the decision made by my right hon. Friend I am criticising the decision made by the British Government, which is my Labour Government. It is a decision for which the Cabinet have collective responsibility. My right hon. Friend the Secretary of State has to carry the can for the decision this afternoon, and he is perfectly capable of doing so. If I say anything in criticism, it certainly does not concern him personally, although perhaps over the last three years he has led his troops in different directions in this matter—first in the 1964–1970 Government, in favour of the Channel Tunnel project, and then, in perhaps what might be termed a "temporary trauma"—in the days when Labour was in opposition—against it. On two occasions last year he led his troops in support. He has outmanœuvred even the noble Duke of York.
  Equally, my right hon. Friend has always written in the small print, so that if events came to pass as he foresaw, and there were reasons why he could not carry on with the project, he had the final clauses in reserve. He was never wholly committed. He was optimistic at times and he was disappointed at times, but he has never come forward as determinedly in favour of the project as I am.
  We now have the present situation. I wish to concentrate on the reasons for the decision announced this afternoon, because charges were made against my right hon. Friend this afternoon by the Opposition that the decision was being influenced by "little Englanders" and Luddites in the Cabinet. I do not believe that for one moment. The Government have their share but the Opposition benches contain many more of such people. Even if a Conservative Government promised to carry this project through there would be a high price to pay in the disasters they would bring on the country.

  1097
  I should like to ask a number of questions of my right hon. Friend. During the passing of the procedural motion on 18th November, the Government, in the words of my hon. Friend the Under-Secretary of State for the Environment, made it clear that Parliament would have the ultimate voice in any decision taken. This is not a criticism of the Under-Secretary of State, who gave the promise in good faith and in the belief of support from the Minister and the Cabinet. The Cabinet is responsible for the decision. The decision was clearly made that Parliament would be given the ultimate decision, as was its right.
  Since November we have read Press reports. There have been Press leaks, and information has come through various channels. It seemed that the Government were going to do nothing. They did not bring the Bill forward. They did not ratify the treaty. They were acting by default, as though they had decided that simply doing nothing would achieve the abandonment of the Channel Tunnel. My right hon. Friend has set up a fair number of inquiries from time to time. I ask him to make some inquiries about the source of the Press leaks over the last weekend, to see whether they came from the Department of Trade, the Department of Industry, his own Department, or from across the water. If we are to have information coming remarkably conveniently after 4 o'clock on a Friday I think we should ask for the source of that information at least to be sought.
  Secondly, my right hon. Friend has been negotiating over the past few weeks with the companies concerned. If, by Tuesday or Wednesday of last week, at the latest, he arrived at a decision which meant the project would have to be abandoned, and if he failed to get an agreement with the companies, why did he not say to the House "We carry out our pledge that the House of Commons will have the right to the final say. We want that to continue. We have tried to carry through the negotiations with the companies in good faith, and we have failed to do so. What is the opinion of the House of Commons?" There was time last week for that to be done. There should have been time to have this on the Order Paper today if it could not have been done then. It certainly should not have been left for a back-
  1098
  bench Member to raise it on a motion seeking the Adjournment of the House under Standing Order No. 9. There was time for that decision to be reported. It was not done. I want to know why.
  The third point concerns the compensation. It was questioned whether £15 million is our liability under the statute and the treaties. Whether we shall be able to persuade the French Government to bear their share of the £30 million is a matter of argument. Legally, the French Government are bound by the terms of the treaty, and our share will be between £15 million and £17 million.
  It would seem that for £15 million my right hon. Friend has bought, with taxpayers' money two short access tunnels from the cliffs of Dover down below the sea. He has got the country 7,000 precast tunnel segments and some start on other kinds of work.
  The main new Priestley boring machine is a brilliant piece of British engineering, of which everyone, regardless of party, should be proud. The machine is the envy of the French. The General is turning over in his grave at the thought that the French have to go to New York to buy their machinery, whereas ours is home-made. It was developed from the Mersey mole. The Priestley machine is now 150 feet below the Channel bed, about 200 yards from the shore, ready to start work tomorrow—£500,000 worth of British machinery. It has not done a stroke of the main work. It now lies down there to be mothballed.
  If my right hon. Friend had found a way of keeping this project going for another six months, at most, at the cost of another £5 million at most, he would have got for himself, the British taxpayer and the British community another one and a quarter miles of tunnel, he would have used all the tunnel segments, and he would have had all the knowledge and expertise of actually tunnelling from our side.
  My right hon. Friend would also have given time for British Railways to finish their report on the alternative rail links between London and the South and how they could fit in their advanced passenger trains and freightliners. My right hon. Friend could have given time for all the Kent local authorities to put in their proposals.

  1099
  Even more important, my right hon. Friend would have given time for the Cairncross Committee, which he set up, to report to him its independent evaluation of the whole viability of the project and the results of its inquiries, its advice and its calculations on the alternative cost to the British taxpayer and the British community if the project were to be abandoned. For example, if this project is abandoned British Railways will have to invest twice the amount of the total compensation—£60 million—on British Railways ferry services alone by the 1980s. There will have to be twice as much investment in ferry ships as it has cost to abandon the Channel Tunnel. There will be alternative costs which we do not know, but which the Government may know. If the Government know them, why did they set up the Cairncross Committee to investigate and report? It would seem that the Government have done this by default.
  If the argument were, "We cannot afford this project at this stage" I would accept the Government's decision, if it were part of a package deal, if it were brought to the House by the Chancellor of the Exchequer, and if he said, "We are going through difficult times"—no one will deny that we are—" We all have to tighten our belts and cut our standard of living. We have to cut Government expenditure." We have been doing that—haphazardly and apparently without much long-term planning. If all those things were being done and if it were presented as part of an endeavour in which every Department of Government had to take its share in combating unemployment and inflation, and if everything else, including Concorde, had to have a cut, it might be acceptable. As it is, it would seem that only the mistake that the planners of the Channel Tunnel made was to put the tunnel entrance and exit at Dover instead of at Bristol.
  If this had been brought forward as part of an economic package I could have accepted it. However, this seems to be an alternative way of proceeding. The attitude seems to be, "We shall cut this project, which is viable and practical and which would be a great asset, but we will allow other things to go forward."
  I have kept my coments to a minimum. There are many other arguments which
  1100
  could be advanced. As my right hon. Friend may have gathered. I am very disappointed with his decision. I ask that he listens to what is said in the House tonight, even though the debate arises only on a technical motion that the House should adjourn. Over the past three years the House has given majorities in favour of the tunnel project of at least five to two. The House of Commons should not be easily dismissed when it declares its will with such majorities.
  I hope that my right hon. Friend will at least give an undertaking that nothing will be done after the decision tonight that will finally and irrevocably force the abandonment of a fixed rail-link Channel Tunnel. I hope that, at worst, this is merely postponed till some time in the future. The sooner it is built the better.
  7.16 p.m.
  The Secretary of State for the Environment (Mr. Anthony Crosland): It is by agreement between the official channels that I shall speak briefly now and that both Front Benches will have two speakers.
  Mr. Anthony Berry: Too many.
  Mr. Crosland: This was a decision of the Opposition Front Bench. I am not criticising. We had intended to have one speaker, but in the light of the decision of the Opposition Front Bench we shall have two speakers. Both will be extremely brief.
  Mr. John Peyton: The decision was a joint one, and it was also agreed that both speeches on each side should be very short.
  Mr. Crosland: Actually, the decision was not strictly a joint one, but this is not something that we should argue about now.
  My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) may be surprised to know that I have a great deal of sympathy with his argument. I do not at all resent his criticism either of the Government collectively or of myself individually.
  It is fair to point out that, as my hon. Friend will know, in Opposition my right hon. Friend the Minster for Transport and I fought hard aganst strong Labour Party opposition to prevent the party from

  1101
  coming out completely and irrevocably against the Channel Tunnel. My right hon. Friend and I have fought very hard against much back bench opposition to keep the Channel Tunnel Bill alive, and we have fought equally hard to keep the project alive. That is worth saying for the record.
  Of course, I should have liked to have, and have always looked forward to having, a final parliamentary decision when all the evidence was available, but this course of action was not possible for us. I am certain that it was right, in the very tight timetable imposed by the companies' claim for abandonment, that, before coming today, as I have, to make a statement to the House, I should have informed the other three parties in the tunnel project of what our decision was.
  I agree with my hon. Friend strongly on his point about schools and hospitals. I agree with him and I disagree with my hon. Friend for Nuneaton (Mr. Huckfield) here. If we do not build the tunnel, it does not mean that all these resources will go towards building more schools, more houses, and more hospitals. It means that these resources will go towards more ferries, more port development, more docks, and all the rest of it.
  I accept all that my hon. Friend said about leaks. I can find no evidence that the leaks, which I greatly deplore, came from anyone in Her Majesty's Government. We are in a situation in which there are four separate partners, all of whom must be separately informed. The total number of people who know about that decision must be enormous. One can only speculate about the source of the leaks.
  I am sorry that the hon. Member for Southend, West (Mr. Channon) referred to this as being a concession to Left-wing anti-Marketeers. The hon. Gentleman must know that both my right hon. Friend the Minister for Transport and I are committed pro-Europeans and that the division of opinion on the Channel Tunnel project is not at all correlated with the question whether people are pro-Market or anti-Market. I give him and the Leader of the Opposition my personal assurance that this was not, in the sense that he implied, a political decision. He must accept from me that this was an economic decision. This is underlined
  1102
  by the statement, to which I alluded this afternoon, by the French Foreign Minister who made it clear that while he regretted this decision it would have no effect on other Anglo-French projects, or, generally, on Anglo-French negotiations or co-operation.
  I hope to cover most of the points which have been raised. I shall deal with the main criticisms which have been made of the announcement which I made this afternoon. First, were we wrong on 26th November to seek a year's postponement? I am certain that we were not wrong. The timetable for the phase 2 studies and other studies was already extremely tight, in view of the fundamental reappraisal which had to be made of the Channel Tunnel project, in the light of the rate of inflation, the quadrupling of the price of oil, the prospects for slower economic growth and the slowing down in the rate of tourism.
  On top of that—I am not criticising British Rail—we had the bombshell of the huge escalation of costs of the British Rail high-speed link. I believe that it had become absolutely clear that we could not, as a responsible Government, take the final phase 3 decision this summer. Therefore, it was right for us to seek an agreement with our partners to postpone that part of the decision till the summer of 1976.
  When the companies rejected this, as they did, and rejected the French Government's proposals for a standstill agreement, as they did, and claimed abandonment, as they did, were we right to reject the package—a mainly non-negotiable package—which they put to us for continuing the project? I have no doubt that we were right. Financially, their proposals would have given the companies the whip hand right the way through any remaining negotiations but, even more important, they were trying to tie us to a quite impossible timetable, that by 15th March, this spring, the Government should, in effect, commit themselves to an entirely new package of proposals involving a final decision on the tunnel by October 1975. In my view, this was quite out of the question. Given the need to appraise the Cairncross studies, the revised phase 2 studies, and the alternative rail options put to us by British Rail, it was wholly inconceivable

  1103
  that the Government or the House would have been prepared to take a mature and responsible final decision to build before October 1975.
  My next point concerns the railway specifically. It has been suggested in the Press that because British Rail is due to propose a new intermediate rail link option in two weeks' time we could have waited for that. If we are to believe the same Press reports, which are obviously accurate, the proposed so-called intermediate rail link which British Rail will put to us will still cost £100 million more than the original rail link, allowing for the change in prices—that is a comparison at constant prices—and all of that would have fallen on public expenditure when most parts of the House are urging us to control public expenditure.
  Mr. Robert Adley rose—
  Mr. Crosland: I shall not give way now. I think the sensible course is for a large number of Members to make short speeches.
  In addition—let me emphasise this to Surrey and Kent Members of Parliament—it would take many months of continuing blight while we examined the various possible routes and alternative rail links through Kent and Surrey and the possible effects of alternative rail links on the White City at Hammersmith. There could be no question of coming to a final decision on the rail link within the timetable which the companies were seeking to persuade us to agree to.
  Even though the companies have abandoned, and we have to accept that abandonment, should we have gone on negotiating with the French Government alone? My answer to that is "No", and for a fundamental reason. The negotiation would not have been in good faith. It is inconceivable, in my opinion, that the British Government, of either complexion—or the British Parliament—would agree in a few weeks or months to a 100 per cent. Government-financed project in the present economic situation and given the present constraints on public expenditure which are rightly urged on us by hon. Members on both sides of the House.
  1104
  My next point is: even granted all this, was I discourteous in not meeting M. Cavaillé, the French Minister for Transport? I do not think that M. Cavaillé would suggest that I had been discourteous. In letters to him of 26th November, 6th January and 19th January I offered a meeting if he would like one, and I suggested that my right hon. Friend the Minister for Transport should fly to Paris last Saturday to see him. He replied that he thought no good purpose would be served by this.
  It has been suggested in some French comments—not necessarily ones which one must take too tragically—that there has been some sort of betrayal involved in the Government's decision this afternoon. My answer is: nothing of the sort. We have been scrupulous in meeting our obligations so far as it lay within our power. But for the fact of two General Elections in 1974 we would have ratified the treaty by the due date of 1st January this year, and we are now acting fully within our rights according to the treaty negotiated by the previous administration. It is the companies which have claimed abandonment—not Her Majesty's Government. The Government asked for a due and sensible postponement, and that is what has been rejected by the companies.
  I underline what I said this afternoon. This is in no sense placing a moral blame on the companies. They were acting wholly within their rights. Nevertheless, I emphasise what the facts of the matter are, namely, that it was the companies which gave notice of abandonment, after they had refused the proposal which initially came from the French Government and not the British Government, for a standstill agreement, for delay.
  My next point concerns the 50–50 sharing of financial liability as a result of abandonment. I can understand the French Government's view that the responsibility for the present position does not lie with them. Nevertheless, as the right hon. Gentleman knows, the sharing of the financial liability was explicitly laid down under the previous administration in the exchange of letters of 17th November 1973.
  A number of points have been raised—rightly so—about the reaction of the French. I shall read to the House the statement—I do not know whether it has

  1105
  already appeared on the tape—by M. Cavaillé made at 5 p.m. United Kingdom time today. This is a translation, as is normal in these cases. [Interruption.] Well, I should like to try out my French:
  "Le gouvernement français "—
  that is as far as I can go!
  I quote:
  "The French Government has just learned of the statement of Mr. Crosland, the result of which is that the British Government have decided not to go ahead with the construction of the Channel Tunnel. The French Government would have wished to carry through this great enterprise in accordance with the agreements signed on 17th November 1973 with the British Government. The French Parliament, in conformity with the obligation undertaken, authorised the ratification of the Anglo-French Agreements on 16th December 1974 and the legislation was published in the Official Journal on 27th December 1974. The French Government considers that the problems faced were not insoluble and it regrets the decision to abandon the project."
  That is a reasonable response, I suppose. Nevertheless, hon. Members will judge for themselves how moderate or how violent a reaction they consider this to be.
  I said that I would occupy only a quarter of an hour. Where are we now? The Channel Tunnel Bill will lapse. The project will be mothballed. We shall ask the Cairncross group to complete its work, partly because, in my view, it would be extremely useful to have its immediate reactions to the project but more particularly because we want its opinion on the method of assessment that has been used for this project in the event of the project's being revived at a substantially later date.
  I conclude on this note. Although I am not as ardent a tunneller as is my hon. Friend the Member for Liverpool, West Derby, I am none the less more of a tunneller than many of my hon. Friends are, and I, personally, greatly regret that the project should end in this way. I have no doubt that what we suggested on 26th November was right, that we should seek a year's postponement for the Cairncross study, the phase 2 studies and the rail link studies, to enable us, in the summer of 1976, to take a rational and mature decision on the basis of full and proper evidence. But that has not proved possible. I could not, in all conscience, advise the House to accept the terms which the companies have put forward,
  1106
  and I must, therefore, reluctantly advise the House that the present project is dead.
  7.30 p.m.
  Mr. Paul Channon: The House is indebted to the hon. Member for Liverpool, West Derby (Mr. Ogden) for initiating this debate, though I must say that it is not a wholly satisfactory way of proceeding—at this very short notice on a matter of such importance.
  There are two issues which the House must decide. The first is the merits of the actual Channel Tunnel case, and whether it was right for the Government to take the action they did. Second—I think that the House ought to devote some time to this—there is the way in which Her Majesty's Government have chosen to behave during these past critical months. Whatever the merits or demerits of the case, the one thing which becomes crystal clear from the Secretary of State's words on two occasions now is that this was not the way to decide such a great issue.
  I intend to speak for but a few minutes, and I shall not spend time on the merits of the Channel Tunnel scheme save to make two or three comments. First, any hon. Member who imagines that as a result of the cancellation of the project, there will suddenly become available a fount of public money for other purposes is wholly mistaken. The Secretary of State made this clear. It may well be that the result of the Government's decision will be extra public expenditure rather than less.
  It will be essential—I regard it as of fundamental importance, and I hope to hear from the Minister for Transport about it—that the interests of the people of Kent should be protected. There will be those in Kent deeply affected by the extra volume of traffic thrown upon their roads, and their interests will have to be looked after by the Government in the light of the wholly new situation in which they have been put by the failure of the project to mature. We were glad to hear this afternoon that the Secretary of State intends to proceed with the M20. I strongly welcome that decision. Further action will have to be taken for Kent, and I hope that the Minister of Transport will take immediate steps to meet representatives of the Kent County Council to discuss the situation now facing them.

  1107
  I believe that the very decision to go ahead with the M20 shows that not proceeding with the Channel Tunnel will not be a way of saving public money. Public money will still have to be spent. The traffic costs will still be there. As has been said elsewhere, traffic cannot be kept out by putting barbed wire round Kent. There will still be serious environmental problems and transport problems in Kent.
  Second, I greatly regret the loss of the enormous opportunity in terms of expansion and profitability which would have accrued to British Rail as a result of this imaginative scheme.
  Third, I hope that the Government will be able to show—with respect, the Secretary of State has not yet shown it on any occasion—that they have quantified the cost of not building the Channel Tunnel. What do they think the cost will be? I believe that the cost of not building the tunnel may well be far greater than the cost of cancellation in the first place.
  My right hon. and hon. Friends have never said that we must proceed with the Channel Tunnel at any price, regardless of economic consequences. I welcomed the setting up of the Cairncross Group. All of us today have a common aim: we regard it as essential that particular attention should be given to public expenditure at this difficult time. As I say, I welcome the creation of the Cairn-cross Group so that the House, before it decided one way or another on whether to proceed with the scheme, could have a report from a properly commissioned impartial body set up by the Government for that very purpose.
  I find it all the more astonishing, therefore, that the Government should have come to their decision without even waiting for the Cairncross report, the report of a study group which they themselves set up and which they themselves said would be one of the factors in the decision on whether to proceed with the tunnel.
  Mr. Adley: Cairncross? Double cross.
  Mr. Channon: I very much regret also—this is a serious matter—that the Government did not decide to wait for the report from British Rail on the new cost of the rail links and the suggestions which
  1108
  could have been put forward in the light of the Government's decision in November.
  The reasons which the Secretary of State has frankly given to the House on two occasions today have not been those of public expenditure. He has not argued that. No doubt, he could not argue it because he has not waited for the Cairn-cross report. The reason which he gave for his decision, both in his statement this afternoon and in his speech this evening, has, in effect, been to throw the blame—I must use that word—for the decision upon the Channel Tunnel companies. He says, and he is right to say it, that there is no moral blame impugned or implied in his statement. We accept that, but I invite hon. Members to look at the terms of his statement this afternoon when they see it in Hansard tomorrow. It is clear in almost every sentence of the second part of it that he attacks the companies for the action they took.
  The House must consider whether the companies were right in their decision in present circumstances. What was their position after November? The Government had changed their mind on several occasions. They cancelled the high-speed rail link, and they had changed their decision on a number of matters. They had not proceeded with the original date. The whole basis on which the companies had sought money from private persons and institutions to invest in this project had been changed by the Government. In the circumstances I do not consider that the House ought necessarily to think it unreasonable for the companies to say that the Government also should take account of this situation.
  I do not feel that the House is necessarily the right place for us to argue the complicated merits or demerits of the detailed negotiations which must have gone on between the Government and the Channel Tunnel Company in the past few weeks, but I must remind hon. Members of what the Secretary of State said in his statement on 26th November:
  "When I have received and considered the further phase II studies, the report of the Cairncross Group and the advice from British Rail on an alternative rail strategy, I shall report them to the House. Meanwhile, as I have repeatedly told the House, the decision on whether to proceed with phase III and build the tunnel remains completely open,

  1109
  and the House will have the fullest opportunity for debate before this final decision is taken."—[Official Report, 26th November 1974; Vol. 882, c. 246.]
  Instead of that, we have a debate after the decision has been taken, a debate in limited time, at a few hours' notice, at the instance of the hon. Member for Liverpool, West Derby.
  The right hon. Gentleman made that observation perfectly freely in the course of his statement. It was not forced out of him by supplementary questions or in answer to a snap question. It came in one of the most important parts of his statement. From the facts as they knew them al that time, what was likely to occur must have been immediately apparent to the Government. They must have known that the situation which arose on 9th January was the most probable event to take place.
  If the Government thought that the companies' proposals put to them on 9th January were unsatisfactory, why did they not themselves come forward with new counter-proposals? What was unsatisfactory about the companies' proposals? Is it not a fact that they were wholly related to the agreement which had been signed by the Government and the companies? Was it not a fact also that the Government had repeatedly changed their position in the past? Was it not a fact that the Channel Tunnel Company was unable to get from the Government any protection for the shareholders who were, after all, risking their money in this situation, not even being in a position, I understand, to get from the Government an offer for the requested three months' breathing space to protect the interests of shareholders during that period? In the circumstances I cannot help wondering whether there was any alternative open to the companies but to take the action they took.
  That, however, is not the main issue in this connection. The main issue, which must be crystal clear now, is that if the Government had been serious about wanting to proceed with the Channel Tunnel they could have come forward with constructive counter-proposals, in which case we should at least have seen between the Government and the companies a genuine negotiation in the public interest which would have allowed the decision to be taken not in this panic and rushed way
  1110
  but after we had had the full Cairncross study, after the report of British Rail and after the House had been fully acquainted with the facts of the case.
  The Secretary of State must recognise that the way in which he has conducted this negotiation and the way in which the Government have handled the matter have done nothing to dampen the doubts and suspicions which surrounded the Government's attitude in this. It appears to many people inside and outside the House that the Government have seized upon a flimsy pretext for cancelling the project for reasons wholly unrelated to the overt reasons that have been given to the House.
  The Secretary of State told the House on 26th November that the House would be fully consulted, that we should be given an opportunity for debate before a decision would be taken and that we should have an opportunity to reflect and consider on this whole important matter before the Government would come up with final solutions. After six weeks, in a situation which the Government created, and which was not surprising since nothing new has emerged which the Government could not have foreseen on 26th November, we are told that the Government have come to the conclusion, which breaks their original undertaking, to abandon the whole project.
  It is my contention that the Government's handling of this situation has been such that they have not done their best by the country, they have not done their best by the House of Commons since they have broken a clear undertaking given to it, they have not done their best by the companies, and they have not done their best by the people of this country who wanted a rational and informed decision on whether or not to proceed. It is a sad day for Parliament that it should have been treated in this way on a decision of this kind.
  For that reason I invite my right hon. and hon. Friends to show in the only way open to them their disapproval of the way the Government have handled the matter.
  7.43 p.m.
  Mr. Stanley Cohen: I intend to be rather critical of my right hon. Friend the Secretary of State, yet

  1111
  expressing sympathy for him in what not only I but many hon. Members might regard as a situation in which he finds himself as the Devil's advocate. It seems to me, having heard the speeches he has made and having studied the history of his statements and his past attitude, that he is not entirely in support of what he is advocating. I recognise that this is a question of collective responsibility, and, therefore, the criticisms which I shall make are levelled not at him as an individual but at the people who have collectively, and in a majority sense, taken the decision.
  I accept my right hon. Friend's points in his initial statement which were critical of some of the commercial interests and dealt with the pressures these interests have tried to exert on the Government. Like the hon. Member for Southend, West (Mr. Channon), I tend to think that the reasons put forward are more excuses than facts, and I believe that view is shared by many right hon. and hon. Members. The tragedy for the people of this country is that once again social and environmental considerations are being sacrificed for economic interests.
  I should have thought that we had learned our lesson from the past but it would appear that memories are very short and we soon forget situations which develop. My right hon. Friend's justification for his decision—and I think that he will accept this—is confined mainly to the costs involved. Like the hon. Member for Southend, West, I have reflected on the report in Hansard on 26th November and on the points which were raised then. Apart from the financial considerations, there are many other factors which the House should have the opportunity of considering. For instance, has my right hon. Friend considered the loss to the community in respect of speed, comfort, the reduction of hazards and the energy problem, which we were discussing earlier today? Has he thought about the environmental questions, because there was a reference earlier to the joy which would be felt by many people at the decision? Reports in the Press suggest that as a result of today's decision there will be bonfires in celebration. Popularity is a good friend but a hard taskmaster, and the bonfires in the not-too-distant future
  1112
  may turn into funeral pyres because of the number of people who suffer environmentally because the tunnel is not built, a number far in excess of those who will benefit.
  Some of the critics of the tunnel ask why there should be only one outlet to the Continent when there is a series of ports all along our coast, but if we cancel the tunnel what is the alternative? My right hon. Friend believes that these ports will have to be developed. Have we seriously considered the cost of developing these complexes to the point where they can cope with the volume of traffic which will increasingly demand access to the Continent, and the roads in England which will give access to these port complexes? The cost of this will be fantastic and the environmental effects tragic. The Government will come to regret the day this decision was made.
  I speak as one who is concerned about the environment, the economic situation and the railway industry. We need a railway industry if we are to survive and if we are to retain the quality of life which most of the people in Britain require. This is a tragic blow for that industry. It undermines its confidence and the confidence of those employed in it.
  In his statement earlier my right hon. Friend used the term "abandonment". In the course of subsequent replies to supplementary questions that was watered down to suggest that this might only be deferment. However, that is not a situation which can exist. We have to have a clear understanding about where we stand. On 26th November I and a number of other hon. Members asked the questions which covered the points which have been made. My right hon. Friend said on that occasion in reply to a question about whether a formal public inquiry should be set up:
  "This is a subject on which the final decision can be taken in only one place, and that is in Parliament"
  I agree with the hon. Member for Southend, West that the decision flouts the authority of Parliament and ignores the assurances which were given previously. On that occasion I asked for an assurance, which I thought subsequently I had obtained, that before a final decision was made the House would have the opportunity of considering the

  1113
  cost of the alternative to the Channel Tunnel. I felt that my right hon. Friend was sympathetic and that this was something which should be done, because he said:
  "What we are asked to decide, and what Parliament must eventually decide, is which is the cheaper method of carrying across the Channel the inevitable increase in traffic."
  He went on:
  "Is it to be the Channel Tunnel or is to be the heavy alternative transport investment in ships, hovercraft, port facilities and the rest, which would certainly be incurred by the country if we were not to have the tunnel."—[Official Report, 26th November 1974; Vol. 882, c. 248–9.]
  There has been no mention today of what these alternative costs will be not only in financial but in environmental terms.
  I thought that my right hon. Friend and the Government had made it clear that before rushing madly into this sort of situation they would listen to the report of the Cairncross Committee. I hope that my right hon. Friend will give British Rail an opportunity to produce a viable transport scheme which will be to its benefit and to the benefit of the country in the future.
  7.50 p.m.
  Mr. John Wells: I go a long way with the hon. Member for Leeds, South-East (Mr. Cohen) when he points out that many more people will suffer from environmental discomfort as a result of the decision. Some hundreds of people would have suffered from the high-speed rail link; some thousands—maybe many thousands—will suffer from the discomfort of the new motorways and, lamentably, the new non-motorways of Kent. There are some roads in the county with a B classification of which the Minister washes his hands, saying that they are a county council responsibility, yet there are roads with that classification carrying a heavier load of traffic than the M40. With the abandonment of the tunnel these B classified roads will carry still more traffic.
  It is perhaps good news for some of us in some parts of Kent that the Minister intends to proceed with the M20 and M2. But will they be extensions towards London as well as towards the sea? Are these roads to be extended properly, or will their existing western terminal points be left untouched for another generation?
  1114
  This is a sad day for Kent, because we are losing a considerable volume of employment. I know that hon. Members from other parts of the country feel that the South-East is an area of affluence and full employment. They must be reminded that Kent is a peninsula, and that a man who lives in Kent can go only to London or the centre of the county to obtain new employment, whereas a man who lives with land instead of sea all round him can go in any direction for a new job. Therefore, new jobs are scarcer in Kent than elsewhere.
  We are losing about 230 jobs on the tunnel itself and work at Ashford in building the segments for the tunnel and at Gravesend for repeat tunnel digging machines. Tunnel technology is a great part of British technology. It is not high-speed Benn technology, but sound, down-to-earth, under-the-sea technology, the sort of stuff that could have sold well all over the world. It is to be put in mothballs before it has even been turned over once. What a tragedy, both for employment in our county and for British technology!
  I do not believe that the Secretary of State has been entirely honest with the House in seeking to put the blame upon the companies. I want to make one or two clear points from what the companies have said as opposed to what the Secretary of State has said. The right hon. Gentleman talked about the package that the companies offered, implying that there was just one package. By contrast, the companies say:
  "The British and French Channel Tunnel Companies have made proposals to the Governments which would have allowed work on the Channel Tunnel to continue. These included proposals which would shorten Phase II, complete Phase II, or prolong Phase II by a year in response to the British Government's request."
  Those are three possibilities for a start, so nobody can claim that what was offered was a package. The Secretary of State has not made it clear to the House that the companies presented the Government with alternatives to consider.
  In a statement issued after the Secretary of State's statement this afternoon, the companies say:
  "Since November the Companies have been discussing with the Governments ways in which the project might be continued and put

  1115
  forward a number of constructive proposals. Unfortunately, the British Government has been unable to accept these proposals with the result that the two companies are obliged to purchase within sixty days the shares"
  and so on. The Secretary of State should have said that more than one proposal was put to him. The Minister for Transport might care to comment.
  The Minister for Transport (Mr. Frederick Mulley): We proposed to all our partners that what was necessary in the first instance was to get an extension of the ratification date from 31st December. We should have been happy if we could have obtained a protocol to extend that date to keep the options open while negotiations went on. But that accommodation was not forthcoming. We were quite happy to talk about dates and so on. The dates would have been in the hands of Parliament, but the companies laid down that, apart from a general programme which we could have negotiated by 15th March, they wanted in effect a decision on the tunnel by October of this year, because we would not have come to the House with yet another Bill without the House having come to a decision about the tunnel at least in principle.
  The companies have the right to withdraw capital if they wish by 22nd March, with the premia written into the agreement. The most difficult matter was that they wanted to extend that so that at any time during the negotiations if they thought fit, or at any time before the main construction started, they had the right to withdraw their capital with substantial premia. That would have necessitated a substantial re-writing of all the agreements, and would have re-opened the whole question.
  It was made absolutely clear to us on 9th January that the terms about the premia were not negotiable. The companies said that there was no point in going on to the other matters unless we accepted the re-writing of the agreements in that way.
  Mr. Wells: I am grateful to the right hon. Gentleman for repeating in different words what the Secretary of State said. He must remember that there were many completely new shareholders who had come into the project, putting up about
  1116
  £8 million, as a result of the prospectus. The boards of directors of the companies would have been failing in their duty to their shareholders if they had not sought to protect their interests. Those new shareholders had come in on a prospectus with a break period, as it were. If the Government reneged on their decision, which they have done, that was the only time when the boards of directors could protect their shareholders. I am speaking not about the historic shareholders, who knew all along the risks they were taking, but the new shareholders who came in only from the beginning of phase 2. It is not unreasonable that they should be properly protected, with or without a premium. Obviously, the premium was what the boards of directors felt was the proper protection for their new share holders. That seems to me not unreasonable.
  Mr. Mulley: It was for these reasons that the Secretary of State said that he did not blame the companies for protecting their shareholders. What the hon. Gentleman has not made clear is that, as well as protecting them in the current situation, they were seeking a new protection of premia at any time, even if the companies pulled out of the project, a protection which does not exist in the projected treaty.
  Mr. Wells: But the Minister must realise that the Government's going back last autumn on the high-speed rail route had completely altered the situation from the companies' point of view. There had been a complete change, and, as the new shareholders had been invited to join, it was not unreasonable of the directors to protect them. Trade unions with which Labour Members are associated may well have been among the investors concerned. It is very likely that they were, and I should not be surprised if they wanted to be protected.
  We should not get bogged down on this point, but I believe that the Secretary of State was less than fair to the House in not coming clean about it at the beginning.
  I return to discussion of the merits of the case. We had in the tunnel a great British technological opportunity, at an admittedly high cost but a cost with no replacement. All the ships and ports and

  1117
  other facilities, particularly the hovercraft, which is so often broken down when one wants to use it, have to be replaced. The costs of replacement or of modernisation or of alteration of these facilities will be very high. As every hon. Member who has spoken so far has told us, there has been no costing of the alternatives to abandonment.
  Four specific classes of people will suffer. First, the people of Kent who live in rural areas away from the railway will suffer because of the roads. Secondly, the people who live alongside the existing mid-Kent line will suffer through increased usage of that line. Perhaps the right hon. Gentleman can tell us how much greater the usage of the line has been in each year of the last five. The fact is that the line has stepped up in usage every summer. It has never slipped back in usage.
  The third group will be those who suffer from the employment point of view. Fourthly, the nation as a whole will suffer from the loss of this technology to exports.
  Mr. Leslie Huckfield: Rubbish.
  Mr. Wells: The hon. Gentleman should go to Gravesend and ask the workers there. They will tell him that it is not rubbish.
  Mr. Cohen: Or to Ashford.
  Mr. Wells: Plenty of opportunities are now being thrown away. There is no doubt, as every other hon. Member who has spoken has pointed out, that we are losing out in the long term. Therefore, I trust that my right hon. and hon. Friends and other supporters of the tunnel project will appear in the right Lobby this evening.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Sir Myer Galpern): Order. Many hon. Members are anxious to take part in the debate—in my opinion, with every justification—and I appeal to right hon. and hon. Members to make their speeches as brief as possible. If they do, I should be able to accommodate all those who have signified their wish to take part.
  8.2 p.m.
  Mr. John Prescott: I welcome the statement made today by my right hon. Friend the Secretary of State for the Environment. As is well known, I have been a keen opponent of this project. I am also a member of the National Union of Seamen, which clearly has an interest in shipping, although my arguments, as hon. Members will know from my speeches, have been largely based on the economic aspect. I have constantly questioned the economic viability of the project.
  My right hon. Friend's statement will be welcomed in the regions, particularly the under-developed regions, and in the ports themselves, including Hull, and by seamen in Dover, because of the consequential effects. I want to consider the consequences of the decision and put to my right hon. Friend the Minister of Transport some questions to which I hope the Department will address itself. The consequences of the decision are of tremendous importance to our transport industries, and I want to look at some of the alternatives available to us, following cancellation of the tunnel project.
  Obviously, in the crossing of the Channel shipping and hovercraft facilities are of vast importance. In large measure these facilities are provided by nationalised industries, particularly British Rail. The consultants' report on the tunnel contained estimates of future shipping prospects if the tunnel was built and if it was not built. It pointed out that if we did not build the tunnel, 40 new vessels would be needed by 1980 and 60 by 1990. In 1973 terms, the investment would total £51 million and £97 million respectively. All that would mean considerable work also for our shipyards, most of which are in under-developed areas.
  British Rail management has been mesmerised by the tunnel. Most of its investment decisions of the last few years have been made in the light of the tunnel. That is particularly true of its shipping services, including hovercraft. Because of the tunnel project, there has been lack of adequate investment by British Rail in its shipping and hovercraft facilities. This has allowed its major private competitors to develop to such an extent that, now that the tunnel is cancelled, British Rail will find itself at a major disadvantage

  1119
  compared with the private sector, which has gone ahead with investment in new vessels and new hovercraft.
  Last year the report of the Monopolies Commission on Channel shipping showed that British Rail ships were twice as old on average as those of the private sector—10 years compared with five. New types of vessel and the technology involved in modern shipping facilities are giving a tremendous advantage to the private sector. Further expansion and boom will take place now in shipping investment. This is particularly so with hovercraft, which British Rail, to its great credit, innovated. But it is now being outpaced by the private sector because of its lack of investment in hovercraft, largely because of its desire for the Channel Tunnel at the expense of all other things.
  British Rail thus faces tremendous problems of investment, particularly in shipping. The management decision was to concentrate on the tunnel area and the tunnel services, and this has been reflected in shipping policy. My hon. Friend the Member for West Bromwich, East (Mr. Snape) and I visited the port of Heysham, where British Rail is to close down its passenger Belfast-Heysham service, handing the traffic over lock, stock and barrel to the private sector, primarily because it would not invest in shipping. It has made agreements with private shipping concerns much to its own disadvantage. My right hon. Friend should look into the question of the Heysham services following the decision to cancel the tunnel and correct the situation by allowing cross-subsidisation. He should do so with regard to the rest of British Rail's shipping services as well.
  A Select Committee is looking at these problems, so I will not go into detail about them. I will merely press upon my right hon. Friend the need to have an urgent review of all the shipping services available. The Department should consider the expansion of our shipping facilities and how this may be done in order that the nationalised industries are not disadvantaged by legislation or tax advantages to private shipping. My right hon. Friend must allow them to make more investment now to meet the challenges that will arise in the next 10 years.
  1120
  The criticisms I have been making have been largely of management decisions. It has always been difficult to make estimates in relation to the Channel Tunnel. Some have made estimates, while others have preferred not to. For the moment the Government's decision rests. However, it is felt by many that this matter will be resurrected in some 10 or 15 years. At the moment it appears that a decision has been taken.
  What I wish to draw to the attention to the House is the management qualities of British Rail. My right hon. Friend referred to the costs of the British Rail link. He referred to the bombshell when it was shown that the estimate of £120 million for the rail link had increased to £360 million within 12 months. That would have meant £500 million for a rail link in 1980. I am working on the basis that the figures change within 12 months. That would have been the approximate cost.
  How can any organisation when considering such a major investment make such a gross and stupid mistake in the costings? It is a matter that the French find hard to understand, and it is something that the House must also find difficult to understand. Indeed freightliner costing has closed the Hull-Liverpool link. I suspect the management qualities of British Rail. I wonder whether my right hon. Friend may be considering Mr. Marsh's contract and terminating it, if not sacking Mr. Marsh.
  Railwaymen are sick of having generals, businessmen and politicians playing railwaymen. They would like to see real railwaymen who have a faith in the railway industry taking part in an integrated transport system. What I have been trying to emphasise is that an integrated transport policy is essential in view of the fundamental transport decision that has been taken. Clearly, British Rail must have more of the share of the traffic. We must utilise our rail system to the full because the congestion on the roads will be greater.
  I appeal again to my right hon. Friend to consider the introduction of quantity licensing so that long-distance road traffic can be taken from the roads and put on to the rails. That is essential. I hope that my right hon. Friend is conducting an urgent review of an integrated transport system in view of this major change

  1121
  in our transportation network. Quantity licensing should be considered in that review and our shipping services should be considered as a crucial link. There should be major investment in that direction. I also hope that the management of British Rail will be given a damned good shaking up.
  8.12 p.m.
  Mrs. Winifred Ewing: I agree with the points made by the hon. Member for Kingston upon Hull, East (Mr. Prescott). My agreement with the hon. Gentleman will save me some time. I promise to be brief.
  When I cast my mind back a long time I can remember, as a university student, having to write an essay called, "The southern drift of industry". The question that we had to answer was, what should be done about the drift? If it was a problem those many years ago—we were asked to deal with the problem of centralisation in the South-East—it is clear that the problem has grown to mammoth proportions. It affects the quality of life of people living in the South-East in all manner of ways. We often hear about the problems of overcrowded roads, pollution and the bad effects on water and the length of time involved in travelling.
  If the Channel Tunnel project had gone ahead the effects of centralisation would have been carried to absurd lengths. It is my party's belief that one of the reasons for there being 12 SNP Members as opposed to a lower number is that when people in Scotland hear about the attention paid to such projects, which in their view have nothing to do with an integrated transport system, they have doubts about their representation.
  I believe that today we all received a copy of a pamphlet entitled "Britain's Road Progress". I do not think that I was singled out for special attention. It is one of the best pieces of propaganda that the SNP has ever produced. Scotland has the lowest number of motorway miles in Europe. The A9 is a disgraceful road. I keep on writing to the Prime Minister asking him to travel on the A9 for his education. The road is a farce. It is an A road on which English tourists lose their way because they cannot imagine that it is an A road. The result is that they keep turning off it to look for the A road. The A9 takes heavy
  1122
  traffic and it is the link to the so-called oil-related development.
  The Scottish people see most of their country cut off from trains of any kind. The old rolling stock is dumped on us for the few trains that run in Scotland. Hardly any sea links are left. We can fly direct from Scotland to only a few places. It is from that point of view that we regard the dropping of the Channel Tunnel as a welcome decision. We take that view on behalf of people who care about an integrated transport system. We also have doubts about the economic viability of the tunnel. They have already been mentioned. I shall not rehearse that point.
  My party has a much better alternative to the Channel Tunnel, namely, an ocean span. As far as I know, that is not a matter that has been debated in the House, but it is one that is well known to Scottish Members. An excellent report was produced after years of study by the Scottish Council concerned with development and industry. The brief concept is that the narrow neck of land between the two great Scottish coastlines is unique and that the deep water on the west of Scotland would make a natural gateway to Europe. Containerisation could take place and the great ships of the world could easily go into the deep water of the Clyde. Its rocky bottom would mean that no heavy dredging would be required. That is a sensible proposition from the point of view of the whole of the British Isles. I commend it to the House as a much more sensible type of study for our great modern technology.
  8.17 p.m.
  Mr. Leslie Huckfield: I speak as one who opposed the Channel Tunnel project from its inception. I convey to my right hon. Friend that none of us who opposed the project throughout feels tonight any smugness or self-satisfaction. We realise that many serious economic planning issues have been raised by the Government's handling of the project. We also realise that many issues of a highly technical nature were involved in the collaboration that took place between Great Britain and France. Such issues have also been raised by the Government's handling of the problem. It is with a note of concern rather than

  1123
  with a note of smug self-satisfaction that I speak tonight.
  I do not speak as any kind of technological Luddite. I have always argued instead that, this being a country with a serious economic situation, it would be wrong to devote the resources involved in the Channel Tunnel project as a matter of the utmost priority and to let the project take precedence over industry, housing, poor schools and various other matters that the country so desperately needs. I have argued that such a priority for this country is wrong at this time.
  I commend to the House the excellent contribution that was made in today's Times Business News by Hugh Stephenson. It exposes some of the myths which have been built up about the tunnel. We have been told that we have to have new investment in cross-Channel facilities. I praise the eloquence with which my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) put forward that argument. But we must accept that throughout the year there is about 75 per cent. excess capacity on the basis of the existing services. I would have thought that when we have throughout the year that kind of excess capacity, and when 25 per cent. of the traffic crossing the Channel does so within a period of about 20 days, there is an argument not for building another fixed link but for re-arranging the present fares structure.
  When we consider the feasibility of price reductions as revealed by the Monopolies Commission, I believe that the Government would have been far more sensible and correct if they had devoted their energies to carrying out the commission's recommendations rather than planning yet another fixed link. We have been told by various quarters that the cost will not be that great, and particularly not to public funds. Of course, we have seen the escalation of the cost of the rail link. The cost to public funds of the rail link plus the public guarantee could have been quite sizeable. I suggest that before this project was through we should have been asked to consider in resources terms a project that would have been analogous to the Maplin airport and seaport scheme, a project analogous to the London motorway box. The House
  1124
  would have been asked to sanction a project that would have totalled about £2,000 million of resources.
  On top of that, there is the railway link. My hon. Friend the Member for Kingston upon Hull, East has echoed sentiments about rail management with which I entirely agree. He knows, as many others of us who have studied this project throughout know, that British Rail had to be told to get interested in the Channel Tunnel, that orginally British Rail was not keen on the tunnel and had to be told from other quarters to become keen. So backward and so incompetent was the management of British Rail that British Rail was almost under orders to get involved and to get keen about this project. That is how forthcoming rail management was about this project until it was prodded.
  Looking in retrospect at the resources cost of the project, what also worries me is the fact that Rio Tinto Zinc and all those others with that rather incestuous relationship with Rio Tinto Zinc made their cost projections on an assumption of an annual rate of inflation of 5 per cent. How can we possibly calculate the cost of a project like this on an assumption of an annual rate of inflation of 5 per cent. when even the National Institute in its most optimistic moments does not go below a rate of 25 or 26 per cent.?
  This project was calculated on the assumption that the exchange rate of the pound would stay stable. It was calculated on the assumption that interest rates would go down. It was calculated on the assumption that the geology would not change. It was calculated on the assumption that the design specifications would not change. There are so many lessons that the Government must learn from Rio Tinto Zinc and the others in the handling of this project.
  But perhaps we should not chastise Rio Tinto Zinc and the others too much, because they openly admitted to all and sundry that their real motive was not to benefit the railway and not to benefit the environment. The real motive of Rio Tinto Zinc and S.G. Warburg and all the other bankers who dominated the Channel Tunnel Company was to make money. The trouble is that an administration in the past was foolish enough to give them a guarantee that it would try to encourage

  1125
  them to make money. Let us be frank about this: the main promoters of this project, in all the intricate relations among themselves, were concerned to make money, to make a profit.
  I cannot see how my hon. Friends can argue that this project would have been beneficial to the environment or the railway system when 80 per cent. of the revenue from it would have come from holidaymakers using their cars. It was even calculated that 75 per cent. of the holidaymakers using their cars would be willing to pay 42 per cent. more for the possibility of saving half an hour crossing the Channel. How could we possibly claim that British Rail would benefit when British Rail had only a 4·7 per cent. stake in the tunnel operating company alongside the 50 or 60 per cent. stake that the merchant banks had?
  Then there is the fact that the British Government had already signed a treaty with the French to say that the British Channel Tunnel Operating Authority and the joint operating authority would not be allowed to discriminate in favour of the railways. It stands to reason that, with Rio Tinto Zinc and all those other people pushing to make money, the operating authority would concentrate on where it could most make money; namely, carrying holidaymakers with their cars on this gigantic underwater turnpike.
  If my hon. Friends think that some kind of road/rail freight switch would have occurred with this project, they must know that the main expansion in freight-carrying capacity to the Continent is happening not between Dover and Dunkirk or between Folkestone and Calais, but from the East Coast ports. When one recognises that Continental rail traffic would not have been able to go any further than London and when one sees the Paddock Wood development by Transfesa, it is clear that with the Channel Tunnel Kent would have become nothing but a gigantic lorry park. Environmentally, the south-east of the country will gain from the cancellation of the tunnel.
  The only way in which we can get a shift from road to rail in this country and the only way in which the financial and freight-carrying performance and capacity of British Rail will be improved is by changing the transport policy of the
  1126
  country. That is why the Labour Party is committed to a policy of co-ordinated and integrated transport investment. I do not think that quantity licensing will do a damned thing.
  This is a resources argument. We are told that the Channel Tunnel would have taken up only 0·3 per cent. of our gross national product in resources. The trouble is that everything we debate in the House would take up only 0·3 per cent. of our national resources. I disagree with my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) because I believe that if we had started on phase II of the project we should not have seen a bypass or a house or a hospital completed in the south-east of England, because we should not have been able to get the labour, or the contractors, or the equipment. That, too, is a resources commitment that the project would have made.
  I hope that the breathing space that we now have will enable the Government to examine afresh all their expenditure. I hope that the breathing space will enable the Government to plan afresh for the diversion of these resources into industry, houses, hospitals and schools. I hope that the breathing space will enable the Government to take stock and bring about the kind of Socialist order of priorities that the country needs.
  8.27 p.m.
  Sir Brandon Rhys Williams: I shall respect the Chair's wish for short speeches.
  The Secretary of State did the best he could to answer the damaging and able attack by his hon. Friend the Member for Liverpool, West Derby (Mr. Ogden), but he did not do well enough. This is a bad day for the House of Commons, because the Government have flouted their undertaking that we should be consulted before a final decision was taken.
  It is a bad day for the people who believe in the competence and audacity of British engineering. It is a bad day for people who believe in the reinstatement of the railways as the major long-term carriers of heavy goods. It is a bad day for people who believe in general in the modernisation of British industry by ambitious investment. It is a bad day for people who believe in the necessity for closer economic integration with

  1127
  the Continent, whether by a free trade area or through the Treaty of Rome. It is a very bad day for people who care about the value of Britain's word in commercial undertakings.
  The public has, I know, been concerned about certain details of the Channel Tunnel scheme. Many must have wondered whether the particular arrangements with the companies matched the needs of 1975. As the representative of Kensington, I have become convinced that a great deal more thought was needed about the proposals for a terminal at the White City. But these were problems that could have been overcome.
  The Government have said very little to the House about the alternatives, and the public are bound to wonder whether this decision will mean more juggernauts, more delays, more investment in secondary projects, more unnecessary expenditure—and Britain becoming obsolete. The Secretary of State said that this was an economic decision. Certainly that is the reason for the panic action that the Government have taken.
  But Britain's chronic weakness is the timidity of our investment, both public and private, over many years. How will this decision help?
  Many people have listed the Channel Tunnel among what they call white elephants, such as Maplin. I have always felt that the tunnel is in a quite different category, because the traffic is already there; it can be seen to exist and to be expanding. We have to ask whether this is a sample of the way in which the Government intend to solve our economic weakness. We have read a lot about the Healey plan and the approach to the International Monetary Fund. The Government are planning to pile debt on debt by their recycling of petro-dollars. But they will only be able to borrow on terms.
  I cannot help wondering whether this sudden announcement, so soon after the Chancellor's return from Washington, means that the Channel Tunnel has had to be offered up on the altar of the International Monetary Fund. Some hon. Members on the Government side may not recall the fuss there was in this House from their own benches when the IMF began to investigate their Government's investment projects in the 1960s. But
  1128
  they have all that coming again. It is ahead of us now. If they are to depend on borrowing from international institutions they will have to do what the officials of those institutions think is right. Cutting major investment projects may well be one of the things which has been dictated to the Government.
  The Secretary of State leaves us with this question: is he the sort of man who is prepared to stand by the things in which he believes? I am afraid that the way in which he has tackled this decision does not give me confidence in him. We know that he is a committed European. We know that he has believed in and fought for this project. Yet he now seems so read to abandon it, so suddenly. It is not enough to hint, as he did, that it might be revived later. If he believes in the tunnel but has lost his battle, his proper course is to resign.
  8.30 p.m.
  Mr. Dennis Skinner: I am relatively pleased with what I heard on television and radio over the weekend. That is not to say that I was listening-in every half hour. I was against the tunnel principally, because of the resources question, which has been adequately covered by my hon. Friend the Member for Nuneaton (Mr. Huckfield). Notwithstanding what my right hon. Friend had to say, I am certain that the transfer, or release of resources will, perhaps not marginally, assist him in his other great task, which I know he wants to begin as quickly as possibly, namely, the building of more houses and the releasing of resources to meet other social needs.
  Even though we do not want to overstress that argument, I am sure that my right hon. Friend will agree that this marginal shift of resources is bound to help. I am relatively pleased with the decision because it will, marginally, shift the regional imbalance. Again, that is not to say that we should over-egg this particular pudding, because it will be extremely marginal. In government, as in most other things, it is the marginal shifts which are the most important and significant. It is rare, in any strata of society, to get a fundamental shift. Most of the changes that occur are marginal, even if it is a miners' strike bringing down the previous Government. At the beginning the decision is marginal.

  1129
  I have been an anti-Marketeer from the outset, unlike some hon. and right hon. Members who tend to use the European argument according to the prospects of job preservation or job improvement, and so on. While my anti-Market views have not become interwoven with prejudice they have influenced my thinking just a little. To that extent I am pleased with what my right hon. Friend has had to say.
  The most important point about the tunnel was that it would have been a private venture. That does not mean that it would not have been using vast amounts of taxpayers' money. It would have used a lot of such money, seemingly without any accountability.
  Mr. Ogden rose—
  Mr. Skinner: We have not got much time. My hon. Friend has had a fair crack of the whip. He knows much better than I do the people who would benefit. I have never seen any of them. I believe that this decision helps back benchers. I well recall that during the period of this Government we were engaged in a batle to establish a position on the Channel Tunnel and obtain its cancellation as quickly as possible. At that time we were beginning to realise that in the mind of the Secretary of State and in the minds of several prominent members of the Government there was a degree of hesitancy. Therefore, it needed a push, and some of us were prepared to push reasonably hard.
  The Guardian compiled a list of Members of Parliament—it did not include me—who were elected at the February and October elections and who had had the gall to vote against the Government on this matter. Perhaps that newspaper will record tomorrow that those Members who decided to take their parliamentary lives into their hands should get some credit for rescuing my right hon. Friend and his colleagues from the collective responsibility which was creating more than a small degree of disturbance in their minds.
  It is perhaps disturbing that this matter was decided in an almost continental fashion over the weekend. However, those Members who go into the other Lobby tonight had better bear in mind that this is the way in which such matters
  1130
  are decided on the Continent. If the British people are brainwashed and a lot of money is lavished this year on propaganda to keep this country in the Common Market—I hesitate to anticipate the result—hon. Members had better get used to less consultation and more continental-style methods of announcing decisions, because the Ministers will take charge from beginning to end.
  The erstwhile leader of the Scottish National Party—the hon. Member for Moray and Nairn (Mrs. Ewing)—said that the pathway to Europe would be through Scotland and not the Channel Tunnel. I hope that the Scottish nationalists and, perhaps more important, the whole of the Scottish nation will bear that sentence in mind, among all the trivia which the hon. Lady spoke. She is not as anti-European as most of us thought.
  I welcome the remarks of my right hon. Friend the Secretary of State—[HON. MEMBERS: "Relatively."]—relatively. They were a shade better than the remarks which he made on the Clay Cross question.
  8.39 p.m.
  Mr. John Moore: I am sure that the House will be happy if I do not endeavour to continue the lecture which members of the Parliamentary Labour Party obviously have had on many occasions. My colleagues do not need such dissertations, although I am excited to know that I am in the company of another ardent pro-European.
  Since becoming a Member, I have been intimately concerned with the Channel Tunnel project. It is a vital constituency matter for me. I became a Member with the belief, and I still believe, that at some stage in our history we should have a land link with the Continent. However, properly, I have to take cognisance of the views of my constituents.
  I was a particularly ardent attender of the meetings of the Standing Committee and I became increasingly distressed at the extraordinary lack of thoroughness in the work preparations behind the basic statistics for the rail link. It would be almost tragic for us as a society to embark on a similar national project in the future on the basis of such appallingly badly researched work. At our final meetings in July we were still discussing the link

  1131
  in terms of £120 million. It is destructive to democracy to discuss the matter on that basis and to be told on 26th November that £373 million was not adequate in terms of certain environmental factors relating, for example, to my constituency.
  I am delighted that the Secretary of State is to allow the Cairncross Committee to finish its work. It seemed as it in the Standing Committee the sensible attitudes of my constituents were being propagated and that there was a prospect that the citizens of Croydon would not have their houses torn down in the course of the construction of the tunnel. I hope that the Cairncross Committee's report will eventually vindicate the citizens of Croydon.
  There is another major facet which needs attention and study for the future. As a newcomer, I found in studying and debating the Bill that there were extraordinary complexities in hybridity. My constituents have suffered from the complexity that surrounds the Land Compensation Act 1973 in its relationship to nationalised industries. New Clause 6 moved in the Standing Committee by my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) merits further attention.
  On the basis of the cost that even now has not finally emerged, my view is that in our current economic state the project is not commercially viable. The £373 million which has been mentioned for the link is not the final figure. We must remember that funds would have to be raised for the project, funds which would probably be taken away from other social projects. I do not see how the Government could recommend such tax-raising at this juncture in our history.
  The worst possible outcome would have been postponement. My constituents, and the constituents of other hon. Members through whose area the link was likely to run, would have been more gravely affected if no decision had been announced. I congratulate the Minister on making a decision now. I trust that the decision will have the effect of removing the blight from which my constituents suffer. I hope that the right hon. Gentleman will be more emphatic in his final comments than he was in answering
  1132
  questions on his statement. His anwers to some questions might have the effect of creating permanent blight. I hope that he will make his and the Government's attitude slightly more emphatic.
  Mr. Crosland: May I make quite clear on the question of blight that there is no possibility of the project being revised within a time scale which could conceivably allow the blight problem to continue.
  Mr. Moore: I thank the Secretary of State for that comment. Those who are on the route of the Channel Tunnel will now be fully aware of the emphatic nature of his final remarks.
  8.45 p.m.
  Mr. Peter Snape: I declare my interest as a member of the National Union of Railwaymen and Secretary of the All-Party Committee on the Channel Tunnel.
  I wish to make clear at the beginning of my remarks that I disagree with my right hon. Friend's decision to cancel the Channel Tunnel project. However, I was grateful for his contribution to this debate, which was certainly much less flippant than his attitude earlier this afternoon, when he seemed to be more interested in the prospect of convolutions of view within the Tribune Group than in attempting to answer the questions which were put to him from various parts of the House. Perhaps I should inform him that the next meeting of the Tribune Group will be held on Monday next at 4.15 p.m. I am sure that its members will welcome the right hon. Gentleman, as I hope they will welcome me to that meeting.
  The hon. Member for Southend, West (Mr. Channon) appeared to take the view that the Secretary of State for the Environment was blaming the Channel Tunnel companies for the cancellation of the project. Having heard the statement made by the Secretary of State on 11th November, I do not see why the hon. Member should be surprised at the situation in respect of those companies. However, does he think that the situation has altered significantly since 11th November in such a way as to bring forward the bombshell of today's announcement? I hold no shares in any of the private companies, but I do not find it surprising that

  1133
  private companies are not prepared to accept what seems to be a never-ending saga of delay and indecision by the Government.
  I take a different view from that of my hon. Friend the Member for Leeds, South-East (Mr. Cohen), who absolved from blame my right hon. Friends the Secretary of State for the Environment and the Minister for Transport. Having heard both of my right hon. Friends on this topic over the past year or so, I have taken the view that they approach this project with the enthusiasm of a couple of Trappist monks advocating birth control. They have done their best to denigrate the feasibility of the project on every occasion, both at meetings of the Parliamentary Labour Party and on the Floor of the House.
  I do not blame the private companies for deciding that enough is enough. Perhaps we should look at the question of alternative investment before blithely accepting the decision about cancellation. Some of my hon. Friends are the first to complain when Ministers agree to matters without prior consultation with the House or their own political party, yet this afternoon they appeared to greet my right hon. Friend's announcement with delight. They cannot have it both ways. Either there is consultation in the House or in the ranks of the Labour Party or Conservative Party, or there is no consultation. It is all very well to greet with delight a decision made out of the blue—even though news of it has been leaked over the weekend—but there are other considerations to be borne in mind.
  On the question of an alternative, my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) said that £60 million would be required by British Rail's Shipping Division alone between 1975 and 1980. The Shipping Division is a comparativey minor company in terms of cross-Channel activity. A great deal of extra investment will be needed in the privately-owned companies. Anybody who has examined the balance sheets of the privately-owned companies or has read the minutes of the Channel Tunnel Committee will realise that the British taxpayer will have to pay for new investment because the private companies are too shrewd to pay British tax.
  One in particular—I think it is the largest in the cross-Channel business—is
  1134
  European Ferries, which was advertising in the newspapers over the weekend and in the share tip columns that these were the shares to buy, and that with more than 200 shares one could have half-price travel to the Continent. This is the sort of company that today's decision will benefit.
  The roll-on roll-off car ferry business across the Channel is increasing all the time. There was an increase of 20 per cent. in 1974 and all the indications are that it will continue to increase in the future. Surely this is the very business that would be captured by the railway industry with the Channel Tunnel link. I am pleased that my hon. Friend the Member for Nuneaton (Mr. Huckfield) has returned to the Chamber, because I find it surprising that he cannot understand the fact that the roll-on roll-off business could so easily be attracted by a through rail communication to the Continent.
  The hon. Member for Moray and Nairn (Mrs. Ewing), who has left the Chamber, made one or two points about the Scottish transport system and Scottish railway men. I wonder whether she bothered to consult the Glasgow and West Scotland District Council of the NUR—which could tell her a few things about integrated transport and the railway industry—before she criticised the Channel Tunnel so bitterly, because it is quite apparent that she is badly in need of some advice.
  The freightliner network in this country, as we have recently heard, is being run down. My hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) raised the question of the Hull-Liverpool freightliner service before Christmas. It is a fact that freightliners are not particularly competitive over compartively short distances. Here was an opportunity for freightliner services all over Great Britain, including Scotland—and there are depots there—to have through links to the Continent. It was a prime opportunity for removing heavy lorries from the roads of England, and Kent in particular, which are cursed with them at present. I have listened over the past year to objections to the high-speed rail link, and now the latest British Rail proposals. I wonder whether some of the people who have been active behind the scenes in promoting the justifiable fears of the residents are not more interested in

  1135
  seeing the railway link cut out of the project. Even if the high-speed railway link were used to its maximum capacity, the adjacent residents would hear nothing for 50 minutes in every hour.
  In my constituency I have two motorways and a main line railway link. There are also the largest marshalling sidings in the Midlands—at Bescot. I would willingly show any hon. Member a thick file of correspondence on complaints about motorway noise, but I have yet to receive one letter of complaint about noise from the railway link.
  I hope that hon. Members on both sides of the House will not have reason to regret the decision when the motorway planners come forward, as they surely will, with their proposals to take away the expected growth in traffic. The excuse will once more be trotted forth that this is the only way of removing heavy traffic from towns. I hope that hon. Members will not have cause to regret what is being done today.
  There were many potential benefits to British Rail arising directly out of the tunnel. Despite the misgivings of my hon. Friend the Member for Nuneaton, the White Paper issued by the previous Conservative Government listed the benefits. Given the time situation, I shall not repeat them tonight, but they included the growth in passenger traffic and motor-rail traffic and, above all, in freight.
  Had the previous Conservative Government still been in office we might well have ended up with the worst of both worlds. They were determined to have a Channel tunnel. I very much doubt whether, under the original proposals, we would have had any sort of railway link. I am sure that would have been the worst of both worlds. Moreover, to see this project destroyed tonight for the benefit of very marginal, short-term financial gain would be disgraceful.
  I have listened to speeches dealing with the use of resources. My hon. Friend the Member for Bolsover (Mr. Skinner), in one of his accurate, factual and passionate statements, mentioned that he would prefer to see the construction of houses, hospitals, schools and other such buildings, of which this country is so short. I agree that one cannot have it both ways.
  1136
  One would think, listening to my hon. Friend and other hon. Members, that the building industry was working flat out now and that we would be diverting resources from eminently worthwhile projects.
  We know that the building industry is the latest of the lame ducks in the queue for a public hand-out. Let us have no nonsense about diverting resources which could be used elsewhere. We would not be doing that. These resources are very much under-utilised now and will be so in the future.
  The management of British Rail has received its share of hidings in this debate. Far be it from me to seek to defend it. I subscribe to the view that the top management of British Rail would be hard put to run a prosperous chip shop, let alone manage the railway industry.
  However, on the question of the high-speed rail link, it is fair to British Rail to point out that the line of route, the amount of tunnelling necessary, and the different options available are being changed time and again. One cannot expect accurate estimates to be given in that situation.
  Turning to the question of the contrast between the way we treat the railway industry and other industries, according to the Sunday newspapers, £2,600 million has been given in public subsidies to the aircraft industry alone over the past decade. Are we now to see the one worthwhile new railway project sacrificed for the benefit of the Concorde and the MRCA? It seems to many of us that that is the case.
  Today is a sad day for the British people, for the future prospects of British industry, and for British Rail in particular. It is an even sadder day for those railwaymen who believed the Labour Party election manifestos of the last two elections, which promised a greater share of public resources for the revitalising of the railway industry. It appears that there is to be no revitalisation in the near future.
  I hope that tonight the Minister for Transport will reflect upon the let-down of the future prospects of British industry, investment, and trade. The Government have let down those railwaymen who gave their support to the Government and the Labour Party.
  Mr. Deputy Speaker: I remind hon. Members that they should be as brief as possible so that everyone wishing to speak can be accommodated. It is proposed to begin the winding-up speeches at 9.30 p.m. thanks to the generosity of the Front Bench speakers who have given up some of their time. I appeal to hon. Members to take five minutes apiece.
  8.59 p.m.
  Mr. Stephen Ross: I believe that the Secretary of State made a very good case for his decision when he opened the debate. Hon. Members on the Liberal bench consistently requested over the past 12 months that the ratification of the agreement with the French should be delayed. It will be remembered that we said so in the House and in Committee. We asked that this should be done. We were told time after time that it was not possible.
  It has been obvious to us for a long time—I agree with the hon. Member for Croydon, Central (Mr. Moore)—that our economic situation and the soaring rate of inflation could not permit construction to proceed at this time with the sort of involvement to which the Government were committed.
  It is a fair criticism to make that the discussions the Minister referred to in his statement should surely have started much earlier—that is, after 26th November—both with the French Government and with the two Channel Tunnel companies. The Minister's undertakings to the House, which were referred to by the hon. Member for Southend, West (Mr. Channon), have been rightly criticised. This debate should have taken place before the decision was announced this afternoon.
  We are entitled to ask whether the companies now consider that the costs are so prohibitive as to make the project completely financially unattractive to them. Those of us who made a visit to the Channel Tunnel project at Folkestone last spring were told by one of the directors of the company that inflation was then soaring so much that those concerned had great doubts about whether they would be able to proceed if inflation continued at that rate. We all know that it has.
  This afternoon we were given a figure of the costs to date. I did not hear the reply to my question whether the French Government would meet half those costs.
  1138
  I was glad to hear the Minister say that the Cairncross Committee will continue with its deliberations and that the findings of the committee will be published. Does this apply to the British Railways study of the alternative rail link which, if Press reports over the weekend are to be believed, are reaching an advanced state? As I understand it, British Railways are to use existing rails and it will not involve blight, except possibly in an inner London area.
  We rightly supported the abandonment of the earlier high-speed route. Did the hon. Member for West Bromwich, East (Mr. Snape), who I understand is a member of the National Union of Railwaymen, see a film on television the other night about the Japanese experience of these high-speed routes? People were depicted in that film who had suffered considerably and were bitterly opposed to what their Government had allowed to be foisted upon them.
  We on this bench have always taken the view that a public inquiry should have been held long ago at which all the alternative cross-Channel routes could have been openly discussed and the evidence properly cross-examined and that the matter should not have proceeded in this way, not with the Cairncross Committee.
  Unfortunately, the hon. Member for Maidstone (Mr. Wells) has left the Chamber. He made a violent attack on the hovercraft. This is just one of those developments that Britain has allowed to slumber but which the Americans have now taken up and they are building 2,000-tonners. We have a little of the offshoot from them. I use the hovercraft service from Cowes on the Isle of Wight to Southampton consistently, week in week out. Apart from when my right hon. Friend the Leader of the Liberal Party is on board, the hovercraft never breaks down.
  In principle we still consider that a rail-only tunnel is the right concept. This is a concept which the Secretary of State himself supported up to about a year ago. I hope that this will prove to be the case. I think that the evidence for it will prove to be more and more conclusive as the price of oil continues to soar.
  We support the Government's decision, despite the bad manner in which it has been brought to the House, and welcome

  1139
  the Secretary of State's assurance that the works already carried out will be looked after on a care and maintenance basis. I hope that this will apply also to the boring machine.
  I hope that the minutes of the Select Committee will be read with care. I hope that the hon. Member for Faversham (Mr. Moate) will have a say in these matters, because both he and I have some responsibility. He pointed out that the costs of this tunnel could have been 30 per cent. less if we had not gone for the rolling motorway idea. That was a concept which we on these benches consistently opposed. Had we gone purely for a rail-only tunnel, the cost would have been much less.
  I urge the Secretary of State to reconsider the whole project on the basis of a completely integrated European rail system.
  9.5 p.m.
  Mr. Anthony Berry: May I begin by saying that I strongly agree with my hon. Friend the Member for Croydon, Central (Mr. Moore) that the Government should have a close look at the new clause which we moved in Standing Committee. We might well have won a Division, but it would have rehybridised the Bill and made a complicated Bill even more complicated.
  One of the most interesting things about this debate is that it was initiated by the hon. Member for Liverpool, West Derby (Mr. Ogden), who is not a Conservative Member and does not sit for one of the constituencies in the South-East which are particularly concerned with this project, but is a Member for the great city of Liverpool in the North-West. This fact shows that the concern about the Government's decision is widely felt and that many people all over the country will be affected by a very unfortunate and damaging decision, particularly as it comes at a time when, on both sides of the Channel, great steps forward are being made on the tunnelling itself.
  I visited the sites on both sides of the Channel in August and I saw men of great experience and skill working under very difficult conditions, with water falling on them but nevertheless determined to carry on with the work which they thought was in the best interests of the two countries. When one saw the
  1140
  old French tunnel of 100 years ago, extending a little way under the Channel, one was reminded that it was Queen Victoria who stopped the old tunnel, and I wonder what hon. Members opposite will think when in future they are named with her as being the reason for stopping this tunnel.
  The Government's attitude has been very confusing. Future historians—and the Secretary of State is a historian—will find it difficult to understand what the Government have been up to. In December 1973 they voted against the Second Reading of the Bill. In April 1974 the Minister for Transport reintroduced the same Bill, and he gave what seemed to be convincing reasons for doing so. The basic difference was that he wished to have more time for a report. He set up the Cairncross Committee. It took several months for that committee to come into being. Nevertheless, we accepted that the whole basis of his argument was that there were technical reasons for continuing with the Bill but that the Government wanted a further report and they were going to ask these wise men to produce one, and now they have not waited for it.
  Incidentally, I do not understand why the October election has been given as an excuse for the postponement. After all, the period of the election was one when we are not sitting here anyway. Therefore, I do not see why we could not have resumed consideration of this matter when we came back after the election.
  I feel that the Minister for Transport has been let down by the Cabinet. He gave undertakings which he cannot keep. The Under-Secretary, who is not here tonight, also gave definite promises that after the Cairncross Committee reported and before the Government had come to a decision we would have a debate in Parliament, and this has not happened.
  In addition, there is the British Rail decision. I regret giving up the idea of the high-speed train. Nevertheless, I recognise that Government money was involved. It is understood that there is a shortage of money and that the idea had to be put back for the time being. But what is going to happen in the future? Are we going to have these new roads which are so vital not only in Kent but in London? The South

  1141
  Circular will be even more vital than before, and that will incur Government expenditure. If we are not careful, the road problem will be worse than before, and so will the railway problem.
  It has been suggested that there is something wrong in the Channel Tunnel company wishing to make profits. But the Channel Tunnel company consists, among others, of pensioners and such people. They have all put money into the company. The company wants to continue. People have faith in it, in spite of the increased costs. Yet the Government, and the hon. Member for Nuneaton (Mr. Huckfield) in particular, think there is something wrong in making profits. I wish that British Rail, the National Coal Board and the National Bus Company could make profits. Life would then be very much easier for many of us. I just cannot follow it.
  We have had many debates during the past 18 months on all the prospects for this great enterprise, which could, I am sure, be a great thing for our country. The Government have come to a unilateral decision without the agreement of the French Government or of either of the Channel Tunnel companies which have given of their expertise and money to take the project forward. They have done it also without Parliament. This is a bad day. The Government have made a bad decision for Britain.
  9.10 p.m.
  Mr. David Crouch: This is a tragic day in the history of our country. The Secretary of State has made a wrong decision. Although he may be confident, comfortable and even smug in believing that he has satisfied the short-term requirements of the financial problems pressing on his Government today, I believe that, as Secretary of State for the Environment, he will rue the day when he so damaged his reputation as to make this decision.
  Britain is not moving forward today, and the principal reason is the attitude of responsible Ministers and statesmen such as the Secretary of State for the Environment. The Government are not taking the right decisions. Somehow, they duck the issue time and again. As a result of what we learned through a leak on Friday, we now know that on yet another problem the Government have ducked the
  1142
  issue and failed to match the real demands of Britain's needs in a few years, in even so short a time as 10 years from now.
  How do the Government imagine we can continue our trade with Europe, our greatest trading area in the world, without a communications link in 20 years? Communications in 20 years will not be by vehicles propelled by oil. They will use some other energy, and that other energy will be electricity generated, I suggest, by either coal or nuclear power. We are not to have that link. Yet the right hon. Gentleman proudly says that there will be no blight because there will be no tunnel. It is completely out of his mind and his plans. It is a tragic day when Ministers take Britain backwards. We should have Ministers and a Government trying to take Britain forward against all the odds and against all the costs. A tragic decision has been made.
  I am speaking nationally at the moment when I suppose I ought to be speaking regionally. In my county of Kent there will be many people dismayed to think that I am supporting the Channel Tunnel project. But I do support it. I am still prepared to go ahead with the tunnel. I remain convinced that we need this link for our trade with Europe because, whether we are in the Common Market or not—and we are in at the moment—we shall still carry on trading at an ever-increasing rate. In the last three years the traffic build-up on Kent roads to the Channel ports has been rising at over 40 per cent. a year, and it will go on rising at that rate.
  Speaking regionally, or, to call it that, even parochially, I asked the Secretary of State this afternoon whether he could give an assurance that the M20, which is part and parcel of the link with Europe, would be built, and he gave me such an assurance. I must tell him that the projections by his Department and the Kent County Council have already shown that by the year 1990–91 the traffic going to the Channel ports will be shared almost equally between the M20 and the A2, the latter being an A road, not a motorway.
  To this day the Government are talking of modernising the A2, which at present carries 92 per cent. of the continental traffic to Europe and goes through my

  1143
  constituency—right through it, there not yet being a bypass—and the Minister for Transport proposes that that A2 road should be modernised by the addition of single carriageway routes round Canterbury and into Dover. That is the most ridiculous suggestion to come from any Government—that, as we look to the future of our major trade route, we should "modernise" it, as it is called, with single carriageway routes. It is just not good enough. It is a joke, a bad joke, a joke in bad taste.
  The Minister must think again. He must go back to his Department. If he and his right hon. Friend cannot look ahead with the Channel Tunnel project, at least let them look ahead and recognise what disaster has ensued during the past 20 years from the non-planning of roads in Kent. This time let them think of true planning, and of planning not just roads in Kent but roads out of Britain into Europe. That is what we must have. Let them think big, and this time do the right thing.
  9.15 p.m.
  Mr. Tim Rathbone: The Secretary of State made one point absolutely clear this afternoon and again this evening—that this was an economic decision, not a political one. It is very difficult to see it in that light, however, since the decision seems to have been taken entirely in a vacuum.
  I wish to concentrate on the cost of not having the tunnel. How in the future are we to cope with some of the things mentioned by my hon. Friend the Member for Canterbury (Mr. Crouch), such as the travel requirements of British people travelling to the Continent and beyond? Pre-energy crisis projections showed a fourfold increase expected between 1970 and 1990. We can expect 1975 to be below expectations, but after North Sea oil comes on flow we can expect travel to be up to expectations in 1980, and beyond by 1990. One can hypothesise on how London would be operating today without the Underground or how Merseyside would have developed without the Mersey Tunnel. Considering those cases we can postulate how Britain will prosper without the Channel Tunnel.
  My second point concerns how we shall meet future shipping requirements. In
  1144
  the last seven years, according to the Government's figures, overseas trade showed an increase from £4 billion seven years ago to £14 billion now. This trend will continue—sometimes increasing, sometimes slackening. The figures take no account of shipments through Europe to destinations beyond which without the tunnel will have to go on top of the water rather than beneath it, usually by a more circuitous route which will increase inconvenience and, very often, the time and cost.
  What are the Government's plans to meet these increasing requirements? How is the country to pay for better shipping, particularly shipping through the British Rail shipping division, better rail links to those ships, better port facilities, and larger grants for improved and new road links to and within the ports? I have raised this final point more than once with the Secretary of State and some of his hon. Friends as it affects Newhaven. How are we to afford better inland road systems, trunk roads to relieve the bottlenecks and the byways which juggernauts tend to take on leaving the ports, more and better bypass routes and relief schemes such as the sadly and repeatedly delayed relief scheme for South Street, Lewes? This route assumes a new dimension because it is part of the major road from Newhaven inland.
  Immediate action is needed. An urgent review of resources and their application must be made. The road and rail links are very real social expenditures to people who are involved closely with them. There must now be, in the light of this sad Government decision, a reassessment of resources. The decisions and reactions which flow from it must be made part and parcel of a package which will be in the interests not only of the South-East and Sussex but of the nation as a whole.
  Several Hon. Members rose—
  Mr. Deputy Speaker: Order. Three hon. Members are still rising to catch my eye. I think I can accommodate all three by 9.30 p.m. if each is brief.
  9.20 p.m.
  Mr. Roger Moate: I welcome the Government's decision. I constantly voted against the Channel Tunnel Bill. I welcome the decision for financial reasons, as I am sure that it is not only

  1145
  right but inevitable that sooner or later escalating costs—rising interest charges, the cost of rail links, and so on—would have meant cancellation, and the sooner it came, the better.
  I also welcome the decision for environmental reasons. I accept that there are many different arguments on the matter, but I believe that on balance it will be beneficial to Kent. The decision is also welcome in the context of the Minister's desire to see cuts in Government spending. I hope that it is an earnest of other things to come from other Departments.
  Although I constantly opposed the Bill, I have been very much a supporter of a rail-only project. Therefore, I can well understand the sense of disappointment and frustration that will be felt by all those working on the planning and construction of the tunnel and those in the county councils—Kent County Council, in particular—who have worked so closely with the Government on the project. It is a tragedy that the whole project has been approached as it has been, but I am sure that the decision is absolutely right, in view of that approach.
  Although there are arguments and disputes about the environmental benefits—we are all crystal-gazing when we make such judgments—I am sure that in the south-east of England tonight there will be far more rejoicing than regrets.
  But the Secretary of State and the Government are not immune from the criticism levelled at them of the way in which the matter has been handled. They are to be criticised for having abandoned with such alacrity pre-election promises about a rail-only link. Secondly, they are seriously to be criticised for the six months' delay in setting up the Cairncross Committee. If they had set it up promptly, as they promised, the committee could well have reported by now, and the House would have the benefit of its advice. Having set up the committee, the Government disregarded it and cancelled the project before receiving its advice.
  We are confronted with a cancellation at this eleventh hour. There must have been negotiations on the question of abandonment over recent weeks, and an announcement could have been made last week to give the House prior notice. Yet we have the pretext of cancellation on the grounds of technical and contractual
  1146
  difficulties. I am sure that the French Government are right when they say that the matter could have been soluble, given the political will. To hide this simple policy decision behind the pretext of legalities is less than helpful and honest to the House.
  The panic way in which the cancellation has been carried out is extraordinary. At lunchtime today we were told that the project was dead. Then we were told that it had been put in mothballs. There is a significant difference of emphasis for people living on the route and in the area concerned. It was later confirmed that the project is dead. That is very good, but at lunchtime the Government did not know whether Cairncross would continue. This evening we were told that it is to continue. That shows an extraordinary rush and confusion in the Cabinet and in Government circles.
  There is much more that I should like to say, but two of my hon. Friends wish to speak. Therefore, I shall simply make two other serious criticisms of both Governments. The first concerns the whole appalling story of British Rail's involvement in the project. My hon. Friend the Member for Croydon, Central (Mr. Moore) is right. It would be difficult now to proceed on the basis of the new costs that British Rail is putting forward. How can we be sure that the rumoured £260 million will be anywhere near right? Neither the House nor the Government can be expected to proceed on such inadequate researches and poor estimating.
  The other lesson I draw from what has happened concerns the absence of a public inquiry on one of the most important planning proposals ever to come before the country. There have been endless discussions and debates, and many documents have been produced, but they are no substitute for a proper public inquiry, where the documents can be scrutinised and those involved can be subjected to tough cross-examination, with the presentation of other options, as happened with the Roskill Commission on Maplin, for example. I hope that if every such a project is reviewed there will be a far better approach in terms of a public inquiry.
  I welcome the decision, and hope that many of the other points raised by my hon. Friend the Member for Canterbury

  1147
  (Mr. Crouch) about roads and the improvement of port facilities will now receive close scrutiny by the Government, and that the Government will approach those matters with understanding.
  9.25 p.m.
  Mr. A. P. Costain: As the Channel Tunnel project involves my constituency I must express disappointment that my time is limited in which to make the points that I believe should be made. I am reassured by a letter that I have received from the Minister for Transport which says that he will see me and discuss the matters that concern Folkestone. That gives me some relief, but it does not prevent me from making criticism of the way in which the operation has been carried out. Such criticism has been set out in terms by many hon. Members.
  I have lived with the Channel Tunnel project in my constituency for 13 years. Nine years ago the present Prime Minister agreed with the President of France that the Channel Tunnel would be built. It is noticeable that in his statement the Secretary of State was careful to ignore that side of the situation.
  I wish to point out one or two matters to those who are delighted that the Channel Tunnel project is being stopped. If it is to be stopped—and we understand once and for all that that is the position—what will happen to the M20? The Secretary of State has said that the M20 will be built. At present there are seven lines for the M20. The Shepway Corporation is extremely worried, because the M20 now finishes in a housing estate of the old Folkestone Corporation. There are no links to the docks. The road joins a single carriageway road and no proposals have been put forward for an extension to the docks.
  We know from our own experience that the British Railways Board built a dock at Folkestone without any reference to the road routeing to it. The Folkestone residents are entitled to be told clearly what the planning prospects entail. That applies not only to Folkestone but to Hythe. Hythe is a narrow town. We have been waiting for eight years for some ideas to bypass it. All the time we have been told that it has not been possible to make a decision, as
  1148
  the Channel Tunnel has not been agreed. May we be assured that progress will be made with a Hythe bypass? May we be assured that the car parks will be considered? Only today we heard that two ferries collided. It seems that every time the Channel Tunnel is discussed something happens to a ferry. On the last occasion, a bomb was found in the harbour. May we be assured that that will be looked after?
  Further, may we be assured that the Cheriton site will not be used as a car park? There were arguments for using it as an entrance to the tunnel. It was said that there was no need for the car park. I should like to continue for longer, but I am not able to do so. What will happen to the Channel Tunnel entrance site?
  Perhaps I may introduce a little humour to the debate. I suggest that the site would be a very good hotel site and that the tunnel would make a marvellous indoor golf driving range. It would bring the Japanese into the country. Why not a luxury hotel and a golf driving range down the tunnel? That would provide a fascinating experience.
  9.28 p.m.
  Mr. Robert Adley: Although I have only two minutes, I must pay a tribute to my hon. Friend the Member for Folkestone and Hythe (Mr. Costain). He has been most concerned throughout the project to look after his constituents. I am sure that he must be in somewhat of a turmoil today.
  I shall start and finish my brief speech with a prophecy. The first is that many people, particularly those in Kent and South-East London, will now be waving the flags. Will they be doing so in five or 10 years' time? I suspect that it will be the Chicago Midway and the O'Hare story once again.
  I stood shoulder to shoulder with the Secretary of State on the question of Maplin. I am afraid that we shall have to part ways today. To me it is extraordinary that a Socialist Government should be taking a decision which is bound to bring delight to the private ferry operators and inordinate dismay to British Rail. I deprecate the uncalled-for and unwarranted attacks on Richard Marsh. They were something which we could have done without. In the year

  1149
  in which Britain will celebrate the 150th anniversary of the Stockton and Darlington railway, the Secretary of State's decision will be a significant but unfortunate milestone in the history of the railways. The tunnel represented for British Rail its greatest single development project since electrification. The Secretary of State has a great deal to answer for in the way he has kicked British Rail very firmly in the backside today.
  I conclude with another prophecy. The project may be dead, or in mothballs. I suspect that dead it may be, but it will not lie down.
  9.30 p.m.
  Mr. John Peyton: I will not follow my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) into the realm of prophecy. This short debate is not really on the merits of the tunnel; we have discussed them often enough before. It is on the Government's attitude and handling of the matter. Listening to the Secretary of State's statement today, having pondered over the leak we had a during the weekend and heard what the right hon. Gentleman and his supporters have had to say, I conclude that the Government have stumbled into this decision with a mixture of relief and irresponsibility.
  The hon. Member for Liverpool, West Derby (Mr. Ogden) has been gallant and totally consistent in his support of the project from both sides of the House, and on a number of occasions I have had good cause to acknowledge his courage and honesty in pursuit of what he believes. I do so again today. I echo his first question: what is the opinion of the House of Commons on this matter? I regret, as he did, that we should have had our first taste of the news from the weekend Press.
  It was right that the hon. Gentleman should ask: what of the earlier votes which have taken place in the House of Commons, all of them in favour of the project, now to be lightly waved on one side? What about the undertaking that the Secretary of State gave on 26th November that a debate would precede and not succeed a decision? I ask the Minister of Transport to apply himself in particular to the question of what is the opinion of the House of Commons on the matter. Does he care?
  1150
  Secondly, what are the costs of the alternatives? If the Government knew what the costs of the alternatives were, why did they ever set up the Cairncross Committee? If they did not know, why did they not wait just that extra month until Cairncross had reported and filled the gaps in their knowledge?
  The Secretary of State told us that he had fought to keep the project alive. The hon. Member for West Bromwich, East (Mr. Snape) compared the right hon. Gentleman's fighting with the enthusiasm shown by two Trappist monks advocating birth control. I have no doubt that the hon. Gentleman can reach down into a depth of experience that I cannot rival, but at least he gave some proper tinge to the enthusiasm of the Secretary of State for this project. We all know that the right hon. Gentleman—we have heard him on a number of occasions—has hovered his way to and fro on the road to Damascus, and now, without conversion, he has shuffled off it into some wayside lair of his own.
  I ask the Minister of Transport to pay particular attention to a point about which there may well have been some misunderstanding. The Secretary of State said that the companies had demanded a final decision by October. I am informed that that is not the case. What the companies asked for was an earnest of the intentions of the Government to continue—in other words, the deposit of the Hybrid Bill by October, it being then assumed that, having deposited that Bill in October this year, they would be in a position to reach a final decision by, say, July or October next year. The Bill being through by next July, the companies would be in a position to reach a final decision by the end of this year. I should like the right hon. Gentleman to clear up this point because there is a genuine misunderstanding. I put it no higher than that at this stage.
  There is a second misunderstanding that appears to have arisen, to judge from the right hon. Gentleman's remarks. He said that the companies had declared their proposals to be non-negotiable. I am assured that that is not the case, that in fact what the companies put forward was put forward merely as suggestions to enable discussions to continue. I hope that the right hon. Gentleman is listening to this.

  1151
  I have had these assurances since the Secretary of State made his statement, and, knowing the right hon. Gentleman as I do, I am confident that he would not wish to impute to others words that they have not said and would wish to see this misunderstanding, as it plainly is, cleared up with speed.
  I personally regret that in the statement this afternoon the right hon. Gentleman used the words such as "take advantage of our inability to ratify". It appeared from those words that the Government were deliberatedly engaging in a manœuvre to make the companies the scapegoat for the Government's own scruffy conduct.
  The only point at which I agree with the right hon. Gentleman is on his disapointment on receiving the estimate of £375 million. I find it difficult to understand, as he did and as did my hon. Friend the Member for Croydon, Central (Mr. Moore), how the figure could have rocketed to that extent in so short a time.
  I should like to tell my hon. Friend the Member for Croydon, Central that, although he may rejoice now, this problem is one which has only been pushed into the background and his continuency, like others in Kent and Surrey, will continue to suffer from the inundation of traffic that this country has not the courage to tackle.
  My hon. Friend the Member for Southend, West (Mr. Channon) challenged the Government to assess the cost of not building. So did my hon. Friend the Member for Lewes (Mr. Rathbone), who has a special problem. On the other side of the House, the hon. Member for Leeds, South-East (Mr. Cohen) again repeated the question "What is the cost of not building?" and asked what were the consequences for the railways, as I did. My hon. Friend the Member for Maidstone (Mr. Wells)—[Interruption.] I hope that the right hon. Gentleman will listen and will answer some of these questions. We are bored with seeing Ministers sit on the Front Bench and not even make a note of the questions that they are asked.
  Mr. Mulley: I listened very carefully to the right hon. Gentleman's hon. Friends and took a note. I think that I can deal
  1152
  with the right hon. Gentleman when the time comes without any notes.
  Mr. Peyton: Without any notes? That is so interesting. We shall listen carefully to see whether, in fact, the right hon. Gentleman answers these questions, particularly those asked by my hon. Friends.
  My hon. Friend the Member for Southgate (Mr. Berry) was concerned about where our country was heading and what we were to do about our roads. My hon. Friend the Member for Canterbury (Mr. Crouch) was deeply concerned about the lack of planning of Kent roads to fill the gap, and my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) repeated his own deep anxieties about this problem.
  I do not want to detain the House at any great length and I hope that a number of hon. Members will forgive me if I do not go into what they have said at great length. The hon. Member for Kingston upon Hull, East (Mr. Prescott) made some comments and had some rather nasty things to say about Mr. Richard Marsh. I think that the nicest thing that I can say about them is that they are very unlikely to do Mr. Marsh much harm.
  The hon. Member for Nuneaton (Mr. Huckfield) gave us a long dissertation about what a bad thing it was to make money. Some people might sometimes pause to think what a pity it is that in this country more people do not make money, because this country would not be in its present parlous position if they did.
  The hon. Member for Moray and Nairn (Mrs. Ewing) gave convincing proof that, whatever else she had thought about, she had not thought very deeply about the Channel Tunnel. She may be grateful that the prospects of her being Minister for Transport in this country are very remote indeed.
  Mrs. Winifred Ewing: May I remind the right hon. Member that, with my colleagues on this bench, I represent 30 per cent. of the people of Scotland? Bearing that in mind, and the road chart I showed this House, which is well imprinted on the minds of the people of Scotland who do a bit of travelling and who see motorways end the minute they hit the Scottish border, I feel that the right hon. Gentleman's remarks are ill-founded and ill-informed.
  Mr. Peyton: I am sure that the whole House will judge in its own way whether that intervention was interesting.
  Mrs. Winifred Ewing: On a point of order, Mr. Speaker. Perhaps you can understand that sometimes we on this bench wonder whether this is a Scottish House in any sense of the word. It looks as if the British House is not particularly interested in the affairs of Scotland, as was shown by the attendance on the benches during the Scottish debate earlier today.
  Mr. Speaker: Order. Every hon. Member in this House has equal rights.
  Mr. Peyton: I have three questions to address to the right hon. Gentleman and I earnestly invite him to pay attention to them. First, do the French Government agree that the companies are to blame for this present situation and for the British Government's present position? Second, what are the costs of the alternatives? I am glad to know that Cairncross is to continue. Will the Government undertake to publish at the earliest possible date a full estimate of the costs of providing facilities alternative to the Channel Tunnel? Third, why was the House of Commons offered no debates in fulfilment of what looks very like a solemn pledge and undertaking given by the Secretary of State on 26th November?
  I very much hope that my right hon. and hon. Friends, whatever their views on the merits of the tunnel project, will see fit to condemn the Government for their irresponsible handling of this matter. We believe that in the way they have conducted themselves they are giving one further and important item of evidence to a watching world that this Government in particular are not a Government upon whose intentions anyone can for long rely.
  9.44 p.m.
  The Minister for Transport (Mr. Frederick Mulley): I am sure that it would be the wish of all hon. Members that I should say how satisfied we are that, through the initiative of my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden), we have had the opportunity of this debate, which permits us to set out matters in rather more detail than is possible by question and answer. I hope that the many Conservative Members who
  1154
  have written to me—sometimes several times a day—seeking the cancellation of the tunnel and the rail link will at least listen to the arguments before they follow the passion of the hon. Member for Southend, West (Mr. Channon) or the truculence of the right hon. Member for Yeovil (Mr. Peyton), thinking that they have a case for voting against the way the Government have handled this matter.
  I never cease to marvel at the way in which the right hon. Member for Yeovil roars in opposition, compared with his behaviour when he had responsibility for these matters. I shall have something to say about his concern for Parliament when I deal with the questions he asks.
  We all understand the great disappointment of many hon. Members who have spoken, including my hon. Friends the Member for West Derby, Leeds, South-East (Mr. Cohen) and West Bromwich, East (Mr. Snape) and the hon. Members for Maidstone (Mr. Wells) and Canterbury (Mr. Crouch). However, the real issues before the House are: why has this happened now, and why was the House not given a full opportunity to consider and debate the matter?
  There are two separate problems. First, why did we not ratify the treaty by 1st January this year—a point made forcefully by the hon. Member for the Isle of Wight (Mr. Ross), who spoke for the Liberal Party? The House will recall that on the day following the Queen's Speech we tabled a motion to enable the subsequent stages of the Bill to be resumed at the point that had been reached in the previous Parliament. One cannot move much quicker than that. Objection was taken to that procedure by hon. Members, including a large number on the benches opposite. We had the debate as early as we could and, by a majority, the House agreed that we should adopt the accelerated, novel parliamentary procedure. We could not have done more to proceed with the Bill as quickly as possible.
  However, by this time it was clear that no one—I repeat, no one—could have got the Bill through this House and another place by the end of the year. Statements had been made on behalf of a large number of objectors. The proceedings in the Select Committee took three or four weeks. We had no reason

  1155
  to suppose that the matter could have been dealt with by the end of the year. It was therefore necessary for us to consult our partners, the French Government, and the two companies, about getting an extension of the date. There was no point in following the parliamentary procedures without that extension. We approached all the parties in good time. All that would have been required was agreement to a date later than 1st January. The processes of the House have to begin again after each General Election. When the date was fixed by the right hon. Member for Yeovil he had in mind a period of over a year to get the Bill through. Therefore, I do not think that we can reasonably be criticised on this matter.
  The rail link created new problems. More time was needed to collect all the up-to-date information, so that public opinion as well as the House could make an informed and proper judgment on the merits of the case. The Government have never budged from that objective.
  The only reason why we have not been able to continue collecting the information together and putting the final decision to the House on whether to proceed to stage 3 and the construction of the tunnel is that certain procedures were set in motion when we did not ratify. It would not have been possible to complete the processes of this House and other place by the end of the year—the date fixed by the right hon Member for Yeovil when he signed the treaty. He could not at that time have had in contemplation the possibility of two General Elections.
  We had no proposals from the companies about the dates before the deadline of 31st December. I had some preliminary discussions with the French Minister, and the French Government would have wanted a protocol to give time for us to ratify and for further consideration between the four parties as a result of our wishing to look again at the question of the rail link. No proposals came from the companies. For the Conservative Party to accuse us of mishandling matters is almost as monstrous as it is for the right hon. Member for Yeovil to taunt us with a lack of courage If the right hon. Gentleman had been a man of courage he would
  1156
  not have asked the House to approve further studies of the project. He would have asked the House to take a decision. The purpose of all this documentation is to defer that decision until a later stage.
  It must surely have been in the contemplation of the right hon. Gentleman that the events that have occurred could occur. In Agreement No. 2, 15 out of 70 pages of close type deal with abandonment, and much of it deals with what would happen if the British Government, or either Government, did not ratify by the end of December 1974. The negotiation of these complex arrangements must have taken an enormous amount of official and ministerial time.
  We were not able to do anything about the companies. I express my own assessment, no one else's, but it seemed to me that they were waiting for 1st January to arrive. They slapped in their notices at the earliest opportunity, on 2nd January. The agreement provides that there must be a minimum period of notice of 15 days. The companies gave us 19 days' notice, expiring today. Had they wanted a real negotiation they could have given at least a month's notice for these matters to be discussed and for Parliament to debate them.
  The right hon. Member for Yeovil raised an important question about the proposals not being negotiable, which was made by the companies on 9th January. Their main argument was that they wanted to safeguard the position of the companies' shareholders. They made clear that not only should the shareholders, during the current phase, have the right to withdraw their investment on 22nd March—with premiums of £2·10 for £1 for the phase 1 invester and £1·40 for £1 for the phase 2 invester—but that that option should remain open until the moment when the Channel tunnel was actually being built.
  That was an entirely new arrangement—an arrangement which required the renegotiation of these agreements and an arrangement which my right hon. Friend and I felt we could not recommend to the House. If it had been thought to be a reasonable provision, I would have thought that then Conservative Ministers would have included it in the agreement which they drew up. I wonder what kind of criticism we would have received from both sides of the House

  1157
  if, while further studies, such as Cairncross and the others, were taking place, we had found that a good deal of private capital already in the investment had been withdrawn without awaiting the assemblage of all the information and without a final decision on the tunnel having been reached.
  These were the considerations before us, and I fail to see how we can be accused of any discourtesy to the House or how, having regard to the public interest, we could have made any other recommendation than that which we have put to the House today, namely, that if the companies' terms cannot be negotiated and if they are not terms which we can accept, we must look to the abandonment situation envisaged to the tune of 15 pages of close type.
  Mr. Peyton: Instead of the Minister's quoting from that book, I wonder when he will answer any of the questions that he has been asked.
  Mr. Mulley: I am explaining where the responsibility lies.
  The environmental damage in Kent is an arguable proposition. I have always taken the view that Kent would be better off with a tunnel than without it, but many people in Kent take a different view.
  Mrs. Elaine Kellett-Bowman: On a point of order, Mr. Speaker. Did the Minister not say that he would remember the questions and answer them?
  Mr. Speaker: That is not a point of order. Mr. Mulley.
  Mr. Mulley: I thought I had done rather well on some of the questions.
  On the subject of the road programme, I confirm that it is part of the package of the M20. I have already written to the Chairman of the Kent County Council inviting him and his colleagues to meetings to discuss the issues that now arise. We have also written to the hon. Member for Folkestone and Hythe (Mr. Costain) so that we may go into the detailed but important matters which he raised on behalf of his constituents.
  On the subject of alternative costs, we have not worked out what the alternative costs would be—[Interruption.] That was the purpose of the Cairncross and phase 2 studies, which cannot possibly be completed, because the last thing the Labour Government wanted was a notice in the form in which it was presented to us, so that we had no option but to follow the agreement signed and sealed by our predecessors.
  I was asked about the view of the French Government. I always find French Ministers not only capable but very willing to speak for themselves—
  Mr. Ogden: I beg to move, That the Question be now—
  Mr. Speaker: I do not think that is necessary.
  Question put, That this House do now adjourn:—
  The House divided: Ayes 218, Noes 294.

  Division No. 61.]

  AYES

  [10.00 p.m.

  Adley, Robert

  Buck, Antony

  Drayson, Burnaby

  Aitken, Jonathan

  Budgen, Nick

  du Cann, Rt Hon Edward

  Alison, Michael

  Bulmer, Esmond

  Durant, Tony

  Arnold, Tom

  Burden, F. A.

  Dykes, Hugh

  Atkins, Rt Hon H. (Spelthorne)

  Butler, Adam (Bosworth)

  Eden, Rt Hon Sir John

  Atkins, Ronald (Preston N)

  Carlisle, Mark

  Edwards, Nicholas (Pembroke)

  Awdry, Daniel

  Chalker, Mrs Lynda

  Elliott, Sir William

  Baker, Kenneth

  Channon, Paul

  Emery, Peter

  Banks, Robert

  Churchill, W. S.

  Eyre, Reginald

  Bennett, Dr Reginald (Fareham)

  Clarke, Kenneth (Rushcliffe)

  Fairbairn, Nicholas

  Benyon, W.

  Cockcroft, John

  Fairgrieve, Russell

  Berry, Hon Anthony

  Cooke, Robert (Bristol W)

  Finsberg, Geoffrey

  Biggs-Davison, John

  Cope, John

  Fisher, Sir Nigel

  Blaker, Peter

  Corrie, John

  Fletcher, Alex (Edinburgh N)

  Boscawen, Hon Robert

  Costain, A. P.

  Fookes, Miss Janet

  Bowden, A. (Brighton, Kemptown)

  Crawshaw, Richard

  Fowler, Norman (Sutton C'f'd)

  Bradley, Tom

  Crouch, David

  Fry, Peter

  Braine, Sir Bernard

  Crowder, F. P.

  Galbraith, Hon. T. G. D.

  Brittan, Leon

  Davies, Rt Hon J. (Knutsford)

  Gardiner, Georgs (Reigate)

  Brown, Sir Edward (Bath)

  Dean, Paul (N Somerset)

  Gardner, Edward (S Fylde)

  Buchanan, Richard

  Dodsworth, Geoffrey

  Gilmour, Rt Hon Ian (Chesham)

  Buchanan-Smith, Alick

  Douglas-Hamilton, Lord James

  Gilmour, Sir John (East Fife)

  Glyn, Dr Alan

  Langford-Holt, Sir John

  Roberts, Michael (Cardiff NW)

  Godber, Rt Hon Joseph

  Latham, Michael (Melton)

  Roberts, Wyn (Conway)

  Goodhart, Philip

  Lawrence, Ivan

  Rossi Hugh (Hornsey)

  Goodhew, Victor

  Le Marchant, Spencer

  Rost, Peter (SE Derbyshire)

  Goodlad, Alastair

  Lewis, Ron (Carlisle)

  Royle, Sir Anthony

  Gorst, John

  Lloyd, Ian

  Sainsbury, Tim

  Gow, Ian (Eastbourne)

  Loveridge, John

  St. John-Stevas, Norman

  Gower, Sir Raymond (Barry)

  Luce, Richard

  Scott, Nicholas

  Grant, Anthony (Harrow C)

  McAdden, Sir Stephen

  Shaw, Giles (Pudsey)

  Gray Hamish

  Macfarlane, Neil

  Shaw, Michael (Scarborough)

  Griffiths, Eldon

  MacGregor, John

  Shelton, William (Streatham)

  Grist, Ian

  Mackintosh, John P.

  Shepherd, Colin

  Grylls, Michael

  Macmillan, Rt Hon M. (Farnham)

  Silvester, Fred

  Hall, Sir John

  McNair-Wilson, M. (Newbury)

  Sims, Roger

  Hall-Davis, A. G. F.

  McNair-Wilson, P. (New Forest)

  Sinclair, Sir George

  Hamilton, Michael (Salisbury)

  Madel, David

  Skeet, T. H. H.

  Hampson, Dr Keith

  Mates, Michael

  Smith, Dudley (Warwick)

  Hannam, John

  Mather, Carol

  Spence, John

  Harvie Anderson, Rt Hon Miss

  Maudling, Rt Hon Reginald

  Spicer, Jim (W Dorset)

  Hastings, Stephen

  Meyer, Sir Anthony

  Spicer, Michael (S Worcester)

  Havers, Sir Michael

  Mills, Peter

  Spriggs, Leslie

  Hawkins, Paul

  Miscampbell, Norman

  Sproat, Iain

  Hayhoe, Barney

  Mitchell, David (Basingstoke)

  Stainton, Keith

  Heath, Rt Hon Edward

  More, Jasper (Ludlow)

  Stanley, John

  Heseltine Michael

  Morgan-Giles, Rear-Admiral

  Steen, Anthony (Wavertree)

  Hicks, Robert

  Morris, Michael (Northampton S)

  Stewart, Ian (Hitchin)

  Higgins, Terence L.

  Morrison, Charles (Devizes)

  Stradling Thomas, J.

  Holland, Philip

  Morrison, Peter (Chester)

  Taylor, Teddy (Cathcart)

  Hordern, Peter

  Neave, Airey

  Tebbit, Norman

  Howell, David (Guildford)

  Nelson, Anthony

  Temple-Morris, Peter

  Howell, Ralph (North Norfolk)

  Neubert, Michael

  Thatcher, Rt Hon Margaret

  Hurd, Douglas

  Newton, Tony

  Thomas, Rt Hon P. (Hendon S)

  Irvine, Bryant Godman (Rye)

  Normanton, Tom

  Townsend, Cyril D.

  Irving, Charles (Cheltenham)

  Nott, John

  Trotter, Neville

  James, David

  Onslow, Cranley

  Tugendhat, Christopher

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

  Oppenheim, Mrs Sally

  van Straubenzee, W. R.

  Jessel, Toby

  Parkinson, Cecil

  Viggers, Peter

  Johnson Smith, G. (E Grinstead)

  Pattie, Geoffrey

  Wakeham, John

  Jones, Arthur (Daventry)

  Percival, Ian

  Walder, David (Clitheroe)

  Jopling Michael

  Peyton, Rt Hon John

  Walker, Rt Hon P. (Worcester)

  Joseph, Rt Hon Sir Keith

  Pink, R. Bonner

  Walker-Smith, Rt Hon Sir Derek

  Kaberry, Sir Donald

  Price, David (Eastleigh)

  Walters, Dennis

  Kellett-Bowman, Mrs Elaine

  Prior, Rt Hon James

  Weatherill, Bernard

  Kershaw, Anthony

  Pym, Rt Hon Francis

  Wells, John

  Kimball, Marcus

  Raison, Timothy

  Whitelaw, Rt Hon William

  King, Tom (Bridgwater)

  Rathbone, Tim

  Wiggin, Jerry

  Kirk, Peter

  Rawlinson, Rt Hon Sir Peter

  Winterton, Nicholas

  Kitson, Sir Timothy

  Rees, Peter (Dover & Deal)

  Young, Sir G. (Ealing Acton)

  Knight, Mrs Jill

  Renton, Rt Hon Sir D. (Hunts)

  Knox, David

  Renton, Tim (Mid-Sussex)

  TELLERS FOR THE AYES:

  Lamont, Norman

  Rhys Williams, Sir Brandon

  Mr. Eric Ogden and

  Lane, David

  Rifkind, Malcolm

  Mr. Peter Snape.

  NOES

  Abse, Leo

  Buchan, Norman

  Davies, Ifor (Gower)

  Allaun, Frank

  Butler, Mrs Joyce (Wood Green)

  Davis, Clinton (Hackney C)

  Anderson, Donald

  Callaghan, Jim (Middleton & P)

  Deakins, Eric

  Archer, Peter

  Campbell, Ian

  Dean, Joseph (Leeds West)

  Armstrong, Ernest

  Canavan, Dennis

  Delargy, Hugh

  Ashley, Jack

  Cant, R. B.

  Dell, Rt Hon Edmund

  Ashton, Joe

  Carmichael, Neil

  Dempsey, James

  Atkinson, Norman

  Carter-Jones, Lewis

  Doig, Peter

  Bain, Mrs Margaret

  Cartwright, John

  Dormand, J. D.

  Barnett, Guy (Greenwich)

  Castle, Rt Hon Barbara

  Douglas-Mann, Bruce

  Barnett, Rt Hon Joel

  Clark, Alan (Plymouth, Sutton)

  Duffy, A. E. P.

  Bates, Alf

  Clemitson, Ivor

  Dunn, James A.

  Bean, R. E.

  Cocks, Michael (Bristol S)

  Dunwoody, Mrs Gwyneth

  Benn, Rt Hon Anthony Wedgwood

  Coleman, Donald

  Eadie, Alex

  Bennett, Andrew (Stockport N)

  Colquhoun, Mrs Maureen

  Edelman, Maurice

  Bidwell, Sydney

  Conlan, Bernard

  Edge, Geoff

  Biffen, John

  Cook, Robin F. (Edin C)

  Edwards, Robert (Wolv SE)

  Bishop, E. S.

  Corbett, Robin

  Ellis, John (Brigg & Scun)

  Blenkinsop, Arthur

  Cormack, Patrick

  Ellis, Tom (Wrexham)

  Boardman, H.

  Craigen, J. M. (Maryhill)

  English, Michael

  Body, Richard

  Cronin, John

  Ennals, David

  Booth, Albert

  Crosland, Rt Hon Anthony

  Evans, Ioan (Aberdare)

  Boothroyd, Miss Betty

  Cryer, Bob

  Evans, John (Newton)

  Bottomley, Rt Hon Arthur

  Cunningham, G. (Islington S)

  Ewing, Harry (Stirling)

  Boyden, James (Bish Auck)

  Cunningham, Dr J. (Whiteh)

  Ewing, Mrs Winifred (Moray)

  Bray, Dr Jeremy

  Dalyell, Tam

  Fell, Anthony

  Brown, Robert C. (Newcastle W)

  Davidson, Arthur

  Fernyhough, Rt Hon E.

  Brotherton, Michael

  Davies, Bryan (Enfield N)

  Fitch, Alan (Wigan)

  Brown, Hugh D. (Provan)

  Davies, Denzil (Llanelli)

  Flannery, Martin

  1160

  1161

  Fletcher, Ted (Darlington)

  Loyden, Eddie

  Ryman, John

  Foot, Rt Hon Michael

  Luard, Evan

  Sandelson, Neville

  Forrester, John

  Lyon, Alexander (York)

  Sedgemore, Brian

  Fowler, Gerald (The Wrekin)

  Lyons, Edward (Bradford W)

  Selby, Harry

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

  MacCormick, Iain

  Shaw, Arnold (Ilford South)

  Freeson, Reginald

  McElhone, Frank

  Sheldon, Robert (Ashton-u-Lyne)

  Garrett, John (Norwich S)

  MacFarquhar, Roderick

  Short, Rt Hon E. (Newcastle C)

  Garrett, W. E. (Wallsend)

  Mackenzie, Gregor

  Short, Mrs Renée (Wolv NE)

  George, Bruce

  Maclennan, Robert

  Silkin, Rt Hon John (Deptford)

  Gilbert, Dr John

  McMillan, Tom (Glasgow C)

  Silkin, Rt Hon S. C. (Dulwich)

  Ginsburg, David

  Madden, Max

  Sillars, James

  Golding, John

  Magee, Bryan

  Silverman, Julius

  Gould, Bryan

  Mahon, Simon

  Skinner, Dennis

  Gourlay, Harry

  Marks, Kenneth

  Smith, John (N Lanarkshire)

  Graham, Ted

  Marquand, David

  Spearing, Nigel

  Grant, John (Islington C)

  Marshall, Dr Edmund (Goole)

  Stallard, A. W.

  Grimond, Rt Hon J.

  Marshall, Jim (Leicester S)

  Stewart, Donald (Western Isles)

  Grocott, Bruce

  Marten, Neil

  Stewart, Rt Hn M. (Fulham)

  Hamilton, James (Bothwell)

  Mason, Rt Hon Roy

  Stoddart, David

  Hamilton, W. W. (Central Fife)

  Mawby, Ray

  Stott, Roger

  Hamling, William

  Meacher, Michael

  Strang, Gavin

  Hardy, Peter

  Mellish, Rt Hon Robert

  Strauss, Rt Hon G. R.

  Harper Joseph

  Mikardo, Ian

  Summerskill, Hon Dr Shirley

  Harrison, Walter (Wakefield)

  Millan, Bruce

  Swain, Thomas

  Hatton, Frank

  Miller, Dr M. S. (E Kilbride)

  Taylor, Mrs Ann (Bolton W)

  Hayman, Mrs Helene

  Miller, Mrs Millie

  Thomas, Jeffrey (Abertillery)

  Healey, Rt Hon Denis

  Mitchell, R. C. (Soton, Itchen)

  Thomas, Mike (Newcastle E)

  Heffer, Eric S.

  Moate, Roger

  Thomas, Ron (Bristol NW)

  Henderson, Douglas

  Molloy, William

  Thompson, George

  Hooley, Frank

  Molyneaux, James

  Thorpe, Rt Hon Jeremy (N Devon)

  Hooson, Emlyn

  Moonman, Eric

  Tierney, Sydney

  Horam, John

  Morgan, Geraint

  Tinn, James

  Howell, Denis (B'ham, Sm H)

  Morris, Alfred (Wythenshawe)

  Tomlinson, John

  Howells, Geraint (Cardigan)

  Morris, Charles R. (Openshaw)

  Torney, Tom

  Hoyle, Douglas (Nelson)

  Morris, Rt Hon J. (Aberavon)

  Varley, Rt Hon Eric G.

  Huckfield, Les

  Mudd, David

  Wainwright, Edwin (Dearne V)

  Hughes, Rt Hon C. (Anglesey)

  Mulley, Rt Hon Frederick

  Wainwright, Richard (Colne V)

  Hughes, Mark (Durham)

  Murray, Ronald King

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

  Hughes, Robert (Aberdeen N)

  Newens, Stanley

  Walker, Harold (Doncaster)

  Hughes, Roy (Newport)

  Noble, Mike

  Walker, Terry (Kingswood)

  Hunter, Adam

  Oakes, Gordon

  Ward, Michael

  Hutchison, Michael Clark

  O'Halloran, Michael

  Watkins, David

  Irvine, Rt Hon Sir A. (Edge Hill)

  O'Malley, Rt Hon Brian

  Watkinson, John

  Irving, Rt Hon S. (Dartford)

  Orbach, Maurice

  Watt, Hamish

  Jackson, Colin (Brighouse)

  Ovenden, John

  Weetch, Ken

  Jackson, Miss Margaret (Lincoln)

  Owen, Dr David

  Weitzman, David

  Janner Greville

  Padley, Walter

  Wellbeloved, James

  Jay, Rt Hon Douglas

  Park, George

  Welsh, Andrew

  Jeger, Mrs Lena

  Parry, Robert

  White, Frank R. (Bury)

  Jenkins, Hugh (Putney)

  Penhaligon, David

  White, James (Pollok)

  Jenkins Rt Hon Roy (Stechford)

  Perry, Ernest

  Whitehead, Phillip

  John, Brynmor

  Phipps, Dr Colin

  Whitlock, William

  Jones, Alec (Rhondda)

  Prentice, Rt Hon Reg

  Williams, Alan (Swansea W)

  Jones, Barry (East Flint)

  Prescott, John

  Williams, Alan Lee (Hornch'ch)

  Jones, Dan (Burnley)

  Price, C. (Lewisham W)

  Williams, Rt Hon Shirley (Hertford)

  Judd, Frank

  Price, William (Rugby)

  Williams, W. T. (Warrington)

  Kaufman, Gerald

  Radice, Giles

  Wilson, Alexander (Hamilton)

  Kelley, Richard

  Reid, George

  Wilson, Gordon (Dundee E)

  Kerr, Russell

  Richardson, Miss Jo

  Wilson, Rt Hon H. (Huyton)

  Kilroy-Silk, Robert

  Ridley, Hon Nicholas

  Wilson, William (Coventry SE)

  Kinnock Neil

  Roberts, Gwilym (Cannock)

  Wise, Mrs Audrey

  Lambie, David

  Robertson, John (Paisley)

  Woodall, Alec

  Lamborn, Harry

  Roderick, Caerwyn

  Woof, Robert

  Lamond, James

  Rodgen, George (Chorley)

  Wrigglesworth, Ian

  Latham, Arthur (Paddington)

  Rodgers, William (Stockton)

  Young, David (Bolton E)

  Leadbitter, Ted

  Rooker, J. W.

  Lee, John

  Rose, Paul B.

  TELLERS FOR THE NOES:

  Lever, Rt Hon Harold

  Ross, Stephen (Isle of Wight)

  Mr. Thomas Cox and

  Lipton, Marcus

  Ross, Rt Hon W. (Kilmarnock)

  Mr. Laurie Pavitt.

  Litterick, Tom

  Ross, William (Londonderry)

  Lomas, Kenneth

  Rowlands, Ted

  Question accordingly negatived.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's Sitting, the first Motion relating to the District Courts (Scotland) Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Walter Harrison.]

  LOCAL GOVERNMENT (SCOTLAND) BILL
  Postponed proceeding on Question, That the Bill be now read a Second time, resumed.
  Question again proposed.
  10.13 p.m.
  Mr. John Robertson: In view of the late hour, although I had not said half of what I wanted to say earlier when the proceedings were postponed, I will conclude now with an appeal to my right hon. Friend to consider some of the pleas which have been made.
  Mr. Teddy Taylor: We have just had a very interesting debate on a vital issue—
  Mr. Speaker: Will hon. Members withdraw quickly and quietly.
  Mr. Taylor: I was saying that we have just had a most interesting debate on a vital issue to the economy. The issues in the debate were not entirely clear. Some thought that the question was whether the Government had conducted affairs properly. Some thought it was an issue of the future of the railways. Some thought it was a question whether we wanted to go into Europe by a boat or by a tunnel or by other means.
  On this Bill the issues are absolutely clear. It is a Bill on which hon. Members will have to make a clear decision. There are some important issues of principle which cannot be ignored by any democrat.
  In introducing the Bill the Secretary of State said that it was largely non-controversial in paving the way for local government reform in Scotland, which is to take place later this year. The Bill was looked forward to by many as a
  1164
  chance to show that local government could become more efficient and more responsive to the community's needs.
  Fears have been expressed, mainly by my right hon. Friend the Member for Renfrewshire, East (Miss Harvie Anderson) and by the hon. Member for West Stirlingshire (Mr. Canavan) to the effect that many are looking to local government reform with considerable apprehension. The changes which are proposed, however, are pretty minor. There are some changes in valuation procedure and in grants. What changes there are are broadly welcomed, but there has been near-unanimous agreement in the debate this afternoon that there is grave disappointment that the Secretary of State did not take a more fundamental step to change the rating system, which is becoming more intolerable and more unjust every year, and certainly in this year of local government reform will undoubtedly impose a heavy burden on the whole of Scottish ratepayers.
  The hon. Member for Dundee, West (Mr. Doig) who has long advocated rating reform, in an excellent speech, pointed out some of the problems facing us, and he will be bitterly disappointed, as I am, that no fundamental changes in rating have been proposed. My hon. Friend the Member for Aberdeen, South (Mr. Sproat) said he thought that a golden opportunity had been missed, and so do I. My right hon. Friend the Member for Renfrewshire, East pointed out the hardship which was becoming an increasing problem under the rating system. The hon. Member for Dundee, West requested a radical change in the rating proposals. If he is looking for a radical change there is no better place that he could look for it than in the Conservative manifesto for the last election. There we set out the fundamental change which we proposed.
  It is unfortunate that in this significant Bill on local government reform the Government have done nothing to meet the fundamental problems of the rating system. We were at least expecting that they might have agreed to transfer the burden of teachers' salaries from the rates to the Exchequer, bearing in mind the Labour Party's evidence to the Layfield Commission and the suggestion that this should take place very shortly. This is

  1165
  disappointing, and it is a grave mistake that the Government have not taken the opportunity to make some change in the rating system at this time of local government reform.
  The second main issue has concerned the question of the new powers which the Government are taking to give help to local authorities to deal with oil-related infrastructure spending. My hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) said that Inverness and other areas which are not directly in the oil development line were facing substantial rises in rates because of the amount which they have had to spend on this infrastructure. My hon. Friend the Member for Aberdeen, South was right in pointing out some of the deficiencies in the clauses dealing with this matter. Oil is not even mentioned. There is no specific obligation on the Government to do anything about this—only a permissive power. What must have shocked many hon. Members is the fact that only a figure estimated at £5 million in 1980 is mentioned as the likely total of this new grant provided by the Government. We shall want to know a great deal more about this in Committee.
  The third major topic for discussion was the phasing out of specific grants for public transport, rates and PTEs, mainly the Greater Glasgow PTEs. The hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) was right to point out the crucial importance of rural transport, particularly when the price of electricity is increasing so dramatically.
  In this connection we have several fears about the new proposals. First, there is a danger that as the money, instead of being given in the form of a specific grant, will be an overall grant which will be distributed to the local authorities, the special needs of particular areas with special problems will not be taken fully into account. Our second worry is that there is no statutory obligation for the Government to take this into account in assessing the total of the rate support grant.
  We are also concerned that there may be a special problem in Glasgow. At present negotiations are in hand be-
  1166
  tween the Greater Glasgow PTE and British Rail which will result in the Greater Glasgow area having to carry a substantial amount to help British Rail, and we fear that this will not be taken fully into account in the rate support grant now that it is proposed to abolish this form of direct specific grant.
  The fourth subject of discussion has been the proposal to set up a local government ombudsman. The hon. Member for Motherwell and Wishaw (Dr. Bray) suggested that we might be overloading the commissioner with more work than he could reasonably handle. Other hon. Members have suggested that we are not giving him enough to do in the sense that some matters are specifically excluded from his purview.
  My main concern in this connection arises out of Clause 24(7):
  "The Commissioner shall not conduct an investigation in respect of any action which in his opinion affects all or most of the inhabitants of the area of the authority concerned."
  Precisely what does that mean? Does it mean, for example, that a complaint about overspending by a local authority—there are plenty of candidates for that in Scotland—a complaint about the standards of the cleansing service in one area in comparison with other authorities, or a complaint about a local authority's house transfer rules would not be a competent subject matter for the local government ombusman to look into?
  Do the Government intend that the ombudsman should be allowed to look into the grievances of individuals and not into the effectiveness or reliability of local authority services in general? In my view, the latter could be one of his most useful functions. It has stood out a mile from our recent debates in the Scottish Grand Committee that the services offered in local authority maintenance of council housing, for example, would be a useful subject for the local government ombudsman to examine. Is it the intention that only individual grievances or group grievances will be put to him, not grievances about the efficiency of local government services generally?
  The main topic, however, which has raised a great deal of heat has been Clause 19, just one clause in the Bill but a clause of fundamental importance and crucial for democracy. My hon. Friends

  1167
  the Members for Edinburgh, West (Lord James Douglas-Hamilton) and for Edinburgh, Pentlands (Mr. Rifkind) effectively demolished the rather timid case advanced by the Secretary of State. The truth is that Clause 19 is a shameful and unprincipled use of retrospective powers to relieve certain councillors of their obligations to their ratepayers.
  It must have come as a shock to the Secretary of State that he had to rely for support on the speeches of the hon. Member for Central Ayrshire (Mr. Lambie)—the self-acknowledged godfather. I think, of the "Lambie" régime in Saltcoats—and of the hon. Member for West Stirlingshire (Mr. Canavan), and, strange to say, the views of the Scottish National Party. I am sure that this latter support will make the Secretary of State even more unhappy about it than he would otherwise have been. I must say, having heard the speech of the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), that I was shocked that a party which claims to be democratic should give its full support to a measure which will undoubtedly undermine support for the rule of law in Scotland and in Great Britain.
  The Secretary of State did not attempt to justify the actions of the councillors of Clydebank and other burghs and cities, although I thought that the grunts and raised eyebrows of the Minister of State showed that he was desperately looking for some sort of justification. But we had certain cases put to us, principally by the hon. Member for Central Ayrshire. The hon. Gentleman and his Friend the Member for West Stirlingshire said that the Housing (Financial Provisions) (Scotland) Act 1972 was a piece of vicious anti-working-class legislation, thus giving the show away completely and revealing that Clause 19 is basically designed to bail out councillors who had defied the 1972 Act.
  I remind the hon. Member for Central Ayrshire that not all working-class people live in council houses.
  Mr. Lambie: Eighty per cent. do.
  Mr. Taylor: Rubbish. The hon. Gentleman ought to know the figures. I am not talking about this hypothetically. I am certain that I represent more coun-
  1168
  cil tenants than he does, and I am well aware of their problems. I am well aware also that my constituents are as worried about support for the rule of law as they are about any other subject, and they certainly would not look upon the hon. Member for Central Ayrshire as a man whom they would wish to represent or champion them in any cause whatever. I would suggest to the hon. Member that the 1972 Act was in no way anti-working-class legislation. It was designed to remove a totally unfair situation in which everyone who lived in owner-occupied or private rented accommodation subsidised everyone who lived in a council house. We made it clear in our legislation that we were in favour of subsidies for those in need, but it is a particularly unfair situation where in some cases the poor are subsidising the more wealthy. That was utterly intolerable and something which had to be dealt with.
  The hon. Member for Central Ayrshire said that the second argument concerned the loss of freedom to local authorities. The House passes Bills and regulations from time to time giving local authorities more power or taking powers away from them. However, if the hon. Member is really concerned with taking powers away from local councils or interfering with their freedom of action I hope that he will look at Schedule 2, where the Secretary of State is taking unprecedented powers to slash grants to local authorities where he considers their rate poundages to be unreasonably high. I hope we shall hear from the hon. Member on this point in Committee.
  Has the hon. Member considered. I wonder, another question concerning the amount of money provided by the 1972 Act? He will be aware that the rent increase we proposed in our Act should be charged until an economic rent had been reached—and in many areas we are not far from that now—was an average of £26 per year. The hon. Member obviously thinks that this was totally unreasonable and unfair to the working class. I know that he has been away recently, so I wonder whether he is at present aware that we are currently considering in Standing Committee a Government Bill and there have been very few constructive propositions from the Government. The Bill will mean that local

  1169
  authorities can increase rents by up to £39 a year and, in addition, the Secretary of State is taking powers to increase this limit of £39. It cannot therefore be the amount which is concerning the hon. Member for Central Ayrshire. We get very few contributions from the Government because of the hatchet tactics of the Whips, which means that when we hear speeches from the Government back benches they rarely add to the light or sweetness of the occasion.
  I wonder whether the hon. Member is concerned about hardship. I do not think he is because there has been almost a conspiracy of silence from the Government benches on the question of rent rebates. The result of our 1972 Act is that more than three out of every 10 council house tenants in Scotland are getting a rebate, and the average payment is more than £1 a week.
  The hon. Member for Central Ayrshire also said that we should forget about the money because here we were dealing with men of principle who needed to be protected. He said it was possible that there would be a roll of honour for the councillors on Clydebank and others who had acted in this way in defying the law. Of course, we cannot consider these men as being in any way men of principle, because they abandoned the fight at the edge of the precipice and did not carry on to the bitter end, and I regard them as pathetic cardboard revolutionaries. They withdrew at the brink, and in the case of Clydebank left the ratepayers to pay the fines.
  What has been the result? I put that question now to the Minister of State in the hope of obtaining more information. I was most interested at the way in which the Secretary of State in his rather tepid defence of the clause seemed to be almost anxious to persuade us that the ratepayers had lost a great deal of money. The right hon. Gentleman referred to the figure of £1·7 million—
  Mr. William Ross: I did not.
  Mr. Taylor: The right hon. Gentleman referred to that figure, and if he checks Hansard he will see that I am correct. He said that if we added on the amounts in respect of those local authorities where auditors' reports have not been sent in the total was about £4 million.
  1170
  He seemed almost to be looking round at the hon. Member for Central Ayrshire and saying "Look how clever I have been. The ratepayers are having to pay £4 million more and the tenants are getting off with £4 million." But I wonder whether that is the fact. Can the Minister of State tell us what has been the result of this little revolution by the councillors of Clydebank and elsewhere?
  Looking at the facts and figures, I think that the Secretary of State has been engaged today in a desperate attempt to create a smokescreen to hide from the tenants of Clydebank and other areas the true result of the action of their councillors, which was allegedly taken in the interests of the tenants.
  The Under-Secretary has kindly provided me with figures of rent increases since November 1973. The average rent increased by 62p in Aberdeen. In Dundee it did not increase. In Edinburgh it went up by 38p. In Glasgow, one of the cities which were rent rebels, it went up by £39·69—well above the average which was laid down in the Housing Finance Act. The result is that the average rent for a council house in Glasgow, at £171·28 a year, is the highest of any city in Scotland.
  I turn from the major cities to the large burghs. In Airdrie there has been no increase since November 1973. The rent has increased by 52p in Arbroath, by 79p in Ayr, and by £43·44 in Clydebank, which is famous for its cardboard revolutionaries. Its increase was well above the maximum laid down in the Act. That happened because the council was late in applying the law. I wonder why the Secretary of State did not say a little about that.
  Shortly after the Government came to power they imposed a rent freeze. That freeze, imposed in about last March, will not end until 15th May. Its result was that the rents of the rebel authorities such as Clydebank and Glasgow were frozen not at the levels they would have reached if they had obeyed the law but at the higher levels. My interpretation of the figures is that because of the defiance of the law by the rebel councillors in Clydebank and Glasgow, and no doubt in Denny and the other places, the tenants in them have paid and are paying more rent than they would have

  1171
  paid if they had conformed to the Conservative Act.
  Mr. Robertson: Statistical nonsense.
  Mr. Taylor: I hope that the Minister of State will tell us the facts. I can see from the smiles and raised eyebrows in one part of the House that I seem to have struck home with an important truth.
  I hope that the Minister of State will tell the hon. Members for Central Ayrshire and West Stirlingshire and his other misguided colleagues that the councillors of Clydebank have brought disrepute on local government in Scotland. They have undermined the law and respect for the law. As a result of their allegedly trying to defend the interests of council tenants against the alleged vicious attack of the Conservative Party, those tenants are paying more in rent than they would have paid if the councillors had followed the law.
  Mr. Canavan: Do not the hon. Gentleman and his party accept any responsibility for the farcical situation that arose over the Housing Finance Act? Does he not realise that it was he and his party when in Government who flouted the traditions of local government democracy in Scotland by introducing that vicious Act, against the wishes of the majority of the elected representatives of the Scottish people? He can check with the Town Clerk of Denny the statistics, which show that the people of Denny were no worse off as a result of the delay in implementing the Act.
  Mr. Taylor: I have the figures for Denny, and shall be only too glad to give them to the hon. Gentleman. The Minister supplied them to me a few days before the debate. I hope that the Minister will tell the council tenants of Clydebank and Glasgow the facts and the truth. They will be interested to learn how they have been landed in trouble as a result of the actions of their councillors who claimed to be working for them. This is the direct result of the combined acts of irresponsible, law-breaking councillors and an inadequate Secretary of State, who compounded the felony by ensuring that we have this ridiculous situation.
  The hon. Member for West Stirling-shire asked whether the blame was not to be placed on the Conservative Party
  1172
  for introducing the Housing Finance Act. It is obvious from his speech that he is not interested in the rule of law, and the working of Parliament and local authorities. His idea was that we should establish communes in local areas instead of normal local government councils and that the commune should have the right to say which advice from the Government it was prepared to accept. The hon. Gentleman must appreciate that the system in Britain is that Governments make laws and local authorities carry them out.
  If the hon. Member is suggesting that we should have a system whereby local councils look upon the Government simply as a means of getting money and giving advice, he is suggesting a new kind of democracy. It is clear from his intemperate and extreme remarks that he, with his hon. Friend the Member for Central Ayrshire and the new revolutionaries from the Scottish National Party, is not thinking of democracy in the way I and most Labour Members think of it.
  Mr. Gordon Wilson: Does the hon. Gentleman not realise that this Bill is not a case of true retrospective legislation? The provision in Clause 19 is not one which calls for the withdrawal of a decision which has been taken. It relates purely to reviewing certain facts and circumstances at a given date. There is no decision to be recalled by Parliament. The exercise of these powers will be a matter for the executive—that is, the Secretary of State. Does he not realise that he is wilfully exaggerating the position for party political purposes and is wronging the Scottish National Party?
  Mr. Taylor: I have a high regard for the hon. Member because I know that he is an able politician. He is trying to cover up an appalling blunder and faux pas. He cannot escape the fact that if he and his party vote for this Bill they are supporting councillors who wilfully and openly broke the law.
  Mr. Gordon Wilson: Will the hon. Gentleman answer my question?
  Mr. Taylor: It is clear that this policy is being introduced retrospectively for the sole purpose of bailing out councils to whom a pre-election pledge was given. It is utterly shameful.

  1173
  Will the Minister of State tell the council tenants of Clydebank and Glasgow how much they have been saved as a result of these working-class heroes, these paper revolutionaries? I have a feeling that, rather than saving the council tenants any money, they will end up making them pay more, as well as bringing disrepute on the good name of their local authorities.
  The issue is not about money. It is not a question of what goes on the rates. It concerns a grave and important principle, affecting the whole basis of democracy. We are undoubtedly entering a period—[Interruption.] The hon. Member for Central Ayrshire will be aware that, while I have fought strenuously for many causes, it would be a novelty if I were, wilfully and openly, to incite local authorities to break the law. Even if I had been as irresponsible as the hon. Members for West Stirlingshire and Central Ayrshire, that would not be an answer to those concerned for democracy. [Interruption.] If you had heard the speech of the hon. Member for Central Ayrshire, Mr. Deputy Speaker, you would understand why he is agitated. When his constituents read what he said they will throw him out at the next opportunity.
  We are undoubtedly entering a period of great strain for the nation. We know that severe unemployment seems inevitable and that falling living standards have been forecast by the Chancellor. We know that prices will undoubtedly be rocketing. Massive increases in local rates and higher taxes seem inevitable or round the corner. In that situation one thing which is inevitable and which stands out a mile is that many people will be faced with a situation which they find unacceptable, unjust, unreasonable and at times intolerable. There will be enormous temptation to display their anger and concern by hitting out in various ways and by ignoring the normal rules and practices which are the basis of democracy.
  If we are to emerge from these troubled times with our democracy and freedom unscathed it is crucial that all our leaders in industry, the unions and commerce should demonstrate their total commitment to the law and not to disorder. They must demonstrate their
  1174
  commitment to reason and not to militancy.
  The greatest obligation of all surely rests on our political leaders who make the laws and do their duty on the assumption that laws will be obeyed and respected. The Labour Party in Parliament and in the country has a shameful record on that issue in recent times. It is a record which now that it is in Government it will have reason to regret. It is already clear that the Secretary of State for Education and Science has had the message clearly and that the Secretary of State for the Home Department has been equally brave in his recent action. But they have been voices crying in the wilderness of Leftist irresponsibility, and they have been too late.
  We remember the irresponsible support given by some Labour Members to the imprisoned dockers, to the strikes against the prices and incomes policy, to the Housing Finance Act and, more recently, to the so-called Shrewsbury martyrs. We remember the deafening silence—I accept that the hon. Member for Central Ayrshire has not been silent—from many of those from whom we expected more.
  I feel that in some ways the Bill is the last straw. At a time when the nation is facing grave economic perils the time of Parliament is being taken up to pass retrospective legislation which appears to be solely designed to free a number of Scottish councillors from their obligations and responsibilities for breaking the law on housing finance. It is no less than a squalid post-election pay-off which should be rejected with contempt by the House.
  I am appalled that the Secretary of State for Scotland should have succumbed to the pressure from the militant Left. He apparently lacks the backbone to stand firm against this intolerable use of retrospective powers. For that reason alone I believe that Parliament must reject of the Bill. It is yet another indication of the sad and shameful drift of the Labour Party from social democracy to the irresponsible doctrine of the extreme Left.
  10.43 p.m.
  The Minister of State, Scottish Office (Mr. Bruce Millan): I shall come a little later to Clause 19. I shall deal first with

  1175
  a number of other matters that are contained in the Bill. First, I turn to the rating system generally. It has been much criticised today, as it tends to be at any time when we debate matters relating to it. Of course, the system has considerable disadvantages. That is why the Government have established the Layfield Committee to review the whole system of local government finance and to produce proposals as rapidly as possible.
  I am not impressed by any party which makes the radical sounding noises in Opposition that we have had from the Conservatives in recent months. The Conservative Party has had ample opportunity to reform the rating system, and it has signally failed to do anything about it. I am particularly unimpressed by some of the proposals which we have had from the Opposition recently. There has been, for example, the abolishing of domestic rating altogether. But they completely failed to mention the money that would be lost by its abolition. Domestic rating would have to be made up in some way. Presumably that would be done by way of national taxation—income tax. Therefore, I remain absolutely unimpressed by anything that the Opposition have said today or at any other time about the rating system. The matter will be reviewed by the Government when we have the outcome of the Layfield Committee's deliberations.
  Rates, like every other item of personal expenditure, are likely to be affected by inflation. For that reason alone there is likely to be a substantial increase in the rating burden for 1975–76. A number of hon. Members have drawn attention to what they consider to be extravagance by local authorities, particularly in staff salaries. Local government reorganisation is the product of the Opposition, and the Secretary of State is not involved in fixing local government salaries; that is a matter for the normal national joint council and negotiating machinery.
  We have taken every opportunity—and my right hon. Friend the Secretary of State did this at the weekend—to remind local authorities that local government reorganisation must not be allowed to be an excuse for extravagance either in salaries or in any other aspect of local government expenditure. If hon. Members look at the rate support grant order for 1975–76, which has been published
  1176
  today and is now available, they will see that in calculating the relevant expenditure for rate support grant for 1975–76, far from encouraging extravagance, we urge the utmost economy in local authority expenditure, which should be kept to existing levels plus inescapable commitments. New commitments in staff or in any other respect should not be taken on by local authorities in the coming year.
  If, despite these injunctions, local authorities behave extravagantly—and I do not accept that that is likely to happen on a substantial scale—the burden will fall on local ratepayers. The burden of additional expenditure resulting from ignoring the Government's injunctions will be met not by the Government but by local ratepayers, and I hope that they will put every pressure on local authorities to ensure that local expenditure is kept within reasonable bounds.
  The Government have given the most generous rate support grant ever for 1975–76, with 75 per cent. of the reckon-able expenditure being met by Government grant, which is an increase of 8½per cent. on the figure for the previous year which we inherited from the Opposition. I take it amiss when the hon. Member for Glasgow, Cathcart (Mr. Taylor) makes wild accusations about the Government being unmindful of the burdens on the ratepayers when he must know that we have made a settlement with local authorities. Domestic rating relief has been increased for 1975–76 from 17p in the pound to an annual equivalent of 24p in the pound, which is another considerable protection for the domestic ratepayer.
  I do not pretend that there is not concern, and even apprehension, among domestic ratepayers. What I am saying is that the Government have taken action on these matters.
  The transitional arrangements for particularly heavy burdens that may arise out of local government reorganisation are not covered by the Bill, as some hon. Members have thought. Provision will be made by an order under the 1973 Act as soon as we can assess the position. Transitional arrangements between regions are provided for in the rate support grant order.
  Local government reform produces uncertainties, but there is no reason to

  1177
  defer any of the provisions in the Bill, and the same applies to what may happen when the Scottish assembly is established. That is completely neutral in relation to the Bill and the need to do certain things quickly in 1975–76.
  I will not spend a great deal of time dealing with detailed arguments on the valuation provisions, which have been generally accepted. We can debate in Committee the appointment of valuation panels, and so on, and I shall always be willing to listen to what my hon. Friends and hon. Gentlemen opposite may say in Committee.
  The transport grant provisions arise directly from the 1973 Act and are part of the movement away from specific grants towards support through the general rate support grant. It is part of a policy which, among other things, is designed to get the new regional authorities to look at the transport needs in their areas generally and to produce plans, which they are in a much better position to make than are the Government. The provisions are a counterpart of the increased devolution of responsibilities in several areas away from central government to local authorities. Hon. Gentlemen who continually urge us to do that must accept some of the consequences. They must not expect the Government to retain all their present powers.
  I am glad that the oil provisions have been welcomed by hon. Members on both sides of the House. The reason why oil is not specifically mentioned in the Bill is that we want to maintain an element of flexibility. The provision may be used for other purposes in future, although I cannot anticipate what they may be. Hon. Gentlemen have complained, on the one hand, about oil not being mentioned in the Bill and, on the other hand, about certain details of the circular which has been sent to local authorities. If everything is put in the Bill a rigid system results which cannot be altered according to changing circumstances. By doing it in this way we shall be able to listen to representations from hon. Members and local authorities about the way in which we intend to operate the scheme, and if we are not bound by a precise formula written into the Bill we can make changes.
  1178
  The fact that it is not written in in specific terms does not detract from the obligation taken on by the Government—an obligation which the previous Government were asked by local authorities to take on but did not. I am glad that the Labour Government are making special financial help available to areas which have had to bear a particularly heavy burden of oil development.
  The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) and several other hon. Members asked what the amount of help was likely to be. A figure is given in the Financial Memorandum. That figure is a good deal higher than the hon. Member for Cathcart suggested, because local authorities are involved largely in capital expenditure. Therefore, the figure for help in revenue terms which is related to loan charges represents a substantial amount of capital expenditure. I shall not go into details of the percentage grant that might be available, but hon. Gentlemen will see from the rate support grant order that the 2p threshold mentioned in the circular has been dropped. The local authorities will welcome that.
  A number of my hon. Friends mentioned the question of the local government commissioner. I am glad that these provisions, too, have been generally welcomed. To a considerable extent, they follow in principle the provisions we already have for the Parliamentary Commissioner, the Commissioner for the National Health Service, and, basically, the English local government commissioner.
  There is a difficulty of definition, which my hon. Friend the Member for Mother-well and Wishaw (Dr. Bray) mentioned, for example, but policy is not a matter, basically, for the commissioner. He is to be concerned with maladministration, with individual complaints. Policy of a local authority is a matter to be decided by the local authority itself. I believe that there will be a considerable volume of work for the commissioner and that his appointment is a very important additional democratic element of complaints machinery, available to the individual elector and resident who feels that he has been badly treated because of local authority maladministration. The details are matters we can consider in Committee and on Report.

  1179
  The provisions of Clause 19 have aroused the only controversy in the debate. My first comment is the simple one that these provisions are almost exactly the same in wording and intention as those which the Conservative Government included in the Local Government (Scotland) Act 1973. The Opposition Front Bench have been careful not to criticise the wording of Clause 19 because it has been copied from the 1973 Act.
  We are entitled to know, because of the fuss made about Clause 19, why the Conservative Government changed the 1947 Act in the first place. We are entitled to know why they felt it was not working properly and decided to make the change which we ourselves are now proposing. We have not had an explanation today from the Opposition about it; nor did we get one when the 1973 Act was going through Parliament.
  Indeed, the matter then was so unremarkable and uncontroversial that it was not even debated—although, wishing to be fair, I must admit that it may have fallen victim to the guillotine tactics of the Conservative Government. We are, nevertheless, as entitled now to ask these questions of the Opposition as they are to ask them of us.
  I can only guess why the Conservative Government decided in the 1973 Act to change the 1947 Act. I guess that it was for very much the same reasons why we do not want to deal with a number of interim reports, arising from the Housing (Financial Provisions) (Scotland) Act, simply by using the provisions of the 1947 Act. The 1947 Act is inflexible and does not allow the Secretary of State to take account of all the circumstances of the case. Just as Conservatives thought it sensible in 1973 to make that change in the law to deal with future cases arising under local government reorganisation in the wider and more sensible way, so we feel that it is not desirable to wait until 16th May 1975 for the new local authorities to come into operation. We want the additional flexibility which the Conservatives then sought, and we want it now. That is why the provision is in the Bill in its present terms.
  There is another extraordinary feature of the Opposition's activities on the clause in relation to the 1973 Act. The 1973 Local Government (Scotland) Act
  1180
  which made the change came, of course, after the Housing (Financial Provisions) (Scotland) Act 1972. During the passage of the 1972 Act it was well known that certain local authorities, because of the depth of feeling by certain councillors, would be tempted not to implement the Bill. It seems to me extraordinary that after the 1972 Act went into operation the Conservatives, having foreseen the disastrous consequences they claim of getting people "off the hook", did not desist in making changes in the 1973 Act—particularly the change that we seek in Clause 19. I can only speculate that that occurred because Conservatives felt difficulty in dealing with the 1947 provisions.
  Let us take the school milk episode, which came before the Housing (Financial Provisions) (Scotland) Act. We all know that a number of housing authorities refused to make the changes. That was done not because of a mistake or inadvertence, but through deliberate defiance of the Act. What did the so-called tough occupants of the Scottish Office do then? The then Conservative Scottish Secretary of State has since departed the House, but some Conservative Members, including the hon. Member for North Angus and Mearns, were in the Scottish Office at that time. I find it difficult to recollect the office which the hon. Member for Cathcart then held, but he was around somewhere at the time. What happened over school milk? The Secretary of State at the time, in a matter involving deliberate defiance of the law in the matter of school milk, did nothing at all about the situation.
  When we look at the 1947 Act and the procedure which it embodied, we may think it extraordinary that the then Secretary of State did not do anything about the school milk issue. I do not know on what basis he justified himself, or the Lord Advocate, in taking no action about school milk defaulters, if I may put it in that way, but the fact remains that he took no action. That must have been rather uncomfortable for him. So much, then, for the tough guys at the Scottish Office. The hon. Member for Edinburgh, Pentlands (Mr. Rifkind) mentioned sending local councillors to gaol, and so on. But those tough guys did nothing about the school milk episode in 1971.
  Let us come to the Housing (Financial Provisions) (Scotland) Act 1972. I shall

  1181
  not go into the merits of that Act—[Interruption.]—unless I am tempted. The background of the Act was that it was repugnant to very large numbers of local authorities. As my hon. Friend the Member for West Stirlingshire (Mr. Canavan) said, it took away from them power to fix their own rents, to which they, and we on the Government side of the House, attach considerable importance. I am not saying that that, by itself, is justification for defying the law, but feelings were very strong and were strengthened by the determination of the then Government to provoke conflict with local authorities.
  Mr. Teddy Taylor: I hope that the Minister will try to redeem himself a little by going a bit further and saying that he opposes local authorities which break the law.
  Mr. Millan: I thought that I had made that clear. I am not in favour of local authorities defying the law. I am not particularly in favour of central Government behaving with the insensitivity shown by Conservative right hon. and hon. Gentlemen concerning the 1972 Act. There were great problems of timing, mentioned by my hon. Friend the Member for Paisley (Mr. Robertson), and there was confusion about what the Secretary of State would do and whether he would send in a commissioner. Many local authorities believed that if they did not carry out the provisions of the Act, not that the rents would not rise but that the Secretary of State for Scotland would send in a local commissioner. But the then Secretary of State funked that, as well. We did not have any commissioners in Scotland, although that action was open to him.
  A number of doubts about the interim reports have never been satisfactorily cleared up. The first interim report was made in September 1973. There were five months from then until February 1974. We saw no action by Mr. Gordon Campbell or the then occupants of the Scottish Office. The five months passed and nothing happened. Perhaps they were embarrassed by another factor in the situation that in most of the cases of default the auditors did not put in a default procedure at all.
  The whole situation is erratic and patchy, and cannot be logically defended
  1182
  on principle. It was only in some cases that the auditors put in reports; in other cases they did not.
  What will happen if the Bill is passed in its present form, as we intend, is that the Secretary of State for Scotland will consider all the outstanding default reports on the basis of the new provision in the Bill and on the basis of taking account of all the circumstances, and that will include the auditor's report concerning the Clydebank fines as well as all other auditor's reports. I am not able to say at this stage what decision my right hon. Friend will take on these matters. However, he will be able to take decisions in the light of the new provision and with regard to all the circumstances of the case—a situation into which hon. Members of the Opposition were only too happy and anxious to put their Secretary of State.
  The hon. Member for Glasgow, Cathcart is trying to have it both ways concerning money. He is trying to pretend that a large sum was lost to the ratepayers but, on the other hand, that people paying rents actually paid more than they would have done—[Interruption.] If no money has been lost, I am not clear why we should be surcharging anyone, because the surcharge is meant as a recompense, not as a kind of penalty or punitive charge. It is meant not to send people to gaol but to recompense ratepayers for losses which they have sustained. If, according to the hon. Gentleman, there have been no losses, there is no need to surcharge councillors at all—but the hon. Gentleman is quite inaccurate in what he has said on that matter. The fact is that certain burdens fell on the ratepayers. That is history. Even if one attempted to surcharge all the councillors concerned, to the last penny included in the auditor's report, the ratepayers would get virtually nothing, because one of the unrealities of the present situation is that one cannot get money out of councillors who do not have the money to pay if the surcharge is placed upon them.
  Mr. Teddy Taylor: Will the Minister answer the straight question which I asked him? He must have information available to him. Am I wrong in thinking that the tenants of Clydebank might be paying more in rent now than they would

  1183
  have paid under the Housing (Financial Provisions) (Scotland) Act?
  Mr. Millan: The hon. Gentleman is wrong about that, as he is about a number of other matters, which it would be too tedious to mention now.
  A great fuss has been made about a perfectly sensible, realistic provision, of a sort which the Opposition were only too anxious to write into the Local Government Act 1973. There was an element of humbug displayed by the Opposition tonight, not least by the hon. Member for Glasgow, Cathcart, who, at the time of the Education (Scotland) Act 1969, which abolished fee paying in local authority schools, was only too anxious to encourage
  his Tory friends on the Glasgow Corporation to find ways of circumventing the express will of Parliament and the rule of law which had been expressed by Parliament in the 1969 Act.
  Apart from a little difficulty about Clause 19, I am glad to know that this Bill has received a general welcome. It is an excellent, sensible Bill—not the least excellent, sensible provision of which is contained in Clause 19. I have great satisfaction in commending the Bill to the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 285, Noes 239.

  Division No. 62.]

  AYES

  [11.12 p.m.

  Abse, Leo

  Dalyell, Tam

  Harper, Joseph

  Allaun, Frank

  Davidson, Arthur

  Harrison, Walter (Wakefield)

  Anderson, Donald

  Davies, Bryan (Enfield N)

  Hatton, Frank

  Archer, Peter

  Davies, Denzil (Llanelli)

  Hayman, Mrs Helene

  Armstrong, Ernest

  Davies, Ifor (Gower)

  Healey, Rt Hon Denis

  Ashley, Jack

  Davis, Clinton (Hackney C)

  Heffer, Eric S.

  Ashton, Joe

  Deakins, Eric

  Henderson, Douglas

  Atkins, Ronald (Preston N)

  Dean, Joseph (Leeds West)

  Hooley, Frank

  Atkinson, Norman

  de Freitas, Rt Hon Sir Geoffrey

  Horam, John

  Bain, Mrs Margaret

  Delargy, Hugh

  Howell, Denis (B'ham, Sm H)

  Barnett, Guy (Greenwich)

  Dell, Rt Hon Edmund

  Hoyle, Douglas (Nelson)

  Barnett, Rt Hon Joel

  Dempsey, James

  Huckfield, Les

  Bates, Alf

  Doig, Peter

  Hughes, Rt Hon C. (Anglesey)

  Bean, R. E.

  Dormand, J. D.

  Hughes, Mark (Durham)

  Benn, Rt Hon Anthony Wedgwood

  Douglas-Mann, Bruce

  Hughes, Robert (Aberdeen N)

  Bennett, Andrew (Stockport N)

  Duffy, A. E. P.

  Hughes, Roy (Newport)

  Bidwell, Sydney

  Dunn, James A.

  Hunter, Adam

  Bishop, E. S.

  Dunwoody, Mrs. Gwyneth

  Irvine, Rt Hon Sir A. (Edge Hill)

  Blenkinsop, Arthur

  Eadie, Alex

  Irving, Rt Hon S. (Dartford)

  Boardman, H.

  Edelman, Maurice

  Jackson, Colin (Brighouse)

  Booth, Albert

  Edge, Geoff

  Jackson, Miss M. (Lincoln)

  Boothroyd, Miss Betty

  Edwards, Robert (Wolv SE)

  Janner, Greville

  Bottomley, Rt Hon Arthur

  Ellis, John (Brigg & Scun)

  Jay, Rt Hon Douglas

  Boyden, James (Bish Auck)

  Ellis, Tom (Wrexham)

  Jeger, Mrs Lena

  Bradley, Tom

  English, Michael

  Jenkins, Hugh (Putney)

  Bray, Dr Jeremy

  Ennals, David

  Jenkins, Rt Hon Roy (Stechford)

  Brown, Hugh D. (Provan)

  Evans, Ioan (Aberdare)

  John, Brynmor

  Brown, Robert C. (Newcastle W)

  Evans, John (Newton)

  Johnson, James (Hull West)

  Buchan, Norman

  Ewing Harry (Stirling)

  Johnson, Walter (Derby S)

  Buchanan, Richard

  Ewing, Mrs Winifred (Moray)

  Jones, Alec (Rhondda)

  Butler, Mrs Joyce (Wood Green)

  Fernyhouch, Rt Hon E.

  Jones, Barry (East Flint)

  Callaghan, Jim (Middleton & P)

  Fitch, Alan (Wigan)

  Jones, Dan (Burnley)

  Campbell, Ian

  Flannery, Martin

  Judd, Frank

  Canavan, Dennis

  Fletcher, Ted (Darlington)

  Kaufman, Gerald

  Cant, R. B.

  Foot, Rt Hon Michael

  Kelley, Richard

  Carmichael, Neil

  Ford, Ben

  Kerr, Russell

  Carter-Jones, Lewis

  Forrester, John

  Kilroy-Silk, Robert

  Cartwright, John

  Fowler, Gerald (The Wrekin)

  Kinnock, Neil

  Castle, Rt Hon Barbara

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

  Lambie, David

  Clemitson, Ivor

  Freeson, Reginald

  Lamborn, Harry

  Cocks, Michael (Bristol S)

  Garrett, John (Norwich S)

  Lomond, James

  Coleman, Donald

  Garrett, W. E. (Wallsend)

  Latham, Arthur (Paddington)

  Colquhoun, Mrs Maureen

  George, Bruce

  Leadbitter, Ted

  Conlan, Bernard

  Gilbert, Dr John

  Lee, John

  Cook, Robin F. (Edin C)

  Ginsburg, David

  Lewis, Ron (Carlisle)

  Corbett, Robin

  Golding, John

  Lipton, Marcus

  Cox, Thomas (Tooting)

  Gould, Bryan

  Litterick, Tom

  Craigen, J. M. (Maryhill)

  Gourlay, Harry

  Lomas, Kenneth

  Crawshaw, Richard

  Graham, Ted

  Loyden, Eddie

  Cronin, John

  Grant, John (Islington C)

  Luard, Evan

  Crosland, Rt Hon Anthony

  Grocott, Bruce

  Lyon, Alexander (York)

  Cryer, Bob

  Hamilton, W. W. (Central Fife)

  Lyons, Edward (Bradford W)

  Cunningham, G. (Islington S)

  Hamling, William

  MacCormick, Iain

  Cunningham, Dr J. (Whiteh)

  Hardy, Peter

  McElhone, Frank

  MacFarquhar, Roderick

  Phipps, Dr Colin

  Thomas, Jeffrey (Abertillery)

  McGuire, Michael (Ince)

  Prentice, Rt Hon Reg

  Thomas, Mike (Newcastle E)

  Mackenzie, Gregor

  Price, C. (Lewisham W)

  Thomas, Ron (Bristol NW)

  Mackintosh, John P.

  Price, William (Rugby)

  Thompson, George

  Maclennan, Robert

  Radice, Giles

  Tierney, Sydney

  McMillan, Tom (Glasgow C)

  Reid, George

  Tinn, James

  Madden, Max

  Richardson, Miss Jo

  Tomlinson, John

  Magee, Bryan

  Roberts, Gwilym (Cannock)

  Torney, Tom

  Mahon, Simon

  Robertson, John (Paisley)

  Varley, Rt Hon Eric G.

  Marks, Kenneth

  Roderick, Caerwyn

  Wainwright, Edwin (Dearne V)

  Marquand, David

  Rodgers, George (Chorley)

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

  Marshall, Jim (Leicester S)

  Rodgers, William (Stockton)

  Walker, Harold (Doncaster)

  Mason, Rt Hon Roy

  Rooker, J. W.

  Walker, Terry (Kingswood)

  Meacher, Michael

  Rose, Paul B.

  Ward, Michael

  Mellish, Rt Hon Robert

  Ross, Rt Hon W. (Kilmarnock)

  Watkins, David

  Mikardo, Ian

  Rowlands, Ted

  Watkinson, John

  Millan, Bruce

  Ryman, John

  Watt, Hamish

  Miller, Dr M. (E. Kilbride)

  Sandelson, Neville

  Weetch, Ken

  Miller, Mrs Millie (Ilford N)

  Sedgemore, Brian

  Weitzman, David

  Mitchell, R. C. (Soton, Itchen)

  Selby, Harry

  Wellbeloved, James

  Molloy, William

  Shaw, Arnold (Ilford South)

  Welsh, Andrew

  Moonman, Eric

  Sheldon, Robert (Ashton-u-Lyne)

  White, Frank R. (Bury)

  Morris, Alfred (Wythenshawe)

  Short, Rt Hon E. (Newcasle C)

  White, James (Pollack)

  Morris, Charles R. (Openshaw)

  Silkin, Rt Hon John (Deptford)

  Whitehead, Phillip

  Morris, Rt Hon J. (Aberavon)

  Silkin, Rt Hon S. C. (Dulwich)

  Whitlock, William

  Mulley, Rt Hon Frederick

  Sillars, James

  Willey, Rt Hon Frederick

  Murray, Ronald King

  Silverman, Julius

  Williams, Alan (Swansea W)

  Newens, Stanley

  Skinner, Dennis

  Williams, Alan Lee (Hornchurch)

  Noble, Mike

  Smith, John (N Lanarkshire)

  Williams, Rt Hon Shirley (Hertford)

  Oakes, Gordon

  Snape, Peter

  Williams, W. T. (Warrington)

  Ogden, Eric

  Spearing, Nigel

  Wilson, Alexander (Hamilton)

  O'Halloran, Michael

  Spriggs, Leslie

  Wilson, Gordon (Dundee E)

  O'Malley, Rt Hon Brian

  Stallard, A. W.

  Wilson, Rt Hon H. (Huyton)

  Orbach, Maurice

  Stewart, Donald (Western Isles)

  Wilson, William (Coventry SE)

  Ovenden, John

  Stewart, Rt Hn M. (Fulham)

  Wise, Mrs Audrey

  Owen, Dr David

  Stoddart, David

  Woodall, Alec

  Padley, Walter

  Stott, Roger

  Woof, Robert

  Palmer, Arthur

  Strang, Gavin

  Wrigglesworth, Ian

  Park, George

  Strauss, Rt Hon G. R.

  Young, David (Bolton E)

  Parker, John

  Summerskill, Hon Dr Shirley

  TELLERS FOR THE AYES:

  Parry, Robert

  Swain, Thomas

  Mr. James Hamilton and

  Perry, Ernest

  Taylor, Mrs Ann (Bolton W)

  Mr. Laurie Pavitt.

  NOES

  Aitken, Jonathan

  Costain, A. P.

  Grant, Anthony (Harrow C)

  Alison, Michael

  Crouch, David

  Gray, Hamish

  Arnold, Tom

  Crowder, F. P.

  Griffiths, Eldon

  Atkins, Rt Hon H. (Spelthorne)

  Davies, Rt Hon J. (Knutsford)

  Grimond, Rt Hon J.

  Awdry, Daniel

  Dean, Paul (N Somerset)

  Grist, Ian

  Baker, Kenneth

  Dodsworth, Geoffrey

  Grylls, Michael

  Banks, Robert

  Douglas-Hamilton, Lord James

  Hall, Sir John

  Bell, Ronald

  Drayson, Burnaby

  Hall-Davis, A. G. F.

  Bennett, Dr Reginald (Fareham)

  du Cann, Rt Hon Edward

  Hamilton, Michael (Salisbury)

  Benyon, W.

  Durant, Tony

  Hampson, Dr Keith

  Berry, Hon Anthony

  Dykes, Hugh

  Hannam, John

  Biffen, John

  Eden, Rt Hon Sir John

  Harvie, Anderson, Rt Hon Miss

  Biggs-Davison, John

  Edwards, Nicholas (Pembroke)

  Hastings, Stephen

  Blaker, Peter

  Elliott, Sir William

  Havers, Sir Michael

  Body, Richard

  Emery, Peter

  Hawkins, Paul

  Boscawen, Hon Robert

  Eyre, Reginald

  Hayhoe, Barney

  Bowden, A. (Brighton, Kemptown)

  Fairbairn, Nicholas

  Heath, Rt Hon Edward

  Boyson, Dr Rhodes (Brent)

  Fairgrieve, Russell

  Heseltine, Michael

  Braine, Sir Bernard

  Fell, Anthony

  Hicks, Robert

  Brittan, Leon

  Finsberg, Geoffrey

  Higgins, Terence L.

  Brotherton, Michael

  Fisher, Sir Nigel

  Holland, Philip

  Brown, Sir Edward (Bath)

  Fletcher, Alex (Edinburgh N)

  Hooson, Emlyn

  Buchanan-Smith, Alick

  Fookes, Miss Janet

  Hordern, Peter

  Buck, Antony

  Fowler, Norman (Sutton C'f'd)

  Howell, David (Guildford)

  Budgen, Nick

  Fry, Peter

  Howell Ralph (North Norfolk)

  Bulmer, Esmond

  Galbraith, Hon T. G. D.

  Howells, Geraint (Cardigan)

  Burden, F. A.

  Gardiner, George (Reigate)

  Hurd, Douglas

  Carlisle, Mark

  Gardner, Edward (S Fylde)

  Hutchison, Michael Clark

  Chalker, Mrs Lynda

  Gilmour, Rt Hon Ian (Chesham)

  Irvine, Bryant Godman (Rye)

  Channon, Paul

  Gilmour, Sir John (East Fife)

  Irving, Charles (Cheltenham)

  Churchill, W. S.

  Glyn, Dr Alan

  James, David

  Clark, Alan (Plymouth, Sutton)

  Godber, Rt Hon Joseph

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

  Clarke, Kenneth (Rushcliffe)

  Goodhart, Philip

  Jessel, Toby

  Cockcroft, John

  Goodhew, Victor

  Johnson Smith, G. (E Grinstead)

  Cooke, Robert (Bristol W)

  Goodlad, Alastair

  Jones, Arthur (Daventry)

  Cope, John

  Gorst, John

  Jopling, Michael

  Cormack, Patrick

  Gow, Ian (Eastbourne)

  Joseph, Rt Hon Sir Keith

  Corrie, John

  Gower, Sir Raymond (Barry)

  Kaberry, Sir Donald

  1186

  1187

  Kellett-Bowman, Mrs Elaine

  Morris, Michael (Northampton S)

  Shelton, William (Streatham)

  Kershaw, Anthony

  Morrison, Charles (Devizes)

  Shepherd, Colin

  Kimball, Marcus

  Morrison, Peter (Chester)

  Silvester, Fred

  King, Tom (Bridgwater)

  Mudd, David

  Sims, Roger

  Kirk, Peter

  Neave, Airey

  Sinclair, Sir George

  Kitson, Sir Timothy

  Nelson, Anthony

  Skeet, T. H. H.

  Knight, Mrs Jill

  Neubert, Michael

  Smith, Dudley (Warwick)

  Knox, David

  Newton, Tony

  Spence, John

  Lamont, Norman

  Normanton, Tom

  Spicer, Jim (W Dorset)

  Lane, David

  Nott, John

  Spicer, Michael (S. Worcester)

  Langford-Holt, Sir John

  Onslow, Cranley

  Sproat, Iain

  Latham, Michael (Melton)

  Oppenheim, Mrs Sally

  Stainton, Keith

  Lawrence, Ivan

  Parkinson, Cecil

  Stanbrook, Ivor

  Lawson, Nigel

  Pattie, Geoffrey

  Stanley, John

  Le Marchant, Spencer

  Penhaligon, David

  Steen, Anthony (Wavertree)

  Lewis, Kenneth (Rutland)

  Percival, Ian

  Stewart, Ian (Hitchin)

  Lloyd, Ian

  Peyton, Rt Hon John

  Stokes, John

  Loveridge, John

  Pink, R. Bonner

  Taylor, R. (Croydon NW)

  Luce, Richard

  Price, David (Eastleigh)

  Taylor, Teddy (Cathcart)

  McAdden, Sir Stephen

  Prior, Rt Hon James

  Tebbit, Norman

  Macfarlane, Neil

  Pym, Rt Hon Francis

  Temple-Morris, Peter

  MacGregor, John

  Raison, Timothy

  Thatcher, Rt Hon Margaret

  Macmillan, Rt Hon M. (Farnham)

  Rathbone, Tim

  Thomas, Rt Hon P. (Hendon S)

  McNair-Wilson, M. (Newbury)

  Rawlinson, Rt Hon Sir Peter

  Thorpe, Rt Hon Jeremy (N Devon)

  McNair-Wilson, P. (New Forest)

  Rees, Peter (Dover & Deal)

  Townsend, Cyril D.

  Madel, David

  Rees-Davies, W. R.

  Trotter, Neville

  Marten, Neil

  Renton, Rt Hon Sir D. (Hunts)

  Tugendhat, Christopher

  Mates, Michael

  Renton, Tim (Mid-Sussex)

  van Straubenzee, W. R.

  Mather, Carol

  Rhys Williams, Sir Brandon

  Viggers, Peter

  Maude, Angus

  Ridley, Hon Nicholas

  Wakeham, John

  Maudling, Rt Hon Reginald

  Ridsdale, Julian

  Walder, David (Clitheroe)

  Mawby, Ray

  Rifkind, Malcolm

  Walker, Rt Hon P. (Worcester)

  Maxwell-Hyslop, Robin

  Roberts, Michael (Cardiff NW)

  Walker-Smith, Rt Hon Sir Derek

  Mayhew, Patrick

  Roberts, Wyn (Conway)

  Weatherill, Bernard

  Meyer, Sir Anthony

  Ross, Stephen (Isle of Wight)

  Wells, John

  Mills, Peter

  Rossi, Hugh (Hornsey)

  Whitelaw, Rt Hon William

  Miscampbell, Norman

  Rost, Peter (SE Derbyshire)

  Wiggin, Jerry

  Mitchell, David (Basingstoke)

  Royle, Sir Anthony

  Winterton, Nicholas

  Moate, Roger

  Sainsbury, Tim

  Young, Sir G. (Ealing, Acton)

  Moore, John (Croydon C)

  St. John-Stevas, Norman

  More, Jasper (Ludlow)

  Scott, Nicholas

  TELLERS FOR THE NOES:

  Morgan, Geraint

  Shaw, Giles (Pudsey)

  Mr. John Stradling Thomas and

  Morgan-Giles, Rear-Admiral

  Shaw, Michael (Scarborough)

  Mr. Adam Butler.

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  LOCAL GOVERNMENT (SCOTLAND) [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to make further provision as respects local government finance in Scotland, and to make provision for the appointment and functions of a Commissioner for the investigation of administrative action taken by or on behalf of local and other authorities, it is expedient to authorise the payment out of money provided by Parliament of—

  (a) any administrative expenses incurred by the Secretary of State under that Act;

  (b) any increase in the sums payable out of money so provided under section 1 of the Rural Water Supplies and Sewerage Act 1944 which is attributable to any provision of the said Act of the present Session removing the limit imposed by subsection

  1188
  (5) of the said section 1 as amended and as applied to Scotland on the contributions under that section towards the expenses of local authorities in Scotland;
  (c) any increase attributable to the provisions of the said Act of the present Session in the sums payable out of money so provided under any other enactment.—[Mr. Walter Johnson.]

  DISTRICT COURTS (SCOTLAND) BILL [Lords]
  Motion made, and Question proposed,
  That the District Courts (Scotland) Bill [Lords] may be proceeded with as if it had been certified by Mr. Speaker as relating exclusively to Scotland.—[Mr. Harry Ewing.]
  11.25 p.m.
  Mr. Edward Gardner: It may seem a little odd that a Member who represents an English constituency should intervene on a matter of this kind, but—[Interruption.]
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. If some right hon. and hon. Members do not wish to listen to the hon. and learned Member and those who may wish to follow him, will they kindly withdraw quietly from the Chamber?
  Mr. Gardner: I wish to point out that Standing Order No. 67, which would in the ordinary course apply to legislation of this kind, lays it down that if Mr. Speaker is of opinion that the legislation in question relates exclusively to Scotland, he shall so certify, and the Minister may then, on a motion, have that legislation committed to the Scottish Grand Committee.
  In this instance the procedure under Standing Order No. 67 is not being followed. I make no objection to that, because it would be within the competence of the House to order, as the Government wish, that the Bill be proceded with as if it had been certified by Mr. Speaker as relating exclusively to Scotland. The reason for my somewhat surprising intervention is that, as I see it, there are in the schedule to the Bill references to two Acts of Parliament both of which apply to England.
  The Game Act 1831, which is referred to in paragraph 3 of Schedule 1, was originally excluded from any effect in Scotland or Ireland, and it is only by the Game Licences Act 1960, which amended the 1831 Act, that the provisions of the 1831 Act now apply to Scotland. The schedule contains no reference to the amending Act. For the convenience and enlightenment of anyone who looks at the schedule, I suggest, one amendment to the schedule should certainly be a reference to the Game Licences Act 1860.
  I turn next to the Coal Mines Regulation Act 1887, which is cross-border legislation—[Interruption.]I know how enthralled hon. Members must be by these subtle questions, and I am delighted to note the interest being shown. I assure the House that it is a matter of some importance, going beyond technicalities. It is an attempt to introduce, under the guise of exclusively Scottish legislation, an amendment to an English Act of Parliament, and that cannot be right. That is the reason for my taking the rather unusual course of intervening at this time.
  I submit that it would be wholly wrong, in these circumstances and for these reasons, that the motion should be allowed to pass committing this legislation to the Scottish Grand Committee.
  Mr. J. Grimond: I wish to raise briefly a somewhat
  1190
  different point from the important constitutional issue mentioned quite rightly by the English nationalist. I suggest that if this motion is carried and the Bill is referred to the Scottish Grand Committee—to which I do not object—the Minister should look into the question of the representation, at the Committee stage, of my party—and I think that also applies to the Scottish National Party. I hope that the Minister will give an undertaking that he will consult and consider how we may be better represented on the Standing Committee, since these are matters on which we have a view to express.
  Mr. Nicholas Fairbairn: I find it offensive that an Act which applies solely to England should find its way into the schedule of a Scottish Act. I object, secondly, to the fact that an attempt should be made to confuse the law by introducing Scottish terminology into matters which apparently apply only to England. One can conceive of no circumstance in which Section 12 of the Coal Mines Regulation Act 1887 could apply to Scotland. If for no other reason than to counter sloppiness of legislation, it is in the interests of the House that these things should be regulated.
  11.32 p.m.
  The Under-Secretary of State for Scotland (Mr. Harry Ewing): I begin by welcoming the hon. and learned Member for South Fylde (Mr. Gardner) to our debates. No doubt we shall see him in Committee and we shall hear his legal points there. We shall consider what has been said by the hon. and learned Gentleman, although, strangely enough, we have not put down the motion for any of the reasons that he referred to. It was for two other reasons, which have to do with slight amendments to the English law. The two reasons are, first, to do with the transfer of fines and, secondly, the border police, where cross-border activities often take place, and where warrants issued in the Scottish borders often have to be implemented in the north of England.
  Mr. Gordon Wilson: Will the Minister tell us whether he is making this statement in his capacity as Under-Secretary in charge of home affairs or in connection with his duties in relation to devolution?
  Mr. Ewing: I am making the statement in connection with all the responsibilities I have for home affairs and devolution, and the responsibilities I have for keeping the Scottish National Party as well informed as is humanly possible.
  For the reasons I explained to the hon. and learned Gentleman, the motion was put down seeking permission of the House to refer the Bill to the Scottish Grand Committee. We shall examine the points that have been made.
  The matter of representation on the Committee, which was mentioned by the right hon. Member for Orkney and Shetland (Mr. Grimond) is obviously not one for me, but those who have that responsibility were within earshot of his remarks and no doubt consideration will be given to them.
  Mr. Ian Percival: Did the Minister refer to the importance of certain fines or the importance of some provisions in the Bill in relation to fines? I hope that he will forgive the ignorance of an English lawyer, but I should be grateful if he could explain that part of what he said.
  Mr. Ewing: I would not want the hon. and learned Gentleman to go to bed tonight under the impression that his ignorance had been forgotten.
  The position in connection with fines, at present—if I may spell it out in order that the hon. and learned Member may sleep peacefully tonight—is that Schedule 1, paragraph 26 provides that in Section 72A(2) of the Magistrates' Courts Act 1952 there shall be substituted "one hundred pounds" for "fifty pounds". Section 72A(2) concerns the transfer of fine orders imposed by the magistrates' courts in England and Wales to courts of summary jurisdiction in Scotland.
  At present, where the sum in question is above £50—the maximum amount of fine which can be imposed by existing lay summary courts in common law cases in Scotland—the statute requires that the courts specified in the order shall be sheriff courts. The amendment raises the limit to £100, to be consistent with the provisions in Clause 3(3) of the Bill, which raises from £50 to £100 the maximum fine which can be imposed by a district court in common law cases. I have absolutely no doubt that the matter
  1192
  is now much clearer—indeed, crystal clear—to the hon. and learned Member.
  With those comments I hope that the House will approve the motion.
  Question put and agreed to.
  Ordered,
  That the District Courts (Scotland) Bill [Lords] may be proceeded with as if it had been certified by Mr. Speaker as relating exclusively to Scotland.

  DISTRICT COURTS (SCOTLAND) BILL [Lords]
  Order for Second Reading read.
  Motion made, and Question put, That the Bill be referred to the Scottish Grand Committee.—[Mr. William Ross.]
  Whereupon not less than ten Members having risen in their places and signified their objection thereto, Mr. DEPUTY SPEAKER declared that the Noes had it.
  Bill to be read a Second time tomorrow.

  DISTRICT COURTS (SCOTLAND) BILL [Lords]
    ADJOURNMENT
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Walter Johnson.]

  FOOTWEAR INDUSTRY
  11.42 p.m.
  Mr. Terry Walker: This debate highlights the short-time working in the footwear industry in my Kingswood constituency. This is a very important matter, and it is not confined to my constitutency. It concerns many other parts of the country where footwear is the main industry. Three of my hon. Friends—the hon. Members for Northampton, North (Mrs. Colquhoun), Rossendale (Mr. Noble) and Norwich, South (Mr. Garrett) have asked to be associated with the debate, and I shall allow time so that they can contribute to it.
  We in Kingswood are particularly concerned about the present crisis in the industry, for after a long period when coal mining was our main occupation we developed a strong boot and shoe industry, in Victorian times, and it was a great rival to Northampton for the title of the principal home of the industry. In Braine's "History of Kingswood

  1193
  Forest", published in 1891, many factories were mentioned, but as well as employing many hundreds of people they involved a host of other people who worked in smaller workshops throughout the constitutency, and even in their own cottages and homes, producing materials that they took to the works once a week. At that time Kingswood and Northampton were the centres of the boot and shoe industry, and there was great rivalry between them.
  Up till the turn of the century many of these manufacturers produced in a small way, but at about that time there was an amalgamation of some of the small manufacturers, in which a company now known as G. B. Britton and Sons came into being. As smaller manufacturers faltered, Britton's advanced. When the changes in fashion came in, with lighter and more flimsy shoes being produced, the Kingswood firms started to go out of business, but Britton's was well to the forefront, with moulded-tread shoes, after the Second World War. Tuf made a considerable impact on the market.
  By then, almost all of the smaller manufacturers were in great difficulty. Kingswood watched many of them go out of production and eventually out of existence. It was a sad day when the Ward White group of Northampton took over Brittons, because Brittons had been the jewel in the crown of the footwear industry in Kingswood. That meant the end of the old war between Kingswood and Northampton, a war that Kingswood had lost, because Brittons was gobbled up. That was a measure of our decline.
  I hope that I have shown why Kingswood is so worried by the present position in the industry. Brittons employs about 600 manual workers, most of whom are now on a four-day week. There have been redundancies in South Wales. The redundancy notices posted on 3rd January in Braemar sent a cold wind through Kingswood, because we know that, geographically, we are next to the factories there. Forty-four per cent. of the labour force in the footwear industry is now on short-time working. The South-West and South Wales have 9,000 workers in the industry.
  The increase in the volume of imported cut-price footwear, if allowed to con-
  1194
  tinue, will cause irreparable damage to the economic survival of the home footwear manufacturing industry. The first repercussions are now affecting the industry in our area. Short-time working in the industry is running at a level 20 times higher than in manufacturing industry as a whole. It is a great problem, which makes us very fearful.
  Both the manufacturers and the trade unions have for some time been calling upon the Government for immediate quota restrictions on imports, many of which enter the United Kingdom at prices which bear no relation to the costs of production. In this respect the manufacturers and trade unions are at one about what should happen. This is a great strength of the argument we are putting forward all the time.
  We can no longer be a free market while others have restrictions. There is an element of dumping on our market. Other countries already have restrictions, and, therefore, if there is to be dumping anywhere it will be on the United Kingdom.
  All who work in the industry or are associated with it in any way agree that it is in a serious position. It is realised that getting anti-dumping duties imposed may be too slow a process. I think that it would be too slow in the present crisis. Quota restrictions must be imposed now.
  We also believe that a broad-based inquiry must be instituted by the Government. The study carried out by the Department of Industry gave us only the position, and not the answer. Many of us already knew the position. I pay tribute to it, but it is by no means the answer. The Government must make up their mind. The real question is whether the footwear industry is expendable. The industry has lost 20,000 workers over the past 10 years. If the present trend is not reversed there will be redundancies, factories will close, men and women will lose their jobs, skills will disappear, and we shall be completely reliant upon imports from abroad. Not only Kingswood, but the rest of the country will be affected.
  When 10 years ago my right hon. Friend the Secretary of State for Industry represented the part of Kingswood that I represent there were many more factories and many more people working in

  1195
  the industry. The figures given to me by a trade union indicate that the number of union members in the footwear industry has halved in Kingswood. That is something that cannot go on for another 10 years. I do not think that it can continue for more than a few years. The rest of the country will be affected, as well as the traditional homes of the footwear industry.
  I impress upon the Government the need for action now. There is no reason for delay. The position is well known, and is appreciated by all who are taking part in the debate. I hope that when my hon. Friend replies he will give the workers and the manufacturers in the industry a definite assurance of their position now. The present position is so critical that we cannot allow matters to be delayed further. Even now many people in the industry suspect that the action that we implored to be taken so long ago might be too late. I impress upon my hon. Friend the need for action now.
  11.47 p.m.
  Mr. Mike Noble: I shall be brief in my comments on the present situation. I shall concentrate on the situation in Rossendale, although the debate is about short-time working in Kingswood.
  My hon. Friend the Member for Kingswood (Mr. Walker) said that the problem was not peculiar to his constituency. I have the latest figures from the Lancashire Footwear Manufacturers' Association concerning short-time working in an area including my constituency. On 31st December, 50 per cent. of the women and 43 per cent. of the men employed in the footwear industry in Rossendale were on short-time working, and had been for some time. Indeed, some factories in the area have not recovered from the three-day working week of last year. Some of them have had scarcely any full-time working since that time.
  The situation is not just one of short-time working. Rossendale is not a wealthly area. Many families depend upon two incomes to sustain them. On a situation in which 50 per cent. of the women and 43 per cent. of the men are unable to take home a full wage we can
  1196
  imagine the position that will face such families when the weekly bills have to be paid.
  Shortly before Christmas there was an Adjournment debate on textiles. The textile industry is the second most important industry in my constituency. There is a close association between the footwear industry and the textile industry. There is a situation in textiles matching that in footwear. I hope that the Minister, when considering the measures which are necessary to meet this crisis, will bear in mind not just that we have relations with other nations which are exporting footwear to this country but that we represent the constituencies involved. I ask my hon. Friend to consider the desperate circumstances which face so many of the families who depend for their livelihood on footwear.
  11.50 p.m.
  Mr. Robert Boscawen: I am grateful for the opportunity to intervene briefly in this debate. I, too, have the headquarters of a large footwear organisation, perhaps the largest in the country—C. and J. Clark—in my constituency. As many hon. Members will know, it has been on short-time working for a considerable period, which has affected the whole of the West Country, where it has factories. This short-time working is having a harmful effect on town and country areas.
  I congratulate the hon. Member for Kingswood (Mr. Walker) for raising this subject. As he said, there is an ill wind blowing from the east which affects the industry. The Comecon countries have undoubtedly been exporting to this country for a considerable period at prices below the cost of production. There has been a lack of faith on the part of those countries, in that they have not let this country know that they intended stepping up the export of shoes in 1974. They did so, and last August the industry made strong representations to the Department, asking it to do something about the situation. The industry is disillusioned about applying for anti-dumping legislation. It wanted something quicker to be brought in—something in the nature of a quota system which would operate at once. We now learn that the quota system is not possible.
  We are disappointed that the Department is not able to operate a quota

  1197
  system. We believe that anti-dumping legislation is far slower, more cumbersome and less likely to be effective in a reasonable time. We ask the Minister to expedite any measures that he is able to take. Many families are suffering. I ask the Minister to do something now. All representing this industry will be extremely grateful.
  11.53 p.m.
  Mr. John Garrett: I thank my hon. Friend the Member for Kingswood (Mr. Walker) for giving me time to speak in this debate. I shall concentrate on a few strategic issues which those of us who have constituency interests would like to see in the Government's mind. The British footwear industry is suffering a slow and steady decline in employment. It is wasting away in the face of foreign competition. It is easily forgotten by Governments. The Government may think that the industry is expendable in the cause of trade policy. However, the industry's case for protection against imports from Comecon countries is overwhelming.
  The industry has also borne the brunt of imports from the Far East. I hope that the Government will insist that all the industrialised countries should bear their fair share of imports from these countries. However, the industry faces bigger problems than that of low-cost imports.
  By far the greatest volume of imports comes from Italy. I am told that Italian footwear out-sells ours here because of superior design and marketing. I also understand that French and Italian footwear out-sells ours throughout the world, although their costs are broadly the same. I call upon the Government to institute a broad inquiry into the nature and cause of the decline in the British footwear industry.
  Some of the questions I want answered are: what is the future of the industry if present trading conditions continue? Who is doing the importing, and why? What can the Government do to help the industry to replace imports from Italy? How can exports be promoted? Do we need a State-supported British shoe export corporation? Is the ownership of the manufacturing industry now too concentrated or too dispersed? What is the effect on the industry of the dominance of the United Kingdom retail trade
  1198
  by one large corporation? What can the Government do to rebuild the industry through trade, employment, economic, taxation and regional policies? Can the Industry Act be used to help the whole industry, rather than regions of high unemployment, as has been the case in the past? These are the crunch questions that have to be answered soon if action is to be taken in time to revive, let alone save, the British footwear industry.
  11.54 p.m.
  The Under-Secretary of State, Department of Industry (Mr. Michael Meacher): I thank my hon. Friend the Member for Kingswood (Mr. Walker) for the very constructive manner in which he opened the debate. I shall not be able, in the time available, to answer all the points put to me by my hon. Friend the Member for Norwich, South (Mr. Garrett), but I shall try to sketch the essential position.
  In the last decade this most important industry has undergone a considerable change. Employment has fallen by about 22 per cent., or about 20,000 employees, though production has remained steady due to improved productivity, for which workers and management in the industry deserve great credit. I am happy to say that this fall in employment has not caused general hardship because most of the lost jobs were in areas where other work was readily available. At no time over that period did registered unemployment in the industry exceed the minimal figure of 2·2 per cent. In the assisted regions of Great Britain, where jobs are less plentiful, employment in the industry actually rose by about 300 between 1963 and 1973 and in Northern Ireland it went up by about 1,000. I shall return to the immediate employment situation later.
  As in most other developed countries, shoe manufacturers have to face increasing competition from imports from low-wage countries. Demand in this and other developed countries is rising only slowly. But with the emergence of strong industries in low-wage countries, world trade has been rising at 20 per cent. every year. As a result, imports into the United Kingdom went from 18 per cent. to 32 per cent. of consumption in the 10 years to 1973 and the trade deficit deteriorated from about £7 million a year to about £50 million.

  1199
  Many of these imports are of types like wellingtons, some sports shoes and footwear with textile uppers where, for many years, we have met only a small part of our own needs and have relied on overseas suppliers. The consumer has benefited from low-priced goods. But there has also been import growth in the staple British production lines—what might be termed everyday footwear. Here, import penetration between 1963 and 1973 rose from 11 per cent. to 25 per cent.—a serious increase.
  It is against this background that I turn to the immediate problems of short-time working and redundancies which are troubling hon. Members. I share their concern. The effects are particularly unhappy in those localities where the industry is a major employer. These difficulties spring from a combination of causes, but mainly from a falling off in demand at home and abroad. At home the most recent figures show that apparent consumption in the three months to September 1974, the latest period for which figures are available, was about 3 per cent. higher than a year before. However, retailers and manufacturers, faced with rising costs and expensive money, have been keeping their stocks as low as possible. Like most other industries, they are having to husband their cash so as not to put their livelihood and that of all their workers at risk. So production has been cut back. That is the basic problem.
  Production for export has also been affected by the state of trade. Demand in America has fallen. Australia has placed restrictions on footwear imports. We have made vigorous representations to the Australian authorities about the effect on our trade, as I think the United Kingdom Federation has done on behalf of British manufacturers. In these circumstances, rising imports of footwear with leather uppers at very low prices from Eastern Europe, especially from Czechoslovakia, Poland and Romania, are causing particular concern. The Government have reached a definite decision that some action must be taken to prevent them from further aggravating the fall in orders and loss of jobs from which the industry is suffering.
  Of course, in deciding what form this action should take it is essential to take
  1200
  account of the fact that the United Kingdom is a major exporter, vitally interested in maintaining open markets worldwide. Thus, although the Government are anxious to assist domestic industry wherever possible, it is understandably anxious not to impede our access to the markets of Eastern Europe, where our exports have in general been increasing in recent months. Nevertheless, and contrary to the impression given by the Financial Times report of 14th January 1975 of the meeting of the Parliamentary Labour Party Footwear Group with the Secretary of State for Trade, it is the Government's intention to approach the Eastern European supplying countries concerned with a view to discussing the difficulties facing British industry at the present time, and particularly where these relate to imports from the three countries.
  Some of my hon. Friends will recall that in the autumn of 1972 the Department of Trade and Industry accepted that there were grounds for investigating an application from the Footwear Federation for the imposition of antidumping duties on imports of men's leather-uppered footwear from Czechoslovakia, Poland and Romania.
  This led to discussions at official level with the countries concerned, as a result of which the application was not then pursued. In view of the continuing rise in these imports and the industry's difficulties, we are approaching the supplying countries with a view to seeking a solution to the situation. No form of solution will be excluded from these discussions, including voluntary restraints by the relevant countries. We intend to begin consultations before the end of this week. Whilst clearly, at this stage, it would not be helpful to the industry's cause for me to elaborate further, I can give an assurance that we shall fully take account of industry's representations to us on the level of these imports.
  Apart from action on footwear imports, in the November Budget the Government announced measures to strengthen the private industrial sector generally and to encourage consumer expenditure. The footwear industry, in common with other consumer goods industries, should benefit from those measures, and one would hope to see

  1201
  an improvement in company fortunes and in employment in the coming months, as a result of these measures.
  Turning to the specific point raised by my hon. Friend, I emphasise that the footwear industry in Bristol is relatively small. Its work force of some 1,300 represents less than half of 1 per cent. of all employees in the area. That is in no way to underestimate the importance of what my hon. Friend said, but we need to have this in perspective. The largest local footwear employer—G. B. Britton, one of the Ward White Group—employs just over 1,050. I am advised—and my hon. Friend confirmed—that this firm has been operating a four-day working week since October, but I understand that there have been no redundancies.
  For the Bristol area as a whole, the latest—November 1974—figures for unemployment of 8,500, including 7,400 males, represent a rate of2·7 per cent., which is below the regional rate of3·2 per cent., and the same as the national rate.
  Short-time working of this order is, I regret, typical of the industry at the present time. In another factory of the Ward White Group, at Brynmawr, where I understand shoes similar to those at Kingswood are made, about 250 employees have recently received notice of redundancy. Before taking the Brynmawr decision the group examined a number of alternatives, one of which was to introduce a similar number of redundancies at the Kingswood factory. This has now been firmly rejected and the position of Kingswood is correspondingly strengthened. From my own discussions with both sides of industry, I know that the local consequences of the Brynmawr decision are well understood by the Ward White Group, which has emphasised that the Brynmawr factory is not being closed and has
  1202
  assured my officials that, should conditions improve, it will take steps to increase the number of jobs at Brynmawr once more. I hope that this time is not far off.
  In view of reports in the local Press that the redundancies were caused by the Government's alleged refusal to act on imports, I should make it clear that the company informed us that the decision was due to general lack of demand, coupled with excess capacity in the group as a whole.
  I end by looking beyond the short-term difficulties facing the industry and towards the study to which my hon. Friend referred. It is essential to place it on a sound long-term footing. The Government believe the footwear industry to have potential for development both in the United Kingdom market and abroad. An internal study of the industry was therefore made by officials of my Department, in particular of the scope for using the powers of the Industry Act 1972 to assist and further develop the footwear industry in the United Kingdom. I repeat what I recently told an industry delegation. The Government certainly do not consider this industry to be expendable. I stress that because my hon. Friend expressed doubt whether that view had been firmly taken. The Government wish to see it sufficiently strong and imaginative to be capable of dealing with free and fair competition throughout the world. I would therefore welcome an early approach from the industry to officials in my Department with proposals on how Government and industry together might determine how best to assure a successful future for the industry.
  Question put and agreed to.
  Adjourned accordingly at six minutes past Twelve o'clock.