Commons Sitting of 23 January 1975

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

    Fishing Industry
    Mr. Beithasked the Minister of Agriculture, Fisheries and Food whether he has completed his consideration of the case for a temporary operating subsidy or fuel subsidy for the fishing industry; and whether he will make a statement.
    Mr. Miscampbellasked the Minister of Agriculture, Fisheries and Food what action the Government are taking concerning the present position in the fishing industry, especially in relation to increased costs of operation.
    Mr. James Johnsonasked the Minister of Agriculture, Fisheries and Food whether he can now make a statement regarding the extent of financial aid in the form of subsidies that he intends to give to the fishing industry.
    The Minister of State for Agriculture, Fisheries and Food (Mr. E. S. Bishop): As I informed the House as recently as 16th January—[Vol. 884, c. 667]—the Government are actively considering the question of aid for the fishing industry. I shall make a statement as soon as possible.
    Mr. Beith: Does the hon. Gentleman realise that his statement is anxiously awaited, that as time elapses the catching capacity of the fishing industry is being reduced by vessels being sold or laid up and that the situation with fuel costs and gear costs is getting worse and not improving?
    Mr. Bishop: I appreciate that need for an urgent decision, but the claim for the
    1716
    resumption of the subsidy, largely due to fuel cost increases, which is a national problem, raises many difficult questions. We are dealing with this as quickly as possible but further inquiries have had to be made. We shall certainly bear in mind the hon. Gentleman's anxiety.
    Mr. Johnson: One accepts that this excellent Government need time to make a decision which is wise and helpful for the industry, but will my hon. Friend bear in mind that the old system of operating costs per day worked well, was accepted by the industry and, I believe, will be welcomed back if and when he makes his decision?
    Mr. Bishop: Yes. My hon. Friend will know that operating subsidies were available for fishing vessels until the end of July 1973, by which time the general profitability of the fleet made subsidies unnecessary. However, I shall certainly take note of his point in the context of the other aspects which must be urgently considered at this time.
    Mr. Powell: In considering these matters of subsidy, will the Government bear in mind that far more important for the future of the fishing industry is the preservation of the fishing grounds by proper extension of this country's limits?
    Mr. Bishop: I certainly welcome the emphasis that the right hon. Gentleman places on that matter. We are urgently considering these aspects and others against the background of the Law of the Sea Conference and quotas and other discussions which are now taking place.
    Mr. Monro: Will the Government accept that these answers are not good enough? We have known for months that this situation would develop at the turn of the year, yet nothing is ready and organised to help the fishermen. Will the hon. Gentleman take urgent action and try to give us a report within the next two or three weeks?
    Mr. Bishop: I certainly appreciate the hon. Member's concern. Although we can use the data available to deduce whether the fleet as a whole or significant elements of it are operating successfully, there are other questions of judgment that the Government must consider, including how long the developing situation might

    1717
    last, the consequences and whether intervention is justified in certain respects in the national interest. But I share the hon. Gentleman's anxiety.

    British Poultry Federation
    Mr. Biffenasked the Minister of Agriculture, Fisheries and Food what plans he has to meet representatives of the British Poultry Federation.
    Mr. Bishop: I met representatives of the British Poultry Federation on 17th December and further meetings are to take place between representatives of the federation and officials of my Department.
    Mr. Biffen: Although I appreciate the charm and authority of the hon. Gentleman, I. am sure he realises that the Minister is the person to whom this Question was directed and that the federation would be grateful if he could see his way to meeting it, particularly in the light of the considerable hardships that the industry is now facing, not least on account of the vagaries of the workings of the common agricultural policy, which is presenting the prospect of unfair competition in eggs from France and in poultry meat from Holland and Denmark. Will the hon. Gentleman convey to his right hon. Friend the real appreciation that there would be if he would see a delegation himself?
    Mr. Bishop: I appreciate the hon. Gentleman's concern, but because of my right hon. Friend's many other engagements at home and in Europe, and because he did not wish the meeting with the federation to be held up, he asked me to meet it and to keep him informed of the discussions. At the moment our officials are in touch with the federation. I have only just come from an excellent occasion at the Savoy, when I was able to present the European Egg Marketing Trophy Award. I was also able once more to assure the industry of our concern, quite apart from the fact that one of the biggest poultry farms in the country is in my constituency. I will bear the hon. Gentleman's points in mind.
    Mr. Pym: Will the Minister assure us that he will have these consultations in the context of discussions in relation to the price review and take fully into account in the context of the review the representations of the federation?
    Mr. Bishop: There is no United Kingdom guarantee scheme for eggs or poultry meat. The federation has every opportunity of making its views known about the price review and developments in those areas known to the Ministry. We shall take into account all the observations made to me direct and to my right hon. Friend.

    Tied Cottages
    Mr. Lawsonasked the Minister of Agriculture, Fisheries and Food what representations he has had from farmers and farming organisations on the subject of tied cottages; and whether he will make a statement.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Gavin Strang): The National Union of Agricultural and Allied Workers has urged upon my right hon. Friend the need for early action to implement the Government's pledge to abolish the tied cottage system in agriculture. He has also received representations from the National Farmers' Union, the Country Landowners' Association and from some farmers expressing concern about the Government's intentions here.
    Mr. Lawson: May I inform the Minister that the farmers in my constituency—[Hon. Members: "Question."]
    Mr. Speaker: Order. The hon. Member may not "inform" the Minister of anything at Question Time.
    Mr. Lawson: I apologise, Mr. Speaker. I was seeking permission to inform him.
    Mr. Speaker: Order. The usual form is "Is the Minister aware."
    Mr. Lawson: Is the Minister aware that I and farmers in my constituency are extremely concerned about the Government's intentions in this matter? This is a very complex issue which has ramifications going far beyond agriculture and involves tied accommodation in many other sectors. Before action of any kind is contemplated, will the Government consider setting up a full-scale independent inquiry of a fact-finding nature into this matter, perhaps along the lines of the O'Brien Committee, whose report the House approved last week despite the fact that the Minister was so shamefully deserted by many of his Cabinet colleagues?
    The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): A good victory.
    Mr. Strang: No, I should be against an independent inquiry. We are concerned specifically with the issue of the agricultural tied cottage. I acknowledge that some farmers are concerned about some of the implications of this reform, and we shall be having discussions with the NFU. I would hope, however, that the hon. Gentleman would also listen to the views of the agricultural workers in his constituency on this issue.
    Mrs. Colquhoun: Does my hon. Friend accept that the tied cottage system has been an intolerable burden on farm workers and their families? [HON. MEMBERS: "Rubbish."]. This is an important part of the Labour Party's election promise and should be implemented as quickly as possible.
    Mr. Strang: My hon. Friend is absolutely right. There is tremendous strength of feeling on this issue within the National Union of Agricultural and Allied Workers. The Government intend to fulfil the pledge they gave in two manifestos last year.
    Mr. Carlisle: Is the Minister aware that the continuation of the tied cottage system is most important, particularly for farmers in the dairy industry? Is he also aware that I represent a fair number of dairy farmers in my constituency and that I have never had one complaint from any agricultural worker about the tied cottage system? Will he tell the House what is the difference, if there be one in kind, between the tied cottage for the agricultural worker and the tied cottage for the headmaster, the tied cottage for the policeman or the tied cottage for the railway employee?
    Mr. Strang: I cannot really accept that in practice a headmaster is in a similar position to a farm worker on this issue. But I acknowledge that when we come to implement this reform we must look at all aspects, including the question of dairy farming and farming in remote areas.

    Horticulture (Glasshouse Section)
    Mr. Blakerasked the Minister of Agriculture, Fisheries and Food what recent consultations he has had with the
    1720
    NFU about the problem of glasshouse growers.
    Mr. Michael Lathamasked the Minister of Agriculture, Fisheries and Food what further representations he has received from the NFU regarding the glasshouse sector; and what reply he has sent.
    Mr. Strang: My right hon. Friend has discussed the glasshouse sector on several recent occasions with representatives of the NFU who have also met officials. The most recent discussions took place on Friday last in the context of the annual review.
    Mr. Blaker: Is the Minister aware that I am grateful to him for receiving my hon. Friend the Member for Worcestershire, South (Mr. Spicer) and myself last week to discuss the problems of this sector? Is he aware that the main problem facing glasshouse growers is the critical one of the cost of fuel oil, in which context they are in a very special position? When does he expect to be able to make a statement about whether the subsidy which existed until the end of last year will be continued until June?
    Mr. Strang: I agree that this is an important question. As I indicated to the hon. Gentleman when we met, the Government are considering this most urgently, and we shall announce our decision in the very near future.
    Mr. Dalyell: Is my hon. Friend aware that the horticulture section of the Scottish NFU has persuaded some of us that unless help is given there will be bankruptcies in the Clyde Valley and elsewhere in Scotland?
    Mr. Strang: I would agree with my hon. Friend that this is a matter of extreme importance to horticulture producers, particularly to many in the Clyde Valley who are going through a very difficult time.
    Mr. Latham: What has changed since the oil subsidy was first granted and then removed, except that oil prices have increased several times?
    Mr. Strang: I do not think that is a very helpful point—[HON. MEMBERS: "Oh."]—if only because it is so fatuous. The fact is that the Government are giving this matter serious consideration. But

    1721
    I am sure that even the hon. Gentleman would accept that the question of the subsidisation of oil imports is one which must be decided in the widest context.
    Mr. Pym: What is the reason for the delay in the Government's decision? Does the Minister agree that the European Community is disposed to be helpful on this matter? Will any decision, to which he has just referred, be back-dated, perhaps to the beginning of the year?
    Mr. Strang: I can confirm that there is no obstacle from the European Community to extending this subsidy, but I do not think that the right hon. Gentleman would expect me to talk of the possibility of back-dating before we have announced our decision in principle on this matter.

    Sugar
    Mr. Michael McNair-Wilsonasked the Minister of Agriculture, Fisheries and Food if he will make a further statement about sugar supplies.
    Mr. Fairbairnasked the Minister of Agriculture, Fisheries and Food what, in the light of recent statements by the Jamaican Trade Minister concerning the continuation of Commonwealth sugar supplies to Great Britain in the next few months, is his forecast of the likely shortfall of sugar supplies in the coming year.
    Mr. Spearingasked the Minister of Agriculture, Fisheries and Food if he will make a statement concerning future deliveries of raw cane sugar to the United Kingdom port sugar refineries.
    Mr. Peart: Unfortunately it has not yet been possible to reach agreement with the developing Commonwealth countries on the price to be paid for their sugar in 1975. Meanwhile our requirements are being met from our domestic beet crop, imports from the Continent and imports from the world market under the EEC import subsidy arrangements. I am glad to say that the EEC Council of Agricultural Ministers has just agreed to extend this scheme to a further 300,000 tons.
    Mr. McNair-Wilson: May I press the Minister to tell us a little more about the apparent breakdown in his negotiations with Commonwealth suppliers? Will he say whether this has anything to do with the price he is prepared to offer?
    1722
    Will he also say whether there is any probability of Guyana offering her crop at the price he is apparently prepared to pay, and whether supplies for this country this year are in any sense guaranteed?
    Mr. Peart: On the negotiations with ACP countries, which are fundamental to the hon. Gentleman's question, the talks have not broken down. We shall be pursuing talks with the ACP countries. I announced an offer of £250 cif. I believe that what we offered is reasonable. I hope we shall succeed in getting an agreement.
    Mr. Spearing: Does my right hon. Friend agree that if we had been able to conduct these negotiations a year ago the prospects for everyone might have been a great deal better? Will he also tell us something about the deliveries of raw sugar to port refineries from the beet factories? Does he agree that unless these can be continued as they have been in the past, the prospects for employment, irrespective of cane, will be difficult in those refineries, and that the answer given by my hon. Friend the Minister of State to a Written Question some time ago is not reassuring on this matter?
    Mr. Peart: I hope that my hon. Friend will not be too pessimistic. After all, we renegotiated the ACP countries' long-term agreement with the Community, which is a very good agreement, very similar to the old Commonwealth Sugar Agreement, with guaranteed access for 1·4 million tons. All I am saying is that we are still negotiating. I do not want to prejudice negotiations, and I do not think that any hon. Member would want me to say anything which could harm negotiating stances. All I can say is that we are well aware of the problem of the refiners.
    Mr. Fairbairn: Does the Minister appreciate that whatever sugar supplies he may be able to obtain, and at whatever price, in rural communities sugar supplies de facto are not available since those who supply sugar cannot afford to take it to those who eat it, and those who eat it cannot afford to drive and get it from those who supply it?
    Mr. Peart: That was an interesting conclusion to the hon. Member's speech. As the production Minister I am concerned to ensure that our talks with the ACP countries succeed.
    Mr. Pym: Will the Minister say how much of the 300,000 tons is expected to come to the United Kingdom, and for how long that will secure our supplies? If the Minister had not been so dilatory last year we would not have the continuing uncertainty that we know today.
    Mr. Peart: I am amazed at the right hon. Gentleman, especially in view of the great arguments about bankable assurances advanced by one of his colleagues. We have succeeded in negotiating a long-term agreement for the ACP countries. The Conservatives did not do that; we did. Perhaps I can give a specific example of the operation of the import subsidy scheme, which I agreed to and which was a good scheme, whereby we got subsidised sugar, with the subsidy provided by the Community. On the first tranche of 200,000 tons, 156,000 tons came to us. We have negotiated another tranche, but we are not the only deficit area. The other country concerned is Italy. I have every reason to believe that even the right hon. Gentleman will be satisfied with what I have secured.
    Mr. Pym: How much?
    Mr. Peart: I cannot say yet.

    Feeding Stuffs
    Mr. Hicksasked the Minister of Agriculture, Fisheries and Food whether he is satisfied with the operation of the emergency measures that he introduced in respect of assisting hill farmers with the fodder requirements for their stock; and what is the number of hill farmers in England and Wales that have taken advantage of this scheme and the number of cattle that have been moved to lowland farm locations.
    Mr. Jim Spicerasked the Minister of Agriculture, Fisheries and Food if he is satisfied with the current supply position of animal feeding stuffs.
    Mr. Bishop: Supplies of cereal feed are adequate and prices have fallen. Fodder is short, although the carry-over stock in 1974 was higher than we had earlier estimated. The mild weather has helped, but some farmers, particularly in parts of Wales, continue to have serious shortages of roughage. About £12,500 has already been committed under the agistment scheme; 29 hill farmers have
    1724
    moved 830 cows to lowland farms. I am satisfied that the measures taken, particularly the substantially higher payments of beef cow, hill cow and hill sheep subsidy now being made, are helping with feed costs.
    Mr. Hicks: Does the right hon. Gentleman agree that, however well-intentioned the scheme may have been, it has not been a success? Does he accept that the immediate requirement of our hill farmers is both confidence and cash—cash to help them purchase their much-needed fodder and confidence to restore their faith that they have a future in the pattern of home-produced food?
    Mr. Bishop: I appreciate some of the points made by the hon. Member. Of course, the cost of food was one of the reasons why we introduced measures to increase the cash flow. Noticeable among these measures was the advancement of the hill and beef cow subsidy and higher hill sheep subsidies which accounted for more than £30 million. The hon. Member should not forget the other aspects of the comprehensive package introduced by my right hon. Friend. The hon. Member suggests that in the long run this is a matter of confidence, and I am hoping that in his discussions in Brussels my right hon. Friend will be able to achieve some of the assurances which we all need.
    Mr. Spicer: The Minister's comment about the mild weather was correct, but does he agree that in terms of supply and price the imports from the EEC have helped considerably over a difficult period?
    Mr. Bishop: I appreciate the hon. Member's feelings, but there are aspects of this matter which were mentioned by the hon. Member which have been delayed to some extent through requiring the agreement of the EEC. I know that the hon. Member's area of the South-West has had problems. I was there a fortnight ago speaking to an open meeting of the NFU at which I was able to hear more of the area's difficulties. In that area, as elsewhere, farmers are in touch with our officials who are advising them about the NFU's measures.
    Mr. Hooson: However well-intentioned this scheme, was it not entirely misconceived? Is the Minister aware that 830 cattle at £15 a head costs the Ministry

    1725
    just over £1,200 and that that is the only help from the Government to meet the fodder shortage? [HON. MEMBERS: "No."] Yes it is. It is impossible for hill farmers to get valley farmers to take any interest in the scheme. They need direct help to enable them to buy fodder.
    Mr. Bishop: The hon. and learned Gentleman underestimates my right hon. Friend's intentions. When the situation was revealed as a result of a comprehensive survey we made—we had a straw poll—of the fodder situation, my right hon. Friend was anxious to introduce as many measures as possible. I appreciate that the agistment aspect is not as useful in some areas as in others, but the hon. and learned Gentleman should not overlook the fact that among other measures we decided to increase over six months by 7·7p per gallon the price for milk producers, a floor was put to beef producers' returns by a variable premium and there was an increase in the hill sheep subsidy, a doubling of the hill cow subsidy, advancement of the 1975 hill cow subsidy and other cash and credit measures. The hon. and learned Gentleman should look at the whole package, not just one part of it.
    Mr. Torney: Does my hon. Friend agree that it was a former Labour Minister of Agriculture who introduced considerable help to hill farmers, particularly on the point of guaranteed prices? Does he agree that a system of guaranteed prices is far better than going cap in hand to the Common Market, which the Conservatives rushed us into a couple of years ago?
    Mr. Bishop: I am not sorry that my hon. Friend has caused a little discomfort among the Conservatives. It was the Labour Party which gave assurances and long-term confidence to agriculture over the years with the 1947 Act and subsequent measures. It was the ending of the fatstock guarantee scheme by the Conservatives and other aspects of entry into the EEC which removed the certainty. My right hon. Friend is busy trying to regain the assurances which were so much taken for granted when we were in power before.
    Mr. Jopling: Does the Minister recall that when this scheme was announced the announcement envisaged that 10,000 cattle would be moved to lower ground
    1726
    with the estimated expenditure of £150,000? Does he not, therefore, agree that the movement of only 830 cattle under the scheme shows what a miserable failure it has been? Is he aware that at this moment it is estimated that 1,000 cattle a week are being slaughtered in the West Country alone because of malnutrition? Will he take steps to improve the scheme?
    Mr. Bishop: Of course, the problem has not been as severe as might have been expected in the areas where the agistment scheme might have been helpful. We have taken all the steps that I have mentioned. In addition the O'Brien Report has been debated by Parliament, and the outcome there might help. In the long term it is a question of getting a good deal from the package now being negotiated in Brussels.

    Mole Valley Flood Alleviation Scheme
    Mr. Matherasked the Minister of Agriculture, Fisheries and Food what is the starting date for the Mole Valley flood alleviation scheme.
    Mr. Strang: The Thames Water Authority was given approval in principle to carry out this scheme on 13th January. The matter is now in its hands.
    Mr. Mather: Is the Minister aware that since Monday there has been an amber flood warning on the River Mole? The last time we had an amber warning there was considerable flooding, and people living in the areas are now getting very anxious. Will the Minister give an assurance that the disagreement over contributions will not delay the beginning of the scheme?
    Mr. Strang: The resolution of the argument over contributions is a matter for the Thames Water Authority and the Surrey County Council. My Ministry has offered to give every help it can to try to resolve this matter because, like the hon. Member, we are anxious that the scheme should go ahead as soon as possible.
    Mr. Spearing: Will my hon. Friend confirm that when planning permission was sought on flood plains the former Thames Conservancy opposed building and on occasions was overruled by the decision of the inspector? If that was so, will my hon. Friend take steps, with

    1727
    the Secretary of State for the Environment, to see that such events do not recur?
    Mr. Strang: I am not sure whether my hon. Friend is referring to this specific scheme.
    Mr. Spearing: No.
    Mr. Strang: My hon. Friend has raised a general point, and I shall look into it.
    Mr. Pattie: My constituents have suffered bad flooding from the Rivers Mole, Wey and Bourne in recent years, and they are waiting anxiously for the Mole scheme starting date, because flood alleviation schemes for the Wey and Bourne depend on the commencement of that scheme.
    Mr. Strang: I think I can fairly claim that I have kept the promises I gave the hon. Member for Esher (Mr. Mather) in the debate on the matter before Christmas. Any delay now will certainly not be the Ministry's responsibility.

    Cattle and Sheep
    Mr. Hardyasked the Minister of Agriculture, Fisheries and Food what are the numbers of cattle and sheep in Great Britain at the last available date; and what were the numbers at the same period two years and four years ago.
    Mr. Bishop: The number of cattle and calves in Great Britain in June 1974, the latest date for which full information is available, was 13,607,000; in June 1972, 12,040,000; and in June 1970, 11,261,000. The number of sheep and lambs in June 1974 was 27,703,000; in June 1972, 25,873,000; and in June 1970, 25,114,000.
    Mr. Hardy: I am grateful for that interesting information. Would my hon. Friend care to comment on the recently-expressed suspicions that the remarkable and sustained improvement in livestock quality over recent decades has not been maintained in the past two or three years?
    Mr. Bishop: Yes, Sir. We are aware of this and are taking the necessary steps to reverse the trend.
    Mr. Peter Mills: Will the Minister bear in mind that there will be a reduction in sheep and beef production if the Chancellor's tax proposals are continued
    1728
    and that agriculture will go into reverse? What representations is the Minister of Agriculture making to the Chancellor, who is destroying British agriculture in this way?
    Mr. Bishop: The matters that the hon. Gentleman has raised are matters for my right hon. Friend the Chancellor.
    Mr. Watt: Does the Minister agree that until such time as we have a meat marketing board we shall have a succession of slumps and booms in the beef production industry?
    Mr. Bishop: That is the basis for another question. It is a matter for the industry as well as for us.

    Food Prices
    Mr. William Hamiltonasked the Minister of Agriculture, Fisheries and Food which foods are now being bought more cheaply from within the EEC than from elsewhere; and if he will publish the differences between current world prices and EEC prices for each commodity.
    Mr. Bishop: It is difficult to make direct comparisons of prices of foodstuffs from different national sources because of differences in quality, grading and presentations of products. Of our main temperate imports according to the latest available figures, supplies of wheat, rice, maize, sugar, bacon, lard, tomatoes and apples were available more cheaply from the EEC than from non-EEC sources. There is no easily identifiable world price for many commodities, but with permission I will publish in the Official Report a table showing cif values of our main temperate imports.
    Mr. Hamilton: What would be the difference in the retail price index if we had to buy these commodities on the world market? Will my hon. Friend make sure that the information is given as much publicity as the distorted figures on the balance of trade deficit given recently by my right hon. Friend the Secretary of State for Trade?
    Mr. Bishop: It is difficult to talk about the comparisons of prices on world markets, but I have no doubt that there will be no lack of volunteers to make the information known to those who they feel should have it.
    Mr. Ronald Bell: Will the Minister remember, in attempting any answer to his hon. Friend's questions, that prices would have to be assessed as they would have been if we had renewed long-term arrangements which we abandoned as a result of a certain mistaken policy?

    AVERAGE UNIT VALUES OF UNITED KINGDOM IMPORTS OF CERTAIN COMMODITIES—NOVEMBER 1974

    Commodity

    (£ per ton) E.E.C. Countries

    Non-E.E.C. Countries

    1. E.E.C. lower than non-E.E.C.

    Wheat

    …

    …

    …

    Denmark

    …

    …

    70·50

    U.S.A

    …

    …

    …

    87·82

    France

    …

    …

    …

    72·51

    Canada

    …

    …

    …

    94·47

    Rice, short grained

    …

    Italy

    …

    …

    …

    161·75

    Australia

    …

    …

    …

    190·53

    Raw sugar, beet and cane

    …

    France

    …

    …

    …

    130·08

    Australia

    …

    …

    …

    147·28

    Belgium/Luxembourg

    …

    134·26

    Guyana

    …

    …

    …

    152·71

    Refined sugar

    …

    …

    France

    …

    …

    …

    185·55

    Poland

    …

    …

    …

    383·50

    Tomatoes, fresh

    …

    …

    Irish Republic

    …

    …

    292·75

    Spain

    …

    …

    …

    332·99

    Netherlands

    …

    …

    319·09

    Romania

    …

    …

    …

    344·14

    Apples

    …

    …

    …

    France

    …

    …

    …

    191·31

    U.S.A.

    …

    …

    …

    220·30

    Italy

    …

    …

    …

    213·14

    Canada

    …

    …

    …

    231·37

    2. No significant difference

    Lard

    …

    …

    …

    Belgium/Luxembourg

    …

    238·54

    Hungary

    …

    …

    254·17

    Netherlands

    …

    …

    267·64

    Poland

    …

    …

    …

    268·12

    U.S.A

    …

    …

    …

    401·05

    Maize

    …

    …

    …

    France

    …

    …

    …

    73·30

    U.S.A

    …

    …

    …

    68·58

    West Germany

    …

    …

    75·38

    South Africa

    …

    …

    72·08

    Bacon

    …

    …

    …

    Denmark

    …

    …

    696·55

    Sweden

    …

    …

    …

    754·65

    Irish Republic

    …

    …

    669·41

    Poland

    …

    …

    …

    701·75

    3. Non-E.E.C. lower than E.E.C.

    Butter

    …

    …

    …

    France

    …

    …

    …

    649·72

    New Zealand

    …

    …

    361·05

    Netherlands

    …

    …

    651·41

    Denmark

    …

    …

    699·29

    Cheddar type cheese

    …

    Irish Republic

    …

    …

    772·29

    New Zealand

    …

    …

    312·05

    Netherlands

    …

    …

    810·13

    Lamb

    …

    …

    …

    Irish Republic

    …

    …

    483·78 (fresh)

    New Zealand

    …

    …

    478·84 (frozen)

    Beef

    …

    …

    …

    No reliable comparison possible owning to ban on imports from non-E.E.C. countries.

    Sources: Overseas Trade Statistics of the United Kingdom Customs and Excise Tabulation Sheets.

    Beef
    Mr. Hawkinsasked the Minister of Agriculture, Fisheries and Food how the future beef régime to be worked out in the EEC will be affected by the fact that there is no provision in the EEC price proposals for the continuation of the variable premium after February, but only for direct headage payment of thirty units of account.
    Mr. Peart: As I said in the debate in the House on 16th January, I have put proposals to the EEC Council of Ministers for the inclusion of a variable premium scheme in the new beef régime. These proposals, together with other proposals for changes in the beef régime, were discussed by the Council at the meeting earlier this week, and the discussion will be resumed at the next meeting of the Council on 10th-11th February. In the meantime the current arrangements for
    Mr. Bishop: I do not think that the hon. and learned Gentleman needs an answer. He has made his observation clear.
    Following is the information:
    beef in the United Kingdom will continue throughout February.
    Mr. Hawkins: Is the Minister aware of the fall in the price of cattle in the market which we have seen during the past few weeks and still see? I am convinced, and I am sure the right hon. Gentleman is aware, that it is because of the lack of confidence in a long-term bottom in the market. Therefore, farmers are bringing their stock half finished on to the market in order to get the headage payments before the end of February.
    Mr. Peart: I well understand what the hon. Gentleman is saying, but I believe that it is right to try to negotiate a new long-term agreement for beef, and that is what I am doing. I believe that I have the complete support of the farmers' unions on the issue. I think that in the end that agreement will restore confidence.
    Mrs. Kellett-Bowman: Does the Minister appreciate that farmers are selling their cattle forward not only because of lack of confidence but because they do not have the money to buy fodder, and that the doubling of the beef premium is not assisting them to buy the fodder as the premium has not yet arrived in their pockets or banks?
    Mr. Peart: I hope the hon. Lady will appreciate that to get the agreement approved by the Community in negotiations would be good for the industry. I also hope she will understand that the farmers want the agreement.
    My hon. Friend the Minister of State answered the fodder question in reply to another Question. As the hon. Lady knows, I advanced the hill and beef cow subsidies.
    Mr. D. E. Thomas: Can the Minister give us some indication of the reasons why the Council of Ministers has been unable to come to a decision on the structure of the new beef régime?
    Mr. Peart: We had two days of discussions, which are to be continued. I hope that we shall complete them, and then perhaps I shall be able to report to the House.
    Mr. Torney: Does my right hon. Friend agree that he would be in a much stronger position to do all the things that Opposition Members seem to want him to do, and that the National Farmers' Union wants him to do, if he were a completely free agent and could act on behalf of the British Government and people without running cap in hand to the Common Market?
    Mr. Peart: I do not go to the Community cap in hand. I have stated the position of the British Government, which is that we want an entirely new system to replace that which operates purely on the basis of permanent intervention. I am seeking to achieve that. My hon. Friend is right in saying that the Conservatives removed the guarantees.
    Mr. Pym: The right hon. Gentleman knows that I do not accept that for one moment. Of course, we all hope for a thoroughly successful negotiation leading to a satisfactory and workable new beef régime, but, as the Ministers did not reach
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    agreement earlier this week, will the right hon. Gentleman in February increase the steps of the variable premium in the way they have increased over recent months instead of continuing it at the same level as in January?
    Mr. Peart: The right hon. Gentleman must allow me to negotiate in what I think to be the best way. I shall report to the House. There will still be hard negotiating, but I believe that we shall achieve a successful conclusion.

    Food Supplies
    Mr. Peter Morrisonasked the Minister of Agriculture, Fisheries and Food what foods are at present in short supply.
    Mr. Strang: At present no major foods are in short supply.
    Mr. Morrison: Does the Minister agree with the Meat and Livestock Commission's forecast that beef will be in short supply in 1976? If so, what does he intend to do about it?
    Mr. Strang: There is considerable scope for argument about the level of supplies of beef as far into the future as the hon. Gentleman indicated. The Government are anxious that we should have a prosperous and viable beef industry. That is what my right hon. Friend is determined to achieve when he returns to Brussels.
    Mr. Jay: Is my hon. Friend aware that world grain and maize prices have been falling for the past two weeks, that this month world wheat prices have fallen below the EEC level and that an EEC import levy on wheat is now in force? Further, is he aware that it is now true of grain, dairy products and wheat that all of them can be obtained more cheaply outside the EEC than inside?
    Mr. Strang: I think that my right hon. Friend is perhaps being a little sweeping, but I agree with the basic point that the relationship between EEC prices and world prices is liable to considerable fluctuation throughout the years and that there is no saying what it will be in two years' time.
    Mr. Jopling: Has the Minister forgotten that what are now in short supply are butter and milk products from our home resources? Will he take every step

    1733
    to ensure that at the forthcoming price review adequate incentives will be given to dairy farmers to ensure that milk supplies increase so that we can restore the supply of butter and milk products to what it was not long ago?
    Mr. Strang: I can assure the hon. Gentleman that my right hon. Friend is considering closely the position of the milk producer in the context of discussions prior to the annual review. I point out to the hon. Gentleman that if we are to remain a member of the Community we do not want a huge butter mountain.

    Cattle Prices
    Mr. Wintertonasked the Minister of Agriculture, Fisheries and Food what estimate he has made of the effect that the removal of the ban on the export of live animals would have on the average market price received by producers for cattle in the United Kingdom.
    Mr. Bishop: No such estimate has been possible. Because there has been no trade in live cattle from this country since July 1973 it is difficult to judge the potential export demand for cattle now, especially as the supply situation in the Community and world markets has changed considerably during the last 18 months.
    Mr. Winterton: I thank the Minister for his reply. Does he accept that the National Farmers' Union and the British livestock industry are most grateful to him and to his right hon. Friend for accepting the O'Brien recommendations and to Parliament for lifting the ban on the export of live animals? Does he agree that there is increasing concern about the amount of payments due on any animals that are exported. For instance, on a beast of 10 cwt. going from the United Kingdom to Holland the amount due could be as much as £80.
    Mr. Bishop: I thank the hon. Gentleman for his compliments, which are always welcome from the Opposition benches. The NFU amongst others is aware that live cattle face a 9·6 per cent. ad valorem duty on imports into the EEC countries. There are transitional and monetary compensatory charges and the precise level varies, as the hon. Gentleman suggests, according to destination and fluctuations in currency ex-
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    change rates. It may be necessary to levy an export charge on cattle corresponding with the current charge on exports of beef arising from the variable premium arrangements. My right hon. Friend will keep these matters under review.

    Sugar Beet
    Mr. Shersbyasked the Minister of Agriculture, Fisheries and Food if he is satisfied that the price he has indicated that sugar beet manufacturers will receive in the next sugar beet campaign will be adequate to ensure the maximum take-up of the increased sugar beet quota; and what is the present level of take-up of contracts compared to the same time last year.
    Mr. Strang: The British Sugar Corporation expects the contracted acreage to reach about 500,000 acres compared with 484,000 acres last year.
    Mr. Shersby: Is the Minister aware that the House will be grateful for the assurance he has given regarding the acreage contracted for so far? Will he tell the House something about the progress of the negotiations now taking place for an 8 per cent. price increase on 1st February and a further 8 per cent. price increase on 1st July as a result of the EEC recommendations?
    Mr. Strang: I am grateful for the hon. Gentleman's remarks. I think he will be well aware that my right hon. Friend stated that he is in favour of the proposed price increase for beet.
    Mr. Hugh Fraser: Will the Minister be so kind as to sweeten my few moments by telling us whether he will now consider a massive increase in beet production in this country? Beet produced here is infinitely cheaper than that which we can buy from overseas. Will he offer to our beet producers a proper incentive by which we can raise nearly half a million tons more sugar a year than we are now raising?
    Mr. Strang: I can assure the right hon. Gentleman that we are in favour of increased beet production. If the Commission's proposals go through, the price to the producer will be about £16 a ton compared with £8 a ton in 1972.
    Mr. Wiggin: If the sugar beet crop this year yields even an average amount, what

    1735
    will be the total deficiency on United Kingdom sugar requirements? Is the hon. Gentleman aware that, although his right hon. Friend has said that he is negotiating a long-term agreement with the Commonwealth Sugar Agreement countries, so far not one ounce of that sugar has been bought, is on the high seas or has reached a British port?
    Mr. Strang: Expected production of sugar beet will be somewhere in line with our basic quota. The hon. Gentleman know that we have had a disappointing beet crop this year. On the second part of his question, the fact is that my right hon. Friend has just secured 300,000 tons of sugar through the Lardinois scheme and is in the process of negotiating a long-term agreement with the ACP countries.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Pattieasked the Prime Minister if he will list his official engagements during the recess.
  Mr. Norman Lamontasked the Prime Minister whether he will publish in the Official Report a list of his official engagements during the Christmas Recess.
  Mr. Lawsonasked the Prime Minister whether he will list his official engagements during the Christmas Recess.
  Mr. Hurdasked the Prime Minister whether he will publish with the Official Report a list of the official engagements he carried out during the Chrismas Recess.
  Mr. Skinnerasked the Prime Minister how many official visits he made during the recess.
  Mr. Tim Rentonasked the Prime Minister whether he will list his official engagements during the Christmas Recess.
  Mr. Blakerasked the Prime Minster if he will list his official engagements during the recesss.
  The Prime Minister (Mr. Harold Wilson): I would refer my hon. Friend and the hon. Gentlemen to the replies I gave to my hon. Friend, the Member for Birmingham, Perry Barr (Mr. Rooker), and to the hon. Member for City of
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  Chester (Mr. Morrison) on 14th and 16th January respectively.
  Mr. Pattie: Does the right hon Gentleman agree that, on the Government's own figures, inflation is now running at a rate of 25·2 per cent. and that a list of his official engagements would reveal a complete absence of any meetings with the representatives of the many groups in our society who have been cripplingly affected by inflation, one such group being the self-employed, who have been shabbily treated by the Government?
  The Prime Minister: Sir, I was asked about my official engagements. I have recently answered many Questions on inflation in the House. The House had a long debate on self-employment. I suggest that it is an abuse of Question Time to ask what official engagements I have had and then to try to raise every other subject. As there are eight Questions tabled on my official engagements, other Members are prevented from asking a Question.
  Mr. Lamont: May I ask the Prime Minister a question which he has carefully avoided answering before? Even if the social contract is completely successful in limiting wage increases to the rise in the cost of living, how can that reduce the rate of inflation? Will it not perpetuate the existing rate of inflation? Is it not a reality that the Prime Minister should face that if we are to achieve any reduction in inflation living standards must fall?
  The Prime Minister: The Question relates to my official engagements. The social contract is not an official engagement.
  Mr. Lipton: Do not these jejune questions which are asked mainly by Opposition Members indicate that the Daily Express leader writer was correct the other day when he said—
  Mr. Speaker: Order. The hon. Member must not quote.
  Mr. Lipton: —that we have the silliest and most ineffective Tory Opposition in living memory?
  The Prime Minister: My official engagements did not include the Daily Express during the period in question.

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  I would ask my hon. Friend to show more compassion for the Conservative Party at this time.
  Mr. Hurd: As the House adjourned for the Christmas Recess on the eve of what was obviously a growing economic crisis, is it not natural that my right hon. and hon. Friends and the hon. Member for Bolsover (Mr. Skinner) who seems for some reason not to be here today—[Interruption.] I am drawing to the attention of the Prime Minister the fact that the hon. Member for Bolsover joined us on the eve of the recess in tabling Questions that were designed to determine the leadership that the Prime Minister was to give us during the recess in dealing with the mounting crisis. Will the right hon. Gentleman now answer the question of my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont)?
  The Prime Minister: It is perfectly in order for the hon. Member to table Questions about my official engagements. He did not put down a Question about the matters now being raised in supplementary questions and I submit that this is an abuse of the House which has stopped the answering today of a large number of Questions tabled in good faith by Conservative and Labour Members who were not a syndicated team such as are this lot who appear every week.
  Mr. Renton: Is the right hon. Gentleman aware that his answers to my hon. Friends' questions are, as usual, long on words but short on facts? Will he kindly tell us what he did in the Christmas Recess to deal with the economic crisis?
  The Prime Minister: The hon. Member is perfectly well aware of the engagements I had, for example, with the NEDC and others, on Northern Ireland and on one thing and another. They were all announced at the time. The hon. Gentleman did not need to table Questions to find out. I have not been long on words. My comments have been directed to the rules of the House.
  Mr. Ashton: Will my right hon. Friend please publish a list of his engagements for the benefit of the Labour side of the House so that we can see how they compare with conducting carol concerts at Broadstairs and killing dolphins off Jamaica?
  The Prime Minister: Although in the previous Parliament the same syndicated group put most of their Questions to the then Prime Minister about me and not about him, I have to say—and this is the position—that there is no ministerial responsibility for the Leader of the Opposition.
  Mr. Blaker: What on earth does the Prime Minister think Prime Minister's Question Time is for? Is it not intended to enable him to answer such questions as what he did during the Christmas Recess, or does he regard it as being designed to enable him to fill the Chamber with a fog of verbiage?
  The Prime Minister: The fog is coming from these questions. A number of hon. Members on both sides of the House have tabled serious Questions which will not be reached because of the obstruction of hon. Members opposite. The whole House is aware that every week, under the previous Government and this one, an official of Tory Central Office sends out little coloured slips to hon. Gentlemen. It has now become an abuse.
  Mr. Lawson: Is the Prime Minister aware that the only abuse of Question Time is the way he is carrying on at present? Since he did not pay an official visit to Leicestershire during the Christmas Recess, may I ask him to take this opportunity of publicly commending those women workers in Leicestershire who have voluntarily forgone nationally-negotiated wage increases so that their firms will not suffer redundancies and possible bankruptcies?
  The Prime Minister: The hon. Gentleman is a member of this syndicated group. The Question he put down asked about my official engagements, not about things I did not do. The hon. Member has now been a Member of this House long enough—
  Mr. Cryer: Too long.
  The Prime Minister:—to know that there is a perfectly proper procedure for this, which I think he has used. He can ask me if I will visit his constituency or any other part of Leicestershire or the United Kingdom. It is often done. The hon. Gentleman might do it directly next time and not by this technique.
  Mr. Heath: Is it not the case that it has long been the custom of this House that Questions to the Prime Minister deal with two spheres, namely, whether he will visit a particular place or whether he will give details of his previous engagements, to give right hon. and hon. Members in all parts of the House the opportunity to question him on wider matters which, because of the present definition of Questions, they are not otherwise permitted to do? What is happening this afternoon is an abuse by the Prime Minister of a long-standing custom of the House. Since the Prime Minister has now stated that one of his engagements was with the NEDC, may I put to him a specific question concerning the NEDC which has been raised by my hon. Friends? As a result of the discussions which he has had with industry, employers and trade unions, are workers entitled to get settlements under the social contract which maintain their real standard of living in 1975? "Yes" or "No"?
  The Prime Minister: In reply to the first part of the question, if it was a question, put by the right hon. Gentleman, I have followed past practice in these matters. Asking Questions about official engagements has never been any warrent whatever for putting supplementary questions about engagements that did not take place or for covering general matters which have been answered by me each time that I have been here ever since the House came back. I answered the second part of the right hon. Gentleman's question last Thursday. I refer him to that answer. It did not arise out of my official engagements. I answered that question last Thursday in reply to a perfectly properly put Question. There was also a statement issued on Monday dealing with this. I refer the right hon. Gentleman to the statement made yesterday by Mr. Len Murray which is relevant to this. The answer is that we are asking people now to show greater compliance with the social contract. That is what the social contract means, and that is an answer to the right hon. Gentleman.
  Mr. Heath: Will the right hon. Gentleman now, on his own responsibility, give a direct answer to the question which has been asked by my hon. Friends and myself? Is it "Yes" or "No"?
  The Prime Minister: This does not arise out of my official engagements, but I will answer it. It is this kind of question that was responsible for the mess the country was in a year ago. Of course it is possible for people to maintain living standards, but this depends on productivity, avoidance of unemployment, the following of our policies and the repudiation of those which brought the country to its knees.

  LEGISLATIVE PROGRAMME
  Mr. Kilroy-Silkasked the Prime Minister if he is satisfied with progress in the implementation of the Government's programme as set out in Her Majesty's Gracious Speech.
  The Prime Minister: Yes, Sir.
  Mr. Kilroy-Silk: Can my right hon. Friend give an assurance to the House that the National Enterprise Board, when it is set up, will be adequately financed? Can he say whether its decisions, once it is established, can be overridden by the European Commission?
  The Prime Minister: I hope that the Bill dealing with the National Enterprise Board will be introduced in the very near future and that it will make reasonably speedy progress through the House, with the general will of hon. Members in all parts. Its powers will be set out in the Bill. It will follow strictly the lines of the White Paper published by the Government before the General Eelection and clearly endorsed by the country. There is no power that I am aware of in the European Commission which in any way interferes with the right of the Government to set up anything like the 1RC or the NEB or to take firms into public ownership, in accordance with the law of the land.
  Mr. Fry: Will the Prime Minister tell the House when the Government intend to do something to redeem their pledge to improve rural transport? Is he aware that, because of the vastly increased price of petrol, bus services in many rural areas are being drastically reduced? Is it not time that the Government came forward with proposals to help when many people are finding it difficult to get to work?
  The Prime Minister: The hon. Gentleman has raised a most important issue. I am not sure whether he is referring to public transport in rural areas or to owner-drivers. Both cases are important. The House has discussed the petrol problems of those who have to drive to work. I have answered questions about it and my right hon. Friend the Minister for Transport has given help to rural bus undertakings, road transport and railways. Because this is an important point, I hope that the hon. Gentleman will pursue this matter with my right hon. Friend.

  PRESS (ROYAL COMMISSION)
  Mr. Dodsworthasked the Prime Minister when he expects to announce the appointment of the new Chairman of the Royal Commission on the Press.
  The Prime Minister: As soon as possible.
  Mr. Dodsworth: I am grateful for that information. Is the Prime Minister aware of the increasing public concern which has been expressed about the freedom of the Press? Will he, in particular, take early steps to give evidence to the Royal Commission to ensure that it is aware of the need for those employed in the industry to have the right to belong to the trade union of their choice? Furthermore, will he ensure that editors employed in the industry have the right to select the material of their choice without censorship from those otherwise employed in the industry?
  The Prime Minister: That is an important question. The House debated these matters last spring in what I believe most people felt was one of the most significant and constructive debates on this subject for many years. I think the hon. Gentleman has in mind the question of industrial relations legislation, which has been fully debated in the House and outside, and the House has taken decisions. It is not for me to go further into it today.
  As I think the hon. Gentleman will agree, the Royal Commission by its terms of reference has to deal with the freedom of the Press. If I could feel that the anxieties—I recognise that they are real—about the National Union of
  1742
  Journalists and the editorial position were the only threat to the freedom of the Press, we should be talking about a very different Press. Some of the main threats to the freedom of the Press are concerned with the danger of newspapers going out of existence—which has been very real in these last few days—and with proprietorial interference with the rights of those self-same newspapers. These are matters within the terms of reference of the Royal Commission.
  Mr. Christopher Price: Does not my right hon. Friend agree that the influence of advertisers and politically motivated proprietors is infinitely more dangerous than anything which the NUJ might exert? I am sure that the Prime Minister supports his right hon. Friend in his approach to the "phoney" campaign that has been waged against him.
  The Prime Minister: That accusation is often made about advertisers. I have not seen a great deal of evidence on this matter except for one or two suggestions recently of owners getting a good personal Press in "William Hickey" or not getting into "William Hickey" because of the switching of advertising. That is very trivial stuff. If it were thought that advertisers were using their economic power to interfere with the freedom of the Press, that would be eminently a matter for the Royal Commission. So is the question raised by my hon. Friend about proprietorial interference with editorial views.

QUESTIONS TO MINISTERS
Mr. Crouch: On a point of order, Mr. Speaker. I have raised with you on several occasions the strange devices to which the House has to resort to get the Prime Minister of the day to answer Questions. I have suggested to you, Sir, that we should consider a method of doing this other than by suggesting that the Prime Minister should pay an official visit to a constituency.
It so happens that I have just been advised by the Prime Minister that he is to visit my constituency tomorrow, without my having invited him. I am delighted that he is to be accompanied by yourself, the Leader of the Opposition and the Leader of the Liberal Party. I assure the Prime Minister that I shall not be

1743
discussing politics with him on this occasion.
On the more serious matter, I think that we should give time to considering how we should be able to speak to the Prime Minister at Question Time.
The Prime Minister: Further to that point of order, Mr. Speaker. I apologise to the hon. Member for Canterbury (Mr. Crouch) if, contrary to usual practice followed by nearly all right hon. and hon. Members, he was not informed earlier. He will know that I am not going to his constituency for any nefarious purpose, and I shall not make any speeches which are likely to lead to his early unseating. The visit is not concerned with the hon. Gentleman's constituency. It is for the enthronement of the Primate of All England that the Leader of the Opposition, myself and others are going.
Mr. Hastings: Further to that point of order, Mr. Speaker. May I try to clear up the matter of the Questions to the Prime Minister this afternoon about his official engagements? If those Questions were in order—as, clearly, in your view, Mr. Speaker, they were or they would not have appeared on the Order Paper—is it not the duty of the Prime Minister to answer them? Is it right for the Prime Minister or any other Minister to arrogate to himself the judgment whether or not they are an abuse of the House? Surely these are matters for you and not for the Prime Minister.
Mr. Kershaw: Further to that point of order, Mr. Speaker. May we have your assurance that the Table will continue to accept Questions of this type whether or not they are welcome to the Prime Minister?
Mr. Speaker: With regard to those three points of order, with which I think many hon. and right hon. Members have some sympathy, this matter was referred to a special Select Committee on Parliamentary Questions. From memory, that Select Committee came to the conclusion that there was not much that it could do about it.
Certainly, I think that the situation is not very satisfactory, whichever party is in power. It is a matter which could perhaps be looked at again.
The Prime Minister: Further to that point of order, Mr. Speaker. There may be some confusion between the Questions and the supplementary questions. No one has ever objected to Questions of that type being put on the Order Paper, and I answered them. But it takes the time of the House if on those Questions hon. Members hang any subject relating to any part of the world without regard to ministerial responsibility.
As the whole House knows, I have been much freer in answering Questions from the Government side of the House over the last 10 years than has the right hon. Gentleman the Leader of the Opposition. But when syndicated Questions are asked for the purpose of raising subjects which have nothing to do with official engagements the result is to crowd out many hon. Members on both sides of the House who have serious Questions and supplementary questions to put.
Mr. Peyton: Further to that point of order, Mr. Speaker. The Prime Minister said that he had been much freer in answering Questions than had my right hon. Friend. If by "freer" he means longer, I think there will be total unanimity.
The Prime Minister: Further to that point of order, Mr. Speaker. The right hon. Member for Yeovil (Mr. Peyton) by that remark has shown the quality of his bid for the leadership. I have been freer, Mr. Speaker, in the sense that I have gone wider. I have answered supplementary questions that have not normally been answered by Prime Ministers of either party.
Mr. Speaker: If I may continue to preserve complete impartiality, I think that the House is in a genuine difficulty. We are concerned with the peg on which to hang a Question to the Prime Minister. The trouble is that if one asks a direct Question it is frequently transferred to another Minister—as I have found in the past. That has happened under both Governments and it has been going on for a long time. This has nothing to do with party issues; it has been the practice of the House, and I do not think that it is a very satisfactory one. The Select Committee examined the subject and came to the conclusion that there was not much it could do. Perhaps the Procedure Committee or a special Select

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Committee might look at this matter again.
Mr. Norman Lamont: Further to that point of order, Mr. Speaker. Surely, the distinction which the Prime Minister, in replying to you a moment ago, sought to make between official engagements and the supplementary questions that were asked is not a meaningful distinction. If it is in order to put down a Question about the Prime Minister's official engagements, it must also be in order and quite legitimate to ask a supplementary question about the subject which we know from those engagements the Prime Minister discussed.
Mr. Lawson: Further to that point of order, Mr. Speaker. Is it not a simple matter of the Prime Minister alleging that the supplementary questions were out of order? Is this not a matter for you, Sir, rather than for the Prime Minister, and if you allow the supplementary questions is it not incumbent on the Prime Minister to answer them?
Mr. Speaker: It would be much better to consider this as a general question on the better management of the affairs of the House of Commons. The problem has existed for a long time, and arguments of this sort should be put to a committee that might be appointed to look into the matter.

EUROPEAN ECONOMIC COMMUNITY (BRITISH MEMBERSHIP)
The Prime Minister (Mr. Harold Wilson): Mr. Speaker, I will, with permission, make a statement about the means by which the British people will decide the issue of our membership of the European Community.
It is the declared policy of the Government that, once the outcome of our renegotiation of the terms of membership is known, the British people should have the right to decide, through the ballot box, by means either of a General Election or of a referendum, whether Britain should continue in membership of the European Community or should withdraw.
The Government have decided that this should be done by means of a referendum.
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Prolonged uncertainty and delay on the decision of the British people are in the interests neither of Britain nor of other members of the Community. After 15 years of discussion and negotiation, it is an issue which all of us in this House and in the country want to see settled; and uncertainty about the future of British membership is inhibiting the work of the Community. The Government are committed to putting the issue to the people before 10th October this year. Provided that the outcome of renegotiation is known in time, we intend to hold the referendum before the summer holidays, which means in practice not later than the end of June. We shall, therefore, propose to the House arrangements which would make it possible to hold the referendum on that timetable, tight though it will be.
When the outcome of renegotiation is known, the Government will decide upon their own recommendation to the country, whether for continued membership of the Community on the basis of the renegotiated terms, or for withdrawal, and will announce their decision to the House in due course. That announcement will provide an opportunity for the House to debate the question of substance. That does not, of course, preclude debates at any earlier time, subject to the convenience of the House.
The circumstances of this referendum are unique, and the issue to be decided is one on which strong views have long been held which cross party lines. The Cabinet has, therefore, decided that, if when the time comes there are members of the Government, including members of the Cabinet, who do not feel able to accept and support the Government's recommendation; whatever it may be, they will, once the recommendation has been announced, be free to support and speak in favour of a different conclusion in the referendum campaign. [HON. MEMBERS: "Oh!"]
As to the arrangements for the referendum, I told the House on Tuesday that the rules for the test of public opinion must be made by this House. The Government propose within a very few weeks to publish a White Paper on the rules and arrangements for conducting the referendum. The White Paper will set out the various possible courses on each issue and the Government's proposals on

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such matters as, for example, the information policy of the Government during the referendum campaign, broadcasting arrangements during the campaign, the question of expenditure by campaigning groups, the form in which the question is to be put to the British people, and arrangements for conducting the poll, the counting of the votes and the announcement of the result.
The Government will provide time for a debate on the White Paper on referendum procedure in this House before the Easter recess. That debate will, of course, be separate from, and will precede, the parliamentary debate which will be necessary on the outcome of the negotiations. The debate on the referendum White Paper will enable the Government to take full account of the views expressed by right hon. and hon. Members of this House, and by public opinion generally, in drafting the necessary legislation for the referendum.
The Government propose to introduce the legislation around Easter-time. We shall, of course, propose that all stages should be taken on the Floor of the House. If we are to be able to hold the referendum before the summer holiday, the Bill will need to complete its passage through both Houses and to receive Royal Assent by the end of May.
Mr. Heath: I thank the Prime Minister for making his long-foreseen and much-heralded statement. He will recognise that he has announced a major constitutional innovation but has told us little about the details of how the matter is to be dealt with. He told the House that in what he described—and many of us would agree—as a unique operation and a major question of our time the Government are not going to maintain collective responsibility.
May I ask the right hon. Gentleman certain questions? If his Government are not to maintain collective responsibility, how will the Government make their recommendation to the House over what the attitude should be towards the situation of the so-called renegotiation? Will the Government set out the number of members of the Cabinet who support the recommendation and those who are opposed to it? Will the Government publish the names of the members of the Cabinet who are on each side, or does he
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undertake to make a recommendation which will include freedom for them to decide to make no recommendation? Perhaps the Prime Minister will elaborate on the course he proposes to follow.
Secondly, the Prime Minister said nothing about the relationship of the referendum to Members of this House. Will he, therefore, confirm that the referendum, if it takes place, will be advisory and consultative and cannot be binding on Members of the House of Commons?
Thirdly, should not the details of the referendum be set out in a Green Paper rather than in a White Paper so that it is a consultative document on which Members of the House will be free to express their views and to influence the Government in debate—a matter which we welcome because it is essential?
Fourthly, will the right hon. Gentleman assure the House that if the referendum takes place the House will go into recess for a proper period to allow Members to express their views to constituents and to campaign up and down the country? It will not be enough to carry on that activity while the House is sitting.
May I remind the right hon. Gentleman that what he has announced is that the Government will be seeking power from Parliament to have a referendum? This is a major constitutional issue which we on this side of the House have always maintained is undesirable. Therefore, it rests with Parliament to decide whether this constitutional innovation should take place or not.
The Prime Minister: The right hon. Gentleman the Leader of the Opposition is right to say that this is a major constitutional innovation, and it is right that we should both use the word "unique". It is a very special situation which I do not think anybody will take as a precedent.
The right hon. Gentleman referred to collective responsibility, which I shall come to in a moment.
The right hon. Gentleman asked how the decision of the Government would be recommended to the House and, through the House, to the country. The answer is that we shall state what our recommendation is in the light of the renegotiations—[Interruption.] We shall state—I shall

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state—the recommendations I hope that hon. Gentlemen will take these matters very seriously. I am prepared to make every allowance for the nervousness of those hon. Gentlemen. Other right hon. and hon. Members have more serious matters to attend to both in Government and in relation to this very important question. I am trying to answer a serious question from the right hon. Gentleman the Leader of the Opposition. Perhaps his back benchers and supporters will allow it to be answered.
We shall state to the House the view of the Cabinet on this matter. When the right hon. Gentleman asked whether this would mean freedom to state that there will be no recommendation made to the House, I can assure him right away that there will be a recommendation to the House in the light of the renegotiations to say whether the Government advise the House and the country that we should stay in the Common Market on the terms renegotiated or come out of the Common Market on the terms renegotiated. I am sure that when the House comes to look at the legislation for the referendum it will see that people in the country will be given a chance of giving a clear decision "Yes" or "No" and that there will be an equally clear recommendation "Yes" or "No" in that respect.
The right hon. Gentleman was anxious to know whether the vote of the people should be binding. He no doubt has given his mind to this very carefully, and it is an important question. I cannot imagine that if the country votes clearly one way or the other "Yes" or "No" hon. Members would feel able to go against that decision and vote against—[Interruption.] That is my view. The right hon. Gentleman takes a different view, and he is entitled to do so. I am expressing my view and the view of most of us, I think, on this side of the House.
The right hon. Gentleman asked whether the document on the referendum could be in the form of a Green Paper rather than a White Paper. I do not believe that there should be much difficulty over what he has in mind. I made clear on the question of the White Paper that we should want to have a debate and to listen to the views of right hon. and hon. Members in all parts of the House before finalising the legislation. I
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hope also that it might be possible for informal talks to take place, through the usual channels or in any other way, between parties of the House and for all this to be set out before the legislation is finalised. In other words, the White Paper will have some green edges, and I am prepared to discuss with the Leader of the Opposition the basis on which we give advice to the House on the referendum. But in the last resort Parliament is sovereign in the matter of legislation which governs the holding of and all other arrangements connected with the referendum.
The right hon. Gentleman asked whether Parliament should go into recess during the campaign. That matter would have to be considered, although I would not feel it right that a very important and essential parliamentary timetable—which the whole country wants us to get through this year—should be held up on that account. But the right hon. Gentleman may have noticed, having done his calculations on the matter, that if there is an adequate degree of co-operation in getting the legislation through, combined, of course, with the thorough investigation of all the different parts of the legislative process which we usually have in this House, there might well be time during the Whitsun Recess for hon. Members who might otherwise go on holiday to campaign on the issue.
The right hon. Gentleman said that a major constitutional question had been raised by what I have announced. This matter has divided the country. People on both sides of the question hold their views very deeply, very sincerely and very strongly. That applies both in this House and in the country. Indeed, the Liberal Party has such a division as well. There is undoubtedly a very deep and serious division in this House. Contrary to the pledges which were given during the 1970 General Election campaign, the British people were not given the right to decide. We are repairing that omission; and in the circumstances, while there may be differences about the Common Market, there is no division on this side of the House, or in the Cabinet, on the major issue of the referendum. That is why I believe it right to take this step in this unique situation.
Mr. Heath: Will the Prime Minister clarify two points? Whatever he may

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judge the attitude of right hon. and hon. Members to be, will he confirm that a referendum cannot be constitutionally binding on any Member of this House, and that it remains for Parliament to decide, if it so wishes, after the referendum? Secondly, will the right hon. Gentleman confirm that, when he is announcing the Government's policy, he will tell us how many members of the Cabinet support the recommendation, how many oppose it, and who they are?
The Prime Minister: The right hon. Gentleman is, of course, right in the constitutional sense that no one can tell a Member of this House how to vote, although people may try sometimes to tell hon. Members on either side of the House how to vote. In that sense, the referendum could not be binding. But I perhaps pay more attention to the views of the people in the country than the right hon. Gentleman did, despite his promise, and I express the view that I could not imagine many hon. Members deciding to pit their own judgment in this matter against what has been the decision of the people of the country. That is just my view.
The second question related to what I should say when the recommendation is made to the House. I will consider the point raised by the right hon. Gentleman. I do not see much difficulty in it. The situation will become obvious very quickly anyway.
Mr. Thorpe: We welcome the fact that the Government are to make a recommendation in this matter, from which we assume that the Cabinet will make a collective decision from which individuals may subsequently deviate.
Is the Prime Minister aware that if it is the case that the Government are divided on the matter it is better that individual Cabinet Ministers should have freedom of expression rather than that they should be compelled to vote and speak against their convictions? Since Cabinet Ministers are no more than ordinary Members of Parliament, will the same facilities be given to Labour back benchers? It would be very odd to have a free vote of the British people and a whipped vote of their elected representatives.
Does the Prime Minister recall that last Tuesday he said that this was a matter
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to be decided by the Chief Whip? Is he aware that, such is the respect we have for the Chief Whip, we think he must be allowed to have his own views on these matters, and we should like to know what they are?
Is the Prime Minister suggesting that the Government would regard the refer-end urn decision as mandatory and that if the recommendation were rejected by the British people, they would feel compelled to have a Dissolution and go to the country? That is important.
Finally, if the Prime Minister is to allow a free vote—which would be a new democratic position for him to enter upon—would not he agree that for the sovereignty of Parliament, which I hope we all value, the best thing would be to have a free vote of this House and then ask the British people whether they agreed with that free vote, democratically arrived a by their sovereign Parliament, and if they did agree that would be the end of the matter, and, if not, there would be a Dissolution.
The Prime Minister: I hope that it will be the view of the House, and it will be our recommendation, that it should be a straight question—"in" or "out", "Yes" or "No"—and not a convoluted question. It will be a straight question.
The right hon. Gentleman not incorrectly summed up what I said about the decision of the Cabinet and the right to differ, although he used the word "deviate" The only precedent—a sound one—was devised by the Liberals in 1932.
Mr. Thorpe: It was 1931.
The Prime Minister: Was it 1931? I think that the actual agreement to differ in the Cabinet was in 1932. I have studied this matter, as one of historical interest, in the Public Record Office, and I shall be glad to send the right hon. Gentleman a copy of the relevant document. But, whether it was 1931 or 1932, it was a Liberal precedent. That is why I am so glad that the right hon. Gentleman is supporting us today on this matter.
The right hon. Gentleman also raised the question of a free vote or of whipping on the matter.
"Every Government is entitled to ask its own supporters to support it on a major issue such as this."

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Those words were used by the right hon. Member for Sidcup (Mr. Heath) on this question when he was Prime Minister. He said, 10 days before the Common Market debate, that there would be no free vote. However, three days before the debate he changed his mind—it had to be dragged out of him—and for tactical reasons announced a free vote in the House. We will decide this issue nearer to the day, although perhaps much earlier than the right hon. Gentleman did.
Mr. Michael Stewart: My right hon. Friend the Prime Minister has said that, in his view, Members of this House will be, at any rate in some way, bound by the result of the referendum. Might not that be difficult if, as is possible, a considerable number of citizens feel that the matter ought to be decided by Parliament and that, therefore, they cannot vote in the referendum? Might it not, therefore, be wise to establish the principle that no result from the referendum can be regarded as effective unless it has the support of a clear majority of all those entitled to vote?
Mr. Arthur Lewis: Plus 15 per cent.
Mr. Stewart: My right hon. Friend has told us that when it comes to announcing the Government's recommendation it will be he who will express it to the House. Can he tell us who at that date will express the Opposition's point of view?
The Prime Minister: It depends on what we announce. It might well be the Leader of the Opposition for the time being who will express a view on that. [Interruption.] I refrain from rising to that one. It would be a little too easy in this situation. I am very anxious to protect the right hon. Gentleman. I have longer-term considerations in view so far as he is concerned.
As regards what my right hon. Friend said on the question of a percentage vote, we are studying what has been the position in other countries which have held referenda either on the Market or on other questions, and we shall in due course let the House know our views on this matter.
I have known and understood my right hon. Friend's position on this matter for very many years, certainly over the last
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10 years. My right hon. Friend was against joining Europe at the time of the first application by Mr. Macmillan's Government. Later he took the view that he was in favour, and that has been his view.
I have taken the view all along that it is right to be in if the terms are right, not if they are crippling. That is the position. [Interruption.] My right hon. Friend, however, speaks with all his authority, which is not added to by any praise from a small-timer like the hon. Member opposite.
My right hon. Friend has expressed his view this afternoon about whether it is appropriate to have a referendum rather than to debate the matter in Parliament. I remind my right hon. Friend that he, in common with all my right hon. and hon. Friends, fought the General Election on a manifesto which said precisely this.
Mr. Marten: I understood the Prime Minister to say that before the White Paper is published he will have conversations with the party political leaders, and so on. Will he also have consultations with the organisations outside the House which represent, rather more than the party political leaders possibly, the feeling in the country?
Secondly, the Labour Party has always said that it would leave the matter to the ballot box. I understand that the Prime Minister has now gone nap on a referendum. If, as one hears rumoured, the other place will block it, surely that will force the Prime Minister back to the ballot box by holding a General Election.
The Prime Minister: The last time, apart from 1974, when there were two General Elections in a year was precisely because of a challenge by the House along the corridor. I am quite certain that the whole trend of opinion has changed since those days, and I would not, and I am sure that the whole House would not, expect any problems of that kind.
The hon. Gentleman referred to organisations outside. Certainly my right hon. Friend the Leader of the House will be prepared to have consultations with any organisations outside the House expressing any point of view about the Market, as well as parties inside the House.

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One of the things that we are looking at in relation to the White Paper that I have promised to publish is the question of how far the main campaigning groups—it is a straight "Yes" or "No" issue, so there cannot be more than two—if they can organise themselves in such a way that the Government and the Opposition and everyone else can consult them about the conduct of the referendum, can be recognised in the campaign in the sense that parties are recognised by the broadcasting authorities in a General Election.
These are all matters on which we have not formed any view. We shall consider them and inform the House of our views, and we shall expect to hear from the House whether it feels that what we are proposing is the right thing to do.
Mr. Atkinson: Would not my right hon. Friend agree that the supreme policy-making body within the Labour movement is the annual conference of its rank and file members? Therefore, will he accept that there will be great disappointment throughout the country that he has resorted to the idea of having a free vote by Cabinet members in order to pre-empt the necessity of an annual conference decision that would be binding upon all Members? Will he have another look at the request that he has made to the National Executive Committee of the Labour Party to abandon the idea of taking a vote at a specially convened conference of the party?
The Prime Minister: I have not made such a request. My hon. Friend is, of course, right to display his knowledge of the constitution of the Labour Party, which is a subject I have studied over many years. I have chaired the party and I have been on its National Executive Committee for many years. One day, no doubt, my hon. Friend will succeed finally in getting on to the National Executive Committee.
With regard to both the practice of the party and its constitution, my hon. Friend will find that the constitution of the party lays down that the party was set up to secure seats in Parliament, at which we have not done too badly over the years. It was not the purpose, having done that, to say that those who had been elected to Parliament should not be able to play their full part in the parliamentary sovereignty of this country. Parliamen-
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tary sovereignty is, in fact, one of the issues in question in the Common Market negotiations.
Therefore, while I have always paid the fullest attention to decisions whether of the conference or of the National Executive Committee, all of us in the House have been elected to take decisions and as long as I am Prime Minister there will be no derogation in this matter. There will always be the happiest and most comradely of relations with the National Executive Committee. No one has done more than I have for over 20 years to secure that, except my right hon. Friend the Foreign Secretary over the last year—[Laughter.]—and, of course, previously. I was referring to my right hon. Friend's year of chairmanship.
The Labour Government were elected on a manifesto which pledged us to this referendum. I have announced the referendum this afternoon. We shall put this matter to the country, and as far as this Government are concerned—let there be no doubt about this—we shall accept the verdict of the people.
Mr. Walters: If the Prime Minister is going to concede that members of the Cabinet should express diverse views on a collective issue, is he going to extend this principle to other issues as well—for instance, nationalisation?
The Prime Minister: I have said, as the right hon. Gentleman the Leader of the Opposition said in a different context, that this is a unique matter. It is a unique matter. It is a matter which divides every party. It divides the whole country. We as a Government and as a party are a great deal more united on all the other major issues of the day than is the Conservative Party, because it has no policy on most of them. That is the problem.
I recognise, and I am right to recognise, that this is a matter on which my right hon. and hon. Friends feel very deeply even to the point—some of them, on one side or the other—of feeling that they would rather leave politics than accept something unacceptable. I respect that position. I believe that there are some hon. Members on the other side of the House who take the same view. Some have shown this. I think that it is right for us to show this respect. Whether it is right or not in the view of hon. Members opposite does not matter at the end of

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the day. This is a matter of fundamental importance. I believe that it is right to give this freedom to differ on this matter because we are so united on everything else.
Mr. Powell: In the House last week the Prime Minister reaffirmed the commitment to seek the whole-hearted consent of the British people to British membership of the European Economic Community. Will the White Paper which he has announced this afternoon that he intends to publish indicate how the results of a referendum will be evaluated in the light of that commitment?
The Prime Minister: I am not sure what the right hon. Gentleman means by "evaluated". If he means whether questions of counting, and so on, will be dealt with, I said that the White Paper will deal with them. It would be premature for me to forecast what we shall recommend to the House, and we shall take into account the House's views on this matter. If by "evaluated" the right hon. Gentleman was referring to the matter raised by a right hon. Gentleman on the benches opposite and by my right hon. Friend the Member for Fulham (Mr. Stewart) about how one should evaluate a hypothetical situation in which X per cent. of the people vote for and Y per cent. of the people vote against, I do not think that it is likely that we shall speculate about hypothetical questions of that kind. Perhaps the right hon. Gentleman will make plain what he wished me to answer.
Mr. Powell: I had assumed that a bare majority would be unlikely to be regarded as indicating the full-hearted consent of the people which leaders of both parties have regarded as the essential condition of continued British membership.
The Prime Minister: I think that this is a somewhat hypothetical question. Whenever I try to get guidance on this matter from people who feel strongly about it, I get the impression that they would be satisfied with a bare majority if it went their way but not if it went the other way.
Sir G. de Freitas: Is my right hon. Friend aware that it has been difficult to hear everything that he said about the nature of the White Paper? Will the
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White Paper be detailed enough to set out what the Government propose to do to ensure that the electors are presented clearly with the alternatives to membership?
The Prime Minister: The White Paper will be about the technical methods of taking the vote on the referendum. It will not deal with the issues. It will not deal with the case for or the case against or the alternatives. It will deal with the method of taking the referendum, which the House will have to decide. It will deal with the questions, for example, whether there should be unlimited expenditure by the various campaigning groups, whether paid canvassers will be allowed and whether people can buy broadcasting time. It will deal with the technical questions relating to something which is unprecedented and, by common consent of the House, unique; namely, a referendum. It will not deal with the arguments for and against staying in the Community.
Mr. Paul Dean: Will the right hon. Gentleman help us a little on the question of the legislation? Under the new doctrine of Cabinet responsibility, will it be in order for the Secretary of State for Industry to move amendments to the Government's referendum Bill? If so, will he do it from the Government Front Bench or the Government back benches?
The Prime Minister: I find it difficult to forecast which of my right hon. and hon. Friends will want to move amendments to the Bill, because I do not know, and nobody else knows, the outcome of the renegotiations. Perhaps the hon. Gentleman has it all sewn up. We have had that before and paid a big price for it. I do not know what the renegotiations will provide. All I know is that the terms must be a damned sight better—I am sorry, Mr. Speaker; a great deal better—than the lot we had before. The hon. Gentleman has put a very hypothetical question, but the position of individual members of the Cabinet will be decided at the time. The hon. Gentleman will recognise that when I referred to the possibility of what used to be an agreement to differ, I said that it will apply only if there is not complete unanimity in the Cabinet on this question. There may well be.
Mrs. Winifred Ewing: May I on behalf of my party congratulate the Prime Minister on his statement and particularly on the very clear-cut time scale? As he seems not to be entirely appreciated, may I offer him some crumbs of constitutional comfort from Scots law by which the supremacy of Parliament is less important than the sovereignty of the people?
Does the right hon. Gentleman agree with the view of the Secretary of State for Employment, as reported in The Times today, that the counting should be done on what he calls a regional basis lest the Government be accused of attempted concealment of the facts? Will the Prime Minister bear in mind that if there is an attempted concealment of the facts, of the vital statistics, from the people of Scotland, it will be reflected in an ever upward scale of support for my party?
The Prime Minister: I shall not enter into the question of vital statistics with the hon. Lady, but I undertake to consult the Lord Advocate about the matter of Scots law she mentioned and certain situations in which the will of the people is regarded as more important than Parliament, though I have never noticed that it has inhibited her or her hon. Friends in seeking election to this House.
I have seen the reports about the remarks of my right hon. Friend the Secretary of State for Employment. I cannot confirm them. They were made at a private meeting of the National Executive Committee of the Labour Party, which always meets in private and in confidentiality. I was not present. All I can give is the position of the Cabinet in this matter; namely, that we shall issue a White Paper in which will be our recommendation to the House, which must decide whether the count shall be taken in this way or that way or in some other way.
Mr. English: Will my right hon. Friend congratulate all his colleagues on the unanimity with which they have carried out their pledges compared with the broken pledges of the former Prime Minister? Will he also direct their attention to the fair point made by the hon. Member for Inverness (Mr. Johnston) on behalf of the Liberal Party a week or so ago when he pointed out that in Norway and Denmark substantial funds were
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allocated to each side so that the issue was divorced from the influence of more corrupt sources of money?
The Prime Minister: I am grateful to my hon. Friend for the kind and unreserved compliment he paid to the Government.
We have been studying the practice in every other country. This is not necessarily a final decision, but I am sure that most right hon. and hon. Members would feel that the country should not be swamped with private money spent on a propaganda campaign, and it may well be that those who attempt it and have access to large sums will feel on consideration that such expenditure might be heavily counter-productive. One of the things to be decided is whether there should be any limitation. It would be difficult, unlike the position in a General Election, to have a financial limitation or amount. It may be that the House will want to consider a limitation on the types of expenditure which it would feel inappropriate in this kind of election campaign.
Mr. Maurice Macmillan: The Prime Minister talked about renegotiating substantially better—or, as he said, damned sight better—terms. Will he say what he meant and whether he is taking account of the considerable improvement of the original terms gained by the Conservative Government over a number of years in a constant process of negotiation?
The Prime Minister: I withdrew, with Mr. Speaker's permission, the word "damned". The question of what we meant about obtaining improved terms was set out in the Labour Party manifestos for the February and October elections and was spelt out with considerable force and at length and in detail by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs when he opened the renegotiations with the Common Market last April. I recognise—and this is a very important matter in the test of opinion—that there have been changes in the Common Market irrespective of anything which any Government in this country might have requested. Some of these changes may be improving the situation; others perhaps are worsening it. They are very relevant.

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On the question of pressure by the previous Government, I did not see much sign of it, but I shall look into the question which the right hon. Gentleman has raised because I should like to know about it. The biggest problems which we have had to face have concerned beef and sugar. It was our insistence on going back to the system of deficiency payments for beef which made sense out of the situation, and we are pressing that on a longer-term basis. The sugar shortage and the high price of it are due entirely to the failure of the Conservative Government in 1971 to secure continued freedom of access for Commonwealth sugar. The tearing up by them of the Commonwealth Sugar Agreement is responsible for the shortage and high cost of sugar today. I shall study what the right hon. Gentleman has said and see whether I can find any better record for the Conservative Government.
Mr. Mackintosh: Recognising that this is a sad day, since this is the first historic time that a public announcement has been made that the House is fundamentally unfit to take a major decision affecting the country, if we arrive at a position where the referendum must be held will the Prime Minister consider publishing a second White Paper—we have argued the merits of entry for 15 years—explaining the costs of leaving the Common Market at this juncture?
The Prime Minister: With regard to the introduction to my hon. Friend's question, he knows perfectly well that I said nothing of the kind about the unfitness of this House. What I said was to make a reality of the principle on which my hon. Friend was elected to the House. Some hon. Members went to considerable lengths to get him back because we like to have him here. He is a very good colleague and comrade. The task was difficult and he was re-elected with a narrow majority. He might now ask himself whether he would have been elected if he had not fought on the manifesto which gave that pledge. It is fair to say as much to my hon. Friend, who has always been very frank, in his usual comradely way, about me on the radio and television.
With regard to the second part of the question, we shall consider what it is right for the Government to put out on all
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aspects of the choice facing the people and in what way these matters—the factual information, the arguments and so on—should be put out. We shall consider that. We are not rushing into it, because we do not yet know what the terms are.
Mr. Gwynfor Evans: Is the Prime Minister aware that it is desirable to ascertain the results of the referendum on a national basis—that is, not on a State basis, but on a basis of the nations of England, Scotland and Wales, so that we may know what is the judgment of the Welsh and Scottish nations?
The Prime Minister: The hon. Gentleman has no warrant for failing to mention Northern Ireland in this context.
I said that we were considering in our White Paper the question whether we should make a recommendation. We have not taken a decision. There are, broadly speaking, three main possibilities. The first would be for the counting to take place on a constituency basis. A second might be counting on a county or a wider than constituency basis, or regional basis, which would also mean that there would be separate figures for Scotland, Wales and Northern Ireland, and possibly for parts of them. The third possibility would be a national count in United Kingdom terms for all of those. Those are the possibilities. Naturally, we have started to look into them, but we have not taken any view on them which I can yet put to the House. However, I hope that we can do so before the White Paper is published and then hear the views of the House as a whole on this matter.
Mr. Whitehead: Will my right hon. Friend distinguish between the two decisions that must be taken; namely, the decision on the referendum and the form of the referendum, and the decision on the substantive terms renegotiated? Does not my right hon. Friend see that it is crucial for the House and many of our constituents, who wish to know the view of Parliament upon the terms on which they will now pronounce, that the second of those decisions should be taken on a free vote? The Prime Minister should announce that there will be a free vote of this House. If he delays until immediately before the debate takes place,

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he is open to the charge which was levelled against the former Prime Minister, that it was a tactical decision and not one of principle.
The Prime Minister: My colleagues and I will give consideration to that matter, recognising that the authority in these matters is with my right hon. Friend the Chief Whip. No one would ever seek to undermine his authority in these questions. Certainly it will be considered. At the right moment we shall make a statement. On the previous occasion, on Panorama, just before the big debate in the House, the Leader of the Opposition, then Prime Minister, was obviously taking the opposite point of view. Three or four days before the debate began he announced the decision to have a free vote, to put us on the spot. That was all there was to it. We shall try to decide the matter rather earlier, I think.
Mr. Rippon: As the Prime Minister has conceded that the referendum cannot be binding constitutionally on a sovereign Parliament, does he agree that a simple straight in-and-out question cannot be put? Does not he agree that we must put to the British people the question whether we should remain in on the basis of the terms renegotiated by the Government and approved by Parliament, or, alternatively, withdraw on terms which would then have to be negotiated and approved by Parliament, because a treaty is involved? In those circumstances, since Parliament would have to be consulted at every stage and would be affected by the referendum, is it not right that the public should know what Parliament thinks before the referendum—and on a free vote?
The Prime Minister: It is certainly the case that these matters arise in the taking of the decision by the British people. I do not say that anything the right hon. and learned Gentleman said is incompatible with a voting paper that asks "Yes" or "No". I should not like to see a voting paper drafted in the terms of the right hon. and learned Gentleman's supplementary question. I am sure that he will do everything in his power to bring his great clarity of mind and lack of bias on these matters to help the British people to understand what are the issues. I am sure that he will do so, before deciding what must be the decision as regards the Conservative Party, "Yes" or
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"No". Before that, Parliament will have debated this, perhaps more than once. We may want to debate these matters in the continuing process of renegotiation, as well as the late-night debates and so on.
I have answered the question on the free vote. That will be decided in due course at the proper time.
Several Hon. Members rose—
Mr. Speaker: Mr. Short, Business statement.

BUSINESS OF THE HOUSE
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): The business for next week will be as follows:
MONDAY 27TH JANUARY—Supply [8th Allotted Day]: There will be a debate on standards in education, when the appropriate Votes will be before the House.
TUESDAY 28TH JANUARY—MOtion to appoint a Select Committee to consider the position of the right hon. John Stone-house as Member for Walsall, North.
Motions on the Rate Support Grant Orders for Scotland.
WEDNESDAY 29TH JANUARY—Remaining stages of the Social Security Benefits Bill.
Motion relating to the Building (Second Amendment) Regulations 1974.
THURSDAY 30TH JANUARY—Second Reading of the Prices Bill.
Motions on the Counter-Inflation (Price Code) Orders.
FRIDAY 31ST JANUARY—Private Member's Bills.
MONDAY 3RD FEBRUARY—Debate on devolution, which will arise on a motion for the Adjournment of the House.
Mr. Heath: Regarding next week's business, when does the Leader of the House expect to put a motion on the Order Paper concerning the setting up of the Select Committee to consider the position of the right hon. Member for Walsall, North (Mr. Stonehouse)?
As regards the business on Monday week, will the Leader of the House confirm that the debate on devolution will be extended for a second day? I think most right hon. and hon. Members will agree that it is not possible for all those who

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are interested in the major questions of devolution, particularly affecting Scotland, Northern Ireland, Wales and England separately, to speak in just one day. Will the right hon. Gentleman confirm that the debate will take two days?
Thirdly, will the right hon. Gentleman tell us when we are likely to have a debate on the report of the Phillimore Committee, which greatly concerns many hon. Members, and, of course, particularly the Press outside?
Fourthly, will the right hon. Gentleman consider a debate on foreign affairs, particularly the Middle East in view of the critical situation there?
Fifthly, will the right hon. Gentleman confirm that the Secretary of State for the Environment will be making a satement on housing policy to the House in the very near future, probably next week?
Mr. Short: On the first point, a notice of motion setting up the Select Committee on the right hon. Member for Walsall, North (Mr. Stonehouse) will be put on the Order Paper today.
Secondly, if it is the general wish of the House, I shall be prepared to make a second day available for a debate on devolution.
Thirdly, I cannot say when there will be a debate on the report of the Phillimore Committee. It is an important topic, but I think that we perhaps need rather more time in which to digest the report. I recognise its importance and the need to debate this matter.
Fourthly, I cannot say yet when there will be a debate on foreign affairs, but I have discussed this with my right hon. Friend the Secretary of State, and I shall try to meet the right hon. Gentleman's wishes as soon as possible.
Finally, I hope that my right hon. Friend the Secretary of State for the Environment will be able to make a statement on housing in the not-too-far-distant future.
Mr. Heath: May I raise one further point with the right hon. Gentleman? It concerns the matter that we have just been discussing with the Prime Minister on the handling of the White Paper on the proposals for the referendum—or the Green Paper for which I have asked—and the legislation. Will the Secretary
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of State for the Home Department be in charge, as he is of all electoral matters, together with the other Secretaries of State involved?
Mr. Short: The preparation of the Bill will be done by a department in the Cabinet Office, supervised by me.
Mr. Faulds: In view of the broken promise about the introduction of a public lending right Bill before Christmas, may we be told when we can now expect this measure?
Mr. Short: I hope that this Bill will be published before very long.
Mr. Grimond: Is the Leader of the House aware that his indication that there will be a second day for the debate on devolution is extremely welcome and absolutely essential considering that this is the first opportunity that we have had to examine the whole matter referring to four countries since the Kilbrandon Committee? Will these days be consecutive?
Mr. Short: Yes, Sir, if that is the wish of the House, and they will be the first two days of the week after next.
Mr. Atkinson: Is my right hon. Friend aware that there will be considerable surprise in the Governments of the United States, Turkey and Greece that next week we are not to have a statement on the situation in Cyprus, especially in view of the second phase of the Clerides-Denktash talks and also because it is rumoured that we are to take initiatives in the United Nations about the partition of the island? Will my right hon. Friend assure us that the Foreign Secretary will be making a statement next week on the situation so that we may be informed about the initiatives which we understand the British Government will want to take?
Mr. Short: The Foreign Office is top for Questions next week and there are a number of Questions down on the subject. That will be an opportunity to question the Foreign Secretary on Cyprus.
Mr. Eldon Griffiths: The right hon. Gentleman will be aware of the strong feelings on both sides of the House about the embarrassing situation in which we appear unintentionally to have exempted ourselves in advance from paying the

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additional national insurance contributions which are to be imposed on the self-employed. May I draw his attention to a short and, I hope, non-contentious Bill which I have put down for Second Reading on Friday, and ask him two questions? First, at a time when we are asking for sacrifices from people generally with higher incomes, is it not embarrassing to Members of Parliament to appear to be doing for ourselves that which we are not prepared to do for others? Secondly, in the interests of the whole House, will the right hon. Gentleman facilitate the rapid passage of this simple and non-contentious Bill?
Mr. Short: I am afraid that I cannot do that. If I may say so, the hon. Gentleman is putting the matter round the wrong way. The new rule flows from a Bill passed by the previous Government. The need is to have a closer alignment between the way that Members of Parliament are taxed and the way in which they pay national insurance contributions. The two have to be aligned. At present, they are not.
Mr. Molloy: In view of the Prime Minister's very important statement today, can my right hon. Friend say whether a statement might be made very early next week by the appropriate Minister preventing Commissioners Soames and Thomson making many of their offensive broadcasts which could have an unjustifiable effect on the great debate? Because of the Prime Minister's statement, does not my right hon. Friend feel that such instructions or requests should be sent immediately to Brussels asking the two gentlemen concerned to stay there until the British people have made their decision?
Mr. Short: I have a fair amount of sympathy with the sentiments behind what my hon. Friend has said. However, the commissioners are independent. I am sure that no one could or would wish to prevent them expressing their views on the matter.
Mr. Gorst: May I remind the Leader of the House that I wrote to him on the subject raised by my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths), and may I also ask him whether he will arrange for time for this matter to be debated? Is he aware that his answer to my hon. Friend was entirely
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unsatisfactory because it did not answer my hon. Friend's question about whether Members of Parliament are self-employed, which they have always been, or whether they are employed by the State, by the Government or by the Crown? I hope that the right hon. Gentleman will be able to provide an opportunity for us to have an answer to the question. These are important matters, and they should not be decided as a result of legislation which arose on some previous occasion. It should be a decision taken by all back benchers—and Front Benchers if the right hon. Gentleman so wishes.
Mr. Short: The fact that Members of Parliament have been regarded as self-employed for some years is the result of a decision taken by the post-war Labour Government, quite arbitrarily and for no good reason. The present position is the law of the land, and there is nothing to be done about it unless the law is changed.
Mr. Powell: Does the Leader of the House still intend to bring before us the budget of the EEC?
Mr. Short: Yes, Sir. But my right hon. Friend the Chief Secretary has still to give evidence to the Scrutiny Committee. When he has done that, I shall bring it back to the House.
Mrs. Colquhoun: May we have a debate on the hours of sitting of the House? I remind my right hon. Friend that the Russian secret service interrogates its prisoners at 2 a.m. It is becoming increasingly the practice of this House to tramp through the Division Lobby at that same hour. Regardless of any parallel that my right hon. Friend may see between those two facts, I can assure him that it is extremely unpleasant to experience the second of them. At that time in the morning, the spirit of a Member of Parliament is very low. I ask him to arrange a debate on our hours of sitting as quickly as possible.
Mr. Short: After three days on the Finance Bill, I can understand how my hon. Friend feels. But this is a matter that the Select Committee on Procedure can discuss. I have put a proposal to the Committee which will, I think, considerably lighten the load after 10 o'clock if it is adopted.
Mr. Peyton: Although we are all overflowing with sympathy towards the hon. Member for Northampton, North (Mrs. Colquhoun), is not the real problem the growing tide of Government business with which the right hon. Gentleman's Government—I am sorry for the right hon. Gentleman in the colleagues that he has—is inundating this House? The Prime Minister's announcement and the muddle that he has got into over the referendum only threatens worse things to come.
Mr. Short: The Government's business is in perfect order. What has complicated our sittings after 10 o'clock is our membership of the EEC. That is the complicating factor now.
Mr. Grylls: Will the Leader of the House ask the Prime Minister to make a statement next week about whether Sir Don Ryder, the Government's industrial adviser, is responsible to the Prime Minister or to the Secretary of State for Industry? Many of us would like to know.
Mr. Short: Sir Don Ryder is physically located in the Cabinet Office, and he reports to the Prime Minister.
Mr. Gordon Wilson: Will the Leader of the House say whether it is the intention of the Government to make a statement on the powers and remit of the Scottish Development Agency before the forthcoming debate on devolution?
Mr. Short: There is no intention to do that. The Bill setting up the Scottish Development Agency will be introduced into Parliament some time in the early summer. But I shall pass on to my right hon. Friend the hon. Gentleman's wish to see whether it is possible to make any announcement before the legislation is introduced.
Mr. Buchan: My right hon. Friend will have noticed that the Government motion on agricultural prices in the EEC is still on the Order Paper, and he will know that the significant point about it is that the matter to be discussed is my amendment, following the dropped order the other night. We all recognise the Government's difficulties resulting from the flow of ill-advised draft directives and regulations coming from Brussels. We are in a pre-referendum situation in which
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discussions of these documents will help form public opinions and attitudes before people decide how to vote in the referendum. Is it not an important element in the formation of public opinion for people to have information on these matters, and does that not mean that matters of this kind ought to be discussed at a time when our conclusions can be disseminated in the country? Since precedents have been made today, my right hon. Friend can make another by suggesting that this House should meet on Wednesday mornings so that these EEC directives and regulations may be properly discussed and examined for the information of the people of this country.
Mr. Short: This matter has been referred to the Select Committee, which is going into it very thoroughly. My hon. Friend's suggestion is one possibility for dealing with this flow of legislation. On the general question, I think that my hon. Friend and his colleagues should give us credit for going much further in this matter than any other Government in the Community. This Parliament is giving far more information than any of the eight others, and I believe that we deserve a little credit for that.
Mr. Hastings: The right hon. Gentleman will appreciate the deep concern in all parts of the House over the procedure for the referendum. When will the next occasion be that we can probe a little further? In particular, can he satisfy me on one point with which the Prime Minister failed to deal, although I think he was asked? If the Government's recommendation be "Yes", it is essential for this country to remain in Europe, and if the result of the referendum he "No", what then happens to the Government, or to the Prime Minister and that proportion of the Government who happen to be supporting him at the time?
Mr. Short: I cannot answer the second part, which is a question for the Prime Minister. On the first part, I will try to ensure that the White Paper is produced by the second half of February. The Prime Minister has undertaken that there will be an opportunity for the House to debate the White Paper on the arrangements for the referendum.
Mr. Spearing: Is my right hon. Friend aware that many of his hon. Friends are

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grateful for the arrangements that he has made for the Scrutiny Committee, particularly since the present Leader of the Opposition made no such arrangements and kept the House largely in ignorance during the whole year of EEC legislation. [HON. MEMBERS: "That is not true."] In view of that, would he give one day of the four days in May which he has announced for a debate on the EEC budget? Also, does he intend to reinstate the VAT orders which mysteriously disappeared from the Order Paper last Monday?
Mr. Short: On the first part, it was the Conservative Government who set up the Foster Committee on which our present arrangements are based, so we must be fair. I pointed out last week that the VAT orders will be taken by the Council of Ministers much later in the year, so there is a good deal of time. I also said last week that by the time they come to be discussed there may well be other relevant documents. So there is a case for waiting a little while yet to see whether anything else is produced. I realise the importance of the matter.
Mr. Finsberg: Reverting to next week's business, as there is no business after 10 o'clock on Monday night due to the withdrawal of the Prayer which the right hon. Member for Battersea, North (Mr. Jay) was going to move, would the right hon. Gentleman consider putting down Early-day Motion No. 127, which has all-party support, is backed by both parties on the GLC and is of major importance to the people of London?
[That an humble Address be presented to Her Majesty, praying that the Town and Country Planning (Industrial Development Certificates: Exemption) (No. 2) Order 1974 (S.I., 1974, No. 2028) dated 4th December 1974, a copy of which was laid before this House on 6th December, be annulled.]
Mr. Short: I could not commit myself to that without notice, but I will have a look at the motion. I have undertaken to give time for my right hon. Friend's Prayer. It expires on 6th February, so I shall find time in the following week to discuss it after 10 o'clock.
Mr. Peyton: Would the right hon. Gentleman have a look at the point about Motion No. 127 immediately after he
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leaves the Chamber, and perhaps answer my hon. Friend?
Mr. Short: I would not be happy to put down a Private Member's motion after 10 o'clock, but I will look at it and talk to the hon. Gentleman about it.

CABINET (PRINCIPLE OF COLLECTIVE RESPONSIBILITY)
Mr. Gow: I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter which should have urgent consideration; namely,
that the constitutional principle of collective Cabinet responsibility no longer applies.
I apologise for the fact that it was not possible, Mr. Speaker, to give you much advance notice of my application this afternoon, but it was possible to consider this matter only after the Prime Minister's statement. I submit that this is a specific matter in the light of the new doctrine enunciation by the Prime Minister this afternoon. I suggest that it would be impossible to think of a matter of greater importance. We have, down the centuries, established the principle—
Mr. Speaker: Order. I think that the hon. Member has only one point to which to address himself. This is obviously an important matter and a specific matter, but he has to convince me that it should be debated today or on Monday.
Mr. Gow: I am coming to that point Mr. Speaker. I now submit that it is also a matter which should have urgent consideration. There is no knowing what the Government may get up to over the weekend. It is precisely because of the turpitude of the Prime Minister today and because of the lack of courage of some of his right hon. Friends in not resigning today from his administration—I am thinking notably of the Home Secretary and the Secretary of State for Education and Science—that this matter is not only specific and important but also vitally urgent.
Mr. Speaker: I am afraid that the answer to the hon. Member's application is "No".

UNEMPLOYMENT
The Secretary of State for Employment (Mr. Michael Foot): With permission, Mr. Speaker, I will make a statement on the unemployment situation.
As I informed the House on 13th January, the dispute which has prevented the compilation of unemployment figures for December and for the scheduled date this month has been settled. Figures for future months should become available at the usual times. I promised to consider whether it would be possible to make an approximate estimate of the current level of unemployment, and I now have this estimate.
Last Monday, 20th January, the level of unemployment in Great Britain is estimated to have been about 742,000, an increase of about 121,000 since the count last November. Of course, I do not minimise the seriousness of these figures, but part of this increase is what would normally be expected at this time of the year owing to seasonal factors. The increase since November in the seasonally adjusted level, excluding school leavers and adult students, was approximately 67,000.
Further details of the estimates, including regional figures, are being issued by my Department, and I have arranged for a copy of the Press release to be placed in the Library.
Mr. Prior: I agree that these figures are very serious. How do the increases compare with figures for recent years? Would the right hon. Gentleman agree with the Chancellor that the real threat during the coming months comes from inflationary wage settlements and that they will have the greatest effect on the unemployment figures? Do not these figures, together with the record increases in the cost of living and the numbers of days lost through strikes, indicate the total discredit of all that the right hon. Gentleman and his right hon. Friends said only three months ago during the election campaign?
Mr. Foot: There is, of course, no basis at all for what the right hon. Gentleman has said on the general political questions. I do not think, and I do not imagine that the rest of the House would accept, that the best way to debate those
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questions is in answer to the particular question on the compilation of the figures, particularly when we shall in a few minutes be discussing some of those subjects in the debate initiated by my hon. Friend the Member for Fife, Central (Mr. Hamilton). They are obviously subjects for general debate, and we are glad to have such a debate, but the figures that I have provided are in response to what the House rightly said, that it wanted figures as soon as we had some available. It is not easy to compare them with other figures over previous months, because these are for a different period than the normal figures, but the next count will be taking place at the normal time and then the normal comparisons will be made.
Mr. Dalyell: Cannot these figures often be deceptive? For example, does the Department understand the difficulty of the blockages and shortages of certain kinds of skilled labour, even in areas where there seems on the surface to be rising unemployment—for example, in the oil-related industries—and that this makes the manpower training policies of the Department absolutely crucial in the short term? Second, could the Department have some discussions with the oil companies, not least Burmah—or is it Chevron now, in the Ninian field?—to see how short-term training could be properly conducted to ease unemployment in areas where oil-related processing industries are on the upturn?
Mr. Foot: I should be glad to answer my hon. Friend's particular question about the oil industry if he would put it down. It is true, as he says, that there is a general shortage of skilled labour in many parts of the country, despite these rising figures. However, I do not believe that on that account anyone should minimise the seriousness of these figures. I certainly do not seek to do so. They indicate a serious rise in unemployment, and, naturally, the Government are very concerned about them. The interpretation of the figures should not be used to suggest that these are not people who want to get jobs if only the jobs were available.
Mr. Cyril Smith: In his statement the Minister referred to part of this increase being expected. Will he put a figure to that part? In other words, how much of the 121,000 increase is due to seasonal conditions and how much is due to the

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general economic position of the country? Secondly, will the Minister say, if he can, what the Government are doing about the causes of these figures and, what is even more important in this particular situation, what the Minister and the Ministry are doing about the effect of those causes?
Mr. Foot: As I said in answer to the right hon. Member for Lowestoft (Mr. Prior), I do not think that the best way to discuss the whole situation and the remedies which the Government are seeking to deal with it is in an answer which is concerned primarily with the compilation of the figures themselves. But the actions which the Government are taking to deal with the situation range over the whole degree of Government policy. They figure in Budget debates, and the measures taken by my right hon. Friend the Chancellor of the Exchequer, in both his mini-Budget and the other Budget. They were directed to trying to guard against rising unemployment. Indeed, they have had some effect in that sense, as our figures of unemployment are not as bad as those of some other countries. I do not say that this is any great boon, but it is something of which we should take account. The Government are seeking measures which will assist, including measures on snending more money on training and speeding it up. That is one—but only one—of the ways in which we can assist the situation.
Mr. Prior: The Secretary of State has come to the House and produced figures which all hon. Members will accept are serious, but then when he is asked what he is going to do about them he says that this is not the right time to discuss the matter. What is the right hon. Gentleman going to do about these figures in view of all he has said in recent months about unemployment?
Mr. Foot: The right hon. Gentleman is abusing the situation entirely. What I did—partly in response to him and, even more so, partly in response to my desire to inform the House as soon as we had the figures available—was to give the estimates that were available. They are not the official regular figures. What I am saying now—I should have thought that it was common sense as well as common practice in the House—is that the
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way to discuss the general question of unemployment and policies to deal with it, or the effect of the social contract or of wages on these matters, is in general debate—particularly as we are to have a general debate to be initiated immediately on the subject. We also have other occasions on which these matters are debated. The idea that the best way to deal with the discussion about unemployment is on the particular question of the compilation of the figures does not strike me as the best way for Parliament to do its business.
Mr. Golding: Is the Minister aware that short-time working is also a very serious problem in the West Midlands, as well as unemployment? When he gives us the regional figures, will he also give an estimate of the amount of short-time working that is taking place, in addition to unemployment?
Mr. Foot: Estimates about short-time working are not included in the figures that I have said that we are today publishing and putting in the Library. As I have indicated previously, these are not the regular figures compiled each month by the Department of Employment. They are estimates made in the intereval. I have given them to the House because of the hold-up in the regular figures as a result of the dispute which prevented us from publishing them earlier.
As for the remark of the right hon. Member for Lowestoft about the Government's policies, he should bear in mind the situation all over the world. He ought to understand that this is a matter much better dealt with in general debate than by individual questions and answers.
Mr. McCusker: Is the right hon. Gentleman aware that when there is increasing unemployment on the mainland it has an accelerating effect in Northern Ireland? Is he aware that his right hon. Friend the Minister of State for Northern Ireland has indicated this week that he is seriously concerned about unemployment prospects in the Province? This is because mainland-based companies frequently trim their peripheral activities when we are in this difficult situation. Will the Minister assure the House that he will work closely with his colleagues in the Northern Ireland office to alleviate this problem as much as possible?
Mr. Foot: I assure the hon. Gentleman that we certainly shall. We are very much concerned with the increasing unemployment in Northern Ireland, and in some other regions of the country, too—indeed, in the country as a whole. I am certainly not seeking to minimise the significance of these figures.
Mr. Cryer: May I express my concern about these increased figures, but may I also thank the Secretary of State for taking the trouble to bring them to the House, as requested by the Opposition? Has my right hon. Friend any idea how the regions are affected, as distinct from London and the South-East? May I urge upon him the necessity—of which I am sure he is aware—of bringing in remedial measures as a matter of urgency, and, in particular, increased investment from the National Enterprise Board? Will he assure the House that he does not regard wage curbs and confrontation with the trade unions as a method of solving this problem?
Mr. Foot: I assure my hon. Friend that I certainly do not regard the matters concerned in the warning he gave us at the end of his remarks as possible ways of dealing wih this problem. On his other question about the National Enterprise Board, perhaps if I answered that I might stray into doing what I refused to do with the right hon. Member for Lowestoft—to engage in a general debate. But certainly it is the Government's policy to get the NEB established as swiftly as possible. We believe that it could play a very important part in dealing with this problem.
But the Government have not waited to deal with these matters until this present moment. One of the first measures which the Government took to deal with unemployment in the regions, about which my hon. Friend asked—[Interruption.] My hon. Friend put a particular question about the regions, and it relates to the figures. In Scotland, for example, the seasonally adjusted figure has risen since the last count by 7,000, in Wales it has risen by 4,000, and in the North-West by 9,000. But the biggest proportional increase has been in the South-East, although in the regions there have been these increases. As I have indicated, the Government did not wait for the figures in order to try to help
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to deal with some of the problems in the regions. That was one of the reasons why the Government doubled the regional employment premium and refused to continue with the action of the previous Government to abolish REP.
Mr. Craigen: Is the Secretary of State still considering the contingency plans which the Manpower Services Commission put before him at the end of last year? When does he hope to come forward with his views on those plans, particularly the commission's proposals for selective job creation?
Mr. Foot: We are still having discussions with the Manpower Services Commission about the job creation proposals. That can be one element in assisting the situation, but only one. There will have to be other measures to deal with it.
Mr. Madel: What further measures does the right hon. Gentleman have in mind to encourage firms to notify vacancies, particularly small firms?
Mr. Foot: I do not want to be tempted to do what I tried to guard against—the discussion of all the policy issues. However, certainly the Government are very eager that firms should give us all the information they can about possible redundancies. The Employment Protection Bill, which will be coming before the House in a month or two, will make statutory provision for this on a much more extended scale than that which we have at present. In the meantime, firms can assist by giving full information to the Department, and many firms up and down the country do this.
Sir A. Meyer: The figures quoted by the right hon. Gentleman in reply to his hon. Friend the Member for Keighley (Mr. Cryer) indicate that the situation in Wales is deteriorating less rapidly than that in the rest of the United Kingdom. However, is the right hon. Gentleman aware, nevertheless, of the repeated and snowballing redundancies being announced in my part of North Wales at any rate?
Mr. Foot: I assure the hon. Gentleman that I am not minimising the significance of the increase in the figures in any part of the country. My hon. Friend

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the Member for Keighley (Mr. Cryer) asked a specific question about the figures in the regions, which I gave. I also made a comparison with the fact that there had been a bigger increase in the South-East on this occasion. I am not seeking to draw any great policy deductions from them. I agree that the situation in Wales, Scotland and the other regions is even more serious because they start from a very difficult point in the range of unemployment.
Mr. Finsberg: Will the right hon. Gentleman, since he has agreed that there is a rise in the South-East, try to persuade his right hon. Friend to withdraw Statutory Instrument No. 2028/74, which is designed to stop small and medium firms expanding their businesses in London and providing more jobs, which will make the situation much more difficult?
Mr. Foot: Discussions have been held about this matter, but if I knew more about that statutory instrument I would be in a much better position to reply. I shall hold further discussions as a result of the hon. Member's question.
Mr. Stanley: Since the serious figures produced by the Secretary of State understate the position by not including the numbers on short-time working, will the right hon. Gentleman give an estimate of the current number of employees who are on short time?
Mr. Foot: No, I will not give any estimate of that kind. I said that these are interim figures which are an estimate of what we believe to be the position. The figures are not in exactly the same form as when the regular figures are presented
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to the House. The regular figures are based on a more detailed examination than has been possible in this case. However, since the figures had been delayed by the dispute we felt that we should present them as soon as we received them, and that is what we have done.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. George Thomas): Order. We must move on.

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 10TH FEBRUARY
Members successful in the Ballot were:
Mr. Bryan Magee.
Mr. John Cope.
Mr. Michael Neubert.

BILL PRESENTED
  COAL INDUSTRY
  Mr. Secretary Varley, supported by Mr. Secretary Crosland, Mrs. Secretary Castle, Mr. Secretary Ross, Mr. Secretary John Morris, Mr. Fred Peart, Mr. Joel Barnett, Mr. Albert Booth, and Mr. Alex Eadie, presented a Bill to provide for grants to the National Coal Board to meet expenditure under a scheme providing for compensation for pneumoconiosis; to enable the Board to withdraw support to enable coal to be worked and to work coal in former copyhold land; to make further provision in relation to opencast operations; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 66.]
ORDERS OF THE DAY

  CONSOLIDATED FUND (No. 2) BILL
  Order for Second Reading read.
  Motion made, and Question proposed, That the Bill be now read a Second time.

  SOCIAL CONTRACT
  5.3 p.m.
  Mr. William Hamilton: I am glad to have this opportunity of initiating a debate on the need to preserve the social contract. We have just had exchanges on unemployment figures which will fit in nicely with the text of my speech.
  My right hon. Friend the Secretary of State for Employment will need no reminding of the long arguments and discussions during and since the election, outside and inside the House, about what the social contract is. We had some lengthy exchanges on the matter at Question Time on Tuesday this week. My right hon. Friend, who, I presume, will be answering my debate, said then
  "The social contract covers the whole range of Government economic policies."—[Official Report, 21st January 1975; Vol. 884, c. 1205.]
  I start from the proposition that the basic aims of these policies are: first, to halt inflation; secondly, to redistribute the national wealth of this country; thirdly, to maintain, so far as we can, full employment; and, fourthly, to improve our competitive position as a world trading nation.
  All these problems and others have been with us for at least the last 30 years, and no Government have ever come up with enduring solutions to them. Even during the years immediately after the war we as politicians played little part in damping down the expectations of our people of an automatic, steady, annual increase in their standard of living. We have tended to regard that automatic increase, year by year, as some God-given right. We have seen it as a hangover from the days of our imperialistic glory when for generations, even centuries, we sucked the blood of our colonial empire, and the private
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  owners of our industry at home exploited their ill-organised workers who had never dreamed of the real power that lay in their hands.
  Today all that has changed, and it is changing fast every day. We are witnessing a massive shift of power within the United Kingdom and in the world. The British Empire as it was known, and about which we were taught in school, has gone for ever. With it have gone our sources of cheap food and raw materials, and who in this House would regret that? Yet we still assume, or some still assume, that we could have access to that same cheap food and these same cheap raw materials.
  All of us are having to learn the hard way that this is an illusion. The Arabs have got us by the anatomy where the pinch hurts most. Our long-suffering sugar suppliers in Jamaica and elsewhere are refusing to be exploited any longer by their former masters in the United Kingdom. One could go on applying these cold douches of the realities of the modern world in which we must fight for our standard of living and work for it. It is a world in which we have very few friends and still fewer philanthropists prepared to bail us out.
  Internationally there are unmistakable signs of a shift in the balance of power from the rich and developed northern hemisphere—if I may generalise in that way—to the poor and under-developed southern part of the globe. There is a similar shift within our own boundaries. There is a transfer of power to those who produce the wealth from those who own it. Our sovereign Parliament—and we have heard a great deal about the sovereignty of it—is less sovereign than we in it care to think. To fear the loss of our sovereignty—and this fear has been expressed by certain Cabinet Ministers in recent weeks—from joining and remaining within the EEC is just about as credible as Zsa Zsa Gabor fearing the loss of her virginity as a result of her sixth marriage. That power has moved from this House to forces outside.
  No British Government could today survive for long without the approval, support and co-operation of organised labour outside the House. That does not mean simply the leaders of the separate trade unions like Mr. Jack Jones or Mr. Hugh

  1783
  Scanlon. Still less does it mean the General Secretary of the TUC, the genial Mr. Murray. Twenty shop stewards in a key industry like electricity supply or a majority of one or two on the National Executive of the National Union of Mineworkers have more power in their hands than all the back-bench MPs in this House.
  These seem to me to be the hard realities of our situation, and it is a recognition of those hard realities that produced the social contract.
  Mr. John Golding: Does my hon. Friend accept that the executives of unions have the power only so long as they have the support of the rank and file?
  Mr. Hamilton: I am not dissenting from that. I am simply making the general proposition that the power to disrupt the country's economy lies not in what we do here but in what is done by people outside, including the trade unions, the CBI and other bodies that are not elected in the way that we are.
  The recognition of that fact has brought our party to the point where we have sought to devise a contract, which we commonly call the social contract. It is easy to make jibes about it—about its vagueness, the ease with which it appears to be broken and the fact that some trade unions and their members have refused to accept it. The extreme Right and the extreme Left of the political spectrum seem to have one thing in common, which is to break both the letter and the spirit of the social contract.
  Here I speak for myself and, I think, all responsible and reasonable people. All who have the welfare of the country at heart are concerned for the well-being of all our people and the protection of the weakest sections. All of us who accept that proposition must also accept the principle underlying the contract, which is to ensure that such sacrifices as must be made are fairly shared. That was a fundamental concept on which we fought and won the February election and the October election. But I find it hard to reconcile that principle with some of the things that have happened since the election.
  I should like to give a few examples. The Government made what I can only
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  describe, as politely as I can, as furtive announcements about substantial salary increases for the chairmen of nationalised industries, judges and the other higher-paid professional sections of our society. There was, equally surreptitiously, an announcement of increased school meal prices. It does not seem to me that those two announcements fit in with our concept of protecting those who cannot protect themselves, and demanding sacrifices from those best able to make them.
  I hope that my right hon. Friend the Secretary of State will take what I say next in the spirit in which I say it. We had from him a harsh criticism of a recent pay award to certain members of the BBC, but there have been few such criticisms from him or any other Minister of any of the other substantial wage and salary awards made since October. My right hon. Friend the Chancellor of the Exchequer and other Ministers have told us that 75 per cent. of the claims met recently have fallen within the terms of the social contract. My right hon. Friend the Secretary of State repeated that point a Tuesday. Certainly many of the lower paid, especially in the public services, have had substantial increases which are thoroughly deserved and justified. As my right hon. Friend knows, I speak strongly and emotionally about the nurses and about the teachers. Increases to them and to postmen, old-age pensioners and the disabled fit very well within the terms of the social contract.
  There has been rather slower progress towards equal pay than I would wish. I hope that my right hon. Friend will say something about that. We have had the freezing of rents, and there have been the food subsidies. I gather that there will soon be an announcement of a further increase in food subsidies.
  By and large, and taking account of these factors, few can doubt that the Government have played, and are playing, their full part in keeping their side of the contract. We had a good example yesterday in the consideration of the Finance Bill. I compare the packed Opposition benches yesterday, when we discussed the capital transfer tax, with the presence of just two Tory back benchers now. When we were talking about taxing the very wealthy 3 per cent. or 4 per cent. at the top it was not possible to find a seat on the Opposition benches. Now that

  1785
  we are discussing something that is designed to protect weaker sections of our society and to build a more just society, which is what the social contract is about, not a Tory gives a damn about it.
  Mr. Christopher Tugendhat: Does the hon. Gentleman agree that the Government benches are also denuded? The number of Labour Members present can be counted on fewer than the fingers of two hands. There are far fewer present than when the capital transfer tax was being debated.
  Mr. Hamilton: I am making the point that the Conservative benches were packed for the whole of the debate till half-past one yesterday morning, when Conservative Members would normally all have been tucked up in bed in the Savoy or the Hilton. They had important and privileged people to protect. That is the fundamental difference between the Conservatives and my party.
  The invaluable work of the independent Advisory Conciliation and Arbitration Service has gone on, and is going on, largely unobserved, unpublicised and unappreciated. I hope that my right hon. Friend will do more to tell the people the value of what the service is doing and how it is doing it.
  Despite all the progress on the Government side, the contract could be in grave danger of total collapse within the next few months. I think that my right hon. Friend is disturbed about that. There are ominous signs. My right hon. Friend gave us an indication about one of them, the increase in unemployment, this afternoon. I had a note only yesterday about youth unemployment in the county of Fife. Last January it was 343 boys and girls, and this month it had gone up to 731. If that kind of increase is spread over the country it is a matter of grave concern.
  The spectre of mass unemployment is a more daunting discipline than anything the House can put on the statute book. No one who has had first-hand or secondhand knowledge of unemployment can fail to understand the fear that working people have of it. The speech made a few weeks ago by Jack Jones expressed it in blunt and courageous terms. He said in
  1786
  effect that, to re-turn a phrase, one man's wage increase could mean another man's standing in the dole queue. There is not much point in a man's getting a big wage increase if it contributes to the bankruptcy of the firm in which he is employed or of someone else's firm. Many firms are finding it difficult to continue. The massive wage increases being handed out give further twists to the already frightening inflationary spiral, which results in a massive loss of confidence in our currency at home and abroad, and increasing discouragement to save, with resultant disastrous stagnation in investment, both public and private.
  I want to ask about an article in a newspaper yesterday. It may have been mischievous, mendacious or without foundation, but I must put questions about it to my right hon. Friend. How does he see the social contract developing over, say, the next six critical months? I think that he said a little while ago that we could not yet judge whether it was failing or succeeding, and that we should have to give it another few months. Will my right hon. Friend give his views on that? Will he reassert, as I am sure he will, that it will never be the Government's intention to seek to reimpose a statutory incomes policy? Because of experience over the past few years, there are still suspicions, some of which are being voiced, perhaps within the Government, that there will soon come a time when some kind of statutory incomes policy will have to be introduced.
  Thirdly, in what circumstances do the Government envisage a tightening up of the existing terms of the social contract, and how would such an exercise be undertaken? I think that Mr. Len Murray gave some indication of the way in which his mind was working. I presume that he was able to speak with some knowledge of the Government's thinking on these matters. Will my right hon. Friend give an assurance that over the next 12 months at least the Government will take all possible steps by fiscal or other means to ensure that no one in receipt of salaries of, for example, £5,000 will receive any increase in remuneration? The total sums that are involved in the increases proposed for the chairmen of nationalised industries, judges and the rest may not be large, but psychologically such increases can be particularly damaging. Whenever I go to my constituency and say to people

  1787
  "For God's sake, try to get your trade union to observe the social contract", I have the pay increases recommended by the Boyle Committee hurled at me. Many of my hon. Friends have had the same experience.
  Mrs. Renée Short: The amounts are large. It is not correct to say that they are not. The increases are of the order of 28 per cent. That is a higher percentage than most wage-earners are able to achieve. An increase of 28 per cent. on a salary which is already about £18,000 is a considerable increase. Even though my right hon. Friend the Prime Minister said that the increases should be put into effect in two stages, those involved will still receive them by a year next summer.
  Mr. Hamilton: My hon. Friend is underlining and re-emphasising what I have already said. They are substantial increases. It is impossible for us to persuade ordinary working people to deliver the social contract while the Government accept that kind of policy. I should like my right hon. Friend to take more active steps to give the House of Commons more specific information about how the social contract is working and developing. By deliberate intent or otherwise, the Government are creating the impression that they are giving Members less information than they are giving to outside pressure groups on both sides, including the CBI and the TUC. In that sense we are becoming second-class citizens. We are getting our information about what the Government are up to either in answers to Written Questions or through the Press.
  My right hon. Friend over the years has been a good parliamentarian. I think that he will accept the point that I have just made. We are anxious to be partners and to play our part in the great changes facing us as a nation. We are not prepared to be mere Lobby fodder groping in the dark for such information as we can find on what the Government are doing.
  I hope that the Conservative Party will soon resolve its bloody civil war. One of our great difficulties and dangers is that we have no effective Opposition. The Tories have no leader and no alternative policy. Nothing whatever comes from them except negative belly-aching and the
  1788
  history of a three-day working week. That is all we have. That is bad for government. It makes for bad, indolent and incompetent government. That is a luxury that we cannot afford. I still have great faith in the social contract. I think that the most inspired appointment made by the Prime Minister—I hope that my right hon. Friend will not be embarrassed by this flattery—was to appoint my right hon. Friend to his present job. If there is anyone who can deliver the goods in this context it is him. We look to him to help us to help him and for him to help the Government in this great experiment. Until now no credible alternative has been put forward to the social contract. If it does not work I fear for the future of the country.
  5.25 p.m.
  Mr. Christopher Tugendhat: There was a great deal in what the hon. Member for Fife, Central (Mr. Hamilton) said with which my hon. Friends and I were in considerable disagreement. However, we entirely agree with his central points, that the House needs more information about the social contract and that there is grave unease and uncertainty in the country about its workings.
  The hon. Gentleman is to be congratulated not only on drawing first place in the Ballot but on bringing this important subject before the House and on putting questions to the Secretary of State which should certainly be answered. Some of the questions which I shall be putting to the right hon. Gentleman and some of the questions which will be put by my hon. Friends will be along the same lines as those put by the hon. Gentleman. As he said, there is growing concern about the way in which the social contract is working. There might well be concern as the figures published for the calendar year 1974 show that wage rates last year rose by 28½ per cent. The right hon. Gentleman and the Chancellor of the Exchequer—in other words, the Government—have admitted that one in four people who received pay settlements during the course of the year settled outside the terms of the social contract.
  I now think back to the words of warning which the Prime Minister uttered in the summer of last year when he was settling down after his election victory.

  1789
  He said then that, while import prices had been a major cause of inflation up until last summer, the danger was that wages would become so. He warned very much about the dangers of wage-push inflation taking over from imports. He was right about that. He was right to warn the country, and his fears have been more than fulfilled. The 28½ per cent. increase in wages during 1974 more than fufilled the Prime Minister's worst fears when he was pleading for restraint during the halcyon days following his election victory.
  It is not only the hon. Member for Fife, Central who has been expressing unease within the Labour Party. Before Christmas the right hon. Member for Battersea, North (Mr. Jay) wrote an extremely interesting article in the Financial Times about the social contract. In his article he put forward far-reaching proposals which he said were designed
  "to prevent our economic difficulties from getting completely out of hand."
  He argued that the Government should set up some form of authority to determine whether settlements had been or were within or without the social contract. He suggested that a White Paper should be published to give information to the House and to the country about the exact nature of the social contract. He also suggested that the CBI should be brought into the arena. He proposed that tax penalties should be levied on all working people to compensate for the pressures which excessive wage claims were bringing forward.
  My hon. Friends and I are in agreement with much of what the right hon. Member for Battersea, North said. It is a matter of regret that the hon. Member for Fife, Central should have to make the kind of speech which he made today and that the Secretary of State did not respond earlier to the kind of suggestions that were being put forward by his right hon. and hon. Friends as well as by my right hon. and hon. Friends.
  It is not only among the moderates in the Labour Party, if the right hon. Member for Battersea, North think of himself in that context, that there is grave uncertainty and concern being expressed. On Tuesday no less a figure than the hon. Member for Tottenham (Mr. Atkinson)
  1790
  was expressing some confusion about the way in which the social contract was working and about its purposes. The hon. Gentleman, a bastion of the Left wing of the Labour Party and, I understand, a close associate of the Secretary of State, seemed uncertain as to whether the social contract referred to take-home pay or to gross pay. That is a fundamental and central point. If the hon. Member for Tottenham, with all the advantages that he has during this present administration of being on the Left of the Labour Party, does not know the answer to that question it is clear that the Government have been not only less than frank with the House but less than frank with the Labour Party.
  I hold the Secretary of State personally responsible for the confusion that has arisen. Since he became Secretary of State he has consistently failed to provide the House with sufficient information to judge whether the social contract is working. We are not here concerned with whether the guidelines are right or wrong. We are concerned about the fact that we do not have sufficient information to know whether the policy put forward by the Government is working.
  We have only to look at the admissions made in the past few days by the Chancellor and by the Secretary of State, to the effect that 75 per cent. of wage settlements have been within the social contract, to see some of the problems. It is difficult to reconcile the fact that as many as 75 per cent. of settlements have been within the social contract in the light of other figures we have about the performance of the economy during the past year.
  We know, for instance, that there has been a 28½ per cent. increase in wages and a 19 per cent. increase in prices. Those figures certainly suggest that rather more than 25 per cent. of wage settlements have been outside the social contract. Perhaps the Secretary of State is right. Perhaps the Chancellor is right. The only way for us to judge is by being given details of the wage settlements. The Secretary of State, as is his wont at the moment, attacked the Press, particularly The Times of Tuesday for what he called irresponsibility over its headline about the prevailing rate of wage settlements.

  1791
  It is the Secretary of State who is being irresponsible. His Department has the details. It knows what is happening. How can it expect the Press, the House of Commons, even the hon. Member for Tottenham to know how the social contract is working, and whether it is working, if it will not publish the details? It is no good the Secretary of State or any other member of the Government resorting—and I am sure that the right hon. Gentleman would not wish to—to ministerial evasion. As members of the Labour Party, from the highest to the lowest, are for ever telling us, the social contract is the centre point of this Government's policy. It is the key to their attempt to overcome inflation and to get the economy on to a sounder footing.
  The Foreign Secretary told the Labour Party conference that everyone was involved. In his television performance on Monday the Chancellor hinted that the gravest possible economic measures would follow if the social contract failed. He also suggested in that speech that it was vital for people to restrain their rate of wage increases because otherwise high unemployment would follow. That is a point of view with which I and my hon. Friends entirely agree. The Chancellor has recently been talking a certain amount of good sense on this subject. In his speech of 10th January he pointed out, quite correctly, that when the social contract was originally negotiated the world was a very different place. He pointed out that at that time both the economy of this country and the international economy were enjoying a boom, perhaps the greatest boom since the war. Now the international economy and, more particularly, the economy of this country are facing grave difficulties. It is not surprising, therefore—and this would apply to any form of contract—that a contract signed in the halcyon days of a boom should need alteration, tightening up and modification in today's changed circumstances.
  It is difficult for us to know whether the Government are endeavouring to tighten up the social contract or whether they feel it needs tightening up. It is difficult to know what the social contract means when no information that could possibly cast light on the subject is ever brought before the House or, judging
  1792
  from the speech of the hon. Member for Fife, Central before the Labour Party.
  There are two things which the Government ought to do in response to this debate. The first is to publish the relevant information for which we are all asking. Such information should be published immediately. We have been asking for it for many weeks, and now Labour Members are asking for it, too. Second, the Government ought to look back to their programme of June 1973 and to some of the wise words of Mr. Len Murray, whose counsels play such an important part in the Government's policy. In the Labour Party's programme of June 1973 the social contract was described as
  "a contract which can be renewed each year as circumstances change and as new opportunities present themselves."
  That is a sound proposition. Mr. Len Murray has also said that the contract was:
  "comparable to an industrial agreement which was subject to modification from time to time from both sides in accordance with changing circumstances."
  I know that the Secretary of State approaches economic problems from a somewhat different standpoint than that of the Chancellor, but I feel sure that even he would agree that circumstances have changed since the social contract was originally negotiated. He may even agree that circumstances have changed during the year or so that the Government have been in office.
  As we know from the statement made earlier this afternoon, the Government believe in renegotiation. Renegotiation is a central part of their policy in some other areas. We would like to know what proposals the Government have for renegotiating the social contract in the light of changed circumstances, in keeping with their programme of June 1973 and in keeping with Mr. Len Murray's words in the Daily Telegraph of 23rd May 1974.
  In this debate, when time is of no consequence, when the Secretary of State has all the time in the world to say whatever he wishes with no possible excuse for not saying something because it is not a suitable time—as he said earlier—we want to know how the social contract is working. We want the figures and details which are available from his Department and will enable us to form a judgment.

  1793
  We also want to know what, in the light of the changed circumstances, his proposals are for renegotiating the social contract.
  5.37 p.m.
  Mr. Bob Cryer: I am grateful to my hon. Friend the Member for Fife, Central (Mr. Hamilton) for raising this subject, which is of crucial importance to the whole of Government strategy. I am particularly gratified that my own subject for debate during the proceedings on the Consolidated Fund Bill has been usefully grafted on to this basic issue. The social contract concerns the whole relationship of the trade union and Labour movement to a Labour Government.
  As my hon. Friend the Member for Fife, Central had said, it involves an irreversible shift of wealth from those who have been receiving it to those who actually create it. The debate on capital transfer tax last night provided us with a quite different picture. While we congratulate the Government on the thoroughness with which they are dealing with the Budget, may I remind them of their commitment to "open government"?
  In spite of the political opportunism which has been shown on the Opposition benches, I have to say that some of us are less than satisfied with the method used to introduce one element affecting the social contract. My hon. Friend has referred to the wrong sort of psychological atmospere which this creates. I refer to the findings of the Review Body on Top Salaries and the way in which those findings were introduced to the House by means of a reply to a Written Question. As we all know, Written Questions can be tabled at useful points in time. I understand that the previous Conservative administration made plentiful use of this method, so that Conservative Members have no basis for criticism. But we want to be committed to a much more open and democratic system of government. It was imprudent and mistaken to put down a Written Question for answer on the last day before the House rose for the Christmas Recess. When the Written Question procedure is used in that way the House has no opportunity for debate before the policy is implemented.
  1794
  The Government accepted certain sections of the Review Body's report, and those sections were implemented on 1st January, 13 days before the House reassembled. When this matter was raised on a previous occasion the Leader of the House said that it would be difficult to arrange for a great many statements to be made to the House. He said that it was a matter of judgment on what is important and what is not and whether a statement is justified. But I suggest to my right hon. Friend that matters relating to pay are of paramount importance because they are part of the key policy of the social contract. The Government should consider whether it is necessary for the House to sit earlier so that more statements may be made and issues debated.
  I congratulate the Government on having stuck to the policy on which they went to the country on the necessity for a referendum. It is a matter for commendation that some degree of Cabinet dissension will be permitted, depending on the final outcome of the negotiations, so that the tradition of collective Cabinet responsibility on this unique occasion can be modified. If the Government can produce modifications on this scale they can surely produce modifications to ensure that the Government are open to the check, scrutiny and jurisdiction of the House.
  When I talk to my constituents about the social contract they often say "What about these huge sums that have been awarded?" Sometimes they say "It was announced in the Commons." That phrase is often used by the media. People do not realise the academic complexities of the House. They do not realise that "an announcement in the Commons" means that a Press release is produced at 4 o'clock and an answer goes into Hansard which is not available until the following week, so that there is no opportunity for debate. I was criticised for not debating something which I had no opportunity to debate. It is essential that we must be seen to justify every Government decision.
  The hon. Member for the City of London and Westminster, South (Mr. Tugendhat) said that the social contract had been breached by 25 per cent. of wage agreements. To put it in another way, 75 per cent. of agreements have

  1795
  been within the social contract. I wonder whether the social contract was borne in mind when the report on top salaries—which the Government inherited—was accepted. With the present economic uncertainty and gloom, that sort of award is not conducive to encouraging rank and file constituents.
  The report makes one a little uneasy. On the list of people who gave evidence to the Review Body I can find no reference to engineers or textile workers giving their opinion on the salaries that judges and chairmen of nationalised bodies should receive. Nor can I find evidence from boiler firers in the Central Electricity Generating Board or porters on the railways on what they think their respective chairmen should receive. But, in the light of the social contract, that is the sort of discussion there should be. It is not simply a question of doling out large amounts of money to a tiny group of people. The people who gave evidence to the Review Body represented an élitist approach.
  A group of people have received an increase of £2,650, which is more than many people in my constituency earn in a full year. During 1975 the economic climate of this group of people will be cushioned by an additional £3,000. In another instance the first increment is £3,325. People feel that increases of that size are unfair. Members of Parliament receive a copy of the "Low Paid Bulletin." The issue dated January 1975 points out that in 1974 nearly 3,750,000 men and women were paid poverty wages. That calculation was based on statistics provided by the Department of Employment. Just under 3 million were men working a full week but receiving less than £30 a week, overtime excluded, and 800,000 were women employed at wages below £17 a week.
  I was approached in my constituency by a member of the public who showed me his wage slip, according to which he was taking home £32 after working a week of 52 hours. When we talk of the social contract and the shift of wealth we have to bear in mind that, on the one hand, awards of £2,500 are doled out and, on the other hand, people are taking home £32 a week. According to a weekly magazine, the doormen of London luxury hotels are getting £24 a week. When people realise this discrepancy they
  1796
  do not believe that we are moving towards a more just society. They regard the people who gave evidence to the Review Body as an élitist group who do not represent a cross-section of working people. When the decisions which are based on the evidence given by the élitist group are accepted by a Labour Government people feel that the social contract and the irreversible shift in wealth which we were promised at the last election are being undermined.
  The Labour Government should not accept the market theory of wages, which is that to get the best talent and the best ability we have to go into the market place. It is a good thing that that theory has never been applied to nurses. Nurses over the years have given their skill and ability for a pittance. If the nurses and other members of our community can make that kind of contribution to our society, it is reasonable to ask those in the higher income income groups to make the same sacrifice to make it clear to everybody that wealth is being redistributed.
  If the Labour Government govern with flair and courage, we need not worry about their replacement by a Conservative Government for many years to come. But that flair certainly is not exhibited by the report on top salaries. I believe that the Labour Government should set an example by taking a cut in salary. It would not be so extraordinary and would be very much to their credit throughout the nation. I subscribe to the theory that if top salaries were curtailed at £7,500, it would be a symbol of our endeavour to solve our economic problems.
  I should like to turn to the subject of the nationalised industries. We have a very large public sector, and if the social contract is to work people must be shown that they are involved in decision making in the nationalised industries and that there is not a highly-paid elite making decisions in which the people play no part. I know that my right hon. Friend the Secretary of State for Employment regards participation in decision making as an important part of Labour's programme. I am pleased that the Labour Government have set up a Royal Commission on pay, but I believe that the pay of nationalised board chairmen should be looked at carefully

  1797
  so that the people who sweep the platforms and drive the trains feel that the industry for which they work is their own industry and that the Government are not merely perpetuating the existing system.
  The curbing of wage demands is not the sole answer to the problem of making the social contract work in order to solve our economic difficulties. We expect working people—those who create the wealth of the nation—at least to keep abreast of living standards. No Labour Government could stay in office if they were to try to cut living standards of the vast body of working people who helped to elect them. We must at least maintain living standards and ensure that the lower paid receive wage increases to keep abreast of inflation. But we must do more. We must seek increases in productivity—and that means increases in investment, too, for this has not happened in the private sector. It means that we must introduce the National Enterprise Board as a matter of urgency as a key weapon in ensuring that both investment and productivity are raised. If we raise productivity, the increased wealth can be distributed among working people. Furthermore we must consider some form of selective import control. For example, in the textile industry the scale of cheap imports has been such that the situation can almost be classified as dumping.
  The Government must look at all these weapons in their economic armoury and say "We are prepared to employ these weapons and to have a much greater control over the economy". They must seek to ensure that market forces which have such a great effect on our economy are diminished. They must decide that our salary and wage structure must be so organised that the people on top salaries set an example by taking cuts, or certainly not by accepting increases in salaries.
  If we keep faith with the policies on which we were elected in February and October of last year, we shall retain people's faith. We shall then ensure that the social contract, which will bring about an irreversible shift in wealth, will succeed and in future elections we shall fear no opposition whatever.
  5.55 p.m.
  Mr. Tom King: I apologise to the House for the fact that I was not in the Chamber to hear the beginning of the speech made by the hon. Member for Fife, Central (Mr. Hamilton). I also apologise in advance for the fact that, owing to a somewhat pressing engagement in an upstairs Committee room a little later, I shall probably not be able to hear the complete reply of the Secretary of State for Employment.
  I support the hon. Member for Keighley (Mr. Cryer) on the matter of open Government. He drew attention to the way in which the top salaries report had been published. He will also be aware that his right hon. Friend the Secretary of State for Industry used an even more devious method, since he published a Written Answer on the day before the Christmas Recess—in fact it was not even a proper answer; it was a document which he put in the Library. One copy was deposited in the Library—at 5.30 in the evening after all hon. Members had left the House—on the subject of the IDP co-operative. I regarded that as the most devious way of trying to avoid publicity, and I believe that it is a matter which the Leader of the House and all hon. Members should take seriously. Ministers should make statements in the House and have the courage to stand by them and defend them here rather than to hide matters in documents in the Library.
  Mr. Cryer: I accept the hon. Gentleman's general point that more statements should be made in the House. However, I am sure he will agree that the matter of the Kirkby Co-operative had been extensively discussed and was not a matter which was totally unknown to the House. It was quite different from the case of the top salaries report. In regard to the co-operative, deputations came to see the Secretary of State and there were wide consultations.
  Mr. King: I am not sure the hon. Gentleman is aware of what was put in the Library. I refer to a statement of dissent by the advisory board on the unwisdom of the whole project. That board was not just a board of top industrialists, but included a distinguished trade unionist, and there was no note of his

  1799
  dissent from the view of the Secreary of State for Industry. That was an extremely important report, and the way in which it was produced did no credit to the Secretary of State for Industry.
  The hon. Member for Keighley said that the Government should not allow any cuts to take place in the living standards of working people, but the truth is that they are now suffering a cut in living standards. I should like to know what percentage of the present working population is now undergoing a cut in living standards. The answer might surprise the hon. Member for Keighley. Certainly the hon. Member for Tottenham (Mr. Atkinson) has at last woken up to the real impact of the situation. The hon. Member for Wolverhampton, North-East (Mrs. Short) has spoken in the past about a level of increase of 28 per cent. for people on top salaries. However, since they probably pay tax on 83 per cent. of their increase, they are suffering in effect a 12 per cent. cut in their standard of living. That point is rarely mentioned or bandied about. Anybody on a higher salary in the last two or three years has unquestionably suffered a cut in his standard of living. If inflation continues at a rate of 20 per cent. per year at the present rate of tax, a person who now earns £10,000 will, in four years' time, need an income of £40,000 to retain the same net spending power.
  Such is the effect of the combination of the high rate of inflation and our high rate of tax. On that basis, there may be something else to put into the pot for the hon. Member for Keighley to consider—whether taking 12 per cent. off our living standard is not making a marginal contribution to the working of the social contract.
  I support what my hon. Friend the Member for City of London and Westminster, South (Mr. Tugendhat) said about our approach to the social contract. I am one of those who have never knocked the contract. I am a great believer in it. We have all worked away at it. The Conservative Government, through endless tripartite discussions, by threshold payments, by improvement of pensions, and so on, made tremendous efforts to feel their way towards establishing a social contract, although
  1800
  perhaps their aim was not so presentationally beautiful, and was not given a nice name.
  Mrs. Renée Short: Would the hon. Gentleman describe the three-day working week as progress towards a social contract?
  Mr. King: It was an attempt to try to restrain the total monopoly bargaining power of one trade union—to give the community some protection against it—so that the country could at least start to take a stand against inflation. The figures of unemployment announced today are part of the price we shall pay for our failure to face that challenge now. The Secretary of State knows—he cannot be looking forward to it—that in successive months he will be announcing worse and worse figures. The figure which worries me most, and which the right hon. Gentleman was not able to give, is the short-time working figure. This is an increasing problem, perhaps in the constituency of the hon. Member for Wolverhampton, North-East as well. All these things are bound up in the same problem.
  During the election campaign the Prime Minister said, that all "God's chillun" wanted a social contract, and he caused great laughter. I think that it is true. If we are to succeed, there must be, whether named or described, a social contract of one form or another. I hat is why my hon. Friend the Member for City of London and Westminster, South was right in saying that we do not know enough about it—that half the nation has not been taken into the confidence of the Labour Party or the TUC about what the contract really is. If it is going to work—and something along these lines, whether Socialist or a Conservative, is desperately needed—it must be done by the Government and in such a way that everyone, as far as possible, feels involved.
  That was the point made by the hon. Member for Keighley when he said that certain people do not feel involved because of the top salary situation. I do not necessarily agree with him, but certainly the social contract has not been properly explained by the Government. They should take every opportunity of explaining it.

  1801
  The great glaring absence from the contract is the involvement of industry—of directors and managers of companies. I know that there are those who feel that these people are a terrible relic of our feudal industrial past, but that is an obsolete idea. In a modern industrial society, managers are, in reality, very often worker-directors, having risen from the shop floor and worked their way up, establishing themselves on their merits. It is against this background that if the balance is tilted too much in one direction, one side will feel left out.
  I recognise the efforts which the right hon. Gentleman makes with the unions and the very close contacts he has with the TUC as a whole, but the impression I get from my contacts with industry suggests that his great weakness at the moment is that the management side of industry has no confidence in him. This is not based on any dislike of him as a person, or, necessarily, of his political views, but the impression rife in industry is that he is the kept man of the TUC—its front man. I withdrawn the phrase "kept man", because that has a connotation I would not want to make, but let us say that he is the personal representative of the TUC—that he is really there to implement whatever recommendations come from the TUC.
  In the old days, however, St. James's Square was regarded as a place where genuinely independent judgments were made—where the two sides could go for a fair and impartial hearing. However, during the last Government I often heard the same criticism made of St. James's Square and the rôle of the Secretary of State. If the balance was too much the other way in those days, it has gone completely in the other direction, and now the other side does not feel involved—does not feel that it is being consulted.
  The Employment Protection Bill and the preparations for it are an example. There were discussions with the TUC, and then the CBI was effectively told what had been decided. The right hon. Gentleman does not have to justify himself to me, but—
  The Secretary of State for Employment (Mr. Michael Foot): Neither does the hon. Gentleman have to listen to anything that I say.
  Mr. King: I shall read it with interest. I recognise the problems of the Secretary of State for Employment, who, with his natural courtesy, friendliness and personal charm, can make people believe that we are all getting along swimmingly—that people can come into his office and it will all seem friendly and nice—but I am sure that he is much more worried about what people are really thinking, and whether there really is a measure of confidence.
  The hon. Member for Fife, Central (Mr. Hamilton) spoke of the seriousness of the industrial situation generally and the problems facing us. If ever there was a time when, in the national interest, a Government should be gathering people together and sayings, "You are all important; you all have a rôle to play, and we shall only solve our problems if we can do so together", it is now. But at the moment appeals are being made to the shop floor, while another significant group is feeling singularly left out. The right hon. Gentleman should make an effort to see whether something can be done to bring in people who are a little less disruptive, a little less feudal and a little less traditional in their views than he expects. He should start the process of the growth of confidence again. He could be a great help to these people, and I am sure that they could help him.
  6.8 p.m.
  The Secretary of State for Employment (Mr. Michael Foot): The hon. Member for Bridgwater (Mr. King) said that he would have to leave before he heard me reply, but he has not been so lucky. He will have to wait a minute or two now. I shall give him an immediate reply—or shall attempt to do so—and then he can depart, although I thought that the election was not until the week after next or a little later. I shall liberate him as soon as I can.
  I repudiate at once the suggestion that the Department of Employment has not acted with perfect courtesy towards employers who wish for its assistance and advice in dealing with various problems. We had the newspaper proprietors with us a few days ago and did our best to assist them in their very difficult circumstances. I do not think any one of them went away saying that we had not done everything possible to listen to their case and get a sensible settlement

  1803
  of the dispute. Many other employers have been to see us at other times, either when there have been disputes or with other problems which they have wanted to put to us.
  My hon. Friend the Minister of State has spent many hours listening to representations made by employers. When we were still pursuing a statutory control of wages, we had groups of employers coming to us and pleading with us to help them in the difficulties in which they were encoiled by that system. We did our best to assist them, too. When I went up to Aberdeen and saw some of the employers' organisations, they passed a vote of thanks to me, much to my amazement. They said "If you had not abolished the Pay Board, we would either be in prison or be bankrupt."
  Many employers have had assistance from the Department. Therefore, they cannot say that we have not treated them fairly. It is true that they do not like some of the proposals—or, rather, the employers' organisations, such as the Engineering Employers' Federation, do not like some of the proposals—in the Employment Protection Bill. That does not mean that we have not listened to their representations about it.
  I have explained to them that we have commitments to the social contract. Many of the measures figuring in the Employment Protection Bill are part of the social contract. The employers knew full well that we were going to carry them through and that we had a special association with the trade union movement. That has never been concealed. I do not think that the employers have any reason to protest about the way in which we have proceeded in this matter.
  Of course, we have closer associations with the trade union movement. That is a political fact. It is part of British history, but it does not mean that we have conducted the Department of Employment in a way which has in any sense injured the possibility of getting sensible agreements to try to get on with the job of helping to secure the nation's recovery.
  Mr. Tom King: My point is exactly the same as the right hon. Gentleman has made. The Department behaves with perfect courtesy. The right hon. Gentleman has friendly relations, because of his personal
  1804
  charm. It all looks fine. I am saying to him—this is an outsider's warning; it is up to him whether he takes it—that under his leadership the Department of Employment is not regarded by employers as a place to which to have recourse except possibly in emergencies, where it is the only place they can go. I should like there to be a situation in which people looked upon the Secretary of State for Employment as a real aid and asset.
  Mr. Foot: It seems that there is some misunderstanding of the situation amongst many employers, as the hon. Gentleman has represented it. All I am trying to say, with some evidence on my side, is that his charges are baseless in fact. Of course it is the fact that we have different views from many employers' organisations. Nobody should be surprised about that. Nobody should be surprised at the fact that my hon. Friend the Minister of State and I do not immediately see eye to eye with the Confederation of British Industry on many political questions. We would not be members of the Government if we did.
  We won an election on a different programme. We are seeking to carry out that programme. Within the terms of carrying out that programme, in particular the social contract, we certainly wish to establish and sustain the best possible relations with employers' organisations and those who speak for them. We at the Department of Employment have sought all the way through to secure that. I could give the hon. Gentleman instance after instance—I know that he is eager to get away—to refute his suggestion.
  I am very grateful to my hon. Friend the Member for Fife, Central (Mr. Hamilton) for introducing the debate in the way that he did. He said that neither he nor others of my hon. Friends must be regarded as Lobby fodder. I have never regarded my hon. Friend the Member for Fife, Central—still less my hon. Friend the Member for Keighley (Mr. Cryer)—as Lobby fodder. If we had regarded them as Lobby fodder in this Parliament we were in for a starvation diet, and I am not looking forward to that prospect. I would not be so foolish as to place reliance on any such thing.
  I do not complain at any of the criticisms my hon. Friends made, or about

  1805
  their raising matters in this debate, because this is one of the special arrangements in the House whereby subjects which it has not been possible to raise by other means can be raised on this Bill. I am grateful to my hon. Friend the Member for Fife, Central for raising the subject of the working of the social contract. I hope that I shall answer almost every one of the questions he asked. I shall not go into what he said at the beginning of his remarks about the fading of the British Empire, and the wider topic that he then introduced. I shall try to deal with the specific questions dealing with the social contract.
  My hon. Friends asked, first, a question about unemployment. I refer to that because of the figures I gave the House earlier and the statement made by others that over the coming months we may have to face figures that are even worse in some respects than those we have to face today.
  I certainly do not minimise the significance of these dangers, in any sense. Of course, if unemployment were to soar upwards, it could do the greatest possible injury to the operation of the social contract, apart from any other objections that we would have to such a happening and all the human considerations that are involved.
  I assure my hon. Friend and everybody else that we do not regard these figures with any complacency, and that we wish to do everything in our power to guard against them. As I said in my earlier remarks, the Government have already taken some steps to guard against these dangers, particularly in the areas which are most threatened—the regions in which unemployment is traditionally higher. In the middle of last summer the Government took measures which will have some effect now. I refer to the measures taken in the mini-Budget.
  Many people said that my right hon. Friend the Chancellor of the Exchequer should not have embarked upon those measures at that time, but my right hon. Friend had the courage to do so, and some of those measures, such as the doubling of the regional employment premium, were taken deliberately to try to ward off some of the dangers of unemployment this winter and this coming spring. Many of the measures that were
  1806
  taken by my right hon. Friend the Chancellor of the Exchequer in the Budget were designed for that purpose as well.
  No doubt we will have to consider other measures—emergency measures, if you like—to try to deal with many of these dangers. As part of the social contract the Government will be considering the proposals which have been put forward by the Manpower Services Commission and other such bodies, because we see absolutely eye to eye with what Mr. Len Murray said the other day, namely, that fighting against unemployment is also an essential part of the social contract itself.
  It is the case—we must keep our fingers crossed on this—that we have guarded against it better than some other countries in the western world have. I am sorry to say that they have higher unemployment figures than we have. That is not beneficial to us. I am not saying this in any sense of boastfulness—of course not. We wish to see those countries taking measures to bring down their unemployment. Nothing could assist us more in dealing with our own unemployment than that they should do so. That is also an essential part of the Government's policy and the policy that my right hon. Friend the Chancellor of the Exchequer has pursued. I hope that that deals with what my hon. Friend said on the subject of unemployment.
  My hon. Friend then raised a general question about the information given about the social contract, and the hon. Member for City of London and Westminster, South (Mr. Tugendhat) pressed us even more closely, suggesting that in some way or other we are denying evidence or information on this subject to the House of Commons. We have no desire to do so. I should like to try to explain what is the Government's view about it and why we take the attitude that we take.
  The right hon. Member for Lowestoft (Mr. Prior) wrote me a letter the other day accusing me of engaging in some form of Government censorship, or of seeking to withhold information from the House of Commons on the subject of wage settlements and the operation of the social contract guidelines generally.
  We have no such desire and no such intention of withholding information in that sense at all, but we are not in

  1807
  favour—I do not say that this is an absolutely cast-iron view for all time—of having a system whereby the Government publish a judgment on every wage settlement that goes through, with the Government putting a stamp of approval on some, saying, "This settlement is inside the social contract" and saying of others "This one is outside the social contract", with figures being published on that basis.
  We do not want to do that for a variety of reasons. If we were to set up such an elaborate system, many people would believe that it was part of the preparation for the reintroduction of a statutory incomes policy. That is one of the reasons why we do not want to do it. One of the dangers that we have had to guard against—this was one of the reasons, perhaps, for some of the special difficulties that occurred in Scotland soon after the election—was the fear that a statutory policy was to be brought back at any moment. We have done our best—I certainly have—to guard against that fear. But there are other reasons why we think that it would not be satisfactory to publish information along the lines hon. Members opposite have suggested.
  Let me say a few words on the famous 75 per cent. figure. When I replied to the right hon. Member for Lowestoft in the House yesterday, I said that if only he had looked at my speeches in the House he would have seen that I had referred before to the 75 per cent. figure. It was certainly my belief, when I said it, that I had quoted the 75 per cent. figure in the House on more than one occasion, but that does not appear to be the case. I have quoted it elsewhere in several speeches—for instance, earlier in the week, at the Industrial Society. I have used it on so many occasions that it never occurred to me that I had not used it in the House. If any inconvenience was caused to the right hon. Gentleman on that account, I apologise for it. I should like to get the facts absolutely straight.
  I have told the House before that my Department is reasonably well informed about the details of major pay settlements. There are gaps in our knowledge, but we have reasonably full information about settlements covering about two-thirds of the working population. Leaving aside the special cases—miners and nurses—covering about 1 million people, roughly 75 per cent. of the people covered
  1808
  by settlements about which we have reasonably full information settled within the TUC guidelines.
  It must not be assumed that the settlements about which the Department has limited information, or no information at all, were all outside the guidelines. That would almost certainly be wrong. A more likely assumption is that the pattern in the areas where we are not well informed is much the same as the pattern in the areas where we have reasonably full information. That is another reason why we do not believe that we can publish a Department of Employment section of the Department of Employment Gazette on social contract wage settlements in the same way that we publish unemployment figures or other kinds of figures, because the figures are not available to the same degree and, moreover, the comparisons are not so precise.
  It may be said that the comparisons of whether settlements are within or without the social guidelines cannot be precise because the guidelines are not tight enough. One of the virtues of the guidelines is that they are not inflexibly fixed. With fixed guidelines which were absolutely precise, so precise that one could publish statistics week by week or month by month on exactly what had occurred—not that the TUC would ever have been prepared to do so because it laid down the guidelines—one would not be able to achieve settlements in many cases and one would not be able to use the flexibility of the system to bring common sense back into our bargaining system.
  What we have been trying to do in the past few months—it is not an easy job—is to escape from all the follies, stupidities and rigidities of the statutory system. One of the great vices of the statutory system is that it is difficult to get out of it. When hon. Members ask why we do not publish in the way they have described details of this or that settlement, they still talk in terms of the old statutory system, as though the Department of Employment was some kind of undercover pay board which was dealing with these matters. We are not dealing with them in that way.
  We want to get back to a much more flexible and intelligent collective bargaining system. It takes some time, and we do not believe that the process would be assisted if we were to create the kind of

  1809
  elaborate machinery which right hon. and hon. Members opposite suggest.
  Mr. Tugendhat: I have followed the right hon. Gentleman's argument as closely as I can. However, I do not think that he entirely appreciates our point. We are saying that there is considerable misunderstanding about the present situation and that we do not have the information necessary to judge whether the 75 per cent. figure is accurate. The remarks of the hon. Member for Tottenham (Mr. Atkinson) demonstrate that. Misleading figures are sometimes published in the newspapers. If the right hon. Gentleman would give us the Department's information, at least the argument would take place on a basis of common statistics.
  Mr. Foot: That is not so. If the Government did what the hon. Gentleman suggests, they would have to publish the details of every wage settlement, with a Government stamp on it showing whether it was within the guidelines. In my view, so far from assisting us in carrying out our policy, that might disrupt it.
  The guidelines were laid down not by the Government but by the TUC. The TUC understood and appreciated the economic circumstances which the Government presented to it in our discussions and, in response, said, "We shall give guidelines to our negotiators on how best we think we can assist the country and the trade union movement". The TUC does its best to sustain the guidelines. If the Government said, "Let us see whether this settlement comes within or without the guidelines", it would reintroduce some of the disadvantages of the statutory system.
  That does not mean that we want to withhold information from the House. I repudiate that charge. That is one of the reasons why we have given the House the figures and why we shall answer as best we can the questions put to us in the House, as I am seeking to do now. We wish to give the House every scrap of information we can. But we are not in favour of setting up the elabarate statutory system for which hon. Members opposite hanker.
  My hon. Friend the Member for Fife, Central asked for a fresh assurance about our determination not to introduce a statutory policy. I am eager to give him
  1810
  that assurance. What I had temporarily mislaid—all matters are dealt with very speedily in the Department of Employment, and I have it now—was a copy of the Financial Times, which seems to be coming round to the view which I have expressed ever since I have had this job. I have been bitterly opposed to a statutory system, and I have said many times in the House and outside that we shall not return to it. We have had to stand un to a barrage of propaganda from hon. Members opposite and from members of the Liberal Party—who have so much interest in the social contract that none of them is attending this debate—who have been going round the country saying that within a few weeks or months of the election the clamp would come down and we would be back to a statutory system. One newspaper after another said the same.
  We have always denied that. Therefore, I am glad to welcome the article written by Mr. Samuel Brittan in the Financial Times today, not because his political and economic views accord with mine—very few of them do—but because he has belatedly reached the same conclusion that I reached some time ago. He took the low road, I took the high road. I wish to read the article to the House, because it was not written by a wicked opponent of statutory policy such as myself or other members of the Labour Party. Not only does Mr. Brittan object to the idea of a freeze or a statutory policy; he goes on to say:
  "Similar objections apply to milder suggestions, such as that of the independent umpire to referee the 'Social Contract'—the favourite consensus idea endorsed this week by Mr. Robert Carr. The direct effect would be small and would be more than outweighed by the false sense of reassurance it might engender".
  I recommend hon. Members to read the whole article because here at last—it has taken a long time—the pundits of the Financial Times are coming round to the view that it is not sensible to talk about trying to reintroduce a statutory policy and that even the mild measures and the latest wisdom of the right hon. Member for Carshalton (Mr. Carr) are to be condemned. Therefore, I hope that we shall have better informed discussion on this matter throughout the country. The Government have no intention whatsoever of reintroducing a statutory system. We think that would be a gospel of disaster and despair. We are not proposing

  1811
  to do it. We are very glad to see that others are now coming round to our point of view that this would be a foolish way for us to proceed.
  Mr. Tugendhat: By chance, I have Mr. Samuel Brittan's article by me. Will the Minister say whether he agrees with my distinguished ex-colleague in what he says, in the article, about monetary policy and employment? Since the whole article should be read as one, perhaps the right hon. Gentleman should devote some time to monetary and unemployment aspects.
  Mr. Foot: If the hon. Gentleman had listened with his usual care he would have heard me guarding myself against that by saying that I disagreed with Mr. Samuel Brittan about many things. The Times, the Daily Telegraph and The Sunday Times have been coming forward drearily as the advocates of the reinstitution of the statutory system in one form or another. However, a gleam of wisdom is now emerging from the Financial Times. I hope that will be taken into account.
  Mr. Nigel Lawson: I apologise for having been unavoidably absent during the earlier part of the Minister's speech, being involved in the Standing Committee on the Finance Bill upstairs. But I have long been interested in this subject and I recall writing articles against a statutory incomes policy, while the right hon. Gentleman trooped through the Lobbies in favour of the statutory incomes policy introduced by the previous Labour Government. So I do not think he should argue as to who got there first, because the road is rather tortuous. There is neither a high nor a low road, since the road goes up and down.
  In addition, is it not the case that we should take the argument put forward in the Financial Times as a whole? An alternative to the statutory incomes policy is put forward in the article. I believe that it is the only serious alternative. I do not believe that the Government have an alternative. If the Government have an alternative, I should be interested to hear from the Secretary of State what it is.
  Mr. Foot: The hon. Gentleman should have made his own speech at another time—not in the middle of my speech.
  The hon. Gentleman is misinformed about my trooping through the Lobbies
  1812
  in defence of statutory policies. The complaint of my right hon. Friend the Chief Whip at that time was that I was not doing very much trooping through the Lobbies. On some critical occasions I did, but I always held the view that that was the wrong way to proceed. I am glad to say that the rest of the members of the Labour Party have since come to the same view.
  As for swallowing Mr. Samuel Brittan's article as a whole, I have never made such an outrageous suggestion and I trust I never shall. He should be taken in small doses. This is one good dose today, which may be a sign of better doses in the future.
  My hon. Friend raised the central point regarding top salaries, as did my hon. Friend the Member for Keighley (Mr. Cryer). I appreciate their feelings on the subject. They make a powerful case. I do not think that the recommendations of the Boyle Report accord with the TUC guidelines in any sense. Indeed, the report was drawn up before the guidelines were in operation. The Government were faced with the difficulty that the recommendations in the Boyle Report bore very little relationship to the guidelines. It is not the case that the Government accepted the Boyle Report. The Government modified many parts of it. Some of those modifications may have brought the recommendations nearer to the guidelines. There is no doubt that it presented considerable difficulties for the Government. I appreciate the views held by my hon. Friends on the subject. I understand the warnings they have given about the future. I take the warnings to heart. We shall see what can be done.
  Mr. Tom King: As regards the constant apologies being made for the Boyle Report, the reason that the Government put this forward, and felt, on balance, with certain modifications, that it had to be done, was that they recognised that there was also a certain equity in the case. If there was collective responsibility, why has the right hon. Gentleman made no attempt to give any justification for the Boyle Report? He slithers around it, apologises, looks embarrassed, and does nothing. He has not even made the elementary point that everyone on the top level receiving those increases will take a 12 per cent. cut

  1813
  in their living standards this year. Why did the Minister not say that?
  Mr. Foot: I shall not enter into the whole discussion on that subject with the hon. Gentleman. There are many other aspects which could be cited. I said, and it cannot be disputed, that the Boyle Report presented the Government with considerable difficulties because the principles on which the report is based bear very little relation to the TUC guidelines.
  Let me give one further illustration. The whole principle of comparability does not figure in the TUC guidelines. That is another of the problems which arise.
  I turn to a further aspect of the argument on this subject put by my hon. Friend the Member for Keighley when he talked about low pay. I fully agree with my hon. Friend on that subject. Indeed, the emphasis on low pay is one of the essential parts of the TUC guidelines. The £30 target was adopted at the last congress of the TUC and it became an essential part of the guidelines. Within a matter of a day or so, the Government agreed with the TUC that we would do our best to sustain that part of the TUC recommendation. I think we have carried out that obligation faithfully. That means that, so far as the Government has any influence in this matter, we recognise that there must be a move towards the £30 target. Many settlements have been reached on that basis.
  Looking back over the past year, whatever deficiencies we may have had, low-paid workers have been better treated under our incomes policy—if we can call it that—than in any previous period, partly because we took direct action to deal with the cases of some of the people who were worse treated of all, such as nurses, teachers and postmen. However, they were not the only ones. Some of the others were paid similar or even lower wages. They were covered by the £30 target negotiations taking place. The Government claim that we have sought not only to abide by the social contract in the general legislative measures being carried out to try to fulfil it but to do our best to carry out, under those conditions, the Government obligations of the social
  1814
  contract. In my opinion one of the most important aspects of Government policy over this period has been the way in which we have sought to deal with those problems.
  My hon. Friend then asked what was the Government's attitude towards the tightening up of the guidelines of the social contract. We had discussions with the representatives of the TUC General Council on Monday. I do not believe that there was any great secret about the common approach to these problems. We do not believe there can be a situation where the guidelines can suddenly be twisted or tightened up in that sense.
  I do not think that that is a proper approach. On many occasions I have said to the House, to the TUC, and in public that I believed that we must have a stricter allegiance to the terms and principles of the guidelines. That means that we must carry out those guidelines in a sense which does not stretch them. I believe that to be the way in which Mr. Len Murray has spoken during the last day or two. One of the most important principles in this respect is that wage settlements should not be made on the basis of anticipating increases in the cost of living over the future period. Different aspects can be taken into account but that is not to be applied as a general principle. Mr. Len Murray has stated that clearly in the last two days. It was not a question of closing a loophole that had been there all the time. It was a question of re-emphasising what had been the understanding of the TUC and of the Government. We do not say there have not been some breaches of that principle, although we deny what was said in the National Institute report, which read as if the loophole was one of the TUC guidelines. That was never the case. Nor was it the case that settlements were generally being made on that anticipatory basis. That is why we deny forcibly what the institute says.
  I come now to the false figures, and why I am so angry about them. I was rebuked for being so concerned about these figures in the newspapers, as if I had some mania to attack the newspapers about them. I have no desire to attack the newspapers for the sake of attacking them, but when we are seeking to carry out the social contract and to

  1815
  say how we propose to apply the guidelines of the social contract, what the newspapers say and what individual politicians say on the subject is a matter of great importance.
  If the general impression is spread throughout the country that wage settlements are taking place at a level of, say, 40 per cent. when the figure is, say, half that, as a national average, it creates a dangerous state of affairs. Many people may believe it. During the election campaign, the Leader of the Opposition was saying, in speeches throughout the country, that the general level of wage settlements at the time was 40 per cent. It was not true. It bore no relation to the facts. It was based on a statistical fallacy which was pointed out to him at the time. But he was too eager proclaiming how he always told the truth to admit that he was telling a lie on that occasion. However, the lies of the Leader of the Opposition outside this House are perfectly in order, so Opposition Members need not get too het-up about it. But that is what happened.
  Now the same fallacy is repeated by The Times. A great many people regard it as a reputable source of information on these matters. I do not say that trade unionists are poring over their copies of The Times in order to see what wage increases to claim, but if they are told that earnings are rising at the rate of 37 per cent. a year, they may believe it. However, it is not true.
  The claim of the Leader of the Opposition and the statement in The Times are both based on a simple statistical fallacy. The figures published on Monday show an increase in the wage index of 28½ per cent. to December 1974. According to The Times, earnings may be rising at the rate of 37 per cent. The latter is based on the rate of increases over the past few months. These produce alarming results, because the monthly increase depends on how many people get an increase in that month as well as how much they get. If a large number get even a small increase in a given month, the index will show an appreciable rise. To talk of increases at an annual rate of 37 per cent. is quite nonsensical, especially when the figure is based on increases in the past few months when large numbers of people have been receiving threshold payments. Stage 3 threshold payments
  1816
  were triggered for the last time in November, and there is no question of increases of this kind continuing at the same annual rate.
  I hope that we shall not have to destroy this statistical fallacy again. It was pointed out that it was a complete fallacy when it was raised by the Leader of the Opposition. I have pointed it out again now. I have received no apology from The Times. But we shall not be rebuked, as a Government, by newspapers or by an Opposition who are so loose in their figures that they think it proper to tell people that this is the rate at which settlements are being made when the facts dispute it.
  Yesterday and again earlier today, the Opposition were squealing at me for not providing sufficient facts. We provide the facts, and we correct the Opposition when they get them wrong. We have shown that what the Leader of the Opposition said about wage settlements during the election was falsely based. They continue to get the figures wrong. We have said the same to The Times. The Times continues to get them wrong. But I hope that I have now repudiated this statistical fallacy once and for all.
  It is perfectly true to say that the rate of wage settlements presents difficulties for the conduct of the Government's economic policy, but matters are made far more difficult if people who should know better, now that they have been told, continue to spread throughout the country stories of settlements which bear no relation to the facts.
  Mr. Lawson: Is the right hon. Gentleman really saying, at a time of unparalleled economic crisis, with rampant inflation at an unprecedented and accelerating rate, that our sole protection is a socal contract which is so fragile and feeble that one or two newspaper reports can blow it to pieces? That is a most alarming suggestion.
  Mr. Foot: I have never suggested that. I have indicated some of the measures which the Government seek to take to enable the social contract and the guidelines of the social contract to operate, and I have reported the discussions that we have had with a view to seeking a stricter allegiance to those guidelines, but it stands to reason that if false estimates

  1817
  of wage settlements are being peddled round the country, it makes it more difficult for people to hold to their agreements. It must be remembered that what happens in wage negotiations is that people make comparisons with settlements being made in other places. If, over the coming critical six months, people are going into wage negotiations accepting at face value what The Times puts on its front page, it will be much more difficult to reach sensible settlements.
  What, for example, will the miners think? Let us suppose that they believe what they read on the front page of The Times. Will that make it easier to resolve the mining dispute? I think that we shall get a settlement with the miners which is honourable to them, to the Government, and to the community, but matters are not made any easier when a newspaper publishes figures of this kind, based on a statistical fallacy which can easily be disproved. Even I can disprove the statistical fallacy, so it must be very easy to do.
  Wage negotiation is only one part of the social contract. All my right hon. and hon. Friends understand that, even if the Opposition do not. The National Enterprise Board is another essential part, and the sooner we get it into operation the better. The sooner we can get into operation many of the other measures that we wish to secure, the better. But we have to get from this critical economic situation to the situation in the middle of the year, at the end of the year and at the beginning of next year. We have to get through this period. During it, our economic success will depend greatly on the respect that there is for the guidelines laid down by the TUC. We shall have constant discussions with the TUC as to how best we can fulfil the guidelines. I believe that the overwhelming majority of trade unionists—their leaders and the rank and file—are eager to assist the Government and the country to ensure that we overcome these difficulties.
  If there is one criticism of the Government, it is that, perhaps, we have not put together all the measures being taken and explained them sufficiently so that people may understand how one part relates to another and how essentially this part of the social contract relates
  1818
  to avoiding unemployment. If that is so, we can be rebuked and we shall see whether we can do it better in the future. One of the purposes of this debate is to be able to set these matters in a different context and to do so over the coming months in a more ambitious and sensible way than we have so far done.
  None of us underrates the scale of the crisis that this country has to overcome. It is a crisis of complexity unparalled in the whole history not only of this country but of many others. The western world has never faced such problems in such a way. In this country, thanks in some respects to the social contract—not only that: there are other assets in the Government—I believe that we have a better chance than some other countries of overcoming these problems.
  We should not be defeatist in facing our problems. I repudiate all such suggestions—particularly the idea that we are seeking to hide from the House or the country what we mean by the social contract, what the TUC means by it, and how we seek to co-ordinate our ideas. It is not a question of the Department or me surrendering to the TUC. It is a question of a proper understanding. We cannot have a democratic Government unless the Government understand the unions, and vice versa. I believe that that understanding is closer and stronger than ever before, and that that is one of the foundations on which we can overcome our economic problems.

  EMPLOYMENT AGENCIES ACT 1973
  6.51 p.m.
  Mrs. Millie Miller: Over the years countless words have been poured out in this House about employment agencies. As recently as 16th February 1973 the hon. Member for Rutland and Stamford (Mr. Lewis) succeeded in introducing a Private Member's Bill on the subject. In doing so, he stressed the urgent need for reform to license and regulate the private sector in employment agencies "nationally, realistically and firmly". That was a fine intention, but despite considerable support from both sides and the insistence of hon. Members on the need for this regulation, nothing firm has happened to this date.

  1819
  In that debate, much was said about the particular need to protect young people. Part of the discussion hinged on a recent scandal involving some 250 young girls who had gone to Spain to work in various kinds of sleazy establishments with "conditions of residence"—a term which does not usually apply to such situations—which according to a Guardian article at the time, appeared to have including sharing living accommodation either with Service men or with groups of men and women. The subsequent fuss gave rise to a good deal of Press comment. It is interesting to read in that debate the Minister's reference to the LCC's Employment Act of 1921, which related primarily to immorality and fraud. He said that they were subjects about which we did not need to be quite so concerned today.
  I refer particularly to the need to protect the young because of revelations within the last week about young girls—in the case of one agency up to 100 over the last year—having been sent out to Belgium for similar activities. Perhaps it would interest the House if I gave some details.
  Advertisements have been appearing in a journal, sold primarily for advertising purposes, which read:
  "Girls! Tired of that routine job? Do you enjoy dancing, night life? Take a break—have fun working in a discotheque in Belgium (no experience necessary). £40 to £60 per week plus bonuses."
  I suppose that the only experience needed would be that of dancing, whether in discotheques or anywhere else.
  That advertisement was in a magazine for which one had to pay, but others having been appearing in give-away magazines.
  Mr. Patrick Cormack: Would the hon. Lady name the publication?
  Mrs. Miller: Yes, of course—it is the London Weekly Advertiser.
  It is interesting to note that, although that advertisement does not appear in the current issue, there is a different one which I had intended to bring to the attention of the House. That one is headed not just "Girls", but "Photogenic Girls". Those photogenic girls are required to model for nude photographs. One of the attractions, apparently, is that free photographs
  1820
  graphs are provided. Perhaps this adds interest to this kind of job for the girls themselves. I mention the fact that girls are involved because although it is true that the word "girls" can cover a multitude of sins, those going over to Belgium are aged between 16 and 20.
  I am concerned about the nature of the advertisement and the implication that it is young girls who are wanted. I am even more worried about the fact that advertisements of this kind have been appearing in journals which are given away in their thousands or even hundreds of thousands on the streets of London. One is called Girl and another is called Miss London. Both are free, pushed into the hand of every likely-looking young woman who passes. I was even given one myself, by mistake, probably in connection with the advertisements for office workers rather than those for discotheque dancers.
  I think that the House should know what happens after a girl has seen an advertisement and before she actually reaches foreign climes. I know of two agencies particularly concerned in this. One calls itself a theatrical agency—Ballet Jon McGrath. In response to inquiries it sends out a letter and then interviews suitable girls, of whom there seems to be no shortage. The letter says:
  "We have noted … that you have been interviewed for work in Belgium. We are at present interviewing Disco-Birds for the King Discotheque, Ostend. Salary 600 Belgium francs per day (approximately £6·50) less Ten per cent. agency fee, also social security. Accommodation is arranged"—
  a fact which should be noted—
  "costing approximately £1 per day … The contracts used are passed by the Westminster City Council and comply with the Belgium laws. Should you be interested, please telephone my office and arrange a meeting.
  P.S. Disco-Birds. The name Disco-Bird was taken from Discotheque Disco-Bird Bird-lands as some of the pubs are called in London.
  A Disco-Bird is employed for the Disco-theques in Belgium just to create ambience"—translated in brackets as "atmosphere"—
  "to encourage people to come into the Disco-theques especially in the early part of the evening something similar to the crowds as seen on TV programmes i.e. Top of the Pops, Ready, Steady, Go etc. Ordinary clothes are worn just as one would wear in any disco."
  So the young girl goes along and is interviewed and told that she is the lucky

  1821
  person who is to get this fabulous job abroad.
  I have been the mother of a 16 to 17 year old girl. Until I entered the House I was employed on counselling girls in this age group. I know only too well the lure of travel anywhere across the sea, the lure of anything to do with television and the lure of anything to do with disco-theques. Further, I know the pressures that these youngsters can impose on their parents, especially if their friends are already involved in this kind of activity.
  The young ladies who are fortunate enough to be engaged are given a contract to sign, which is the standard contract of the Variety and Allied Entertainers' Council of Great Britain. It gives the address of the King Disco in Ostend and gives the hours the girls are to be employed as from 7 to 4 p.m. or 8 to 5 p.m. That is what it says on the card. Further back, however, somehow the hours seem to change. They change in the schedule of performances from 7 to 4 p.m. I am sorry—I have mislead the House. They still remain the same, but my information is that they are the opposite—7 p.m. to 4 a.m.
  In fact, if young people in Belgium were to apply for jobs of this kind they would be precluded by Belgian law from taking them because no girls under the age of 21 are allowed to be employed in any kind of entertainment industry at night. From that point of view, therefore, their employment is illegal.
  It is true that the wage, as set out in the original letter, is 600 Belgian francs per day. It goes on to say:
  "The artiste will be fined for any 1 minute late two Belgian francs. The artiste is not allowed to work or visit any other disco within the run of this contract. Doing so will mean a breach of contract."
  It also says:
  "Should the artiste stay in Belgium for any other reason than sickness they will forfeit to the agency £2 for any 1 week of this contract completed."
  I have no idea what that means. I am sure that the signatories to the contract have no idea either. I mention that because it is another example of the misleading nature of the contract.
  I return to the point which I have asked the House to remember—that accom-
  1822
  modation is arranged. It is arranged in an establishment called the Night and Day Hotel in Ostend. During last week the BBC televised a programme showing some of these young girls aged from 16 upwards who had gone to Belgium on a contract of this kind and had gone to the Night and Day Hotel. That hotel turns out to be a brothel and is known to be a brothel by the Belgian police. In the interview which the Chief of Police in Ostend gave on television he expressed grave concern about the situation and said that these young girls were on the threshold of prostitution.
  A lot has been said, as I have mentioned, about the need to protect young people. In the debate on his Bill the hon. Member for Rutland and Stamford said that it was nonsense to pass his Bill without adequate regulations being made. He referred—I agree absolutely with the example he gave—to his Bill as "a slumbering elephant—all trunk and no movement" without the regulations which would force its implementation.
  The sad thing is that although that Bill received Royal Assent in July 1973 no regulations were introduced until June 1974, although the regulations which are set out would in many ways serve to deal with the kind of situation I have described today. As I understand it, the Government sent out draft regulations for consideration by interested parties in the industry. The proposals include one which states that an agent will not be allowed to introduce to an employer anyone under the age of 18 years unless he has first satisfied himself that the young person has received vocational guidance from a local education authority. I wonder about the vocational guidance necessary to be a disco-bird.
  However, we then move on to the recommendations regarding employment overseas where it is said that
  "The written consent of parent or guardian will be a pre-condition of placing anyone under 18 years in a job abroad, or from overseas into a job in this country. Agents placing young people from abroad, or going abroad, will have to satisfy themselves as to the suitability of accommodation and its cost. Premature termination of employment in under a year makes the agents responsible".
  I mention this because the misleading sentence that I quoted, describing what would happen in the event of sickness, or

  1823
  whatever it was, in Belgium, is quite contrary to this, which states that an agent would be responsible for financing the cost of the fare for the employee's return to the home country and that
  "Advertisements issued by agents for publication outside Great Britain will have to state any conditions that must by law be satisfied by job applicants before they can take up employment in this country".
  It is a pity that these regulations have not so far been implemented. I know that it is the Government's intention to introduce them. I hope that the time will not be too long delayed. However, what I feel I should do today is draw the attention of the Government to the fact that movement of young people under the age of 16 abroad is amply covered under the Children and Young Persons Act 1933. Section 25(1) of that Act clearly states:
  "No person having the custody, charge or care of any person under the age of eighteen years shall allow him, nor shall any person cause or procure any person under that age, to go abroad for the purpose of singing, playing, performing, or being exhibited, for profit, unless … a licence has been granted in respect of him under this section."
  Penalties are laid down for breach of the regulations in this respect. It seems, therefore, that already, before we have the regulations which cover the whole of the Employment Agencies Act, there is the possibility of taking action against agents who are flouting the conditions of an existing law. That is one aspect, but there are many others.
  I was a little troubled, in view of the information I have given to the House, to see that in the discussions on that Bill theatrical agencies were expressly excluded. I can well understand that the relationship between genuine members of the theatrical profession and their agents may be a subject which ought not to be tied in quite the same way. Nevertheless, where an agency is using its freedom as a theatrical agency to do this kind of thing as a sideline the Government should be very well aware of what is going on, and such an agency should be certainly subject to the conditions in the Children and Young Persons Act even if it does not have to abide by them under the Employment Agencies Act.
  A further point which is of considerable importance concerns the whole question of advertisements. At present
  1824
  the control of advertisements is entirely on a voluntary basis. It is dealt with by the code of advertising practice of the Advertising Standards Agency. Unfortunately, it has no powers over the give-away books. I have consulted it on this matter and it is confirmed that these magazines are totally outside its realm. In any case, it can make recommendations only, and it tells me that it usually does so very discreetly. We then come into an area of concern about a whole range of advertisements. I hope that my hon. Friend the Minister will bear this in mind when talking to his colleagues because it is something to be taken into account.
  There is one other point which does not relate to young persons. I am as concerned for people over 18 as for those under. A number of such people are among those who are in Ostend at the moment. There are two agencies and I have named one of them. The second is the H and V Agency which apparently is a Belgian-based company. I have its full name if hon. Members are interested. It has a branch in this country and is engaged in the same kind of business as the first agency. However, it has an additional interest which my hon. Friend might find of particular concern in view of the problems in other areas. The second string of the agency is exporting "lump" labour to Belgium. It is sending a wide range of building workers out to Blankenberghe and these workers are putting in something like 12 hours a day under the same conditions which apply to "lump" labour in this country. In view of the concern that trade unionists here are expressing about "lump" labour I should imagine that if what is happening comes to be known among Belgian trade unionists, they might take a similar view.
  This subject has been discussed ad infinitum. I mentioned originally the London County Council's 1921 Act. Subsequently there have been Private Members' Bills, not all of them successful. There was a Prices and Incomes Board report on the matter and a House of Commons Select Committee has reported on it. There is an ILO Convention of a similar nature, but that convention goes much further than the proposals which are before this House by saying that agencies should be either regulated or

  1825
  abolished. It is quite clear and specific on that aspect.
  The Government must take action. I am sure that there has been a sufficient succession of events surrounding foreigners coming here to work—and I refer to the au pair girls and the Philippino women who have come here in the past few years, and workers going out of this country to the most unsatisfactory conditions—to give cause for concern. People are making substantial sums by handling an illegal trade—in the case of the young girls it is not too melodramatic to say that this trade is verging on white slavery—by sending youngsters unprotected abroad to a place where they are, according to views of the police of that country, in very serious danger and at moral risk.
  I ask the Minister to consult with those responsible for receiving the girls into Belgium. I have recently had a case in my constituency of a young woman, quite legitimately and with the consent of her parents, going with her fiance to live in another Common Market country. However, because she had only a small amount of money with her, and although her fiance had an ample supply of money, a job and a flat for them both to live in, she was turned back at the port of entry. If the Belgian police are concerned about what is happening the British Government should put pressure on the receiving authorities in Belgium not to allow into their country young girls who have inadequate money and unsatisfactory jobs.
  This matter has been talked about long enough. The regulations would do a great deal to rectify most of the abuses I have described. The hon. Member for Rutland and Stamford, in introducing his Bill, was dealing with a very important subject of great public interest, not merely to the parents of the youngsters and to trade unionists concerned about "lump" labour, but to everybody who is concerned that we should not be misled about the way in which jobs are advertised. I hope that what I have said today will help to speed up the introduction of the regulations without which the Act, which is now two years old, will continue to be meaningless.
  7.17 p.m.
  Mr. Kenneth Lewis: First I wish to congratulate the hon. Member for Ilford, North (Mrs. Miller) on raising this subject. It has been somewhat nostalgic to listen to her speech and think back on the Bill that I introduced. It now seems a long time ago. I congratulate her, too, for raising the subject at this civilised hour. We have had two rather late nights and I do not know what we would have done if this subject had come up at 5 o'clock in the morning.
  Introducing a Private Member's Bill is almost like having a child. There is a certain amount of activity well in advance to produce the Bill, as with a child. There is a long period of hard labour in actually producing it, and afterwards one is never quite sure whether it will be implemented immediately. I am told that it is not unusual for a Private Member's Bill to take some time to be implemented. This Act has been on the statute book long enough and we require regulations to be introduced as soon as possible.
  However, in this case I think the regulations which have to be laid under Section 5 of the Act require a certain amount of consideration and a good deal of discussion. I have kept in touch as far as I could with what was going on. I understand from the Government that they have almost completed their consideration, so it may not be too long before they have the regulations. The regulations will cover what the hon. Member for Ilford, North has rightly pointed out is required in order to establish a good pattern of employment agencies and a system of working which will give confidence to the public.
  While my Bill was going through the House, I was in close touch with those involved in the question of employment agencies which belonged to the Federation of Personnel Services. Without any doubt, they want the measure, its regulations, and the standards which will follow. They believe it is the only way in which they can provide the kind of service which the public wants, and in which they can root out the kind of agency that the hon. Member for Ilford, North described and which seems still to exist.
  After the Government have put their proposals before the House the agencies

  1827
  will have to register, and if they do not conform to standards they will cease to exist. There is no reason why the sleazy agency should exist now, however—certainly in London and some of the big cities. The Greater London Council can take action already. In many ways it should have begun to take action under its existing powers as soon as the measure was put through the House. Perhaps the fact that the hon. Lady has raised the subject, and that we are having this short debate, will lead the GLC to consider what it should do.
  I do not think that the newspapers should be blamed for taking the advertisements. Having investigated the matter, the hon. Lady discovered that there was something underlying the advertisements that she read out. But the advertisements appeared to be perfectly reasonable as she read them out. I am glad that the hon. Lady was not tempted to become a disco-bird, because she would have been lost to the House. Doubtless she thinks that she has enough night work here, anyway. The publication in question does a service to London. I believe that it is widely used by people wanting jobs and that most of the advertisements in it would normally meet the standards laid down by the Advertising Standards Agency.
  I imagine that the publication had no idea that there was anything unsavoury about the advertisements the hon. Lady read out. The GLC can deal with the matter if it wishes.
  I support the hon. Lady's request to the Government to introduce the regulations as soon as they can. I believe that they will be fairly comprehensive. The Act provides that they should be. They can deal with the two questions that the hon. Lady raised—of young persons and of people leaving this country for employment abroad, as well as people coming from abroad to be employed here. I want to see the measure activated as soon as possible.
  I thank the hon. Lady for raising the subject.
  7.22 p.m.
  Mr. Dudley Smith: I, too, congratulate the hon. Member for Ilford, North (Mrs. Miller) on raising the subject. As my hon. Friend the Member for Rutland
  1828
  and Stamford (Mr. Lewis) said, it seems a long time ago, although it was not, when we put the Act on the statute book. Any reasonable person would be on the hon. Lady's side in her condemnation of unsavoury practices such as she described. It is right that the Press and others should expose such practices. But the hon. Lady will agree that, whichever Government are in power, there will always be those who try to get round the regulations. There will always be examples of such malpractices, however much we legislate.
  I must declare an interest, because I am a director of a management consultancy firm of international repute. The important thing is to get a good, high standard generally among the majority of operators in a particular area.
  My hon. Friend did a Trojan amount of work on the Employment Agencies Act, which had the benign acceptance of the Department of Employment, in which I was then engaged. The Act went a long way towards levelling up the standards of all types of agency. The vast majority of agencies throughout the country are honourable and of good repute, whether they are engaged in the kind of activity in which my firm is engaged—executive search—or in dealing with domestic employment, clerical employment or other specialised interests. They welcomed the Act, and, as I know from my time in Government, co-operated in making it a sensible measure which could show the way to those who perhaps were not quite up to the previous standards. Once the regulations are implemented, those who flout them will lose their licence and can be hounded out of business.
  Like my hon. Friend, I hope that the Government will be able to indicate when they will be able to produce the regulations. I also hope that the regulations will be sensible and workable, and in the spirit of the Act. During the passage of the Act there was a good deal of unanimity between the two sides in Committee.
  I appreciate the hon. Lady's concern about advertising. I know that in another context the code of advertising practice is well operated by all reputable publications, and that people in the advertising industry and the newspaper industry are constantly giving concern and

  1829
  attention to making sure that malpractices do not occur. But advertisements can be worded in such a way as to have a different meaning from that which they appear to have. It is hard to guard against that. However, it would be wrong to introduce statutory control of advertising, as some Labour Members have suggested. It would be dangerous in the long term to go down that road.
  I am glad that the hon. Lady raised the subject. We look forward to having the regulations from the Government. I hope and believe that they will be sensible and workable. I am positive that the employment agency profession will do its best to co-operate in their implementation.
  7.25 p.m.
  Mr. Patrick Cormack: I must first declare an interest. As the Minister knows, I act as an adviser to the Federation of Personnel Services, and I know full well that most agencies in this country will be as grateful as we are to the hon. Member for Ilford, North (Mrs. Miller) for raising what is obviously an outrageous case.
  As the promoter, or perhaps re-promoter, of the Indecent Displays Bill, I am totally in agreement with what the hon. Lady said, and I hope that she will be with me next week, at least in spirit.
  As my hon. Friend the Member for Warwick and Leamington (Mr. Smith) said, it is important to get it firmly on the record that what the hon. Lady described is not typical of the behaviour of employment agencies. The hon. Lady spoke moderately and sensibly, and did a service to the House and the whole industry, but it is important to underline that there will be just as much revulsion and horror among the vast majority of decent agencies, which place millions of girls in good jobs over the years, at these malpractices.
  The federation with which I am associated will never have any truck with that sort of agency, as the Minister knows. Such an agency is not admitted to membership. If members misbehave, they are expelled. A tight code of practice is operated by the federation and rigorously applied to all its members.
  Agencies are anxiously waiting for a definitive pronouncement from the Minister,
  1830
  who has been extremely helpful over the last two years. He was on the Opposition benches when the Act went through, and made many constructive suggestions. He enjoys a happy relationship with the federation. I hope that he will be able to tell us tonight when the regulations are likely to be implemented, for it is essential that they should be implemented.
  I underline a point made by my hon. Friend the Member for Rutland and Stamford (Mr. Lewis), who has done so much in this matter. Within London and many of our great cities, there is already the power to deal with rogues and pirates. I hope that certain officials will blush when they read Hansard and realise that the sort of thing about which we have heard tonight still goes on. Theirs is the obligation and the responsibility, and they should be doing something about the matter.
  I hope that the regulations will be produced soon, and that they will be sensible and workable. But that is no reason why they should not be tough and rigorous and solve not just most of the problems, as the hon. Lady said they would, but all the problems.
  7.29 p.m.
  Mr. David Madel: We have had an interesting short debate. I join my hon. Friends the Members for Rutland and Stamford (Mr. Lewis) and Warwick and Leamington (Mr. Smith) in congratulating the hon. Member for Ilford, North (Mrs. Miller) on raising the topic. It is good that we have the father of the Employment Agencies Act here to tell us something about it, to tell us of some of the difficulties of getting it on to the statute book and of the need to introduce the regulations so that it works at 100 per cent. capacity.
  I have before me the draft regulations from the Department of Employment which were published in December 1974. I feel that the section that deals with placings outside the United Kingdom or with workers from outside the United Kingdom goes almost the whole way in dealing with the points that the hon. Lady raised in bringing a particular case to the attention of the House. As she has said, the Bill received all-party support. It is not yet properly off the ground because the regulations have not been laid before the House.

  1831
  I shall refer briefly to two points which are of importance and which stood out in the Bill when it became law. Section 13 of the Act deals with licensing authorities. It provides that licensing will be done by local authorities rather than by some sort of national unit. I hope that we shall have a hint from the Minister about the plans of the local authorities to train inspectors for licensing purposes. For some local authorities the licensing of employment agencies will be a new function.
  I hope that my next point will be noted by the public. If we are to give power to local authorities—I am all for getting as much power as possible out of Whitehall and Westminster and into the hands of the local authorities—the question may arise of whether a local authority has carried out its licensing duties properly. There could be a case in which a member of the public felt aggrieved by the way that he or she had been treated by the licensing authority. He or she might feel that it had not investigated an employment agency properly. As I read the Local Government Act 1974, it would be open to a member of the public to go to the local ombudsman if he or she felt that there had been maladministration by the licensing authority, which, as the Act provides, is the local authority.
  I desperately want the public in local matters to make full use of their local ombudsman. We put a provision to that effect into the Local Government Act. We gave local ombudsmen a wide range of powers. In my view, we do not have enough local ombudsmen.
  The Act gives a new responsibility to many local authorities, and there is an extra safeguard if a member of the public feels that the licensing authority has not done its job properly. I hope that the Minister will be able to confirm that he means to keep the local authorities as the licensing authorities. I hope that he will be able to say something about the training of inspectors and about any plans that the Government may have in that respect. I am sure that the public will be given confidence as the Act gets off the ground. As my hon. Friend the Member for Rutland and Stamford said, the sooner the regulations are made law the better.
  7.33 p.m.
  The Under-Secretary of State for Employment (Mr. Harold Walker): I must
  1832
  straight away add my congratulations to those which have been properly and readily extended to my hon. Friend the Member for Ilford, North (Mrs. Miller). I think she has done a service for young women. She made a sensible and effective speech. I hope that this short but useful debate will add to the attention which has been rightly focused on what seems to me to be a clear abuse and exploitation of young womanhood. I think that the hon. Member for Bedfordshire, South (Mr. Madel) will see as I proceed that I intend to respond to the points that he has raised.
  I understand and sympathise with my hon. Friend's concern. Similarly understanding and sympathy have been reflected during the debate. I agree that there is a need for the activities of private employment agencies to be controlled and for there to be careful regulation governing the placing of young people in jobs abroad.
  The hon. Member for Staffordshire, South-West (Mr. Cormack) has rightly reminded the House that we were largely in agreement in Committee when dealing with the Bill and, indeed, during its passage through the House before it became the Employment Agencies Act 1973. As he and the hon. Member for Rutland and Stamford (Mr. Lewis) will recall, there were one or two points about which we had some difference of opinion. For example, there was the matter of which authority should be the licensing authority. Perhaps the hon. Member for Rutland and Stamford will not be completely happy about what I shall say on that point at a later stage.
  I have noted carefully what my hon. Friend has said about the Children and Young Persons Act 1933 and the way in which that Act is available, in her understanding, to do something to deal with the problem about which she has spoken. I must tell her that that Act does fall within the responsibility not of my own Department but of the Department of Health and Social Security. I see that my hon. Friend nods in agreement; I am glad that she understands that. I shall convey what my hon. Friend has said to my right hon. Friend the Secretary of State for Social Services. Equally, I shall convey her remarks to the attention of those responsible for the overseas

  1833
  activities of my Department. Having regard to what she has said about the need to draw attention to these matters with those who have relationships with foreign Governments, I shall pass on her remarks.
  The House will recognise that private employment agencies have grown into a major commercial activity. We recognise that at present they have a rôle to play in the labour market alongside advertising and other forms of recruitment and alongside the public employment service. As the House will know, that service is undergoing a radical and successful modernisation. I believe that the private employment agencies will have a rôle to play only if they are properly and honourably conducted. I am sure that I echo the feelings of all hon. Members who are present.
  The hon. Member for Staffordshire, South-West said that he spoke to some degree on behalf of the Federation of Personnel Services. The federation has done a great deal to lift and maintain standards, but there still remains a real need for effective national licensing and for controls to raise standards generally to those of the very best. There are those who take the view that private employment agencies should be abolished altogether. We have been required to look carefully at the representations to that effect that were made recently by the Trades Union Congress. We concluded, as did the House of Commons Expenditure Committee in its Seventh Report for the 1972–73 Session, that abolition is not a practicable proposition at present and that such abuses and malpractices as there are in the current system can best be dealt with through the implementation of the Employment Agencies Act.
  I should say to my hon. Friend that we are sharply aware of the manpower policy commitment of "Labour's Programme for Britain" and the declared objective of using a strong manpower board and its facilities to
  "be responsible for using its vastly superior resources and expertise to drive almost out of existence the private employment agency …".
  I am sure that my hon. Friend will welcome that declaration of healthy competition. Let me assure her that it is our
  1834
  intention to deal with the immediate situation by bringing the Act into operation. I am afraid that the consideration given to abolition has delayed implementation. I must tell the House that I expect some further slight delay. I am sure that the reason will be seen as fully justified as the result will be to increase the effectiveness of the legislation.
  The Act at present provides for licensing and enforcement to become the responsibility of 160 larger units of local authority. During the period of consultation on possible regulations to be made under the Act it has become increasingly apparent that there is a need for stronger and more uniform enforcement than that which can be achieved by a large number of local authorities with differing interpretations and standards. I see the hon. Member for Rutland and Stamford smiling in recollection that that was very much the point that I made when the Bill was in Committee. It was also a point that was recognised by the House of Commons Expenditure Committee in the report to which I have already referred.
  We hope to amend the Act to transfer the licensing authority responsibilities to the Department of Employment. I think that the House will agree that a centralised system of licensing will ensure stronger and more consistent standards of enforcement. We hope to incorporate the necessary amendments in the forthcoming Employment Protection Bill. It is our intention to bring the amended Employment Agencies Act into operation as soon as practicable after the Employment Protection Bill is passed.
  Mr. Kenneth Lewis: The Minister has made an interesting and important announcement. I do not cavil too much at that. I do not feel too strongly about it. We debated this during the proceedings on the Bill. Some people favoured the county council and others the district council. On balance, we came down on the side of the smaller authorities because we felt that they were local and knew the local scene. There was one other reason, and that was that we felt it would be rather difficult for the Minisstry to be judge in its own court since the Ministry, through the Manpower Services Commission, has its own employment agencies. The Manpower Services

  1835
  Commission is the State arm of employment agencies. We have the free enterprise agencies competing with the Manpower Services Commission agencies. The Minister would have the power to regulate the free enterprise agencies. It is possible that the Ministry, in certain circumstances, and with certain Ministers, might feel that it wanted to support the State sector rather than the free enterprise sector. This was the argument that made us come down in favour of local authorities. I do not over-rate the point. I want to see this Bill effective, and, therefore, I will not make too much of it.
  Mr. Walker: The hon. Gentleman has put his point most reasonably. I understand it. I ask the House to appreciate the great and growing pressure that there has been—all hon. Members have seen evidence of this—for the abolition of private employment agencies. We cannot ignore the strength of the demands made not merely by trade unions but by some employers, who see employment agencies as a disagreeable activity with which they come into contact from time to time. We have also seen Government civil servants protesting on the streets about the activities of these agencies. I am glad that the hon. Gentleman said that he did not wish to make too much of the point that has been repeatedly made about the State having access to the internal affairs of its competitors and to some degree having influence over such agencies.
  We must recognise that the State is in the business not as a commercial activity but, instead, to render a social and economic function. Therefore, it is wrong to see it as a kind of commercial competitor. It is important to bear that in mind when making the point about the position of the State vis-à-vis the confidential information of the private employment agencies.
  Mr. Cormack: This is an important point. Everyone knows to what considerable pressure and powers of persuasion the Minister and his colleagues at the Department have been subjected for some months. Nevertheless, the point made by my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) has considerable substance. I hope that the Minister will clarify who, in each
  1836
  area, will be personally responsible for the supervision of the area. If he cannot do it tonight, perhaps he will undertake to do it at the earliest opportunity.
  Mr. Walker: I am anxious to be as frank and as helpful as possible. Let me try to help the hon. Gentleman by saying that it is our intention to create a unit within the Department that will have its own officers to look after the enforcement of the regulations.
  Mr. Dudley Smith: I, too, am extremely interested in what the Minister has said. This is probably not the time or place to debate it. Could I ask him to make absolutely sure that there is some worthwhile and fair basis for appeal if the whole procedure is centralised? It would be utterly wrong for the Minister to be judge and jury in his own court. There has to be some means of appeal, because there will undoubtedly be occasions when there should be an appeal. I congratulate the hon. Gentleman on the good sense which he, his officials and the Government, have shown on this one occasion in resisting the reactionary forces who want to abolish almost everything which is of a private nature. For once the Government can be congratulated.
  Mr. Walker: The hon. Gentleman ought not to be too premature in his congratulations. I have not yet reached the end of my speech. I thank him for his remarks. I speak off the cuff here—I have the Act at my side but I do not want to take up time by going through it—when I say I believe there is provision for appeals in the Act. I am pleased to see the hon. Member for Rutland and Stamford nodding.
  Mr. Cormack: That will remain?
  Mr. Walker: Yes, There is provision in the parent Act. There is the power for the Secretary of State to establish an appeals machinery. He has the power to appoint a person to listen to appeals.
  Mr. Kenneth Lewis: I have the Act here. The relevant section is Section 4. There is one slight hiccough here, and that relates to the Secretary of State appointing someone independent to hear the appeal "in the prescribed manner". If the Secretary of State is changing the registration it will be necessary for him to appoint someone who is independent.
  Mr. Walker: The Act says that the Secretary of State has the power to appoint someone to hear appeals. I am sure that in those circumstances the Secretary of State would seek to appoint someone who would have the confidence of the parties to the appeal. Otherwise it would, manifestly, be a charade.
  The amendments we propose will not, however, preclude the possible delegation of these functions to the Manpower Services Commission at some future date if it is thought, in the light of experience, that that would be an appropriate way to proceed. We think, too, that there would be value in a study being undertaken on the rôle of the private employment agencies and employment businesses in the labour market, particularly in the light of changes resulting from the bringing into operation of the Act. It might be that the Manpower Services Commission would be a suitable body to carry out such a study. I intend to have discussions on this with the commission.
  I turn now to the regulations to be made under the Act. We have referred to the hon. Member for Rutland and Stamford as the "father" of the Act. I am not sure whether we have not been confusing birth with conception. I could not help recalling the words of T. S. Elliot, that
  "Between the conception and the act Falls the shadow."
  Here has fallen a shadow which will continue to delay the regulations for a little while.
  I assure my hon. Friend the Member for Ilford, North that the Act and the regulations cover theatrical agencies. The exemptions are dealt with in Section 13(7), and theatrical agencies are not among the exemptions. I ought to qualify that by pointing out that the Secretary of State has power, under Section 6, to exempt from the requirement not to charge employers for finding work. That could apply to those employers operating in the theatrical world.
  The Act gives my right hon. Friend the power to make a variety of regulations. The heart of the Act is Section 5 which provides for the making of regulations to secure the proper conduct of not only of employment agencies but employment businesses, which are separately de-
  1838
  fined, and to safeguard the interests of workers and employers who use them.
  We have consulted a large number of interested bodies about our proposals for the regulations, and the House will be glad to hear that we are now close to the stage of finalisation. We are confident that the stringent set of rules we propose will go a long way towards dealing with abuses which have been the subject of frequent criticism and complaint. They will help to achieve a uniformly higher standard in the industry.
  I would single out for special mention some of the proposals for regulations which will bear on the sort of situation to which my hon. Friend referred; namely, the placing abroad of young people. One or two have been referred to in the debate, but I think it would be as well for me to spell them out.
  First, our proposals will require an employment agent to obtain the written consent of the parent or guardian before placing a young person under 18 abroad.
  Second, and most important, an employment agent will not be permitted to arrange for the employment abroad of any United Kingdom resident unless he has obtained written information from a person or source of suitable standing—for example, a firm of solicitors on a British consul's list—testifying to the satisfactory nature of the proposed employment and to the good character of the prospective employer. Similar clearance will have to be obtained of the standing of any agent abroad whose services an agent in this country proposes to use. Such an agent would have to hold a licence in the country concerned if the law there required it.
  Third, before placing a young person under 18 abroad the agent will be required to satisfy himself that the young person has suitable acommodation to go to, and that the charge for it is commensurate with the wages to be paid and that these arrangements are acceptable to the young person. Fourth, he will have to satisfy himself that the young person has a return ticket. Otherwise he will have to obtain a written undertaking from a suitable person who agrees to advance the amount of the return fare in the event of premature termination or non-commencement of the job, or on its completion if it is for a fixed term.

  1839
  Moreover, in the event of failure of a written undertaking of this kind the agent will be held responsible for advancing the return fare to the young person. Thus, where the job falls through, or turns out to be very different from what the young person has been led to believe, he or she will not be left stranded and unable to get home without the assistance of a British consul.
  Fifth, in the case of all placings abroad the agent will be obliged to give the worker, before he departs, a written statement setting out full details of the job, including its nature and the duties to be performed, plus particulars of such matters as wages, hours of work, notice, accommodation, travel arrangements and information about the general requirements of the immigration law of the country concerned. Similarly, he will have to give written information about the worker to the prospective employer.
  Sixth, the agent will not be allowed to introduce a worker to an employer where he has not satisfied himself that the employment would be legal, and in cases where legal conditions attach to the taking of a job the agent will be required to ensure that both employer and worker are aware of them. This will mean, for example, that if the law of the country concerned provides that no person under 18 shall be employed in a particular type of establishment, the agent must take reasonable steps to ensure that he places no one under 18 with such an employer.
  My hon. Friend referred specifically to advertising, and I note what the hon. Member for Warwick and Leamington (Mr. Smith) said. Seventh, we also intend to make regulations in relation to advertising by private employment agencies and businesses. We have not yet finalised our proposals, and we are considering carefully how such matters as false or misleading advertising should be dealt with. I should certainly welcome any views that my hon. Friend or any hon. Member might have.
  Finally, the agent will have to keep records on all these matters to enable an inspector of the licensing authority to check that the regulations are being complied with.
  These are some of the matters that we have in mind to include in the regula-
  1840
  tions. I will make sure that my hon. Friend is sent a copy of our full proposals and would certainly welcome any comment which she or any other hon. Member may care to make on them. I feel confident that she will agree that they will help to curtail the undesirable overseas placing activities of certain less scrupulous—or as my hon. Friend says "sleazy"—agencies which have been the subject of publicity and complaint in recent months.
  There are, of course, penalties for non-compliance with the regulations. Contraventions will render an agent liable to prosecution and on summary conviction to a fine of up to £400. Furthermore, the agent's licence may be revoked on the grounds that an employment agency has been or is being improperly conducted.
  Mrs. Miller: Will the regulations require that agencies should not set up in business initially until they have been licensed? Under the present system of local authority licensing, where it applies, local authorities allow agencies to be set up pending the granting of the licence.
  Mr. Walker: I understand my hon. Friend to say that there are circumstances at present in which, in a licensing area, an agent can set up a business first and then apply for a licence.
  Mrs. Miller: Yes.
  Mr. Walker: I understand the point, but I cannot tell my hon. Friend exactly the position. I think it is as she wishes it to be and that a business must seek a licence before it can operate, but I had better make certain of that. I will do so and let my hon. Friend know exactly what the position is.
  My hon. Friend referred to "lump" labour. She will recognise that this problem, apart from what the Government are bringing forward in terms of other legislation, will fall not so much on employment agencies but on employment businesses, which are separately defined in the Act and for which we intend to bring forward regulations as for employment agencies.
  In conclusion, I should perhaps explain the present position in relation to the licensing and control of employment

  1841
  agencies. As my hon. Friend may perhaps be aware, a number of local authorities, mainly in London and the home counties and a few other cities, currently license employment agencies under local Acts and require them to comply with byelaws relevant to their conduct. Thus, until the Employment Agencies Act comes into operation complaints about the conduct of any agency situated in one of these areas should be raised with the local authority concerned. I understand that the appropriate licensing authority is, in fact, aware of the case about which my hon. Friend is concerned.
  I thank my hon. Friend once again for having brought this matter to the attention of the House. She has given me the opportunity to explain the latest state of play and to give assurances for which the House has asked about the introduction of regulations. Although I have not perhaps answered all my hon. Friend's questions, I hope that I have assured her that the action she seeks has been taken.

  NATIONAL HEALTH SERVICE (CONSULTANTS)
  7.57 p.m.
  Mr. Kenneth Baker: I am fortunate to have drawn third place in the Ballot for the Consolidated Fund debate instead of the 23rd or 33rd. It reassures one's faith in parliamentary democracy on a day when it has been somewhat tarnished.
  I want to use the opportunity to raise the whole question of the rôle of private consultants and specialists in the National Health Service. The House will appreciate that this is a matter which affects many of my constituents, representing as I do central London, including Harley Street and Wimpole Street. Among my constituents are many thousands of consultants, some of whom work exclusively in the private sector and some exclusively in the public sector. The great majority work in both sectors, and many of them have written to me and seen me over the last few weeks to express their great sense of outrage at the way they are being treated by the Government. I am told that the feeling in the provinces and in hospitals in towns all over the country is
  1842
  even greater than is the feeling in central London.
  The doctors and specialists are aggrieved because what started as a reasonable request from them for a renegotiation of the contract under which they work to take account of the fact that they do not get paid for overtime has led to a mapjor dispute in which the very existence of the part-time consultants is at stake. This is the central issue in the negotiations on this contract. The doctors—specialists and consultants—have been driven by Ministers to fight for their independence as professional men.
  I begin by asking the Minister about Labour's intentions on this subject. In certain aspects of policy on the health service Labour has come clean. It has made clear its position about pay beds. The Labour Party manifesto made clear, as has the Secretary of State for Social Services, that the object is to phase out pay beds or private beds in the health service. That is a decision which I shall oppose medically and politically, but at least we know where we are.
  However, in regard to the rôle of the consultant in the health service—the doctor who works both for the NHS and in private practice—Labour intentions are much vaguer. On occasions the Secretary of State and her Minister of State have said that they have no intention of abolishing the rôle of private practice in the health service. However, that is not the sort of declaration they tend to make on the platform at a Labour Party conference, although they tend to mumble that sort of obligation when meeting representatives of the medical profession.
  In 1973 the Labour Party programme said that
  "All new medical appointments of a consultant status will be on a full-time basis."
  That expresses the real intention of this Socialist Government. They are trying to achieve the object of having consultants working either exclusively for the health service or exclusively for the private sector. In the negotiations they have been trying to achieve that object by stealth.
  The situation has been made worse by the way in which it has been handled by the right hon. Lady the Secretary of State for Social Services and her Minister of State who is now present on the Government Front Bench. She seems to have

  1843
  pursued the object of separating the public and private health services with an intensity which I can only describe as a personal vendetta. She has a personal vendetta against private practice in the health service. This can be seen in the way in which the negotiations have been conducted.
  When the Labour Government first took office, just under a year ago they set up a working committee, which was referred to as the Owen Committee. I understand from the doctors that they were making reasonable progress through the summer and autumn of last year. I gather that they were close to coming to some sort of arrangement or a compromise which would allow consultants in the health service also to work in private practice. But at some time in November or December the Secretary of State called in the papers and, having read them, obviously realised that the Owen Committee was going a little far. I understand that she published the contract before Christmas on the basis "This is what I want. It has not been agreed in the working party, but you can take it or leave it." If the Minister of State disagrees with that interpretation of events, no doubt he will say so in his reply, but that was the effect of the right hon. Lady's personal intervention, which added a degree of bitterness to the negotiations.
  Before we rose for the Christmas Recess the contract was published, and the Government's view was that it was nonnegotiable. During that recess they modified their position to some extent and said that they were prepared to start talking again.
  The Minister of State, Department of Health and Social Security (Dr. David Owen): Since the hon. Gentleman is implying that my silence may be taken to be agreement, I should like to say that that is not the case and that I shall put the facts at the end. Has the hon. Gentleman read the initial proposals which were placed in the Library, not in December, but when the document was presented—namely, in October or November? The time scale would appear to be confounded by that factor.
  Mr. Baker: The time scale may be confounded, but the Government's intention is in no doubt whatever. When the Owen Committee was moving towards
  1844
  some compromise, in which the profession was prepared to accept proposals, for political purposes the compromise was not allowed to happen.
  Since Christmas the Secretary of State has said that the negotiations can recommence, but only on details and not principles. This is an absurd negotiating posture. Ultimatums are not the language of industrial relations. This raises the question: what are details and what are principles? The details of the contract are very complicated. In some cases the details are so important that they affect the original principles. Therefore, it appears to be quite unacceptable for the right hon. Lady to say that only details, not principles, can be negotiated. The whole profession—doctors and consultants—is concerned with the principle at stake. For the right hon. Lady to say, "This is not negotiable" reminds me of the comment made by Beatrice Webb at the end of her life. She was asked why her marriage with Sidney Webb has been so successful over the years, since it appeared to be a rather unlikely union. She replied, "When we got married, we decided that from that day on Sidney would decide matters of detail and I would decide matters of principle." The point was then put to her that life was not really like that and that one could not compartmentalise married life in that way. She was asked, "How did you decide the dividing line?" She replied, "The difference as to what is a matter of detail and what is a matter of principle is itself a matter of principle." That is what the Secretary of State is saying. Therefore, I urge the right hon. Lady to return to the negotiating table now without preconditions.
  I want to mention three important details in the contract. First, consultants in the NHS will have to work set hours, from nine to five. Those times are specically laid down. It may be asked, "If somebody wants to work 40 hours a week as a National Health Service consultant, from nine to five, and then wants to undertake private practice, when is he to do it?" It does not take the Owen Working Party to answer that. Obviously he has to undertake that work either before 9 am or after 5 pm. That is an absurdity. Doctors in the health service run their clinics at a certain time, for the convenience not of themselves but of their

  1845
  patients. Therefore, for the Government to say to a consultant, "You can undertake your private work after 5 o'clock in the afternoon, or on a Saturday morning" is an absurdity.
  I am sure that the Minister of State will appreciate this fact, because he has practised as a doctor—is, I understand, still a doctor, and no doubt will practise again as a doctor when he returns to Opposition. He should appreciate that as consultants go ahead in their profession not only are they involved in practising their art, they become involved in the whole paraphernalia of committee work which, in teaching hospitals in London, does not begin until 5 or 6 o'clock in the evening. A prohibition is being put on the activities of those consultants. Therefore, flexibility is essential.
  My second point of detail relates to merit awards which are given to consultants, based on experience and skill. The proposal in the contract is that if the consultant wishes to work in the NHS and qualifies for a merit award, and also has a private practice, that merit award is reduced pound for pound by the level of earnings in private practice. That is unfair.
  I am not saying that a consultant in the NHS who has a private practice and who has, say, a merit award of £1,000 and spends only 80 per cent. of his time in the NHS, should get the full award, but it is unfair that, compared with a consultant who wants to work 40 hours in the NHS and to do only NHS work, the consultant who wishes to work 40 hours in the NHS but, in addition, to do private work, should have a reduction of his merit award pro rata to his earnings outside. I hope that here at least there will be some give by the Government.
  My final point of detail concerns the area where detail and principle come together—the pay differential for full-time service, or the "two-elevenths" as it is called. The right hon. Lady has said that this issue is non-negotiable, but of course it is, because it is at the centre of the negotiations. It is a change in the basic principle of remuneration. Up till now, if a consultant worked both for the NHS and the private sector, he was paid
  1846
  hourly rates on a pro rata basis. The right hon. Lady's proposals would mean, in future, that when a consultant opted for full-time NHS work he would get a premium for that, whereas a consultant who worked the same number of hours but, in addition, had a private practice, would not. This is the instrument by which the right hon. Lady seeks to make part-time consultancy unattractive. I hope that it is far from being nonnegotiable, and is put back into the centre of the discussions.
  I turn now to the broad principle involved—whether there should be an element of private medicine in the NHS. That is really what it is all about. I believe that there should be such an element.
  The first reason is that doctors—particularly specialists and consultants, who are highly skilled and experienced men and have a great tradition for public devotion—are not greedy. Other professional groups which have skills and arts which can be sold in the international market—airline pilots, for example—have in the past acquired negotiators who have provided them with substantial salaries and attractive working conditions. This is not the case with the doctors, and the Minister knows it. What they cherish above all is their professional independence. I believe that of all the professional groups they cherish independence more than anything else.
  They fear that if they became wholly State employees they would be open to direction in a way that they would find objectionable—that they would have to conform more and to succumb to the administrative mentality. I can express this only by comparison with our own status as Members of Parliament. Consultants are being asked, "Do you want to become full-time State employees in the NHS, or not?" If it were proposed to hon. Members that they should become nine-to-five wholly-employed Members of Parliament, I would vote against it. I would do so because it would impoverish this place and be a bad day for our constituents and democracy. Over the years it would choke off a great flow of talent into the House. The doctors feel much the same way.
  Mr. Philip Whitehead: Does the hon. Gentleman think that the 45 per cent. of consultants who work full

  1847
  time, often because they have no choice because of their locality or specialty, have in any sense sacrificed their clinical independence by doing so?
  Mr. Baker: I would not argue that, just as I would not argue that those among us who are full-time Members of Parliament have sacrificed their independence. But if one makes everyone conform to a pattern in such a profession, one makes it less attractive to the open-minded person. That is surely evident.
  Secondly, if the Government pursue their policy they will do grave damage to the NHS. These men and women have rare skills, and already the country is suffering from an export of such talent. If the Government devise a system which will make it more difficult for these people to adjust themselves and to accommodate themselves to what we have been talking about, they are bound to seek jobs overseas. An hour's flight from here will take a specialist or consultant to Holland, Belgium or France, where he can earn, net, in real terms, three times what he is now earning here. In my constituency, a recruiting team from the Queensland medical service has been in the Middlesex Hospital for the last three weeks. In Manitoba, in 1974, more doctors who came from England went on to the register than came from the remaining provinces of Canada. This is an export of talent we can ill afford.
  If the Government impose too rigid a scheme, too restrictive and too conformist, they will promote the flow of doctors away from this country. They will also promote something else. They will force doctors to move more into the private sector of medicine exclusively. I have several private hospitals and nursing homes in my constituency, and many consultants who work exclusively for the private sector. But I do not believe that the public health services of Britain should be rigidly divided into public and private sectors, because I think that it would impoverish the services in both. Separatism means duplication, a waste of resources and a lower standard in the NHS. I do not have to argue this case. It was argued much more eloquently by Aneurin Bevan, when he said many years ago, that
  "If we do not permit fees in hospitals we will lose many specialists from the public hospitals for they will go to nursing homes."
  1848
  The Secretary of State and the Minister of State know that to be the case.
  Because of Socialist dogma and attitudes, the Government want to impose a degree of conformity upon this profession because they think that conformity is efficient and also because, in my belief, they have a sneaking softness for conformity itself, which they prefer to diversity. But the doctors and many other groups do not want it. They cherish their freedom and independence of action, which this contract would compromise. The opposition to the contract in the profession is overwhelming. In the Middlesex Hospital, a meeting of all grades of hospital staff—not just senior consultants—voted 135 to three against the contract. All the London teaching hospitals have objected to it. Doctors in the Plymouth area have said that they prefer to resign rather than sign the contract.
  What the Government as a whole must learn, not only in this matter but in tax matters as well, is that one cannot impose a law upon any community of people who will not accept it. The Conservative Party has learnt that lesson. It is a very hard lesson, but we have learnt it. It should not be for me, a Tory, to lecture a Labour Government on the lesson which they have to learn now. What they have to learn in their area of social policy and tax policy is that Governments can govern only with the grain of human nature and not against it. That is the central issue in this dispute.
  It is the Government who are being dogmatic and stubborn. I appeal to the Secretary of State, through the Minister of State, to return to the negotiating table with no preconditions. Let the Government put the interests of the profession and of the patient before their own prejudices.
  8.20 p.m.
  Mrs. Elaine Kellett-Bowman: Like my hon. Friend the Member for Saint Marylebone (Mr. Baker), who spoke so ably, I represent what might be called a hospital city, in that hospitals are the main employers in the city of Lancaster.
  For many years the National Health Service has been enjoying the benefit of a great deal of absolutely free overtime

  1849
  worked by consultants in every specialty and throughout the length and breadth of the land. By the terms of their contract, full-time consultants must work 11 sessions during the week. Consultants with nine-elevenths contracts must work nine out of 11 sessions. In other words, full-time consultants are committed to working morning sessions and afternoon sessions five days a week and a morning session on a Saturday, which very few other people do nowadays.
  Whether consultants are full-time or part-time, they work virtually precisely the same hours—and very long ones at that. In practice, most consultants work at least double the number of hours for which they are contracted and paid, whether they are full-time or theoretically part-time. In their lunchtime they see patients. Often they are operating or seeing NHS patients well into the night and through the weekends—National Health Service patients as well as their own private patients.
  The consultants do this without a penny extra in pay. Who else in this day and age would work such very long hours for no extra pay? The position of the part-time consultant—the one on the nine-elevenths contract—is even worse, because although in theory he is contracted for only nine sessions he works just as hard and just as long as the full-time consultant but receives pay for two sessions fewer than he works. Therefore, he is even more seriously underpaid than his full-time colleague. He does his private work in his very limited off-duty time.
  When Aneurin Bevan set up the National Health Service he gave as one of the reasons for keeping private beds in the National Health Service that given by my hon. Friend—and also the very practical reason that if private beds were inside National Health Service hospitals consultants did not waste their time doing a great deal of road travelling. It was the best use of skilled time to have private beds in National Health Service hospitals. Therefore, a consultant doctor was more efficiently and effectively used, to the benefit of the whole service, and this was not done for the benefit of his private patients, but for the service as a whole.
  In her aversion to private practice the Secretary of State is wrecking these very
  1850
  sensible arrangements and will oblige consultants to spend more time in transit and less attending to their patients. In the hospitals in Lancaster private patients paid no less than £26,000 in a six-month period last year. This money was used to the benefit of the service. If the Secretary of State has her way, such money will no longer be available to the service but will have to be provided by the hard-pressed taxpayer or the services will be that much worse off.
  The Secretary of State has tried alternatively to persuade or to bully consultants to accept full-time contracts and do no private work. She has tried the carrot and the stick but a rather higher proportion of stick.
  It passes my comprehension why the Secretary of State should be quite happy for consultants to be free to do anything they like in their spare time—gardening, even electioneering if they choose to do it, playing bridge—everything except the very thing that they have been trained to do, love to do, and want to do—their work.
  Whether a consultant wishes to exercise his right to undertake private practice is obviously his affair, or it should be, but to try to dictate to doctors what they may or may not do when they are off duty seems to me as an average British person to be an intolerable intrusion into the private lives of these people and a hopeless infringement of human freedom.
  Mr. David Crouch: I do not want to raise any difficulty or contention, but, speaking as one who is closely associated with the National Health Service, I do not think that that is what the Secretary of State is suggesting. I think that she is suggesting that a full-timer is a full-timer and nothing else and cannot take a fee from any private patient, but that a part-timer has a full-time contract in the National Health Service and can take a private patient elsewhere than in the National Health Service. That is what I understand the situation to be.
  Mrs. Kellett-Bowman: It seems to me that the Secretary of State, by giving a very much higher inducement to those in full-time employment, is gradually, by the thin end of the wedge, trying to phase private patients out of the National Health Service altogether.

  1851
  It is very interesting to remark in this connection that the feeling against this sort of bludgeoning, as the doctors clearly feel it to be, is just as strong amongst consultants who are and who will remain full-time consultants in the National Health Service as it is among consultants who have a private practice. Consultants in my area come out at about 60 to 40 in the two categories. The feeling against the present contract is just as strong amongst those who are full-time as it is amongst those who are not.
  An even more absurd aspect of the proposed new contract is the way it deals with distinction awards. Part-time as well as full-time consultants will be eligible for the new awards, but the whole of the consultant's private earnings will be deducted from his payment, so that literally he will be paying himself for his own skill and services. Just imagine trying that sort of thing with a miner or a docker and seeing how it goes down!
  What angered the doctors most was the way in which the Secretary of State tried to force them to accept these terms when they had been negotiating for six months with the Minister of State. I gather that the hon. Gentleman had been conducting the negotiations with considerable tact and patience, and the doctors were convinced that they had nearly reached—indeed, they believed that they had reached—a verbal agreement with him on a new contract. They simply wanted it to be in writing and all, they thought, would have been well, when the right hon. Lady suddenly intervened, more or less thrust a contract under their noses and told them that vital parts of it were not negotiable but that she would graciously permit them to discuss what she called "an area of detail".
  Just imagine the right hon. Lady in her days of "In Place of Strife" going to Joe Gormley or Hugh Scanlon or Jack Jones and informing them that they could discuss not their main wage claims but only the details! Would she then have described the industrial action which would inevitably have followed within minutes as "industrial backmail"? Of course she would not. Why, then, has she decided to treat the doctors in this highhanded manner?
  Moreover, the consultants, in the industrial action upon which they are em-
  1852
  barked, have fully safeguarded the patients. They have made it clear that no patient will suffer, by dealing with emergencies and making themselves available for any treatment required outside their contracted hours, provided they are paid for the work they do. Any lengthening of the National Health Service queues is quite unnecessary, and if it occurs it will be the clear responsibility of the Secretary of State.
  The consultants are fighting for a fair choice of contract to cater both for those who wish to work only for the NHS and for those who do not. The Secretary of State should stifle her invective, swallow her pride, which is fast wrecking the health service, and give the consultants and all others who work in the health service a fair deal.
  Mr. Whitehead: I had not intended to intervene in this debate, and I shall be extremely brief since I have tabled a subject for debate later. However, I am moved to comment by the hon. Lady the Member for Lancaster (Mrs. Kellett-Bowman)—
  Mr. Cranley Onslow: On a point of order, Mr. Deputy Speaker. I should hate to put the hon. Gentleman in the difficult position of not being able to speak on the subject which he wishes to raise in due time because he had preempted his right to speak by speaking now. Would it be helpful if you were to guide him in this matter?
  Mr. Deputy Speaker (Sir Myer Galpern): Yes. I have looked to see whether the hon. Gentleman has a subject down for discussion later. If that is the case, he cannot speak now except by leave of the House.
  Mr. Whitehead: I am obliged to the hon. Member for Woking (Mr. Onslow). I do not ask for leave.
  8.30 p.m.
  Mr. Paul Dean: I did not realise that I should be called so promptly, Mr. Deputy Speaker.
  Mr. Deputy Speaker: The hon. Member for Derby, North (Mr. Whitehead) said that he would be brief. He was very brief.
  Mr. Dean: I congratulate my hon. Friend the Member for St. Marylebone

  1853
  (Mr. Baker) on his good fortune in obtaining an early place in the Ballot to raise this important subject. I declare an interest in it as a result of my association with BUPA.
  I welcome, as I am sure does the whole House, the signs of greater flexibility by the Government which were amplified in the statement of the Secretary of State for Social Services on 13th January. I welcome the discussions which are taking place with, I understand, officials in the Department, and I hope that the Minister of State will be able to tell us more about them and, above all, about the timetables which are envisaged.
  However, I hope that the Government realise that a great deal of damage has been done and that the consultants and other doctors strongly resent the way in which they have been dealt with and the Government's take-it-or-leave-it attitude. They feel hurt by the Government's insensitive approach. They are suspicious of the Government's motives. In a profession which is usually noted for its individualism there is a strength and unity which is unusual and which the Government would be foolish to ignore. It is clear from the surveys made by the British Medical Association and BUPA that there is a strength of feeling in the profession which is marked and which runs throughout the profession among consultants, be they part-time or full-time, and among the juniors. I hope that the Minister of State, with his medical background, and in view of the long discussions which he has had with the medical profession, realises how strong and united this feeling is.
  The job pressures on the consultants are increasing all the time. The advances of medical science, the greater demands by patients and the poor working conditions in which many doctors operate are obvious examples of this. The work load far exceeds the contractual hours. The average consultant works about 35 hours a week over and above the contract, and he does it for nothing. The contract, must therefore give greater financial recognition to these growing pressures and the work load, quite apart from the adjustment required to deal with the substantial increase in the cost of living.
  1854
  But there is something much more important than matters of pay, hours and working conditions, what one might call the nuts and bolts of the contract, and that is freedom—freedom to treat patients without political or bureaucratic interference, and freedom for patients to spend their own money on health if they so wish and to go to the doctor of their choice. A consultant's contract which compelled him, either directly or by financial penalties, to go wholly public or wholly private would be wrong in principle and bad in practice. It would undermine the freedom which the consultant and the patient have always had. In practice it would mean less effective use of time and of medical skills, and as a result all patients, both National Health Service and private, would suffer.
  I thought that the BMA, in a note produced in January headed "Consultants Care", summarised this deep feeling on the part of the consultants when, in commenting on the contract which was offered before Christmas, it said:
  "Such an unacceptable contract could force doctors either to leave the Service altogether or compel many of them, against their professional judgment, into a complete commitment to the NHS. This could in turn lead to a monopoly State service which would restrict the individual's freedom to seek medical care from the doctor of his choice and, in years to come, endanger the clinical independence of doctors which enables them to work solely in the interests of their patients."
  That is a very good summary of the issue of principle which the consultants and other doctors feel is involved.
  Surely we should be breaking down barriers in the health service and not making new ones. We should be forging links between all aspects of medical care and strengthening the existing ones, not breaking them.
  Consultants are not only fighting their own battle and the battle of their patients. A wider issue is involved, which I thought was well illustrated in a leading article which appeared in The Times on 11th January. The article was headed "The Anger of the Middle Class". Having dealt with the pressure to which all sections of the community are subject these days, it went on—and this illustrates the wider theme—to say:
  "Many people in the middle class feel all the resentment and anxiety of being boxed in. The doctors, who know that they would be

  1855
  earning several times as much in almost any comparable country and find private wards being closed because, on ideological grounds, the cleaners refuse to clean them, are the group who are nearest to action. Mrs. Castle seems to be intent on making the same misjudgment of their mood that Mr. Heath made of the miners. In their sense of social usefulness, their unity and now their indignation, the doctors are the miners of the middle class."
  I am not sure whether the consultants would accept that definition. I do not agree with all the analogies there. There is a very real sense of being boxed in which is perhaps most graphically expressed in the present conflict and which is also felt amongst other sections of the community. Therefore, this matter is of greater significance than just the aspect which we are discussing.
  In my judgment, the onus is on the Government to undo the damage fast, to restore the confidence of the consultants, to negotiate an agreement with them, and not to try to dictate to an honourable and dedicated profession.
  8.40 p.m.
  Mr. Arnold Shaw: It was not my intention to intervene in this debate—in fact, I hope in a very short space of time to be returning to the deliberations of the Committee sitting upstairs—but it is a welcome relief from the intricacies of the Finance Bill.
  I intervene only to draw attention to the considerable amount of mythology which is growing up in the dispute between the consultants and my right hon. Friend the Secretary of State for Social Services. To hear people talk, one would imagine that the whole trouble started when this Government came to office and that it started principally because my right hon. Friend heads the Department of Health and Social Security.
  In fact, of course, the trouble started back in 1972 when the consultants were fuming and threatening industrial action. In the event, they did not take industrial action. But they had no redress from the then Government. Eventually they came round to asking for a working party to be set up to discuss their pay and conditions. The then Secretary of State decided to wait until the following administration took office.
  That was in February 1974. The next administration took office and immediately got down to the job of looking at the salaries and conditions of the con-
  1856
  sultants. A working party was set up. It worked fairly rapidly, and even more rapidly at the insistence of the consultants when they again threatened to take industrial action.
  The mythology to which I refer is that arising from the charge that my right hon. Friend acted in bad faith and completely ignored the consultants. It reached the point where a final decision was to be made by the consultative committee. The meeting was fixed for 12th December. However, just before the meeting, further demands were made by the consultatnts, which could not be met singly by the Secretary of State, who made it clear that this would have to be a Government decision. Accordingly, the meeting was postponed until 20th December.
  Then it was said—and here again I refer to the mythology—that my right hon. Friend had acted in bad faith by not turning up at the meeting on 12th December and by ignoring the consultants. This is patently untrue.
  It is fair to say that when the Government decision was taken and the report was issued the consultants did not have a great deal of time in which to consider it. It was in their hands only about 24 hours before the meeting on 20th December which finally brought about the break down in the service.
  Mr. Onslow: The hon. Gentleman is giving what passes to be an authoritative account, and he is attempting to demolish a number of myths. He has referred to a period of 24 hours. Does he know it was as long as that?
  Mr. Shaw: Only recently I met consultants in my district who authenticated this. I agreed that there was not a lot of time, but they had the answer in the meeting on 20th December. Something more than simply pay and conditions is involved: to my suspicious mind there seems to be a political element.
  There is a malaise in the health service, and the doctors have complaints, but in this instance the consultants are very much on their own. They are making contradictory claims—for example, about the closed contract. On the one hand they say "We do not want to work 9 to 5, five days a week like other workers." On the other hand they say "After a certain point, we must get overtime."

  1857
  Without prescribed hours, how does one calculate overtime?
  There should be some flexibility, of course. A surgeon might work late into the night, and if he has little to do in the morning, why should he come in at 9 o'clock? The accusation is made that it was a take-it-or-leave-it arrangement. That is not true; everything was negotiable—
  Mrs. Kellett-Bowman: No.
  Mr. Shaw: Well, that is my reading of the matter. The Minister has made it clear that she was prepared to negotiate the arrangements. I am sure that that is the situation now.
  I was appalled at that meeting by the complacency of these consultants, these men who had taken the Hippocratic oath, who said that the longer it went on—
  Mrs. Kellett-Bowman: I have here the Hansard containing the Minister's statement on 13th January. In column 34 she said that certain principles were not negotiable, only certain areas of detail.
  Mr. Shaw: Certain factors were not negotiable, but I am sure flexibility on hours was. I was appalled to hear consultants saying "We are beginning to like this sort of leisurely doctor-patient relationship—never mind the people waiting urgently to see us". That comes ill from such people who had previously condemned others in the health service who had been fighting for a living wage.
  8.49 p.m.
  Mr. Robert J. Bradford: As one who represents a constituency in which many doctors and consultants live and which also includes two major hospitals, I think that it is my duty to reflect their attitude to these proposals. The hon. Member for St. Marylebone (Mr. Baker) introduced the debate so ably and comprehensively that I need not detain the House for long.
  Three points need re-emphasising, even after the very able contributions to the debate which have been made by Opposition Members. The first point is the intransigence of the Secretary of State concerning these proposals. The hon. Member for Lancaster (Mrs. Kellett-
  1858
  Bowman) has indicated quite accurately the Secretary of State's attitude, and the consultants' joint working party has made the Secretary of State's obstinacy very well known indeed. It is deeply regrettable that an issue of this importance should be in some way jeopardised by the Secretary of State's unforgivable attitude.
  The second point is that in this issue we have another example and expression of the present Government's attitude to State control. They are attempting to force men who need individuality, and who need to express themselves in an individualistic way, into some kind of stereotyped mould, which just will not serve the nation as the consultants ought to do.
  The third point is that we have an exceedingly serious drain away from the profession. In my constituency there is great concern about appointments which have been made and some which ale due to be made. I do not wish the House to misunderstand what I am about to say. I certainly do not intend to introduce a racialist note into the debate. However, the fact is that because we are losing many of our most able consultants to other countries—and not all to underdeveloped countries; I shall come to that point shortly—we are having to rely on appointing to very important positions men who would not have had such appointments some years ago. The choice, the degree and comprehensiveness of selection, does not obtain as it did some years ago. That reflects on the quality of service and work offered to the whole community.
  This is a very serious and important point. It also has a converse side, which is that the countries of origin of many doctors and consultants who are trained in Britain—countries which would benefit immensely from their skill and dedication—are being deprived of their skilled contribution because of the incentive to stay in this country. We owe the underdevelopment countries the right to develop their health services. We do not help them in that respect by making it almost impossible for our best doctors and consultants to remain and to function in this country.
  There are many other things I should like to say, but most have been stated already and I shall not reiterate them

  1859
  now. However, I again urge the Secretary of State, through the Minister of State, to think again concerning her intransigence and to meet these men as they seek to acquire a just settlement of the dispute.
  I have been assured by the consultants to whom I have spoken that they are deeply embarrassed by the present dispute. I think that they would be the first to admit that they are very poor negotiators. They are not used to this kind of argy-bargy or cut-and-thrust. During their negotiations they feel themselves to be at the mercy of a very expert, very ruthless and certainly a very vitriolic Secretary of State. I have their assurance that these men, who certainly exercise a tremendous degree of dedication to society, would not in any circumstances be prepared to let society down over an issue like pay beds. Although it is a related issue it is one on which those of whom I have spoken would not be prepared to strike. Where principles are concerned, however, particularly those enumerated by my hon. Friend the Member for St. Marylebone (Mr. Baker) it is quite a different matter. It is our hope and prayer that we would not force the hand of these well-intentioned and very able citizens.
  8.56 p.m.
  Mr. Cranley Onslow: I add my congratulations to those which other speakers have already tendered to my hon. Friend the Member for St. Marylebone (Mr. Baker) on his good fortune in the Ballot and the good use he has made of it. We have had a valuable debate. I hope the Minister's contribution will make it yet more valuable. We are dealing with a highly topical and most important matter, and the House could not possibly be accused of having wasted its time in spending an hour or so on it this evening.
  There was a remarkable degree of unanimity in the contributions which were made, with the exception of that by the hon. Member for Ilford, South (Mr. Shaw) whom I am sorry to see has now left us. He will have to read in Hansard what I would have been prepared to say to his face, which is that the only effect of his intervention this evening has been to cast grave doubts on the value of his contributions to the Finance Bill Committee. With that exception, everyone who has
  1860
  taken part in the debate has fixed the attention of the House on the real issues, and I hope briefly to add a little more to what has been said about them.
  As I understand it, the situation now is that talks about talks are restarting tomorrow, if they have not actually restarted today. I hope that the two parties will find a way of getting serious negotiations going again, because this dispute has done no good for the health service, and in certain respects it has already done damage, which will be difficult ever to repair. For instance, there has been—this is unfortunate—an upsurge of ill-feeling between the doctors and some of the ancillary staffs in the way in which some of the latter have reacted, by breaching their own contracts in reaction to the consultants' decision to work to contract. This is bound to leave an unfortunate legacy.
  The pressure created by the action has also served to highlight some of the deficiencies which have for long existed in the health service. I believe that the public have begun to understand how far the service has relied on unpaid overtime from its staff. Not only the doctors but nurses and others have been working long hours without adequate remuneration, and anyone who has been concerned with these matters in the past must accept a share of the responsibility. It would be well to remember the recent statement by the Secretary of State in which she made plain that there is little likelihood of finding a considerable increase in resources to put right some of the deficiencies which we see so clearly. It therefore behoves us to be even more careful about how we tackle the present stresses and strains on the health service. I hope that the Minister will give us evidence of his awareness of that fact.
  In many ways the consultants can be said to have acted in a responsible and restrained way, even though they have been driven to this difficult pass. If the Minister does not think that it is responsible for them to have elected to give priority to emergency cases, to ensure that the emergency cases receive highest priority and treatment, perhaps he will say so. If he thinks that working strictly to contract is irresponsible, when the consultants have been instructed to

  1861
  work as required under contract and for the hours upon which their remuneration is based, let him say so. But if he believes that the action which the consultants have taken is irresponsible and unrestrained, then the chances of the two sides getting together must be smaller than ever.
  I hope that the Minister will be restrained and responsible in his approach to this difficult matter. The talks about talks are I think, based on the presumption, on the consultants' side that if there is evidence of a real change in the situation—if the atmosphere is different, and if the most objectionable proposals are withdrawn, there is every likelihood that their members would be prepared to resume their normal schedules of work. That must surely be the objective to which the Minister is first and foremost dedicated.
  I hope that in the Minister's approach to the talks he is ready to say to the consultants either that their reactions are mistaken, and patiently to persuade them, or to understand their objections and to show flexibility and a willingness to go as far as need be, consistent with what the Minister thinks to be the essential principles at stake, to meet them.
  It may help the Minister and the House if I identify some of the proposals in the paper of 20th December which the consultants seem to find most objectionable. The first, in order of appearance in the paper, was the insistence that the Department's agreement was available only on the basis that the new contract was taken as a whole. It is that statement which is the basis of the accusation, in the leaflet headed "Consultants Care", that it was a "take it or leave it" situation. It may be that there was a certain carelessness or rigidity in the phrasing If so, I hope that the Minister will say so. Other proposals in the paper have aroused strong objection on the side of the BMA and the HCSA. For example, though this may seem a trivial matter, the new standard contract required that a doctor should be in hospital from 9 a.m. to 5 p.m., including meal times. He was not even allowed to go home for lunch. It would seem an unnecessary provocation if that were rigidly insisted upon.
  1862
  There was concern about the effect of the proposals on the differential and about the way in which they would favour the man who opted for option B. There was a stipulation that a consultant who agreed to take a full-time contract would have to undertake to work extra sessions as an indefinite commitment. He would be tying himself to compulsory overtime on a continuing basis. If the Minister thinks that that is justifiable, the House will be interested to have his explanation.
  There are other features upon which I could spend time but I do not want to delay the House unduly. I shall merely refer to three points which are worthy of mention. First, it was stipulated that the consultants who elected to retain their existing contracts would in so doing retain their existing merit awards. As the proposal appears to be drafted there would be no opportunity for them to move to a higher grade of award. In other words, election to remain on the old contract would carry with it the freezing of award levels.
  Second, the provisions on the career supplement relating to earnings from private practice would have had the effect that the doctors most successful in private practice, and, by presumption, the most successful and able in their speciality, would forfeit the career supplement even though the contribution which their skills make to the NHS must be among the most valuable of any.
  Third, for some curious and unexplained reason, the limited session contract for disabled doctors or married women unable to work full time carried with it a stipulation that no private practice would be allowed to anyone taking a contract of that kind.
  In running through the provisions the House may have detected—certainly, in the exchanges which have taken place in the past it has been evident—that this Government, seem to have a phobia about private practice. I very much hope that the Minister, even if he thinks that that is an unrealistic attitude on the part of the consultants and even if he is persuaded that they are entirely wrong in the belief, will take some pains to explain precisely why those who believe that he and his right hon. Friend have a phobia about private practice are, in fact, mistaken.

  1863
  We must accept that on the face of it there is a fairly wide gap between the Minister and the doctors. The solidarity of the doctors, as my hon. Friend the Member for Somerset, North (Mr. Dean) has pointed out, is one remarkable feature of this unhappy situation. But how does it look to the Minister? I hope that he will not mind if, in an attempt to analyse the situation, I refer to a letter which he recently sent to my hon. Friend the Member for Wallasey (Mrs. Chalker). My hon. Friend has kindly let me see a copy of the letter. If the Minister has no objection I shall quote one or two passages. If he objects I shall not do so, as I accept that I have given him no warning.
  Dr. Owen: I have no objection.
  Mr. Onslow: I am grateful to have the Minister's agreement. In his letter he says that he believes
  "that there are many, many misunderstandings about the present consultants' contract that can only be developed in further negotiations. We have never tried to insist on everyone becoming whole-time and if you study the proposals I think you will agree that it represents a broadly fair package of measures'.
  In the next paragraph the Minister sets out the points of dispute as he sees them. The paragraph begins:
  "The points of dispute are that the BMA want the Government to give up the long standing 18 per cent. differential that has existed between the whole-timer and the maximum part-timer. This we are not prepared to do."
  The Minister then lists his reasons. It may be that he will go through them tonight, so I shall not take time to read them to the House. He ends the paragraph by saying that
  "Apart from that 18 per cent. differential, the only way that we would be changing the position of the balance between whole and part-timers would be in the suggestion that the career structure supplements, which were put forward to replace the present distinction award system, would be subject to an offset arrangement whereby you would take account of private practice earnings. This, though controversial, has some positive merit; but the Government has been careful to say that this is not a principle on which it is not prepared to negotiate. We are certainly prepared to discuss the method of payment."
  That seems to be a step forward and, if I may say so, without in any sense being patronising towards the Minister, a step in the right direction. But if the paragraph to which I have referred summarises all
  1864
  the areas in which he sees himself as being in dispute with the consultants, I must tell the hon. Gentleman that, from what I know of the consultants' side, he does not seem to have hoisted in sufficiently the extent to which they see his actions and the statements of his right hon. Friend as presenting an almost vindictive attitude towards private practice. This appears consistently in the proposals that I have mentioned.
  It is encouraging to note that in this letter the Minister says
  "Admittedly the meeting on our proposed contract could and should have indicated that there was a little more flexibility than might appear."
  It is good to have the admission that that is so, because it shows that there is some willingness on the hon. Gentleman's part to say that this is not a "take it or leave it" situation. He seems to be saying that the Government are prepared to sit round the table and talk about this. It seems to imply that one and a half hours was not sufficient time during which to examine the document.
  I am not trying to lead the hon. Gentleman into criticisms, implicit or otherwise, of his right hon. Friend. I am hoping to give him some suggestions as to how he can make the most of the opportunity, which we all want to see developed to the best advantage. At the top of the next page of this letter he comes to the nub of the matter because, with devastating frankness the hon. Gentleman says:
  "The medical profession is traditionally almost impossible to negotiate with."
  The hon. Gentleman should know. I do not know why this is so—whether it is because those in the profession are desperately bad negotiators, which I guess he did not mean, or because they are quite tough negotiators. If that is the case I can tell him that the BMA would be glad to have that testimonial, since it would do much to reconcile some of those in its ranks who feel that it has not been sufficiently tough. The hon. Gentleman may think that the profession is not skilled in this business of negotiation—that it is not a professional negotiator. If that is what he means, perhaps it is fair enough.
  I do not believe that doctors need to be trained—so far—in the art of negotiation before they are let loose, if that is

  1865
  the correct phrase, upon the public. But if the Minister recognises that the profession is almost impossible to negotiate with, it is most inept that his right hon. Friend should have been so insensitive as to provoke and exacerbate the situation by her attitude towards pay beds in particular and private medicine in general.
  After all, this is a contract which has its roots in 1948. It is based on the presumption that people want to work a five-and-a-half day week. The 11-session contract presupposes Saturday morning work. I do not believe that that is generally known. If it is, I do not believe that it is generally supported in current social conditions. On this, at least, if people understood the position, they would have great sympathy with the doctors and all those who have to work for them on a Saturday morning, under a contract long since out of date. That makes it all the more unfortunate that the hon. Gentleman and his right hon. Friend should say that if the doctors do not like the new contract they can always go back to the existing one. That is adding insult to injury.
  I realise that it is difficult to be brief when dealing with this subject, but there is one further argument that I want to put in some detail. Why does it matter to the general public that the case of the doctors should receive the most sympathetic consideration possible? Naturally it matters to the doctors. We have their testimony, and we can see by their actions and hear by their words that they care deeply. But why does it matter so much to us—the general public? There are some important reasons which go beyond that connected with our immediate reaction, which conjures up the possibility of emigration. That is an obvious danger. My hon. Friend the Member for St. Marylebone (Mr. Baker) mentioned the existence of overseas recruiting teams. Perhaps the most instinctive reaction of anyone who considers the situation is that we shall be left with no doctors. But if we were left with doctors who had no independence, what would be the consequences?
  First, we should lose the check which private practice provides on the performance of the National Health Service. I do not know whether the Minister, when he was in practice in the NHS, was ever asked
  1866
  by a patient for a second opinion. I suspect that a doctor in the NHS who is asked by a patient to obtain a second opinion is unlikely to be wholly sympathetic, on the grounds that if he had thought a second opinion necessary he would already have arranged for it, so the patient does not have freedom of choice in that situation, and if there is no private practice the patient cannot go outside to seek a second opinion on his or her own initiative.
  I speak here on a personal point. If private practice is stifled, the spur to progress which it provides will be lost to the NHS, and a great many people will suffer thereby. One of these days, when I get the time, I shall need to go to a doctor and ask him to be kind enough to give me a new hip joint. The fact that I am able to do that inside or outside the NHS stems from the fact that one brilliant surgeon, working in the private sector as well as in the NHS, drawing upon private patients in larger number than could ever have been referred to him within his own hospital area, was able to develop a technique which has been applied more widely and brought relief to large numbers of people who would otherwise have ended their days sitting in a wheelchair.
  That kind of spur to medical advance would not survive without the ability of people constantly to demand better medicine and to urge doctors to raise their standards and their sights, because they would be at the mercy of medical bureaucrats and tied down by the financial limitations of the hospital administrators.
  Finally, and perhaps most important, we need to recognise that the hospital service sets out to cure but not to care. In certain situations the NHS, in effect, says to a patient, "We can do no more for you". I have had personal knowledge of this in recent months. Given that that is so, and given that the resources to alter that position are not there, it is essential that private practice and private medicine should be available to take over where the NHS leaves off. People who want to provide for themselves from their own resources, or to provide for others by means of charity from their own resources, will then know that the medical skills of the consultants who are essential in this area will be there, and they will

  1867
  be confident of getting the kind of care and attention to which they are entitled.
  It may be difficult for Labour Party conferences to understand that. It may be difficult for Socialists to accept that there are, inevitably, inadequacies in the NHS, and that when they occur it is right for people themselves to seek to meet the need and for the doctors to be there to help them to do so.
  I hope that the Minister will not misunderstand me when I say that the doctors feel themselves to be left out of the social contract and to be part of an important element in our society which is not being given its due.
  The negotiations, to which the Minister is, I hope, honestly committed and in which I hope he will work towards success, turn as much on his understanding of that point as on the fact that he needs consent if he is to have a National Health Service worthy of the name. He needs the consent of the consultants. I hope that no personal dogma or political prejudice will stop him seeking that consent. I do not doubt that the consultants are prepared to respond as far as they can.
  9.20 p.m.
  The Minister of State, Department of Health and Social Security (Dr. David Owen): This has been an interesting debate. I do not wish to go too much into the philosophy and principles of private practice because we shall probably wish to spend most of our time in this debate concentrating on the consultants.
  In response to the remarks made by the hon. Member for Woking (Mr. Onslow), I should like to say that my political philosophy, and, indeed, the policy of my party, aims at widening the area of consent and, indeed, extending it. Indeed, one of the papers which were put to the working party about the philosophy in a democratic State over private practice said that it should be clearly demonstrated that the adverse effects to society of failing to restrict individual freedom are such as to outweigh decisively the disadvantages of restrictions, and that there is a predisposition in favour of individual freedom. That document was presented to the working party before the General Election and subsequently published.
  If we go on to question the problem of why the controversy over private medicine
  1868
  exists, we are bound to say that the experience in the National Health Service is that the general public have begun to recognise that no system of health care will ever be able to provide wholly adequate resources. Some degree of rationing is now seen to be inevitable and this realisation, instead of damping down the controversy over private medicine has tended to emphasise it. People realise that there will always be unsatisfied demand, so they question whether rationing of scarce skills can be justified other than on the basis of need.
  If society decides, as it did in 1946, that its national pattern of health care should be organised on the basis of need, inevitably it will question the justification of a health care system organised on the basis of ability to pay. There is inevitably additional controversy if an alternative minority health care system based on ability to pay not only exists but operates within, and is tied to, the public system, organised on the basis of need. That is why the Government have come to a policy of separation. That is why there is a controversy on which there is more than one view, and I ask the House to recognise that this is a controversy which now exists within the health service. Any Government would face the prospect of dealing with it.
  There are two other points I wish to make at the outset. I believe that it is possible to have a second opinion within the National Health Service. Many full-timers encourage second opinions. It may have to be decided whether a second, third or fourth opinion is required, and, in my experience, many patients are referred to other centres of excellence for a second opinion.
  Mr. Onslow: I was not casting doubt on the willingness of doctors spontaneously to refer for second opinions. I was seeking to ask what would happen if the patient sought a second opinion and the sort of response he would be likely to get.
  Dr. Owen: My experience is that most general practitioners, if asked for a second opinion, are only too happy for that to be done and agree that degree of choice is an important part of the health service.
  In my reply, I am taking what I am sure is the basic view of the House—a wish to see a settlement of the dispute.

  1869
  It is sad for me, as a doctor, to see a situation where, since 2nd January, a section of the medical profession has been taking industrial action. But I must say to the hon. Member for Woking that I hope that it is not the considered view of the Opposition that the consultants have acted with responsibility and restraint. I take a different view, quoted from The Times of 3rd January. It said of the industrial action:
  "As an exercise in industrial pressure, the campaign has a fair chance of success if a large number of doctors are prepared to persist in it. But it does not deserve to succeed, not at least if its targets are those proclaimed by the leaders of the British Medical Association and the Hospital Consultants and Specialists Association."
  It went on:
  "… the proposals are in truth not out of reach of what most doctors would accept. With a softening of the (broadly desirable) service supplement proposals, a modification of the rule about taking meals on the hospital premises, and with less passion in the air, the plan might appear in a very different light."
  At least we have the right to expect that the Opposition would not seemingly almost support industrial action which can, and has in some cases, damaged patient care.
  It is in an attempt to try to resolve the dispute that we must approach the situation. Hon. Members have mentioned private practice as being an element in it. I quote again The Times. In a leader on the grievances of the consultants, it said:
  "It is possible to hold, without inconsistency, that the proposals are within reach of reconcilement with the interests of the profession and the health service, while also believing that the present relationship between private and public medicine is broadly beneficial to both sides."
  It is against the background of such quotations that we should look at the issue more dispassionately than has been done so far in the debate. It is striking that, throughout the dispute, with the objective case which needs to be argued and on which the medical profession has taken precipitate industrial action, it has not been able to persuade many people outside the profession of the total validity of its claim and of the need to take industrial action. I have quoted from The Times. I could have quoted also from The Guardian, from the Observer, from the Financial Times and from the Economist. Of course, opposing views
  1870
  have been expressed—the Daily Telegraph and the Daily Mail would be two examples. [HON. MEMBERS: "The Sun."] Many of the Sun's comments have tried to personalise the issue. I say, therefore, both to doctors and to hon. Members, that if they consider the difficulties with which my right hon. Friend has been faced since she took office last March they will realise that they owe a great debt to her for what she has done for the National Health Service.
  Ever since we took office last year, we have faced unprecedented problems of industrial relations. We faced difficulties with the nurses, the ancillary workers, the technicians, the works engineers and the hospital pharmacists. My right hon. Friend inherited a whole legacy of problems, mainly of pay. Many of these have now been resolved, I am thankful to say, and many are in process of being resolved. I believe that the dispute with the consultants is equally capable of resolution. Unfortunately, it is a very complex issue, but I do not want to go too much into the background and the legacy we had.
  Completely absent, so far, from the comments of the Opposition is any indication of whether they support the differential pay which has been given to the whole-timers ever since 1948. In their comments, the right hon. and learned Member for Surrey, East (Sir G. Howe) and the hon. Member for Woking have concentrated on the career structure supplements. It would be helpful to know, in this dispute, whether they support the Government in their belief that it is right to maintain the two-elevenths differential, which has broadly stayed in existence since 1948. Do the Opposition agree that the doctors, by putting this factor as one of the major planks in their negotiations, have been wrong to try to change the differential? If the doctors would at least concede that—it is hard to see a single major concession by the profession's negotiators to date—the chances would be greatly increased of finding a resolution to the problem. There is a peculiar and particular reason why this should be done. This dispute has gone on for some time. In July 1972 the BMA submitted to the then Government its proposals for a new contract. In its proposals the association made clear that all consultants should be

  1871
  permitted to engage in private practice consistent with their contractual obligations—that is, they wanted the differential and the ban on whole-timers engaging in private practice to be removed.
  Discussions proceeded between the profession and the Department from July 1972 until October 1973. They made little headway. No conclusions were reached. In October 1973 the profession indicated that the contract claim details I mentioned should be laid on one side and that it wished to submit a claim which took full advantage of the then existing Pay Code.
  In January 1974 the profession asked the then Secretary of State for the establishment of a working party to consider consultants' contracts. The profession was told that the request would be dealt with by the incoming Government.
  In early March my right hon. Friend the Secretary of State announced in a speech on the Address in reply to the Gracious Speech that she had agreed to meet the request of the profession to set up a joint working party, which was to be chaired by myself.
  The request for a major change came from the profession. We have constantly reiterated that it is not the Government who are seeking to impose a new contract on the profession. Quite the contrary, it is the profession that came to the Government. It is the profession that asked for a closed contract. I believe that some of the requests for a closed contract were made without full recognition of what this sort of contract involves.
  Mr. Onslow: Will the hon. Gentleman give way?
  Dr. Owen: I am anxious to know whether the hon. Gentleman will tell me that he supports the two-elevenths differential.
  Mr. Onslow: I was hoping that the hon. Gentleman would give me an opportunity to reply on that point. It is clear that there must be a distinction between those who work full-time and those who work part-time.
  What seems to me to be most extraordinary—it is understandable that the consultants should find it extraordinary, because it is a new element injected into the situation since they first came forward
  1872
  and asked for a review of the contract—is this obsession with separation. That is a deliberate act of policy to which the. Minister of State has committed himself tonight. If only he would show some signs of being prepared to accept reality and would moderate his dogmatic views, it might be possible for a workable solution to be found to the differences which there must be between a full-timer and a part-timer.
  Dr. Owen: The hon. Gentleman has intervened to say precisely nothing, so the House is no closer to knowing whether he and his right hon. and learned Friend support the existence of the differential, which they supported all the time they were in Government between 1948 and 1974. The question is whether they support it now. It would help the resolution of this dispute if they were to make their views quite clear on this issue. To introduce the question of separation of private practice into what is a discussion about the contract seems to me to have evaded the issue.
  Mr. Onslow rose—
  Dr. Owen: The hon. Gentleman spoke for long enough but did not introduce much light into the discussion.
  The question I was dealing with was the question of what are the implications of a closed contract. This is a serious issue. Broadly speaking, the professions have adopted the attitude that there are no fixed hours for their professions. They work long hours. They get higher pay than most people on fixed closed contracts perhaps. That is part of professional status.
  With that has gone considerable freedom to choose their hours. The Times had this to say—
  "The first is the humiliating proposal that men of distinction should have in effect to clock in and out of hospital. This requirement arises, however, almost inevitably from the professions' own insistence on a 'closed' contract with extra pay for work outside the sessional hours."
  Whatever we say or do about the hours of nine to five, the proposals had actually said that "normally from nine till five"—but I am perfectly willing to concede that there should be greater flexibility about this; it was never meant to be a rigid implication—was to be one aspect of the closed contract. [Interruption.] No,

  1873
  it was not. Everyone knows that there are some times, quite properly, when it is of considerable advantage to have sessions out of closed hours. Paediatricians and venerealogists work very different hours. We must try to give a broad outline. Basically, if one goes for additional sessions—for payment out of hours, for emergency payments—some degree of definition becomes absolutely inevitable and implicit in the request for a closed contract. Many of those in the profession had not recognised the inevitability of that—in effect—restriction in order to gain the other advantages which they wanted of a more work-load sensitive contract.
  The question of the definition of the session needs further discussion. It was our intention not to specify where a consultant has lunch but simply to get across the point, which should not be too controversial, that under a contract of the type which the profession negotiated there must be a clearer definition than there is at present if the system for paying extra remuneration is to be fair.
  I shall not deal with the question of the differential. A number of comments have been made about the proposed career structure supplements. These have been warmly welcomed by many people who find the existing distinction award system in need of change. The profession has many views about this system. Our proposals are an attempt to spread the money for the distinction award system more evenly through the country and to be a bit more sensitive to some of the specialties which perhaps do not have any private practice. This is an important element, when we consider why the Spens Committee first introduced the whole concept of distinction awards. But our proposals are in many ways a novel concept, and that is why discussion of all the details and methods of application will be needed. They have not been discussed as fully as they should have been.
  The principle of the service supplement is that it should provide financial recognition for special efforts to maintain or develop National Health Service services, particularly in situations which are specially burdensome or difficult. As the Secretary of State said in her statement in the House, it should be possible to negotiate criteria and methods of payment
  1874
  for these supplements which are both right for the health service and fair to consultants.
  The question of payment for on-call has been raised. This is extremely difficult. When it was first discussed in the joint working party, we argued and hoped that payment for emergency visits on a fee basis, which is a new provision, would recognise, to some extent, the unsocial hours responsibility of consultants without payment for on-call as such. We anticipated that the visit fee might be priced accordingly.
  We are prepared to consider any proposals made for the remuneration of on-call as such, but it is fair to say that there are difficulties of definition in a system which ensures that the cost of such remuneration is not out of proportion to the cost of consultants' remuneration generally. The hon. Member for St. Marylebone (Mr. Baker), who has considerable interest and concern in this matter, knows from his experience with the Civil Service how repercussive on-call arrangements might well be. We cannot look at any contract, which will be for the future—many people will decide to stay on their existing contract—without taking into account the implications for many other people in other jobs.
  It is difficult to argue whether these are points of detail or of principle, but it would be wrong to mislead the House by saying that there are not considerable practical difficulties about payment for on-call.
  Other points were raised concerning the extra session and the overload situation. I sometimes wonder whether hon. Members understand the peculiar way under which the whole-time and maximum parttime contracts have come about. The evidence suggests that the hours worked by maximum part-timers are similar to those worked by whole-timers. In any event that is expected, since under the terms of the agreement reached between the then Minister of Health and the profession, candidates are not allowed to specify in advance of appointment whether they would prefer to be whole-timers or maximum part-timers. Under the terms of the agreement, where an employing authority decides that the needs of the hospital service demand a whole-time appointment, the competition

  1875
  should be thrown open to all applicants who are prepared to give substantially the whole of their time to the post, whether they prefer a whole-time or a maximum part-time contract. In such a case the successful candidate should not be asked to state his preference until after he had been selected for appointment.
  The commitment between a whole-timer and a maximum part-timer is important to the employing authority—I am sure the profession would wish to keep this in any new contract—if the decision whether to go whole-time or maximum part-time is not made until after the appointment has been decided.
  I have dealt with some of the detailed proposals. There is room for considerable negotiation on many of those aspects. However, I wish to draw attention to the extent to which the Government have already compromised their proposals. If we compare the proposals put to the working party in October, which were then published, because of the heated reaction of the profession and the proposals published late in December it is clear that the Government considerably modified their proposals to try to understand the profession's viewpoint. In the October proposals the career structure supplements were not going across the board and were confined to whole-timers. When the case was put that there were many part-timers with small private practice earnings who would feel this to be very discriminatory, there then arose the suggestion of the offset which has caused a great deal of criticism, although there is some positive merit in the system and in retaining the money within the Health Service. This was an attempt to meet genuine objections made by the profession.
  The working party worked for the last few weeks almost under the constant threat of sanctions from a profession which had started to ask its people to sign on with employment agencies, which seemed to want a confrontation, and which pushed the Government into producing proposals in a rapid space of time.
  I say to the profession that now is the time to think carefully before continuing with industrial action. It should come back to the negotiating table,
  1876
  remove the sanctions and enable us to agree to a pricing of the existing contract for implementation as soon after 1st April as is humanly possible, which is what the general practitioners and the junior hospital doctors want. We can hopefully negotiate a new contract which will meet many of their demands and make the modifications and changes necessary to the proposals put to them on 20th December.
  The Government have exceptionally agreed to price the proposed new contract before the agreement is made, which I think allows the profession to see both the new and the old contracts. The Government is not imposing a contract.
  Mr. Baker: The hon. Gentleman said that there is considerably more give and take in the Government's attitude than there was in December. This is not a debating point. He has asked the medical profession to return to the negotiating table. He has indicated some of the areas of important details where there can be further discussions. Will the hon. Gentleman undertake, on behalf of the Government, to return to the negotiating table and meet the request I made earlier, namely, that the Government should be prepared to negotiate on the underlying principles of this contract? It is not just a matter of details. There are important principles in this contract, of which the Minister is aware.
  Dr. Owen: The Government made clear their view about the existing differential between the whole-timers and the part-timers. That is a principle to which they attach considerable importance.
  The other aspects where principle and detail merge need to be discussed in negotiations. My plea to the profession is to take off the call for industrial action and to negotiate in an atmosphere which is conducive to settlement. We are discussing neither pay nor an existing contract. This is a strange industrial dispute, not about pay or an existing contract—because there is an existing contract—but about a future contract. The negotiators would serve the interests of their members now if they called off sanctions and negotiated a new contract to be priced by the review body before the profession needs to make a final decision whether to accept it.

  SCOTLAND (GRANT-AIDED SCHOOLS)
  9.45 p.m.
  Lord James Douglas-Hamilton: I am grateful for the opportunity to speak on the Consolidated Fund Bill and to draw attention to the freeze as it relates to the grant-aided schools. I congratulate warmly my hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind) and my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) for having made the Government aware of the present serious predicament of these schools in Scotland.
  If the freeze is continued at the same level, it is possible that 25 per cent. of the children at these schools will be withdrawn from them because their parents are unable to keep them there. If that happens, there will be no alternative form of education available for them, especially in Edinburgh. There are approximately 7,000 children at these schools in Edinburgh, and already Edinburgh's comprehensive schools are packed to capacity. If no increased grant is made to the grant-aided schools it is likely that many children will not be able to have a reasonable education in Edinburgh.
  Last week I met some parents who were seriously considering, if the grants were not increased, withdrawing their children from school and sending them to their grandparents in Darlington in Yorkshire. However great a regard I may have for Yorkshire and the comprehensive system of education there, it is a tragic situation when parents in Edinburgh are so afraid about their children's future that they consider sending them to the State system of education in England.
  There are at present 25 grant-aided schools in Scotland, and 21,000 pupils go to them, of whom about 7,000 are in Edinburgh. Until 10 years ago the grants covered 60 per cent. of the running costs of these schools. The proportion has been gradually reduced over the years and is now in the region of 33⅓ per cent., the remaining two thirds of the running costs being met from fees. The result of the 1973 freeze and the recent implementation of the Houghton Report means that the grant covers only 25 per cent. of running costs, with the result that fees will be increased enormously, by 50 per
  1878
  cent. and in some cases by as much as 100 per cent. In the case of the merchant company schools—George Watson's Daniel Stewarts and Melville College and Mary Erskine—there will be a 100 per cent. increase in fees.
  We feel that Scottish pupils in grant-aided schools are being treated most unfairly and far more unjustly than pupils in direct-grant schools in England and Wales. In England and Wales, in a freeze situation, 72 per cent. of pupils benefit either from rate support grant or from a national free remission scheme wholly financed by the Exchequer. This means that 72 per cent. of pupils in direct-grant schools are protected by the Exchequer against the full impact of rising fees and costs.
  When the Scottish Education Department grant is frozen, no fresh Government aid is made available, directly or indirectly, to the pupils themselves. In all, 98 per cent. of the pupils at grant-aided schools in Scotland are affected, which means that only 2 per cent. of pupils at grant-aided schools enjoy benefit from foundations.
  This is a critical situation. The example which I have given of the parents who are thinking of sending their children to Yorkshire is particularly tragic. But they are only one case, and in Edinburgh there are several thousand families in the same situation.
  The parents whom I met last week made it clear to me that if the grants covered only 25 per cent. of running costs, with the effect of the present rate of inflation, they would be unable to keep their children at their respective schools. Their son is at George Watson's. Their daughter is at Mary Erskine. While they can afford fees of £270 a year, they cannot afford £540, so one child will have to leave; for the son this would be shortly before taking his O-level examinations.
  Whatever the Government's view of the justification or otherwise of grant-aided schools, it is grossly unfair that children now at these schools should have their future careers threatened by an insensitive Government. A refusal to increase the grant will mean an inevitable massive increase in fees, which has come as a huge financial shock to parents. Many parents send their children to these schools

  1879
  on the basis of a substantial grant. Now, a large number of families will not be able to afford the fees.
  I have mentioned to Ministers the disruption in the lives of many children which would result. I hope that the Government will consider the interests of the thousands of children in Edinburgh and elsewhere in Scotland and take immediate action to increase the grant. First, this might be cheaper to the Exchequer than the additional burden of far more pupils in the comprehensive schools. Second, the corporation schools in Edinburgh would in any case be quite unable to cope with the numbers involved. Third, the grant-aided schools in Edinburgh and elsewhere in Scotland have a high reputation within the capital, within Scotland and elsewhere in Britain. They have proved themselves excellent, and there can be no advantage in refusing to take this necessary action, thereby causing a serious educational crisis when it could so easily be averted.
  Fourth, a refusal to increase the grant will be unsettling for the children, worrying for the parents and depressing for the teachers who are trying to give them the help they deserve. I beg the Government to remember that irreparable damage can be done to children's future lives by forcing parents to take them from school at a crucial moment. Since it is families with relatively modest means who will be suffering—the more wealthy can afford the increased fees—I ask the Government to think again and to act not through dogmatism or ideology but from a sense of humanity.
  9.53 p.m.
  Mr. Malcolm Rifkind: Of all the shabbier aspects of the Government's educational policy, there can be nothing more deplorable than the way in which they have treated the grant-aided schools in Scotland and their sister schools—the direct grant schools—in England and Wales. Over the last few months, having stood by while the local authority education system descended into a shambles throughout Scotland, they have now moved from a negative position and are positively wrecking some of Scotland's finest schools without any care for the hardship they cause and the disruption which is involved for parents, children and teachers.
  1880
  I oppose these measures for two reasons. First, I oppose the Government's longterm objective of phasing these schools out. Second, and equally important, irrespective of that objective I utterly condemn the way in which they are treating the schools at present. On the general question, let us consider the Government's objection to the existence of these schools. It is undisputed that they have provided first-class education for many generations for thousands of Scottish schoolchildren from all backgrounds.
  So what, then, is the Government's objection? First, it is sometimes suggested that it is wrong in principle that the State, the Exchequer or the public, should give grants towards schools which are not themselves State schools but which are at least partly independent. Let us examine that suggestion, because it is clearly an important point of principle.
  The first thing I suggest to the House is that it is in no way unique for the Government, the State or the taxpayer to provide financial help to institutions or bodies which are not fully controlled by the State. The very existence of regional development and the regional employment premium shows that. That goes not to nationalised industries but to independent firms acting privately, because it is clearly in the public interest that they should receive such help—likewise through virtually every aspect of Government policy.
  Equally, there can be no moral objection to the mere fact that schools which are partially independent, and which accept Government standards throughout every aspect of their structure, should receive financial help. These schools are not independent, in the public school sense. They have to conform to national regulations on the payment of teachers. They may not employ any teachers they wish; they may employ only recognised teachers, in the same way as local authority schools. They have to conform to standards of educational examinations. Throughout the whole administration they come under considerable Government control. Therefore, it is not unreasonable that they should receive a financial contribution.
  I accept that if it could be argued that it was somehow against the financial interest of the taxpayer that these grants should be made, there might be a good

  1881
  reason for withdrawing the grants altogether from these schools. But let us examine what the situation is and whether it is in the interests of taxpayers as a whole that these grants should be withdrawn.
  I refer the Minister and the House to the figures which have been produced on this matter. I refer to the latest figures in the Scottish Educational Statistics for 1971–72. These figures show that the cost per child at a State primary school is £130, but for a child in a grant-aided primary school it is £53·75. If we go to the secondary level, the figures are just as revealing. A child in a State secondary school costs £282. The same child, if attending a grant-aided school, costs the taxpayer £116.
  Let us work out what that means in total. It means that if grants were to be withdrawn from all the Scottish grant-aided schools the extra burden on the taxpayer would be an annual sum of at least £4½ million. So we can say, quite specifically and without fear of contradiction, that far from the grant-aided schools being a burden on the public they actually save the public a tax burden of £4½ million at today's prices. It would be interesting to find out whether the Government disagree with those figures, which have been culled from their own statistics.
  It is equally possible to argue, "Despite that, the children at these schools get a better deal and have more money spent on their education." Let us examine the figures on this matter, which are also available. We find that if we add to the grant which the schools receive the income they receive from fees and other sources, the total amount spent on children at grant-aided schools amounts, in the case of a primary school, to £115·85, as compared with the £130 spent on a child at a State primary school. In the secondary schools the figures are £251 as compared with £282, including fees and all other forms of revenue which these schools obtain.
  Therefore, at the end of the day we find that not only do these schools save the public £4½ million but that at these schools much less is spent, per child, than is spent in the State system.
  If, as is argued—I would not for a moment wish to deny this—these schools
  1882
  have managed to produce a first-class education, the fact remains, from the Government's statistics, that they have done that while spending less per child than does the State system. If they are to be condemned for that, it is a very remarkable example of the Government's lack of concern and insensitivity to the problems of education in Scotland and throughout the country.
  If the financial objection cannot be maintained there is always, of course, the suggestion that, somehow, these schools are exclusive and must be condemned for that—that they are restricted to a certain social sector of the population.
  Let us examine the facts. I am particularly concerned with the schools in Edinburgh. I am sure that the Minister is aware that schools such as the George Heriot School or the Merchant Company schools and the other grant-aided schools draw their children from practically every walk of life. Like every other Edinburgh Member I have received many representations not just from parents who live in grand houses but from those who live in council houses, from active trade unionists and such people who have allocated part of their income to sending their children to these schools because they believe they provide a first-class education.
  I do not believe that these schools are in any way socially exclusive. Let us for the purposes of the debate, however, assume that they are, and let us examine the effect of Government policy. The Government have stated that their long-term objectives for grant-aided schools are to force them either to go into the State system or to become completely independent. Clearly, one or two of those schools might opt to be merged into the local authority system. It is equally obvious that a large number of them will move, however reluctantly, towards complete independence. The result of that will clearly be a necessary and substantial increase in fees, and the long-term result will be the one that the Government wish to avoid. The schools will become socially exclusive. Without the grant they will have to charge higher fees. If that is the Government's objective it demonstrates their lack of sensitivity and their lack of any appreciation of the educational needs of Scotland.

  1883
  The reasons that the Government have put forward in the past do not, therefore, bear close examination. The Scotsman said this morning that these schools deserved to continue to exist in their present form because they had been proved to be good schools. It is vital that we maintain some variety in our education system. It would be wrong for education to become a State monopoly so that, ultimately, it would be forbidden for a parent to have his child educated other than in the way the State determines.
  We know that there are fashions in education. Just after the war the grammer school was seen to be the great liberator for working-class children. That is now unfashionable, and the current craze is for the comprehensive system. It would be a pity if, when this system becomes unfashionable—as it will sooner or later—there is no alternative in our educational system. Let us assume that the Government insist upon carrying out their long-term policy of phasing out these schools. The Government will stand to be condemned for the way they have treated the present situation.
  Even compared with the attitude of the Secretary of State for Education and Science, who is responsible for England and Wales, the attitude of the Scottish Office has been particularly deplorable. Unlike their English counterparts, Scottish Ministers have refused to give any timetable to the House, the parents, or the local authorities, who are equally involved in the future of these schools. I shall be interested to hear the Minister explain why his English counterpart has been able to state a timetable for Government policy while the Scottish Minister has manifestly refused to do so and has evaded answering questions when they are put.
  We deserve to know what the position is. No only the schools and the parents are in difficulties; if the schools are to be phased out the local authorities must be able to plan ahead and, so far, they have no timetable or indication what they must plan for—the type of influx they can expect and when it will arrive.
  On the immediate problem of freezing the grant the Government have acted with an alarming and incredible lack of concern for the feelings of parents and children involved. No one can suggest
  1884
  that the parents are responsible for the rate of inflation or for the Houghton recommendations, which recommended large increases for the teaching profession. Every grant-aided school had to make these payments to the teachers, and it was quite happy to do so. The payments were backdated to March.
  On what basis do the Government refuse not to increase the percentage of grant but to maintain the grant at the level at which it has always been—to increase it in actual money terms but to maintain it in real terms?
  The Government know perfectly well that their long-term objectives can be achieved equally well without punishing parents and their children. We have heard from my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) that considerable hardship is being created for many parents and children. I have letters from one parent with five children at Merchant Company schools, and numerous letters from those with one or two children who cannot afford to pay. It is not only those people who will suffer. The local authorities are concerned about the influx they can expect.
  It is not just a question of children now at those schools being withdrawn. There is the equally dangerous problem that children who might have been expected to begin next session will not do so, because their parents, seeing the sort of fees they will be expected to pay, will change their minds and send the children into the local authority system. They are free to do so.
  The local authorities know that it is their duty to accept those children, but they do not have the means. If only a quarter of the children were withdrawn in Edinburgh it would mean a burden of more than 1,500 children. In my constituency, which has George Watson's school, the two local authority schools are grossly overcrowded. They cannot take the present influx, never mind the new influx. But the Government seem determined, for ideological reasons, to ignore the effects of their actions.
  I hope that the Government and those who support them will not underestimate the strength of feeling not just in Edinburgh but throughout Scotland—not just among the parents of children presently

  1885
  at the schools, not just among parents who themselves went to the schools, and not just among people who have a direct interest in them. Many people who have never been to them and have no direct concern with them believe strongly that they have made a valuable contribution to Scottish education, and that they could continue to make a magnificent contribution if they were allowed to do so.
  The Government must realise that this is not a policy that they will be able to implement by stealth. They will not be able to get the local authorities to do
  1886
  their dirty work for them. I hope that they will not expect that the parents and the public as a whole will stand by and watch fine schools destroyed, with no concern for the effect on the schools or the general local authority structure.
  If the Government are determined to go ahead not just with their long-term policy but with their thoughtless short-term application of it, they will have a long, bitter struggle, which will not be in their interests, or anybody's interests. I hope that they will carefully consider not only the feelings but the true interests of all those who believe in Scottish education.
  10.8 p.m.
  Mrs. Margaret Bain: I welcome this opportunity to speak about grant-aided schools in Scotland. There is no doubt that the matter is becoming the dominant issue in Scotland. Last Session it was the teachers' salaries dispute, which has created a substantial part of the dispute of this Session.
  The Scottish National Party has a different attitude toward the problem than that of the two hon. Members who have just spoken. We are totally committed to the comprehensive ideal of education, because we believe in equality of opportunity. It is an ancient Scottish tradition to believe in that, and it is something that we wish to see continued.
  I agree with the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) that there are reasons why parents have been opting out of the State system. I am sure that the Under-Secretary is very much aware of them. We need only to look at the statistics of designations for schools in Scotland, the number of mobile classrooms, which have been increasing almost day by day, and the fact that many children in Scotland are on part-time education.
  When we look at the State system, we can understand what is behind the parents' anxieties. It is a terrifying situation for many people in Scotland. We would like to see a phasing-out take place over five years. There have been arguments about the time that should be involved but we prefer five years. It is the shortest possible period which would give the State system the opportunity to readjust, expand and provide the facilities and resources which the parents concerned are looking for in terms of their children's education. Five years will also give the parents the guarantee that there will not be the disruption of education that they fear, since children currently in grant-aided schools could finish their course; and there should be no further intake of pupils into the grant-aided schools. Five years seems a logical period and I ask the Minister in the Scottish Office who is responsible for education to consider that period.
  I should also like to know whether the Minister, like myself, is committed to the ideal of comprehensive education. I am
  1888
  sure that he is. The Labour Government should be considering the future of the ultimate bastion of privilege in educational terms, namely, the so-called public system of education. That is the system that we in Scotland would call the private system.
  Mr. T. G. D. Galbraith: Why not call it the independent system?
  Mrs. Bain: It is a system that must go eventually in order to give equality of opportunity to all.
  10.12 p.m.
  Mr. Hector Monro: I am glad to have the opportunity to participate in this debate. My hon. Friends the Members for Edinburgh, West (Lord James Douglas-Hamilton) and Edinburgh, Pentlands (Mr. Rifkind) have highlighted the most important situation that is developing rapidly in Edinburgh in particular and throughout many areas of Scotland in general. My hon. Friends have explained the statistics to the House clearly and accurately. I do not propose to go over that ground again, save to remind the Minister that the Government have forced the grant-aided schools into imposing swingeing increases in fees, of the order of 100 per cent. That means an increase of about £300 per annum. For many parents that is an impossible increase.
  We want to know what alternative the Minister considers is available to the parents concerned. As my hon. Friends have indicated, there is nowhere else for their children to go. For many children this situation has developed at a critical time in their educational lives, when examinations are imminent. When I was the Minister concerned—that was my position until 12 months ago—I not infrequently had representations from Edinburgh Corporation and received deputations from the corporation's education committee. It was rammed home to the Government that there was a desperate shortage of accommodation. The Government of the day were asked to increase the building programme by X hundreds of thousands of pounds because of the acute shortage. Yet here the Government of 1975 are making it inevitable that 1,500 or 2,000 additional pupils will have to be taken into the State sector.

  1889
  The Minister must explain tonight where the places will be and where the money and resources are to come from to provide the places. From 1970 onwards the Conservative Government gave a percentage increase of grant to the grant-aided schools each year. They updated the grant that had been frozen by the Labour Government during 1964–70.
  It is so wrong that whenever a Labour Government are in power they should seek to impose their will on education instead of leaving the matter to those most involved. We made it clear in our election manifesto in October that we would continue wholeheartedly to support the grant-aided schools and to increase the percentage grant in line with the rapid rise in costs. Indeed, on 4th October, I published a detailed plan in an educational journal. We made it clear that we would reopen the possibility of increasing the number of grant-aided schools and make further provision for assisting the parents having difficulty in meeting the fees.
  There was a working party looking into all these matters with the grant-aided schools. What progress is it making? Or has it been snuffed out? In the EIS Journal of October the Minister made absolutely clear where his party stood. I cannot prevent a wry smile at the Scottish National Party. There was no mention of grant-aided schools in its manifesto. Not a squeak. It seems to have a different policy for every constituency. The hon. Member for Dunbartonshire, East (Mrs. Bain) said that her party would carry out its policy in five years. In its manifesto expenditure on education is doubled, to £900 million, and takes 10 per cent. of the GNP. I doubt whether the resources of this country could stand that.
  Mrs. Bain: The hon. Gentleman should be aware that the Scottish National Party has had a long-standing policy to the effect that direct-grant and independent schools will be phased out in an independent Scotland. Does the hon. Gentleman not agree that the basic philosophy behind the idea of spending 10 per cent. of GNP on education is a good one? It would eradicate problems in the State system and would give us the oppor-
  1890
  tunity to build up a good system with an element of choice within it, which was not based on ability to pay.
  Mr. Monro: It is interesting to have a policy that is not written down. Then it can mean all things to all people. If the hon. Lady thinks that this country can spend 10 per cent. of its GNP she must tell us what other expenditure will be cut. It is no good saying that defence expenditure must be cut, because that is vital.
  I remind the Minister that we are talking about 1·9 per cent. of the children in our schools, and a cost of £2·2 million. These figures should not be ignored just because they are thought to be insignificant. What will be done about specialist schools, such as St. Mary's Cathedral Choir School? There is no other school in Scotland that can provide extremely high-quality musical education for particularly gifted children. The Minister ought to know that the Department has been trying to find ways and means of extending this type of education with courses supported by Yehudi Menuhin and many other important people in the musical world. Does the Minister intend to phase out the grants to such a unique school?
  What about the Morrison Academy at Crieff, or even the Robert Gordon School in Aberdeen—part of which the Minister represents? Why should he attack the Merchant Company schools, which boast exceptional administration and an extremely high standard of education? We can give particular reasons why these schools should be supported in their areas as alternatives to the State system.
  All of these schools have had to bear the increase in the cost of living, which the Government have now admitted to be 25 per cent. There has been the Houghton award, giving a deserved increase to teachers. It is essential that we have an increase in the grant for these schools and an updating of the increase in current grant—which they did not receive last year. It is up to the Government to respond to the wishes of the parents who give up many little luxuries to send their children to these schools.
  The individual has a right to spend his money as he wishes, despite what the Chancellor of the Exchequer may wish

  1891
  to do. It is right that people should have the opportunity to send their children, at a reasonable fee, to these secondary schools. I make the pledge tonight that the Conservatives will return to this scene time and again until the Government give an increased grant to the grant-aided schools and assure the House that those schools will continue for as long as they wish.
  10.20 p.m.
  Mr. T. G. D. Galbraith: I do not know for how long the debate will go tonight, but some of us have trains to catch, and if I do not manage to hear the whole of the Minister's speech I hope that he will not think that it is because of any lack of courtesy or interest on my part.
  I begin by congratulating my hon. Friends the Members for Edinburgh, Pentlands (Mr. Rifkind) and Edinburgh, West (Lord James Douglas-Hamilton) on their good luck in securing this important subject in the Ballot, because the future of the grant-aided schools is vitally important for the well-being of Scotland. The Government's policy puts the continued existence of these schools in jeopardy. The Government only put them in jeopardy, but the Scottish National Party, to which the hon. Member for Dunbartonshire, East (Mrs. Bain) belongs, intends to cut their throats. I was glad to hear what the hon. Lady said tonight. The people in my constituency who voted for her party will have their eyes opened and will realise that what I said during the General Election campaign was true. Far from expressing the proper Scots attitude towards education, the SNP has it wrong, as it has everything else wrong. Opportunity, yes, but not drab uniformity. That is what is betraying the proper heritage of Scotland, and I am thoroughly ashamed to belong to the same race and nation as these people.
  After that parenthesis, I should like to ask the Minister one or two questions to find out the reasons for the Government's attack upon grant-aided schools. In his reply, will the Minister say whether he thinks the education provided in these schools is a good education or a bad education? Surely, the answer cannot be that it is a bad education. If it is not a bad education, why do anything to limit its extent?
  1892
  My two hon. Friends have referred to cost. Is that the reason? If the number of grant-aided schools declines, the cost to the Exchequer will be more, not less. Will the Minister tell us what figure is at stake? I am afraid that he is being penny-wise and pound-foolish.
  I have often heard speeches made by the Under-Secretary of State for Scotland, the hon. Member for Aberdeen, North (Mr. Hughes), which have wrung our hearts with pity. Tonight he appears to have no pity, and no feeling, either for the parents or the children who attend these schools. That makes me think that his assumed pity is humbug and hypocrisy. Otherwise, he would take a different attitude.
  This is a concentrated form of attack upon individuality in schools and excellence in education. Only a few years ago we saw the abolition of the fee-paying schools—
  The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): Hear, hear.
  Mr. Galbraith: The Under-Secretary of State says "Hear, hear", but he has not any of these schools in his constituency, otherwise he would not be grinning as he is.
  Mr. Hamish Watt: Will the hon. Gentleman give way?
  Mr. Galbraith: No, I will not give way. The hon. Gentleman has plenty of opportunity to make a speech.
  Not long ago the selective schools—schools that cater for and give a good education to children from the poorest classes in our community—were the subject of attention. In my constituency the Girl's High School has gone. These schools cannot be recreated. Now the attack is being directed at the grant-aided schools—schools such as the Kelvinside Academy, the Westbourne Gardens School and Hutchison School. Some may continue, but others will go to the wall. Many of those that continue will go if the Scottish National Party has its way—and if the Labour Party has its way it will get rid of the independent schools. I see the Under-Secretary of State indicating his agreement.
  Why does it want uniformity? Does it not know what uniformity means? It

  1893
  means dictatorship. Variety is not only the spice of life; it is the essense of good education. It is a good thing to be able to experiment, to have competition between one form and another and not have to be dominated by the power-hungry figure in the form of the hon. Gentleman from St. Andrew's House. It is no good the Minister's putting that look on his face. He knows what it would mean. If he gets rid of fee-paying schools, grant-aided schools, and, eventually, the independent schools, we shall end up with no variety in education at all.
  I am not necessarily against the experiment of trying out comprehensive schools because we should try a bit of everything. What I am opposed to is the tendency towards uniformity.
  The present decision does not appear to be required through financial necessity, and it cannot be said to be required by educational wisdom. The decision seems to be taken on what are called grounds of social engineering. It is inspired by envy. Because everybody cannot have something, nobody should have it. Taken to its logical conclusion, we are saying that because selective schools are to go, grant-aided schools must go and the next will be independent schools. What is left then? Only the parent is left. The next aim of the Labour Party will be to remove children from good parents, in the interests of fairness, because some are good and some are bad. That is the logical extension of what the Minister proposes.
  It is utterly wrong to try to fix a straitjacket on education. What we should be doing is to encourage each parent to choose for himself his own school according to his means and to try to lead more people towards self-help, instead of abolishing the lot and going in for drab uniformity.
  Despite some of the things I have said to the Minister, I should like to ask him to reconsider this matter. We have a mixed economy in this country, and time and again the Labour Party has expressed its belief in that philosophy. It does not yet believe in a Communist State. If we have a mixed economy, surely we should have a mixed educational system, too. If there is to be a move towards
  1894
  comprehensiveness—which I am not necessarily against as to some of it—let us hasten in that direction slowly, otherwise the Minister may throw out the good with the bad.
  My last appeal to the Minister—because I believe that despite his stern exterior he has a soft heart—is that he should have some compassion for the children who attend these schools now. Do not force them out, for it will affect their future. Scottish education is being needlessly jeopardised by what I can only describe as a shabby example of parsimony and social dogma.
  10.30 p.m.
  The Under-Secretary of State for Scotland (Mr. Robert Hughes): Speakers in this debate have raised what is obviously a matter of some public concern. The hon. Member for Glasgow, Hillhead (Mr. Galbraith) raised the matter with great passion. The hon. Member for Dunbartonshire, East (Mrs. Bain) referred to education as the dominant issue in Scotland today, while the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), who initiated the debate, made a passionate—although in a sense it was dispassionate—plea on the facts of the case.
  I acquit hon. Members of any blame if they have to leave the Chamber to catch a train. I understand the difficulties of parliamentary life. However, I shall be disappointed if they are unable to listen to the whole of my speech. That is something which I may well have to bear.
  I am very glad that the hon. Member for Dumfries (Mr. Monro) acquitted the Government of trying to deal with the question of grant-aided schools by stealth, since it was made very clear in the Labour Party manifesto for Scotland in the last election and in my piece in the E.I.S. Journal that the Labour Government had frozen grants to grant-aided schools as a first step to the longer-term aim of phasing out grants. We do not believe that such schools should continue to enjoy a specially privileged place in Scottish education. Indeed, that has been our policy for a number of years. The previous Labour Government also froze the grants to grant-aided schools. The Labour Party manifesto, on the basis of which we

  1895
  fought and won the election, said that the Government would stop the present system of direct grants to schools—although that referred mainly to England—and would abolish tax relief for public schools as a step towards our long-term aim of phasing out fee-paying schools. Our policy has been perfectly clear from the beginning. There was no question of doing this by stealth.
  A number of hon. Members said that some parents make sacrifices to send their children to grant-aided schools. We read from time to time in the Press what those sacrifices are—such as doing without a car or a holiday. I understand why parents make sacrifices to obtain what they think is the best education for their children. For example, my parents made sacrifices for what they thought was the best education for me, as a bursar of Robert Gordons.
  The hon. Member for Dunbartonshire, East said that there were difficulties in some State schools, which was one reason why people opted out of the State system and sent their children to grant-aided schools. The system of grant-aided and private schools has existed for a long time.
  Difficulties arose during the last term over the Houghton Report. I am glad that the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) recognised that the Houghton Committee awarded large increases to teachers. It is the first time that the Opposition have conceded that fact. Although nothing more was made of the point, I am glad that they recognise the amount of money going to Scottish education for teachers' salaries as a result of the Houghton Committee recommendations.
  Dealing with Scotland as a whole, we should ask ourselves why 8 per cent. of the pupils in Edinburgh and 3 per cent. of the pupils in Glasgow should go out of the State system. Paragraph 6.8 of Part Two of the Public Schools' Commission Report says:
  "It was put to us that: There is a first and second class education service in Edinburgh. The removal of so many able children (many from the age of 5) to fee-paying schools and the great gulf between the esteem and support enjoyed by these schools and the lack of interest in non-fee-paying schools seems impossible to bridge. This militates against the
  1896
  success of comprehensive education in Edinburgh."
  The Public Schools Commission, in effect, agreed with that assessment. In its main recommendations it said that it believed in comprehensive education and that the grant-aided schools should become comprehensive.
  Mr. Galbraith: That was an examination of the independent schools—the public schools and the grant-aided schools. But surely there was something in between. I refer to the selective fee-paying schools, which are at a lower level of parental contribution but not of scholastic excellence.
  Mr. Hughes: This report goes into a number of matters—fee-paying schools, grant-aided schools and independent schools.
  The fact that there was such a gulf between the State system in Edinburgh and the fee-paying, grant-aided and independent schools is a savage condemnation of the Conservative Party, which controlled education in Edinburgh for many years and did not take care to see that the children of ordinary people had the opportunity to obtain a proper education.
  Reference has been made to the types of parent who send their children to the schools that we are discussing. In this connection, I tried to discover the social backgrounds of children who go to grant-aided schools in Scotland. According to paragraph 435 of the Report of the Public Schools Commission, an overwhelming proportion of the children in grant-aided schools—about 80 per cent.—came from social classes 1 and 2. Fewer than 20 per cent. were from class 3, a very small group from class 4, and a negligible number from class 5.
  There were variations, of course, because some grant-aided schools are really the local schools. There, between 65 per cent. and 80 per cent. of the children were from classes 1 and 2, whereas in all the other schools of the 26 or 27 which exist, more than 85 per cent. of the pupils were from social classes 1 and 2, and in some there were more than 90 per cent.
  It may be argued that a report published in 1970 on the basis of information

  1897
  collected in 1968 and 1969 is out of date, but there is no reason to believe that it is. Some of the people interested in financial matters in Edinburgh are in no doubt about the social classes from which the children come.
  It is purely fortuitous that the Scotsman on 22nd January carried a two-page advertising feature and a large advertisement saying "Education or State School?" put in by a company named Education and School Fees Planning (Scotland) Limited. The advertising feature is headed,
  "Painless way of paying school fees."
  It says:
  "Parents who have decided on a private education for their children despite the financial sacrifice involved—are faced with constant increases in school fees caused by inflation. Many fear that they will be unable to afford to pay school fees, yet the prospect of state education does not appeal. What can be done?
  "The answer lies in early financial planning. Last year a specialist company was launched in Edinburgh to advise parents on financial provision for private education. A subsidiary of Kirton Webster Financial Services Limited, this new company, Education and School Fees Planning (Scotland) Limited, met with an immediate and overwhelming response."
  It says that people who look after their money reasonably well may have to invest only 10 per cent. of their income, although fees at senior school can cost 40 per cent. It says that they must start planning early.
  Beside the advertisement is an article by the financial editor, headed, "A philosophy for investors", which says of this educational planning service
  "They can also devise applications of their philosophy to meet the needs of parents who are finding school fees a very heavy and always increasing burden."
  I do not know the connection here in terms of research, but it says
  "It has been possible for a couple with four children, ranging in age from two to eight, to settle £20,000 on the children which has the prospect of growing to £85,000 when they have all reached 21. To get the exemption, the father settles £5,000 on each of two children and the mother settles £5,000 on each of the other two."
  There are two ends of the spectrum, and hon. Members cannot have it both ways. They say that many of the parents affected cannot meet the school fees and that Labour policy means that children
  1898
  whose parents are in more difficult circumstances will have to leave school. But the schools can determine their own fees, and can operate their own remission schemes if they wish.
  As always, we have heard that schools should not be exclusive to children from only one class. The figures I quoted show that the social mix is very limited. On this matter, this useful document from the Public Schools Commission says:
  "Moreover, social segregation of young people in their formative years is likely to impoverish their education in some fundamental ways. They will grow up lacking understanding of and respect for large groups of their fellow countrymen."
  Mr. Watt: Does not the Minister agree that that quotation is a description of the ideal qualities for Tory candidates?
  Mr. Hughes: Let us leave Tory candidates out of it for a moment.
  I agree with social mix. It is important that people from different walks of life should mix, but the trouble is that, when Conservative Members are talking of social mix, nine times out of 10 they are really thinking of giving working class children of ability the opportunity to mix with their betters, in socially desirable grant-aided or independent schools. They may not mean to, but they denigrate the working class way of life. Children from privileged and wealthy backgrounds—children of doctors, lawyers, academics and so on—would benefit from going to the ordinary neighbourhood comprehensive school with the children of the whole catchment area.
  Lord James Douglas-Hamilton: Does not the Minister agree that if there is a large exodus from these schools the comprehensive schools in Edinburgh will not be able to cope, as they are at present crowded to capacity, and he already has a crisis on his hands?
  Mr. Hughes: I am coming to the points about timing and a large exodus, but since at least one hon. Member suggested that the Government's policy was built on envy and greed, that we were seeking to destroy and not to build, the philosophy behind the policy is important. This is not being done because of

  1899
  cost, or because we object to the amount of money being spent; It is an argument about education and social philosophy.
  I turn to the question of the timetable. First, it is speculative, at present, certainly, to try to say how many children will come out of the grant-aided schools next term. We just do not know. We shall have to look at questions about the timing details. There is again no question of this being done by stealth or behind anyone's back. For the policy of phasing out grants to continue, the Government will require legislation. That legislation will be open to discussion on the Floor of the House and in Committee. It will go through the normal processes of Parliament and we shall be able to discuss this matter. Before we reach that stage there will have to be discussions with the local authorities and the schools about the timing with regard to the phasing out of grants and on the question of the integration of the schools in the system.
  It is certainly not our intention to compel grant-aided schools to become part of the State system by legislation. They will certainly have the right to choose which is the best course for them. I should very much like to see them becoming simply part of the comprehensive system of education. The hon. Member for Edinburgh, West is making a great mistake if he thinks that anyone in the Labour Party is trying to drive people into a common mould and make them all the same. We shall never get the real variety of education or real improvements in State education if we insist on creaming off people of ability and interest. That is a sad fact, with which it is very difficult to come to terms.
  Very often people from socially deprived backgrounds find it difficult to make their impact on the education system and to understand what it is about. They have been tied down in this cycle for so long. They see their children rejected, in the way they have been rejected by the selective system, and they see them rejected by teachers and those who say "Let us solve the education problem by letting them leave school as quickly as they can". If children are rejected by society, one cannot be surprised if the children themselves reject society. That rejection on the part of children may take different forms, such
  1900
  as vandalism or children simply becoming apathetic towards what goes on around them.
  It is very important that we should have an education system which is of great value to all the children in our schools. I certainly hope that within the different schools in different parts of Scotland we shall have educational variety and educational experiment—as long as at all times we have the interests of the children at heart.
  I have made it perfectly clear that my party is fully committed to the comprehensive system. I cannot tell hon. Members tonight the exact timetable for the phasing out of grants, but I do not think that they are right to draw the conclusion that my right hon. Friend the Secretary of State for Education and Science—in England—has made any more specific pronouncements than we have in Scotland. Nor are we treating grant-aided schools in Scotland any more harshly than they are being treated in England and Wales.
  Our Scottish system—even the grant-aided system—has grown up in different ways, with different legislation. The fact that there is a fees remission scheme in England and Wales results from the way in which their system has developed—by education authorities having nominated places at schools and the schools taking the children nominated. We have not developed in that way. It is not a question of being especially harsh. There are two different systems.
  I cannot say what the timing will be. I can only say that the Government do not intend to increase the grant for 1975–76. There is plenty of time to discuss what will happen after that.
  I have one last quotation from the Public Schools Commission. That was an excellent report—not that I agree with all its conclusions. I agree with a lot of the evidence and with some of its conclusions. Paragraph 7.2 says
  "An educational system which enables a fortunate minority of children to take their education a long way while permitting the rest to leave school for the labour market at the minimum leaving age is obsolete."
  I agree that it is obsolete. We have made a great start by moving over mainly to a comprehensive system. I believe

  1901
  that a lot of the barriers to a proper education have been removed. I believe, too, that the individuality and personal freedom that Conservative Members speak about so much would be far better achieved by having a Socialist system of education, where people are more important than anything else.
  We have made a very good start by pursuing a policy of integrating the grant-aided schools and, eventually, the independent schools, into the State system. That will help us to remove most, if not all, of the barriers which exist. The Government are operating a policy of compassion. We care very much for the children who are never mentioned and who face difficult circumstances. They need more of our care and compassion than those who are able to look after themselves. As the Government's policy unfolds and is seen to work I believe that it will be agreed on all sides that it is both socially and educationally desirable.

  RENT OFFICERS
  10.52 p.m.
  Mr. Tony Durant: I wish to discuss the effects of the Rent Act 1974 since it came into force about six months ago. I have said before that politicians generally do not have a good record on housing. Every time a Government have interfered in housing since the war their legislation has made the situation worse. Some of the legislation even goes back to the First World War and it still affects a considerable number of properties.
  When the Minister introduced the Bill which subsequently became the 1974 Act he said that one of its purposes was to help relieve the situation of the homeless in the stress areas. I do not believe that has happened. In addition to the legislation I have described there has been a freeze on rents. A landlord who was interviewed on London Broadcasting this evening mentioned the case of two houses in the same street. The rent for one was £13 a week and for the other 59p. That is a ridiculous situation.
  I am delighted that the Government are to examine the whole question of housing finances. However, tonight I wish
  1902
  to deal with rented accommodation and its control under the 1974 Act. I believe that that Act has given the rent officers an almost impossible task. They are having to deal with an enormous backlog of cases and inquiries. We were told in answer to a Question on 10th July 1974 that the cost before the Act was running to £3½ million, and the cost of the rent tribunals was £1½ million. Applications then were 19,000, and there is no doubt that there has been a vast increase since.
  Another aspect is the tremendous delay. The delay between application and decision on 10th July was about three months, in London boroughs. I am sure that it is now worse, though I have no evidence. Perhaps the Minister will tell us.
  I believe that the Act has dried up the supply of furnished accommodation. It has been in force for only six months. What are the results? Let us consider the categories of people who need furnished accommodation, beginning with students. When we debated the matter on 30th July I raised the question of student accommodation as it affected my constituency. I told the House that the students' magazine had said that there was great anxiety in the university about what would happen as a result of the Act. The Minister agreed that there were anxieties, but could see no problem. He said that he would keep an eye on the situation.
  Today I spoke to the Vice-Chancellor of Reading University to discover what he felt about the Act, and he said "Thank heavens the intake last October was fairly small." That meant that the situation was not so serious, but the university expects a big intake next October and the Vice-Chancellor is worried about where they will be accommodated, because the supply of rented accommodation is drying up.
  The rent officers, who are under pressure, are themselves putting on pressure to get early decisions. A professor at Reading University let his house to students on a very amicable arrangement at a nominal rent. One of the tenants behaved badly, upsetting the whole household, and the professor asked him to leave. An application was made to the rent tribunal, and the professor's house was investigated. He was put under duress and stress by the rent officer to

  1903
  make sure that all the tenants, his students, submitted their cases to the court. They did not want to. Most of them were quite happy where they were.
  There was a happy outcome, because the rents were increased. But the incident created an unhappy atmosphere, and as a result the professor is considering whether to continue with that type of letting, which he had begun with the best will in the world towards his students.
  The next category with which I want to deal is that of the young marrieds, who face a tremendous problem. Many of them do not have large incomes and cannot afford mortgages or high-rent unfurnished accommodation. They would therefore like to start their married life in, say, two rooms, as I did. I took a two-roomed flat in Notting Hill Gate. I doubt whether I should find such a flat today. The Act has done tremendous damage to the availability of that type of accommodation, which is required by most young people when they marry.
  Another category is that of the single person. The single person who travels considerably wants furnished accommodation. The idea of digs is becoming unfashionable. People prefer to cater for themselves instead of having one room and being looked after by a landlady. I enjoyed that existence, but it does not seem fashionable. Most people who are mobile like furnished flats.
  The opportunity to obtain furnished flats is much on the decline. In Committee on the Housing Rents and Subsidies Bill the Minister said that he wanted to see only two forms of housing, namely, publicly-owned and owner-occupied. He wanted to see the private landlord phased out as soon as possible. If that is his object he has set about putting it into practice extremely well. He has destroyed the desire to let out rented accommodation.
  I wish to make a plea on behalf of private landlords. In the main they are not winklers and crooks but ordinary decent citizens, who probably have one or two houses to let out. They may have inherited them, or have put their savings into them. There may be many different reasons for their ownership. They are worthy people in our society, but they are now under vicious attack. That is a great pity.
  1904
  When the Minister says that all he wants to see in the housing market are the publicly-owned and owner-occupied sectors, what will be the outcome? Between 20 per cent. and 25 per cent. of rented accommodation is still provided by the private sector. If that is to be abolished, I believe that the Minister is giving himself an enormous housing problem. I believe that the private sector should be allowed to continue.
  As a result of recent legislation many small landlords no longer wish to let. They are being advised by the banks, for example, not to continue. They are advised to keep their property empty and try to sell it. They are told that the sooner they can sell it the better. Many of them have rented their houses at low rents and they have often ended up with bank overdrafts after trying to maintain them. The bank may have said "This is your only asset. If you want to clear your overdraft the best thing is to sell the property. Do not let it. If you let it you will not be able to get the tenant out."
  The small landlords are fighting back. They have set up a new association. There was a report on the new association in yesterday's issue of The Times. At a meeting in London the secretary said:
  "The small landlord has become a second-class citizen to the tenant."
  That is beginning to be the case. Small landlords no longer have the same freedom of action. They no longer feel that it is their property. The Acts that have been passed, the rent officers, and the investigations are making them into second-class citizens. I regret that very much. I believe that they are a valuable part of our society.
  A number of letters have been passed to me from ordinary citizens who either want accommodation or rent accommodation, who are being hit badly by current legislation. I am on their side. I shall fight on their behalf as hard as possible. I urge the Minister to think again. He has a reputation for wearing nice, bright ties. I hope today that he will react to what I have said by putting forward some bright ideas to amend the Act and to help the small landlord.

  1905
  I ask the Minister to consider the three categories of person who are worried about the Act—the students, the young marrieds and the single persons. What will happen to them on the housing market? In a Written Answer on 8th November the Minister said that he would give consideration to the position of students. I am pleased about that, but I urge him to consider the other categories that I have mentioned. Unless he faces the situation realistically more and more people will become homeless in the next few months. Every Member has to deal with homeless families. What advice do we have to give them? We have to tell them that the best thing to do is to ensure that they are thrown out on the street.
  What a situation for young couples, with, perhaps, one child. I urge the Minister to re-think this and to relieve the pressure on rent officers, who are finding it increasingly difficult to do their job. In my constituency they are concentrating mainly, and regrettably, on the decent landlord who lets out rooms or small flatlets to students, and are not dealing with the multiple occupation problem. They realise that if they move in on that they will create a further problem for the local council. There is a tendency to go for the small landlord, and this is a great pity. I urge the Minister to re-think the workings of the Act and deal with its bad effects.
  11.7 p.m.
  Mr. Nicholas Scott: It would be wrong to let this opportunity go by without congratulating my hon. Friend the Member for Reading. North (Mr. Durant) on raising some aspects of the operation of the Rent Act 1974. I hope that it will be possible in the not too distant future for us to have an investigation in more depth into this subject. The Government have been complaining that they have no evidence of the way in which the legislation is going. From a variety of sources evidence is beginning to build up as to the shortages which are being created and the distortions which are emerging as a result of an Act which was hurried through and which is turning out in practice to be anomalous and unfair.
  1906
  I hope that the Minister will give us some idea of the Government's thinking. It would be intolerable if he were simply to repeat the expression of astonishment of the Minister for Housing and Construction and ask Conservative Members to do the Government's work for them. It was their legislation and they should now be monitoring the way in which it is working.
  There are those who say that the way forward in housing is to abolish all controls, because that would somehow are create a new market in housing and would solve all our problems. I do not hold that view. I take the view that there was a case for extending control beyond the artificial divisions, certainly in terms of London, between furnished and unfurnished accommodation. In rushing legislation through in the summer of last year the Government—as Labour Governments so often do—allowed a rather unwise heart to rule their head. What has clearly emerged from the operation of the legislation is that sitting tenants have gained something from the Act at the expense of a great deal of heartbreak on the part of those seeking furnished accommodation in London and other big cities.
  We have increasingly seen the stock of furnished accommodation being devoted to holiday accommodation and short lets. This has been a mistake. It looks as though the Government are still hell-bent on repeating the same sort of mistake in turning their attention to the question of tied housing. Here, again, for all sorts of reasons which arouse great emotion on the Labour side of the House, they have decided that tied housing is a bad thing and must be abolished. If they embark upon this road they will create disaster, just as they did in setting out this blanket control of furnished accommodation.
  Their first mistake here is that they have again allowed their heart to rule their head. They have not thought through an initiative in the housing area and seen where the balance of advantage lies. I shall be corrected if I am wrong, but I believe that the Government have not provided any extra resources for the increased burden of work which will be placed on the rent officer service in extending control in this way. If extra

  1907
  provision has been made I hope the Minister will tell us about it.
  I do not believe that, overall, in housing, the Government have any ideas where they are going. They repeat, time after time, phrases about the whole rented sector coming into what they are now pleased to call social ownership. They know perfectly well that the legislation they are passing, whether the Housing and Subsidies Bill or the Rent Act 1974, is turning the landlord out of this business, that councils cannot cope with the extra burden placed on them, and that they are in many ways unfitted to cope with it if this policy is carried through to its logical conclusion. Yet they are prepared to see housing in the rented sector decline.
  By their policies they are creating new slums with which the community will eventually have to cope. My hon. Friend, in raising the question of this Act as well as that of the administrative burden, has done a great service. I hope that we shall be able to return to the matter in the not-too-distant future, but that tonight the Under-Secretary will be able to give some indication of Government plans to mitigate the extra burden which this hurried and thoughtless introduction has placed on the rent officer service.
  11.11 p.m.
  The Under-Secretary of State for the Environment (Mr. Gerald Kaufman): The House will be grateful to the hon. Member for Reading, North (Mr. Durant) for this opportunity to look, if only briefly, at the working of the Rent Act 1974, if only to give an opportunity to dispel some of the misapprehensions which have arisen over the working of the Act—misapprehensions which are embodied, as they have been tonight, in emotional language with little evidence behind it, as I shall be able to show in one respect in which the hon. Member for Reading, North raised it.
  In the 10 months during which I have been a Minister I have sat through what have appeared to be countless housing debates, here in the Chamber and in Committee. I have yet to hear, on any occasion, an Opposition Member speak on behalf of tenants. The hon. Member for Reading North, was at his most
  1908
  typical, and repeated the kind of thing he said in Committee, namely, that he wanted to make a plea on behalf of landlords. Hon. Members opposite can never be accused of not making pleas on behalf of landlords.
  Many landlords are seeking, perhaps in vain, to get a small return on a small property and the economic climate is highly unsatisfactory for them. At the same time, far too many landlords are still, in almost the last quarter of the 20th century, behaving in an almost legendary way—the way in which landlords behaved in the fiction of Charles Dickens and others. From my constituency, day by day, including today, I get letters from the constituents and at weekends I visit the homes of those who have been victimised in the most unscrupulous and appalling ways by absentee landlords who treat them badly and are not fitted to operate a tenancy of this kind.
  I understand the reasons for the hon. Gentleman speaking as he does, but I cannot accept the spirit in which he and his party approach these subjects—landlords, landlords, all the way, and scarcely ever a word for tenants.
  In addition, the Conservative Party operates far too much on the basis of conjecture and imagination rather than fact. If there was one phrase which occurred again and again during the speech of the hon. Member for Reading, North it was "I believe". Almost every extreme assertion of alleged fact was preceded by "I believe". The hon. Gentleman then went on to make statements which cannot be borne out. He spoke of "an impossible job for rent officers", "an almost impossible backlog", "the rent officer service being worked off its feet" and "tremendous delay". He is supported, not in his language but in his sentiments, by his hon. Friend the Member for Chelsea (Mr. Scott).
  What is claimed by the hon. Member for Reading, North about the effect of our legislation on the rent officer service simply is not true. At the time of the passing of the Rent Act 1974 it was expected that some further strengthening of the service would be required, to deal principally with the further general decontrol work which would result from the Housing Finance Act 1972, and to ensure

  1909
  that the service could cope with the former furnished sector coming within its jurisdiction. It was estimated that a further 55 rent officers and 88 supporting staff would be recruited.
  With the ending of general decontrol, these proposals have been dropped. The Conservative Party came to power with great claims about the way in which it would reduce the Civil Service, but the numbers employed in the Civil Service rose when the Conservatives were in power. In the rent officer service we do not intend to increase the numbers. We find that it is not necessary to do so. The present strength of the service is 550 rent officers and 900 supporting staff, and this complement is quite sufficient to deal with current work. Any further strengthening will be to meet short-term bulges in work, and will normally be met by temporary appointments.
  In many areas existing backlogs have disappeared and rent officers are dealing with current work. Where there is spare capacity, it is wherever possible being used to help harder pressed neighbours. Two areas being helped in this way are Birmingham and Newcastle, which have the largest backlogs, but help is being given across county borders, and, indeed, across panel boundaries.
  With the loss of decontrol work, in most areas, the former furnished cases are not being kept waiting. Six thousand two hundred former furnished applications have been received throughout the country, of which 2,000 have been dealt with, 1,400 have been withdrawn and 2,800 are in hand.
  There is certainly no backlog in Berkshire. The 330 cases in hand are all current work; 91 furnished applications have been received, 14 withdrawn, 46 determined and 31 are in hand. There are no problems here.
  At present we are at fullest strength in the service. I am convinced that the rent officer service is carrying out efficiently and compassionately the rôle assigned to it—to give the public a service it deserves and needs. I say to the hon. Gentleman—who is not given to rash charges and is moderate in his expressions, even if I cannot generally bring myself totally to agree with him—that I regret his language when he talked about "duress" and
  1910
  "stress" from a rent officer. That is a serious allegation. I have had the opportunity of meeting rent officers in conference, discussing their work with them in private and meeting them in other ways, and I have found that they are dedicated to what they rightly believe is a public service. Although it is possible to have subjective views about their behaviour, I think it was unfortunate for the hon. Gentleman to use the language he did about a rent officer who could certainly be identified.
  Mr. Durant: I wish to make two points. First, for the greater part of my speech I spoke about tenants; and the minor part of my remarks dealt with landlords. I spent a considerable time on students, young marrieds, and the proportion of single people. Let us get the matter in proportion. Secondly, I did not wish to bring the case out into the open, but I will send the hon. Gentleman the details.
  Mr. Kaufman: I am obliged to the hon. Gentleman. I shall ensure that anything he puts to us will be looked into.
  Mr. Scott: Will the Minister say what is the average delay between approach and settlement?
  Mr. Kaufman: Not without notice. I shall write to the hon. Gentleman and give him my best information.
  The hon. Member for Chelsea chided us for not bringing forward evidence about the working of the Rent Act and rightly said that it was the Government's responsibility to accumulate such evidence. We shall take what measures we can to obtain evidence which we shall make available to the House. When allegations are made about the ill effects of the Rent Act, we say that they should not be based on nebulous statements but that facts should be brought forward to underpin the allegations. We are not saying that it is the responsibility of the Opposition or other bodies outside the House to provide us with evidence—evidence which it is our responsibility to collect, so far as we can—but if allegations are made about the disastrous effects of the Act—the effect on the rented market, on the homeless, on resident landlords who do not wish to let—it is

  1911
  only fair that those who make the allegations should buttress them with statistical information rather than intermittent anecdotal information. Everybody in the House can bring forward an anecdote, but the only information I have seen so far about the working of the Rent Act is a brief piece in New Society about cards in shop windows—a respectable piece of research but one from which no large conclusions could be drawn.
  Mr. Scott rose—
  Mr. Kaufman: I hope the hon. Member for Chelsea is not going to refer to the Conservatives' bible "Putting Britain First" or Time Out which I think they cite these days.
  Mr. Scott: I was going to ask the hon. Gentleman whether he had received any communication from the National Union of Students about the operation of the Rent Act 1974?
  Mr. Kaufman: I shall come to the subject of students in a moment. The hon. Member for Reading, North was moderate on this topic, and, indeed, we had a moderate statement from the Vice-Chancellor of Reading. We are giving consideration to students following the undertaking we gave during the passage of the Rent Bill.
  The hon. Member for Reading, North referred to young married couples. It is true that if they cannot get anywhere else to live they have to fall back on furnished accommodation, but there seems to be some delusion on the part of many Conservatives that most young people require that type of accommodation. It seems to be a phantasmagorical impression on the part of Conservatives—we used to get it at one time from the hon. Member for Hornsey (Mr. Rossi)—that the first thing a couple do when they get married is to look for a furnished flat. That is not so. Experience of my constituents who find themselves in such a position is that they do one of two things—they either try to buy a house, if they can get the deposit, or try to rent an unfurnished house, mainly through the local authority.
  We have never denied that furnished accommodation is useful at the margin but it can never be more than at the margin. The main tenancy supply must
  1912
  be left to local authorities, for the very reason which the hon. Gentleman gave—that the private rented market has gradually declined, not because of legislation passed by this Government, but over a period, and inexorably. He was right to accuse his own party of having contributed to whatever problems there are in the private tenancy sector, because the most drastic loss of rented housing—about 300,000 a year—in recent years occurred between 1958 and 1964, when the Conservative Party was in power and during the period of greatest decontrol.
  The graphs, as it were, of decontrol and the decline of rented accommodation do not march together. Whatever happens, whether a Government like ours bring in legislation to assist tenants, or a Conservative Government bring in legislation to assist landlords, the graph of rented accommodation declines, because it is no longer, and can never be again, a profitable field of investment. It cannot be, because landlords cannot secure, without rents being enormous, a return from tenants which will enable them to maintain their properties and at the same time secure a return on their investment. That is the reason why private rented sector is disappearing.
  The hon. Member for Chelsea might have looked behind him when he was claiming, genuinely, that his party did not believe in decontrol and leaving tenants to fend for themselves. The hon. Member for Wolverhampton, South-West (Mr. Budgen), an admirable disciple of his right hon. Friend the Member for Down, South (Mr. Powell), shook his head in a severe manner when the hon. Member for Chelsea was saying that.
  The hon. Member for Wolverhampton, South-West is right. The only way one will restore the private rented sector is by removing controls, allowing private landlords to name their own rents and removing protection from the tenants.
  Mr. Nick Budgen indicated assent.
  Mr. Kaufman: The hon. Member for Wolverhampton, South-West agrees. He is most straightforward in his views. One knows where he stands on all things, including this one.
  The hon. Member for Reading, North referred to the student situation. We

  1913
  made clear during the passage of the Act that we would seek to set up a registration system for students and reduce the measure of control for students which exists in the Act. We asked the House to reverse the amendments put in by another place on the understanding that a registration system would be set up.
  I regret that the Evening Standard, in a report which appeared a few days ago, implied that our proposal to set up a registration system and amend the Act in that respect only was something of a climb-down from the position we took during the passage of the Act. But my hon. Friend the Minister for Housing and Construction gave a commitment that we would do this, and it was only lack of time which prevented us from attempting to do it during the passage of the Act.
  We are at work on it and are hopeful that we shall be able to introduce such a registration system in time for the new academic year. I cannot give an undertaking—Parliament will have to decide whether it passes the legislation—but it is our aim to bring it forward, if we can, in time for the new academic year, in order to allay precisely the kind of problems to which the Vice-Chancellor of Reading University referred when he was in conversation with the hon. Gentleman.
  The hon. Member also claimed that landlords were withdrawing accommodation from the market. Here again, we have anecdotal rather than statistical information. I cannot say whether the hon. Gentleman is right or not. What I will say is that if landlords are withdrawing accommodation from the market, and if, in particular, resident landlords are withdrawing accommodation in their own houses, it is because they have been misled by the somewhat hysterical propaganda which has been got up by some hon. Members opposite and interests outside the House.
  The right hon. Member for Penrith and the Border (Mr. Whitelaw), during the General Election, used a memorable combination of words about one of my right hon. Friends going about stirring up complacency. Nobody in this Government is going about stirring up complacency about the operation of the Rent Act, but some people are going about stirring up quite unnecessary fears among
  1914
  landlords, and particularly among would-be resident landlords, about what would happen to them if they let rooms in their houses.
  Mr. Budgen: Going back to an earlier point about the whole position of landlords, the Minister rightly said that it was my view that rents must ultimately be allowed to rise to their market level. One of the other ways in which the landlord could be brought back into business would be by giving him some measure of tax relief. One of the difficulties the landlord has is that he is competing with the owner-occupier. The owner-occupier has his tax relief in respect of his mortgage interest payments, whereas the landlord has no tax relief. Even if rents were allowed to rise to the market level, the landlord would always be competing unfairly against the owner-occupier.
  Mr. Kaufman: I am astonished and pained by the hon. Gentleman's intervention. That he of all people should suggest that we should interfere with the free working of the market by a subsidy to landlords, which is what he is proposing, is very hurtful to me. I thought that there were three or four Tories left in the House of Commons—of whom he was one. I shall now have to reduce that figure.
  Mr. Scott: There is widespread misunderstanding among resident landlords. Part of it is a fear that the Labour Government may again extend the provisions of control and whip them in at some point in the future. As the Minister knows, I was not in the House in the summer when the Rent Bill became law. However, it was my understanding that at that time the Government undertook to consider the publication of a simple guide to the Act. That would help to remove these misunderstandings. I have seen no sign of such a guide yet.
  Mr. Kaufman: That is a fair point. I know that the hon. Gentleman was not in the House at the time of the passage of the Act. If he had been, we would have had a much more agreeable time in Standing Committee and perhaps we would not have had to go through those ludicrous all-night sittings. The hon. Gentleman is a reasonable man. I will not say the same for all the opinions he proffers.

  1915
  I agree that it is very necessary for us to make the position clear, and I think that it is right that we should look again at ways of making the position clear. I accept that entirely from the hon. Gentleman.
  The hon. Gentleman said that this Government do not know where they are going in housing policy. We know exactly where we are going. We are attempting two things. First, we are attempting to expand the market for owner-occupation. We inherited the most appallingly disastrous situation for the private developers and builders, who came to tell us of the straits into which they had been plunged by the policies of the Tory Party. The market for private building had almost disappeared when we came into office.
  Through the £500 million bridging loan, which was bitterly attacked by Tory Members when we brought it forward, we have now been able to bring about a much healthier mortgage position. There is now a great deal of mortgage money about. We are hopeful that before long we shall be able to bring forward further proposals which will give incentives to people to buy houses. But I must not stray into a later debate which we shall have on the Second Reading of the Bill and during which, with the leave of the House, I shall be able to reply to further remarks from the hon. Member for Wolverhampton, South-West.
  One prong of our policy is the expansion of owner-occupation, but the other prong is the expansion of rented accommodation through what my hon. Friend the Minister for Housing and Construction vividly calls the social landlord—local authorities and the voluntary housing movement, whose efforts we have stimulated through the Housing Act 1974, an improved version of the Housing and Planning Bill introduced by the Conservative Party in its dying days in government.
  I am happy to tell hon. Members opposite that while we have no cause for complacency and only a little room for optimism, at the moment, as regards owner-occupation—we must do a great deal more over the years to expand that sector—the number of starts in council house building is markedly up, and the number of council houses which will be started next year and the year after will
  1916
  increase in a way which will assist. This is the only way in which we can begin to make inroads on the problem of helping people who wish to rent houses.
  Meanwhile, we have the Rent Act, which has been attacked by the Opposition for perfectly respectable ideological reasons but which we defend for equally respectable ideological reasons. We believe that it was right to introduce it. We have provided protection for about 80 per cent. of the 764,000 furnished tenants in the country as a whole and for about 75 per cent. of the 279,000 furnished tenants in London.
  We built into the Bill protection for resident landlords, and I say without equivocation to the hon. Member for Chelsea that that protection will not be eroded. That protection stands. We built in that protection because we believe that the only sector for private landlordism which should survive in the long run is that of the resident landlord who lets rooms, whether furnished or unfurnished, in his own house. That is a useful contribution to making housing accommodation available, and we wish to provide the necessary protection for the resident landlord to continue to make it available.
  The hon. Member for Reading, North and I sat through many long, weary and rather grubby hours in Committee while the Rent Bill was being dealt with. It was subject to attack at the time, and it has been subject to attack since. If I am associated with no other piece of legislation during the period that I am a Member I shall be proud to have been associated with that Bill, and I am satisfied that though it may from time to time have to be looked at again—as any legislation may have to be looked at—it is a worthy piece of legislation which has brought about a good deal of happiness to people who were under threat.
  Mr. Durant: May I put the record straight? I did not serve on the Committee on that Bill.
  Mr. Kaufman: I am sorry. That is a good illustration of the stress to which I was subjected by the hon. Member for Hornsey (Mr. Rossi). The hon. Member for Reading, North served on some Bill with me. It might as well have been that one for all the good he did in amending it.

  NORTHERN IRELAND (CUSTOMS SERVICE)
  11.40 p.m.
  Mr. McCusker: My colleagues and I were motivated to seek this debate on the Customs Service in Northern Ireland—with special reference to their functions in relation to the land frontiers—by three factors. The first was the observations made by my right hon. Friend the Member for Down, South (Mr. Powell) and me on recent tours of the frontier, where we noticed that there was no apparent liaison or co-ordination between the security forces and personnel from Her Majesty's Customs. That view was subsequently reinforced in various discussions which we had with people during that tour.
  The second factor was the answer given by the Secretary of State for Northern Ireland on 16th January 1975 when, in reply to a question as to how many persons had been the subject of exclusion orders made under the Prevention of Terrorism (Temporary Provisions) Act 1974, he indicated that no orders had been made. However, notwithstanding the difficulties involved, he considered that the control of the borders was essential, and said:
  "I intend to carry out this Act because I believe that it is necessary." [Official Report, 16th January 1975; Vol. 884, c. 654.]
  Strong representations were made to hon. Members with border constituencies by legitimate business interests who were concerned by the delays and difficulties experienced at the frontier crossings. As a consequence of our decision to seek this debate, I decided last weekend to investigate personally the conditions which existed along the land frontier of my constituency and with particular reference to the six approved crossings. I did not do that with any malice. I did it on three days within the last week, during the afternoon, when one would have expected normal conditions to have existed. I did it at what was considered by members of the security forces to be considerable risk to myself, because they refused to accompany me on one of the days when I asked for a security guard. Nevertheless, this was done in an attempt to produce a spot check report on conditions which existed there.
  1918
  Before giving that report I shall remind hon. Members of this part of my constituency. The border is extremely long, and meanders over desolate land and, frequently, mountainous country. When one looks round the barren greenness of this Chamber one almost feels at home.
  There are approximately 90 crossings along that section of the frontier in my constituency. They range from the main trunk route between Belfast and Dublin to rutted mountain tracks. There are six approved crossings and two concessionary crossing points where the Dundalk-Castleblaney road enters and leaves my constituency. The Army, with varying degrees of success, have attempted to close many of the crossings. The six approved crossings are the A3 at Ardgonnel, two miles outside Middletown, the crossing of the B32 at Carrickduff, four miles outside Keady, the crossing of the B30 at Cullaville, two miles outside Crossmaglen, the crossing of the A29 at Tullydonnell, two miles from Forkhill, the crossing of the A1 at Killeen, on the Belfast-Dublin road, and the crossing of the Newry-Omeath road. That list reads like a war record.
  On 18th January, accompanied by my agent Mr. J. A. Anderson, I visited the Middletown and Keady crossings. On Sunday afternoon, 19th January, accompanied by my wife, I visited the crossings at Omeath and Killeen, and on Monday, 20th January, again accompanied by my agent, I visited Cullaville and Tullydonnell.
  At Middletown the customs post has been moved back four miles from the border. There was a sign displayed outside the temporary building stating "Customs—Stop". I drove past it both going out of Northern Ireland and returning to Northern Ireland. All the other traffic did the same, with the exception of one lorry. No attempt was made to stop me or even to request me to stop. However, I did stop and I returned to the post, identified myself to the customs officials there and learned that they make no attempt to stop any traffic. They told me that they were open from 8 a.m. until 9 p.m., although I was unable to confirm that one way or the other.
  Certainly they had no knowledge of the Prevention of Terrorism Act 1974. I have learned subsequently that they did not need to have any knowledge of that

  1919
  Act, because they are not examining officers. But, as people involved in the control of the frontier, I should have thought that they would at least have been briefed about the order as it applies to Northern Ireland and concerned about its operation and perhaps how they might be involved in it.
  The village of Middletown lies between the post and the border, and the Army has an efficient permanent vehicle checkpoint there. I understand that the Army feels that this would be a useful place for Customs examinations to be made. However, there is no liaison between the Army and the Customs. If soldiers venture anywhere near the Customs officers, they shut up shop and drive off in their cars. They will have no contact with the security forces, and perhaps this is understandable. But they perform no function as examining officers, and I question whether they perform any function as Customs officers.
  At Keady, the post has been moved back a mile from the border. No attempt was made to stop me leaving Northern Ireland and no other vehicles stopped while I was in the area. I stopped there again when I returned to Northern Ireland and spoke to a Customs officer. He told me that the post was open from 9 am to 6 pm. I asked him what procedures I had to observe when entering and when leaving Northern Ireland. When I was last there, which was in 1968 or 1969, there were fairly strict procedures in operation. However, I was told that there are none now. What is more, due to the position of this post, vehicles can disperse before reaching it.
  At Omeath, on Sunday afternoon, I was unable to locate the Customs post. Later I discovered that it is housed in an ordinary caravan parked at the side of the road. It is about two miles from the border. There are no signs indicating that it is a Customs post. There was no obvious presence there, the curtains being drawn and the door closed. Further up the road there is a permanent vehicle check point operated by the Army, and all vehicles entering or leaving Northern Ireland are checked.
  As a result of the interest in Flagstaff Road, which has some notoriety because our security forces were obliged to take down a permanent blockage there, I
  1920
  turned into Flagstaff Road. I drove past the Eire Army's permanent check point. The soldier on duty made no attempt to stop me. I reversed and stopped beside him. I asked whether he wanted to ask me any questions or to search my car. He told me to drive on. A little further on, an Eire Customs officer pulled aside the barrier and let me drive on. We were assured that there was control on that very dangerous road, but I saw no evidence of it. I returned to Northern Ireland by an unapproved border crossing, which is illegal.
  At Killeen, the post has been moved one mile back from its original position. I drove past it into the Republic. I turned, and drove back into Northern Ireland. As I approached the post, I slowed as if to stop. A Customs officer put his arm out of a window and waved me on as if I had no business even to think of stopping.
  At Cullaville, the permanent post has been destroyed. This is one of the very dangerous areas in my constituency. There is no temporary post. I crossed the border. I did not realise that I was crossing it, but I noticed some Gaelic hieroglyphics on a sign and I realised that I was outside the Eire Customs post. The Eire official waved me on. He was annoyed when I did not move, and asked what I wanted. I asked where the British Customs post was. He said, "You need not worry; they are not here any more." That is an "approved" crossing point. At Tullydonnell, the permanent post has been destroyed. There are signs showing that there should be a temporary post, but it is not there. Traffic was moving quite freely.
  So of six approved crossings, at two we have no control at all, at two there are efficient vehicle checkpoints manned by the Army, but no Customs staff, and four of the six have a Customs presence but no control is being exercised. The two permanent posts are at the extreme eastern and western ends of my constituency, so that whole border area is completely open to the free movement of traffic. The Secretary of State has said that the implementation of this statute is essential to control the frontier, so this needs some examination.
  How many border posts are operational and effective in County Armagh even for

  1921
  the normal Customs function? How many uniformed Customs officers are engaged along that frontier? What are the opening and closing times of the Customs posts? What is their function? I have seen them perform none. Are they, as we have heard, authorised not to co-operate with the other security forces? Finally, are they really necessary? If they are performing no function, there must be something better they can do somewhere else. I should like to know who are the designated examining officers under the anti-terrorist Acts, and whether they are on the spot to perform their duties.
  Over 100 lives have been lost in County Armagh in the present troubles, and over 50 were members of the security forces. A soldier going to Northern Ireland is twice as likely to be killed in County Armagh as in any other constituency. In the deep south of the county, 30 soldiers and one terrorist have been killed. One could ask, who is winning what war?
  There is a free and easy transfer of arms and explosives over that border. I do not expect Customs officers to control that flow, but if we are ever to convince the enemy that we see the frontier as establishing Northern Ireland as part of the United Kingdom, we should make sure that frontier controls work. We should use the Customs officers to show that any traveller is leaving a hostile country and entering my country.
  11.54 p.m.
  Mr. J. Enoch Powell: I think it will be agreed that my hon. Friend the Member for Armagh (Mr. McCusker) has performed a service in bringing before the House the circumstances and conditions on which he has been able to report first-hand. But I think it would also be right to link with the recognition to my hon. Friend a word to the Financial Secretary, who is at present carrying a very heavy load in other directions and has made himself available, as the representative of the Department responsible for Her Majesty's Customs and Excise, to listen to the debate, to take note of the points and, so far as may be at this stage—no doubt more fully later—to respond. I would certainly link with that a reference to the representative of the Northern Ireland Office,
  1922
  for in this respect the responsibility of the two Departments of State is very difficult to disentangle.
  There are two distinct aspects to the subject which my hon. Friend was covering. One is the functioning of the Customs on the international frontier in the narrower sense of the term—the Customs as the service which has the object of ensuring that whatever duty is payable is, as far as may be, levied, and that there is no reasonably avoidable loss of sums which are due by way of duty.
  In that more limited context of the work of the Customs, properly so called, I think that a scandalous situation is disclosed in County Armagh. As my hon. Friend very reasonably observed, if the Customs officers and the Customs posts which are there are not in fact exercising any Customs control over the traffic passing those points, that manpower could certainly be better used in other directions. I may say that it could be better used not many miles away; for certainly the Under-Secretary at the Northern Ireland Office will be aware of the existence in Newry in my constituency, on the main route among those mentioned by my hon. Friend, of a vehicle Customs post, and I must bring to the attention of the Government the unsatisfactory nature of the service which is provided at that Customs post.
  If I may quote from one statement which was given to me by the CBI of Northern Ireland:
  "The service given by Customs"—
  at that point—
  "has not been uprated to deal with the ever-increasing volume of traffic passing this way, and they have neither sufficient staff nor the right sort of premises to carry out checks"
  on the type of vehicles and the volume of traffic which is now passing.
  Again, the Road Transport Association of Northern Ireland, referring to the same post, describe it as
  "completely inadequate, having regard to the volume of business"
  and says that
  "vehicles have no alternative but to park on both sides of the public highway causing a traffic hazard."
  There is also very serious complaint about the adequacy of the manning of the post at Newry. The opening hours at present are, at any rate ostensibly, from

  1923
  9 a.m. to 5 p.m. In practice it is found that traffic builds up rapidly just after opening time and around the closing time. This has a very serious economic effect upon road hauliers who are making relatively short journeys; for a delay of that kind, at that time and at that point, can prevent a round journey being made within one working day, which especially for a small haulier, can be a very heavy economic burden indeed.
  I should add finally, while I am on the subject of the unsatisfactory Customs arrangements at Newry, that while Her Majesty's Customs and Excise have assured the Northern Ireland Chamber of Commerce and Industry, who assembled these observations, that
  "any driver who is delayed or wishes to pass through Customs after 5 p.m. merely has to telephone and, on payment of a small fee, arrangements will be made to clear him outside hours,"
  I must tell the Financial Secretary that this is a highly imaginative piece of information in the light of what I have been assured not once but repeatedly by the road hauliers who are using that road. So, merely for the proper performance of the ordinary Customs functions as anywhere else in the Kingdom, it is clear that major improvements are necessary at the Newry customs post both physically and in respect of manning.
  If the Government are looking for the nearest place to find additional manpower the investigations of my hon. Friend the Member for Armagh suggest that many of the personnel who are idle in Customs posts at or near the border which are not working properly could be utilised in Newry in order to facilitate the flow of traffic through the post there.
  That brings me from the narrower aspect of the Customs to the broader and more urgent aspect of control in the wider sense over the crossing of the frontier. I venture to remind the House—though it is less full now than it was when the decisions were taken under two months ago—of the form of control which it then decided requires to be exercised. Section 8 of the Prevention of Terrorism (Temporary Provisions) Act 1974 empowers the Secretary of State—I pause there to observe that although, as is invariable in statutes, the power is couched in permissive form—
  1924
  "The Secretary of State may … provide"
  for certain following things—the clear intention of Parliament, and the normal interpretation of the meaning of a statute, is that the Secretary of State shall provide. When the House passed the Act it did not mean that it would be no bad idea if, occasionally, when he thought fit, the Secretary of State instituted some kind of control. This is none other than the standard form in which the House gives instructions as well as powers to the Ministers of the Crown.
  I resume after that digression, Mr. Deputy Speaker, intended to make sure that there is no misunderstanding of the importance and intention of that provision. Section 8 says that the Secretary of State is to provide for
  "the examination of persons arriving in … Northern Ireland".
  Again I pause to say that by an order made by virtue of that section it was made perfectly clear that the arrival in Northern Ireland which is referred to includes arrival in Northern Ireland by land. Over and over again in Statutory Instrument 2038/74 provision is made by the Secretary of State for Northern Ireland to cover entry into Northern Ireland by land from the Republic.
  Again I resume. The Secretary of State is to provide for
  "the examination of persons arriving in … Northern Ireland"
  by land
  "with a view to determining—
  (i) whether any such person appears to be a person concerned in the commission, preparation or instigation of acts of terrorism".
  I pass no judgment upon the general appearance of my hon. Friend the Member for Armagh, but even if he had borne innocence upon every trait of his features, even if the vehicle and the man had screamed innocence, there would have been nobody, in most cases, to take note of it.
  Persons are to be examined
  "with a view to determining—

  (i) whether any such person appears to be a person concerned in the commission, preparation or instigation of acts of terrorism, or

  (ii) whether any such person is subject to an exclusion order".

  1925
  I pause again. The exclusion orders which have been made by the Home Secretary are, in a number of cases at any rate, exclusion orders which apply to the United Kingdom as a whole. They forbid persons to return to the United Kingdom, from which they have been excluded by order of the Home Secretary in pursuance of the decisions of the House. The second of the objects of the control which the Secretary of State is to institute is to ascertain whether they are among the persons seeking to enter Northern Ireland by land.
  The section continues:
  "(iii) whether there are grounds for suspecting that any such person has committed an offence under section 3(8) of this Act"—
  that is, other offences connected with exclusion orders.
  It will be clear that it was the intention of the House that there should be a real and thorough control for those purposes upon entry into the United Kingdom. I am not saying that in order to be real and thorough the control needs to be either 100 per cent. or even 24-hour. What I am saying is that the circumstances which exist on that frontier today, as described by my hon. Friend, and observed by myself on the other occasion to which he referred, in no way correspond—cannot by any stretch of the imagination be regarded as corresponding—to the duty laid upon the Secretary of State and the Government by the House in the Act which was deemed necessary as recently as November of last year.
  We have, then, an Act which says that there is to be that control, with those purposes, for the examination upon those criteria of persons entering Northern Ireland by land. I ask, to whom has the responsibility for carrying it out been assigned by the Secretary of State?
  A few days ago I asked the Treasury how many Customs and Excise personnel were engaged in Northern Ireland in the control of points of entry by land, sea and air respectively. I was given the respective numbers, which were 232, 60 and seven. I also asked, in view of the duties and powers given to them under the Prevention of Terrorism Act 1974, what increases were proposed in their numbers. In his reply, the Paymaster-General drew my attention to the fact that at present no such functions had been
  1926
  assigned to Custom sand Excise officers. He said:
  "Customs and Excise officers carry out immigration functions only at a small number of Northern Irish seaports"—[Official Report, 13th January 1975; Vol. 884, c. 22.]
  If that is so then, of the three types of servant of the Crown mentioned as potential examining officers in the relevant order, one is eliminated: there are no Customs officers serving that purpose. So we are left with the constabulary and, secondly, wtth the immigration service. I want to know whether the constabulary or the immigration service have been assigned to the duties of examining officers on that frontier. We should know how many have been so assigned. We should also know something about the manner in which their duties are carried out. We need to do so after the revelations of my hon. Friend the Member for Armagh. The clear implication of his evidence is that in effect there is no control, and that if examining officers exist they are lucus a non lucendo, named from the opposite of what they actually do; they are certainly not officers who examine.
  Perhaps it may be said that this is too nice an interpretation either of the intention of the Act or of the policy of the Government. It might be said—I do not think that it should be said—that the Government regard the provisions to which I have referred as merely existing in terrorem, as a deterrent, as something which is nice to have on the statute book, something which is handy to pull out in a particular case but which is not intended as far as may be practicable to be actually applied. I am glad to be assured that that is not so.
  I quote again the words of the Secretary of State on 16th January that have already been quoted by my hon. Friend the Member for Armagh. It is not my opinion of the right hon. Gentleman that he is careless in the use of language. On the contrary, I regard him from my experience as a man who when he says something carefully means it and intends to carry it out. He said:
  "It would be idle to pretend that there are not difficulties, given the nature and the length of the border.…"
  Of course there are difficulties. One would be foolish to deny or to minimise

  1927
  them, as foolish as one would be to suggest that the difficulties render negatory the intention of Parliament, the passage of the Act and the intention of the Secretary of State. The right hon. Gentleman said:
  "I intend to carry out this Act…"
  That is the Act that I have just read to the House. We have the right hon. Gentleman's word that he intends to carry it out. He continued:
  "I believe that it is necessary."—[Official Report, 16th January 1975; Vol. 884, c. 654.]
  So do we who represent Northern Irish constituencies both on the frontier and elsewhere in the Province. We, too, believe that it is necessary.
  We raise this debate not for the purpose of petty criticism. There might be a humorous aspect to one or two of the observations of my hon. Friend, but there is nothing to laugh at in the whole of this matter. It is serious indeed. We are confronted with the fact that the Act and the order made by the Secretary of State are, for all practical purposes, not being carried out.
  We wish to use this debate as a means of encouraging the Government to institute an urgent investigation not only of the Customs position, to which I have drawn attention, but of the non-implementation of the intention of the Secretary of State. We ask the Government to do that. It is manifestly their duty to do so without being asked. What is more, we assure them that despite the difficulties that they will face in making the Act a practical reality, which it is not at present, they will in so doing enjoy the total support of all the United Ulster Unionist Members who represent constituencies in Northern Ireland. I am pretty sure that, if they were here, other Members of other parties from both sides of the House who passed the Act would assure the Government of similar support.
  There is an ultimate reason why, to use the adjective of the Secretary of State, this is necessary.
  The loss of life, of property, the loss even of hope, which has devastated Northern Ireland for near upon six years now, has its root cause in an ambiguity, a doubt, an uncertainty which has permitted and encouraged the violence of a tiny minority, the violence of the enemy, to whom my hon. Friend referred. Every
  1928
  act of Government which removes that uncertainty, which renders it clear what the status of Northern Ireland is to be, is the most direct contribution towards the restoration of peace and the preservation of the lives, both of the security forces and of those whom it is their duty to protect.
  The fact that, having passed an Act to control the border, this House insists upon it being reasonably seriously fulfilled is one of the principal ways in which that sureness of purpose can be asserted and ambiguity can be banished from the scene. My hon. Friend, on an impulse of the moment, discerning the expanse of green opposite, was tempted to imagine that he was once again on his native heath and peering across the border. I assure Ministers on the Treasury Bench that this is not how we on this bench regard them. We on this bench consider ourselves duty bound not merely to prompt but to assist the Government in carrying out the duty of Government in Northern Ireland. I hope that it is in that sense that any criticism we have offered tonight will be taken and will be acted upon.
  12.17 p.m.
  The Financial Secretary to the Treasury (Dr. John Gilbert): It is more with trepidation than with diffidence that I attempt to reply to a debate that was opened so eloquently by the hon. Member for Armagh (Mr. McCusker), supported by his right hon. Friend the Member for Down, South (Mr. Powell). I have to reply to the debate because it is primarily concerned with Customs matters. Before I reach the more serious aspects of the debate I must say to the hon. Member for Armagh that he is indeed a happy fellow if, every time he sees these benches, visions of the county of Armagh float before his eyes. I only wish that I was so fortunate at any time, day or night, to be so privileged.
  Mr. McCusker: What about Dudley?
  Dr. Gilbert: We do have some farms in my constituency of Dudley, but I must not expand on that now. The hon. Member recognised, as did his right hon. Friend, that there are terrible difficulties on the border and it would be almost patronising for me to refer to them because I have not a tithe of the knowledge that he and his right hon. Friend

  1929
  have about them. I am sure that the hon. Member appreciates that this is a matter ranging wider than the Treasury. It ranges over the responsibilities of my hon. Friend the Under-Secretary of State for Northern Ireland, who has been listening to this debate with me.
  I shall first attempt to deal with the specific questions put by the hon. Member about various border points that he inspected a short time ago. He talked of the border post at Middletown. I am advised, as he is doubtless already aware, that the post has been moved back to its present position from a site nearer the border where it had been repeatedly destroyed. On the day that he was there and spoke to the staff on duty it was not manned from 8 a.m. to 9 p.m. but from 8 a.m. to 6 p.m. In that respect the information I am giving might be said to confirm his worst apprehensions. The post is not supposed to be open as long as he expected.
  The post at Keady has not been re-sited during the emergency but has been in position for several years, and is manned from 9 a.m. to 5 p.m. I have to say to the hon. Member that we have inquired into his movements, or such as we can trace. The officer at Keady knows him well, and I gather, from the freedom with which he moves around, that many officers know him well. The officer at Keady did not see him, any more than he saw the officer. I cannot understand how it came about that they were looking in the wrong directions, but I am assumed that the officer on duty that day when he paid the visit knows him—
  Mr. McCusker: I shall not quibble, but I stopped my car and walked in and had a talk with the officer. I did not identify myself.
  Dr. Gilbert: I am advised that the officer did not think he had seen the hon. Gentleman, so there is some confusion of identity somewhere.
  I am advised that at Omeath, although the hon. Member was not aware of the Customs presence, the officers were on duty until 6 p.m. that day. The caravan and stop sign were burnt on 13th January, six days before his visit, and the stop sign has, unfortunately, not yet been replaced.
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  At Killeen, the officer on duty apparently saw no reason to stop the hon. Member's car, because he is, as we have agreed, well known to many officers on that border. [Interruption.] I hope I am not implying anything improper about his movements, but that is what I am advised.
  The posts at Cullaville and Tullydonnell are on roads which carry little commercial traffic. They are not at present manned, and are being covered by Customs patrols. It is not the case that there is no Customs control on the land boundary. We are maintaining our controls, which are primarily concerned with the movement of goods. This is done both by selective examination of traffic at patrol points and by the patrolling of roads.
  Very largely, the rates of duty on most goods in the Republic do not vary much from those in the United Kingdom, but there is some risk of evasion, and duty has to be paid. Those Customs officers who are on the spot carry out their duties in conditions of considerable hazard. I repudiate any suggestion that they are lax in the exercise of their duties. They have an extremely difficult job—probably the most difficult job of any civilian in the United Kingdom—and they are probably the most significantly exposed officers in the United Kingdom, in the exercise of their duties.
  The right hon. Member for Down, South spoke of the scandalous situation of the Customs service, and raised complaints about the service which he said was not available at Newry. He said that there were not sufficient staff and that there were inadequate premises, and quoted from a CBI report to that effect. As he will be aware, the Customs station at Newry was bombed and virtually totally destroyed in 1972, and four members of the staff were killed on that occasion. Since then, the staff have been working in makeshift accommodation, which does not make their job any easier.
  In August last year Customs and Excise introduced a new system of processing documents at Newry specifically to facilitate the movement of lorry traffic through the control at that point and to attempt to reduce congestion there. The reports we have from our collector at Belfast all suggest that these procedures

  1931
  have been an improvement and have been welcomed. I was not aware of any recent complaints until the right hon. Gentleman spoke, but I will undertake to look into the matters he has raised.
  Passing to the question of immigration control, which was raised primarily by the right hon. Member for Down, South, I shall always bow to him in knowledge of the provisions of the Prevention of Terrorism (Temporary Provisions) Act, but when he was discussing various categories of individuals who were eligible to be appointed as examining officers, he mentioned constables, immigration officers and officers of Customs and Excise who are listed under paragraph 2(a), (b) and (c) of Schedule 3 of the Act, but he did not include members of Her Majesty's Armed Forces who, under paragraph 3 of the same schedule, can perform the functions.
  Immigration matters on the border are primarily security matters, and the prime responsibility for them lies with the constabulary and Her Majesty's Armed Forces. The rôle of Customs in controlling immigration in Northern Ireland is in no way related to security matters and has for some time been operated solely with respect to immigration at the few airports and small seaports in Northern Ireland. That is the full extent of their involvement in immigration control, and that has been so for a considerable time.
  Mr. Powell: Will the Financial Secretary, either now or later, please answer this question: to whom, apart from the Army, have the duty of the examining officers under the Act and the order now been assigned?
  Dr. Gilbert: I am relying on the text of the Act in front of me. I have neither day-to-day experience nor departmental responsibility for this aspect. I am responsible only for Customs and Excise matters, which are not involved. To answer the question, I should have to be familiar with the responsibilities of another Department. As I read Schedule 3, other than members of the Armed Forces, the constabulary would be involved, but I hesitate to give the definitive answer because it is a matter which is outside my responsibility.
  Mr. Powell: I well understand, and I apologise for interrupting the hon. Gentle-
  1932
  man a second time. Those are the categories that can be examining officers. The practical question of my hon. Friend and myself is, to whom are these duties on that frontier actually assigned? Who, apart from the Army, is carrying them out? The hon. Gentleman and his colleague might arrange for that question to be answered specifically later. I appreciate that there is a difficulty here of different departmental responsibilities being involved.
  Dr. Gilbert: I am grateful to the right hon. Gentleman for appreciating my difficulties tonight. I am sure that if he seeks the information by tabling the appropriate question, my hon. Friend the Under-Secretary of State for Northern Ireland will seek to give him the information he requires. I have sought to examine the question of immigration control, but I must emphasise that the Customs authorities have no function at all in security matters.
  I must apologise to the hon. Member for Armagh for not answering his specific questions about the number of uniformed officials assigned to border positions and patrols in his country. I shall try to give him the information as soon as possible.
  Mr. McCusker: Will the hon. Gentleman confirm whether a car leaving the Republic has to stop at the post? This is a critical matter even in the normal performance of customs officers' duties.
  Dr. Gilbert: I understand—I speak subject to correction—that if it involves a free-travel area, these matters are enforced by spot checks. I shall take advice on the subject, but that is my understanding of the situation. I shall try to give the hon. Gentleman the information which he seeks as to how many uniformed officers are engaged in Customs work in Armagh. If he would like to approach the matter by means of a Question, exactly the same course is open to him as to his right hon. Friend the Member for Down, South.
  I hope the answers I have given have satisfied the hon. Member for Armagh. I assure him and the right hon. Gentleman that we treat these matters just as seriously as they do. We are fully aware of all the implications of what has been said in this debate. It is our concern

  1933
  to see that controls in the Customs Service are exercised in a proper way and that, given the appalling conditions in which members of Her Majesty's Customs and Excise have to work on the border, there is no avoidable loss to the Revenue and that people attempting to evade payment of proper duties are prevented from so doing.
  Mr. James Molyneaux: Does the hon. Gentleman intend to have a proper departmental examination of the rôle of the Customs officers in implementing the 1974 Act?
  Dr. Gilbert: I should like notice of that question. If the hon. Gentleman is referring to Schedule 3, I shall not say that that provision is a dead letter in respect of the Customs and Excise Service, but the whole thrust of the Act, so to speak, has been to the effect that Customs and Excise officers are in no way involved in the prevention of terrorism and security matters. I think it would be the wish of hon. Members on both sides of the House that that state of affairs should continue.

  ARMED FORCES (RECRUITING)
  12.33 a.m.
  Mr. Michael McNair-Wilson: The subject of recruiting has exercised the House of Commons for many years. As we remember from history, there has always been difficulty in persuading young men to come forward for the various Armed Services. In the past we have had to resort to press gangs, recruiting sergeants and all the rest to try to make young men take the Queen's shilling.
  We have moved from those rather extraordinary times to something more spohisticated in recruiting terms in that we try to persuade, by all means available to us, those we should like to see in our Armed Services. Yet clearly as Britain's rôle in the world has changed, so the opportunity available for young men—and nowadays for young women—to join the Armed Services as a way of seeing the world also has changed. Thus, the task of those who seek to keep up the numbers of our Armed Forces is entirely different. They have to find the essential element that attracts young people to the
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  Services and have to play on certain themes to persuade young people to come forward. Yet I suggest that whereas that is what they should be doing, they have not defined their task clearly or brought to their assistance many of the aids used by industry and commerce.
  Therefore, when I saw in the Supplementary Estimate a further £100,000 for publicity and recruiting services over and above the £1,720,000 in the Estimate, I felt that this was an opportunity to ask the Minister if he would answer some questions about the general subject of recruiting. I have taken an interest in this subject for six or nine months, and therefore some of what I want to say is the result of my not very deep research.
  First, we are spending about £6½ million on Service recruiting, advertising and promotion. But "promotion" is an ill-defined word, and if the hon. Gentleman could help me to understand exactly what comes under it, I should be grateful. For this expenditure in 1973–74, we obtained 2,237 officers recruits and 30,196 Service men and women. In other words, for the expenditure of £197·30, we obtained one recruit, never mind the rank, Service or sex. That is our base figure for the debate.
  When we break it down, however, we discover that in advertising expenditure it cost about £863·80 to obtain a Royal Navy or Royal Marine officer, £466·20 to obtain an Army officer, and £618·60 to get a Royal Air Force officer. One might say that Army officer recruiting is apparently the cheapest form of officer advertising recruiting we have.
  In other-rank terms, a sailor cost £123·90, a soldier £99, and an airman £116·70. I emphasise that these are the advertising figures. Therefore, in the recruiting of other ranks, we come up with an average figure of £100 per new other-rank recruit.
  That may not seem in these days of inflation particularly high, yet when I put it to someone in civilian life, he said, "A secretary would cost you that." I countered with the argument that, whereas industry may have to recruit a single person for a single job, we are here talking about recruiting sailors for the Royal Navy, soldiers for the Army and airmen for the RAF, and therefore we cannot

  1935
  use the argument that one has to have a particular advertisement for everyone one gets. So the figure of £100 for every other rank recruit, in my submission, is quite high, and I hope to be able to persuade the hon. Gentleman that it is actually even greater than I have so far suggested. Indeed, it is on this question that what I want to say turns.
  If we have to have a Supplementary Estimate and a debate on this Bill to discover why extra money is required, it is equally fair to ask what cost-benefit analysis has been carried out by the Ministry into expenditure on recruiting and whether the hon. Gentleman really thinks that the British taxpayer is getting value for money. Does he know how every pound is being used? Is he satisfied that every pound is achieving a particular target? Does he share with me the thought that recruiting is an extraordinarily haphazard process—so haphazard that no one can be in any way specific about what any piece of promotion achieves?
  For instance, we cannot divorce the figure of £6½ million for advertising in 1973–74 from the cost of what are now called career information offices but which used to be called recruiting offices, of which there are no fewer than 295 throughout the country. Those 295 career information offices and the many people staffing them are also part of the recruiting drive.
  Was the answer given to me by the Minister of State in April last year, that there were 596 civilian personnel staffing these offices, correct—or was the answer given to me on 7th November, that the number of civilian personnel was 396, correct? Whether the number is 596 or 396, there is this large number of civilian personnel employed. There are also 1,500 Service personnel manning these career information offices.
  The career information offices are filled with models of guns, and all the paraphernalia of defence. There are glossy magazines, posters, and books, claiming that one Service is better than any of the others. In short, the offices are full of material which can be described under the one word "promotion".
  Next, what is the cost of upkeep of these offices? Seventy-eight of them are freehold. How valuable are the freeholds?
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  Two hundred and seventeen are leaseholds. When do the leases fall in? Will the Minister confirm that the cost of running the offices is £5½ million? So, instead of talking about £6½ million for recruiting advertising, we are really talking about a figure of £12 million. That is a 1973–74 figure. I wonder what it is today with the effects of inflation.
  Obtaining 32,430 recruits in the course of 1973–74 from 295 recruiting offices thus works out at 109 recruits per office, which means that we are getting two recruits per week per office. This is a fairly expensive way of recruiting young men and women for the services. The Minister must wonder with me whether we are getting value for money from these offices when the output from each office is only two recruits a week.
  Added to the recruiting offices and advertising is the cost of all the Service displays which are used to attract people. There are special parades and displays at agricultural shows. There is "beating retreat". There are mobile exhibitions. There are small mobile recruiting offices at such places as the Battle of Britain shows and the Farnborough Air Show. There are open days on warships. I suppose one might even say that there is the Royal Tournament.
  What is the cost of all those promotions? When that cost is added to the cost of the recruiting offices and the advertising expenditure, are we talking about a figure of £12 million? If not, what is the figure. If it is £12 million, it means that it costs us on average well over £200 to get an other-rank recruit. That is a lot to pay to recruit a young sailor, soldier or airman. If we add the officers, my figure of £197·30 rises to over £400. That too seems an excessive figure for what we are achieving.
  It may be that I am being very unfair. Perhaps the task of recruiting is incredibly difficult and if only I understood the problem better I should not be making this speech. But I have the feeling, backed by fact, that what I am saying would be substantiated in many career information offices.
  I recall a visit which I paid to the recruit selection centre at Sutton Cold-field last August. I asked the staff from where the recruits came. Were they

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  attracted by the advertising—"The Professionals", which I think is the Army other-rank advertising concept; or had their fathers been in the Army? Had they walked past the recruiting office and thought, "Gosh, that is a super life. I shall join"? The staff said that they had not the faintest idea which magnet brought young people into the Services. That seems to provide fairly powerful evidence that what I am saying bears more than a grain of truth.
  However, I wish to go beyond the question of what the recruitment selection centre tells me and to use my own judgment. I thought that perhaps the best way to do this was to look through four national newspapers last week to see what sort of recruiting advertising was being carried. I selected the Daily Express, the Daily Mail, the Daily Mirror and the Sun. I chose them in alphabetical order so that no one should think that I had any preference. It made fascinating reading, for hardly a day goes by without each of the Services vying with another for new recruits.
  It is interesting to read the arguments which are put forward in those advertisements to attract recruits. I am not in advertising professionally, though I have taken some interest in the subject, but I gather that there is one phrase which is used by advertising companies when they consider a new client and how they should approach his problems. It is to discover the "unique selling proposition" which applies to the product they are being asked to advertise—in short, USP. When I look at the Service advertisements, I feel that most of the advertising agencies—and I remind the Minister that there are seven involved in Service recruiting—have not discovered what the USP is. They do not know what they should be advertising. Therefore, there is an extraordinary hit-and-miss approach.
  I wish to carry the matter further by quoting some of the headline slogans, but at the moment I want to stick to this concept because it seems to me that one of the agencies has got it right. I do not know the name of the company, but it is the one which does the advertising for Army officers. Earlier I pointed out that we get Army officers more cheaply in advertising terms than either Royal Navy
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  officers or Royal Air Force officers. Perhaps my judgment is supported by my eyes when I look at that advertisement, for it seemed to have got hold of a USP concept. When we had an Empire, or even the bases at Cyprus or Hong Kong or Singapore, they were attractions to offer Service men. Now we have a different, more rugged situation, in which our Services will be less attractive from the point of view of a lot of free travel and will demand from those who join them a much greater appreciation of what it means to be a soldier, an airman or a sailor today.
  As I have said, I read the advertisements which appeared between 13th January and 18th January in four national newspapers and found that the Royal Navy advertisers, who were essentially advertising for other ranks, told me that I could have "a secure future", and that if I wanted "a great career and was between the ages of 17 and 20½" I should be in the Royal Navy. I was told that I could "swap my job for a career", and that "if it was easy I would probably not be interested". That was an advertisement for helicopters pilots. As I read the slogans I wondered why they applied only to the Royal Navy rather than to a dozen other professions.
  For instance, one of the Royal Navy advertisements spoke of security and said one could earn over £2,970 at 21. It was not bad, but it did not have much to do with being in the Royal Navy.
  The Royal fleet auxiliary took a slightly different angle—it was the engineer officer cadetship that set you apart. I suppose that that is a rather elitist concept. I wonder whether it appeals to the Minister.
  Then there were the other charming advertisements, used by the Army and Navy, inviting people to write for either a "Free Book of The Facts." I suppose that when one has no other ideas a "Free Book of The Facts" will do.
  On 14th January an advertisement for Army officers appeared in the Daily Express under the heading "Are you prepared to die for them". I thought that the copywriter responsible for that advertisement had thought seriously about the USP of the Army and had come up with an advertisement which, while it required a certain amount of

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  reading, seemed to put the Army in its contemporary setting and asked the questions that should be asked of a young person who is serious about doing something for his country. However, there was one sentence in the copy which, if it did not stick out, somehow rang a familiar bell. It said:
  "By laying such stress on the dangers of an Army officer's life it is not our intention to give anyone schoolboyish thrills. It just seems more honest at the present time than showing photos of cheery young men water-ski-ing or tinkering with advanced electronics."
  On Monday, 13th January in the Daily Mirror an R.A.F. advertisement, showed—guess what?—a young man water-ski-ing, while a naval advertisement showed a young man tinkering with electronics. I found myself wondering whether these advertisements illustrated a lack of Service recruiting co-ordination or whether the advertising agents were having a go at each other. Clearly someone is out of step with someone else, or perhaps the Army is more serious about its task than either the Royal Navy or the Royal Air Force.
  The Royal Air Force advertising slogans read "A better life in the RAF", "It is easy to make friends in the RAF", "Broaden your horizons. See a bit more of the world. See a bit more of life." Have those slogans much to do with being in the Royal Air Force, servicing aircraft and generally acting as a Service man? All those phrases could apply to 1,001 civilian jobs, and I suggest that whichever agencies are responsible for Royal Navy and Royal Air Force advertising should seriously consider what they are about.
  I also wonder why advertising for officer recruits is so much better than that for other ranks? Why is it so much more intelligent? Why is it written in a way which makes one think about the Service while the other rank phraseology is so often slap-happy and, it seems to me, out of place today?
  I come back to the advertisement for the Army officer. I went to the recruiting officer in my constituency town of Newbury and asked the recruiting sergeant there what he thought about advertising. I asked him what he thought about the other rank advertising for "the Professionals". He said that he did not think that that was what a young man wanted
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  when he came to the office to join the county regiment. He wanted to meet a job which would test him physically. He wanted risk-taking, toughness, and toughness combined with fairness. He wanted to sense that it was not a chore to be in the Army, but that he was performing a really valuable function in defending our democracy and the free world. That is why I think that the Army officer advertisement was so good, and that its theme is one which other agencies might get on to. I noticed the Royal Marines advertising went much the same way.
  It is not my task to tell the Minister which advertisement is better or worse than another. I have my own view, but I do not claim to be a professional. But we both know that the best recruiting sergeant for the Army in the past five years has been the troubles in Northern Ireland and that deserves a great deal of careful consideration. Perhaps it was because Northern Ireland was a task which was worth doing and people respond to that sort of situation. Although it may now have fallen off as a recruiting plus, there are not many recruiting officers in the United Kingdom who would deny that they had plenty of young men coming forward when those troubles started.
  But I come back to the main purpose of my speech. It is to kindle in the Minister the same enthusiasm that I have to get some sort of cost effectiveness out of recruiting, and to discover whether the figure of £200 plus for an other ranks recruit is the sum that we should pay, whether we need 295 careers information offices and the vast number of personnel who man them, what is the cost of all other promotions being used to get recruits, and finally whether he is convinced that the £6·5 million plus this Supplementary Estimate has to be spent. Is it achieving what it should be achieving, or does the Minister feel, as I do, that his Department or the Service chiefs, or both, should be looking at the whole subject of recruiting again, especially in view of the reductions in the Services which have been announced, to decide whether we are getting value for money and whether next year, instead of having a Consolidated Fund Bill debate about additional money for Service recruiting, we shall be told that it has been possible to reduce the amount spent in that direction.
  12.59 a.m.
  Mr. George Younger: We are all grateful to my hon. Friend the Member for Newbury (Mr. McNair-Wilson) for bringing an important fresh approach to a subject which we have discussed too infrequently in the past. Modestly, he said that he was not an expert, but his research has been very thorough, and his presentation of his case was all the better for being so fresh and so thoroughly well briefed before he started.
  I am amused by the thought of the careful thumbing of the columns of Hansard that will go on in the various advertising agencies concerned following my hon. Friend's speech. I know something of that competitive world, and I imagine that a league table will be drawn up showing who was criticised most in his entertaining description of the various methods of advertising.
  I had great sympathy for those members of the recruiting staff that my hon. Friend interviewed at Sutton Coldfield in trying to give any information about what persuades someone to join the Services. Even when one goes to experts, one gets as many opinions as there are people. For instance, large numbers of people in the Army believe that the best recruiting factor is the county regiment or the regimental tradition itself. Others say that it is the satisfied Service man. As with all advertising, it is difficult to tell whether a particular advertisement or some other factor is bringing about a certain result.
  I would put one of my hon. Friend's questions the other way round. It is fascinating to draw up a league table of how much each Service spends for each recruit obtained, but I should like to know what monitoring is done—perhaps monthly, perhaps six-monthly—of the need to cut or step up advertising for a particular Service which is doing well or badly in recruiting.
  What is the rationale behind advertising for naval and RAF officers? Both are well recruited. The RAF is pretty well up to strength, and in the Navy there are 12 applicants for every one selected. One wonders whether the truly magnificent advertisements for naval officers need, therefore, be on such a scale.
  The standard of most Service advertising is extraordinarily good. The efforts
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  are very lively and obviously represent a great deal of thought. But I would sound one note of caution. Some of the more adventurous copy writing of the last few months is getting near to being a little too racy, certainly for my taste. I am not sure that some of the Army slogans bear in mind the fact that people who are not concerned with recruiting are also reading them and getting a subliminal impression of Service life.
  Will the Minister give us his latest assessment of the trend in Service recruiting? At various times this causes us extreme concern. Then we find that things improve and we all relapse into euphoria. There was extreme concern last year. Some recent figures have been very interesting. I hope that the Minister can give definite opinions about them.
  Finally, when we are considering recruiting and expenditure upon it, we should remember the most important factor of all, which is that it is not only the recruit that we take in from civilian life that is important—although that is very important, and in some cases a dominant factor in our recruiting; it is also the existing Service man who decides at the end of his engagement to re-engage. He is not only very important, in terms of numbers, but he is very much more valuable, because of his experience, than the new person from civilian life.
  Much of the public relations and expenditure on welfare and the good projection of Army life should also be directed to thinking how we can encourage our skilled Service men to be sufficiently happy and satisfied in their jobs to make them wish to re-engage. That is really the key to keeping the Services up to strength.
  The House will be very grateful to my hon. Friend for raising this important subject. We hope that the Minister will be able to give us some impressions and opinions of the current situation.
  1.7 a.m.
  The Under-Secretary of State for Defence for the Royal Air Force (Mr. Brynmor John): I have been bombarded with questions and, in part of the speech of the hon. Member for Newbury (Mr. McNair-Wilson), subjected to the tyranny of figures. I shall try to answer the questions and to understand the figures

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  as best I can, but if either the hon. Member for Newbury or the hon. Member for Ayr (Mr. Younger) has a question that is unanswered, I hope that he will forgive me, and I shall write to him upon that.
  I agree that the subject which has been raised is important. I should like to explain what the philosophy is behind our total package of advertising and recruiting.
  This is an important subject, for two reasons. The first is surely that in an age in which defence establishments are much less frequently happened upon, often the only contact which the public has with the Services is either the Service advertisement or the local recruiting office. More important still is the fact that in each case the first point of contact that a recruit has with the Service of his choice is either through the advertisement or through the recruiting office or information office. It is extremely important that the information he gets there throughout those first few days is as accurate as possible. As has been said, we are looking beyond the immediate three or five years of the first engagement towards his subsequent re-engagement, and subsequent career. The accuracy and candour of the information that he gets on his career prospects in the early stages very often decides whether he re-engages.
  Secondly, in recruiting and advertising for recruitment there is no static policy. Everything done, every move made, is subjected to self-criticism. We hope that analysis and change is made where necessary so that we may attract recruits of the highest possible calibre and character and in the numbers which will enable us to fulfil our defence commitments.
  It is worth while putting on record something which may be axiomatic to hon. Members opposite as well as those on the Government side of the House—namely, that we shall still need our recruiting effort because we need to keep a flow of recruits to balance the age structure, the career and promotion structure, in the Forces. There will still be an extremely fine career for suitably qualified men and women in the Forces.
  But on the matter of achieving this flow of recruits, I return to the cardinal point which I hope to make in this debate, and
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  throughout the time I am charged by the Secretary of State with overall responsibility in this matter—which is something I have acquired fairly recently. It is that we must give a truthful and realistic picture. Sometimes we have overplayed the recreational pursuits—elevated them as if they were the whole of the Service man's career and the hard work was just an unpleasant interlude. Recreation and travel, however, certainly play a part in recruiting some people, of course.
  It is a matter of judgment, which varies from time to time, whether a satisfied Service man is the best recruiter. However, it is beyond peradventure that if we do not tell the truth and if we release a flood of disgruntled Service men who feel they have been misled about the prospects open to them, they may be a positive disincentive to the recruiting effort. So, for the sake of the young men's careers involved, and for the sake of future recruiting effort, we need candour and realism.
  I must tell the hon. Member for Newbury that his unique selling product falls down at precisely that point where human beings differ from soap or deodorants. We are infinitely more complex, and I fear that there is no such thing as the unique selling product in the Armed Forces. There are certain factors which we know sell the Forces to some people. We know that for some the thought of comradeship plays a part. The hon. Member was talking in a rather disparaging way about meeting friends. I think that he referred to the advertisement which dealt with friendship. To some young men the prospect of comradeship of that nature is extremely attractive and therefore it is right, in some advertisements, in a balanced way, to mention that.
  The hon. Member referred as though it were an inconsiderable factor—which it is not—to the appearance in an advertisement of the figure £2,900 at age 21. We know from research that the salary and its comparability with civilian life is important and is an attractive factor to people coming into the Forces, and therefore it is right that that should be mentioned at some time on a balanced basis. There are as I say these infinite variations in human beings, but one can at least try to reduce these varied motivations to certain propositions upon which to place emphasis in our advertisements. There is

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  certainly not now, nor will there ever be, a unique selling product—one coin-operated phrase which will enable us to get all our recruits at the cost of one never-changing advertisement.
  In order to attract the sort of people we want in the numbers we want we have to emphasise different facets of the Service career, to emphasise where it differs from other careers in the hope that one or more of these will appeal to the sort of person whom we need to attract to Service life.
  Mr. Michael McNair-Wilson: I was seeking to suggest not that there is a unique selling point, but that there is a unique selling proposition. We have to get hold of what the Services have to offer. I agree that we cannot categorise human beings like soap, and that we should not try to. The problem is to discover why a man wants to go into the Royal Air Force rather than the Army.
  Mr. John: As I have tried to make clear, that proposition is irreducible to one single cause. A complexity of factors plays some part in the composition of the individual, that is why one advertisement will cover different aspects of the same career.
  The hon. Gentleman will also see a different sort of sales pitch—if I may be allowed to use the Americanism—in each Service's advertisement. Although the hon. Gentleman said that the Royal Navy and the Royal Air Force were competing with the Army for the same pool of individuals, there is not, so far as we know, an attraction to Service life in the abstract. There is an attraction to a single Service. The needs of those single Services vary. That is why in advertising for recruitment the type of appeal one must make differs.
  I take a simple example, that of the advertisement the hon. Gentleman saw for the Navy, where the man is tinkering with electronic equipment. It may be that in advertising for recruitment to the Army one must not, for candour's sake, build up the prospects of being an electronic operator. But the sailor—a compendious word, which does not mean a great deal nowadays, because the skills are such that the men are hardly interchangeable—may well need the capacity to understand and operate electronic
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  equipment. That is why the fact that one Service emphasises one facet rather than another does not necessarily mean that the Services are competing or criticising each other. Each is appealing to the sort of person who is most likely to join that Service. There is a whole gamut of factors which cause this.
  It is true that we have seven advertising agencies, all of which deal with recruitment for the various Services. It is not true that it is a hit-or-miss arrangement. I have only recently taken up the tri-Service responsibility for this aspect of Service life, but I have already managed to visit one advertising agency. I was surprised not by the fact that the matter was approached scientifically and in great detail but by just how scientifically and in how much detail it was approached.
  Interviews are conducted to see what attracted a particular recruit to the CIO in the first place. Each of the little forms that the hon. Gentleman so nobly refused to fill in, because he was not between 19 and 21 at the time, bears a tag which identifies the newspaper in which it was placed, to show which newspapers are most effective in reaching the target audience.
  There is also a massive programme, not only post-campaign, but pre-campaign, to assess the effects of each campaign on the recruit. When there are live features the serving soldiers or airmen often play a vital part. They will often say to the agency which wants them to pose in a certain way, or do a certain exercise for the purposes of recruitment, "That would not happen in real life", and in that way the realism and candour of which I have spoken comes across.
  The hon. Gentleman asked me, as if his request were necessary, whether I was satisfied with the value we get for our money. One can never be completely satisfied that one is getting value for money. I promise the hon. Gentleman that so long as I have responsibility it will be part of a continuing function of mine to search for better ways of advertising and recruitment, so that we get the sort of recruit of whom I have spoken.
  I now turn to the careers information offices. I think that the recruiting factor has been overstressed at the expense, as I like to think of it, of the counselling

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  factor. It clearly is important that the man who joins knows that he is being treated and advised to the best of our ability. I am considering whether there are too many CIOs, whether they are in the right places and whether we are getting value for money out of them. Since, whilst in Opposition, I asked a Question about tri-Service recruiting offices, there has been a modest increase in the number of CIOs in recent years. However, I am keen, where at all possible and practicable, that there shall be shared use of accommodation, so that the overheads can also be shared. That in no way derogates from the single Service appeal. It means that certain common factors are shared.
  The hon. Member for Ayr (Mr. Younger) referred to monitoring. As he will know, each Service has its director of recruiting. He is naturally extremely concerned to monitor the progress not only of CIOs but of professional advice and the performance of professional contracts that are carried out. The agencies do not get a contract on a dynastic basis. They do not assume a throne never to step down until the agency goes out of existence. They are subject to competitive stress at certain times. Of course, it would be unrealistic to pretend that experience does not help them. However, that is discounted to the maximum extent possible. There is fair competition to ensure that the agency which has been given the job is still up to it.
  I cannot give the assurance that everything is perfect; I should be a fool to do so. I can give the assurance that I shall make it my business to ensure that everything is as good as it can be made to be.
  I was asked to give an assessment of the latest trends in recruitment. For the year ending 31st March 1974, 25,800 Service men were recruited. That compares with 39,000 for the previous year. It was a sharp and disastrous drop. The main factor was the raising of the school leaving age. I am happy to say that this year there has been a definite increase in recruitment. We have already recruited more men than in the whole of last year. I hope that this year we shall be able to push recruitment levels beyond the 30,000 barrier again.
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  Recruitment is not a matter for complacency. However, even with the commitments which the previous Conservative administration undertook, there was not a serious shortage of manpower, although there were crucial weaknesses in certain trades. I hope that the present trend will continue. My object will be to ensure that the young man who is placing his future at the disposal of the Armed Services will know what he is doing and will be appreciated and valued. If I can achieve that I think that I shall have satisfied the spirit of the valuable contribution of the hon. Member for Newbury.

  WALES (WATER AND SEWERAGE)
  1.25 a.m.
  Mr. Wyn Roberts: The purpose of this debate is to seek clarification of Government policy in connection with the provision of water and sewerage facilities in Wales. I shall therefore put a number of questions to the Minister. I hope that the hon. Gentleman, whom we congratulate on his birthday yesterday, will have observed that the planet Uranus is in the ascendant and that it is supposed to have an enlivening influence on birthday celebrants, even at this late hour.
  We shall therefore expect from the Minister in his reply to the debate not the usual re-hash of criticism of the Water Act passed by the last Conservative administration but a fresh and constructive appraisal of the problems we shall bring to his notice. We know that water reorganisation has suffered from at least three handicaps additional to those experienced in local government reorganisation.
  First, there was the shortage of time between the Royal Assent being given to the Act and the coming into being of the authorities on 1st April. Second, the methods of financing water services had, of necessity, to be of an interim nature. Third, there was the problem of the estimates prepared by the authorities' predecessors, including some local authorities that were being abolished. These estimates were, in some instances, so inaccurate that there had to be a complete re-examination of programmes within

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  a short period and with a limited number of staff.
  We accept that all of these difficulties confronted the Welsh National Water Authority, along with others, last year. But we are now entitled to ask what progress has beep made in dealing with these problems and whether the Government are satisfied with the rate of progress being made. At the end of the Adjournment debate on 6th May, initiated by the right hon. Member for Anglesey (Mr. Hughes) the Minister said:
  "before next year's charges are fixed, there will have been a complete review of how charges should be levied in future."—[Official Report. 6th May 1974; Vol. 873, c. 178.]
  That review was clearly different from the long-term review being carried out by Sir Goronwy Daniel's committee, as was indicated by a Written Answer to my hon. and learned Friend the Member for Denbigh (Mr. Morgan) on 4th November. What were the results of that review and of the consultations that the Secretary of State and, I believe the Minister, had with the Chairman of the Welsh Water Authority to discuss charging policy? This was referred to in Questions on 29th July.
  It is clear from the replies that the Government at least share the responsibility with the authority for charging policy this year. As regards fundamental changes in charging policy, the Government may well reply that they cannot act before Sir Goronwy Daniel's committee has reported. That is understandable. Meanwhile, the Welsh National Water Development Authority is taking certain actions which are causing concern and the Government cannot escape their share of responsibility in connection with those actions.
  Before dealing with the Welsh Water Authority's most recent actions I would like to draw to the attention of the Minister the working party report "The Water Services: Estimates and Accounts", published last year, and to the point made there that water authorities should make provision in their estimates for depreciation rather than loan charges. Did the Welsh Authority base its estimates for 1974–75 on this principle, which is more common in commercial than public sector accounting? If not, is the
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  authority basing its estimates for 1975–76 on this principle recommended by the working party? Some experts believe that failure to adopt this principle could have been a factor in last year's massive increases in water and sewerage charges throughout England and Wales.
  This is obviously an important point and I hope that the Minister will comment upon it. I referred earlier to actions which the authority had taken and for which the Government have various degrees of responsibility. First, there is the proposal for equalisation of water rates which the authority approved on Tuesday. It will mean excessive increases in urban areas. I note that my district of Aberconwy was one of the objectors, with Cardiff and Colwyn Borough, and I hope that the hon. Member for Cardiff, North (Mr. Grist) will draw particular attention to the problems of Cardiff.
  My district council wanted phased equalisation because the present proposal will mean a 135 per cent. increase in the Conway valley area if it is to be implemented in a single year. What is the view of the Government on this equalisation proposal, and phased equalisation, which has been put clearly to the Secretary of State by the Chief Executive of Aberconwy?
  I understand the increase will have to be approved by the Price Commission, but apart from that, what is the Government's rôle in this? They should tell us whether they gave a direction to the authority to implement the equalisation proposal and, if not, what advice was given? What is the reaction of the Government to the suggestion that implementation should be phased to avoid exorbitant increases? Are the Government at this stage in a position to intervene—or perhaps I should say to intercede—by grant under Schedule 3 of the Act to assist those areas liable to suffer the biggest increases?
  Those are all questions to which we should like answers.
  The Government have acted directly and of this there can be no doubt, in that they recently told the authority that its capital allocation for 1975–76 would be 06.8 million as opposed to the £42·9 million which the authority wanted, after early trimming of some £18 million from projected expenditure. This allocation

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  necessitated further cutbacks in expenditure of some £7 million, including about £4 million worth of sewerage schemes. These cutbacks make sad reading—£230,000 in the Usk area; £324,000 in the Wye area, £754,000 in Morganny; £488,000 in Dee and Clwyd; West Wales, £683,000; Tawe, £390,000 and Gwynedd, £835,000.
  How many started schemes will have to be abandoned as a result of these cuts? Is it true that £800,000 will be lost on the Sker scheme? What will be the effect of these cuts on housing? One cannot build homes without sewerage, and the Minister has been tramping the Principality urging local authorities to build more houses. Will he now detail the housing programmes likely to be postponed because of the cuts?
  The cutback is bound to have an adverse effect on industrial development and my hon. Friend the Member for Pembroke (Mr. Edwards), who is at present speeding peacefully to his constituency, is deeply concerned about South Pembrokeshire sewerage schemes and has given me a letter from the chief executive of the local authority to the national water authority. I should like to read part of it.
  The chief executive states:
  "I will not reiterate the situation of inadequate sewerage in the district, the steps taken by former councils to rectify, and the manner in which, outside their control, these were aborted. Enough correspondence has already flowed on this matter. What I will reiterate, however, is that the water authority must be fully aware of the situation in this district, must be fully aware of the necessity to provide services (which in the national interest will cope with the expansion and development of the Celtic Sea) and in the light of all previous evidence, and submissions made; why the Water Authority now propose to give these schemes an apparent low priority will never be capable of a satisfactory explanation—whatever the circumstances."
  The reference to Celtic oil introduces an entirely new, United Kingdom and, in-indeed, international, dimension to the problem. My hon. Friend was right to suggest that the Secretary of State's Oil Advisory Committee should give urgent consideration to the implications for Celtic Sea developments, of delaying the South Pembrokeshire schemes. What has been the Government's response to my hon. Friend's suggestion?
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  Other hon. Members will, I am sure, indicate the effects of the cuts on their own areas, and I shall refer only to one other by way of contrast. Included in the cuts is a £40,000 scheme to provide basic main sewerage for the little village of Minffordd, near Bangor, in my constituency. At the request of the residents, I visited the area some months ago and saw for myself what the absence of main sewerage meant—people having to carry buckets of excreta, sometimes through the main living room, to a communal dumping ground, which was undoubtedly a serious health hazard, especially for children. I regret to say that this is the second time the scheme has been postponed. When I see that the authority is to spend £300,000 on increasing the size of its headquarters in Brecon I wonder on what basis the authority's cuts in expenditure were made, and the people of Minffordd will wonder, too. Perhaps the Minister will give us some hope and tell us when these desperately needed schemes will be implemented.
  We all understand the need for economy and restraint in spending—a need spelt out clearly to local authorities on 23rd December by the Welsh Office circular. With such exhortation—which we hope was not lost to the authorities in the Christmas mail—and with the scathing cutbacks in expenditure on sewerage schemes as the result of Government limitation on capital allocation, one might have expected that the water authority's rate increases would have been more moderate than they appear to be. We know that the authority inherited debts of £180 million, but are the Government satisfied that the proposed rate increases are fully justified? Do they have the Government's approval?
  On the brighter side, there is the authority's decision, based on the provision of the Act, to charge more for future supplies going outside Wales. I refer particularly to the negotiations in connection with the expansion of the Craig Goch reservoir, in the Elan Valley. I wish the authority all success in its efforts.
  Overall, the subject of water and sewerage facilities in Wales is a depressing one, and the Government cannot shirk their responsibility—certainly not for the cuts in sewerage expenditure which are the direct consequence of the Government's

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  economic policies. Neither can the Government blame the Act, as they have done repeatedly in the past, for although the Minister may have believed that water services should be paid for from general taxation as much as by a direct charge on the consumer, the Government do not share that belief as regards water, or any of the services provided by nationalised industries.
  The Chancellor of the Exchequer has declared the Government's policy to be that of charging realistic prices for the goods and services of nationalised industries. As I said at the beginning of my speech, we need clarification of the Government's policy and I hope that we get it in the reply to this debate.
  1.40 a.m.
  Sir Anthony Meyer: At this late hour I shall not go in detail into the grave problems of sewerage, which have been so admirably covered by my hon. Friend the Member for Conway (Mr. Roberts).
  The problem of sewerage, aggravated by the Government cuts, has been causing difficulties owing to disputes over the interpretation of Section 16 of the Water Act. This has resulted in arguments between the Welsh National Water Development Authority and the district councils as to who precisely is responsible for providing new sewerage facilities for new housing developments. In certain cases this has led to absurdities.
  I know of one case in which a sewerage scheme on a new development does not function because it has not been connected to the main scheme. The gap is a matter of feet. The scheme crosses a minor road, but because there is no proper co-ordination between the water authority and the district council the connection has not been made. The authorities are blaming each other for the failure to complete the scheme. I hope that the Minister will encourage his officials to bang a few heads together and will consider whether more co-ordination and co-operation can be achieved.
  The district council has been in touch with me urging that the Act should be amended, but clearly we cannot amend the Act after it has been in operation for such a short time. If we were to attempt to do so we should almost certainly make
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  matters worse. Clearly, the Act has imperfections, but we must allow it to remain in operation for a little while before we decide to amend it. However, even without any amendments to the legislation, I feel sure that the Minister and his officials could make the process work more smoothly if they were to call together round the table the district council and the water authority to discuss some of these practical problems.
  Even at a quarter to two o'clock in the morning, I thought that I must be present in the Chamber to convey to the Minister a fact of which I am sure he is well aware of, namely, the continuing fury of my constituents, as no doubt of constituents elsewhere, at the way in which water rates doubled last year. Furthermore, some of those people can look forward next year to still steeper increases. Some commercial ratepayers have no water on their premises, but they will still have to pay water rate or sewerage charges—and that also applies to people whose premises are not connected to main drainage. They are compelled to pay charges for services which they do not enjoy, at a time when the Government are for ever telling them how successful they are being in keeping the cost of living down by tight and effective price control.
  I received a letter from a constituent today complaining that he had written to the Price Commission asking why his water rate had virtually doubled at a time when the commission was supposed to be keeping a close eye on these things—and my constituent had not even received an answer. I am looking into that, but I can see the difficulties the commission is in.
  People have been led by the Government to expect that measures are being taken to keep costs down, but they find that these costs, imposed on them by public authorities, are not being kept down. This leads to a sense of uncomprehending despair by people whose incomes are fixed as they face rising charges which they cannot escape. One can cut down on other things, such as fuel, sugar, and postal charges—not writing to one's parents when they are ill, for example—but one cannot economise on one's rates or water rates. They are totally non-elastic.

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  For those whose incomes are frozen, rises in rates and water rates inexorably drive down their living standards at a time when some Ministers and all union officials are saying that we all have a right, at the worst, to maintain our living standards. It puts me and other hon. Members in difficulty when our constituents write to us in anguish and ask what they are to do. They are told that they can maintain their living standards, yet those living standards are falling because of demands imposed on them by public authorities.
  If only the Government would say frankly that we must all take a cut in our standard of living—as some Ministers are beginning to do—I could urge my constituents to be a little more philosophical. But I give a pledge that, whatever the provocation, I shall in no circumstances ever encourage any of my constituents to refuse or delay payment—although I can well understand the motives which lead many of them to do so.
  I hope that the Government will feel able to give more help to hard-pressed ratepayers and water ratepayers and accept the notion not just of the absolute but the relative hardship of those who are not in absolute want but are suffering a sharp fall in their living standards because they have no flexibility.
  I assure the hon. Gentleman—I am sure he found this in his own constituency—that in both elections last year this above all was what was said when people buttonholed me at the doorway. I am sorry to say that I see no sign whatever of this indignation beginning to die down.
  1.48 a.m.
  Mr. Ian Grist: I want to raise two issues. The first concerns a sewerage scheme in an area in which I lived until recently, and the second concerns the charges now falling to the city of Cardiff.
  My hon. Friend the Member for Conway (Mr. Roberts) has already mentioned the cancellation, or postponement, at any rate, of the treatment and disposal scheme at Sker. This has been under way for two years and is one of the most amazing examples of the 40 schemes to be put on ice by the water development authority.
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  I presume that the Under-Secretary of State is aware of the details, so I shall not rehearse them now. But a number of major questions arise. The first and most obvious is, for just how long has this scheme been postponed? We hear that it has been "temporarily abandoned". I fear that there is nothing more permanent than the temporary. I should like to know when the Minister expects this scheme to be taken up again. The director of the development authority has said that it will be "utilised at some time". I cannot think of more depressing words. What do they mean? I am sure that the Minister will try to enlighten us.
  It has been stated that the cost of diverting the sewage from the central scheme to the Merthyr Mawr plant could be as high as £3 million. If that is true, it would seem to be easier and cheaper to have continued with the original scheme on which already well over £½ million has been spent.
  In the end, three major points arise. The first is the apparent complete failure of the development authority to forewarn or consult the Ogwr District Council or the community councils, all 23 of which have protested vigorously at the announcement of the step the authority propose to take. Nor did the authority consult the consultants engaged on the Methyr Mawr treatment plant itself. This is a failing of statutory bodies, and we in Cardiff have had a prime example this week.
  The second point concerns the capacity of the Merthyr Mawr plant itself. Can it deal with the new demands which are to be made upon it? I have read that with the diverted sewage that is to be put through it it will reach its capacity in about two years. If that is so, clearly it will put a considerable strain on the development of Bridgend and the valleys in the hinterland, for which the Merthyr Mawr scheme was first devised.
  Perhaps worst of all in some respects is that the sewage is now to go out through a leaking pipe, of which I know, having walked with my children in that area. Can it be right, at a time when we take pollution seriously—when we look to cleanliness on our beaches, when we are considering health—that this enormous weight of sewage diverted

  1957
  through the Merthyr Mawr plant should go out through this old, outworn and pre-war pipe? I cannot think that it is right, and I hope that the Minister will say something on the point.
  For a relatively small sum—small when set against the extra £1,000 million the Government seek for food subsidies, a form of expenditure which should be phased out, not increased—we are endangering the environment and threatening the development of one of the most promising areas of South Wales, one of its growth areas. I wonder whether we are returning to the brake on housing and industrial development which we saw under the last Labour Government in the latter part of the 1960s—a break which was released by the last Conservative Government, as the Minister well knows from the major sewerage scheme in his constituency.
  I turn to the problem facing Cardiff—the problem of the water and sewerage charges. This has arisen overwhelmingly from the decision of the water development authority to equalise charges throughout Wales. I have serious reservations about the policy and I want to say something about the way in which it is being carried out.
  The Consultative Paper on Finance said that water authorities
  "should plan to eliminate variations in water charges over seven years."
  The Third Report of the Steering Group on Economics and Financial Policies appointed by the Secretary of State for the Environment has been published. Among its recommendations, the 26 members of the steering group—except for the Chief Executive of the Welsh National Water Development Authority—said that
  "In view of the substantial increases in the general level of charges that must be expected next year, any moves towards the greater equalisation of charges in 1975–76 should be both gradual and limited in extent in order to avoid further sharp increases in charges to particular groups of customers".
  I cannot conceive how, in that case, the present situation has arisen. It is the development authority, by this sudden and violent increase in charges, which is out of line with the original consultative document and with the steering group.
  1958
  May I illustrate what this has meant for Cardiff? In the coming year, water charges will rise by 89 per cent. following last year's rise of 82 per cent., and sewerage charges will rise by 353 per cent. These increases are quite monstrous and grossly out of proportion to any possible increase in anybody's income, particularly as they affect houses of lower rateable value. In Cardiff, a house with a rateable value of £100 will, if these proposals are accepted, pay water charges of £17·50 in the coming year, compared with £8·20 in the current year. I say "if they are accepted", because they are to go before the Price Commission, and I hope that when they get there they will be drastically amended or, better still, turned down completely.
  But what is most resented by people who live in Cardiff, as I do—and I should point out that I have an interest in this matter—is that we cannot see the fairness of this policy of equalisation as it is proposed. Equalisation of bills for water consumed, yes; but equalisation of rate poundage, no. Apart from the fact that we are being saddled with the high cost of new installations in other areas, we are expected to pay more for every gallon of water we use in Cardiff than people in any other part of Wales.
  It is difficult to get comparable examples in housing and, therefore, I take a three-bedroom council house built to Parker Morris standards. In Cardiff it has an average rateable value of £177, in Port Talbot, £126—one cannot tell me that the average income is lower in Port Talbot than it is in Cardiff—and in Merthyr Tydfil, £119. In short, compared with other areas in South Wales, the house in Cardiff has a rateable value which is approximately 50 per cent. higher.
  On the equalisation of poundage, that applies to the bills we must pay for the water we consume. Next year, the average ratepayer in Cardiff will be paying £12·19 more for his water and £17·70 more for his sewerage. I hope that the Minister will not tell us that for a clear and final answer we shall have to wait for the report of the Daniel Committee. The development authority should also wait before implementing its proposals.
  We in Cardiff represent about 10 per cent. of the population of Wales, and

  1959
  yet we are expected to provide between 20 per cent. and 25 per cent. of the receipts of the Welsh National Water Development Authority. This is a monstrous policy. It is unfair and unjust, and I do not think it should proceed.
  2.0 a.m.
  Mr. Caerwyn E. Roderick: I am delighted to join in this short debate. I was fascinated by the fact that the Opposition were so concerned with water charges that they should seek it. I was also fascinated to look forward to what they said. They have not let me down. We have had a great deal of confused thinking. However, I am glad that the Opposition have joined us in the campaign to change the structure of the water authority. They were missing a year ago, but we welcome them now as converts.
  The hon. Member for Conway (Mr. Roberts) seemed to suggest that the formal financing should be of an interim nature. I find it difficult to recall his having said that a year ago. It is only now that that has dawned on him. He also mentioned that the Aberconway District Council objected to equalisation, and that the 130 per cent. increase in one year was just too much to bear. I do not recall that the hon. Member helped me last year, when the local authorities in my area were suffering from 297 per cent. increases, while those in another area were suffering from a 250 per cent. increase.
  The hon. Member told us what the people in Aberconway believed. He failed to tell us what he believed. I recall that some months ago he said on the radio that he believed in equalisation. He should tell us what his view is now, not what the people of Aberconway are thinking.
  The hon. Member then complained of the cutbacks in certain schemes of the former river authorities, and named several authorities. Does he believe that those schemes should go ahead and that the charges for water and sewage should be increased? He did not come clean on that point, either. He complains that the money is not being spent and that the charges are too high. He should tell us what he believes about those matters.
  The hon. Member for Flint, West (Sir A. Meyer) suggested that we should delay
  1960
  the amendments to the Water Act 1973. That is exactly what the Government have said. There has already been a delay of two years, but I would be satisfied with a delay of one year. I hope that the hon. Member has no complaint on that score.
  The hon. Member seemed to suggest that meters should be installed, since consumers could not control, or cut down, their payments. That suggests to me that he is in favour of domestic metering. However, I wish that he had made that point clear in his speech. The hon. Member for Cardiff, North (Mr. Grist) said something similar. He complained that the equalisation should apply to the volume of water consumed. Was he complaining that the Government were responsible for the change in the Ogwr scheme? He seemed to suggest very strongly that the Government were responsible. Since the Welsh water development authority took that decision, it is unreasonable to blame the Government, when we were not responsible for giving so much power to that water authority.
  The hon. Member also complained about the Cardiff water charges and said that equalisation should be a gradual process. I invite him to tell that to my constituents who are anxious for change. They have had enough of the present scheme, and are desperately anxious to be relieved of the burden from which they suffer.
  Those points should be clarified, since the Opposition are shielding themselves behind the fact that the Government have borne the brunt of the attack on the anomalies and shortcomings of the legislation for which the Conservative Government were responsible.
  This evening, I returned from a very wet part of the country. It is also extremely beautiful. Besides suffering a heavy rainfall, a lot of the rain is stored in the form of man-made reservoirs, providing water for people in various parts of the country. I refer specifically to the Elan Valley. Other areas in my constituency have reservoirs, and we are fortunate in that many, but not all, of my constituents have running water and mains sewerage.
  The existing Craig Goch reservoir is to be replaced by a project costing about £100 million. Its capacity at present is

  1961
  2,028 million gallons. The capacity of the new reservoir will be 120,000 million gallons. Its height will be increased from 120 feet to 350 feet. It will have a perimeter of 36 miles. I quote those figures only to demonstrate the magnitude of the project. The water stored in the reservoir will supply the needs of people living in the Severn-Trent authority's area and areas beyond it.
  We undertake this kind of activity and are glad to be of assistance. But there are factors which do not make the project an attractive one to many of my constituents and others living in the community.
  With the emergence of the new authorities, formed as a result of the Tory legislation, we found that residents in Radnorshire and North Breconshire were to pay 20p in the pound water rate, when residents in Montgomery were paying 4.1p in the pound. For the benefit of the uninitiated, I remind them that Montgomery is next door to Radnorshire. Meter charges have been 50p and 16.7p per thousand gallons in Radnorshire and Montgomery respectively. Simply because of the accident of an arbitrary boundary line, Montgomery is in the Severn-Trent area, whereas Radnorshire is in the area of the Welsh National Water Development Authority. To my mind, Montgomery cannot be separated from Radnorshire. They are virtually identical counties.
  Montgomery benefits from sharing with Birmingham, with its concentration of population, and thus the rate per head or per household is considerably reduced. But why should not Radnorshire benefit in the same way? Again, it is the accident of the boundary. We understand the historical explanation, but we cannot accept that the situation should be allowed to continue. Whenever I have spoken about it to those of my hon. Friends who represent Midlands constituencies they have hardly been able to believe me when I have told them of the situation, and that Birmingham pays something like 4p in the pound in water charges, whereas Radnorshire pays 20p in the pound. I ask hon. Members to imagine what it is like trying to explain to someone living in the shadow of the reservoir, where they have all this water on their doorsteps, that it can be trans-
  1962
  ported 80 miles and still obtained for a fifth of the price.
  We have covered this ground many times in the past, and suggestions have been made of ways to correct the anomaly. Equalisation is one. The Welsh National Water Development Authority is proposing for its area a scale of £5 per household, plus a rate of 12p in the pound. That is all that it can do at this stage. Without further legislation, it can only suggest equalisation within its boundaries. But this is still well above the scales for other parts of the United Kingdom, which means that we must continue to campaign at least for equalisation throughout the United Kingdom rather than simply throughout Wales.
  It has been suggested that we should sell water, that we should charge for the water which crosses Offa's Dyke. I have been opposed to that all along. Such a proposal is full of contradictions. Water leaves Breconshire for Cardiff. Are we to charge for that water crossing the county boundary? I see no sense in that, I am opposed to charging by volume, because it is just metering again.
  Logically, we should have to charge for every transfer—for water coming back to Wales, as it does, as much as for water leaving it. Any charges should be uniform throughout the United Kingdom. Gas, coal and electricity are not charged for in this stupid way, when the rate in one area can be five times the rate in another.
  I have made what I believe to be a sensible suggestion to the Daniel Committee, set up by the Secretary of State to study charges in Wales. There is much talk of transferring to central Government such costs as teachers' salaries. I have proposed that domestic water charges should be transferred. It would be difficult to do this for industry, because consumption varies so much, and metering is essential, but this proposal could cure all domestic anomalies immediately. Then water provision could be paid for by grant, in the same way as are so many other activities.
  I was glad to see that the Welsh water authority has proposed that charges should be cut for those who are not connected to main sewerage. They have

  1963
  been cut by 50 per cent., but I am disappointed that they have not been abolished altogether; after all, the reduction recognises the anomaly. I ask my hon. Friend to press on the authority the fact that it need not stop there.
  We inherited a hotch-potch from the Conservative Government. It is ironic that Conservative Members should be critical now, when they were silent a year ago. I welcome them to our ranks. We were complaining last January. I hope that they will join us in trying to achieve justice for everyone and not be parochial. We shall be blamed for the set-up, as we were at the last two elections. We have this anomaly to correct, and I hope that we will undertake the task.
  2.14 p.m.
  The Under-Secretary of State for Wales (Mr. Edward Rowlands): I thank the hon. Member for Conway (Mr. Roberts) for his kind wishes on my birthday. I could think of no better way to celebrate it than to take part in a debate on the water issues of Wales at this time of the morning.
  Mr. Deputy Speaker (Mr. George Thomas): I am sorry, I did not hear the hon. Gentleman. I should like to be associated with that and wish the Minister a happy birthday.
  Mr. Rowlands: Thank you, Sir. I was born under the sign of Aquarius, the water bearer, which is an apt sign for this debate.
  The hon. Member for Conway said that he did not want to hear the arguments about the 1973 Act. I appreciate that he would want to draw a veil over his murky past. He said that we should not shirk our responsibilities. I hope that he will not shirk his responsibilities for his failure to object to the principles of that Act.
  There was a little shirking tonight, when the hon. Gentleman did not reaffirm his position on equalisation. He is on record as being in support of equalisation, in rather strong contrast—at the present time, anyway—to the hon. Member for Cardiff, North (Mr. Grist). However, we have to go back.
  I have been asked many questions, with which I shall try to deal objectively. I hung on to certain facts about the water situation as it was becoming more and
  1964
  more complex. Anyone who reads the steering committee's reports will realise that although it affects us—housewives, mothers and the man in the street—the esoteric descriptions of the economics of water and some of the suggestions for the future give us considerable scope for concern.
  I want to try to answer many of the points raised and, in doing so, to underline exactly what the 1973 Act said, upon whom it placed responsibility, and in what direction.
  First, there was the fundamental principle of self-financing. Unlike the previous situation, the Water Act 1973 laid down unequivocally that water should be self-financing. It then drew boundaries around areas to create the Welsh National Water Development Authority and stated that within that authority the books had to be balanced.
  We were then doing two things. If any hon. Member talks about sharp increases, he must remember what happened just a year ago. There was, at a stroke, the withdrawal of a range of indirect subsidies to the consumer on both water and sewerage. Many Welsh local authorities—my own did it, and Anglesey and others—through their own sewerage provisions, had to allow water authorities and boards to precept on their rates, and then, in return, claim from central Government a significant proportion in rate support grant to offset the cost.
  What happened when we established the Water Act 1973—with some of my hon. Friends moving amendments to try to prevent it happening at a stroke, within a matter of months—was that there was a withdrawal of indirect finance and support from central Government to the consumer. Consequently, we had the most arbitrary and capricious increases in charges, as my hon. Friend the Member for Brecon and Radnor (Mr. Roderick) has illustrated so vividly, with a curious geographic incidence which could not bear any relation to the actual costs at that time or any relation to the needs of the consumer or his ability to pay. We have to start with that principle because it is enshrined in the Act, and to understand and appreciate where we go from there and the question of equalisation.
  The second fundamental thing that the Water Act 1973 did was to take away

  1965
  powers from both local government and central Government. It is no use hon. Members saying to me "Why are you shirking your responsibility? We want an answer. You must accept your share of responsibility for these things." The truth is that we share responsibility for only a very small proportion of the responsibilities and functions that are now vested in the Welsh National Water Development Authority.
  When I was in the Welsh Office for the first time, back in 1969, I used to have to stand at this Dispatch Box and announce and defend our decisions on loan sanctions on both water and sewerage schemes. The Secretary of State had power and supervision over charges. He now has neither of those functions; they have been basically transferred to the Welsh National Development Water Authority. The basic function of fixing charges and deciding what water or sewerage scheme should go ahead was taken away from central Government—from the Secretary of State, answerable to hon. Members in the House. We had that transfer of power from central Government to the nominated body in the form of the Welsh National Water Authority.
  The reserve power in Section 30(6) enables the Secretary of State to give a direction to the water authority on the general criteria. This is vital, since, under Section 30(1), the Welsh water authority has the power to fix water charges. The Secretary of State can exercise his reserve power to vary the general criteria under which charges are fixed only in extraordinary circumstances. In addition, he must consult the National Water Council and the authority.
  These two principles show the debate in a fresh light. These arguments cannot be ignored. I assure hon. Members that I would be only too happy to assume responsibility for water in some respects, but since that responsibility now lies with the water authority it is to it and the Act that we must turn for answers. The issue should be considered against the background of this relationship between the Government, Parliament and the water authority.
  On discovering this arbitrary and capricious arrangement for water charges, which arose from the combination of an
  1966
  accident of history and the withdrawal of the subsidy which had been paid until the passing of the 1973 Act, we alleviated it in the only way possible in the short term—by a massive increase in the relief to domestic ratepayers.
  Even after the latest rate support grant negotiations and settlement the domestic ratepayer in Wales enjoys double the rate relief afforded to his English counterpart. In Wales it is 36p in the £ and in England it is 18p. We did that to try to offset some of the impact of the 1973 Act and its charges. Secondly, we had discussions with Lord Brecon and he made a modest reduction in the 50p per 1,000 gallons imposed upon the metered industrial consumer.
  We have also urged on the Welsh water authority the removal of the anomoly and injustice under which people were being charged the full rate for sewerage when they were not connected to the system. I must correct the hon. Member for Flint, West (Sir A. Meyer) in one respect. To our knowledge no industrial, commercial or domestic consumer pays a water charge unless he is connected to a water supply. The hon. Member implied that he knew of a case where charges were imposed. I should be interested to see such an example. He would be correct if he was referring to the charge for sewerage because there the charge was imposed irrespective of whether ratepayers were connected to the system.
  The water authority will give a 50 per cent. relief of the general service charge where premises are not connected to the sewerage system. My hon. Friend the Member for Brecon and Radnor asked why the relief was not greater. The charge is not only for sewerage, but goes on to cover such things as river pollution and drainage. Sewerage is only a part, although a significant part, of that general service charge. We have given relief of 50 per cent. to cover what we see to be the sewerage side of the general service charge to those not connected to a sewerage system.
  The hon. Member for Cardiff, North discussed the issue of equalisation, but my hon. Friend countered him on this point. The hon. Gentleman asked what was the Government's rôle. I think that he was unfair in describing the increased

  1967
  charges to the consumer in Cardiff without comparing them with the increase to the consumer in my hon. Friend's constituency and elsewhere. I cannot argue with the hon. Gentleman whether rateable values in Cardiff are incorrect in relation to those in Port Talbot. As both water and sewerage charges relate to rateable value, we can ask where the inequity lies in ensuring that the same charge is paid in respect of houses of £100 rateable value in Cardiff and in Brecon and Radnor.
  In Cardiff in the current financial year the charge for water is £8·20 for a house of that rateable value, and the new charge is £17·50. But the hon. Gentleman forgot, perhaps conveniently, to quote what others were paying. For example, in Taff Ely the charge is £16·80.
  The Welsh water authority has equalised the charges throughout Wales, because that seems the only equitable basis on which to assess them for the future. My hon. Friend gave graphic illustrations of the present haphazard charges. Yet last year and this year the domestic ratepayer of Cardiff received exactly the same rate relief as did my hon. Friend's constituents. When we have tried to relieve the ratepayer through the domestic rate relief on a uniform national basis throughout Wales it is not unreasonable that the Welsh water authority should move towards equalisation of its charges throughout Wales.
  The hon. Gentleman asked why Cardiff should pay for other people's projects. That is the principle of the 1973 Act. During the passage of that measure many hon. Members fought bitterly against what they saw as the rape of local authority assets. The assets of many local authorities, built up and paid for by ratepayers, were being handed to another authority. The hon. Gentleman cannot now rest his case on the fact that one community should never make a contribution to developing the facilities of another. The facilities of all local authorities have been pooled. The inevitable and logical consequence is to try to move towards equalisation.
  Mr. Grist: I accept that argument so far as it goes, but would it not be fair, having pooled the costs of sorting and
  1968
  supplying the water, to make the bill the same for all the consumers?
  Mr. Rowlands: I do not know how that could be done. The charge is now based on rateable values. We would have to revise all the rateable values and decide, for instance, whether Cardiff should have lower or equal rateable values than Port Talbot. That would have to be done, of course, on the assumption that the system of revaluation is reasonably rational. The hon. Member for Cardiff, North might quarrel with the idea of basing water charges on rateable values. That is a broader point. It is only reasonable that the Welsh water authority should move towards equalisation.
  A number of points have been made about capital programmes. Continual mention has been made of costs. I was interested in the idea that there had been significant, massive cuts in capital expenditure this year compared, for example, with last year. The hon. Member for Conway did not mention the fact that this year there will be an increase. I do not see how an increase equals a cut. The hon. Gentleman spoke as though this Government had suddenly and savagely cut the capital expenditure programme of the Welsh water authority. Last year the capital expenditure programme was £30 million. Until this week it was £35·8 million. I am pleased to announce tonight that only this week we have been able to add an extra but modest £1 million to the capital programme. I do not think that by any form of grammar or dialectic which the hon. Gentleman can deploy he can describe a rise of £6 million as a savage cut.
  The most savage cut that was made was the 20 per cent. cut in capital expenditure that occurred under the famous Barber axe in December 1973. I suspect that the hon. Gentleman's scheme, which he so effectively put before us tonight in a manner that plucked at our heart strings, was also cut by the Barber axe.
  Mr. Wyn Roberts: I hope I made it clear that the cuts of about £7 million to which I referred were cuts imposed by the National Water Development Authority rather than by the Government. Nevertheless, such cuts are related to the Government's capital allocation.
  Mr Rowlands: I accept that we desperately need to do a lot more regarding

  1969
  sewarage projects. There is a tremendous backlog of sewerage works and schemes that are desperately needed to improve the environment and communal life. I am glad that the hon. Gentleman is not suggesting that there has been a savage cut in the capital programme.
  The point has been made—it is an awkward one—that under the 1973 Act the authority is in a considerable dilemma. The more it embarks upon capital expenditure programmes the more the charges increase. There are no grants and no offsetting Government supports. They are not allowed in general terms under the Act. The larger the programme the higher the charges. There must be some balance. The authority seems to be undertaking as much as it can cope with within the present financial and economic constraints. It is probably undertaking the largest capital programme it can involve itself in, given the present circumstances. No schemes that have been started have been cut or stopped. Of course, much depends on the way in which one defines "cuts". A great deal of argument is taking place on some aspects of the schemes that are going ahead.
  I was asked about housing. Paragraph 9 of the first major housing circular issued by the Government in March said that priority must be given to housing. I assure hon. Members that whenever possible that priority has been brought to the attention of the Welsh water authority. I cannot direct it to choose scheme A, B, or C; alas, that does not lie in our power. Whenever we have had representations from any housing authority we have conveyed to the water authority the fact that this priority should be afforded to housing. When I tramp the countryside I always ask each local authority to give me chapter and verse of cases when sewerage schemes with a high housing content have been deferred or threatened with deferment.
  Mr. Grist: Will the Minister now tell us whether it will be two years before the Merthyr Mawr scheme reaches full capacity following the diversion of sewage from the Sker scheme?
  Mr. Rowlands: I was about to mention Sker and Ogwr. I do not want to com-
  1970
  ment in any detail on the Sker-Bridgend situation, because there is to be a meeting on 30th January between the Welsh water authority and councillors and officials from Ogwr. I have a great personal interest in the South Pembrokeshire scheme. I have a high regard for the local authorities there. I know that they are keen to get on with the job. They had bad luck, in that they had gone through an inquiry into the scheme but the inquiry was unfortunately overtaken by the 1973 Act, which led to a loss of power on the part of the Secretary of State, who could not make any judgment on the scheme. It then passed to the Welsh water authority. I am desperately anxious to ensure that the parties get together. I have written today to the Chief Executive of the South Pembrokeshire District Council suggesting that we call an urgent tripartite meeting with officials from the water and environmental divisions of the Welsh Office acting as honest brokers, when the other officials of the local authority and the water authority can try to resolve the complex problems that have arisen with the regional scheme.
  It is unfortunate that procedures are not as good as they should be, particularly at the discussion and formative stage. We have conveyed our concern about this to the Welsh water authority and hope that there will be an improvement. One of the problems is that the water authority meets in public. Its committees are open to the public and the Press, and the committee discussions are reported—sometimes misreported.
  There is a desperate need to improve the consultation procedures between the authority and the local authorities. If I or the Department can make a contribution in this direction and help establish such procedures we shall be only too pleased to do so.
  It is not for me to make any judgment on the merits of the argument. We are not in a position, and have no power to be involved now, but we shall do our best to help.
  I shall refer briefly to the future. The major question looming up is that of the surcharge and the power in the Act to surcharge, and, most important, the imminent report of the Daniel Committee.

  1971
  Hon. Members have said that I should not shelter behind that committee. I hope, in the facts and in the information I have given, that I have not sheltered behind it, but we expect it to report in a month or so.
  Hon. Members cannot blame me for asking them to be patient. What they thought they were passing in the 1973 Act and its effect on Wales is not, perhaps, what they desired, and we look to the Daniel Committee to see if it makes any recommendations which could amend the situation to meet the needs of the Welsh people as a whole.

  FISHING LIMITS
  2.41 a.m.
  Mr. Andrew Welsh: I am glad to have this opportunity to raise the matter of fishing limits and the Law of the Sea Conference, but it seems a strange way to run a country to do so at about three o'clock in the morning; it is government by endurance test. There is only one Scottish MP here, apart from the SNP. I hope that does not show their depth of concern for the fishing industry.
  The battle and the conflicts of international law are exemplified in considering international and national claims to the seas and oceans of the world. The Law of the Sea Conference presents an opportunity, and I hope the Government will use that opportunity. I hope that we have got over the stage of fighting over the seating arrangements. It took seven days at the last conference to get over that "who-sits-where" dispute.
  My interest is basically Scottish, and concerns Scotland's part in this world of changing and finite resources. I ask the Government to ensure the proper representation of Scotland at Geneva and a large Scottish delegation to make sure that every aspect of the Scottish fishing industry as well as Government and other major economic interests are given a voice. I ask for urgency in relation to items which especially affect Scotland. Several much wider problems have special application in Scotland.
  The problem of deciding on patrimonial seas and exclusive economic zones affects the rights of a future Scottish Government on our oil and gas reserves. I ask the Government to make clear their
  1972
  views about the extent and nature of such exclusive economic zones. Will the Government press for 200-mile limits, as Chile and Peru did in 1947 and as many other States are now demanding?
  I would like strenuous Government efforts to be made to ensure international agreement on pollution—a problem made more acute by increased sea traffic, by massive increases in tanker capacity and by the oil exploration and exploitation going on off the Scottish coastline. Some kind of agreement is necessary, such as the 1972 Dumping of Wastes Agreement and the 1973 Pollution from Ships' Oil and other Substances Agreement.
  Here we have the classic question whether controls should be international or national. The United Kingdom delegation should bear in mind the effects of massive doses of pollutants being introduced into the oceans' ecosystem and press for the highest standards of safeguard.
  Pollution is of special danger to Scottish fishermen, whether it be from pipelines which cut across traditional fishing grounds or the debris from oil exploration and exploitation activity, all of which cause danger and financial loss.
  I am told that the men of one fishing boat thought that they had made a fortune when they found their nets bulging, but all they dredged up was a cement mixer. A large and respectable oil company took radioactive materials, put them in a box, stuck the box on the superstructure of an oil rig supply vessel and sent the ship out in a January gale in the North Sea. The inevitable happened, and that box lies on the bed of the North Sea. It represents a hazard to the life of fishermen if it is dredged up and opened. Better safety standards must be insisted upon.
  There are other dangers from oil spillage, which affects the fish from which these men get their livelihood. What are the Government's views on vessel-based pollution? It is better that these rules should be internationally accepted and agreed. What are the Government's views on the rôle of United Nations agencies, such as IMCO? Do they support Canada's objections to it and prefer to leave these decisions to individual States? Either way, Scotland's fishermen are suffering from very real problems, and I

  1973
  hope to see their views strongly represented at the Law of the Sea Conference. Do the Government advocate extension, with proper controls of right of search or arrest of ships causing pollution by discharging oil or dumping harmful wastes in the sea?
  The most important aspect of the conference from the point of view of practical fishermen concerns the delineation of fishing limits. Conservation of Scotland's fishing stocks must be a priority of the United Kingdom delegation, and must be argued strongly at the international conference.
  One by one valuable fishing grounds have been destroyed by over-fishing. Those who attended the fishermen's lobby heard those men, in their straightforward fashion, outline the loss of traditional ground after traditional ground. East Anglia is finished. In Buchan there has been no herring since 1966. Shetland was the main summer fishing ground. There is a whole list of fishing grounds which have been ruined by over-exploitation. Our Scottish fishermen have been conservationist-minded and have protected their livelihood. It is, therefore, up to the Government to give them the protection from foreign industrial fishing fleets that they deserve and must get. Added to that are the fears of our fishermen of what will happen after the EEC 10-year transition period runs out. Our fishermen have the genuine fear that foreign fishermen who fish up to the beaches will come in and ruin the fishing grounds.
  In our world of finite resources, the pressure of world population growth, rising nutritional standards, industrial requirements and rapidly changing fishing technology have put unheard-of pressures on the natural resources of the seas. Nowadays, fishing is less of an art and more of a science, with factory ships bristling with electronic gadgetry and freezing equipment. Anything with two fins and a tail is fair game. The United Kingdom delegation must protect Scotland's fishing grounds from the vacuum cleaner-like operations of foreign fishing fleets.
  Let us learn from Iceland. In 1956, 50 per cent. of Iceland's total catch consisted of herring, yet now the Atlanto-
  1974
  Scandinavian herring has almost disappeared as a result of foreign over-exploitation, and that in spite of the supervision of two international organisations. Icelandic cod are now rarely allowed to live long, and the spawning stock has been brought disastrously low through sheer over-exploitation. Iceland is almost totally dependent on fish and fish products, and it therefore reacted quickly and unilaterally. The United Kingdom is less dependent, and we are perhaps slower to learn this lesson.
  I ask the Law of the Sea Conference delegation not to let Scotland's fishermen suffer from the slowness of United Kingdom reaction. Act now; the precedent is there. The United Kingdom should, at the very least, introduce a 50-mile fishing limit and, at best, a 200-mile limit. This would retain the great fishing grounds within the reach of our more conservationist fishermen.
  However, in demanding a 200-mile limit, I would strongly object to any "ham and butter" type deals. The fishermen I met last week were cynical about politicians—and who can blame them. They fear that a 200-mile limit would lead to some sort of barter agreement with, for example, Norway whereby Scotland's fishermen would be sold out to suit Hull and Grimsby fishing interests. I seek Government assurances on that matter.
  I ask the delegation to protect Scotland's inshore fishing industry against foreign industrial and indiscriminate fishing. I want to know whether our delegation will make demands in respect of the areas where fishing should take place, the fishing techniques to be used, and the number of fish to be caught. Will the United Kingdom, as an example to others, offer some sort of quota system?
  In regard to the proposed changes, I should like to see our delegation proposing research programmes to establish that adequate supplies of deep water species exist to compensate for any reduced access to cod stocks. There are many other issues that could be touched on—for example, international research facilities and access to international waters, rights of freedom of navigation, and so on. However, I wish to put in a plea for Scotland's interests and to

  1975
  ask for a 200-mile fishing limit to be pressed for.
  I realise that the final solution may not be tidy or uniform and that specific cases and anomalies will and must appear. However, I hope that the conference will produce more than just a debate between Hugo Grotius and John Selden and that Scotland's interests will be strongly upheld.
  2.53 a.m.
  Mr. Douglas Henderson: I am sure that the Minister of State for Foreign and Commonwealth Affairs will welcome this opportunity to have a debate on the Law of the Sea Conference. It is one of the most important international conferences in which any country with interests in the sea has been engaged. The right hon. Gentleman must be impatient with those of his colleagues who arrange the business, in that they have not before found it possible to afford an opportunity of discussing Government fishery policies with those of hon. Members who have an interest in this subject. Although I deeply regret the fact that the Minister of State is detained in the House at this extraordinary hour of the morning, I hope that he will bear with us in discussing this important subject.
  I am greatly impressed at the serried ranks of Scottish Labour and Conservative Members who are thronging the benches for this debate—and that also applies to the Liberal Party. At least I am grateful for the presence of the Under-Secretary of State for Scotland. I feel sure that he will hear something of value. I am also happy to see on the Opposition Front Bench the hon. Member for Ayr (Mr. Younger).
  The Minister of State will be aware that last week deputations came from Scotland, from the herring fishing industry, to speak to hon. Members. I take the opportunity to thank the Minister of State for his great courtesy in seeing a deputation at short notice. I assure him that it was greatly appreciated by all the members of the delegation who came down. Although, perhaps, the Minister did not respond with urgent enthusiasm to the view put forward at the meeting, we feel that it augurs well that he was prepared to listen to their views. I extend my
  1976
  personal thanks to him for having seen that delegation.
  The Minister knows that the herring fishermen who came to London are not politically sophisticated. They do not beat about the bush, they come directly to the point. They are people who have built up their livelihood by hard work and dedication. This was the first time for many years that they had come to London to speak to elected representatives and the Government in such strength and that should be taken very seriously.
  Not only was there the cost of bringing such a large delegation to London; there was the loss of fishing time, and to any fisherman the loss of even one day's fishing can never be recovered and he carries it on his back as a burden for the rest of his life. These are men of great integrity and strength of character. When they say that the herring industry of Scotland stands on the brink of disaster, they are not exaggerating.
  When I asked questions on this subject last December the Under-Secretary of State suggested that the outlook in the garden was rosy for the industry in Scotland. He made a stricture on my dissent, suggesting that I should be telling the herring fishermen that things were going well and what a great job the Government were doing for them. I hope that he has looked more deeply into the issue since then, and since he, too, was present to meet the delegation—I am grateful to him as well—he may have realised, from the intensity of feeling, the views put forward, and the facts presented, that the situation is indeed not anything like rosy for the herring industry.
  Scottish herring fishermen have practised conservation for many years. Unfortunately, that policy has not been followed by other fishing nations. Our fishermen will be penalised for their conservation and others will take advantage of what they have practised. The scarcity of herring stocks in the North Sea owes a great deal to the fishing industry activities of countries like Denmark and Norway.
  I do not think that my hon. Friend the Member for South Angus (Mr. Welsh) was exaggerating when he spoke of the way in which the Danes and the Norwegians have been scooping out the fish. They

  1977
  have gone at the North Sea as though with a vacuum cleaner, sucking out the fish, taking both immature and mature fish, destroying future stocks. Whatever criticisms may be levied at our herring fishermen, it is not that, because they have practised conservation.
  There has been created, therefore, a condition of scarcity in the North Sea. Under the North-East Atlantic Fishing Conference, the figure of 488,000 tons of herring has been fixed for the 12 countries concerned. I ask the Government why they have agreed to a quota which gives us a derisory 4 per cent. of the catch, whereas Norway has 21 per cent.—yet Norway has been one of the countries destroying stooks—and Denmark, including the Faroes, has 43 per cent. Our 4 per cent. equals 18,000 tons. It is derisory.
  I stress the importance of reviewing the amount of this quota in the North Sea, because it has been totally inadequate for the catching capacity of our vessels and for the needs of our housewives, for whom herring is an important food of high protein. Eighty per cent. of the Danish and Norwegian catches of herring go not to the housewives of Denmark and Norway but for non-human consumption in fishmeal. Eighty per cent. of the catch of our herring fishermen is for human consumption and is sold in shops.
  I am told that only last year our North Sea quota was taken up in just over four months. Consequently, we have been banned by law from herring fishing from about the middle of November 1974 until the beginning of February 1975. Thereafter, until the end of June 1975 our vessels may fish for the balance of the quota—900 tons. A handful of our vessels could take this quantity in about two weeks.
  The effect of the ban is to force our vessels to fish for herring off the west coast of Scotland, and at a time when foreign vessels are fishing there in great numbers. Off the west coast of Scotland are some of the best herring grounds left to any country. It is very galling for our fishermen to have to be tied up at the pier when Norwegians, Faeroese and Icelanders are coming up just outside the 12-mile limit and catching fish.
  1978
  The Minister will rightly say that there is an international agreement on the amount of the quota. Our fishing industry is not convinced that there is any way in which we can be sure that the other countries are playing the game in relation to the quota. No Minister has persuaded the Scottish fishing industry that there are adequate ways of checking that the other countries which are signatories to the North-East Atlantic Fisheries Conference are able to have their catches identified in relation to the quantity which they take and the area from which they are taking it.
  This is the crux of the question on quotas. It is possible to check the catch taken by any boat operating out of our ports. The Minister will agree that the figures are recorded meticulously. What assurance have we that the catches of the Icelanders or the Faeroese or the Norwegians or the Danes or anyone else involved in the trade are recorded in the same meticulous fashion, and that we know exactly where the catches were taken? No international quota system can work unless there is a method of ensuring that the places from which the catch was taken and the quantity of the catch can be correctly recorded and identified.
  I hope that the Minister of State was impressed by the views of the deputation on this point. There is no confidence in the Scottish fishing industry that these other countries are playing the game according to the rules by which our own fishermen are being rigorously policed.
  The fishing industry in Scotland has been urged to be patient and to await the outcome of the Conference on the Law of the Sea which resumes in Geneva in March, when there is the possibility of an agreement being reached. I sincerely hope that we shall reach agreement internationally on the question of the economic zone of a 200-mile fishing limit.
  The conference may take that decision in March or later this year, but the problem is that there are so many countries represented at the conference. Incidentally, it is ludicrous, when countries of minor importance are represented at the conference, that Scotland is not represented as an independent country. However, the Minister of State will understand

  1979
  our feelings on that matter. Each of the countries will have to ratify the conclusions of the conference. The national Parliaments will have to deal with the matter. In view of the amount of legislation which we face in this Parliament, including the legislation announced by the Prime Minister yesterday, even if the United Kingdom Government agree to what is proposed, what date can the Minister offer for a debate and ratification of the decision in the House?
  The Minister of State has a certain optimism in this respect, and I am always encouraged by optimism. But I hope that it is optimism based on a realistic assessment that each country will show the same sense of urgency and dedication as the Minister of State shows in ensuring that any agreement made at the conference is ratified by its own national Parliament and put into effect. Plainly we are trying to seek international agreement on this matter. How long is the Minister prepared to wait to see how the other countries respond to any decision which may be taken in Vienna this year—six months, two years, 10 years? The fishing industry expects a clear statement from the Minister on the time that he will be prepared to wait for all the other countries to ratify. Can he give it an assurance on the period that the United Kingdom will take to ratify—a matter much more under the Minister of State's control than that of the other countries?
  The fishermen believe that this matter cannot be left in abeyance. They think that it is a matter of great urgency. They believe that unless something is done to safeguard the herring stocks this summer there may be no future for the herring fishing industry. Successive Governments—I pay tribute to them for this—have invested a great deal of money in assisting people to buy boats, but they may have to repossess boats because the catch is insufficient for the fishermen to pay the cost of fishing.
  The situation may have serious consequences for the shore-based industries which are dependent on the fish catch. In Fraserburgh, in my constituency, MacFisheries Limited has paid off 80 part-time women workers because of the depressed state of the frozen food industry. D. A. MacRae has paid off 65 women workers because of the fall in the demand for smoked products. The
  1980
  shore-based industries dependent on the herring catch and on the fishermen are going through a very serious time. If herring are not landed, thousands of people dependent on the fishing industry will suffer deep distress.
  One of our leading journals, the Press and Journal of Aberdeen—which is Scotland's national newspaper—stated that
  "Some indication of the present fortunes of the fishing fleet is given by the number of skippers willing to invest in a new boat. Boatyard owner Mr. James Noble said they had done well in 1974 as far as orders were concerned but the outlook for 1975 was uncertain".
  The correspondent on shipping, Mr. Jim Kinnaird, commented that fishermen, like farmers, are aye complaining The question is whether they have something to complain about. Looking at the economics of shipping and the oil crisis, one sees that the fourfold increase in the price of oil has put a tremendous strain on the profitability of the fishing fleet.
  The same correspondent wrote:
  "In contrast to 18 months before, when almost anything that floated went fishing because there was big money to be made, the numbers of second-hand boats on the market began to swell appreciably—a sure barometer of the economic climate.
  The pinch was felt from Shetland to the Solway—and it's still hurting.
  In addition, by the end of the year, about 10 ships were laid up at Aberdeen indefinitely because of mounting losses.
  The weight of white fish landed was down by about 140,000 cwt."
  Those are serious matters for the fishing industry. Our constituents expect us to be deeply concerned about these issues and to take action over them. That is why the cry is going up from the fishing industry that if we cannot obtain an international agreement, the time may come when it will have to consider taking unilateral action, however repugnant that may be to all who respect international law. The Minister of State has made it clear how abhorrent such a declaration would be to him. It is equally abhorrent to me. However, at the end of the day only one law matters, and that is the law of survival. The fishing industry looks to that law today.
  My hon. Friend the Member for South Angus referred to the rôle that Iceland has played in the question of fishing limits over the past few years. It has been said

  1981
  by many fishermen that Iceland obtained the 12-mile limit for them because she was prepared to strike out against any force in the world. The fishermen now say that Iceland will give them a 50-mile limit because, fighting in defence of her national interests and for her very survival, she has in effect achieved a 50-mile limit.
  The Minister of State has announced that he has come to an accord with Norway in relation to Norway's proposals for trawler-free zones. I hope the Minister is aware that it may be possible for him to start discussions with the other countries involved in the North Sea area where herring is found and to try to reach a similar accord in the interests of our fishing industry. I hope that the Minister will be able to initiate such discussions and reach an agreement on a local, regionalised basis, in advance of the decisions that will be arrived at by the Law of the Sea Conference or by anyone else. I hope that the Minister will not say that he is precluded from taking action because of the Law of the Sea Conference. The Norwegian Government have, by agreement between the United Kingdom, France, West Germany and Norway, been approached, without the Law of the Sea Conference having made a final decision on the matter.
  I put to the Minister the view that for the herring industry there is an urgent need for him to enter into negotiations immediately with the other countries involved to try to reach an agreement which will guarantee British herring fishermen a 50-mile limit for herring. I do not say that he should act unilaterally, and certainly not before he has exhausted every other possible avenue to reaching agreement, but I urge upon him the necessity to get into discussions immediately to try to reach this kind of agreement and not to wait for any decisions on the Law of the Sea Conference.
  The Norwegian Government have taken action to protect their national interests, and I am sure that that Government are as anxious as the Minister for an international agreement to be reached on the Law of the Sea Conference. But Norway has taken the view, in my opinion rightly, that her national interests are involved. As a result, Norway has gone ahead and entered into discussions, and she has
  1982
  reached what all reports suggest to be an amicable agreement with the other countries involved.
  I suggest that this is a perfectly feasible course of action for the Minister to follow—to reach an amicable agreement with the other countries involved. If such an agreement cannot be reached, I hope that he will tell us about it, when I am sure we shall support him if he decides that it is necessary to take action without agreement. But we urge him to try to initiate discussions and to reach an agreement which is satisfactory to our fishing industry, as the Norwegians think that the agreement which they have reached with him and the other countries is necessary for the Norwegian fishing industry.
  My second point concerns the urgent need to improve fishery protection. The Minister will be aware, from the views expressed by the deputation which saw him, of the cynicism about the level of fishery protection provided by the United Kingdom Government at present. It would be interesting to hear what proposals he has, in collaboration with such other members of the Government as may be involved, to re-assure fishermen that we have a fishery protection service. There is a strong view among fishermen that we do not have any fishery protection at all and that by the time a fishery protection vessel comes out the fellows have done their dirty work and are away. I hope that we shall have an assurance that action is being taken in this direction.
  My final point is one which I stressed to the hon. Gentleman the other day. The inshore fishermen of Scotland feel, rightly or wrongly, that successive British Governments have paid far too much attention to the British Trawler Federation and to the deep sea interests. When the fishing industry is discussed in this House or elsewhere, too often what is thought of is Hull or Grimsby, and not Fraserburgh, Peterhead, Buckie and other great centres of the inshore industry in Scotland. I hope that the Minister will be as ready to listen to the interests of the inshore industry of Scotland as he has to these other interests which we feel have had his ear for far too long.
  I can do no better than end by quoting the comments in the Scottish Daily

  1983
  Express about the deputation which came down about the 50-mile limit:
  "How can the British Government hesitate? The livelihood of 8,000 families depends on their protection, as well as a significant part of the housewife's budget. Other nations waste no time in defending their fisherfolk. Why should not Britain do likewise?".
  3.19 a.m.
  Mr. Donald Stewart: My hon. Friends the Members for South Angus (Mr. Welsh) and Aberdeenshire, East (Mr. Henderson) have covered a wide area of proposals for and aspects of the fishing industry which I do not need to repeat. For that reason, I shall confine my remarks mainly to the question of fishing limits.
  Last week in the House there was a very unusual lobby of Scottish inshore fishermen. One of them mentioned how long it had been since they had last been forced to seek help from the London Government. They came to demonstrate how vital it was to extend to 50 miles the fishing limits for herring.
  The past year has been disastrous for them. There was a sharp fall in the prices for fish and prawns and a shattering increase in the cost of fuel and gear. Boats are up for sale in many ports, and few new ones are being ordered. The Government should accept their responsibility towards these men—whose contribution in peace and war is beyond praise—and tide them over their difficulties. If, as seems likely, those difficulties turn out to be temporary, the fishermen will be the first to free themselves of Government help.
  I was a member of Stornoway Town Council when we were pressing for an extension of the limit to 12 miles and the Government were dragging their feet and saying that we could not take unilateral action. In the end, we were one of the last countries concerned to take that decision. I differ in one thing from my hon. Friend the Member for Aberdeenshire, East. I do not think that unilateral action would infringe the law. These are international agreements. They are not broken lightly, but Iceland had to do this twice to ensure that her own people had a living.
  The national executive of the Norwegian fishermen's union has adopted a resolution calling for a 200-mile econo-
  1984
  mic zone by 1st January 1976. Who can doubt that that will be accepted by Norway on behalf of her fishermen? Iceland extended hers to 50 miles, and I supported that move because it was for their economic survival. I ask for this treatment to be accorded to the fishermen of Scotland.
  The Scottish fisherman's conservation record is excellent. It is therefore all the more galling and frustrating that countries which have ignored conservation on their own grounds should now be destroying the herring stocks in our waters. They have ruined their own fisheries and are now well on the way to destroying ours. Their industrial fishing methods for herring are deplorable, indeed, sinful. To convert herring on such a large scale to oil and meal is madness in these days of food shortage.
  To conserve stocks and ensure a valuable food supply, to maintain our fishermen in this great Scottish industry, we demand on their behalf the extension of the limits for herring to 50 miles, and we demand it now.
  3.19 a.m.
  Mr. Iain MacCormick: I am sure that the House will be glad to hear that the excellent speeches which have been made so far have made it possible for me to dispose of six pages of my notes.
  Time and again, the fishermen who lobbied us this week, when faced with tremendous problems, have said that they are asking not for money but for something that would not cost the Government a penny piece. In view of all their other difficulties—the escalating cost of gear, nets and fuel oil; difficulties in the marketing of their products, and the poor prices they have been getting this year—that was a noble gesture on the part of those herring fishermen.
  We ask the Minister to try to persuade his colleagues to take this action, which could have such a marked effect on the Scottish herring fishing industry. In doing this we are asking him and his colleagues to break with a very long tradition of United Kingdom Government approach towards the inshore fishing industry. I do not want to get involved in a history lesson, but there are a few salient points which I must mention.

  1985
  I would briefly take the story back to the beginning of this century—to the time when, in a very indifferent, not to say hostile way, the London Government scrapped the old Scottish concept of territorial limits. They scrapped them basically and mainly because they wanted to curry favour with other fishing nations in the north of Europe. That was the first time. But there were to be three other times, some of which have already been mentioned.
  The next striking thing was the move of the Icelandic Government, in the 1950s, to increase their fishing limits to 12 miles. We all know that in 1964 the British Government followed suit. But they did so as a last resort.
  The next interesting point was the Common Market negotiations. The Government of the day had to pretend that they had won a signal victory in the negotiations concerning the fisheries. But it was a pretence, because in a few short years, as my hon. Friend the Member for South Angus (Mr. Welsh) very forcibly and correctly said, if the result of those negotiations is not radically altered we shall see the boats of Common Market countries fishing right up to our shores.
  The fourth example of this weak attitude on the part of British Governments concerns the latest extension of Iceland's fishing limits. If she can do it, we can do it. The population of Iceland is about half that of Edinburgh. If she can increase her limits to 50 miles, what is to stop the British Government doing the same for our people?
  The inescapable conclusion is that our fishermen are just that wee bit too far away from London to matter very much. But we did not see a similar reluctance on the part of the United Kingdom Government to make sure that all the oil, for hundreds of miles out under the North Sea, was made part of the things which mattered, because it mattered much more down here in the South, with the rise in fuel prices, and so on. The attitude seems to be that these are a few fishing communities scattered around the west, north and north-east of Scotland, so what do they matter? We believe that they matter much more, in a sense, because they are communities with a traditional way of life. They are not something which should
  1986
  be preserved, museum-like, in a West Highland setting, but communities producing one of the most valuable commodities we have in this country and utilising one of the most important natural resources we possess. We do possess this resource, although the Government seem remarkably reluctant to lay claim to it.
  Regardless of past mistakes on the part of the United Kingdom Government, I make this genuine plea: could we not see a change in this matter and get some common sense going before it is too late?
  3.29 a.m.
  Mr. Hamish Watt: I find it utterly reprehensible that I have to rise to speak at this hour in the morning to plead the case for the Scottish fishing industry, and to find that we are crowded in between the problems of rent officers and of water and sewage in Wales. We have to push in, in some way, to get through to the Government the problems facing our Scottish industry today.
  It is all very well to have symposia in the Church Hall and other such places, but it is here, on the Floor of the House, that matters of this magnitude must be discussed. For some time my hon. Friends and I have continually pressed the Government to discuss this subject, but they would not. It must be raised by us on the Consolidated Fund Bill at 3.30 a.m.
  For at least seven generations fishermen of my constituency and other constituencies round the North of Scotland have been following the fishing shoals. They used to have regular patterns, year by year, which took them on many grounds round the shores of Britain, but now they find that the Lowestoft grounds are totally fished out and boats no longer go there. The Whitby grounds suffered a similar fate. The Scarborough grounds were fished out in the 1950s, the Buchan grounds in the 1960s, and now, in the 1970s, there are only two grounds left—those at Shetland and the West Coast. Shetland was virtually cleaned out last year.
  As each ground has been fished out the boats have had to go further and further from their home shores. This becomes progressively more difficult for small boats, as they find themselves fishing alongside vast foreign vessels. Our boats fish four or five days a week, but

  1987
  the big foreign catchers fish every day, transferring their catches to factory and freezer ships. Their catches cannot be measured. As my hon. Friend the Member for Aberdeenshire, East (Mr. Henderson) said, the catches by our boats can be measured accurately and note can be taken from whence the fish came. That is not the case with boats of Norwegian, Faroese, Icelandic or Russian origin.
  I am sure the House can imagine just how annoyed my fishermen get when they are told that their quota for the year has been reached and that they must stop fishing herring until next July. There is now the concession that they can fish from March to July provided they catch only the 1,000 tons that remain of the 18,000 ton quota. That was the situation on 11th November, and it is the situation today. Our boats have had no opportunity to catch herring. Our factories, therefore, have had no opportunity to manufacture herring. The East Coast herring quota has totally disappeared. If our boats are big enough to go after the fish they must go to the West Coast, but what do they see there? There are the big boats, fleet after fleet of them, trawling as much as 20 and 30 abreast, scraping up the stocks from our waters.
  On the West Coast, because of the geological lie of the islands—and thank God for that—the Minches are sacrosanct to our own boats. But what do we find? We find whole fleets of boats fishing outside the Minches catching the herring before they ever get into the shallow water.
  I turn now to the Shetland situation. Over the last year white fish have been scarce, and they have fetched a very poor price. Many of the boats have turned to catching herring. The factories of Shetland have been existing on the catches of herring that have been landed there. But the quota was finished in November. There have been no boats fishing herring out of Shetland since then. The boats have gone to the West Coast. That is all very well from a boat's point of view. There is herring to be had on the West Coast, but what of the factories of Shetland? How are they expected to get the supplies of herring from the West Coast to Shetland? There are no lines of communication, so the factories of Shetland are denuded of stocks, and have been ever since November. They had
  1988
  a little in cold store, but now they have nothing left, and staff are being paid off every day.
  The Government are not being very bright in killing off whole communities round the North East just because some negotiator boobed in past negotiations. I am fully aware that successive British Governments have taken up certain stances, many of which were dealt with by my hon. Friend the Member for Aberdeenshire, East. They have taken up attitudes about sea limits which perhaps seem right when seen from a desk in Whitehall, but which look plain crazy when seen from a fishing community in the North of Scotland. I appeal to the Minister not to be hamstrung by any historic agreements, but to start with a clean slate when he goes to Geneva in March to renegotiate the deal in the Law of the Sea Conference.
  I am equally aware that there is a recurrent cry for conservation, but it is not our fishermen but the foreigners that have been the predators. Our fishermen have always been selective fishers. They take ashore only top-quality fish for human consumption. That mere fact is one of the reasons why we now have such a low quota for herring catching on the East Coast. We get only 18,000 tons of prime quality fish. Our fishermen go only for fish that the market can take for human consumption. We do not fish for fish meal, unlike the Norwegians and the Danes. Norway gets a quota of 100,000 tons and Denmark and the Faroe Islands 210,000 tons—12 times as much as our fishermen.
  Why have these countries such large quotas? It is for the simple reason that they have for many years indulged in industrial fishing only, where the fish are used for making oil and fish meal. Our Scottish fishermen are no fools. They are fine men, who make many friends as they fish around our shores. They make friends with the Norwegians and Icelanders. There are even times when they land some shots in countries such as Denmark and Norway, where they can see full well what is going on. They see the fish going up the escalators into the factories, and see that there are often many immature and mature herrings in the catches. They see that those are the countries that are the predators of the stocks in the North Sea.

  1989
  I know that Government thinking has long favoured the Hull and the Grimsby fleets. We should be the last people to try to deny the people of England their fish and chips of an evening. I know that that industry has had the ear of successive Governments. I have noticed that in the short time that I have been a Member of the House of Commons. But we must face reality. The distant water fleet has been declining over the years and at the same time the Scottish fleet has been increasing. The pattern has changed. That is why I urge the Minister to change his thinking when he next goes to negotiate our case. The attitude of "Let's stand back and let the other man forward", that seems to be so prevalent in the English character, is totally out of date in present-day economic thinking.
  That attitude is totally out of place in the fishing grounds. When our men go out on a Monday morning they find that after standing back over the weekend the foreigner has gone ahead and pulled in all the shoals of prime quality herring. All that are left are a few spots of herring that have been so harassed over the weekend that they are nervous and difficult to catch.
  We have all been aware of the attitude taken in the recent past vis-à-vis Iceland. Iceland wanted to extend its limits to 12 miles. We have noticed how the British Government have tried to harass little nations like the Faroes, with a population of 250,000 people, because they wanted to protect the only asset they had—fish. We in the Scottish National Party are equally interested in protecting Scotland's assets. It so happens that the remaining stocks of fish are one of those important assets.
  We are all aware of the great new discovery of oil. We hope that it will last for ninny years—40, 50 or 60 years. I trust that it will do some good to the economic life of Scotland and, to some degree, some good to the economic life of our neighbour, England. But we are determined that when that asset has all gone our fishing stocks will still remain and that they will be in a better state than they were under successive Governments in the 1960s and 1970s.
  For the first time last Monday a deputation of Scottish skippers lobbied
  1990
  the House. People have been calling them fishermen, but they were all skippers. Every one of them represented a crew. They represented crews made up of their friends. They feel responsible for those men, and for their families. The skippers took off fishing time to come here to plead their case. Are the Government in some way proud that those men reached the stage when they felt that they had to come here to beg the Government to do something for their industry? Are they proud to have brought such a community of independent men to that stage?
  I give the Government a clear warning. The skippers came in good will last Monday, but I can assure the Government that unless their just demands are met they will not come with good will another time. One of them said clearly "Unless we are given what we are looking for, by God, we shall be back". Those men will settle now for a 50-mile limit for herring fishing. They want that limit now. They say that they must have it by 1st July. July 1976 will be much too late. They know that the last hope for their industry is to have that limit this year. That lies in the bands of our negotiators at the Law of the Sea Conference.
  Every fishing community in my constituency has written to me on this matter. I seek to impress on the Minister how deep is the feeling throughout the whole of the fishing community around the North Coast. The skippers were not here asking for money. They only want to play their full part in the economy. As the country is in such a dreadful economic mess, is it not reasonable to expect the Government to help them play their full part?
  I come now to what will happen assuming we get this exclusive 50-mile limit for our fishermen. We hope that the Minister will be so successful that he will return with a 200-mile limit. Our fishermen would dearly like that. But they are determined to have the 50-mile limit. They are aware that with the outer 150 miles there will be ample opportunity for negotiation—for swapping so many thousand tons of Norwegian cod for so many thousand tons of Scottish herring. They are aware that the Government will not want to throw overboard other countries which have

  1991
  long, traditional rights and they are prepared to accept this.
  The big difference will be that for the first time ever these areas will be under British control and will be available for British policing so that we can see what is happening to our fishing stock. Has not the time come when the Government must face the facts and perhaps withdraw the patrol that wanders off the coast of Africa, round Beira? The Government should bring some of the Navy back home to look after the interests of our own people.
  The fishermen of Scotland are just as conservation conscious as the Norwegians, and are prepared to give their stocks the chance to recover. They point out that so long as immature fish are taken away there seem little point in their playing the game. British fishermen are closely controlled by net size and the operations of the fishery protection vessels—when they can leave port. That is why this service must be augmented by the Royal Navy.
  I ask the Minister to put an end to the law of the jungle which exists now. Our fishermen are the laughing stock of the North Sea. They fish alongside others and see what they are taking. Yet our men have to pull up their nets and come home because they have their quota. As the House has repeatedly been told recently, our fishermen have the oil industry to contend with. They have to contend with careless dumping of debris, as my hon. Friend the Member for South Angus (Mr. Welsh) pointed out.
  For the sake of Britain's economy, and in the belief that they will one day get fair play from the oil companies, our fishermen are prepared to put up with aggravation and inconvenience, but they are not prepared to remain the laughing stock of the fishing communities round the North Atlantic coast. They demand this 50-mile limit and they mean to get it. They have definite plans of action.
  The fishermen round our coasts are deep thinkers and they have time to think. I urge the Government not to push them. They have got ideas. My hon. Friend the Member for Aberdeenshire, East and I have been sitting on top of a cauldron these many weeks past. We have been trying to take some of the heat out of
  1992
  the situation. We believe that we are succeeding.
  I must impress upon the Government that we in the Scottish National Party are prepared to play our part in getting this right. We have no axe to grind other than to look after the interests of our fishermen—our constituents. That is what we were sent here for, and that is what we intend to do. If the fishermen are pushed, I give the Government fair warning that I shall go along with them. It is their future and mine that is at stake when the Government go to this conference.
  I say to the Minister, "Go to the Law of the Sea Conference with a fresh outlook. If you need it, take a new team of negotiators with you. If you need any advice, take it from the Scottish fishing industry, because it knows what goes on and what it wants". Yesterday's men are old, and no use today. I know that attitudes have been adopted and the Minister may feel bound by them.
  I urge the Government to throw off this reluctance to look at the problem afresh, because there is not much time in which to save our fishing fleet. The inshore fleet can measure its life in months, not years, unless something is done soon.
  Food is the only currency which matters these days, and our Scottish fishermen have invested vast sums of their own and the Government's in boats and gear. They are still prepared to work hard and to develop new techniques, and, more than that, to sacrifice life itself in their calling. In peace and war, Scottish fishermen have never let the nation down. I urge the nation now not to neglect them in their hour of need.
  3.51 a.m.
  The Minister of State for Foreign and Commonwealth Affairs (Mr. David Ennals): I welcome the opportunity to discuss the Law of the Sea Conference and the issues which have been raised.
  Hon. Gentlemen should not feel too self-righteous that we are meeting at between 3 am and 4 am to discuss the problems of fishing. We well know that the fishermen are out in their boats in bad weather and bad conditions day and night and we should not begrudge spending some of the time when we would normally be asleep in considering some

  1993
  of their problems, so I am grateful to the hon. Member for South Angus (Mr. Welsh) for raising the question.
  I am interested in this matter as well as being involved as a member of the Government. We are most anxious to see results in a new convention generally acceptable to all States, which will open the way for the peaceful use of the oceans by all nations in the future. At Caracas there was encouraging progress, both in the technical preparation of texts of draft articles for inclusion in the new convention and in the developing sense of momentum in favour of reaching agreement through compromise on a convention which would be generally acceptable to all groups of States.
  We have, since the conference in Caracas and before its beginning again in Geneva in the spring, been extremely active in our discussions with other Governments and the reconsideration of policy issues, to maintain this momentum and to improve the prospects of agreement being reached in the session from 17th March to 10th May.
  The hon. Gentleman who introduced the debate raised the question of the representation of Scottish fishery interests on the delegation. That is important. As the hon. Member rightly said, the delegation which will go to Geneva will represent the whole of the United Kingdom, not just England or Wales. We are deeply concerned with the interests of Scotland.
  At Caracas we had the former Fisheries Secretary for Scotland as a member of the delegation, and his experience was extremely valuable. We also had a representative of the Scottish Fishermen's Federation as an adviser to the delegation. I assure the hon. Gentleman that although the composition of the delegation for the next stage of the conference has not finally been decided Scottish interests will be fully represented by the membership of the delegation, and there is now, and will continue to be, consultation with the Secretary of State and his hon. Friend the Under-Secretary of State, who is with me on the Front Bench, so that we can ensure that Scottish interests are properly represented.
  In preparation for this conference we are carrying out a full review of British
  1994
  policy to determine how best to promote agreement. The hon. Member for Banff (Mr. Watt) said that it was important to look afresh at our policy. That is absolutely right. We should not merely continue to take positions that we have taken in the past. We must be prepared to make changes in our policy, not only in our interests but in international interests, and we expect other countries to do so too. If we get agreement it will be because other countries as well as ours are prepared to change their traditional positions in the interests of general agreement.
  That formation of policy entails discussions with other Governments—active work is being done on this—and discussions in this country. Mention was made of a seminar to be held in London at the end of this month to give all interested parties an opportunity to express their views. The hon. Member for Banff should not be too discouraging about that sort of initiative.
  In the formation of Government policy it is important that we should be quite open, that before conferences we should consult and after conferences report, and that before the next session we consult. We have gained greatly from the opportunities that representatives of the many interests involved, including Scottish fishery interests, have had to take part in these consultations. Our objective is to ensure wide agreement on a generally acceptable Law of the Sea Convention. In this we are determined to proceed by agreement. We are opposed to unilateral action on these issues.
  Reference has been made to the question of a 200-mile exclusive economic zone which would include fishing rights. At Caracas I stated the Government's willingness to discuss that concept. I said that provided freedom of navigation and overflight within the zone was guaranteed we should be prepared to accept this concept as part of a generally acceptable convention, given a satisfactory régime within the zone. We could not accept an economic zone within which the rights of coastal States were so extensive as to make it virtually a territorial sea. Acceptance by the Government of the concept of a 200-mile economic zone is an important step forward. It is a complete change from the policy which

  1995
  has been adopted by previous Governments on this issue. I believe that it is in the interests of the fishing industries of the United Kingdom, including Scotland, and it is in response not only to our assessment of the need but to the stated wish of fishery interests, including those in Scotland.
  The Government are aware of the concern of Scottish herring fishermen over the state of the fisheries off Scottish coasts and their desire for urgent Government action. Each hon. Gentleman who spoke referred to the men who came to London last week. I was proud to have the opportunity of meeting them—it was no concession on my part. When men's future livelihood is at stake, not only hon. Members but Ministers should make themselves available to hear the views of those who are primarily involved. It is sometimes all too easy for Ministers, Opposition spokesmen and others to take a message second-hand. That is not the same as hearing it from those who are involved.
  I was deeply impressed by the quality of the men who came to see me in that delegation. I did not see them as apostles of Scottish nationalism. Their cause is not one that should be seen in any party political sense at all. They were men speaking from a great depth of feeling and concern, and their presence made me more aware of their problems and more anxious to help. Serious consideration will be given to the points which they made and, indeed to the points made in this debate.
  Reference has been made to the agreement with NEAFC—the North East Atlantic Fisheries Commission—over quotas. In an attempt to help these fishermen, Britain has taken a lead in NEAFC in pressing for quick agreements on herring both in the North Sea and off the west coast of Scotland. These have now been agreed within the NEAFC and are currently in force. Under these agreements, quotas for the United Kingdom are roughly in line with the general level of catches in recent years.
  Hon. Gentlemen have said that the quotas are not adequate. We must see whether we can obtain a larger share in future, but we have not seen any fall in the level of allocations made for the
  1996
  British fishing industry in terms of herring or other fish. The Government will keep a close watch on the situation.
  The hon. Member for South Angus said that we should take action to establish a 50-mile limit, and it was suggested that it must be done now. If it were done now, it would be going beyond the bounds of international law. Hon. Gentlemen were prepared to argue that this should be done. It is clear that there was disagreement among them on the question whether action should be taken now regardless of international agreement or whether that action should be based only on an international agreement.
  Mr. Henderson: I feel that the Minister of State has detected some nuances which do not exist between my hon. Friends and myself. What I was asking him to do was to seek agreement now with the countries involved in the area so that we may achieve a 50-mile limit on the lines of what has been negotiated with the Norwegian Government in respect of the interests off the Norwegian coasts. My view is—I know that my hon. Friends agree with me—that if the Minister returns from the conference and tells the House "Although I have worked extremely hard, we were unable to reach agreement because other countries were not prepared to agree", we should take action unilaterally to protect our coast. I hope that that clarifies the question of any so-called differences of opinion or shades of meaning in what was said from our side.
  Mr. Ennals: Even if the hon. Member for Aberdeenshire, East (Mr. Henderson) denies that there was disagreement, the very word "disagreement" was used by his hon. Friend the Member for the Western Isles (Mr. Stewart) who clearly felt that action was needed. The hon. Member for Banff said that we should not be hamstrung by agreements. Therefore, we must look at the danger of taking unilateral action as opposed to a negotiated agreement. We have accepted in principle the concept of a 200-mile economic zone, not a 50-mile zone. I hope that there will be rapid progress at the conference, that we shall be able to follow up decisions taken at the conference and that we shall act in the interests of British industry.

  1997
  Hon. Members must face the implications of taking unilateral action. Any party prepared to ignore international law must accept some of the consequences which may flow from that. The chance of getting agreement in Geneva would be virtually negligible if those countries which have stood for international law were to turn their backs on it and take action which others would follow.
  The recent negotiations with Norway were mentioned by hon. Members. At one time there was a suggestion that the Norwegian Government might take unilateral action to establish trawler-free zones off the north Norwegian coast. Had Norway done so, it might have caused damage to international relations, affecting not only Britain but other countries. The Norwegian Government understood that and sought agreement. The proposals they had put forward were changed and modified in order to meet the needs of other countries with which they were in negotiation. That was vision.
  If we went ahead with a policy of unilateral action we should head towards anarchy on the high seas. The hon. Member for Banff referred to the law of the jungle, and we would certainly have it by unilateral action. There would be no law of the sea—there would be anarchy if we did not move by means of international agreement.
  It is all too easy to try to play off one section of the fishing industry against another. It is wrong to argue that we take too much note of the interests of trawlermen from Hull and Grimsby because they happen to be English and therefore have more rights than Scottish fishermen. We have responsibility for all sections of the fishing industry, no matter what fish they catch, no matter what waters they go to, near or far, and no matter where they come from in the United Kingdom. In this context, the interests of the Scottish fishermen will be carefully looked at. There will be continuing assistance by the Government to the industry, and its urgent problems are being closely considered.
  Conservation is a very important aspect of the law of the sea discussions. We have seen the development of factory ships which can do serious damage to breeding grounds and stocks and we want
  1998
  to ensure effective international control. We recognise the dangers of over-fishing and the importance of agreements reached through NEAFC.
  Reference was made to pollution, which is also of great importance. In Caracas, we consistently took the view that pollution from vessels on the high seas should continue to be a matter for the jurisdiction of the flag State of the vessel. We proposed strengthening the obligations on the flag State to exercise its jurisdiction effectively.
  However, we wish to retain as much flexibility as possible and are examining what rôle might be given to the port State—the country where the vessel is at the time—or the coastal State in the enforcement of internationally-agreed regulations. We also see an important rôle for IMCO in the application of agreements on marine pollution.
  In general, as well as in particular, I assure hon. Members that the interests of Scotland—not only of its herring fishermen but in terms of its mineral interests, marine pollution and conservation—will be very carefully considered and dealt with and effectively represented.
  Mr. Henderson: I am grateful to the Minister for giving way yet again. I had hoped that he might comment on the suggestion I made that he should seek urgently a limited regional agreement with the other States involved. I have in mind a limited 50-mile limit for herring on the lines of the agreement which it has been possible to conclude with Norway.
  Mr. Ennals: I shall not be drawn by the hon. Gentleman. I know that he would like to hear comments. I assure him that a number of points which were made by the fishermen themselves when they spoke to my hon. Friend and myself last week are being seriously considered.

  IMMIGRATION
  4.10 a.m.
  Mr. Norman Fowler: I welcome the opportunity to raise the subject of immigration from India, Bangladesh and Pakistan. I know that the Minister, who has just returned from a tour of those countries, will welcome the opportunity that the Opposition are

  1999
  giving him of making a statement to the House about the tour.
  The cause of the debate is the hon. Gentleman's visit, during which he made a number of comments which we shall want to examine. More particularly, the purpose of the debate is to seek from the hon. Gentleman guidance on what policy decisions he is reaching.
  The hon. Gentleman's visit, valuable though it was, was not the first tour of this kind. My hon. Friend the Member for Cambridge (Mr. Lane) went to these three countries a year ago. The pioneering trip was made, however, by the Select Committee on Race Relations and Immigration, of which I was a member, which went a year previous to that under the able chairmanship of Mr. William Deedes, the then Member for Ashford.
  The hon. Gentleman's visit was the most recent. It had the further distinction of being punctuated by comments from the hon. Gentleman which were different in kind from any previously made by a Minister on the subcontinent. Hon. Members are used to the hon. Gentleman's method of expression. We know that hyperbole comes naturally to him, and we make some allowance for him. It is a little less certain whether the Minister's idiosyncrasies are always appreciated outside the House.
  Before I go on to the serious questions posed by what the Minister stated I urge him to put one matter absolutely beyond doubt. He should make it clear that nothing in all the comments he made implied criticism of the immigration staff who are working in those countries. In Dacca, after he had been in Bangladesh for all of four days, he gave a Press conference at which he referred to the amount of red tape, which he said was scandalous.
  He asserted that
  "No one has ever sat down and said, 'Do we need all this?'"
  He went on to say:
  "We are making too many mistakes. We are making more mistakes than are tolerable".
  To many observers, those comments appear to be a criticism of the immigration staff working in those countries. It is impossible to interpret the second remark in any other way. The impression of the Select Committee when we went to
  2000
  the subcontinent was entirely different. Everywhere, we found immigration staff working under intense pressure and enormous difficulty, but working well and, above all, fairly. We may disagree on other matters, but I hope that the hon. Gentleman will set the record straight on that point.
  What has caused most concern about the Minister of State's comments is that he seems to have in mind a change of policy, and it is the change of policy—what he intends to do—that is the purpose of this debate. We wish to examine and try to elicit from him further information on this matter. The hon. Gentleman is now considering the system of checking on the genuineness of applications from immigrants to come for permanent settlement in this country. Predominantly we are talking about the dependants of wives and children who have the head of the family in this country.
  In the vast majority of these cases, families have been separated for several years. In other words, the separation is of long standing. Usually, the head of the family has been in Britain for several years before making the application for his dependants to come here. Separation has not been caused by the immigration control system. Separation can be extended, because it takes time to check the applications. The pressure on immigration offices has led to delays—sometimes long delays.
  Given that that is the situation, I should like to know how the Minister intends to speed up the process. New immigration staff have already been sent to the subcontinent—to all three countries concerned, I think—and undoubtedly this will reduce the delays. But in Dacca the Minister of State said that he was not aiming at a reduction in the waiting time. He said:
  "I do not regard a queue as tolerable at all".
  According to a Foreign Office reply to me, the offices in Bangladesh, Pakistan and India have before them almost 18,000 applications from dependants. I understand that some of them involve more than one person, and, in addition, others, such as fiancées, are applying for settlement here.
  On the trip—this was not a statement made by the Minister of State, but it was certainly reported, perhaps after guidance from the hon. Gentleman or his officials

  2001
  —the figure of 35,000 people was mentioned. Perhaps the hon. Gentleman will say whether that is the correct figure.
  My first major question is: how does the Minister intend to reduce the queue to zero? Does he plan to send more immigration staff, or to reduce the checks? What is the scandalous red tape which he wants to do away with?
  My second major question springs directly from that. Will the Minister confirm that the queue and the cause for delay are caused in part by a number of factors which he cannot eliminate, however much he might like to, simply by a stroke of the pen or by a few optimistic words? In Dacca he spoke as though the documentation available there to immigration staff was enough to establish the claim being checked, as it might be, in York or some other city in this country. Does not he agree that the documentation provided in a country such as Bangladesh, which is often provided—as the Select Committee report showed—by fairly minor officials, is fundamentally different from the developed documentation provided in the United Kingdom? Does not that make it very much more difficult to check upon the credentials and the true position of Wives and children?
  Even more important than that is the question of illegal immigration. I remember an example in Islamabad, which I think the hon. Gentleman visited, when, looking from the windows of our immigration offices, I saw the tents a short distance away in which agents were advising on the immigration checks being operated.
  We must recognise the pressure that exists to get into Britain, and the extent of the attempts to make illegal entry. It is undoubtedly a cruel trade. It involves human exploitation. Unhappily, it is a well-developed trade. The Select Committee took evidence on this subject. In 1972 we were given figures by the Foreign Office which showed that in Pakistan three out of every eight applications processed were disallowed—that is, they were false. Perhaps the Minister can say whether that position has to any extent changed, or whether the pressure of illegal immigration has been reduced. Until it is reduced, there can be no question of reducing our checks. If the hon. Gentle-
  2002
  man agrees with that, we come back to the crucial question of just how he intends to eliminate the queues.
  The third question concerns the numbers involved. The purpose of this debate is to elicit information from the Minister on immigration policy. Immigration affects race and community relations. A large number of new immigrants entering the country, and going to a few areas, can place strain on, for example, the educational facilities. It was that concern about education which prompted the visit of the Select Committee to the subcontinent to try to understand the wider context. We must remember that the children entering the country may be 9 or 10, or even older, and may have very little education, or knowledge of English. We are dealing with a fairly severe educational problem. Other problems flow from that, including employment opportunities. That is one reason why we should be told more about the numbers involved—the number of dependants who are entitled to come to this country.
  There are other reasons why we should be given more information. The Minister envisages a speeding up of the flow of dependants into this country. That is implicit in what he said in all three of the countries which he visited. Therefore, we are entitled to know how many people the Home Office estimates to be involved here. The Minister seems to envisage a change of policy, or at least a change of emphasis. Therefore it is not quite enough for him to reply that it has never previously been the practice to disclose figures of this kind. His policy statement has never been quite the previous practice, either.
  What is more, as I understand it, the techniques for estimating the numbers involved have improved and have been improved by his own Department over the past two years. It may be that the Home Office is now in a much better position to give an estimate than it was even 12 months ago.
  In this estimate, the Minister should include four essential elements. First, there is the number of applicants who at the moment are having their claims processed. That should be an easily-produced figure. It is directly within the knowledge of the Government. The information has already been partly

  2003
  provided by the Foreign Office in the number of applications, and therefore it should not be too difficult to provide the number of people to whom these applications appertain.
  Second, and more important, I wonder whether the Minister is able to give an estimate of how many dependants are entitled to come to this country from the Indian subcontinent—people who are entitled to entry as dependants. As I understand it, such an estimate exists in the Home Office. This was a subject which I raised with the Home Office in 1973 when one of its officials gave evidence before the Select Committee. He said:
  "We have the figures, but they are not considered sufficiently reliable for public release. When one goes beyond the end of 1973, it is considered too speculative to give them public currency."
  Asked whether there were working figures inside the Home Office, he replied, "Certainly." It may be that, as a result of the better techniques which I understand have been developed, the Minister is now in a much better position to give a more accurate estimate than the Home Office had previously.
  An additional point is that if the Home Office has no reliable working estimate, perhaps it should consider having one. If it has an estimate which it has in use, I believe that it should consider the publication of it because this is information which the public are entitled to have.
  The third element is that of spouses. My hon. Friend the Member for Cambridge will probably touch upon this matter. Last June, the Home Secretary announced that in future women would be able to bring their husbands into the country, in the same way as men had previously been able to bring in their wives. What effect has that had? What are the numbers entitled to come? To what extent have we increased the entitlement to entry?
  Fourth, last year the Home Secretary announced an amnesty for illegal immigrants. I gather that, currently, 1,500 people have made application for this amnesty. It is still not altogether clear whether the granting of an amnesty to an illegal immigrant provides that immigrant with the right to bring in his
  2004
  dependants. If that is the case, to what extent has this right been exercised?
  I have raised some detailed questions, but those about the numbers are not new. None will have come as a total surprise to the Minister. I hope that he will be able to tell us what policy changes he is considering and what effect they are likely to have, what his strategy is and whether it has changed. He should be under no illusion about the justified concern with which the public regard this point.
  4.31 a.m.
  Mr. David Lane: My hon. Friends and I asked for this debate so that we could express some anxieties and give the Minister of State the chance to make at least a preliminary report on his recent visit to the subcontinent. It is good to see him flanked by the Minister of State for Foreign and Commonwealth Affairs, who has responsibility for the posts.
  The level of total immigration has fallen substantially in the last few years but the pressure to enter Britain is still great. Controlling immigration firmly and fairly is a difficult task of government; but it is extremely important, because we see it as a precondition of our supreme objective of maintaining good race relations in this country on a basis of equal rights and opportunities for all citizens.
  The Government should think carefully before changing the procedures for scrutinising entry certificate applications from dependants. Any relaxation which widened the scope for fraudulent applications or weakened confidence at home in the efficacy of the system would be highly irresponsible. The continuing assurance of an effective control and a manageably low rate of immigration is essential if race relations are to remain relaxed and harmonious.
  On immigration from the subcontinent, we should pay special attention to two matters—first, dependants, including spouses, and, second, the problem of illegal immigration. Apart from the United Kingdom passport holders from East Africa, virtually all dependants now entering this country for settlement come from the subcontinent, including people from Pakistan who are now shown in

  2005
  the non-Commonwealth section of the quarterly immigration statistics.
  In 1967, the peak year, well over 50,000 dependants came here for settlement. In 1973 there were about 17,000, and the trend for the first nine months of 1974 suggests that the figure for that year will have been 16,000 or 17,000. One asks, what of the future? How large is the "pool" of adults and children who are entitled and will wish to join the head of the family here?
  There have been estimates and "guestimates" during the last two or three years from various quarters. My hon. Friend has referred to the visit of the Select Committee two or three years ago. After my visit to the subcontinent in January last year it seemed desirable that an up-to-date assessment should be made. This, I think, has been in progress during the past few months. What I certainly envisaged was a new statistical exercise which could use the past experience of the Home Office in forecasting, which had proved accurate year after year, and the census data from 1971 about the pattern of the immigrant community settled in this country, and could use also the various information built up in the posts in the subcontinent through the very efficient record keeping they have developed.
  I ask the Minister of State whether this reassessment has been completed and what the outcome is. Can he give any broad indication of what the total "pool" may be? Would it be about 50,000, about 100,000, or about how many? It is important that we should have some well-based idea—however approximate; I am not asking for precise figures—of the order of magnitude of the remaining commitment over a period of years.
  That brings us to the annual rate of entry in future. So far as I know, the last public forecast was made by my right hon. Friend the Member for Carshalton (Mr. Carr) when he was Home Secretary, in the debate in the House on 6th December 1973. He was discussing the number of dependants admitted for settlement. He said that it was 22,000 in 1972 and was likely to be about 18,000 in 1973. He went on to say:
  "According to our forecasts, which have proved substantially accurate in the past, we expect a further drop, although probably not
  2006
  so steep, in 1974 and 1975."—[Official Report, 6th December 1973; Vol. 865, c. 1474.]
  In other words, just over a year ago we were expecting the annual rate to fall towards 15,000 and eventually below 15,000 during the middle and late 1970s. That was the view of the then Government during our final weeks in office.
  If I remember rightly, the Select Committee, after its investigation, made a forecast that the annual average would settle at about 15,000. Today, according to the Government, there are approximately 18,000 applications outstanding in the queue in all the three countries together, which is reported to be equivalent to about 35,000 individuals. Perhaps the Minister will confirm that.
  I hope that the Minister will give his latest forecast now. We know that it has not been the practice to publish individual forecasts for every year, but it would be valuable in today's circumstances to have his judgment of the trends, because it is the trend as well as the level that is important. Any sudden surge upwards as a result of changes in procedure would be bound to cause uneasiness in Britain, particularly at a time of rising unemployment. This country's capacity to absorb newcomers from any quarter of the world is limited now.
  I ask the Minister of State to pay particular attention to the problem that my hon. Friend has mentioned—the children who come here from the subcontinent with considerable language difficulties which must be met and looked after here, but who will be attending schools which in many parts of the country are already stretched to the utmost. This problem needs to be handled very carefully indeed.
  Coming to the Minister's trip, we know that it was prompted by the delays which had built up—these were causing concern to our Government, too—and the interview queues at the posts. We have all had heartrending letters from constituents about this matter. The length of the queue in each post has been increasing. When we were in government we took some steps to reinforce the staff, and, we intended to review the position later last year.
  I agree that a point is reached where the amount of delay is unacceptable. The Home Secretary put it this way in a

  2007
  Written Answer, in reply to my right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) when he was describing the operation of the controls. It would be
  "in a way compatible with both justice and humanity".—[Official Report, 19th December 1974; Vol. 883 c. 499.]
  At the same time, the Minister of State must have felt the pressures at first hand during his visit. He must have been given evidence of the extent of fraud. That was the first-hand impression felt by my hon. Friend the Member for Sutton Coldfield (Mr. Fowler) and others on the Select Committee. I had the same feelings when I made my shorter visit a year ago.
  I, too, regret some of the apparently wild words that the Minister of State was reported to have used in the early days of his visit. This was particularly unfair to the entry certificate staff, for it would have been taken to reflect on them. They are carrying out the system approved by this House and initiated by a former Labour Government when the entry certificate system was established. I am glad that the Minister paid a well-deserved tribute to the staff later in his visit, and I hope that he will repeat it when he speaks. These people have a very difficult job to do and they do it with great conscientiousness and fairness.
  Will the Minister say whether there is any noticeable effect, yet, on the rate of entry and on the lessening of the queues as a result of the reinforcement of the staff? Perhaps more important, what further changes in the procedure are being contemplated in the light of the experience of the last few years? How is the Minister intending to keep the system as watertight as it needs to be? If it is to be simplified, in whatever respect, how can the Government be sure that they will be able to thwart the bogus applications which may develop on a still larger scale? Is there any prospects of some joint operation with the Governments in the subcontinent on the question of documentation? This might be valuable, but it needs to be approached with care.
  Have the Government considered, as a possible change in the machinery, putting on the head of the household in this country the onus of initiating the applica-
  2008
  tion, rather than leaving it to be started by the dependant in the subcontinent? There might be advantages in a change of that sort, and it should be examined. Altogether, I hope that the Government will be as careful as the Minister of State implied in a Written Answer on 15th January, when he said that the Government were considering whether it would be possible to simplify the procedures without in any way reducing the safeguards against bogus applications. I repeat that the Government must not run the risk of opening loopholes under the pressures we all know exist.
  I have been talking generally about the situation of dependants, but I want to say a few words about spouses in particular—and I am still concerned with the Indian subcontinent. The change in the immigration rules in the second half of last year gave women settled here the same right to bring in their husbands as had always been possessed by the men settled here to bring in their wives. When the Home Secretary announced the change my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said that the removal of the element of sex discrimination in the immigration rules would be welcomed, but added that there would also be anxiety about the consequences for immigration.
  What will be the extent of the continuing commitment on spouses? There was already a commitment, with men able to bring in their wives; but there is a new dimension now that men can join women here. Can the Minister say how extensive is the custom of arranged marriages? Is it diminishing as some people believe? Will our additional commitment to new male immigration be limited by the fact that within the Asian communities settled in this country there is a considerable surplus of young single men over young single women?
  How large, in other words, will be the "extending tail" formed by spouses of either sex? Is it likely to be 2,000 a year, 5,000, or what? I am not expecting precision, I should like some idea of the order of magnitude of the continuing commitment that will develop as a result of the new rules for spouses.
  We are entitled to know more than we have been told so far of the reasons why the Home Secretary decided that he had

  2009
  been exaggerating in March, when he talked of a substantial and continuing wave of male immigration if he made the change in the rules which he later decided to make. Will the Minister also say more about the safeguards on which he is to rely to prevent men circumventing the control by bogus marriages, as a number did before 1969? Will he confirm that the Government will be ready to review the whole situation if the change leads to a substantially higher level of new immigration than he now expects?
  Over all this area of concern we urge the Minister to be as frank as possible. The House and the country would be far better placed to handle the situation if we had an authoritative assesment of the extent of the remaining commitment.
  I turn to the second matter—illegal immigration. This, too, is largely a problem of the subcontinent. My hon. Friend reminded the House of the figures resulting from the amnesty. We are still more concerned with further action to stamp out the inhuman trade in illegal immigration for the future. We all welcome the successes by the authorities in recent months at this end, particularly off Dover at the beginning of January.
  Will the Minister give us a short report on the progress the Government have made with the improvement of the counter-measures which the Conservative Government set in train a year or so ago? It is convenient to look at this in three parts. The first is co-operation with the Governments in the subcontinent and visits to the subcontinent by intelligence specialists from the immigration service here.
  Secondly, there is the continental coastline of Europe, in particular France and Belgium, and the co-operation which has been developed between our police and immigration authorities and their opposite numbers. Thirdly, within the United Kingdom there is the work of the intelligence unit centrally in the London area and also in the different places around the country where its staff serve. I hope that we shall hear more about this, and that in any case the Minister will continue to act vigorously on all these three parts of the problem.
  To sum up, we urge the Government to keep the control firm and effective, what-
  2010
  ever adjustments in procedures may be desirable from time to time. We also urge them to maintain a careful watch on the total level of immigration, particularly having in mind the problems of unemployment here. We shall continue to keep a close watch on the Government.
  4.49 a.m.
  The Minister of State, Home Office (Mr. Alexander W. Lyon): The subject raised by the hon. Members for Sutton Coldfield (Mr. Fowler) and Cambridge (Mr. Lane) is pregnant with emotion, and leads to considerable controversy. I am glad that the hon. Member for Cambridge acknowledged that it is also one which gives rise to heartrending letters from constituents. This part of the problem must be emphasised.
  I regularly receive large number of letters from hon. Members who have immigrants in their constituencies. The bulk of them are heartrending accounts of the way in which human beings are separated by what they regard as the incomprehensible non-understandable processes of bureaucracy. The hon. Members for Sutton Coldfield and Cambridge have between them explained some of the reasons why the present system came into being. In assessing the cogency of those reasons it must be borne in mind that there is another side which must be brought into the balance. I refer to the effect on individual human beings of the kind of checks which have grown up over the years.
  I shall try to put the debate into context. We are not talking about a wave of new male immigration from the subcontinent. We are not talking about another batch of workers coming into this country. We are considering the wives and children of men who came to settle here some time ago. By and large, male immigration stopped when the 1965 White Paper considerably reduced the number of work vouchers. Since then the number of work vouchers or permits which has been issued to the subcontinent has been very small.
  We are now concerned to wind up the commitment, given in the Immigration Act 1971, that any Commonwealth citizen who was settled here before 1st January 1973 would have the statutory right to bring in his wife and children. In that context, much has been said, not

  2011
  only this evening but before, about numbers. It has never been the policy of Governments to speculate publicly on the estimated total but we do publish figures as to the number of applications received.
  It is clear that if a certain number of men came into this country for settlement from India, Pakistan and Bangladesh before 1st January 1973 the number must be finite. A fixed number of men came. Some of them have already brought in their wives and families. My experience in India, as we went round the villages, was that a substantial number of Indians had already brought their families to the United Kingdom. That is also the message that comes out of the census.
  The balance of the sexes in the Indian population living here is roughly equal. The balance between males and females in the Pakistani community, which in 1971 included the Bangladesh community, shows a preponderance of males. Therefore, it would be expected that the commitment would be greater towards Pakistan and Bangladesh than towards India. That seems to be the pattern that is developing. If it is said that the rate at which we are discharging our residual commitment—which was undertaken some years ago and was accepted by the previous Government as it is accepted by the present Government—should be increased, that does not mean that any more people will come into the country. It simply means that the commitment will be extinguished more quickly. It is that which ought to be underlined by anyone who comments seriously upon this.
  Therefore, if it were possible for me—I shall come to the matters raised by the hon. Member for Cambridge in a moment—by any change in the procedures to raise the rate at which people have been coming over the last couple of years, I would not be increasing the total commitment of this country towards immigration from the subcontinent beyond the commitment which was entered into by a Conservative Government. All I would be doing would be seeing that the commitment was realised more quickly.
  I would have thought that it was in the interests of race relations that this should be so. We have two residual
  2012
  commitments out of the whole immigration story from the Commonwealth. One is concerned with the East African Asians, which both Governments have accepted and which is subject to the issue of vouchers. The other is the issue of dependants, which, as the hon. Member says, really means dependants from the Indian subcontinent.
  It is in that light that I approach the question of what we should do. It is sometime suggested that if I were to alter the procedures in any way it would somehow open a great new door to further immigration, but the experience over the last five years, since the entry certificate procedure was introduce in 1969, suggest that, far from increasing, applications from the subcontinent, year by year since 1969, have declined. From a total, in the first full year—1970—of about 32,000, the figure has fallen to about 25,000 in the last full year—1973. In the first nine months of 1974 it was 16,000.
  It is noticeable that the number of applications which we have processed has gone down even more. The reason why there is a longer queue is not that more and more people are applying but that we are dealing with fewer applications each year. For the first nine months of 1974 we have dealt with only 9,000 applications. If that were doubled—I am not suggesting that that could happen in the immediate future—it would still be fewer than the number of people who were dealt with in 1970 or in 1971. In those circumstances, increasing the rate of flow will not make the absorption into our society any greater than it has been in the period between 1970 and 1973.
  The intricacy of our procedures and the way in which they are administered has meant a slowing down of the number of applications which could be processed, leading to inevitable delay. What I had to ask myself as I went round the subcontinent was whether it would be possible in any way to increase the flow by increasing the rate of interviewing, without in any way reducing the checks against evasion. By and large—these figures relate to the period before 1973, in that the situation is rather different in 1974—at the end of the procedures 15 people out of every 100 are refused entry

  2013
  certificates. That means that 85 per cent. of those who apply get their entry certificates, but get them after waiting a considerable time.
  Mr. Norman Fowler: Does that figure include all three countries, or is it a general global total?
  Mr. Lyon: That is the average over the three countries in the subcontinent by the end of 1973.
  I was about to say that although 85 per cent. get their entry certificates, they get them after waiting some time—as long as four or five years—for the interview and thereafter, after the interview, waiting another two years before getting a decision. The position can vary in the subcontinent between as little—I say "as little"—as two years, and five, six or seven, before a decision is reached to give an entry certificate.
  I went to see whether it was possible to improve the procedure so that we got the same refusal rate, but got it much more quickly—and if I achieve this I shall in no way have increased the number of bogus people. That was central to my thinking as I went around. No conclusions have been reached, because these matters have to be considered with my officials, but I shall give some indication of my thinking.
  The other matter raised is one on which the hon. Member for Sutton Cold-field criticised me—that in Dacca I said we were making too many mistakes. The hon. Member, who knows a good deal about race relations in this country, would admit that as he goes around the country he meets many, in the Asian community, in particular, who complain bitterly that they have been refused entry certificates when the wives and children were genuine.
  These expressions of distress—of anger, sometimes—occur not immediately after a decision when one could understand that if a bogus application had been made and refused there was some still sense of bogus grievance, but even years after, when, if there had been a bogus applicant, one would find it difficult to see why there was so much strength of feeling. Although I do not pretend that that means the decision was necessarily wrong, it should lead us to wonder
  2014
  whether the procedures we use might need to be re-examined.
  One thing I wanted to do when I went round was to see whether I could find cases on the ground which would show whether we had made a mistake. It is the most difficult thing in the world in an office in Dacca, Islamabad or New Delhi to recapture the realities of village life with the difficulties of talking to an illiterate woman who could be in purdah and who has come out of her village, possibly for the first time, to see through her eyes what goes on in her village, particularly if the entry certificate officer is not familiar with the village life.
  I first visited the posts to see the interviews, then took some of the immigration staff with me into the villages, not to talk to the village councils or to hold formal sessions, as I understand the Select Committee did. We went to the villages and asked if there was anyone there who had been refused an entry certificate, then took officials into the home and talked to women and villagers about this particular family. Then we would go back to the High Commission and get out the file and see why they were refused.
  In one village in Jallunda in India I came across just such a wife whose application had been refused. When we went to find her—she did not come to us, we went with a whole band of people to find her—we met her husband, who had been refused entry for his wife four years ago. He had come back from a visit to England and was knocking down and rebuilding a house for this woman—whom the British High Commissioner said was not his wife—and the children.
  On looking at the file I could see how the decision had come to be made, and that there was ample room for mistake. What had happened was that we had got it wrong. That was one concrete case about which I am entirely satisfied that we had make a mistake. How many such cases are there? That, too, has to be put into the balance as well as the number of bogus applications.
  Bogus applications also have to be considered with some reserve. All three societies are largely undocumented societies, and that is the cause of the difficulty in dealing with applications. Until recently—1961 was probably the

  2015
  earliest year when marriage certificates in the three countries of any worth became available—most people were born, married and died without ever getting on to any register other than, possibly, a village notebook. It is difficult for us to apply the standards of documentation common in the West to that kind of society, and yet we ask each applicant to bring documents to prove what he or she is saying. Illiterate people in that situation may be tempted to turn to someone who can give them such a document. Therefore, most of the entry certificate officers rightly take with considerable reserve the documents that are brought in. The real question is whether we should ask for documents which, in the end, we do not regard as being of great probity value anyway.
  As I went from country to country I sought to find out whether, within the general lack of documentation, there were certain documents on which we could rely. In Bangladesh I found that to obtain a passport is a difficult procedure. It is not so in India and Pakistan. In Bangladesh there are checks on the issue of passports, and although there are still some forged passports, the information on a Bangladesh passport can be regarded as being more reliable than that given on other passports. One asks oneself whether it would be possible to make a start here.
  Similarly, in India and Pakistan there are certain areas and certain kinds of document which are regarded by my officials as being of greater probity value than others. One asks whether, in these cases, the documentation could be made more crucial in the decision, so that the entry certificate officer could arrive at a decision more quickly.
  Out of 100 cases, of which 15 per cent. are refused, about 15 per cent. are referred back to the Home Office for checking over here. I am seriously considering whether we should begin the application by asking the sponsor here to provide such documentation as he can—which is probably of greater probity value, because it comes from English sources—about a person's status, and his tax and work record here. That would allow the entry certificate officers to resolved some of the doubts which they now find in the interviewing procedure, such as those they refer back to England, which can take between 18 months and
  2016
  two years to resolve. There are difficulties, because such a proposal would put extra strain on staff at Lunar House, Croydon. That is why the suggestion has been resisted in the past. I am seeking to find out what the real burden would be, and whether we can carry it.
  I am sure that it will always be in the interest of any applicant that the sponsor should send to the high commissions in all three countries the details about his status in this country, preferably with a photostat of his passport and details about his tax applications, as certified by the Inland Revenue. That would show when he applied for allowances for his wife and children, and show how many children he applied for and the details of his work record. Those factors could be supplied now, voluntarily, so that the applicant had them with her when she went to the post for interview. That would help to streamline the procedure a good deal over what has occurred in the past.
  I have under consideration an even more radical change. It will not be generally known that in each of the three counties from which immigrants come the areas are very localised. Almost all who come here from Bangladesh emanate from 100 villages in an area of no more than 50 square miles. In India they come from an area which is only slightly larger. In Pakistan they come from two areas—one in Azat Kashmir and one in the area of Gujarat, about 50 miles south of Islamabad. In each country the basic catchment area is rural, though some of the larger villages are almost towns, but our immigrants are mainly rural people from villages. This is particularly true of Sylhet, where we have instituted an experiment—we are sending an officer to the village to see whether he can gain a better appreciation of the bona fides of any application within the village context than in his office in Dacca.
  Clearly, because that this is so experimental, I do not want to switch all our staff resources to that activity. We propose to use two officers for this experiment. The experiment will go on for two or three months and we shall await the results.
  I hope that we can interview many more people who have applied for interview in the villages than we can do in

  2017
  the same time in Dacca. In Dacca, at present, an entry certificate officer is interviewing for settlement about two cases a day. He may be able to interview in the village, say, 10 cases a day. It is obvious that he wastes a certain amount of time in getting up to Sylhet and back again. I hope this will be countered by the increase in productivity gained thereby. I cannot say that the experiment will succeed. There are formidable difficulties, but we shall look at it very closely.
  It was not so obvious to me that the pattern could be repeated in India or Pakistan, because there the villages were not so close and not so identifiable as in Sylhet. But if the experiment is successful, we may look again at the situation in India and Pakistan.
  We are taking up the question of co-operation with the local Governments. I have asked that in each of the posts they should make some kind of formal connection with the domestic Governments to see whether there are means of checking documentation, in particular, so that it can be carried out more quickly than at the moment. Some progress was made on this after the hon. Gentleman's visit, but it has not been considerable, and I am not entirely optimistic that we can get better progress. The domestic Governments, particularly in Bangladesh, were much concerned by the problem, and I hope that they will be able to give us greater assistance than in the past in checking documentation.
  It is in this kind of way that we want to project the central problem of cutting down the delays in the system and also in getting better decisions, which will eliminate the bogus and the fraudulent and mistakes in relation to genuine dependants. If we can do that, we shall have achieved a great deal.
  The hon. Member for Sutton Coldfield suggested that my remarks in Dacca might have been taken to be critical of the men and women who operate this system. I never intended that my remarks should be so construed, and I do not think that they are capable of such construction. I have always maintained that it was the system that was wrong.
  It was not, as the hon. Member for Cambridge suggested, a system approved by Parliament. The idea of an entry
  2018
  certificate procedure was approved by Parliament, but what goes on in the interview has never been approved by Parliament or any Minister. It has grown up over a period of five years as a result of individual initiatives of entry certificate officers and the experience of the immigration service, and it is their accumulated experience which has come together. There is no uniform pattern.
  In Dacca, it took on the whole two or three interviews before one got a decision, often extending over two years even after the first interview, which itself took from three to four years to get. In India, a decision normally came after the first interview. In Islamabad, it was found sometimes than they could manage with one interview. I hope that it will be possible to unite the procedures at the posts and manage, possibly, with one interview, with the documentation follow-up thereafter.
  But, in commenting on the one particular case as being inhuman or any of the other suggested phrases of the hyperbole the hon. Gentleman attributed to me, I am glad that he is so gracious about my weakness on hyperbole. My command of English may be limited, but I do not understand how one could describe in any other way a case in which a woman and two children had been kept waiting for five years for a decision, when two doctors, selected by the High Commission, declared that it was a perfectly genuine case. I do not attribute blame to the entry certificate officers. The blame ought to lie properly on the procedures and upon us who have allowed and sanctioned them. I was concerned to change the procedures.
  If the hon. Gentleman wishes to make inquiry, he will find from the people who were in the offices that after each of the visits that I made they felt that there was no criticism of them personally, and their morale was improved, because they felt that we were taking a serious look at their problem and trying to relieve their burdens as well as those of the immigrants with whom they were having to deal.
  It is only in that spirit that I approach this task—not in any censorious attitude towards those who do the job. It is a difficult and trying job for anybody to undertake. I have been seeking to find

  2019
  a humane way whereby we can overcome the problems, not in any way relaxing our vigilance against bogus and fraudulent applications but ensuring that we get the right decision and the humane decision as quickly as possible.
  Mr. Lane: Will the Minister of State say a few words about the numbers question, and about spouses in particular?
  Mr. Lyon: I cannot say anything about the numbers question, for the reason the hon. Gentleman gave when he was Minister. It is perfectly true that we are keeping some kind of estimate of the total commitment, but it is an estimate, and the hon. Gentleman eschewed acceding to any request to state the estimates when he was Minister. I adopt the same view, simply because in giving an estimate one cannot be absolutely certain. All kinds of possibilities may occur to change the extent of the commitment before it is actually undertaken. I do not intend to say anything about numbers.
  As regards spouses, it is inevitable that in the first year in which the new rule is operating after a period when it has not been operating there will probably be a greater number of applications than in succeeding years, because there is a backlog to deal with. Much as I expected when we changed the rule, the major number of applications has come in in New Delhi, in India, rather than in Pakistan or Bangladesh, because the arranged marriage system is stronger in the Indian Hindu tradition than in the other traditions. In New Delhi, the number of applications which have so far come in is about 900. The number at other posts is very much less. In each of the posts there has been a falling off from the first few months after the announcement, as one would expect. Over a period of a whole year the number of applications would be relatively small.
  It must be recognised that these applications will be dealt with at roughly the same speed as the dependants. I have no intention of giving an expedited clearance for male fiancés and female fianceés, as against people who have been married for many years and who have been waiting to come here for many years. Therefore, these applicants will be dealt with at roughly the same rate.
  That means that present applications may take anything up to two to three
  2020
  years. If the interviewing rate is speeded up, as I hope it will be, we shall be able to process them more quickly. The result of dividing the figures by the number of years that it will take to process the applications shows that the commitment is very small.
  A somewhat similar result occurred in relation to the illegal immigrants' so-called amnesty. Although we were told at the time we made the announcement that we would be deluged by thousands of applications from people who wanted to bring in their dependants, in the whole period since May we have had fewer than 1,500 applications. The number of those who have been processed and been accepted as being genuinely within the terms of the announcement has shown a relatively small number of dependants whom they might wish to bring in at some future date. Therefore, the total commitment from that source is very small. I suspect that the total commitment from fiancés and married men will probably be greater, but not out of context with the number of women who have been coming in for marriage. Last year, from all sources—Commonwealth and foreign sources together—5,000 women came in for marriage, and if the figure were no more for men it would be well within our capacity to absorb.
  Therefore, I am fairly certain that the announcement which we made in the summer will not unduly add to our burdens in immigration or in race relations. Indeed the fact that it has been made, and the fact that the communities feel so strongly about it, has considerably assisted race relations in this country.

  BROADCASTING COVERAGE
  5.26 a.m.
  Mr. A. J. Beith: The diversity of Home Office responsibilities, and those of the Minister of State in particular, is nowhere more apparent than in the number of debates which the hon. Gentleman has had to deal with at these uncongenial hours of the night. As I turn his mind from immigration to broadcasting, and from Bangladesh to Berwick, I appreciate that he has had a long vigil and recognise that he is equal to the task.
  The report of the Committee on Broadcasting Coverage could hardly have

  2021
  been published at a more unfavourable moment from the point of view of getting its recommendations carried out, in the midst of an economic situation which is taxing generally and presents particular difficulties to the BBC. The Vote on which this debate hinges illustrates all too clearly that the BBC's finances are, by and large, static in character, while, as with anybody else's, its commitments increase in cost because of the effect of inflation. With a high proportion of costs attributable to staff, wages and salaries, the inflationary effects are very great. The problem of licence revenue is that there is little natural increase in the level of income which it provides.
  However, the Crawford Committee was set up to establish what should be the priorities, and in a situation of stringency its report therefore becomes that much more important. A reading of it suggests that in the past some of the priorities may not have been correct. The Government have a job to do to ensure that these priorities are recognised by the broadcasting authorities, the BBC and the IBA.
  The Minister will inevitably be faced with demands from the BBC for an increase in the licence fee. He should realise that he cannot expect support from me or my constituents for a penny on the licence fee unless Northumberland is provided with an adequate service. The number of references in the Crawford Report to North Northumberland underlines the fact that my constituency has been one of the worst served in England, and people in Northumberland have been paying the price for a full service while getting less than half a service.
  As the report points out at length, listeners and viewers in rural areas have a far greater need of the broadcasting services. The provision of entertainment and cultural opportunities in a rural area is more limited, and the means of getting to these facilities, even where they exist, perhaps in nearby towns, are more difficult and expensive. Public transport is not available to get to and from a theatre in a distant urban centre or even a cinema or amateur production in a town. Even if private transport is available, the increased petrol costs make such
  2022
  an excursion of perhaps 60 miles each way in my constituency a prohibitive cost.
  The entertainment and cultural facilities provided by television are greatly appreciated in areas in which people have so few alternatives open to them. Perhaps even more important in rural areas, there is a greater dependence on the local information which broadcasting services can provide. News, weather information, details of roads blocked by snow, which is a common occurrence in my constituency—not so far this winter, but I suspect that it will be before the winter is out—are far more important to rural communities dependent on road communications and, in their daily work in activities such as farming and fishing, on the vagaries of the weather.
  The Minister cannot brush aside as a matter for the BBC the extent to which the priorities for rural areas, and for my constituency in particular, should be recognised in its future expenditure. It must be seen that the BBC's initial reaction to the economic situation has been to hint that its regional expenditure in general, and its regional development programme in particular, might have to bear the burden of the cuts, because that is the area in which the most immediate capital development is taking place and, therefore, the one in which the cuts can more readily be imposed. It must be clear to the hon. Gentleman that this would be contrary not only to what the Crawford Report suggests but to general Government policy, for if the burden of cuts in an economic crisis were to fall on regional expenditure and on development in the development areas, which Governments have encouraged over the years, this would be clearly contrary to Government policy. In that sense the Minister has an obligation to indicate to the BBC that the general regional development programme should not bear the burden of the economic cuts.
  Secondly, as Government decisions have had as much to do with the reception situation in my constituency as any decisions taken by the BBC, the responsibility lies with the Government to ensure that these matters are remedied. My constituency must be one of the few areas in which radio reception problems, far from remaining unsolved,

  2023
  have been made worse by Government decision. The situation in my constituency has not remained static, but it has been systematically worsened by Government decision.
  I deal first with television. The hon. Gentleman will know that television reception has been greatly improved as a result of the long-awaited Chatton transmitter. However, it has been a bitter disappointment to some of the villages in my constituency which are not served by the new transmitter, and to the people living in Berwick who thought that their dependence on the fairly extensive relay service would be removed when the transmitter was opened. Although that has happened for some people, there are substantial areas of the town in which that is not the case. A deep sense of injustice is felt by people who have to pay twice for television reception.
  The Crawford Report contains a recommendation that the Home Office should set up machinery to investigate and establish wired television in areas where this might be a sensible alternative to transmitter improvements. There is no news so far of any setting up by the Home Office of this machinery involving local authorities and other interested organisations to deal with areas which are not served by transmitters and in which the economical solution might be publicly-financed or publicly-supported wired television. Given the deep sense of injustice felt by those who have to pay both licence fees and the fees of the relay contractor for basic reception, will the Minister say whether this machinery is being set up? If not, will he say why it is not being set up?
  The deficiencies in the coverage of the Chatton transmitter were predicted. The suggestion was made that the new Eye-mouth transmitter would help to deal with some of them. Those suggestions were turned down by previous Ministers on the extraordinary grounds that the Eye-mouth transmitter provided the wrong service and that my constituents would be provided with the Scottish instead of the English service. It must be apparent to the Minister that this problems is all too familiar and represents a feeble excuse for a decision to build a transmitter and adapt it in such a way that it did not
  2024
  serve areas which it could otherwise have helped.
  Now that the deficiencies of the Chatton transmitter have become apparent, the financial situation is very much less conducive to their being resolved. It makes it that much more important that the wired television possibilities outlined in the Crawford Report should be the subject of the kind of investigation which that report recommended. I shall be interested to know what is happening in the case of that recommendation.
  I turn from television to the greater unsolved problem of sound radio in Northumberland. There have always been deficiencies in medium-wave reception in Northumberland, which meant that most of my constituents had difficulty in receiving, or could not receive. Radios 1, 2 and 3. The only clear reception throughout the constituency is that of Radio 4, while VHF receptions is almost non-existent except in those areas in the north of the constituency which can receive VHF programmes from Scotland. Although this caused great dissatisfaction, it was nothing to the damage done by two other decisions. The first of them dates back to the time of a previous Labour Government. It was the local radio policy, the establishment of local radio, and the dismantling of the regional pattern of the BBC. The second was the increasing tendency to split the networks between medium wave and VHF.
  The setting up of local radio stations by the BBC and by commercial concerns represented an appallingly bad husbandry of scarce resources in terms of both frequency and finance. For my constituents, it was a clear illustration that
  "to him that bath shall be given, and that from him that hath not shall be taken away even that which he hath".
  In pursuit of this policy, local news was taken off medium-wave Radio 4. Meanwhile, in concentrated urban areas such as Tyneside not only was local news retained on VHF but Radio Newcastle was provided, together with a commercial radio station, Metropolitan Radio, and my constituents were deprived of the only thing that they had—the basic local news service provided on medium wave.
  We never asked for the development of this local radio policy, and we still get

  2025
  no return from it. Previously, the shepherd, the fisherman or the farmer could get weather forecasts, and the person travelling around a difficult rural area could get reports on local roads blocked by snow. Now they can get nothing. If they are lucky, in the north of my constituency they can get the news in Gaelic and other Scottish broadcasts. I need not remind the Minister that there are virtually no Gaelic speakers in my constituency, so this facility is not widely appreciated. It is a callous betrayal of a rural community to take away the little that it had and to provide in such large measure to other areas.
  The other aspect is the effect of the splitting of networks. It means that many programmes available only on VHF are denied to my constituents; they are also denied the programmes of the Open University.
  What is the extent of the area affected and the number of people involved? We need to clarify that. It is estimated by the BBC that 4,000 people in my constituency do not receive any VHF programmes at all, and that a further 23,000 people can receive VHF from Scotland and thereby get the news in Gaelic and the piping programmes but cannot get English VHF programmes. But this latter group includes a large number—probably the majority of the 23,000—who can get VHF programmes only if they have roof-top aerials.
  I received a letter the other day from the BBC specifying that almost the whole of the town of Berwick-upon-Tweed is served from Scotland for listeners using roof-top aerials. When the splitting of networks between medium wave and VHF was allowed, it was on the basis that elderly people and others with limited means who were dependent on radio could obtain relatively cheap portable VHF sets and would not have to put large expenditure into buying VHF sets. But the normal set is not sufficient to receive this coverage. How many people of the Minister's acquaintance have installed roof-top aerials for VHF listening, and how does he expect the elderly to afford this? It was not necessary until a Government decision took away their medium-wave service. The number of people unable to receive VHF on normal sets may be as large as 20,000 and not
  2026
  just 4,000, because it is the largest population group in Berwick to whom the BBC refers. It is also estimated that 40,000 people in North Northumberland cannot get Radio Newcastle—equal to almost the whole of my constituency.
  The main answer is simple and not expensive in broadcasting terms. It is to use the already-built Chatton transmitter to provide a relay VHF radio service. We asked for this in 1972 and we were told to wait for the Crawford Report. The BBC has shown some foresight and made physical provision in that transmitter for a VHF relay. It is simply a matter of adding the technical facility.
  We now find in Crawford a clear recommendation.
  "The objectives should be to fill gaps in areas nominally served, as well as those in areas nominally unserved … and to correct the programme anomalies in South-West Scotland and North Northumberland."
  But the letter that I received from the BBC Engineering Information Service said:
  "The very small number of people who are not served at all and the rather larger number who are only unable to get the appropriate regional variations of Radio 4 could almost all be satisfied by the provision of the VHF radio transmissions from Chatton. This would be quite an expensive matter, however, for the great benefit of a few and the modest benefit of more. As Mr. Alexander Lyon correctly supposed in his reply to you in the House on 19th December, we cannot, in the present financial climate, allocate it a very high priority. There are, I am afraid, many far more pressing calls upon our severely limited resources."
  I wonder what these more pressing calls are. It has not escaped my constituents' notice that the BBC has signed a contract with Mr. Tony Blackburn for about twice what it would cost to include this transmission facility at Chatton.
  How can the BBC and the Minister disregard what the Crawford Report says and say that there are far more pressing priorities? When we asked for our 261m local news service to be saved, we were told to wait for Crawford. Now that we have it, there appears to be a total breach of faith by the Government in not requiring the BBC to make this simple and inexpensive provision.
  The report went considerably further than I am doing. It suggested that the BBC should be allowed to develop perhaps a dozen local radio stations in rural

  2027
  areas, operating at low power and serving limited areas. North Northumberland was specifically mentioned as a place in which such a station could be set up. Even before that Berwick had been mentioned within the BBC as a possible location for an additional smaller local radio station. The present economic situation has, in my judgment, made that a luxury we cannot afford and my constituents are realistic enough to accept this if—and only if—they are given a a basic network service, including the regional variations to Radio 4 and perhaps including Radio Newcastle, since this would involve no additional cost. That at least is an obligation dating from before the present crisis and one which the Government should honour. My constituents would be quick to recognise that it would not be appropriate in the present financial circumstances to be setting up further local radio stations solely to serve small rural communities. But they can be asked to recognise that, and to accept the licence fee increases which the BBC is demanding, only if they have the basic network service and the most limited few minutes a day of local news and weather forecasts, which have been deliberately and systematically denied not just by the BBC but by the Government.
  I ask the Minister to recognise that this is a priority and to ask the BBC to recognise it as such.
  5.46 a.m.
  The Minister of State, Home Office (Mr. Alexander W. Lyon): With the leave of the House, Mr. Deputy Speaker, I should like to reply to the debate.
  The hon. Member for Berwick-upon-Tweed (Mr. Beith) has dealt with a subject which is close to the hearts of his constituents exhaustively and lucidly. I am afraid that I cannot assist him very much more than I have done in the past because, as he recognises, I think, it is not within the power of the Government to determine in what way the BBC allocates its resources. The final decision about that must depend upon the judgment of the corporation, which, though a statutory corporation, has independence to this extent. Therefore, I am afraid that I cannot be as exhaustive as he has been, and I certainly could not hope to match his lucidity, in replying to the debate.
  2028
  The Home Secretary announced, when the report of the Committee on Broadcasting Coverage was published on 21st November, that, while the greater part of the report would fall to Lord Annan's Committee of Inquiry into the Future of Broadcasting to consider, the Government undertook to deal in advance with the issues which were capable of being treated in that way. There were two main issues of that kind.
  The first was the recommendation that in all parts of the country the extension of UHF television coverage should take first priority. The Government accepted that recommendation. The second was that the fourth television channel in Wales should be allotted to a separate service in which the Welsh language should be introduced without waiting for a decision on the use of the fourth channel as a whole—which is a subject that is being considered by the Annan Committee. The hon. Gentleman is not, I know, primarily concerned with the situation in Wales. All I say about that is that a working party is now trying to find ways in which recommendations could be made by the BBC and ITV about carrying out that recommendation.
  The implementation of those recommendations which the Government indicated could be dealt with in advance of Annan is in some cases dependent on the availability of frequencies. But all of them depend on the availability of broadcasting organisations' technical and financial resources and on the priority they attach to individual projects. This really brings us to North Northumberland. I am afraid that the hon. Gentleman is in the position of arguing, so cogently, for an area which, over the total coverage which is afforded by the BBC, has not the same kind of priority. What he has to do is not to persuade me but to persuade the BBC.
  Mr. Beith: I pressed that point upon the Minister because he seems, from what he has said, to be aiding and abetting the BBC, by encouraging it in its present priority, to attach a lower priority to North Northumberland, which to some extent I hope he can retract. As I have tried to emphasise, the decisions of the Government have deprived North Northumberland in a peculiar way. Therefore,

  2029
  there is some obligation on the Government to seek to persuade the BBC to redress this.
  Mr. Lyon: I shall certainly have the Department consider the matters raised by the hon. Gentleman in this debate in so far as they are proper matters for the Government. All I am seeking to do is not to justify in any way the allocation of priorities by the BBC but to explain why the powers of the Home Secretary in relation to this problem are so limited. I think that the hon. Gentleman recognised this and that he is seeking by the debate to bring pressure to bear on the BBC. I hope he is successful in doing just that. I am sure that the BBC will note with fresh concern the problem he has outlined, and I hope that it will feel that some reallocation of resources to cover the points he has made is possible, even within the budgets faced at the moment.
  I am afraid, however, that I cannot carry the matter any further than I could in the answer to which the hon. Gentleman referred. I am sorry that the BBC should be using my answer against him in the letters it has written to him. There is no way in which the BBC can avoid the policy decision about resources. It lies entirely with the corporation, and if it decides not to assist the area the hon. Gentleman is talking about in the way that he wishes, that is something it must justify against its total commitments.
  I understand the corporation's problem, as I am sure the hon. Member does. It is not an easy one to solve, but I do not think that it is anything I could commit the Government on, and I regret that my reply tonight has been cold and cheerless. Those parts of the hon. Gentleman's speech which refer to Government policy will be considered by the Department and we shall bring to the BBC's attention the whole of the hon. Gentleman's speech, so that I hope we can lend force to the campaign he has waged so assiduously since he came into this House. I hope that he will be successful in the future.

  BRITISH BROADCASTING CORPORATION (FINANCE)
  5.52 a.m.
  Mr. Philip Whitehead: Thanks to your prompt intervention some 10 hours ago I am able to address the House, Mr. Deputy Speaker, on the subject of the finances of broadcasting. I am delighted to see you in your place, Mr. Deputy Speaker, knowing as I do your long interest in broadcasting.
  I have chosen to raise this matter, particularly as it affects the BBC, because it seems that the whole question of the financing of broadcasting and public service broadcasting is now in doubt at a time when the structures of broadcasting have been re-examined and major policy decisions and initiatives are being sought along the lines suggested by the hon. Member for Berwick-upon-Tweed (Mr. Beith), who has spoken about the implications of the Crawford Committee's Report.
  My concern is that we may be in a situation now where the financing of the BBC is in doubt precisely at the moment when it should be examined as a healthy going concern. As the House knows, I am a member of the Annan Committee, although I am not speaking for it. It has no collective view, but is collecting views about the future of broadcasting. One of the things it is hoping to do is look at the present structures of broadcasting and not find by the time it reports that half of these structures have been irredeemably altered by financial factors.
  I am sceptical, and have been for some long time, about the licence fee alternative as the long-range answer to the problem of financing public service broadcasting. By opting for an inquiry into the future of broadcasting, with the implication that the present broadcasting structures are continued at least until the Annan Committee has deliberated and its deliberations have been debated in Parliament and then acted upon by the Government of the day, we have committed ourselves to seeing the present structures continued through that period.
  There is cause for concern in the areas of both the largest and the smallest sections of broadcasting now under consideration. I refer to the BBC, and the

  2031
  whole question of its finance, and to the small and struggling experimental cable stations, which are now in a serious position.
  The present position has given rise to unreasonable suspicions on both sides. There is a suspicion on the BBC side, echoed in Mr. Peter Jay's article in The Times yesterday, that the Government are delaying action on reconsideration of the level of the BBC licence fee in order that the BBC shall be cut back or otherwise altered or forced into an act of self-mutilation—a kind of death of a thousand cuts—while the committee is sitting. I do not believe that that is true. I do not think that the Government have entered upon a policy of malign neglect of the BBC. But it is true that since July 1974 the BBC's application for an increase in the fee has been held up. As a result, a considerable amount of revenue which the BBC might have expected from 1st January, or perhaps 1st April 1975, has been lost to it for good.
  There is a second fear, the fear of many hon. Members and perhaps some people in the country, that the BBC is crying "Wolf". The General Secretary of the Association of Broadcasting Staff, Mr. Tony Hearn, said the other day, with some truth, that the problem of the BBC was that it had cried "Wolf" so often and now realised that the wolf was at the door.
  In many people's minds, including mine a few months ago, there was a suspicion that this orchestrated campaign for a considerable increase in the licence fee was in a sense a major public relations exercise. Obviously, there had to be some increase, but we suspected that all the talk of economies was somewhat overdone. I do not hold that view today.
  The licence fee was set in 1971 at £7 for the monochrome licence and £12 for the colour licence. That is quite a while ago. It is not fair to argue, as is sometimes argued by those who wish to see a considerable increase, that that in a sense fixed the BBC's income. It did not, because although the licence fee was set at that level the income has been rising considerably, because of the enormous expansion, particularly in the sale and rental of colour television sets. In an odd way, inflation has helped that along. There has been a transfer of money into
  2032
  the purchasing of commodities, and such items as colour television sets in particular, by people who think that in that way they will beat or get ahead of inflation. But nobody gets ahead of inflation. That is a sad fact of the declining value of real money as against paper money. The BBC has not got ahead of inflation either. The effect of inflation, in the past two or three years in particular, has been to make the financial situation of the corporation somewhat parlous.
  I understand that the application for an increase in the licence fee was made last July. The delay thus far, which has resulted in a considerable number of small and perhaps rather niggling economies, has led to its losing about £17 million in the first three months of this year—the difference between the estimate of what it needed last July and what it has today. It is usually reckoned that what it was asking for then, when it could foresee continuing inflation, although perhaps it could not quite look into the crystal ball for 1975, was what was called the £9-£18 increase. That is an increase in the monochrome licence to £9 from £7 and an increase in the colour licence to £18 from £12.
  The deficit of the BBC at the end of March, at the end of the financial year, is likely to be about £20 million. My guess is that its borrowing powers must also be almost exhausted or will be exhausted by the end of February. They will be exhausted not merely in terms of long-term capital expenditure but in terms of paying the monthly bills.
  The corporation outlined in December a number of cuts that it felt it had to make. They have now been enumerated in the BBC publication "BBC Record", Issue 92. So they at least are a matter of public record and are not in dispute. It proposed that television afternoon programmes between 2 p.m. and 4 p.m., excluding school programmes, should close down from Monday to Friday, that the evening shutdown should take place at 11.30 p.m. and that afternoon programmes should be cut on BBC 2 on Saturdays in the summer and on Sundays in the winter. Various radio amalgamations were proposed. There was to be a further amalgamation of Radio 1 with Radio 2, a deferring of the start, an advancing of the closedown on Radio 2,

  2033
  an advancing of the closedown on Radio 3, and the amalgamating of Radio 3 and Radio 4, perhaps the most serious matter, from 12.5 to 12.55 on Saturdays.
  Those were small economies. They amounted in total to a saving of about £1 million. No one considering those suggestions when they were first made some two months ago could then have said for sure whether they were just a part of the process of the serving of notice by a great estate of the realm on the Government of the day as it was in financial straits or whether the situation was more serious.
  I am inclined to the view now that the situation was more serious. I believe that in the immediate future we shall see further cuts unless something is done. I do not believe that the Government can will the end of public service broadcasting without willing the means. We cannot maintain the institution of broadcasting until 1977 or 1978 without allowing it the means to continue in something like its present form.
  We could have gone a different way. The Government of the day or the previous Government could have said that because of anomalies in the licence fee system or because of concern or disquiet about this or that section of broadcasting they would alter the system unilaterally. They could have said that there would not be a committee of inquiry set up to consider the whole system and to report upon future prospects. We have chosen to have a committee of inquiry. We have chosen to have a period of deliberation that must be prolonged for two or three years. During that time we must maintain the system as it is. That seems to imply that we must make arrangements for the financing of the whole of the public service system for a further two and a half or three years, plus all the additional responsibilities which are laid upon the corporation and upon broadcasting in general by the ongoing consideration of technical matters.
  The hon. Member for Berwick-upon-Tweed referred to the Crawford Committee and its recommendations. Some of its recommendations have been accepted by my right hon. Friend the
  2034
  Secretary of State for the Home Department. They lay further duties by way of recommendation upon the BBC. It is clear that those duties cannot be carried out and that the recommendations will not be implemented unless the BBC is in a healthier financial position.
  We must consider not merely the possibility of a certain number of cuts in the services provided by the corporation—perhaps some of them are inevitable—but a situation where there is bound to be a foreclosing of the further responsibilities laid upon it by the Crawford Committee and by other bodies.
  How are we to go about getting a better system of broadcasting? We cannot do this unless we are able to examine the full potential of the BBC as it stands. It is clear from representations that have been made to us that the BBC is now in a situation where it is contemplating much more serious cuts in programming output and staff than was suggested in these reports made in December of last year. It has been forcefully suggested to us by the Federation of Broadcasting Unions that there is a real fear now of additional cuts and that these cuts might involve things as serious as laying off of staff. Initially, this would mean creative staff, people on short-term contracts, particularly actors, freelance producers and writers who work on the creative side of television and would be gravely affected by some of the things now threatened or suggested.
  None of this has been said publicly, and I do not think it would be. If there were now to be a situation in which it was considered, for example, that the operation of BBC 2 was no longer viable because the service had to be cut back—and the view was taken that if the BBC 2 service was cut back below two or two-and-a-half hours a night it would no longer be a viable service—and the main emphasis were put on the maintenance of the one truly national service as the BBC sees it—that is, BBC 1—that would mean a considerable cutback in jobs and employment prospects and in the whole creative potential of public service broadcasting.
  Similarly, if local radio stations were threatened—my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) will probably refer in more detail to that

  2035
  —there would admittedly be a saving of millions of pounds for the corporation in its present situation. But there would be an immeasurable loss by way of the local community service which would no longer be provided. That is a serious matter. The position, as I understand it, is that we can perhaps now look at various alternatives open to the Government.
  How are we to tackle the problem of what inflation has done to the costs of the BBC? There are various ways. There is the possibility of a straight increase in the licence fee to the extent that the BBC wishes. It would be fair to say that, in view of the accelerating pace of inflation, to increase the licence fee to £9 and £18 respectively would mean that a number of cuts that have been made or are contemplated would still be effective. It is not a question of increasing the services or even maintaining full output, as it was a year or two ago. It is a question of treading water at that level of increase.
  This is what is suggested. If it were politically possible to raise the licence fee by this amount it would still be cheaper than in most other European countries operating systems which have a considerable amount of public service broadcasting financed this way. The colour television service licence in Ireland is already £20 for the more restricted service of necessity provided by Radio Telefis Eireann. It can be said that it is a small country, the burden is spread less widely than the service provided and, therefore the licence fee is larger, but it is fair to point out that the amount actually collected is not so large in respect of the service provided when we compare it to the cost of a daily newspaper and the extent to which that has risen in price dramatically over the past three or four years.
  The problems and anomalies come from the fact that the licence fee is in a sense regressive, that it is difficult and expensive to collect and that there is a wide measure of public resentment when a Government particularly a Government committed, as ours is, to counter-inflation policies suddenly impose some increase of this sort. It may be that the Government feel that they cannot concede a straight increase on those lines. If we were to dock £1 from each licence, monochrome and colour, that would be a considerable
  2036
  amount lost in terms of revenue over the next two and a half to three years. It would be, for example, a loss, by my rough and ready calculation and not on official figures but an informed guess, of about £50 million in an overall budget of about £500 million over the next three years.
  If that were the case, how might the Government be making it up? There have been various suggestions, and the Federation of Broadcasting Unions suggested, when it came to see us the other day, that the Government might make up that amount in an action which might be politically more acceptable, raising the licence fee by a once-for-all grant-in-aid to a time-limit when the Annan Committee proposals have been discussed, or raising the borrowing powers, or something else, but inevitably that kind of budget will be needed if public service broadcasting—and that means the BBC—is to continue until 1978.
  Some kinds of revenue service could be achieved with little legislation. Mr. Jay suggested in his article in The Times a levy on the rental and sales of television sets to supplement the licence fee for two or three years. It might be felt that that would be an innovation and—and it would be stoutly maintained by the BBC—that it would be a threat to the concept of the licence fee, the whole licence fee and nothing but the licence fee and a threat to its independence, but it would help finance those three years. Additional revenue raised in some such way will be needed.
  I should like to say a word about the other end of the spectrum. We have talked of the great public service corporation disposing of millions but at the other end is a small area of concern. Before I came into the debate I was handed a telegram from Bristol which read:
  "a group representative of community interests helping Bristol Channel TV meet today with Rediffusion executives and learnt that a board meeting on Monday is likely to decide the fate of the station. Stop. We urgently request you to ask Lord Harris to reconsider the terms of the licence so as to allow Bristol's own TV station to continue its valuable service to the community. Stop. We think we can persuade Rediffusion to continue to underwrite that experiment. Stop. Will you support us in our attempt to get the terms of the licence

  2037
  changed so that we can accept aid from other bodies?"
  I shall have to reply that it would be out of order to go into this in detail now, but what I said about the BBC also applies here.
  Those of us who have seen small experiments set up—one at Greenwich has already virtually folded and most of the others face trouble of one kind or another—will be concerned that, through Government inactivity, the experiments may expire before they are considered by the Annan Committee.
  I could not pass a judgment, as a member of the committee, whether local community and cable television are good and deserve to continue but I am greatly impressed by some experiments in handing power and access to television to people in local communities, as seen in Bristol and Greenwich, and the same is true of other cable stations. Here we have a situation where the alternatives open to us which can be considered as ongoing by the Annan Committee might be put at risk by the financial situation and where it is in the remit of the Government to do something about it.
  The Annan Committee wants to see how the present systems are operating, not how they are dying. It would be a matter of infinite regret if this long-delayed inquiry were to find that it had strayed into a sort of elephants' graveyard where sick broadcasting systems had come to die. That should not happen. We have to maintain as best we can the widest range of alternatives within broadcasting over the period in which the future structure of the system is to be arrived at. No proper synthesis of what we have at the moment can be arrived at by the committee or by Parliament if some parts of the system are withering on the vine meanwhile.
  For example, the thought that local radio as the BBC has operated it is threatened is serious. I hope that the Government will stir themselves and intervene positively between now and 1st March to ensure that the future of public service broadcasting in this interim period when the whole structure is under review is properly safeguarded
  6.16 a.m.
  Mr. John Golding rose—
  Mr. Deputy Speaker (Sir Myer Galpern): Order. I take it that the hon. Member for Newcastle-under-Lyne (Mr. Golding) wishes to speak now with reference to his subject, the Home Office and the British Broadcasting Corporation?
  Mr. Golding: I gave an intimation of that to the previous occupant of the Chair, Mr. Deputy Speaker.
  Before speaking about BBC licences, may I comment on the remarks made by my hon. Friend the Member for Derby, North (Mr. Whitehead) towards the end of his speech? Although I agree with much that he said, I disagree fundamentally with him on the question of local community television. It would be wrong for the Government to give in to the demands from the companies which run the community stations for a revision of licences.
  Mr. Whitehead: My hon. Friend has not declared his interest as a member of the Post Office Engineering Union. I was not saying that the Government should give in to the demands made by the companies. I was saying that the Government should find a way to allow experiments to continue.
  Mr. Golding: When I watched the spokesman for Greenwich Television in a television programme I found it disturbing that pressure was being put on the Government to introduce pay-TV and to increase the commercialisation of that station.
  After declaring an interest as an Assistant Secretary of the Post Office Engineering Union, I would ask the Government to consider the alternative of experimenting in the area of public service local community television. That is the basis upon which local community television should operate. The less commercialism there is in broadcasting the better. I would much prefer community television to start from a public service rather than a commercial base. I should like the Home Office to talk to the BBC about the possibility of an experiment in community television for Milton Keynes or any area in which there is already a

  2039
  Post Office cable to provide technical facilities for such an experiment because I take the point made by my hon. Friend the Member for Derby, North that the Annan Committee has to review community television experience.
  The present experiments are false because we have always known that there was no intention by those engaged in them to continue them without changing substantially the nature of the services. That is why I hope that the Home Office will continue to take the stand it has taken.
  Turning to the main question of the BBC licence, we must face the fact that the BBC is in severe financial difficulties. There has been no increase in the licence fee since 1971. The licence fee was then fixed for a four-year period and that period is coming to an end. Therefore, the BBC is entitled to look urgently for an increase in income. We appreciate that the increase in the cost of colour television licence has helped, but, although last year the BBC roughly broke even, it now faces a deficit of £20 million. The effect of that deficit will be traumatic on the structure of the BBC.
  As my hon. Friend the Member for Derby, North suggested, my interest is predominantly with local radio. I feel that the consequences for local radio will be severe if the BBC has to carry a substantial deficit.
  I strongly disagree with the hon. Member for Berwick-upon-Tweed (Mr. Beith), who sought mildly to deprecate the introduction of local radio.
  Mr. Beith: The Gentleman is all right. His area has local radio.
  Mr. Golding: It is true that for those of us in the towns rather than for people in the country local radio has proved to be very beneficial. I believe it is one of the most interesting features of broadcasting at present and has done a great deal. Surely the Liberal spokesman on broadcasting should welcome local broadcasting rather than deride it.
  Mr. Beith: Local radio is beneficial when the system is comprehensive, but when one area has two radio stations and another area has none at all, that can hardly be said to be satisfactory.
  Mr. Golding: I agree with the sentiment behind that intervention. One of the worst features of the financial crisis is that there can be no possibility of an extension of BBC local radio or the likelihood of the BBC implementing the recommendations. of the Crawford Committee. I support the extension of local radio to the country as well as to the towns.
  The BBC's income must be increased. I appreciate that some hon. Members, and, indeed, people outside the House, argue that first there should be substantial economies. We have to face that situation. It is unfortunate that publicity has been given to the cost of dresses used in lavish BBC productions. We must not under-estimate the effect of that publicity on public opinion. The hon. Member for Berwick-upon-Tweed mentioned Tony Blackburn's contract, and again that will have an effect when it comes to seeking an increase in the licence fee.
  Mr. Whitehead: What about Jimmy Hill?
  Mr. Golding: My hon. Friend mentions Jimmy Hill. Personally, I prefer Jimmy Hill to Tony Blackburn. I think these matters raise a question in people's minds. There is cause for concern on this score, but I believe that the argument about salaries paid to the top people is marginal in comparison to the total question. Even if a strong line were taken, the financial crisis would still remain.
  General salaries in the BBC are not lavish. I understand that even after the 20 per cent. settlement in August, which rightly because they had not been consulted upset the Government, BBC pay is still not lavish for the generality of staff. Indeed, that 20 per cent. settlement was a patching-up operation after a period in which the public sector had been badly treated in pay terms. The BBC says that 97 per cent. of outside contributors are paid less than £2,000 a year from the BBC. Therefore, we must get the salary question in context. I am certain that there should not be savings by sackings or by dispensing with live artists.
  I served on the inquiry by the Select Committee on Nationalised Industries into the IBA, and it became apparent

  2041
  that it was most important that we should do all we could to foster talent in television and radio. It would be wrong at present to disperse talent, to make it more difficult for artists to work and stay in their professions. It would be deleterious to the long-term interests of broadcasting.
  I do not want as a viewer to see constant repeats. The BBC, in defence of itself, is saying, as a virtue, that it used so many repeats on BBC 2 at Christmas. That is a confession of failure. I do not want to see repeats. I want to see fresh productions and not a canned public service broadcasting system. The increase in income is essential if quality and diversity of programmes is not to suffer. It is essential that there should be no reduction in the service. We want to have the highest quality public service television and radio.
  It is most important that no advantage be handed to commercial interests at this time. This is particularly true of local radio, where the contrast between public service and commercial service is most marked. Ever since you, Mr. Deputy Speaker, and I served on the Standing Committee which considered the Sound Broadcasting Bill I have listened long and often as a penance to the London Broadcasting Company commercial service. Day by day it appals me. Such a standard should not be tolerated in our capital city. At weekends I listen to Radio Stoke, and the contrast is enormous. Radio Stoke provides a service of which we can be proud; LBC we should be ashamed of.
  It would be to the detriment of broadcasting if stations like Radio Stoke had to go out of business, leaving the field to companies like LBC. We have to face the fact that the strength of our broadcasting system is in having a public service which can set standards. It would be disastrous if that public service had to be reduced substantially because of the unavailability of funds.
  If we want the service, we have to pay for it, and quality broadcasting is much more expensive than broadcasting where standards are not properly considered. I remember Mr. Wilfred Proudfoot telling up that all he wanted was 40 records and a record player for a broadcasting
  2042
  station. He had done it, and he was successful. Broadcasting can be cheap in both senses of the word. It can be cheap, and cheap and nasty. I accept what the Federation of Broadcasting Unions has said, that quality broadcasting is of necessity going to be more expensive. We should meet that expense.
  The BBC would obviously prefer an increase in the licence fee. I believe that this should not be granted. I am opposed to the licence system in itself. I declare an interest: I represent people who are involved in the detection of licence evasion. They would lose their jobs if the licence were abolished. The licence is a poll tax. It is regressive. Any increase at present would cause great hardship to many people. The House should think carefully before agreeing to increase it.
  I am glad that the Deputy Chief Whip is present at this unearthly hour. I must tell him that it will be very difficult for the Government Whips if the Home Secretary should try to put through the House a substantial increase in the licence fee in present circumstances. I believe that Members on the Government side are utterly opposed to a substantial increase at present. The Government must know that they will face difficulties if they try to introduce a substantial increase.
  I appreciate that by international standards our licence fee is low. In France the licence is half as much, in Belgium it is twice as much, and in Denmark it is three and a half times as much. My hon. Friend the Member for Derby, North gave the comparison with the fee in Eire. I understand that television is cheaper than daily papers. Even so, the licence fee should not be increased.
  Before we make long-term decisions on the financing of broadcasting we should wait for the report of the Annan Committee. In the meantime the Exchequer should make a grant without strings to the BBC. There should not be a tax on sales, because the unemployment figures are bad. The short-time working figures are perhaps even worse. It would make the situation worse if an additional tax were to be placed on consumer goods.
  The BBC would no doubt resist being granted a sum to tide it over until Annan has reported, on the ground that it might take away its independence. However,

  2043
  until Annan reports I think this should be the solution.
  It is important that we defend our public service broadcasting sector. I am certain that we should keep it—for the time being—within its present structure.
  6.34 a.m.
  Mr. Jonathan Aitken: I welcome the opportunity to participate in the debate, even though it is taking place as dawn is breaking, because what has been said here this morning will perhaps have awakened the Government—I mean the Government as a whole, not the Minister—from their somewhat complacent and somnolent approach to the crisis facing the BBC thanks to the financial difficulties which have been so ably outlined by hon. Members opposite.
  The financial crisis facing the BBC is very real. The hon. Member for Newcastle-under-Lyme (Mr. Golding) used the word "traumatic". I take leave to doubt whether the trauma will be quite as much felt by the public at large as it certainly may be felt by those working within the BBC. Nevertheless, hon. Members on both sides will agree that there is a crisis situation which needs to be debated.
  However, I felt as I listened to hon. Members opposite that this debate was taking place as a plea for special treatment for the BBC and perhaps not enough in the context of the national economic situation. The hon. Member for Derby, North (Mr. Whitehead) made some references to inflation, but he did not seem to accept that inflation, which is the great leveller for us all, should necessarily level down the BBC at the same rate.
  Mr. Whitehead: I said that even if the BBC received the sort of licence fee increase it wanted it would imply a reduction in the services and not an expansion or even their full maintenance at the present rate.
  Mr. Aitken: I am glad to hear that the hon. Gentleman does not argue for expansion of the BBC, but the BBC must accept its share of the national economic problems.
  I should like to make some constructive suggestions for the economies which the BBC could still usefully make, and for new ways and methods of paying for broadcasting. Let me first make some
  2044
  suggestions for economies which the BBC might make. Much could be done to share facilities with the IBA. The sharing of cameras on outside broadcasting units with the IBA at sporting and ceremonial occasions would be a useful economy. In recent memory, the investiture of the Prince of Wales at Caernarvon was covered by 30 cameras from the BBC and 30 cameras from the commercial companies. Surely they could have used the same cameras and had separate commentators. I understand that many suggestions about sharing cameras have been made by the IBA to the BBC, but the BBC has always spurned such approaches. It should swallow its pride and make economies in this respect.
  Extravagances in salaries and payments and contracts to broadcasters could be avoided. We must see no more extravagant 20 per cent. wage rises of the sort which rightly provoked last summer furious accusations by the Secretary of State for Employment about a breach of the social contract. Their generosity surprised even some of the BBC employees, I think. With a communications background, largely in Fleet Street, I am worried that the built-in extravagance of the Fleet Street union structure could be creeping into broadcasting. One of the big problems of Fleet Street is that over the years some of the unions have established extraordinarily generous salaries—linotype operators on the Financial Times earning £200 a week, members of the National Graphical Association earning £97 a week. The way in which some of the unions in broadcasting, particularly the ACTT, are moving is introducing the same built-in extravagance to the salary structure of the BBC and the broadcasting companies.
  Economies could be made in programme spending. There was a reference earlier to expenditure on dresses. These small indications of excessive spending have a serious impact on public psychological confidence in the way in which economies are being made in the BBC. The BBC must be vigilant to ensure that it does not throw away money on programmes which are offensive to the majority of listeners and viewers. For example, three weeks ago Nationwide screened a long item publicising the forthcoming book attacking the monarchy written by the hon. Member for Fife,

  2045
  Central (Mr. Hamilton). To give the maximum publicity to the hon. Member's notorious views on the Royal Family the BBC dispatched film units to portray him at Balmoral, Windsor and four other locations around London. That extravagance is helpful to the sales of the hon. Member's books but it is deplorable in a public broadcasting service whose duty it is to uphold respect and preserve the monarchy and other admirable institutions of our national life.
  The BBC has a duty not to waste money on programmes the contents of which are repugnant to the majority of British people. This programme concerning the hon. Member's anti-monarchy propaganda must have cost the BBC several hundred pounds. Nationwide will screen another instalment of this costly programme next Monday. It is no use the BBC holding out the begging bowl in one hand while doing gold-plated hatchet jobs on the monarchy with the other, because the BBC will lose sympathy for the case it argues.
  The expensive error of judgment by Nationwide, which could have been made by many producers, illustrates a much wider point on spending on television as a whole. The BBC television programmes cost some £90 millions out of the BBC's total expenditure of £140 millions. There is a general feeling, exemplified in a leading article in The Times of 28th November 1974, that this side of the BBC is overpaid, over-staffed and subject to rather loose disciplines of cost control.
  Remarkable value for money is given by the external overseas broadcasting service of the BBC, which is run on a shoestring budget from Bush House. However, it is fair to argue that greater economies can still be made in the BBC television service.
  It is unfortunate that the subject of the licence fee should be brought into the political arena. Nevertheless, in the short term I believe that this nettle must be grasped and that there is no soft option that can be taken. The Federation of Broadcasting Unions has put forward the idea that there should be a short-term once-and-for-all Government grant. I believe that such a solution is unaccept-
  2046
  able. Why not impose a short-term onceand-for-all rise in the licence fee while considering long-term solutions to the problem of BBC financing? Government grants are unacceptable because of the fears about the threat to freedom which might be involved. We would do better to set a household rate for radio and television, payable on a quarterly basis, along the lines of the water rate or other domestic rates. This would avoid the great loss now caused by licence dodgers. People could contract out of the household rate if they could genuinely argue that they did not have a radio or television set. The number of people prepared to sign a form stating that they had no radio or television sets would be smaller than the number of those who did not pay their television licence fees. Such a household rate could be indexed, which would ensure that proposed increases were not constantly subject to a political decision by the Government.
  That method is preferable to the continuation of the licensing system, which incurs much unpopularity when the rate is increased. It is preferable to the solution suggested by the frightful document "People and the Media", which proposed that a public broadcasting commission should be created to administer radio and television finance on the same lines as the University Grants Committee administers university finance. I noticed with approval that Sir Michael Swann, opposing the idea, said that the University Grants Committee was responsible for the steady erosion of independence in the universities. The BBC, quite rightly, is hostile to the idea of direct Government grants or finance. Sir Michael Swann said:
  "Our fear is that direct Government finance would slowly, perhaps almost imperceptibly, but very surely, erode our independence".
  The independence of the BBC certainly is worth fighting for.
  If there is not to be a rise in the licence fee, the effects on the BBC will be drastic. With a deficit already of some £20 million by the end of March, no one can be anything but upset at the possible cuts which will have to be faced. Sir Michael Swann has spoken of massive cuts coming next year unless there is a rise in the licence fee, although I doubt whether those cuts would seem so massive from the point of view of those who

  2047
  watch television as opposed to those who make programmes or work in television.
  Cuts are occurring everywhere in our national life as a result of the present economic situation, whether on a high, civilised pleasure plane of life, such as dining out, going to the theatre and buying books, or on an every-day level. People face real cuts in their standard of living. In common with many other hon. Members, at weekend surgeries in my constituency I hear heart-rending stories of people on small fixed incomes living in retirement who have had to give up their cars or have had to give up meat on certain days of the week because of the high price of food, and so on.
  The fact of our national situation is that the cruel state of inflation cuts back all our standards. We are all reduced by the present crisis. Should broadcasting be exempt? I think not. It would be symbolic of the present age of austerity that the BBC, too, should be frugal.
  Cuts in transmission time might bring home to people how serious is the present economic situation. The credibility gap over the three-day working week arose when the Government of the day, having cut back television time because, they said, the power crisis was so serious, immediately extended it again simply because there was a General Election about to take place.
  If we are trying to communicate to the nation that people have to rein in their demands for increased wages and salaries and all share in the tragedy of inflation, a cut in transmission time will bring home to them faster than anything else the fact that the economic situation is one in which everyone shares.
  In the long term we should look for new methods of financing. In the short term, if the BBC can persuade the Government that it has done everything that it can to create the kinds of economies that I have discussed, perhaps it should have a short-term rise in the licence fee. But there is no soft option, and probably there will have to be cuts. The BBC should also share the suffering that the nation is enduring because of the present inflationary situation.
  6.48 a.m.
  The Minister of State, Home Office (Mr. Alexander W. Lyon): With the
  2048
  leave of the House, I rise again to reply briefly to this debate.
  The purpose of the contributions which have made, though I am not sure how far the hon. Member for Thanet, East (Mr. Aitken) will dissociate himself from this remark, is to urge upon the Government some decision which will relieve the difficult economic circumstances in which the BBC finds itself. Contrasting ideas have been put forward, but the central matter for consideration is the application of the BBC for an increase in the licence fee.
  It is for the Government to determine what should be the level of licensing, though it is for the BBC to determine what it does with the money which is made available. There should be no blurring of the distinction between the two. The Government have consistently said that it is not for us to determine how the BBC spends its money, but when it applies for a substantial increase its own behaviour over costs affects the atmosphere in which a decision is made. My hon. Friends were right to point out that in certain respects over the last few months the BBC may have made a decision difficult. Nevertheless, we hope to be able to announce a decision as soon as possible.
  My hon. Friend the Member for Derby North (Mr. Whitehead) suggested that the Government had been dilatory. When the present fee was established in July 1971, the BBC gave assurances that it would be able to manage until 1975, subject, of course, to inflation. It was only last July that the BBC approached my right hon. Friend about an increase, but it was always intended that a decision would not be made until the early part of this year, so there has been no delay in responding by the Government.
  We have to consider carefully what are the justifiable claims for the increase. My right hon. Friend has been having discussion with the BBC about possible economies that it would make. Recent economies in December amounted to £1 million and there are proposals for another similar amount. But these are not large in relation to the BBC's total expenditure. The central issue still is whether the BBC can meet its existing commitments or will have to cut them

  2049
  still further. There are three alternatives: first, no increase at all or practically none, with savage cuts; second, the full increase; third, a compromise which would entail some economies of scale. The Government are considering which course to pursue.
  One suggestion is not to increase the fee, which would have regressive effects, especially upon pensioners, in a time of rising inflation, but to make a direct Government grant to cover the BBC's deficit. The BBC is hostile to that idea, for reasons that it has often stated—that any precedent of direct Government financing would lead to the possibility of greater political interference in its decision-making. Whether we as politicians would agree that that was inevitable, whether it would not be possible to find some intermediary stage, as with the universities, is a matter for discussion. Indeed, it is certainly a matter for the kind of consideration which the Annan Committee could give to just such a proposal.
  It is really this that would deter the Government from making any contribution at this stage. The issue of principle is one of very considerable importance, which ought to be considered at some length before any precedent is set, and we would defer such a decision until consideration of the Annan Committee's proposals.
  Mr. Golding: How carefully have the Government weighed, on the one hand, the BBC hostility to a grant and, on the other hand, the hostility not only of pensioners but of my hon. Friends on the Government side of the House to an increase in the licence fee?
  Mr. Lyon: I always take with the greatest care any of my hon. Friend's threats and military advice about the reaction of my hon. Friends. I know of his extensive sources of information about their reactions. Of course we pay attention to what the reaction would be, in the House as outside it, to any increase in the licence fee. I am not committing the Government in any way to what would be their reaction to that point. But it would be difficult, for the reasons I have given, to go along with my hon. Friend's suggestion that the only way in which the matter should be dealt with is
  2050
  by a direct Government subvention, quite apart from all the considerations of the present stringency in relation to public expenditure. It would be a strange thing if at a time when we are cutting public expenditure over a wide range of programmes we were to make such a contribution to the BBC on quite a substantial scale, even if it were only a once-for-all grant. Therefore, I do not wish to leave my hon. Friend with any feeling that that is a way in which we could approach the matter.
  I cannot at this stage go further. I hope that it will be possible in a short time to be able to make some announcement. We have the matter very much in mind. But for the moment all I can say is that I shall bring to my right hon. Friend's attention all that has been said in the three speeches we have heard in this debate—although the contribution of the hon. Member for Thanet, East was really directed to Sir Charles Curran, who no doubt will read it with great interest, and perhaps profit.

  WORKERS' CO-OPERATIVES
  6.58 a.m.
  Mr. John Stanley: I think that the House would agree that the use of public funds to provide direct financial assistance to workers' co-operatives in industry as opposed to agriculture is one of the most interesting and potentially significant developments of industrial policy under the present Government. I welcome the opportunity of a short debate upon this subject.
  I should like to make it clear that I have no personal, philosophical or practical objection whatsoever to the provision of Government financial assistance to workers' co-operatives. As a matter of principle, that does not seem to me in any way to be contentious. It has been accepted over many decades and by successive Governments that it can be in the public interest for public funds to be made available to companies. If that is so, it cannot be contentious that where a group of workers incorporate themselves and form themselves into a company they may equally be able to qualify for public assistance in the public interest.

  2051
  If I have no specific objection to the principle as such, I should like to say that in the operation of the present policy I believe that there are grounds for objection in the specific cases in which Government funding has been provided. I shall be concentrating principally on the provision of assistance to the co-operative at Kirkby, as the Under-Secretary no doubt expected. But, before coming to that, I should like to refer briefly to the other co-operatives to which the Government have declared their intention and willingness to make public funding available.
  First, let me deal with Meriden. Both sides of the House deeply regret that this has now become a very protracted industrial dispute. Industrial action began at Meriden in September 1973 and it has continued over the last 16 months. There has been a considerable cost to the balance of payments and to the company which nominally owns the Meriden works, Norton Villiers Triumph. The company has lost nearly two seasons' motor cycle production, principally in the North American market.
  The Government's intentions are still most unclear, and I hope that the Minister will be able to help on that score. The only announcement so far has been that £4·95 million was offered in principle last July to the co-operative at Meriden. In addition, a sum of £12,872,000 appears day after day on the Order Paper, indicating that the Government are willing to make this further sum available to NVT under the Industry Act, but as yet we do not see an order coming forward for debate in the House. I believe that the sum has appeared on the Order Paper every day without exception since the present Parliament opened in October.
  It is not clear whether the Government have a firm intention to try to revitalise the industry on a three-factory basis, and, if so, whether they accept the previous evaluation which was done in 1973, when it was apparent to the then Government and to NVT that to proceed on that basis was unlikely to produce a commercial situation in the motor cycle industry for a period of up to six years. It is not clear whether the Government intend to provide financial assistance to the Meriden co-operative or to NVT or to both. It is not even clear whether the Govern-ment
  2052
  are considering as a possibility the outright nationalisation of NVT and, effectively, of the British motor cycle industry. I hope that the Minister will be able to clarify some of these points.
  There is a clear commitment to provide public finance to the co-operative which has been set up to run the Scottish Daily News and an offer of £1·75 million has been made available in principle to that co-operative, subject to a number of fairly stringent conditions. In the last parliamentary answer on the matter the Government stated that the deadline for making the necessary cornmercial arrangements to establish the co-operative and the acceptance of the grant of £1·75 million was 28th February 1975.
  I hope that the Minister will clarify what has happened to the application by the workers' co-operative at Propytex for Government assistance under the Industry Act. I know that the co-operative there wanted the assistance, but it is not clear whether the Government have turned the application down.
  Turning to Kirkby, the Opposition take a very poor view of the fact that the Secretary of State delayed publication of the Industrial Development Advisory Board's comments about the possibility of making a grant to the Kirkby co-operative, and that he delayed publication of his views and comments on the board's report, until the last Friday before the Christmas Recess. The statement having been delayed until then, we deeply regret that the right hon. Gentleman chose to make it in writing and not in the House. It is a strange contrast that, whereas the right hon. Gentleman is enthusiastic in the Press and on radio and television about this initiative to finance and support workers' co-operatives, he appears to be so diffident and reluctant about explaining in the House the reasons for his decisions about individual co-operatives. I mean no disrespect to the Under-Secretary when I say that as this is the first opportunity we have had to debate the subject I had hoped that the Secretary of State might have used that opportunity to explain the decision about the Kirkby co-operative.
  It will be acknowledged by hon. Members on both sides of the House, and by people outside, that by any standards the Secretary of State has taken a high-risk

  2053
  decision in making funds available to the co-operative at Kirkby. Some might describe it as a reckless decision, because the burden of advice he received from consultants and experts outside his Department, and also, apparently, from within it, has been unanimously against the commercial prospects and viability of the co-operative. In its report to the right hon. Gentleman, the Industrial Development Advisory Board said:
  "Confronted with obstacles of this magnitude, no concern, however well-intentioned, could expect to be viable on the basis of the proposals advanced, and the support of such ventures raised crucial issues about the proper employment of taxpayers' money."
  The chairman of the board, Mr. Robert Clarke, went still further in a radio interview in which he took part on 22nd December, when he said of the Kirkby co-operative:
  "we think it doesn't have a chance of success."
  The Government have also received advice from the management consultants, Inbucon. Although their report has not been published it has been leaked extensively in the financial Press. It appears that Inbucon had every reason to be no more sanguine about the commercial prospects of the Kirkby co-operative than the Industrial Board was. The report has apparently suggested that the extent of overmanning at Kirkby, which is one of the major reasons for its lack of prospective viability, has been between one third and a half.
  In addition to that external advice, the unusual step was taken by the Second Permanent Secretary in the Department of placing on file a written objection to the use of the selective assistance powers under the Industry Act in this case. I believe that I am right in saying that the whole question of his objection is likely to be considered by a Select Committee. In that case, the objection will no doubt be made public. Does the Under-Secretary propose to make the Second Permanent Secretary's objection public earlier? It is very much in the public interest that the objection and the Secretary of State's comments should be made public as soon as possible.
  There is no doubt that there has been a formidable weight of objection to the basic viability of this industrial operation. I hope that the Under-Secretary
  2054
  can tell us why the Secretary of State's commercial judgment in the matter has led him to different conclusions from those of the expert advisers that he has both inside and outside his Department. I hope that the Minister will not use what I regard as a fallacious argument that has been used outside the House by the Secretary of State in defending the grant—namely, that if the grant were not made to keep this operation in being, public funds would have to be used to pay unemployment benefit to those who are now working at the co-operative. If the operation is not viable, all that is happening by the paying of the grant under the Industry Act is the deferring of the unemployment benefit that will be claimed subsequently.
  There can be only one justification for providing public funds for the co-operative—namely, a reasonable assumption, contrary to all the evidence made available to the House, that it will prove to be a commercial success.
  I ask the Minister to elaborate and clarify the statement that the grant of £3·9 million represents—I use the phrase of the Minister's Department—"a once-and-for-all grant". Does that mean that the £3·9 million represents the total public financial commitment, or does it apply only to grant finance? When reference is made to the £3·9 million in those terms, is it meant that that sum might at a future date be supplemented by loan finance or by a Government guarantee to provide loan finance? Does it represent the total public commitment by way of grant, loans and guarantees to loans? Assuming that the latter is the case, will the Minister confirm that after the £3·9 million has been spent and the co-operative has not managed to prove its viability and is unable to meet its commitments it will be the Government's policy to allow the newly formed company to go into liquidation in the normal way?
  Although the Government have taken some steps to try to ensure that the commitment of nearly £4 million to the co-operative is accompanied by a proper measure of public control and accountability, the evidence which has been made available from the Secretary of State's written statement suggests that there are real grounds for doubts as to

  2055
  whether the public control and accountability is adequate. We are dealing with a situation in which 100 per cent. of the capital of the co-operative has been provided from public funds. It would be reasonable to expect that the appropriate degree of control and accountability would be that applicable to a 100 per cent. owned company in the public sector.
  I am well aware of the conditions for accountability that are set out in the Secretary of State's statement of 20th December, but I believe that there are some serious omissions. For example, no provision has been made for the ownership of the shares in the company which has now been formed by the co-operative. I hope that the Minister will be able to clarify who owns the shares. Are they owned by the directors of the company or by those who are employed in the co-operative? This is a material point, because if a total of £3·9 million has been put into the company the shares prospectively have a value of £3·9 million. It is important for the House to know who are the legal owners of the shares of that value.
  I am aware of no provision relating to conditions covering the transferability of the shares. I appreciate that the Government take the view that if the assets of the company were suddenly liquefied and turned into cash it would not be in the public interest for those who are employed in the co-operative to use the cash in their own way.
  For that reason the Secretary of State said in his statement that the grant would be repayable in the event of its being used for purposes other than those specified; namely, the running of the factory at Kirkby. Although there is a clear commitment to prevent the assets of the company being turned into cash and used by members of the co-operative as they choose, there is no provision dealing with the transferability of the shares. It appears to be open to the owners of the shares, whoever they are, to on-sell the shares to another company in the same business. Presumably at that point the holders would have a legal entitlement to the sum realised by the on-sale. Perhaps the Minister can clarify this point.
  Third, there is no provision in the conditions for the repayment of the public money made available in the event
  2056
  of the co-operative being a success. I appreciate that this is not in any way a precedent and that there are many types of Government and local authority grant which can be made available to private individuals without there being a provision for repayment. However, I believe I am right in saying that in every other such case, if public funds are being made available on a grant basis, such a grant is accompanied by an obligation on the person receiving the grant to contribute some proportion of his resources.
  In this case there is no contribution from the personal resources of those employed in the co-operative and, therefore, they are the beneficiaries of 100 per cent. financing by the Government. It seems appropriate in this case for the Government to give consideration to the circumstances which will arise if the co-operative is a success and the value of the shares is substantially increased. Obviously, that is the hope of the Government and of the Opposition. It seems to be a basic requirement of accountability that there should be some provision, in certain circumstances, for the repayment of at least part, if not all, of the funding which has been made available.
  The fourth and final point about accountability on which I would like the Minister's views concerns the fact that we have here what is effectively a 100 per cent. owned company in the public sector, It is a company which has been funded exclusively by the taxpayer. Although there are provisions for regular financial reports from the workers' co-operative to the Department of Industry, there has, as far as I know, been no appointment of Government directors to the board of the company.
  That would seem to be a basic requirement if the public accountability is to be real and ever-present, particularly in a high-risk commercial situation such as this. Will the Minister say whether Government directors have been appointed, and, if not, whether it is the intention of the Secretary of State to appoint such directors to the board of the company?
  There are two essential types of workers' co-operative. The first is a co-operative in a basically profitable commercial or industrial situation, in which the workers both own and operate the

  2057
  business, sharing collectively in the rewards and risks. The second category is a co-operative in a basically non-profitable situation, in which the main impulse behind the co-operative is the joint protection of existing jobs, regardless of whether the concern is sound. Co-operatives in the first category are a desirable development, and I am happy to see them encouraged. I suggest that to encourage those in the second category as an instrument of job preservation regardless of commercial viability—and this appears to be the Secretary of State's policy—is neither in the interests of the public nor, equally importantly, in the interests of those involved in the working of the co-operatives concerned. All it is doing is discouraging them from seeking employment in more profitable, secure, and sound sectors of the economy and extending the period during which they and their families will be subject to anxiety about their livelihood.
  7.20 a.m.
  The Under-Secretary of State for Industry (Mr. Michael Meacher): I congratulate the hon. Member for Tonbridge and Malling (Mr. Stanley) on his well-prepared speech. He has shown great persistence in the scrutiny of this important subject, and I hope to be able to assist in answering his questions.
  The House last had an opportunity to discuss aid to co-operatives under the Industry Act during the Second Reading of the Consolidated Fund Bill (No. 1) on 4th December. My hon. Friend the Minister of State, Department of Industry then explained to the House the general attitude of the Government in offering aid to Meriden, the Scottish Daily News and the Kirkby Manufacturing and Engineering Company Limited. It is a mark of the importance of these projects in industrial organisation and experiment that we are tonight discussing these projects again.
  The hon. Gentleman has asked about the terms and conditions on which offers of assistance have been made to KME, Meriden and the Scottish Daily News. I can assure the hon. Gentleman that whenever assistance is offered under the Industry Act appropriate conditions are attached and monitoring arrangements made which are commensurate with the
  2058
  amount of public money and the degree of risk involved. That applies in all cases.
  The purpose of these provisions is to ensure the proper use of public money and to maximise the chances of securing the purposes for which the assistance was offered. Thus in the case of Meriden and the Scottish Daily News the Government's offer is conditional upon the fulfilment of certain prior conditions.
  On Meriden, my right hon. Friend informed the House on 29th July 1974 that the Government would, subject to the conclusion of certain agreement with Norton Villiers Triumph Ltd, make available a maximum of £4·95 million, for purchase of factory and assets and for marketing of motor cycle output.
  When consulted, the IDAB did not feel able to support the project, but, while the Government recognise the difficulties to which it drew attention, they concluded that because of the contribution to export earnings and the new approach to industrial relations it was in the national interest that is should go through.
  The Government offer still stands. Discussions are now in progress under the auspices of the Confederation of Shipbuilding and Engineering Unions to find a means by which the fears expressed by the Small Heath work force can be allayed. I was pleased to read in a newspaper report two days ago that the shop stewards have reached agreement with the union officials, although this agreement is subject to confirmation by the work force.
  In the case of the Scottish Daily News—
  Mr. Stanley: Before the Minister leaves Meriden, will he confirm that it is the Government's clear policy to continue on a three-factory basis for Meriden NVT? Will he confirm that it will require public expenditure of £18 million to £19 million.
  Mr. Meacher: The Government are considering their policy towards industry as a whole. It is true that we have received proposals from Mr. Dennis Poore, Chairman of NVT. I can neither confirm nor deny the precise figures given by the hon. Gentleman until that investigation is complete, but the important thing at this stage is to ensure that the offer goes ahead to the Meridan co-operative. I am pleased

  2059
  to say that there is a sign of definite progress in that direction.
  In the case of the Scottish Daily News the Government have also laid down conditions relating to the amount of finance for the project to be provided from non-Government sources. On 25th July last year my right hon. Friend the Secretary of State made an offer of a loan of up to 50 per cent. of the cost of the project to a maximum of £1·75 million subject to certain conditions. Those conditions were laid down to ensure that the project had support from commercial sources and the general public as well as from the workers, and that all investors in the project were aware of the risk involved and had seen the advice that had been given to the Government in the reports which they had received from the Industrial Development Unit and the Industrial Development Advisory Board.
  On 31st October the Secretary of State wrote to the action committee re-affirming the Government's offer of a loan of up to 50 per cent. of the projected cost, now estimated at £2.4 million, and the conditions attached to it. A deadline of 30th November was set for meeting those conditions. Since then the action committee has informed the Department of the successful progress that has been made towards raising the non-Government finance required by the conditions. In the light of that progress the time limit attached to the Government's offer has been extended to 28th February of this year to give the committee time to complete and issue a prospectus. I am pleased to be able to tell the hon. Gentleman that the completion of this prospectus is now far advanced.
  Conditions of this nature are, I emphasise, quite normal in offers of assistance under the Industry Act. In the case of KME the prior conditions for the negotiation of a satisfactory agreement with the receiver for the purpose of the assets have been satisfactorily complied with. A formal agreement with the company has been completed. The first payment of grant was made on 15th January, and the co-operative has now assumed full control of the business. The monitoring arrangements that will apply in the case of KME were described in the statement which my right hon. Friend the Secretary of State laid before the House on 20th December at the request
  2060
  of the Industrial Development Advisory Board.
  In answer to the hon. Gentleman's question, there is a requirement under the Act that this be laid before Parliament, and it is, therefore, entirely appropriate that it should be in answer to a Written Question.
  Mr. Stanley: I fully accept, as the hon. Gentleman said, that there is a statutory requirement that when the Industrial Development Advisory Board requires to make its views known they should be laid before the House, but did not the Secretary of State on the same day, 20th December, choose to make a statement about his own volition on the amount he was making available to the Kirkby Co-operative, and is there any reason why that statement should not have been made verbally to the House?
  Mr. Meacher: As I said, the Secretary of State carried out the requirements laid upon him under Section 9(4) of the Industry Act 1972, and there is no reason why those should necessarily form part of the same statement. A Written Answer can be a cause of future debate, but there is no requirement laid upon the Secretary of State to make an oral statement to the House.
  The grant is being paid to KME in tranches on proof of need. Further payments may be stopped if the Secretary of State considers the project to be in jeopardy. The grant becomes repayable if it is not used for the intended purpose or if the co-operative fails. The co-operative is to supply information regularly to the Department so that its progress can be carefully monitored. Appropriate monitoring arrangements are, I repeat, quite normal in cases of assistance under the Industry Act.
  I should perhaps add a few words about the rôle of the IDAB. In asking for a statement to be made to Parliament on KLE, the IDAB was exercising its right under Section 9 of the Industry Act 1972. The board's view that the project should not be supported was made public in the Government's original announcement on 1st November. Therefore, contrary to the impression the hon. Gentleman gave, the fact that the statement was not made until 20th December does not imply any attempt by the Government to conceal the IDAB's view. In deciding to

  2061
  provide assistance contrary to IDAB advice, the Government were motivated by the high level of unemployment on Merseyside, the resolution and determination of the workers to succeed and the significance of the co-operative as an experiment in industrial organisation. The Government have made clear that this aid is on a strictly once-for-all basis. That implies a total commitment.
  The hon. Gentleman also raised one or two other questions on KME which I shall answer. On the matter of vesting and the transferability of shares, the precise details of the constitution are still under discussion. I can assure him that transferability will be regulated by the constitution when finally published and made known. The Government do not intend to appoint Government directors.
  A great deal of attention has been focused on points of difference between the IDAB and the Government, and it might be helpful to put the matter in perspective. We should perhaps view the few cases where the board's advice has not been followed in the context of the total number of cases considered by the IDAB. Since the board was set up in 1972, the total of cases has been 87. Of that total, 39 cases have been considered since the present Government took office. In only five cases was there any difference of view; the three cases dealt with in this debate, Aston Martin, which is in receivership, and Alfred Herbert, a case which we are fully examining.
  The hon. Gentleman also mentioned that it is a novelty for the Government to offer public funds to a co-operative. I was grateful to hear him say that there is no reason why they should not be made available to a co-operative as indeed to other companies. Any co-operative—and there are about 30 producer co-operatives in this country at present—can make application for Industry Act assistance. A co-operative is as free as any other company to apply for assistance under the Industry Act, and I see nothing extraordinary or novel in providing assistance to a co-operative under the Industry Act. If a producer co-operative has planned to expand employment in the assisted areas, its application will be considered in the normal way. An appraisal of the viability
  2062
  of the proposal would be made, the security that the co-operative could offer would be negotiated, and so forth.
  The criteria for selective financial assistance under Section 7 of the Industry Act 1972 were published on 2nd October 1972 and were notified to the House on 1st November of that year. The essential requirements for Section 8 assistance are set out in Section 8(1) of the Act. Therefor, the full details of the criteria for giving selective financial assistance are entirely known.
  The novel characteristic of the Scottish Daily News, KME and Meriden in that these co-operatives have arisen from close-down situations where the employees concerned have had a choice of endeavouring to find other work or of working up alternative proposals which would provide lasting employment at their existing place of work.
  The Government have made available in these cases the advice of expert consultants in order to assist the workers in their decision. This was also done in the case of Propytex, and in that case the workers, in the light of the expert advice from the consultants, have decided that it is not feasible to formulate alternative viable proposals, and my Department is endeavouring to find, as quickly as possible, someone who will take over the Propytex factory and provide jobs. The situation of the Scottish Daily News, KME and Meriden arose from a response to particular situations, and the Government have equally responded to the particular circumstances of each case.
  Mr. Stanley: Will the hon. Gentleman kindly deal with the remaining two points I raised? First, could he tell us who are the owners of the shares in KME, who have the legal entitlement to the value of the assets represented by those shares? Secondly, could he say whether it is the Secretary of State's intention to make public, at the earliest possible date, the written objection placed on file by the Second Permanent Secretary to the grant to KME?
  Mr. Meacher: On the latter point, I remind the hon. Gentleman that it is not normal practice to make public advice which is given by permanent civil servants to Ministers, and there is, therefore, no intention in this case to make

  2063
  public advice on that matter. I am coming to the point about legal status, but in the meantime I assure the hon. Gentleman that the legal status is that a co-operative enterprise is vested, as with any other limited company, in the directors.
  Another question raised concerned the Government's policy on announcing offers of assistance to individual companies. Arrangements for the publication of offers amounting to £10,000 or less, or, in the case of interest relief grants, loan equivalent, were announced by my right hon. Friend on 31st July.
  The total amount of selective assistance committed will be published in the quarter after that in which the first tranche is paid. I expect the first of these lists to be published next month. In cases of great and immediate public interest, it is normal practice to make an announcement as soon as possible, thus, the offers of assistance to the co-operatives at Meriden, Kirkby and the Scottish Daily News were all announced as soon as the Government' decision was made.
  I turn now to the question of legal status of workers co-operatives. I was asked, for example, whether they will accept liabilities under the Companies Acts. The answer in the case of KME is that it is a limited liability company properly constituted under the Companies Acts, and, therefore, has a legal status no different from that of any other Companies Act company. The legal liabilities of the directors, and their responsibilities to their shareholders and employers, are determined, in the same way as for other companies, by the provisions of the Companies Acts and other relevant legislation. The detailed constitution of the Scottish Daily News will no doubt be set out in its prospectus, but I understand that it is also its intention to be a public company. The legal status of the other co-operative, Meriden, is not yet finally settled, but incorporation under the Companies Acts is, naturally, a possibility. Other possibilities can be considered in appropriate cases—for example, registration under the Industrial and Provident Societies Acts, under which a number of existing co-operatives are registered.
  I end by drawing particular attention to existing co-operatives. A point which is sometimes overlooked in discussions about Government assistance to co-opera-
  2064
  tives is the extent to which producer co-operatives and common ownership firms have already established themselves in manufacturing industry in this country. I am referring to enterprises such as the co-operative productive societies, some of which are members of the Co-operative Productive Federation, and to members of the Industrial Common Ownership Movement. Such enterprises, as the hon. Gentleman rightly acknowledged, are eligible to apply for assistance in the same way as other companies for projects that will create new employment or help safeguard existing employment in the assisted areas.
  Industrial co-operatives are, therefore, rooted in the experience of successful enterprises both in Britain and in other European countries. We believe that they have a significant role to play in harnessing the new social forces in Britain today.
  In the short time I have had available this morning I hope that I have been able to indicate that this new experiment is nevertheless rooted also in well-accepted and fully accountable procedures.
  Mr. Stanley: The Minister has not dealt with the last question which I put to him. It is a very material point. He has not said who are the owners of the shares in KME. He will be well aware that if that company is constituted, normally under the Companies Act—the Minister has said that it is—those who own the shares will be the legal owners of the assets which have been financed solely from public funds. This is a material point. Who will own the shares and, therefore, be the legal owners of the assets which have been purchased with public money?
  Mr. Meacher: Although I had concluded, I will respond to the point to which the hon. Gentleman has drawn particular attention. I indicated that the constitution of KME is still under discussion and that this is a matter which will be settled when that constitution is finally settled. There has not yet been a full distribution of shares. Therefore, I cannot give a comprehensive answer. I assure the hon. Gentleman that, as with all the other points he has mentioned and all the questions which have been raised in the House about accountability of co-operatives, he will in due course have access to a complete answer.

  HOUSING (MUNICIPALISATION)
  7.43 a.m.
  Mr. Michael Neubert: The issue of municipalisation—an ugly word for a doubtful practice—is not new, but it is continuingly relevant and needs constantly to be exposed to the light of day. At an earlier stage in this debate it might have been difficult, but in five minutes' time the sun will be officially up.
  We are indebted to the Under-Secretary for his attendance at this un-convivial hour, and particularly as he is likely to hear much that is uncongenial to him, apart from his own contribution, which no doubt will be idiosyncratically sardonic as ever. I look forward to hearing it.
  I intend in making my case to turn for illustration very much to my London constituency of Romford in the London borough of Havering, very much as I imagine the Minister will illustrate his case from his experience in his Manchester constituency.
  Long before the first minority Labour Government last February, the Labour-controlled Greater London Council and the Labour-controlled London borough of Havering were embarked upon a policy of purchasing private properties to meet the general housing need in their areas. In the borough elections last May a Conservative/Ratepayer administration was returned in Havering which put an end to this policy, but not before the process in train had led to the purchase of approximately 1,000 such private properties. It is therefore very much a matter of a policy which has been experienced and the effects of it felt. It is those effects that I should like to examine.
  The background is that the Chancellor of the Exchequer made in his March Budget last year provision of £200 million for this purpose, in his terms, as an expedient in an emergency situation. But like most expedients, this policy seems to have several defects. In my view, it can be faulted on five counts: it is wastefully expensive of public money; it is totally unproductive of new housing; it has the effect of sustaining house prices at an artificially high level to the detriment of prospective new purchasers; it is poor on grounds of management, and maintenance problems stored up for the future;
  2066
  and by creating tenancies in areas which are otherwise areas of owner-occupation by arbitrarily putting people in what is for them an alien environment, it is unnecessarily divisive and socially damaging.
  It is wastefully expensive of public money on a number of counts. First, on the evidence, in many cases the price paid for the properties will have been much more than it might otherwise have been. I cite cases from the London borough of Camden. Two blocks of bedsitters were purchased by the borough for £85,000 each. A similar property was put on the market at £35,000. Arkwright Mansions, in Finchley Road, were sold to the council for £240,000. A local estate agent put a value of about £150,000 to £180,000 on them. These examples can be multiplied in no doubt smaller cases throughout the country, and certainly in my London borough.
  Then there is the question of the condition and state of these properties. Many of them were a drag on the market for the reason that they were in poor repair and required a great deal of work to be done on them to make them fit for council tenants to live in and, in particular, to meet the stringent Parker Morris standards for council accommodation. They were expensive because as a result housing authorities were unable to cope with the necessary repairs. The properties lay vacant for many months, incurring not only high interest charges but a loss of rent revenue and, at the same time, a great deal of resentment on the part of nearby residents and those on the housing waiting list who could see properties standing empty.
  There is a much more important continuing reason why these properties are wastefully expensive of public money. The differential between the outgoings on them and the rental income is, in my borough, between £1,000 and £1,500 a year. The tenants are being subsidised by about £20 to £30 a week. Therefore, one would think that the expenditure of money in this way was wasteful. I do not say that it does not serve a purpose, but—and this is a cliché—such a policy does not build one new dwelling, and it is a desperate expedient which I understand, in one sense, on the Government's part to get the housing market moving but it is an

  2067
  enormous sum of money to spend at the upper end of the market without producing any results in increased housing which all political parties agree is what is needed to crack our homeless and housing problem.
  Therefore, money could, in my view, be much better spent mulching the roots of the housing market rather than purchasing expensive secateurs to cut off the fading blooms. Many of these properties are not among the best property on the market.
  Then there is the question of the management and maintenance of properties. The London borough of Havering is a large area. It has purchased about 1,000 properties in different parts of the area. It will be difficult for officers of the borough to administer such properties of different sizes and standards. Maintenance will be difficult, since the variation in the construction of the units means that spare parts are not available for quick service to tenants. That is one of the minor drawbacks.
  A more important factor is the way in which the intervention of local authorities with virtually bottomless purses in the housing market has boosted house prices at a time when they might have dropped. It is only too easy for Governments to provide money for the purchase of housing, but they find it neither easy nor quick to build the houses. The result has been a doubling of house prices in recent years. We find that, with the access of public authority money for the purchase of private properties, prices in those areas have not fallen, whereas prices came down in areas alongside where the policy was not pursued.
  Finally, I come to the most contentious argument, which may provoke some angry response from the Minister, namely, the suggestion that, in bringing forward this policy as an expedient or emergency measure, it is non the less the long-term fundamental philosophical belief that all rented accommodation should ultimately be municipalised—"social ownership" is the current euphemistic phrase—and that the property-purchasing policy should be the start of a much wider longer-term campaign.
  The first effects of that policy are most unfortunate. Taking an example from my constituency, the Nash estate
  2068
  was built between the wars for private owner-occupation. When the council started buying properties there, the owner-occupiers took round a petition to 1,000 households, of which 875, or 95 per cent., were against the policy of the indiscriminate purchase of those properties, and 76 refused to sign. The remaining householders were not at home when called on.
  Before any hon. Member rushes in to say that this is sheer class consciousness and snobbishness, I should point out that many of the owner-occupiers who took the majority view were until recently council tenants from estates in East London and elsewhere in the vicinity, where their friends and members of their families still live. Their objection is not to the people who occupy the properties but to the principle of establishing tenancies in roads and areas which are otherwise solidly owner-occupied. That is a valid point of view which is widely held. A tenancy is not the same as owner-occupation. Except in rare cases, it is inevitably human nature that a tenant does not invest as much time, effort or expenditure to maintain and improve the property as someone who has striven by sacrifices and hard work over a number of years to save the necessary money to purchase and improve a property.
  This was the controversy which arose in an area where already there are about 50/50 council tenants and owner-occupiers. It is an area which is by no means Tory in persuasion. It is a very mixed area. It was a genuine belief on the part of those owning properties in that part of Collier Row that it was unfair that tenants should be put amongst them. But it is, unfortunately, an instrument of social engineering, and perhaps the Minister will comment on it.
  To me, knowing that only the very recent evident popularity of owner-occupation deters this Government from coming out more openly with their policy of municipalisation, it is significant that we should have such a policy embarked upon. It is thoroughly unsatisfactory, and, like many expedients, it will lead to long-term problems which will be with us many years hence.
  If the Minister had the chance last night to read the Evening Standard he would

  2069
  have seen a relevant feature on housing with the heading
  "Hope fades in the waste land."
  It was a feature on the land in East London where it is said that 100,000 families could be accommodated in the area on both sides of the Thames between Tower Bridge and Beckton but which would require a very large sum of money to be invested in it over a period—an estimated £1,000 million over 20 years. It would seem that the money that is available to the Government for housing should be put into this kind of venture. It is very much more constructive. It would build new houses.
  We support the Government in their campaign to secure a solution to our housing problem. That is not just a glib statement. It is a genuinely held belief. The Minister will know that we supported the Housing and Planning Bill which was enacted last summer and which will give assistance to housing associations and strengthen the housing corporation. We welcome the revival in the council house building programme. We would welcome any encouragement which could be given to private house-building performance, and we are glad that, by the provision of money, the mortgage flow is beginning to run heavily again. All these we welcome. But it is difficult to welcome a policy of indiscriminate and widespread purchases of properties by local authorities in the open market.
  If at the end of this administration's period in office the public in my part of London see that the Government have done no more than harry the outer London boroughs to give up what little land they have, to destroy the environment which is London's heritage as well as their own residential privilege, and to suggest that local councils should purchase private houses in areas of owner-occupation, the Government will be condemned by the 6,000 acres of land lying derelict and disused, and in many ways suitable for redevelopment with a new town, and a substantial gain in housing. The electorate will not forgive them for it.
  7.59 a.m.
  Mr. Nick Budgen: I add a few words to those so eloquently delivered by my hon. Friend
  2070
  the Member for Romford (Mr. Neubert). I also wish to refer to the public expenditure which was authorised in the Budget of March 1974, when the Chancellor of the Exchequer allocated an additional £350 million to new council house building, to municipalisation, and to the buying of unsold newly-built homes.
  The Ministry talks of "municipalisation" when it is talking about the purchase of houses from the rented sector. The purchase of houses built by speculative builders is distinguished from that in the Ministry's circular by the phrase "acquisition of new houses from developers". The justification for this new venture is that there is a need and a demand for more housing. There is always a demand for subsidised housing. It is impossible to say that there is a need but in any market situation, no matter how the market is rigged, there will be a demand for a product sold at less than the market prices. Unhappily, this demand, which is described as a need, is largely created by the Government's own policies.
  I should like to pinpoint some of the factors over which the Government have control which have exacerbated the situation. I accept that inflation has much to do with the difficulties of the housing market. I am not trying to blame this Government for all our inflation but their Housing Act 1974 made the situation worse. I, too, heard the debate last night on the Act's effects.
  The Minister rightly says that we cannot prove our assertion that security of tenure for furnished accommodation has led to the supply drying up, but he speaks like a counsel defending an accused when these are no such proceedings. We in the Tory Pary say, from our knowledge of human nature and our basic philosophical beliefs, that the landlord is as much a creature of idealism and self-interest as any normal human being. As a matter of sheer self-interest, if he cannot ever get control of his furnished accommodation he will not let it. There are no national statistics yet, but all that we have heard from various parts of the country shows that our understanding of the oddities and imperfections of human nature is more realistic than me muddled idealism which is the Socialist concept of the way in which landlords operate.

  2071
  The present Government have also made the situation worse by the threat of land nationalisation, which is at least one of the depressing factors which have harmed the building industry, and by the council rents freeze, which has made council housing more attractive to first-time buyers or newly-married couples than private housing. This last factor, far from being a compassionate and useful measure, is harmful to the whole housing market. As my hon. Friend said so clearly and eloquently, it is wrong because it prevents young couples taking advantage of market conditions.
  That is one of the odd paradoxes of the present Government's position. They rode to power, as all Governments try to ride to power, by blaming individuals rather than Governments for the creation of inflation. They had not got the courage to say that the previous Government were responsible for the creation of inflation. They had to say that all sorts of speculators, whether they be in land or commodities, were not only persons who benefited from inflation but persons who created inflation. So it was that among the economically illiterate they made a great deal of mileage by attacking those who made money out of the land boom which followed inevitably on the increase in the supply of money between 1971 and 1974.
  However, the extraordinary thing now is that when the Government so vehemently attack those who made money out of the housing boom they are taking away the whole justification for the entrepreneur's rôle in the market situation. He takes the risk and the profits, and when things go wrong he ought to take the losses. Now the entrepreneur in the housing market is being prevented and protected from taking the losses because the Government are trying to buy up housing left unsold on the market, and they are preventing young couples from buying houses which would drop in price were it not for this most ill-considered policy.
  It will be worse in the future. There are now about 50,000 houses unsold on the market. We all know that there is plenty of money in the building societies. Although the Minister will probably deny it, we are in a period of very rapid wage inflation. Many of the new rich, who under the social contract are enjoying wage increases of about 30 per cent., will
  2072
  find that it is to their advantage to become home owners. They will then find that the stock of housing which might have lain idle on the market for some time will have been bought up by the time they come on to the market. There will then be a grave shortage of houses available for sale, and once again we shall unhappily find that prices start shooting up very quickly indeed.
  Therefore, I attack this measure most of all because it is grossly unfair to those who wish to move into home ownership either now or in the immediate future. But I also attack it because it is grossly wasteful of public money. As we all know, it is cheaper to allow the citizen to buy his own house than to push him into subsidised public accommodation. The figures were well rehearsed on the Second Reading of the Housing Rents and Subsidies Bill. I shall not bore the Minister with them at this early hour. He knows that in broad terms the subsidy on a new council house from the taxpayer and ratepayer amounts to about £1,000 a year, and that the average tax relief to an owner-occupier is about £300 a year.
  These proposals for the purchase of unsold housing are also grossly wasteful because many Socialist-controlled local authorities take a very realistic view about the Government's expenditure. They recognise that the bonanza must stop at some time. They are extremely anxious to get as much housing purchased as quickly as possible, irrespective of whether that particular housing is suitable to their needs, because they know that, notwithstanding all the brave talk about everything being all right, fairly soon there will have to be a Draconian cut-back in public expenditure. I have seen this clearly in my constituency in recent weeks because the Labour-controlled Wolverhampton metropolitan borough council is at present negotiating to purchase 26 flats at Bromfield Court, Tettenhall Wood. This is high-class luxury accommodation intended to be occupied by people of comfortable means. The flats were on offer at £15,000 each, and in some instances they had only one bedroom. On any basis this is expensive accommodation which would clearly, not have been provided as subsidised accommodation for council tenants.

  2073
  The proposal is that the council should purchase the flats, and I understand that its application for loan sanction is still being considered by the Minister. It is impossible to discover the criteria the Minister is applying in deciding what sort of accommodation is suitable for purchase by local authorities under this heading of public expenditure. The circular which the Minister issued to the local authorities to guide them in this type of purchase simply speaks in paragraph 23 of the
  "Minister's readiness to approve such arrangements in cases where houses are available in the right place to meet urgent housing needs, and provided that the houses are of an appropriate standard and price."
  That is as vague as vague can be, and it leaves the matter wide open for prodigal local authorities to exceed by far those prudent limits which the Chancellor has quite properly tried to impose upon local authority spending.
  I know that the Minister is not loyal to the Chancellor's earnest desire to keep the borrowing requirement down. I had something to say on a previous occasion about the Minister's attitude to Government expenditure, but since he is now not only my opponent but also one quarter of my audience perhaps I shall be slightly more polite than I was before a larger audience.
  There is another problem relating to the purchase of houses. My hon. Friend referred to the important point that when councils buy houses on partially-completed estates intended for private purchasers and private occupation there is a sense of social divisiveness among the people already living there. This arises not from snobbishness or, as one of my hon. Friends said, because we have derogated in any way from the important principle that ours is a national party not given to trying to stir up enmity between one class and another, but because the people recognise that there is a pride in ownership and that when householders own their own homes they look after them substantially better than when they live as tenants, whether they are tenants of a private company or a public corporation.
  This gives rise to an interesting dilemma. In my constituency last summer the local authority purchased a
  2074
  number of houses on an estate called Wrekin Drive. The houses were part of a wider development on which a number of houses had already been sold to private purchasers. As soon as it became clear that the local authority was proposing to purchase the remaining houses, all hell was let loose and the original purchasers had a great deal to say about it. They rightly said that they had contemplated that the whole of the estate would be lived in by owner-occupiers. They said that they had been done by the speculative builder, and now they were going to be done by a combination of the Wolverhampton Council and the Minister, if the Minister gave loan sanction. The councillors, sensitive to these allegations, therefore said "The tenants who go into these houses will be hand-picked". That is reasonable enough, but it means that those who arguably need housing most do not go into those houses. The hand-picked tenants are the people who are socially respectable, who will conform to the standards of the area.
  It may be that by hand-picking the tenants in that way the local authority is acting in contradiction to the rules that the Minister laid down when he set out his proposals for local authority housing programmes in Circular 70/74. Paragraph 30(c) stated that he would give loan sanction for the acquisition of properties which had been standing empty for six months, or properties with vacant possession, in areas in which there was a serious overall shortage of housing, and the acquisition of which would be for the purposes of housing essential public service employees or the homeless.
  It is plain that if a local authority, in order to placate local views about the undesirability of putting council tenants into what is otherwise an owner-occupied estate, hand-picks the tenants, the probability is that they will not be homeless people, and other people most urgently in need of housing. Therefore, there is the ridiculous dilemma that, once again, by interfering in a market situation a Government fail to benefit those whom they most want to help.
  I hope that the Government will rapidly reconsider the whole of their housing policy and take account of the real needs and character of the people, and realise that there is a place in housing for profit

  2075
  and the proper use of units of accommodation.
  Here to some extent I take issue with my hon. Friend. It is dangerous to be for ever shouting for more housing, because we have enough units of accommodation. They may be in the wrong place, but we have enough. I should like to see a great deal more emphasis put upon the proper economic use of our present units of accommodation, as a first priority, before we try indiscriminately to expand the stock of housing.
  8.18 a.m.
  Mr. Nicholas Scott: I should like to intervene briefly—
  Mr. Deputy Speaker (Mr. George Thomas): Order. The hon. Gentleman has already spoken in the debate. He needs the permission of the House to speak again.
  Mr. Scott: With the leave of the House, I should like to intervene on this subject. I thank my hon. Friend the Member for Romford (Mr. Neubert) for raising it and my hon. Friend the Member for Wolver-hampton, South-West (Mr. Budgen) for bringing his experience and forensic skills to bear on the problems of municipalisation and acquisition, which is how we can describe these two headings of Government policy.
  None of us should be surprised that the Government are behaving as they are, for many of us warned the electorate at the last two General Elections that what they are now doing would be part of a Socialist approach to housing policy. We have a right to consider the results and to see what that policy means for ratepayers, taxpayers and tenants if it is carried forward.
  I hope that the Minister will not repeat the accusation that he made earlier about the attitude of the Conservative Party towards tenants and landlords. We are concerned with fulfilling the rights and expectations of tenants. If at times we are concerned with the rights of landlords it is because we believe that they fulfil a proper and important function in the housing market. Our concern is also for the housing stock.
  The Government are falling into a grave error in saying that because eventually the rented housing sector will come under Socialist ownership it will be
  2076
  possible virtually to neglect the importance of giving landlords sufficient encouragement to keep their property in decent repair and condition. If that policy is pursued we shall have an endless renewal of slums which will make the eventual realisation of the Government's dreams that much more difficult.
  Earlier the Minister talked about the commitment of the Labour Government to the expansion of owner-occupation. I am bound to say that that commitment seems to have slipped somewhat. We have been promised a statement on measures to improve the state of the housebuilding market and measures relevant to the owner-occupied sector for months, but we have heard nothing. I do not know whether it was a slip of the tongue when the Minister in an earlier exchange mentioned the Second Reading of a Bill—[Interruption.] In any event, we look forward to the promised statement. We hope that it will contain the same sort of commitment to house-building and owner-occupation as the Government have to municipalisation.
  The Government have the wrong priorities. The Labour Party's attitude to housing priorities is not bady illustrated by the Greater London Council. The GLC is now threatening to raise the interest rate on its home loans from 11 per cent. to 13¼ per cent. That is threatened at a time when there is discussion in the Press of the possibility of some building societies reducing their lending rates and when interest rates overall are beginning to be reduced.
  The GLC has recently reduced its maximum home loan from £10,000 to £9,000. A loan of £9,000 over 25 years with an interest rate of 11 per cent. would demand a family income of £3,975. If the GLC's latest threat comes into operation the family would need an income of £4,645. That is the income that would be required for an interest rate of 13¼ per cent. The cost to the GLC of holding down its home loan rate to 11 per cent. would be £3 million a year. It is apparently refusing to find the money. It is refusing to find one-twentieth of the amount that it is presently planning to spend on municipalisation. The GLC, like the Government, has its priorities totally wrong. It refuses to find that £3 million because of its doctrinaire and

  2077
  ideological commitment to municipalisation and acquisition.
  We have three main complaints about the Government's policy. The first is that houses are frequently being acquired at exorbitant prices. When that accusation was first made by my hon. Friend the Member for Romford it caused a certain amount of agitation on the Treasury Bench. If the Government do not accept it, have they seen the work that Christopher Booker and Bennie Gray have been doing, the surveys that they have been preparing and the evidence they have been adducing week after week in the Observer?
  The defence to that evidence has been extremely weak. On 24th November there was an article about Camden paying £85,000 each for two 16-bedsitter houses, which estate agents estimated to have an asking price of £35,000. My hon. Friend the Member for Romford mentioned that this was happening in Camden and elsewhere, with apparently exorbitant prices being paid. Mr. Mills the Chairman of the Camden Housing Committee, was challenged about this and his reply was interesting. I am sure that my hon. Friend the Member for Wolverhampton, South-West will relish the answer he gave. He said:
  "Everyone knows the particular difficulties of fixing prices fairly, because a seller will not sell at prices that buyers are prepared to pay."
  My hon. Friend is exactly right. The intervention of these councils in this way has rescued a number of people from their bad judgment.
  Mr. Mills went on:
  "I believe our current purchases will look cheap in a year or two's time",
  by which I suppose he means that he expects house prices to begin to soar again under this Government. Again, my hon. Friend the Member for Wolverhampton, South-West illustrated the sort of process going on which may well lead to the return of that cycle.
  The second complaint is that councils are buying up sound housing and going ahead with plans which will destroy large numbers of such houses. We know the attitude of the Secretary of State to this, because on 6th May last he said:
  2078
  "I have for long been a passionate opponent of indiscriminate clearance, which I believe has gone too far in many areas.… I believe that indiscriminate clearance can be appallingly destructive of existing communities and is frequently a very expensive solution."—[Official Report, 6th May 1974; Vol. 873, c. 53.]
  Yet we see that in Camden, Lambeth, Wandsworth and Islington, councils are going ahead with their plans, buying up sound houses and preparing to demolish them. This process involves housing being left empty for long periods.
  That is our third complaint, that this programme of municipalisation is a wasteful use of the housing stock because large numbers of houses are left empty for long periods. The best estimate is that about half of the 1 million homes in this country which are empty at the moment are owned by local authorities which are not making proper use of their housing. It is a wasteful nonsense for them to be expanding their municipalisation and acquisition programmes in this way.
  My hon. Friend the Member for Romford mentioned the subject of councils buying property on private estates and the two levels of maintenance which sometimes arise. Frequently the fault does not lie with the tenant because the rules of the local authority prevent tenants from carrying out the sort of improvements and maintenance which a private owner would carry out.
  We know, too, because in Circular 171/74 which local authorities received on New Year's Day, that the Government recognise that the cost of managing these properties which are being acquired will place extra burdens on councils' allocations for maintenance and management. The circular says that where savings cannot be made elsewhere on the management budget this extra cost must be paid for by postponing the work of repair and maintenance. Anyone who owns property knows that that is a recipe for disaster.
  If important repairs are postponed extra expense is built up to be met in the years ahead. To do this simply to make possible this programme of municipalisation is housing policy gone mad. This expenditure is bad on political and economic grounds because it is a wasteful use of precious resources. It is bad on

  2079
  housing grounds because it means spending money in vast quantities without adding a single extra house to our national housing stock. The scandal of dockland continues, and, while this programme goes ahead, millions of pounds are being wasted while thousands of people who could be housed in dockland wait for the go-ahead on that scheme.
  This whole policy is, from the points of view of the taxpayer, the ratepayer, the tenant and the homeless, little short of disastrous.
  8.30 a.m.
  The Under-Secretary of State for the Environment (Mr. Gerald Kaufman): With the leave of the House, I will reply.
  The hon. Member for Romford (Mr. Neubert) was good enough to include me in his compliments for attendance at this hour. I am grateful for the compliments but I recollect that about a year ago when the equivalent of this Bill was being debated I was inconsiderate enough to keep some of his hon. Friends up by initiating a debate at about this time of day. I rebuked the Government for apparently contemplating a General Election on February 7th on a dying election register, and I suggested that they postpone it until 28th February, suggesting that there would be a happy outcome, a Labour Government removing from the Conservatives the burdens of office.
  Mr. Budgen: The hon. Member won the last election.
  Mr. Kaufman: The hon. Member is right. I had the Labour Party win in the last election to my personal credit. But I must also tell the hon. Member that when we came to office we found a housing situation verging on the disastrous because of the mismanagement of the Conservative Party. It was as a result of the disastrous housing situation which we found, together with the speeches we made, that we were returned twice last year and that we are pursuing policies which the Opposition, for reasons of ideology and doctrine oppose.
  The hon. Member for Romford and the hon. Member for Wolverhampton, South-West (Mr. Budgen) spoke about different aspects of our policy, and I shall deal with their remarks separately.
  2080
  The hon. Member for Romford was critical of the municipalisation policies which we put forward at elections and which we are pursuing as part of our mandate. He rebuked us for the kind of purchases which were made by the former administration in his own borough. He said that prices are more than they might have been. It is difficult to calculate whether a price is more than it might have been if one is buying the house. We are doing our best to ensure that local authorities get good bargains.
  The hon. Member quoted not so much from his own constituency as from the borough of Camden and from the constituency of Hampstead within that borough. He was reinforced in his strictures by the hon. Member for Chelsea (Mr. Scott). We are constantly being assailed by his hon. Friend the Member for Hampstead (Mr. Finsberg), who originally affixed his name to this debate but for inexplicable reasons is not here, to get more permissions for his local authority to make purchases in his constituency. He becomes quite irritable if we refuse loan sanction to Camden Borough Council to purchase blocks of flats at high prices.
  I was looking forward to pointing out the inconsistency between those who have spoken and the hon. Member for Hampstead, whose views I had amassed in a large brief. I assure the hon. Member for Romford that in choosing Hampstead he has chosen entirely the wrong constituency in entirely the wrong borough upon which to attack the Government, because his hon. Friend the Member for Hampstead joins the Camden Borough Council in assailing the Government for their stringent, mean and small-minded attitude towards the putative purchases of the Camden Borough Council. We are assailed also by other Labour-controlled councils including, I am sorry to say, my own Manchester council.
  One reason why we are assailed is that the criteria for purchase under the municipalisation heading are more stringent under the Labour Government than they were under the Conservative Government. We are constantly being reminded that under the previous Government there was almost a carte blanche for municipalisation purchases, whereas the criteria in paragraph 30 of Circular

  2081
  70/74 are stringent and restrictive. We have had to make them so because we have a large-scale municipalisation programme and, being a good sensible Socialist Government, we have priorities within that programme. Those priorities are listed from (a) to (e) in paragraph 30 of the circular which the hon. Member for Wolverhampton, South-West quoted accurately but misunderstood. Indeed, purchase cannot be indiscriminate and widespread—to use the words of the hon. Member for Romford—because the criteria in paragraph 30 are so stringent. There is now no general consent as there was under the Conservative Government.
  All three hon. Gentlemen spoke of the misgivings and sometimes the opposition of owner-occupiers who sometimes find council tenants among them. It is not for me to comment on the views or motives of people who have taken trouble and spent a good deal of their own money on buying houses for owner-occupation. One can well understand any feelings they may have, however misplaced, that the value of their houses might be reduced by tenants being introduced. I ask the hon. Gentleman whether they would prefer to have council tenants among them or would prefer the houses to be unoccupied and possibly vandalised, which is what is likely to occur if they were allowed to remain empty for long.
  That is one justification for the acquisition policy on which we embarked as a totally new venture when we came to office last March. Somewhat to my surprise and greatly to my satisfaction, that acquisition policy has been a considerable success. The latest figures show that since Circular 70/74 urged local authorities to venture into the acquisition from developers of newly-completed houses or houses approaching completion 174 local authorities have acquired 9,000 dwellings. That is a useful addition to local authority housing stock and an important aid to private developers and the building industry.
  Although we welcome the addition of those houses to local authority rented stock, when we introduced the policy we made no secret of the fact that we did it first and foremost as a means of helping the building industry out of the trough into which it had fallen during the
  2082
  last period of the Conservative administration when we approached a situation in which the building industry had so many unsold new houses on its hands that it was not only not starting new houses but was not finishing houses under construction because of lack of confidence in the industry. It is undeniable that the policy on which we embarked when we came into office was strongly supported from within the building industry. The hon. Member for Wolverhampton, South West will realise that the industry was in great trouble and was grateful to us for intro-during a policy that assisted it to regain liquidity after it had had a large amount of unsold stock on its hands. There still is too much stock in its hands, but the position has improved.
  Because the position has improved, because houses at the lower end of the market are now moving more easily—in a way in which they were not moving in the last period of Conservative Government—we are now reconsidering the acquisition policy. It is a policy that may well continue in some form, but the urgency of the situation that led us to introduce in last March is now less pressing. Therefore, we shall be reconsidering this aspect as well as others in our housing policy.
  The hon. Member for Wolverhampton, South-West, reverting happily to true Tory doctrine, reproved us because he said that under our policy the entrepreneur was being prevented from taking losses. That is true. But if we had not taken this and other initiatives there would have been no private house-building left in the country. Those were the straits into which the building industry was being led by the Conservative Government. It was not only the building industry but the building materials industry that was approaching a desperate situation. Indeed, the building materials industry is still in a desperate situation, as the hon. Gentleman will know.
  Mr. Budgen: Is the Minister being frank with the House when he says that the reason that the Government are reconsidering the policy of purchasing new houses is simply due to the fact that it has been successful and now the lower end of the market is starting to move? It is plainly moving, because President Ford is doing what the Chancellor of the

  2083
  Exchequer may well do at the end of this year, and that is inflating—
  Mr. Deputy Speaker: Order. Is the hon. Gentleman making an intervention or a second speech?
  Mr. Budgen: I apologise, Mr. Deputy Speaker. Will the Minister say whether there are other reasons for the changed policy?
  Mr. Kaufman: I am never anything but totally frank with the House. I am surprised that the hon. Gentleman should attribute a movement in the housing market to the concatenations of the Watergate affair, for that is what he seemed to be saying. He said that the movement stemmed from the fact that President. Ford had made his recent statement, but the movement in the housing market and the return of confidence to the housing market began earlier. The present Government and my Department have nothing which they are not ready to reveal to the House. Any concern we have about acquisition policy is entirely for the reason I stated and no other.
  The hon. Gentleman seemed, on the other hand, to be slightly schizophrenic. While he rebuked the Government for helping private developers, at the same time he dragged out the old and inaccurate statistic about State aid to tenants being greater than State aid to the owner-occupier. One would think that he would not wish to give any State aid to owner-occupiers since he believes everybody must struggle in the whirlpool of the private market. But in a recent Written Answer my hon. Friend the Minister for Housing and Construction made clear that on an annual basis tax relief for an owner-occupier was considerably higher than the subsidy for a council tenant. I will gladly send the hon. Gentleman a copy of that answer, since it is one to which I give constant attention.
  The hon. Gentleman revealed in the House, as he has in correspondence, his obsession with the Bromfield Court prospective purchase. It seems to emerge from his interest in this that he is terrified that if Wolverhampton Council were to buy these flats so many Labour voters would move into them that he would be deprived of his parliamentary constituency. In time we shall get him out of this
  2084
  House, but we shall not do it by diluting his constituency in this way.
  I assure the hon. Gentleman that this prospective purchase, now being considered in the Department, will be decided upon the criteria within the circular. The hon. Gentleman should have read a little further on in the circular and beyond paragraph 23, because paragraph 25 amplifies the criteria. It says:
  "As to price, the maximum should be that recommended by the District Valuer."
  Therefore, there is a control on price.
  "Local authorities should be able to negotiate favourable prices … It is not intended that local authorities should acquire dwellings in the higher price brackets and the Departments"—
  that is, my Department and the Welsh Office—
  "will not normally be prepared to approve arrangements involving such dwellings."
  I assure the hon. Gentleman that the prospective Bromfield Court purchase will be judged according to those criteria, just as other purchases must be judged by them.
  The criteria for acquisition are different from the criteria for municipalisation, and, therefore, although the hon. Gentleman read out some of the headings of paragraph 30, I must point out to him that those headings do not apply to the kind of acquisition he has in mind in the Bromfield Court situation.
  The hon. Member for Romford and the hon. Member for Chelsea once again attempted to prove that this Government were not as interested in expanding owner-occupation as they are in expanding council tenancies. I remind them that it was the last Labour Government who introduced the mortgage option scheme and that it was the present Labour Government who introduced the £500 million bridging loan scheme.
  I remember the Opposition going on and on about it when I moved the bridging loan order last spring. They attacked us for it, and threats were made to vote against it. The right hon. Member for Finchley (Mrs. Thatcher), who was not present on that occasion but raised the matter on others, attacked us for increasing the borrowing requirement. Nevertheless, we proceeded with it, and the result has been wholly beneficial. It has restored confidence to the private housing market, and it has helped bring about a

  2085
  very welcome flow of funds into the building societies, which is making increased mortgage commitment possible.
  The hon. Member for Chelsea asked about our future plans for assisting owner-occupation. A statement will be forthcoming before too long. I trust that that statement also on further proposals by the Government will assist still more the owner-occupation market.
  The hon. Member for Chelsea, who seems to be an assiduous reader of the Observer, mentioned some of the proposed acquisitions by certain local authorities in London. These are not acquisitions which have come about. They are all planned compulsory purchase orders, and, as such, they will be subjected to the very severe scrutiny to which all compulsory purchase orders are subjected under this administration. My right hon. Friend the Secretary of State for the Environment has expressed a personal interest in all compulsory purchase orders.
  I assure the hon. Gentleman that the fact that proposals have been made does not necessarily mean that they will be accepted, though, since it is a semi-judicial proceeding, I must point out that it does not mean that they will not be accepted. All these proposals will be considered on their merits.
  The hon. Member for Romford reproved us for chiding and harrying, as he put it, outer London boroughs for failing to build on their land. The report of the London Housing Action Group, which was published last autumn, and which was a report by that admirable all-party group whose members include a number of distinguished Conservative experts on housing, made it absolutely clear that the behaviour of many outer London boroughs in respect of house-building was an absolute scandal, that some of their housing totals were disgraceful by any possible criteria.
  We, whatever the hon. Gentleman thinks, will certainly go ahead with all measures that we can to persuade the outer London boroughs to help the general London housing situation by making land available for housing, because the London housing problem is, in both quantity and quality, the most severe housing problem that this country faces,
  2086
  and measures must be taken to deal with it. We are determined to do so.
  Our housing policy goes ahead on a number of fronts—council building, which will be helped by the Housing Rents and Subsidies Bill, assistance for owner-occupiers, and extension of the public sector. Whatever one's view upon this Latin-derivated word, we stand by our municipalisation policy. We believe that it is the right policy. We are governing it by the criteria laid down in the circular because, while financial conditions remain stringent, it is essential that priorities be imposed upon acquisition.
  I assure the hon. Gentleman that we believe that acquisition by local authorities through municipalisation is the right policy, and we shall certainly encourage them to go ahead with it.
  Mr. Neubert: I ask the Minister, who has confirmed his Government's intention to proceed with their policy of attempting to solve London's housing problems by going to the outer London boroughs alone, not to sit down without mentioning the 6,000 acres of land which lie derelict and disused. I cannot recall his making any reference to that.
  Mr. Kaufman: I do not believe we can solve the London housing problem in outer London alone. We are undertaking a new initiative in the London Housing Action Group by looking at the inner London situation. In our report of the London Housing Action Group last autumn we did not confine our strictures to the outer London boroughs. We also made it clear to the inner London boroughs that they must take urgent steps.
  As for dockland, I agree with the hon. Gentleman that bringing land from dockland into use is an extremely important measure, but it is generally agreed by experts on the London housing scene, including the experts from his own party who add so much to the work of the London Housing Action Group, that dockland by itself will come nowhere near to solving the London problem, that, though it is an essential means of increasing housing in London, the possibilities from dockland have continually been exaggerated. This is agreed by experts.
  This does not mean that we do not anxiously wish to bring dockland into

  2087
  use. We shall certainly do our best to ensure that that is brought about.
  Mr. Michael Ward: Will my hon. Friend undertake that if the friends of the hon. Member for Romford (Mr. Neubert) in the London borough of Havering repeat their performance of 1971, when they reduced the council's housing programme to practically zero, he will indeed continue to harry them and ask them to carry out their duty under the Housing Act? I assure my hon. Friend that there will be the greatest possible support from myself and other members of that authority if he does just that.
  Mr. Kaufman: I assure my hon. Friend that any local authority in or outside London—Labour, Conservative or, if there are any left, Liberal—which does not fulfil its duty under housing legislation to provide dwellings for its citizens will be left in no peace by the Government. We do not distinguish between party control. There are, unfortunately, some Labour authorities which do not fulfil their obligations. We shall do our best to ensure that all local authorities fulfil their housing obligations to their citizens.

  WORLD FOOD SUPPLIES
  8.55 a.m.
  Mr. Frank Hooley: A great many reasons are given to explain our present economic ills and the problems of inflation, recession and unemployment. Some people blame the trade unions. Others blame the Common Market. Yet others regard the oil-rich States as the main culprits. But a major factor in our economic difficulties was the disastrous failure of world harvests in 1972. There was a widespread failure across the world, and in both hemispheres, in the harvests of the major grain-growing countries and, consequently, a shortage of grain and animal feedstuffs which pushed up prices, leading to an escalation in the price of raw materials throughout the world.
  Perhaps we should remind ourselves from time to time that, despite all our advanced technological knowledge, the world's economy still depends greatly on the work of farmers and farm workers.
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  The disastrous fact is that mankind has run out of reserves of food to tide over the lean years when harvests fail. For people in this country it means dear sugar, expensive meat and rising costs for other food, with the inconveniences and, to the poorer people, hardship which this undoubtedly causes. It is said that one Bangladesh farmer commented to another "There is a world food crisis because the British are short of icing sugar for their Christmas cakes".
  However, for people in other parts of the world these problems mean not expensive food and hardship but famine, starvation and death. We have seen this at its grimmest and most obvious in the Sahel region of West Africa where years of drought have brought appalling tragedy and total destruction to entire peoples across the African continent. Similarly, in Bangladesh, for the opposite reason, the great floods caused by the rivers flowing from the mountains, the torrential tropical rains and the monsoons have washed away the crops and land. But whatever the cause, the problem is there and for many people it is not a question of being short of food; it is a question of having no food at all.
  In the shadow of these events—harvest failures, great droughts, floodings—the representatives of 130 nations gathered in November last year for the first great World Food Conference, held in Rome. It was called by decision of the United Nations General Assembly following a suggestion or initiative by the American Secretary of State, Dr. Kissinger. I do not intend to weary the House by going over all the arguments and counter-arguments adduced at the conference, but I wish to draw attention to the four major decisions taken by it.
  First, it was agreed to set up a World Food Council whose duty it would be to co-ordinate the international agencies involved in agricultural matters and to create a body at ministerial level to try to devise a world strategy and world policy on the provision of food. The World Food Council will consist of members nominated to the United Nations General Assembly through the Economic and Social Council and will be serviced within the framework of the Food and Agriculture Organisation of the United Nations, the FAO. It will be a high-powered body designed to evolve policies

  2089
  and strategies by international agreement to ensure that a repetition of the kind of disaster that occurred in 1972 will not have the appalling consequences which we have seen within the last 18 months and which may yet continue into the next year or two unless strong action is taken by the richer countries.
  Since I am fairly certain that Britain will become a member of the World Food Council. I should like to know whether we shall be represented by someone from the Ministry of Overseas Development or by someone from the Ministry of Agriculture, Fisheries and Food. This could be a decision of some importance because we saw at the World Food Conference that the British contribution, which was fairly widely criticised, seemed to be dominated by the fact that our main representative came from the Ministry of Agriculture, Fisheries and Food rather than from the Ministry of Overseas Development, which many people woud have preferred.
  If the council comes into existence and begins to work effectively, British policy within it and the British contribution to it will be greatly influenced by whoever is chosen by the Government to put forward the British viewpoint. I should like to know whether that viewpoint will derive from strictly British agricultural interests and strictly British food interests or whether there will be a fairly strong streak of consideration for the world food position expressed by someone from the Ministry of Overseas Development, who may have a somewhat broader view than we can reasonably expect fom the Ministry of Agriculture. While I cannot reasonably expect my hon. Friend—the Parliamentary Secretary to answer that question this morning, I shall be glad if he will pursue it later with the Government.
  The second main decision of the World Food Conference was to set up an international fund for agricultural development. This proved to be a matter of considerable controversy because many of the Western Powers in particular took the view that there were enough existing funds—for instance, the United Nations Development Fund—within the FAO and many other agencies through which help to agriculture could be channelled as and when required.
  2090
  The conference also took the view that if extra funds were to be provided they might perhaps come from the newly-rich oil-producing States rather than the Western World. The only country which has so far pledged any financial help to this international fund is Iran, which I understand has offered $150 million.
  The question then arising is whether we are to contribute to the fund at all, if so how much, when and on what conditions, if any. Shall we take the view that our existing contributions to other international agencies or through Common Market institutions are sufficient, or shall we be prepared to give something to this new special international fund for agricultural development? If so, how much?
  Our present contribution to development in agriculture is not a very high percentage of our aid budget. The most recent figures that I have been able to obtain show that only 5 per cent. of our project aid goes towards agricultural projects, and this is widely scattered in countries round the world. It is true that there is another 15 per cent. for general infrastructure technical aid to other countries, some of which has a bearing on rural development and could affect agricultural development and agricultural production. But in 1973, according to figures supplied to me, only £7.4 million out of £106 million project aid was devoted to agricultural projects in continents and countries scattered all over the globe.
  However, I am pleased to see that last year my right hon. Friend the Minister of Overseas Development concluded an agreement for aid of £11 million to Tanzania which will be devoted largely to rural development. I welcome this resumption of aid to Tanzania, and I hope that it will improve relations between our two countries, which suffered because of the cutting off of aid in 1965.
  The key point following from the World Food Conference decision is whether the creation of this new fund will spur our efforts to assist financially with agricultural development in the developing world or whether we shall say that we are already doing enough elsewhere.
  The third major decision of the World Food Conference was that there should

  2091
  be set up a co-ordinated system of nationally-held cereal reserves supported by a worldwide food information and food shortage service. In other words, there was to be an international intelligence system designed to anticipate serious food shortages, whether caused by bad harvests, bad weather or inadequate marketing arrangements. In addition, although the conference could not come to any conclusion about an internationally-held reserve of grain, there should at least be reserves in individual countries which together might constitute an adequate working reserve in the event of another 1972 lean year.
  Britain is an importer of grain. We are not an exporting country. We are not a surplus producer. But one practice in this country which should be given a great deal more attention is that of importing an immense amount of feeding grain for our livestock. I am told that it takes 8 lb. of grain to produce 1 lb. of beef. I have also learned that 400 million tons of grain are fed to livestock in the Western industrial world, which is more than the total consumed by people in China and India.
  We in this country should look carefully at this policy of raising livestock on imported grain to the extent that we do and at whether it would be possible, through the annual price review, our agricultural subsidy system and our annual negotiations with the farming community, to try to encourage the greater use of grass, which incidentally is one of our great natural resources, and root crops as an alternative to the use of grain feed for our animal stock. This question probably cannot be answered today, but there should be urgent discussion between the Ministry of Overseas Development and the Ministry of Agriculture.
  Is it really preposterous that we might think of rationing bread to save others from starving? Mr. Attlee did it in 1946 at a time of infinitely greater economic difficulty. It might be thought an outrageous proposal in these times when people even balk at the thought of using their cars a little less in the face of an oil crisis. But when it is estimated that between 40 million and 70 million of our fellow human beings may face starvation in the next year, perhaps we might think of some practical way of reducing
  2092
  our own food consumption to a more reasonable level.
  The fourth main decision of the conference was that the producer countries should provide food aid finance for at least 10 million tons of cereals each year over the next three years. We are not an exporter of grain, but we could provide money to ensure that that grain went to countries too poor to buy it even if it were available. Moreover the EEC has a stockpile of 8 million tons, a carry-over from last year's harvest. The EEC commitment to food aid at present is 1·3 million tons. I would strongly urge that Britain should use her influence to increase this commitment to at least 2·6 million tons to overcome the shortfall which will otherwise occur in the next 12 months or less.
  Those four main conclusions of the conference do not in themselves solve the urgent short-term problem. It is reckoned that between 7 million and 10 million tons of grain will be required within the next seven months to meet the present food crisis, but an additional 1·6 million tons of fertiliser will have to be found to supply countries whose output will otherwise decline disastrously.
  A meeting of the main grain-producing nations was held on 29th November and concluded that that amount could be provided if the money was forthcoming. The question again arises whether Britain is prepared to supply any of this money and, if so, how much. We have offered 25,000 tons of fertiliser to help the countries suffering from the shortage. That is not enough, and I understand that the British industry could well double that amount without serious damage to our own agriculture. We are already producers of more than 4 million tons of fertiliser a year. Countries like Holland have already as much as ourselves. We should be more generous. I recognise, however, that our offer is generous compared with what has been offered elsewhere. Also, within the Common Market it is essential to pressurise our partners to be more generous in the provision of grain and money and in their contribution to the fertiliser fund.
  In the long term the problem remains. It has been estimated that the world needs about 20 million tons more grain every year to keep up with the expansion of the world's population. In some

  2093
  parts of the world, fortunately, there has been an increase in output in 1974. Production of wheat, rice, and maize in Latin America and Asia increased. There are encouraging signs that China, with her immense population of 800 million, is making successful efforts to produce the food to feed her own people. But although there was an increase in some parts of the world last year, there was a decline overall—and the world's population is inexorably increasing.
  In conclusion, I want to touch on the specific points in the British aid programme. It is clear that to solve the problem in the long term we must help the developing countries to help themselves. We must increase our technical assistance in agriculture, with particular regard to subsistence farmers who represent so high a proportion of the food producers in Asia and Africa. We need more research and development into better strains of seed and pesticides. We need a higher output of fertiliser. In this regard I wonder how far this country is helping developing countries to create the fertiliser plants to produce this essential commodity for themselves.
  A little while ago I read a very interesting suggestion that it might be possible in the future to produce high-yield crops without fertiliser as a result of some special research which apparently is being carried out by the Agricultural Research Council's nitrogen fixation unit at Sussex University. I do not have the scientific expertise to evaluate this effort, but if it is as revolutionary as is suggested I should be interested to know from my hon. Friend what attention his Ministry is paying to this development and what effort the British Government are prepared to make to exploit this scientific breakthrough and to see that developing countries have a chance to exploit it as well.
  The crucial question is whether our aid programme is geared to a substantially improved effort in agricultural development. I very much welcome the initiative which my right hon. Friend the Minister has taken in calling the Commonwealth Rural Development Conference, which I understand will take place in March, but it is essential that the conference should be followed up by practical effort and cash.
  2094
  The world has allowed itself to drift into a dangerous situation with regard to food supplies, despite ample warnings. For us this means the dangers of inflation, recession, unemployment and social unrest. For the Third World it means hunger, famine and outright starvation. We can avoid most if not all of these by a generous outpouring of our wealth and scientific knowledge for the general benefit of our comrades throughout the world.
  9.19 a.m.
  The Parliamentary Secretary to the Ministry of Overseas Development (Mr. John Grant): The whole House—if I can use that phrase at this hour of the morning—should be grateful to my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) for raising this subject. I am a little disappointed that there is no one on the Opposition Front Bench. I hope that it does not reflect the Opposition's view of the situation.
  My hon. Friend has rightly drawn attention to the crisis dimensions of the food problem being faced by many people in many parts of the world today—the problem of hunger, malnutrition and starvation, and, as he said, the problem of death. It is right that the House should be deeply concerned about this situation, and right to expect that the Government should do all they can to help to relieve the problem.
  My hon. Friend mentioned Bangladesh. The stark suffering that I saw for myself so recently in the refugee camps and during a brief stay in India, where I saw some quite frightening urban poverty, has left an indelible impression on me of the dire needs of the developing countries. That is an impression that no attendance at the conference table could possibly convey.
  That is not to minimise the importance of the World Food Conference, which was concerned essentially with the longer-term problems and underlined the need to improve food production and distribution and improve rural development in the developing countries. The Government are anxious to do all they can to help the developing countries increase their own production and produce more food for themselves, getting it to the poorest people so that they may eat better. Britain has for a long time

  2095
  paid special attention to agricultural development, particularly in the least developed countries, and we have encouraged those countries to give adequate emphasis in their development programmes to this sector.
  About 40 per cent. of our overall bilateral aid now goes to rural and agricultural development, and we are determined increasingly to direct our aid effort this way. It was very much in line with this policy that my right hon. Friend the Minister of Overseas Development took the initiative in Rome in suggesting the Commonwealth Ministers Conference on Rural Development which we shall be hosting in London in March. My right hon. Friend anticipates that this conference will get down to discussing some of the practical difficulties which arise at grass roots level, and how best we donor nations could help our friends in the developing world to overcome them. I am convinced much of the answer lies at grass roots level. I was most impressed by the activities I saw at first hand in local communities in South Asia—the bare-foot doctors, the para-medics, the farming co-operatives and so on. They were rays of light in a generally dismal scene, but there were too few of them.
  I hope that we can co-operate more closely than ever before with the voluntary agencies in rural development projects, and we are currently discussing with the agencies plans for joint funding so that their experience in these matters can be bolstered by direct Government cash aid.
  In the Queen's Speech at the beginning of this Parliament the Government stated that they recognised the economic problems confronting developing countries and would seek to increase the provision of aid. Moreover, unlike our predecessors, we have accepted in principle the United Nations target that the provision of official development assistance should amount to 0·7 per cent. of gross national product. But the speed at which we can move towards this target must be determined in the light of our own very serious economic circumstances.
  Nevertheless, we expect that our gross spending on the aid programme during the current financial year will be around £350 million compared with £293·5 million for 1973–74. It is our firm intention that an increasing proportion of
  2096
  that programme should be devoted to the countries most seriously affected by the rising oil and other prices and to the development of their rural sectors. Increased food production, of course, must depend very much on the availability of agricultural inputs, and my hon. Friend mentioned fertilisers, which is probably the most important.
  There are difficulties in the supply of fertilisers arising mainly out of an acute shortage on the world market of the raw materials used in manufacture. We have to import these materials, and there are limits to what we in Britain can do directly in the short-term. We have agreed to make available through the FAO Fertiliser Supply Scheme 25,000 tons of fertiliser. In addition we have recently provided 10,000 tons for Bangladesh. Commercial exports to developing countries have been much greater than in previous years.
  My right hon. Friend is considering with my right hon. Friends the Minister of Agriculture and the Secretary of State for Industry and the United Kingdom Fertiliser Manufacturers' Association what more can be done to help those developing countries most seriously affected.
  We are also using the aid programme to assist developing countries to create their own sources of fertiliser supply. This is immensely important. For example, since 1970 Britain has committed over £25 million in capital aid to India alone for the construction of fertiliser plants.
  My hon. Friend mentioned the Agricultural Research Council unit at Sussex University, which is looking into the production of fertilisers from non-petroleum products. Although I gather that recent findings there show some advance, I am told that it will be some years before any process can be effectively developed for commercial use. However, we are very interested in the project.
  In addition to capital aid, technical assistance has for long been provided under the aid programme. British experts have been provided to serve in posts relating to agriculture, and British consultants have been engaged to carry out surveys and studies in the agricultural sectors. We also recognise the importance of research generally into agricultural production. Our bilateral assistance

  2097
  for agricultural research is concentrated on specific problem-solving projects carried out both overseas and in Britain. International agricultural research is supported by the Government's giving grants to several international research institutes.
  To help meet the short-term food problem we expect to spend about £20 million on food aid in the current financial year, of which roughly £18 million is our share of the cost of the supply and delivery of cereals and other products being provided as EEC food aid. The expected expenditure on EEC food aid in 1974–75 represents an increase of £13 million over the expenditure in the previous financial year.
  Our actions in this respect have been concentrated on the countries in most need. For example, 54 per cent. of the 1973–74 commitments was with Mali, Bangladesh and India; 21 per cent. is held in reserve for use in emergencies; and the remaining 25 per cent is for refugees in the Canal Zone and for the World Food Programme. We have taken great satisfaction since we became a member of the EEC from seeing its distribution policies for food aid financed from the EEC budget similarly concentrated more and more on the most needy countries. My right hon. Friend has played a significant rôle in this.
  We cannot solve the world food problem on our own. It requires a massive international effort from both developed and developing countries. The World Food Conference was not the beginning. A great deal was being done before that, but the conference emphasised the magnitude of the problem. Since the conference the proposed World Food Council has been formally established by the United Nations General Assembly, and the United Kingdom has been elected to the council for a three-year period. I cannot say which Minister will be involved in that work, but I noted my hon. Friend's points and will see that they are noted elsewhere.
  We are waiting for the Secretary-General of the United Nations to convene a meeting of all interested countries and institutions to work out the details of the proposed International Fund for Agricultural Development. We shall be represented at that meeting. Pending a
  2098
  satisfactory outcome of the meeting, expect us to contribute our share.
  Although we had our doubts about the creation of new institutions, there was a hope at the conference that the fund would mobilise food aid money from new sources. We very much hope that that will happen.
  We also supported the move to achieve international co-ordination of national food stocks, but there are practical difficulties to be resolved. The FAO is due to discuss the matter again next month.
  My hon. Friend has made many valuable suggestions, some of them perhaps a little contentious, but none of them preposterous, to use his own word. The Government will take all of them very seriously. I hope that my hon. Friend will accept my assurance that the Government in general, and my right hon. Friend and myself in particular, consider that it is vital that our policy to provide in hard times the greatest help for those in the greatest need should not stop at the white cliffs of Dover. Our aid programme is being increasingly geared to the needs of the poorest people of the world community, whose greatest single need is for an adequate supply of food.

  OCEAN ISLAND
  9.30 a.m.
  Mr. John Lee: My hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) in his admirable speech on world food problems talked about the necessity for fertilisers. Although the substantial matter that I intend to raise is of a totally different character, there is the strange coincidence that the subject of fertilisers arises tangentially inasmuch as phosphates feature in it.
  I shall set the scene for what I am seeking to mention. In 1900 an ocean island in the Pacific had phosphates discovered upon it. The following year it was annexed as part of the British Empire. Its status was a rather insular one in every sense of the word. In 1916, after some time had elapsed, it was included in the Gilbert and Ellice Islands and juridically it has remained in that situation ever since.

  2099
  In these days when the colonial empire has now diminished to a few fortresses and enclaves such as Gibraltar, Hong Kong and a scatter of islands, we are now discussing one of the few remaining colonial problems.
  The island in question, because of its phosphate resources, attracted much attention. Since 1920 it has been mined by a consortium which is responsible to the Australian, New Zealand and United Kingdom Governments. The part of the island which was most required for mining was acquired by compulsory purchase after the native people, who are known as Banabans, had declined voluntarily to do so. As always with mining activities, the mining led unfortunately to a great deal of dereliction of the land. That was not the principal problem involved.
  During the Second World War the Banabans were the sufferers at the hands of the Japanese. They lost their island, and when the war was over they were placed not back in their original homeland but upon the island of Rabi, in Fiji. They were placed there somewhat precipitously and without very many resources. The tribulations and deprivations of war were made worse by the fact that instead of being returned to their homeland—I have indicated that it was others who benefited most from the mineral exploitation—they became, as it were, exiles and strangers in another territory.
  The time is fast approaching when, in common with almost every other of the few remaining colonial territories which are without independence, the Gilbert and Ellice Islands will be granted independence. An interesting situation will arise and it is one which I think should give rise to considerable concern by the Government.
  For some time the former inhabitants of Ocean Island, now in exile in Rabi, have been anxious to return to their island. Not only that, but they feel aggrieved that, as a result of their status as a component of the Gilbert and Ellice Islands, the revenues derived from the royalties on mineral exploitation which ought to be in their hands are likely to be shared by them with the other members of the Gilbert and Ellice group.
  The story does not end there. Unfortunately it now seems likely that the
  2100
  phosphate resources which have provided a great deal of the revenue will be exhausted within a short time. Even if the Banabans return to their homeland, it seems that they will return to a land where most of the resources have been depleted. If they are enabled to return they will find that the island has suffered damage through mineral workings. What was a quite fertile territory will inevitably require a great deal of restoration.
  Nevertheless there is among that community not only a strong desire to return to Ocean Island, from whence they came, but also a desire to be considered an independent country. There are three options facing these people. They can remain in Rabi as part of Fiji, they can return to Ocean Island as a component of the Gilbert and Ellice Islands or they can return to Ocean Island and become an independent community.
  As we move to the final stage of colonial rule it is often said that the most difficult task is not that of deciding when a people are entitled to independence—that argument has been settled long since—but of deciding what form the independence should take. In dealing with small communities it is frequently said that the question of economic viability provides the greatest difficulty. That may be so, but there have been a number of instances in recent sears when, for no doubt well-intentioned motives, different communities have been consolidated in federation against their will. This has led to a great deal of heartburn and in some cases conflict after independence.
  The serio-comic situation of Anguilla a few years ago is the closest approach to the kind of situation I am seeking to draw to the attention of my right hon. Friend the Minister. As I understand it, the people of Ocean Island always thought, with some justice that the rich revenues and royalties derived from the mining of their homeland had been used deliberately for the benefit of the other Gilbert and Ellice Islands.
  They feel that they are entitled to strike out on their own. They feel, too, that the British Government have been too free in their capacity as trustees in spreading that wealth around. It would probably be out of order when an action is pending to seek to determine exactly the rights and wrongs of the claim they have made to get their revenue. Suffice

  2101
  it to say that the Banabans feel strongly that they have been the victims of a number of injustices.
  I am seeking from my right hon. Friend an assurance that when the time comes—and it obviously cannot be far off—that me Gilbert and Ellice Islands are being prepared for independence, if the Banabans wish to go their own way and become an independent territory separate from the Gilbert and Ellice Islands they shall be free to do so.
  As a prerequisite to seeking that assurance, I seek clarification of the position of the people themselves, living as they now are in exile, in Rabi, Fiji.
  This is an odd, even unique, situation in which, because of the ravages and difficulties of war, a whole community was uprooted and placed in another colonial territory, and when that territory, Fiji, became independent, as it did a few years ago, those people remained there and are regarded as strangers in a different homeland. There has been little move in recent years to return them. I am concerned not only with the task of returning them to the homeland from which they departed but with the question of their status when they return to the place which rightfully belongs to them. I hope that in his reply my right hon. Friend will not place too much emphasis on economic liability. The Banabans accept that they will be faced with considerable difficulties.
  It is, I suppose, a reasonable proposition having regard to Government policy that when a small nation becomes independent on the winding up of the colonial empire generous economic aid will be forthcoming in any event to help in rehabilitation and to repair the damage done by mining.
  The Banabans are prepared to go their own way. They believe that they have much to offer, and in terms of fishing and in other respects that may well be so. The important point is that they should be given the choice to live independently if they so wish.
  If it is sought to resist that argument, I remind my right hon. Friend that the Gilbert and Ellice Islands as a whole represent a fairly modest area of the world's surface, but they will be severed into separate communities when they
  2102
  become independent. At least the principle has been accepted that when independence comes the Gilbertese will go one way and the Elliceans will go the other. In other words, they will each be able to take their place in the world as sovereign independent communities. The Banabans, as inhabitants of Ocean Island, seek to do the same.
  If they do that, they will not be the smallest independent nation in the world. One thinks of Lichtenstein, San Marino, Monaco and so on. The idea is not ludicrous and is not to be scoffed at. If we accept, as we have long since accepted, the principle of self-determination, we accept the right of people to decide what form their independence shall take. Anthropologically the Banabans are different from the Gilbertese and their island stands geographically some distance apart in this scatter of islands in a remote ocean area.
  In several instances when independence has been granted, countries have subsequently gone through the processes of fragmenation. At one end of the scale there has been the fragmentation of the Indian sub-continent. We accepted the example of Pakistan from the outset and we have had to accept the breaking away of Bangladesh. We have seen the strains that certain other countries have undergone after independence as a result perhaps of our failing to comprehend the internal fissures that are sometimes obscured in the run-up to independence. One saw it in the Sudan some time ago. Those are territories of a very different scale of magnitude. The Nagas in India and the Karens in Burma are other instances. I suppose one quails at the cost of infinite fragmentation. Nevertheless it is for people to choose their own form of independence.
  It is my intention, first, that the Banabans shall return to their land, secondly that they shall be adequately recompensed from the revenues from the phosphates that have been gained from their territory over many years and, thirdly, that independence when it comes shall, if they so wish, be independence on their own. If they wish to take their place as a small independent nation, it is not for us to stand in their way. It is for us to help them to stand on their own feet, if necessary alone.
  9.50 a.m.
  The Minister of State for Foreign and Commonwealth Affairs (Mr. David Ennals): I am grateful to my hon. Friend the Member for Birmingham, Handsworth (Mr. Lee) for raising the subject of the Banabans—
  Mr. Deputy Speaker: Order. I think the Minister has already addressed the House during this debate. He therefore needs permission to address it again.
  Mr. Ennals: I apologise, Mr. Deputy Speaker. I should like to ask permission to address the House again.
  I think that not enough time is spent on considering the problem of the remaining territories for which Her Majesty's Government and the House of Commons have responsibility. It was not our choice that the matter should be dealt with at this hour of the morning, but I am grateful to my hon. Friend for raising the subject.
  The Banabans, who number rather more than 2,000 and who since 1945 have lived on Rabi Island in Fiji, are the original inhabitants of Ocean Island. Ocean Island has been administered by the United Kingdom as part of the Gilbert and Ellice Islands Protectorate—now the Gilbert and Ellice Islands Colony—since phosphate was discovered there in 1900, and was the capital from 1907 to 1942.
  As early as 1909 local British officials were expressing concern about the future well-being of the Banabans when the open-cast phosphate mining on Ocean Island made it impossible for them to live there. The Banabans, however, were quite naturally reluctant to leave their homeland, and for some years the project of resettlement was not actively pursued. In 1940 the Banabans themselves proposed the acquisition of Wakaya Island in Fiji, though they saw it more as a second home than as a replacement for Ocean Island. Wakaya was found to be unsuitable, and Rabi was purchased by Her Majesty's Government with moneys in the Banaban Provident Fund in March 1942.
  The Japanese, as my hon. Friend said, occupied Ocean Island in August 1942 and the Banabans suffered severely, being very largely dispersed as slave labour. Following the surrender of the Japanese in
  2104
  October 1945, GEIC officials investigated Ocean Island and found that the island was, for the time being at any rate, not habitable owing to the absence of food supplies, the great difficulties of building up stores and the total destruction of all four villages. The Banabans, who had been taken to other islands in the Pacific by the Japanese, were brought together again on Tarawa, and they agreed, though reluctantly, to go to Rabi Island in December 1945 until it was clear what their needs were. It is true that conditions on Rabi Island, with inadequate houses and poor medical and educational facilities, were inevitably unsatisfactory at the beginning. In many parts of the world 1945 was a difficult year for everyone. I must stress, however, that when, in 1947, a secret ballot was arranged a large majority of the Banabans on Rabi voted in favour of making the island their home. They have lived there ever since.
  In 1967 and 1968 the Banabans sought independence for Ocean Island but, as Lord Shepherd explained to the Banabans at the time, Her Majesty's Government felt that it would be wrong to go against the clear wishes of the elected representatives of the people of the Gilbert and Ellice Islands Colony as a whole, who strongly opposed the separation of the island. Her Majesty's Government accordingly concluded at that time that it should not grant independence to Ocean Island.
  In March last year the Rabi Council of Leaders, on behalf of the Banaban people, sent a petition to my right honourable Friend the Secretary of State for Foreign and Commonwealth Affairs, again seeking independence for Ocean Island. The petition laid particular emphasis on the fact that Her Majesty's Government had agreed that a referendum should be held in the Ellice Islands concerning their future relationship with the Gilbert Islands. The Ellice Islands will become separate by January 1976 as a new colony, not with full independence.
  The Banaban petition was referred to the Governor of the Gilbert and Ellice Island Colony for advice and he duly consulted the newly-formed Council of Ministers which had been set up following the introduction in May 1974 of a new constitution in the colony. It replied that it did not consider that the question of the separation of the Ellice Islands had any bearing on the future of Ocean

  2105
  Island, which was considered an integral part of the Gilbert Islands. It added that it would oppose separation and independence for Ocean Island either now or in the future.
  A formal reply to the Banaban petition was in preparation when the Banabans asked for a Minister from the Foreign and Commonwealth Office to receive their spokesman, the Rev. Tebuke Rotan, and their legal representatives. My hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs arranged to see the Banaban representatives in September, and they proposed that independence for Ocean Island should be combined with some kind of associated status with Fiji.
  Mr. Lee: Let us be clear about this. The question of associated status with Fiji has been one of the alternatives canvassed. Can my right hon. Friend say, with reasonable clarity, just what that would mean?
  Mr. Ennals: That would be a matter for sorting out between the Banabans and the Government of Fiji if it were accepted as a viable proposition.
  As I was saying, my hon. Friend the Under-Secretary of State met the Banaban representatives, when they proposed independence for Ocean Island combined with some kind of associated status with Fiji. She agreed to look at the matter again in the light of this suggestion, but she also made clear that there was no basic change in Her Majesty's Government's position and that she did not envisage a change.
  The Banabans also petitioned the United Nations last year, seeking support for the idea of independence in association with Fiji. The matter came up in November 1974, when the United Nation's Committee of 24 discussed the Gilbert and Ellice Islands, and particularly the report of the United Nation's visiting mission which had gone to observe, in August and September 1974, the referendum for the separation of the Ellice Islands. The Committee of 24 noted the Banaban petition, but did not otherwise comment on it.
  Mr. Ratieta, the Chief Minister of the Gilbert and Ellice Islands, accompanied by Mr. Roniti Teiwaki, the Member of the House of Assembly for Ocean
  2106
  Island, and also at that time Leader of the Opposition in the House of Assembly in Tawara, also attended the meetings with the Committee of 24. Mr. Ratieta explained very clearly to the committee why the Government of the Gilbert and Ellice Islands were totally opposed to the Banaban claim, and why they did not consider that there was a parallel between Ellice separation and the separation of Ocean Island.
  Mr. Lee: One is not trying to be cynical about this, but would not my right hon. Friend agree that the richness of the revenues from the royalties from Ocean Island was undoubtedly a potent factor in the attitude of the Gilbertese towards this matter?
  Mr. Ennals: I shall deal with that question later in my speech.
  The Chief Minister recalled that Ocean Island and the Gilbert Islands were settled by Micronesian people long before Ocean Island was administered by Her Majesty's Government together with the Gilbert and Ellice Islands, and that the Banabans and the Gilbertese were sharing the same gods, the same language and the same cultural traditions long before they shared a common administration under Her Majesty's Government. He pointed out that there has always been inter-marriage, and that many Banabans own land in the Gilbert Islands in addition to their land on Ocean Island. He said:
  "If there are now differences between the Banabans and the Gilbertese, they are the differences between the people of one village and another village in the same country, the differences between one family and another family in the same village. They are not the differences between one people and another."
  Following the discussions in the United Nations Committee of 24, the Gilbert and Ellice Islands House of Assembly passed a resolution on 28th November 1974 in the following terms:
  "that this House, in the fair belief that Ocean Island is an integral part of the Gilbert Islands, utterly rejects any claim by, or on behalf of, the landowners of Ocean Island for any change in the present status of that Island which would make it separate and independent from the remainder of the Gilbert Islands".
  We are not without sympathy for the Banabans, but we do not think the picture is quite as some, including my hon. Friend, make it out to be. It is not all

  2107
  a story of colonial exploitation. It was only because the Queen's Regulations applicable to the Gilbert and Ellice Islands were extended to Ocean Island early this century that further sales of land by the natives to non-natives were stopped. Had this not happened, the Banabans would almost certainly have sold their land, including all the phosphates, outright for the sort of trivial sums which then obtained. It is as a result of action by the Crown over the years that the Banabans remain to this day owners of the land on Ocean Island—albeit absentee landowners, as my hon. Friend said.
  In support of their cause, the Banabans argue that they have been unjustly treated over the years in respect to their share of the phosphate revenues. As regards the present position, the Chief Minister of Gilbert and Ellice Islands explained at the United Nations Committee of 24 in November that of every million Australian dollars of proceeds from phosphate mining, the Banabans, who number a little over 2,000, receive approximately 65 Australian dollars per capita and the Gilbert and Ellice Islanders, who number about 60,000, receive only about 14 Australian dollars per capita. With the recent sharp increase in phosphate prices, it is likely that the Banabans will receive over 3 million Australian dollars in revenue this year. We hope that this, together with the prospect of further very substantial sums to come in the remaining four years or so of phosphate mining, will enable the Banabans to press on with the development of a prosperous and contented community on Rabi Island, which has now been their home for 30 years.
  There has recently been some direct contact between the Banabans and the GEIC Government, and we understand that further contacts are expected to take place shortly. When the Rev. Tebuke Rotan saw my hon. Friend the Under-Secretary for Foreign and Commonwealth Affairs again last month it was agreed that a formal reply by Her Majesty's Government to the Banaban petition would be deferred pending the further contacts between Banaban and GEIC representatives. I am sure that it is right that we should not say anything today to prejudice such contacts or any conclusions that may flow from them.
  2108
  Though I cannot give some of the assurances my hon. Friend asked of me, I assure him that everything he has said in the debate on behalf of the Banaban people will be carefully considered by my right hon. Friend before any final decision is taken.

  JAGUAR AIRCRAFT
  10.1 a.m.
  Mr. Geoffrey Pattie: It is not necessary for me to remind the House of the performance specifications of the Jaguar because this excellent aircraft is now in service on both sides of the Channel and is, I understand, meeting the very high and exacting requirements of the Royal Air Force and the French Air Force.
  The Jaguar has been produced jointly by Britain and France. I pay a special tribute to all those who have worked on the projects especially in this country at the British Aircraft Corporation.
  The Jaguar is an aircraft which will be suited to the needs of air forces not only now but in all probability for the best part of the last quarter of the century It is, therefore, obvious that it has enormous sales potential abroad, and it is critically important for our balance of payments and for maintaining high and satisfactory levels of employment in the aircraft industry. I hope that in these troubled times it is not necessary for me to stress the importance of those two points.
  It is accepted that the selling of aircraft is a fiercely competitive business, but I have a suspicion that we British do not compete as hard as we should in international markets. If my suspicions should prove to be correct, successive British Governments must bear a heavy responsibility, because our ineffectiveness is more a product of an attitude of mind than of any particular political dogma.
  We have opportunities here that must be grasped, because in the Jaguar we have in service a highly successful proven project which we know is wanted by foreign countries.
  That brings me to the question of the sales of the Jaguar to the Indian Air Force, a matter which I had occasion to raise with the Minister at Question Time

  2109
  before Christmas. I understand that about 100 aircraft—or approximately five squadrons, with a few spare aircraft—are involved in the sale. It is no secret that the Indian Air Force wants the Jaguar, and wants it very badly, but it will not wait for ever. It has already waited far too long. There is strong pressure on India from the Soviet Union to buy the MiG fighter. But those aircraft do not meet the operational requirements of the Indian Air Force, and, therefore, the only way in which the Indian Air Force would accept these aircraft would be by changing its operational demands.
  The French F1 is also being peddled extremely strongly, as the French have a habit of doing. It is an interesting commentary on the French understanding of a collaborative project. The Jaguar is an Anglo-French project, and yet here are the French competing hard against the Jaguar with one of their own. This is the sort of thing we are up against in competitive markets. Time and again we seem to be the nice guys who stand back and hold the door open for other countries and salesmen to make their pitch.
  The Jaguar and the F1 have already been tested against each other and evaluated by the Indian Air Force, and the Jaguar came out on top. Therefore, one would have assumed, in a world other than the one we inhabit, that the French would have folded their tents and departed, saying "We have lost that". But, no, their hopes are kept alive by the dilatoriness of the British Government because the French can see that perhaps the Jaguar sale will not go through and, therefore, there is an opportunity for them.
  I understand that the French are making a massive presentation in Delhi in March when they will deploy all their formidable selling resources and techniques, and still there is no decision coming from the British Government.
  Mr. Michael Marshall: I have some experience of India and of commercial matters there. Does my hon. Friend agree that experience shows that the French Ambassador and, indeed, his staff follow a strongly commercial line when these matters come to the fore? I hope that my hon. Friend will be able to get an answer from the Minister
  2110
  showing whether he is similarly confident about our own diplomatic and economic resources in these matters.
  Mr. Pattie: I am grateful for that intervention. Without touring the world and assessing the capability of the British diplomatic service in all markets, one suspects that our diplomatic service is not as commercially-oriented as, say, that of the French. There are many examples of French ambassadors sending cables to Paris commenting on whether a contract is going in a favourable direction. This always produces a response, sometimes from the highest level. I have known instances of the French President taking in a country which was not on his itinerary, with a satisfactory sales outcome.
  What is happening in this country which is causing delay? I understand that the Indian Government require very generous credit terms, and, in the present circumstances, one can understand that. The financial criteria are important. We cannot give away a fine aircraft like the Jaguar. Plainly we must have regard to the return on capital and all the other important stringent financial criteria. But there must come a point when strict, almost actuarial and financial, considerations must give way to overall national policy, such as the balance of payments and maintaining full employment in the aircraft industry.
  I suspect that the Ministry of Defence supports this sale. I do not want to embarrass the Minister because he may well be fighting extremely dogged and vicious battles behind the scenes. One detects in this the dead hand of the Treasury. The Treasury's purpose is to do a job, but it cannot take overall decisions on whether this sale should be allowed to go ahead in the British interest and having regard to the immense potential sales on the Indian subcontinent. In either event we need a decision. Will the Minister say whether he expects the decision to be taken in the near future? Can he give the House any idea what that decision is likely to be?
  I urge on the Minister a possible compromise solution suggested by the British Aircraft Corporation, which is that the sale might be initially on a more modest scale and that 18 aircraft could be considered in the first instance. That would

  2111
  presumably make it easier to phase the payments over the requisite number of years, which would meet the requirements of the Indian and British Governments.
  I refer now to one other area of interest to do with the Jaguar aircraft, the so-called "sale of the century" as it is called in aircraft circles. By that we mean the possible two-tier replacement of the F-104 for the air forces of Holland, Belgium, Norway and Denmark. It is for those countries to say whether they wish to change the terms of reference of the working party which, when it was set up, was instructed to look for a single aircraft replacement solution. It has been suggested very forcibly in this country that the combination replacement using the Jaguar and the F-1 would perfectly meet the future needs of the four countries. The sales potential is huge, and, since we are talking about possibly 600 aircraft, this is an enormous market.
  I understand that the Secretary of State raised this question at various meetings in NATO in recent weeks. I urge the right hon. Gentleman to do more than simply raise the question.
  This brings me back to my point about attitude. A Secretary of State for Defence who cared about the sales of British products would not say, when the group concerned decided to change its terms of reference, "I shall do my best for the Jaguar." Instead, he would say "Why don't you change your terms of reference? I understand your difficulties. Let me assist you, since I have the solution." That is called positive thinking and positive salesmanship, but we do not seem to see any evidence of that. I do not suggest that the Secretary of State for Defence has to be involved as a part-time salesman. However, I should have thought that British interests and the enormous potential for British aircraft should take higher precedence in his thinking than has so far been evident.
  I am grateful to the Minister for coming at this rather unusual hour and for the contacts I have had with him. I look forward with interest to his reply.
  10.15 a.m.
  The Minister of State for Defence (Mr. William Rodgers): I have listened with interest to the remarks of the hon. Member for Chertsey and Walton (Mr. Pattie)
  2112
  and I understand his concern about the export future of what, as he has said, is a very great and successful aircraft with a potential use throughout the world.
  My concern this morning is whether I shall be able to add a great deal more to what I said in answer to the hon. Gentleman's parliamentary question in November. The considerations that he has raised will be very much in my mind, and I hope that he will believe that, even if the emphasis is slightly different, they are not matters which the Ministry of Defence and its sales organisation or my right hon. Friend the Secretary of State have overlooked.
  If the hon. Gentleman had that fear, I am sure that he will feel that his own speech was totally justified in asking us about our responsibilities in this area. So if I do not add significantly to what he and the House already know, I can at least undertake to examine carefully what he has said and do all that I can to ensure that in the proper circumstances this aircraft has a very substantial overseas sale.
  We are very anxious to sell equipment, within the proper restraints and given the proper safeguards, to friendly countries. There is no doubt that the RAF is very pleased with the aircraft, and we hope that it has a very substantial future ahead of it in service.
  Basically, however, it is not whether we want to sell, but whether a country wants to buy. The hon. Gentleman referred at the end of his speech to "positive salesmanship". But I do not think that he suggested that it was in our interest or compatible with our relationships with other countries to try to sell an aircraft which they may not want or to persuade them to look at it in a rôle which does not apply. So, although positive salesmanship in terms of showing concern at selling and suggesting that there are alternatives in terms of a replacement for the four countries in NATO is right, there comes a point when it would be foolish to seek to persuade an unwilling buyer to change his specification, knowing that it did not make a great deal of sense.
  We want, therefore, to sell aircraft at a price and in circumstances which make good economic sense to both the parties to the sale. Inevitably, this raises the question which the hon. Gentleman

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  raised in relation to the Indian order and the credit terms. This itself is a major policy question with all export sales. "The seller wants a realistic period for repayment at a realistic rate of interest. The purchaser often wants very soft terms, a long period of repayment and a low rate of interest. The need is to find a reconciliation between the two which makes good economic sense to both parties.
  The hon. Gentleman was right to say that there had been times in the past when our sales organisation had not been as fiercely competitive as it might have been. But I do not mean now. Nor do I mean in recent years. There has been a fundamental change in the attitude to salesmanship, and that is equally true of the Diplomatic Service. I know from my experience that distinguished ambassadors coming to this country spend a remarkably large part of their time going round factories and getting to know techniques lying behind the exports which it is their job to promote. The old-fashioned generation would not have regarded this as proper, but the new generation of diplomats is often more concerned with commercial sales than with the strict orders of diplomacy as we understand them.
  If the hon. Gentleman were to see the telegrams which come in, he would realise that a substantial proportion of them deal not with the great issues of our time but with something that we want to sell abroad. Though there may still be room for improvement, the hon. Gentleman can feel confident that our diplomatic staff feel themselves at least as much salesmen in matters of this kind and are fully aware of the importance of the sale of the Jaguar as often as possible. We cannot give it away. But, short of that, we want to sell it to friendly countries wherever they may be.
  Jaguar has been in squadron service for some months now in a ground attack role. The RAF is extremely pleased with its performance. Pilots have found it very easy to fly and have been particularly pleased with its low-level performance. It has proved reliable and easy to maintain, which has meant that the flying rate has been considerably higher than was at first forecast. For this reason it is an aircraft with at least some of the qualities of robustness—very difficult to combine
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  with modern technology—which give it good export prospects.
  We believe that there will be substantial sales, and BAC has already concluded deals with two countries. It would not be consistent with the policy of successive Governments for me to give further details of these deals. In this area, except for the broad areas of policy, it is for the Government purchasing an aircraft or any piece of defence equipment to make an announcement about it if they wish.
  We are very aware of Indian interest in the Jaguar. Whether at the moment it is strong or less strong is not a matter for us. It is for the Indian Government to decide what aircraft they need. We have made, and will continue to make, a real effort to ensure that the aircraft is available at the right price. Certainly, credit terms are central here, and the Indian Government have very good internal economic reasons, because in the aftermath of the oil crisis they face a quadrupling of oil prices, for wanting to get the aircraft as cheaply as possible.
  Therefore, one of the major factors to be taken into account is the ability of the Indian Government, faced with this problem, to find the money for the purchase, given other interests that they may have, on anything approaching normal credit terms. It is finally a decision for the Indian Government but they are aware of our present position and know that we are happy to try to meet them if the commercial aspect of the deal makes good sense. It is a question not of bending rules or breaking them, nor of having rules which do not change in any circumstances, but of having arrangements which are practical and represent a good bargain to both parties to the sale.
  Mr. Pattie: It has been suggested in some quarters that there might be a certain political reluctance to make this sale because of the nuclear test that the Indians had last year. Could the Minister refute that suggestion?
  Mr. Rodgers: We have to look at all the circumstances, but I am sure that in this case it is a question of whether the Indians are prepared to meet the credit terms which we feel to be right. It is a very difficult question. There have been long discussions, and we are open to representations if anyone wishes to make them.

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  Turning briefly to the question of the NATO replacement, I mentioned earlier that the Jaguar was primarily designed for ground attack and interdiction. Although, rightly, BAC had hoped to see it in a wider role, this is the purpose for which it was designed and for which it is employed by the RAF and the French Air Force. On the other hand, Denmark, Norway, Belgium and the Netherlands are currently considering a replacement, optimised in an interceptor rôle, for the F104G. So the real problem is finding some middle way, the sort of compromise that the hon. Gentleman mentioned, between the needs of those four countries for an aircraft that no one claims that the Jaguar is.
  As long ago as last June, my right hon. Friend commended the Jaguar to his relevant NATO colleagues as part of a two-aircraft replacement programme. However, at that stage it became clear that the Jaguar was excluded from the list of aircraft which the four-country consortium would be evaluating. But if the consortium fails to agree on a standard replacement aircraft for the F104G—and the French have a particular and special interest of their own in the Jaguar in this—and as a consequence modifies its requirements in favour of the Jaguar's characteristics, or should it seriously consider a two-aircraft procurement, every attempt would be made to persuade it to adopt the Jaguar. The final choice is understood to be a matter of national responsibility, and it is still possible that the four countries will fail to agree on a common solution. At present there is no reason to believe that there is disagreement, though obviously it is a highly competitive situation. This is one of the reasons for delay.
  However, my right hon. Friend cares very much about sales here. There has been no complaint, as far as I know, from BAC. I can certainly give the undertaking that if there is a chink at any time we shall return to this. Obviously, we should make ourselves foolish if we were pushing at the wrong time, having introduced the idea. The idea is there; it is lodged in the minds of the countries concerned. Certainly we shall return to it at the right time with whatever strength may be appropriate.
  The hon. Gentleman referred to the success of the Jaguar. I join him in
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  the tribute he paid to the skills of those who conceived, designed, developed and built this aircraft. In sales abroad BAC will receive all possible support. I do not believe that BAC has complained about the support it has received so far, bearing in mind our judgment of the sales situation. I do not believe that we shall give BAC any future cause for concern. The hon. Gentleman must know not only of our enthusiasm for this aircraft but of the practical good will which we shall bring to bear on its very high export potential.
  The Treasurer of Her Majesty's Household (Mr. Walter Harrison)rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put and agreed to.
  Question put accordingly and agreed to.
  Bill accordingly read a Second time and committed to a Committee of the whole House.
  Committee this day.

  RESERVOIRS BILL [Lords]
  Order for Second Reading read.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 66 (Second Reading Committees), That the Bill be now read a Second time.
  Question agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  RESERVOIRS [Money]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to make further provision against escapes of water from large reservoirs or from lakes or lochs artificially created or enlarged, it is expedient:

  (a) to authorise the payment out of money Provided by Parliament of any increase

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  attributable to the Act in the amounts so payable under any enactment by way of rate support grant; and

  (b) to authorise, in connection with any provision made by the Act for there to be panels of civil engineers qualified to act for purposes of the Act:

  (i) the payment out of money provided by Parliament of any expenses of the Secretary of State, including sums required by him for reimbursing expenses incurred by any institution for purposes connected with consultations he is required to have: and

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  (ii) the payment into the Consolidated Fund of any fees received by the Secretary of State on applications by civil engineers to be placed on any panel.—[Mr. Coleman.]

  RESERVOIRS [Money]

    ADJOURNMENT
    Resolved, That this House do now adjourn.—[Mr. Coleman.]
    Adjourned accordingly at twenty-eight minutes past Ten o'clock a.m.