Commons Sitting of 21 October 1975

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

PRIVATE BUSINESS
PORT ASKAIG PIER ORDER CONFIRMATION BILL
ROYAL COLLEGE OF SURGEONS OF EDINBURGH ORDER CONFIRMATION BILL
Considered; to be read the Third time tomorrow.

ORAL ANSWERS TO QUESTIONS
  DEFENCE

    Expenditure
    Mr. Canavanasked the Secretary of State for Defence whether he intends any adjustment of the policies of his Department, in view of Her Majesty's Government's anti-inflationary policy as outlined in the White Paper, The Attack on Inflation, Command Paper No. 6151.
    The Secretary of State for Defence (Mr. Roy Mason): Only in the same way that every other Department will have to adjust its practices to implement the measures.
    Mr. Canavan: Has the closure of the Admiralty armament depot at Brandeath anything to do with the Government's anti-inflation policy? Does not my right hon. Friend agree that it is rather anomalous for his Department, at this time of economic crisis, to be involved in an increase in public expenditure as well as contributing to an increase in unemployment? Will he consult the Department of Employment about this aspect of the problem?
    Mr. Mason: No decision has been made to close the Royal Naval Arma-
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    ment Depot at Brandeath, and this has nothing to do with the anti-inflationary policy, but if closure proposals for defence establishments, either due to the Defence Review or to rationalisation, concern Brandeath, the staff and the trade unions will be fully consulted.
    Mr. Pattie: Will not the Secretary of State agree that, no matter how many White Papers there have been since, the Defence White Paper represents the Government's view of the absolute minimum expenditure necessary to maintain our security? Is that still the Government's view?
    Mr. Mason: Yes, I am still planning defence based upon the proposals in the last Defence White Paper, other than the £110 million cut in the last budgetary statement.
    Mr. Crawshaw: Will my right hon. Friend assure the House that, whatever cuts are made, they will not impair the ability of the Regular reserve forces to do training? Is he aware that there is grave concern in both forces that the lack of petrol, for one thing, is making them unable to undertake training? Is he further aware that there is the possibility in the near future—I say this without wishing to be an alarmist—of having units not trained because they have been unable to go on exercises?
    Mr. Mason: I am afraid that I cannot give my hon. Friend the complete assurances that he would like. The increase in oil costs and the effects of the defence review are bound to have some effect on training. Nevertheless, my hon. Friend will have noticed that we are now in the midst of an exercise called "Inside Right" in which we are carrying out the mobilisation procedures of both Regulars and the TAVR.
    Mr. Tuck: Is my right hon. Friend aware that Britain spends no less than 5·2 per cent. of her gross national product on defence, whereas the average for the 11 NATO countries, excluding Portugal, is 2·7 per cent., and with Portugal included only 3·3 per cent.? Why is it that Britain has to spend so much more as a percentage of her GNP than the other NATO countries?
    Mr. Mason: No doubt my hon. Friend will catch up with what the Defence

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    White Paper revealed some months ago. Because we have been expending cash on overseas or international commitments which are not purely NATO but have now decided to withdraw from our major bases overseas, we are now carrying out the Manifesto commitment to bring down our defence expenditure in line with that of our major European allies, and during the course of the next four years we shall be saving £2,000 million.
    Mr. Frank Allaunasked the Secretary of State for Defence if he will make a statement on the effect so far on the policies and expenditure of his Department in the light of Her Majesty's Government's anti-inflationary policy as outlined in the White Paper, The Attack on Inflation.
    Mr. Mason: I would refer my hon. Friend to the answer I gave earlier this afternoon to my hon. Friend the Member for West Stirlingshire (Mr. Canavan).
    Mr. Allaun: What is the value of colossal military might if it means economic bankruptcy? Did not my right hon. Friend contradict himself earlier this afternoon? Did he not say that the economies would affect arms only in the same way as other Departments were affected, and a minute later also say that his policy was still based on the defence White Paper? Surely in the light of the present economic situation he must review his arms White Paper and conduct a second review forthwith?
    Mr. Mason: Until the public expenditure survey is complete my defence policy is based on the last Defence White Paper. I cannot put it more clearly than that.
    Mr. Younger: As jobs in the defence industries are being so badly affected by inflation, does not the right hon. Gentleman consider in retrospect that it was wrong of him to commit himself to buying missiles from abroad without at the same time getting a categoric assurance from the United States and France that they would buy British equipment? Will he give an assurance that he will not sign on the dotted line for these orders until there are reciprocal orders from those other two countries?
    Mr. Mason: I have indicated that the orders are subject to negotiations with the French and the Americans. The hon.
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    Member will probably be aware that on the American deal the United States Secretary of State Mr. Schlesinger came to the United Kingdom two or three weeks ago. During the course of that visit we both signed a memorandum of understanding dealing with defence equipment sales between Britain and America hoping that gradually over a period of time we should be able to rectify the imbalance in the purchases of defence equipment. No doubt that MOU will be borne in mind when we negotiate on Sub-Harpoon.

    NATO Defence Ministers
    Mr. Blakerasked the Secretary of State for Defence when he next expects to meet the other NATO Defence Ministers.
    Mr. Mason: I expect to meet my Eurogroup colleagues on 5th November and 8th December. The next meeting of the NATO Defence Planning Committee in Ministerial session will be on 9th and 10th December.
    Mr. Blaker: What consultations has the Secretary of State had with other NATO Defence Ministers about ensuring that Gan is not used by the Soviet Union if we withdraw?
    Mr. Mason: I have had no consultations with my NATO colleagues about the future of the island yet, because initially consultations must take place between the Foreign Office and the Maldivian Government. We may be able to extract an agreement to maintain the island with the Maldivians until the present agreement expires, but this will be entirely up to the Foreign Office when it negotiates with the Maldivian Government.
    Mr. Molloy: Will my right hon. Friend tell the House what discussions he has had or is likely to have with his NATO colleagues regarding the rationalisation of costs, equipment, repairs and spare parts among NATO members? Can he allay in any way the fears that many of us have that there is a massive waste of public money because of non-rationalisation among NATO members?
    Mr. Mason: I am sure that my hon. Friend will recognise that, as chairman of the Eurogroup Ministers within NATO, I have been urging upon my NATO colleagues the need for standardisation of

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    equipment within NATO. The meeting that we are to have on 5th November will devote all its sessions to that purpose.
    Mr. Younger: Will the Secretary of State bear in mind that all his NATO colleagues have stated that they regard our cuts as gravely damaging to the alliance? As the Chief of Defence Staff said recently on television that our defence efforts were down to bedrock, will he assure our NATO allies that he has made all the cuts he intends to make and that we shall be good allies from now on and keep up our contributions to NATO?
    Mr. Mason: It is correct that my NATO colleagues were concerned about the outcome of the Defence Review. I am sorry to say that I am unable to give them a categorical assurance that that is the final limit of our defence expenditure levels. I am sure all hon. Members know that public expenditure is under survey and that means all Departments, including the Ministry of Defence.

    Army (Proposed Reorganisation)
    Mr. Trotterasked the Secretary of State for Defence how many men will be saved as a result of the proposed reorganisation of the Army in Germany without the traditional brigade structure; and what trials it is intended to hold of the proposed new small divisional concept.
    The Under-Secretary of State for Defence for the Army (Mr. Robert C. Brown): I have nothing to add to the answer I gave to the hon. Member for Ayr (Mr. Younger) on 15th April on the question of manpower savings. On the re-organisation of the command structure, extensive trials are already under way and will continue over the next year or so to prove this new concept.
    Mr. Trotter: Will the Minister explain why this fundamental and vital reorganisation affecting commands, supplies, tactics and training—the major reform of the Army since before the First World War—has been made a commitment of the Ministry before any trials were carried out? Surely it would have made sense to have had the trials before committing ourselves to restructuring completely the whole of the Army?
    Mr. Brown: We are satisfied that the overall concept is sound. The main purpose of the trials is to get the details right and to assess the operational procedures, communications, and so on.
    Mr. Onslow: Does the Under-Secretary accept that the country has a right to be satisfied as well? Will he give an undertaking that the Defence White Paper due to be published in February will contain a full evaluation of this experiment, an analysis of the logistical costs which will be involved in redeployment of units in BAOR, and also an assessment of the units that are to be disbanded in these cuts, units whose identities have not been announced since June? I understand that they are to include the Guards Independent Parachute Squadron and at least two batteries of Royal Artillery?
    Mr. Brown: The hon. Gentleman should know that I announced in the Army debate that no cap badge units would be directly affected. The reorganisation is envisaged to be effective from 1st April 1979, but, of course, evaluation of the trials will take place long before that date. I am not prepared to give any undertaking about next year's White Paper.

    French Defence Minister
    Mr. Brothertonasked the Secretary of State for Defence when he next expects to meet the French Defence Minister.
    Mr. Mason: M. Bourges paid a visit to London at my invitation on 13th and 14th October. I am looking forward to a further meeting with him in due course.
    Mr. Brotherton: When the Secretary of State next meets the French Defence Minister will he attempt to make arrangements whereby pilots of the Fleet Air Arm can fly from the decks of French aircraft carriers after HMS "Ark Royal" has been phased out? Does he not agree that it is essential that these skills be retained by the country as a matter of national importance?
    Mr. Mason: I thought that we had assured the House that that was being done. As the through-deck cruiser programme is intact and the maritime Harrier has been ordered, those skills to

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    which the hon. Gentleman has referred will be maintained.
    Mr. Townsend: Is the Secretary of State confident that the programming of British and French Polaris submarines is suitably co-ordinated?
    Mr. Mason: No, Sir. No nuclear exchanges were discussed with the French.

    Polaris Base (Scotland)
    Mr. Teddy Taylorasked the Secretary of State for Defence if he will make a further statement on the future of the Polaris Base on the West of Scotland.
    Mr. Mason: We made clear in our election manifesto that starting from the basis of multilateral disarmament negotiations we would seek the removal of American Polaris bases from Britain. We may be able to initiate such multilateral disarmament negotiations once the present talks on mutual and balanced force reductions in Central Europe are concluded.
    Mr. Teddy Taylor: Members of the public who are concerned with security sometimes gain the impression, I am sure quite wrongly, that speeches by Labour Members or decisions of Labour conferences represent Government policy. Will the Secretary of State make clear beyond a shadow of doubt that it is the Government's intention to maintain the effectiveness of our Polaris forces and that there is no question of the Polaris bases being removed unless that is part of a unilateral agreement for disarmament?
    Mr. Mason: The British Polaris force is a significant contribution to NATO and plays its part in the triad of conventional, tactical-nuclear, and strategic defences of NATO. I have stated on many occasions that we intend to maintain the effectiveness of the Polaris deterrent.
    Mr. MacCormick: Although I appreciate the Minister's answer to that question, may I point out that a great deal of uncertainty is felt by the people in those areas, especially concerning the American base? Will he say definitely whether the American base will continue after the next two years or so?
    Mr. Mason: We have stated often in the past that we consider the American base desirable in our common defence, but we put before the electorate on two occasions last year the proposal that we should within the course of multilateral disarmament negotiations seek the withdrawal of the American base from Britain. After the Mutual and Balanced Force Reduction conference and the Strategic Arms Limitations Talks, Part II, have been completed, we may be able to open those talks.

    Service Accommodation
    Miss Fookesasked the Secretary of State for Defence what is the total stock of service accommodation in the United Kingdom; and what is the average length of time a house or other unit of accommodation remains vacant in the United Kingdom and in Plymouth, respectively.
    The Minister of Stale for Defence (Mr. William Rodgers): At present the Services have some 103,000 married quarters and hirings in the United Kingdom. The period when quarters are empty between tenants is normally up to two or three weeks throughout the United Kingdom, but in cases of modernisation or redeployment of units the period is inevitably longer.
    Miss Fookes: Is the Minister satisfied with the arrangements that are made for ex-Service men, because this is a problem which concerns many local authorities, especially my own, which is a Service constituency?
    Mr. Rodgers: We have not been satisfied in the past, because it is important that when people leave the Services, where they have been accustomed to having accommodation, they should find somewhere satisfactory to live. As the hon. Lady will know, a circular giving further advice has recently been sent to local authorities. We shall do all we possibly can to meet what I agree is a serious problem.
    Mr. Tapsell: Is the Minister aware that the circular to which he refers urging housing authorities to give specially sympathetic consideration to ex-Service men when applying for council houses is more honoured in the breach than the observance? Is he aware that in Lincolnshire I have had difficulty in finding council

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    house accommodation for ex-Service men and that more co-ordination is needed?
    Mr. Rodgers: In my experience, the circular is more honoured in the observance than in the breach. Ofter local authorities have acute housing problems of their own. If the hon. Gentleman would like to give me details of particularly difficult cases, I shall be glad to look at them.

    NATO Strategy
    Mr. Matherasked the Secretary of State for Defence what steps are being taken by Her Majesty's Government in pursuit of their policy to preserve the credibility of NATO strategy.
    Mr. Mason: NATO strategy is founded on the triad of conventional, tactical nuclear and strategic nuclear forces. In all three areas the Government intend to maintain an effective British contribution to the alliance.
    Mr. Mather: In view of the right hon. Gentleman's recent answer to my hon. Friend the Member for Ayr (Mr. Younger) that there was no guarantee that further defence cuts would not take place, how does he intend to preserve the credibility of NATO strategy? Is he aware of the remarks by Doctor Joseph Luns in Copenhagen on 25th September when he deplored the unilateral cuts of individual NATO countries? Is the Minister aware that if he continues with his policy his triad may well become a Troika?
    Mr. Mason: I am still hopeful that I shall be able to continue to maintain the new posture of our NATO role of working within the central region, within the Eastern Atlantic, and within the security of the home base.
    Mr. Marten: What steps is the Secretary of State taking to ensure the closest co-operation with our ally Norway?
    Mr. Mason: As the hon. Gentleman may be aware, we have just received the Norwegian Secretary of State for Defence who is on a Ministerial visit to this country. Talks will be taking place with him during the course of this week.

    Polaris Weapons System
    Mr. Robin F. Cookasked the Secretary of State for Defence what is his current estimate of the future life of the Polaris weapons system.
    Mr. Mason: Many years yet.
    Mr. Cook: What does my right hon. Friend mean by "many years yet"? Does it represent a departure from the view of the previous Conservative Government that Polaris had an effective life until the late 1980s? If it represents a departure from that view, what has happened to enable the Government to depart from that view?
    Mr. Mason: No; I cannot be more specific than that. Without replacing the present Polaris system, there are still many years of life left in the system.
    Mr. Frank Allaun: Is the Minister considering holding a nuclear test explosion at Nevada? If so, is it connected with updating or improving the Polaris warhead?
    Mr. Mason: I have explained to the House on more than one occasion that maintaining the effectiveness of the present deterrent may necessitate further tests and I have indicated already that there may be—I put it no higher than that—a need for another test some time next year.

    Anglo-French Co-ordination
    Mr. Moateasked the Secretary of State for Defence if he is satisfied with the level of co-ordination of defence policy between the United Kingdom and France.
    Mr. Mason: Yes, Sir.
    Mr. Moate: At a time when Britain is being criticised for standing up for its own interests by adopting a non-Community approach on energy, is it not ironic that France should still refuse to play a full and active part in NATO? Does the right hon. Gentleman recall that we were told that membership of the Common Market was essential for the defence of Europe? Will he suggest to the French that until they adopt such a full and active rôle they, unlike us, are not being good Europeans?
    Mr. Mason: No, I would not be as blunt as to tell the French that. France happens to be a member of NATO, but, whereas we are integrated into the military structure, France is not. However, France maintains a military mission to the Military Committee of NATO and is fully aware of NATO developments.
    Mr. Alan Lee Williams: Does my right hon. Friend agree that the French have always complained about the over-weaning influence of the United States in the Atlantic Alliance? Does he agree that if he were to make a success—as chairman of the Eurogroup—of the so-called two-way street in the passage of armaments, this would be a great incentive for France to rejoin the military side of the Atlantic Alliance?
    Mr. Mason: Yes, and I should applaud that posture were France to adopt it. My hon. Friend knows that there is a vacant chair in the Eurogroup and the French can join the group at any time they wish. I drew this fact to the attention of my French colleague during the course of discussions with him last week. He is fully aware of the likely outcome of defence equipment moving from Europe to America and vice versa if the two-way street concept gets off the ground.
    Mr. Pattie: In view of the recent purchase of the French missile Milan, will the Secretary of State say what the French are purchasing from us?
    Mr. Mason: The Question concerns defence policy and not defence sales. There was not a British equivalent of Milan available in the time scale in which we wanted it. We are to negotiate with the French to purchase Milan hoping to get production work in Britain and then be involved in the mid-term improvements of the missile.

    Army Juniors (Release)
    Mr. Gouldasked the Secretary of State for Defence in what circumstances a minor may be released from the Army service earlier than the date laid down in the regulations.
    Mr. Robert C. Brown: I apologise, Mr. Speaker, for the length of this reply, but it is necessary if I am to reply properly to my hon. Friend's question.
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    Regulations provide for a number of circumstances in which a minor can be released earlier than the date shown in his enlistment papers. A minor who enlists under the age of 17½ years has the right to discharge at any time during the first six months of service by giving 14 days' notice. A minor who enlists between 17½ and 18 years of age has the right to discharge at any time during his first six months, or before he reaches the age of 18 years and three months, whichever is the earlier. He may also be discharged for compassionate reasons, on the emigration of his next of kin, or if his commanding officer considers that he is not reaching the standard normally expected.
    Mr. Gould: What course of action would my hon. Friend recommend to a 17-year old soldier from my constituency who has been trying for months to obtain his release from the Army, who has made repeated representations to that effect through me and others, who has even gone to the length of running away from the Army, only to be forcibly returned, but who is still told that he cannot be released? Is it not insupportable in a supposedly civilised country that a 17-year old boy should be kept in the Army against his will as a virtual prisoner?
    Mr. Brown: I think that my hon. Friend knows well enough that I have given a great deal of consideration to the case to which he refers and that the youngster concerned has had a number of interviews with his commanding officer. It seems that the boy himself tends to wish to continue his service. Nevertheless, many youngsters come under pressure from parents and others. This is a case that I have constantly under review. I assure my hon. Friend that if the circumstances arise where a discharge becomes obviously necessary I will see to it.
    Rear-Admiral Morgan-Giles: Is the Ministry taking special steps in present circumstances to draw the attention of school leavers, many of whom are experiencing difficulty in obtaining employment, to the advantages of a Service life?
    Mr. Brown: I should have thought that if the hon. and gallant Gentleman had been watching the Service advertisements he would have realised that the Ministry was taking steps. We are not

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    taking any particular steps, but we have appealed to youngsters for many years.

    Northern Ireland
    Mr. Biggs-Davisonasked the Secretary of State for Defence whether he will make a statement about the operations in support of the civil powers in Northern Ireland.
    Mr. Michael McNair-Wilsonasked the Secretary of State for Defence if he will make a statement about the operation of the security forces in Northern Ireland.
    Mr. Robert C. Brown: Army operations continue throughout Northern Ireland to assist the Royal Ulster Constabulary in the task of combating violence and terrorism. Recent upsurges in violence, particularly in South Armagh, have been met with prompt and firm action on the part of the security forces. An additional infantry battalion is in the Province as a temporary reinforcement and a range of extra selective security measures have been adopted in the areas affected. We are watching the situation very closely and we shall continue to match our operations on the ground to the level of violence in any area.
    Mr. Biggs-Davison: First, I welcome what has been said about South Armagh. Would the Under-Secretary venture to say that Her Majesty's Forces have now regained the terrorist-occupied territories in South Armagh for the United Kingdom? Secondly, in view of the complaints, now widespread on both sides of the sea, that the forces fight with one hand tied, will Her Majesty's Government do more to explain to the public the political and military considerations governing their policy?
    Mr. Brown: I indicated in my original answer that we had taken the necessary steps—not to regain control, because there was never any question of loss of control. It was an increase of violence in a certain area which caused us to increase our cover in the area.
    Mr. McNair-Wilson: Has the Under-Secretary seen the article in the Army magazine Visor which suggests that the Army is concerned about the cease-fire which seems to be honoured only by our own security forces? As 40 soldiers have
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    been killed in South Armagh, is it not time that our security operations in the Province as a whole were reviewed?
    Mr. Brown: The whole House will be concerned about the breaches of the ceasefire. The Provisional IRA has claimed responsibility for a number of incidents which were clear breaches of the ceasefire. Two of the most tragic incidents were, first, the explosion near Forkhill on 17th July which killed four soldiers and injured another, and, secondly, an explosion under an Army personnel carrier near Crossmaglen on 9th October which killed one soldier and injured four other soldiers and a Royal Ulster Constabulary constable.
    Perhaps I may be allowed to take this opportunity of expressing sympathy with the relatives of the brave men killed and injured at the explosion near Crossmaglen on 9th October.
    Mr. Powell: Are the operations of the defence forces affected by communications received from the incident centres and if so, in what respect?
    Mr. Brown: Any information received from the centres is given consideration but would not determine security forces' operations in their entirety, if that is what the right hon. Gentleman was suggesting.
    Mr. Thorne: Is the Minister confident that we now have the activities of the UDA under control?
    Mr. Brown: It would be a bold Minister who would state from this Box that we had under control every organisation in the Province at any one time.
    Mr. Younger: Would not the Minister agree that our security forces are still carrying out their immensely difficult task in Northern Ireland with creditable skill and patience and can he assure us that when the forces see a wanted person in their area, they give every possible assistance to the RUC in apprehending him and getting him arrested?
    Mr. Brown: I am grateful for the hon. Member's initial comments. I have said before, but it is worth repetition, that there is no other Army in the world that could have carried out the unenviable task of the British Army in Northern Ireland with the same good will. It

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    does not matter from which area law breakers may come and whatever their religion—the forces will give all possible support to the RUC to get these people into court to pay the price for some of the heinous offences now being committed in the Province.

    Amphibious Warfare Forces
    Mr. Wallasked the Secretary of State for Defence if he will make a statement on the future of the amphibious warfare forces.
    The Under-Secretary of State for Defence for the Royal Navy (Mr. Frank Judd): I would refer the hon. Member to the information given in the Statement on the Defence Estimates 1975, and to what I said in the Navy Debate on 9th July.
    Mr. Wall: Can the Minister assure us that when the cuts already announced have become effective, we shall still have an effective amphibious force and that there is still a NATO role for it, particularly on the flanks of the alliance?
    Mr. Judd: We have a full and important rôle for our amphibious forces, although at a reduced level, particularly on the northern flank, where they have already demonstrated their effectiveness with considerable success in exercises with the Norwegian forces.
    Mr. Trotter: Can the Minister explain how the forces are to operate when "Bulwark" is scrapped and "Hermes" converted to an anti-submarine rôle? Will the new through-deck cruisers have an amphibious capability and has he considered commandeering or requisitioning cross-Channel steamers to carry the marines in future?
    Mr. Judd: "Hermes" will continue to have a secondary rôle as a commando carrier. "Fearless" and "Intrepid" still have a long and useful life ahead of them. We are always examining ways in which we can raise alternative means of shipping to ensure maximum flexibility in the deployment of our NATO forces.

    NATO (British Contribution)
    Rear-Admiral Morgan-Gilesasked the Secretary of State for Defence, if he will make a statement on the latest posi-
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    tion with regard to Great Britain's contribution to NATO.
    Mr. Mason: The United Kingdoms contribution to NATO is set out in detail in the Statement on the Defence Estimates 1975 (Cmnd. 5976). Since the publication of the statement, the appointment of the Air Officer Commanding-in-Chief RAF Strike Command as a NATO major subordinate commander and consequent extension of his responsibilities have enabled us to make naval and air forces, including nearly 200 aircraft, more readily available to the alliance in an emergency.
    Rear Admiral Morgan-Giles: On Trafalgar Day, has the Secretary of State considered that the greatest and fastest growing threat to NATO now lies at sea with a confrontation below the level of declared war? Has he considered whether the British contribution, which is a more maritime one, would be more effective in preventing war rather than waging it?
    Mr. Mason: I would have thought that on Trafalgar Day the hon. and gallant Member would first have praised the fact that we have the through-deck cruiser programme, that the maritime Harrier is coming, that we have ordered Sub-Harpoon and that we are developing Sea Skewer. He should be standing up in praise of the Navy on Trafalgar Day.
    Mr. Newens: Is my right hon. Friend aware that our contribution to NATO constitutes a heavy burden on our economy which we cannot afford to expand and which many of us think it is doubtful that we shall be able to sustain? Could he confirm that it is our policy to seek, at least eventually, the winding-up of all military alliances, including NATO?
    Mr. Mason: I part company from my hon. Friend on this matter. He should understand, as I am sure most of the British people do, that because of our contribution to the alliance and because NATO exists, we have had 30 years of peace in Europe—the longest span of peace in the last 200 years. If that collapses, our security will be at risk.
    Mr. Onslow: Without dissenting from the right hon. Member's concluding remarks and in the hope that my question

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    will not prompt him to pay himself further compliments, may I ask whether he is aware that the strength of our contribution to NATO must depend on the strength of the nation's economy and that that in turn depends very much on the strength of our defence industry? Is he aware that many people are alarmed by the way the future of the industry has been prejudiced by the conclusion of contracts to buy weapons from overseas without any corresponding firm agreement on work in this country or for reciprocal purchases by our NATO partners?
    Mr. Mason: There cannot be painless defence cuts and when there are military requirements in order that our forces shall have the best equipment in the right time scale, it is necessary to look abroad as well as at home. When the package was made to purchase the British Sea Skewer, the French-German Milan and the American Sub-Harpoon, I managed to equip the forces at a cost of £100 million less than buying all-British. I cannot afford to ignore that.

    Ulster Defence Regiment
    Mr. Bradfordasked the Secretary of State for Defence, in view of the fact that Mr. David Burnside was dismissed from the Ulster Defence Regiment for being a member of the Vanguard Unionist Party, whether he will make a statement on whether all members of that party are to be excluded from the Regiment, and as to which other parties are similarly affected.
    Mr. Robert C. Brown: Members of the UDR are treated exactly the same as members of the Regular Army regarding the expression of political views. A member of the UDR may be a member of a political party, including the Vanguard Unionist Party, but he may not take any active part in the affairs of any political organisation or party.
    Mr. Bradford: Will the hon. Gentleman accept that there are other serving members of the UDR who are actively involved in politics? If he wants names and parties, I am quite willing to submit them. If he is aware of this, we are left with no alternative but to believe that Mr. Burnside has been discriminated against. Would he not agree that it is nothing less than deceitful to discharge
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    him for political involvement when the regiment knew at the time of his admission that he was actively involved in politics?
    Mr. Brown: If the hon. Member has the details he mentions, I shall be pleased to see them. Mr. Burnside was not expelled because of his membership of this organisation, but because of his activity in it. After an article in the Sunday News on 18th May, Mr. Burnside was warned by his commanding officer that he could not be an active member of a political party and remain a member of the UDR. On 2nd June, Mr. Burnside issued a statement as Press officer of the Vanguard Unionist Party and as a result of his continued active involvement in politics he was discharged.

    North Sea Oil Installations
    Mr. Aitkenasked the Secretary of State for Defence if he will set up a specially equipped force to protect North Sea oil rigs and pipelines from possible terrorist attacks.
    Mr. William Rodgers: No, Sir.
    Mr. Aitken: Does the Minister agree that the problems of security on oil rigs and pipelines are in certain important respects unique, and that in particular there needs to be a regular review of the liaison arrangements among the civil police, the Royal Air Force, the Royal Navy and Government Departments? Will he undertake to keep the liaison arrangements under close review, and in doing so will he pay particular attention to the recent lectures and articles by Professor Donald Watt of the London School of Economics, who spelled out the case for such a special force in some detail?
    Mr. Rodgers: The problems certainly are unique. Equally, to review present arrangements is right, and we have frequent and continuing consultation with the Offshore Operations Association, among others. The answer to all the hon. Member's questions must therefore be "Yes".
    Mr. McNamara: Will my right hon. Friend comment on the success of the security forces in dealing with the bomb hoax on the rigs in the North Sea during the recess?
    Mr. Rodgers: My hon. Friend is correst in saying that this was a successful operation. In so far as there were lessons to be learnt, they will be learnt.
    Mr. Kershaw: In view of the Minister's answer, what is the purpose of the force of five or six ships that have been ordered?
    Mr. Rodgers: The hon. Member for Thanet, East (Mr. Aitken) asked whether we would set up a specially equipped force. The answer to that Question is that I made a statement on 11th February making special provision for this purpose. The answer I gave to the hon. Member was therefore correct.

    NATO (Northern Flank)
    Mr. Hal Millerasked the Secretary of State for Defence when were the last exercises held for the reinforcement of the North Atlantic Treaty Organisation's northern flank; and if he is satisfied with the United Kingdom's capability in this respect.
    Mr. William Rodgers: The last NATO reinforcement exercises on the Northern Flank, Exercises "Northern Merger" and "Bold Guard", were held during September 1974. The answer to the second part of the hon. Gentleman's Question is "Yes".
    Mr. Miller: Will the Minister reconsider that reply in the light of the defence cuts, and will he also consider the command structure on the northern flank in view of the importance of the maritime and air rather than the land forces on that front?
    Mr. Rodgers: I made my reply in the light of the defence cuts, and I therefore cannot depart from it. The northern flank will be of continuing concern to us and we shall review the possibilities.
    Mr. Fernyhough: Will my right hon. Friend resist the blandishments of the Opposition who are constantly demanding cuts in every other service while pressing for increases in defence expenditure?
    Mr. Rodgers: I shall resist blandishments from wherever they may come.

    Multi-Rôle Combat Aircraft
    Mr. Wigleyasked the Secretary of State for Defence if he will now abandon
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    all work on the Multi-Rôle Combat Aircraft project.
    Mr. William Rodgers: No, Sir.
    Mr. Wigley: Is the right hon. Gentleman aware that in view of the number of projects in the 1950s and 1960s which cost millions of pounds only subsequently to be scrapped, and in view of the number of projects for hospitals, schools, and old people's homes for which the Government cannot find the money, many people feel that the Government have a ludicrous set of priorities in these matters?
    Mr. Rodgers: I cannot share the hon. Member's view. I think that we are all agreed that this country must be properly defended, and whereas it is right at all times to examine every project, I am satisfied that the MRCA can be justified. The hon. Member should consider the present employment consequences of the sort of cancellation he seems to envisage.
    Mr. Ronald Atkins: Am I right in supposing that the alternative to the MRCA—the American F 14—would cost $50 million?
    Mr. Rodgers: I am grateful to my hon. Friend. Those who propose to cancel the MRCA must indicate the alternative they have in mind. I believe that all the options are less satisfactory and more expensive.

  SOUTH HUMBERSIDE
  Mr. Brothertonasked the Prime Minister if he will pay an official visit to South Humberside.
  The Prime Minister (Mr. Harold Wilson): I have at present no plans to do so, Sir.
  Mr. Brotherton: May I wish the Prime Minister many happy returns of Trafalgar Day—in opposition—and ask him to reconsider his answer? Is he not aware that on South Humberside, particularly in the ports of Immingham in my constituency and Grimsby next door, there is ever-increasing concern at the increase in port and dock charges? Will he consult the British Transport Docks Board and explain to it that to increase charges at a port like Immingham, which is profitable, so that the port is put out of business and competition with other ports is

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  foolish? Will he explain to the board that its intention to take over the port of Felixstowe is equally foolish?
  The Prime Minister: As far as I am aware Felixstowe is not on Humberside. I am aware of the concern felt in the hon. Member's area about the other matter he raised, but he will recognise that this is entirely a commercial matter for the board, which was reluctant to make the increases but was forced to do so by rising costs.
  If the hon. Member wishes to pursue this matter further, even though there is no direct ministerial responsibility, I am sure that he will do so with my right hon. Friend who is concerned with these matters.
  Mr. McNamara: Is my right hon. Friend aware that, no matter what happens on the south bank, he will always be welcome and get the warmth and affection from the people on North Humberside in the future that he has had in the past? There is, however, a matter of concern to both banks, and that is the dispute with Iceland, which is under negotiation. Will my right hon. Friend confirm that if negotiations are protracted beyond the date when the present agreement ends, British trawlers will not go into Icelandic waters unprotected?
  The Prime Minister: The second part of my hon. Friend's question raises hypothetical issues because we are determined, in so far as it lies within our power, to secure reasonable agreement on this matter, but no British fishing vessel will go unprotected where protection is necessary.
  My hon. Friend will be aware that last month my right hon. Friend the Minister of State for Foreign and Commonwealth Affairs had a first round of talks with the Icelandic Government on the continuation of arrangements covering fishing by British vessels off Iceland, and this establishes at any rate the main areas of negotiation. Further talks are starting this Thursday. We know how urgent it is to reach agreement because of the time factor here, and it will be essential that any new agreement should permit access by United Kingdom vessels to the area within 50 miles of the Icelandic coast, which is vital for our industry.

  PRIME MINISTER (OFFICIAL ENGAGEMENTS)
  Mr. McCrindleasked the Prime Minister if he will detail his official engagements for Tuesday 21st October.
  Mr. Lawsonasked the Prime Minister if he will list his official engagements for 21st October.
  Mr. Blakerasked the Prime Minister whether he will list his engagements for the remainder of Tuesday 21st October.
  Mr. Les Huckfieldasked the Prime Minister whether he will list his official engagements for 21st October.
  The Prime Minister: I have held a number of meetings with ministerial colleagues and others, including a meeting this morning with representatives of the executive council of the Scottish Daily News. Later today I shall be meeting leading representatives of the medical profession to discuss the inquiry by the Royal Commission into the National Health Service.
  Mr. McCrindle: When he meets the doctors later today, will the Prime Minister bear in mind that to many of them the issues of clinical freedom and pay beds are inseparable? In those circumstances, will he reconsider his decision not to include the pay beds issue in the terms of reference of the Royal Commission? Will he consider a postponement of the legislation he proposes if a damaging confrontation between the doctors and the Government is to be prevented?
  The Prime Minister: I have nothing to add to what I said yesterday in answer to many questions on this subject. I shall naturally wish to hear the views of the doctors rather than have them aired perhaps on their behalf, in however distinguished a manner.
  Mr. James Lamond: Will my right hon. Friend remind the doctors that they said very little in 1971 when the Tory Chancellor of the Exchequer announced a savage cut in expenditure on the National Health Service? Will he draw their attention to this Government's excellent record with regard to the National

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  Health Service, including an increase of £750 million a year in expenditure on the service?
  The Prime Minister: In these important discussions I shall not want to go back to what doctors did or did not say or do under the previous Government, but it is certainly a fact that, as my hon. Friend said, we have made a big increase in the resources available to the National Health Service. I gave the figures yesterday showing that the proportion of the GNP going to the National Health Service was now an all-time record, despite the economic difficulties facing the country.
  Mr. Lawson: When he meets the doctors, will the Prime Minister ask them whether there is any known cure for an epidemic of burglaries? Bearing in mind that the National Health Service is a major item of public expenditure, when does the right hon. Gentleman intend to see that the Chancellor of the Exchequer honours the pledge that the Prime Minister made last Thursday, recorded at the foot of col. 1587 of Hansard for that day, that the Chancellor will make a statement on the greatly increased size of the public sector borrowing requirement?
  The Prime Minister: My right hon. Friend did, although I am not aware that that matter arises out of the important discussions that I shall be having with the doctors this afternoon, which the hon. Gentleman has characteristically sought to trivialise. I should perhaps tell him in relation to one of his throw-away lines that it is the doctors I am meeting, not the police. The police have their responsibilities. As I have already told the House in answer to Questions, there is no ministerial responsibility involving this Government because this all occurred before the change of Government.
  Mr. Campbell: Who are the representatives from the Scottish Daily News whom my right hon. Friend met today? Can my right hon. Friend give us some idea of the results of that meeting?
  The Prime Minister: We met the representatives of the works council, including the editor as well as the TUC member. As a liquidator has been appointed, the liquidator was also there. The liquidator, who has been given his function by a decision of the court, and
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  who is thereby required to act on behalf of the creditors, will be getting in touch with the creditors, as he informed us. When he has done that, when he has done whatever he can not only to sort out the facts but to decide what should be done for the future, he will be in close touch with my right hon. Friend and hon. Members.
  Mr. Blaker: Will the Prime Minister now answer the Question which he failed to answer last Thursday, and which is even more topical today, owing to the welcome presence in this country of our distinguished visitors from Saudi Arabia: as central Government spending has increased by no less than 47 per cent. in the past six months compared with the same period last year, and as the Prime Minister made it clear last Thursday that he has no plans to announce further cuts in Government spending to take effect before the year after next, how does he expect to convince our overseas creditors and customers—
  Mr. Speaker: Order. This supplementary question seems to be getting a very long way from the Question on the Order Paper.
  The Prime Minister: I answered this question last week, and my right hon. Friend the Chancellor of the Exchequer made a very important pronouncement on these matters, following the practice of previous Chancellors, Labour and Tory, who made important speeches on these occasions. The matter in no way arises out of this Question. I am not meeting Prince Fahd today. I met him yesterday and I am meeting him again tomorrow. I have far more faith in Prince Fahd's ability to assess the economic position of this country than in the ability of biased Opposition Members.

  RABIES
  Mr Farrasked the Prime Minister if he is satisfied with the co-ordination between the Department of the Environment, the Home Office and the Ministry of Agriculture, Fisheries and Food in the campaign against rabies.
  The Prime Minister: Yes, Sir.
  Mr. Farr: As the Minister responsible for health matters is also closely involved,

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  is it not about time that, instead of our having four different departmental Ministers responsible for dealing with an outbreak, a plan was drawn up in the charge of a single Minister for immediate implementation when the disease comes to this country?
  The Prime Minister: I agree with the hon. Gentleman that it is an extremely serious problem, one which causes grave anxiety to us all. My right hon. Friend the Minister of Agriculture and the Ministers in surrounding countries are in close co-operation about the matter. The hon. Gentleman will know—and I think that he will be willing to pay tribute to the actions taken by the present Government—that we introduced a Rabies Act last year giving us enabling powers. We have made two orders, one to deal with import controls and quarantine requirements and one to deal with stamping out any outbreak which might occur in this country. Those orders became fully operative last February. A very high fine is imposed in odd cases.
  Mr. Raphael Tuck: Not high enough.
  The Prime Minister: I heard of a case when I was on holiday last year of a French yachtsman who walked his dog on the quay being immediately fined £400 in a magistrates' court. Offenders are now liable to a year's imprisonment. [HON. MEMBERS: "This reply is too long."] Anyone who says "Too long" in regard to such a matter has no sense of responsibility. I am trying to answer the hon. Member for Harborough (Mr. Farr). I shall begin again.
  Offenders are now liable to up to one year's imprisonment and/or an unlimited fine on conviction on indictment. I agree with my hon. Friend the Member for Watford (Mr. Tuck) that fines, even of £400, are totally inadequate because of the risks to life and the risks of terrible suffering in this country.
  Mr. Faulds: Would the Prime Minister consider it worth while approaching officials of the Council of Europe, the relevant committee of which I think I am right in saying is planning to set up a scheme to monitor the movement of rabies across Europe?
  The Prime Minister: Yes, Sir. We are in touch with our European partners and neighbours. One of the reasons
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  why the whole House, or nearly the whole House, agrees about the urgency of the matter is that that monitoring has shown that rabies is reaching perilously near the Channel coast. We have contingency plans. What we should have to do if there were any danger of this infection reaching this side of the Channel would be horrible. It would mean serious action against wild life in this country. The whole matter involves serious and grave action, but nothing so serious or so grave as the danger of hydrophobia and the spread of rabies in this country.
  Mr. Pardoe: Does the Prime Minister agree that the hon. Member for Harborough (Mr. Farr) was wrong in saying that four Ministers were involved? The number is five, because the Secretary of State for Northern Ireland is involved. Is the Prime Minister satisfied with a situation in which foreigners and residents of this country are being told all round the globe that it is quite easy to bring pets into this country through Ireland?
  The Prime Minister: Strong action will be taken against the smuggling of any possible carrier, or, as I think they say in the technical language, any vector. But I think that I referred to Northern Ireland. Co-operation between the Ministry of Agriculture and its counterparts in Northern Ireland, the Irish Republic, the Isle of Man and the Channel Islands is vital, and it is being thoroughly carried out.
  Dr. M. S. Miller: I thank my right hon. Friend for the action he has already taken in this respect, but may I impress upon him that what is needed is constant publicity about the killing nature of the disease, which can be passed on to people, even in epidemic forms, not merely by an animal bite, but even by licking by animals? The fox population of this country is also involved, and it must be eradicated. May I go further in this respect, and impress upon my right hon. Friend that it is necessary to have at all our airports and seaports indications to tourists going abroad that smuggling pets into this country will be treated with absolute severity?
  The Prime Minister: On the question of smuggling, I agree with my hon. Friend that the maximum publicity should be

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  given to this matter for the reasons he has given. I am grateful to the hon. Member for Harborough and others for what has been said—[Interruption.] This is an extremely serious matter. I only wish that sound broadcasting were now in operation so that Opposition Members could be heard barracking on the subject.
  I repeat that I am grateful to the hon. Member for Harborough for raising this matter this afternoon since it will assist in obtaining the necessary publicity. My hon. Friend the Member for East Kilbride (Dr. Miller) referred to the lethal character of this disease. We must also consider the terrible agonies involved. Anybody who has studied reports on these matters will know the situation and will not make light of it, as the hon. Member on the Front Bench is now doing. I must refer to one point because there may be some misunderstanding. My hon. Friend the Member for East Kilbride called for the eradication of all foxes. That is not in contemplation, but if rabies were to spread to this country, it would be necessary—and it would be a ghastly job—to eradicate the fox population.
  Mr. Onslow: On a point of order, Mr. Speaker. Since the Prime Minister made a deprecating reference to me—
  Mr. Speaker: I did not hear any such reference. I call Mr. Fairbairn on a Private Notice question.
  Mr. Onslow: Further to that point of order, Mr. Speaker. I do not think the Prime Minister would deny making that reference. If he seeks to deny it, I shall know what to think of him.
  The Prime Minister: Further to that point of order, Mr. Speaker. I do not deny making that reference. I was appalled by the frivolity of a so-called Front Bencher making light of a subject such as this.
  Mr. Onslow rose—
  Mr. Speaker: The frivolity of the Front Bench is not a question for the Chair.
  Mr. Onslow: Further to that point of order. As the Prime Minister should be aware that it was in my constituency that there was an outbreak of rabies in this
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  country, may I make plain to him that what infuriated me was the Prime Minister's trivialisation of this subject in an attempt to talk out Prime Minister's Questions.
  The Prime Minister: Further to that point of order. The hon. Gentleman's interruption was not about the horrible nature of death by rabies, but was some silly, frivolous remark to the effect that he was not enjoying my answers to Questions.
  Mr. Speaker: However that may be we now move to the Private Notice Question tabled by the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn).

  PORTUGAL (BRITISH NATIONALS)
  Mr. Fairbairn (by Private Notice)asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the seizure of Monte da Contenta house and farm and the expulsion of its British owners.
  The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley): I saw the Portuguese Ambassador this morning and raised with him the problems facing British farmers, and in particular the eviction of Mr. Wardle from his farm. He told me that he had spoken to the Minister of Foreign Affairs on the telephone and could assure me that the Portuguese Government were fully aware of the importance of this matter and that they would do everything in their power to give British subjects and their property proper protection.
  The House will recognise that there are difficulties in the internal Portuguese situation which the Government of that country may not be able immediately to overcome when dealing with problems of this sort. In the light of that reality, I reminded the Ambassador both of his Government's obligation to British nationals and their property and of the adverse effect episodes of this sort must have on Portuguese standing and economic prospects.
  Her Majesty's Ambassador in Lisbon called on the Deputy Foreign Minister

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  last night and on the Minister of Agriculture this morning and made similar representations. Her Majesty's Government will continue to press the Portuguese Government for a satisfactory outcome.
  Mr. Fairbairn: I am grateful for that reply, but will the Minister this afternoon confirm loud and clear that it is the firm and unwavering policy of the Government to protect inviolate the property, heritable or movable, at home or abroad, of British citizens from those who hold the law in contempt? Secondly, will he confirm that this latest expropriation of private property in Portugal contradicts the views expressed by certain Labour Members, and widely reported, that there is no threat to civilisation and law in Portugal from the Left? Thirdly, will he take all the steps he can to have the invaded property restored to its owners, to restore families to their homes, and to protect many hundreds of British and Portuguese citizens from the same fate at the hands of anarchists, under whatever banner they commit their crimes?
  Mr. Hattersley: I do not wish to enter into political points on this matter this afternoon, but I want to confirm that Her Majesty's Government will do all they can to protect Mr. Wardle and other families who have been treated in an unacceptable way in the last fortnight. I repeat that I avoid taking up the political points which the hon. and learned Gentleman raised, somewhat extraneously. However, I totally confirm that Her Majesty's Government will be robust in protecting British citizens and their property and that this will continue until Mr. Wardle and other families are satisfactorily treated.
  Mr. Torney: Does my hon. Friend agree that it is equally important to protect British farm workers from eviction in our own country since this is an event that often happens?
  Mr. Speaker: Order. That matter does not arise from the Question.
  Mr. Biggs-Davison: Will Her Majesty's Government keep in mind the security and rights of British persons and property in Portugal when considering with other Governments in the Community the extent and timing of aid to Portugal?
  Mr. Hattersley: Yes, Sir. The Community attitude towards aid to Portugal is clear and precise. Clearly, the Community wants to promote the interests of pluralistic democracy in Portugal. We want to see the sixth provisional Government of Portugal prosper and move in that direction. But we must be influenced by these matters. We are not at a point where we should reconsider what happened in Luxembourg some weeks ago. I believe that aid is desirable in a European and Portuguese context, but I fully understand the point made by the hon. Member for Epping Forest (Mr. Biggs-Davison).

ABORTION
The Secretary of State for Social Services (Mrs. Barbara Castle): With permission, Mr. Speaker, I should like to make, in association with my right hon. Friends the Secretaries of State for Scotland and Wales, a statement on abortion. Since March of this year a Select Committee has been considering the Abortion (Amendment) Bill of my hon. Friend the Member for Glasgow, Pollok (Mr. White). The Committee made nine recommendations in its Third Special Report to the House on 5th August, most of which follow up proposals made last year by the Lane Committee on the Working of the Abortion Act. I am glad to tell the House that the Government accept in principle all the Select Committee's recommendations.
My intentions, announced earlier this year, to strengthen the safeguards which apply to abortion in the private sector are similar to those recommended by the Select Committee. Action has already been taken following consultation with the medical profession with a view to requiring private nursing homes which concentrate on abortion to give me an assurance concerning the total fees charged to patients. Assurances have also been sought from all approved nursing homes about financial arrangements with referral agencies. Only those private nursing homes with adequate facilities will be authorised to carry out terminations of pregnancy after the twentieth week.
I have also written to those nursing homes which concentrate on abortion asking for information on the number of foreign patients treated during the 18

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months to 30th June 1975 and I shall be seeking such information from all approved nursing homes at quarterly intervals in future. I am reviewing the arrangements which are made by the nursing homes for the reception, counselling and after-care of foreign patients on the lines proposed by the Select Committee and I will require changes in these arrangements where necessary.
The Committee recommended that the Health Ministers should produce a list of approved bureaux and refuse to approve clinics which accepted patients from unlisted bureaux. We are proposing to implement this change shortly, and application forms have been issued to bureaux and agencies. I am, moreover, concerned to ensure that adequate counselling facilities are available for all women who indicate that their pregnancies are unwanted, and a draft paper as proposed by the Select Committee giving guidance on counselling will be circulated for consultation to bodies representing the medical, nursing and social work professions.
In the National Health Service the Select Committee's recommendation that terminations after the twentieth week of pregnancy should be carried out only in hospitals possessing appropriate facilities, including resuscitation equipment, have been accepted, and discussions have been held with regional medical officers who will be responsible for the implementation of the recommendations. I have issued a circular to health authorities on the report of the Peel Advisory Group on the Use of Fetuses and Fetal material for Research asking for the adoption of its recommended code of practice where not already in use and I put a similar requirement on private nursing homes.
Some of the other recommendations of the Select Committee will require amendment of the Abortion Regulations 1968. My Department is undertaking a study of the procedures and forms set out in the regulations as proposed by the Select Committee, and in the light of its report I shall be considering the whole question of the procedure for the certification and notification of abortions. Another recommendation which would require amending the regulations is to allow the disclosure to the General Medical Council of information taken from the notification to the Chief Medical Officers of the Health Departments. This recommenda-
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tion is accepted, and the regulations will be amended to permit disclosure to the President of the General Medical Council at his request.
A further change in the regulations recommended by the Select Committee is designed to ensure that the doctors who certify that the condition of the Abortion Act are met in a particular case should examine the patient. The regulations will be amended to ensure that a question asking whether the patient has been seen and an examination has been carried out will be put on all forms.
I think the House will be glad to know that action is being or has already been taken on all the recommendations made by the Select Committee in its Third Report and on many of the major recommendations of the Lane Committee. I have issued guidance on day care systems to health authorities and hope to authorise day-care services in some private clinics with a record of high standards. The most important preventive action which the Government have taken is to introduce as part of the NHS a comprehensive family planning service which started to function fully this summer. I can only regret that this was not introduced a decade or more ago.
During the Second Reading of the Abortion (Amendment) Bill in February 1975, a commitment was given by the Government that if the Bill were withdrawn the Government would propose the establishment of a Select Committee to examine and report on the proposals contained in the Bill and would also propose its re-establishment for the 1975–76 Session if this were necessary. In the event, the House did not allow the Bill to be withdrawn but instead committed the Bill itself to a Select Committee. Under this procedure the Bill and the Select Committee lapse at the end of this Session. The Government feel that the House, in the light of the Committee's reports already published and of this statement, should be given an opportunity to decide whether the Select Committee should be re-established as the Committee itself has requested, and a motion will be tabled early in the next Session.
Mr. Norman Fowler: We welcome this statement. Is the right hon. Lady aware that there is a strong feeling on both sides of the House that the Select Committee should continue its work and that

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that part of her statement will be particularly appreciated? Is the right hon. Lady also aware that there is very strong support both in this House and outside for any measures which will eliminate abuses?
I should like to take one further point from the statement. As the Secretary of State realises, many of us attach particular importance to the Select Committee's recommendation that every woman contemplating an abortion should receive proper advice on the dangers and the alternatives. Can the right hon. Lady give the House a little more detail on what she has in mind in this important new counselling procedure that she is proposing?
Mrs. Castle: On the re-establishment of the Select Committee, I think we all agree that it has done very useful work. The items now remaining for consideration enter into some of the basic points of controversy on which hon. Members will wish to consider whether the Select Committee could or could not produce useful advice to the House. Therefore, we propose to allow the House to decide whether it feels that the Select Committee's work should continue. As far as the Government are concerned, that will be on a free vote.
Regarding counselling, as I have said I shall be consulting organisations representing the medical, nursing and social work professions and a consultative group of regional health authority officers. We want to see that proper counselling is given in which the alternatives to abortion are made quite clear and to ensure that proper after-care, advice and counselling after a pregnancy has been terminated are provided.
Mr. James White: I congratulate my right hon. Friend on the speed with which she has moved on this matter. I should like her to know that many thousands of people throughout the country share my views. I am fed up telling people that there has been a great deal of dubiety about whether the Select Committee will meet again in the next Parliament. Again, the Government are keeping a pledge. This proposal will come before the House for us to carry on. What my right hon. Friend has already done will go a long way
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to clearing out some of the "rackets" in the medical world.
Mrs. Castle: I am grateful to my hon. Friend. He is absolutely right that the action that we have taken or are taking following the Select Committee's recommendations will deal with the abuses which have alarmed hon. Members on both sides of the House in the past and will make some important and far-reaching changes in the situation. I repeat that the re-establishment of the Select Committee is a matter for the House itself to weigh up. There are many factors to be weighed up. I should like to feel that hon. Members will be free to follow their judgment and consciences on it.
Mrs. Knight: Before the right hon. Lady brings before the House her proposals for tightening up the Act, will she consider withdrawing at once the directive to hospital boards not to employ junior and freshly qualified obstetricians unless they undertake to carry out abortion operations, since this is a grave invasion of their freedom to operate?
Mrs. Castle: I am sure that the hon. Lady is suffering from a misunderstanding of the situation. There is no such directive. I shall be happy to send her a copy of the Chief Medical Officer's letter on this matter. We have made it quite clear that doctors with a conscientious objection to abortion are not being exluded from working in the National Health Service, but we have also pointed out that the NHS is under an obligation to provide an abortion service as laid down by Parliament. It may happen that in some areas consultants normally dealing with abortion cases do so on behalf of colleagues who have a conscientious objection. When one of those providing a service which Parliament has decided should be provided moves away, if the service is to be continued it will be essential to ensure that the means exist of continuing the facilities.
I should point out to the hon. Lady that the Chief Medical Officer has been notified of only nine appointments made since 1st March this year in obstetrics and gynaecology and anaesthetics where there was a specification of the need for a willingness to carry out abortions. Only nine such appointments have been

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made out of a total of some 70 appointments which would normally be made in such a period. The ratio of nine appointments out of 70 still leaves an overwhelmingly large area for those with conscientious objections to continue to practise in the National Health Service.
Mr. Willey: Does my right hon. Friend realise that the members of the Select Committee will greatly appreciate her ready and prompt reaction to the recommendations that they were able to reach unanimously?
Mrs. Castle: I am grateful to my right hon. Friend, who has done an excellent job on the Committee, for his comments. I appreciate, too, the spirit in which the Opposition Front Bench has responded to my statement. It is important that we should cease to deal with these matters on a party basis.
Mr. Awdry: If the Select Committee is reconvened, will it consist of the members of the existing Select Committee?
Mrs. Castle: We think that this is a matter for the House. The motion will be considered by the House when the time comes.
Mr. Abse: Will my right hon. Friend be ready to acknowledge the thanks of a large number of people now that she has activated her Department, which has been so tardy in the past in dealing with abuses which are now revealed as being in existence and needing considerable attention?
The Select Committee, which has been able to reach unanimity on so many matters and to help my right hon. Friend, has expressed the opinion that there is a need for a Select Committee to be re-established to deal with matters such as conscientious objection and many other issues. If the Select Committee were not re-established, it would be regarded in the country as though once again an attempt was being made to sweep abuses and wrongs under the carpet.
Mrs. Castle: I am sorry that my hon. Friend has spoilt the harmony and atmosphere that was prevailing by that quite unfair allegation against my Department, because anyone who listened to the speech of my hon. Friend the Minister
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of State during the Second Reading debate on the Bill would have realised that we were already proceeding to act against abuses of which we were aware. But that does not prevent me from paying a tribute to the work of the Select Committee for continuing, as it were, to round up the abuses still prevailing in the private sector. I pay a tribute to my hon. Friend's work in the Select Committee, but I shall not accept his indictment against my Department. As for the re-establishment of the Select Committee, I think that my hon. Friend's remarks were really appropriate to that debate.
Mr. Jessel: May I remind the right hon. Lady that in February the Abortion (Amendment) Bill was given a Second Reading by a large majority of 115 and that there is no evidence that the opinion of the House has changed substantially since then? Apart from the possibility of reconvening the Select Committee, what action does the right hon. Lady propose to take to give effect to the wishes of the House?
Mrs. Castle: I do not know what my statement has been about if it is not about the steps that we have taken, without any delay, to give effect to the recommendations of the Select Committee with regard to abuses of the abortion legislalation.
As for the support of the House for the continuance of the Select Committee, that is a matter that we shall discover when the motion is debated, because it could well be that some Members will feel that the action taken on the Third Report of the Select Committee is the answer to the anxieties that they had when they voted as they did on Second Reading.
Mrs. Renée Short: May I ask my right hon. Friend exactly what her statement about the number of foreign women coming into this country for abortion implies? Is she aware that, according to the figures given to me recently by her hon. Friend the Minister of State, it is clear that there has been a dramatic reduction in the number of foreign women coming to Britain because of the more liberal abortion laws in France and elsewhere?

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Secondly, can my right hon. Friend say exactly what is intended to be done for women who present themselves after 20 weeks for a termination of pregnancy? Very often these are women who do not seek advice early in pregnancy, they are unable to take proper contraceptive care and there are also medical conditions that present themselves after 20 weeks of pregnancy. If my right hon. Friend means that they must all be dealt with in National Health Service hospitals, is she prepared to give a guarantee now that facilities for women to have a termination of pregnancy operation will be made available in every region in the country? Is she aware that one of the major abuses is that in many regions women are not able to get the termination of pregnancy to which they are legally entitled? This is an abuse which needs urgent attention.
Mrs. Castle: My hon. Friend is right in the first part of her question. There has been a dramatic fall in the number of foreign women coming to this country for an abortion. In 1974, about 51,000 abortions were performed on women resident outside the United Kingdom, which represented a fall of about 10 per cent. on the 1973 figures. In the first eight months of this year there has been a decline of about 30 per cent. on the figures for the corresponding period in 1974. I think that my hon. Friend is right also in saying that this is connected with the more liberal abortion laws obtaining overseas. On a recent official visit to France one found almost open recognition of the changes that were taking place as a result of the alterations in the abortion law in France.
I also agree with my hon. Friend that there are areas of the National Health Service where facilities provided by Parliament under this legislation are not available. This is connected with my earlier reply about doctors and conscientious objections. I should like to see a more uniform and better coverage of provision in the National Health Service, which is one of the Lane Committee recommendations, because this would reduce dependence on the private sector which has been the source of abuse.
Mr. McNamara: I congratulate my hon. Friend and the Government on their
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decision to bring back to the House the question whether a Select Committee should be established. Whatever views individuals may have on this issue, it is right that this matter should be decided by the House on a free vote, and my right hon. Friend is to be congratulated on what she proposes to do.
Is my right hon. Friend aware that, as a member of the Select Committee, I paid particular attention to the question of counselling and the provision of counselling facilities? It is most importand that my right hon. Friend should not only lay down procedures but should ensure that there is adequate training and that all the facilities and alternatives are known not only to patients but also to those who are giving the advice.
Mrs. Castle: I am grateful to my hon. Friend for his congratulations to the Government, and I pay tribute to his work on the Select Committee. He is right in saying that counselling is an important part of this procedure, and, as I said in an earlier reply, counselling will include the full presentation of alternatives that are available. With regard to my hon. Friend's suggestion that this should involve careful training, I hope that this is one matter that will be dealt with effectively and helpfully in the consultations that I am having with organisations representing medical, nursing and social workers.
Mr. Goodhew: When the right hon. Lady says that the reconvening of the Select Committee should be left to a decision of the House by a free vote, does she mean a genuine free vote on this issue or the sort of so-called free vote that we had on the Murder (Abolition of Death Penalty) Bill when the Labour Party was whipped through the sponsor's Lobby by the then Government Chief Whip, the present Leader of the House?
Mrs. Castle: I think that the record of this Government in recognising that a sensitive subject is a matter for individual conscience is unparalleled. I think that once again the hon. Gentleman is unfairly and unnecessarily trying to stir it up, especially when one remembers the free vote that was fully operational on our side of the House for the Second Reading of the Bill.
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): On a point of order, Mr. Speaker. What the hon. Member for St. Albans (Mr. Goodhew) has just said is utterly untrue.
Mr. Goodhew: I assure you, Mr. Speaker, that I was a Teller in the Lobby on one occasion when the right hon. Gentleman cleared the Lobby and whipped hon. Members through it.
Dr. M. S. Miller: As a member of the Select Committee, may I congratulate my right hon. Friend the Secretary of State on the alacrity with which she has acted on our recommendations? Does not this indicate that the area of abuses of the Abortion Act 1967, which quite rightly agitated the House and the country, has now been cleared for action by her Department? I commend her for repudiating the allegations made by the hon. Member for Birmingham, Edgbaston (Mrs. Knight) about directives to doctors. If I believed that directives of the kind the hon. Lady mentioned applied, I should be extremely concerned. When my right hon. Friend considers abuses of the Abortion Act—and there have undoubtedly been abuses—will she take into account the abuses to which my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) referred, namely, abuses of an Act of Parliament because many women in this country cannot take advantage of this legislation because of the attitude of some members of the medical professions?
Mrs. Castle: I am grateful to my hon. Friend for his generous remarks about the speed with which we have acted. We have acted with speed because throughout it has been our policy to deal with these abuses vigorously and comprehensively. We had already proceeded against a number of the abuses, but undoubtedly the work of the Select Committee, on which my hon. Friend played a distinguished
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part, has helped us to complete the work. I am confident that in the list of measures I have announced there will be a comprehensive and effective attack on those abuses, which will be eliminated.
I am grateful to my hon. Friend for his remarks about doctors with conscientious objections. He is right. It would be intolerable if directives of the kind which the hon. Member for Birmingham, Edgbaston (Mrs. Knight) insinuated were to be issued. My Chief Medical Officer would be the last person to agree with them.
I agree with my hon. Friend the Member for East Kilbride (Dr. Miller) that there are areas in the National Health Service in which women are unable to obtain the facilities provided for by Parliament, and many of them have been driven to the private sector. In difficult circumstances I shall do my best to provided a uniform service.

QUESTIONS TO MINISTERS
Mr. Geoffrey Finsberg: On a point of order, Mr. Speaker. I should like your guidance on the fact that at 12 noon today a 12-page statement was issued by the Secretary of State for the Environment and that Written Question No. 107, which was an arranged Question, appeared for Written Answer at 3.30 p.m. today. Is that in order? If it is in order, is it not a gross contempt of the House?
Mr. Speaker: It is certainly in order. I do not believe that it is a contempt of this House. It is not a matter for the Chair.

STATUTORY INSTRUMENTS
Ordered,
That the Electrical Equipment (Safety) Regulations 1975 (S.I., 1975, No. 1366) be referred to a Standing Committee on Statutory Instruments.—[Mr. Edward Short.]

ORDERS OF THE DAY
  SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL [Lords]
  As amended (in the Standing Committee), considered.
  SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL [Lords]
    New Clause 1

      THE AGENCY AND THE MEDIA
      "Section 9 of the Industry Act 1975 (the Board and the media) shall apply to the Agency as it applies to the National Enterprise Board with the substitution of a reference to section 5 of this Act for the reference in the said section 9 to section 3 of that Act."—[Mr. Millan.]
      Brought up, and read the First time.
      4.5 p.m.
      The Minister of State, Scottish Office (Mr. Bruce Millan): I beg to move, That the clause be read a Second time.
      During the passage of the Bill in the other place, we were asked whether it was our intention to insert into this Bill a similar provision to that which had been included in the Industry Bill with regard to the National Enterprise Board and the relationships of that body and the agency to the newspaper or television industries. This has implications for the freedom of the Press.
      In the other place my noble Friend the then Minister of State made it clear that employment grounds were the only justification for the Scottish Development Agency being involved in the news media. He said that the necessary clause would be put in the Bill to make that clear. This new clause applies to this Bill, with the clause in the Industry Bill, the necessary changes.
      In order to explain what the new clause does, I must explain the corresponding clause in the Industry Bill. It is rather a long and complicated clause, although its basic intention is clear enough. It is that the Scottish Development Agency should not be involved with newspapers or television companies, with certain reservations or qualifications. Clause 9(1) of the Industry Bill ensures that the Agency and any subsidiary of the Scottish Development Agency is prevented from setting up business to publish
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      newspapers, magazines or other periodicals and from contracting as a television contractor with the Independent Broadcasting Authority. However, subsection (2) contains the reservation that the Agency will be able to establish periodicals wholly or mainly concerned with its activities. Therefore, journals or other similar magazines will be permissible.
      Subsection (3) prevents the Agency generally and its subsidiaries from acquiring share capital in companies or groups of companies that are substantially engaged in the media activities which I have already mentioned. However, subsection (4) allows the Agency to acquire share capital in such companies if directed to do so under Clause 5 of this Bill, under the selective assistance procedure of the Industry Act 1972, which the Agency would operate under the specific direction only of the Secretary of State for Scotland.
      I should make it clear that the Agency could be involved with newspapers or television, but it would be on the basis of a specific direction using the powers of the Secretary of State to give that direction. It would be done by making use of the selective assistance provisions of the Industry Act, 1972. A further subsection of the clause in the Industry Bill provides that if incidentally the Agency or its subsidiaries acquired share capital they would have to use the power of that share capital in a way which ensured that they disposed of the business as soon as practicable. It is not possible to make that an absolute provision because there may be circumstances in which the Agency, if it acted precipitately, would unwittingly damage an innocent publication. There are provisions in the clause to provide a reservation for that circumstance.
      There are similar provisions in the clause, which I need not outline, which are directed basically to the same kind of objective. I hope that hon. Members who have read the appropriate clause in the Industry Bill will accept that the clause is adequately and rather tightly drafted from this point of view. If the Agency were involved in a company publishing a newspaper or in television, it would be specifically prevented by the clause from exercising its power other than on financial or commercial grounds.

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      In other words, it is specifically prevented from using its power to influence editorial opinion. That is one of the basic purposes of the clause.
      I have explained the general position, but plainly there is a particular example, the Scottish Daily News, which is very much in our minds and I should like to say a few words about it without, I hope, opening up the whole question which I shall be delighted to have fully debated in the House on some other occasion. I hope that it is clear from what I have said that there will still be provision after the clause is passed for the present Government or any other Government in appropriate circumstances to help a newspaper business in Scotland by loans or grants through the Scottish Development Agency or by selective assistance under the Industry Act. That is not prohibited by anything proposed in the clause. If the Bill had been an Act when the question of the Scottish Daily News arose earlier this year, nothing would have prevented the Government from behaving exactly as they did, because what they did was done under the powers of the selective assistance available in the Industry Act 1972.
      I have very little to add to what the Prime Minister said in answer to a Question this afternoon, namely, that steps are being taken for a provisional liquidator to be appointed. There was a meeting this morning at which Mr. Whitton, who is to be nominated as the provisional liquidator, was present, together with members of the executive council of the Scottish Daily News and the Prime Minister and other Ministers, including the Secretary of State and myself. It will take a day or two for the position to be clarified, but when the provisional liquidator is appointed—and that is a matter which may go through the court today—he will need a few days in which to make his own assessment of the situation and he will then no doubt be in touch with creditors, including the Government, as he is legally obliged to do.
      I should make one point without trying to anticipate what the liquidator may wish to say, because it would be improper for me to do that. The general legal position in a matter of this sort is that the business can be carried on if the liquidator takes the view that it is in the interests of the creditors that that should happen.
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      Whether he will take that view and, if he does, for how long and in what circumstances he would wish to carry on the business are matters for the liquidator The work force has said that it is very anxious that the newspaper should be carried on and that it will give the liquidator every possible assistance towards that end.
      The Government are creditors and have a general public interest rôle in this matter. Therefore, I have already made contact with the provisional liquidator and had a talk with him. When he has assessed the situation, it will be for him to decide whether he wishes to put any proposal to the Government. Anything that he puts to us will be carefully considered.
      Apart from matters of order, I am reluctant to say more than that, but I thought that that preliminary statement would help the House. I am reluctant to say anything which might make the task of the work force and the liquidator any more difficult than plainly it will be, but in this rather unhappy situation, particularly over the next few days, I hope that all of us will remember that a substantial number of jobs are involved at the Scottish Daily News. There is some responsibility on us to remember that we should not do or say anything which might make the situation even more difficult.
      4.15 p.m.
      Mr. Malcolm Rifkind: The Opposition in general strongly welcome the new clause as being an improvement on the Bill. In Committee the Opposition continually stressed the new and unprecedented power being given to the Scottish Development Agency and its parent board, the National Enterprise Board, creating a grave risk of abuse in a series of areas affecting the public interest. Broadcasting is one of the most important of them, and for that reason we welcome the clause.
      However, an additional reason why we welcome the clause is that today gives us the first opportunity to consider the details of the clause in relation not simply to this Bill but to the Industry Bill. The clause did not appear in the original Industry Bill. It was not presented during the Committee stage of the Industry Bill. Only during the Report stage as recently as 1st July did the House have the opportunity of considering the matter. In fact,

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      that is an exaggeration because even on 1st July the House did not have the opportunity to consider it due to the Government's decision to apply the guillotine to the Industry Bill. We have had no opportunity to debate before today the vitally important question of the control or possible influence of the Scottish Development Agency or the National Enterprise Board on the media.
      Despite the lack of debate on 1st July when the clause was presented during consideration of the Industry Bill, as many as 66 hon. Members opposite chose to vote against it—
      Mr. Dennis Canavan: Hear, hear.
      Mr. Rifkind:—including the hon. Member for West Stirlingshire (Mr. Canavan). On that occasion we did not hear why they opposed the clause, the sole purpose of which was to prevent a non-elected body from being able to control or influence a vital organ concerned with freedom of speech. We shall be interested to see whether the same 66 gallant defenders of freedom of speech today divide the House in opposition to the Government.
      In particular, I await to hear the views of the hon. Members for West Stirlingshire, Central Ayrshire (Mr. Lambie) and South Ayrshire (Mr. Sillars), three of the 12 Scottish Labour Members who voted against the clause when the House considered the Industry Bill. We wonder whether they will be consistent in their opposition and divide the House again, this time perhaps giving us the benefit of hearing their reasons for doing so. If they choose not to do so, we shall be anxious to hear why their views have changed in the short time which has elapsed since 1st July. Those three hon. Members in particular have a duty to the Government, to the House and to their electors to say why they opposed the clause when the Industry Bill was considered but, unless they divide the House today, support its inclusion in this Bill.
      Although in general the National Enterprise Board and the Scottish Development Agency are to be prevented from initiating new opportunities in journalism or acquiring shares in existing broadcasting or journalistic operations, in a situa-
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      tion in which financial help was deemed to be necessary by the Secretary of State, it will be possible for the SDA or the NEB to acquire a proportion of share capital in newspapers or other media in Scotland. I ask the Minister of State to clarify the criteria which will determine whether the NEB or the SDA should exercise such a power. This is yet another example of the obscure and unnecessary duplication involved in the parallel presence in Scotland of the NEB and the SDA.
      The Minister indicated that there might be occasions when it was necessary for part control in newspapers to be acquired by the Government. What criterion would determine whether the Scottish Office or the Department of Industry would exercise that right? The Government may exercise their power to give financial assistance to a newspaper, or to enable the Agency acting on the Government's behalf to acquire partial control of the newspaper's share capital. The Minister correctly said that normally the Government would be required to dispose of that interest as soon as practicable. Under the terms of the Industry Bill the Secretary of State may allow the National Enterprise Board or the Scottish Development Agency not to dispose of an interest in the share capital of a newspaper if, without such a direction, serious commercial injury would be caused to any newspaper, magazine or periodical.
      That begs certain questions. We presume that the power to acquire share capital would be used only if the newspaper experienced a serious commercial problem. Is the Minister saying that if, in the exercise of these powers, the Government gave financial assistance to a newspaper in Scotland, the Scottish Development Agency could continue to own, control or have a major influence in the affairs of the newspaper until the commercial problem, or the financial difficulties which formed the original reason for the Government intervention, has disappeared? If that is the Minister's argument, it makes a mockery of the provision requiring the Agency to dispose of its interest as soon as reasonably practicable.
      The Minister is duty bound to explain in what circumstances the Secretary of State would be entitled to direct the

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      Agency to continue to control a significant degree of the share capital of a newspaper.
      The Minister said that we were not discussing this question in a vacuum. The Scottish Daily News is now experiencing its death throes. Unless there is a dramatic change in Government policy it is highly unlikely that the Scottish Daily News will be able to survive. It is not adequate for the Minister to say that if the powers which he now seeks had been contained in legislation earlier this year the Government might have acted in the same way.
      If the discretion exercised by the Government earlier this year in relation to the Scottish Daily News appears to have such pointless consequences, and if it has not ensured the survival of the newspaper in Scotland, does this not question the basis whether financial help by the Government to any newspaper can be in the public interest? Is the Minister satisfied that the grant of a loan of £1·2 million to the Scottish Daily News earlier this year ensured that the public interest was properly protected? If at that time the Government were satisfied that this newspaper was viable, do the Government believe that their opinion has been proved to be correct? Were they wrongly informed about the financial viability of the Scottish Daily News? If so, when will the House be informed of the facts? If the Government were correctly informed, has the Government's judgment been shown to be sadly lacking? If the Scottish Daily News is on the verge of extinction, does that not suggest that the Government, in the exercise of their discretion, boobed or made a mistake in loaning public money to the newspaper? A proper evaluation at the time might have shown that that was not a reasonable way in which to use public money.
      Mr. Iain MacCormick: Does the hon. Gentleman say that it is wrong for the Government to take risks in giving away such sums of money? If the Scottish Daily News is about to fold up, that might be the result of what happened since the loan was granted rather than have anything to do with the basic grounds on which the Government decision was made.
      Mr. Rifkind: The hon. Gentleman highlights the problems. Were the Gov-
      262
      ernment advised? Was advice available to the Government from the various sources which made their views known at the time ovewhelmingly to the effect that this newspaper could survive as a viable entity if only the money was loaned to it? At the time it was apparent to those who read the viability report on the Scottish Daily News that the advice was to the contrary. The Government took the decision in conflict with that advice and must now meet the consequences.
      The hon. Gentleman says that the present events occurred as a result of what has happened since the money was loaned. That forms an important aspect of the problem. However, it does not detract from the Government's responsibility to satisfy Parliament and the electorate that in going against the advice of those who studied the subject the Government endangered public money and may still be doing so.
      The Government announced that there was to be no further financial help to the Scottish Daily News. Does that represent the continuing position of the Government? Many of us were surprised at the decision of the Prime Minister to meet members of the staff of the Scottish Daily News. We do not object to that in principle. However, we wonder what is the purpose behind that. Was that meant to be a public relations exercise? If so, is that not the worst form of cruelty to the hopes and aspirations of those who work in the Scottish Daily News? If that is more than a public relations exercise, and suggests a willingness by the Government to contemplate a change of their publicly announced policy, the Government must inform Parliament that they have an open mind on this question, that they are prepared to be convinced if the evidence is there, and that they would be willing to give extra financial help to the Scottish Daily News by means of either the Scottish Development Agency (No. 2) Bill or other legislation. The Government gave us no information. The Prime Minister's answer did not clarify the point. Will the Minister explain the position of the Government and whether a final decision has been taken or whether the Government continue to have an open mind on this subject?
      Mr. Deputy Speaker (Mr. George Thomas): Before calling other speakers, I must explain that I am in a difficulty. I understand that the Minister referred to a newspaper. That is why I allowed the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) to develop his argument at length. However, my common sense tells me that that is an illustration of what is involved in the clause, rather than the main debate being centred on the subject of the Scottish newspaper.
      Mr. J. Grimond: I am sure that we shall respect your ruling, Mr. Deputy Speaker.
      However, perhaps I might be allowed a passing remark on the Minister's comment on the Scottish Daily News. I promise to be brief. I wish that newspaper well. The more newspapers there are in Scotland, the better. If it proves to be a success, I shall be pleased. However, the Government were warned that the industry was generating enormous cost for itself. They were warned that the newspaper would probably fail.
      We are constantly told that there is a dire need for effective investment. One reason why we are short of investment is that our savings, whether Government or private, are often wasted. There is no point in investing money unless it is invested in enterprises which yield profit and benefit. This newspaper will most likely provide an example where that will not occur.
      The Minister spoke of the relationship of these Development Agency advisory boards to broadcasting, radio companies and the Press. He said that the Government would not interfere with editorial policy. The accepted wisdom is that proprietors should not interfere with editorial policy. As a trustee of The Guardian, I accept that view up to a point. It would be monstrous if proprietors or those who invested in the media constantly interfered with the editor in the day-to-day functions he has to perform. It would also be monstrous if, like Pontius Pilate, they washed their hands and said that whatever the broadcasting company or newspaper did was no concern of theirs.
      4.30 p.m.
      In general, I am against totally divorcing finance from any responsibility for the conduct of the business in which it is invested. In the Press that is of particular
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      importance. Anyone who invests money in the Press thereby puts a stake in it to get something out of it. A proprietor of a newspaper has a delicate job. He has to keep clear of day-to-day interference, but if editorial policy ever becomes Fascist, Communist, libellous, irresponsible or takes to cheque-book journalism he cannot say "That is nothing to do with me".
      There is a point at which proprietors must be held responsible, and those who invest large sums of money must also be held responsible. It is difficult to judge. It is time that someone at least questioned the conventional wisdom that Press proprietors who are trustees, like myself, Press Lords and nationalised corporations can be exempted from all responsibility for editorial policy.
      That aspect is particularly important where Government money is involved as it is here. Government money carries with it different implications. I ask the Government to put this specific point to the Royal Commission on the Press which is now sitting. The Commission will consider whether it is proper for Government money to be put behind the Press and it will consider editorial responsibility, but I should like the attention of the Commission to be drawn to this explicit power and I should like the Commission to be asked what code of conduct should govern the National Enterprise Board or any similar body when it puts substantial sums of money into a broadcasting company, a television company or the Press.
      Mr. Canavan: The clause is an attempt to transpose into the Bill a new clause which was inserted in the Industry Bill. I question the legality of referring in the clause to the Industry Act 1975 when the Industry Bill has not yet been passed, although some of us hope that it soon will be, even in mutilated form.
      The Government's logic seems to be that because the National Enteprise Board is precluded from taking share capital in media concerns, the Scottish Development Agency should likewise be precluded from so doing. The logic seems to be that what is sauce for the goose is sauce for the gander, but the Government have a duty to find a far better justification than that.

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      The new clause to which I refer in the Industry Bill was sneaked in on 1st July. I do not often agree with the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), but there was no debate on the new clause and its acceptance without debate was one of the unfortunate results of the timetable motion. Hon. Members were trundled down from all over the place, not knowing what they were voting for. They followed the Whips' advice and went into the Lobby. On that occasion 68 hon. Members, including myself—all Labour Members—had taken the trouble to read the new clause before voting and had registered an objection to it.
      The argument in favour of the new clause appears to be the fear that Government financing of media concerns automaticaly means Government or even party domination or bias. But surely it it possible for the clause to be reworded to guarantee editorial freedom. I believe in the editorial freedom of the Press and in freedom of expression. If democracy is to survive, freedom of expression must be maximised.
      Within the last week we have heard a great deal about the freedom of the Press. Last Thursday in this House we had a debate on that subject and yesterday in the House of Lords there was a debate about the freedom of the Press with particular reference to a clause in the Trade Union and Labour Relations Bill. It is all very well for Opposition Members to decry what they see as a lack of freedom because of the possibility of a closed shop in the National Union of Journalists, but the biggest threat to the freedom of the Press anywhere, particularly in Scotland, is a decline in the number of newspapers, especially those which have a wide circulation.
      Over the years there has been a marked decline in the number of popular daily newspapers published in Scotland because of the failure of private enterprises which run the newspapers. As a result of mergers, certain people have a monopoly in the expression of opinion. No doubt Opposition Members say that the private proprietors of the Press do not interfere with editorial freedom, but the system works in a more subtle way than that.
      There may have been occasions in the past when Beaverbrook and other Press barons of yesteryear went into the editor's
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      room and said "You will not print that story on the front page; you will print this one", or "Take out that sentence and insert this one instead". It is done in a more subtle manner now. The editor knows the political views of his proprietor or proprietors and he says to himself "For the sake of my own career, I had better not put this slant on the story". One would be naive to imagine that that does not occur right the way through from the most junior journalist to the most senior.
      In talking of the freedom of the Press, whose freedom are we referring to? Are we talking about the freedom of the proprietors or the freedom of the advertisers? When an editor decides what to print or what not to print, one criterion he uses is whether it will or will not please the advertisers. He asks himself whether the newspaper is in danger of losing thousands or possibly millions of pounds per year in advertising revenue if he puts a story into print.
      Mr. Deputy Speaker: Order. I am trying to be as generous to everyone as I was at the beginning. I hope that the hon. Gentleman will not widen the scope of the debate over the whole field of advertising, which is hardly involved in the new clause.
      Mr. Canavan: Yes, Mr. Deputy Speaker, I was about to move on. It is a misconception by Opposition Members that Government financing of the media automatically involves the Government in the nitty-gritty editorial decision-making of a newspaper. I do not accept that at all. Governments of various hues have introduced legislation providing Government finance in areas as diverse as industry, sport, education, tourism and the arts. A precedent has already been established in the media through the BBC. It is a public corporation with a certain amount of governmental control, with governmental revenue-raising powers. Why should not that principle be extended to newspapers?
      I make a brief reference to the Scottish Daily News which the Minister has mentioned. Here I declare an interest. Along with many other people, most of them ordinary Scottish working people, I put my hand into my pocket to help get that newspaper off the ground. I have £25 worth of shares in the Scottish Daily

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      News. I would like to see the paper survive, not just because I want my shares to survive but because I care about the workers' interests and the interests of the Scottish public. The Government have helped a great deal with a £1·2 million loan. Conservative Members may think that this is money down the drain, but it was not a public handout. It was a Government loan and as such it is recoverable on the collateral of the building.
      The Scottish Daily News has, contrary to some opinion, achieved a lot in less than six months. Normally it takes at least a year to get a newspaper established. It would probably take longer in today's economic climate. It is a tribute to the workers in the Scottish Daily News that they have managed to double the newspaper's circulation and treble its advertising since it went tabloid a few weeks ago.
      There are 531 jobs at stake on this newspaper. But it is not only the jobs which concern me. These workers, in my opinion and in the opinion of hundreds of thousands of readers in Scotland, are doing a good job. They are producing a good newspaper. Earlier I spoke about the diminution, not only in quality but in quantity, of the Scottish Press. It is worth remembering that there is only one other popular newspaper in Scotland which is printed, published and entirely produced in Scotland. Therefore, it is not simply jobs that are at stake; it is freedom of the Press and the variety of expression among organs of the Press in Scotland.
      This clause precludes the possibility of the Scottish Development Agency investing in a venture such as the Scottish Daily News. If the Government cannot help the News by way of either investment or loan, it is obvious that some shark may come along and take the paper over. That will be one more paper which, instead of being controlled by the workers and consumers, will be in the hands of private enterprise, possibly in the hands of someone who seeks to manipulate public opinion. Let us not kid ourselves. There are people like that who use proprietorship of the Press in an irresponsible manner.
      Mr. Hamish Gray: The hon. Gentleman said that there was only one paper wholly produced in Scotland—
      Mr. Canavan: One popular paper.
      Mr. Gray: I disagree. Those of us who sit for northern constituencies are aware that the Aberdeen Press and Journal is one of the leading papers in the Highlands. I have no interest to declare. It is worth noting that that newspaper has a circulation more than the combined circulation of the Scotsman and the Glasgow Herald. Although it may not be popular in the eyes of the hon. Gentleman, it is a highly popular paper in the area in which it circulates. The hon. Gentleman should not—
      Mr. Deputy Speaker: Order. I think that I am the most neutral person on this question. This argument can hardly arise out of this clause. Perhaps the hon. Gentleman should return to the Bill.
      Mr. Robert Hughes: May I get in on the act and say what a good paper the Press and Journal is? Surely the point is that it is not a national newspaper and that it has not got an all-Scottish circulation.
      4.45 p.m.
      Mr. Canavan: I was about to explain that to you, Mr. Deputy Speaker. As a Welshman you may not know that the Press and Journal, be it good, bad or indifferent, could not be described as a paper which is circulated throughout the whole of Scotland. The Scottish Daily News, although produced in Glasgow, not only goes up to Aberdeen; it goes to the Borders, the Western Isles and so on. I apologise if the hon. Member for Ross and Cromarty (Mr. Gray) misunderstood me. That was what I meant when I said that there was only one other popular daily newspaper in Scotland covering virtually the whole of Scotland.
      Like myself, the hon. Member for Pentlands checked up on the voting records for 1st July. I have looked at the names of those who registered a protest against the insertion of this clause in the Industry Bill. It is interesting to note that out of the 68 persons who did so, including two Tellers, there were only 12 Scotsmen. Those 12 Scottish apostles are all members of the Labour Party.

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      I hope that we shall show a consistency this afternoon by not accepting this new clause. I hope that the Minister will take it back and try to reword it so as to guarantee editorial freedom without precluding the possibility of an investment by the Scottish Development Agency in any part of the media. What is at stake here is first of all the employment prospects for those involved and secondly the opportunity for wider expression of opinion to Scottish readers. By opposing this new clause, we shall help to ensure the right to work among Scottish newspaper workers and at the same time we shall be fighting for freedom of expression in the Scottish Press.
      Mr. James Sillars: I shall be as consistent as my hon. Friend the Member for West Stirlingshire (Mr. Canavan) and I shall oppose the new clause. I do not see the Scottish Development Agency as an instrument of benevolent capitalism operating in Scotland to pick up the odd newspaper that runs into trouble, help restore it to good fortune and economic health and then hand it back to private individuals who are, in the strict literary sense of the term, irresponsible in that there is no public accountability or responsibility for the editorial policy which a newspaper insists on pursuing.
      I see no danger in the Agency not being lumbered with the inhibitions with which the Industry Bill will lumber the National Enterprise Board. I can understand the apprehension of any hon. Member about the Press or any other part of the media falling under what is called State bureaucratic control—when faceless men and the State Government machine issue the editorial orders and editors and journalists fulfil those orders whether or not they want to. If we look at the Bill, and indeed at the Trade Union and Labour Relations Bill—I am not quite sure where that is at the moment—it will be seen that there are safeguards. Clause 2(2)(f) says that one of the functions of the Agency shall be the promotion of industrial democracy in undertakings which the Agency controls.
      I believe it would be a good thing for the media if the Scottish Development Agency assisted in the promotion of industrial democracy in the Scottish Press as part of its operation. I do not
      270
      see how any of my hon. Friends could object to that. The alternative is that we continue with the Press in private hands but give the people the right to determine how many newspapers shall circulate in Scotland, the quality of those papers and their editorial policy. In effect, we shall give them the right to take over the Scotsman, the Glasgow Herald or the Daily Record, for example.
      It may not be within the ken of some hon. Members, but according to my information the Daily Record could be vulnerable in the years that lie ahead. I understand that the holding company has taken property from the Daily Record and Sunday Mail and transferred it to another company, taking away an important capital asset. If the paper ever runs into difficulty in future it will have no capital in the bank to see it over a difficult period. What would happen in those circumstances? Would the Agency intervene to shore up the paper, put it back on its feet and then be forced to hand it back to some other private entrepreneur who will in due course present the paper with the same problems?
      Mr. Robert Hughes: A loan to a newspaper to allow it to continue means that it will remain in private hands and will never be held in public hands.
      Mr. Sillars: I think that my hon. Friend has made a valid point. I hope that it is reported in the Aberdeen Press.
      There is an important safeguard in Clause 4—namely, the power of the Secretary of State to give the Agency directions. There is power for the Secretary of State to give not only general but specific directions. Therefore, if the Agency ran amok in the Scottish newspaper industry there is sufficient power, either here or in the Scottish Assembly, to ensure that it behaves itself in a proper democratic manner. We need not fear State control given that safeguard.
      I remind my Front Bench that the Labour Party has a commitment within its manifesto to encourage the development of co-operative enterprises. I believe that the Agency could do a magnificent job in the advancement of democracy where it matters most—namely, where opinions are conveyed from the opinion makers to the ordinary citizens. I shall oppose new Clause 1.
      Mr. Millan: I hope that if my hon. Friend the Member for South Ayrshire (Mr. Sillars) opposes new Clause 1 he will do so on the basis of what the clause seeks to do and not on his interpretation of it. I believe that my hon. Friend misunderstands what the clause does. It does not invite the Scottish Development Agency to take up newspapers which might be in financial difficulty, put them back on their feet and then return them to private enterprise. The clause does not allow the Agency to pick up newspapers in the first place, as I have already tried to point out. The clause, for reasons which I shall explain again, would prevent the Agency becoming involved directly in the kind of rescue operation which my hon. Friend has described, whether or not at the end of the day there was to be a return of the enterprise concerned to private enterprise. I believe that my hon. Friend misunderstands the purpose of the clause.
      I have already said that nothing in the clause prejudices in any way Section 7 of the Industry Act 1972, which allows selective financial assistance to be given to a newspaper enterprise in the same way as to any other enterprise. That does not arise from the legislation of the present Government; that is what is contained in the 1972 Act. Section 7 applies to newspaper enterprises in the same way as it applies to any other enterprise. There is nothing in the clause which in any way diminishes the powers of Section 7 of the 1972 Act.
      Far from the Government being in favour of the power of selective assistance being used in a way which would mean that private enterprise would be rescued when it was unprofitable and then passed back to private enterprise when it was profitable once more, what will be the Industry Act 1975 specifically amends the 1972 Act in a way which means that the legislative provisions in the earlier Act, which provide that any equity taken up in the form of selective assistance shall be disposed of as soon as possible, will be eliminated. Therefore, there is no question of the Agency doing what my hon. Friend obviously fears. Nor is there any question of that being done by the exercise of selective assistance under the 1972 Act. The kind of transaction to which my hon. Friend is opposed—and
      272
      I share his opposition—is eliminated by the amendments to the 1972 Act which will be contained in the new 1975 Act, which is still before the House. I hope that my hon. Friend will accept that statement of the position. If he wishes to oppose the clause, I hope that he will do so for rather different reasons.
      Mr. Sillars: I am extremely grateful to my right hon. Friend for the technical correction, but it is a narrow point. It is important that the Agency should be able to intervene.
      Mr. Millan: With respect, I do not think that I have made a technical point. As I have already said, the Agency can be involved in selective assistance generally—this applies to a newspaper as well—by means of a direction given by the Secretary of State under Clause 5 that selective assistance in any particular case may be carried out by the SDA as an agent of the Secretary of State rather than directly by the Secretary of State himself.
      Why is it that we are adopting this way of proceeding? Why is it that we are saying that the Agency, which will be financed directly by the Government, should not be involved of its own volition in the acquisition of share capital in newspaper production or television broadcasting? The simple answer is that important questions of editorial freedom are raised.
      The right hon. Member for Orkney and Shetland (Mr. Grimond) said that he did not share the conventional view that the management or proprietors of a newspaper should be completely unaware of editorial content, should disregard it and should never interfere. It is not for me to argue that general proposition, but it is the sort of matter which is perfectly relevant to put before the Royal Commission. I have a good deal of sympathy with what the right hon. Gentleman has said, but there is a difference in this argument between the case where the proprietor is either a private individual or a private company or trust, as it happens to be in the case of The Guardian and one or two other newspapers, and an instance where the Government are the proprietors. Whatever we may feel about proprietors or trusts interfering in editorial content, and however disagreeable we may find some of these interventions

      273
      to be, there is an entirely different question involved from that of a Government or Government agency's intervention in the editorial content of a newspaper.
      That immediately raises the implications of the Government attempting to direct the editorial policy of a newspaper in a way that would be favourable to the Government's point of view. Whatever we may feel about the SDA's involvement in the newspaper business, and whatever we may feel about Section 7 assistance, there would be general acceptance of the proposition that the Government or a Government agency should not interfere in the editorial direction and content of a newspaper. That would raise serious problems from the point of view of editorial freedom and freedom of expression of opinion.
      5.0 p.m.
      To say that does not mean that all of us are absolutely happy about the present position concerning editorial content or editorial freedom. I personally am not. But it is not a solution to that problem to suggest that a Government Department, a Minister or a Government agency should be involved in the editorial content of a newspaper or a television broadcasting company. That is why this provision is in the new clause. I need not go beyond saying that.
      I think that answers the main point of my hon. Friend the Member for West Stirlingshire (Mr. Canavan), because he said that there had not been a debate about this or a Government justification for what we are doing here. The Government justification is as I have expressed it here and subject to the qualifications about Section 7, and so on, which I have already described to the House.
      I was asked whether in any particular case it would be the Scottish Development Agency rather than the National Enterprise Board that would be involved. Under the Bill it would clearly be the Scottish Development Agency, because there is no mention of the National Enterprise Board in the Bill. So far as any body would be involved in the Bill by means of a direction in a selective assistance case, it would be the Scottish Development Agency and not the National Enterprise Board.
      With respect, I think that the hon. Gentleman mentioned a point about the
      274
      divisison of responsibility between the Scottish Development Agency and the National Enterprise Board which does not arise on this clause. The division of responsibility to which he should have been directing his mind is that between the Secretary of State for Industry and the Secretary of State for Scotland in selective assistance cases. That has already been determined within the Government by administrative means. The transfer of responsibilities for Section 7 cases to the Secretary of State has been in operation since 1st July this year, and it is working at administrative level perfectly adequately. There are occasionally cases where both Departments may be involved, but there is no particular difficulty about that.
      I was also asked about the Scottish Daily News, and I have very little to add to what I said when introducing the clause. I was asked what was the purpose of the Prime Minister's meeting this morning. It was specifically that which the Prime Minister himself made clear to the works council in the reply that he sent to its request for a meeting—to enable the Government's decisions and the background to them to be explained directly to the works council, with the Prime Minister there and by the Ministers directly concerned. That was what happened this morning.
      As my right hon. Friend the Prime Minister explained, the holding of the meeting did not anticipate any change in Government policy, which had already been made clear to the works council. That was made clear at this morning's meeting. The works council also put certain points to the Prime Minister and the other Ministers present at the meeting. In any case, the situation has changed in the sense that later this week a provisional liquidator will be appointed, and he will take over the responsibilities which at the present time are being discharged by the works council.
      Mr. Rifkind: The Minister has pointed out that at the meeting of the Prime Minister with the works council it was explained that no change in Government policy was anticipated. Can the Minister rule out any change in Government policy?
      Mr. Millan: I have said that the Government policy remains, and this was

      275
      made clear to the works council this morning. The provisional liquidator will be appointed tomorrow and, as I said earlier, he will have to be in touch with the Government as a creditor, just as he will with the other creditors. He will be acting on the basis of responsibility towards creditors and will therefore have to be in touch with us. It will be part of his legal responsibilities so to be. I have already had a preliminary informal conversation with him. As I said earlier, whatever the liquidator puts to the Government as creditor—he will put propositions also to the other creditors—will be very carefully considered. That is the position at the present time.
      The only other point concerning the Scottish Daily News was that made by the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) as to the assessment of viability of the Scottish Daily News at the time that the newspaper was launched and Government assistance was granted. There was absolutely no misunderstanding about this situation. No one believed that this was a sure-fire certainty for success. Indeed, the Government insisted that in the prospectus issued by the company, when it invited public subscription, there were inserted the assessments made by the various studies into the possible viability of the project, so that any potential investors in the company would know absolutely clearly—here we had particularly in mind the worker shareholders themselves—the risks they were taking in investing in the company.
      That was all spelt out in very considerable detail in the public prospectus issued at the time. It was done at Government insistence. The Government appreciated as well as anyone else that this was an undertaking which had no guarantee of success, but we felt that it was an undertaking which had certain exciting and novel characteristics which ought to be supported by the Government.
      1 should like to pay tribute to the tremendous effort that has gone into the workers' co-operative and to the dedication of the work force, which, I may say, even in these extremely difficult times, has not been changed. There is still a very considerable dedication to make this newspaper a success.
      Mr. Teddy Taylor: As the main concern is the future of jobs, will the Minister say whether the Government are involved in discussions and whether any group, company or individual has emerged as being interested in buying the paper and saving the jobs?
      Mr. Millan: That would not be for me to say. These are now matters for the liquidator.
      I had finished what I wanted to say about the Scottish Daily News. I have also explained the clause in some detail and the reasons for it. I hope that it will be accepted by the House.
      Mr. Teddy Taylor: I should declare my interest, like the hon. Member for West Stirlingshire (Mr. Canavan), in that I am a shareholder in the Scottish Daily News. Some hon. Members have a financial interest, but I think the main interest of Scottish Members is in the jobs aspect.
      Although the Minister has painted a very gloomy picture, it was disappointing that he was not, in advance of the appointment of the liquidator, able to give any indication whether there had been any approaches which might lead to the saving of jobs.
      My hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind) said at the beginning of this debate that he was inclined to give general support to it. Having heard this short debate, from the Conservative benches I would strongly recommend all my hon. Friends to vote enthusiastically for this clause, because we have had some indication of the reasons—which were not advanced previously in the Industry Bill, because of the guillotine—why some Labour Members opposed it.
      We heard the speech from the hon. Member for West Stirlingshire having been reminded by my hon. Friend the Member for Edinburgh, Pentlands that the hon. Member for West Stirlingshire had voted against the clause in the Industry Bill.
      We also had an indication—a very clear and alarming one—from the hon. Member for South Ayrshire (Mr. Sillars), of his reason for opposing the clause, and I hope that those who are concerned with freedom will make a point of reading his

      277
      speech. It was one of the most frightening we have heard for a long time. But we expect such speeches from him. He voted against a similar new clause in the Industry Bill.
      It was probably because he was speaking with the authority of the hon. Member for Central Ayrshire (Mr. Lambie) that the speech of the hon. Member for South Ayrshire was rather more extreme than usual. He was saying that he wanted the Government, through the Scottish Development Agency, not to move in to rescue newspapers and thereby rescue jobs. The money was not to be used for propping up capitalism. He wanted Government involvement, through the Agency, in newspapers in order to promote Socialism. That is a frightening situation. He is suggesting that instead of freedom of editorial expression, as we have now, we should have a situation in which we would have a Scottish Pravda and a Scottish Red Star and virtually nothing else.
      Mr. Sillars: Perhaps I can cool the hon. Gentleman's fevered brow by pointing out that I referred to subsection (2)(f) of Clause 2, relating to the promotion of industrial democracy as one of the functions of the Agency. I would include, for example, the promotion of industrial democracy on the Glasgow Herald, where a fair number of people are Conservatives. My concept of industrial democracy also includes Conservative newspapers for which the hon. Gentleman could continue to write.
      Mr. Taylor: That is the danger. Let us consider the subject of freedom of expression. There is no indication that where industrial democracy has any place, truth emerges more clearly. For example, people in Portugal are concerned about freedom of expression and broadcasting. The Scottish Daily News published a leading article saying that we should be inclined to support the Army in Portugal in what it was doing to preserve the revolution. That was one point of view, but it is very important that other points of view should be expressed. If we had Government control of newspapers in Scotland—Government-financed newspapers—it would be almost impossible for other newspapers to compete. Hardly a newspaper in Britain is making money, and some of them are losing substantial amounts.
      Mr. Robert Hughes: The hon. Gentleman is exposing the whole weakness of his case. The greatest danger to the freedom of the Press is the fact that newspapers cannot pay unless they get substantial advertising revenue. The threat to the freedom of the Press as expressed by the hon. Gentleman is a myth, a distortion. The freedom to preserve the freedom of the capitalist system is regarded by him as being the same as freedom of the Press. But that is a distortion of the truth and the hon. Gentleman knows it.
      Mr. Taylor: The hon. Gentleman is wrong. If he will look at countries whose political regimes he might favour, he will see that there is not anything like freedom of the Press there. But in this country if one has any point of view ranging from extreme left wing through mild, mediocre or middle to extreme right wing, one can find a newspaper to reflect one's opinions. In other countries, where the Government control the Press—a situation which some hon. Members are trying to achieve by opposing new Clause 1—there is not that breadth of expression.
      Mr. Canavan: The hon. Gentleman has already demolished his own case. Only one popular daily newspaper in Scotland can by any stretch of the imagination be said to be Government financed, if we accept the £1·2 million lent to the Scottish Daily News as Government finance, but that fact does not seem to have disturbed its editorial freedom, because it has even allowed an extreme right winger like the hon. Gentleman to write for it.
      5.15 p.m.
      Mr. Taylor: I was delighted to write for it for a while. I think it folded up for all kinds of reasons. But that is not the kind of sponsorship that the hon. Member for South Ayrshire is suggesting. There is a difference between a rescue operation for a newspaper which it is hoped will survive as a viable concern and what the hon. Gentleman suggests in opposing new Clause 1.
      The hon. Member for South Ayrshire said that he did not want this to be a rescue operation without the Government moving in and running newspapers which would then be able to advance Socialism. That is a frightening prospect. One of

      279
      the great things about freedom as we have it is the variety of opinions expressed. Readers themselves control the Press by buying those newspapers which they like and not buying those which they do not like. We should also remember that if the Government moved into such an operation and gave unlimited cash to it, there would be a danger that those newspapers which competed with the Government-financed newspapers would have to close down. In that way, we would not save jobs but we would destroy what freedom of the Press we have.
      In order to preserve a variety of opinions in our newspapers—those excel-
      lent newspapers, like the Express and Journal, which reflect regional problems—we support new Clause 1, give our full backing to the Government, and reject the alarming and vicious suggestion put by the hon. Member for South Ayrshire, who wants to have Government control of Government-subsidised newspapers reflecting only a limited degree of opinion. That would be the beginning of a slippery slope which could lead to the destruction of the freedom we have always enjoyed and which I hope we always will enjoy.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 291, Noes, 30.

      Division No. 344.]

      AYES

      [5.17 p.m.

      Adley, Robert

      Dempsey, James

      Hayman, Mrs Helene

      Amery, Rt Hon Julian

      Doig, Peter

      Healey Rt Hon Denis

      Armstrong, Ernest

      Dormand, J. D.

      Horam, John

      Ashley, Jack

      Douglas-Hamilton, Lord James

      Howell, Denis (B'ham, Sm F)

      Atkins, Rt Hon H. (Spelthorne)

      Douglas-Mann, Bruce

      Howells, Geraint (Cardigan)

      Atkins, Ronald (Preston N)

      Drayson, Burnaby

      Hoyle, Doug (Nelson)

      Awdry, Daniel

      Dunn, James A.

      Hughes, Rt Hon C. (Anglesey)

      Bain. Mrs Margaret

      Dunwoody, Mrs Gwyneth

      Hunt, John

      Barnett, Rt Hon Joel (Heywood)

      Edelman, Maurice

      Hunter, Adam

      Bean, R. E.

      Eden, Rt Hon Sir John

      Hurd, Douglas

      Beith, A. J.

      Edge, Geoff

      Hutchison, Michael Clark

      Bidwell, Sydney

      Edwards, Robert (Wolv SE)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Biffen, John

      Elliott, Sir William

      Irving, Charles (Cheltenham)

      Bishop, E. S.

      English, Michael

      Irving, Rt Hon S. (Dartford)

      Blenkinsop, Arthur

      Ennals, David

      Jackson, Colin (Brighouse)

      Boardman, H.

      Evans, Fred (Caerphilly)

      Jackson, Miss Margaret (Lincoln)

      Booth, Albert

      Evans, Gwynfor (Carmarthen)

      Janner, Greville

      Bowden, A. (Brighton, Kemptown)

      Evans, Ioan (Aberdare)

      Jay, Rt Hon Douglas

      Boyden, James (Bish Auck)

      Ewing, Harry (Stirling)

      Jeger, Mrs Lena

      Brotherton, Michael

      Fairgrieve, Russell

      Jenkins, Hugh (Putney)

      Brown, Hugh D. (Provan)

      Farr, John

      Jenkins, Rt Hon Roy (Stechford)

      Brown, Robert C. (Newcastle W)

      Faulds, Andrew

      John, Brynmor

      Buchanan, Richard

      Fernyhough, Rt Hon E.

      Johnson, James (Hull West)

      Buchanan-Smith, Alick

      Fitch, Alan (Wigan)

      Johnson, Walter (Derby S)

      Budgen, Nick

      Fookes, Miss Janet

      Johnson Smith, G. (E Grinstead)

      Butler, Adam (Bosworth)

      Foot, Rt Hon Michael

      Jones, Alec (Rhondda)

      Butler, Mrs Joyce (Wood Green)

      Ford, Ben

      Jones, Arthur (Daventry)

      Callaghan, Jim (Middleton & P)

      Forrester, John

      Jones, Barry (East Flint)

      Campbell, Ian

      Fowler, Gerald (The Wrekin)

      Jones, Dan (Burnley)

      Cant, R. B.

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

      Kaufman, Gerald

      Carlisle, Mark

      Freeson, Reginald

      Kelley, Richard

      Carter, Ray

      Garrett, W. E. (Wallsend)

      Kilroy-Silk, Robert

      Carter-Jones, Lewis

      George, Bruce

      Kitson, Sir Timothy

      Cartwright, John

      Gilbert, Dr John

      Knight, Mrs. Jill

      Castle, Rt Hon Barbara

      Gilmour, Sir John (East File)

      Lamborn, Harry

      Clemitson, Ivor

      Ginsburg, David

      Lamond, James

      Cockcroft, John

      Glyn, Dr Alan

      Latham, Arthur (Paddington)

      Cocks, Michael (Bristol S)

      Godber, Rt Hon Joseph

      Lestor, Miss Joan (Eton & Slough)

      Cohen, Stanley

      Goodhew, Victor

      Lewis, Ron (Carlisle)

      Colquhoun, Mrs Maureen

      Gould, Bryan

      Lipton, Marcus

      Conlan, Bernard

      Gourlay, Harry

      Lomas, Kenneth

      Cooke, Robert (Bristol W)

      Gower, Sir Raymond (Barry)

      Loveridge, John

      Corbett, Robin

      Graham, Ted

      Lyons, Edward (Bradford W)

      Cox, Thomas (Tooting)

      Grant, George (Morpeth)

      McCartney, Hugh

      Craigen, J. M. (Maryhill)

      Gray, Hamish

      MacCormick, Iain

      Crawford, Douglas

      Grieve, Percy

      McCrindle, Robert

      Crawshaw, Richard

      Grimond, Rt Hon J

      McElhone, Frank

      Cronin, John

      Grocott, Bruce

      Macfarlane, Neil

      Crowder, F. P.

      Hall-Davis, A. G. F.

      MacFarquhar. Roderick

      Cunningham, G. (Islington S)

      Hamilton, James (Bothwell)

      McGuire, Michael (Ince)

      Davidson, Arthur

      Hampson, Dr Keith

      Maclennan, Report

      Davies, Bryan (Enfield N)

      Hannam, John

      McMillan, Tom (Glasgow C)

      Davies, Denzil (Llanelli)

      Harper, Joseph

      McNamara, Kevin

      Davies, Rt Hon J. (Knutsford)

      Harrison, Walter (Wakefield)

      Magee, Bryan

      Davis, Clinton (Hackney C)

      Hart, Rt Hon Judith

      Mallalieu, J. P. W.

      Deakins, Eric

      Hattersley, Rt Hon Roy

      Marks, Kenneth

      Dean, Joseph (Leeds West)

      Hatton, Frank

      Marquand, David

      Marshall, Dr. Edmund (Goole)

      Rifkind Malcolm

      Tierney, Sydney

      Marshall, Jim (Leicester S)

      Roberts, Albert (Normanton)

      Tinn, James

      Marshall, Michael (Arundel)

      Roberts, Gwilym (Cannock)

      Tomlinson, John

      Marten, Neil

      Robertson, John (Paisley)

      Tomney, Frank

      Maude, Angus

      Roderick, Caerwyn

      Torney, Tom

      Maxwell-Hyslop, Robin

      Rodgers, William (Stockton)

      Tuck, Raphael

      Maynard, Miss Joan

      Rooker, J. W.

      Varley, Rt Hon Eric G.

      Meacher, Michael

      Ross, Rt Hon W. (Kilmarnock)

      Wainwright, Edwin (Dearne V)

      Mellish, Rt Hon Robert

      Rowlands, Ted

      Wainwright, Richard (Colne V)

      Meyer, Sir Anthony

      Sandelson, Neville

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

      Millan, Bruce

      Scott, Nicholas

      Walder, David (Clitheroe)

      Miller, Dr M. S. (E. Kilbride)

      Shaw, Arnold (Ilford South)

      Walker, Harold (Doncaster)

      Miller, Mrs Millie (Ilford N)

      Sheldon, Robert (Ashton-u-Lyne)

      Walker, Terry (Kingswood)

      Molloy, William

      Shore, Rt Hon Peter

      Wall, Patrick

      Moonman, Eric

      Short, Rt Hon E. (Newcastle C)

      Ward, Michael

      Morris, Alfred (Wythenshawe)

      Short, Mrs Renée (Wolv NE)

      Watkins, David

      Morris, Charles R. (Openshaw)

      Silkin, Rt Hon John (Deptford)

      Watt, Hamish

      Morris, Rt Hon J. (Aberavon)

      Silkin, Rt Hon S. C. (Dulwich)

      Watt, Hamish

      Morris, Michael (Northampton S)

      Silverman, Julius

      Weetch, Ken

      Mudd, David

      Small, William

      Weitzman, David

      Mulley, Rt Hon Frederick

      Smith, Cyril (Rochdale)

      Welsh, Andrew

      Murray, Rt Hon Ronald King

      Smith, Dudley (Warwick)

      White, James (Pollok)

      Noble, Mike

      Snape, Peter

      Whitehead, Phillip

      Oakes, Gordon

      Spearing, Nigel

      Whitlock, William

      Ogden, Eric

      Speed, Keith

      Wigley, Dafydd

      O'Malley, Rt Hon Brian

      Spriggs, Leslie

      Willey, Rt Hon Frederick

      Orbach, Maurice

      Stallard, A. W.

      Williams, Alan (Swansea W)

      Ovenden, John

      Steen, Anthony (Wavertree)

      Williams, Alan Lee (Hornch'ch)

      Padley, Walter

      Stewart, Ian (Hitchin)

      Wilson, Alexander (Hamilton)

      Park, George

      Stott, Roger

      Wilson, Gordon (Dundee E)

      Pavitt, Laurie

      Strang, Gavin

      Wilson, Rt Hon H. (Huyton)

      Peart, Rt Hon Fred

      Strauss, Rt Hon G. R.

      Winterton, Nicholas

      Penhaligon, David

      Summerskill, Hon Dr Shirley

      Wood, Rt Hon Richard

      Perry, Ernest

      Tapsell, Peter

      Wrigglesworth, Ian

      Phipps, Dr Colin

      Taylor, Mrs Ann (Bolton W)

      Young, David (Bolton E)

      Price, C. (Lewisham W)

      Taylor, Teddy (Cathcart)

      Young, Sir G. (Ealing. Acton)

      Price, William (Rugby)

      Thomas, Dafydd (Merioneth)

      Younger, Hon George

      Radice, Giles

      Thomas, Jeffrey (Abertillery)

      Rawlinson, Rt Hon Sir Peter

      Thomas, Rt Hon P. (Hendon S)

      TELLERS FOR THE AYES:

      Rees, Rt Hon Merlyn (Leeds S)

      Thompson, George

      Mr. Donald Coleman and

      Reid, George

      Thorpe, Rt Hon Jeremy (N Devon)

      Mr. David Stoddart.

      Renton, Rt Hon Sir D. (Hunts)

      NOES

      Abse, Leo

      Lee, John

      Sedgemore, Brian

      Allaun, Frank

      Litterick, Tom

      Skinner, Dennis

      Atkinson, Norman

      Loyden, Eddie

      Swain, Thomas

      Bennett, Andrew (Stockport N)

      Luard, Evan

      Thomas, Ron (Bristol NW)

      Cryer, Bob

      Madden, Max

      Thorne, Stan (Preston South)

      Flannery, Martin

      Mikardo, Ian

      Wise, Mrs. Audrey

      Heffer, Eric S.

      Newens, Stanley

      Woof, Robert

      Hughes, Robert (Aberdeen, N)

      Richardson, Miss Jo

      Hughes, Roy (Newport)

      Rodgers, George (Chorley)

      TELLERS FOR THE NOES:

      Kinnock, Neil

      Rose, Paul B.

      Mr. James Sillars and

      Lambie, David

      St. John-Stevas, Norman

      Mr. Dennis Canavan.

      Latham, Arthur (Paddington)

      Question accordingly agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 2

      FINANCIAL OBJECTIVES OF UNDERTAKINGS CARRIED ON BY AGENCY
      'In each case where the Agency uses its powers under section 2(2)(b) to establish and carry on an industrial undertaking, the Agency shall be obliged to provide the management of the undertaking with a written statement of the financial objectives of that undertaking, and in drawing up the statement, the Agency shall have regard to the desirability, in its commercial activities, of obtaining a reasonable return on capital employed; and a statement on the extent to which each such undertaking has
      282
      achieved, exceeded or fallen short of the financial objective shall be included in the Annual Report of the Agency'.—[Mr. Teddy Taylor.]
      Brought up, and read the First time.
      Mr. Teddy Taylor: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With that new clause we are to take the following:

    New Clause 5

      ADVISORY COMMITTEE IN RESPECT OF s. 2(2)(b) SCHEMES
      'There shall be established an advisory committee to the Agency, consisting of not less than three persons and not more than five persons, all of whom shall have had experience

      283
      of business, commerce and banking, who shall have the task of reporting to the Secretary of State on the viability of each scheme in which the Agency proposes to exercise its powers under section 2(2)(b), and the Agency shall be obliged to provide the Committee with such information as it requires'.
      Amendment No. 15, in Clause 13, page 13, line 42, at end insert:
      'Notwithstanding the general limit imposed by this subsection, the Agency shall not be authorised to spend more than £50 million on the exercise of their powers under section 2(2)(b) until a report has been submitted to Parliament on the record and achievements of the Agency in this regard, and the report has been approved by both Houses of Parliament'.
      Mr. Teddy Taylor: We believe that the debates which we have had on this matter have been worth while. In the previous discussion we achieved a great deal, including some remarkable conversions. I was delighted to see the hon. Member for East Kilbride (Dr. Miller), who had voted against us on the last occasion, decide to vote for us. That was very encouraging. Therefore, we shall try to do the same thing on this occasion and persuade the Government to support us on new Clause 2 in the same way as we supported them on new Clause 1.
      New Clauses Nos. 2, and 5 and Amendment No. 15 are important. It is important that the Bill be amended to ensure that there is a fair deal for private industry in Scotland, especially bearing in mind the unemployment figures which were revealed today and which unfortunately indicate male unemployment in Scotland has increased at the rate of approximately 1,000 a week over the past month. At present we have eight fully unemployed Scots for every vacancy. This is obviously a serious and deteriorating situation.
      Another factor which causes great concern is that investment is not going ahead. We want to ensure that private industry in Scotland is given a degree of safeguard and confidence.
      5. 30 p.m.
      The Minister will know from the approaches which have been made by the Confederation of British Industry, and other bodies, that Scottish industry is worried about certain aspects of the Bill—particularly about Clause 2(2)(b), which empowers the Agency to engage in Indus-
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      trial undertakings on its own or in co-operation with others.
      It is desperately important for us to ensure that these nationalising powers—powers to set up State firms, or firms in which there is a State partnership)—follow certain basic rules which are fair to the private sector of industry. Without the clause there will be no guarantee that the taxpayers' money will be used wisely or that the full story of the taxpayers' involvement in industry will ever emerge, or emerge fully. There is great concern that nationalised or semi-State-controlled companies should engage in fair competition and use the State money wisely and prudently.
      The clause does not provide that companies or partnerships in which there is State participation should immediately be profitable or should immediately move towards a profitable position. It provides that if the Government are to put public money into an industry or a firm they should state clearly, at the beginning, the financial objectives of the undertaking. Without this there is no measure of the success of the enterprise and no way of assessing the accuracy of the predictions of the officials of the Agency.
      If the Agency decides, for example, to put £1,000, £100,000 or £1 million into an industrial venture, there should be a statement, at the outset, of what it is hoped that the firm will achieve by way of profitability or return on capital. The new clause provides that
      "the Agency shall be obliged to provide the management of the undertaking with a written statement of the financial objectives of that undertaking, and in drawing up the statement, the Agency shall have regard to the desirability, in its commercial activities, of obtaining a reasonable return on capital employed."
      We also want to ensure, the objectives having been stated, that there is some indication whether the objective has been achieved. Therefore, the clause also says that there should be
      "a statement on the extent to which each"
      undertaking
      "has achieved, exceeded or fallen short of the financial objective"
      and that this
      "shall be included in the Annual Report of the Agency".
      We have had very unfortunate examples of State involvement in business, particularly by means of

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      nationalisation and its great ability to waste a great deal of taxpayers' money, to lose millions of pounds and, unfortunately, to ensure that there is no greater job security than exists in the private sector.
      We want to ensure that if the Government decide, through the Agency, to finance an industrial operation, they set out the aim at the beginning. Unless we ensure this, those who are engaged in the management of the enterprise will have no guideline to which to work, no specific aim, and nothing against which their success can be measured.
      In view of the great number of people employed in the State sector of industry, it is desperately important that we have a real and effective measure of whether the aims are being achieved.
      If the Government argue against the clause, they should tell us what would be lost if the clause were to be accepted; in what way it would frustrate the endeavours of the Agency; in what way it would hold up the Agency's work; and in what way it would frustrate the endeavours of management.
      The clause would not frustrate the Agency in any way. I can see no objection to it, unless the Government are anxious to cover up much of the Agency's activity and to ensure that skeletons remain in cupboards and are never found out.
      Next, we ask the House to agree to new Clause 5, in which we propose an advisory committee whose members will have
      "experience of business, commerce and banking, who shall have the task of reporting to the Secretary of State on the viability of each scheme in which the Agency proposes to exercise its powers under section 2(2)(b)".
      Before the Government commit any public money, we want to ensure that there is a body which is, so far as possible, independent, charged with the responsibility of examining schemes, assessing their viability and reporting to the Agency. The clause also provides that
      "the Agency shall be obliged to provide the Committee with such information as it requires".
      particularly at a time when Government expenditure is being reduced so substantially, it should be seen that money is
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      being used wisely and that schemes are viable.
      So far, we have had only one indication of an appointment to the Agency. Sir William Gray has been appointed chairman. Sir William, who is a leading public figure in Scotland and who has contributed a great deal to our country, does not, so far as I am aware, possess direct experience of industry and commerce. His experience to date has been as Lord Provost of Glasgow, which has had many financial problems.
      Irrespective of the public figures who will be appointed to the board of the Agency, it is important that we have independent views expressed about the viability of each project in which the State wishes to have a shareholding. Here again, nothing would be lost if the clause were accepted. We believe that a great deal would be gained.
      Our third proposition is contained in Amendment No. 15, whose purpose is to secure that
      "Notwithstanding the general limit imposed by this subsection,"—
      that is, the £200 million which is to be available over an unspecified period
      "the Agency shall not be authorised to spend more than £50 million"
      on nationalisation schemes
      "until a report has been submitted to Parliament on the record and achievements of the Agency in this regard, and the report has been approved by both Houses of Parliament."
      If the Government are to spend a great deal of money on nationalisation schemes in Scotland by promoting firms in which there is a substantial State shareholding, it is important, after the expenditure of £50 million, that we have an indication whether an operation is likely to be successful. All our experience has been to the effect that when the State gets involved in business enterprises it loses a great deal of money.
      The Government take the view, as they said in debates in Committee, that this will not happen in the case of the Agency. The Government want the Agency to be involved in profitable businesses which are contributing to the nation. We suggest that after spending £50 million on this purpose—if the Government spend that amount—the House should be enabled to review the situation, to pause for breath and reflection, and to judge if

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      further moves should be made in this direction.
      We hope that when replying to the debate the Minister of State will take the opportunity of giving us some idea of what cash is to be made available to the Agency. It will not be good enough for him to say that there is to be a £200 million limit and that it will be up to the Agency; government does not work like that. We hope, further, that the Minister of State will be able to give us an idea of the proportion of the cash to be made available which will be spent on nationalisation schemes.
      I need not remind the House of the serious economic problems now facing Scotland. The Minister will know that although some people have welcomed the Agency in differing degrees the CBI and other bodies have expressed considerable concern about certain aspects of it. The Confederation is concerned, in particular, about State involvement in industry, first because in every other case it has meant a higher burden of taxation on the private sector. It also means a smaller private sector to bear the burden of taxation—
      Mr. Deputy Speaker: Order. I never like interrupting hon. Members, but the hon. Gentleman is now embarking on what I would call a Second Reading point.
      Mr. Taylor: I was coming to the end of my speech, Mr. Deputy Speaker. I was pointing out—this is directly relevant to new Clause 2—that we were very concerned to ensure that money was wisely spent in this regard and that there should be accountability. I said that we were concerned about the extent of State participation in industry, about the amount which was being spent, and about the way in which a considerable burden was being put upon the private sector of industry.
      I mentioned the views of the CBI. Unless we can have an indication that that Government accept the new clause in principle there will be very real concern in the private sector of Scottish industry about its future. We want to encourage private industry to invest and ensure that the burdens on it will not be intolerable. I hope that the Minister who replies to this debate will at least be able to say that he accepts the principle behind the
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      new clauses and the amendment. If they are incorporated into the Bill, many of the fears of the private sector will be removed.
      Dr. M. S. Miller: To say I am astonished by these new clauses and the amendment would be putting it mildly. The hon. Member for Glasgow, Cathcart (Mr. Taylor) should be seized of the necessity to get things moving. The part of the Bill which sets out the proposed functions of the Agency should commend itself to hon. Members opposite. I am astonished that the hon. Member should think of putting a millstone around the Agency's neck even before it gets going. The procrastination involved in his proposals is too terrifying to be contemplated with equanimity.
      It is obvious that the Opposition are not keen on this Agency. They are terrified in case there might be some success in what we are setting out to do. The Minister who is to reply may feel he should allow a degree of latitude to the hon. Member for Glasgow, Cathcart. I counsel him with every fibre at my disposal to throw out the proposals and not pay them the slighest attention.
      Mr. Grimond: I have some sympathy with the thinking behind new Clause 2, but the Agency will anyway probably do what is suggested in the clause. It will presumably have discussions with managements about financial prospects and undertake to have regard to the desirability of obtaining a reasonable return on capital. I imagine that from the annual report we shall be able to see how the Agency is doing. All these things are necessary, but I think the Government will believe it is not necessary to have such a specific statement written into the Bill, although I shall be interested to hear what the Minister has to say.
      I have the gravest doubts about new Clause 5. The most recent experience we have of an agency similar to that now being established is the Highlands and Islands Development Board. It is a common complaint already that the board is getting too bureaucratic and is suffering from Parkinson's well-known disease, for ever increasing its staff and resources in Inverness. This is causing serious delays; I have constituents who complain that applications for grants and loans made last winter were not passed

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      until this autumn. In a time of inflation it is even more serious, because costings are thrown out not annually but every few months. As I understand the proposed new clause, it will prevent the Agency from making decisions till it receives the go ahead from the advisory committee. This would entail considerably more delay.
      Who is to serve on this committee? Will its members be part-timers employed in industry or, worse still, not employed in industry, or would they be full-time members? Where does Scotland have all these people? Can we afford to have the SDA and also the additional staff to advise it? Presumably the advisers would have to be people of equal or even greater expertise. The advisory committee would need accountants, lawyers, and a large staff and would, in turn, contract Parkinson's disease, so that before we knew it we would have a very large development agency and another very large agency looking over its shoulder. I cannot believe that this is the intention of the Opposition, but it is what the new clause seems to entail.
      Unless I have missed something, this seems to be the wrong direction. I have great doubts about increasing the number of bureaucrats in Scotland. We have enough already, and there is no telling how many more might be recruited to look into every proposal to which the SDA might be attracted. I hope I shall either hear something more about the purpose of new Clause 5 or that it will be quietly buried.
      5.45 p.m.
      Mr. Gray: I support my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) in the way he moved the new clause. I hope the Minister realises he cannot have the agreement of both the hon. Member for East Kilbride (Dr. Miller) and the right hon. Member for Orkney and Shetland (Mr. Grimond). They were asking him to do quite different things.
      There is much to be said for putting in safeguards of this kind. I have long been a supporter of the Highlands and Islands Development Board, which has not always been easy, because the board has been the subject of some criticism in the past. I think it has done, and is doing, a good job. It has faults, as do
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      most boards of that kind, but they can be put right, and I hope that in the very near future we shall see some improvements. The board attracts most headlines when it has a failure. If it has supported a company which fails, the Press always latches on to it. This is only natural, because public money is involved. If, by including new Clause 2, we can protect the Agency, there is nothing to be lost. This is not meant to be a restriction on the Agency, and it may be that the Agency will do much of what is proposed in the new clause anyway, but I do not see any harm in writing this into the Bill.
      We shall think of the SDA in a different light from the National Enterprise Board or the British National Oil Corporation, which some of us have had a lot to do with during the Committee stage of another Bill. The SDA will be a more personal agency than either of those. The people involved in administering it, from the chairman down, will be very much in the public eye in Scotland. The advice they take is very important, and the fact that in respect of each concern in which they invest they should have to report back periodically with a fairly lucid account of its activities would be an advantage.
      The extent of the Agency's participation will probably be considerably limited, initially, because of our present economic circumstances, but there can be little doubt that as time goes on more and more money will be available for the Agency, and since that is public money its expenditure should be closely monitored.
      I do not wish to go on at any length about Amendment No. 15 or new Clause 5, but it is surely important that where public money is being spent, particularly when the public are so aware of the economic crisis, every safeguard should be employed.
      Mr. James Dempsey: I have been searching my mind during the debate to discover how it is humanly possible to spend Government money willy-nilly. How is it possible to get away with it? I have never known any public undertaking to be allowed to spend money without some control being exerted by the authorities concerned.

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      The SDA will have to produce annual accounts which will show the rate of investment, the return on capital, and the other financial results of its activities. Surely the hon. Member for Glasgow, Cathcart (Mr. Taylor) realises that expenditure of that type is vetted by more than one body to ensure that public money is being spent prudently. From the way he speaks one would suppose that we were about to shovel money down a drain, but nothing could be further from the truth. He quoted the example of a development costing £50 million being carried out by a private enterprise firm for the Agency. He gave the impression that it would just be a matter of handing over £50 million and then letting the firm get on with it. That is not true. Money is not loaned to or invested in any undertaking unless there are regular reports on the way in which the investment is working out.
      The hon. Member must appreciate that such undertakings are run in a normal businesslike fashion, and that they produce annual balance sheets and statements of accounts. They show the details of Government contributions and expenditure covering the various items on which they produce a profit or a loss. The accounts are supplied not only to the Government but to any other interest which invests in the undertaking. That is normal business procedure; it does not need to be written into every Act of Parliament.
      The Bill provides for the Agency to invest, and it can pursue that investment to the fullest, even to the extent of its auditors investigating the accounts, analysing the balance sheets and satisfying the Government that the money which has been invested has been spent wisely. It amazes me to think that any hon. Member should consider that a public undertaking was willing to invest large sums without guarantees as to control and development.
      I was naturally distressed to hear the reference by the hon. Member for Cathcart to some other publicly-owned activities. I could take him to industries, the appearance and condition of which are a disgrace to the United Kingdom. These firms have been in operation for 50 or 60 years, and the private owners, instead of reinvesting some of the profits to ensure
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      a healthy rate of growth, have been spending them on high living. I hope that money will be spent on taking certain industries into public ownership with a view to improving them in every way possible, to make them more competitive and to safeguard the jobs they provide. I know of industries in which the buildings are ramshackle, there is no proper pavement and, after 60 years of profiteering, the roads still have earth surfaces. I know of industries in which the workpeople do not even have a decent floor to stand on; they have to stand on earth surfaces which serve also as a urinal because of the poor toilet facilities provided. I should like to know where all the profits go—
      Mr. Deputy Speaker: Order. I am trying to be as fair as I can with the hon. Member, but I think he is developing now what I would regard as a Second Reading argument rather than relating his remarks to the new clause.
      Mr. Dempsey: I apologise, Mr. Deputy Speaker. The hon. Member tempted me by quoting examples of nationalised industries.
      Surely the SDA should be able to use money to take over works that were still potentially competitive, so that it could modernise the buildings and put in decent roads, using that element of its resources allocated for environmental improvements. The SDA has every opportunity, given the support, to make this injection into areas like the one I represent and to ensure that the money would not only be spent wisely but would be properly accounted for. If the hon. Member for Cathcart thinks there is any possibility of dodging the column, he has forgotten about the Government Auditor. That gentleman will be in the background, supervising, and he will ensure, if no one else does, that the money that Parliament is voting under this legislation is prudently spent.
      Lord James Douglas-Hamilton: I enjoyed the speech by the hon. Member for Coatbridge and Airdrie (Mr. Dempsey) and the optimism with which he delivered it. He must appreciate, however, that there is an advantage to be gained from having safeguards in certain circumstances. The setting up of an advisory committee under

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      new Clause 5 would, for example, assist in considering the viability of schemes.
      I think that the right hon. Member for Orkney and Shetland (Mr. Grimond) asked who would constitute the advisory committee. Surely the SDA would benefit greatly from the expertise of the Scottish Council (Development and Industry). It has put the case for development in Scotland with great persistence and ability. Even if the Minister felt that the clause is inappropriate, he could still draw from the expertise of the Council, and if he can think of a better way of using its services we should be very glad to listen to what he has to say.
      6.0 p.m.
      Mr. Millan: In its industrial functions the Scottish Development Agency will be expected to pay its way. It will not be subsidising industry but will be involved on a commercial basis. I have made that point many times at different stages of the Bill's progress through the House. Involvement on a commercial basis will be achieved by the determination of the financial duties of the Agency, and will be done by the Secretary of State under Clause 12. In the guidance to be provided for the Agency and to be available as a public document to hon. Members and others it will be made clear that the Agency is to act in a commercial way.
      I deal first with new Clause 2. Government Amendment No. 7 provides that any enterprise established under Clause 2(2)(b) will be established by way of a company. Therefore, all the normal provisions of the Companies Act relating to the publication of accounts and so on will be attracted to enterprises established and carried on by the Agency. Under the provisions of the subsection information will automatically become available. There is no need to make special provisions for information to be made available when it will be made available in any case, particularly when we are dealing with companies which are under a legal obligation under the Companies Act to publish their accounts and give certain information.
      Mr. Teddy Taylor: The Minister said that the normal Companies Act procedure would apply. In other words, companies will have to put information in their accounts, and members of the public can pay their shilling and see them. But will
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      such information about every company in which the SDA has a holding be published in the annual report? If not, how is (hat a safeguard?
      Mr. Millan: The hon. Gentleman has just admitted that the information will be publicly available, and if it is publicly available I imagine that well-informed people such as the hon. Gentleman will soon be able to obtain the information from the public registers.
      There will have to be provision for the accounts of the companies to be consolidated with the accounts of the Agency, That will be done in accordance with the best commercial practice under a further amendment, so the information will be publicly available.
      I am not in favour of writing into the Bill that there shall be the kind of statement provided for in the new clause. The right hon. Member for Orkney and Shetland (Mr. Grimond) sensibly said that the Agency, in its discussions with management of undertakings for which it will be responsible, would no doubt be talking about financial objectives and so on, but I have seen no reason why the Agency should be in the position, which no private company is in, of setting out for all to see a written statement of financial objectives and so on, and then including in its annual report statements about whether or not the objectives have been met, met only partly, or perhaps not met at all.
      There will be an overall obligation on the Agency to pay its way in its industrial function. The information will all be publicly available, and if the Agency is not meeting the financial guidelines laid down by the Secretary of State that will be obvious in its report. I am not in favour of placing on the Agency obligations well beyond those that would be placed on a private enterprise company or holding company. I am not in favour of any of the enterprises which would be subsidiaries of the Agency being excused from any of the normal obligations of the Companies Act and other legislation, but, equally, I am not in favour of their having additional burdens placed upon them.
      Mr. Gray: The Minister uses the example of the private company. He would not be agreeable to writing into

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      the Bill anything which would impose on a SDA venture as opposed to a private company any additional burden. Does he not accept that a private company is using its own finances, whereas a considerable amount of public money is involved in the SDA? Is that not justification for providing an extra safeguard?
      Mr. Millan: I do not know what the hon. Gentleman means by "an extra safeguard". I have already said that the information will be publicly available in any case. The Agency will be operating in accordance with financial guidelines which will be available to the public and to this House under Clause 12. I am not in favour of laying down for the companies which will operate the industrial functions of the SDA obligations beyond those which would be laid on private enterprise companies, and therefore I cannot accept new Clause 2.
      The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) asked me to explain who would establish the advisory committee under new Clause 5. It is not my new clause. The hon. Gentleman's name is attached to it, and I was going to ask him and his hon. Friends the question that he put to me. There is nothing in the clause to say who establishes the advisory committee, as the right hon. Member for Orkney and Shetland pointed out. Is it to be established by the Agency, the Secretary of State or somebody else? I am not responsible for the drafting of the clause. It is obviously defective from that point of view alone.
      The clause is also defective because we should not write into the Bill obligations on the Agency to establish all sorts of committees, whether of the kind described in the clause or any other kind. It is certainly necessary to write into the Bill the power for the Agency to establish such committees as it may think fit, and that power is provided in paragraph 15 of Schedule 1, but we deliberately did not make provision for committees by writing into the Bill an organisational structure for the Agency, because we want it to develop its own organisational structure. If it feels that advisory or other committees are sensible, it will have power to appoint them, but we shall not write that into the Bill.
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      Speaking personally, I hope that the Agency does not operate through a whole series of committees, that it does not operate in a bureaucratic way. Particularly in matters of commercial judgment and so on, I want it to act in an enterprising way, certainly taking advice from outside if it feels it desirable in a particular situation, but not adopting a bureaucratic structure which would mean that matters would have to go to a committee for a decision before it could operate. I strongly resist any suggestion that we should write that sort of thing into the Bill, and therefore I cannot advise the House to accept new Clause 5.
      I cannot recommend the House to accept Amendment No. 15. It would write into the Bill a second financial limit apart from the general one of £200 million to £300 million, and would direct that limit to a specific power in the hands of the Agency. It is not for me to anticipate what the Agency might spend on any of its functions. We shall have to discuss with the chairman-designate of the organising committee and the Agency the question of budgets, as we do in the case of every other public agency. Information about budgets will be available in the ordinary way through the White Papers on public expenditure and, as the Agency develops, it will produce accounts which will show to hon. Members how much is being spent on one function as distinct from another. All that information will be publicly available, and no doubt I shall be advised if the whole range of activities of the Agency are not debated in the House from time to time. Obviously that information will be available, but I am not willing to write into the Bill any additional restrictions on the Agency's powers.
      If the Agency is to succeed, as I believe it will, it will have to be on the basis that the Government of the day have appointed the Agency on a given day with wide-ranging powers, powers that are accepted by a wide range of opinion in Scotland. It should be allowed to exercise enterprise and should not be continually restricted or inhibited by detailed control or intervention from Government. There should be nothing in the legislation, or indeed in the Government's attitude, to suggest that the Agency is not to be trusted, and can do what it wants only if it is subject to detailed control

      297
      by the House or the Government of the day. It would set the Agency off on the wrong foot if we were to single it out for special attention by imposing on it a separate financial limitation.
      I repeat that the spending figures will be publicly available as will our estimates of sums under various headings. However, we shall not act in a way which
      will inhibit the Agency in furthering the industrial and environmental development of Scotland. I cannot recommend that any of these propositions be accepted.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 194, Noes 252.

      Division No. 345.]

      AYES

      [6.12 p.m.

      Adley, Robert

      Gower, Sir Raymond (Barry)

      Morris, Michael (Northampton S)

      Aitken, Jonathan

      Grant Anthony (Harrow C)

      Morrison, Hon Peter (Chester)

      Alison, Michael

      Gray, Hamish

      Mudd, David

      Arnold, Tom

      Grieve, Percy

      Neave, Airey

      Atkins, Rt Hon H. (Spelthorne)

      Hall-Davis, A. G. F.

      Nelson, Anthony

      Awdry, Daniel

      Hamilton, Michael (Salisbury)

      Neubert, Michael

      Baker, Kenneth

      Hampson, Dr Keith

      Newton, Tony

      Banks Robert

      Hannam, John

      Nott, John

      Bell, Ronald

      Harvie Anderson, Rt Hon Miss

      Oppenheim, Mrs Sally

      Berry, Hon Anthony

      Hastings, Stephen

      Page, Rt Hon R. Graham (Crosby)

      Biffen, John

      Hawkins, Paul

      Parkinson, Cecil

      Biggs-Davison, John

      Hayhoe, Barney

      Pattie, Geoffrey

      Body, Richard

      Heath, Rt Hon Edward

      Peyton, Rt Hon John

      Boscawen, Hon Robert

      Heseltine, Michael

      Pink, R. Bonner

      Bottomley, Peter

      Hicks, Robert

      Price, David (Eastleigh)

      Bowden, A. (Brighton, Kemptown)

      Higgins, Terence L.

      Raison, Timothy

      Brotherton, Michael

      Hordern, Peter

      Rawlinson, Rt Hon Sir Peter

      Buchanan-Smith, Alick

      Howe, Rt Hon Sir Geoffrey

      Rees, Peter (Dover & Deal)

      Budgen, Nick

      Howell, David (Guildford)

      Renton, Rt Hon Sir D. (Hunts)

      Bulmer, Esmond

      Hunt, John

      Rifkind Malcolm

      Carlisle, Mark

      Hurd, Douglas

      Rossi, Hugh (Hornsey)

      Carr, Rt Hon Robert

      Hutchison, Michael Clark

      Sainsbury, Tim

      Chalker, Mrs Lynda

      Irving, Charles (Cheltenham)

      St. John-Stevas, Norman

      Clark, Alan (Plymouth, Sutton)

      James, David

      Scott, Nicholas

      Clark, William (Croydon S)

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

      Shaw, Giles (Pudsey)

      Clarke, Kenneth (Rushcliffe)

      Jessel, Toby

      Shelton, William (Streatham)

      Cockcroft, John

      Johnson Smith, G. (E Grinstead)

      Shepherd, Colin

      Cooke, Robert (Bristol W)

      Jones, Arthur (Daventry)

      Shersby, Michael

      Cope, John

      Jopling, Michael

      Silvester, Fred

      Cordle, John H.

      Joseph, Rt Hon Sir Keith

      Sims, Roger

      Costain, A. P.

      Kershaw, Anthony

      Sinclair, Sir George

      Crouch, David

      Kimball, Marcus

      Skeet, T. H. H.

      Crowder, F. P.

      King, Tom (Bridgwater)

      Smith, Dudley (Warwick)

      Davies, Rt Hon J. (Knutsford)

      Kitson, Sir Timothy

      Speed, Keith

      Dean, Paul (N Somerset)

      Knight, Mrs. Jill

      Spicer, Michael (S Worcester)

      Dodsworth, Geoffrey

      Knox, David

      Sproat, Iain

      Douglas-Hamilton, Lord James

      Lamont, Norman

      Stainton, Keith

      Drayson, Burnaby

      Latham, Michael (Melton)

      Stanbrook, Ivor

      du Cann, Rt Hon Edward

      Lawrence, Ivan

      Steen, Anthony (Wavertree)

      Eden, Rt Hon Sir John

      Lawson, Nigel

      Stewart, Ian (Hitchin)

      Edwards, Nicholas (Pembroke)

      Lester Jim (Beeston)

      Stokes, John

      Elliott, Sir William

      Loveridge, John

      Stradling Thomas, J.

      Emery, Peter

      McCrindle, Robert

      Tapsell, Peter

      Fairbairn, Nicholas

      Macfarlane, Neil

      Taylor, R. (Croydon NW)

      Fairgrieve, Russell

      MacGregor, John

      Taylor, Teddy (Cathcart)

      Farr, John

      Macmillan, Rt Hon M. (Farnham)

      Temple-Morris, Peter

      Fell, Anthony

      McNair-Wilson, M. (Newbury)

      Thomas, Rt Hon P. (Hendon S)

      Finsberg Geoffrey

      McNair-Wilson, P. (New Forest)

      Townsend, Cyril D.

      Fisher, Sir Nigel

      Madel, David

      Trotter, Neville

      Fletcher-Cooke, Charles

      Marshall, Michael (Arundel)

      van Straubenzee, W. R.

      Fookes, Miss Janet

      Marten, Neil

      Vaughan, Dr Gerard

      Fowler, Norman (Sutton C'f'd)

      Mates, Michael

      Viggers, Peter

      Fox, Marcus

      Mather, Carol

      Wakeham, John

      Fraser, Rt Hon H. (Statford & St)

      Maude, Angus

      Walder, David (Clitheroe)

      Fry, Peter

      Mawby, Ray

      Wall, Patrick

      Galbraith, Hon. T. G. D.

      Maxwell-Hyslop, Robin

      Walters, Dennis

      Gardiner, George (Reigate)

      Mayhew, Patrick

      Wells, John

      Gardner, Edward (S Fylde)

      Meyer, Sir Anthony

      Wiggin, Jerry

      Gilmour, Rt Hon Ian (Chesham)

      Mills, Peter

      Winterton, Nicholas

      Gilmour, Sir John (East Fite)

      Miscampbell, Norman

      Wood, Rt Hon Richard

      Glyn, Dr Alan

      Mitchell, David (Basingstoke)

      Young, Sir G. (Ealing, Acton)

      Godber, Rt Hon Joseph

      Moate, Roger

      Younger, Hon George

      Goodhew, Victor

      Montgomery, Fergus

      Goodlad, Alastair

      Moore, John (Croydon C)

      TELLERS FOR THE AYES:

      Gorst, John

      More, Jasper (Ludlow)

      Mr. Adam Butler and

      Gow, Ian (Eastbourne)

      Morgan-Giles, Rear-Admiral

      Mr. Michael Roberts.

      NOES

      Abse, Leo

      Grimond, Rt Hon J.

      Orbach, Maurice

      Allaun, Frank

      Grocott, Bruce

      Ovenden, John

      Armstrong, Ernest

      Hamilton, James (Bothwell)

      Padley, Walter

      Ashley, Jack

      Harper, Joseph

      Park, George

      Atkins, Ronald (Preston N)

      Hart, Rt Hon Judith

      Parker, John

      Atkinson, Norman

      Hatton, Frank

      Parry, Robert

      Bain, Mrs Margaret

      Hayman, Mrs Helene

      Peart, Rt Hon Fred

      Barnett, Rt Hon Joel (Heywood)

      Healey, Rt Hon Denis

      Penhaligon, David

      Bean, R. E.

      Heffer, Eric S.

      Perry, Ernest

      Beith, A. J.

      Henderson, Douglas

      Phipps, Dr Colin

      Bennett, Andrew (Stockport N)

      Horam, John

      Price, C. (Lewisham W)

      Bidwell, Sydney

      Howell, Denis (B'ham, Sm H)

      Price, William (Rugby)

      Blenkinsop, Arthur

      Howells, Geraint (Cardigan)

      Radice, Giles

      Boardman, H.

      Hoyle, Doug (Nelson)

      Rees, Rt Hon Merlyn (Leeds S)

      Booth, Albert

      Hughes, Rt Hon C. (Anglesey)

      Reid, George

      Boyden, James (Bish Auck)

      Hughes, Robert (Aberdeen N)

      Richardson, Miss Jo

      Bray, Dr Jeremy

      Hughes, Roy (Newport)

      Roberts, Albert (Normanton)

      Brown, Hugh D. (Provan)

      Hunter, Adam

      Roberts, Gwilym (Cannock)

      Brown, Robert C. (Newcastle W)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Robertson, John (Paisley)

      Buchanan, Richard

      Irving, Rt Hon S. (Dartford)

      Roderick, Caerwyn

      Butler, Mrs Joyce (Wood Green)

      Jackson, Colin (Brighouse)

      Rodgers, George (Chorley)

      Campbell, Ian

      Jackson, Miss Margaret (Lincoln)

      Rodgers, William (Stockton)

      Canavan, Dennis

      Janner, Greville

      Rooker, J. W.

      Cant, R. B.

      Jay, Rt Hon Douglas

      Rose, Paul B.

      Carter, Ray

      Jeger, Mrs Lena

      Ross, Rt Hon W. (Kilmarnock)

      Carter-Jones, Lewis

      Jenkins, Hugh (Putney)

      Sandelson, Neville

      Cartwright, John

      Jenkins, Rt Hon Roy (Stechford)

      Sedgemore, Brian

      Clemitson, Ivor

      John, Brynmor

      Shaw, Arnold (Ilford South)

      Cocks, Michael (Bristol S)

      Johnson, James (Hull West)

      Sheldon, Robert (Ashton-u-Lyne)

      Cohen, Stanley

      Johnson, Walter (Derby S)

      Short, Rt Hon E. (Newcastle C)

      Coleman, Donald

      Jones, Alec (Rhondda)

      Short, Mrs Renée (Wolv NE)

      Colquhoun, Mrs Maureen

      Jones, Barry (East Flint)

      Silkin, Rt Hon John (Deptford)

      Conlan, Bernard

      Jones, Dan (Burnley)

      Silkin, Rt Hon S. C. (Dulwich)

      Cook, Robin F. (Edin C)

      Kaufman, Gerald

      Sillars, James

      Corbett, Robin

      Kelley, Richard

      Silverman, Julius

      Craigen, J. M. (Maryhill)

      Kilroy-Silk, Robert

      Skinner, Dennis

      Crawford, Douglas

      Kinnock, Neil

      Small, William

      Crawshaw, Richard

      Lambie, David

      Smith, Cyril (Rochdale)

      Cryer, Bob

      Lamborn, Harry

      Snape, Peter

      Cunningham, G. (Islington S)

      Lamond, James

      Spearing, Nigel

      Davidson, Arthur

      Latham, Arthur (Paddington)

      Spriggs, Leslie

      Davies, Bryan (Enfield N)

      Lee, John

      Stallard, A. W.

      Davies, Denzil (Llanelli)

      Lestor, Miss Joan (Eton & Slough)

      Stoddart, David

      Davis. Clinton (Hackney C)

      Lewis, Ron (Carlisle)

      Stonehouse, Rt Hon John

      Deakins, Eric

      Lipton, Marcus

      Stott, Roger

      Dean, Joseph (Leeds West)

      Litterick, Tom

      Strauss, Rt Hon G. R.

      Delargy, Hugh

      Loyden, Eddie

      Summerskill, Hon Dr Shirley

      Dempsey, James

      Luard, Evan

      Swain, Thomas

      Doig, Peter

      Lyons, Edward (Bradford W)

      Taylor, Mrs Ann (Bolton W)

      Dormand, J. D.

      McCartny, Hugh

      Thomas, Dafydd (Merioneth)

      Douglas-Mann, Bruce

      MacCormick, Iain

      Thomas, Ron (Bristol NW)

      Dunn, James A.

      McElhone, Frank

      Thompson, George

      Dunnett, Jack

      MacFarquhar, Roderick

      Thorne, Stan (Preston South)

      Dunwoody, Mrs Gwyneth

      McGuire, Michael (Ince)

      Thorpe, Rt Hon Jeremy (N Devon)

      Edelman, Maurice

      Maclennan, Robert

      Tierney, Sydney

      Edge, Geoff

      McMillan, Tom (Glasgow C)

      Tinn, James

      Edwards, Robert (Wolv SE)

      McNamara, Kevin

      Tomlinson, John

      English, Michael

      Madden, Max

      Tomney, Frank

      Evans, Fred (Caerphilly)

      Magee, Bryan

      Torney, Tom

      Evans, Gwynfor (Carmarthen)

      Mallalieu, J. P. W.

      Tuck, Raphael

      Evans, Ioan (Aberdare)

      Marks, Kenneth

      Varley, Rt Hon Eric G.

      Ewing, Harry (Stirling)

      Marquand, David

      Wainwright, Edwin (Dearne V)

      Faulds, Andrew

      Marshall, Dr. Edmund (Goole)

      Wainwright, Richard (Colne V)

      Fernyhough, Rt Hon E

      Marshall, Jim (Leicester S)

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

      Fitch, Alan (Wigan)

      Maynard, Miss Joan

      Walker, Harold (Doncaster)

      Flannery. Martin

      Meacher, Michael

      Walker, Terry (Kingswood)

      Fletcher, Ted (Darlington)

      Mellish, Rt Hon Robert

      Ward, Michael

      Foot, Rt Hon Michael

      Mikardo, Ian

      Watkins, David

      Ford, Ben

      Millan, Bruce

      Watkinson, John

      Forrester, John

      Miller, Dr M. S. (E. Kilbride)

      Watt, Hamish

      Fowler, Gerald (The Wrekin)

      Miller, Mrs Millie (Ilford N)

      Weetch, Ken

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

      Molloy, William

      Weitzman, David

      Freeson, Reginald

      Moonman, Eric

      Wellbeloved, James

      Freud, Clement

      Morris, Alfred (Wythenshawe)

      Welsh, Andrew

      Garrett, W. E. (Wallsend)

      Morris, Charles R. (Openshaw)

      White, James (Pollok)

      George, Bruce

      Morris, Rt Hon J. (Aberavon)

      Whitehead, Phillip

      Gilbert, Dr John

      Mulley, Rt Hon Frederick

      Whitlock, William

      Ginsburg, David

      Murray, Rt Hon Ronald King

      Wigley, Dafydd

      Gould, Bryan

      Newens, Stanley

      Willey, Rt Hon Frederick

      Gourlay, Harry

      Noble, Mike

      Williams, Alan (Swansea W)

      Graham, Ted

      Ogden, Eric

      Williams, Alan Lee (Hornch'ch)

      Grant, George (Morpeth)

      O'Malley, Rt Hon Brian

      Wilson, Alexander (Hamilton)

      Wilson, Gordon (Dundee E)

      Woof, Robert

      TELLERS FOR THE NOES:

      Wilson, Rt Hon H. (Huyton)

      Wrigglesworth, Ian

      Mr. Walter Harrison and

      Wise, Mrs. Audrey

      Young, David (Bolton E)

      Mr. Laurie Pavitt.

      Question accordingly negatived.

    New Clause 3

      PREVENTION OF UNFAIR COMPETITION
      'The Agency shall take all reasonable steps to ensure that it does not engage in any of its activities, in uneconomic or subsidised competition with private industry, and in the event of any complaint being made to the Agency of such unfair competition, the Agency shall refer the complaint to the Secretary of State who shall, unless he determines the complaint to be trivial or inaccurate, appoint suitably qualified persons to investigate and report on the complaint to him; and a record of such complaints and the action taken on them shall be available for inspection by the public at the Agency's office'.—[Mr. Buchanan-Smith.]
      Brought up, and read the First time.
      Mr. Alick Buchanan-Smith: I beg to move, That the clause be read a Second time.
      This clause is of fundamental importance. I ask the Minister of State not to deal with it in the same way as he has tried to deal with other arguments and amendments tabled by Conservative Members concerning politically motivated actions of the Agency. I am not thinking simply in terms of objecting to the Agency taking part in industrial matters or having shares in industrial concerns in Scotland, although the Minister realises that Conservative Members are not happy about that. I ask him to consider the clause in the much broader context of the intervention of the Government generally in industrial and commercial matters. I have in mind not simply investment and intervention by the Agency or the Government in commercial ventures which are already profitable but the intervention of the Agency or the Government in spheres of commerce and industry which Conservative Members would agree are necessary.
      There are powers under the previous Industry Act under which the Government or the Agency will intervene in the commercial affairs of a company where for one reason or another that is desirable. I have in mind an industry or firm that needs help over a difficult period—perhaps a short-term intervention, which we would support—or an industry or firm which is of particular importance
      302
      to the economy in terms either of employment or of the technological developments taking place in it. In those instances intervention by the State or the Agency can be thoroughly justified and supported.
      There is a broad measure of support across all political parties for a certain amount of State intervention. This is reflected in the fact that we have a mixed economy. Occasionally we overlook the effect that that intervention has on other firms and undertakings within the industry. Although a certain amount of good may be achieved by intervention, we must not overlook some of the effects it may have on others within the industry.
      I give three examples of how this may arise. It has arisen in the policies of successive Governments towards the shipbuilding industry. The previous Conservative Government played their part in supporting the shipbuilding industry of Upper Clyde. I do not wish to make party political points. In that situation, however, because of certain overriding factors that cause Government intervention and substantial investment in an industry, we overlook the effect that it has on shipbuilding elsewhere—for example, on Lower Clyde.
      Competition is subsidised by taxpayers' money against a firm which is in receipt of Government funds from other sources. Although we hope that this has not led to a contraction of the shipbuilding industry elsewhere in Scotland, it is a factor that must be considered by the shipbuilding industry in, for example, Lower Clyde. Some would argue that it has had an inhibiting effect on the development of the shipbuilding industry elsewhere in Scotland.
      6.30 p.m.
      Another example has occurred more recently in the motor industry. It is perhaps slightly far-fetched, but I use it because it illustrates the repercussions of Government intervention. British Leyland, in which the Government now have a very large stake, has undergone considerable rationalisation. There are now plans to rationalise the company even further in the hope that it will become more profitable, and the Government are pushing it to do that. This will

      303
      have repercussions for Albion Motors, which when it was swallowed by British Leyland was a profitable concern. It was a small commercial vehicle company operating successfully in Glasgow. We are led to believe that further rationalisation may take place at its premises as a consequence of the much wider rationalisation throughout the British Leyland company.
      I am the first to admit that that is not a direct consequence of the Government's stake in British Leyland; it is a consequence of a multiplicity of factors. I use that example only to show that when the Government become involved in an industry it has repercussions throughout the industry. Albion Motors was originally outwith the section of the industry in which the Government were interested but it is now at the receiving end of what the Government are doing.
      The third example, the newspaper industry, has already been mentioned. There have been certain repercussions throughout the newspaper industry in Scotland as a direct result of Government intervention. There is no doubt that the fact that the Scottish Daily News got off the ground has had and is having an effect on other sections of the newspaper industry in Scotland. When the Beaverbrook Press contracted in Scotland, the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid), with his knowledge of the newspaper industry, questioned whether it was possible, given the population base in Scotland and the potential circulation, for another independent newspaper to operate in Scotland. The Scottish Daily News is an example of State intervention causing the continuation of a firm or even the introduction of another firm within an industry which is bound to have an impact on the other firms in it.
      I hope that by giving those three examples I have demonstrated that we are not dealing with a wholly hypothetical situation.
      Mr. MacCormick: I am a seeker after truth and, therefore, I should like to pose another analogy. Take the example which we debated just before the recess, Western Ferries and Caledonian-MacBrayne. That was a case in which a Government-subsidised operation was in competition with an operation which was not subsidised.
      304
      No hon. Gentleman said that the operation should be confined to the private enterprise company. That is why I am worried by the hon. Gentleman's argument.
      Mr. Buchanan-Smith: What the hon. Gentleman has said highlights my point. Earlier my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) said that we should know the economics and commercial basis on which State companies operated and the extent to which competition was taking place so that we would be better able to form an opinion. That is only one leg of my argument. I do not think that the hon. Member for Argyll (Mr. MacCormick) supported what my hon. Friend proposed. The new clause takes the argument one stage further and asks the Government to put an obligation on the Agency to ensure that when it operates in competition, as inevitably it will do, with existing firms, there will be proper recognition of the effect that that may have on those firms.
      Uneconomic or subsidised competition with private industry could have two basic effects. The first relates to the profitability of other firms within an industry. Let us suppose that there is over-capacity in an industry. Plainly it is undesirable that there should be over-capacity of, for instance, newspaper production in Scotland. If the Agency were to maintain a firm in that industry instead of allowing orderly contraction or rationalisation to take place, it would have a serious effect on the profitability of other firms within the industry, which if that firm was not propped up and helped but went out of existence would enjoy a more profitable and perhaps a more viable position.
      If the Agency is used to prop up firms which should be allowed to disappear, diversify or rationalise and to preserve capacity in an industry when it would not be desirable economically in the long term, it will do a disservice not only to those firms, which may eventually go to the wall, but to other firms in the industry by making it more difficult for them to operate economically and profitably.
      I come to the fundamental connection between profitability and jobs. If a firm is not profitable, it will not be able to continue in operation. If it is not able to continue in operation, it will not be able to offer security of employment. That has

      305
      been the dilemma of successive Governments when faced with the question of what to do about a firm in difficulties. The long-term economic situation of the industry might not justify the process which I have outlined. As a result of the element of competition or over-capacity, we may put at risk the jobs of those working in other firms in the same industry. That is why I put forward the new clause.
      A problem must be faced by the Scottish Development Agency. It has faced Governments of all parties in the past. It concerns the position of firms in the industry when State intervention occurs. Therefore, we specify in the new clause that where the Agency becomes involved in uneconomic or subsidised competition with private industry, and where other firms in that industrial sector are aggrieved and feel that it affects their viability, they can make a complaint to the Secretary of State, who can ask for that complaint to be investigated in the way we suggest. We also suggest that a record of this should be made at the office of the Agency.
      The Minister said that the Agency will engage in its activities in a commercial manner and will have an obligation to pay its way. I am glad to hear those assurances. However, that does not solve the problem, which is not confined to the Agency, where the Government become involved in an industry such as shipbuilding or the motor industry, not because they regard it as a commercial and profitable occupation but because there is a reason for helping an industry or firm which is in difficulties during a transitional phase. For a short period there might be a degree of competition which some might regard as unfair. I am concerned that the Agency may engage in activities which might affect the longer-term viability of other firms in the same industry and put further jobs at risk.
      I do not question the need for the Agency to become involved in that type of operation. In some circumstances there may be a need for the Agency to become involved in that way. However, where the Agency becomes involved, proper cognisance should be taken of the effect that the Agency's activities have on other firms in the industry to make sure that they are not discriminated against unfairly. If there is unfair discrimina-
      306
      tion, profitability will suffer and the jobs of those working in other firms will be put at risk. It would be a dangerous policy if for the sake of propping up an individual firm we put at risk many jobs throughout the industry.
      In that spirit I put forward the new clause. It is constructive in that it will help industry throughout Scotland and the work of the Agency. It may help the Agency better to understand its functions and to receive acceptance by Scottish industry when it becomes engaged in the activities envisaged in the Bill.
      6.45 p.m.
      Mr. Russell Fairgrieve: Like my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith), I am worried about uneconomic or subsidised competition. There are dangers whenever Governments become involved in industry. We have learned that Governments, of whatever political party, are not the best institutions to run industry.
      I should like to give some examples illustrating the dangers we may encounter if the clause is not accepted. We have the example of the nationalised industries, some of which have been running for the past 25 years. For example, instead of merely producing gas, the gas industry has entered into competition by selling fitments and installing pipes in houses. In many cases, we know that its activities are uneconomic. The same happens with the electricity industry, where the electricity boards quote figures for installations which are subsidised and totally uneconomic. Another example is to be found in the direct labour departments of local authorities, which do not even ask for competitive tenders. We know how costly are such works.
      I cite the Petroleum and Submarine Pipe-Lines Bill, which provides another example of what happens when the Government become involved in an industry. That Bill aims to set up the British National Oil Corporation. The Minister, a new fireball of energy when transferred from his previous Department, presented us with what he thought was a new concept of nationalised industries, which was different from the Morrison concept. The Corporation was to be a commercial proposition and would enter into competition.

      307
      I should like to quote the first three decisions taken by the Corporation to see whether they were commercial or political. First, the BNOC is to be relieved of petroleum revenue tax, which will put it in a highly competitive position. The next decision was the location of the headquarters. I thought that the oil was situated off the North-East Coast of Scotland. Were the headquarters situated in Aberdeen? No, they were established in Glasgow. Was that a commercial or a political decision? There was a long search to find a chairman. Was an expert appointed who knew the oil industry backwards? No, a retired Socialist supporter from the textile industry was appointed. The first three decisions of the Corporation were not commercial decisions. They were political decisions. That is the danger when a Government intervene in industry. That is why I support the new clause.
      I recently returned from a short trip to Norway. Many Norwegians told me that Statoil is a Norwegian national disaster. I do not wish to see similar bodies set up in this country.
      Mr. William Small: I should explain that Sir William Gray, the Chairman of the Scottish National Development Agency, and I are friends.
      I understood the reference to Albion Motors, but I shall not go into the list of failures of State enterprises which the Opposition enumerated. However, I note the many failures of private enterprises.
      Under the new clause it is a priori the first task of the Agency and its chairman to take all reasonable steps to ensure that its activities are not unfair to private enterprise. That is a criterion on which to operate, stimulate and reinvigorate Scottish industry. The provision of £200 million will not stimulate unfair competition. This sum is provided to stimulate new enterprises.
      It would be peculiar for a complaint made to the Scottish Development Agency to be referred to the Secretary of State and for the Secretary of State to appoint "suitably qualified persons" to consider it. What are the criteria for the appointment of suitably qualified persons to determine whether there is competition
      308
      between public and private enterprise? I challenge any hon. Member to think of even one such neutral man who could be appointed. To that extent the clause is nonsense, and in introducing it the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) is acting like a demented woman.
      Mr. Millan: I agree with a good deal of what the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) said, although I cannot recommend the House to adopt the clause, for reasons which I shall explain.
      As I have said on numerous occasions, the Scottish Development Agency will be expected to act in its industrial role competitively and commercially. That is the answer to the clause. There is an assumption in the clause that the SDA will not act in that way but will act in a non-commercial manner so that it is necessary to set up a watchdog to observe its activities. From that point of view the clause is fundamentally misconceived.
      The hon. Gentleman put forward several valid arguments. When the Government get involved in a selective way in assisting one firm but not every firm, that is discriminatory and by definition it introduces an element of unfair competition. That will not be done by the SDA. That is done by selective assistance under the Industry Act 1972. Although I have stressed this argument on several occasions, it is not yet fully appreciated—certainly in Scottish industry—that if one is looking for Government intervention which is discriminatory between one firm and another, thereby giving unfair advantage to one firm as against another, one should look at the selective assistance given under the 1972 Act, which is by definition discriminatory, and not to the activities of the SDA, which in its industrial function has to act on a competitive and commercial basis.
      Scottish industry has sensibly been taking advantage of selective financial provisions since the Industry Act 1972 was passed. During those three years about 450 firms have received selective assistance. In each case, that selective assistance was a Government intervention in the free play of market forces and was by definition discriminatory in favour of

      309
      the firm that was helped and discriminatory against firms in the same line of activity which were not helped. There is no way of operating selective assistance except on that basis.
      Far from the Government having tried to disguise that position, when my right hon. Friend the Member for Bristol, South-East (Mr. Benn) became Secretary of State for Industry it was decided that information on the selective assistance that was given should be made publicly available on a quarterly basis. There may be a de minimis rule, but a list of firms which are helped is now published. That was not provided for by the 1972 Act. During the passage of the 1972 Bill the Labour Opposition wanted more openness, but it was resisted by Conservative Ministers. We wanted openness to see what the Government were doing, but selective assistance is discriminatory by definition whether it is given to Upper Clyde Shipbuilders as against the Lower Clyde Shipbuilders, to the car industry or to any other industry.
      If we wish to insert into an Act of Parliament a provision to enable industry to complain about discriminatory Government intervention, that provision should go into the Industry Act 1972 and should be directed against Section 7 and Section 8 assistance. It should not go into the Scottish Development Agency (No. 2) Bill, where it would be irrelevant.
      Even if the clause were relevant, it does not explain what action will be taken if it is proved that selective intervention is discriminatory against existing elements of private industry. The only action that can be taken to remove unfair competition is to remove the selective assistance. The provisions of the 1972 Act for selective assistance would therefore be rendered completely nugatory if on a complaint one had to take the only sensible and reasonable action available, which is to remove altogether the selective assistance. Only by doing that should we be able to put all the firms in a particular industry on absolutely level terms.
      The hon. Gentleman put his finger on the important consideration concerning selective assistance that it is discriminatory and that by helping one firm one might damage another firm. I agree with
      310
      that, but the answer is not to put into the Bill a clause which is not relevant to the Bill but is perhaps relevant to another situation. If we were to try to deal with that consideration in this legislation, the clause would have to be drafted in more precise terms.
      I sympathise with a good deal of what (he hon. Gentleman said and appreciate that this is a genuine difficulty of any Government, but for the reasons that I have outlined I cannot recommend acceptance of the clause.
      Mr. Teddy Taylor: The Minister has given a disappointing reply which contains no valid reason for not pressing ahead with the clause. His first argument for rejecting it is that there is other discrimination, for example in Section 7 assistance. If that argues anything, it argues the need for an appeal procedure for Section 7 assistance also. That is not a comparable situation. Under the Bill the SDA will be able to engage in commercial activities, setting up new firms and so on, but Section 7 assistance is primarily designed to cope with an emergency or a rescue operation.
      Mr. Millan: With respect, there have not been 450 emergencies and rescue operations in Scotland in the past three years. Only a small proportion of the Industry Act cases come under the heading of rescue or emergency. We have more than 300 applications for assistance currently active under the supervision of the Scottish Economic Planning Department, only a small fraction of which are emergency and rescue operations.
      Mr. Taylor: The Minister is referring to Industry Act assistance whereas I am referring to Section 7 assistance. If there are 300 applications for Section 7 assistance and if a large number are successful, the fears of my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith), who expressed concern about the Industry Act 1972, become even more valid. If that is so, Section 7 goes much further than it was designed to go when the Conservative Government brought forward the Industry Bill of 1972. If that justifies anything it is the need for something comparable to be introduced in respect of the Industry Act.

      311
      7.0 p.m.
      The Minister has failed to give us any indication of how the introduction of the clause would cause damage or unfairness to anyone. Will it cause delay? Of course not. Will it cause unfairness? It will not do so in any way. Will it cost a great deal of money? It obviously will not cost very much.
      The Minister must be aware that the main concern of Scottish industry in expressing concern about the Bill is the fear of unfair, subsidised and uneconomic competition. All that we are asking in the clause is that the Agency shall take all reasonable steps—these are words we have had many a time despite what the hon. Member for Glasgow, Garscadden (Mr. Small) has said—to ensure that it does not engage in uneconomic or subsidised competition with private industry. That does not mean that in every endeavour it must ensure that there is total parity. It merely seeks to ensure that private firms will not be unfairly treated and will not be forced to engage in competition on an uneconomic or subsidised basis.
      Mr. MacCormick: I agree with many of the things that the hon. Gentleman has said. For example, the Highlands Development Board has before it a case from the Isle of Mull in which an incoming business has been helped with Government funds, when an established firm doing exactly the same thing will probably be forced out of business. Is that what the hon. Gentleman is pointing out?
      Mr. Taylor: That is exactly the kind of situation of which I am thinking. I am afraid that many Labour Members have failed to recognise that by giving subsidies, and spending a great deal of money in an attempt to save jobs, the result can be exactly that which the hon. Member for Argyll (Mr. MacCormick) has suggested—namely, the destruction of existing jobs. That has happened already in some industries. If the Minister of State looks at the figures given to me last Wednesday by the Secretary of State for Industry about aid to the shipbuilding industry, he will notice that the lion's share will go to one small sector of the industry which is State-owned. Unfair competition of that
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      nature can destroy jobs as well as save them in the short term.
      We are suggesting not a total overhaul of Government policy but the establishment of an appeal mechanism to deal with any cases of unfairness. Such a mechanism would provide for the example cited by the hon. Member for Argyll. If someone were to say "My firm is being ruined. I am in danger of having to dismiss my employees because State subsidies have resulted in unfair competition", there would be somewhere for the representatives of the complainant firm to go to register their complaint. We are not saying that there should be a judge who should make determinations, but people should be appointed who would have the task of investigating allegations of unfair competition.
      The second argument advanced by the Minister was that there will be no unfair competition. I do not believe that. I accept that the Minister intends that to be the position. I am sure that in the beginning the SDA will hope that the competition will be fair and that the Agency will engage in its activities in a commercial and economic manner, but all our experience of the history of State participation in industry shows that that does not happen in practice. If State firms have access to cheap money and unlimited subsidies, or limited subsidies, there can never be fair or reasonable competition.
      Apart from that argument, I hoped that some Labour Members might support the clause for different reasons. The hon. Member for Central Ayrshire (Mr. Lambie) is always arguing that State intervention is good, that State firms are efficient and that public participation is a splendid thing. If that is so, and if State firms are being unfairly attacked by the private sector, I must observe that I have heard the hon. Gentleman attacking an organisation which fairly stands up for private enterprise—namely, Aims of Industry. I have heard the hon. Gentleman saying unkind things about that organisation because from time to time it attacks State firms and State intervention. If the attacks are unfair, what is wrong with their being investigated?

      313
      I refer to a case which is not comparable but which is relevant. I receive many complaints—doubtless this is the experience of the hon. Member for Garscadden—about people living in council houses as a result of unfair allocations. When I receive such complaints I always contact the housing manager, pointing out that a complaint has been made that someone has a house which should not have been allocated to him. I make it clear that it is suggested that there has been a "fiddle" or bribery or that someone has been given a house because he is black, white or green. I have always received a full explanation, which I pass on to the people making the complaint. I can say that in 49 out of every 50 cases of that nature, the explanations I have received have been satisfactory, and that action has been taken in the remaining cases because the authorities had not been fully aware of the position.
      Surely we can proceed in the same way as regards State industry. If State industries are unfairly attacked, there should be some mechanism whereby their activities can be fully investigated. What is unfair in that? If the Minister were to say that the mechanism which we suggest is unnecessary and unfair, and that a private firm believing it was being subjected to unfair competition which was threatening to put it out of business could write to the relevant Member of Parliament or to Sir William Gray, I would suggest that it would be more effective to provide proper machinery whereby such matters could be investigated by people who did not have an axe to grind. It is important not only that we should investigate complaints but that they should be investigated by someone who is reasonably independent.
      I would not argue that the wording of the clause is exactly right. We have said that the Secretary of State should
      "appoint suitably qualified persons to investigate and report on the complaint to him;".
      We thought that if the Government supported the principle of the clause they could suggest the best people to be appointed. I think that those appointed should not be directly involved as employees of the Government in any other way. We suggest that a record of complaints and the action taken on them should be available. The Minister asked what would be the point of investigating
      314
      if nothing was done about it afterwards. If there were an independent inquiry which could say that there had been grossly unfair competition which was doing damage to a private firm, the mere reporting of the matter and the subsequent investigation would undoubtedly force action on the part of the Government or the SDA.
      Mr. Gordon Wilson: I direct the hon. Gentleman's attention to the phrase
      "uneconomic or subsidised competition".
      The substance of the phrase might extend far beyond what he and his colleagues have in mind. The phrase might involve projects which the Agency has started up as new undertakings. As we all know, whether an industry starts with the help of State support or with the help of private capital, it probably takes about three years before it reaches the breakeven point. In the meantime, the operation of such a company might be construed as being uneconomic or subsidised competition as against another firm. Obviously, capital would be used for a supportive purpose during the first few months or years of the operation of such a firm.
      Mr. Taylor: That is quite true. I am not in any way wanting to say that a firm which will lose money for the first few years should be regarded as uneconomic competition. A private firm setting up a new enterprise involves much capital expenditure for the first few years. However, I want to ensure that there should not be cheap capital for State firms and dear capital for private firms, and thereby fewer jobs in the private sector. If there were any doubt about this, it would be dealt with by the words
      "Take all reasonable steps to ensure".
      That enables the Agency to have a certain degree of flexibility. Although I do not think that the wording I have proposed would have the effect which is suggested, I hope it will be agreed that we can express an opinion as to the kind of situation we want to achieve. If the wording is not perfect something can be done to improve it.
      If we put this new clause into the Bill and a State firm receives a degree of support by way of interest rates lower than those which can be obtained in the

      315
      private sector, action can be taken. If the hon. Gentleman has good grounds for saying that "uneconomic" is the right word and that suitably qualified persons should look at the complaint, the only basis on which they could report on a complaint of uneconomic competition would be if the finance had been made available to the State concern at a rate which was unfair to the private sector and which might result in a loss of jobs for the private sector.
      Mr. Gordon Wilson: The hon. Gentleman has mentioned something which troubled me, namely that a cheap loan could be regarded as subsidised competition. If cheaper loans than those available on the market can be supplied, so be it. Does not the hon. Gentleman's real complaint about uneconomic and subsidised competition relate to continued cash subsidies or cash investment on a revenue basis rather than a subsidised capital basis?
      Mr. Taylor: That is my main complaint. I am anxious to avoid the situation that a firm is subsidised by the State and is losing, say, £500,000 a year but is paying wages which a private firm trying to make a profit cannot afford. I am seeking to achieve reasonable parity and justice. I want to make sure that State firms do not have an unfair advantage simply because they have access to public funds.
      This is a real fear which has shown itself on many occasions in British industry ever since State participation began. We want an appeals machinery to which a private industrialist may turn if he feels that he is suffering from unfair State competition. There must be someone who can investigate the complaint fairly and reasonably and then publish his report and the action he has taken. We of the Opposition do not always get our
      drafting right but we are near to it here. Our intention is clear. It is fair to the public and private sectors for a complaint of subsidised competition to be investigated and for the facts to be known. It is fair to the private sector and it is also fair to the public sector. Some public sector firms believe themselves to be unfairly affected.
      Mr. Small: The practicality of the hon. Gentleman's suggestion is that he would give suitable persons the powers of a Royal Commission. They would be able to send for persons and papers relating to any company and would be able to make such papers public. That would be the result of the bad drafting of the new clause.
      Mr. Taylor: I do not accept that the drafting is bad. It may be open to certain interpretations. It is a good deal better than some of the Government's drafting. The hon. Gentleman is going too far in talking about Royal Commissions. All I am saying is that there should be power to appoint a suitable person to investigate and to report. Would the hon. Gentleman think it fair if a private employer in his constituency was put out of business as a result of subsidised, uneconomic competition? At present nothing can be done about such a situation. An independent inquiry should be available.
      This is a desperately important point. If the Minister is to remove the fears which private industry has about the Bill, he should support the principle of the new clause. He has not done so. For that reason, I hope that hon. Members will vote for the new clause so that we may have reasonable protection against unfair or subsidised competition.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 207, Noes 229.

      Division No. 346.]

      AYES

      [7.15 p.m.

      Adley, Robert

      Body, Richard

      Clarke, Kenneth (Rushcliffe)

      Aitken, Jonathan

      Boscawen, Hon Robert

      Cockcroft, John

      Alison, Michael

      Bottomley, Peter

      Cooke, Robert (Bristol W)

      Arnold, Tom

      Bowden, A. (Brighton, Kemptown)

      Cope, John

      Atkins, Rt Hon H. (Spelthorne)

      Brittan, Leon

      Cordle, John H.

      Awdry, Daniel

      Brotherton, Michael

      Costain, A. P.

      Bain, Mrs Margaret

      Buchanan-Smith, Alick

      Crawford, Douglas

      Baker, Kenneth

      Bulmer, Esmond

      Crouch, David

      Banks, Robert

      Carlisle, Mark

      Crowder, F. P.

      Beith, A. J.

      Carr, Rt Hon Robert

      Davies, Rt Hon J. (Knutstord)

      Bell, Ronald

      Churchill, W. S.

      Dean, Paul (N Somerset)

      Bitten, John

      Clark, Alan (Plymouth, Sutton)

      Dodsworth, Geoffrey

      Biggs-Davison, John

      Clark, William (Croydon S)

      Douglas-Hamilton, Lord James

      Drayson, Burnaby

      Johnson Smith, G. (E Grinstead)

      Rawlinson, Rt Hon Sir Peter

      du Cann, Rt Hon Edward

      Jones, Arthur (Daventry)

      Rees, Peter (Dover & Deal)

      Durant, Tony

      Jopling, Michael

      Reid, George

      Eden, Rt Hon Sir John

      Joseph, Rt Hon Sir Keith

      Renton, Rt Hon Sir D. (Hunts)

      Edwards, Nicholas (Pembroke)

      Kershaw, Anthony

      Rifkind Malcolm

      Elliott, Sir William

      Kimball, Marcus

      Rippon, Rt Hon Geoffrey

      Eyre, Reginald

      King, Tom (Bridgwater)

      Roberts, Michael (Cardiff NW)

      Fairgrieve, Russell

      Kitson, Sir Timothy

      Rossi, Hugh (Hornsey)

      Farr, John

      Knox, David

      Royle, Sir Anthony

      Fell, Anthony

      Lamont, Norman

      Sainsbury, Tim

      Finsberg, Geoffrey

      Latham, Michael (Melton)

      St. John-Stevas, Norman

      Fisher, Sir Nigel

      Lawrence, Ivan

      Scott, Nicholas

      Fletcher-Cooke, Charles

      Lawson, Nigel

      Shaw, Giles (Pudsey)

      Fookes, Miss Janet

      Lester Jim (Beeston)

      Shelton, William (Streatham)

      Fox, Marcus

      Loveridge, John

      Shepherd, Colin

      Fraser, Rt Hon H. (Stafford & St)

      MacCormick, Iain

      Shersby, Michael

      Fry, Peter

      Macfarlane, Neil

      Silvester, Fred

      Galbraith, Hon. T. G. D.

      MacGregor, John

      Sims, Roger

      Gardiner, George (Reigate)

      Macmillan, Rt Hon M. (Farnham)

      Sinclair, Sir George

      Gardner, Edward (S Fylde)

      McNair-Wilson, M. (Newbury)

      Skeet, T. H. H.

      Gilmour, Rt Hon. Ian (Chesham)

      McNair-Wilson, P. (New Forest)

      Smith, Dudley (Warwick)

      Gilmour, Sir John (East Fife)

      Madel, David

      Speed, Keith

      Glyn, Dr Alan

      Marshall, Michael (Arundel)

      Spicer, Michael (S Worcester)

      Godber, Rt Hon Joseph

      Marten, Neil

      Sproat, Iain

      Goodhew, Victor

      Mates, Michael

      Stainton, Keith

      Goodlad, Alastair

      Mather, Carol

      Stanbrook, Ivor

      Gorst, John

      Maude, Angus

      Steen, Anthony (Wavertree)

      Gow, Ian (Eastbourne)

      Mawby, Ray

      Stewart, Ian (Hitchin)

      Gower, Sir Raymond (Barry)

      Maxwell-Hyslop, Robin

      Stokes, John

      Gray, Hamish

      Mayhew, Patrick

      Stradling Thomas, J.

      Grieve, Percy

      Meyer, Sir Anthony

      Taylor, R. (Croydon NW)

      Grimond, Rt Hon J.

      Mills, Peter

      Taylor, Teddy (Cathcart)

      Gray, Hamish

      Mayhew, Patrick

      Temple-Morris, Peter

      Hall-Davis, A. G. F.

      Mitchell, David (Basingstoke)

      Thomas, Rt Hon P. (Hendon S)

      Hamilton, Michael (Salisbury)

      Moate, Roger

      Thompson, George

      Hampson, Dr Keith

      Montgomery, Fergus

      Thorpe, Rt Hon Jeremy (N Devon)

      Hannam, John

      Moore, John (Croydon C)

      Townsend, Cyril D.

      Harvie Anderson, Rt Hon Miss

      More, Jasper (Ludlow)

      Trotter, Neville

      Hastings, Stephen

      Morgan-Giles, Rear-Admiral

      Van Straubenzee, W. A.

      Havers, Sir Michael

      Morris, Michael (Northampton S)

      Vaughan, Dr Gerard

      Hawkins, Paul

      Morrison, Hon Peter (Chester)

      Viggers, Peter

      Hayhoe, Barney

      Mudd, David

      Wainwright, Richard (Colne V)

      Henderson, Douglas

      Neave, Airey

      Wakeham, John

      Heseltine, Michael

      Nelson, Anthony

      Walder, David (Clitheroe)

      Hicks, Robert

      Neubert, Michael

      Wall, Patrick

      Higgins, Terence L.

      Newton, Tony

      Watt, Hamish

      Hordern, Peter

      Nott, John

      Wells, John

      Howe, Rt Hon Sir Geoffrey

      Oppenheim, Mrs Sally

      Welsh, Andrew

      Howell, David (Guildford)

      Page, Rt Hon R. Graham (Crosby)

      Wiggin, Jerry

      Howells, Geraint (Cardigan)

      Parkinson, Cecil

      Wilson, Gordon (Dundee E)

      Hunt, John

      Pattie, Geoffrey

      Wood, Rt Hon Richard

      Hurd, Douglas

      Penhaligon, David

      Young, Sir G. (Ealing, Acton)

      Hutchison, Michael Clark

      Peyton, Rt Hon John

      Younger, Hon George

      Irving, Charles (Cheltenham)

      Pink, R. Bonner

      James, David

      Price, David (Eastleigh)

      TELLERS FOR THE AYES

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

      Pym, Rt Hon Francis

      Mr. Anthony Berry and

      Jessel, Toby

      Raison, Timothy

      Mr. Adam Butler.

      NOES

      Abse, Leo

      Carter-Jones, Lewis

      Douglas-Mann, Bruce

      Allaun, Frank

      Cartwright, John

      Dunn, James A.

      Anderson, Donald

      Clemitson, Ivor

      Dunnett, Jack

      Armstrong. Ernest

      Cocks, Michael (Bristol S)

      Dunwoody, Mrs Gwyneth

      Ashley, Jack

      Cohen, Stanley

      Edelman, Maurice

      Atkins, Ronald (Preston N)

      Coleman, Donald

      Edge, Geoff

      Atkinson, Norman

      Colquhoun, Mrs Maureen

      Edwards, Robert (Wolv SE)

      Barnett, Rt Hon Joel (Heywood)

      Conlan, Bernard

      English, Michael

      Bean, R. E.

      Cook, Robin F. (Erin C)

      Evans, Fred (Caerphilly)

      Bennett, Andrew (Stockport N)

      Corbett, Robin

      Evans, Gwynfor (Carmarthen)

      Bidwell, Sydney

      Cox, Thomas (Tooting)

      Evans, Ioan (Aberdare)

      Bishop, E. S.

      Craigen, J. M. (Maryhill)

      Ewing, Harry (Stirling)

      Blenkinsop, Arthur

      Crawshaw, Richard

      Fernyhough Rt Hon E.

      Boardman, H.

      Crosland, Rt Hon Anthony

      Fitch, Alan (Wigan)

      Booth, Albert

      Cryer, Bob

      Flannery, Martin

      Boyden, James (Bish Auck)

      Cunningham, G. (Islington S)

      Fletcher, Ted (Darlington)

      Bray, Dr Jeremy

      Davidson, Arthur

      Foot, Rt Hon Michael

      Brown, Hugh D. (Provan)

      Davies, Bryan (Enfield N)

      Forrester, John

      Brown, Robert C. (Newcastle W)

      Davies, Denzil (Llanelli)

      Fowler, Gerald (The Wrekin)

      Buchanan, Richard

      Davies, Denzil (Llanelli)

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

      Butler, Mrs Joyce (Wood Green)

      Deakins, Eric

      Freeson, Reginald

      Campbell, Ian

      Dean, Joseph (Leeds West)

      Garrett, W. E. (Wallsend)

      Canavan, Dennis

      Delargy, Hugh

      George, Bruce

      Cant, R. B.

      Dempsey, James

      Gilbert, Dr John

      Carter, Ray

      Doig, Peter

      Ginsburg, David

      Gould, Bryan

      Madden, Max

      Short, Rt Hon E. (Newcastle C)

      Gourlay, Harry

      Magee, Bryan

      Silkin, Rt Hon John (Deptford)

      Graham, Ted

      Mallalieu, J. P. W.

      Silkin, Rt Hon S. C. (Dulwich)

      Grant, George (Morpeth)

      Marquand, David

      Sillars, James

      Grocott, Bruce

      Marshall, Dr. Edmund (Goole)

      Silverman, Julius

      Hamilton, James (Bothwell)

      Marshall, Jim (Leicester S)

      Skinner, Dennis

      Harrison, Walter (Wakefield)

      Maynard, Miss Joan

      Small, William

      Hart, Rt Hon Judith

      Meacher, Michael

      Snape, Peter

      Hatton, Frank

      Mellish, Rt Hon Robert

      Spearing, Nigel

      Hayman, Mrs Helene

      Mikardo, Ian

      Spriggs, Leslie

      Heifer, Eric S.

      Millan, Bruce

      Stallard, A. W.

      Horam, John

      Miller, Dr M. S. (E. Kilbride)

      Stoddart, David

      Howell, Denis (B'ham, Sm H)

      Miller, Mrs Millie (Ilford N)

      Stott, Roger

      Hoyle, Doug (Nelson)

      Molloy, William

      Strang, Gavin

      Hughes, Rt Hon C. (Anglesey)

      Moonman, Eric

      Strauss, Rt Hon G. R.

      Hughes, Robert (Aberdeen, N)

      Morris Alfred(Wythenshawe)

      Summerskill, Hon Dr Shirley

      Hughes, Roy (Newport)

      Morris, Charles R. (Openshaw)

      Swain, Thomas

      Hunter, Adam

      Morris, Rt Hon J. (Aberavon)

      Taylor, Mrs Ann (Bolton W)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Mulley, Rt Hon Frederick

      Thomas, Dafydd (Merioneth)

      Irving, Rt Hon S. (Dartford)

      Murray, Rt Hon Ronald King

      Thomas, Ron (Bristol NW)

      Jackson, Miss Margaret (Lincoln)

      Newens, Stanley

      Thorne, Stan (Preston South)

      Janner, Greville

      Noble, Mike

      Tierney, Sydney

      Jay, Rt Hon Douglas

      Oakes, Gordon

      Tinn, James

      Jeger, Mrs Lena

      Ogden, Eric

      Tomlinson, John

      Jenkins, Hugh (Putney)

      O'Malley, Rt Hon Brian

      Tomney, Frank

      Jenkins, Rt Hon Roy (Stechford)

      Orbach, Maurice

      Torney, Tom

      John, Brynmor

      Ovenden, John

      Varley, Rt Hon Eric G.

      Johnson, James (Hull West)

      Padley, Walter

      Wainwright, Edwin (Dearne V)

      Johnson, Walter (Derby S)

      Park, George

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

      Jones, Alec (Rhondda)

      Parker, John

      Walker, Terry (Kingswood)

      Jones, Barry (East Flint)

      Parry, Robert

      Walker, Terry (Kingswood)

      Jones, Dan (Burnley)

      Pavitt, Laurie

      Ward, Michael

      Kaufman, Gerald

      Peart, Rt Hon Fred

      Watkins, David

      Kilroy-Silk, Robert

      Perry, Ernest

      Watkinson, John

      Kinnock, Neil

      Phipps, Dr Colin

      Weetch, Ken

      Lambie, David

      Price, C. (Lewisham W)

      Weitzman, David

      Lamborn, Harry

      Price, William (Rugby)

      Wellbeloved, James

      Lamond, James

      Radice, Giles

      White, James (Pollok)

      Lestor, Miss Joan (Eton & Slough)

      Rees, Rt Hon Merlyn (Leeds S)

      Whitehead, Phillip

      Lewis, Ron (Carlisle)

      Richardson, Miss Jo

      Whitlock, William

      Lipton, Marcus

      Roberts, Albert (Normanton)

      Wigley, Dafydd

      Litterick, Tom

      Roberts, Gwilym (Cannock)

      Willey, Rt Hon Frederick

      Lomas, Kenneth

      Robertson, John (Paisley)

      Williams, Alan Lee (Hornch'ch)

      Loyden, Eddie

      Roderick, Caerwyn

      Wilson, Alexander (Hamilton)

      Luard, Evan

      Rodgers, George (Chorley)

      Wise, Mrs. Audrey

      Lyons, Edward (Bradford W)

      Rodgers, William (Stockton)

      Woof, Robert

      McCartney, Hugh

      Rooker, J. W.

      Wrigglesworth, Ian

      McElhone, Frank

      Rose, Paul B.

      Young, David (Bolton E)

      MacFarquhar, Roderick

      Ross, Rt Hon W. (Kilmarnock)

      McGuire, Michael (Ince)

      Sandelson, Neville

      TELLERS FOR THE NOES:

      Maclennan, Robert

      Sedgemore, Brian

      Mr. J. D. Dormand and

      McMillan, Tom (Glasgow C)

      Shaw, Arnold (Ilford South)

      Mr. Joseph Harper.

      McNamara, Kevin

      Sheldon, Robert (Ashton-u-Lyne)

      Question accordingly negatived.

    New Clause 4

      ACCOUNTING FOR GRANTS FROM EEC FUNDS
      'In the event of the Agency receiving grants from the Regional Fund or any other Fund of the European Economic Community for any of its purposes and functions, the Agency shall be obliged to account for these funds and expenditures separately within its annual accounts'.—[Mr. Teddy Taylor.]
      Brought up, and read the First time.
      Mr. Teddy Taylor: I beg to move, That the clause be read a Second time.
      The Government will appreciate that they are losing the sympathy of the House. The last Division showed that the voting is going very much against
      320
      them. For that reason I hope that they will be reasonable in accepting an amendment which I think is an eminently reasonable one.
      It relates to the Common Market, a subject which received a considerable amount of attention during the recent referendum campaign. We are not in relation to this clause trying to debate the whole question of the Common Market. It has been made clear, as the Secretary of State indicated, that it may be some time before we see the advantages claimed for the Common Market, such as the improvement in our balance of payments, the improvement in our living standards, the strengthening of sterling, and the availability of food at reasonable prices. It would be wrong to have a debate on the extent to which the Common Market in the past two and a half

      321
      years has been helpful to our nation or has hindered it.
      I am seeking simply to provide that, in the event of the agency receiving grants from the Regional Fund of the Common Market, or any other fund of the EEC, for any of its purposes and functions, the Agency shall be obliged to account for these funds and expenditures separately within its annual accounts—in other words, showing the money from the Government in one column and the money from the Common Market in another. This is perfectly clear. It may be that this would be done in any event, in view of the Government's later amendment concerning the use of sound financial or commercial practices in accountancy. I hope that the Government will make it absolutely clear that this will be done.
      I raised this matter in an oblique way in Committee, on two grounds. First, I suggested that it was important to know whether the SDA would get money from the Common Market. My second ground was that there was doubt at that time about the whole question of additionality.
      It was argued during the referendum campaign by members of my own party, by members of the Labour Party, and by people in the Government at the present time who supported the Common Market, that the Regional Fund would ensure that more jobs would be made available, particularly in areas like Scotland. It was consistently stated by the Commission and by the Council of Ministers that the Regional Fund would be undermined if used other than as an addition to the grants made available by countries in their own regional development programmes.
      Since we discussed this in Committee on 22nd July there has been a dramatic and fundamental change in the Government's policy in this matter, for they announced during the recess that, instead of Regional Fund money being an addition to the regional aid programmes of the Government, as in other member States, the money would simply be used as a substitute for money which the Government would otherwise spend. If, for example, the Government were proposing to spend £100 on regional development next year, and expected to get £20 from the Regional Fund, under the new policy the Government expenditure would be reduced by £20. There would be £80 provided by
      322
      the Government plus £20 from the EEC. I understand that that has been objected to by the EEC Commission. Is it the Government's intention that the regional fund money will be extra money or will simply be taken off what the Government were intending to spend on regional development?
      7.30 p.m.
      The second argument for the new clause is that it is desperately important that we should know precisely how much money the Government intend to spend on regional development through the Agency. We have pressed them on several occasions today to give an indication of what cash will be available. We have merely received the comment from the Minister of State that we shall soon learn about it from the public expenditure White Papers. At a time when Scottish unemployment is rising at the rate of 1,000 a week, it is not good enough for the Government to say that they do not know how much money will be made available. The only indication in the Bill is that £200 million is the limit before the Government must come back to the House, but we have no indication of the amount for next year, the year after or the year after that. There is a profound suspicion that, because of the restraint on Government spending, only a very limited sum will be available to go ahead with the work of the Agency.
      Thirdly, there is now no doubt that the Agency will get some money from the regional fund. In Committee, the Minister of State said:
      "Clause 3, which includes a power for the Agency to accept grants, will cover the Agency's accepting grants from the EEC as well as from other sources."—[Official Report, 22nd July 1975; First Scottish Standing Committee, c. 495.]
      It is important that we should know how much money the Government are putting into the Agency and how much is coming from other sources—what is new Government money and what is regional fund money.
      Since I tabled new Clause 4, the matter has been overtaken by the Government's decision on additionality. It was a body blow to the regions, many of which, although being concerned about the Common Market, had accepted it because of the promises of the regional fund, to hear that they were not going to get money from the fund at all. To

      323
      that extent, the drafting of the new clause may have to be changed, but the Government have an obligation, because they took the opportunity of announcing their decision in the recess, to explain why they took it when they had said that the regional fund money would be extra, to provide for jobs in Scotland and other development areas, and when the Commission had said repeatedly that the regional fund should be extra money and that it would undermine the purpose if it were not so used.
      We have now had the first indication of the use of the regional fund. We are told that some of the money is being put to an advance factory building programme which the Government had already decided should go ahead, with the Government spending taxpayers' money for that purpose. Now, the regional fund will be used for it. This is a further indication that there will be no direct additionality, and it is a serious matter. If we had known about this before, the new clause would have been in a rather different form.
      It is important that the Government should indicate why they have decided to deprive the regions and Scotland of any direct benefit from the regional fund, about which so much was said during the referendum campaign and before, when membership of the EEC was a live issue, when the Secretary of State for Scotland took an active part, although we were deprived of much of his comments during the campaign. I hope that the Minister of State will at least now give an assurance that he will accept the new clause and ensure that we know thereby how much of the cash reaching the Agency comes from the Government and how much comes from other sources, including the EEC. I hope that the Minister will give us a clear answer and indicate the reason for the remarkable decision of the Government on additionality. Did the Secretary of State support this policy change?
      Mr. Millan: I do not know what would have been in new Clause 4 if it had been drafted in a different form at a different time by the hon. Member for Glasgow,
      324
      Cathcart (Mr. Taylor). It is no doubt an interesting speculation, but I have to deal with it as it is. The new clause does not deal with the wider issues; it deals only with the question whether any funds received by the Agency from the EEC should be separately identified in its accounts. Sums so received will be identified separately in the annual accounts. There is therefore no need for a separate clause to provide for that event.
      We already have power in Schedule 2(8) to prescribe the form of the accounts. Later tonight, we shall move an amendment to provide that the accounts shall conform to the best commercial standards. I give an assurance that we shall prescribe the form of the accounts in a way which will enable any sums from the EEC to be separately identified. Therefore, the purpose of the new clause will be met, and I cannot recommend a separate clause in the Bill to deal with the matter. It is unnecessary.
      Mr. Taylor: I thank the Minister of State for his clear assurance that there will be a separate account for the sums obtained from the regional fund or elsewhere, but it is extremely unfortunate that, given an opportunity to justify an astonishing decision made by the Government during the recess—a decision in which there must have been Scottish Office involvement, and one which will cause damage and perhaps extra hardship and unemployment to Scotland and other development areas—the Minister has chosen to say nothing.
      In Committee, we pressed the Government to say whether they accepted additionality. We have had no statement of any sort from any Minister on that score. Although I am grateful to the Minister of State for accepting the simple point of the new clause, it is shameful that he has dodged the issue of trying to justify a decision which is bad for Scotland and for the regions, and will do no good to the country as a whole.
      I beg to ask leave to withdraw the motion.
      Motion and Clause, by leave, withdrawn.

    New Clause 6

      DECENTRALISATION OF SCOTTISH DEVELOPMENT AGENCY ACTIVITIES
      "The Board of the Scottish Development Agency shall, as soon as is practicable, examine the means whereby the activities of the Scottish Development Agency shall be decentralised to local offices in the major centres on Scotland and at the same lime to arrange for the provision of a fixed annual level of spending autonomy to these local offices'.—[Mr. Crawford.]
      Brought up and read the First time.
      Mr. Douglas Crawford: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Myer Galpern): With this we shall take new Clause 7—Internationalism of the Scottish Development Agency—
      'The Board of the Scottish Development Agency should as soon as is practicable, examine means whereby the Scottish Development Agency can establish permanent bureaux in major world trade centres and to thereby arrange for the immediate technological transfer of new industrial thinking and developments to the Scottish Development Agency's headquarters in Scotland.'
      Mr. Crawford: These clauses are aimed at decentralising the activities of the Scottish Development Agency within Scotland and internationalising its activities beyond Scotland. It is no use substituting for centralisation in London centralisation in Glasgow or Edinburgh. The Highlands and Islands, the Borders, the North-East and the South-West of Scotland often feel as remote from Glasgow or Edinburgh as they do from London.
      One of the dangers of our time is the personal alienation that individuals experience in our society. We see it today in the new regions of Scotland—a monstrous bureaucratic growth imposed on local government in Scotland, conceived by the last Labour Government and brought to birth by the Conservative Government. We do not want industry and employees in various parts of Scotland to feel as remote and distant from the Agency as thousands of Scots are already beginning to feel from regional government in Scotland.
      In Committee, the Government moved an amendment to promote industrial democracy, which I supported. I do not
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      think that it would be easy to promote industrial democracy in Scotland from remote and centralised offices in Glasgow or Edinburgh. The creation of local offices throughout Scotland might help the more efficient promotion of industrial democracy. It is essential to take the Agency to all parts of Scotland and to see it operating on the ground.
      This is not a matter of increased bureaucracy; it is the exact opposite. If there were a small but highly directional group of offices in about half a dozen major centres in Scotland, fewer people would need to be employed at head office. The existence of local offices will imply a smaller travelling budget than if executives are based at Edinburgh or Glasgow. Moreover, there will be a less top heavy bureaucracy at headquarters.
      The last line of the new clause refers to
      "a fixed annual level of spending autonomy".
      This means that each year local offices will be given a fixed amount to spend on a given project without reference to headquarters. This will encourage more local enterprise in the offices. This is not directed to Strathclyde. Thanks to Westminster's neglect of Scotland as a whole and to the fact that Glasgow and much of the rest of Strathclyde have almost uninterruptedly, for the last half century, been under the care and control of the Labour Party, Strathclyde has 115 of the 121 worst areas of urban and social deprivation in the United Kingdom. For that reason a major job has to be carried out by the Agency in Strathclyde—but not to the detriment of other parts of Scotland. The Minister said in Committee that the Agency is for the whole of Scotland, and not for any one part. If that is so, its activities should be decentralised by way of local offices throughout Scotland.
      I turn to new Clause 7, which leads on from the decentralisation of the Agency within Scotland to its internationalisation beyond Scotland and overseas. We envisage that the Agency should act as an interface between all parts of Scotland and the international trade centres of the world. There are many international and multinational companies in Scotland, and we welcome their presence. They are there because of the excellent work carried out by the Scottish Council (Development and Industry) and

      327
      other more localised agencies. Part of the reason for the Scottish Council's success in this matter has been that it has had, from time to time, representatives in overseas countries and at major trade centres. It has always maintained fairly close links and friendship with business interests overseas.
      The new clause seeks to make the Scottish Council-type of arrangement more formal, more permanent and also more answerable.
      Technology is nothing if it is not international. Technological developments throughout the world have to be developed. Their implications must be transmitted with speed to Scotland if Scotland is to benefit from them and from technological investment, and if jobs are to be created. It is essential to have these technological developments monitored on the ground where they are taking place and to have joint ventures and licensing as well as export opportunities which can increase employment if they are transferred to Scotland from international offices overseas. If they are transmitted quickly back to Scotland, they must go from the Scottish Development Agency to the local offices throughout Scotland.
      The Scottish National Party does not accept that United Kingdom embassies and consulates overseas represent Scotland's interests as well as specific Agency representation abroad. Let us take, as an example the United States. Various states or even parts of states, have commercial offices in London seeking to sing the industrial and investment praises of those areas or States. It is the view of my party that Scotland has a far greater international status than the states of the United States.
      What exists overseas should be more than mirrored by the activities of the Scottish Development Agency overseas. That does not mean a lot of offices. I am talking in terms of a few—probably fewer than 10—bureaux overseas. Scotland has a great level of friendship overseas. If we are to promote Scotland's commercial advantage overseas, it is essential that we have these international bureaux and that they transmit what they discover and, we hope, translate it into job terms, not in one part of Scotland but throughout Scotland, in a decentralised way, via the local offices.
      7.45 p.m.
      Mr. Grimond: The Bill will inevitably greatly increase the already serious top heavy bureaucracy in Scotland, but there is no way out of that. That is a serious argument against the Bill.
      The hon. Member for Perth and East Perthshire (Mr. Crawford) is optimistic in thinking that if the Agency has local offices this will necessarily lead to less bureaucracy. I hope that it will, but there is the danger that we shall have an enormous central office and big local offices as well. If I were certain that that would not happen—I am very far from being anything like certain—I should support the plea that it should operate, as far as possible, on a decentralised basis.
      I believe that we should look at the experience of the Highlands and Islands Development Board. It found that it was getting much too centralised in Inverness, and too far away from the businesses and areas which it was supposed to be serving. To do it justice, I must point out that it has tried to decentralise by appointing local representatives all over the Highlands. Therefore, I should have a lot of sympathy if this Agency could decentralise its activities, although I do not believe that it will be able to decentralise all of them. I take this view so long as it does not mean a still further increase in its non-productive staff.
      I am seriously concerned about the number of people and the amount of resources given to the bureaucracy—resources spent on energy; indeed, resources of every sort—which are unproductively employed. That is a major factor in our economic distress, inflation and unemployment.
      I turn to new Clause 7. I am glad to hear that what I first of all gathered was an exercise in modern witchcraft in the drafting of the clause was a mistake. As originally drafted, it appeared that the headquarters were to be removed by technological transfer to an area of new industrial thinking. This conjured up visions of a marvel of modern technology. I am still surprised that so much stress is put upon new industrial thinking and development. Those features are important, but they can probably be attracted.
      I support the idea that smaller Scottish industries, such as the fish processing and

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      textile industries, need to be kept in touch with overseas markets. A great deal of processed fish is sold in the United States. The fish is processed in small factories, by small firms. They are having difficulty in keeping in touch with the market, finding out about developments, and undertaking the right sort of packaging. Scotland has many of these small industries, especially in the rural areas.
      I hope that the Agency will look at the promotion of Scottish products both at home and, as new Clause 7 indicates, abroad, and ensure that they are properly advertised, presented, packaged and assisted in transport and the whole process of marketing. Whether it is necessary to write that into a new clause is a matter for discussion. I have no doubt that the Government will say that the Agency can do all these things if it wants to, and will therefore ask why we should seek to put them in specifically.
      It is important to draw attention to the need to keep in touch with local development and small industries in Scotland and not to become fixed on Glasgow and Edinburgh, which are regarded, in many ways, as just as remote as London. It is important to emphasise that in many ways smaller industries in Scotland need assistance, admittedly over capital, but primarily over marketing.
      Mr. MacCormick: I agree with the right hon. Member for Orkney and Shetland (Mr. Grimond) on the question of bureaucracy, and whether, in relation to new Clause 6, by creating local offices the amount of bureaucracy involved is multiplied. I think not, because the new clause would give autonomy to local offices. Rather than having a large monolithic body based in Edinburgh, with one overlord making all the decisions, under our suggested framework there would be people in different areas of Scotland with authority to take decisions.
      The right hon. Member for Orkney and Shetland appositely mentioned the Highlands and Islands Development Board. The present Secretary of State is to be congratulated on setting up that board. One of his main reasons for doing so was, presumably, that that part of Scotland had had particular problems which could best be tackled by an office located in the Highlands. I agree that the more that the board can decentralise
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      its activities the better. However, even accepting that, and if one accepts that the board should continue when the Agency is established, it is logical to accept that the activities of the Agency, too, should be split up and proper consideration devoted to all parts of Scotland.
      The whole lesson of life in all Scottish rural areas for the past 50 or 60 years has been that the tremendous centralisation of decision-making—this applies not only to parts of Scotland, but to Scotland in relation to the rest of the United Kingdom—has led to a diminution of initiative and economic activity in the more far-flung parts. For that reason, I wholeheartedly support the new clause.
      Mr. George Thompson: There has been mention of the North and of the Islands. I want to point out how we in the South expect the new clause to affect us.
      The clause is crucially important to the more remote and more peripheral areas. It would appear from looking at a map of the United Kingdom that the South of Scotland is not a peripheral area, yet within England and within Scotland it seems to be just that.
      Mr. Canavan: Not within England, surely?
      Mr. Thompson: I mean that when studied on the map it will be seen that because the North of England is south of the border, the area north of the border is peripheral inside Scotland. I hope that I have now made the geographical position sufficiently clear.
      The remote and peripheral areas are largely rural areas. We in the rural areas have the right to expect that the Agency will do great and good things for us. The clause seeks to ensure decentralisation. We want decentralisation, not to weaken the Agency but to ensure that its attention is not totally directed to the Glasgow-Aberdeen-Edinburgh triangle and to ensure that it can act positively in areas such as the South of Scotland or in the Highlands and the Islands.
      Decentralisation to local offices in the major centres does not necessarily mean decentralising to major towns. A relatively small town can be a major centre in relation to a large area of the country. In the South of Scotland it might mean

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      a local office in Dumfries and one in the Border regions. It might prove desirable to have even greater decentralisation. An office in Dumfries and one on the eastern borders would make good sense, because the local office would be in close, frequent and personal contact with the regional council. I consider this to be eminently desirable.
      In my area of Galloway we are looking to the Agency to continue the good work that has been begun by the development commission and the regional council in preparing the ground for new factories. We are looking to the Agency to continue the good work of the Small Industries Council in negotiating small nursery factories in the area. These efforts can be best prosecuted if we have local offices of the Agency right there in the midst of the developments.
      The development commission started on the first phase of its work last year. It has paid a return visit to Galloway. I should say "Dumfries and Galloway". I must not allow my chauvinistic Gallovidianism to take away my knowledge of reality. On this visit it started work on the second phase. The Agency will be responsible for carrying that work forward. It is up to the House to ensure that the Agency has the best means available to achieve its goal in Dumfries and Galloway and in the South of Scotland in general. I believe that the goal can be nothing less than the rejuvenation of the old province of Galloway so that there will be a proper balance of population, and not more and more retired people coming in and a flood of young folk going out because there are no jobs for them.
      Mr. John Robertson: Does the hon. Gentleman have it in mind to get rid of the real influence which prevents development in Galloway? Galloway is probably the most feudalistic part of the United Kingdom.
      Mr. Thompson: I think that I might be treated as being the first blast of the trumpet against feudalism in Galloway.
      Mr. Robertson: Why not say so?
      Mr. Thompson: I am obliged to the hon. Gentleman for enabling me to proclaim myself as the first blast of the trumpet against feudalism in Galloway.
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      I hope that for many years Galloway will continue to blast the trumpet in the same direction. These are interesting sidelines, but I am sure that you, Mr. Deputy Speaker, would call me to order were I to go further.
      Mr. Deputy Speaker: A more appropriate instrument would be the bagpipes. The hon. Gentleman could blow them.
      Mr. Thompson: I take your point, Mr. Deputy Speaker.
      We also hope to have more jobs available in Galloway for young people who wish to stay in their own countryside. Many of our people like to return to their own countryside to live and to work. We should make this possible for them. This means a reversal of the depopulation from which we have suffered. The Agency, if it carries out these functions properly, will not only improve the industrial life of Galloway. It will contribute extensively to an enhanced social, cultural and intellectual life in the area.
      I have mentioned Galloway not because I think that it is the only area worthy of the consideration of the House but because I think it can be taken as a sort of paradigm case which might be taken as an example of what could be expected in other areas. The achievement of this goal will require a great deal of effort and money.
      I come finally to the second point that we seek to make in the clause. It would be most valuable if we introduced a certain amount of local autonomy in spending by local offices of the Agency. In Galloway and the rural areas of Scotland we are expecting great and good things from the Agency, and it is up to us to support these ideas. I commend the new clauses most heartily to the House.
      8.0 p.m.
      Mr. Millan: I agree that we want the Agency to have genuine all-Scotland functions and not to neglect any part of Scotland. I have made clear previously that this will be the position and I have equally made clear on numerous occasions that the main industrial and environmental problems are located in West Central Scotland, particularly in the Strathclyde region, and they must be the first priority for the Agency. It is not intended that more rural areas should be

      333
      neglected. Co-operation within the Scottish Development Agency and the Small Industries Council for Rural Areas of Scotland, which is provided for later in the Bill, will mean that right from the start the Agency will have staff who are well versed in the problems of rural areas and small towns and who have a creditable record of success in dealing with these problems over many years. This expertise will go straight into the Agency and it will start with a staff familiar with these problems before it gets staff familiar and competent to deal with the major industrial problems of West Scotland. There is no question of rural areas being negected in any way.
      We have already made arrangements for the Development Commission's activities in the South-West and, more recently, in the Grampians area to be continued. There will be a handing-over date to the Agency to ensure that there is no question of these activities slowing down. I have met the chairman of the Development Commission, who is, incidentally, based in London, to discuss these matters. The kind of visit to which the hon. Member for Galloway (Mr. Thompson) referred was not a visit by a local office but a visit by Donald Chapman from London, It was not necessary to have a local office to deal with the difficult problem in South-West Scotland.
      While we recognise that there should be all-Scotland activity, we are not anxious or willing to write such an organisational matter into the Bill. This is an area in which the Agency must decide for itself. Depending on its attitude towards this matter and the expertise it achieves in dealing with problems, it may want offices in other parts of Scotland. It will start with offices in Glasgow and Edinburgh. The Scottish Industrial Estates Corporation is based in Glasgow and the Small Industries Council for Rural Areas of Scotland is based in Edinburgh. The Agency may wish to have local offices elsewhere in Scotland and no doubt it will be willing to listen to representations made by hon. Members and others, but we should not write into the Bill that the Agency must have local offices in the so-called major centres of Scotland. I say "so-called" because it was clear from the description of the new clause by at least one hon. Member that the term "major centres" could cover a very large
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      number of individual localities in Scotland.
      To lay an obligation on the Agency to establish a whole series of offices in different parts of Scotland as one of its first obligations would be getting our priorities out of joint. I could not possibly recommend that to the House.
      The second part of the new clause provides for fixed annual levels of spending autonomy, and this again is a matter to be decided by the Agency. Whatever happens, it is unlikely that local offices will be able to go on their way without reference to headquarters. As the right hon. Member for Orkney and Shetland (Mr. Grimond) rightly said, if one spreads activities too thinly one can create bureaucracy and delay decision-making rather than improve it. One thing worse than having no one on the spot is having someone on the spot who has no authority and has to keep referring back to headquarters.
      The same kind of principle applies in the case of overseas representation by the Agency. There is nothing in the Bill to prevent the Agency from doing that in the best way it thinks would suit its activities, whether by permanent representation, agents or any other means. The Bill includes powers to promote Scottish industry, and there is a specific provision allowing the Agency to operate outside Scotland in any way it thinks is calculated to facilitate the discharge of its functions under the Bill. Everything is provided for in the Bill.
      The Agency would be able to operate in other parts of the world and have representation abroad to take advantage of developments of benefit to Scotland, but we should not write this in as an obligation, as it would be if new Clause 7 were accepted. That would be a misdirection of effort and we would be asking the Agency to direct its attention in early days in misdirected ways instead of getting on with the real job that needs to be done. Later, this would be a matter on which the Agency could make up its own mind.
      Without going into the merits of these clauses in any great detail, because the merits are less important than the principle behind them, I cannot recommend the House to accept them.
      Mr. Rifkind: While expressing my general agreement at what the Minister has said on both these new clauses, I have to say that the House is clearly grateful to the hon. Member for Perth and East Perthshire (Mr. Crawford) for introducing them. The wording of his new Clause 7 was corrected, and I was surprised that he did not find it necessary to clarify the wording of new Clause 6 also. It reads:
      "The Board of the Scottish Development Agency shall, as soon as is practicable, examine the means whereby the activities of the Scottish Development Agency shall be decentralised to local offices in the major centres on Scotland…".
      I know that the Scottish National Party sees itself as a separatist party, but I did not realise that it regarded Scotland as an island on its own.
      Mr. Crawford: That is a printer's error, and there is another in new Clause 3 where one of the hon. Member's colleagues has been given a new Christian name.
      Mr. Rifkind: I was not sure whether it was a printer's error or not. In its present form it is equally consistent with the policy of the hon. Member's party. I am surprised that he should wish to dissociate himself from the present wording. The Table Office clearly realised the true intentions behind the new clause and simply wished to fit in with his objectives. I accept his clarification on that point.
      It is important to stress that although the hon. Member has put forward a superficially attractive proposition with which at first glance no reasonable man could reasonably disagree, we have to go further and examine whether in practice his suggestion would produce benefits for Scotland that would justify the substantial expense involved. The clause looks innocuous. It simply refers to decentralising to local offices in the major centres of Scotland. The Minister has pointed out that nothing in the Bill would prevent the Agency decentralising if it wished. By putting a statutory obligation upon the Agency to decentralise to the major centres, we should be left to decide what was meant by "major centres". The hon. Member for Argyll (Mr. MacCormick) took the view that his constituency was a major centre and the hon. Member for Galloway (Mr. Thompson) seemed to feel the same.
      Mr. MacCormick: I hope that the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) will check Hansard, because there he will see that I did not mention Argyll as being a major centre. I merely said that the Highlands and Islands Development Board was a useful analogy.
      Mr. Rifkind: I regret if I misunderstood the hon. Member, but when he said that an Agency with headquarters in Glasgow could not deal with matters in Argyll as efficiently as an office located in Argyll I assumed that he must be regarding Argyll as a major centre. He has not bothered to rise to answer that point, and I can only assume that he accepts what I have said to be true. No doubt he and his hon. Friends would regard Dumfries, Galloway and East and West Dundee and other areas as major centres.
      Clearly, if we were to accept the clause we should be incurring substantial expenditure. It is not simply a question of establishing an office, buying property and employing staff. We have to consider the duties that the sponsors of the clause wish to give these offices. They do not intend to ask the offices only to find out what is locally required or to advise the head office what might be desirable. They want to provide a fixed annual level of spending autonomy for the offices throughout Scotland. That is a terrifying suggestion because it would mean that anyone who approached the Agency for financial help for any industrial purpose might encounter totally different criteria in, say, Argyll than in Dumfriesshire.
      Mr. Robertson: Ten minutes ago I was convinced of the Government's case on this matter, but having heard the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) I have grown to the opinion that locating the office anywhere away from Edinburgh would be satisfactory.
      Mr. Rifkind: The hon. Member for Paisley (Mr. Robertson) should bear in mind where the headquarters of the Agency will be. They will be closer to his constituency than mine, and on that basis it is I, not he, who should be calling for decentralisation. If he thinks that Glasgow's interests are totally contrary to those of Paisley, he will no doubt inform his right hon. Friend of that fact and

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      perhaps a special exemption will be made to benefit his constituents.
      If there are to be large numbers of offices, each with autonomous power to decide on applications for financial help, that must mean that different criteria will be applied in different parts of Scotland, not necessarily because of differing needs but because of the views of the officials as to what the suitable criteria should be. This will make a mockery not merely of parliamentary supervision of the Agency but of any overall comprehensive effort to ensure that the work of the Agency is relevant to Scottish needs. Hon. Members cannot escape from the fact that what they are suggesting is an irresponsible solution which will be enormously expensive and for which there will be very little to show.
      I turn now to new Clause 7 which appears in its new manifestation. We have to consider whether the expense involved will justify the very sparse benefits that the sponsors of the clause appear to be conceding would arise from the clause if it were accepted. From the wording, it would appear that the only, or certainly the major, reason for establishing permanent bureaux in major world trade centres is that they would
      "thereby arrange for the immediate technological transfer of the Scottish Development Agency's headquarters in Scotland to new industrial thinking and developments."
      The purpose is therefore to have information collected overseas to ensure that the Agency is aware of those developments.
      8.15 p.m.
      When there is already a whole collection of embassies throughout the world, even if they were, according to the dream of the Scottish National Party, Scottish embassies, it would be a duplication of effort also to have permanent bureaux and would impose a massive burden upon the Agency simply for the accumulation of information. The Scottish National Party might want to improve the services offered by the Scottish Council or by private means, or even by the British embassies, but to suggest that the limited funds available should be squandered on expensive bureaux is quite wrong. After all, if these offices are to be set up overseas they cannot be in shanty huts in the back streets of London, New York or
      338
      Tokyo. Presumably the hon. Member who moved the clause envisages offices that would give an impression of dignity and importance, and that would mean expenditure. If the hon. Member thinks it is worth spending millions merely to accumulate information which could be easily acquired by a British embassy or the Scottish Council, he is doing Scotland and his constituents a disservice.
      Mr. Gordon Wilson: I was disappointed by the speech by the hon. Member for Edinburgh, Pentlands (Mr. Rifkind). He showed signs of having closed his mind to the reception of new ideas. There is nothing particularly political in these suggestions. If he cared to study the terms of the clauses, he would see that they do not impose a strict direction upon the Agency. The Government have been much more open-minded in their approach. Nevertheless, I am disappointed that the Minister could not see his way to accepting the clauses, which, as he says, set out a principle.
      The first point to be borne in mind is that the clause provides that the board shall
      "as soon as is practicable, examine the means whereby"—
      and so on. In other words, at the outset the indication is given to the Agency that Parliament does not wish to see a tightly-centralised organisation. The clause does not lay down specific conditions affecting the Agency, and how is should proceed; it allows it a timetable by which it may consider the proposition, and it gives the Agency the right to consider how the various activities should be arranged, both at home and abroad.
      New Clause 7, contrary to what was said by the hon. Member for Pentlands, does not involve great expense. The equivalent Irish organisation has six offices throughout the world, in major centres. If Ireland, which is much smaller than Scotland, can accept the proposition that it is useful and worth while to have offices of this kind, there is no reason why we should not do the same.
      Developments abroad concerning employment which might arise from new technology would constitute essential information for the Agency, which could key in quickly on new developments. One of the successes of the Scottish Council resulted from an early understanding of

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      the developments taking place, many years ago, in electronics and the opportunities that they would give to Scotland in particular.
      Leaving aside the external operations of the Agency—on which I understand, from what the Minister said, there is no restriction anyway—and passing on to its more important domestic activities, I think that certain points can be made, First, the clause would not necessarily involve huge operations in the centres referred to; indeed, many of the advisory functions—the giving of advice on what sort of suitable expenditure might be made by way of loans or development grants—could be carried out through voluntary committees of those who are knowledgeable about the locality, with the expertise, managerial ability and knowledge of what is available coming from the officer of the Agency on the spot. To cut down duplication of offices, there is no reason why the Highlands and Islands Development Board should not undertake agency activities on the Agency's behalf. That may be one of the things the Government have in mind, because there will be these two organisations in any event.
      There is a plethora of development agencies in Scotland. One of our problems is that they sometimes trip over one another. An advantage of the Agency is that we shall be able to benefit from coordination of activities, but we must see that that co-ordination does not become rooted in centralisation, which could nip off true knowledge of what is happening in other areas of Scotland. If, at the outset, we build into the structure measures to prevent that, the Agency will be in a stronger position.
      As reference was made to my area, I should like to give one example of the way in which savings may be made. A political dog fight is going on between the Tayside Regional Authority and the Dundee District Council. They have two separate industrial development opera-
      tions neither of which is at present satisfactory, in my opinion. When I wrote to a foreign firm which wanted information about Dundee, I had to give seven separate addresses and telephone numbers of those who specialise in different matters.
      There is no reason why the office of the SDA in the Tayside area should not be much more acceptable than the un-co-ordinated activity now going on, because it is not involved in local politics to that degree. That is one example of the way in which we might even prevent the existence of two offices by having one which is organised or aided by the Agency. Similar arrangements could be entered into with certain local authorities which have their own organisations.
      There is advantage in decentralisation. The principle was accepted by the formation of the Highlands and Islands Development Board, which is responsible for some spending. It should be made clear that there would be ceilings, so that major projects would have to go to the head office of the Agency for consideration of the amount that could be spent and the desirability of the project. That would key into the national economic pattern which might be developing.
      Another example is the Offshore Supplies Office, which has recently felt it necessary to open a small outpost in Aberdeen, as the Under-Secretary of State for Energy specified. There was obviously a need for that. Why should not similar action be extended to the operations of the Scottish Development Agency?
      I warmly recommend the House to support the new clauses.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 13, Noes 229.

      Division No. 347.]

      AYES

      [8.23 p.m.

      Bain, Mrs Margaret

      Penhaligon, David

      Wilson, Gordon (Dundee E)

      Crawford, Douglas

      Reid, George

      Evans, Gwynfor (Carmarthen)

      Thomas, Dafydd (Merioneth)

      TELLERS FOR THE AYES:

      Grimond, Rt Hon J.

      Watt, Hamish

      Mr. Douglas Henderson and

      Howells, Geraint (Cardigan)

      Welsh, Andrew

      Mr. George Thompson.

      MacCormick, Iain

      Wigley, Dafydd

      NOES

      Abse, Leo

      Graham, Ted

      Ogden, Eric

      Allaun, Frank

      Grant, George (Morpeth)

      O'Malley, Rt Hon Brian

      Anderson, Donald

      Grocott, Bruce

      Orbach, Maurice

      Archer, Peter

      Hamilton, James (Bothwell)

      Ovenden, John

      Armstrong, Ernest

      Harrison, Walter (Wakefield)

      Padley, Walter

      Ashley, Jack

      Hart, Rt Hon Judith

      Park, George

      Atkins, Ronald (Preston N)

      Hattersley, Rt Hon Roy

      Parker, John

      Atkinson, Norman

      Hatton, Frank

      Parry, Robert

      Barnett, Rt Hon Joel (Heywood)

      Hayman, Mrs Helene

      Pavitt, Laurie

      Bean, R. E.

      Heffer, Eric S.

      Peart, Rt Hon Fred

      Bennett, Andrew (Stockport N)

      Horam, John

      Perry, Ernest

      Bidwell, Sydney

      Howell, Denis (B'ham, Sm H)

      Phipps, Dr Colin

      Bishop, E. S.

      Hoyle, Doug (Nelson)

      Price, C. (Lewisham W)

      Blenkinsop, Arthur

      Hughes, Rt Hon C. (Anglesey)

      Price, William (Rugby)

      Boardman, H.

      Hughes, Robert (Aberdeen, N)

      Rees, Rt Hon Merlyn (Leeds S)

      Booth, Albert

      Hughes, Roy (Newport)

      Richardson, Miss Jo

      Boyden, James (Bish Auck)

      Hunter, Adam

      Roberts, Albert (Normanton)

      Bray, Dr Jeremy

      Irvine, Rt Hon Sir A. (Edge Hill)

      Roberts, Gwilym (Cannock)

      Brown, Hugh D. (Provan)

      Irving, Rt Hon S. (Dartford)

      Robertson, John (Paisley)

      Brown, Robert C. (Newcastle W)

      Jackson, Miss Margaret (Lincoln)

      Roderick, Caerwyn

      Buchanan, Richard

      Janner, Greville

      Rodgers, George (Chorley)

      Butler, Mrs Joyce (Wood Green)

      Jay, Rt Hon Douglas

      Rodgers, William (Stockton)

      Campbell, Ian

      Jeger, Mrs Lena

      Rooker, J. W.

      Canavan, Dennis

      Jenkins, Hugh (Putney)

      Rose, Paul B.

      Cant, R. B.

      Jenkins, Rt Hon Roy (Stechford)

      Ross, Rt Hon W. (Kilmarnock)

      Carmichael Neil

      John, Brynmor

      Sandelson, Neville

      Carter, Ray

      Johnson, James (Hull West)

      Sedgemore, Brian

      Carter-Jones, Lewis

      Johnson, Walter (Derby S)

      Shaw, Arnold (Ilford South)

      Cartwright, John

      Jones, Alec (Rhondda)

      Sheldon, Robert (Ashton-u-Lyne)

      Clemitson, Ivor

      Jones, Barry (East Flint)

      Short, Rt Hon E. (Newcastle C)

      Cocks, Michael (Bristol S)

      Jones, Dan (Burnley)

      Short, Mrs Renée (Wolv NE)

      Cohen, Stanley

      Kaufman, Gerald

      Silkin, Rt Hon John (Deptford)

      Coleman, Donald

      Kelley, Richard

      Sillars, James

      Colquhoun, Mrs Maureen

      Kilroy-Silk, Robert

      Silverman, Julius

      Conlan, Bernard

      Kinnock, Neil

      Skinner, Dennis

      Cook, Robin F. (Edin C)

      Lambie, David

      Small, William

      Corbett, Robin

      Lamborn, Harry

      Snape, Peter

      Craigen, J. M. (Maryhill)

      Lamond, James

      Spriggs, Leslie

      Crawshaw, Richard

      Lestor, Miss Joan (Eton & Slough)

      Sproat, Iain

      Crosland, Rt Hon Anthony

      Lewis, Ron (Carlisle)

      Stallard, A. W.

      Cryer, Bob

      Lipton, Marcus

      Stoddart, David

      Cunningham, G. (Islington S)

      Litterick, Tom

      Stott, Roger

      Davidson, Arthur

      Lomas, Kenneth

      Strang, Gavin

      Davies, Bryan (Enfield N)

      Loyden, Eddie

      Strauss, Rt Hon G. R.

      Davies, Denzil (Llanelli)

      Luard, Evan

      Summerskill, Hon Dr Shirley

      Davis, Clinton (Hackney C)

      Lyons, Edward (Bradford W)

      Swain, Thomas

      Dean, Joseph (Leeds West)

      McCartney, Hugh

      Taylor, Mrs Ann (Bolton W)

      Delargy, Hugh

      McElhone, Frank

      Thomas, Ron (Bristol NW)

      Dempsey, James

      MacFarquhar, Roderick

      Thorne, Stan (Preston South)

      Doig, Peter

      McGuire, Michael (Ince)

      Tierney, Sydney

      Dormand, J. D.

      Maclennan, Robert

      Tinn, James

      Douglas-Mann, Bruce

      McMillan, Tom (Glasgow C)

      Tomlinson, John

      Dunn, James A.

      McNamara, Kevin

      Tomney, Frank

      Dunnett, Jack

      Madden, Max

      Torney, Tom

      Dunwoody, Mrs Gwyneth

      Magee, Bryan

      Varley, Rt Hon Eric G.

      Eadie, Alex

      Mallalieu, J. P. W.

      Wainwright, Edwin (Dearne V)

      Edelman, Maurice

      Marquand, David

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

      Edge, Geoff

      Marshall, Dr. Edmund (Goole)

      Walker, Terry (Kingswood)

      Edwards, Robert (Wolv SE)

      Marshall, Jim (Leicester S)

      Ward, Michael

      English, Michael

      Maynard, Miss Joan

      Watkins, David

      Ennals, David

      Meacher, Michael

      Watkinson, John

      Evans, Ioan (Aberdare)

      Mellish, Rt Hon Robert

      Weetch, Ken

      Ewing, Harry (Stirling)

      Mikardo, Ian

      Weitzman, David

      Fernyhough, Rt Hon E.

      Millan, Bruce

      Wellbeloved, James

      Fitch, Alan (Wigan)

      Miller, Dr M. S. (E. Kilbride)

      White, James (Pollok)

      Fitt, Gerard (Belfast W)

      Miller, Mrs Millie (Ilford N)

      Whitlock, William

      Flannery, Martin

      Molloy, William

      Willey, Rt Hon Frederick

      Fletcher, Ted (Darlington)

      Moonman, Eric

      Williams, Alan Lee (Hornch'ch)

      Foot, Rt Hon Michael

      Morris, Alfred (Wythenshawe)

      Wilson, Alexander (Hamilton)

      Forrester, John

      Morris, Charles R. (Openshaw)

      Wise, Mrs. Audrey

      Fowler, Gerald (The Wrekin)

      Morris, Rt Hon J. (Aberavon)

      Woof, Robert

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

      Moyle, Roland

      Wrigglesworth, Ian

      Freeson, Reginald

      Mulley, Rt Hon Frederick

      Young, David (Bolton E)

      George, Bruce

      Murray, Rt Hon Ronald King

      Gilbert, Dr John

      Newens, Stanley

      TELLERS FOR THE NOES:

      Ginsburg, David

      Noble, Mike

      Mr. Thomas Cox and

      Gould, Bryan

      Oakes, Gordon

      Mr. Joseph Harper.

      Gourlay, Harry

      Question accordingly negatived.

    New Clause 9

      PAYMENTS TO AGENCY BY SECRETARY OF STATE TO BE RELATED TO NORTH SEA OIL REVENUES
      '(1) The sums to be paid to the Agency by the Secretary of State under paragraph 1 of Schedule 2 to this Act shall be re-assessed annually and shall be increased each year up to the limit prescribed by section 13(3) of this Act by an amount proportionate to any increase in the preceding year in the revenue's accruing to the Treasury from the exploitation of North Sea oil, in accordance with the provisions of a scheme to be prepared by the Secretary of State.
      (2) A draft of any scheme prepared by the Secretary of State under subsection (1) of this section, shall be laid before Parliament and shall not come into effect unless approved by a resolution of the House of Commons.—[Mr. Grimond.]
      Brought up, and read the First time.
      Mr. Grimond: I beg to move, That the clause be read a Second time.
      The clause may not be perfectly drafted, and what we ask must be circumscribed to comply with the rules of order. It might be desirable to take a greater proportion of oil revenues for Scottish purposes and to assist the financing of the Agency, but we are confined by the legislation to the amounts laid down in Clause 13. The purpose of the clause is reasonably clear—namely, to link the finances of the Agency to oil and to increase funds as the revenues from oil increase.
      I do not intend to go over all the arguments about the ownership of Scottish oil and to whom it belongs. It may be Shetland oil or Orkney oil. It is conceivable that it belongs to the North of Scotland, to Scotland or to Great Britain, and it may be that the world—particularly the underdeveloped countries—has some interest in North Sea oil. However, there is no doubt that Scotland has an interest in this oil.
      I am anxious to maintain Scotland's interest in England's coal and in the gas that is to be found in the southern part of the North Sea. I am pleased that my constituency is gaining considerably from the arrangements we made with the oil companies. Therefore, I am not one of those who claim that all the oil should belong to Scotland.
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      It is a little hypocritical to pretend that it is a peculiarly Scottish form of selfishness to claim some interest in the oil. These types of operations in the North Sea between the riparian countries have not been carried out since the Pope divided the world between the Portuguese and Spaniards. There is a case for some correlation between some of the oil revenues and the Agency.
      My reasons for this are, first, that it is a general principle in the United Kingdom that taxes are not allocated to particular purposes. I accept that as a general principle and it may be valid. However, there are other occasions when, if we allocated taxes for particular purposes, we might bring home to people more directly what certain economic factors amount to and we might improve their attitude towards taxation and its expenditure.
      Secondly, Scotland, and in particular the North of Scotland, has suffered a great deal from being treated as a poor relation. It is widely believed that the Highlands and Islands of Scotland subsist largely on subsidies. I am not sure that this is true. It is true that the revenue of local councils in my constituency is largely provided by the central Exchequer. However, if we take into account the amount of excise duty paid by the Highland Park and Scapa Distilleries in Orkneys the picture is different. Millions of pounds go out of Orkney in excise duty, a fact which is not appreciated by the public.
      When oil was discovered, unfortunately a great deal of it had already been mortgaged. It is not sufficiently appreciated that oil revenues are already heavily mortgaged. Nevertheless we hope that the oil will bring great wealth. Therefore, the Highlands and Islands and the North-East of Scotland are entitled to say that for many reasons, including economic, psychological and political ones, this enormous accretion of wealth off our coasts should be reflected not only in our economy but also in the attitude of people towards us and in the view that we are an area which must be subsidised.
      I fear that if the main funds of the Scottish Development Agency come straight from the Exchequer, it will be felt that they are being provided by England. That will not be true, but if a certain proportion of them—not all of

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      them—are related to oil, it will be appreciated that Scotland is now very much in the black and out of the red. Further, it is desirable that people in the North of Scotland should feel that as the oil production develops, a proportion of the revenues—I do not ask for more than that—should be used to build up investment there. I know that the Government will argue that that may happen through the Exchequer, but it is desirable that the people should realise that it is happening.
      It may be feared that oil, already being so heavily mortgaged, will be frittered away in other ways, and, whether one likes it or not, it is a powerful Scottish National Party argument that Scotland should claim the oil and finance all sorts of wonderful things with it. I do not go all that way by any means, but there is something to be said for a certain proportion of the oil revenues being seen to go into investment in Scotland. It is for that purpose that we have tabled the clause.
      Mr. Iain Sproat: Very few hon. Members can make a more agreeable or persuasive speech than the right hon. Member for Orkney and Shetland (Mr. Grimond). He has done his best on this occasion in a rather rough sea, but I wish to put on record my objection in principle to the idea of linking directly and specifically the amount of money which Scotland obtains from the United Kingdom Treasury with the amount which the United Kingdom Treasury obtains from North Sea oil.
      That is a bad principle for reasons which the right hon. Gentleman indicated. How would we equate Scotland's getting money out of North Sea oil in direct proportion to the revenue which accrues in Yorkshire or East Anglia from the Selby coalfield or East Anglian gas, not to mention the vexed question of where we would draw the line between England and Scotland? Would we subtract the revenue from Auk and Argyll and, if Shetland went independent, subtract the income from the northern oilfields?
      I do not wish to go into detail on those matters. In principle it is absolutely wrong to try to divide Scotland from England in distributing the benefits which accrue from our natural resources. The principle which I should like the House to establish is that Scotland should get no
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      more and no less than her level of need requires in the perspectives of the United Kingdom. Otherwise, what would happen when the oil revenues fell? Would Scotland receive less than she received the year before because suddenly the oil supply dried up? The level will certainly fall in 20 or 30 years. The amount of money which Scotland receives should be dependent on the level of need in Scotland and not upon what revenues accrue from the North Sea.
      Mr. MacCormick: It has been a good principle in the past.
      Mr. Sproat: That is why Scotland receives £120 per capita from the United Kingdom compared with £100 for the people of England. It is precisely because the Government have adopted that generous principle that Scotland has received what she has.
      Mrs. Margaret Bain: Does the hon. Gentleman accept that any extra expenditure in Scotland is an indictment of the policies operated by successive Governments which mean that additional social security and unemployment benefit must go to the Scottish people because they cannot obtain good jobs in their own country?
      Mr. Sproat: Try telling people that in Aberdeen, where there is a tremendous shortage of labour. If I were to go into that point at length, I should be out of order.
      Let us suppose that the oil revenues in Scotland were increasing and that more money was coming to Scotland while unemployment was increasing far faster in other parts of the United Kingdom than in Scotland. Several regions in England have much worse unemployment figures than Scotland. Would it then be said that we should not give more money to those areas and that it must be given to Scotland because the oil revenues were increasing? That would be a ridiculous and inhumane principle for us to adopt.
      I finish on a practical note. In reply to the laughter from the Scottish National Party Members, I must point out that I object to this suggestion in principle and practice. If the Treasury knew that Scotland received more money under one method, it would receive less from

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      another source. Therefore the whole exercise would be self-defeating.
      8.45 p.m.
      Mr. Gordon Wilson: The argument about whom the oil belongs to occurs from time to time. I am told that the hon. Member for Berwick and East Lothian (Mr. Mackintosh) described it as Europe's oil. In that case the French would certainly lay claim to it. I inspected the map of the designated areas under the Continental Shelf Act. It is a pity that we cannot record these maps in Hansard.
      Although there is disagreement on these matters, there are many economic and industrial problems in Scotland. Economists argue that if we built up an area such as Scotland, it could prove of real strength to the United Kingdom. The economic policies pursued for years by the United Kingdom have not in general proved successful. They have had little effect on the Scottish economy. We are left with many problems. We all know of the social and industrial problems in Scotland. Scotland badly needs reflationary policies, but it is problematical whether the United Kingdom Government will adopt them.
      Had I been allowed to speak on a new clause suggested by two of my hon. Friends and myself, I should have dwelt on the need for reflating the Scottish economy by injecting about £300 million a year into it.
      This clause raises the question of the buoyancy which should be built into the funding of the Scottish Development Agency as the oil revenues appear. We have discussed the boom in offshore jobs and those directly or indirectly related to the oil industries. Some areas of Scotland have benefited, including the constituency of the hon. Member for Aberdeen, South (Mr. Sproat).
      Economists now say that the number of offshore jobs will reach a peak in about one and a half to two years' time. When that happens, people now working in the oil industry will become unemployed, partly as a result of the mistaken oil policies pursued by successive Governments. Once the number of people employed in the industry has reached between 45,000 and 60,000 it will begin to go down, although at the same time oil revenues will begin to flow. Perhaps the
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      revenues made available can be used to give additional buoyancy to the Scottish economy at a time when direct investment for the development of offshore fields slows down. Therefore a good case may be made out, even in unionist eyes, for the expenditure of oil revenues in Scotland. Our principal claim is that Scotland is a national community and that we have the right to develop and use our own natural resources for the benefit of our own people.
      I cannot understand why the hon. Member for Aberdeen, South is so strongly opposed to the hypothecation of oil revenues for Scotland when that was the policy put forward in his election manifesto. I remember challenging the hon. Member for Glasgow, Cathcart (Mr. Taylor) in the Scottish Grand Committee to say what percentage of the oil revenues would be made available for Scotland. The hon. Member said that he would not like to be specific about figures but that a Conservative Government would be generous to Scotland in that respect. If it is accepted Conservative policy that the oil revenues should be made available to Scotland on a specific or hypothecated basis, why are the Opposition changing their tune?
      Mr. Teddy Taylor: If the hon. Gentleman looks at the record, he will see that we did not accept the principle of hypothecation. Scotland's problems are likely to be substantial, and we do not accept a specific percentage for the good reasons put forward by my hon. Friend the Member for Aberdeen, South (Mr. Sproat).
      Mr. Wilson: But the Conservative Party accepted that a proportion should go to Scotland. Special emphasis is placed on the oil revenues. The Conservatives cannot try to wriggle out of that commitment simply because there has been a change in the leadership. Presumably the Conservative Party conference has something to say about the policy contained in the manifesto which is not always given down on tablets from on high.
      Mr. Rifkind: Hypothecation means that a predetermined percentage automatically goes to the body in question. It does not mean that each year the Government determine what is in the interests of an area and give priority to

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      that area because of the geographic location of the oil.
      Mr. Wilson: I do not want to get involved in an argument about this. I suggest that the hon. Gentleman looks at his own manifesto and discovers which platform he occupied in the election. If what he says is so, it is for him to change his party's policy. The Conservative Party accepted that Scotland should get a specified share of oil revenues set apart from other taxation. Be that as it may, the new clause has allowed this important question to be ventilated in the House, as I am sure it will be aired many times in succeeding months.
      Mr. Sillars: The clause is deficient in that it does not specify what proportion of the revenue should go to the Exchequer and ultimately to the Scottish Development Agency. It is not enough simply to say that some of the oil revenues should go to the SDA and fail to specify how much, whether it be 5 per cent., 10 per cent. or, as was suggested by a Liberal spokesman who appeared on television with me, 50 per cent. The right hon. Member for Orkney and Shetland (Mr. Grimond) shied away from putting a figure to it.
      We are discussing the clause within the context of the United Kingdom, and oil will always have to be discussed in the context of the United Kingdom, irrespective of what happens—
      Mr. Douglas Henderson: In the context of the EEC.
      Mr. Sillars: It appears that someone has changed his mind. From being an anti-Marketeer he has become a pro-Marketeer. I have not changed my mind.
      Irrespective of where we stand within the EEC or within the United Kingdom from a Scottish standpoint, in my view the oil must always be regarded as a United Kingdom resource. The consequences of any other policy are so dreadful that I do not think any sane, sensible person would contemplate them. As the hon. Member for Aberdeen, South (Mr. Sproat) said, there are grave dangers in a policy which specifically allocates resources from one area of the economy. I do not think that hon. Members representing the Scottish National Party have considered that matter fully enough within the context of the United Kingdom. Even new
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      Clause 8 standing in their name, which has not been selected, refers to £300 million.
      Mr. Hamish Watt: Is the hon. Gentleman suggesting that Scotland could not manage with its own resources if they were properly handled by a Scottish Government?
      Mr. Sillars: I do not want to discuss at this stage the economic integration between Scotland and the rest of the United Kingdom. However, the hon. Gentleman should take into account that if we engaged in the immoral practice of removing all the oil assets from the rest of the United Kingdom it would lead to a collapse. That might be regarded as a propaganda point by the hon. Gentleman's party, but it would have to explain to the Ferranti electronic workers, the workers in the car plants at Linwood and the textile factory workers who sell to the English why their jobs had been lost practically overnight. Those jobs could not be replaced within 24 or 48 hours.
      I return to the danger of allocation from one particular resource. Many problems arise. All may seem well when it so happens that we have an asset which allows one political party to go round the country boasting about the potential wealth that may be gained from one resource, but there are swings and roundabouts in every political and economic situation. Let us consider the other side of the coin. If we argue that we should get a specific allocation from one potential resource, we must accept on the deficit side that we carry a greater degree of the burden than ever before.
      Let us consider the Scottish situation. There is an enormous transport subsidy because of the geographical character of Scotland. I stand open to correction, but I believe that the transport subsidy for the Highlands and Islands is about £3½ million. Given the plans of the SNP it would be a great deal more than that, the SNP having promised the moon to the Highlanders and Islanders.
      A matter that worries me very much is the situation in the Scottish coalfields. I represent a coalmining area in Scotland. God has been good to us as regards North Sea oil but not terribly good in the geological conditions he has laid down in the Scottish coalfields. We stand this

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      year in the face of a substantial loss, not because the Scottish miners are lazier than the English miners, are unable to work as hard or lack technical experitise, but because they are faced day in and day out with enormous geological faulting in the Scottish coalfields.
      If we accept the right hon. Gentleman's clause we must accept that it should be applied to all resources, including the coalfields I represent. A much more stringent financial attitude would have to be applied. That would result in about 20,000 miners losing their jobs in Scotland. We could not say to the United Kingdom Treasury "On the oil we get all the assets. On the coal we want you to ignore the deficits involved." We could not have it both ways.
      Mr. Gordon Wilson: Does the hon. Gentleman accept that if we are prepared to accept the assets we should be prepared to assume the responsibilities—that is, the position which has always been adopted by my party? There is no doubt that a Scottish Government would be well able to undertake their responsibilities, including the maintenance of the coal industry, in the same way as the United Kingdom has done, or go even further.
      Mr. Sillars: I look forward very much to the next election when the SNP candidate in South Ayrshire explains to the Ayrshire miners that one of the consequences of his party's argument—perhaps an SNP candidate will not be standing against me after the speech of the hon. Member for Dundee, East (Mr. Wilson)—on North Sea oil is that we must accept the demands of the Scottish coalfields and the Scottish coal industry—[Interruption.] Yes. It follows automatically.
      Hon. Gentlemen have not taken into account the problem of the agricultural input in Scotland, given geographical factors. It takes a great deal more in terms of agricultural input in Scotland to produce a given amount than in many other parts of the United Kingdom. It is a question of swings and roundabouts. The Liberal Party and the Scottish National Party have not said that they are prepared to accept the swings and roundabouts. They want to gain all on the swings and lose nothing on the roundabouts. That is a stupid and immature policy and I shall vote against it.
      9.0 p.m.
      Mr. Buchanan-Smith: I hope that the Scottish National Party has noticed the survey financed by the Social Science Research Council and published in The Scotsman last week, dealing with attitudes in Scotland and other parts of the United Kingdom. It was revealed that a majority of those who support the SNP in Scotland do not believe that the majority of the revenue from Scottish oil should necessarily be applied in Scotland. That is a significant finding. The greed which members of the SNP have displayed tonight is not shared by their supporters.
      I find that among people in Scotland there is a much greater sense of belonging to the United Kingdom than members of the SNP in this House suggest. The people of Scotland want to share their benefits throughout the United Kingdom. I ask the hon. Member for Dundee, East (Mr. Wilson) to read the new clause It is one thing to talk in general terms about Scotland's getting some of the benefits from oil but it is quite another to start talking of hypothecation. Hypothecation means a pre-determined fixed precentage of the revenues being applied. That is what the new clause is all about. We who oppose hypothecation cannot be accused of not wanting to see benefits returning to Scotland as a result of the development of North Sea oil.
      Hypothecation would be dangerous for Scotland. If we had had it in the past, when things were going less well for us in terms of natural resources, the results would have been disastrous. To go for such a policy now when we have these natural resources would be mean, petty and grasping in the extreme. It is not the present or the past but the future which worries me. There are grave disadvantages to this policy of hypothecation. First, it is rigid. The percentage is fixed. It does not alter to take account of a changing situation. Secondly, if oil revenues start to decline—I believe that they will, and the hon. Member for Dundee, East is more pessimistic than I—we shall need a higher level of investment.
      Mr. Gordon Wilson: I was talking about oil-related jobs, not about revenue. I was saying that revenue should be used

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      to give additional buoyancy at a time when jobs related to oil development were decreasing.
      Mr. Buchanan-Smith: I apologise if I read more into the hon. Member's remarks than he said, but it makes my remarks no less valid. The time will come when we shall see oil revenues declining. What will happen then? Our children will be living in those times and I do not want to see them saddled with hypothecated revenue at a fixed level, which may have benefited our generation at a particular moment of time. I do not want to see them without the benefits of be belonging to a wider United Kingdom which will help them over the period when industrial change again takes place, as the oil industry starts to decline.
      My last point was very strongly made by my hon. Friend the Member for Aberdeen, South (Mr. Sproat). We have to judge this in relation to needs. We want to see the oil benefits from the North Sea coming back into Scotland, as soon as we have the revenues—we do not have much yet—in order to do all the necessary things in terms of communications, infrastructure and so on. We want to see it a year or two ahead, as the hon. Member for Dundee, East said, so that when we pass the peak in jobs we shall be helped by the diversification of industry.
      That, surely, as my hon. Friend the Member for Aberdeen, South said, is the way to judge it—by our needs, and by what is required to help the communities that are having to adapt to the problems of the oil industry. It must be related to the needs of Scotland in the future and to the need for new jobs. If we want the best benefit from North Sea oil it is in that sense that it should be done, and I hope that the Government will approach it in that way as well.
      Mr. Millan: In moving the new clause the right hon. Member for Orkney and Shetland (Mr. Grimond) said that he did not believe that all the benefits of North Sea oil should accrue to Scotland, and that this was a United Kingdom resource. I agree with him on that. He also said that he did not believe in hypothecation, but then said that he believed in a qualified hypothecation. I do not believe that one can have a qualified hypothecation. Either one believes that this is an acceptable principle or one
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      does not. If one does not believe that it is an acceptable principle, I do not think one can then introduce the principle, as it were, by a kind of back-door method, which is basically what the clause attempts to do.
      As my hon. Friend the Member for South Ayrshire (Mr. Sillars) said, one cannot adopt the principle of hypothecation only in circumstances in which one thinks it will be of benefit and then ignore all the circumstances in which a similar principle could be very detrimental to Scottish interests.
      The right hon. Gentleman has introduced a kind of hypothecation, although it is expressed in a way which is perhaps not wholly clear, and would in practical terms produce, even from his point of view, rather eccentric results—certainly results different from those that he envisaged when he spoke to the clause.
      What he has proposed is really a rather odd kind of arrangement. First, he says that the increase in this part of the SDA's financing shall be increased proportionately to any increase in the preceding year in oil revenue. That is, with respect a straight arithmetical calculation. It does not require to be worked out under the provisions of a scheme to be prepared by the Secretary of State. That, really, is a contradiction in terms, because it suggests a certain flexibility in the situation—looking at circumstances, and so on. It is contrary to the earlier part of the clause, which would involve a straight arithmetical calculation.
      Oil revenues will increase very rapidly indeed over a short period of years, so that, unless we started from a very small amount, we should reach a very large amount very rapidly. To avoid reaching a disproportionate amount we should have to start in the early years of the SDA with a budget which would be quite inadequate for the job that the Agency would have to do.
      The new clause is even more defective, because it relates the question of oil revenues to only a part of the Agency's activities—industrial development. I understand exactly why the right hon. Gentleman has done this. He says that the one thing, above all, that the people of Scotland will look to from North Sea oil, is a sense that Scotland's economy and industry are prospering. I agree

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      completely. That is the objective. That is why we have done certain things which have benefited his and other areas, in directing more oil-related jobs to Scotland and seeing that they are spread throughout the country.
      The right hon. Gentleman knows that in his area there is a great deal of new prosperity, which has come directly from North Sea oil. That will continue. His local authorities have been adept at looking after the interests of their inhabitants. He knows that certain long-term benefits will come to his area almost regardless of what happens in terms of increases in oil revenue generally. There have thus been considerable advantages to his area, and to other parts of Scotland.
      To direct to North Sea oil this piece of the Agency's financing—public dividend capital—which is related to industrial development, would be a mistake in terms of practical implications and not just of principle, which in any case I do not accept. It would have the result that that part of the Agency's capital would be far more likely to be spent not in the North of Scotland but in the old industrial areas, which is where the main industrial effort should be directed.
      The formula in the new clause would not demonstrate a direct benefit in the North of Scotland. The benefits, if they came at all, would go to other parts of Scotland. It is a misguided or badly drafted clause from that point of view as well.
      Nevertheless, I take the point that it is very important, psychologically and in terms of human dignity, and the rest, that areas in the North of Scotland or elsewhere should not feel that they have always had to be subsidised by the rest of the United Kingdom and the rest of Scotland. It is important that people should feel a sense of economic independence, which can come only from economic well being.
      It has been part of the Government's policy in the right hon. Gentleman's area and in the oil development areas generally, as well as in other parts of Scotland, to demonstrate the real advantages of North Sea oil, to get them, to the maximum extent, to all areas, but particularly
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      to areas which have felt the major impact from North Sea oil exploitation.
      The Government's general policies will be directed towards these ends. I do not believe that those ends could be achieved consistent with the policy of no hypothecation or by financing a part of the Agency's activities in the way that the new clause would provide. For all these reasons, I could not recommend the new clause to the House.
      Question put and negatived.

    Clause 1

      THE SCOTTISH DEVELOPMENT AGENCY
      Mr. Crawford: I beg to move Amendment No. 1, in page 1, line 6, after second 'the', insert 'democratic'.
      Mr. Deputy Speaker: With this we shall take Amendment No. 2, in page 1, line 9, after second 'Agency', insert:
      'answerable to the Scottish Assembly, immediately upon establishment of that Assembly',
      and Amendment No. 8, in Clause 4, page 4, line 41, at end add:
      '(4) This report shall be laid before the Scottish Assembly upon the establishment of that Assembly'.
      9.15 p.m.
      Mr. Crawford: A similar amendment was defeated in Committee by the combined forces of the Conservative and Labour Parties. That usually happens in Committee when Scotland's interests are at stake. I am sure that those who voted against this proposal in Committee did so sincerely, genuinely believing that the Scottish Assembly should not have economic powers or control over the Scottish Development Agency.
      My position and that of my party was that the Scottish Assembly should have considerable economic and industrial powers and that without the powers of the Scottish Development Agency the Assembly would be a eunuch and the Scottish Development Agency would not have a proper Scottish master accountable to the people of Scotland. However, perhaps there has been a change of air in the political atmosphere in Scotland since the Committee convened.
      Pronouncements from both the Labour Party and the Conservative Party since the Committee stage of the Bill suggest

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      that there has been a change of view. I believe that there are splits in both the Labour and the Conservative Parties. However, there appears to be a change of view to the effect that the Scottish Assembly should have economic and industrial powers.
      Mr. Dempsey: Some.
      Mr. Crawford: I may be wrong, but I understood that several Conservative Members thought that it should have more than some economic and industrial powers. If it is to have those powers, ipso facto it must have control of the Scottish Development Agency. That must follow as night follows day.
      I am delighted that the Scottish National Party is being supported in public statements on this subject by people like the hon. Members for South Ayrshire (Mr. Sillars), Central Ayrshire (Mr. Lambie), and Paisley (Mr. Robertson). Like the rest of my hon. Friends, I look forward to their support in the Lobby tonight if the Government do not accept the amendment. I state categorically that it will be hypocritical humbug if they vote against the amendment today and then say at a future date that they wish to devolve economic and industrial powers to the Assembly. They cannot have it both ways.
      The Scottish National Party is giving the Government and the Conservatives a second chance. They have thrown the idea out once. We are giving them a second chance to make the Scottish Development Agency answerable to the Scottish Assembly when it is set up. It is no use their saying that this is hypothetical. The wording of the amendment is fairly straightforward:
      "immediately upon establishment of that Assembly".
      It would appear that both Labour and Conservative Members are having a change of heart. I look forward to an earnest expression of their intentions by their support for the amendment.
      Mr. Robert Hughes: This is not the place to develop an argument about the Scottish Assembly, until it is established what its powers will be. We are all awaiting with keen anticipation the publication of the White Paper which the Government have promised early next Session. I also await with great anticipation and
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      enthusiasm the publication of the Bill which will follow that. It would be a great mistake if, today, we tried to go over arguments which have been put forward for some time and which we shall have to deal with again when we have seen the White Paper and the Bill.
      I am concerned that the Scottish Development Agency gets off the ground and is allowed to do its job without worrying about its future when the Scottish Assembly comes into being. We are concerned that it does its job and that it can operate from the beginning under firm limits from the Secretary of State for Scotland. I draw an analogy with what is now happening in local government. Local government reform in Scotland is under unceasing and quite ruthless attack. I have never hidden my feelings about the set-up of the regions and districts. If anyone cares to look at the records he will find that I have been fairly consistent about this matter.
      I believe that some of the attacks made on local government in Scotland are quite scandalous. Local government has not been given an opportunity to begin to tackle its job, or even to begin to work. Nothing can be worse for the morale of people in local government than the way they are being used by people who are not concerned about local government but are prepared to fasten on every indiscretion, error and, indeed, everything which they can pick on, and say that all the difficulties in local government in Scotland are due to local government reforms passed in this House. That is not honest politics. Members of the Scottish National Party should not abuse their position in Parliament and attack people in local government who have no right of reply.
      Mrs. Bain: I am one of those in the SNP who have attacked local government work in Scotland. Is the hon. Gentleman suggesting in some way that I am not concerned about the homeless in my constituency and about the fact that we cannot attract teachers to our area, specifically because of regional policies?
      Mr. Hughes: I do not deny the hon. Lady's sincerity about the homeless and education, but I deny the allegations that this is due to local government reform and that the reason why these things cannot be cured quickly is that local government

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      reform was approved by this Parliament. I do not like the set-up. However, I use the analogy between the Agency and the Assembly because I know many people in local government—elected members and officials—who are sickened by the fact that although they have been given a mammoth task, before they have even begun to tackle the problems and see their way through to overcoming the difficulties of reorganisation they have come under constant attack, not for the reasons advanced by the hon. Lady but because attack on local government reform is being used as a vehicle for political advantage.
      It is no use the hon. Lady's shaking her head. If she is honest with herself, she knows that what I am saying is true. The attitude which was adopted when the Bill started its passage through the House—"Never mind what happens in the future. We must determine here and now what the terms of the Assembly will be and how it should operate in relation to the Agency"—means that the Agency could well come under attack from the moment it begins to operate. It will not be given a chance, because people will say that it must be under democratic control.
      I, too, would like to see the Agency under democratic control, but the issue is how to ensure that it begins its mammoth task without delay. With the best will in the world, it will be anything from a year to two years before the Assembly comes into being. I hope that the Agency will be far-seeing, adventurous, and prepared to take risks, not always looking over its shoulder because it is worrying about criticism.
      I was not in the House when the Highlands and Islands Development Board legislation was passed, but I recollect, from reading reports in the Press, that before it came into being attacks were made on the Board by members of the Conservative Front Bench and of the Scottish Tory Party. There were dreadful scare stories about what the Board would do.
      I believe that the HIDB has done a tremendous job. No one would argue that it is perfect. The right hon. Member for Orkney and Shetland (Mr. Grimond) complained earlier about applications from his constituency which
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      were made at the beginning of the year but were not approved until the autumn. If the Board has been less than adventurous in some areas, I believe that that is because, from the beginning, it has been looking over its shoulder, because there have been people prepared to attack it and pinpoint everything which might happen and say "The Board is wrong to do this. It has made a mistake."
      There is no magic elixir which will solve, overnight, the problems which afflict Scottish industry. Solving them will be a long job. There will need to be a determination on the part of everyone to back the Agency from the beginning, to stick with it through its successes and, more importantly, in any errors it makes. To suggest from the beginning that it must come under the Assembly can only inhibit it in its future activities.
      For that reason, I think that amendments which seek to lay down guidelines or outlines for the operation of the Assembly are wrong, misplaced and misguided. I hope that hon. Members opposite—primarily members of the Scottish National Party—will not use this as a springboard for their own policies, which would be ruinous and disastrous for the people of Scotland.
      Mrs. Bain: I cannot hope to remain in order and answer all the political points raised by the hon. Member for Aberdeen, North (Mr. Hughes) in his speech. I would only ask him to read Amendment No. 2 carefully. It says that the Agency should be answerable to the Scottish Assembly when the Assembly has been established. We are asking not for a delay in the operations of the Agency but merely that when the Assembly is set up the Agency should be answerable to it.
      The Scottish National Party welcomed the establishment of the Agency. We expressed some criticisms, as is our democratic right, but, unlike the Conservative Party, we were not prepared to block this legislation, because we recognised the great social and economic problems facing our country and that the Agency presents a unique opportunity for us to solve them. It will not solve every problem overnight—I think the Government recognise that—but it gives us an opportunity which is very important if we are to give our

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      people the kind of standard of living and decent employment opportunities which many of us in this House seek for them.
      If the Assembly is to be meaningful, it must have a decisive role to play in Scottish life and the right to control various matters which affect our people in employment, education, industrial development and other sectors. There are vast social implications in the establishment of an Assembly for the Scottish people.
      We do not want the Agency to be yet another regional body. I ask the Government and Labour Members to bear in mind what the Scottish Council Research Institute said about regional policies. The best description it could find was that they had been a distinct failure. We do not want the Agency to be part of a regional policy which will merely paper over the cracks in the Scottish economy and way of life. We want a body with real powers to tackle the problems which face us.
      I want to deal particularly with the Agency's work in the development and improvement of the environment. I come from the West of Scotland. The vast majority of my constituents came originally from Glasgow and have moved out to seek a new life in overspill communities. The problems facing us in the West of Scotland cannot be solved by a single region. They are Scottish national problems. The strategic economic planning powers given to the Strathclyde Region cannot possibly meet the vast deprivation and lack of advantages in the West of Scotland. The Agency has to be given these power of environmental improvement if we are to remove urban deprivation. At the moment, 97·5 per cent. of the worst areas in the United Kingdom are in the Strathclyde Region. This is a national problem, and the Assembly, through the Agency, must have responsibility for it.
      I am not sure whether the hon. Member for Aberdeen, North wishes to intervene or whether he is just uncomfortable in his seat.
      9.30 p.m.
      Mr. Robert Hughes: I am grateful to the hon. Lady. I was waiting for a "natural break". The hon. Lady is right as far as she goes in her argument. The problems of West Scotland cannot be solved by regional government, but
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      they could be solved in a much more meaningful way by regional planning on the basis of the Strathclyde Region rather than Glasgow alone. We might then have better relationships with Glasgow on the overspill problem than existed in the past.
      The Agency, however, has the opportunity to work as a national body. One of my fears is that it will be so concerned about the West of Scotland that it will not have time to look at the other parts. It is not necessary for the SDA to pass immediately on vesting day into the control of the Scottish Assembly for it to be a success or a failure, and the hon. Lady is making a cardinal error in her assumption on that score. She is saying that unless it is passed over immediately the Assembly is established it will not work, and that is a mistake.
      Mrs. Bain: The hon. Member should recognise that on questions of strategic economic planning those who are given the powers must be directly answerable to the people through an elected body, which is what we shall have in the Assembly. We must be democratically answerable. I accept that people fear that the West of Scotland will dominate the Assembly, but we have a great programme ahead of us to educate the people of Scotland into realising that the problems of any particular area, whether it is the Highlands or the West of Scotland, are national problems.
      The hon. Member was referring to strategic economic planning powers, but he must be aware that Strathclyde was having to pay, at 1973 prices, £23 million every year to service the housing debt of the city of Glasgow. How can any local authority hope to build new houses when it has to pay out so much in interest?
      Mr. Hughes: This is an interesting argument, but I fear that we have been diverted away from discussion of the SDA. My party has argued for years that it was quite wrong for money to be raised on the private market at private market interest rates in order to pay for house-building. My Government have done a great deal through the Public Works Loan Board to reduce that rate of interest, and I am delighted if the SNP is now saying that it is opposed to private entrepreneurs making money out of council housing through loans.
      Mrs. Bain: We want housing to become a national rather than a local responsibility. That is the only way in which the problem will be solved. Conservative Members may laugh at the idea of a Scottish nation ignoring the problems of any one particular area, but they do themselves and the people of Scotland a great disservice because the Scottish people are concerned about these problems wherever they exist. Hon. Members from the three major parties who claim to have some kind of social conscience about what is happening in Scotland and who believe in having a meaningful and powerful Assembly for Scotland should go into the Lobby with the SNP tonight to ensure that the Assembly takes the Agency under its remit so that it too may become a meaningful body.
      Mr. Grimond: The House is in some difficulty—a difficulty has arisen constantly in this Parliament because the Government have introduced too much legislation, and in the wrong order. Of course we should never have reformed local government in Scotland before setting up the Assembly. We know why that happened. Neither the Conservative Party nor the Labour Party before it believed that an Assembly was possible or desirable. We are now discussing one of the most crucial and central issues affecting the Assembly. I do not see how we can avoid discussing the relationship of the Agency to the Assembly.
      One of the faults of planning since the war has been that, admirable though the intentions have been in respect of help for the areas of special need, the plans to give that help have not involved the people of those areas in their own fate. The measures of assistance have been regarded as being handed down from London, and, as a result they have often been out of touch with the ways of different areas of Scotland and have not pulled out the response they might have done. I have a great deal of sympathy with what has been said about the appalling environment with which various parts of Scotland have been left, partly, though not entirely, as a result of that policy.
      If we want the Agency to get off the ground satisfactorily and to have a wholehearted response from the people of Scotland, it must be seen to be the Agency of those people. It must not be seen to be something which is dominated
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      from Whitehall, let along Westminster—something which is largely out of the control of the local people.
      If the Assembly should be set up without power over this type of operation in Scotland, I believe that it will be doomed to failure, because there will be a hostile and undesirable reaction in Scotland. We are faced with this matter on Report. We must indicate clearly to whom the Agency is responsible. We must face the question whether the Scottish Assembly is to have some power over industrial and planning policy in Scotland. We cannot just leave the matter and say that it will all be reviewed and amended when the Assembly begins to operate. We see what has happened in local government, which is now in some confusion because of the possibility of everything being amended. In my view, one level of Scottish local government should be cut out. That would not affect my constituency, because we have general-purpose local councils, but it would be desirable to do it on the mainland.
      It is very difficult to set up the Agency without knowing to whom it is ultimately responsible—simply saying that we shall introduce amending Bills in the Assembly in two years' time, if all goes well. That will not get the Agency off on a good footing.
      All that our amendment suggests is that the report of the Agency should be laid before the Assembly. The amendment would make it clear that the Assembly has the right to discuss and amend. That is the minimum. I would go much further. Industrial policy is one of the matters which, if devolution is worth doing at all, must be at least largely devolved. I do not say the same about the overall planning of the United Kingdom, but a Scottish Assembly without some control over investment planning, the siting of industry, the development of certain depressed areas, attention to conditions on the housing estates of the Clyde, and so on, would be hardly worth setting up.
      Therefore, we should include in the Bill at least an indication that when the Assembly is set up it will have a role to play in regard to the Agency. I hope that the Government will say that they will examine the question very closely.

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      If they cannot accept the amendment tonight, I hope that they will review the matter and possibly find other ways of dealing with a central question which cannot be put off indefinitely.
      Mr. Sillars: I do not think that I or any other hon. Member is any less committed to the Scottish people than is the hon. Member for Dunbartonshire, East (Mrs. Bain). It is a mistake for members of the Scottish National Party to believe that they are the only ones who are horrified by deprivation and other faults in the Scottish economic and social scene, and who are motivated to demand action.
      The fact that I shall not vote with the hon. Lady tonight should not be taken as a sign of any retreat by me from the belief that the Agency should reside under the control of the Scottish Assembly. Where I am in conflict with the Scottish National Party, at any rate on Amendment No. 2, is over the words
      "immediately upon establishment of that Assembly".
      This is not a question of semantics; there is a sound argument for not taking a decision of this magnitude this evening, after such a short debate. We should argue the question of the Assembly's responsibility to the SDA within the context of the Government's comprehensive proposals over the powers of a Scottish Assembly.
      I am told in the Press that a Cabinet meeting is to be held on Friday I sometimes wish that I were a member of the Press rather than a Member of Parliament, because they seem to know about these matters when we do not. The Press is always more knowledgeable about Cabinet meetings, attendance at them, the the publication of White Papers, and other matters, than we are. We are told that at the Cabinet meeting on Friday the major decision will be taken on a package deal for the Scottish and Welsh Assemblies. Therefore, we should examine the issue against the background of what the Government will say.
      I should like to see the amendment withdrawn, rather than that it should go to a Division. I am concerned about the use of the word "immediately". Of course, we are concerned with the way in which the Scottish Assembly is set up and with the expertise of those who are
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      to run the departments following legislative, executive and economic devolution. Perhaps the Assembly will require a settling-in period, because we must remember that we shall be establishing a Scottish Parliament for the first time for 270 years. I foresee the possibility of the Scottish Assembly's being transferred, if not on vesting day, within a year or two. That would be a much more sensible way to transfer functions from Westminster to Edinburgh. That would be a much better course than merely dancing round the totem pole with the cry that all power must go to the Assembly on vesting date, whether or not it is fit to handle matters from then on.
      My hon. Friend the Member for Aberdeen, North (Mr. Hughes) made a valid point about the importance of the Agency's impact on the Scottish economy. It may be better for the Agency to run for its first year, post-Assembly, under the control of the Secretary of State for Scotland and thereafter for it to be transferred to the Scottish Assembly, so that the Assembly can debate policy and other matters. I wish to emphasise my worries about the word "immediately" because we should not give powers on an ad hoc basis.
      When the House considers the Bill on the Scottish Assembly, I shall not be found wanting in my views about where the Agency should go. I think that it should go to the Scottish Assembly, but it is not sensible for us at present to proceed in the way suggested by Amendment No. 2.
      9.45 p.m.
      Mr. Robertson: I wish to reinforce the remarks of my hon. Friend the Member for South Ayrshire (Mr. Sillars). Amendment No. 2 appears to be a politically naive and even dangerous proposal. It involves the House in discussing the powers of a future Scottish Assembly rather than the position of the Scottish Development Agency vis-à-vis the Assembly. In other words, an irresponsible note appears to have crept into the debate.
      The Opposition appear to be looking for a nail on which to hang their coat, but their arguments show that they do not have the matter properly in perspective. We want to discuss the powers of the Scottish Assembly at the time when

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      that legislation appears rather than discuss such basic matters in a debate on the Agency. To start talking about relationships with a non-existent and hypothetical body at this time—[Interruption.] I was asking my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) what this hypothetical thing was, and he thought it was a horse running in the 3 o'clock race tomorrow. I am confused about the thinking of the Scottish National Party on this matter, as I am on so many other things.
      The Scottish National Party has its priorities wrong. As a keen devolutionist, I am worried that it will queer the pitch. There are many enemies and opponents of devolution. The Scottish National Party is not helping the argument for the setting up of a Scottish Assembly. It is hindering it. However, its political naïvety has to be seen to be believed. It has no grasp of the reality of the situation.
      It is utterly ridiculous to discuss the powers of an Assembly or a Parliament in terms of a Scottish Development Agency. The Scottish National Party should take a look at itself to see whether it has a serious contribution to make to the problem which the hon. Member for Dunbartonshire, East (Mrs. Bain) described. Although the hon. Lady may come from Glasgow, she must not imagine that she is the only person who has ever been moved to dedicate herself to a solution. If she is saying to those on the Opposition Front Bench—these sudden converts to Marxism—that the solution for Scotland is a Socialist one, I shall go a long way with her, but I do not believe that she means it. All this is simply airy-fairy vote and headline catching. It has no serious intention or purpose.
      I am offended at having to listen to the contribution that the Scottish National Party Members have made. It is childish and naive. No serious thought has been given to it. This is a serious place and we are discussing serious issues. Scottish National Members should consider making a serious contribution.
      Mr. George Reid: I was astonished to hear the hon. Member for South Ayrshire (Mr. Sillars), of all people, preaching the
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      inevitability of gradualism. I was even more surprised to hear the hon. Member for Paisley (Mr. Robertson) talking about "hypothetical" bodies. The hon. Member for South Ayrshire has gone on record as saying "While difficulties over trade and industry powers for the Scottish Assembly might exist, the minimum requirement would be Assembly control over the Scottish Development Agency." His hon. Friend the Member for Paisley has said that it is "essential" that the Scottish Assembly has control over the Scottish Development Agency. Both of them have retreated.
      I hope I shall not be ruled too wide of the mark if I say that the amendment before the House is as much about devolution and the forms of economic government we shall have in Scotland as it is about the Scottish Development Agency. In that sense it is a fundamental amendment. It deals with the general management of the economy of Scotland. It is also, at this rather late stage, a probing amendment. The people of Scotland will be interested to know who goes into what Lobby, because I am sure that my hon. Friend the Member for Perth and East Perthshire (Mr. Crawford) will press his amendment to its logical conclusion. They will be interested because tonight they have the first chance to identify those hon. Members who would deny Scotland self-government in her internal economic affairs.
      If the Scottish Assembly is not responsible for the Scottish Development Agency, it will be neutered and emasculated right from the start. Hence the reason for immediacy. If the Scottish Assembly is not given control over the Scottish Development Agency right from the start, we shall have to face up to an alternative course, namely, that the Assembly will seek those powers for itself. We shall thereby have constitutional wrangling between London and Edinburgh from which we could well be spared by a positive resolution of the House tonight.
      Mr. Robert Hughes: I hope that the hon. Gentleman will reflect on what he has said, because it seems to me to be a recipe for disaster. He says that unless the Assembly, which I should love to debate at length in future as I have done in the past, gets everything that the SNP

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      Members want from the day that it begins to operate, they will damn it and destroy it and say that it is hopeless. They are intent on giving it no opportunity to work. The real enemies of devolution in Scotland are the members of the Scottish National Party, those separatists who do not want the Assembly to work. If they are suggesting that from the day the Assembly comes into being it should take over the SDA function and policy without a break, they are living in cloud-cuckoo-land, and the sooner they realise that the better.
      Mr. Reid: It would seem that the hon. Gentleman wants to separate the Agency from the people of Scotland. He forgets that 348,000 members of his party wanted the Agency to be controlled by the Assembly as against 350,000 people who wanted it to be the other way round. He forgets that the Transport and General Workers' Union, the National Union of Mineworkers and the Association of Professional, Executive, Clerical and Computer Staff believe that the Agency should be an Assembly function. He forgets that it is the published view of the Under-Secretary of State for Scotland, the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), who said in an authorised interview:
      "Anything which is held by the Secretary of State is more easily transferred to the Assembly than if it were held by a Secretary of State for any other Department".
      Why not in this case?
      Fundamental questions will therefore be asked by the people of Scotland. The Agency will be responsible for furthering economic development in Scotland. Is it not right that the Assembly should have responsibility for that? The Agency will be responsible for the maintenance of employment in Scotland. The improvement of the environment will be an Agency responsibility. Should that not go to the Assembly? Will the Scottish people not believe that the "games are bogy" unless the Assembly has power over the matters referred to in my hon. Friend's amendment
      It will be claimed that this is a premature amendment because we are awaiting the White Paper. But if we were to wait for the Government, we should wait for ever. We have waited for their decision on home rule for a remarkably long time. We now await the White Paper. After
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      the White Paper is ultimately published, we may well wait a very long time before the Bill is published. My hon. Friends have suggested, given the constitutional and economic change through which Scotland is going, that the Government should hold back on their published plans for the regions of Scotland. They did not; they went ahead. As the New Statesman suggests this week, there is a terrible and terrifying muddle for Scottish local government as a result.
      I suspect that a large degree of Government thinking is devoted to putting the Agency in a straitjacket, tying it up neatly, delivering it to the Secretary of State and setting it to one side before the White Paper is published. The Scottish people will not accept that.
      Mr. Teddy Taylor: Before the hon. Gentleman sits down, I hope he will explain what he meant by saying that if Parliament does not give the Assembly the power and responsibility for managing the Agency, the Assembly will take the power itself. Is he saying that the SNP envisages that the Assembly will not act as a constitutional democracy and, indeed, may be a revolutionary body?
      Mr. Reid: The Scottish National Party is a gradualist party. Devolved Governments in Canada, Australia, the United States and India gained those functions which this Government is tonight attempting to deny to the Scottish Assembly. A Scottish Assembly, even with a Labour or Conservative majority, will, as a result of the economic circumstances of Scotland today, inevitably want more power as the Scottish people increasingly identify themselves with the Assembly. This week, for instance, the Young Conservatives expressed sympathy with that view.
      There is the view that the Scottish Development Agency amendment, proposed by my hon. Friend the Member for Perth and East Perthshire is irrelevant. The hon. Member for Glasgow, Hillhead (Mr. Galbraith) has said that there will be no powers to give to the Assembly as there will be no Assembly. It is certainly not premature to raise this issue now, as that opinion is shared by a number of back benchers representing English constituencies.

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      If the management of the Scottish economy is not properly tied to the Scottish Assembly there will be clutter and confusion, and a total division of its economic powers.
      In terms of devolution, hon. Members have regularly witnessed government by leak. We have read time and time again, in reports of authorised interviews, what the Government will do in terms of the White Paper. I suggest that in a few weeks' time, with its publication, we shall see an Assembly in Edinburgh having minor economic powers. It will exercise consultative power over the SDA, while the Secretary of State for Scotland will keep most powers. The Secretary of State for Industry will exercise responsibility from London, and the NEB will assume new responsibilities. That is a recipe for constitutional conflict. Inevitably, the Scottish Assembly will seek a wide diversity of powers and there will be demands by the Assembly for power over industry.
      Mr. Robert Hughes: Does the hon. Gentleman suggest that the problems of the Scottish economy can be solved entirely north of the border, without any reference to the United Kingdom economy?
      Mr. Reid: Yes. Taking my gradualist view, there will be demands from the Scottish Assembly that the Scottish economy be placed under one central authority, situated either in London or in Edinburgh. My own view is that the powers given to the Assembly will increasingly come in strengthened form to Edinburgh.
      We are dealing with a period of transition in Scottish constitutional and economic life. It is most important to know who is accountable for what. The SDA will be an appointed body, vaguely responsible to Parliament and under the broad control of the Secretary of State. However, given the provision of Clause 2 it is vitally important not to allow the SDA to act unilaterally. Someone must be responsible and accountable.
      The Scottish National Party believes that the appropriate body is the Scottish Assembly. This cannot be done overnight. My hon. Friend the Member for Perth and East Perthshire suggested that
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      we create a body analagous to the Irish development authority which reports yearly to the Dail. In the same way the SDA could report yearly to the Scottish Assembly while possessing powers and finances based on a rolling five-year programme.
      What will happen to the Secretary of State if these economic powers are given to the Scottish Assembly? The people of Scotland face a genuine democratic choice. Will they give powers over the Scottish economy to a genuinely democratic body accountable to the people of Scotland, or will they leave those powers with the Secretary of State?
      It being Ten o'clock, the debate stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's Sitting, the Scottish Development Agency (No. 2) Bill [Lords], the Cinematograph Films Bill and the Recess Elections Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Stoddart.]

  SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL
  Question again proposed, That the amendment be made.
  Mr. Reid: Given the Scottish Assembly, the Secretary of State will not die; he will simply fade away over the years. Come 1985, I do not see the office of Secretary of State reaching its centenary; it will fade away over this intervening period.
  The people of Scotland have to pay their money and take their choice. They have to decide one way or the other. Either they opt for genuine democratic control, with a distinctive Scottish economic policy and with a chance for the Scottish economy to take off or they will go on as they have in time past with poverty, deprivation and the depressed economy to which my hon. Friend the Member for Dumbartonshire, East (Mrs. Bain) referred.
  This is a fundamental amendment. It makes the SDA accountable to the Scots people through the Scottish Assembly. It satisfies the members of the STUC and the unions, and those Labour Members who have preached the cause of the Scottish Development Agency's

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  being responsible to the Assembly right from the start. I hope that the hon. Members for Central Ayrshire (Mr. Lambie), South Ayrshire (Mr. Sillars) and Paisley will tonight stand up and be counted, because the people of Scotland are watching them.
  Mr. Sproat: When the Scottish Assembly legislation comes before the House I do not suppose that I shall agree with much of what the hon. Member for South Ayrshire (Mr. Sillars) has to say, but even if one were in favour of an SDA controlled by a Scottish Assembly, it would be incredibly naive to propose tonight that we should preempt that Scottish Assembly legislation. Either the Scottish National Party is so naive that it offends the House, as the hon. Member for Paisley (Mr. Robertson) said, or it is trying to use yet another hook on which to hang a discussion of the whole question of the Scottish Assembly, which is an abuse of the proceedings of the House.
  The Scottish National Party is perpetually denying any relationship with the violent actions which have been perpetrated in Scotland—the blowing up of pipelines. The members of the SNP cannot, either in the House or elsewhere, use such violent language as "If Westminster does not give powers to the Scottish Assembly the Scottish Assembly will have to take those powers" without inciting violence of action, and they should take the responsibility for it.
  Mr. Rifkind: The debate has been significant for the attempt made by the SNP Members to threaten the House and the people of Scotland as to the unconstitutional action they will support if their demands are not met. It is also significant in that, for the first time, we have heard from the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) that the SNP favours the disappearance of the Secretary of State for Scotland. The members of the SNP, for the first time, have stated that, notwithstanding the continued existence of the United Kingdom in the foreseeable future, they wish to see the post of Secretary of State for Scotland wither away. They wish to see Scotland's position within the Cabinet, as of right, disappear, irrespective of the future integration of Scotland in the United Kingdom. They do not say that that is a condition of independence.
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  There is no doubt that the amendment is premature. The hon. Member for South Ayrshire (Mr. Sillars) and other hon. Members pointed out how absurd it is at this stage, before a devolution measure is before the House, to prejudge that devolution proposal. I advise my hon. Friends, whatever their general views on devolution, not to support this absurd and premature amendment.
  The Secretary of State for Scotland (Mr. William Ross): I have been fascinated by the range of this debate. Here we have three wee harmless amendments, amendments that do not make very much sense. Let us consider them. Amendment No. 1 seeks to insert the word "democratic". It is sought to insert it in Clause 1(1) so as to make the subsection read:
  "For the purpose of furthering the democratic development of Scotland's economy".
  What does that mean?
  Amendment No. 2 seeks to insert the word "answerable". That does not mean anything legally. If the Agency is answerable to an Assembly it is democratic, and if it is answerable to the Secretary of State it is not—is that what is suggested? Let us remember that we are talking about the Agency. What confusion we are in. It is suggested that somehow the Secretary of State is undemocratic, but at the same time it is left to him to appoint the Scottish Development Agency.
  The hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) said that the amendment was a probing amendment. In fact, we dealt with the same amendment on 10th July. With all his experience and eloquence, the hon. Gentleman could not persuade anyone in the Committee to join him in voting for the amendment. However, it is now claimed to be merely a probing amendment.
  Next, we are told how important a decision is now before the House. It is said that we must make the decision tonight because the meaningfulness of the Assembly depends upon it, not to mention the SDA. Of course, it was said to be merely a probing amendment. What are we talking about? We are talking about the establishment of the Scottish Development Agency. That is the purpose of the Bill, nothing else.

  375
  These are unfortunate amendments. The hon. Gentleman has had the opportunity since the proceedings in Committee to make changes to them but he has not done so. They remain poor amendments. It is suggested that we should insert into the Bill that the Agency shall be
  "answerable to the Scottish Assembly, immediately upon establishment of that Assembly."
  There is no Assembly at present. We have not decided what will be the functions of the Assembly. The House of Commons must make that decision.
  Mr. Crawford rose—
  Mr. Ross: No, I am not nearly finished yet. The hon. Member for Dunbartonshire, East (Mrs. Bain) spoke of housing, education and other matters. We have not decided that those functions shall be transferred from the Secretary of State to the Assembly. We have not had a Bill on the subject. Indeed, we have not had a White Paper. Let the hon. Lady face the fact that she is seeking to deal in a piecemeal fashion with only one function, a function that the Secretary of State does not even have himself.
  The SDA has not been established and the Bill has not yet been approved. There will be plenty of argument as to which functions should be transferred to the Assembly from the Secretary of State, but is it not right to wait until we see the White Paper before starting the argument as to whether what is proposed is right or wrong? Is it not right to deal with the functions in the round and to discuss what is right or wrong on that basis?
  Let SNP Members appreciate that I am getting rather sick of hearing them say "The Scottish people will say". Are they the only interpreters of the will and wishes of the Scottish people?
  It is a measure of their arrogance that rather lets them down when they speak in these terms. We all know our own areas and the ideas of our people. But I would not proclaim myself to be the sole interpreter of what the Scottish people say.
  It is only fairly recently that some SNP Members have been speaking in those terms. An hon. Member referred to what happened when the Highlands and Islands Board was being set up. I felt rather amused listening to that. One member of SNP was a Tory candidate at that time and no doubt was attacking us for our policies. Talk about the inevitability of gradualism! The approach of the hon. Member for Clackmannan and East Stirlingshire was a fairly gradual one.
  This is the wrong time to talk about the functions of the Assembly. It is premature. Without going into the merits of whether it is desirable to do this when we come to deal with the functions of the Assembly, without making a decision in advance, I say that we should reject this amendment.
  Question put, That the amendment be made:—
  The House divided: Ayes 12, Noes 228.

  Division No. 348.]

  AYES

  [10.12 p.m.

  Bain, Mrs Margaret

  Reid, George

  Wilson, Gordon (Dundee E)

  Crawford, Douglas

  Thomas, Dafydd (Merioneth)

  Evans, Gwynfor (Carmarthen)

  Watt, Hamish

  TELLERS FOR THE AYES:

  Grimond, Rt Hon J.

  Welsh, Andrew

  Mr. Douglas Henderson and

  Kilfedder, James

  Wigley, Dafydd

  Mr. George Thompson.

  MacCormick, Iain

  NOES

  Allaun, Frank

  Boyden, James (Bish Auck)

  Cocks, Michael (Bristol S)

  Anderson, Donald

  Bray, Dr Jeremy

  Cohen, Stanley

  Archer, Peter

  Brown, Hugh D. (Provan)

  Coleman, Donald

  Armstrong, Ernest

  Brown, Robert C. (Newcastle W)

  Colquhoun, Mrs Maureen

  Ashley, Jack

  Buchanan, Richard

  Conlan, Bernard

  Atkins, Ronald (Preston N)

  Butler, Mrs Joyce (Wood Green)

  Cook, Robin F. (Edin C)

  Atkinson, Norman

  Campbell, Ian

  Corbett, Robin

  Barnett, Rt Hon Joel (Heywood)

  Canavan, Dennis

  Cox, Thomas (Tooting)

  Bean, R. E.

  Cant, R. B.

  Craigen, J. M. (Maryhill)

  Bennett, Andrew (Stockport N)

  Carmichael, Neil

  Crawshaw, Richard

  Bidwell, Sydney

  Carter, Ray

  Crosland, Rt Hon Anthony

  Bishop, E. S.

  Carter, Ray

  Cryer, Bob

  Blenkinsop, Arthur

  Cartwright, John

  Cunningham, G. (Islington S)

  Boardman, H.

  Castle, Rt Hon Barbara

  Davidson, Arthur

  Booth, Albert

  Clemitson, Ivor

  Davies, Bryan (Enfield N)

  Davies, Denzil (Llanelli)

  Jones, Alec (Rhondda)

  Rees, Rt Hon Merlyn (Leeds S)

  Davis, Clinton (Hackney C)

  Jones, Barry (East Flint)

  Richardson, Miss Jo

  Deakins, Eric

  Jones, Dan (Burnley)

  Roberts, Albert (Normanton)

  Dean, Joseph (Leeds West)

  Kaufman, Gerald

  Roberts, Gwilym (Cannock)

  Delargy, Hugh

  Kelley, Richard

  Robertson, John (Paisley)

  Dempsey, James

  Kilroy-Silk, Robert

  Roderick, Caerwyn

  Doig, Peter

  Kinnock, Neil

  Rodgers, George (Chorley)

  Dormand. J. D.

  Lambie, David

  Rodgers, William (Stockton)

  Douglas-Mann, Bruce

  Lamborn, Harry

  Rooker, J. W.

  Dunn, James A.

  Lamond, James

  Rose, Paul B.

  Dunnett, Jack

  Latham, Arthur (Paddington)

  Ross, Rt Hon W. (Kilmarnock)

  Dunwoody, Mrs Gwyneth

  Lestor, Miss Joan (Eton & Slough)

  Sandelson, Neville

  Eadie, Alex

  Lewis, Ron (Carlisle)

  Sedgemore, Brian

  Edelman, Maurice

  Lipton, Marcus

  Shaw, Arnold (Ilford South)

  Edge, Geoff

  Litterick, Tom

  Sheldon, Robert (Ashton-u-Lyne)

  English, Michael

  Lomas, Kenneth

  Short, Rt Hon E. (Newcastle C)

  Ennals, David

  Loyden, Eddie

  Short, Mrs Renée (Wolv NE)

  Evans, Ioan (Aberdare)

  Luard, Evan

  Silkin, Rt Hon John (Deptford)

  Ewing, Harry (Stirling)

  Lyons, Edward (Bradford W)

  Sillars, James

  Fernyhough, Rt Hon E.

  McCartney, Hugh

  Silverman, Julius

  Fitch, Alan (Wigan)

  McElhone, Frank

  Skinner, Dennis

  Fitt, Gerard (Belfast W)

  MacFarquhar, Roderick

  Small, William

  Flannery, Martin

  McGuire, Michael (Ince)

  Snape, Peter

  Fletcher, Ted (Darlington)

  Maclennan, Robert

  Spearing, Nigel

  Foot, Rt Hon Michael

  McMillan, Tom (Glasgow C)

  Spriggs, Leslie

  Forrester, John

  McNamara, Kevin

  Sproat, Iain

  Fowler, Gerald (The Wrekin)

  Madden, Max

  Stallard, A. W.

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

  Magee, Bryan

  Stoddart, David

  Freeson, Reginald

  Mallalieu, J. P. W.

  Stott, Roger

  Garrett, W. E. (Wallsend)

  Marquand, David

  Strang, Gavin

  George, Bruce

  Marshall, Dr. Edmund (Goole)

  Strauss, Rt Hon G. R.

  Gilbert, Dr John

  Marshall, Jim (Leicester S)

  Summerskill, Hon Dr Shirley

  Ginsburg, David

  Maynard, Miss Joan

  Swain, Thomas

  Gould, Bryan

  Meacher, Michael

  Taylor, Mrs Ann (Bolton W)

  Gourlay, Harry

  Mellish, Rt Hon Robert

  Thomas, Ron (Bristol NW)

  Graham, Ted

  Mikardo, Ian

  Tierney, Sydney

  Grant, George (Morpeth)

  Millan, Bruce

  Tinn, James

  Grocott, Bruce

  Miller, Dr M. S. (E. Kilbride)

  Tomlinson, John

  Harper, Joseph

  Miller, Mrs Millie (Ilford N)

  Torney, Tom

  Harrison, Walter (Wakefield)

  Molloy, William

  Varley, Rt Hon Eric G.

  Hart, Rt Hon Judith

  Moonman, Eric

  Wainwright, Edwin (Dearne V)

  Hattersley, Rt Hon Roy

  Morris, Alfred (Wythenshawe)

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

  Hatton, Frank

  Morris, Charles R. (Openshaw)

  Walker, Terry (Kingswood)

  Hayman, Mrs Helene

  Morris, Rt Hon J. (Aberavon)

  Watkins, David

  Horam, John

  Moyle, Roland

  Watkinson, John

  Howell, Denis (B'ham, Sm H)

  Mulley, Rt Hon Frederick

  Weetch, Ken

  Hoyle, Doug (Nelson)

  Murray, Rt Hon Ronald King

  Weitzman, David

  Hughes, Rt Hon C. (Anglesey)

  Newens, Stanley

  Wellbeloved, James

  Hughes, Robert (Aberdeen, N)

  Noble, Mike

  White, James (Pollok)

  Hughes, Roy (Newport)

  Oakes, Gordon

  Whitlock, William

  Hunter, Adam

  O'Malley, Rt Hon Brian

  Willey, Rt Hon Frederick

  Irvine, Rt Hon Sir A. (Edge Hill)

  Orbach, Maurice

  Williams, Alan (Swansea W)

  Irving, Rt Hon S. (Dartford)

  Ovenden, John

  Williams, Alan Lee (Hornch'ch)

  Jackson, Miss Margaret (Lincoln)

  Padley, Walter

  Wilson, Alexander (Hamilton)

  Janner, Greville

  Park, George

  Wise, Mrs. Audrey

  Jay, Rt Hon Douglas

  Parker, John

  Woof, Robert

  Jeger, Mrs Lena

  Parry, Robert

  Wrigglesworth, Ian

  Jenkins, Hugh (Putney)

  Peart, Rt Hon Fred

  Young, David (Bolton E)

  Jenkins, Rt Hon Roy (Stechford)

  Perry, Ernest

  John, Brynmor

  Phipps, Dr Colin

  TELLERS FOR THE NOES

  Johnson, James (Hull West)

  Prentice, Rt Hon Reg

  Mr. James Hamilton and

  Johnson, Walter (Derby S)

  Price, William (Rugby)

  Mr. Laurie Pavitt.

  Question accordingly negatived.
  Mr. Millan: I beg to move Amendment No. 3, in page 1, line 13, leave out 'six' and insert 'eight'.
  There was some discussion in Committee about the number of members of the Agency. I indicated then that I thought that if we wanted to change the number we should do so by increasing the minimum number, which, at six, seemed to me to be rather small. I thought that the maximum might well be 12, but I said that I would consider the minimum number. Having done so, and having taken account of the large range of functions which the Agency will carry out, we think that eight is the more appropriate minimum figure.
  Amendment agreed to.
  Mr. Grimond: I beg to move Amendment No. 4, in page 1, line 21, after 'workers', insert:
  'or representatives of small businesses, or representatives of rural industries,'.
  Mr. Speaker: With this we shall take Amendment No. 17, in Clause 15, page 15, line 26, leave out subsection (5).
  Mr. Grimond: Amendment No. 4 refers to subsection (4) of Clause 1, which lays down the classes of person from whom the Secretary of State is to appoint the members of the Agency. He is given wide discretion. Indeed, it appears by the latter part of the subsection that he can appoint practically anyone from every sector
  "…which the Secretary of State considers is relevant to the…functions of the Agency."
  It could well be said that it is unnecessary to specify any particular class of person, but earlier the clause so specifies. It particularly mentions those who have
  "…shown capacity in industry, banking, accounting or finance, environmental matters, local government or the representation of workers…".
  It seems to me, therefore, that if we are to specify, bearing in mind that in Scotland there is great need to have some people at least who are experienced in small-scale industry and in rural matters, it might be wise to include them.
  I recognise that it is always difficult to know where one is to stop once one
  380
  specifies people in a class of this sort, but it seems to us that, as it stands, the provision is weighted possibly in favour of those who might generally be thought to be connected with rather large-scale industry, and so on, and that we might well emphasise, therefore, that people with rural experience and who are well versed in the problems of running smaller industries, particularly in the rural areas, should be included as well.
  Mr. Millan: I want to deal with with Amendment No. 17 first. I do not think that the right hon. Member for Orkney and Shetland (Mr. Grimond) referred to it. It would take the Small Industries Council for Rural Areas of Scotland out of the Agency. I take it, therefore, that it is a probing amendment, and I hope that it will be withdrawn, for reasons which I shall put to the right hon. Gentleman. The work of SICRAS is very important and is work which can be carried out very appropriately through the Agency.
  I take the point of Amendment No. 4. We discussed it at some length in Committee. At one point I almost offered to take out everything in reference to different backgrounds and simply give the Secretary of State carte blanche to choose the members of the Agency. I believe that on balance there was a feeling in Committee that the matters that had been mentioned were worth mentioning and that the clause would lose something if any of them were removed. Nevertheless, it would be a mistake to include additional questions of this type. I can think of a number of other areas of experience that one could quite well write into the subsection. Experience of industry, accounting, finance and so on can equally apply to small businesses or rural industries as it applies to large industries in urban areas. There is nothing exclusively related to the larger urban areas in the clause, as drafted, at present.
  I have already said that the Scottish Development Agency will pay attention to all areas of Scotland. I believe that the small business sector is an important part of Scotland's economy. It should be nurtured and allowed to expand. Often that can be done with comparatively small sums of Government money, but with the help of management as well as advice,

  381
  experience and all the rest which a small business sometimes finds it difficult to obtain for itself. This is already well within the compass of the Agency and what we expect the Agency to do.
  I can give all these assurances, but, to avoid making the subsection more elaborate, I cannot recommend that we make the amendment, because the kind of experience that it says should be specifically looked for is already covered.
  Mr. Grimond: In view of the Minister's assurance that he has got the matter much in mind and will ensure that SICRAS is properly represented, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

  SCOTTISH DEVELOPMENT AGENCY (No. 2) BILL
    Clause 2

      GENERAL PURPOSES AND FUNCTIONS
      Mr. Millan: I beg to move Amendment No. 5, in page 2, line 25, leave out 'and' and insert—
      '(bb) the promotion of industrial efficiency and international competitiveness; and'.
      This matter was discussed in Committee, where I was asked, in connection with an amendment which I believe was worded in a sightly different way from this one why I did not include words about industrial efficiency, international competitiveness and the rest, because these were words already in the Industry Bill and in the Welsh Development Agency Bill. I made the point then which I think in principle is right; namely, that there was no reason why the wording of our Bill should follow the Welsh Bill or the Industry Bill or that the wording of those Bills should follow our Bill. I said that we should maintain a certain independence in the matter. That is certainly true in principle, and it applies to other parts of the Bill in practical terms, but, having looked at the wording of this clause again, it seemed to me that it might be misunderstood if these words were not in the Scottish Bill but were in the Welsh Bill and the Industry Bill.
      It might be thought, however unfairly and unjustifiably, that we were not concerned about promoting industrial efficiency and competitiveness in an interna-
      382
      tional way. It was to avoid such misunderstanding that it seemed to me, on balance, that it was better that these words should be put into the Bill. Those who served on the Committee will welcome this amendment.
      Amendment agreed to.
      Mr. Millan: I beg to move Amendment No. 6, in page 3, line 16, leave out 'subsection (5)' and insert 'subsections (5) and (6)'.
      This is a drafting amendment consequential on another amendment made in Committee. The consequential drafting amendment was not made at that time, but it is now made by the amendment.
      Amendment agreed to.
      10.30 p.m.
      Mr. William Ross: I beg to move Amendment No. 7, in page 3, line 39, at end insert—
      '(4A) The functions of the Agency mentioned in subsection (2)(b) above may only be exercised through a company within the meaning of the Companies Act 1948 or through a partnership firm.'.
      Since the Committee stage we have reflected as to whether it would be desirable and appropriate to put some more words into the Bill which would clarify our intentions with regard to the Agency's industrial investment functions under Clause 2(2)(b). As a result, I commend the amendment to the House. It provides that, in performing its industrial investment functions under Clause 2(2)(b), the Agency is required to operate through a company within the meaning of the Companies Act or through a partnership firm. It will mean that any company set up by the Agency, whether wholly- or partially-owned, will be subject to the same rules of conduct and the same liabilities as are private companies. They will be regulated by the City code and by all the legislation which governs commercial trading activities. This meets the point which was raised in Committee and is a useful clarification.
      Mr. Buchanan-Smith: I welcome the amendment, which covers points such as auditing to which I will return.
      Amendment agreed to.

    Clause 5

      EXERCISE BY AGENCY OF POWERS TO GIVE SELECTIVE FINANCIAL ASSISTANCE UNDER INDUSTRY ACT 1972
      Amendment made: No. 9, in page 6, line 4, after 'of' insert 'and incidental to'.—[Mr. Millan.]
      Mr. Millan: I beg to move Amendment No. 10, in page 6, line 18, leave out subsection (14).
      Mr. Deputy Speaker (Mr. Oscar Murton): With that amendment we will take the following amendments:
      No. 22, in Schedule 2, page 26, line 32, after 'Agency', insert '(a)'.
      No. 23, in page 26, line 34, after 'relates', insert:
      'and
      (b) in respect of their administrative expenses'.
      Mr. Millan: The amendments must be read together. This is a slightly complicated drafting point relating to the administrative expenses of the Agency. The effect of the three amendments taken together is to improve the drafting and to enable all administrative costs of the Agency to be met from grant in aid, which is what the intention has been.
      Amendment agreed to.

    Clause 7

      DEVELOPMENT AND IMPROVEMENT OF THE ENVIRONMENT
      Mr. Millan: I beg to move Amendment No. 11, in page 7, line 10, leave out from 'given' to end of line 11 and insert:
      'in relation to a specific act of the Agency or in relation to all acts of a class or description specified in the approval, and may be given subject to such conditions as may be so specified'.
      The effect of the amendment is to allow the Secretary of State to issue approvals for a class of scheme rather than to approve each scheme individually. It will obviously depend on such matters as the scale of the scheme whether it is a matter of individual approval or whether the Secretary of State does it in a wider way. This is an improvement in the drafting
      384
      and improves the flexibility and should reduce the administration.
      Amendment agreed to.

    Clause 8

      DERELICT LAND
      Mr. Millan: I beg to move Amendment No. 12, in page 8, line 36, at end insert—
      '(5) Where the Agency exercise or propose to exercise their powers under this section in connection with land as respects which a local authority have before the appointed day incurred expenditure in the exercise of similar powers, the Agency may, if they think fit, pay to the authority concerned the amount of that expenditure or any part thereof.'.
      The amendment is basically in the nature of a transitional provision. The claims of derelict land will become the Agency's responsibility. There is already provision in the Bill for transitional arrangements. It has been pointed out to us—for example, by the local authorities themselves—that in some cases they will have incurred expense on schemes which will be taken over by the Agency and which are not already covered by the transitional provisions in the Bill and they should be reimbursed for any expenses they have already incurred on the schemes. The effect of the amendment will be to empower the Agency to reimburse them. Obviously this is only right, as the local authority will no longer be responsible for the schemes. The local authorities have legitimately asked for this. It is an improvement in the Bill from their point of view.
      Amendment agreed to.

    Clause 10

      POWERS OF ENTRY
      Mr. Millan: I beg to move Amendment No. 13, in page 10, line 11, leave out 'Any' and insert
      'Subject to subsection (2) below, any'.
      This is basically a drafting amendment which arose out of an interesting little discussion in Committee initiated by the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn), who took the view that the clause was inadequate and did not properly incorporate

      385
      the safeguards in subsection (2) because there was no reference to them in subsection (1). I am not sure I altogether agree with him, but this amendment is made in order to make it clear beyond peradventure that the drafting is correct.
      Amendment agreed to.

    Clause 11

      POWER TO OBTAIN INFORMATION
      Mr. Teddy Taylor: I beg to move Amendment No. 14, in page 12, line 5, at end insert—
      '(1A) Any person or body required to provide information under subsection (1) above shall be entitled to obtain compensation from the Agency for expenses reasonably incurred in providing and obtaining the said information'.
      Clause 11 gives the Agency power to send a notice to people or companies who occupy premises or obtains rent from them to give information about their own interest and the name and address of anyone else known to them as having an interest in the premises, whether as superior, owner, heritable creditor, lessee or otherwise. Failure to do this can result in a fine of £100, and a knowing mis-statement can bring a fine of £400 or two years' imprisonment.
      If any hon. Member received a notice of this sort, the first thing he would do would be to see a lawyer. Expense might be involved, and I am suggesting in the amendment that reasonable legal costs involved in getting this information should
      be paid by the Agency. This would be a protection for the public and would prevent the Agency from asking for too much unnecessary information.
      Mr. Millan: The provision in Clause 11 is a common form for any enactment which confers powers of compulsory acquisition. [Interruption.] I do not know where the right hon. Member for Yeovil (Mr. Peyton) has come from. If he wants to make an intelligent or intelligible contribution, perhaps he would care to stand up. We have done quite well without his presence during the rest of the day.
      All that is required under this clause is that the person concerned should state his interest in the land—whether he is an occupier or a landlord—and he is not obliged to carry out expensive surveys to find out any information. There is no reason why he should be entitled to obtain compensation for what would be basically writing a letter to the Agency telling it of his interest.
      Mr. Teddy Taylor: That reply is quite unsatisfactory. It is not just a question of a person's own interest. He must give details of other people known to him. We are going too far in forcing people to give information and making them liable to heavy penalties if they do not. We can stop this by voting for the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 177, Noes 224.

      Division No. 349.]

      AYES

      [10.40 p.m.

      Aitken, Jonathan

      Costain, A. P.

      Galbraith, Hon. T. G. D.

      Arnold, Tom

      Crouch, David

      Gardiner, George (Reigate)

      Atkins, Rt Hon H. (Spelthorne)

      Davies, Rt Hon J. (Knutsford)

      Gardner, Edward (S Fylde)

      Banks, Robert

      Dean, Paul (N Somerset)

      Gilmour, Sir John (East Fife)

      Berry, Hon Anthony

      Dodsworth, Geoffrey

      Glyn, Dr Alan

      Bitten, John

      Douglas-Hamilton, Lord James

      Godber, Rt Hon Joseph

      Body, Richard

      Drayson, Burnaby

      Goodhart, Philip

      Boscawen, Hon Robert

      du Cann, Rt Hon Edward

      Goodhew, Victor

      Bottomley, Peter

      Durant, Tony

      Goodlad, Alastair

      Bowden, A. (Brighton, Kemptown)

      Eden, Rt Hon Sir John

      Gorst, John

      Bovson, Dr Rhodes (Brent)

      Edwards, Nicholas (Pembroke)

      Gow, Ian (Eastbourne)

      Brittan, Leon

      Elliott, Sir William

      Gray, Hamish

      Brotherton, Michael

      Emery, Peter

      Grieve, Percy

      Buchanan-Smith, Alick

      Eyre, Reginald

      Grimond, Rt Hon J.

      Bulmer, Esmond

      Fairbairn, Nicholas

      Grist, Ian

      Carlisle, Mark

      Fairgrieve, Russell

      Hall, Sir John

      Churchill, W. S.

      Farr, John

      Hamilton, Michael (Salisbury)

      Clark, Alan (Plymouth, Sutton)

      Finsberg, Geoffrey

      Hampson, Dr Keith

      Clark, William (Croydon S)

      Fisher, Sir Nigel

      Hannam, John

      Clarke, Kenneth (Rushcliffe)

      Fletcher-Cooke, Charles

      Hastings, Stephen

      Cockcroft, John

      Fookes, Miss Janet

      Havers, Sir Michael

      Cooks Robert (Bristol W)

      Fowler, Norman (Sutton C'f'd)

      Hawkins, Paul

      Cope John

      Fox, Marcus

      Hayhoe, Barney

      Cordle, John H.

      Fraser, Rt Hon H. (Stafford & St)

      Heseltine, Michael

      Hicks, Robert

      Meyer, Sir Anthony

      Scott, Nicholas

      Higgins, Terence L.

      Mills, Peter

      Shaw, Giles (Pudsey)

      Hordern, Peter

      Miscampbell, Norman

      Shelton, William (Streatham)

      Howe, Rt Hon Sir Geoffrey

      Moate, Roger

      Shepherd, Colin

      Hunt, John

      Montgomery, Fergus

      Shersby, Michael

      Hutchison, Michael Clark

      Moore, John (Croydon C)

      Sims, Roger

      Irving, Charles (Cheltenham)

      More, Jasper (Ludlow)

      Sinclair, Sir George

      James, David

      Morgan, Geraint

      Skeet, T. H. H.

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

      Morgan-Giles, Rear-Admiral

      Smith, Cyril (Rochdale)

      Jessel, Toby

      Morris, Michael (Northampton S)

      Smith, Dudley (Warwick)

      Johnson Smith, G. (E Grinstead)

      Morrison, Hon Peter (Chester)

      Speed, Keith

      Jopling, Michael

      Mudd, David

      Sproat, Iain

      Joseph, Rt Hon Sir Keith

      Neave, Airey

      Stanbrook, Ivor

      Kilfedder, James

      Nelson, Anthony

      Stewart, Ian (Hitchin)

      Kimball, Marcus

      Neubert, Michael

      Stokes, John

      King, Tom (Bridgwater)

      Newton, Tony

      Stradling Thomas, J.

      Knight, Mrs. Jill

      Nott, John

      Taylor. Teddy (Cathcart)

      Knox, David

      Oppenheim, Mrs Sally

      Temple-Morris, Peter

      Lamont, Norman

      Page, Rt Hon R. Graham (Crosby)

      Thomas, Rt Hon P. (Hendon S)

      Latham, Michael (Melton)

      Parkinson, Cecil

      Thorpe, Rt Hon P. (Hendon S)

      Lawrence, Ivan

      Pattie, Geoffrey

      Townsend, Cyril D.

      Lawson, Nigel

      Penhaligon, David

      Trotter, Neville

      Lester Jim (Beeston)

      Percival, Ian

      van Straubenzee, W. R.

      Loveridge, John

      Peyton, Rt Hon John

      Vaughan, Dr Gerard

      Macfarlane, Neil

      Pink, R. Bonner

      Viggers, Peter

      MacGregor, John

      Price, David (Eastleigh)

      Wakeham, John

      Macmillan, Rt Hon M. (Farnham)

      Pym, Rt Hon Francis

      Walder, David (Clitheroe)

      McNair-Wilson, M. (Newbury)

      Raison, Timothy

      Wells, John

      McNair-Wilson, P. (New Forest)

      Rees, Peter (Dover & Deal)

      Wiggin, Jerry

      Madel, David

      Renton, Rt Hon Sir D. (Hunts)

      Wood, Rt Hon Richard

      Marshall, Michael (Arundel)

      Rifkind Malcolm

      Young, Sir G. (Ealing, Acton)

      Marten, Neil

      Rippon, Rt Hon Geoffrey

      Younger, Hon George

      Mates, Michael

      Roberts, Michael (Cardiff NW)

      Mather, Carol

      Rossi, Hugh (Hornsey)

      TELLERS FOR THE AYES:

      Mawby, Ray

      Sainsbury, Tim

      Mr. Adam Butler and

      Maxwell-Hyslop, Robin

      St. John-Stevas, Norman

      Mr. Fred Silvester

      Mayhew, Patrick

      NOES

      Allaun, Frank

      Dean, Joseph (Leeds West)

      Hunter, Adam

      Anderson, Donald

      Delargy, Hugh

      Irving, Rt Hon S. (Dartford)

      Archer, Peter

      Dempsey, James

      Jackson, Colin (Brighouse)

      Armstrong. Ernest

      Doig, Peter

      Jackson, Miss Margaret (Lincoln)

      Atkins, Ronald (Preston N)

      Dormand, J. D.

      Janner, Greville

      Atkinson, Norman

      Douglas-Mann, Bruce

      Jay, Rt Hon Douglas

      Bain. Mrs Margaret

      Dunnett, Jack

      Jeger, Mrs Lena

      Bean, R. E.

      Dunwoody, Mrs Gwyneth

      Jenkins, Hugh (Putney)

      Bennett, Andrew (Stockport N)

      Eadie, Alex

      John, Brynmor

      Bidwell, Sydney

      Edge, Geoff

      Johnson, Walter (Derby S)

      Bishop, E. S.

      English, Michael

      Jones, Alec (Rhondda)

      Blenkinsop, Arthur

      Ennals, David

      Jones, Barry (East Flint)

      Boardman, H.

      Evans, Gwynfor (Carmarthen)

      Jones, Dan (Burnley)

      Booth. Albert

      Evans, Ioan (Aberdare)

      Kaufman, Gerald

      Bray, Dr Jeremy

      Ewing, Harry (Stirling)

      Kelley, Richard

      Brown, Hugh D. (Provan)

      Fernyhough, Rt Hon E.

      Kilroy-Silk, Robert

      Brown, Robert C. (Newcastle W)

      Fitch, Alan (Wigan)

      Kinnock, Neil

      Buchanan, Richard

      Fitt, Gerard (Belfast W)

      Lambie, David

      Campbell, Ian

      Flannery, Martin

      Lamborn, Harry

      Canavan, Dennis

      Fletcher, Ted (Darlington)

      Lamond, James

      Cant, R. B.

      Forrester, John

      Latham, Arthur (Paddington)

      Carmichael, Neil

      Fowler, Gerald (The Wrekin)

      Lestor, Miss Joan (Eton & Slough)

      Carter, Ray

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

      Lipton, Marcus

      Carter-Jones, Lewis

      Freeson, Reginald

      Litterick, Tom

      Cartwright, John

      Garrett, W. E. (Wallsend)

      Lomas, Kenneth

      Castle, Rt Hon Barbara

      George, Bruce

      Loyden, Eddie

      Clemitson, Ivor

      Gilbert, Dr John

      Luard, Evan

      Cocks, Michael (Bristol S)

      Ginsburg, David

      Lyons, Edward (Bradford W)

      Cohen, Stanley

      Gould, Bryan

      McCartney, Hugh

      Coleman, Donald

      Gourlay, Harry

      MacCormick, Iain

      Conlan, Bernard

      Graham, Ted

      McElhone, Frank

      Coot, Robin F. (Edin C)

      Grant, George (Morpeth)

      MacFarquhar, Roderick

      Corbett, Robin

      Grocott, Bruce

      McGuire, Michael (Ince)

      Cox, Thomas (Tooting)

      Harper, Joseph

      Maclennan, Robert

      Craigen, J. M. (Maryhill)

      Harrison, Walter (Wakefield)

      McMillan, Tom (Glasgow C)

      Crawford, Douglas

      Hart, Rt Hon Judith

      McNamara, Kevin

      Crawshaw, Richard

      Hattersley, Rt Hon Roy

      Madden, Max

      Crosland, Rt Hon Anthony

      Hatton, Frank

      Magee, Bryan

      Cryer, Bob

      Hayman, Mrs Helena

      Mallalieu, J. P. W.

      Cunningham, G. (Islington S)

      Henderson, Douglas

      Marquand, David

      Davidson, Arthur

      Horam, John

      Marshall, Dr. Edmund (Goole)

      Davies, Bryan (Enfield N)

      Howell, Denis (B'ham, Sm H)

      Marshall, Jim (Leicester S)

      Davies, Denzil (Llanelli)

      Hoyle, Doug (Nelson)

      Maynard, Miss Joan

      Davis, Clinton (Hackney C)

      Hughes, Rt Hon C. (Anglesey)

      Meacher, Michael

      Deakins, Eric

      Hughes, Robert (Aberdeen, N)

      Mellish, Rt Hon Robert

      Mikardo, Ian

      Roberts, Gwilym (Cannock)

      Thompson, George

      Millan, Bruce

      Robertson, John (Paisley)

      Tierney, Sydney

      Miller, Or M. S. (E. Kilbride)

      Roderick, Caerwyn

      Tinn, James

      Miller, Mrs Millie (Ilford N)

      Rodgers, George (Chorley)

      Tomlinson, John

      Molloy, William

      Rodgers, William (Stockton)

      Torney, Tom

      Moonman, Eric

      Rooker, J. W.

      Varley, Rt Hon Eric G.

      Morris, Alfred (Wythenshawe)

      Rose, Paul B.

      Wainwright, Edwin (Dearne V)

      Morris, Charles R. (Openshaw)

      Ross, Rt Hon W. (Kilmarnock)

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

      Morris, Rt Hon J. (Aberavon)

      Sandelson, Neville

      Walker, Terry (Kingswood)

      Moyle, Roland

      Sedgemore, Brian

      Watkins, David

      Mulley, Rt Hon Frederick

      Shaw, Arnold (Ilford South)

      Watkinson, John

      Murray, Rt Hon Ronald King

      Sheldon, Robert (Ashton-u-Lyne)

      Watt, Hamish

      Newens, Stanley

      Short, Rt Hon E. (Newcastle C)

      Weetch, Ken

      Noble, Mike

      Short, Mrs Renée (Wolv NE)

      Wellbeloved, James

      Oakes, Gordon

      Silkin, Rt Hon John (Wolv NE)

      Welsh, Andrew

      Ogden, Eric

      Sillars, James

      White, James (Pollok)

      O'Malley, Rt Hon Brian

      Silverman, Julius

      Whitlock, William

      Orbach, Maurice

      Skinner, Dennis

      Wigley, Dafydd

      Ovenden, John

      Small, William

      Willey, Rt Hon Frederick

      Padley, Walter

      Snape, Peter

      Williams, Alan (Swansea W)

      Park, George

      Spearing, Nigel

      Williams, Alan Lee (Hornch'ch)

      Parker, John

      Spriggs, Leslie

      Wilson, Alexander (Hamilton)

      Parry, Robert

      Stallard, A. W.

      Wilson. Gordon (Dundee E)

      Pavitt, Laurie

      Stoddart, David

      Wise, Mrs. Audrey

      Peart, Rt Hon Fred

      Stott, Roger

      Wool, Robert

      Perry, Ernest

      Strang, Gavin

      Wrigglesworth, Ian

      Phipps, Dr Colin

      Strauss, Rt Hon G. R.

      Young, David (Bolton E)

      Rees, Rt Hon Merlyn (Leeds S)

      Summerskill, Hon Dr Shirley

      Reid, George

      Taylor, Mrs Ann (Bolton W)

      TELLERS FOR THE NOES:

      Richardson, Miss Jo

      Thomas, Dafydd (Merioneth)

      Mr. James Hamilton and

      Roberts, Albert (Normanton)

      Thomas, Ron (Bristol NW)

      Mr. James A. Dunn

      Question accordingly negatived.

    Clause 13

      FINANCES OF THE AGENCY
      Amendment proposed: No. 15, in page 13, line 42, at end insert—
      'Notwithstanding the general limit imposed by this subsection, the Agency shall not be authorised to spend more than £50 million
      on the exercise of their powers under section 2(2)(b) until a report has been submitted to Parliament on the record and achievements of the Agency in this regard, and the report has been approved by both Houses of Parliament'.—[Mr. Buchanan-Smith.]
      Question put, That the amendment be made:—
      The House divided: Ayes 177, Noes 223.

      Division No. 350.]

      AYES

      [10.50 p.m.

      Aitken, Jonathan

      Emery, Peter

      Higgins, Terence L.

      Arnold, Tom

      Eyre, Reginald

      Hordern, Peter

      Atkins, Rt Hon H. (Spelthorne)

      Fairbairn, Nicholas

      Howe, Rt Hon Sir Geoffrey

      Banks, Robert

      Fairgrieve, Russell

      Hunt, John

      Biffen, John

      Farr, John

      Hutchison, Michael Clark

      Body, Richard

      Finsberg, Geoffrey

      Irving, Charles (Cheltenham)

      Boscawen, Hon Robert

      Fisher, Sir Nigel

      James, David

      Bottomley, Peter

      Fletcher-Cooke, Charles

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

      Bowden, A. (Brighton, Kemptown)

      Fookes, Miss Janet

      Jessel, Toby

      Boyson, Dr Rhodes (Brent)

      Fowler, Norman (Sutton C'f'd)

      Johnson Smith, G. (E Grinstead)

      Brittan, Leon

      Fox, Marcus

      Jopling, Michael

      Brotherton, Michael

      Fraser, Rt Hon H. (Stafford & St)

      Joseph, Rt Hon Sir Keith

      Buchanan-Smith, Alick

      Galbraith, Hon. T. G. P.

      Kimball, Marcus

      Bulmer, Esmond

      Gardiner, George (Reigate)

      King, Tom (Bridgwater)

      Butler, Adam (Bosworth)

      Gardner, Edward (S Fylde)

      Knight, Mrs. Jill

      Carlisle, Mark

      Gilmour, Sir John (East Fife)

      Knox, David

      Churchill, W. S.

      Glyn, Dr Alan

      Lamont, Norman

      Clark, Alan (Plymouth, Sutton)

      Godber, Rt Hon Joseph

      Latham, Michael (Melton)

      Clark, William (Croydon S)

      Goodhart, Philip

      Lawrence, Ivan

      Clarke, Kenneth (Rushcliffe)

      Goodhew, victor

      Lawson, Nigel

      Cockcroft, John

      Goodlad, Alastair

      Lester Jim (Beeston)

      Cooke, Robert (Bristol W)

      Gorst, John

      Loveridge, John

      Cope, John

      Gow, Ian (Eastbourne)

      Macfarlane, Neil

      Cordle, John H.

      Gray, Hamish

      MacGregor, John

      Costain, A. P.

      Grieve, Percy

      Macmillan, Rt Hon M. (Farnham)

      Crouch, David

      Grimond, Rt Hon J.

      McNair-Wilson, M. (Newbury)

      Davies, Rt Hon J. (Knutsford)

      Grist, Ian

      McNair-Wilson, P. (New Forest)

      Dean, Paul (N Somerset)

      Hamilton, Michael (Salisbury)

      Madel, David

      Dodsworth, Geoffrey

      Hampson, Dr Keith

      Marshall, Michael (Arundel)

      Douglas-Hamilton, Lord James

      Hannam, John

      Marten, Neil

      Drayson, Burnaby

      Hastings, Stephen

      Mates, Michael

      du Cann, Rt Hon Edward

      Havers, Sir Michael

      Mather, Carol

      Durant, Tony

      Hawkins, Paul

      Mawby, Ray

      Eden, Rt Hon Sir John

      Hayhoe, Barney

      Maxwell-Hyslop, Robin

      Edwards, Nicholas (Pembroke)

      Heseltine, Michael

      Mayhew, Patrick

      Elliott, Sir William

      Hicks, Robert

      Meyer, Sir Anthony

      Mills, Peter

      Pym, Rt Hon Francis

      Stanbrook, Ivor

      Miscampbell, Norman

      Raison, Timothy

      Stewart, Ian (Hitchin)

      Moate, Roger

      Rees, Peter (Dover & Deal)

      Stokes, John

      Montgomery, Fergus

      Renton, Rt Hon Sir D. (Hunts)

      Stradling Thomas, J.

      Moore, John (Croydon C)

      Rifkind Malcolm

      Taylor, Teddy (Cathcart)

      More, Jasper (Ludlow)

      Rippon, Rt Hon Geoffrey

      Temple-Morris, Peter

      Morgan, Geraint

      Roberts, Michael (Cardiff NW)

      Thomas, Rt Hon P. (Hendon S)

      Morgan-Giles, Rear-Admiral

      Rossi, Hugh (Hornsey)

      Thorpe, Rt Hon Jeremy (N Devon)

      Morris, Michael (Northampton S)

      Sainsbury, Tim

      Townsend, Cyril D.

      Morrison, Hon Peter (Chester)

      St. John-Stevas, Norman

      Trotter, Neville

      Mudd, David

      Scott, Nicholas

      van Straubenzee, W. R.

      Neave, Airey

      Shaw, Giles (Pudsey)

      Vaughan, Dr Gerard

      Nelson, Anthony

      Shelton, William (Streatham)

      Viggers, Peter

      Neubert, Michael

      Shepherd, Colin

      Wakeham, John

      Newton, Tony

      Shersby, Michael

      Walder, David (Clitheroe)

      Nott, John

      Silvester, Fred

      Wells, John

      Oppenheim, Mrs Sally

      Sims, Roger

      Wiggin, Jerry

      Page, Rt Hon R. Graham (Crosby)

      Sinclair, Sir George

      Wood, Rt Hon Richard

      Pattie, Geoffrey

      Skeet, T. H. H.

      Young, Sir G. (Ealing, Acton)

      Penhaligon, David

      Smith, Cyril (Rochdale)

      Younger, Hon George

      Percival, Ian

      Smith, Dudley (Warwick)

      Peyton, Rt Hon John

      Speed, Keith

      TELLERS FOR THE AYES:

      Pink, R. Bonner

      Spicer, Michael (S Worcester)

      Mr. Cecil Parkinson and

      Price, David (Eastleigh)

      Sproat, Iain

      Mr. Anthony Berry.

      NOES

      Allaun, Frank

      Evans, Ioan (Aberdare)

      Loyden, Eddie

      Anderson, Donald

      Ewing, Harry (Stirling)

      Luard, Evan

      Archer, Peter

      Fernyhough, Hon E.

      Lyons, Edward (Bradford W)

      Armstrong, Ernest

      Fitch, Alan (Wigan)

      McCartney, Hugh

      Atkins, Ronald (Preston N)

      Fitt, Gerard (Belfast W)

      MacCormick, Iain

      Atkinson, Norman

      Flannery, Martin

      McElhone, Frank

      Bain, Mrs Margaret

      Fletcher, Ted (Darlington)

      MacFarquhar, Roderick

      Bean, R. E.

      Forrester, John

      McGuire, Michael (Ince)

      Bennett, Andrew (Stockport N)

      Fowler, Gerald (The Wrekin)

      Maclennan, Robert

      Bidwell, Sydney

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

      McMillan, Tom (Glasgow C)

      Bishop, E. S.

      Freeson, Reginald

      McNamara, Kevin

      Blenkinsop, Arthur

      Garrett, W. E. (Wallsend)

      Madden, Max

      Boardman, H.

      George, Bruce

      Magee, Bryan

      Booth, Albert

      Gilbert, Dr John

      Mallalieu, J. P. W.

      Bray, Dr Jeremy

      Ginsburg, David

      Marshall, Dr. Edmund (Goole)

      Brown, Hugh D. (Provan)

      Gould, Bryan

      Marshall, Jim (Leicester S)

      Brown, Robert C. (Newcastle W)

      Gourlay, Harry

      Maynard, Miss Joan

      Buchanan, Richard

      Graham, Ted

      Meacher, Michael

      Campbell, Ian

      Grant, George (Morpeth)

      Mellish, Rt Hon Robert

      Canavan, Dennis

      Grocott, Bruce

      Mikardo, Ian

      Cant, R. B.

      Hamilton, James (Bothwell)

      Millan, Bruce

      Carmichael, Neil

      Harrison, Walter (Wakefield)

      Miller, Dr M. S. (E. Kilbride)

      Carter, Ray

      Hart, Rt Hon Judith

      Miller, Mrs Millie (Ilford N)

      Carter-Jones, Lewis

      Hattersley, Rt Hon Roy

      Molloy, William

      Cartwright, John

      Hatton, Frank

      Moonman, Eric

      Castle, Rt Hon Barbara

      Hayman, Mrs Helene

      Morris, Alfred (Wythenshawe)

      Clemitson, Ivor

      Henderson, Douglas

      Morris, Charles R. (Openshaw)

      Cocks, Michael (Bristol S)

      Horam, John

      Morris, Rt Hon J. (Aberavon)

      Cohen, Stanley

      Howell, Denis (B'ham, Sm H)

      Moyle, Roland

      Coleman, Donald

      Hoyle, Doug (Nelson)

      Mulley, Rt Hon Frederick

      Conlan, Bernard

      Hughes, Rt Hon C. (Anglesey)

      Murray, Rt Hon Ronald King

      Cook, Robin F. (Edin C)

      Hughes, Robert (Aberdeen, N)

      Newens, Stanley

      Corbett, Robin

      Hunter, Adam

      Noble, Mike

      Cox, Thomas (Tooting)

      Irving, Rt Hon S. (Dartford)

      Oakes, Gordon

      Craigen, J. M. (Maryhill)

      Jackson, Colin (Brighouse)

      Ogden, Eric

      Crawford, Douglas

      Jackson, Miss Margaret (Lincoln)

      O'Malley, Rt Hon Brian

      Crawshaw, Richard

      Janner, Greville

      Orbach, Maurice

      Crosland, Rt Hon Anthony

      Jay, Rt Hon Douglas

      Ovenden, John

      Cryer, Bob

      Jeger, Mrs Lena

      Padley, Walter

      Cunningham, G. (Islington S)

      Jenkins, Hugh (Putney)

      Park, George

      Davidson, Arthur

      John, Brynmor

      Parker, John

      Davies, Bryan (Enfield N)

      Johnson, Walter (Derby S)

      Parry, Robert

      Davies, Denzil (Llanelli)

      Jones, Alec (Rhondda)

      Pavitt, Laurie

      Davis Clinton (Hackney C)

      Jones, Barry (East Flint)

      Peart, Rt Hon Fred

      Deakins, Eric

      Jones, Dan (Burnley)

      Perry, Ernest

      Dean, Joseph (Leeds West)

      Kaufman, Gerald

      Phipps, Dr Colin

      Delargy, Hugh

      Kelley, Richard

      Price, William (Rugby)

      Dempsey, James

      Kilfedder, James

      Rees, Rt Hon Merlyn (Leeds S)

      Doig, Peter

      Kilroy-Silk, Robert

      Richardson, Miss Jo

      Douglas-Mann, Bruce

      Kinnock, Neil

      Roberts, Albert (Normanton)

      Dunn, James A.

      Lambie, David

      Roberts, Gwilym (Cannock)

      Dunnett, Jack

      Lamborn, Harry

      Robertson, John (Paisley)

      Dunwoody, Mrs Gwyneth

      Lamond, James

      Roderick, Caerwyn

      Eadie, Alex

      Latham, Arthur (Paddington)

      Rodgers, George (Chorley)

      Edge, Geoff

      Lestor, Miss Joan (Eton & Slough)

      Rodgers, William (Stockton)

      English, Michael

      Lipton, Marcus

      Rooker, J. W.

      Ennals, David

      Litterick, Tom

      Rose, Paul B.

      Evans, Gwynfor (Carmarthen)

      Lomas, Kenneth

      Ross, Rt Hon W. (Kilmarnock)

      Sandelson, Neville

      Strauss, Rt Hon G. R.

      Welsh, Andrew

      Sedgemore, Brian

      Taylor, Mrs Ann (Bolton W)

      White, James (Pollok)

      Shaw, Arnold (Ilford South)

      Thomas, Dafydd (Merioneth)

      Whitlock, William

      Sheldon, Robert (Ashton-u-Lyne)

      Thomas, Ron (Bristol NW)

      Wigley, Dafydd

      Short, Rt Hon E. (Newcastle C)

      Thompson, George

      Willey, Rt Hon Frederick

      Short, Mrs Renée (Wolv NE)

      Tierney, Sydney

      Williams, Alan (Swansea W)

      Silkin, Rt Hon John (Deptford)

      Tinn, James

      Williams, Alan Lee (Hornch'ch)

      Sillars, James

      Tomlinson, John

      Wilson, Alexander (Hamilton)

      Silverman, Julius

      Torney, Tom

      Wilson, Gordon (Dundee E)

      Skinner, Dennis

      Varley, Rt Hon Eric G.

      Wise, Mrs. Audrey

      Small, William

      Wainwright, Edwin (Dearne V)

      Woof, Robert

      Snape, Peter

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

      Wrigglesworth, Ian

      Spearing, Nigel

      Walker, Terry (Kingswood)

      Young, David (Bolton E)

      Spriggs, Leslie

      Watkins, David

      Stallard, A. W.

      Watkinson, John

      TELLERS FOR THE NOES:

      Stoddart, David

      Watt, Hamish

      Mr. Joseph Harper and

      Stott, Roger

      Weetch, Ken

      Mr. J. D. Dormand.

      Strang, Gavin

      Wellbeloved, James

      Question accordingly negatived.

    Clause 15

      TRANSFER OF PROPERTY, RIGHTS AND LIABILITIES OF CERTAIN BODIES TO AGENCY
      11.0 p.m.
      Mr. Millan: I beg to move Amendment No. 16, in page 15, line 18, after 'section', insert
      'other than land held in security of a loan'
      These provisions deal with the transfer of property to the Agency inadvertently. As the clause was drafted, it would transfer to the Agency property held by the Government as security for loans made under the Local Employment Acts. It was not intended that that should happen, and the amendment puts the situation right.
      Amendment agreed to.

    Clause 16

      TRANSFER OF PUBLICLY OWNED PROPERTY TO AGENCY
      Mr. Millan: I beg to move Amendment No. 18, page 16, line 5, after 'shall', insert 'as soon as practicable'.
      This amendment and Government Amendments Nos. 19 and 20 are in exactly the same terms and all three amendments go together. The present wording provides for statements to be laid before the House by the Secretary of State "as soon as practicable." It was said in Committee that there was no obligation on the Secretary of State to lay these documents quickly. The amendments put the matter beyond doubt.
      Amendment agreed to.
      Amendments made: No. 19, in page 16, line 14, after 'shall', insert 'as soon as practicable'.
      No. 20, in page 16, line 23, after 'shall', insert 'as soon as practicable'.—[Mr. Millan.]

    Clause 24
      INTERPRETATION
      Amendment made: No. 21, in Clause 24, page 20, line 17, leave out 'Parts III and IV of'.—[Mr. Millan.]
    Schedule 2

      FINANCIAL AND ADMINISTRATIVE PROVISIONS RELATING TO THE AGENCY
      Amendments made: No. 22, in Schedule 2, page 26, line 32 after 'Agency', insert '(a)'.
      No. 23, in page 26, line 34, after 'relates', insert
      'and
      (b) in respect of their administrative expenses'.—[Mr. Millan.]
      Mr. Millan: I beg to move Amendment No. 24, in page 26, line 37, at end insert
      'other than functions under section 5 of this Act'.
      This amendment is basically a drafting amendment relating to borrowing by the Agency. The same comments apply to Government Amendment No. 25.
      Amendment agreed to.
      Amendment made: No. 25, in page 26, line 48, after 'borrow', insert
      'from him under paragraph 3(1) above. '—[Mr. Millan.]
      Mr. Millan: I beg to move Amendment No. 26 in page 29, line 7, at end insert
      'being a form which shall conform to the best commercial standards'.
      Mr. Deputy Speaker: With this it will be convenient to take Amendment No. 27, in page 29, line 18, at end insert—
      "(4A) Where the Agency conducts activities of a commercial or industrial character, the accounts of the Agency in respect to these activities shall also be audited by auditors appointed by the Agency after consultation with the Secretary of State, and a person shall not be qualified to be so appointed unless he is a member of one or more of the following bodies:

      The Institute of Chartered Accountants of Scotland,

      The Institute of Chartered Accountants of England and Wales,

      The Association of Certified Accountants,

      The Institute of Chartered Accountants in Ireland,

      and any other body of accountants established in the United Kingdom and for the time being recognised for the purposes of section 161(1)(a) of the Companies Act 1948—section 155(1)(a) of the Companies Act (Northern Ireland) 1960; but a Scottish firm may be so appointed if each of the partners is qualified to be so appointed".
      Mr. Millan: The matter was raised in Committee by the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith). He was concerned that the accounts of the Agency, which is to have commercial functions, should conform to the best commercial standards. In Committee I took the view that it was not necessary to insert this provision in the Bill but that we should ensure that the accounts were drawn up in accordance with the best standards. On reconsideration, in view of the importance attached by the hon. Gentleman to the matter, I think that it would be desirable that these words should appear in the Bill. That is what Amendment No. 26 does. I know that it will be acceptable to the hon. Gentleman.
      I shall not say anything about Amendment No. 27, which is the hon. Gentleman's amendment. I prefer to hear what he says, after which I shall answer him.
      Mr. Buchanan-Smith: I am grateful to the Minister for anticipating and meeting my wishes in this matter. Amendment No. 26 helps to meet the points made in Committee. I know that it is welcomed by the accountancy bodies in the United Kingdom.
      396
      Although I sought to include in Amendment No. 27 the points made in Committee, with modifications, to achieve the ends which the Minister now seeks to achieve, I realise that that amendment is no longer necessary. However, I should like the Minister to reassure me on one point. The question of proper auditing is partly anticipated in Amendment No. 7, which reads:
      "The functions of the Agency mentioned in subsection (2)(b) above may only be exercised through a company within the meaning of the Companies Act 1948 or through a partnership firm.".
      Therefore, the auditing must be carried out to the highest commercial standard.
      I have one reservation, which has already been raised by the accountancy bodies in correspondence with the Department. I refer to the definition of "partnership firm". I do not wish to press my amendment as the matter can be dealt with by the Department and the accountancy bodies. If I receive an assurance from the Minister on this matter I shall be happy to let the matter rest.
      Mr. Millan: That is a fair statement. The earlier amendment provided for the industrial activities to be dealt with through a separate company or partnership firm. This will automatically attract the audit provisions of the Companies Act, which the hon. Gentleman mentions in Amendment No. 27. However, Amendment No. 27 would attract other matters which it would not be appropriate to audit under the normal arrangements, other than those of the Comptroller and Auditor General. What the hon. Gentleman has in mind is covered.
      I was not aware that there was any difficulty about the partnership point, but I will examine it. If it is still true that partnerships are not under the same obligations as are companies in terms of the qualification of auditors, it is well recognised that partnerships are often audited in exactly the same way. Any partnership with which the Agency is involved will be audited by a person who is qualified to audit company accounts. As a matter of practice that would be done. As far as I am aware, the accountancy bodies are perfectly happy with the Bill.
      Amendment agreed to.

    Schedule 4

      MINOR AND CONSEQUENTIAL AMENDMENT OF ENACTMENTS
      Mr. Millan: I beg to move Amendment No. 28, in page 31, line 15, leave out
      'or compensation payable by virtue of Schedules 1 or 3'
      and insert
      payable by virtue of paragraph 10 of Schedule 1 or of regulations made under paragraph 3 of Schedule 3'.
      The amendment removes from the Agency the obligation to increase the pensions of members of the Agency and compensation payments which may be made to present members of the SIEA and SICRAS by reference to the Pensions Increase Act 1971. Those provisions for automatic increases under the terms of the Pensions Increase Act 1971 are perfectly relevant from the staff point of view and are so provided, but they may not in every case be relevant from the point of view of membership. It would be necessary to examine the member's individual circumstances, and in some cases it would not be appropriate to make these provisions apply automatically because the person concerned might otherwise be covered perfectly adequately.
      It will be within the power of the Agency to apply similar provisions—that can be done administratively—but there will be no obligation to provide for a comparatively small number of people automatic pension increases which will not necessarily be appropriate in all cases. The amendment does not prejudice the interests of the staff. They are fully covered and will remain covered even with the amendment.
      Amendment agreed to.
      Order for Third Reading read.—[Queen's Consent on behalf of the Crown, signified.]
      11.13 p.m.
      Mr. William Ross: I beg to move, That the Bill be now read the Third time.
      Since the Second Reading debate on 25th June, the Bill has been subjected to full consideration both in Committee and on Report, and it has emerged a better Bill. In particular, I am pleased that we have reinstated in Clause 2(2)(b)
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      the function which had been deleted elsewhere whereby the Agency is enabled to carry on industrial undertakings.
      Today, on Report, the House accepted an amendment which will require the Agency to exercise this function through companies within the meaning of the Companies Act or through a partnership firm. This is a valuable clarification of the Bill. It will, I am sure, commend itself particularly to the CBI in Scotland and pave the way for full and fruitful co-operation between the Agency and the private sector. That is important.
      It is absolutely essential for Scotland's future prosperity that the public and private sectors should work closely together, neither suspicious of the other's motives, but both dedicated to the development of the economy and the strengthening and expansion of existing firms, the stimulation of new ideas and the creation of the new job opportunities which Scotland so badly needs. One of the prime purposes of the Agency will be the provision, maintenance or safeguarding of employment. This policy will commend itself to existing firms and the people of Scotland generally.
      In preparing the Bill, we have consulted all sorts of interests and organisations whose work will be touched upon by the functions of the Agency. It is only fair to say that across the board there is a wide general welcome for the Agency and a recognition that a body with the remit and power we propose can play a crucial part in the revitalisation of the Scottish economy.
      The time for talking is now nearly over. We are at another stage. The Chairman has been appointed. Sit William Gray is uniquely well fitted for this task, with his wide knowledge of local government, his valuable experience as Chairman of the Scottish Special Housing Association and of a new town, and he is conversant with the problems of industry.
      The Secretary of the Organising Committee has been established. Premises have been acquired in Sauchiehall Street and, with admirable speed, have been adapted to house the nucleus of the Agency, with room for expansion. In other words, we are determined to press on as quickly and speedily as possible to get the Agency established.

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      I hope soon to announce the membership of the Organising Committee, but meantime advertisements have been published for the post of chief executive, which will be of vital importance. I understand that there has been a fairly good response, and I hope that we shall be in a position to consider a short list very soon. We are determined to get these things right. It is our intention to have the Agency operational as soon as possible after Royal Assent. I think I can say that it will be operational before Christmas.
      One of the first tasks of the Organising Committee will be to meet staff representatives of the Scottish Industrial Estates Association and of the Small Industries Council for the Rural Areas of Scotland to go into detailed arrangements about their absorption within the Agency. This is clearly important, and I see no fundamental problem, if only because they will be part of an expanding organisation. But, naturally, the staff will want to be reassured that their interests will be safeguarded.
      The Agency will begin its work in difficult times. Despite what may be said by anyone, Scotland cannot be insulated from the economic difficulties of the United Kingdom and the Western World. Although the oil developments have given the economy greater resilience, we face a serious problem of unemployment.
      I think that in the Agency we have a means of finding a longer-term solution for a comprehensive and co-ordinated attack on the deep-seated structural problems of the economy. I have heard it said today by hon. Members opposite that we should not look for miracles. It is tempting to look for ready answers and speedy action when establishing a new agency. However, I am confident that the Agency will make an effective impact, but among its tasks will be the solution of some of the most intractable problems of the economy, and these will not be solved overnight. Equally, the Agency must not spend too much time on further studies. The Agency will be drawn widely from people with experience of the various sectors which it will cover. I am sure that the House will join me in wishing the Agency every success in its challenging task. I am happy to commend the Bill to the House.
      11.20 p.m.
      Mr. Buchanan-Smith: Having listened to the Secretary of State, I can understand the sense of relief with which he has reached Third Reading. If we had not passed the Bill into law the right hon. Gentleman might have been left wondering what to do with the premises in Sauchiehall Street. That is obviously behind his sense of relief at having reached this stage tonight.
      The right hon. Gentleman said that we have had full consideration of the Bill. I would agree with that. However, this is an important Bill—I have never tried to deny that. For it to reach the House at such a time in the Session is not necessarily the best way of dealing with such legislation. This is a lesson that all of us should heed. Legislation of this sort should be introduced rather earlier in the Session. That is an aside rather than a main point.
      I join the right hon. Gentleman in wishing well of Sir William Gray, the Chairman-designate of the Scottish Development Agency, in the task ahead of him. Sir William is a man of realism and of broad administrative experience. As my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor) said earlier, he is coming to an area of industry that is, to some extent, new to him. It is important that he has the right calibre and quality of people around him. All of us recognise his abilities and achievements in Scotland, and my right hon. and hon. Friends and myself genuinely wish him well in the task that is before him.
      I believe that there are two matters on which the Agency will be judged. They will show in time whether the Government were right or wrong in establishing this body to do the task that has been set for it in Scotland. One matter that the right hon. Gentleman mentioned which is the 64,000-dollar question regarding the work of the Agency is the finance available to it. The right hon. Gentleman has warned the House not to expect miracles. I think that he was right to warn the House that the Agency will be successful only to the extent of the financial resources that it has at its disposal.
      As the right hon. Gentleman fairly and correctly indicated, we are not living at a time when the Government are flush

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      with funds and when there will be a lot of money to spend on the purposes for which the Agency has been established. In global terms the figures look very good, but people will judge the Agency by the money that the Government will be able to spend. In turn, the money that the Government will be able to spend will depend upon the success or otherwise of their financial policy for the United Kingdom as a whole. That is the first matter by which we shall judge the success of the Agency—namely, the ability of the Government to give it the funds necessary to fulfil the tasks that the Government have set it.
      The second matter by which we shall judge the Agency is the way in which it carries out its tasks, whether it is better or worse than the bodies now responsible. I refer specifically to the issues of derelict land and the improvement of the environment in Scotland, jobs that are now the charge of the local authorities in Scotland. If it can do its job no better than existing local authorities we shall be entitled to ask in future years whether the setting up of the Agency and the accompanying bureaucracy was justified. I hope that it will lead to an improvement and to quicker and more effective action. If it is merely set up as duplication to what is already being done by local authorities, the vision some people have of the work of the Agency will have been fulfilled. To justify its creation it must carry out its tasks more effectively than the local authorities.
      I come to the basic qualification and reservation that I hold, which the right hon. Gentleman has mentioned namely Clause 2(2)(b). Here is the one thing which motivated Conservative Members in their original opposition to the Agency. It is sad that the Government have reinstated these powers, enabling the Agency to intervene in profitable concerns in Scotland and take them over. It is here that there is a basic philosophical divide between us and the Government. We believe that the function of the Government is to facilitate the operation of industry, whereas under Clause 2(2)(b) the Government take a different attitude, underlining the difference between us.
      The Government do not want to facilitate the operation of industry—they want
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      to see the operation of industry carried out by the State. Here we must differ. I hope that in operating its functions the Agency will concentrate on those tasks which we all support, such as facilitating the operation of industry in Scotland and improving the environment. I am sure that I express the feelings of my right hon. and hon. Friends when I say that I hope that the Agency does not get bogged down with its functions under Clause 2(2)(b) and lose sight of its other functions. I believe that Clause 2(2)(b) is inserted for purely doctrinaire reasons. If the Agency wishes to have the support, sympathy and understanding of the people of Scotland it will do well to steer clear of that clause. With that one major reservation I wish the Agency well in its other tasks.
      11.27 p.m.
      Mr. Robert Hughes: I am glad that even with that reservation, the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) has cast aside in the main his objections to the Bill as a whole. It seems as though all parts of the House now support the Bill. No one will be surprised to find that I wish the Bill and the Agency well. I hope that the Agency will help new industry, co-operatives of all kinds, and new enterprises. If the Agency is to succeed it will need vision, imagination and, above all, courage. It may need to take controversial decisions. If it does not, it may not be facing up to its task. I trust that the Agency will have the nerve to sustain its point of view when it is under attack, as no doubt it will be.
      The terms of the Bill give the Agency a wide remit for the regeneration of the Scottish economy. No one who has looked at the Scottish economy recently, or at its history, can deny the need for such a wide remit. We have heard much of urban deprivation and derelict industry. Such things bear witness to the fact that the free enterprise system has failed the people of Scotland. If it had not, there would not be any necessity for the Agency.
      Mr. Nicholas Fairbairn: We are to invest £300 million in private enterprise under this Bill. Where is it coming from? From private enterprise, is it not?
      Mr. Hughes: It will not come solely from private enterprise. It will come from taxpayers, whether companies or individuals. At least the hon. and learned Member recognises that there is a considerable amount of money involved which will be invested to provide funds, even for the private enterprise system.
      Over the years we can see that the difficulty in Scotland, in common with the rest of the United Kingdom, has been that private enterprise companies have always put profits before people. That is why I welcome Clause 2(2)(b), which gives the Agency the opportunity not simply to rely on giving loans to companies to keep them going, but to taking part in new enterprises.
      The day has long passed when we regarded the role of the State as being one of propping up companies until such time as they might become profitable and then letting them go back to private industry, or when the only role of the Government was simply to act as a source of funds, through whatever industry Act it might be, in order to keep companies going or to give them particular advantages.
      I believe that the day is coming when the State must intervene even more in public enterprise. But I want to say one word of caution, because I believe that in some of the remarks made by the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) there was over-simplification and seeking for an easy answer. No one can say that the problems of the Scottish economy can be solved in the context of Scotland alone, totally dicorced from the United Kingdom economy.
      I believe that the Scottish Development Agency has a very important role to play and that it will succeed, given the backing of all quarters of this House. I wish it well, and I am sure that in all parts of Scotland the passing of this Bill tonight on its Third Reading will be widely welcomed. It will be seen as the fulfilling of an election pledge by the Labour Government, and I believe it is being done in the right spirit and with the right intention.
      11.32 p.m.
      Mr. Crawford: On the Second Reading there were three fairly clear positions. The first came from the party which
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      wanted none of it, the Conservative Party. The second was from the Government, which sought to use the SDA as something of a public relations exercise, with a lot of froth and not much gravity. The third was from my own party, which wished to fashion it into something bigger, less dogmatic, more democratic and more accountable.
      The Conservatives, I gather, have had a change of mind and are not going to oppose tonight, apparently. I am delighted to hear it. I am very glad of their change of heart. They seem to be changing their minds on several things these days.
      The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) said that he opposed Clause 2(2)(b) on Second Reading—
      Mr. Buchanan-Smith: Will the hon. Member do me the courtesy of reading my speech?
      Mr. Crawford: I believe that the hon. Gentleman said that he voted against the Bill because of Clause 2(2)(b). I said to the Secretary of State at the time that the SDA Bill was a pygmy Bill, and I have not changed my mind about that. We have not had an answer to how long the £300 million will last or how much extra this is on top of the existing income, how we are to fashion procedures for getting more money, or what is the proper answer to the question whether or not the SDA is free from the National Enterprise Board.
      I feel that the SDA, as it stands, is mutton dressed up as lamb, but some meat is better than none, and at least we have some morsels.
      My party is disappointed that the Government have not seen fit to accept the need for a much higher rolling budget of £300 million a year. Let no one say that Scotland cannot afford it. At the end of the decade the oil revenue will be £3,000 million a year, and £300 million is only one-tenth of that.
      Mr. Robert Hughes: I hope that the hon. Gentleman is not saying that, irrespective of the figures from North Sea oil, the government of the Scottish economy can be solely north of the border, with no regard whatsoever to United Kingdom economic policies.
      Mr. Crawford: I say that our problems are greater, with our higher unemployment and our urban deprivation. The hon. Member for Aberdeenshire, West (Mr. Fairgrieve) says that Scotland does not have higher unemployment than the United Kingdom. What I say is that we in Scotland have higher unemployment than the rest of the United Kingdom. The statistics show this. The figure for the United Kingdom is 4 to 5 per cent. and for Scotland it is between 6 and 7 per cent.
      The Scottish National Party is disappointed that the request for a higher budget has not been accepted by the Government. We are disappointed that the amendments seeking decentralisation and internationalisation of the activities of the Scottish Development Agency have not been accepted. Above all, we are disappointed by the wriggling of Labour and Conservative Members on the question of the answerability of the Scottish Development Agency to the Scottish Assembly. It is no use saying that the Assembly will have power over the economy and industry if the Scottish Development Agency is not directly answerable to it.
      It is worth repeating the anxiety felt by the Scottish people about an alliance of the Conservative and Labour Parties in Committee. The Conservative and Labour alliance in Committee was a monstrous and shocking alliance against Scotland.
      Mr. Fairgrieve: As a Conservative Whip on the Bill, I point out that on no occasion was there an alliance between the Conservative and Labour Parties. The hon. Gentleman knows that full well.
      Mr. Crawford: The hon. Member for Aberdeenshire, West knows that on three occasions Conservative and Labour Members voted together against Scottish National Party amendments.
      It is clear that the Scottish Development Agency, as it stands at present, will no more than begin to solve Scotland's problems. Certainly it will not begin to meet the exciting challenges which I believe face the Scottish economy. However, Scotland needs a Scottish Development Agency and it must have one. Although this Agency leaves much to be desired, it is at least a faltering step towards the right goal.
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      The Scottish National Party sees the Scottish Development Agency as a beginning and a new departure which, with self-government, can have some of the dogma written out and be fashioned more fully and nearly to the hearts, desires and economic needs of the Scottish people.
      Mr. Dempsey: I shall make a brief intervention. I have been very tolerant. I have listened for a long time to all sorts of claptrap from the Opposition. I am delighted that the Bill has, at last, reached Third Reading, and I hope that it will be approved.
      I am pleased that we are to concentrate on the principal purpose of the Bill; namely, the expansion of employment in Scotland. If we fragment our efforts in Bangladesh, Pakistan and other parts of the world, as we have been advised to do, it would be very foolish. We must not allow a domestic instrument of this nature to be abused in that way. Therefore, we should all welcome the Bill.
      It must be borne in mind that there is grudging admiration by the Opposition. The Agency when it becomes operative will be of inestimable value to the people of Scotland.
      I should like to direct the attention of the Agency to the approaches which I believe should be made towards ensuring the success of this proposed legislation. I believe that the Agency should approach the problem from the point of view of getting its priorities right. Its priorities should be in the areas where we have the highest unemployment. I happen to come from the constituency of Coatbridge and Airdrie, which is part of North Lanarkshire, which is at present among the top three of the unemployment league in Scotland. Indeed, in the last return we had nearly 500 boys and girls without jobs in that part of Lanarkshire, and that is only a corner of the new Strathclyde Region.
      It is my belief that certainly Sir William Gray should approach the problem by applying the very desirable principles of this legislation to the areas needing it most.
      I, too, heard the Front Bench speaker for the Conservative Party talk about need and the desirability of meeting needs where they are greatest. That is why my

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      hon. Friend the Member for Paisley (Mr. Robertson) congratulated the Conservative Front Bench speaker on his conversion to Marxism, on adopting the principle—
      "to each according to his needs".
      The most urgent need is in Coatbridge and Airdrie in North Lanarkshire as well as in two other areas on the mainland of Scotland. I should like the Agency to make a study of the steps it can take and the shots in the arm it can give to industrialists to expand their enterprises, to increase their manufacturing capacity, with a view not only to maintaining existing jobs but to providing additional jobs.
      One of the difficulties we experience when it comes to promulgating legislation is that when it comes to the construction of small factories there is an attempt to pass the responsibility on to local authorities, which reply that, because of the difficulty about borrowing powers, they cannot proceed to erect small factories. In my part of the country more than 100 people have expressed interest in small factories to meet the needs of spin-off jobs from the oil development in the north. Not one small factory has been built. I should like to direct the Agency's attention to this problem, which would be within its remit and which would make a substantial contribution to the lowering of unemployment in my area of Scotland.
      When we seek to attract industrial enterprises to come to my area the male employees will say "We would not mind coming to North Lanarkshire, but our wives and families will not come".
      Mr. Canavan: It is not a salubrious area.
      Mr. Dempsey: My hon. Friend knows: he comes from the area. We should like factories to be titivated, brought up to date, and re-modelled. Layouts should be improved. Attention should be paid to the provision of recreational and other amenities. This is one of the main inducements for industrialists to come to areas like North Lanarkshire and provide much needed jobs.
      I wish the Agency well. I believe that it can not only meet the challenge but will have the personnel, the capacity and the experience to meet the challenge.
      11.44 p.m.
      Mr. Canavan: The declared aim of the Bill is, first, to regenerate Scottish industry and to provide more jobs for Scottish workers. I suppose that the four parties would agree on the legitimacy of the aims. It is a pity that the Liberals cannot be here tonight. They are obviously away home to their beds.
      There appears to be a difference of opinion in the other parties. At every stage the Tories have, in accordance with their tradition, fought tooth and nail to preserve the rights of private enterprise. This is the private enterprise which has failed Scotland in the past. The Tories see this Bill as a threat to the rights of the private enterprise they are determined to protect. They made sure that the Bill would not go to the Scottish Grand Committee for a Second Reading and the Government had to re-introduce it in the Lords.
      Mr. Fairgrieve: Has the hon. Member never heard of the Scottish whisky, textile, shipbuilding and agriculture industries? Those, I believe, are private enterprises.
      Mr. Canavan: I have heard of those industries, and the Scottish shipbuilding industry, to take one of the hon. Gentleman's examples, has had gross inefficiency and mass unemployment under private enterprise. That is why the Government are determined to take it into public ownership.
      The Scottish National Party at least believes in some kind of agency, though, if we are to believe its industry spokesman, it does not believe in a substantial public enterprise role for the Agency. Hon. Members from the SNP have tried to introduce red herrings into this debate with arguments about the initial allocation of funds to the Agency.
      I admit that £200 million, rising to £300 million with the consent of the Treasury, is not enough to solve Scotland's industrial and employment problems, but it is only an initial allocation and there is no reason why this House or possibly even at some future date a Scottish Assembly should not allocate more. Of course, it would not matter if the Government were giving the Agency £2,000 million—the SNP would still conduct the argument like auctioneers by

      409
      calling for £5,000 million or £10,000 million. The Government are right not to be distracted into this kind of debate.
      The real argument is not about the initial allocation of funds or whether the Agency should have an office in Tobermory or Timbuctoo—we spent an hour earlier discussing the location of offices—but about the nature and powers of the Agency. Will it be just another agency to prop up the existing system or will it radically change the system? Will it be a Socialist Agency or a body which, to use the new word introduced tonight by the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith), facilitates industry rather than intervening? When public money is being spent, there must be public control, and this means a strong public enterprise rôle for the Agency.
      The SNP has the naive concept that budding young Scottish businessmen, or even those from multinational companies, should be able to say to the Chairman, Sir William Gray, "Look at me, I am Douglas MacCrawford. I would like to start a haggis factory in Inverness. I have a degree from Cambridge University and am a very successful businessman".
      Sir William, in his munificence, should be duty bound to give him £2 million or £3 million. If he makes a loss and the business collapses within a few months, that is just too bad; that is public money down the drain. If he makes a profit, the Agency will, in time, sell off its holding to some private profiteer. That appears to be the daft concept envisaged by the hon. Member for Perth and East Perthshire (Mr. Crawford).
      Mr. Crawford: I should be delighted if the hon. Member for West Stirlingshire (Mr. Canavan) could join the haggis factory to beat the haggis out of the heather.
      Mr. Canavan: The hon. Member's sense of humour is quite good. It is a pity his political and economic judgment do not measure up to the same standard.
      The Agency must not be allowed to degenerate into just another bank for handing out public money to private enterprise. There must be some form of accountability, and the only way to get that is by extending public ownership.
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      My greatest regret is that new Clause 1 was accepted this afternoon. It will prohibit the Agency from entering into a real public enterprise role in the newspaper industry and other media in Scotland. With that reservation, I welcome the Bill and look forward to its helping to create a better society in Scotland, a better Scotland where the living standards and job security of Scottish workers can be vastly improved.
      11.53 p.m.
      Mr. Millan: I am glad that the Bill has had a general welcome. I would not have spoken now except that a number of points have been raised to which I think some hon. Members might want answers.
      As my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) said, it will be necessary for the Agency to have priorities and to concentrate its attention in the early stages in particular in the areas of activity and in the geographic areas of Scotland where its efforts will do most good. I repeat that in terms of industrial dereliction and the need for industrial regeneration, the West of Scotland is obviously a priority area for the Agency.
      I say that with no disrespect to other areas of Scotland and without in any way detracting from the point made earlier this evening that the Agency will have an all-Scottish rôle. It has a wide remit because it will need it if an attack is to be made on all fronts on Scotland's industrial and environmental problems.
      If Clause 2(2)(b) has not been included the Agency would have been weakened and would have been in a sense simply picking up a number of disparate functions currently carried out by different agencies, collecting them together in a reasonably coherent form but lacking the element of enterprise and initiative of its own hand which provides an additional ingredient for tackling Scotland's problems.
      It was always our main intention that the Agency should be able to act in this way, not simply handing out munificence to private enterprise or concerned only with factory building and so on. We wanted an agency which would do things and involve itself in industry directly, and that is what Clause 2(2)(b) does.

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      I believe we have provided the right range of functions for the Agency. The canards about the Agency being a subsidiary of the NEB have been dealt with most effectively during the passage of the Bill. It is tragic that the hon. Member for Perth and East Perthshire (Mr. Crawford) should even at this late stage be talking in slogans which have been dealt with in Committee and on other occasions. The poverty of ideas about the Agency on the hon. Gentleman's bench has been for me one of the most depressing features not only of today's proceedings but of the whole proceedings on the Bill.
      The Conservative Party scores slightly higher marks, but I cannot say more than that, because at the end of the day the Opposition have been extremely reluctant converts to the idea of the Agency. I think that in their heart of hearts many Conservative Members would love to vote against the whole concept of the Agency, but they have not the political courage to do it, because they recognise that it has been widely welcomed by a range of Scottish opinion on both sides of industry.
      The Agency starts its life with a tremendous amount of good will in Scotland. I believe that with that good will and co-operation, and with the wide range of functions that the Agency has under the Bill, it can make a major contribution to Scotland's industrial regeneration. That is what we intend. We wish the Agency well in the work that it will now take up.
      Question put and agreed to.
      Bill accordingly read the Third time and passed, with amendments.

  CINEMATOGRAPH FILMS BILL
  Order for Second Reading read.
  11.56 p.m.
  The Under-Secretary of State for Trade (Mr. Eric Deakins): I beg to move, That the Bill be now read a Second time.
  I commend this Bill to the House. It is short, and it has the support of all sides of the industry. Its aim is to divert a very small part of the British Film Fund to the National Film Finance
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  Corporation, where it will be used for financial assistance at the pre-production stage of film production, including script writing.
  Before going into the details of the Bill itself, perhaps I should outline the circumstances which have led to these proposals being brought before the House at a time of such crowded parliamentary business. For years past the cinema and film production industry in this country has been declining. There are now just over 1,600 cinemas in Great Britain compared with nearly 2,000 10 years ago, and nearly 5,000 at their peak in the late 1930s. The number of admissions in 1974 was 138·5 million. Ten years ago the figure was 385 million, so there has been a drop of 246·5 millions, or nearly 61 per cent. This decline has been largely due to television. We must accept that people wish to sit at home and watch television. We cannot be reactionary and attempt to put the clock back to the 1950s.
  Nevertheless, while the huge attendances of the immediate post-war years are unlikely to return, there is still a large audience for good films in cinemas, and I am happy to say that the benefits from the very considerable investment in the twinning and tripling of cinemas are now being felt, for the number of admissions has gone up by nearly 4 million, from 134·2 million in 1973 to 138·5 million in 1974. If we can continue in this direction the proper place of the cinema as a means of mass family entertainment may well be preserved. Cinema takings in 1974, including VAT, totalled £69·3 million, and are up by about £11 million on the previous year. These increased takings, however, are due far more to inflation than to increased business, and credit is due to the many cinematograph exhibitors who throughout this economically difficult period have remained in business despite these difficulties, which cannot always be met simply by increasing seat prices.
  It is, however, at the production end that the most immediate concern lies. For many years past about 80 British feature films have been produced annually. At one period in the late 1960s about £46 million was invested in film production in this country in one year.

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  Nearly 90 per cent. of this money came from American sources, but this has now been withdrawn, and we must do our best to find alternative sources and to encourage the use of more British finance. Despite this withdrawal of American finance, 78 British films were made in 1974, but present indications are that the total number of feature films made here in 1975 will be about 65.
  Lack of investment is not the sole cause of the present serious situation. There is also a shortage of good projects. This is illustrated by the fact that the consortium—which was set up three years ago in conjunction with the NFFC to provide assistance to the industry—still has about £500,000 available, but has considerable difficulty in finding suitable projects.
  The Cinematograph Films Council looked at this alarming situation last year and in its Annual Report for 1973–74 made a number of useful and constructive proposals. The proposal which led to the Bill has the unanimous support of all members. It is also supported by the Film Production Association of Great Britain, the Writers' Guild of Great Britain, and the Federation of Film Unions—all of which played a part in devising the scheme.
  This proposal has been put forward because financiers are, not unnaturally, reluctant to risk their money on a project which has not been explained to them fully. It follows that, however attractive a project may appear to its sponsors, it must be effectively worked up before it can attract financial backing. The experienced and well-known film producer may well be able always to raise finance for his films whenever he has a good project to offer. This is not true, however, of the younger, less experienced and less-well-known producers who, if they are not permitted to develop their ideas and abilities because of economic difficulties, will be lost to the industry in years to come, so that there may eventually be no one to succeed today's experienced producers.
  It is hoped that this measure will go some way towards solving this problem and remedying the shortage of good projects. The scheme will enable someone who comes up with a good idea but who has not sufficient funds himself to develop
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  it to the point where he can attract investment capital for production to get additional finance to enable him to develop his idea. He would be able to prepare a complete script, and so reach the stage where he could convince potential backers that the project is worth pursuing. If a measure such as this is not taken, the industry may well continue to decline, and by the time we come to its rescue it might not be there at all.
  This is particularly important in view of the need to encourage British investment. I hope would-be British investors will have taken note that a number of films made with the help of British finance have recently been successful, and one such even spectacularly so.
  The money for assistance under the proposed scheme will come, as I said, from the British Film Fund. It will thus be the industry's own money, and the Bill will not lay a new burden on the taxpayer.
  The Bill is necessary because the existing Cinematograph Films Acts prescribe the uses to which levy money may be put, and these statutory uses do not include the kind of financial assistance which we have in mind.
  Although the Bill does not itself limit either the amount to be made available or the period during which the scheme will operate, it is my right hon. Friend's intention to follow the recommendation by the CFC in its 1974 Annual Report, and to make the sum of £200,000 available in each of the first two years of the scheme, after which it will be reviewed. That sum will be divided up so as to provide enough money for script writing and pre-production expenses for about 20 projects in each year. The intention is that assistance will normally take the form of loans, repayable whenever a project actually goes into production. No single project will receive more than £10,000, including the script fee.
  Mr. Terence Higgins: The hon. Gentleman said that assistance would normally take the form of loans. I understood that under the Bill it would always take the form of loans.
  Mr. Deakins: It would normally take the form of loans, but in certain circumstances—and we want to retain as much flexibility as possible for the NFFC and

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  the advisory committee which will be set up—other forms of assistance will perhaps be necessary. Basically the idea is that loans will be made. The sum which I have mentioned will be divided between script writing and pre-production expenses for about 20 projects a year.
  That brings me to the operation of the scheme itself, which will be governed by arrangements approved by the Secretary of State. An advisory committee comprised of persons appointed by the Secretary of State, and including representatives of film producers, writers, and persons employed in the film industry, will assist the NFFC in selecting suitable projects to receive financial assistance under the scheme. The committee will have regard, among other things, to the likely capacity of the applicant of bringing a project to fruition as well as the adequacy of the project itself.
  The full amount of an advance will be repayable to the fund, plus a premium, immediately a project goes into production. The premium is necessary, and justifiable, because the fact that the project is to go into production indicates that someone expects to make a profit, and it is reasonable that the fund which has helped launch the project should claim a modest share of that profit.
  I turn to the Bill itself. The first clause authorises the British Film Fund Agency to make payments to the National Film Finance Corporation for these purposes.
  The use of the moneys in the British Film Fund are confined, under the Cinematograph Films Acts 1957 to 1970, to payments to makers of British Films and to payments to three bodies which are mentioned in the Acts. These are the British Film Institute to provide assistance towards the cost of making films, the National Film School and the Children's Film Foundation Ltd.
  Clause 1 of the Bill will add the NFFC to the bodies which may receive payments. The Bill does not specify how much these payments will be, but follows the precedent whereby the Secretary of State is required to consult the Cinematograph Films Council in every case before approving a payment to these bodies. Hence, the industry will have ample opportunity to make recommendations as to the amount to be used.
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  The moneys will be administered as a separate fund, unconnected with the other funds held by the National Film Finance Corporation, and Clause 2 of the Bill directs that the NFFC shall apply the payments to the purposes I have described in accordance with arrangements to be approved by the Secretary of State. Those arrangements will set out the basis on which applicants for assistance under the scheme will be selected, and the conditions on which assistance will be given. I am sure the House will agree that a scheme of this kind must remain flexible, and it must be possible to make modifications and changes in the light of experience. The arrangements will also ensure that any project which is assisted will, if it goes into production, result in a British quota film eligible to receive levy payments.
  Subsection (2) of Clause 2 is necessary because, in the course of its normal lending business, the NFFC is restricted as to the period of a loan and as to the interest which must be charged. Financial assistance under this new scheme will take a different form, and these restrictions would be inappropriate. Subsection (3) of Clause 2 will confine the scheme to projects intended to result in the production of films primarily for exhibition in cinemas.
  Clause 3 includes the normal statement on citation. Subsection (2) follows the precedent of other Films Acts, which generally do not extend to Northern Ireland, but this subsection would not debar a citizen of Northern Ireland from eligibility to receive financial assistance under the scheme.
  Finally, as hon. Members will be aware, the Prime Minister has set up a working party to examine the long-term viability of the film industry, and it is probable that the working party's reply will lead to more legislation. The other recommendations made by the Cinematograph Films Council are still under consideration and, if adopted, may also need legislation.
  The assistance provided under this Bill is still an experiment, and the Bill itself may ultimately be consolidated into further legislation, though this will depend on the report of the working party. Nevertheless, this is a useful measure which will provide some modest help to a hard-pressed industry.

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  Finally, the House will have noted that the proposal is based on a unanimous recommendation of the Cinematograph Films Council, the statutory advisory body concerned and, as it thus has the support of all branches of the industry, I confidently hope that the House will accept it without Division.
  12.8 a.m.
  Mr. Michael Shersby: It is at the least unusual for the Government to introduce a Bill so late in the Session during the spill-over of business after the Summer Recess. That the Bill concerns the finances of the film industry is a fact that explains a good deal, for it is believed in some quarters that the Prime Minister has had a soft spot for the film industry ever since he became President of the Board of Trade.
  In welcoming the Bill tonight on behalf of the Opposition, as I do, I hope that the film industry will realise that the House as a whole is able to demonstrate that it recognises the serious problems that the industry faces from time to time and our desire to assist it by giving a greater degree of flexibility to the way in which British films are financed.
  I was glad to hear the Minister say that the Bill has the support of the British film organisations. Having spent 10 years in the film industry, I can claim a modest degree of expertise in this field, although I am no longer connected with the industry.
  The Bill provides for payments to be made by the British Films Fund Agency to the National Film Finance Corporation and for the making of loans or the giving of assistance at the pre-production stage, including loans to scriptwriters. The Bill will provide what is called "seed" finance, and script preparation will be the main beneficiary of the new arrangements.
  The other provisions of the Bill are the result of the recommendations in the 1973–74 Annual Report of the Cinematograph Films Council. Those recommendations were made because the future prospects of the film industry are bleak owing to the serious drop in finance available for film production. We know that to a large extent this is due to the competition suffered by the film industry from television. I was interested to read in the report of the Cinematograph Films
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  Council, based on figures relating to Belgium, that 3·25 per cent. of viewers regularly see films in the cinema, that 96·75 per cent. of viewers see films on television, and that 96·5 per cent. of all revenue accruing to the film industry comes from television. In face of this worrying situation, it was natural that by the summer of 1973 the number of feature films planned for 1974 and 1975 should have been much fewer than the number envisaged in past years.
  One of the main reasons for this, apart from competition from television, was the situation whereby traditional source of finance for British film production—namely, finance from the United States—had diminished over the years—not because British films are not the best in the world, as we know they are, but for other reasons connected with the American film industry. Therefore, it has been necessary for the British film industry to look elsewhere for finance if production is to be maintained at previous levels, if employment is to be maintained, and if Britain is to continue to enjoy substantial export earnings from the exhibition of British films overseas.
  It will interest hon. Members to realise that one of the most recent successful examples of British films earning large sums of money over the years was "Murder on the Orient Express", which is based on Agatha Christie's novel. It is the first British film ever to top the list of dollar earners and is now expected to gross about £19 million worldwide. That speaks for itself and is a tremendously creditable example of first-rate British film production.
  The Cinematograph Films Council, in an effort to see what can be done to improve the availability of finance, set up a working party which, in turn, made a number of recommendations, some of which appear in the Bill. The first recommendation related to a levy known as the "Eady levy", which should yield £2½ million to £3 million a year. I should like to know whether that prospect is likely to be fulfilled. The second recommendation was that each year £55,000 should be set aside from the fund to finance the writing of scripts—a basic necessity for good film production. The third was that £145,000 should be set aside each year from the fund to finance pre-production projects. This gives a

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  total of £200,000 for pre-production finance and scripts. It is not much money, but it is important to the industry at this time.
  Clause 1 adds the National Film Finance Corporation as a recipient of the British Film Fund, which in turn depends for its income on the levy, or the "Eady" money, as it is generally known. The Bill directs the National Film Finance Corporation to apply that money in accordance with the arrangements to be approved by the Secretary of State. I was alarmed when I saw that this was included in the Bill, as in the past year or so we have become accustomed to this formula, which is not tight enough, as it frees loans made out of that money from the restrictions which apply to loans made in the course of normal business.
  I am glad that the advice which the Secretary of State will receive before making his decisions will come from the advisory committee which is to be set up for the purpose. The film industry will give excellent advice to the Secretary of State, who I am sure will implement it. I should like to know whether the advice to be received by the Secretary of State from the advisory committee will affect the arrangements whereby the national film finance consortium, consisting of the corporation and 10 groups in the private sector, constitutes the only channel through which the corporation will be permitted to make loans.
  During the past 20 years the National Film Finance Corporation backed 721 British feature films, which is approximately half the total number of films made in that period. That is a creditable record. It deserves our praise. That is why the Opposition welcome the Bill. We hope that the additional £200,000 to be provided from the levy will do much to encourage successful new productions, which we are glad to hear will be British quota films.
  We hope to see better employment prospects for those engaged in the British film industry and a corresponding rise in export earnings. We wish the Bill well.
  12.18 a.m.
  Mrs. Gwyneth Dunwoody: I welcome the Bill, although it is a small, uncertain step in the dark. The amounts we are discussing, when compared with
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  the problems of the British film industry, are infinitesimal. Without the pre-production work and the investment going into the early stages of film production, no producer has any hope of attracting finance from outside sources. Only two or three of our senior British producers are capable of attracting that finance owing to their reputations and the films which they made in the past.
  This evening we heard useful tributes paid to the work of Nat Cohen. Men of the calibre of Nat Cohen and Sir John Woolf have proved how British films can survive in an international market. However, we are in a highly dangerous situation. There is hardly any point in producing a British film if there is nowhere to show it in the home market. The film industry is one of the few British industries which have the equipment and the ability to think in terms of 1980. It has improved not only the handling of its material but the equipment it uses to produce films. It has cut down the ratio of men to production. It is using the management techniques it developed in the 1930s and now suffers from the decisions taken then.
  For example, the Under-Secretary of State referred to the drop in the number of cinemas. I must declare an interest in that I am an adviser to the Association of Independent Cinema Owners, which is deeply concerned at the way cinemas are going out of business at an ever-increasing rate. Anyone who is interested in the production end of the industry must also be concerned. Young people in towns want cinemas, not necessarily twinned and tripled, but small, comfortable cinemas, and they want the opportunity to see good films in those cinemas.
  The producers who will apply for the pre-production money in the fund will produce films which are capable of standing up on the international market. There is never any discussion in Britain of the fact that rising costs have pushed up the cost of producing a film into the realm where it must recover its negative costs from the international market if it is even to begin to be a viable proposition. That will put a tremendous strain on the fund. We are talking about only 20 projects a year. One matter which I should like to clear up concerns the conditions under which the projects will

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  be chosen. I am all for an advisory board chosen from the industry. In the past, too many projects have used Government money without taking advice from the people who actually do the job. Will my hon. Friend give an undertaking that the people who provide the advice will not in any way be able to benefit financially from the scheme while they are advising the National Film Finance Corporation? Even a suggestion that the scheme might turn into an "old boy" network, with people sitting in on the projects and deciding which of their friends should have the money, would be damaging both to Parliament and to the British film industry.
  I enter a caveat about the National Film Finance Corporation, and I am sorry to have to say this after working for many years with the Corporation. I welcome the setting up of the Prime Minister's working party. I hope that it will examine distribution, the relationship between television and the film world, the scheme in France which gives practical assistance to cinema owners in modernising cinemas and, more than anything else, the organisation of the Corporation. In its time the Corporation has been a tremendously useful organisation, but it should be reorganised.
  The Conservative Government—I am not making a political point—for reasons of their own decided that the Corporation should not have all the money owed to it under the Films Act and should not be allowed to continue to operate. A consortium was set up and great hopes were raised. Everyone in the film industry believed that producers would have access to funds to enable them to make new and better films. What has happened? The Corporation continues to exist. It has helped a certain number of projects, but the total number of British films has fallen. The consortium still has money in the kitty, while there is a 60 per cent. unemployment rate in the film industry.
  If the Corporation is to handle this fund and is to be responsible for the rejuvenation of the film industry, will it proceed on the slightly neutered giant basis which it has adopted up to now, or will it show a little courage and imagination, try to do what it did before 1970, give support to imaginative projects and produce films which may have a risk element but are capable of attracting
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  enormous audiences? Or is it going to do what it has done since 1970, and drop gently behind the other commercial companies, only picking up projects where money has already been committed by people from other sources, and never giving the young British producer the chance which he so desperately needs and never even picking up the people who have made their first films through the British Film Institute funds? Or is it now going to show that it has the imagination, ability and courage to do what is essential in backing new and better British films?
  I hope that this is the first piece of legislation about the cinema industry. It is astonishing that, whilst Italy protects her film industry by restricting the number of feature films shown on television during the week and not allowing the showing of feature films at the weekend, while Germany has made specific funds available through her Films Act for films made for television, and while France makes use of the prize system to ensure that French films are used as an arm of the propaganda machine and shown all over the world to show French goods or French starlets—to use the market term—we do nothing to use our film industry either to help project British products or even to produce constant employment for the existing technicians at home.
  It does not matter which film maker one meets, whether American, French or German, he will say that the standard of intelligence and ability of the British film maker is higher than that of any other nation. Why in Malta do I see British film crews being employed on American projects? Why do Anglo-German projects—few enough as they are—employ entirely British crews? It is because this country still has a fund not just of writers, actors and producers but of technicians who are of a standard one does not find readily everywhere and who are yet facing considerable problems every day while they seek work, even if it is only for a few weeks.
  The television industry in this country has very strongly resisted any suggestion that it should pay any contribution towards the film industry. The very film fund we are discussing contributes to a film school which in turn produces a number of highly skilled technicians who do not go into the film industry but

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  into television. The television industry, with its overseas sales, is gaining more and more money from those markets whilst using the very techniques, the very abilities which have been developed by the film industry in Britain.
  It may be sad enough that we have already left it so late with the television industry that it has got into considerable financial difficulties and may almost have a small, though not, I think a very real, excuse for saying that it does not wish to contribute anything in any large measure to saving the British film industry. But I do not make the plea on cultural grounds for this support. I say that the television industry in Britain actually bleeds the film industry constantly.
  Mr. Robert Cooke: While I agree with the hon. Lady in wanting to save our film industry. I remind her that the film industry itself recognises that the Government are bleeding the television industry white by taking such an enormous levy.
  Mrs. Dunwoody: That is nonsense. The television industry is not subject to a levy unless it is in a considerable profitable situation, so what the hon. Gentleman says is not on. I am surprised he even bothered to say it at this time of night.
  Further, we are not taking the necessary steps in distribution. There is not only the duopoly situation. We should be doing something about booking patents. My hon. Friend must know that our patent procedures still do not work.
  After all its continuing problems, the film industry still finds itself in a situation in which no one is prepared to consider the effect of the consolidation of the American distribution houses, which has reached the stage where we shall soon have only three bookers for the six or seven major companies. The British are already consolidated into two booking agencies, with booking patents, which means that the independent exhibitor does not get a fair showing of the good No. 1 pictures. I hope that all those matters will be considered.
  Production is the beginning of the line, but distribution and exhibition are the matters that make the industry viable. I am disappointed that we should be dis-
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  cussing the Bill, inadequate though it may turn out to be, before such an empty House. It is one of the disappointments of my life that when the House decides to talk about art in its finest form we get a full turn-out by both major parties, but when we are talking about the cinema, which used to be called mass entertainment, although I am afraid we can no longer use that term, the attitude of the House is that it is one of the industries which can be left to go to the dogs, without any consideration being given for the cultural aspects, the artistic aspects or even the export earnings, which are considerable when we are turning out the normal number of films per year.
  I enjoyed my work in the film industry over the four years that I was out of the House. I am grateful to it for the friendship and kindness it has shown me. I am delighted that even in the European Parliament I am able to continue in some small way with my involvement in the interests of the film makers as a whole.
  We must decide in simple terms exactly what we are endeavouring to do. If we intend to leave the industry in the hands of those who have presided over its decline, be they exhibitors, distributors, producers, members of the National Film Finance Corporation or members of the consortium, we are doing a disservice to the young film maker, to the actor, to the up-and-coming man in the industry who must be our future.
  I do not intend to stand aside and see that happen. I am happy that my hon. Friend has made it clear that he gives his support to a much wider range of legislation. I hope that he will also make plain to his colleagues in the Government that the time has come for urgent action. We are not talking about 20 projects a year; we are talking about the survival of a means of cultural expression which is virtually disappearing from this country. If my hon. Friend wants an undiluted diet of American pap turned out through our cinemas and television screens, occasionally lightened with the odd sex film from Copenhagen and Germany, I must tell him that he is very much alone. That is not the future that I shall accept for the film industry. We want some urgent action now.
  12.34 a.m.
  Mr. Fred Silvester: Unlike the hon. Member for

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  Crewe (Mrs. Dunwoody), I do not have any direct interest in the film industry. However, I have been watching it for some years as an interested outsider.
  The debates that have taken place in the House have the curious effect of suggesting that we have been in this situation before. Articles in the Press are always telling us the same story.
  Mr. Terence Higgins: It is a flashback.
  Mr. Silvester: Indeed. It is a cyclical situation in which we stagger from crisis to crisis. Whenever there is a crisis, the House brings forward a piece of legislation which it hopes may in some way tinker with the problem. Tonight we are tinkering again. It seems that there is an element of wishful thinking in the way in which the politician deals with the cinema industry.
  We are giving new powers to the National Film Finance Corporation. It has been going for 25 years. At no stage has it been able to contribute more than 10 per cent. of the film production of this country, frequently—and certainly at present—much less. We are talking about a decline now, as we have at some stages in the past, of an order which makes anything the NFFC can do appear to be peanuts.
  We are in a situation in which all the agencies available to us through Acts of Parliament are small beer compared with the major movements going on inside the film industry. We are talking about the Americans, and I was sorry to hear the hon. Member for Crewe speak of "American pap." As far as I can understand it, the British film industry is at its most prosperous when there is a conbination of American money and English skill. The times of greatest health in the industry were when we had the right skills and talent to capture the American market. We do it from time to time, but we do not do it all the time or anything like enough at present.
  The £200,000 which we are currently discussing is for 20 projects. We hope that young and enterprising producers will come along with their ideas for films which they can work up in the early stages. That is fine. I remember conversations in the industry going back,
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  certainly to the late 1960s, in which people were then saying how difficult it was for young men to get started and how they would find it impossible to raise finance. That was not true. Over the years, if a person has had the right skill and the right outlook, he has been able to find the finance. So I raise this subject of wishful thinking. It is doubtful whether this £200,000 will necessarily have any effect.
  The Minister speaks of an advisory committee. He has not said who is to be on it. I am sure that he will tell us when he replies. That £200,000, and the effect it has, will depend entirely upon the skill of these six people who will be on the committee. They will have to get it going. They will have to find not only people who show skill in the art of film making—after all, some of those are now supported by the British Film Institute—but those who have a nose for commercial success. That is what we are talking about. It is commercial success which keeps people employed. The state of the cinema as an art form is something to which we shall have to give a lot of attention. Without basic commercial success, we have not a hope. That is a big burden to place upon the advisory committee.
  I agree with much of what the hon. Member for Crewe has said. The NFFC has been losing money—if it is averaged out over a period—at the rate of £400,000 a year. It has been less in recent years because it has been doing less. That means that there has been a subsidy of about £400,000 a year. It is doubtful whether the NFFC has the vigour it once had. There has been a certain hardening of the arteries. Although it will be found that it made a profit on "Stardust", as I understand it, in that case it was a film which had already got adequate finance and the NFFC almost begged its way in so that its funds would have a profit. I do not believe that it is the function of a Government-sponsored agency to take over the rôle—
  Mrs. Dunwoody: I completely agree with the hon. Gentleman. He will remember that it was his Government that put the NFFC in this position in the first place because it was they who said that the NFFC would have to work

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  through the basis of the consortium to be able to continue.
  Mr. Silvester: I do not accept that. I do not want to get into a long argument about that. The basis of the consortium was an attempt to bring into the NFFC a source of private money in the hope that it would stimulate greater financial involvement from other private sources. It is rather sad that it does not seem to have done so, but it does not necessarily follow that the NFFC's method of working has been handicapped by that decision. The NFFC has always sought, not always successfully, to back films which would make a profit. That was true long before the consortium was established.
  I welcome most strongly the setting up of the working party. I do not think it is generally recognised that the amount of money going into films is quite considerable. Broken down, the 1973 figures show that the NFFC's loss was running at the rate of £400,000 a year. The grant to the National Film Institute was £900,000; the Film Production Board accounted for £99,000; the National Film Archives, £70,000; the Children's Film Foundation, £310,000; and the National Film School, £367,000. That is a total of £2¼ million going in one form or another to some part of the film industry, and it has arisen in a higgledy-piggledy fashion.
  I remember the discussion on the National Film School, and the question was then very seriously raised by the Film Production Association in relation to the Eady levy. What we are doing, albeit with the full support of the corporation, is making an ad hoc decision. This leaves it with quite a lot of money. There will still be over £4 million in the kitty, but again it is an ad hoc decision.
  There was some very interesting correspondence published in The Times a year ago when virtually everybody in the industry was involved in discussing the suggestions for the Eady levy. Even then the Film Production Association, although prepared in certain circumstances to give a nodding agreement in regard to the Eady levy, raised some very severe questions about whether it was wise to do so. It emerged from that correspondence and from the con-
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  versations in the industry that nobody was quite sure whether the levy was effective or whether it helped British film production as, say, the Boultings would claim.
  There are these crunch questions arising and I hope that the working party will look at them and try to get some evidence on them. What is to be done with the £4 million lying around is rather fundamental to the whole of British production finance.
  The money made available for films is always compared with that for television. I understand that at the moment there is a buyer's market for films to be shown on television, and the rates paid for films have declined. It is a simple example of the operation of the market. A lot of old films have been released for showing on television.
  I find it rather sad—the hon. Lady echoed it—that the television and cinema industries are always seen as being in conflict with one another. I do not think that makes any sense. The hon. Lady may have seen our film crews at work in Malta. If people are trained for films and find jobs in television, they are nevertheless using their skills in a way for which they were trained. They are being provided with jobs and opportunities. There are jobs for actors, producers and technicians. It is time we started looking at the two industries together and tried to find ways in which they could cooperate with one another to their mutual benefit.
  The figures that my hon. Friend the Member for Uxbridge (Mr. Shersby) quoted from Belgium were straggled. It is quite clear that there is some imbalance there, but I do not believe that it will be cured by animosity between the two media. I believe that this problem should be one of the working party's major considerations. Of all the small things that we can do with the money available, I believe that the priming of the pump in this way is one of the most valuable. I wish the scheme success.
  12.46 a.m.
  Mr. Tony Durant: I welcome the Bill and especially the contribution by the hon. Member for Crewe (Mrs. Dunwoody), with a great deal of which I entirely agree. The British film industry has gone awry in many ways

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  since the war and much of what the hon. Lady said emphasised that. However, I challenge the hon. Lady's view that the origin of the industry was entertainment, because I believe that historically it was for scientific research and documentaries. In any event, I shall not labour that theme.
  I turn to the comments of my hon. Friend the Member for Manchester, Withington (Mr. Silvester) about the conflict between television and cinema. We should try to find a way of getting these two sectors together. The fault lies principally in the court of television, because when it began, it was looked upon as a new creative art. In fact, it was only a new way of projecting.
  From my limited experience of the industry I believe that the only fundamental production difference between the two industries is that one has to arrest people's attention at the beginning of a programme instead of after the first five minutes when they have sat down. However, there was a phase when it was thought that the two industries were different. The reality is that television is dependent to a great degree on the film industry even to the extent of keeping a station going. The amount of live material broadcast on television decreases week by week. Pre-recording and the use of film techniques are increasing.
  I take the point that the two industries should get together. However, television should stand its corner. It has got away with it for far too long. It has used the talent, expertise and background of the film industry and made a lot of money.
  I am especially interested in the Children's Film Foundation, the British Film Industry Production Board and the National Film School. I want to be assured that this proposal will not in any way penalise them as there is now a quarterly arrangement instead of a four-monthly arrangement.
  The Children's Film Foundation has been established for a long time. It has provided a great service in the Saturday viewing for school children and made some extremely valuable children's films. The British Film Industry Production Board has provided new and exciting talent. We have tremendous talent in this country. We had a long drawn out battle to establish the National Film
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  School. There was much argument and difference of opinion. I should hate to see any damage.
  Hon. Members and the country as a whole must recognise that Britain has tremendous talent, which is one of our greatest assets. Indeed, it is one of our servicing skills, and goes alongside mundane things like banking, insurance, public relations and so on. We have talent for putting things over, for directing and for production. For too long we have neglected an industry which is important to Britain and which has provided a great part of our culture and our heritage.
  I hope that we shall not be content with this Bill, but that we shall push the Government hard, so that when we receive the report from the committee we shall get some extra help and impetus for what I believe to be an important industry.
  12.50 p.m.
  Mr. Jonathan Aitken: This is one of those rare but happy occasions in the House when such is the degree of harmony that we are all agreed on congratulating the Under-Secretary on bringing forward the Bill and we are agreed on its general purposes. In common with other hon. Members, naturally I welcome the Bill. I agree very much with most of the points that have been made, particularly that by my hon. Friend the Member for Reading, North (Mr. Durant) that television must stand its corner and contribute far more handsomely than it does now to such things as the National Film School.
  The Under-Secretary rightly pinpointed the real cause of the present crisis in the film industry, namely, the withdrawal of American finance. The hon. Gentleman was right to do so, because for the last 10 years or more, 90 per cent. of the finance for British films has been coming from American sources. It is a valid point, and I hope not too contentious, to point out to the Under-Secretary that if only there had been a little more co-ordination between some of the Government Departments and his right hon. and hon. Friends, at least part of the crisis relating to American-source money for British films might have been avoided.
  Just over a year ago every Member of the House received a letter from Mr.

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  Alan Sapper, the General Secretary of ACCT. This source, which could hardly be described as a high Tory one, pointed out that the feature film industry in Britain would face extinction unless something was done about the 1974 Budget provisions, which caused United States citizens resident in Britain to pay up to 83 per cent. tax rates on three-quarters of their United Kingdom earnings. This affected an absolutely tiny number of people. It was a foreign jealousy tax. It was very regrettable that Mr. Sapper's wise words of advice were not heeded.
  The 1974 Budget provisions had the effect of sending an infinitesimally small number of talented and creative American producers, directors and others working in the film industry back to their own country, where they were faced with much more modest rates of tax. America has a total tax rate of only 50 per cent. I suggest that the Under-Secretary makes this point when he has discussions with his right hon. and hon. Friends about the future of the film industry in Budgets to come.
  The Under-Secretary spoke about a lack of good projects. This was a slight case of putting the horse firmly behind the cart. The lack of good projects is due to the fact that there is a complete lack of confidence in the industry, not to the fact that there is a lack of creative inventiveness latent in the film industry. The financial crisis is caused by the factors I have mentioned and by the fame drain of many top creative artists going to live overseas, and this is stopping many projects from coming forward.
  We should seriously start to consider whether Britain should not follow the Irish example of creating a special tax category for creative artists, directors and writers. The Labour Party hates anything which might tend to create a new élite. Those who care deeply about this subject regard the Irish example as worthy of examination, because the Irish have benefited considerably from the arrangement.
  We are talking fundamentally about a search for new financing methods. The Government would do well to consider Middle East money as a new source of finance. I know the Under-Secretary and his colleagues are to have talks with Saudi
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  Ministers in the next few days. I hope they will try to get Arab money for the British film industry.
  This is not a high-flown idea. There is one feature production—"Cinderella"—being made with the help of Arab money now. I declare an interest as director of a company that is trying, so far not too successfully, to raise Arab money for the British film industry. We have distinguished Arabs on the board and we believe that what we are trying to do will be a growing trend, but these trends have to be started mainly by inter-government discussions and agreements.
  It is disappointing that we are having this debate in such an empty House and with not enough of a clarion call to Parliament to take an interest in this vital industry. If it goes down, we shall say goodbye to an industry of high exports and creative talent. I would regret that and I welcome the possible sign of hope that the working party, if it really gets working, may be able to instil confidence into this industry.
  12.56 a.m.
  Mr. Terence Higgins: The lateness in the Session for the introduction of this Bill is matched only by the early hour at which we are debating it. It reflects the shambles into which the Government's programme has fallen. This is a most important industry and it is unfortunate that we should be debating the Bill at such an early hour.
  My hon. Friends have already dealt with a number of issues raised by the Bill and we listened with great interest to the comments of the hon. Lady the Member for Crewe (Mrs. Dunwoody). We have had a very knowledgeable debate and at this late hour I shall concentrate on some more technical aspects of the Bill. The general points have been made very well by my hon. Friends.
  This is not a major measure and does not involve large sums of money, but we wish it well and hope it will do something to help the preparatory side of film production. There is no doubt that the 1974 Finance Act, which we debated in great detail, has had an adverse effect, with the taxation changes deterring a number of people from continuing to work in this country. It also had an adverse effect on British people working abroad,

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  and in an industry like films, where people are very mobile, this has been most regrettable.
  The Bill does not involve extra money from taxation. The money will come from the Eady levy and I suppose Sir Wilfred Eady is the only Permanent Secretary at the Treasury to have had anything named after him. Such allegedly faceless men do not often get such interesting memorials.
  We are dealing essentially with widening the scope of distribution of money in order to cover pre-production finance. That being so there are one or two points I should like to raise.
  The point that the Minister raised about Northern Ireland also crossed my mind when I read the Bill. It would seem a curious situation for the levy to be raised only on this side of the Irish Channel, but for it to be distributed on both sides. Perhaps he will clarify that. It seems to be an unusual arrangement.
  I am concerned about certain other aspects. Clause 2 refers to the arrangements approved by the Secretary of State, but to what extent is the House, which has a degree of expertise in these matters, to be made aware of the arrangements which are to be approved by the Secretary of State? Are they to be laid before the House in the form of a statutory instrument, or in some other way? No doubt they will be detailed. We appreciate the need for flexibility, but it is important that information should be provided for the House in some form, and the negative resolution procedure might be appropriate in that respect.
  Another point which causes me concern is that there are to be consultations with the Cinematograph Films Council about payments into the fund. But there is also to be an advisory committee which will be concerned with payments out of the fund. Presumably, it will advise the fund on those to whom the money is to be given. There is reference to consultation with the Cinematograph Films Council, for example, in Clause 1(2), but there appears to be no reference to the advisory committee. The Bill is tightly drafted and perhaps this point is comprehended by the reference to earlier legislation.
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  The advisory committee, I understand, is to be a new committee, and if that is so the point raised by the hon. Member for Crewe is important. The House should consider whether the membership of the committee might be influenced in the way in which it allocates money. It might even be difficult to find people to serve on the committee who are sufficiently expert but who do not have some interest in the way in which the money is spent.
  If I am right and the committee is not mentioned in the Bill, we need to know who the members are to be and by whom they are to be appointed. Ought not the Secretary of State seek the approval of the House on the suitability of the appointments?
  I am still not clear whether all the finance is to be provided in the form of grants or loans. I understood that the original intention was to make loans, but I understand also that there could be other payments. I am not clear on what criteria it is to be decided whether a matter should be dealt with by a loan or some other payment. I do not sea how the advisory committee or the fund will decide which form the payment should take. Am I right in thinking, however, that the loans are to be interest-free, and if so, why?
  The Under-Secretary said that the loans would be repaid, but with a premium. That seems a curious expression. One would normally repay a loan with interest, but a premium seems to suggest that the main charge for the use of the loan is in some way to be related to the success of the project, if it is eventually carried through. If that is what the hon. Gentleman has in mind, I am not sure that it is desirable. I believe that if it is a loan, it should be at interest. The person carrying the venture forward further will then know exactly how much he has to pay. I do not see the point of having a premium on the loans as the Minister outlined.
  I shall be grateful if the hon. Gentleman will clarify those points. I have concentrated on the details because we shall have to consider them at Committee stage later this week. The overall welcome given to the Bill is appropriate, and we do not wish in any way to oppose its passage.
  1.5. a.m.
  Mr. Deakins: With permission, I should like to reply to the debate.
  A number of detailed points have been raised, and I shall be happy to answer them all tonight if that will ensure that we have a shorter Committee stage on Thursday evening, or perhaps early on Friday morning. However, if the House feels that it would be better to concentrate on the broad principles, I shall be happy to do that, leaving other questions for answer in Committee.
  Mr. Higgins: If we do not know the answers, we shall not know whether to table amendments. The Minister may well be able to anticipate amendments and avoid their being tabled.
  Mr. Deakins: In that case I shall try to answer all the points raised in the debate.
  The hon. Member for Uxbridge (Mr. Shersby) gave the Bill a welcome, for which we are most grateful. He was concerned, as was his hon. Friend the Member for Reading, North (Mr. Durant) and my hon. Friend the Member for Crewe (Mrs. Dunwoody) with the question of the television levy and the relationship between the cinema and television industries. The matter is being considered by the working party set up by my right hon. Friend the Prime Minister. I can make no comment about what the outcome will be.
  We know that the Cinematograph Films Council recommended that there should be a levy on films shown on television, a recommendation which was not entirely welcome to people working in television. Nevertheless, I think that the House will agree that the two industries have been separate for a long time, and that anything which can help bring them together in their mutual interests will be good. There are individuals with great experience of television represented on the working party.
  Mr. Robert Cooke: The Minister will appreciate that if there is a levy on films shown on television it will simply put up the programme companies' programme costs, and the Government will get less in television levy out of the programme companies. Therefore, the Government will have to pay out of taxation anyway.
  Mr. Deakins: I am not advocating a television levy. That was recommended by the CFC, representing the film industry, not the television industry. The matter will have to be worked out by the working party.
  The hon. Member for Uxbridge also asked about the advice from the advisory committee. That advice will be given not to the Secretary of State, but to the National Film Finance Corporation, and it will relate to the making of loans under the Bill. The advice will not affect the arrangements that the NFFC has with the consortium. There will be no relationship whatsoever.
  In an interesting speech, based on her great experience of the industry, both from speaking as a Minister in charge of the industry and with experience of the commercial side of the industry, my hon. Friend made a number of points which I and the House heard with interest. She stressed the importance of the international market for British films. I believe that it is now genuinely recognised that while there may still be some specifically British films, such as the "Carry On" series, which I understand is making an impact overseas as well as in this country, our film makers are increasingly directing their attention to the needs not only of the home market, but of the international market. As my hon. Friend rightly said, it is essential to venture into that market, for otherwise one cannot cover one's costs and make a profit.
  My hon. Friend asked whether the members of the advisory committee would be put in a position to benefit from the Bill. I can give her a complete and categorical assurance that they will not be able to vote on or take part in the consideration of any application for a loan in which the person concerned or any company with which he is associated has any interest. In any event, the final decison will rest with the NFFC.
  Mrs. Dunwoody: I am not sure that I understand the way in which my hon. Friend is using the term "NFFC ". Will the advisory committee advise the officers of the NFFC or the board of the NFFC? If the work of the consortium and the NFFC and the pre-production and script writing scheme are to be totally separate,

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  the industry would like to know who make up the NFFC in that sense.
  Mr. Deakins: It will be the members of the NFFC. The advisory committee will have some day-to-day contact with the managing director. Much of the work will be fairly detailed and mundane, but I am sure that the board of the NFFC would wish to be consulted on any issue of policy, for example. In any event, the fund will be kept separate from the consortium operations because we are to set up a separate account for the NFFC funds.
  Mr. Higgins: The hon. Lady has raised an interesting point which had crossed my mind. Are we to understand that the ultimate decision will rest with the board of the NFFC? My impression was that it would simply administer the money. If it is to take decisions as against simply agreeing with the advisory committee's decision, that is an interesting point which we should consider further.
  Mr. Deakins: The people on the NFFC are very experienced but are not, by virtue of the terms of reference under which they are appointed, experienced in the making of films. The advisory committee must be an advisory committee to the board as a whole, but one would expect and assume that the board would depute the management of its day-to-day role to its officials and the managing director in particular.
  In the last resort, the NFFC will be able to reject the advice of the advisory committee. It will be only an advisory committee. If the NFFC does not wish to make a loan to a young person who has been recommended by the advisory committee, the NFFC will have the statutory right to make that decision. If the NFFC wanted to do something against the advice of the advisory committee, it would be able to do it.
  My hon. Friend also mentioned the question of distribution. I assure her that the terms of reference of the Prime Minister's working party are very widely drawn. Organisational matters are not excluded from consideration by it, and there are representatives of virtually every section of the cinematograph and film-making industries on it.
  The hon. Member for Manchester, Withington (Mr. Silvester), in a very in-
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  teresting speech, said that we were tinkering with the problems of the film industry. I have not claimed, and I do not think that the CFC would claim, that the Bill is the answer to the industry's problems, or even part of the answer. It is merely an attempt to ensure that more projects come forward and that priming-the-pump operations are not hindered by lack of adequate finance.
  The hon. Member for Withington also asked who were to be the members of the advisory committee. The advisory committee will be composed of persons representing producers, writers and persons employed in the film industry. The Secretary of State will consult the appropriate associations and organisations before he makes appointments to the committee.
  Mr. Higgins: It is pretty wide.
  Mr. Deakins: Yes, it is pretty wide, because on an advisory committee of this nature we want to take advantage of the wide-ranging expertise that exists in many sectors of the British film industry.
  I was also asked about the evidence we have of the use of the Eady money and whether it is being put to the best possible use. This is a matter which is not debarred from the working party's considerations, as it was not debarred from the considerations set out in the report of the Cinematograph Film Council, to which reference has been made.
  The hon. Member for Reading, North made an important point about whether there would be a penalty imposed in the form of, perhaps, reduced payments out of the Eady money to the Children's Film Foundation, the National Film School and the British Film Institute Production Board. I can assure the hon. Gentleman that that is not the case. The new scheme will in no way prejudice the payments made from the levy to those three institutions and the Cinematograph Films Council will continue to be consulted about all these payments. That is an adequate safeguard for those organisations and for the industry.
  The hon. Member for Thanet, East (Mr. Aitken) suggested that perhaps I had the cart before the horse in that the lack of projects was due rather to lack of confidence than the other way round.

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  Whatever the reason may be—and I do not want to hark back on recent history—I hope that he will agree that the Bill should help in some way to put the position right.
  He also made an interesting suggestion about trying to get hold of Middle Eastern money. This country is already in receipt of quite a lot of Middle Eastern money. It may be that the people in charge of the finances of those countries might be interested in film production. It is certainly an interesting suggestion. I assure the hon. Gentleman that I shall consider it further, not necessarily in connection with the current visit but in connection with future contacts with people from that area.
  The hon. Member for Worthing (Mr Higgins) raised a number of points about the levy. First, he said that it seemed to be payable to makers of British films, which includes those in Northern Ireland. The levy is not payable by cinemas in Northern Ireland and that is why it is excluded from the Films Acts. It is confined to cinemas in Great Britain. The Eady money is not levied on the prices of cinema admissions in Northern Ireland However, the levy is distributed to makers of British films, but not on any geographical basis. If this is an anomaly—and I do not accept that it is—it has always existed in respect of payments to the British Film Fund, and so on.
  The hon. Gentleman asked about the arrangements. I can assure him that the arrangements will be published. They have not yet been agreed and they have to be worked out by consultation with the industry. Indeed, they will have to become public knowledge because we want to attract film makers, script writers and so on. If we are to attract them, they must know what the conditions are for application to the National Film Finance Corporation for a share of this money.
  The hon. Gentleman also mentioned the advisory committee. I reiterate that the advisory committee is not mentioned because it is advisory to the NFFC and not to the Secretary of State. The NFFC will be the statutory body with which the Department will have its relationship.
  Mr. Durant: The Minister has not mentioned the distributors. Does that mean that they are not included?
  Mr. Deakins: The provision refers to those working in the film industry and I should not like to say whether that includes distributors. Since this is a project designed basically to help film making, the answer probably is in the negative. But if, in the light of experience, it were shown that there was an urgent need to have distributors on the advisory body because of projects that might lead the production of films unfit for distribution to the British cinema-going public, there might be a case for having a distributor. But one hopes that good sense from people either working in or with experience of the industry will suffice to ensure that projects chosen are suitable not only as British-quota films, but as films fit to be seen in producers' and exhibitors' cinemas.
  The hon. Member for Worthing asked about loans and other financial assistance. At present it is not intended to give assistance other than loans, but the Bill would permit grants to be given if that is considered advisable later. We shall start oft with loans, and, indeed, I hope that we shall continue with loans, but much will depend on the success or otherwise of the scheme and whether it succeeds in attracting people with the ability to produce films that the British public want to see.
  The hon. Gentleman's final point related to whether the premium was a replacement for interest. There is no interest payment as such. The premium is partly in lieu of interest and partly because if the film is put into production it is only fair that the fund should get back some recompense for the money it has advanced—not merely the capital sum, but some small share of the profit.
  The amount of premium is still being considered by the industry. I mentioned a figure of 50 per cent. and that may not turn out to be the right amount, but some of the projects that would benefit under the scheme may never come to fruition. We must recognise that as well as successes there will be failures.
  Mrs. Dunwoody: The majority.
  Mr. Deakins: My hon. Friend may be right in saying that the majority of them may be failures—failures in the sense that they will never reach the stage of exhibition in a cinema. But if the scheme results in British-quota films coming forward—films made by the British film maker—

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  it will be an investment of the industry's own money that is well worth while.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Harper.]
  Committee tomorrow.

  RECESS ELECTIONS BILL [Lords]
  Read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Harper.]
  Bill immediately considered in Committee.
  [Mr. GEORGE THOMAS in the Chair]
  The Chairman: I suggest that we adopt the same procedure as we pursued yesterday when dealing with a consolidation measure; namely, put the Questions in blocks.
  Mr. Robert Cooke: May we in two or three words be told what the Bill is about?
  The Chairman: I am sorry but I have already put the Question to the House.
  Mr. Cooke: I am just asking that we should be told what it is about before we pass it; that is all.
  The Chairman: I am sorry that we may have moved a little fast, but that point has passed.
  Mr. Terence Higgins: On a point of order, Mr. Thomas. As I understand the situation, you were proposing to put the Question. It would be in order for the Minister to give an explanation at that stage.
  The Chairman: We cannot discuss the content of clauses, and we have already passed the Second Reading stage. The House a few moments ago agreed to give the Bill a Second Reading.
  The Question is that Clauses 1 to 5 stand part—
  Mr. Higgins: I abide by your ruling, Mr. Thomas. Although I understood you
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  to say that we could not discuss the contents of the clauses, I imagine that it would be in order for the Minister to explain the way in which they have been consolidated. I presume that the Minister would want to do that, although I abide by your ruling if that is not so.
  The Chairman: I do not wish to stop the deliberations of the Committee. However, our proceedings must be in order. If the Minister seeks to explain why Clause 1 is consolidated, if we deal with the clauses one at a time, I do not mind. We can discuss them one at a time. However, he must confine himself to why the clause is consolidated.
  The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): Perhaps I could seek your guidance, Mr. Thomas. I do not think that it is the wish of the House that I should go through the Bill clause by clause. However, if there is any way in which I can describe, extremely briefly, the sum total of the clauses, I shall be happy to do so.
  The Chairman: That cannot be done now. Next time I shall proceed more slowly.
  Mr. Davidson: On the next occasion I shall rise more slowly. That will give you, Mr. Thomas, more time.
  The Chairman: I am sorry this has happened because I looked forward with pleasure to hearing the speeches of both hon. Members concerned.
  Mr. Robert Cooke: The title of the Bill intrigued me. Some hon. Members would have liked to know more about the measure. That is why I raised the point.
  Clause 1 to 5 ordered to stand part of the Bill.
  Schedules 1 and 2 agreed to.
  Bill reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

  RECESS ELECTIONS BILL [Lords]
    ADJOURNMENT
    Motion made, and Question proposed. That this House do now adjourn.—[Mr. Harper.]

  THE ARTS (FINANCE)
  1.28 a.m.
  Mr. Robert Cooke: I am glad to have the opportunity of raising the subject of finance for the arts. It is strange that the Minister with responsibility for the arts took no part in the debate on the film industry, for which he has ministerial responsibility. However, I am glad that he listened to the debate. I wish to raise the question of the Downing Street Press notice of 22nd September 1975, according to which the Prime Minister appointed the Chancellor of the Duchy of Lancaster, Mr. Harold Lever, to undertake a thorough assessment of the problems facing the arts. When I asked for this debate I put it down to the Chancellor of the Duchy of Lancaster. I understand that his colleague will answer for him.
  According to the Press notice, the Prime Minister asked the Chancellor of the Duchy to consider, among other solutions, the possibility of raising additional funds for the arts from sources outside the Government and local government. We are entitled to know more about the matter. This is the first opportunity we have had of obtaining information from the Chancellor of the Duchy, through his colleague, about the possible solutions which are being investigated. We should be interested to know whether the Government have any new ideas up their sleeve.
  I shall be asking many questions about industrial and commercial sponsorship of the arts, but there may be something else which the Government are thinking about, and we should like to assist them in that. Could it be that new tax reliefs are foreshadowed in the announcement? Perhaps there is to be relief from some of the penalties that a wealth tax would impose.
  The Minister could tell us the scale of patronage of the arts by commerce and industry. I know that the Government are working on that. Unless they know the present scale of patronage of
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  the arts by industry and commerce, how can they possibly work upon it in the future?
  While I am on the subject of industrial patronage, I am sorry to tell the Minister that more than one chairman of a major public company has refused to support the arts so long as the Minister persists in his present attitude towards the wealth tax. The word "Marxist" has been used. The Minister has taken an extraordinarily controversial stand on the arts and the national heritage in his attitude towards the wealth tax. This has frightened off many people who would like to help.
  The Minister has, in a sense, failed with industry. How is he succeeding with the unions? The Government claim to have a special relationship with the TUC and unions generally. The Opposition have raised with the Minister on many occasions the question of union financial support for the arts. As the direct result of our representations, the TUC set up a working party in April 1975. We pressed the Minister, he had words with the TUC and the TUC set up the working party. Its terms of reference are:
  "to consider and make recommendations on ways in which trade unionists and their families may be enriched by, support and contribute to the arts".
  It is obvious that there is no thought of financial contributions from the unions: far from it. I am sorry that although the working party includes members from unions associated with the arts—some fairly indirectly—there is no artist on the working party. Perhaps that might be considered. I know that the unions are genuinely interested and want to be helpful, but the prospect of the unions providing financial support or encouraging others to do so is not very bright.
  When I have spoken to union representatives they have made great play of greater industrial responsibility. The TUC suggested that firms who make money out of matters related to the arts—television tubes spring to mind—should do more to help the arts. I believe such firms already give a fair measure of support. If the TUC takes a friendly attitude about this, I am sure that firms will be encouraged and we shall get results.

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  The TUC certainly will not get results by a frontal attack.
  The TUC also makes much play of the role of municipal patronage. A TUC representative who came to see me today stressed that. I pointed out that during most of the past 30 years the Labour Party—with its special relationship with the TUC—has controlled most of the great municipalities, but the rich municipalities do not have a sparkling record in supporting the arts. Of course, some outstandingly good work has been done, but the overall level is not good and has recently declined. We understand the difficulties faced by local government, but for the TUC to claim that the municipalities are a major source of patronage is somewhat optimistic.
  One of the proposals put forward by the unions would result in even greater public expenditure. They are strongly inclined to award the fourth television channel to an organisation with the aim of developing cultural, educational and minority interests. That would conflict with commercial television's need to attract advertisers. The TUC turned down the idea of a fourth channel in the hands of independent television companies.
  I wonder what the hon. Gentleman thinks about this. He said on 4th March that he was considering whether to give evidence to the Annan Commission. He has had a long time to consider. I wonder what he has done. Perhaps he can tell us the answer tonight. I hope that he has overcome any prejudices he may have had against commercial television and has his feet firmly on the ground in this matter. He could, using his very considerable influence, talk about the considerable arts revenue which could be raised through ITV2. He knows what I mean, and I hope he is thinking seriously about it.
  I want to refer to credits on television for those who finance arts events. Such credits could inspire a great many more people to take the plunge. If a great institution sponsors an opera or ballet or concert, the BBC should be encouraged—I could even say, required—to give credit where credit is due. Various prizes and trophies are given, for example, by Bensons & Hedges, Double Diamond. Hennessey and Gillette. All those who
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  sponsor sports get their names on the television screen, and not just by advertisements plastered across the fairway or around the arena.
  The BBC has a rather curious split personality on this. If it can allow such sport advertising, surely it could, at the end of a television broadcast of an opera from Covent Garden, say that it was sponsored by the National Westminster Bank and the Imperial Tobacco Company, for example. The same applies to Glyndebourne productions sponsored by the Midland Bank.
  There is, however, a chink in the armour. BBC local radio stations have been more generous in giving credits. I was glad to be attacked in Bristol on BBC local radio when I said that it did give credits. I am delighted that it does. I should like to see that done on television as well.
  The Press has been immensely helpful in giving proper credit where it is due. After all, if people are prepared to give large sums of money for sponsoring the arts, they should be given the credit, and if others sec that they do get the credit, many will follow suit, because it all helps to improve reputation and the image of a company or institution.
  I turn now to the question of finance for the arts and for several projects which the hon. Gentleman has in mind. There is, for example, public lending right. What is to be the annual cost? The hon. Gentleman said recently that we must wait for the Bill in the Queen's Speech on 19th November. I hope for another nod from him on that. There is no nod. Perhaps the Bill is not to be after all and we shall have to wait another Session. There must surely be further doubt among the authors on that one.
  Is the annual cost to be in the Bill at all? Was a Bill of this kind ever introduced which said how much money was to be produced to help authors? We have heard the figure of £5 million a year, which would provide meaningful help for authors hoping to participate. But with inflation rising, one wonders whether that would be enough.
  Can we expect extra money to be provided on the arts budget? The Arts Council has said that it has to cope with a 38 per cent. inflation. Even allowing for a little exaggeration, the Arts Council

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  is in grave difficulty. Are we to see another £5 million produced for the arts in public lending rights? I believe that the hon. Gentleman could be accused of practising some cruel deception on the writers if he held out great hope of anything happening in their direction for some time.
  Is the Minister considering the possibility of financing the public lending right out of an extended copyright? Will the copyright run for not 50 years but 60 years, the revenue from dead authors being used to support the living? It may not be the Minister's Department, but the Home Office that is considering copyright internationally, but I am sure that the Minister is in touch with these matters. Now that we have a Cabinet Minister at the helm, perhaps we shall get somewhere fast.
  I now turn to the National Theatre. We have been told on many occasions that the building is getting on nicely and that certain parts will be finished quite soon, but what about the players? Are they to be given some sense of security? Can they indulge in some forward planning? However splendid the building, it will not be of much use to the public unless it is adequately financed and fully used. There is an immense amount of enthusiasm for the project which we would not like to see cool off.
  One more word about the problems of the Arts Council: are we to have the repeated cries of anguish every year and the cat-and-mouse game which we have seen taking place between the council and the Minister? Can we not have even a modest triennial indexed budget? I suppose it would have to be indexed in inflationary times. The council might be told that there was not much room for expansion, but at least it would know where it was and it would be able to plan ahead. I do not believe that the Treasury is entirely to blame. I think that a certain amount of muddle is going on in Belgrave Square. What practical steps is the Minister prepared to take on that?
  The Minister would do well to turn his attention to following our lead in industrial and commercial sponsorship or patronage. I am glad to see him converted to our case. We have always favoured and encouraged the widest pos-
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  sible financial support for the arts from all possible sources. On this side of the House we are practical people. With many sponsors it is possible to look to a more settled future.
  I am delighted to know that the Minister will be in Bristol later today. I am sorry that we have had to keep him here and have not released him in very good time, but he will get there all right. The Minister is going to John Harveys to applaud its sponsorship of the Bournemouth Symphony Orchestra's concerts, which I helped to launch as long ago as 15th September. Perhaps he will be standing on the same spot that I occupied on that occasion. Perhaps he is making his visit to congratulate me on giving him a lead. I am delighted that he is accepting that lead. I hope he will make it clear that the attitude displayed by such sponsorship will have every possible support and encouragement and that it will get the sort of public recognition it deserves.
  I hope that the Minister will also say a word in passing to my friends at the National Westminster Bank for their sponsorship of "Cosi Fan Tutte" during the Glyndebourne tour, which was greatly enjoyed by many people from all over the West Country. When the Minister gets to the Imperial Tobacco Company Cello Festival he will be met by my wife. She will take him to a reception, where he will hear about a fine example of private enterprise collaborating with public finance.
  I am glad to see someone as far Left as the Minister—I know that he will be rather proud of that description—embracing and applauding the fruits of capitalism. I think that the Chancellor of the Duchy of Lancaster must have been working on him. All success to commerce and industry in the arts! Their present contribution is significant and the future is full of possibilities. Let us give them every encouragement, and perhaps even some tax inducements. Perhaps it is more important that they should receive proper public recognition for what they are doing.
  1.44 a.m.
  The Under-Secretary of State for Education and Science (Mr. Hugh Jenkins):I am grateful to the hon. Member for Bristol, West (Mr. Cooke) for raising this

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  subject so shortly after the House has reassembled after the Summer Recess. Just as bullion was said to be the sinew of war, money is certainly the sinew of the arts.
  I have never had any inhibitions about the source of the money. That may be because before I became involved in the world of entertainment some 25 years ago my previous interest was in the banking world. I was editor of the Bank Officer for some time. During that time I came to know the City quite well. I have retained some fairly good connections and associations with business men. I would say that my relationships with business men in the City are remarkably good considering the sharp differences of political opinion which separate us. That difference of opinion has not in any way inhibited me from taking their money from them.
  On the contrary, it seems that while we live in an acquisitive society we can do no better with the surplus profits of capitalism than to divert them into the arts. I have no inhibitions whatever about this. My relationships with those business firms which support the arts are a good deal warmer than they are with those who do not. If the latter firms wish my relationships with them to improve, they can do no better than to direct their funds in this direction, as a number of firms in Bristol are doing. I hope to pay proper tribute to them tomorrow.
  It is not only a good thing in itself; it is a good thing from the point of view of the prestige of the firm. Such a practice is widespread among firms in the United States and we are beginning to catch up here. The idea is growing that business organisations have a responsibility to the society within which they exist. This responsibility should be recognised more and more. I believe that this is happening and I believe that that responsibility should be recognised by public corporations just as much as by private enterprise.
  Mr. Robert Cooke: The Minister will recognise that in Bristol our university, museum and art gallery were all provided by great industrialists. No public money was involved when they were started.
  Mr. Jenkins: If the Bristol example can be followed more widely, no one will be happier than I. I shall certainly encourage such moves and take every
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  possible opportunity, where such things are done, of paying proper tribute to those involved and expressing appreciation, as I have done on several occasions in the House.
  It is wrongly suggested in the Press that I am reluctant to express appreciation to business organisations. The contrary is true. I am somewhat effusive in this matter, sometimes excessively effusive. I shall try to restrain myself and try to achieve a reasonable balance
  I was interested to read about the hon. Member's party setting up some study groups on the arts. I shall watch their progress with interest and any resultant policy that may emerge with greater interests still. Hope and plans are the essence of opposition. Realities are the essence of power.
  One of the last occasions on which the House debated the arts was on the motion moved by my hon. Friend the Member for Leyton (Mr. Magee) on 10th February this year. I outlined then how quickly—whatever political party was in power—the Government's grant to the Arts Council had increased since 1945. I pointed out that it had increased nearly one hundredfold in 30 years, and that this increase had been particularly significant since 1965 when my noble Friend Baroness Lee was appointed as the first Minister for the Arts. It seems necessary to mention this once again as it has easily been forgotten in the public controversies of recent months.
  We are all fully conscious of the labour-intensive nature of the arts which limits the extent to which they can accommodate the kind of inflationary pressures we have experienced over the last two years, without significant damage to the quality and range of performances. Lack of money is certainly detrimental to the arts but inflation makes it much more so. The arts cannot thrive unless inflation is got under control. I am sure that the hon. Member appreciates that. If he does not, he has only to talk for five minutes to the Arts Council or any of its clients to realise that this is so. Inflation, then, is enemy number one. With it is tied up the problem of resources and finance.
  I therefore welcome the Prime Minister's decision to ask my right hon. Friend the Chancellor of the Duchy of

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  Lancaster to undertake a thorough assessment of the financial problems facing the arts. The examination which my right hon. Friend will be carrying out will be of a wide-ranging nature. He has already embarked upon it. One of the reasons I welcome this is that our knowledge of what is being done in the business world is less than it should be. Various figures have been quoted. We can be sure of one thing and that is that it is less than the municipal help which is being given. Public support from central Government funds is much the largest. The next largest is municipal help. Business is a poor but an increasing third; the last figure I saw, £300,000, is, I believe, much too low.
  We know a good deal about what large firms are doing. We do not know enough about the large number of small contributions being made all over the country by smaller firms. Not only is money being given, but a good deal of work is being done by smaller firms. This has not been evaluated, and if it were all added up we might be pleasantly surprised by the sum total.
  Mr, Robert Cooke: The Minister says that his information is not as complete as he would like it to be. He has been pressed by the Opposition—and by me in particular—ever since he became Minister to take the subject seriously. Surely he has been doing some work on it. Just to pull out a figure of £300,000 is extremely misleading.
  Mr. Jenkins: The most exact figure we have is £300,000, but I think it is an under-estimate.
  One of our difficulties in this matter, which we have not entirely resolved—I have touched on it in discussions with the CBI—is that we do not want to be quoting firms unless we are sure they want to be quoted. It might, perhaps, be much more satisfactory were the CBI to set up an organisation or be a party to an organisation which might be responsible for co-ordinating such information. I hope that it will agree to do that. It would be very much more satisfactory if business were to quote what business is doing rather than to have the Government take the responsibility.
  It is all very well for the Government to take responsibility for Government
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  figures, whether central or local, but it is very much better to set up an organisation under the auspices of the CBI to take the responsibility for saying what business is doing. I believe that one result would be that business would do a good deal more.
  I doubt whether the TUC would agree that it acted on the suggestion of the Opposition. The TUC has long been interested in the arts. It has never regarded itself as a major source of money but its good will is important. It would be very sad if a circumstance were ever to arise in which a business firm decided to put money into the arts with the shareholders agreement, and then the employees said, "We do not want that money to be given because it is coming off our wages." The good will of the trade unions, of the TUC, is important in this case.
  Although the size of these business contributions in most cases is small, the effect can be seen in the same light as a prestige advertisement. In many cases a contribution towards the arts would be more effective in terms of its return to the firm than would be the ordinary sort of prestige advertisement, whether a page in The Times, or anything else.
  Mr. Robert Cooke: If the unions have for so long been interested in the arts—and they are very powerful, as the Minister will concede—how is it that they have persuaded firms to spend only £300,000-plus? Perhaps it is £1,500,000 by now. I hope so. Why have the unions been so slow to persuade firms to become involved in the arts?
  Mr. Jenkins: I do not think they have. Just as contributions to the arts by business firms are marginal, so, I believe, are contributions to the arts by the TUC. Neither organisation regards it as a first charge. Our task is to try to translate the good will which exists on both sides of industry into money.
  Discussions cannot be hurried if worthwhile results are to be achieved, but I am very hopeful about them. I am looking forward to my visit to Bristol. I have seen the Glyndebourne "Cosi", which was very fine. I have also seen some opera at the Coliseum and at the Royal Opera House, supported by Imperial Tobacco, one of the Bristol firms. I am

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  not one to say that this is unimportant, because in my view it is important. It may for a long time—I am sure it will—remain of tertiary, not even of secondary, importance. However, that is no reason why it should not grow and become a much more important factor.
  I must now turn to the specific points which the hon. Gentleman has raised. The processes of Government will not allow me to give any indication whatever of the possible outcome of Government grants to the arts for the next year. The House will be informed in due course through the presentation of financial estimates. However, in case it has escaped the notice of the hon. Gentleman, the Arts Council has already submitted its own estimate for next year and it has mentioned recently that this is for £40 million.
  Fortunately, the Government already have a significant record of achievements. When we came to office 18 months ago we had the task of maintaining and advancing the arts at a time of great economic difficulty. Within a fortnight I was able to announce the abolition of admission charges for the national collections, which was in contrast to the record of the Opposition who took three years trying to introduce them against the opposition of nearly all the trustees of our national collections, and three months trying to have them administered in the same circumstances.
  Last year the Government presented two Supplementary Estimates. The Government's record in the arts is one of which we are by no means ashamed. It will not have escaped the notice of the hon. Gentleman that the National Theatre Board started to move into its
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  new building on 1st September. After reaching agreement with the Arts Council on the necessary minimum level of support, the Board issued a statement recently to say that the first performance before a paying public would be on 16th March next year. Therefore, progress has been made. I am gradually answering the hon. Gentleman's questions and I hope that as the weeks roll by I shall be able to answer more and more of them.
  It is not the Government's intention that the National Theatre will open and operate at the cost of the rest of the Arts Council's clients. My report on the arts, which I published last summer, showed that over 60 per cent. of the Arts Council's expenditure was outside London and my further report showed some of the results of that expenditure.
  Other bodies, such as the crafts and the area museum councils, have also had substantial increases in their grants. I am sorry that time does not permit me to give details of those increases. I would have referred to the Standing Commission on Museums and Galleries and to the needs of conservation by local collections. I was able to announce to the House on 8th July that I had reached agreement with five of the trustee-governed national collections—
  The Question having been proposed after Ten o'clock on Tuesday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at two minutes to Two o'clock.