Commons Sitting of 15 December 1976

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  ORAL ANSWERS TO QUESTIONS
  Mr. Speaker: Before Questions begin, may I without undue optimism remind hon. Members that supplementary questions should, first, be brief and, secondly, seek information rather than impart it?
  ORAL ANSWERS TO QUESTIONS
    SCOTLAND

      Springburn Comprehensive Development Plan
      Mr. Buchananasked the Secretary of State for Scotland if he will make a statement on the progress of the Spring-burn Comprehensive Development Plan.
      The Under-Secretary of State for Scotland (Mr. Frank McElhone): A start has been made to housing and industrial development but much will depend on the new road pattern in the area. Implementation of the plan is for the two local authorities concerned.
      Mr. Buchanan: Is my hon. Friend aware that his reply will cause some disappointment in the Springburn area? If the Government are serious about revitalising British industry it is absolutely essential that such excellent sites as exist in Springburn for industry and commerce are suitably serviced, and therefore that the infrastructure is started straight away.
      Mr. McElhone: I realise my hon. Friend's concern about the development programme, but this is a matter for the Strathclyde Region and Glasgow District Council. Nevertheless, I shall convey my hon. Friend's concern to those two authorities.
      Mr. Carmichael: Will my hon. Friend use his good offices with the two local authorities concerned? It is perfectly
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      clear, as my hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) said, that the amount of dereliction in areas such as his and mine is a positive discouragement to industry to come to the area.
      Mr. McElhone: I recognise the concern expressed by my hon. Friend. I must be fair to the local authorities, which are going through a difficult time because of the financial stringency that we have imposed upon them. However, they are conscious of the need to attract jobs and to provide proper sites in the Glasgow area. I shall undertake to convey my hon. Friends' remarks to the appropriate authorities.

      Civil Servants (Scottish Assembly)
      Mr. Reidasked the Secretary of State for Scotland what discussions he has had to date with Civil Service unions in Scotland about the likely status of civil servants consequent upon the establishment of the proposed Scottish Assembly.
      The Under-Secretary of State for Scotland (Mr. Harry Ewing): My right hon. Friend has not yet discussed this question with any of the Civil Service unions, but representatives of the Scottish Office Staff Side discussed the matter with my right hon. Friend the Member for Kilmarnock (Mr. Ross), when he was Secretary of State, in April 1976 and in October with the Minister of State, Civil Service Department.
      Mr. Reid: When the Minister next meets the Civil Service will he discuss with it the possibility of the stress and divided loyalties that its members might suffer once the Assembly is set up? Will he reconsider the block grant system of finance? Does he agree that whether or not there is constitutional conflict on that, there will be some hard bargaining? In that circumstance, where does the loyalty of Scots civil servants lie—to the Prime Minister in Edinburgh or the Treasury in London? Would it not be better to have, as Kilbrandon recommended, a separate Scottish Civil Service with comparable wage rates and career structure, as happened in Northern Ireland?
      Mr. Ewing: The Civil Service unions are opposed to a separate Civil Service. The Government consider that a unified

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      Civil Service is important to the working of the devolution Bill because it will help in the discussions between the Administration in Edinburgh and the Administration in London. There can be no question of civil servants having divided loyalties, because civil servants serving the Scottish Assembly will be serving an integral part of the United Kingdom Government.
      Mr. Robert Hughes: Will my hon. Friend ensure that there is no bar to civil servants from Scotland going to work in England, or to civil servants in England going to work in Scotland? Is that not essential if we are to get the best possible service from the Civil Service? Will my hon. Friend make certain that a separate Civil Service is not established, since that might lead to only Scots being promoted and given jobs in the Scottish Civil Service and only the English enjoying the same benefits in England? Would that not work to the great detriment of the people who rely on the work of the Civil Service?
      Mr. Ewing: The first part of my hon. Friend's question can be taken as read. The Government and the unions are opposed to a separate Civil Service.

      Royal High School, Edinburgh (Conversion)
      Mr. Gardinerasked the Secretary of State for Scotland if he will make a statement on the progress of the plans for converting the Royal High School, Edinburgh, for the proposed Scottish Assembly.
      Mr. Harry Ewing: The Royal High School was handed over to the contractor on 10th September, and work is proceeding satisfactorily.
      Mr. Gardiner: Can the hon. Gentleman say whether the cost of this conversion is proceeding within the latest published estimate for it? To what use do the Government intend to put this splendid building if the Bill should fall?
      Mr. Ewing: The Bill is not going to fall. The cost of reconstruction is within the estimate arrived at before the project began.
      Mr. Alexander Fletcher: What will happen if the first meeting of the Assembly
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      decides that the building is inadequate and that the Assembly should move out to other premises in Edinburgh or elsewhere? Who will then bear the cost of the building, or of any new building?
      Mr. Ewing: The hon. Gentleman is posing hypothetical questions, which can only be answered when the Assembly is in being. It is a matter for the Assembly. Perhaps I may use the words of someone much more famous than I, and say that it is better to wait and see.
      Mr. Watt: Is the hon. Gentleman aware that the cost of conversion can be justified and can be saved if the Government would plump for the independence of Scotland, thus saving expenditure in sending civil servants and hon. Members to this House from Scotland?
      Mr. Ewing: Apart from hon. Members belonging to the Scottish National Party and between 18 per cent. and 20 per cent. of the population of Scotland, there is in Scotland no demand for independence or separation.

      Association of Scottish Chambers of Commerce
      Mr. Crawfordasked the Secretary of State for Scotland when he next intends to meet the Association of Scottish Chambers of Commerce.
      The Minister of State, Scottish Office (Mr. Gregor MacKenzie): My right hon. Friend has at present no plans to do so. From time to time, Scottish Office Ministers meet individual chambers and will continue to do so where appropriate.
      Mr. Crawford: Will the hon. Gentleman tell the Association of Scottish Chambers of Commerce that the decision of some of its directors to support the "Scotland is British" campaign is totally unrepresentative of many of its members, of which I am one? Will he tell those directors either to withdraw their support from the campaign or to drop the name "Scottish" from the association's title?
      Mr. MacKenzie: I have no intention of indicating in the way the hon. Gentleman suggests. I am prepared to listen to any representations made, but I cannot adopt the tactics suggested by the hon. Gentleman.
      Mr. Sproat: Is the hon. Gentleman aware that, in spite of what the hon. Member for Perth and East Perthshire (Mr. Crawford) said, the Association of Scottish Chambers of Commerce voted unanimously against the Government's plans for a Scottish Assembly? Is he further aware that it has been joined in its attitude by individual chambers of commerce, bankers, accountants, farmers, doctors, nurses and secondary school teachers, as well as the CBI and a growing number of trade unions and trade unionists in Scotland?
      Mr. MacKenzie: I have listened to many representations from industrialists and trade unions about the whole question of devolution. I am certain that whether they be industrialists or trade unionists they will totally reject the idea of separatism, because they believe that it would be nonsense for Scotland.
      Mr. Craigen: Has my hon. Friend received representation from the chambers of commerce about the impact on employment opportunities arising from the stupendous increase in rates in the near future and the effect that this could have on retaining existing enterprises, let alone attracting new ones to Scotland?
      Mr. MacKenzie: I have had no such representation from chambers of commerce, but I suggest to my hon. Friend that in view of his concern he should table a Question on the matter.

      Fishery Protection
      Sir John Gilmourasked the Secretary of State for Scotland whether he is satisfied that the fishery protection vessels at present in use will be entirely satisfactory to give adequate protection in the waters round Scotland when fishing limits are extended.
      The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): Yes, Sir.
      Sir J. Gilmour: As some of the surveillance has to be done by very fast-flying aircraft, is it not necessary to have at least a number of fast boats to go to incidents which may be reported or given notice of by these aircraft?
      Mr. Brown: Clearly, speed in getting to the scene of any particular problem can be important, but I think that in any society—and this applies to the sea as
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      well—the best protection lies in abiding by the law, and the vast majority of the fishermen of all nations are law-abiding. But we have this matter under consideration. The fishery protection fleet is being extended, and the point made by the hon. Gentleman is one of those we shall keep in mind.
      Mr. Grimond: Apart from the necessity for all sorts of new vessels for fishery protection, how many more helicopters are to be provided for this purpose?
      Mr. Brown: Helicopters are part of a service which may be called into use from the Royal Navy, but there is no specific provision, other than the Nimrod aircraft, for air surveillance.
      Mr. Robert Hughes: Did I understand my hon. Friend to say that he was satisfied with the number of vessels already in existence for this purpose? If so, can he explain how the big increase in area which will have to be patrolled by these vessels can be covered by the same number as at present?
      Mr. Brown: The Question referred to existing vessels under my Department's control. As I have explained, there are additional vessels from the Ministry of Defence, and an increase is now being provided for. We believe that, in total, the number should be adequate.
      Mr. Henderson: Will the hon. Gentleman confirm the facts stated to him in a letter from me about the recent incidents off Shetland between French and Scottish vessels, and accept the appreciation of my constituents and those involved for his prompt action in ordering the fishery protection cruiser "Westra" to the the scene? Will he make a statement on any further developments that have taken place in the last 24 hours and give our fishermen a categorical assurance that where protection is needed in such a situation it will be made available?
      Mr. Brown: I appreciate the hon. Gentleman's compliment, which I think is the first I have ever had from him. I am sure that it was given in good faith. I am happy to be able to confirm that the "Westra" was sent very quickly, and he has rightly given credit for that. Investigations have taken place, and I

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      can say that there has been no incident involving loss of or damage to the gear of Scottish vessels. The "Westra" found one French vessel towing on a course which might have caused damage to Scottish gear, but headed it off and explained the local fishing practices. We are keeping a continuous watch. The incident reported, of which there has been no confirmation, apparently happened some weeks ago, but we are not thinking of making any diplomatic representations to the French Government. War certainly has not broken out.
      Mr. Younger: Does the hon. Gentleman agree that such a large increase in fishing limits as seems in prospect will transform the scale of the problem of policing those limits? Our fishermen will have to face tremendously difficult changes in their working pattern, and they expect the Government to stand up for their rights in the new limits and to be vocal in doing so.
      Mr. Brown: I keep reassuring hon. Members on this matter. The pattern of fishing has not been finally determined. These matters are being considered with other member States of the EEC, who may well make some contribution to fishery protection in the Community "pond" as a whole. These detailed matters will be worked out following the review of the common fisheries policy.

      Scottish Trades Union Congress
      Mr. Canavanasked the Secretary of State for Scotland when he next expects to meet representatives of the STUC.
      Mr. Gregor MacKenzie: My right hon. Friend, together with my right hon. Friend the Prime Minister and other colleagues, met the STUC on 8th and 9th December. There are at present no plans for a further meeting.
      Mr. Canavan: Is my hon. Friend aware that when the Scottish TUC representatives met Labour Members last week they made an appeal for an early announcement of extra funds for the Scottish Development Agency, and that that appeal was repeated yesterday by the chairman of the agency when he announced its new factory building programme? In view of the excellent work being done by the agency to provide more jobs in Scotland, will my hon. Friend
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      indicate how soon we may expect an announcement about extra funds, despite whatever statement is to be made this afternoon by my sparring partner, the hatchet man from No. 11 Downing Street?
      Mr. MacKenzie: I cannot accept that comment about the attitude of my right hon. Friend the Chancellor of the Exchequer. The Scottish Development Agency figured in our discussion with the Scottish TUC, which paid tribute to it as an excellent means both of regenerating industry and of improving the environment in Scotland. We promised the STUC, as we have promised others, that we would make an announcement about this matter as soon as possible.
      Mr. Alexander Fletcher: When the Minister next meets representatives of the STUC, will he tell them that when they threaten the Prime Minister that they might support the Scottish National Party they should bear in mind that more than half the jobs in Scotland are dependent on business from England, and that their attitude to the SNP should be borne firmly in mind whenever they seek to make this sort of threat to the Prime Minister or anyone else?
      Mr. MacKenzie: It has been made clear by Mr. Milne of the STUC at his Press conference and in subsequent denials on the BBC that he said no such thing to the Prime Minister, to other colleagues, or to anyone else. When he talked to me he was at pains to explain that, while he thought the Tory Party in Scotland was irrelevant, he thought that the SNP's policies would be a complete disaster for the working people of Scotland.
      Mr. Crawford: Will the hon. Gentleman remind his hon. Friend the Member for West Stirlingshire (Mr. Canavan) that in Committee the SNP moved an amendment to increase the sum available to the SDA and that he voted against it?
      Mr. MacKenzie: It is important to bear in mind the comments that were made yesterday by the Chief Executive of the SDA, namely, that at present it has sufficient funds to meet its commitments. I had hoped that the interest of the hon. Gentleman in the affairs of the SDA would prompt him today to stand up and wish the agency a very happy

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      first birthday and wish it well for the future.
      Mr. Teddy Taylor: Does the hon. Gentleman agree that Scotland is facing a desperately serious job situation, especially in the West, which can be seen by the latest news from Marathon and Babcock? Does he agree that it is developing into one of the worst problems in Scotland's history? In view of the difficulty that the Government will have in creating more home demand, is the hon. Gentleman prepared to consider the possibility of getting the Department of Trade to set up a unit in the West to discuss with firms contemplating closure the possibility of solving their problems by getting more Government work?
      Mr. MacKenzie: It is recognised in Scotland, certainly by the CBI and the Scottish Council (Development and Industry), that the facilities offered within the Industrial Development Department in Glasgow often work exceedingly well. The hon. Gentleman referred to Marathon and Babcock. I am astonished by the hon. Gentleman when he makes comments such as these in the House, and especially when he makes them in Scotland, and then votes against the SDA as well as against Leyland and Chrysler.

      Local Government Expenditure
      Miss Harvie Andersonasked the Secretary of State for Scotland what action he will take to persuade local authorities to curtail unnecessary expenditure on administrative and advertising undertakings in the interests of rate control.
      The Secretary of State for Scotland (Mr. Bruce Millan): I have impressed upon authorities by circular and in the rate support grant discussions the urgent need for them to reduce total expenditure in the present year and in 1977-78, but it is the responsibility of each authority to decide whether any particular item of expenditure is necessary.
      Miss Harvie Anderson: Although I appreciate the Secretary of State's efforts to date, does he not realise that the constant pinpricks of regional newspapers, the circulation of minutes and widespread circulation of statistics only bring to the
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      notice of ratepayers who have not the money to pay the rates the continuing extravagances and unreality of the new regional councils?
      Mr. Millan: Basically, these are matters for the regional and district councils themselves. However, if there is any particular question of alleged extravagance, I am always willing to look into it. I take the view that it is not for me to be constantly intervening on these day-to-day matters that are the concern of the local authorities. Members can always take up these matters direct with their own local authorities.
      Mr. Welsh: Although the right hon. Gentleman will be urging administrative savings to be made in consequence of the cuts that are to be made, will he seek to introduce some humanity and even sanity in the essential cuts that have to take place? Is he aware, for example, that the Tayside Regional Council has stopped paying the 50p pocket money to mentally handicapped persons and has cut back on essential home help services? Will he introduce some humanity into the cuts?
      Mr. Millan: I am reluctant to comment on every individual item of expenditure that is the responsibility of an individual local authority. Some of the examples that the hon. Gentleman has mentioned have already been quite exhaustively dealt with at local level.

      Shetland Isles
      Mr. Tim Rentonasked the Secretary of State for Scotland when he next proposes to visit the Shetland Islands.
      Mr. Harry Ewing: My right hon. Friend has, at present, no plans to do so.
      Mr. Renton: Are Ministers frightened to go to the Shetlands these days? Based on the estimate that £2¼ billion from tax and royalties may come to the Exchequer as a result of oil flowing through the Shetlands, to what extent will the Government be influenced by the view of the Shetland Islands Council that it sees no advantage in the Scottish Assembly and that unless its position is safeguarded it may seek to exclude Shetland from the devolution Bill?
      Mr. Ewing: Ministers are not frightened to go to the Shetlands. My right hon. Friend, in his capacity as Minister of State, was there in April of this year. I was there in June to discuss devolution with the Shetland Islands Council. We regard Shetland as part of Scotland and as part of the United Kingdom, and it will be covered by the Scotland and Wales Bill.
      Mr. Buchan: Will the Minister ask his right hon. Friend to reconsider that answer? Would it not be valuable to go to Shetland and to take the Leader of the SNP with him so that he can explain to the Shetland Council how he squares the SNP's policy, which is to grant up to full autonomy to Shetland while at the same time claiming its oil as Scotland's? Is this not a case of offering independence on the one hand and keeping cheap oil resources on the other, which to me equals imperialism?
      Mr. Ewing: My right hon. Friend is extremely busy and no doubt he will make his own arrangements about when to visit various parts of the country. As for the position of the Leader of the SNP, I get the feeling that the SNP might be invited to Shetland. I have a copy of the minutes of the council meeting of 29th October when it was suggested that the SNP should be approached to promote a Private Member's Bill to protect Shetland from devolution.
      Mr. Rifkind: Will the right hon. Gentleman investigate the apparent link between the BBC and the right hon. Member for Orkney and Shetland (Mr. Grimond) now that both his Labour and nationalist opponents at the General Election have had to resign their candidatures and have been appointed BBC spokesmen in Orkney and Shetland?
      Mr. Ewing: I am not quite sure of the implications of the question. If it means that the right hon. Member for Orkney and Shetland (Mr. Grimond) has such a close relationship with the BBC that he should resign, I was not aware of that relationship.
      Mr. Grimond: I assure the Government that I have had to get rid only of my SNP opponent. My Labour opponent
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      has resigned of his own accord. No doubt in disgust with the Government.

      Rate Support Grant
      Mr. Robin F. Cookasked the Secretary of State for Scotland if he will make a statement on the rate support grant negotiations.
      Mr. Millan: The Government's proposals represent a fair settlement having regard to the difficult economic situation. The House will have an opportunity to discuss them in the forthcoming debate on the Rate Support Grant (Scotland) Order 1976, which was laid before the House on 6th December for approval.
      Mr. Cook: Has my right hon. Friend reflected on the Early-Day Motion that has been signed by a clear majority of his Scottish Back Benchers that invites him to reconsider the Order? Has he considered the information given to me in answers last week—namely, that although there is a considerable surplus among local authorities in England, Scottish local authorities are already in deficit? In the light of that, is it realistic to expect them to achieve the same 4 per cent. saving?
      Mr. Millan: It is not actually the same 4 per cent. saving. It is 4½ per cent. in England and Wales as compared with 4 per cent. in Scotland. I have considered the motion, but all these matters will be debatable when the Rate Support Grant Order comes before the House. As well as meeting COSLA about the matter, I met representatives of Strathclyde Regional Council only this morning.
      Mr. David Steel: Was the right hon. Gentleman able to satisfy the Convention of Scottish Local Authorities on the points raised by the hon. Member for Edinburgh, Central (Mr. Cook)—namely, the difference in treatment between local authorities in England and Wales and those in Scotland? Will he bear in mind the Written Answers that he and his colleague the Secretary of State for Wales gave me on direct financial comparisons between Powys in Wales and the Border Region of Scotland, which are areas similar in character? Will he note the marked difference of treatment that the two areas are receiving at the hands of the Government?
      Mr. Millan: I do not think that it is possible to make such comparisons between one local authority area and another. It is necessary to look at the whole picture. The settlement for Scotland is fair in relation to England as well as being fair generally. I shall be willing to answer these points during the forthcoming debate.

      Moray Firth Area (Transport Developments)
      Mr. Ronald Atkinsasked the Secretary of State for Scotland what estimate he has made of the need for major future developments in transport in the area, following the publication by the Highlands and Islands Development Board for the Moray Firth Access Transport Study.
      Mr. McElhone: Major developments since the study was published early in 1974 include improvements on the Perth-Inverness railway, work on A9 from Perth to Invergordon and the strengthening of the runway at Inverness Airport.
      Mr. Atkins: Is my hon. Friend aware that the Tayside Regional Council does not regard work on the A9 north of Perth as of first priority except for the Pitlochry Bypass? Could not the £675,000 that could be saved be used to improve the railway? It is wrong to build up a road and destroy a railway.
      Mr. McElhone: I am not aware of the Tayside Region's attitude towards the A9. I thought that this road was very valuable for the oil industry. Last July work was started on restoring the double track from Blair Atholl to Dalwhinnie, a length of 23 miles, costing £3.7 million. There has been a commitment in this area by British Rail to cater for the needs of rail as well as road passengers.
      Mr. Donald Stewart: Is the Minister aware, in the light of the Highlands and Islands Development Board's reports, that there is an urgent need for the Scottish Office to do something about the repair of the road to the Isles? If this is done, it will be the first time the Government have given a fair chance to the Islands off the Scottish coast. These areas need this link desperately, because commitments given at the time of the withdrawal
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      of the cargo services have not been kept up.
      Mr. McElhone: I am sure that the hon. Member is aware that my right hon. Friend has often dealt with that matter.

      Colleges of Education
      Mrs. Bainasked the Secretary of State for Scotland if he is yet in a position to make a statement on the future of Scottish colleges of education.
      Mr. McElhone: My right hon. Friend hopes to issue a consultative document on this matter very soon.
      Mrs. Bain: Is the Minister aware that that statement will be greeted with derision in Scottish colleges of education, where there is a great deal of dissatisfaction with the Government's handling of teacher recruitment and morale is extremely low? Many people in the colleges do not know whether they will be employed in the next two years.
      Mr. McElhone: I am not aware of any derision from the colleges on this document. It is a very complex matter, which involves many factors and needs full discussion. I am aware of the need to publish the document as soon as possible, and I am hoping to bring it out in the next few weeks.
      Mr. Canavan: Will my hon. Friend assure us that there will be maximum consultation with teachers' unions, lecturers' unions and students' unions, because the very existence of some of the smaller colleges such as Callendar Park could be at stake? What is even more important is that we must make the most of the chance to use additional teachers to increase the educational opportunities of many schoolchildren in Scotland.
      Mr. McElhone: I give my hon. Friend the assurance that we shall consult not only those bodies that he mentioned but local authorities and all other bodies with an interest in this matter.
      Mr. Alexander Fletcher: How can the Minister control public expenditure on education, or anything else, when the latest information on teachers employed in Scotland is for September 1975? What is the Watch on Manpower Committee—a body with a pompous title—doing

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      about this? Teachers are paid on a monthly basis, so why is it not possible to find out how many of them are employed on a month-by-month basis?
      Mr. McElhone: I am considering the problem of bringing in more up-to-date information as soon as possible. In Edinburgh we published the figures for 1976 for pupils and teachers in Scottish schools.

      Murders
      Mr. Doigasked the Secretary of State for Scotland how many persons were murdered in Scotland in each of the last three years; and how many persons were murdered in Scotland in each of the three years prior to the abolition of capital punishment.
      Mr. Harry Ewing: In 1973, 1974 and 1975 the recorded numbers of persons murdered were 39, 34 and 41, respectively. In 1962, 1963 and 1964 the numbers were 25, 15 and 27, respectively. All the figures have been corrected in the light of judicial determination.
      Mr. Doig: Is there not a clear indication from these figures that capital punishment does have a deterrent effect and, therefore, should be considered seriously once more by the Government?
      Mr. Ewing: No, I do not agree. The statistics indicate that the incidence of murder in Scotland, like that of many other crimes, has increased over the last decade. It is not realistic to base any conclusion about the effectiveness or otherwise of capital punishment as a deterrent on the figures for one country over a short period of time. However, we are very concerned about the preservation of law and order and we are giving a great deal of attention to it.
      Mr. Fairbairn: Can the Minister tell us what proportion is represented by serious assaults which result in deaths?
      Mr. Ewing: No. If the hon. and learned Member wants such detailed information he should table a Question.

      Buckhaven and Methil (Employment)
      Mr. Gourlayasked the Secretary of State for Scotland what measures he intends to take to offset the economic
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      consequences for the Buckhaven and Methil community of the 1,000 impending redundancies at RDL (North Sea) Methil, and the closure of No. 3 Dock in Methil.
      Mr. Gregor MacKenzie: Buckhaven and Methil already have special development area status, and my officials will continue to encourage developers and industrialists who show interest in the area.
      The Scottish Development Agency has commissioned a study of possible future uses for Methil No. 3 Dock and, in addition, my officials are assisting in a study being undertaken by the local authorities of industrial potential in the area of the Forth Estuary.
      Mr. Gourlay: Is my hon. Friend aware that more than £20 million of capital has been invested in this site and that it would he a travesty of justice to see the platform site turned into a derelict area? Will he press the British Steel Corporation to do everything possible to retain the skilled labour force in employment in Buckhaven and Methil? We appreciate what the SDA is trying to do here, but will the Minister take steps to press it further with the British Steel Corporation?
      Mr. MacKenzie: We have made it very clear to hon. Members who have raised questions about platform orders that hardly any such orders have been placed in Europe in recent times. I hope that my hon. Friend will accept from me that the Minister of State, Department of Energy and I have been pursuing this as vigorously as possible. We have hopes for 1977 and 1978 in terms of future orders. I know that my hon. Friend will appreciate the statement that was made yesterday by the SDA in relation to advance factories and the purchase of land in the area. This should prove very helpful to employment prospects.
      Sir John Gilmour: Could the Methil docks be used in connection with the proposed development at Moss Morran?
      Mr. MacKenzie: I shall consider that point.

      Unemployment
      Lord James Douglas-Hamiltonasked the Secretary of State for Scotland

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      if he will make an up-to-date statement on the extent of unemployment in Scotland.
      Mr. Monroasked the Secretary of State for Scotland what consultations he has had with industry in Scotland regarding the high level of unemployment.
      Mr. Millan: In October, the latest figures available, total unemployment in Scotland fell by 3,400, compared to September, to 158,000.
      In the course of meetings with various industrial bodies and visits to Scottish industrial firms I have kept abreast of their views on Scottish industrial matters including unemployment.
      Lord James Douglas-Hamilton: Is the Secretary of State aware that the unemployment figures in Scotland are nearly double what they were under the previous Conservative Government? Will he now recognise that there is a case for reducing interest rates in order to encourage much more employment in Scotland?
      Mr. Millan: I recognise that the unemployment figures are far too high, and it is part of the Government's policy that interest rates should be reduced as soon as the economy allows it.
      Mr. Monro: Is the Secretary of State aware that the Government have failed miserably to live up to their election promises of October 1974? Now that unemployment is running at exceptionally high levels, will he assure us that the Chancellor of the Exchequer understands that profits in industry are essential if industry is to expand and offer more employment?
      Mr. Millan: The Government have taken a number of steps recently. In particular, the latest revision of the Price Code should have important implications for profitability, especially when followed by increased investment.
      Mr. Henderson: Does the Minister intend to introduce any further measures soon to deal with this situation, or does he think that the Government have done all they can?
      Mr. Millan: We have taken a considerable number of measures. The various employment protection and job creation schemes which we have introduced have provided about 38,000 jobs already in
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      Scotland, and this has provided some amelioration for the situation. We are always ready to consider such further measures as are necessary.
      Mr. Canavan: Does my right hon. Friend agree that the unemployment situation in Scotland would have been even worse if we had had the emasculated version of the Scottish Development Agency such as that proposed by the hon. Member for Perth and East Perthshire (Mr. Crawford), supported by the Tories, instead of the public enterprise version of the SDA proposed by the Labour Government?
      Mr. Millan: I agree with my hon. Friend. I noted that the Conservative Party recently suggested that the industrial role of that agency should be removed. The suggestion was greeted with considerable criticism not only from the STUC but from the CBI in Scotland.
      Mr. Younger: How can the right hon. Gentleman maintain that he will do all he can to reduce the unemployment level when the Labour Government are introducing a payroll tax of 2 per cent. on national insurance contributions, which is sure to throw thousands more people out of work?
      Mr. Millan: I have in mind the fact that the many billions in public expenditure cuts favoured by the Opposition would have a disastrous effect on employment. The subject of the National Insurance Surcharge has been considered in the House in recent weeks at some length.

      Fishing Industry
      Mr. Sproatasked the Secretary of State for Scotland when he next intends to hold meetings with representatives of the fishing industry.
      Mr. Hugh D. Brown: My right hon. Friend and I have met the industry on a number of issues in recent months, and will continue to do so whenever the need arises.
      Mr. Sproat: Is the hon. Gentleman aware that when he next meets the fishing industry its representatives will tell him that they have no faith in any quota system that may be brought forward by the EEC, because quota schemes have always resulted in British fishermen getting a raw deal? Will he give a

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      guarantee that any interim arrangements brought in by the EEC in the next four weeks will not become permanent arrangements?
      Mr. Brown: The interim agreement is, as it implies, an interim arrangement. I suggest that the hon. Gentleman should wait to see whether we need an interim regime in the first place. As for any assurance, there will need to be a longer-term policy to give some degree of stability and hope to the industry as a whole.
      The hon. Gentleman will know that quota systems are difficult to administer. He should not underestimate—and occasionally should give credit for—the work of the herring fishermen and those who catch haddock, and their successful attempts to operate a quota system.
      Mr. Corrie: When the Minister meets the fishermen, will he ask them whether they are in favour of any boats that are required being built in British shipyards?
      Mr. Brown: I do not think that the hon. Gentleman was in the Chamber when I replied in detail to a question on that topic. Certain Scottish shipyards will be considered if further orders are required to be placed for protection vessels.
      Mr. Watt: Will the Minister meet the industry before the end of the year, and will he be able to spell out the new arrangements that will operate from 1st January?
      Mr. Brown: If there is any need to meet the industry, I shall be available. I appreciate that there is not much time to undertake detailed discussions, but my right hon. Friend the Foreign Secretary made clear at a recent meeting of the Council of Ministers that we cannot expect to agree to interim arrangements that do not take our requirements into account or protect the interests of our fishermen. If some arrangement is proposed requiring consultation with the industry, that can be arranged.

      Islay
      Mr. MacCormickasked the Secretary of State for Scotland if he will pay an official visit to the Isle of Islay.
      Mr. Gregor MacKenzie: My right hon. Friend has, at present, no plans to do so.
      Mr. MacCormick: Does the Minister appreciate, especially in view of what is likely to happen in the near future, that the Government should be thinking in terms of seeking to protect the Scottish whisky industry, of which the Isle of Islay is an important part?
      Mr. MacKenzie: Matters concerning the taxation of whisky would be more properly directed at my right hon. Friend the Chancellor of the Exchequer.

      Immunisation
      Mr. Smallasked the Secretary of State for Scotland if he will make a statement about the drop in the percentage of children now being immunised against disease and illness as a protection for their future.
      Mr. Harry Ewing: I am disappointed by the drop in vaccination and immunisation rates during the last two or three years. My Department recognises that immunisation is one of the main weapons in the fight against diphtheria, polio, measles and whooping cough, and in co-operation with the health boards has started a campaign to stimulate interest in the benefits of having children immunised.
      Mr. Small: In the light of that reply, will my hon. Friend give me the figures of those children who are not protected by means of immunisation?
      Mr. Ewing: Yes, Sir. Perhaps it is convenient to point out that the situation with which we are faced applies to 73,000 children born in Scotland in 1973. By the end of 1975, 20,000 had not been immunised against diphtheria, 21,000 had not been immunised against polio, 34,000 had not been immunised against measles, and 24,000 had not been immunised against whooping cough.
      Mr. Corrie: Does the Minister agree that there has been some bad publicity about the side effects of some injections when given to children?
      Mr. Ewing: Yes, Sir. I agree that there was some bad publicity about the side effects of various vaccines, but the advice I give to parents is that if they are in doubt they should seek the advice of their family doctor.

      Crime Prevention
      Mr. Rifkindasked the Secretary of State for Scotland if he will make a statement on his proposals to combat the substantial increase in serious crime in Scotland over the last 10 years.
      Mr. Harry Ewing: I have nothing at present to add to the answer that I gave to the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) on 10th November.
      Mr. Rifkind: Does the Minister realise that Scotland now imprisons a far higher proportion of population than is the case anywhere else in Western Europe? Does this not inhibit the prison authorities in dealing with hardened criminals? What does he intend to do about the situation?
      Mr. Ewing: I appreciate the fact that we imprison a higher percentage of the male population than does any other country in Western Europe, but, on the other hand, we imprison the lowest percentage of female population. The Government are worried about the numbers in Scottish prisons. We are examining ways and means by which we can deal with the situation. When we have proposals to make, they will be made known.
      Mr. Teddy Taylor: Will the Minister say whether the campaign to combat vandalism has been successful?
      Mr. Ewing: It is too early to give an answer. The campaign started only five or six weeks ago, and we await the results with interest.

      Barra (Hospital and Old Folk's Home)
      Mr. Donald Stewartasked the Secretary of State for Scotland when funds will be available for the construction of the hospital and old folk's home in the island of Barra.
      Mr. Harry Ewing: It is not possible to say at present when funds will become available, but a start has been made to the joint planning of the project by the Western Isles Health Board and the Western Isles Island Council.
      Mr. Stewart: I thank the Minister for that reply and express my appreciation to him for his knowledge and concern. Will he bear in mind the urgent need for
      1518
      this facility and the fears felt by the people of Barra that the scheme will be kept indefinitely in cold storage.
      Mr. Ewing: Yes, Sir. The hon. Gentleman has approached me on other occasions on this topic, and I shall keep the matter in mind.

      Legal Aid
      Mr. Dempseyasked the Secretary of State for Scotland when he proposes to review the operation and administration of the legal aid scheme in view of apparent anomalies; and if he will make a statement.
      Mr. Harry Ewing: The legal aid, advice and assistance schemes are kept under review as a matter of course, but I am always willing to look into any anomalies which may be brought to my attention.
      Mr. Dempsey: Is my hon. Friend aware that included in a number of letters on this subject which I have recently received I have one from a constituent who has take-home pay of £34 and who pays alimony and lodging expenses, yet was turned down for legal aid? Does that case not contrast with the case of the official in the regional council of Strathclyde who has an income of nearly £15,000 and owns his own home but who has been granted legal aid? Is it not time that this anomaly was overcome and that the whole system was democratised and handed over to the elected district councils, with full-time legal services to advise them, so that we might make progress?
      Mr. Ewing: I am not aware of the first case to which my hon. Friend referred. If he will send details to me, I shall examine the matter. On the second case to which he referred, my hon. Friend the Member for Bothwell (Mr. Hamilton) took up the matter with me as soon as it was made public. I have written to my hon. Friend explaining the reasons for the decision in that case.

      Rates
      Mr. Youngerasked the Secretary of State for Scotland whether he will now seek powers to introduce a ceiling for rate increases.
      Mr. Millan: No, Sir.
      Mr. Younger: Is the Minister aware that the Government cuts in rate support grant will not be effective in public expenditure terms if the burden is merely transferred to the shoulders of ratepayers? Why does he think that there should be restraint on rent increases but no restraint on rate increases, which many ratepayers find it difficult to meet?
      Mr. Millan: I do not think that there is any practical way of having a ceiling without introducing legislation on rate increases. The legislation would be complex and would involve a rate of unemployment far greater than anything experienced in the past.
      Mr. Teddy Taylor: Is the Minister aware that hundreds of ratepayers on Tayside are being taken to court because of £3 million rate arrears? Is he aware that all the indications are that rates will soon soar higher because of Government decisions? Is he aware that, without action of the type suggested by my hon. Friend in his Question, there might be a massive loss of jobs in Scotland because of rate increases?
      Mr. Millan: The hon. Gentleman is dealing with a number of matters, all of which will be relevant to the debate next week.

      LEGAL SERVICES (ROYAL COMMISSION)
      Lord James Douglas-Hamiltonasked the Lord Advocate what representations he has made to the Royal Commission on Legal Services in Scotland.
      The Lord Advocate (Mr. Ronald King Murray): So far I have made no representations to the Royal Commission on Legal Services in Scotland. My Department has, however, received from the Royal Commission an invitation to submit evidence, and this is at present being considered.
      Lord James Douglas-Hamilton: Will the Lord Advocate encourage the Royal Commission to look at the whole question of jurisdiction, because if there is a case for divorce going to the sheriff's court there may be an overwhelming argument for other cases above a certain sum of money going to the Court of Session to give Scotland the best possible legal service?
      The Lord Advocate: The Royal Commission's main point of reference is to determine what changes, if any, are in the public interest. That is correctly the overriding concern.
      Mr. Lipton: What use is the Lord Advocate making of existing legal services in Scotland when dealing with the case concerning Sir Hugh Fraser which, according to the Under-Secretary of State for Trade last week, is being referred to the Lord Advocate? What is happening about that?
      The Lord Advocate: I have the matter under consideration, but I am not in a position to make any public statement.

      INTENT TO DEFRAUD
      Mrs. Bainasked the Lord Advocate if he is satisfied with current legal practice pertaining to intent to defraud.
      The Lord Advocate: No general problems relating to current legal practice in this area have been drawn to my attention.
      Mrs. Bain: Is the Lord Advocate satisfied with a legal system that allows consumers and garage owners no legal redress when wrong octane deliveries are made to garages? Is he satisfied with a system that leads to such confusion and in which there is no opening for prosecution by either the garage owner or the car owner?
      The Lord Advocate: I do not accept the hon. Lady's general proposition. I have already written to her about a particular case, and there was no evidence of intent to defraud or of any other offence. The details of the case were consistent with a genuine mistake having been made.
      Mr. Canavan: Is the Lord Advocate in a position yet to say whether there is any evidence of fraud or any other offence in the Stock Exchange inquiry report or the information forwarded to the Department of Trade about Sir Hugh Fraser's company, Scottish and Universal Investments? Will he bear in mind the public concern about this unacceptable face of Scottish capitalism and its connection with the unacceptable face of Scottish nationalism?
      The Lord Advocate: I appreciate that there is public concern, but I cannot add to the comments that I have already made.
      Mr. Henderson: Leaving aside the unacceptable face of Scottish Socialism in West Stirlingshire, does the Lord Advocate consider that the pledge in the Conservative manifesto for an elected Assembly in Scotland could come within the definition of intent to defraud?
      The Lord Advocate: I have no comment to make.

      COURT TRIALS (SCOTLAND)
      Mr. Buchananasked the Lord Advocate what is the average time taken in : (a) the stipendiary courts in Glasgow district, (b) the sheriff courts in Lanarkshire, and (c) the High Court in Glasgow to bring a prisoner to trial after he has been charged.
      The Lord Advocate: The average time taken in all of these courts depends on whether the person is in custody. In the stipendiary courts in Glasgow the average time taken in custody cases is 21 days and in non-custody cases 19 weeks. In the sheriff courts in Lanarkshire there is another variable, namely, whether the proceedings are solemn or summary. In solemn proceedings the average time taken in custody cases is 88 days and in non-custody cases 28 weeks. The time taken in summary cases is 20 days and 22 weeks respectively. In the High Court in Glasgow the average time taken in custody cases is 88 days while in non-custody cases it is 20 weeks.
      Mr. Buchanan: Is the Lord Advocate aware that, as the course of justice pursues its leisurely way, considerable strain is placed upon those people involved in such trials? Will he take action to speed up the course of justice?
      The Lord Advocate: I do not accept the hon. Member's implied criticism. The times taken in the stipendiary courts and sheriff courts are closely comparable, and both are within the Thomson Committee recommendation that non-custody summary cases should be dealt with within 26 weeks and custody cases within 40 days.
      Mr. Fairbairn: If it is correct that the average time taken in the High Court is 88 days, why is it that the Department has been unable to prosecute for 110 days, and thus miscarry justice?
      The Lord Advocate: The hon. and learned Gentleman should be aware that the period he has quoted is well within the 110 days. He should be more careful about uttering his extravagant, headline-catching criticisms of the Crown. On at least two occasions recently the hon. and learned Gentleman has made allegations about the competency of the Crown Office, and he has called for my resignation. On the last occasion, he took me to task for the Crown's interpretation of the 110-day rule. That matter was due to be considered by the judiciary the following Friday. As the House may know, and the hon. and learned Gentleman should know, the High Court of Justiciary upheld the Crown's interpretation of that rule. The hon. and learned Gentleman might at least have the generosity to make an occasional public confession of his error.

      FOOTBALL HOOLIGANISM
      Mr. Monroasked the Lord Advocate what new instructions he has issued to procurators fiscal regarding prosecutions of football hooligans.
      The Lord Advocate: On 18th November 1976 I directed that all persons reported to procurators fiscal following arrest on charges relating to football hooliganism should be brought before the sheriff court if the evidence was sufficient to merit prosecution.
      Mr. Monro: I accept the Lord Advocate's reply, but does he accept that only severe penalties will bring to order those hooligans who disrupt football matches? Does he not agree with the Secretary of State about the collection of fines and further custodial sentences?
      The Lord Advocate: The latter part of the hon. Gentleman's question is part of a long-term project, which is already under way. I am happy to accept his first point.

      JAMES GRIFFITHS AND PATRICK MEEHAN
      Mr. Fairbairnasked the Lord Advocate what steps he now proposes to take to exonerate the name of James Griffiths and to bring a prosecution for the fabrication of the evidence which resulted in the wrongful conviction of Patrick Connelly Meehan.
      The Lord Advocate: James Griffiths was shot dead shortly after the murder of Mrs. Ross in Ayr in July 1969. Accordingly he was not brought to trial, nor was he convicted of any criminal charge in connection with that case. There is no conviction against him which would require to be set aside to exonerate his name.
      On the information presently before me I have no criminal proceedings in mind for fabrication of evidence in connection with the trial of Patrick Connelly Meehan.
      Mr. Fairbairn: In connection with the Lord Advocate's previous reply, is he aware that I am more than happy to apologise when I am wrong, provided that he is willing to resign when he is wrong, which he is?
      I now return to Question No. 45. Does the Lord Advocate appreciate that Patrick Meehan was convicted of acting along with James Griffiths and that there is an implication of guilt on a man who is dead? Does he appreciate that that implication is lifted from Meehan by the pardon but that it is not lifted, by implication, from James Griffiths? I shall be obliged if the Lord Advocate will reconsider the matter.
      The Lord Advocate: A sense of fairness is not indicated by an apology being
      1524
      equated to resignation. It is not disputed that James Griffiths was in Meehan's company that night. In so far as Meehan's conviction implicated James Griffiths, the pardon granted to Meehan could be held to absolve James Griffiths. It would have been easier to determine these matters if Griffiths had not chosen to shoot it out with the police, killing an innocent bystander in the process.

      CROWN PROSECUTIONS (EDINBURGH)
      Mr. Lambieasked the Lord Advocate how many Crown prosecutions he has personally undertaken in the High Court, Edinburgh, during the six months to the end of November 1976.
      The Lord Advocate: I have undertaken one such prosecution during that period.
      Mr. Lambie: Is the Lord Advocate prepared to give more information about the promise by his right hon. Friend to set up a committee of inquiry into the last case that the Lord Advocate prosecuted.
      The Lord Advocate: No, Sir.
      Mr. Rifkind: Does the Lord Advocate recall that in his memorable charge to the jury, Lord Robertson criticised not merely the Secretary of State for Scotland but also the behaviour of the Crown Office? We have had a statement in reply from the Lord Advocate's right hon. Friend; when may we expect a statement from him?
      The Lord Advocate: I am not in a position to answer that question.

ECONOMIC SITUATION (GOVERNMENT MEASURES)
3.30 p.m.
The Chancellor of the Exchequer (Mr. Denis Healey): With permission, Mr. Speaker, I shall make a statement about the future measures which the Government are taking to promote the nation's economic recovery and to achieve the fastest possible return to a high and sustainable level of employment.
In order to avoid excessive strains next year, when the economy will still be operating well below capacity, the measure will cover the next two years. They will form part of a medium-term programme for national recovery to ensure that the 1980s offer us the prospect of an economy fully restored to balance, with high levels of output, employment and real wages and an industry which is vigorous, expanding and profitable. Further elements in this programme for national recovery will be contained in my next Budget and in the next phase of the industrial strategy.

Reduction in the Public Sector Borrowing Requirement
The Chancellor of the Exchequer (Mr. Denis Healey)The latest forecast prepared before the measures showed a PSBR of £10½ billion in 1977–78 and £11½ billion in 1978–79. These forecasts embodied unrealisticaly favourable assumptions on several important points. Even so, the PSBR figures were unacceptably high and the immediate objective of the measures which I am announcing this afternoon is to reduce the public sector borrowing requirement to about £8.7 billion in 1977–78 and to somewhat less in the following year—on present forecasts I expect a figure of some £8·6 billion. So the reduction in the PSBR would be nearly £2 billion in 1977–78 and nearly £3 billion in 1978–79. Expressed as a percentage of GDP, the PSBR will fall steadily from 9 per cent. in the current year to about 6 per cent. in 1977–78 and rather over 5 per cent. in 1978–79. These objectives are calculated on the basis of the economic prospect as I now see it.
To achieve these objectives, the Government are proposing adjustments to current plans amounting to £1½ billion in 1977–78 and £2 billion in 1978–79. I am, therefore, announcing specific
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measures this afternoon which amount to some £1½ billion in each year. In addition, the Government will make a further fiscal adjustment of about £½ billion in 1978–79 but it is too soon to say what form this further adjustment will take.
It is, of course, impossible to forecast with any confidence at the present time what will be the condition of the economy in 1978–79. The extent to which further fiscal adjustment might be needed cannot be decided at this stage. If the forecasts at the time show the economy growing from the beginning of 1978 to the end of 1979 at a rate of more than 3½ per cent. a year, the Government intend to make a further fiscal adjustment in the 1978 Budget—of between £500 million and £1 billion, depending on the buoyancy of demand and the state of the world economy at that time—to ensure that with those higher growth rates domestic conditions do not prevent us from giving the necessary priority to exports and investment.

Expenditure or Taxation
The Chancellor of the Exchequer (Mr. Denis Healey)The fiscal adjustment in both years will come mainly from savings in public expenditure rather than increases in taxation. This is for two reasons. First, although the level of our public expenditure, as a proportion of GDP, is no higher than in some other industrialised countries, it has grown much more rapidly in recent years than has our industrial output, and our industrial output itself is relatively low.
Secondly—and perhaps this is not unconnected with our low level of industrial output—people at work are already highly taxed on their incomes, and face a further drop in their living standards in the coming year. I do not believe that it would be right to burden them with the lion's share of the fiscal adjustment which is now necessary. Inadequate financial incentives to work and to invest could put our economic recovery at risk.
Savings in public expenditure must therefore produce by far the greater part of the adjustment needed. On the other hand, the savings needed are on nothing like the Draconian scale suggested by some outside commentators. I think that there has been a growing consensus

1527
among responsible economists that savage and indiscriminate cuts of up to £5 billion would do irreparable damage both to the structure of our social services and to the prospects for employment. They would imply a massive and immediate contraction of demand which is the last thing British industry wants to see at present.

Public Expenditure
The Chancellor of the Exchequer (Mr. Denis Healey)The White Paper which we published in February this year set out our medium-term strategy for public expenditure.
In accordance with this strategy, we are holding expenditure in this financial year within the planned level by the rigorous application of cash limits, by new arrangements for regular consultation with the local authorities, and by refusing to accept new commitments which would breach the contingency reserve. In carrying out the 1976 public expenditure survey we have already made certain adjustments so as to keep within the February White Paper plan for each year, as modified by the measures I announced in July.
In order to achieve the new PSBR targets to which I have referred, we have now decided to reduce public expenditure programmes further by £1 billion in 1977–78 and £1frac12; billion in 1978–79 at 1976 survey prices. The details are being circulated in the Official Report and are available in the Vote Office, but I shall now describe the main further changes which are being made to the programmes as they emerged from the survey.
Once again we have avoided mechanical cuts across the board and have not reduced the main social security benefits, although we are concerned about the narrowing gap between them and the income of those in work. The cuts will therefore fall elsewhere.

The Civil Service
The Chancellor of the Exchequer (Mr. Denis Healey)So far as the Civil Service is concerned, we intend, in addition to the economies already announced, to obtain further economies of some £30 million next year and £10 million in 1978–79.

Local Authority Current Expenditure
The Chancellor of the Exchequer (Mr. Denis Healey)Local authority current expenditure is now more strictly influenced by the
1528
central Government through the recent reduction of the main rate support grant for England and Wales from 65frac12; per cent. to 61 per cent. in 1977–78 and the corresponding reduction for Scotland. We are not reopening those settlements.

Capital Expenditure and Construction
The Chancellor of the Exchequer (Mr. Denis Healey)There will be a reduction in housing capital programmes. Without these adjustments there would have been a substantial overspend on housing. The reduction now decided will offset most of the likely excess next year and will contribute a saving of £300 million in the following year.
New construction will be suspended or curtailed in several other central and local government programmes, including roads, other environmental services, school building, Government accommodation, and capital spending by the water authorities. This will save about £270 million next year and over £300 million in 1978–79.

Community Land Act
The Chancellor of the Exchequer (Mr. Denis Healey)Borrowing approvals will be reduced to achieve a slower build-up of land acquisitions under the Community Land Act, producing savings of £35 million in each year, although the total amount to spend will still rise substantially.
Food Subsidies
The Chancellor of the Exchequer (Mr. Denis Healey)The planned programme for phasing out the Government's food subsidies will be accelerated and will be completed in 1977–78, saving £160 million in that year and about £60 million in the following year. This will add less than ¼ per cent. to the RPI over 1977–78.
Education
The Chancellor of the Exchequer (Mr. Denis Healey)Besides reductions in school building, to which I have already referred and which will not affect basic needs, the programme for current expenditure on education will be reduced by economies in the administration of school meals, by deferring the operation of Section 9 of the Education Act 1976 dealing with school milk, and by other minor savings, making a total of £20 million in 1977–78 and £30 million in 1978–79.
Nationalised Industries
The Chancellor of the Exchequer (Mr. Denis Healey)Under the new treatment of the nationalised industries on which we have consulted the Expenditure Committee, we shall in future be including in public expenditure only Government finance for these industries, rather than their investment programmes as such. We intend to agree with the nationalised industries action which will reduce the level of Government financing by £110 million and £130 million in the next two years. As well as economies in spending there will be increases in revenue, notably a gas price increase which the Government are asking the British Gas Corporation to effect from April 1977.
Regional Employment Premium
The Chancellor of the Exchequer (Mr. Denis Healey)As I told the House in July, the Government want to move progressively towards a more selective approach to assistance for industry. It is doubtful whether the regional employment premium now fulfils the original purpose of attracting employment to the regions. We therefore believe that it should now give way to more selective measures, and it will be withdrawn by Statutory Order early in the New Year, saving £150 million next year and £170 million in the year after. I shall be describing in a moment other measures in the industrial field designed to assist employment and investment.
The Defence Budget
The Chancellor of the Exchequer (Mr. Denis Healey)In an exercise of this magnitude, spending in support of our external policies must inevitably play its part. Despite the big cuts which we have already made in defence expenditure, we cannot achieve the necessary reductions in public expenditure and the PSBR without a contribution from the defence budget. We are looking to defence for further savings of £100 million in 1977–78 and £200 million in 1978–79.
Overseas Aid
The Chancellor of the Exchequer (Mr. Denis Healey)There will be reductions in the provision for overseas aid which, until now, has been almost entirely protected from expenditure savings. The Government have taken this decision with great reluctance. The savings will be £50 million in survey prices in each year.

Export Credit
The Chancellor of the Exchequer (Mr. Denis Healey)The refinancing by the Government of fixed-rate credit for exports and shipbuilding imposes a major charge on public expenditure and the PSBR which threatens to exceed previous forecasts. Partly to deal with this, I have asked the clearing banks to finance from their own resources an additional £100 million of fixed-rate sterling business in each of the next two years, and I am glad to say that they have agreed to do so.
We believe that by funding medium and long term export credit in foreign currency instead of in sterling we can reduce the burden which export credit imposes on public expenditure, the PSBR and the balance of payments. We are therefore taking steps to encourage the use of foreign currency financing and to control the rate at which new offers of fixed-rate sterling finance will be approved by ECGD.
All these measures will reduce expenditure on refinancing and together produce a net saving of £100 million in 1977–78 and £200 million in 1978–79, below that shown in Cmnd. 6393.
We are aware of the concern of industry about the future of the cost escalation scheme which, as matters stand, is due to end in March 1977. We now propose that it should be continued for a further year. The necessary draft order will be laid before the House in due course.
Revised expenditure programmes for 1977–78 and 1978–79, taking account of these measures and of other adjustments made during the Public Expenditure Survey, will be set out in the public expenditure White Paper in due course. These decisions will reduce planned expenditure by a little over £1 billion and £1frac12; billion in the next two financial years. Both figures are at 1976 survey prices. In current prices they will be much larger.

Measures to Help Employment and Investment
The Chancellor of the Exchequer (Mr. Denis Healey)On the other hand, we have decided to add to expenditure in two areas which we believe should have the highest priority—incentives to promote industrial investment and expansion, and measures to reduce unemployment.
There will be an increase in the resources of the National Enterprise Board

1531
and the Scottish and Welsh Development Agencies. A new selective investment scheme will be introduced to follow up the very successful Accelerated Projects Scheme. It will give help to manufacturing companies for major projects designed to improve capacity and performance. I shall allocate £100 million to this scheme in the first instance. The money will be spent over a period of years. The rate at which it is spent will depend on how many good projects come forward for support.
Further money will also be made available for additional sectoral schemes in support of the industrial strategy, and for other measures to help industry. Taken together, I have allocated £80 million in each of the next two years for these measures to help industry.
There will be an increase of £120 million in 1977–78 in spending on measures to reduce unemployment. New applications for the Temporary Employment Subsidy are to close at the end of this months and for the Job Creation Programme shortly after. We have decided to extend these two schemes to the end of April, and then to review their future along with the other new schemes which the Government have recently introduced. This additional expenditure will more than offset the impact on unemployment next year of the other measures which I have announced and will mean that the net effect of the whole package will he to reduce unemployment during 1977 compared with what it would otherwise be.

Indirect Taxation
The Chancellor of the Exchequer (Mr. Denis Healey)To finance this additional expenditure on investment and employment, I must look for some contribution from the specific Revenue duties, which are fixed in money terms and are therefore continually eroded by inflation.
I have decided to use my regulator powers to increase by 10 per cent. all the revenue duties charged on tobacco and alcoholic drinks. The increases will come into force for the Customs duties on imported tobacco at midnight tonight, and for the duties on tobacco products and drinks on 1st January. They will have no effect on prices during the Christmas and New Year holidays.
1532
If fully passed on, these duty increases, taking into account the consequential increase in VAT, will add rather over ½ per cent. to the Retail Price Index. They will raise the tax charge on a pint of beer of average strength by a little under 1p, and on a standard bottle of spirits by about 31p. They will increase the charge on a standard bottle of table wine by about 5p, and on a bottle of fortified wine such as sherry by about 7p. The tax on a packet of 20 filter cigarettes of average size will be increased by about 4p. The additional revenue raised will be £50 million in the remainder of this financial year and £280 million in 1977–78.
I believe that the British people will accept that these increases in the cost of less essential goods are fully justified at this time, particularly when the proceeds are intended to create more jobs and more investment.

Sale of BP Shares
The Chancellor of the Exchequer (Mr. Denis Healey)There is one further step which we propose to take to reduce the public sector borrowing requirement in 1977–78. Two years ago the Government rescued the Burmah Oil Company from severe financial difficulties, and as part of a package of support the Bank of England bought Burmah's holding of shares in the British Petroleum Company.
We now propose that the Bank should sell enough of Burmah's former shareholding in BP to leave the total of the Government's and the Bank's holdings at 51 per cent. as against the 48 per cent. held by the Government before the acquisition of the ex-Burmah BP shares. As the House will be aware, these shares are currently the subject of a legal claim by Burmah against the Bank of England. We are advised in the firmest terms that this claim is without merit, but so long as it is being pursued it may prove an impediment to a successful sale. If this impediment is not removed, the Government will sell an appropriate number of their own BP shares, and in due course will make good their holding by securing the transfer to the Treasury of an equivalent amount of the BP stock acquired from the Burmah Oil Company and now held by the Bank of England. So the Government holding in BP will still be 51 per cent.—more than it was before.

Incomes Policy
The Chancellor of the Exchequer (Mr. Denis Healey)A central objective of Government policy is to continue the attack on inflation. To maintain a continued fall in inflation through to 1978 we shall need agreement between the TUC and the Government on how to pursue the attack on inflation while permitting greater flexibility in pay negotiation in the period after July 1977. I hope it will be possible for us to reach agreement on this in time for me to take account of the outcome in settling the levels of income tax in the next Budget.
If at the time I settle my Budget for 1977–78 I judge that without increasing the PSBR above £8middot;7 billion there is scope for tax reliefs and if, as I expect, a satisfactory agreement has been reached with the TUC and the CBI on the next pay round, then I propose to use the available margin to reduce the present burden of income tax, which I believe to be too heavy. [HON. MEMBERS: "Who made it too heavy?"]
In this context there are also important questions, which I shall want to consider with the TUC and other interested bodies, concerning the interrelationships between changes in earnings, social security benefits, pensions and rates of direct and indirect taxation.

Taxation of Overseas Earnings
The Chancellor of the Exchequer (Mr. Denis Healey)There is one aspect of taxation which I intend to start considering at once. I believe that it is important to find ways of improving the tax treatment of employees who live in this country but who work abroad on increasing our exports. The people I want to encourage are those at the sharp end of exporting—the business of selling British goods overseas—as well as those who contribute to our overseas earnings by working for a period overseas, for example in construction projects.
I have therefore asked the Inland Revenue to issue a consultative paper which will outline proposals to give to anyone who works for a period abroad the reliefs which are at present allowed only to those with separate jobs abroad. The proposals would also modify the
1534
rules governing the allowance of expenses incurred abroad. I have authorised the Revenue to seek the views of interested bodies, with a view to legislation in next year's Finance Bill.

Domestic Monetary Effects
The Chancellor of the Exchequer (Mr. Denis Healey)I have already described the targets which we have set for the PSBR of £8·7 billion for 1977–78 and £8·6 billion for 1978–79, in order to create monetary conditions which will encourage investment and growth and will help to control inflation. We are expressing the essential monetary targets in terms of Domestic Credit Expansion rather than money supply, since we agree with the IMF that this will be more appropriate than a target for M3, during a period when we shall be giving top priority to putting our balance of payments right.
DCE will be kept to £9 billion in the year up to 20th April 1977 and £7·7 billion in the year ending 19th April 1978, and I expect a further reduction in the following year to £6 billion. The growth of M3 which will accompany DCE at these rates will depend on a number of factors, especially progress on the balance of payments. For 1976–77, again on a banking month basis, the growth of sterling M3 is likely to be between 9 per cent. and 13 per cent. It is too early to give an estimate for 1977–78. But our target will now be in terms of DCE, not M3.
Because the public sector will be making a smaller demand on savings in the next two years, these DCE targets should provide sufficient room for industry's essential needs. The targets will be reviewed after six months to ensure that this is so. I hope, too, that the IMF agreement and the measures I have announced will enable us to see interest rates fall from their present exceptional levels while keeping control of the monetary aggregates. This reduction in interest rates may be slow at first, but should move faster as the balance of payments and the rate of inflation both improve. We shall, however, need the existing range of credit controls for the present, perhaps with technical adjustments to special deposits arising from success with gilt sales.

Summary
The Chancellor of the Exchequer (Mr. Denis Healey)To sum up, the Government's measures amount to a total fiscal adjustment of £1½ billion in 1977–78 and £2 billion in 1978–79. In addition, the PSBR will benefit from the reduced cost of debt interest resulting not only from the lower borrowing requirement but also from the lower level of interest rates which I am confident that these measures will help us to achieve.

International Monetary Fund
The Chancellor of the Exchequer (Mr. Denis Healey)Dr. Witteveen, the Managing Director of the International Monetary Fund, has told me that he supports both the economic strategy which I have described—[An HON. MEMBER: "He must be mad."]—and the measures the Government are taking, and is prepared to recommend acceptance of my request for the standby arrangement to the Executive Directors of the Fund. I have arranged for copies of my letter to him applying for the standby to be made available in the Vote Office this afternoon.
Before the Fund Board meets there will be a meeting of the Group of Ten countries, which stand ready, under the General Arrangements to Borrow, to provide the Fund with the usable currencies it needs for large drawings if its own available currencies are inadequate. I am confident that, in a matter of days after the end of the year, the operation will be complete and the reserves replenished.
The standby arrangements this time cover a two-year period, so that we can make the necessary adjustment without imposing unacceptable strains on the social contract and the industrial strategy. In total we shall be able to draw up to nearly $4 billion, $1·15 billion of it immediately and over $1 billion more before the end of 1977. This, I am confident, will transform the external financing position in 1977.

Sterling Balances
The Chancellor of the Exchequer (Mr. Denis Healey)As the House knows, the Government have been concerned to remove the pressures exerted on the sterling exchange rate by the overhang of the sterling balances. Considerable work has already been done on this problem in the Bank for International Settlements in Basle, where Central Bank Governors have had
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constructive discussions over the last weekend. At the same time, the matter is also under discussion with the Treasury and the Federal Reserve in Washington. These talks have revealed a general desire on the part of those concerned to achieve a satisfactory arrangement for the sterling balances, and I believe it will be possible to reach an agreement before long.
I am also glad to be able to tell the House that during the period ahead and in anticipation of further drawings under the agreement with the IMF which will take place later in the year, I intend to strengthen the reserves with $500 million which has been offered by the United States Treasury and the Federal Reserve in the form of swaps. In addition, the Bundesbank has offered the Bank of England a standby facility of $350 million by way of further support.
Mr. Peter Rost: The right hon. Gentleman is giving away our sovereignty.
Mr. Healey: The endorsement of our policies by the International Monetary Fund and the members of the General Arrangements to Borrow will relieve the pressures on sterling which have damaged our economic prospects in the last 12 months, while the prospective arrangement for the sterling balances will help to reduce the risk of such pressures in future years. This should do much to restore the confidence on which all aspects of our economic performance critically depend.

Economic Prospects
Mr. HealeyThe Government are releasing today and placing in the Vote Office the first economic forecast published under the provisions of the Industry Act 1975, and this will give the House a picture of the economic prospects following the measures I have announced.
Over the next 12 months, I expect a growth in total output of about 2 per cent., though this may be higher if our export performance improves further. The 2 per cent. increase in growth would include an increase of 5½ per cent. in manufacturing production and 19½ per cent. in manufacturing investment.
I do not see a prospect of a fall in unemployment; indeed, I fear that there is likely to be some further rise, but a

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smaller rise than would have been likely without the adjustments I have described. If unemployment does rise, this will be the consequence not of today's measures which, in sum, will increase employment next year, but of the lower growth now expected all over the world and of other factors I have previously described to the House.
The current account deficit, which has totaled £1·7 billion in the first 11 months of this year, is likely to fall next year, and there is good hope of reaching a substantial surplus in 1978–79—perhaps as high as £2 billion to £3 billion. Given continuing moderation in the increase in wage costs, the rate of price inflation should start falling again next summer. The measures I have announced will add less than 1 per cent. to the RPI by the end of 1977.
Next year will be a difficult year of transition. I believe that the policies I have announced, reinforced by the next Budget and further progress on the industrial strategy, will ensure that it is a transition to a much more firmly based prosperity.Part of this prosperity will be due to the development of North Sea oil production, but our economic strength will depend critically on the use we make of the benefit this brings. We must use it not only to resume the growth in our living standards, but—and in the long run this is more important—to rebuild the capital base of our manufacturing industry.
I believe that the late 1970s and early 1980s should be a period when a steady increase of output, employment and living standards is combined with the repayment of our external debt. We shall at last be standing on our own feet, with an economy more healthy and efficient than we have seen at any time since the war.
It is in that belief that the Government have decided these measures and that I commend them to the House.
Sir G. Howe: The House has become accustomed to hearing statements of this kind from the Chancellor. I am sure that I speak for the whole House when I say that we are deeply anxious that, at this attempt, for the sake of the nation as a whole, he has indeed got it right. It is the last chance.
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I hope that the House will allow me a little more latitude in questioning the right hon. Gentleman because of the length and importance of his statement. The House has heard many of the promises and prospects described by the Chancellor at the end of the statement from him many times before and we must hope that in his ninth Budget they will be more credible than they have been in the past, if only because this Budget has been introduced under instructions from the IMF and, indeed, is an IMF Budget. We have a sense of relief because it seems that Labour Governments can be prevented from steering the economy towards disaster only when they are under the firm surveillance of the IMF.
May we have an assurance that we shall have two days to debate this important statement and can the Chancellor assure us that he will tell the House as soon as possible about the arrangements to which he referred for the support of the sterling balances?
We welcome this further evidence of the Chancellor's conversion, however reluctant and belated, to the views which we have been putting forward over the past two and a half years about the importance of money supply and achieving a substantial reduction in public expenditure.
Can the Chancellor confirm the scale of what he has in mind? Is it correct that in the public expenditure White Paper in February—which was not supported by some of his hon. Friends—the right hon. Gentleman proposed a reduction for 1977–78 of £1,000 million, that in his July statement he proposed a further reduction for 1977–78 of another £1,000 million, with additional tax revenue of £1,000 million, and that in today's statement he proposes a further reduction of £1,000 million for the same year and further tax increases of £500 million? Am I correct in welcoming what he has said because it means that by three bites this year he intends to reduce next year's public sector borrowing requirement by £4,500 million? If so, will he cease denouncing those of us who have been urging reductions on that scale for the past two years?
Does the Chancellor recognise that his refusal to take our advice until the economy is stagnant and unemployment

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is clearly rising means that the consequences in lost jobs and a delayed return to prosperity will be far worse than they need have been?
There are some aspects of the statement which we can welcome. We welcome the recognition of the need to reduce food subsidies more quickly and of the desirability of phasing out the regional employment premium.
We also have some sympathy with the Chancellor's desire to reduce the size of the stake holding in the successful BP company. But to whom does he propose that this holding should be sold? Does he believe that the sale of these assets, as part of a sort of Socialist clearance sale of assets whose ownership is in doubt, will restore international confidence? Does he not recognise that it makes a nonsense of the argument previously advanced by the Government that nationalisation has no adverse effect on the public sector borrowing requirement? Does it not also make it doubly foolish to press ahead with the immense cost of taking into public ownership yet further industries as the Government still intend to do?
Does the Chancellor agree that the cuts in defence expenditure since he began dealing with this matter amount to £8,000 million overall and that the three cuts announced this year amount to a reduction of £400 million on defence next year? Does he not recognise the grave risk that, by making these cuts, he will be endangering our national safety beyond an aceptable level?
We welcome the signs which the Chancellor has given that he recognises that new jobs and new prosperity can come only from renewing confidence in the private sector. Is he aware that we welcome his intention to reverse some of the damage done to overseas earnings and those who work overseas by his own 1974 Finance Act?
Is he also aware that we are bound to be concerned that almost half the spending cuts announced today fall on the private sector through reductions in capital spending programmes? The private sector, on which recovery depends, will continue to languish until effective action is taken to restore incentives at every level. The Chancellor would do far better to concentrate less on doling
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out money to this or that board or organisation and to concentrate more on motivating our people by restoring incentives.
Finally, is the Chancellor aware that the House is unimpressed by the belated attempt to pose as Father Christmas in postponing the increases in taxation until New Year's Day and that today's taste of bitter medicine is a direct result of his own reckless and incompetent mismanagement of the economy during three wasted years at the Treasury?
Mr. Healey: I should thank the right hon. and learned Gentleman for the typically gracious way in which he welcomed my statement. At the beginning he spoke about his hopes that the package would be successful, but the tone of his speech reflected a deep political fear that the package would succeed.
I have no doubt that the right hon. Lady the Leader of the Opposition will take up through the usual channels the suggestion of having a two-day debate.
I shall report to the House in full as soon as a final agreement on sterling balances has been reached.
The right hon. and learned Gentleman then treated us to yet another stale recitation of his threadbare party piece which we have heard so often. When he talks about what he and his right hon. and hon. Friends said during their two years in Opposition, he might occasionally reflect on what they did during three and a half years in office.
When the right hon. Gentleman talks to us about controlling public expenditure, he might reflect on the remarks of his erstwhile colleague, the right hon. Member for Down, South (Mr. Powell), in a recent debate. The Conservative Party and the nation would benefit if the right hon. and learned Gentleman showed a little more of the dignified objectivity displayed by his hon. Friend the Member for Oswestry (Mr. Biffen) who, when discussing these problems on television on Sunday, was unable to conceal either his contempt for his party's record in office or his distaste for their opportunism in opposition.
Sir G. Howe: I want confirmation that the Chancellor, who opposed the Chancellor in the last Conservative

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Government when he announced expenditure cuts almost three years ago to the day, now acknowledges to the House that he has to introduce proposals, either by cutting expenditure or by raising taxes, to reduce the public sector borrowing requirement by £4,500 million. Is that right, and is it not what we have been urging on him and what he has previously refused to do?
Mr. Healey: I shall respond to the rather tremulous attempt by the right hon. and learned Gentleman—[HON. MEMBERS: "Answer the question."] I shall be able to answer when the right hon. and learned Gentleman tells us why he refused—[HON. MEMBERS: "Answer the question."]—consistently at any time over the past two and a half years to tell us what cuts in public expenditure he would accept.
Mr. Grimond: Many hon. Members will agree that the Chancellor's speech today marks the fact that not just over the past two years but over the past four or five years public expenditure has got entirely out of control and has greatly damaged the economy. Is the Chancellor aware that the most important thing is to find some common ground on which the country can unite instead of indulging constantly in party bickering. I think that many people would agree with the Chancellor when he puts more emphasis on production and less on unproductive public expenditure.
The most frightful part of the Chancellor's speech was when he spoke of a transition to a more firmly based prosperity. What is it to be based on? That seemed to be lacking in his speech. Are we now at the end of the very damaging proposals contained in the Labour Party's last manifesto? Are we going forward to a situation in which private industry, profit-making industry and productive enterprise will be fully and properly rewarded?
Mr. Healey: I agree with the right hon. Gentleman's remarks when he says that there is a great deal of common ground both in the House and the country about the nature of our economic problems, which the Conservative Party fairly stated in its recent policy statement, and about the nature of the remedies which must be sought for that problem. On his last
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question, however, all I can tell the right hon. Gentleman is that the Government's industrial strategy and the social contract command the support of all our friends abroad and of both sides of industry in Britain.
After the rather demeaning display by the Shadow Chancellor there should be a serious attempt by Opposition Members, from whichever Opposition parties, to join in the national effort for recovery, for which we have now laid the fiscal foundations.
Mr. Atkinson: In view of the delayed phasing of the Chancellor's statement, could he give some assurance to the House that he has not been absolutely rigid in presenting these in total and that there is some degree of flexibility in his statement? Will he say that it is not a threat to the existence of the Government for some hon. Members to try to change some aspects of the Chancellor's statement, bearing in mind that he has placed on the trade unions and on wage negotiators an almost impossible burden? If we take from his statement his prediction that prices, by the start of phase 3 of the social contract, will be rising at about 14 or 15 per cent. year on year—when the workers will already have taken a drop in living standards by the time we reach mid-1977—may we ask for an assurance that there is some flexibility in the delayed taxation proposals, which he said will depend on whether we can successfully conclude a wage arrangement, which does not directly affect prolonging inflation from a wage source? I ask the Chancellor for some assurances of that sort.
Mr. Healey: I am grateful to my hon. Friend for asking that question. I know how deeply he will regret, as do the Government, some of the measures which economic circumstances have compelled us to take.
On the question of a two-year programme, I can assure him that he will see, in the Letter of Application which is now in the Vote Office, that the Government will reconsider the targets for 1978 and 1979 before the end of next year in the light of prospects as they develop. I gave an example of that in my statement.
I am very grateful to him also for what he said about the forthcoming discussions

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with the Trades Union Congress on the next round of pay policy. I can tell him that I know from long talks with leaders of our trade unions that they are as deeply concerned as anyone in the House or in the country to gain control of the two elements which have produced such disastrous inflation since the pay policy was introduced. The first is to recover control of our sterling exchange rate and to stop the disastrous plunge that we have seen this year, and the second is to produce a situation in which there is a firm prospect of falling interest rates in view of the fact that high interest rates have damaged housing and investments. If we approach the talks in this spirit we are bound to succeed.
Mr. Powell: Will the right hon. Gentleman confirm that these measures would have been equally necessary even if the IMF had not existed and that the decision to borrow from the IMF, whether right or wrong, is unconnected with the necessity of what he has put before the House? But why is he so sure that it is only the last £1½ billion of the prospective £10½ billion borrowing requirement in the coming financial year which imports the threat of continued inflation and a decline in the value of sterling? It is on that proposition that he is resting the economic prospects of this country.
Mr. Healey: I shall confirm, as I told the House in the debate the other day in which the right hon. Gentleman spoke, that the Government have taken decisions because they believe them to be necessary. I do not mind saying that it took some time to persude the IMF team that these decisions were the appropriate ones in that situation. They are Government decisions. They would have been more necessary if we had not been able to count on the endorsement of our policies by the IMF and on the assistance to our resources which we shall get from IMF borrowing.
The right hon. Gentleman asked how I could be certain that the reduction of the PSBR to £8·7 billion from £10½ billion, as it would otherwise have been, will be adequate to enable us to recover control of the sterling exchange rate. Of course no one in the world can be certain about what will be adequate in these fields, but the fact that the world's established international monetary authority
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and all the world's strongest economies are endorsing our policy and these measures and are supporting their judgment with their money should give the House and, indeed, the world confidence that these measures are rightly judged.
Mr. Mellish: My right hon. Friend has proposed cuts in new housing starts in the coming year. Will there be any exemptions concerning special stress areas, because this would mean so much to them?
Mr. Healey: Yes, Sir. There will be exemptions, particularly for areas of housing stress. My right hon. Friend will be giving more details of the implications later.
Mr. Maurice Macmillan: The Chancellor has indicated that these are measures for financing an interim period, during which he hopes to deal with the problems of sterling and inflation. Will he be good enough to tell the House now, and to give it an assurance, that in whatever speech he may make in the debate on these measures he will refer to one of the main causes of our difficulties, which is the failure to use existing investment properly and the low output per man that is obtained throughout most of our industry as compared with that obtained by our competitors?
Mr. Healey: The right hon. Gentleman will know that I have referred to inadequate use of existing capital in almost every speech that I have made on the economy over the last two years. He should also be aware of recent studies, notably one published by the British Institute of Management, which make it clear that the inadequate use of existing capital is due, above all, to inadequacies in management. Some of the figures quoted in the recent study by Dr. New show the amount of time for which in most companies polled the average component stands idle, and they should be of deep concern to both sides of the House.
Mr. Crawford: I have one or two brief questions concerning Scotland. Is the Chancellor aware that his comments on increased unemployment will condemn more and more Scottish workers to a further spell in purgatory? On the question

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of Scottish housing, is he aware that his comments on the cut back in the construction industry will increase urban deprivation in the West of Scotland? On the question of whisky, is he aware that it may be a happy Christmas but it will be a hellish New Year, and that he cannot go on killing off that industry? Finally, will he confirm or deny rumours circulating in the City that the Bank of England is considering printing a new bank note which shows the Queen with her fingers crossed?
Mr. Healey: I congratulate the hon. Gentleman on producing that chestnut with such aplomb—if that is the right word. I assure him that it was particularly with his own constituents in mind that I made certain that the new prices for drink would not apply until after Hogmanay, as well as after Christmas.
Mr. Cant: Far be it from me to import the mad monetarist from Chicago into the discussion. However, does not my right hon. Friend, on reflection, consider that he would have been wiser to listen two years ago to some of his hon. Friends—who shall be nameless—who suggested that he might attach some importance to money supply aggregates and that he might even resurrect domestic credit expansion? May I briefly ask whether it is an implication of what he said about economies in public expenditure that all negotiations in the public service sector must be in terms of no redundancy in the Civil Service or in local government?
Mr. Healey: I do not know quite how my hon. Friend relates his last question to his earlier question. My feeling is that it would not be possible to relate the two. However, I think that he will know that, for good or ill, I have paid far more attention to money aggregates than did any of my predecessors in this office. I have kept the money supply under far more effective control than it was under the previous Conservative Administration. As I have said, I expect money supply this year to be broadly within the target that I set for it in July.
Mr. Higgins: If the Chancellor expects the increase in money supply to be less than the rate of inflation, why does he suppose that the net effect of his measures will be to reduce unemployment?
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Can he confirm that the amount for which he now proposes to ask the IMF will be greater than the amount available from the IMF following the ratification of the second amendment of the Articles and the Sixth Quota Review, as suggested in the Queen's Speech?
Mr. Healey: On the second question, the IMF has agreed to make available to us, by way of standby, all our remaining credit tranche plus the 45 per cent. temporary increase which is available in theory only until the new distribution of quotas comes into effect, so from that point of view we are being very generously treated by the IMF. We shall be drawing $3,900 million in all over the next two years.
The hon. Gentleman's earlier question has strayed from my mind. Perhaps he could shout one word, when I would no doubt recall it.
Mr. Higgins: My question was this: if the increase in the money supply is expected to be less than the rate of inflation, why does the right hon. Gentleman think that the net effect of his package will be to reduce the level of unemployment?
Mr. Healey: First, the rate of the increase in money supply is enormously affected by, among other factors, whether one has a balance of payments deficit. For that reason it is a very poor proxy for the rate of domestic credit expansion, which we have chosen to adopt instead. However, in either case it is possible to have a rate of increase in money supply lower than the rate of increase in money GDP without necessarily increasing inflation.
In final reply to the hon. Gentleman's point, the measures that I have announced this afternoon will generate more jobs than they remove. [HON. MEMBERS: "No."] Yes, because the redundancies and unemployment following from the cuts that I have announced will be more than offset by the jobs generated, first, by the employment measures I have announced—£120 million each year; secondly, by additional industrial aid; and, thirdly, by increased activity in demand generated by a fall in interest rates.
Mr. Cronin: As his proposed public expenditure cuts will free immense resources for manufacturing industry, will

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my right hon. Friend indicate what steps he will take to induce manufacturing in, dustry to take advantage of the situation? Having brought the horse to water, how will he induce it to drink?
Mr. Healey: I fully accept my hon. Friend's main point, which is that the success of these measures will depend critically on British industry taking advantage of the priority that it is now being given. However, I can point to some evidence that the switch towards industry has already begun. For example, as I think I said in my last speech to the House, employment in manufacturing industry rose by 60,000 between the second and third quarters of this year when employment in other parts of the economy was falling. Similarly, while investment as a whole in Britain has not yet begun to increase, investment in manufacturing industry rose in both of the last two quarters.
Mr. Graham Page: Will the Chancellor accept congratulations from the Opposition side of the House for saying that he is going to reduce expenditure under the Community Land Act? In order that central and local government staff shall not be retained unnecessarily, in case someone revives the Act, will he come clean and scrap the Act altogether?
Mr. Healey: I fear that I am never ready to accept congratulations from the Opposition side of the House without inspecting them most carefully for explosives. I would certainly not consider repealing the Community Land Act. The Act has already been of immense value in denying to land speculators the profits which under the previous régime they were able to get from buying and selling land. Secondly, I am glad to say that even after these reductions in the amounts of money made available for purchase, there will still be a steady increase over the next two years.
Dr. Bray: Since the question of wider long-term support for sterling will fall to the next United States Administration, who take office next month, and since they are neither monetarist nor simpleminded, will my right hon. Friend assure the House that he is taking steps to present our case to President-elect Carter in the form most likely to appeal to him?
Mr. Healey: First, all the negotiations in relation to the IMF and the sterling balances will be carried out with existing Governments all over the world, including the existing American Administration. My hon. Friend will know that I am familiar with a number of possible and appointed members of the next American Administration, and I have no doubt that my right hon. Friend the Prime Minister will be taking an early opportunity of meeting President-elect Carter. However, I think that it would be a mistake to describe or to treat President-elect Carter as President until he in fact assumes that office.
Mr. Emery: Will the Chancellor accept that much greater international banking and financial confidence would have been restored if he had announced his measures today and had not applied for the standby credit, since what many people fear is that the standby credit will only be frittered away on more Socialist measures?
Mr. Healey: With respect to the hon. Gentleman, I think it possible that I have been in closer touch with the more important parts of international financial opinion in recent weeks than he has. What we know is that the amount of money provided by the IMF is quite small in relation to the magnitudes of foreign exchange spending on both capital and trade purposes, but it is nevertheless of great value to us to have this standby available over the next two years. Although, as I said in reply to the right hon. Member for Down, South, I should have wished to take these decisions even without the assistance from the IMF, if we had not been able to count on that assistance we should have had to make larger, not smaller, cuts in the public sector borrowing requirement and public expenditure.
Mr. Baker: Is it not an extraordinary indictment of his record that a Labour Chancellor of the Exchequer has even to consider disposing of such valuable assets as the BP shares? To whom does the Chancellor expect to sell them? Whom has he in mind? If they go to overseas interests, and if the Bank of England loses its action, is it not possible that control of this company will escape not only from the Government's hands but

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from the country's hands? If the Chancellor sells them to United Kingdom residents, will not those United Kingdom residents buy these shares instead of buying gilts, and will not his object of reducing the public sector borrowing requirement in this way thereby be thwarted?
Mr. Healey: I am afraid that the hon. Gentleman has been misled by some newspaper article which he read. Whoever buys these shares, there will be a fall in the PSBR in consequence. The effect of the fall in the PSBR, on the money supply and DCE—which is what I suspect the hon. Gentleman was vaguely fumbling after—will depend on the extent to which these sales displace possible purchases of gilts, but that is quite another matter. As for who buys the shares, this will depend on who comes along and attempts to buy them. But in any case Her Majesty's Government—even on the worst conceivable hypothesis, that they totally lost control of the Burmah shares and therefore their holding fell to just 30 per cent. in BP—would still have a blocking holding, which would be 25 per cent, of BP; and, of course, they have never sought in a constructive or positive way to use the majority holding in order to determine the policy of British Petroleum.
Mr. English: Are the measures which my right hon. Friend proposes more or less severe than those originally suggested by the IMF for the British economy? Second, why on earth does the Chancellor think it desirable to sell off productive assets such as those referred to in the last question? Would it not be better to sell off unproductive assets, such as the Crown Jewels, rather than something like the most valuable shares in the world?
Mr. Healey: I shall consider my hon. Friend's suggestion about selling the Crown Jewels, but I am not absolutely certain that they are the property of Her Majesty's Government.
Mr. Tebbit: The shares are not, either.
Mr. Healey: On the question of IMF proposals, to which my hon. Friend referred, I thought that I had made clear beyond doubt in our last debate that the IMF does not make proposals. It does
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not see that as its duty. The IMF considers the prospects and circumstances of the economy in any country with which it has dealings, and it then waits for the Government of the country concerned to put proposals to it. It then offers money if it regards the proposals as adequate, or does not if they are not adequate. But it is not for the IMF to make proposals to Her Majesty's Government or to any other Government, and nor has the IMF team done it in this case.
Mr. Ian Gilmour: The Chancellor did not answer the question put by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) on defence—or, indeed, anything else—so will he now confirm that it is the view of the Chiefs of Staff that his latest defence cuts, following on the £8,000 million which his Government have already cut, imperil the nation's defence and undermine the Western Alliance?
Mr. Healey: I hope that the right hon. Gentleman, who, I believe, at some point in his career was Secretary of State for Defence, is not seriously suggesting that any Minister should retail to the House views put to Ministers by the Chiefs of Staff. That would be a most extraordinary suggestion, and totally contrary to the practice of the House and the British Government.
Hon. Members: Answer.
Mr. Skinner: Does the Chancellor of the Exchequer realise that one of the reasons why, during certain passages of his speech, the cheering came in the main from the Opposition was that he was making a statement closely in line with what the Opposition have been putting to him over the past two years, and this Government have in fact not been carrying out the Socialist measures to which they have referred? Where is the economic miracle now? If after this period of time the Chancellor is unable to tell us where the economic miracle has gone, on the basis of the strategies which he has put forward in the past for cutting public expenditure, why on earth do the Government not consider the alternative strategy which has time and again been put forward by some of us on these Benches, along with the TUC and the Labour movement generally?
Mr. Healey: I think it fair to tell the House that the Government have on many

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occasions in recent years considered what my hon. Friend has called the alternative strategy, but they have never succeeded in persuading themselves that the alternative strategy offers this country anything like such favourable prospects as does sticking to existing strategies. Moreover, I think that my hon. Friend will be well aware that the views which he holds on, for example, the siege economy and import controls are very far removed from those put forward by the Trades Union Congress—
Mr. Skinner: This is a siege economy.
Mr. Healey: Let me tell my hon. Friend also, as I have said previously, that the Trades Union Congress and, I believe, ordinary trade unionists would regard it as of absolutely capital importance for any British Government to take measures which will enable the Government to control the sterling rate to produce some stability in the value of sterling and to get interest rates moved down, not up. It is far from clear to me that the strategy which my hon. Friend personally espouses would have a favourable effect in those two respects.
Mr. Hugh Fraser: Instead of selling the British Petroleum shares, why did not the Chancellor look at the list of other Government shareholdings and dispose of them? The list includes Appledore Shipbuilders, Cammell Laird, Govan Shipbuilders and Harland and Wolff. I have the official list here. It seems quite ridiculous at this stage to dispose of one of the best growth assets which this country possesses rather than dispose of other assets here listed and acquired by the present Government.
Mr. Healey: I am rather puzzled by the attitude of the right hon. Gentleman and various other hon. Members who put questions about Burmah. For half the time, they argue that we should not nationalise anything, and for the rest of the time they argue that the accidental passage of Burmah shares into the hands of the Bank of England and within the orbit of the Government should on no account be reversed. When the right hon. Gentleman has made up his mind in which direction he wants to move, perhaps he will send me a letter.
Mr. Alexander W. Lyon: Does my right hon. Friend recollect that two
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months ago he told the Labour Party Conference that he would negotiate with the IMF on the basis of current policy and that last year in the Budget he expected a borrowing requirement of about £10 billion, which he now expects it would be even without these measures? Is it not correct that, in addition to selling BP shares, what we are now selling by this statement is all the Labour Party aspirations and that we are doing this for a squalid little loan of less than £150 per family in this country which we would have got in any event if we had stood up to the IMF and said that we were not willing to accept any conditions at all?
Mr. Healey: I appreciate the strength and depth of my hon. Friend's feelings, but he must face the facts about the position of sterling and the level of interest rates. If he can explain to me how it would be possible for the Government to finance a deficit of the size which was in prospect without these measures without crippling the industrial strategy and without seeing living standards collapse with the fall of sterling, I shall pay more attention to the views which received such a boisterous cheer from the Conservative Benches.
I can tell my hon. Friend that there is no future for the working people of this country or for the aspirations that he and I share unless we recover control of the sterling rate, get interest rates down, and create the conditions in which British industry can make its proper contribution to the national welfare. Unless we do that, we can achieve none of our objectives. We have now created a base on which we can achieve the objectives of our industrial strategy and so pay for all the social advantages which my hon. Friend and I both seek.
Mr. Ridley: May I congratulate the Chancellor of the Exchequer on a considerable slaughtering of Socialist sacred cows this afternoon? May I ask him why he always said that Conservative demands for public expenditure cuts would result in massive unemployment whereas when he makes public expenditure cuts they increase employment? Is the right hon. Gentleman aware that no one believes him and that he would be more respected in the country if he would

1553
occasionally stop trying to paint the picture rosier than it is?
Mr. Healey: The hon. Gentleman, who on the occasions when he attends our debates makes very valuable and often witty contributions, will recognise that I said in my speech that unemployment was not likely to fall next year and is likely to rise, but it will not rise as a result of these measures because of the £200 million that the Government are simultaneously injecting into industrial investment and employment.
When I attacked the Conservative Front Bench for asking for cuts of £5,000 million, I did so because I believed that those would totally wreck the economy and the social consensus on which our polity rests today. I would agree with the hon. Gentleman that his leaders on the Opposition Front Bench always ran 1,000 miles when they were asked to say which cuts they would make, and even today the only clear statement we have had from the Conservative Front Bench is that the Conservatives would oppose the cuts in defence expenditure which are an integral part of the Government's current measures.
Mr. Gould: When will my right hon. Friend turn his attention away from irrelevant cuts in public expenditure and deal, instead, with some of our real problems which are amply illustrated by yesterday's disastrous trade figures? Will not my right hon. Friend accept that the cuts in public expenditure that he has announced will do nothing whatsoever to promote the export-led growth he has talked about for so long but which cannot manifest itself until we stop kidding ourselves about the exchange rate?
Mr. Healey: I am well aware of my hon. Friend's views on the exchange rate. I could hardly fail to be so, because the last time he expressed them sterling fell by, I think it was, three cents.
Mr. Gould: Two cents.
Mr. Healey: I think that my hon. Friend is mistaken if he really believes that our disappointing export performance is due to the fact that the pound is over-valued. This is not the view of any industrialist involved in exporting whom
1554
I have met. The real problem in Britain is the sluggish response of industry to changes in its market environment. That sluggish response cannot be improved by the Government alone. All the evidence that we have had from the trade figures and from investors about our disappointing export performance suggests that we are highly compeitive on price at present. The real problem is that the bulk of individual firms are not taking full advantage of their price competitivity to increase export volumes.
Mr. Cormack: Is the Chancellor of the Exchequer aware that hitherto his forecasts have been less reliable than Old Moore's? If on this occasion he has the figures roughly right—we must hope that he has—does he not consider that he has his priorities wrong? Why is he taking steps that could cripple the construction industry when he could have raised money from prescription charges and such things?
Mr. Healey: Any Government would have been faced with this problem. If there were ever a Tory Government again, they would face this problem. They would face the problem of retaining the confidence of the working people, which we have won and on which we have built such progress as we have made in the fight against inflation in the past two years. In their choice of measures to adopt, a Conservative Government would forfeit that confidence and return this country to the conditions which it had to endure for so many months under the previous Conservative Government. I am sure that this Government were right to take some account of social considerations in deciding on the distribution of their cuts.
Mr. Heffer: Would not my right hon. Friend agree that, despite his comments about more assistance and job creation schemes, this package will mean higher unemployment? How we can talk about continuing the support of working people when we are putting more and more of them on the dole, especially construction workers, I do not understand. Is my right hon. Friend aware that many of us on this side will regard this as a very depressing day for the Labour movement? He really ought to consider his position.
Hon. Members: Hear, hear.
Mr. Healey: That last remark got a good deal of a cheer from the Conservative Benches, but I do not know what conclusions I should draw from that. I share my hon. Friend's feelings about the level of unemployment in this country and particularly about the outlook for the construction industry. However, I can assure my hon. Friend, and I hope to persuade him of this in the debate next week, that a failure to take measures to reduce our public sector borrowing requirement to the extent to which we have reduced it would have had effects on inflation and employment far more severe than anything that he could possibly attribute to the measures that I have announced this afternoon.
Mr. Tapsell: While the Chancellor is considering his position, will he also reflect on the fact that when I told him in the House two months ago that I had reason to believe that the IMF, as a condition for granting the standby credit, would require a reduction of £3 billion in our public sector borrowing requirement, he said that there was absolutely no truth in that? Yet this afternoon, in the opening passages of his statement, he exactly confirmed that figure. Is it not the fact, wholly contrary to what he said in reply to the right hon. Member for Down, South (Mr. Powell), that the Government's prolonged and wholly unsuccessful attempt to persuade the IMF to reduce that demand has still further damaged the credit of this country, which had already suffered such appalling damage during his stewardship?
Mr. Healey: The answer to each of the questions which the hon. Member has asked is "No, Sir".
Mr. Conlan: Does my right hon. Friend not agree that the ending of the regional employment premium is bound to lead to increased unemployment in regions where the level is already excessive? Are not the savings disproportionately small?
Mr. Healey: I understand my hon. Friend's concern about the ending of the REP, but at £2, which is the current level, it represents only 3 per cent. of average male earnings. The temporary
1556
employment subsidy, which we are now bringing in at £20, is 10 times higher. It is difficult to believe that an REP of £2 will make any difference to an employer's decision to take a man on or to make him redundant.
The temporary employment subsidy is likely to be far more effective in this regard. I am comforted to see that my view on this is confirmed by a recent study of the Department of Applied Economics in Cambridge, which is often quoted against me, which concluded that even at the earlier level it was very doubtful whether any net advantage was to be derived from the continuation of REP.
Mr. Younger: If the Chancellor cannot listen to the views of the Chiefs of Staff, how does he feel about the views of the previous Secretary of State for Defence who said in a letter to the National Executive Committee that any further defence cuts would be catastrophic?
Mr. Healey: I am not privy to correspondence with the NEC any more. There are reasons for that. But I certainly do not take that view myself. As the hon. Gentleman will know, I had the honour of holding that office for six years—[HONS. MEMBERSS: "Disastrous years!"]—during which the planned expenditure on our Forces was continually reduced and the consequences which Conservative Members said would flow never took place.
Several Hon. Members rose——
Mr. Speaker: Order. I intend to take two more supplementary questions from each side. We have spent nearly an hour on this subject.
Mr. Fred Evans: Will the Chancellor give the House his estimate of the saving in public expenditure during the period in question if, by some happy inspiration at this late hour, the Government were to drop their plans to foist on this country schemes of devolution which are not believed to be necessary and which many people believe will lead to the break-up of the United Kingdom?
Mr. Healey: I appreciate my hon. Friend's feelings about devolution, with which I was not unfamiliar. I think that he would do better to express them in the debate that is to follow.
Mr. Grylls: Will the Chancellor say how much extra money will be allocated to the National Enterprise Board? Will the Board be told to back winners, in line with the Chequers industrial strategy, or will it go on backing companies which are unable to raise finance anywhere else?
Mr. Healey: I said in my statement that there would be £50 million extra for the NEB in each of the next two years.
Mr. MacFarquhar: In view of the cutback in school building announced by my right hon. Friend, will he confirm that this will not affect school building required under comprehensive reorganisation programmes already agreed?
Mr. Healey: I think I made it clear that basic needs would be protected but that otherwise the exceptions would be very few.

PUBLIC EXPENDITURE SAVINGS

£ million at 1976 Survey prices

Programme

Expenditure

1977–78

1978–79

1

Defence Budget

…

100

200

2

Overseas Aid

…

50

50

3

Food subsidies

…

160

57

4

Regional employment premium

…

150

170

Refinancing of fixed rate credits

…

100

200

Capital spending at CFEs* for industrial training

…

10

10

5

Nationalised industries†

…

110

130

6

Road construction

…

75

50

7

Housing

…

—20

300

8

Regional water authorities etc. construction

…

75

130

Local environmental services: construction and other capital

…

50

50

Community ownership of development land

…

35

35

9

Courts—purchase of sites

…

2

—

10

Education—construction

…

22

11

Other education expenditure, including school meals

…

20

30

11

Health and personal social services—construction

…

10

20

Other NHS expenditure

…

5

5

15

Northern Ireland

…

5

10

various

Property Services Agency

…

27

45

various

Expenditure on the Civil Service

…

30

10

TOTAL

…

1,016

1,513

* Colleges of Further Education.

† Savings in requirements for Government finance.

STATUTORY INSTRUMENTS, &c.
Mr. Speaker: In order to save the time of the House, unless there is objection, I shall put the Questions on the two Statutory Instruments together.
Mr. Nelson: Will the Chancellor explain how, if the standby credit facility of $4 billion is drawn down over the next four years, it is to be paid back? Does he agree that if the exchange rate of sterling does not rise, or even if it is maintained, the actual repayment will result in a deficit which will have to be covered by public funds? How will the loan be repaid?
Mr. Healey: All Governments have borrowed abroad to help finance their deficit. In their last year of office the previous Conservative Goverment borrowed £1 million through the public sector at very high rates of interest. The IMF standby is at low rates of interest—4 per cent. to 6 per cent.—to be paid back over three to five years. I expect, and the IMF agrees with us, that we shall move into a substantial surplus in 1978–79 and that the surplus will increase rapidly thereafter as a result of the increasing benefit of North Sea oil.
Following is the information:
Ordered,
That the draft Compensation for Limitation of Prices (Post Office) Order 1976 be referred to a Standing Committee on Statutory Instruments, &c.
That the Value Added Tax (Education) Order 1976 (S.I., 1976, No.2024) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Foot.]

ORDERS OF THE DAY

  SCOTLAND AND WALES BILL
  Order read for resuming adjourned debate on Question [13th December], That the Bill be now read a Second time.
  Question again proposed.
  4.55 p.m.
  The Secretary of State for Wales (Mr. John Morris): My right hon. Friend the Prime Minister said, in opening this debate on Monday, that this is an occasion of great constitutional significance. There may be disagreement about the details of the Scotland and Wales Bill, and even about the principle of devolution, but there can surely be no disagreement that our debate is an historic, indeed, a momentous occasion both for Wales and Scotland.
  The roots of the modern movement for an elected national Assembly for Wales lie over 100 years back. Since then many of our great political figures—Henry Richard, Thomas Edward Ellis, Mabon, Keir Hardie, Lloyd George, Jim Griffiths—have given their support to the call for an elected Assembly. None of them favoured separatism, or federalism, and we, too, have turned our faces against these courses, which would result in economic and political disaster in the case of separation and rigid legalism and a fundamental effect on the sovereignty of Parliament in the case of federalism.
  Time after time since the first election of 1974 the Government have been taunted by nationalist Members on the Opposition Benches—I see none of them here—that we were not sincere in our intentions to bring before this House our proposals for devolution and that we were using all our ingenuity to find delaying tactics to avoid this measure.
  Whatever may be the views in that part of the House about the Bill, is it too much to hope, now that those Members have seen it, that they will retract their oft-repeated assertions? I wish they were here to assist us in the debate. On the first occasion we heard them they voted with the Conservatives against the Queen's Speech, and were prepared to bring the Government down. Whatever their views about the Labour
  1560
  Government, even the most obtuse should need little convincing that Wales cannot hope for anything from the present-day Tory Front Bench.
  If this Bill were not enacted, or were emasculated, and if by some chance a Conservative Government were elected, that would put the cause of democratic accountability back 10 years in Wales.
  In producing this Bill the Labour movement in Wales is not responding to the nationalist party. Why should we?
  Dr. Colin Phipps: We have heard that stated successively on each day of the debate. Will my right hon. and learned Friend tell me, therefore, what happened between 28th February and 10th October 1974 to change the Labour Party manifesto? If we had honestly been contemplating this measure for all those years, why was it not in the February 1974 manifesto?
  Mr. Morris: It has been clearly in the programme of the Labour Party in Wales for a long time. It was in the February manifesto of the Labour Party in Wales. A motion was put down during discussion of the Local Government Bill and that motion received, I believe, the support of the overwhelming majority of my colleagues in the House. Meetings of the Welsh Labour group were held time after time in 1973, a great many of them under the chairmanship of the Leader of the House. In the late days of 1973 it was unanimously agreed that we should have an elected Assembly for Wales.
  Mr. Leo Abse: While the Secretary of State is re-writing history, as he is, by suggesting that all save one of the hon. Members for Wales sitting here behind him gave a commitment to a Bill of this character, will he also have the historical recollection that the Labour movement of Wales, true to its genuine democratic tradition, when it had, in Ebbw Vale, Aneurin Bevan, unequivocally decided that it would have nothing to do with a Parliament for Wales and damned it in a struggle which perhaps took place while the Secretary of State was still having his heavy flirtation with Plaid Cymru?
  Mr. Morris: My hon. Friend has made a number of assertions in the course of the debate, many of which I am sure on reflection he will deeply regret. I remind

  1561
  him that on 6th November 1963 the Welsh Labour group unanimously came to the conclusion that we should proceed on the basis on which we have decided to proceed, and have a policy on the lines we had advocated for a long time before that—an executive form of devolution. That meeting was attended by 26 members of the Welsh Labour Group.
  Mr. Neil Kinnock: I think that we shall have a somewhat unproductive conflict if my right hon. and learned Friend pursues this line by representing a document to which I and my hon. Friends put our names to as being anything like this Bill or the powers contained in it. The commitment of the movement in Wales at the time, and the basis on which we acepted it in the Welsh Labour group at the time, was for an elected executive council, and nothing that compares in any way with the quasi-legislative major-powers mini-Parliament proposed in the Bill.
  Mr. Morris: My hon. Friend is entitled to make his point about differences of detail, but they do not go to the heart of the matter—that the policy we are putting forward is basically along the lines on which we fought the two 1974 elections. It was clearly in our manifestos on those occasions. If there is any doubt on the matter, I remind him that it has been endorsed by the Labour Party conference in Wales time after time, endorsed by the trade union movement in Wales, and endorsed by the whole Labour Party in national conference.
  As I was saying, the Labour movement in producing this Bill is not responding to the nationalist party. Why should we, with the nationalist percentage vote going down in three successive elections? History shows, in addition to the instances I have given, that well before any transient nationalist success the Labour Party in Wales in 1965 advocated an elected Welsh Council and by May 1966 had established a working party to work out its proposals. These proposals eventually formed the basis of part of our evidence to the Royal Commission on the Constitution. I invite those whose memories are not all that good to re-read the evidence we gave to the Royal Commission.
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  But the aspirations of the Labour Party go back much longer. From Keir Hardie to Jim Griffiths, the cause of a democratically elected Government in Wales received support, and neither Keir Hardie nor Jim Griffiths found difficulty in reconciling their espousal of this cause with their internationalism, their fight for workers wherever they were, and their solidarity with those who were denied their fundamental human rights. We are carrying on that tradition. Our proposals have been endorsed by the Labour Party in Wales, by the Wales TUC and the TUC as a whole, and overwhelmingly by the Labour Party in conference.
  Mr. Roy Hughes: A bunch of Communists!
  Mr. Morris: My hon. Friend the Member for Pontypool (Mr. Abse) will find himself in difficulties, because he has made a number of such foolish accusations.
  No one would accuse the Tory Party in Wales of responding to anything or anybody. The Royal Commission came and went and the Tories arrogantly declined to take it into their confidence. I wonder why. Was it because they had no views, or had views which had better not be disclosed to the people of Wales?
  Those then on the Tory Benches who opposed the setting up of the Welsh Office have their direct successors in those who oppose this Bill. The Conservatives time after time rejected the setting up of the Welsh Office. Their negative attitude then is reflected in their present offering, which, if I understand their policies now that the hon. Member for Glasgow, Cathcart (Mr. Taylor) has taken up the Olympic torch, is merely the facade instead of the reality of power for Scotland, and nothing democratically significant for Wales.
  We have said that we wish to listen to detailed suggestions from all quarters of the House, since there can be no monopoly of wisdom on a great constitutional issue like this. I wonder where my hon. Friend the Member for Bedwellty (Mr. Kinnock) has got to, because this is the kind of argument on which I would like to hear him. I regret that he is no longer with us. If the Bill is killed or severely emasculated, that will not end the argument in any part of Wales, certainly not in my party.

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  So far, we have heard almost every argument under the sun against the Bill. I suspect, however, that even more will be rolled out. But everyone who objects has a duty to clarify his position. Is he for the status quo? If so, why? If not, what else has he to propose? Can we be taken into his confidence? In the last few days, I have read through page after page of speeches from Conservatives and from other opponents of the Bill. They share one common factor—a certain coyness about what they want, a certain bashfulness in their approach to the better government of Wales. I give them the benefit of the doubt that they are not against that in principle.
  The argument that we are creating a new tier of government has been paraded. It is not so. No new functions are created for the Assembly by this Bill. The functions being transferred to the Welsh Assembly exist now and are dealt with now by me and my colleagues. What we propose is that these existing functions should be dealt with instead by a democratically elected body so that decisions will be taken nearer to the people by their elected representatives.
  Mr. Nicholas Edwards: When the right hon. and learned Gentleman suggests that the last Government created another tier of local government, is he arguing that the local authorities were given new functions in local government? Is that to be a test?
  Mr. Morris: If the hon. Gentleman will read my speech, he will find that I have not suggested that the last Government created another tier of government. Perhaps he will do me the favour of reading my speech. I suggested that in all the debates and in all the speeches there is a certain coyness and bashfulness on the part of the Conservative Party about what it proposes for Wales.
  I have described the situation with a degree of the moderation for which I have a certain reputation. I do not see how anyone who claims to favour more direct participation by ordinary men and women in decisions which affect them can easily object to what we are suggesting—that more decisions should be taken by elected representatives.
  Of course we are also dealing with the control of nominated bodies. I yield to no one in my appreciation of the service
  1564
  rendered by individuals on these bodies. I have to appoint them, or to be consulted about their appointment—and there are hundreds of them. But the whole concept is undemocratic and a vital aim of our proposals is to do something about this.
  There are instances where we have to propose, for sound practical reasons, that the body itself will remain in existence, but will be answerable for its Welsh activities to the Assembly which will appoint the body's Members. I hope that in these cases the Assembly, as it will be able to, will appoint Assembly Members to the bodies so that, for example, the Welsh Members who will form the majority on the Welsh National Water Development Authority will, in effect, become a committee of the Assembly.
  Additionally, in the case of bodies operating wholly in devolved matters and wholly in Wales, the Assembly will be able to assume its powers directly if it so chooses. I am not suggesting that it will want to rush into such action in all cases. It will be required to consult the bodies concerned, and through them will want to take account of the views of their staffs, whose interests will need to be safeguarded, before reaching a decision and working out detailed proposals. But the important point is that the initiative and the decision will rest with the Assembly, subject only to the final consent of the Secretary of State.
  I fail to understand how the democratisation of such bodies and the transfer, in many cases, of decisions on their future to the Assembly can be objected to, except by those to whom democratic control is itself repugnant. I suppose that if a party has been a minority party in Wales since 1852 and it knows its only hope of power is by appointment and through appointments, it is all for nominated bodies. They are the means in Wales, as my hon. Friend the Member for New port (Mr. Hughes) has reminded us on more than one occasion, for the Tory Party in or out of office to perpetuate its influence. I have yet to hear a Tory Member criticise the system of nominated bodies in Wales, and no wonder why.
  Will there be better government under a devolved system? If one has faith in democracy, there will. The open system of government which is implicit in our proposals will let in light, and ensure by the participation of all concerned, more

  1565
  direct answerability in and closer scrutiny of decision-making and government.
  Sir Raymond Gower: I do not want to be unfair to the right hon. and learned Gentleman but there appears to be some slight inconsistency in his argument. On the one hand he is saying that there will be no creation of a new tier of government and on the other hand he is talking about bringing more democratic government into Wales. Those two lines of thought do not seem to be easily reconciled.
  Mr. Morris: I regret that the hon. Gentleman is not following the argument. It may be my fault. The bodies are there now. There is a whole host of nominated bodies and the hundreds of members whom I appoint already exist. The other part of our devolution proposals is the function that I exercise, or the function that is exercised by my colleagues. That tier is there whether by way of ministerial responsibility or by the nominated bodies. I am arguing—I should like to hear the argument to the contrary because I have not heard it yet—that the tiers are there. We are not creating a new tier but making the existing tier accountable directly to the electorate. I maintain that we are not creating a new tier.
  Then it is said that the proposals are expensive. I concede immediately that democracy has to be paid for. If we had no elected local authorities, no elected MPs, and no one to challenge the Executive, money would be saved, at least in the short term. But I presume that even the strongest of our critics would not want to put this clock back. As far as staffing is concerned, the additional number of civil servants required in Wales is by no means large in relation to the process of democratisation that is proposed or in relation to the executive tasks for which the Assembly is to be responsible.
  For that matter our nominated bodies are not cheap to run. If their Members were more directly answerable either to constituencies or to elected Members, would not that sharpen their reactions? A completely nominated board cannot be summoned to a ward meeting, but elected representatives can be called to answer to the electorate.
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  Given the limited opportunities in this House to examine in detail my responsibilities, it is not unreasonable to hope that a gathering of 80 would produce a considerable number of ideas for economy, and better government. I see that my hon. Friend the Member for Bedwellty has returned to the Chamber. We missed him a few minutes ago. Such a gathering would produce a considerable number of ideas for economy, and better government, unless one has no confidence at all in elected representatives.
  Mr. Peter Thomas: When the right hon. and learned Gentleman spoke of elected representatives being able to challenge the Executive I wondered in what respect elected representatives of the proposed Assembly would be able to do that. Are they not in themselves the Executive?
  Mr. Morris: In the Assembly, as I am sure the right hon. and learned Gentleman recognises, there would be a majority party and minority parties. We have sought to devise a system—I hope that the right hon. and learned Gentleman will welcome it—that will provide full opportunity for minority parties to play their part. They would be represented on all the committees. In that way they would participate in government. They would have the opportunity of challenging the workings of the majority party in committee and in the Assembly itself. I hope that that leads to better government.
  It is highly misleading to exaggerate the expected level of Assembly Members' salaries and other likely costs. On salaries and related costs, the estimates in the Explanatory Memorandum are based on the corresponding figures for the House.
  Mr. J. Enoch Powell: I perceived that the right hon. and learned Gentleman had completed his eloquent passage about democratic control and appointed bodies. I invite him to insist upon the whole passage being read and studied by his right hon. Friend the Secretary of State for Northern Ireland as it is highly applicable to democratic control of the appointed bodies in Northern Ireland.
  Mr. Morris: I am sure that my right hon. Friend the Secretary of State for Northern Ireland diligently reads all my

  1567
  speeches. If there is any misapprehension on this score, I shall follow the right hon. Gentleman's invitation, which I fully understand, and draw the passage to my right hon. Friend's attention.
  On salaries and related costs, the estimates are based on the corresponding figures for this House. It is therefore quite wrong to suggest that Assembly Members are likely to be paid inflated salaries. The figure of £31,000 per Member which has been mentioned is emphatically not a salary figure, it covers all the expenses, including salary, allowances and support services. And, as I say, it is based on the average costs for Members of this House. So let us have no more comparisons with American Congressmen.
  Another Aunt Sally that has been put up is that the control of Wales would fall into the hands of the minority who are Welsh speaking. But others have put forward the contrary and equally misleading argument that North Wales would be at the mercy of an Assembly dominated by representatives from Glamorgan and Gwent.
  I cannot understand how the first proposition could, on the basis of any of our proposals, have any foundation whatsoever, unless there is a supposition born of fantasy that no one who does not happen to speak Welsh can hold high office in the Assembly. It is no service to Wales to parade unwarranted fears and prejudices, which are quite unjustified, when one considers the make-up and distribution of the population of Wales, heavily concentrated as it is in our industrial areas both in South and North Wales.
  On the other hand, I am not worried about the risk of domination by these heavily populated and industrial areas. After all, the rural areas will have a higher proportion of the seats in the Welsh Assembly than they have in this House. And I have never detected any reticence on the part of North and West Wales in making their views known. What I firmly believe is that the Assembly will show understanding, tolerance—and tolerance is a vital commodity in Wales today —and good feeling towards the interests of all parts of Wales.
  Then there is the fear that this Bill weakens or threatens local government.
  1568
  I have emphasised again and again that the Bill does not propose to take any material responsibility from local authorities. Of course, the Conservatives have a lot to answer for in the way they reorganised local government. The system they devised has few friends in Wales. It is a system that demands an early root and branch examination. It will be within the powers of the Assembly so to do, under Clauses 22, 25 and 15 of the Bill. It will be a task to which I would wish it to apply itself speedily—not only to examine the system and its inadequacies, but also to put forward considered proposals for the future local government structure in Wales.
  Another objection that has been paraded by the hon. Member for Pembroke (Mr. Edwards) is that there would be "two Governments in Wales". This is another variant of the "too many tiers argument", and, to put it mildly, it is highly misleading. The Assembly and the Secretary of State will not be competing authorities. Each will have distinct functions, and although there will be matters on which their co-operation will be very important, there need be no problem of overlapping responsibilities or undue complication of government in Wales. The functions transferred are clearly spelt out.
  Of course there may from time to time be parties of a different colour in control here, and in Wales. But if the powers are clearly defined I do not anticipate more difficulty than when local authorities are of a different colour from the central Government. It is only the rare clashes that make news. Convention, custom and practice ensure that the elected cobbler usually sticks to his particular last.
  Mr. Donald Anderson Mr. Donald Anderson (Swansea, East) rose——
  Mr. Morris: I have already given way more than a dozen times. [HON. MEMBERS: "Give way."] I will not be lectured about giving way. I have already given way on innumerable occasions and I will give way to my hon. Friend in a moment. No one can say that I have not been generous, and if hon. Members suggest otherwise that would be another exaggeration, like so many we have heard in this debate.
  Mr. Anderson: Will not my right hon. Friend concede that there is a very clear distinction between a local authority of one colour and a Westminster Government of another since in Wales there is a sizeable element which is pushing for separation? There is a real danger here which he has not mentioned. Also, is he not concerned about the fact that the cheers for his advocacy so far have been coming from the Welsh National Benches alone?
  Mr. Morris: I remind my hon. Friend that I have the support of the Labour Party in Wales as a whole and of the trade union movement in Wales. Of course there are difficulties and differences between local government and central Government, but I do not share the fears of my hon. Friend about the separatist party because its vote has gone down proportionately in three General Elections, and is now less than 11 per cent. At the last General Election it lost 26 deposits, so why should I worry on that score?
  The fact that we are not breaking up the Civil Service but maintaining a unified United Kingdom Civil Service will be a valuable lubricant to ensure that the wheels go round, that discord between the devolved administration and the United Kingdom Government, and that duplication of effort are minimised. It also means that there can be continued administrative cross-fertilisation across the whole Civil Service, and that the Welsh administration can rely on the expertise of a wider organisation while still firmly remaining political master in its own house.
  The case is put that because our proposals are different for Scotland and Wales, the Principality is being unfairly treated and that, contrary to the fears of some that too many powers are being given to the Assembly, it is being given too few. In particular it has been asserted by the former Leader of the Liberal Party, the right hon. Member for Devon, North (Mr. Thorpe), that this would be "a glorified Glamorgan County Council". May I say in passing that, given the problems which Glamorgan had to face from the inter-war years on, and its many achievements in the fields of education and social services, that could be regarded as a tribute.
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  But the fact is that when I carried out in 1974 extensive consultations with every major body in Wales and every political party—they all came, one after another, to discuss the issues—only a minority wanted a legislative assembly. Our different approach was spelt out in 1974 and we fought the last election on the basis of a difference in approach as between Wales and Scotland.
  Given the kind of powers that the Assembly will inherit from me, I find it difficult to understand how anybody who has studied the matter could make a comparison with a county council. The powers that we are giving the Welsh Assembly are very real policy-making and executive powers over a wide area of government, including some subjects not yet decentralised to my Department: notably further education and much of higher education. Over this wide area of government covering health, education, housing, the environment, roads, and the operations of the Welsh Development Authority and the Development Board for Rural Wales and other nominated bodies, the Assembly will have the same powers that I—and in the case of matters not yet decentralised, other Ministers—now have. It will be able to exercise much closer democratic scrutiny over these matters than Ministers and this House can now exercise.
  During the calendar year so far I and my Department have made well over 200 subordinate instruments, and only a small fraction of these have been subjected to proper democratic scrutiny. A much higher proportion will be so scrutinised when the Assembly takes over this responsibility.
  Last Wednesday we discussed in the Welsh Grand Committee a typical field that will be devolved—that of the Health Service in Wales. The burning issue of the moment in many localities is the capital expenditure programme—which areas are going to get the new district general hospitals and in what order. The demands are of course far greater than the resources available to meet them. I suspect that there is more passion about hospitals in Wales than on many other issues.
  The decisions are difficult and may please some but disappoint many. Is there not a better means of deciding these

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  issues than by one Minister, however well meaning? How much worse it is if the decision has to be taken by a Tory Secretary of State. Is it not more democratic to put such decisions in the collective hands of an elected Assembly? Nobody in the Labour movement has anything to fear from democracy. Those who fear the loss of power are the Tories who, though a minority party in Wales, from time to time get hold of power. It is they who have everything to fear.
  The whole concept of the block fund allows the Assembly to determine its own priorities. I see nothing wrong in that. We on this side of the House attach importance to the language of priorities. It is not only hospitals that concern our people. They want their say as to how much money should go on schools, how much into housing improvement grants, how much on roads.
  I have taken a deliberate decision to concentrate as much money as I could on building a motorway in South Wales. In due course the effort will be switched to the A55 in North Wales. Inevitably, this has meant less money for other roads in Wales. I am confident that this was the right decision. I wish it had been taken earlier.
  In the same way I took the deliberate decision to go ahead with the Bangor District General Hospital. But, inevitably, it meant depriving other areas of new projects while it was being built. Resources are finite, and there was no alternative. But these are major decisions, and others might have taken a different view. Indeed they did, because otherwise the decision to provide adequate finance would have been taken earlier.
  To me, the case is overwhelming—that it is better to rely on the collective wisdom of an elected Assembly than on one individual. How much more so when the political colour of the Assembly at Cardiff is different from that of the Secretary of State at Westminster. Within its fields of responsibility why should not the Assembly order its spending in accordance with its own priorities and philosophy, and with its own evaluation of Welsh needs? For example, it is sensible that under Clause 78 of the Bill we enable the Assembly to distribute Welsh rate support grant in a way that is fully
  1572
  appropriate to Welsh needs. In other fields it is surely right that the Assembly should be able to reapportion resources between the services for which it is responsible.
  Mr. Alexander Fletcher: I am concerned about one matter of which we have had an example today. If a block grant were agreed by the Assembly in Wales, what would happen, regardless of the colour of the Government at Westminster or the colour of the party in control of the Assembly, if the Chancellor of the Exchequer, as he has done today, cut back £200 million on houses, schools, or indeed anything else?
  Mr. Morris: If the hon. Gentleman followed the Bill, he would know that that is the difference between a separate independent approach and that of devolution. That is why one cannot divide the economy of the United Kingdom.
  Mr. Alexander Fletcher: What would happen politically?
  Mr. Morris: The hon. Gentleman will be able to make his own point in his own way in the debate. [Interruption.] There is no need for the hon. Gentleman to laugh. I have dealt with the points one after the other as they have been raised. One cannot isolate the economy of Wales or that of Scotland from that of the rest of the United Kingdom. Whatever difficulty the economy of the United Kingdom faces, it will have its effects on Wales and Scotland in due course.
  An important feature of our scheme is that, following devolution, the offices of Secretaries of State for Wales and Scotland will remain in being. If there is unanimity on anything in Wales, it is on the need to retain the office of Secretary of State. [HON. MEMBERS: "Oh."] I referred to the office of Secretary of State rather than to an individual. There is a difference of view, according to whatever individual is in charge. I did not want to appear to be immodest. There is no doubt that it is important to have a direct voice at the Cabinet table. That is why my right hon. Friend the Member for Huyton (Sir H. Wilson) sought to recognise the needs for Wales to have the first charter Secretary of State. We are pledged to retain that arrangement.

  1573
  Nobody in Wales now wants to go back on that arrangement, not even the Conservative Party.
  That office, however, has changed year by year. In its first year its functions were comparatively few and it had a budget of £48,000. This year, 12 years after its formation, it will be directly responsible, because of the transfer of functions, for £451 million of expenditure.
  With the establishment of the Welsh Assembly the character of the Welsh Office will change. It will lose many of its functions, particularly on the social and environmental side. They will be transferred to the Assembly. But the office will be a major economic Department in Wales, drawing together its recently acquired industrial powers, its new sole responsibility for agriculture and its responsibility for many of the functions of the Department of Employment. The Welsh Office will also be the main point of contact and channel of communication for the Government with the devolved administration. The office will play a major rôle in negotiations with the Assembly over the block fund and in Welsh aspects of primary legislation.
  With my Department, I shall continue my vital rôle of representing Wales in the Cabinet and in the United Kingdom Government. These functions do not overlap or duplicate those of the the Assembly. I shall not in any sense be supervising that elected body's work. Our respective rôles will be complementary. I and my successors will have an essential task in the future, as I have now.
  Mr. Arthur Palmer: I am sure that my right hon. and learned Friend does not object to an English Member asking a question occasionally. He talked of Wales as though it were an island surrounded by the sea. I remind him that Bristol is closer to Cardiff than Bristol is to London. Therefore, will he explain to an innocent English Member why Cardiff should be governed on an entirely different principle from Bristol, despite the Severn Bridge that now unites us?
  Mr. Morris: If my right hon. Friend the Member for Huyton were sitting on the Treasury Bench, perhaps he would apply himself to answering my hon. Friend's question of why we have a Secretary of State for Wales.
  Mr. Palmer: Yes—why do we?
  Mr. Morris: That is an argument, and I am sure that it will be developed in due course.
  The Assembly will exert great influence on the economy of Wales. It will decide planning appeals, determine the trunk roads programme, oversee the work of the WDA and the DBRW.
  Mr. Timothy Raison Mr. Timothy Raison (Aylesbury) rose——
  Mr. Morris: I have already given way 20 times. There are still many hon. Members who wish to take part in the debate.
  Mr. Raison Mr. Raison rose——
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. The House must preserve good temper.
  Mr. Morris: It is a mistake therefore——
  Mr. Raison rose——
  Mr. Deputy Speaker: If the right hon. and learned Gentleman does not wish to give way, he cannot be pressed to do so.
  Mr. Morris: The hon. Member for Aylesbury (Mr. Raison) knows from previous exchanges when he was on the Front Bench how generous I am; indeed, I have never been so generous as I have been today.
  It is a mistake to suppose that the Assembly will not exert much influence on the economy of Wales. On the contrary, its powers of infrastructure planning and development will be very real. But the economy of the United Kingdom cannot be divided. Thus, the WDA's power of industrial investment must operate within United Kingdom guidelines and powers of selective assistance must remain with the Secretary of State. We cannot have one part of the United Kingdom outbidding another for industries: today's advantages would be tomorrow's loss. One could get the situation where Scotland or an English region trumped the

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  Welsh ace by offering better incentives for industry.
  There is nothing in this Bill which seeks to divide the United Kingdom. There is nothing here which derogates from the sovereignty of Parliament. What we propose is a measure which will ensure that within the framework of the United Kingdom Wales and Scotland will have democratically elected systems of government based in Cardiff and Edinburgh and answerable to the Welsh and Scottish peoples.
  This will be a great step forward in democracy. Our proposals have been worked out with great thoroughness. The discussion has gone on for years, and in an intense form for over three years, since the publication of the Kilbrandon Report. Other countries have maintained their political unity and increased their economic strength while allowing considerable autonomy to their constituent provinces, and we can do the same.
  As the White Paper "Our Changing Democracy" said just over a year ago the United Kingdom has never been a monolithic State, and the recognition by this Bill of our diversity within it will, I firmly believe, strengthen and not weaken the fundamental unity of the British people.
  5.41 p.m.
  Mr. Nicholas Edwards: At times during the Secretary of State's arguments with his colleagues, we felt that we were intruding into private grief. A point made by my hon. Friend the Member for Edinburgh, North (Mr. Fletcher) brought us to the heart of the argument when the Secretary of State was talking about the allocation of priorities. My hon. Friend the Member for Edinburgh, North said that while the Assembly would have control over the allocation of resources, it would have no control over, or responsibility for, the provision of resources. He said that it would therefore be a focus of complaint when the Chancellor of the Exchequer acted, as he did today, or on other occasions when things were going less than well.
  The scorn which the Secretary of State pours on the right of the Conservative Party to speak on this issue and the claim that he always makes that he and his colleagues alone speak for the Welsh people looks increasingly thin set against
  1576
  the decline in support for his party in Wales during the period in which he is putting forward these proposals. It is positively threadbare against the background of recent opinion polls which consistently show that considerably more people are hostile to the Bill than are in favour. They show that one-third of the Welsh people are confused and uncertain about the issues.
  Whatever interpretation is placed on these tests of public opinion the latest showed that only 27 per cent. expressed positive approval for the Government's proposals. It surely cannot be that there is that settled consensus that should be the basis for major constitutional change. Advocates of the doctrine of mandate——
  Mr. Dafydd Wigley: The hon. Gentleman said that 27 per cent. was broadly in favour of the Government's proposals. But does he not recall that 35 per cent. of those questioned in the same survey said that they wanted greater powers for the Assembly and that about 23 per cent. were happy with the powers? Does that not make a total of 58 per cent? Many of those who were unhappy with the proposals wanted to go considerably further than is the Government's intention.
  Mr. Edwards: I, too, have read the letter in The Times this morning from Professor Jarman which revealed less than academic respectability in not pointing out what was the first question asked before giving the figures. The first question was "Do you want an Assembly?" and 27 per cent. said "Yes". That was before a different question was asked of those who wanted an Assembly and those who did not. I am not surprised that some of those who did not want an Assembly, when confronted with the certainty of such a body should say that it should have more power. I see the logic in saying that if one is to have an Assembly at all there should be more power.
  Advocates of the doctrine of mandate and students of the life of the Hon. Algy should remember that what really matters about wealth is what is done with it.
  When the Government put forward their Bill, the Western Mail-HTV poll—confirming recent trends and showing

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  that more people support the Conservative Party in Wales than the Labour Party—showed that despite unexampled Government unpopularity, there has been no increase at all in the support for Plaid Cymru since the General Election.
  The Conservative Party's position has been consistently and plainly stated in Wales for several years. There is nothing in these results that persuades us that we have not been speaking for a major section of the Welsh people. The one thing about which there is consensus in Wales—and this is now the shared opinion of 80 per cent. of the population—is that there should be a referendum on the issue. The Prime Minister's statement on that subject was inadequate. It is not enough to be told at this stage that the Government are thinking about it. While we can decide on the details later, I am certain that the majority of people in Wales and of hon. Members demand some certainty before Second Reading that a referendum will take place.
  Mr. John Stradling Thomas: It is my duty to ask the Secretary of State through my hon. Friend the Member for Pembroke (Mr. Edwards) about his view of a telegram which I received this morning.
  Mr. Abse: My right hon. Friend the Member for Ebbw Vale (Mr. Foot) received a similar telegram.
  Mr. Stradling Thomas: The telegram reads:
  "Gwent County Council's Policy Committee today reaffirmed the view that a referendum should be held on the question of a Welsh Assembly as referred to in the devolution Bill. The Council invites Gwent MPs to convey this view to the House and to seek every means to press for such a referendum."
  Mr. Edwards: I shall be interested to hear what the right hon. Member for Ebbw Vale (Mr. Foot) has to say about that subject. Clearly his statement will have an important impact on the way things go on Thursday night.
  I do not agree with those of my hon. Friends who think that the referendum should be held before the Bill is discussed by the House. That so much uncertainty exists and that there is growing evidence in Wales and Scotland of ignorance of the Bill are powerful
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  reasons why a referendum should be postponed until Parliament has decided whether it is prepared to proceed and on what basis. It is important that one should be able to put simple alternatives to the electorate, but at present no clear alternative can be presented. In the present state of public opinion in Wales, it would be a profound mistake for Parliament to seek to impose a Welsh Assembly without the people being allowed to express an opinion. We must have a firm commitment on that before the end of the debate.
  Mr. Abse: Since the hon. Member for Pembroke (Mr. Edwards) speaks so firmly in favour of the need for an expression of opinion on the referendum issue, why did not he and some of his colleagues put their names to the amendment standing in my name, and in the names of more than 30 hon. Members?
  Mr. Edwards: The amendment leaves some doubts about its exact intention and I am not clear about all its implications. I have therefore hesitated to put my name to it, but many of my hon. Friends feel that it will enable the House to consider an important issue in the debate and have added their names to it. That is fine by me. We shall wait and see whether Mr. Speaker calls the amendment.
  My right hon. Friend the Leader of the Opposition spoke of the difficulties we shall find as a result of the Government's decision to combine Wales and Scotland in one Bill. Clearly, differing verdicts in Scotland and Wales in a referendum would cause serious problems. Wales fears that it is to be carried unwillingly along on the backs of the Scots, and it is an odd way to set out on the devolution road by making it infinitely more difficult to arrive at a separate assessment of the needs of the two countries.
  Specific pledges were given by Labour spokesmen while in Opposition that a Labour Government would not tack Welsh Bills on the tail end of English measures and that a Labour Secretary of State for Wales would bring in his own legislative proposals for Wales. It is a pity that those pledges have not been honoured. If ever there were a case for a separate Welsh Bill, this is it. It is no consolation to know on this occasion that

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  we are tagged on to the back of a Scottish rather than an English measure.
  There are three sustainable positions for the devolution debate, and one stands at the opposite end of the range of options from the other two. At the one extremity is the position of the nationalists which is intellectually and in practical terms defensible, though to me unacceptable. I believe that the losses that would be sustained by Scotland and Wales, social, economic, and political, would far outweigh any benefit that could arise from the creation of separate Governments. I do not believe that the price of independence would be acceptable to the people, nor do I believe that there is the slightest desire for it. But I do not challenge the contention that a system of separate government could be devised and made to work, though it would probably involve a substantial lowering of the standard of living of the people.
  The second option at that end of the spectrum is that of federalism. That, too, given the consent of all the people to the fundamental changes that would be required, is no doubt a system of government that could be made to work and that might endure. But, because I believe that Ministers are right in arguing that the English segment of the federation would be disproportionately powerful, it could be established only if there were a desire and a willingness among the English to have their country subdivided into smaller units. I do not discern any willingness, let alone desire, for sub-division and, therefore, I reject that solution in the present circumstances.
  The third option stands at the opposite end of the spectrum. It is to retain a system fundamentally based on our present structure, which is a single Government responsible for the whole of the United Kingdom. There is room for change in the way in which the Government have to obtain consent for their legislation. No doubt we can improve the manner in which the Government's performance is scrutinised and advice is given. What I do not believe will work for long is a system that involves the establishment simultaneously in different parts of the United Kingdom of what will in effect be separate Governments. Fundamentally, I believe that we either have to choose a system based
  1580
  on a single Executive or we have to opt for separation or the federal solution.
  For Wales, I do not hesitate in my choice of the present system, for I believe that Wales has benefited far more from the influence of Welsh Members of Parliament at Westminster and a Welsh Secretary of State in Cabinet than it will ever benefit from a separate Assembly.
  On these Benches, therefore, we feel no sense of embarrassment that our proposals are modest and evolutionary, and that we proffer no miracles to the people. We would continue the process followed by successive Governments which have enlarged the range of responsibilities of the Welsh Office. We would seek to extend the freedom and responsibility of the local authorities, which are the units of government closest to the people. We would seek, through the Select Committee procedure, to enlarge the opportunities for Welsh Members of Parliament to probe, examine and expose the performance of Government and of public organisations. We see a rôle for an enlarged Welsh Council as a body to co-ordinate on an all-Wales scale the extended rôle of the local authorities. I claim that that modest and realistic approach is much to be preferred to the excessive expectations now held out to the Welsh people.
  The Government in the Bill have chosen for Wales, from somewhere in the middle of the range of choice, the permutation which seems to offer the least possible chance of success. They are seeking to create a situation in which one Government have to carry into effect—and to produce—the secondary legislation for a system of law originated by another Government which may be of a totally different political complexion. That is a recipe for administrative and political chaos in any circumstances, but the chaos is bound to be compounded when the Government in Cardiff are to be given responsibility for the administration of most of the social services, while being denied control of the economic policies that produce the resources to fund those social services.
  In those circumstances it is inevitable that every shortcoming in the social services will be blamed by the Assembly in Cardiff on the Government in London. The Assembly will focus discontent and

  1581
  concentrate it in a form likely to create hostility and the maximum friction. When the houses, hospitals or schools are not built or fail to function in the way they should, the Assembly will say, "It is not our fault; it is not our legislation; we are not to blame for the economic mess we are in. It is the fault of all those idiots in London who will not let us produce the miracles of which we know we are capable." That would be a natural reaction in any circumstances, but it is made inevitable by the fact that the nationalist parties will have permanent and powerful reasons for seeing that it happens. They have made abundantly clear again and again that for them the Assembly is to be just a stepping-stone to independence.
  It is entirely fallacious to compare the position of the Assembly with that of local government. Local government is primarily a provider of services. It works within closely defined guidelines but, more important, because it can claim to speak only for a single locality, it cannot challenge the right of central Government to act in the interests of the whole nation. The Assembly in Cardiff will claim to speak for a nation. It is being established because that claim has been recognised. It will, therefore, assert a moral and political authority to challenge the central Government.
  In another sense, too, what is proposed is quite different from the practice of local government, because local government is not involved directly in the legislative process. The Kilbrandon Commission pointed out that there was no break in the chain between legislation on the one hand and the application of administrative decisions on the other. They are part of a continuing process that flows both ways, ideas being translated into action, with the experience gained leading to fresh ideas, fresh laws and fresh action. Under the scheme proposed in the Bill, the chain is to be broken. Two different bodies will each make part of the law. One will have to translate the intentions of the other into practice, though it may be wholly out of sympathy with what is proposed. The creation of the original legislation will become divorced from administrative experience and bedevilled by political conflict.
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  It has been suggested that in some way the scope for conflict will be mitigated by the proposed committee structure, which is supposed to bring the minority parties and the Back Benchers in on the decision-making process and, therefore, to contribute generally to collective good will and understanding. That was the picture painted by the Secretary of State. I do not believe it for a moment. It seems clear to me that the carefully cultivated distinction between the collective responsibility of the Welsh Assembly and the executive responsibility that is proposed in Scotland is a sham. It may be splendid in academic theory, but it will not be like that in practice.
  The reality is that Wales is to have an Executive and a Chief Minister chosen by and from the majority party, just as in Scotland. The Welsh Assembly is to appoint committees to exercise its devolved powers and the committee may—and I dare say will—arrange for those powers to be exercised by the leader of the committee.
  There is to be one super committee known, as the Executive Committee—Cabinet would do equally well—which will consist of the leaders of the other committees, and which will appoint a chairman—to be known, incredibly, as the Chief Executive. Whoever dreamed up the idea of giving the elected leader of a Welsh Assembly the same name as in local government is allocated to the senior local government officer needs his head examining. But I can understand the reluctance and fear of the Government in regard to using the title Chief Minister or even Prime Minister. Whatever we call him, he will be quite a guy.
  The Executive Committee may, but it need not, include additional members apart from the chairmen of the other committees, although only up to one-third of its number.
  The Government have produced what seems to me to be a significant change from what was produced by the Kilbrandon Commission in paragraph 899, because it is clear that the Executive Committee may exercise such functions as are delegated to it by the Assembly—Clause 30(2)(a) refers to that—while the

  1583
  Kilbrandon Commission specifically stated that the committee
  "would not have functions delegated to it by the assembly".
  There we have the executive body which will in fact decide policy and be responsible for the administration of the devolved power. The chances are high that it will consist entirely of members of the majority party. Behind all the complex wordings and careful distinctions of the Bill, therefore, we shall have a Cabinet and a Chief Minister for Wales. Indeed, the Kilbrandon Commission in that same paragraph, 899, made it quite clear that it was its view that that would happen. It is a form of government, and although it will be without economic powers or the ability to initiate primary legislation, it will be uniquely placed to focus discontent and it will be sufficiently frustrated to want more power.
  Wanting more, it will take it from where it can get it. Finding central Government obdurate, it may well turn instead to the local authorities. The financial structure already seems to carry that clear implication, for how can the consultation between the Assembly and the Secretary of State, laid down in Clause 78, do other than weaken the local authorities' own involvement in negotiations both on the Welsh share of the rate support grant and on its distribution?
  I can see no way in which the growing involvement of an elected Assembly in matters such as local government, education and housing can do other than weaken the responsibility of the local authorities for these matters. Indeed, that that is intended is implicit in any suggestion that one tier of local government will have to be eliminated if an Assembly comes into being.
  That proposal, freely advocated by the Secretary of State—as it was again this afternoon—must involve the removal of some powers from where they lie at present, with the county council, to an Assembly in Cardiff. [HON. MEMBERS: "Why?"] I quote from the consultative paper entitled" Devolution: The English Dimension", which states the matter clearly in paragraph 54:
  "Many functions of the counties would therefore need to be raised to the new regional authorities".
  If that is true in England, it must be true in Wales as well.
  1584
  The easy cheer gathered in at present by the suggestion that the county councils might be abolished will turn to fury when the people discover that what has happened is that the decision-making process has been taken even further from them.
  That the change is advocated from the Government Benches also makes a total nonsense of the repeated assertion by the Secretary of State—he made it again and again this afternoon—that in setting up an Assembly we would not be creating an additional tier of government. Ministers may play with words as they like. If it makes them happy, let them believe that a new Assembly does not represent an extra tier. Let us hope that it is just a figment of the imagination. But to me, and to those who will have to pay for it, it looks all too solid and real. We shall have to trek off to the polls to elect it in addition to electing a European Parliament, a Westminster Parliament and the local councils.
  The Members we elect may not do anything additional but we shall have to pay them. As the hon. Member for Pontypool (Mr. Abse) pointed out on Monday, they will cost us £31,250 apiece on the Government's own calculations—and that is before they decide what their own pay should be.
  If the Assembly is only to take over a job at present being carried out by other people, if it is a mere substitute, why do we have to have 1,300 more civil servants in Wales alone than we have at present, at an additional cost of £12½ million a year? If adding to the burden of the citizens an additional organisation almost as big as the Welsh Office is not, in the Secretary of State's mind, adding an additional tier, so be it. He is entitled to his own private thoughts, after all, and why should we cause him pain by seeking to disabuse him?
  But whatever the Secretary of State believes, I know that the Welsh people will feel—and, indeed, the United Kingdom taxpayers who will have to pay will feel it as well—that it is pretty strange that a non-existent extra tier of government is to cost in Wales more than it is in Scotland, when Scotland will not only have to pass laws but has a population about double that of ours in Wales.

  1585
  The right hon. Gentleman and his colleagues do themselves no credit at all in playing with words in this way and in seeking to mislead the people. But the people will not be misled. They know perfectly well that what is proposed is more government, more complicated government and more expensive government—and it is a prospect that fills most of them with horror.
  It is always at that point that the Secretary of State, and, indeed, the Lord President, confronted with the undeniable increase in cost and bureaucracy, declare that it is all justified, and that it will be a source of joy to the people because it will represent more democratic government. Labour politicians, and particularly the Lord President himself, usually use that phrase, and couple it with a good deal of abuse of the Conservative Party, at a moment when they are about to do something profoundly democratic. Therefore we are always a little sceptical about these assurances.
  Hesitating to suggest that our procedures here are wholly undemocratic, Ministers prefer to concentrate the argument upon the nominated bodies. We are asked to believe that a whole regiment of such organisations is trampling across the face of Wales, and that suddenly all these organisations will disappear. But they will not. Almost all the most important of them will still be necessary. The specialist skills will still be needed.
  I well remember the Under-Secretaries of State—I am sorry that they are not here today—during the Committee stage of the Welsh Development Agency Bill speaking of the need to ensure that the best talent among the people of Wales is available to the board of the Agency. I remember them talking of the need to find a balance between the requirement of a substantial measure of independence for the Agency and the need for accountability.
  The same is as true today as when the words were uttered. There will still be a need for those engaged in tourism and travel to be involved in the affairs of the Tourist Board, and for specialists in the arts to be consulted in running the Arts Council. The reality is that the bulk of the nominated bodies will continue to
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  exist. The only difference will be that they will be nominated by the Chief Minister sitting in Cardiff rather than by the Secretary of State sitting in Cardiff.
  That may or may not produce better nominations, but I hardy think that it is likely to cause that revolution in practice that is now held out to the Welsh people. The same bureaucrats will take much the same decisions. Many of the same people will deliberate, or at least I hope they will, because it would be tragic if so many who contributed their specialist expertise and talent to so many activities were to be driven or frightened away.
  It is not immediately self-evident why organisations such as the National Library, the National Museum, the Historic Buildings Council, the Welsh Arts Council and the Sports Council should be better run by party politicians or by the committees of an elected Assembly.
  No doubt there are some nominated bodies which can be dissolved and whose functions can be taken over by the Welsh Assembly, although I have yet to hear, in this or any earlier debate, a single suggestion as to which they might be. I forecast that they will be few, that the Welsh people will not greatly notice the difference, and that if they do it will not necessarily be for the better.
  The one positive point that can be made is that there may well be more frequent opportunities to debate the work of these organisations, but we all know from our experience here that there is a genuine dilemma that cannot easily be resolved, because State organisations, nationalised industries and nominated bodies must be allowed to work free from day-to-day interference by politicians. A Parliament or Assembly can lay down guidelines. It can debate what is done. It can criticise performance. But in most cases day-to-day management, operational control and even major policy-making will have to remain with specialised bodies, and if they are to attract men and women of quality they will have to be given considerable scope and freedom.
  For all those reasons, I believe that this point about democracy and the nominated bodies is absurdly exaggerated. England, which is to be left with them, does not appear to think that they

  1587
  constitute a sufficient argument for a separate Assembly. When they know the cost of achieving this very modest extension of democracy, I doubt whether the Welsh people will, either.
  There is a real risk that these changes will be positively damaging to Wales if they lead to the divorce of the Welsh organisations from their English counterparts. The Welsh Arts Council, for example, benefits immeasurably from the fact that its chairman is a fully participating member of the Arts Council of Great Britain. The financial benefits are even more substantial. I wonder how the Welsh National Opera would survive if it ever had to rely solely on money voted by the Welsh Assembly instead of, as at present, receiving substantial support from outside Wales. We shall be anxious to have an explanation of the financial arrangements for the arts, libraries and museums. The separation of the financial arrangements seems also to carry dangerous implications for the Forestry Commission, which will have to operate under a new structure of unnecessary complexity.
  Finally, while referring to the question of separation and duplication, I would say that it is a very dubious advantage that the British Tourist Authority should cease to encourage people living in Great Britain to take their holidays in Wales, with the job being done solely by the Welsh Tourist Board. It is not just a disadvantage but obviously ludicrous that power should be provided to enable us to have different summer time and different bank holidays in Wales compared with the rest of the United Kingdom.
  Mr. D. E. Thomas: Might it not be appropriate for St. David's day, for example, to be a bank holiday in Wales?
  Mr. Edwards: No doubt we may have St. David's day as a bank holiday, but even the Welsh, who are loyal to St. David, would consider it an infernal nuisance to confront a whole series of different bank holidays and different times when they crossed the Severn bridge or went into North Wales. It would be nonsense in so small an island.
  There are other aspects of the Bill which cause many people in Wales great
  1588
  concern. In the rural areas, and particularly in the North and West, in spite of what the Secretary of State said, they fear the domination of the population mass in Glamorgan and Gwent. Isolated from those with similar interests in England and Scotland, they believe that their views will be subordinated to the population crowded into the area between Llanelli and Newport. It is incredible that the only change the Government have made to the electoral arrangements since their original proposals increases the voting disparity and gives more seats to the industrial South than to the rural North. The change was made because, in the words of the supplementary White Paper
  "This system of division would give low representation to several widespread rural constituencies".
  Three out of the five "widespread rural constituences" which were given an extra seat were Abertillery, Ebbw Vale and Merthyr. Even more worrying to those who understand politics and government is the fact that what the Government propose must weaken the Welsh Members of Parliament at Westminster and the Secretary of State in a British Cabinet.
  But to me what is most alarming about what is proposed is the way in which expectations will be raised and the certainty that they will be disappointed The Bill will do nothing for jobs, nothing for economic recovery and nothing to provide the resources needed to sustain the social services. An Assembly that has no financial powers and has the unenviable task of carrying into practice the legislative proposals of another Government can only be a focus for conflict and disillusionment on a massive scale.
  The expectation is held out to the people that in some way the situation they face will be improved by this change in our constitutional arrangements and that they will find the bureaucrats and the nominated bodies responding in a totally new manner to their wants. It is a colossal fraud, based not on principle but on political expediency. There will still be bureacrats, but there will be more of them. There will still be nominated bodies. Far from decision-making coming closer to the people, some of it will undoubtedly he taken away from local authorities.
  The most frightening consequence of what is proposed is the anger that will

  1589
  be aroused in the people when they finally have brought home to them the extent of the fraud, when they still find themselves confronted by the same harsh economic facts of life and, longing principally to be left alone by Government, to be left to their own devices, find that they must support a huge, costly additional tier of politicians and bureaucrats that can do no more than to act as a place to vent their anger and as the fulcrum for the destruction of the United Kingdom.
  6.16 p.m.
  Mr. Douglas Jay: It is perhaps with some diffidence that any English Member intervenes in the debate. I felt that the hon. Member for Pembroke (Mr. Edwards), whatever we think of the Bill, greatly exaggerated the horrors that will flow from it.
  Speaking as one who has devoted a good few working years, from war time onwards, to trying to bring new industry to Scotland and Wales, I want to urge my Scottish and Welsh friends to be guided by experience rather than doctrine in understanding the enormous harm that could be done to Scotland and Wales if the economic link with England were severed. Since the early war years, when my close connection with these efforts began, the main drive and impetus to bring new employment to Scotland and Wales has come from England, from the central Government, supported of course by the authorities in Glasgow and Cardiff. The great majority of the successful firms that went to Scotland and Wales came from the Midlands, the South of England or—in the case of Scotland—the United States. They were guided there by the central Government authorities in London. If those efforts had not been made largely from the centre, in partnership with the Scottish and Welsh authorities, I believe that unemployment would now be much higher, perhaps twice as high as it is, in Scotland and Wales.
  I shall give a few concrete examples. The main new industrial estates in Scotland, which have counted so much in providing employment, were originally suggested and supported from London, though the sites were chosen in partnership with the Scottish authorities. I remember at the beginning of those efforts
  1590
  having to persuade Lord Bilsland, then of Scottish Industrial Estates Ltd., that we meant business—and finance—in asking him to go ahead with these massive developments of industrial estates in Scotland. When he was persuaded, he went ahead with those projects most enthusiastically. As a result, we have the Newhouse estate, where thousands are employed in Honeywell and other firms. We also have a number of other Clydeside and Lanarkshire estates and the Dundee estate, which has meant so much to the workpeople in that area.
  Similarly, Pressed Steel, which wanted to expand in Oxford, was persuaded by the Government in London to take the original factory at Linwood. If that had not happened, Rootes would not have gone to Linwood and Chrysler would not be here today, employing many thousands of workers. British Petroleum at Grangemouth employs many thousands of people, because, when the firm was AngloIranian, it decided in London, encouraged by the Government, to locate its vast new refinery and petro-chemical works at Grangemouth.
  If it had not been for guidance from London and a firm IDC policy, NCR, Honeywell, Caterpillar, IBM and British Leyland would not be in Scotland today. That is not just my view. Lord Polwarth, who understands industrial realities in Scotland, said in a forceful letter to The Times on 2nd December:
  "my experience in industry and finance in Scotland, England and overseas, as well as two years in Government, have now convinced me that an additional … layer of government can only damage, rather than help, the prospects for economic prosperity and inward investment on which Scotland so much depends."
  Similarly in Wales the major new industrial estates at Bridgend and Hirwain were suggested from London. The large Swansea estate was proposed by the local authority in Swansea and supported and financed from London. All the major new firms, including ICI at Pontypool, Hoover at Merthyr and Ford and Mettoy at Swansea, were steered to Wales by the Board of Trade in London. The great new steelworks at Port Talbot, Trostre, Velindre and Llanwern were located in Wales by decisions of the central Government; and the same has been true of a host of smaller projects, including the Mint and the major new industrial estate

  1591
  of the 1960s at Llantrisant. Where would employment in Wales and Scotland be without these major new enterprises?
  Mr. Gwynfor Evans: Is the right hon. Gentleman not illustrating the natural consequence of centralism for peripheral regions? Does this not always happen? Is that not why the Government must help peripheries directly? Does one find this situation in Finland, Sweden or Norway? If not, why not?
  Mr. Jay: It shows that the periphery of an industrial area is likely to suffer unless there is a deliberate planning policy of directing new employment to the periphery rather than to the centre.
  I can quote figures which show how great the loss of employment might have been over the past 30 years if the drop in the number of jobs in the coal industry in Scotland and Wales had not been counteracted by increased employment in new industries. Between 1948 and 1974, employment in the coal industry in Wales fell from 136,000 to only 39,000. But employment in Government-owned factories alone—not counting private projects and the new steelworks—rose from 14,000 to more than 67,000.
  In Scotland, the figures have been even more striking. Employment in the coal industry—as was foreseen in the early post-war years—fell from 90,000 to 29,000; while employment in new Government-owned factories rose from 26,000 to 82,000.
  It is clear that had it not been for development area policy, planned and supported from the centre, unemployment in Scotland and Wales would have been in each case at least 100,000 greater. Some further striking figures were published only last week by the Department of Applied Economics at Cambridge which confirm what I have been saying.
  This Cambridge report says that between 1960 and 1971 alone, Development Area policy produced about 300,000 new jobs in development areas. Even if one assigns only 25 per cent. of this number to Wales and 25 per cent. to Scotland—which is probably an underestimate—it suggests that the figures which I gave earlier were too low and
  1592
  that unemployment today would be much higher even than I said.
  The Cambridge report adds that development area policies have
  "worked principally by diverting new factories into development areas from more prosperous regions. There is now considerable evidence to suggest that they have been powerful in this respect."
  That is an interesting independent account of what has happened.
  I also urge my Scottish and Welsh colleagues to understand two other rather sobering facts. Because Northern Ireland was separated administratively, during these years, those of us with responsibility for directing policy did not feel the same immediate responsibility for Northern Ireland as we felt for Scotland, Wales and the North-East Coast of England. As a result, when major English and American firms asked for advice from the Board of Trade on location, they were more often steered to Scotland and Wales than to Northern Ireland. Perhaps it was wrong, but that is how administration works, and it is one of the reasons there are so many major firms in Scotland and Wales and one of the main reasons for Northern Ireland having suffered very much higher unemployment in the past 30 years than Scotland and Wales.
  The most sobering fact, which is seldom mentioned and which was a surprise to me, is the remarkable absence in recent years of major native industrial enterprise in Scotland or Wales. The vast majority of new projects which brought new employment came from the Midlands or the South-East of England or from the United States. Worse than that, too many established Scottish firms, from North British Locomotives to Fairfields and many others, contracted or collapsed during that period.
  Mr. John P. Mackintosh: Did my right hon. Friend hear the fascinating speech by a Northern Ireland Member last night in which he accepted that Northern Ireland had done less well economically and added that when the devolution experiment started neither the majority nor the minority party in Northern Ireland wanted it, yet 50 years later the one thing which unifies those parties is a desire to return to devolution, despite the economic problems?

  1593
  Is this not a matter which my right hon. Friend must take on board?
  Mr. Jay: I was coming to that point at the end of my speech. So far I have merely stated what the economic effects have been, whether we like them or not.
  Too many Scottish firms have gone out of business during this period. I remember all too well the chairman and managing director of Fairfields coming to see me at the Board of Trade on a Tuesday in 1966 and saying that the firm could not go on paying its employees' wages beyond the Friday of that week and that only £1 million of public money put in very quickly could save the firm.
  Mr. Emlyn Hooson: I agree with the basic premise of the right hon. Gentleman that it would be a disaster if England, Wales and Scotland were separated economically, but does he not agree that the dispersal of industry policy followed by West Germany has been at least as successful as the policy followed in this country?
  Mr. Jay: I am not saying that other countries have not followed successful policies, though I doubt whether West Germany ever had such severely depressed areas as we had in earlier years.
  The Government found £1 million of public money for Fairfields in less than a week, though heaven knows how we did it. For that reason that yard is still operating today. Incidentally, in the case of Scotland, if Rolls-Royce at Hillington and Chryslers at Linwood had both collapsed, what would be the number of unemployed on the south side of the Clyde today?
  Therefore, I invite those who have the future of Wales and Scotland at heart to realise how disastrous it could be if the economic and industrial link were severed between those countries and the heart of British industry and British Government. For those reasons, I would feel it very difficult—I think I am coming to my hon. Friend's point—to bring myself to vote for the Second Reading of the Bill, unless I feared that many people in Scotland and Wales might have been so misled by facile propaganda as to believe that a severance of the economic links would do them good rather than harm.
  Mr. Norman Buchan: I have been following my right hon. Friend's argument with some interest. Surely his argument is based upon a total economic separation, and not on the kind of proposal in the Bill. On the limited example of Northern Ireland, which has a very large number of deep and peculiar problems related to it, none of this argument invalidates the necessity for the Bill.
  Mr. Jay: I trust that is so. All I am saying is that if it involved the severance of the economic link, it would do great harm. I hope that is generally accepted. It is not possible to establish simply from the text of the Bill whether that is true. Despite this, if the people of Scotland wish to make experiments of this kind, I very much doubt whether it is for us here to deny them the opportunity to do so. But I hope they will do so, if they do, with their eyes open. I believe, therefore, that it would be the right course to give this Bill a Second Reading and to let the issue which my hon. Friend has raised be argued out in Committee and on Report.
  In those circumstances, I see a strong case for giving both the Welsh and the Scottish people separately, the chance to vote in a referendum for or against the proposals which finally emerge from debate in this House. It seems to me that they ought to know what they are voting for before being asked to vote in a referendum. That way I should hope that we can at least reach some sort of compromise which will strengthen what to me matters most—employment in Scotland and Wales, and the unity of the United Kingdom.
  6.34 p.m.
  Mr. Peter Thomas: I very much agree with much of what the right hon. Member for Battersea, North (Mr. Jay) has said. I find it hard to disagree with him on any one matter, but nevertheless I feel that I must. At the beginning of his speech the right hon. Gentleman said that he thought that my hon. Friend the Member for Pembroke (Mr. Edwards) had exaggerated the situation. I wholly disagree with that. My hon. Friend made a compelling and a devastating analysis of the proposals for Wales. In the end, it turned into an indictment which was unanswerable.

  1595
  It was interesting that the Secretary of State for Wales, before my hon. Friend had spoken, had quite clearly anticipated that an attack would be made and that it would be difficult to answer. The Secretary of State gave the impression, when he made his speech, that he was in the dock, and he made a forcible defence which in some ways could almost be described as an apologia for what he was presenting to the House.
  I adopt what my hon. Friend the Member for Pembroke said because I think that his argument today was one which most hon. Members would accept. It is a bad Bill—and many hon. Members have said that it is—because it provides no answer to the serious problems facing the people of Wales and Scotland today. I cannot help but feel that people outside this House may think us mad that at this time of grave crisis, we are preparing to spend weeks and months on a costly bureaucratic constitutional experiment, support for which from any part of the House can be described as only lukewarm. How bad this Bill is will be well demonstrated when it reaches Committee, if it ever does. The Bill is more than bad. It is shameful. It has come into being not as a result of a genuine search for better government, but for other and much less worthy reasons.
  The Secretary of State got into some difficulty when he tried to tell us about the history of the Labour Party in respect of devolution. He knows perfectly well—as I suspect do most of his hon. Friends who entered into that short debate—that the Bill was conceived by an initial loss of nerve and a gross misjudgment of the significance of certain by-election results 10 years ago. The Labour Government were not the only ones to misjudge it. The Conservative Party also misjudged the situation in Scotland to some extent.
  However, the reaction of the then Government to their misjudgment was to resort to short-term and short-sighted political expedients. I include in that, without apology, the setting up of the Crowther-Kilbrandon Commission, which most of us at the time were well aware was a blatant attempt to put off for as long as possible the responsibility of decision. After years of inquiry and deliberation, those commissioners,
  1596
  excellent and worthy men though they are, produced reports outstanding as a combination of intellectual complexity and emotional simplicity, in which the only unanimous conclusion of major significance was that the unity of the United Kingdom must be preserved.
  By the setting up of the Royal Commission the then Labour Government gave new credibility and a stimulus to nationalist and separatist movements which benefited even more from the votes of those who were disgruntled or disillusioned with the main political parties. No one can persuade me, for instance, that the unprecedented vote for Plaid Cymru at Caerphilly in the 1968 by-election or the vote it received at Merthyr Tydfil in 1972 represented a new wave of support for Home Rule for Wales. Of course they did not, and subsequent General Election results showed that, but the Labour Party in Wales lost its nerve. It thought that by going half-way down the path to separatism it could meet the enemy and destroy it. How wrong it was. All that it did was make that path more respectable and easier for its disillusioned supporters to travel along.
  I suggest that it is of some interest to hon. Members to consider these contrasts. In the new counties of Gwynedd and Dyfed, in 1966, the Labour Party held all eight seats. Today the Labour Party holds only two. The seats that it has lost were not taken away from it by just Plaid Cymru. Plaid Cymru, the Conservatives and the Liberals all gained seats. In each one of those eight seats the Labour candidates vigorously proclaimed their commitment to an Assembly for Wales.
  We have heard the hon. Member for Bedwellty (Mr. Kinnock) and the hon. Member for Pontypool (Mr. Abse). Both of them have consistently been well known and uncompromising as opponents of devolution. When one looks at the results in their constituencies in the last General Election one finds that not only their votes but their majorities increased. I think that the same could be said of the hon. Member for Aberdare (Mr. Evans), who has also been uncompromising in his attitude towards devolution.

  1597
  In the last General Election, which was not a particularly good one throughout the United Kingdom for the Conservative Party, every Conservative candidate in Wales supported the policy which was spelt out so clearly today by my hon. Friend the Member for Pembroke—the Conservative policy for Wales that I had announced some time previously at a meeting at Llandrindod. This policy stated firmly that we as a party were opposed to an elected Assembly. Wales was the only region in Britain in which no Conservative seat was lost. In every seat that we retained, Plaid Cymru was at the bottom of the poll.
  The truth is that an elected Assembly for Wales was hardly an issue in most parts of Wales during the last General Election, and in fact it has hardly been a real election issue for the last 10 years, and well back before then. Admittedly, it became an issue in those constituencies that Plaid Cymru now represents. It was an issue because that is what Plaid Cymru stood for. The Labour candidates, Plaid Cymru's opponents, also stood for an Assembly. However, Plaid Cymru Members know—particularly the hon. Member for Carmarthen (Mr. Evans)—that they are in this place today to a great extent because of tactical voting on the part of voters who traditionally would be Conservative or Liberal in order to keep the Labour candidate out of the seat.
  Mr. Wigley: I can speak for my constituency. Will the right hon. and learned Gentleman not admit, having been a Member of Parliament for an adjacent constituency for some time, that in the Caernarvon constituency the Plaid Cymru vote built up over a number of years and was a phenomenon more related to the generation than any other factor, and that the final stage, when we won the seat, was a relatively small shift of votes and not a major tactical move?
  Mr. Thomas: Yes, and I also go as far as this. As the hon. Gentleman knows, I represented the other half of the county for 15 years. Plaid Cymru was then nearly always at the bottom of the poll. The interesting thing is that my hon. Friend the Member for Conway (Mr. Roberts) stood in that half of Caernarvonshire, the Welsh-speaking half, firmly opposed to an elected
  1598
  Assembly, and Plaid Cymru was at the bottom of the poll and he won. Next door, the person who succeeded Lord Goronwy-Roberts stood for an elected Assembly. He, therefore, gave credibility and respectability to that, and the contest was between the hon. Member and the Labour candidate, who might have won the seat, but the hon. Gentleman knows only too well that there was tactical voting in his constituency, and by reason of that he now holds the seat, and has held it now for two General Elections. I mention that because, as I have said, the truth is that an elected Assembly in Wales has not been an election issue, and there is not a demand for it in Wales.
  Quite clearly, this Bill commands very little support in Wales. It was interesting that my hon. Friend the Member for Pembroke mentioned the poll that was conducted recently by the Research and Marketing Survey Company for the Western Mail and HTV. Both the Western Mail and HTV have been very active in promoting support for an Assembly in Wales. The House should know the figures. Some 27 per cent. gave support to the Bill, 40 per cent. said firmly "No", and 33 per cent. were not interested.
  If that poll is to be called in aid, as it was by the hon. Member for Caernarvon (Mr. Wigley) in a somewhat misleading way when he said that 35 per cent. said that they would wish to have greater powers, it should be borne in mind that those polled were asked a question which postulated an answer on a fait accompli; in other words, assuming that the body was actually in existence. They were asked "The body is in existence. Do you think that it should have more powers or fewer powers?" It certainly had no reflection whatsoever on the one question that matters to this House—whether there is support in Wales for the Bill. Only 27 per cent. showed support for the Bill, but 79 per cent.—that is eight-tenths—thought that we should have a referendum. One thing is absolutely clear. The Government must commit themselves to a referendum. I hope that they will do that before the Bill becomes law.
  In relation to the poll that I have mentioned, the hon. Member for Caernarvon will remember that people were asked what their voting intentions would be if

  1599
  an election came on the next day. The poll showed that the majority, 33 per cent. as opposed to 30 per cent., would vote Conservative, 30 per cent. would vote Labour and only 11 per cent. would vote Plaid Cymru. In other words, the majority of the people polled said that they would prefer to vote for a party whose policy was opposed to an elected Assembly.
  I have referred to Wales because it is clear that hon. Members know that I have a considerable interest in Wales and have had for most of the time that I have been a Member of this House. I do not claim to be able to speak with any authority about what the people of Scotland may wish, although I was very impressed by the contribution made last night by my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor). However, I am wholly opposed to what is proposed in the Bill for Wales.
  The Secretary of State is proposing an executive body which from its inception will show increasing discontent with the limitation of its powers and its functions. It will be in sustained and mounting conflict with the Welsh Office, Whitehall and local authorities. The County Councils Association is absolutely appalled at the prospect facing its constituent authorities in Wales. Far from being a vehicle to promote partnership, the Bill will be used to promote discord and disunity, and will move us further and faster along the road to separation.
  The Welsh Office, which in the past 12 years has grown in influence and stature and which, through its Ministers and officials, has brought the central Government close to the Welsh people, is to be demoted. As time goes on its influence and role in Wales and Whitehall will rapidly diminish. The Secretary of State will be stripped of his executive powers and degraded into eventual oblivion. Once the Bill is passed, in my view there will be no justification for the holder of that office to remain in the Cabinet.
  As for Welsh Members of Parliament, they know that if the Bill is passed they will become politically enfeebled, and, as there can be no logical answer to a demand for a diminution of their numbers in this House, they will have no defence against it.
  1600
  That is a prospect which I, as a former Secretary of State for Wales, and also as one who has an abiding interest in and love for Wales, view with great dismay. Tomorrow, without hesitation, I shall vote against this Bill.
  6.52 p.m.
  Mr. Roy Hughes: It was good to hear the right hon. and learned Member for Hendon, South (Mr. Thomas) once again, even though he spoke from the obscurity of the Back Benches. As for his references to bad Bills, he is undoubtedly an expert on these matters, as during his tenure of office as Secretary of State for Wales he introduced quite a number of Bills which did immense harm to the Principality when they eventually became law. One need think only of local government, the National Health Service and the water authorities, though I could mention other examples.
  The right hon and learned Gentleman spoke of the Labour Government acting from expediency. The facts and figures that he gave about election results in Wales seem to indicate that the Labour Party was not acting from expediency at all but was acting because it felt that the proposals now in the Bill were good for the Principality.
  I welcome the Bill without hesitation, because I believe the Government's measures to be both reasonable and logical. First, the Bill will, as the Secretary of State said, make democratically accountable those nominated bodies which have proliferated in Wales over many years. We know that these bodies are invariably manned by Tories and their supporters.
  Second, the Assembly will become the top tier of local government in Wales. As the Secretary of State said, one of the first tasks of the Assembly will be to draw up plans to simplify the structure of local government in Wales. It will be necessary to rectify the costly and bureaucratic structure of local government organisation which was imposed on Wales by the last Conservative Government. My constituency of Newport has suffered badly from this reorganisation, both in loss of status and identity and in the fact that ratepayers have had to pay an awful lot more for a less efficient service.
  Sir Raymond Gower: Could the hon. Gentleman explain why, for a recent "Any Questions" programme held in Newport, with a large audience collected on an all-party basis, only about half a dozen people could be found who were in favour of the Bill?
  Mr. Hughes: I know nothing at all about "Any Questions". I find the programme an absolute bore. There was no reference to it in the Welsh Press, either.
  The points I have made about nominated bodies and local government bear out the logic of the Government's proposals for Wales. I shall not deal with Scotland, which is a separate subject entirely.
  Mr. Hooson: Not in this Bill.
  Mr. Hughes: The fundamental point about the Government's proposals, as I understand them, is that they have nothing to do with separation. We must get that absolutely clear. Why, then, do we have this artificial controversy? One of the reasons for it is that the Government have not put over their case in Wales as they might have done. In a democratic society, that obviously needs to be done.
  I am sorry that my hon. Friend the Member for Pontypool (Mr. Abse) is not here, because I shall make a number of references to him. There is no excuse for the hysterical outbursts on this subject that we hear from him from time to time. He has played on all the fears and anxieties of the people of Gwent and Monmouthshire, and some of his utterances could well have been referred to the Race Relations Board. I find it very difficult to understand why the media pay such attention to his remarks.
  Last Friday in the South Wales Argus, which is printed in my constituency of Newport—I see that the Lord President of the Council has the extract in front of him—there was a disgraceful headline, based on the remarks of my hon. Friend the Member for Pontypool, to this effect: "Be ready for a referendum if you do not wish to be a foreigner in your own country." That is absolute rubbish. I speak as someone who has lived in Monmouthshire for just about all my life, with members of my family in many parts of the county. The hon. Member for Pontypool has never lived in Gwent.
  1602
  The Government's measures for Wales are modest in the extreme. I made a considered reply immediately to that sensational headline in the local paper, pointing out what damage it was doing to the policy of the Labour Government in this respect, as well as to my own position as Member for the constituency in which the paper is printed. So far, my reply has not been printed, presumably because the newspaper has not yet been given permission to do so by the hon. Member for Pontypool.
  Even if the Government's proposal is unpopular, is it to be said that a Government legislate only for measures which are popular at a particular time? I dare to suggest that there would be a number of items in the Government's present programme, or that of the previous Government, for that matter, which would not find overwhelming favour.
  The late Mr. Sydney Silverman campaigned for the abolition of hanging. If that issue had been put to a popular vote, I wonder whether he would have been successful.
  Mr. Abse Mr. Abse rose——
  Mr. Hughes: My hon. Friend must wait a minute. I have a few more references to make to him yet. Then there was the question of the reform of the law relating to homosexuals which my hon. Friend the Member for Pontypool pursued with such zeal. If that issue had been put to a popular vote in Newport, I should have found it difficult to get a majority for him.
  Mr. Abse: I understand that in my absence my hon. Friend, without giving me notice, suggested that some of the comments that I have made are capable of being referred to the Race Relations Board. I put it to him that any Assembly that comes into existence in Wales will be an Assembly that has been demanded by the Welsh nationalists. Therefore, those attending there will have to be bilingual. It will mean that the civil servants who will be required to service the Assembly will have to be bilingual. This will inevitably mean that what will come into existence in Wales will be a Welsh-speaking bureaucratic elite and that in Wales English-speaking Welshmen will become foreigners in their own land.
  Mr. Hughes: My hon. Friend's interjection has borne out my point most adequately.
  Then there is the question of a referendum. We had one on the Common Market issue. My right hon. Friend the Member for Huyton (Sir H. Wilson) said that he regarded that as a one-off job. I took quite a part in the campaign before that referendum and I thought that it was the con trick of the century. In view of my experience on that referendum, I am not anxious to have another. However, this is a matter for the Government to decide. I would say from my experience in Wales that the demand for a referendum, if such a demand exists, has been artificially created, and on a false promise.
  The Government are merely honouring the clear commitment in their election manifesto of October 1974:
  "The next Labour Government will create elected assemblies in Scotland and Wales."
  There were no ifs, buts or maybes. What is more, that paragraph in Labour's election manifesto was put in at the unanimous request of all Welsh Labour Members.
  Prior to the February 1974 General Election, a host of meetings was held. Indeed, at one stage the Welsh Labour Group was meeting almost every day of the week on this subject. That is no exaggeration. I quote from the minutes of a meeting on 6th November 1973, and I will supply a copy of the minutes to any Member who requires them:
  "Unanimous agreement was reached on the Group's attitude towards the various recommendations of the Kilbrandon Report at a specially well attended meeting (26 members present) of the group today."
  The minutes say that 26 members were present. There was one member missing. That was the Prime Minister, who as Home Secretary had been responsible for the establishment of the Kilbrandon Commission which recommended devolution for Wales and Scotland.
  The minutes go on to say:
  "The group welcomed the establishment of an All Wales Elected Assembly with real powers as the best means of exercising closer democratic control over those distinctive features of Welsh life."
  I stand by the promise which was made in that document.
  Mr. Abse: Without going into the history of these events—who was present at the meeting and who was not—would it not be of interest to tell the House and the people of Wales of the strange situation that exists at the moment? The Secretary of State for Wales has an empty seat behind him; he is the only member of the Cabinet who cannot have a Parliamentary Private Secretary of his own. Following the resignation of my hon. Friend the Member for Aberdare (Mr. Evans) because of the Secretary of State's views on devolution, not one Back Bench Welsh Member was prepared to support these proposals.
  Mr. Hughes: The Secretary of State—[Interruption.]
  Mr. Deputy Speaker: Order. We shall make better progress if we can hear what the hon. Gentleman is saying.
  Mr. Hughes: The Secretary of State can answer for himself about what appointments he makes. The question I pose is whether my hon. Friend the Member for Pontypool was at these meetings or whether someone was impersonating him. He was part and parcel of the decision.
  Mr. Abse Mr. Abse rose——
  Mr. Hughes: I shall not give way again. I want to proceed.
  The decisions by Welsh Labour Members immediately prior to the February 1974 General Election have since been endorsed by all sections of the British Labour movement. They were endorsed by the general management committee of the party in my constituency and by the Labour Party in Wales. The policy went to the national Labour Party, where it was approved by a heavy majority at the conference last September. It was also approved, by a very heavy majority, by my trade union, of which I was an officer before I came to the House.
  The policy was endorsed by the Welsh Trades Union Congress which my hon. Friend the Member for Pontypool once described as a bunch of Communists. It is in fact the most responsible, and perhaps the most powerful, part of the Labour movement now in Wales. The decision has also been endorsed by the

  1605
  Trades Union Congress nationally. All Labour Members should now loyally support what the movement itself has overwhelmingly decided upon.
  In conclusion, we must bear in mind that over 80 per cent. of the population of Wales live in the counties of Glamorgan and Monmouthshire. Therefore, many of the population do not speak Welsh. It follows logically that the representatives from those two heavily populated counties will play a major part, though not an unfair part, in the affairs of the Assembly. I am sure that they will ensure that the Welsh language is not rammed down our throats, so to speak. I am sorry that hon. Members think that that last remark of mine was funny. This is a serious matter. I am one of the first to defend the Welsh language and culture.
  Finally, tomorrow night on a point of honour alone I shall vote with the Labour Government in response to the pledges I have given personally and which the whole Labour movement in Britain has given.
  7.10 p.m.
  Mr. Emlyn Hooson: I hesitate to enter this fratricidal combat. When I heard that there were daily meetings of the Welsh Members of the Labour Party before the February 1974 election I was glad to learn that in those days all was honey and light, apparently, and that the hon. Members for Bedwellty (Mr. Kinnock), Caerphilly (Mr. Evans) and Pontypool (Mr. Abse) all agreed, as the hon. Member for Newport (Mr. Hughes) told us, with the recommendations of the Labour Party that there should be an elected Assembly for Wales with real powers. I suppose the meaning of that depends on the nature of reality as it is understood by those three hon. Members in particular.
  The Secretary of State for Wales, in a combative speech asked hon. Members—and he was particularly addressing the Conservative side—to declare their own views. I give my own view. I do not believe that we can stay with the status quo. I am basically a federalist, and I think that that is the arrangement we shall eventually be driven to in any event. If we want to keep the unity of the whole country and yet give meaningful
  1606
  devolution to its constituent parts. logic and the need to preserve that unity will drive us to a federal system.
  If we do not do that, whenever things are difficult in the regions, if powers are devolved, and if the limit of those powers is fudged, the centre will be blamed and the case for total withdrawal will be argued. When things are going well the balance will swing the other way.
  The Secretary of State would have done better today to make a speech which persuaded his friends instead of attacking his enemies. I mean that kindly, because there are real doubts in Wales about the Assembly. He would have served the cause better had he tried to meet those doubts.
  A good deal has been said about the need for a referendum on this issue. I believe in the case for a referendum on all major constitutional changes in this country, and I have said so in the House on a number of occasions. I spoke in the debate in 1969 on the proposal to hold referenda in Wales and Scotland to assess the views of the people on what form of devolution, if any, they wanted. I firmly adhere to that view.
  I say to the Secretary of State and to those who support him, and I am a devolutionist myself, that it is absolutely essential if they are to succeed for the Government and the House to take the people of Wales with them on this Bill. If they are to do that the Government must be true to the pledge they gave to adopt a flexible approach and must be prepared to meet not the total opposition of the Conservatives so much as the friendly criticism of those who really want to see meaningful devolution achieved.
  I was driving to London on Sunday when I heard on the radio the dulcet tones of the hon. Member for Berwick and East Lothian (Mr. Mackintosh) who was arguing the case against a referendum. I was very interested in the debate. He said several times that if Parliament says it must have a referendum on this issue it is virtually saying that when there is a vitally important matter to be decided, Parliament cannot be entrusted with that decision. I do not agree. There is a basic difference between the case for a referendum on a constitutional issue of this magnitude and on any other issue, however serious.

  1607
  For example, take the case that has so often been made for a referendum on whether we should have capital punishment. There have been times when we have had capital punishment, when it has been suspended and when it has been abolished. We can always go back on that if we want to do so. But with a major constitutional change one is permanently changing the relationship between Government and governed. In a mature democracy such as our own, if the Government cannot take the people with them on such an issue the Government should fail on it. That is a basic distinction which the hon. Member for Berwick and East Lothian did not acknowledge in the radio debate.
  Mr. Mackintosh: The hon. and learned Member should realise that where there is a written constitution which sets aside certain issues for settlement in this manner it does not invite the legislature to pronounce upon them until the public has pronounced. That is a different matter. To invite the legislature to pronounce first, and then to invite the public to contradict it on a yes-no basis can do nothing but downgrade the parliament.
  Mr. Hooson: I acknowledge that the hon. Member has a more powerful point against a referendum conducted after the Parliament has pronounced. But I am nevertheless satisfied that there should be a referendum and that this country is moving inexorably towards a written constitution. Every constitutional development over the last 50 years, or even longer, including the Canada Act and the Australia Act points in that direction. There has been a Northern Ireland Act. We are now talking about a Bill of Rights. If we establish the Welsh the Scottish Assemblies that will be yet another step towards a totally written constitution.
  The hon. Member should acknowledge that if the Government cannot take the majority of the people with them on a Bill of this kind—however much we as individuals want to see the aims and objectives of the Bill achieved—a mature democracy such as ours is in a sad state.
  Dr. Colin Phipps: I hope that the hon. and learned Member and his colleagues will now feel able to sign the amendment which stands in the
  1608
  name of my hon. Friend the Member for Pontypool (Mr. Abse). More important, he is raising a point which touches the absolute essence of the opposition on the Labour Benches. It is not that we are not in favour of reasoned devolution for the United Kingdom, but that is not what is being presented in the Bill. We are being asked to do something specific for Scotland and Wales in isolation. We are not asking the people of the United Kingdom. If we were, and if we were devolving power to the people of the United Kingdom, everyone here would surely vote for that. But from the hon. and learned Gentleman's own arguments, the Liberal Party should be going into the Lobby against the Bill.
  Mr. Hooson: I fundamentally disagree with the hon. Gentleman. I heard him shout from a sedentary position during the speech by the hon. Member for Newport that the nationalists would use the Bill to gain separatism. That very argument was used about the Government of Ireland Bills in the last century. They were not passed. Look what happened. In the end Ireland did not just have Home Rule—that is, a domestic Parliament as Gladstone and Asquith had proposed. The result was that because this House denied it to them—I know that the situation there was very different—the Irish eventually forced total independence and total economic separation through bloodshed. This is a serious debate and it is important that hon. Members do not shout out, as the hon. Member did, that the nationalists will use the Bill to gain separatism. The hon. Gentleman must have regard to the history of this country.
  I said at the outset that I basically believed in federalism. It was interesting that the Secretary of State dismissed that subject today without a discussion or any kind of appreciation of it. That was in total contradistinction to what the Prime Minister said on Monday. He said
  "Federalism is an excellent system, but it is not for us."
  Later he said
  "The task before us is to modernise and reinvigorate a partnership between a large historic nation and three much smaller historic nations. I say that federalism is simply not a relevant road for the United Kingdom."—[Official Report, 13th December 1976; Vol. 922, c. 985.]

  1609
  I want to take up that last point. The Secretary of State said today that there were countries which had devolved extensive power to the regions and which were economically successful. But he did not acknowledge that each of those countries is based upon a federal constitution. I refer to West Germany, Canada, Australia, the United States and Switzerland. But what the right hon. and learned Gentleman cannot do is point to one example in the modern world where there is a devolved Parliament of the kind proposed for Scotland and Wales which is not based on either a federal or a quasi-federal system.
  The argument put by the Prime Minister ignores what I would describe as the European dimension to the debate. Anyone would think, from such statements, that we had not been through the great debates of the past 25 years about the need for greater unity in Europe. There is a European dimension. There are two clearly discernible trends in modern political life, not only here but in Western Europe.
  The first is the need for people to get together in order to gain greater security against attack and greater economic benefit from larger units. That draws us slowly but surely in the direction of European unity. At the same time, there is the trend that we see not only in Wales and Scotland but in some of the English regions, where people feel that Government is far too remote and want to preserve their own identity and press for a greater say in their own local affairs. These two trends, far from being in conflict, are complementary.
  I think that in the end we shall be considering the whole issue of devolution in relation to a European concept. The Prime Minister is right to say that if there were a federal system in the United Kingdom alone, there would be an obvious disparity between England, Wales, Scotland and Ireland in size, but if there were a true demand from the English regions, that situation would perhaps change. If I were English, I would personally rather preserve England as a complete entity in any future European federation.
  One of the great weaknesses of the Bill is the fudged powers. It is all very well
  1610
  to say that the powers are clear, but they are not. The detailed criticism, already heard, that the Government are giving with one hand and taking away with the other is justified. One could not introduce a federal system immediately, but if the Bill were based on clear federal principles—sovereignty within separate spheres—we would be sure to maintain the unity of the United Kingdom. Final sovereign power must rest here in Westminster. Nevertheless, the allocation of powers to both Scotland and Wales should be based on a clear sovereignty within their clearly defined spheres.
  Mr. Percy Grieve: The hon. and learned Gentleman made the point that there would be a desire to maintain the integrity of England within the European context. Does he not understand the importance of maintaining the integrity of the United Kingdom within the European context, with far greater power and far greater weight in the united Europe that he and I believe in?
  Mr. Hooson: Looking at the history of our respective countries, which have been in partnership for so long, I think we are apt to underestimate the common sense and the affinity of our peoples if we do not accept that, in any European federation, if England, Wales, Scotland and Ireland would very much pull together. Already in the EEC, with the exception of the agricultural question, where the Irish and ourselves have different interests, the Irish have gone along with the United Kingdom on most things, even though they have serious differences with us historically.
  Mr. Raison: The hon. and learned Gentleman leaves me confused. He says that he still wants to have the United Kingdom and to uphold its integrity, but then he says that the point, raised by the Prime Minister and others, that one cannot have a federation in which one unit is much bigger than the others could be overcome by membership of the EEC. How does he reconcile these two apparently contradictory remarks?
  Mr. Hooson: At present, I do not think that a European federation is on, but I think that we shall move steadily in that direction. I think that when we have achieved it, provided that we have

  1611
  a common defence policy and a common economic policy on the main issues, it will not in practice matter very much whether Scotland is regarded as part of the United Kingdom or as a separate entity within that European federation. I am sure that England, Scotland, Wales and Ireland can very much pull together. However, all that is very much in the future.
  The vote tomorrow will be a vote on principle. It is important to ensure that there is a debate in depth on this subject. It is a major error of the Conservatives to try to defeat the Bill on Second Reading. I would have been more impressed, when the hon. Member for Pembroke (Mr. Edwards) and the right hon. and learned Member for Hendon, South (Mr. Thomas) were extolling the virtues of the Welsh Office, if I had not had the clearest recollection of the debates in this House when Wales was granted a Secretary of State. The Conservative Party attacked that move on a three-line Whip.
  Mr. Peter Thomas: I never did, nor did my hon. Friend the Member for Pembroke (Mr. Edwards).
  Mr. Hooson: It was suggested then that there would be a great growth of bureaucracy in Wales. I think that it was a mistake by the Conservative Opposition. The Conservatives did not take a dispassionate view. The creation of the Welsh Office was a valuable contribution, and its development under successive Secretaries of State has been of considerable advantage to Wales.
  I heard a good deal of the speech of the Leader of the Opposition and I have read it carefully. I agree with some of her detailed criticisms—she has clearly done a great deal of work on the Bill—but I totally disagree with the tone of her speech. She argued that the real choice for the country is between maintaining the status quo and having total separatism. I fundamentally disagree. That is a recipe for total disaster. If it is her view that the choice facing Scotland and Wales is between maintaining the status quo and having total separatism, then God help the chances of the union of the country.
  I am not saying that in relation to Wales in particular. I was recently in
  1612
  Scotland, and if I am any judge of the mood of Scotland I basically disagree with the right hon. Lady's analysis. With the examples before us of the United States, whose federal system has had strains enough, Canada, which is undergoing strains at present, West Germany and Switzerland, I do not believe that the ingenuity of man cannot find a system which enables the Scots and the Welsh to have a good deal to say in their own affairs while preserving the unity of the United Kingdom. The tone of the right hon. Lady's speech was entirely wrong, as was her analysis.
  I agree with her, however, that there should have been a separate Bill for Wales. I know that many people in Wales who support devolution argue that we shall have a much greater chance to get it through if it is tagged on the tail of Scottish devolution. I do not agree with that approach. I believe in devolution, but I do not believe in getting it by deceit or in an underhanded way. Either the people of Wales want devolution or they do not. I think that if Scotland had devolution, devolution would come to Wales as day follows night. I think that it would be impossible to resist. I think that it would be more meaningful devolution to Wales if that happened. Although I shall support the Second Reading of the Bill, I think that it would have been better and straighter if the Government had introduced a Bill for Scotland, where the state of public opinion is different and where the problems are different from those of Wales, and followed it with a Bill for Wales.
  I want to deal with the crucial argument put against the Bill in Wales. I think that the Secretary of State had better address himself to it, and his hon. Friends should do the same. The argument, which is widespread, is that the Assembly will be simply another tier of government. The right hon. and learned Gentleman did not deal adequately with it today. There is no elected body in Wales at this level at present. There is not a body there which can deal with subordinate legislation. The Assembly will in fact be another tier of government. The right hon. and learned Gentleman would do well to face that fact and acknowledge it. It is just the same as the reform of local government that the Conservative Party introduced

  1613
  into Wales. If the truth be known, that introduced another tier of government.
  The Secretary of State should address himself to the consequent great fear in Wales that the Government's proposals will lead to a considerable addition to bureaucracy and officious meddling and supervision of local government by the Assembly. It is suggested that it will be costly and virtually another tier of local government. The right hon. and learned Gentleman remarked that my right hon. Friend the Member for Devon, North (Mr. Thorpe) once said of the powers proposed for the Welsh Assembly that they would provide for a glorified Glamorgan County Council. He suggested that in many quarters that would be regarded as a tribute. I do not know about that, but I know that in many quarters that comparison would be regarded as highly defamatory. My right hon. Friend is right in that there is a fear that an Assembly with the powers that are proposed will have a good deal of ability to meddle in local government and will prove extremely costly.
  Mr. John Morris: I was referring to Glamorgan County Council in the context of its distinguished record, especially in education and social services, in the admiration of which I yield to no one. Glamorgan has gone through an enormous period of adversity, and anyone with any recollection of the problems of the inter-war years will know the proud record of the county.
  Mr. Hooson: I think that the right hon. and learned Gentleman will appreciate that those who make slurs on Glamorgan County Council have in mind the way in which it conducted its business. There was a caucus deciding matters, pushing them through the council in a very short time and steamrollering any opposition.
  In the debate of 17th December 1971 on the Local Government Bill, when I spoke for the Liberal Party in opposing the Bill, I said:
  "It was a major mistake of the Government"—
  I was referring to the Conservative Government
  "not to wait for the Crowther Commission's report. It is no use saying it is possible to distinguish between local and national government
  1614
  as though they are in watertight compartments."
  I then said:
  "To miss this opportunity to consider the reform of the whole of local government in the light of the proposals of the Crowther Commission seems an act of immense stupidity."—[Official Report, 17th November 1971; Vol. 826, c. 536.]
  It was such an act. The Conservative Government did us the greatest possible harm by pushing through the Local Government Bill, the reform of the health service and the Water Bill without considering the recommendations of the Kilbrandon Commission or Crowther Commission.
  The Secretary of State will make his proposals acceptable to Wales only if he can virtually guarantee that one tier of local government will disappear. Surely that should be done simultaneously in the Bill. I see no reason for the powers of the county councils not being given to the district councils. They should exercise those powers on a purposeful basis. Perhaps a few powers might have to go to the Assembly, but only very few. One of the greatest harms done to Wales that upsets many people was the centralisation of local government. There is also the further fear in Wales that under the present voting system the Assembly will be dominated heavily by one party. The introduction of proportional representation in the elections would make al enormous difference to the attitude of many people towards the Bill.
  The Secretary of State spent a good deal of time one evening trying to persuade me that the committee system proposed for Wales would be more democratic than the parliamentary system. I accept that he genuinely believes that to be so. He was anxious to meet my fears on the matter and to put them at rest. The more I consider the matter, the more dismayed I am by the prospect of the Welsh Assembly being run on a committee system. It will enable the whole operation to be controlled by a tight caucus. I much prefer the parliamentary system. We should follow the Scottish rather than the Welsh proposal. There is the fear that bad local government habits, to use a neutral term, will creep into the running of the Welsh Assembly. The right hon. and learned Gentleman would be well advised to forget about the

  1615
  committee system and go for a parliamentary system.
  Mr. John Morris: When I introduced the Bill I said that we would be prepared to listen to arguments. I shall be most interested to hear the arguments introduced from both sides on this issue. I am not being dogmatic. I hoped that our proposals would meet the wishes of the minority parties. If they are not taken up, we shall be prepared to consider the arguments.
  Mr. Hooson: I am most grateful for that indication. The right hon. and learned Gentleman should also consider that he makes no provision for independent Members. He makes provision for minority parties to be represented on committees but not for independent Members. Perhaps it is unlikely that there will be independent Members, but it is a possibility for which he should cater.
  I have said on many occasions that it is more important for Wales to get devolution right than to get it in a hurry. I am sure that that is so. It is vital that we take the people with us. In Committee we shall be watching to see how willing the Government are to accept changes in their Bill.
  I am sure that there will be increasing pressure within the country and from Europe for greater unity within Europe. That is a dimension that will have to be considered. I have said on a number of occasions that although I have always been interested in devolution—this is a matter that my party has argued for many years—the debate is still in its infancy for many people. We may regard the Bill as possibly a pro tern measure, but in the end we shall have to find a system of government that ensures that we are not over-governed, a system that gives us vastly more control over local affairs and regional matters and yet enables us to keep the unity of the United Kingdom with a view to an even greater unity by the end of the century.
  7.38 p.m.
  Mr. John Mendelson: The debate was started by my right hon. Friend the Prime Minister, and from the beginning it has suffered from the making of a number of false comparisons. I believe that my right hon. Friend led us in that direction by his reference to Italy. I know that he has been busy
  1616
  entertaining important foreign visitors and that that is why he cannot be with us now, but that cannot prevent us from referring critically to his major speech in starting the debate. I hope that he will forgive us for any criticism we may make of his absence.
  My right hon. Friend's reference to Italy was wholly mistaken. In Italy there is no separatist movement. The regional system of government in that country can in no way be compared with the provisions that we are now invited to discuss.
  It is no good ending a speech, as did the hon. and learned Member for Montgomery (Mr. Hooson), with a perfunctory final sentence expressing a pious hope about maintaining the unity of the United Kingdom without having seriously addressed oneself to the problems involved in this legislation for the future of the United Kingdom. The Government, in their introduction to the Bill, take very much the same course.
  This being a Second Reading debate and the first occasion on which the House has been called upon to consider the principles involved, I propose to spend almost all my time on the major consequences that I see ahead if the Bill is passed, although I hope that that will not be the result.
  The Scottish National Party in its representations in this debate has made the purposes to which it wishes to put this legislation quite clear, although in less chauvinistic and less outrageous language than it has employed in recent years in its propaganda in Scotland. I use the term "chauvinistic" deliberately because I speak as an internationalist. I do not regard chauvinism as less evil because it is directed against a fellow group in the United Kingdom. That is just as evil as if it were directed against Jews or coloured people. It is equally bad and equally immoral no matter who is on the receiving end. I have watched with growing apprehension the increasingly chauvinistic campaign being carried on in furtherance of nationalist policies which are not in the interests of the Scottish people themselves.
  We must relate this legislation to the common people of Scotland and not to

  1617
  future Ministers or ambassadors, or people who will lead the army and the air force. I was struck when listening to the interesting speech of the hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) late last night, or should I say in the early hours of this morning, because he kept returning to the theme of the place at the top table for the future Government of Scotland. All he was concerned about was that place at the top table—the Ministers and representatives in European councils. He made very little reference to the ordinary working people of Scotland, the farmers and others who earn their living in daily work. That is not surprising when one looks at the general propaganda of chauvinistic organisations. It is always the same—it is the pomp and glory with which they are concerned. It is high time that we examined the policies of the Scottish National Party very carefully from that point of view.
  It is not good enough to say, as the Liberal representative from Scotland, the hon. Member for Inverness (Mr. Johnston), said, that people must realise that many Scots identify their aspirations with those of the Scottish National Party. He is misguided and mistaken. It would be highly dangerous if other political parties in Scotland were to abandon their own principles and take on these assumptions by following the ideas of the Scottish National Party. That would not strengthen democracy; it would weaken it. Competition with chauvinistic parties by non-chauvinistic democratic parties is never successful, in Scotland, Wales, or anywhere else.
  We must look carefully at the actual political situation in which we find ourselves. No legislation exists in a vacuum. I do not take kindly to the considerable amount of detailed criticism made against my right hon. Friend who is the main author of the Bill. I do not join in it. My right hon. Friend had a job to do and he did it after much hard work. I do not take kindly to the Leader of the Opposition, whose approach has been blatantly tactical. She has the difficult problem of a divided party behind her, and she has been directed by a majority within her ranks to oppose devolution. That is the truth of the matter and I
  1618
  do not know why she could not say so. But she wanted to create a facade of unity and agreement, so she backed up her statement of being opposed to the Bill, that same evening with a published statement giving faint praise to devolution in principle. She got around this contradiction by saying that this was a bad Bill. That will not wash. Obviously, some hon. Members opposite will draw their own conclusions, and so will the country.
  That is not the issue before the nation at this stage. It is far more serious than that. What we must face are the implications for the future of the United Kingdom as a unit if this legislation is passed. My opposition to the Bill derives from my fears of the consequences. Just as I believe that the Prime Minister was wholly misguided when he referred to Italy, I believe the reference by the Lord President of the Council to Ireland was equally mistaken, and indeed dangerous.
  Anybody who has studied the Irish problem will know immediately that the whole history of Scotland as part of the United Kingdom cannot be compared with the very tragic history of Ireland. To pick a simple example, after the first spate of bombings, when 95 houses were fire bombed in the 1960s, a group of us—three hon. Members and three members of the National Executive Committee of the Labour Party—went to have a look at the situation in Ireland prior to the visit of the then Home Secretary who is now the Prime Minister. We interviewed more than 50 people. I interviewed a woman who worked in the placing section of the Ministry of Labour in Belfast and she told me that in 26 years that Department had never employed anybody from the minority religion until six weeks before our visit. Such was the blatant discrimination there. Happily, there has been no such discrimination in Scotland. How can one compare the kind of relationship we must observe in Ireland with the situation in Scotland?
  Moreover, one must remember that the proposals we are debating today, if they are to be debated in the way the Scottish National Party is debating them, provide not just a stepping stone, but a deliberate instrument for the deliberate destruction of the United Kingdom. It is not the purpose of the Scottish National Party to use these proposals to improve

  1619
  the standard of living of Scottish people. They intend to use them as a means of finding a place at the top tables of the world. Against this background the House of Commons must warn the people of this country and particularly the people of Scotland.
  The solidarity of the people of the United Kingdom has been immensely valuable in peace and war—not least in peace. There is no question of the advantages which have gone to Scotland after a difficult period economically as a result of this solidarity. Scottish National Party Members get nervous and start arguing when this is pointed out. No wonder, because a number of them used to be members of the Labour Party. This is not untypical of members of chauvinist parties. Mussolini used to be a Socialist, so we are accustomed to this kind of transformation. The benefits to the people of Scotland of having national solidarity with the United Kingdom are real. Although there is no racialist tinge attached to the term, the solidarity of the people of the United Kingdom has been real for a long time and is valuable, and one does not have to be a chauvinist to wish to preserve it. That solidarity was based on an understanding in all the regions of England, Scotland, Wales and Northern Ireland that we all make sacrifices for one another.
  I represent an area where at no time have I been questioned by any of my constituents when I have voted consistently for large sums to be devoted to create more employment in any part of the United Kingdom. I think that applies to my right hon. and hon. Friends in their activities throughout the land. That is how the job has been done. Indeed, there is nothing that I can teach my Front Bench colleagues in that respect. Many have led me in those policies, and I have followed them.
  All this is at stake in this debate and should not be forgotten. But we still hear these puny demands for places at top tables, for consular representatives, and we have had references to what was written in a Swedish paper in 1904 as if that could have anything to do with the present situation.
  Arising from these discussions, there are a large number of people in Scotland—and I can claim to have some know ledge
  1620
  of its people, having visited the country regularly over a period of 35 years—who do not believe that the claims made by the hon. Member for Clackmannan and East Stirlingshire are convincing. The SNP in the House is keen on getting this legislation passed on Second Reading tomorrow night because that will give respectability to its claims for the first time in the history of the United Kingdom. The SNP needs the stamp of approval from the House of Commons to make it appear that its claims are reasonable.
  Let not my right hon. Friends on the Front Bench act under the misguided belief that they will get any credit whatever —if there be any credit—from this legislation. The representatives of the SNP will say "The people did not get these things from a Labour Government, but because we asked for them. The only way in which you, the people, got this kind of legislation was by voting for the SNP rather than for Labour or any other party." In that attitude lie the seeds of change that will arise day after day in the Assembly—not to better the standard of living of the Scottish people but to pile conflict upon conflict. The SNP will try to destroy the Assembly so that it can say that it is no good and that what is needed is complete separation from the United Kingdom and its complete destruction.
  My hon. Friend the Member for Liverpool, Walton (Mr. Heller), who, if nothing else, is an internationalist, made a profoundly moving speech yesterday in which he attacked some of the chauvinistic policies of the SNP. One SNP Member who spoke a little later accused my hon. Friend of having attacked all Scots. That was blatantly false, but it was done for a purpose. A party based in chauvinism needs an enemy. My hon. Friend could not hate anybody and would never attack a whole nation. Such remarks would never fall from his lips. That attack on my hon. Friend was made deliberately.
  I wish to put the record straight by making clear that my hon. Friend was not attacking all Scots. He was seeking to defend the interests of all people and to pursue the aims of solidarity in the interests of the principles that Robert Burns stood for. Those who sit for

  1621
  Clackmannan and one or two other places are now betraying the people every time they make a speech.
  In this debate and tomorrow night there will be at stake hard political thinking about the future of this country. Everybody in that situation must assume his or her responsibilities. There can be no question of asking hon. Members to say to each other "Because there may be bad political consequences if you do not pass this legislation, you must vote for something the intrinsic value of which you do not support." That can be an argument about whether one increases VAT by 2 per cent. or whether one believes that indirect taxation is better in one form or another. It can never be an argument about the future of a country.
  Everybody must choose when it comes to the future of the country. I am confident that everybody will choose in accordance with those principles.
  7.58 p.m.
  Miss Harvie Anderson: It is perhaps somewhat unusual for me to find myself in almost complete agreement with the hon. Member for Penistone (Mr. Mendelson). The trouble with this debate has been that too often we have not got to the heart of the matter—a matter that will affect us for many generations and centuries ahead.
  The right hon. Member for Battersea, North (Mr. Jay) illustrated to the House those things that have transformed the post-war face of Scotland, many of which are to be seen in my constituency in the form of many works that would not be there had it not been for the structure of the United Kingdom.
  One other matter to which I should like to refer was mentioned in the remarks of the hon. Member for Newport (Mr. Hughes). I hope that the House listened carefully to that part of his speech relating to race relations. Never in my long years in this House had I heard any reference to race relations in connection with the indigenous population of this country until the advent of this Bill and the proposals contained in it began to be discussed. That is a regrettable situation because these questions have arisen in the minds of people when there is no need for them to exist.
  1622
  This important debate has come at an unfortunate time. It is totally irrelevant to the difficulties in which we find ourselves and which have been clearly evidenced this very day We have had perhaps the most serious contribution from the Chancellor of the Exchequer that we shall have in this Session of Parliament at a time when we have been overtaken by the even more important constitutional considerations that are before us in this Bill.
  As I see the situation, the judgment challenging us is not about party policies or manifesto writings. It is not whether we shall win a seat here or lose one there. It is not whether one party or another will maintain or gain power. It is a judgment about where we are leading this nation and how we can be sure that we sustain the United Kingdom which for 250 years has developed and preserved that state of freedom and standard of living of which my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) spoke so eloquently on Monday. The question is whether this Bill will advance or arrest the separation that is the avowed intent of the SNP. Separatism is not the wish of the vast majority of the Scottish or Welsh people. Separatism would assuredly break up the United Kingdom in which nearly all of our peoples believe.
  The aspect of devolution which is acceptable to most hon. Members is that which provides and goes on providing administrative devolution in every sphere. But the Bill offers legislative devolution—a full Executive, a complete Parliament, yet without the power to control its own affairs and thus inexorably bound to conflict. In a directly elected Assembly with an Executive and without full power the controlling party needs only to blame its lack of power for every failure and unacceptable decision and upon sovereign Westminster will be made further demands. As the hon. Member for Penistone said, so it has been throughout the history of the nationalist movements and so self-determination and separation come about. That is why the nationalist parties emphasise so much their support for the Bill.
  If any proposal for an elected Assembly could have built into it a stopping place beyond which no separatist could travel there might be a case for

  1623
  further discussion. But the Bill in almost every clause and schedule contains the seeds of conflict varying only in degree.
  Support for the Bill comes from those who for personal, party, or power advantage believe that its content will camouflage the real malaise from which we suffer—inflation, over-spending, over-borrowing and over-taxing at the tragic expense of the hard-working and the unemployed. Yet the Bill is costly in terms of bureaucracy, further taxation and yet another layer of government superimposed upon the 5 million Scots who would then be the most over-governed people in the Western world.
  Opposition to the Bill comes from almost every responsible element of the Scottish people, and that opposition grows daily. Does the Bill provide better government? Better government would have an appeal to many who feel that the individual is being smothered and swallowed by the limitless demands made on him by Government and bureaucracy alike. But the Bill simply imposes a further layer of government that will burden the citizen and in no way lighten his load.
  A further aspect is too seldom mentioned in the debate—where does the responsibility lie when in domestic matters part of the United Kingdom decides its own destiny within the bounds of the power devolved and that same part of the United Kingdom sends to Westminster hon. Members who will then vote on those domestic matters in England which have already been decided in Scotland and Wales. That aspect of conflict is written into the Bill as surely as that that will arise when party balance at Westminster differs from that in Scotland or Wales.
  There is not time to consider the possibilities and difficulties of having selective voting rights at Westminster. What I have said clearly indicates that this dissension will inevitably follow. The Bill makes no mention of that—one of the most important considerations which will arise quickly. Suffice it to say that no Parliament, in Edinburgh, Cardiff or at Westminster, could long survive having first and second-class members.
  Mr. Tam Dalyell: The right hon. Member for Renfrewshire, East (Miss Harvie Anderson) is one of
  1624
  the hon. Members who has spoken in the debate who has experience of the Chair. Is it not hard for the Chair to make a judgment on selective voting rights about what impinges on the United Kingdom as a whole or what is genuinely a Scottish or Welsh matter?
  Miss Harvie Anderson: I do not want to take any responsibility for considerations which the Chair might make, but I can say that throughout my time in the Chair I have strenuously fought to ensure that the Chair is protected from making any such decisions which sooner or later impinge upon party political considerations in which the Chair must never take part.
  The final and perhaps the most significant consideration of all is that which affects the whole of our island race. We look out on a world that is dominated by alien ideology, seized still with the reality of tyranny versus freedom and, as for centuries, we in Parliament and in the country have the overriding responsibility of maintaining the strength of our democracy.
  We have only to glance at the map and look at the Lebanon, Angola, Portugal and NATO—the key points of international affairs, yes, and Scotland, where lies our NATO base, the North Sea and the oil upon which so many of our hopes depend. Some would not be sorry if we failed to hold united against the challenges there.
  I can do no better than to quote the words of one of my constituents whom I do not know personally. His name is Cameron MacGregor, which reveals his identity and perhaps his history. He writes:
  "I am well enough versed in the history of these islands to know what cost and sacrifice, in human terms, went into uniting them and what achievements spring from this unity. I can feel the same thrill at the mention of Waterloo as at Bannockburn and the same grief at the mention of Flanders as at Flodden."
  Those are words that we understand. They make us believe that the United Kingdom is our heritage and our example. It is to defend it that I shall vote against the Bill.
  8.9 p.m.
  Mr. Fred Evans: I do not intend to take part in a floor show or to play a penitential rôole and go into the

  1625
  confessional box. I do not intend to mention that a chairman of the Welsh Labour Party has confirmed that it was not a total agreement but a consensus of opinion to which I, among others, agreed. I cannot find any reference in any Labour Party manifesto which precludes a referendum of the kind which has been suggested by so many hon. Members. Many manifesto commitments stretching over many years have been abrogated, pushed into pigeon holes or conveniently forgotten.
  My constituency has a long history of believing in devolution in its proper context—that is, in the context of bringing power as near as possible to the people, so that they can learn to recognise power, see power being manipulated in their interests and sit in judgment of that manipulation of power. That is the essence of devolution. When we gave evidence for my local authority before the Aneurin Bevan Boundary Commission in the late 1940s, that is what we had in mind.
  We said that what Wales wanted could almost all be achieved by all-purpose authorities—without the proliferation of nominated bodies—by allocation of power responsibly through local government and by keeping power close to the community, which is the essence of democracy. We failed in that. We were told that that would interfere with a national boundary—a river, three yards wide—and that it was outside the terms of reference of the Boundary Commission.
  A great deal of thinking has been going on over many years on this question and it is folly to look upon the people who are debating it in the House as Johnny come-quicklys who have not given serious consideration to the matter in the past. I find some of the thinking rather illogical. For example, the Leader of the House argued that violence might possibly result if the wish for devolution were not granted in Scotland and Wales. It is just as arguable that violence might possibly result if that request were granted. Nothing is surer than that the Assemblies would he used as stepping stones in the demand for greater powers. There would be a playing-off of the inadequacy of the powers granted to the Assembly against those of the Westminster
  1626
  Parliament and that would open up an area of conflict. My right hon. Friend the Member for Battersea, North (Mr. Jay) was charged with overstating the case, but the hon. Member for Pembroke (Mr. Edwards) did not exaggerate.
  Another potential cause for unrest, or even violence, lies in the industrial non-Welsh-speaking population of the south becoming frustrated and almost detesting the way in which affairs might be manipulated to their disadvantage by a small group of people. I do not say that that unrest would arise, but that that danger is present in people's minds should have become obvious during the debate. That again is a possible area of conflict that causes great concern.
  The hon. Member for Carmarthen (Mr. Evans) is on record as saying during the debate that his aim is to advance towards separatism for Wales. He does not trouble to hide his opinions, and I do not criticise him one iota for that. It has been stated that separatism is the ultimate aim, and that what is called Welsh nationhood—which I have never heard defined—is to be the test. It is claimed that the country will eventually have a separate political and economic system. The people of my country are frightened that a separate Welsh economy could lead to the breakup of patterns that have taken centuries to develop.
  For example, painfully over the years the National Union of Mineworkers has struggled to achieve an equal grading system throughout the British coalfields. People are frightened that there might be a reversion to separate coal boards which cut across the whole pattern of nationalisation. If that happened, inevitably the trade unions would have to follow that pattern, and there would be a return to the evils of regional pay agreements, and so on, which the trade union movement has done so much to overcome. Already the people of Wales are putting forward passionate arguments against their salary structures being influenced by the Welsh Assembly. That is symptomatic of what may happen. There could be a break-up of the United Kingdom pattern and the seeds of conflict within the so-called separate nations.
  This afternoon I asked the Chancellor of the Exchequer how much public expenditure could be saved if even at this late hour by some happy inspiration the

  1627
  Government dropped the whole devolution exercise which so many of us consider to be futile. The Chancellor of the Exchequer is not always the cleverest boxer with his footwork, but he rode that punch by referring me to today's debate.
  The questions that pre-occupy the minds of our population today are rates, rents, pay freezes and the traumatic effects of our economic crisis. These preoccupations make them hypercritical of expenditure cuts. They are not slow to point out that, although they are suffering and cuts are made even in the social services, there is one sacred cow which must not be touched, whatever happens, and that is the Bill.
  Mr. Dalyell: Why not make the kindest cut of all and drop the devolution proposals?
  Mr. Evans: Many people outside the House would be relieved if that were to happen.
  The general public, noticing that no element of the public expenditure cuts must be allowed to interfere with this exercise, become highly critical and regard Members of Parliament as people who do not know whether they are on their heads or their heels. Many are rapidly coming to the conclusion that in times like these they would prefer to be governed by people who are on their feet and have kept their heads.
  Therefore, it would be best to drop the Bill altogether. The public regard the time as unfortunate and the expense as unwarranted, and in the end we are accountable to our people. I am fairly sure that if every Back Bench Member of Parliament in Wales were to speak honestly, we should find very few whose constituents gave unreserved support to the Bill.
  Mr. Wigley: I had understood that the hon. Member was a passionate advocate of a referendum. He is now talking about dropping the Bill completely. Does he want to have a referendum in order to give the people in his constituency a chance to decide for themselves, or does he now want to scrap the Bill, without giving them that opportunity.
  Mr. Evans: The hon. Gentleman must understand that when people start with a belief which they would like to see
  1628
  achieved, and the possibility of that achievement is deliberately prevented, the force of that belief can extend into other areas of criticism.
  Mr. Wigley: Will the hon. Member answer the question?
  Mr. Evans: What we are saying is that we want the people of Wales to be allowed to speak. I am trying to voice some of the criticisms that have been made to me personally. I have not said for one moment that I accept all the criticisms. Th point has been made to me very forcibly that the best thing to do with the Bill would be to bury it. This point has been put in somewhat richer language by many miners. The complexity and the mixture of powers, and the almost impossible task of disentangling the Welsh from the Scottish elements in the Bill, are aspects which have aroused a certain amount of criticism.
  What I say unequivocally is that I and many others on the Government side stand for a Socialist approach to curing the ills of our time. We do not want to see the break-up of a United Kingdom pattern of Socialism. To us, a miner in Durham is the same as a miner in Caerphilly. It is no good hon. Members smiling about it. After all, it is the hon. Member for Carmarthen who is on record as saying that he does not hate the English, he hates Britain. He has made many other statements—for example, that Wales has always been treated as a colony and that the Welsh people have been treated as serfs. If this does not warrant the accusation of arousing race prejudice, I should like to know what does.
  Mr. Andrew Welsh: The hon. Member says that he wishes to retain a United Kingdom pattern of Socialism. Is he, therefore, saying that Keir Hardie got it wrong when he wanted Home Rule for Scotland?
  Mr. Evans: We shall not achieve the sort of Socialism that this country needs if we take our existing pattern, fragment it, and then try to introduce Socialistic elements into the parts. The pattern for the development of a Socialist country is there already. It has been painfully built up by years of trade union work and by years of dedicated work in the political field. The possibility of the overthrow

  1629
  of this programme disturbs my part in Wales very deeply indeed.
  Mr. Buchan: Will my hon. Friend say whether he thinks that Keir Hardie would have argued that the oil belongs only to Scotland? Secondly, can my hon. Friend tell me what the people of Wales and Plaid Cymru in particular feel about that slogan coming from Scottish nationalists when there is no oil to be given to Wales?
  Mr. Evans: The nationalists in Wales are prepared to follow exactly the same greedy line, as shown by their almost immoral display of huge posters of shivering old-age pensioners, together with comments about Welsh oil. In 1970, in the election campaign, pamphlets were put out by the Welsh nationalists talking of "our oil". We had to ask "What oil?", because there was no Welsh oil, and there is still no Welsh oil.
  Mr. Welsh: Does the hon. Member feel that it is also immoral to refer to Norway's oil?
  Mr. Buchan: Or Shetland's.
  Mr. Evans: My hon. Friend will probably come up against the problem of Shetland oil. But my point is that the same sort of evidence can be seen in Wales. The plain fact is that it is a crude attempt at populist politics. Their idea is to sling everything at their opponents, trust to God that some of it will stick, and then see what can be capitalised out of it. That policy is now beginning to rebound on the nationalists, as populist politics nearly always do.
  I was talking earlier of trying to make Britain a Socialist State. I believe that the existing pattern is there to be built on. I hope that we shall avoid the pitfall of devolution, and that we shall in Britain advance towards a truly Socialist country which can be an inspiration to much of the rest of Europe which is—and has been ever since the War—moving towards the Right.
  8.28 p.m.
  Mr. Wyn Roberts: Following the hon. Member for Caerphilly (Mr. Evans) I do not think I need declare a somewhat obvious interest—that I, too, am Welsh. I want the best for the people of Wales, for Welsh speakers like
  1630
  myself and for non-Welsh speakers like the hon. Member. I look at the Bill with nothing but that end in view—the best for the people of Wales.
  Mr. Nick Budgen: And the United Kingdom?
  Mr. Roberts: I shall speak about Wales, as a Welshman who is a Member of this Parliament. We have our problems in Wales. Our language and our culture are in a critical state, not for the first time in our long history. Our economy is gravely threatened. England and the English have always been very easy scapegoats—too easy by far to allow proper self-criticism. Yet it is always to England that we turn, even the most rabid nationalists among us, with our demands. Our help in time of trouble comes not from the hills, Colonel Gaddafi, the Swiss cantons or any of the other places held up by the nationalists for our esteem: it comes from the United Kingdom Treasury. Any constitutional move that threatens to weaken Welsh power at Westminster cannot be in the best interests of the people of Wales in the long run.
  The Government say that the great purpose behind the Bill is to bring government closer to the people, but it could be contended that their real aim is the reverse, that they are taking themselves further from the people by placing an extra tier of government between themselves and the electorate. I do not know whether that is deliberate, but it is certainly the effect. They now have an excellent reason for doing so. We have embarked on a long period when Government expenditure will be reduced, and there will be growing protests from the electorate. If the Bill becomes law, those protests should be directed towards the Assemblies at Edinburgh and Cardiff, because they will be dispensing the money for health, housing, education and so on.
  But the ruse will not work. The protests will still come here, to Whitehall and Westminster, because it is here that the amount of the block grants will be decided, just as the rate support grant is fixed here now. Just as the local authorities are increasingly and openly blaming the Government for not giving them enough, so will the Assemblies. They will bark incessantly at the Treasury gates

  1631
  but will not have the power to open them. The power will remain here in this Parliament.
  The Government have also talked about devolution as enabling more local selection of priorities for spending. If the public expenditure White Paper means anything, coupled with the Chancellor of the Exchequer's announcement today, the Assemblies' main task will be the selection of cuts in spending. It may be argued that as a Tory I should approve of the Government's strategy for reducing expenditure through the Assemblies. I can hardly admire the Government's tactics, for they are giving the odium of rigour to the Assemblies while reserving for themselves the privilege of whatever mercy may be available by way of supplements to the block grants. If I were a nationalist, I should be very wary of a Labour Government's bringing gifts by way of a national Assembly.
  The people of Wales are very dubious about the Government's motives in introducing this costly Bill at this difficult time. They cannot see its relevance to our problems, and neither can I. There could hardly be a worse time to introduce such a measure, involving as it does extra expenditure and additional bureaucracy. If we faced a prosperous future, the atmosphere might be different.
  We shall undoubtedly be over-governed, as so many speakers have said. More government does not mean better or stronger government, which may very well be precisely what we need. Perhaps the need for better and stronger government is the explanation for the 35 per cent. in the Western Mail HTV poll who wanted more powers to be given to government in Wales.
  There is the further point that we in Wales have not fared too badly under Westminster's care, as the provisional public expenditure figures per head of population clearly show. Provisional figures for 1975–76 show Wales receiving £826 per head compared with England's £732. What concerns us is that the situation could change to our disadvantage when the Assembly comes into being, because Welsh representation here is bound to mean less in time.
  Mr. D. E. Thomas: The hon. Gentleman is always quoting the higher per capita public expenditure in Wales. Will
  1632
  he tell the House how much of that is accounted for by higher per capita expenditure on social security benefits because of the lower per capita income in Wales?
  Mr. Roberts: Each part of the United Kingdom has its own demands and needs. That is why there is the variety in public expenditure per capita between Wales, England and Scotland. But I urge upon the hon. Gentleman that we have not done at all badly under the present system and that there is a danger that change could be to our disadvantage.
  Wales requires enormous investment in new jobs, as the Moore and Rhodes study of regional policy and the economy of Wales pointed out. This should be top priority. We shall not get that investment under this Bill. It will come only with a return of business confidence, a cut-back in Government expenditure and lower taxation.
  We have social and cultural problems in Wales; we are divided linguistically and between the rural North-West and the industrial South-East. There is no guarantee that an Assembly dominated by the populous and largely monoglot industrial areas of the South will make a substantial and wise contribution to the peaceful solution of these problems.
  The people of Wales are sceptical about the value of the Bill. I am no respecter of polls, but it may be significant that the recent Western Mail HTV poll and the Marplan survey conducted for the Sun showed 27 per cent. and 25 per cent. respectively in favour of the Government's proposals.
  There is an overwhelming demand for a referendum and this is an expression of the distrust not only of the Government's motives, but of the judgment of this House. We must have a referendum despite the fact that it is clearly fraught with problems. For instance, what will happen if Scotland says "Yes" and Wales says "No"? Can the two parts of the Bill be separated?
  Mr. Budgen: Does my hon. Friend agree that the only justification for a referendum would be if all politicians in all parties agreed to be bound not only by its result but by the result of all future referenda? Would my hon. Friend be bound by the result?
  Mr. Roberts: The Government took the result of the Common Market referendum as significant advice from the public. I do not recall a prior commitment to be bound by the result.
  I am sure that hon. Members representing Wales will agree that the demand for a referendum is clearly based on a distrust of the present proposals and of the judgment of this House. If a referendum were held, there would be a clear implication that the Government would be bound by the decision.
  The Government have made a rod for their own back by joining two countries in one Bill. The Prime Minister had his first beating from that rod when he opened the debate. Tomorrow night, we shall decide whether we approve or disapprove of the Bill as a whole. Those who believe that it can be improved in Committee and made acceptable will vote for it; those who believe that it is misconceived and unworkable will vote against it.
  I believe that it is a singularly ill-timed measure, calculated to raise endless suspicions about the Government's real motives. They are proposing to hand over a great deal of power and it is not in the nature of governments to do that without good cause. I have not heard sufficient cause advanced for the Government's action from the Front Bench opposite.
  I begin to reflect the suspicions of the Welsh people who are asking whether perhaps Wales and Scotland are becoming too much of a financial as well as a political liability. Does this lie behind the Bill or are the Government afraid of violence by a minority as the Leader of the House seems to have implied in a broadcast this week?
  I assure the Government that these questions are in many people's minds, ordinary people who do not spend much of their time thinking of a better "instrument of national identity"—as the Prime Minister called it. They suspect that somehow, somewhere, they are being ditched by a weak Government anxious to pass on the responsibility for a wide range of activities affecting important aspects of their lives.
  1634
  For all the reasons advanced by my right hon. Friend the Leader of the Opposition, who I thought made mincemeat of parts of the Bill in her opening speech, and because the people of Wales clearly do not want this Bill and all the irrelevant and expensive paraphernalia it entails, I shall oppose its Second Reading. This does not mean that I am opposing the principle of devolution, but simply that this Bill is a bad embodiment of that principle. I am sure that a better embodiment could be devised.
  Mr. Deputy Speaker (Sir Myer Galpern): I am sure that all hon. Members will be interested to hear the latest report on the state of play. About 26 hon. Members still wish to take part in the debate this evening and there are about 80 minutes left for play.
  8.42 p.m.
  Mr. George Rodgers: It has become clear in recent years that there is broad and growing support for the shift of power away from central Government. But I accept that people have travelled varying distances along the road and that there are problems about the definition of devolution. None the less, those who oppose the spirit are now a small and dwindling number.
  The unfortunate lot of Conservative Members is to defend an almost incomprehensible formula. If I understand the position correctly, the Conservative Party is already deeply committed to the establishment of a Scottish Assembly and simultaneously committed to voting against the very Bill that would make that possible, at least in the foreseeable future. I can only assume that the Leader of the Opposition is determined to demonstrate that she is ag'in Government regardless of the logic, the consequences and the advice of those in her own party who are closer to the realities of the situation than she is.
  It has perhaps been recognised that the only opportunity of the Conservative Party achieving office is the advent of an early election. I suspect that as the months roll by the circumstances which would make that prospect feasible will recede and ultimately vanish. Therefore, the Leader of the Opposition feels bound to snatch at any passing straw and appreciates that the devolution programme is

  1635
  the only straw that is likely to float by for many a long day. Although it is possible to feel a pang of sympathy for her dilemma, it is difficult to believe that there is any conviction or merit in the arguments presented from the Opposition Benches during the course of the debate.
  I strongly favour the devolution principle. I have long considered it a vanity and an absurdity to believe that all intelligence is concentrated in this Chamber. Surely we are all aware that the majority of us are here by chance and circumstance. We must recognise that there is a huge multitude of people in the country with a capacity to serve our nation with integrity, sincerity and ability. It is a contradiction of democracy that so few are given an opportunity to influence the course of events that affect their everyday lives.
  My fear about the proposals is that they tend to move power sideways rather than downwards and towards the people. There is little virtue in transferring power exclusively on a geographical basis. We are inclined to speak volumes in this place about our allegiance to democracy but there seems a curious reluctance to implement our philosophy when the opportunity presents itself.
  I personally welcome the intention to place authority in the locations that it is intended to serve. But that is only one part of the equation. It is no comfort to be able to observe power from one's window if one is not able to penetrate its walls and harness its activities.
  There is, of course, encouragement in the proposals that nominated bodies should become more accountable, but it is a matter for concern and regret that Schedule 11 does not include health or water authorities. These are surely the nominated organisations that have attracted most criticism as being undemocratic and unaccountable. I recognise, of course, that these bodies require the presence of experts, those with special knowledge in their particular fields. The trouble is that too often the professionals have become autocrats rather than advisers. I have in mind particularly the Health Service, which seems to be dominated by the professionals where consultants are involved.
  Devolution gives a golden opportunity to introduce reform to the structures of
  1636
  some of the monolithic organisations that were originally created to serve the public and are, indeed, financed by public funds, though somehow we have allowed them to become detached and remote from the community. Therefore, I look to my right hon. and hon. Friends to rethink this aspect of the programme and to display a greater boldness and a greater faith in the democratic principle.
  Many peculiarities will surely flow from the legislation. Assembly Members with fewer responsibilities will represent a lesser number of constituents than Members of this Parliament. Scottish Members of the House of Commons will be relieved of an enormous amount of constituency involvement and with diminished commitments in that area will be enabled to assume an entirely different rôle in this Chamber. Members from north of the border and from Wales will have differing responsibilities from their English parliamentary colleagues but will be allowed to influence the decision making that affects the English people and the English regions, and there will be no reciprocal arrangements.
  The road is littered with imponderables. It may be that an entirely new breed of Member will emerge, one who will specialise in the subjects that will become the exclusive prerogative of the British Parliament as distinct from those that belong to the Assemblies.
  I foresee that problems will arise from the allocation of the block grant. It is all very well to speak about a negotiated agreement, but should the new Assemblies be dominated by factions that are hostile to Westminster, it could well become impossible to reach an agreement on what constitutes a fair allocation of financial resources. The negotiations could provide a very tempting sounding board for those whose eyes are set on a destination that lies beyond devolution. It may well be wiser to establish a mechanism that could decide and define an appropriate sum, perhaps on a population basis with a weighted addition to meet special circumstances, similar to the rate support grant.
  If a firm procedure is not introduced, the Government of the day could well find themselves with the worst of all worlds—under constant siege by the

  1637
  Assemblies and being held responsible as paymaster for every problem afflicting the devolved sectors.
  I am intrigued about another aspect of the Bill. I do not know how we stand in regard to the role of the House of Lords. I have read the document. As I understand it, the Scottish Assembly will be able to introduce primary legislation and that will not be obstructed. Presumably there will not be a House of Lairds in place of the House of Lords. Thugh there are checks and safeguards, there will certainly be no opportunity for the House of Lords to obstruct legislation passed by the Scottish Assembly.
  I warmly welcome that development. It is a splendid advance. However, if the Government think for a moment that English Members in this House will tolerate a situation in which their legislation can be obstructed when similar legislation via the Assemblies will receive a speedy passage, they are presenting an excellent case for the abolition of the House of Lords.
  On the issue of a referendum, the arguments are finely balanced. I resent government by referendum. If a Government achieve office, they should contain in their manifesto sufficient for their programme without further reference to the electorate. It is true that the Common Market referendum was covered in a manifesto, but I thought that it was an ugly business. There were deep arguments about the manner in which the referendum was financed.
  A referendum provides a temptation to influence people within a Government or within a party in office. If they cannot secure their objectives through their parliamentary colleagues or through their conference, there is a temptation to take the issue outside to secure the support of their opponents in achieving their objective. I suspect that that was the motive behind the Common Market referendum.
  Mr. Buchan: I agree with my hon. Friend about the use of a referendum on general policy matters, but is there not a new situation where one has a House of Commons elected in order to make decisions for one State and a process is set in motion which may give rise to the
  1638
  creation of another State. It is not our wish to create another State. We have no mandate to do that. Only one group can do that, and that is the people, since it transcends parliamentary boundaries.
  Mr. Rodgers: I welcome that interjection. There is a powerful case for a referendum to decide or dispose of the separatist issue. I think that this would expose the false standing of the Scottish National Party. The SNP is tied hand and foot to the creation of a separate Scotland. Indeed, this has become an albatross which, I think, will finally destroy it. The majority of people who support the Scottish nationalists voted for them, understandably, as a protest. I think that a referendum would decisively isolate the Scottish nationalists. Already the ordinary Scot is sickened by the selfish bleating about "Our oil", a parrot cry which has become a substitute for policy.
  Mr. Welsh: I would not accept the contention that the people of who voted for the Scottish National Party do not agree with our policy on independence. But if one agrees to a referendum to ask the Scottish people whether they are for or against self-government, one is setting a precedent, and the Scottish people may be asked the same question again in future.
  Mr. Rodgers: I refer the hon. Gentleman to his own manifesto. I suggest that he examines it carefully if he says that.
  The constant cry of "Our oil" has become a substitute for a policy and for any set of ideals. If Scotland were to become independent, there is small likelihood that the ordinary Scot would receive any fairer share of the revenue from North Sea oil. At present, there are a great number of Scottish aristocrats in possession of vast tracts of land and Scottish capitalists in possession of great wealth, but I hear no cry from the Scottish nationalists to redistribute these internal assets.
  The natural allies of the Scottish working class are the English and Welsh working classes. The purpose of the SNP seems to be to divide working people as though they are one another's enemies rather than the common victims of a repugnant economic system.
  I turn now to the document which purports to clarify the Government's attitude

  1639
  to devolution in England. It is a small document containing small arguments. After such a lengthy period of brooding, I think that we were entitled to a more succulent egg. For my part, I have never sought English Assemblies based on the present regional boundaries. There is nothing sacrosanct about the dimensions of the English regions. I am convinced of the need to have another electoral layer, an intermediate layer, to administer health and hospital services, land use and public transport. Those are prime examples, but obviously there are others.
  I cannot avoid the conclusion that this will involve a restructuring of local government. I have never heard anyone say a kind word in favour of the recently reformed local government system. I am weary of being told that it is not possible to unscramble the omelette, however unpalatable the omelette may be. Our concern is not with omelettes but with people. The scheme has proved to be so disastrous that it must be reformed and we must provide one that is not only more efficient but is closer to the people.
  The paltry 22-page pamphlet "The English Dimension" is an impudence. There are many people who will campaign for speedy progress towards a genuine shift of power away from the centre and towards the periphery and the people in the English regions.
  8.56 p.m.
  Mr. T. G. D. Galbraith: This debate is the third bite that we have had at the devolutionary cherry in the last couple of years and each time its taste seems to me to become more and more bitter, like a type of poison eating into the heart of the body politic.
  When I hear hon. Members extolling the virtues of the Bill, or even the principles of legislative devolution, as some of my hon. Friends do, I am astonished that there can be so much difference of opinion between us as to the likely practical outcome of the Bill. Its supporters believe that it will benefit government in Scotland—the Secretary of State for Scotland said that yesterday—and strengthen the Union, whereas I fear that it will do the very reverse. I fear that an Assembly will be positively harmful to good government in Scotland, will make it more
  1640
  complicated and more costly, and will certainly pave the way for the break-up of the United Kingdom. In spite of all that has been said in the debate, I do not see how with this Bill it can be otherwise.
  I realise, of course, that an Assembly is now regarded by some as being inevitable because the people of Scotland are said to want it, though it is doubtful whether they are aware of the full implications of an Assembly, since the more people know about it, the less enthusiastic they seem to become.
  One popular reason often given for wanting an Assembly is that, if there were an Assembly, one tier of local government could go. However, it cannot be said too often that an Assembly is irrelevant to changes in the structure of local government. Local government can be changed in any way we want now, whether there is an Assembly or not. So it is quite unnecessary to support an Assembly as the only way of getting rid of the much disliked regions. There is no connection between the two. However, the belief that there is a connection between the two—that there must be an Assembly if one wants to get rid of the regions—is one of the many myths, as distinct from facts, that bedevil every discussion we have on devolution.
  Another of these myths, which was given expression to in another place the other day by Lord Crowther-Hunt, is that an Assembly would reduce what he called the overloading of Parliament. Despite the source of this view, I had some doubts. I felt that the extent of any reduction would be minimal. I made some inquiries and found that, if all Scottish business were to be removed from this Chamber, it would reduce the burden on the House of Commons by precisely 4 per cent. It is a mere drop in the bucket. If the object is to reduce the load of business in Parliament, a much more impressive reduction would be achieved simply by the Government exercising a little self-restraint and not introducing the excessive volume of legislation that they now inflict upon us.
  What is, I believe, yet another myth is the view expressed by Lord Home in The Times on Monday—
  "There is a powerful case for devolution in terms of better government for Scotland…".

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  The Secretary of State flirted with that idea yesterday. This statement can be taken to imply only that the present system of government in Scotland is bad. No one would claim that it was perfect, because nothing ever is perfect, but is government in Scotland really worse than it is in the rest of the United Kingdom where there is not any proposal to have any change at all?
  I would most hotly contest such a view. I argue that government in Scotland is probably better. I believe, from my experience of having served as a Minister in a United Kingdom Department, in an English Department and at the Scottish Office—I do not think that anybody else has had that variety of experience, so nobody can either agree or disagree with my conclusion—that the Scottish Office is very much more responsive to Members as well as to Ministers.
  I do not think that the extent to which Scottish Members are favoured in this House is always recognised. Under the present system the Scottish Member has twice the opportunities to ask Questions about Scottish Departments as his English colleague has to ask similar Questions about English matters. The opportunities for general Scottish debates, about which we are always hearing, are twice as great, if not greater, than those which exist for debates about purely English matters. Of course, if those opportunities are not taken—they were not taken this year—the fault is not with the system but with the Ministers concerned.
  At the moment, through Questions and the Scottish Grand Committee, we have within Parliament's existing procedure the very thing that Lord Home's committee proposed and the very thing that my right hon. Friend the Leader of the Opposition said in the debate last year that she wanted; we have a method of discussing Scottish affairs and legislating for them by elected Scottish representatives that is linked to Parliament. Surely, instead of taking a dangerous leap in the dark and setting up an Assembly, the effect of which we do not know, we should try to make better use of the system we possess. I stress that I believe, having thought a great deal about this matter, that the only way of achieving diversity of legislative treatment for different parts of Britain without threatening
  1642
  the unity of the country is through the present system.
  Let me turn now to the Bill. In essence it seems to take parliamentary scrutiny of the functions of the Scottish Office and legislation on those matters from Westminster and to transfer them to Edinburgh. In the process of doing that the number of Ministers is to go up from about half a dozen to more than 20. The number of MPs is increased from 71 to 220. There will be vast increases in the numbers of officials. The cost will also rise staggeringly. It seems a strange choice to spend money on these unnecessary appointments when we do not have enough to pay for useful people such as nurses and doctors.
  I wonder how many of those who clamour for an Assembly now realise that its strongest supporters want to be able to use the Assembly to extract more money from people's pockets than is already taken by the Chancellor in tax and by local authorities in rates. I wonder what people have in mind when they call for "meaningful devolution" as my right hon. Friend the Member for Sidcup (Mr. Heath) said in our debate last year. I wonder, too, what Lord Perth's call for Scotland "to run its own affairs" involves in practice that is fundamentally different from the discretion which exists today. The Ministers concerned should know all about that because the functions to be transferred by the Bill are largely only the existing functions of the Scottish Office on housing, health, education and so on.
  I do not think that there is any great criticism of the way in which these are curently managed or any great demand for change in them. Housing, admittedly, is terrible, but it is worse in Scotland than in England not because of any failure in our legislative process, not because of any diktat from Whitehall, but simply because under the present system, working through Parliament, Scottish elected representatives have chosen to do and have been able to do things differently from the way they are done in England.
  Sometimes the Scottish dimension may produce better results. Sometimes, as with housing, the freedom "to run things our own way" and to have what I would regard as "meaningful devolution" produces

  1643
  worse results than in England. At any rate, we have the freedom to legislate differently when we want to do so.
  I do not see how transferring the legislative process on these matters from Westminster to Edinburgh will greatly alter the independence which already exists in the Scottish Office functions of housing, health, education, and so on. In any case, the subjects to be devolved, important though they are, are not those that people feel affect them most vitally. The number of jobs, the rates of taxation, the standard of living, the extent of inflation are the matters which people really care about—and these are not to be devolved, for the very good reason that they cannot be devolved if Britain is to remain one country.
  Yet once an Assembly is in action, it will claim to be the voice of Scotland, and as the voice of Scotland it will wish to deal not only with the safe Scottish Office subjects for which the Secretary of State is responsible and which have been devolved and about which there has been little discontent, but with the more important economic matters which cannot be devolved and which people really do care about. So the mere setting up of an Assembly sets us on a collision course between Westminster and Edinburgh which, if history is anything to go by, is bound to lead to separation.
  That is what happened to the colonies in America, which at one time had devolved government. Once the threat of French invasion had gone, they became separate. It happened also in Australia, New Zealand and Canada, and within Canada now it is happening again with Quebec. In each of these cases, the devolved assemblies eventually became independent Parliaments, and the countries, which had formerly been united to this country, which had been part of Britain —as the American colonies were—separated from Britain.
  That is what I am afraid will happen to Scotland if an Assembly is ever established in Edinburgh, and it is something that I do not want to happen. I think that it will be disastrous, not only for Scotland—because the oil we hear so much about will not last for ever—but for the rest of Britain. It will be pulling down and destroying a political edifice which has a unique record of achievement
  1644
  and which, despite our present economic difficulties, has great potential for good.
  It is therefore the very negation of statesmanship for unionists—and that surely means all of us—to set up such a body under this Bill when all experience shows that separation is encouraged by so doing, and when separation is the very thing that the Bill's supporters wish to avoid. It is crazy. There must be something wrong with a proposal to set up an Assembly when the Scottish National Party welcomes it so openly as the road to separation. How can we, especially the Government, be so blind to the dangers?
  We must try to face the facts about the separatist effect of devolution and devolving powers to legislative assemblies in the past. We must try to put behind us temporary party electoral considerations and look at the matter not as Conservatives or Liberals or Socialists, but as Britons thinking of our country's welfare. Above all, we must try not to delude ourselves or others with wishful thoughts of some middle course between the status quo and separation, for ultimately there is no middle course.
  The real issue before Parliament is not about an Assembly at all. It is whether we are to stay as one country or become two countries. That is the stark choice that we are in duty bound to place before the people of Scotland instead of encouraging them to think that it is possible to devolve legislative power to part of the country without endangering the unity of the whole.
  Unfortunately that cannot be done. We can remain a unity as one country if we want to, but that means having only one Parliament. Alternatively, we can have two Parliaments—two legislative bodies—if that is what we want, but that means we shall become two separate nations. There is no alternative.
  The tragedy of the Bill is to pretend that there is a further alternative. It falls for the old temptations of not facing reality, of trying to appease and of seeking a cosy compromise when none is available.
  Those of us who are Unionists at heart —I hope that that means most of us—will not be hoodwinked. We shall vote against the Bill not for party reasons but

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  because it imperils the foundations of the State and puts at risk the unity of the country that we hold so dear.
  9.12 p.m.
  Mr. Cledwyn Hughes: The hon. Member for Glasgow, Hillhead (Mr. Galbraith) devoted himself to the Scottish aspects of the Bill but I do not propose to venture north of the border. When listening to the hon. Gentleman and other Scottish Members I was forcefully reminded that there were Scotsmen on both sides in the Battle of Culloden in 1746.
  A Government who set out to deal with devolution in these islands are possessed of at least two qualities—courage and imagination. It is a daunting task and the Government deserve great credit for tackling it.
  Of course the Bill is not ideal. The Archangel Gabriel, assisted by Solomon, could not have drafted a devolution Bill to gain total support in the House. However, the Bill is the culmination of a long process of inquiry, consultation and debate.
  It is wrong for anyone to suggest that devolution is a new subject in Parliament. The House has been debating devolution in various forms for a century or more. Many of the reactions to the Bill that we have heard during the debate demonstrate the impossibility of finding a formula that pleases everybody. Some say that the Bill goes too far, others say that it does not go far enough, while others say that it will lead to the break-up of the United Kingdom.
  This is an important constitutional measure but its proposals for Wales are modest. I find all the talk about the dangers to the constitution and the Union grossly exaggerated. If the British constitution is anything it is flexible. If it ceased to be adaptable to change, it would not survive. Historically, whenever this Parliament has sought to impose a centralist constitutional doctrine, disaster has invariably followed.
  I propose as briefly as possible to deal with three broad questions that have been raised since Monday. The first is whether the Government have authority for introducing the Bill; the second is whether the functions to be evolved by an Assembly
  1646
  justify the setting up of a directly elected body in Cardiff; and the third is whether public opinion in Wales is in favour of this measure of devolution.
  Surely no one questions the Government's justification for bringing the Bill before the House. It was a clear and unambiguous commitment in both the 1974 manifestos. It is important to place the facts on the record. The election manifesto for Wales of February 1974 said:
  "Accordingly Labour will establish a directly elected council for Wales with functions, powers and finances to enable to to be an effective democratic force in the life of Wales."
  Again, the manifesto for Wales in October 1974 said:
  "Labour will establish a directly elected Welsh Assembly with responsibility for a wide range of functions."
  It then went on to list those functions.
  Mr. Raison: I am grateful to the right hon. Member for giving way to me because I take his point about time. Could he tell us what the United Kingdom or English election manifesto said about devolution in 1974?
  Mr. Hughes: The Labour Party's national manifesto said in October 1974:
  "The next Labour Government will create elected Assemblies in Scotland and Wales."
  The position is perfectly clear. This pledge was repeated at the Labour Party's annual conference in Blackpool last October. There can be no doubt that the Government are fulfilling a clear and longstanding electoral promise by bringing this Bill before us.
  In addition my hon. Friends will remember that Welsh Labour Members held several meetings during 1973, under the chairmanship of the Leader of the House, to discuss the Kilbrandon Commission's report and to work out a policy in conjunction with the Welsh Council of Labour. In 1973 we did achieve a consensus. With respect to my hon. Friends the Members for Bedwellty (Mr. Kinnock), Pontypool (Mr. Abse) and Caerphilly (Mr. Evans), they were all present during those discussions and they subscribed to the consensus that we reached.
  Mr. Abse: Does my right hon. Friend recall other matters? Does he recall

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  how he always found himself in a minority on the matter of devolution in the days of Nye Bevan, contrary to the manifesto and contrary to the parliamentary party? Has he something to say about that?
  Mr. Hughes: I have plenty to say, and the only thing that deters me is the fact that other hon. Members want to speak. I have been a devolutionist for over 30 years. I have been perfectly consistent about this, and I am not ashamed of it. I have supported the Labour Party manifesto on some issues on which I did not entirely agree. My hon. Friend is saying now that on a matter of principle, when there is no doubt where this party stands, that he is completely against decisions made in meetings where he had collective responsibility and where he failed to reserve his position. He is perfectly free to do that—as long as he understands what he is doing.
  It has been argued by some hon. Members that this is not the right time to discuss this matter. But as far as those who oppose devolution are concerned, there will never be a right time. They should remember that we are legislating for the future and for a time when the economic situation will be somewhat less harrowing than it is now. We may also have to pay a heavy price for procrastination and delay on this issue now.
  My second point is whether the functions described in the Bill justify the creation of an Assembly. I believe they do. Hon. Members who study Schedule 7 will observe that the powers are extensive for matters which do not engage a great deal of attention in this House. In fact, most of them go without any democratic scrutiny whatever.
  The Welsh Labour Party made some pertinent comments on these matters last year as follows:
  "The present Secretary of State has signed well over 100 orders and instruments, binding on the people of Wales. Not one has been debated in the House of Commons. That is not the fault of Welsh MPs. However conscious and hard-working they may be, there are only 36 of them out of a total of 635 MPs. They must take a full part in what Parliament does for the whole of the United Kingdom. … They must play their part in arguments about international affairs. … They have a responsibility to deal with the particular problems of their own constituencies.
  1648
  Conscientious MPs feel frustrated at the lack of time available to them to keep matters at an all-Wales level under proper scrutiny. An hour of Welsh Questions once every three weeks while Parliament sits, an occasional adjournment debate when lucky in the draw, and three or four Welsh Grand Committee sessions a year are not enough for a proper level of control."
  That statement issued by the Welsh Labour Party last year warrants careful consideration.
  We must of course examine Schedule 7 and the relevant clauses carefully in Committee. The broad thrust of the Bill on these matters is in the right direction. One of the most sensitive parts of the Bill relates to finance. In providing for a block grant the Government have accepted the terms of the Labour manifesto. I wish, however, that it were possible to devise means for the Assembly to raise money on its own account. There is a case for saying that "there should be no representation without taxation". But the present climate is not conducive to raising additional rates or taxes, and the provisions of Part IV of the Bill are therefore broadly right.
  I turn finally to the question of public opinion in Wales. The hon. Member for Pembroke (Mr. Edwards) dealt with the matter in his speech and the right hon. Lady the Leader of the Opposition did so on Monday. We were told what they thought the people of Wales wanted. They are entitled to their opinion. We were told that Wales does not want devolution, and some of my hon. Friends enthusiastically agree with the Leader of the Opposition. I do not share their view, although I would not be as dogmatic about the matter as they are.
  Opinion polls fluctuate, as they did on the issue of the Common Market, but there are some powerful indicators in the other direction. The Kilbrandon Commission came to a firm conclusion after years of study. The Welsh TUC, the Churches in Wales and other public bodies have said that a measure of devolution is desirable. I appreciate that the Conservative Party in Wales, the CBI and some of my hon. Friends take a different view. As I have said on other occasions, I do not like referenda. The hon. and learned Member for Montgomery (Mr. Hooson) discussed that matter at length. I do not share his view,

  1649
  but if the people of Wales agree with it, I would not be afraid of a referendum in Wales on this issue.
  Indeed I am prepared to contemplate a referendum. It is just tenable on the ground that a constitutional change is involved. But I warn the House that a series of referenda will erode the authority of this Parliament far more than will Assemblies in Edinburgh and Cardiff. It is a far more dangerous road to travel than many people have so far realised.
  The people of Wales do not regard these proposals uncritically. I live there, I have always made my home there, and as I travel the Principality extensively, I know what the people are saying. There are things that they are apprehensive about. Their experience of the reorganisation of local government in 1973 has not been a happy one. They will not take kindly to further large increases in the number of public servants. I believe that they would respond warmly to a system combining the Assembly with about 25 to 30 unitary authorities. I suggest that such a system would give efficient and economic service and would not involve a great expenditure.
  Mr. Michael Roberts: Would the right hon. Gentleman seriously advocate 25 education authorities for Wales?
  Mr. Hughes: I would need more time to discuss that point. Education is a major subject. I venture to say this without the necessary thought that one should apply to such an important subject. It is possible that I should wish in those circumstances to give much of the authority for education to the Assembly and perhaps allow unitary authorities to act as agents for the appointment of teachers and the building of schools for example. But the hon. Member must not lead me into discussion on detail at this time.
  The hon. Member for Pembroke said that some people in rural Wales were apprehensive about the dominance of Gwent and Glamorgan. They do not share the view of my hon. Friend the Member for Pontypool that the Assembly will be run by the Gorsedd of Bards! That attitude is divisive and will do us no credit. Our objective should be to unite the people of Wales and not divide them. Nor should anyone frighten the
  1650
  people of Wales into thinking that this is a springboard to separatism and independence, because at the end of the day the people themselves will decide what they want and how far they wish to go.
  I reject the concept of separatism for Wales and on this I agree with Kilbrandon. But if the people of Wales wanted independence, would anyone deny it to them? If the people of Wales clearly wanted federalism, would anyone deny it to them?
  In these debates, we should go back to the report of the Royal Commission more often. It is a remarkable document of great historical significance. It said many wise things. We should remember that the majority of the Commission's members were able Englishmen and they rejected separatism and federalism. I quote two sentences from the Report. Page 39, paragraph 130 states:
  "Generalisations about a people are difficult to make and usually unsatisfactory, but it seems true that as one moves eastward and southward through Wales, the "Welshness" of the people, though it undergoes subtle changes, persists. Despite divisions and gradations—
  and they are manifest in this House—
  "there remain a strong sense of Welsh identity, a different way of looking at things and a distinct feeling that the needs and interests of people in Wales must be considered separately from those of people elsewhere in the United Kingdom."
  The Government have tried to meet those needs and interests in the Bill.
  I shall be glad to support the Government tomorrow night. Any attempt to wreck the Bill will have long-term repercussions that we shall rue. It is our duty to give the Bill a Second Reading and to examine it carefully in Committee and to consider the opinions of the people of Scotland, Wales and of England as they develop in the course of our debates.
  9.29 p.m.
  Mr. D. E. Thomas: I pay tribute to the stand taken for the past 30 years by the right hon. Member for Anglesey (Mr. Hughes). He referred to Nye Bevan and his conversion in 1959 to the idea of a Secretary of State for Wales. Some of us might be praying for the conversion to that view of the hon. Member for Pontypool (Mr. Abse).
  Devolution is not a set of proposals. It is a movement in two senses. It is a

  1651
  movement away from the kind of arid separatism described by my hon. Friend the Member for Caernarvon (Mr. Wigley) towards a greater degree of accountability and a greater degree of local and national democracy. It is also a movement that has brought together the people of Wales and Scotland with the support of the Welsh TUC, the trade union broad rank and file, the Liberal Party and so on.
  The Bill is the minimum programme that Plaid Cymru is able to support. The hon. Member for Conway (Mr. Roberts) is, apparently, able to distinguish between the principle of devolution and support for the Bill. He has been in the House longer than I have, but my understanding of a Second Reading debate is that it is a debate on the principle of a Bill. This is the minimum programme Plaid Cymru is prepared to support, but there must be no watering down of the Bill and no weakening of what is already in our view a relatively weak Welsh Assembly compared with the Scottish Assembly.
  My hon. Friend the Member for Caernarvon in an intervention in the speech of the hon. Member for Caerphilly (Mr. Evans) said that if there is to be a referendum, as the proponents of a referendum argue, the referendum must be in Wales. It would be inconsistent to seek to cut down or remove the relevant Welsh clauses of the Bill or vote against the Second Reading, because the decision on the Bill must be taken not merely by the House but by the people of Wales and Scotland.
  As the Secretary of State said, the devolution movement depends upon the democratisation of the existing powers of Welsh government—the Welsh Office and nominated bodies. I welcome Clause 86 as giving the Welsh more power to dissolve existing nominated bodies. I hope that the Assembly makes wide use of that power, so that there will be more answerability in Welsh government and a reduction in the number of part-timers—usually nominated Conservative part-timers—appointed to serve on boards who are insensitive to the needs and aspirations of the people they govern.
  The devolution movement leads beyond the democratisation of existing powers of government to an attempt to establish more effective policy-making machinery in Wales. We think of that particularly
  1652
  today when there has once again been a cut in the allocation of resources applying throughout the United Kingdom. The hon. Member for Conway said that the Welsh Assembly will become merely a body for implementing the cuts decided in Westminster. That may be so if we have a Labour Government committed to a Tory economic approach. I would much prefer cuts for Wales to be channelled through the Welsh Assembly than to be inflicted from Westminster.
  The Welsh Assembly will be able to decide priorities for policies and allocation in Wales, and the spread of the allocation between health and personal social services and the spread of the allocation in housing, and so on. Particularly in the exercise of public expenditure cuts there is a high level of vertical decision-making in the allocation of resources between education, housing, health and so on, but there is little sensitivity to the horizontal—the geographical—needs of areas in the allocation of resources. The result of the devolution movement in my view will be that the Welsh Assembly and the Scottish Assembly, although they will not have substantial powers of revenue-raising, will have the powers to allocate revenue more effectively, more sensitively and more locally.
  I believe, as does Plaid Cymru, that the devolution movement must go beyond the more effective allocation of resources and more democratisation to ensure a far more effective management of the Welsh economy and an improvement in the social position of Wales relative to that of the rest of the United Kingdom.
  Between 1965 and 1975 there was a loss of 100,000 jobs for men in Wales. That is the record of the unity of the United Kingdom, the record of the centralised economic management of the United Kingdom about which we have heard so much. We have heard a lot about the unity of the United Kingdom but very little about the diversity, the disparity, the geographical inequality, the lower activity rates in Wales and the lower per capita proportion of the GNP in Wales, despite higher productivity. We have unemployment rates in Wales which have always been 170 per cent. of the average level. Only the North of England has done worse. As for poverty, 40 per cent. of families in Wales are below the official poverty line.
  Mr. Ken Weetch: South Wales is industrial and based on two industries, coal and iron, both of which have declined over a long period. What difference, if any, would devolution have made to the problems thrown up by the long-term decline of those industries?
  Mr. Thomas: The major need of an economy which is suffering from a contraction in its extractive sector is effective economic planning in its manufacturing sector and a detailed strategy as to the kind of jobs needed to replace the declining jobs.
  We have not had one effective economic plan in Wales. If we have a Welsh Assembly, with the WDA answerable to it, it will be possible to plan the Welsh economy in a far more effective way than this House or the centralised economic planning of the United Kingdom have been able to do.
  I was saying, before the intervention, that 40 per cent. of all families in Wales are living below the poverty line of supplementary benefit plus 40 per cent. Wales is at the top of the league for social security expenditure, with 330 families per 1,000 involved. In Wales, £187 per head is spent on social security compared with only £115 in England.
  In Wales, the relative deprivation is the result of the lack of Government machinery to plan in and for Wales. There is a lower number of dwellings completed per 1,000 population. There is a lower per capita public expenditure on housing. This is especially relevant after the swingeing cuts announced today. My great fear is that the current levels of £65 per head in Wales and £74 per head in England will not be maintained following this grave further cut.
  The record of centralised management from London, politically and economically, led me as a Welsh Socialist into Plaid Cymru. If I were given evidence that the continued unity and the continued running of the United Kingdom as a unitary State would result in a change in that record and a reversal of these social and economic indicators, I would be converted to unionism. But the record of centralised State capitalism, centralised private capitalism, and what we have seen so far in terms of centralised State Socialism,
  1654
  are such that there is always this geographical inequality. To be a Welshman is to be poorer and to be more often unemployed. This is why we must fight for a change in the system which will allow us——
  Mr. Palmer: I am grateful to the hon. Member for giving way. May I, as a Bristol Member, put to him a question that I put to the Secretary of State for Wales? If these and similar proposals go through, why should Bristol, which is much closer to Cardiff than to London, be governed on a completely different principle?
  Mr. Thomas: I should not want to intervene in the internal affairs of Bristol. If Bristol wants to be run on a regional basis within the South-West of England, that is a matter for Bristol. As for Wales, the improvement of internal communications is as important as the installation of the high-speed train or the improvement of the M4. That is another argument in the area of priorities. If I were looking at the rail system, I should not give priority to high-speed trains to bring Bristol nearer to London.
  Hon. Members on the Government side who are centralists and who are Socialist centralists—I respect them for their Socialism but not their centralism—favour a society which seeks to impose changes from the top down. I believe most passionately and strongly in the devolution movement as something related to a greater self-management of the economy, with workers' control at plant level. I believe in creating centres of power in regions and nations which will be self-regulating and self-regenerating. Worker control will not come about without changing ownership, because worker control at plant level is change of ownership. There will be far more radical changes of ownership through a Welsh Assembly in Cardiff, which must develop into a powerful Welsh Government, than through this House.
  Mr. Buchan: I disagree with very little of what the hon. Gentleman has said, but he has argued the case against centralisation, while his major premise is that Wales is a nation, and therefore should be a State, which is quite different from decentralisation. Plaid Cymru

  1655
  seems to be wishing to create a centralised State. Is it the slogan of the hon. Gentleman's party that North Sea oil is Scotland's oil, or does it believe that the resources of the United Kingdom should be shared?
  Mr. Thomas: I can say without breaching any confidences that there have been intra-party discussions about recirculating any oil revenues.
  In speaking about the desire to create a State in Wales, I do not mean that I want to create a nineteenth-century nation State. My party does not want that either. We want to ensure that full national status is given so that we have power to decide our own economic destiny, to do our own economic planning and allocation of resources. That is not a State.
  Mr. Buchan: What is it?
  Mr. Thomas: What we must be looking for in this debate is a system of government and national participation within Britain which breaks out of the straitjacket of nineteenth-century nationalism. My party is not here to revive nineteenth century nationalism or State-ism. Our thinking is carried out in the context of European confederation and developments on that basis. That is what the whole debate is about. It is a groping by this post-imperial Power for new forms of national status, which must be effective. That is why my party and I are more anxious than other hon. Members may be to see the Welsh Assembly work, both as a forum for decision-making and——
  Mr. Dalyell Mr. Dalyell rose——
  Mr. Thomas: I cannot give way.
  Mr. Dalyell Mr. Dalyell rose——
  Mr. Speaker: Order. If the hon. Member for Merioneth (Mr. Thomas) is not giving way—and time is going on—he must he allowed to proceed.
  Mr. Thomas: I should like to take up a point made briefly by the right hon. Member for Anglesey, who talked about the state of public opinion in Wales. I describe devolution as a movement in a broad sense. There is also an internal movement in the political movement in the political thinking of the people of Wales, shown when they are asked concrete questions as
  1656
  opposed to abstract questions about devolution. Asked "How much power do you want for the Welsh Assembly?", a substantial proportion of those replying—and I do not know whether the sample was taken in the Cardiff and County Club; the hon. Member for Cardiff, West (Mr. Thomas) is not here——
  Mr. Speaker: He is.
  Mr. Thomas: I apologise, Mr. Speaker. I meant the hon. Member for Cardiff, North-West (Mr. Roberts), who I see is here. A substantial proportion of those who replied, including 32 per cent. of Labour voters and 20 per cent. of Conservative voters, 20 per cent. of the hon. Gentleman's electorate, said that they wanted more power for the Assembly. If we analyse that reply, given in the recent Western Mail-HTV poll, and an earlier reply by those who support the Government's proposals, we find that a total of 44 per cent. favour a degree of devolution up to the Government's present proposal or beyond.
  There is a movement of opinion in Wales in favour of substantial devolution. I believe that if there were a referendum next October we would win it handsomely in Wales. The forces of radical change—the trade union movement, my own union, which is the Transport and General Workers' Union, the National Union of Mineworkers, the rank and file and leadership of the Labour Party in Wales and what is left of the Liberal Party in Mid-Wales would all be allied in compaigning for change. The forces of reaction, including the CBI, the Welsh TUC and the CLA, led by the generals below the Gangway on the Labour Benches—for the leaders of the Tribune Group lead the forces of reaction in this debate—would be on the other side. Nothing can prevent the people of Wales from working out the kind of constitutional framework they want.
  9.45 p.m.
  Mr. Andrew Welsh: I shall try to be as speedy as usual, Mr. Speaker. Devolution is not new and nor is separatism. Scotland has had separatism for many years. We have had separate or, as I prefer to call them, independent institutions including the Church, the law, education and a whole host of other organisations.

  1657
  This separatism has been recognised by Parliament for a long time in the creation of separate institutions of government for Scotland. Past waves of nationalism led to the re-creation of Secretary for Scotland which, in turn, produced the post of Secretary of State for Scotland with automatic Cabinet rank. This gives us an embryo Executive, and the recognition of Scottish separateness led to the establishment of St. Andrew's House, which is, more or less, an embryo Scottish civil service.
  Thus we have an embryo Executive and an embryo Civil Service. It is logical to put on top of those a democratically elected Assembly to oversee their work. That is the job of devolution.
  In this debate too much effort has been expended on looking at the negative aspects of devolution. Its opponents have given us all sorts of gloomy prospects and impressions about the Bill and how it will work out in practice. We have heard talk about the slippery slope to independence, about the Bill meaning the break-up of the United Kingdom and prophecies that we shall somehow be knee deep in civil servants and burdened down by extra taxation. There has been a myriad of speeches littered with gloom and doom.
  Even the supporters of devolution have failed to realise the positive element and the potential it contains for bringing back decision-making powers to Scotland and allowing Scots' minds to concentrate on Scottish affairs within the context of Scotland. There is a positive potential for us to do things our way. The Conservative Party must realise that the status quo is no longer an option.
  The Secretary of State was right when he said that the Scottish governmental system within the United Kingdom framework had reached the end of the line and that it had done all it could do. We now have a part-time Secretary of State and Under-Secretary system. This is simply not good enough for the government of Scotland.
  Let me take a practical example. Scottish education is in trouble and Scots Members will accept that something has to be done to meet its problems. Yet at the last Scottish Grand Committee—which governs our affairs—the meeting
  1658
  broke down six times because it was impossible to get a quorum of 17 of the 71 Scots Members to attend a Tuesday morning debate on education. That is not good enough for the government of my country.
  Scots Members have the opportunity to ask one Question of Scottish Office Ministers only once every four weeks. If I wish to ask a Question on education, I can do so only by excluding Questions on housing, police, and a whole host of other matters which have individual Ministers and Ministries in England. The answer lies in having Scottish Ministers on the floor of a democratically-elected Scottish Parliament who can be closely examined by my representatives on my behalf.
  The Minister of State, Privy Council Office (Mr. John Smith): Before the hon. Gentleman goes on about the difficult problem of deciding on which subject to table a Question, I should point out that he did not table any Questions to the Secretary of State today.
  Mr. Welsh: I accept that. However, the hon. Gentleman will know that I asked supplementary questions today.
  I repeat that such Questions are tabled a fortnight earlier. The system would be much better if we moved on to the system about which I have just been talking.
  Mr. Buchan Mr. Buchan rose——
  Mr. Welsh: I shall not give way now.
  We need to progress towards Scottish control over Scottish affairs, with the responsibilities as well as the rewards that that system implies. I realise that there is no magical solution contained in the Bill, but it would give us an opportunity for Scottish people to concentrate on Scottish affairs and the introduction of a Government physically closer to the people and taking place within the context of Scotland. That is important.
  We believe that Scotland has something distinct and individual to offer to the world and to the community of nations. As with self-government, it is another opportunity for people from all parts of Scotland to get together to discuss our affairs and to think out the best solutions for Scotland. This is sharply

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  opposed to the divide and rule philosophy of hon. Members who have spoken over the past few days and who have suddenly discovered the Shetland Isles. There has been no mention of them over the past 10 years. But because some hon. Members want to make cheap debating points and because it suits them, they suddenly discover the Shetland Isles, which no doubt they think are hidden away in a small block on the right side of the Scottish map near to the Buchan coast.
  Mr. Buchan: Watch it!
  Mr. Welsh: We are seeing the beginning of the Scottish dimension and of Scottish interests which can be seen in the Scottish National Party, in the Scottish Labour Party and even in the ranks of the Tories. It is very interesting to watch the differences, whether they admit it or not, and the creation of Scottish feeling among certain Tory Members. Some of them realise that Scotland is theirs and that they have to think about it, as opposed to those who remain ultimately loyal to London. It is their choice.
  What is happening in the Scottish Labour Party and the Conservative Party, and the powerful existence of the Scottish National Party shows that we are witnessing the embryo beginnings of what will be the future Scottish political party system beyond self-government. Through these debates we are seeing the logical and almost inevitable process sparked off by the rising power and strength of the Scottish National Party.
  I find it difficult listening to these debates to reconcile the Scottish National Party that I know and joined with the one described by hon. Members from both sides. Members of my party have been called all sorts of rabid nationalists and all kinds of extremists. That is not the SNP that I know and joined. I wish that some of those hon. Members who put forward these ideas would check their facts and check the reality of the Scottish National Party. It is an extremely healthy and democratic development in Scotland and that is something for which we should all be grateful.
  Devolution is an ongoing affair. There is no once-and-for-all settlement. This Bill is not a once-and-for-all settlement. Ultimately this issue will only be decided by the Scottish people. The SNP is a
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  gradualist party. People know where we stand. But we can only do what we are given a democratic mandate to do.
  We have always chosen, rightly, the difficult way, the democratic and peaceful way, of achieving our ultimate goal of self-government for our nation. It should come as no surprise to any hon. Members anywhere that that is our aim, although a certain Liverpudlian fringe looked on it with surprise on finding out. I joined a party whose motto and slogan is "Put Scotland First". I believe in that. I am here to speak for my constituency and my country, and that country is Scotland.
  The SNP has always said that it will promote Scotland's interests in any Assembly where decisions are taken affecting our country. We have always said that we would participate constructively in whatever devolved Scottish Assembly this House cares to produce even though ultimately it will never be a substitute or an adequate replacement for a Scottish Parliament. But we need an administration in Edinburgh capable of meeting Scottish needs and capable of getting to the roots of Scotland's long-standing social, economic and political problems, and with the resources and the powers adequate to meet this task.
  In the last analysis, this Assembly's ability to transform the social and economic prospects of Scotland will obviously depend upon the extent of the controls that it enjoys over the nation's fiscal and industrial machinery. There are obvious and massive deficiencies within the Bill concerning that matter—for example, the lack of economic and monetary control and the economic and financial muscle power necessary to meet Scotland's problems. However, this is a first step. We accept it as such.
  Devolution seems to have few real friends. That has become plain throughout these debates. But at least we welcome it as a first step towards a new unity of the United Kingdom. I hope that when we say that it will be taken at its face value. I believe that from the SNP Bench people will hear what we really mean to say. We are not a group of people who say one thing in one week and entirely the opposite thing the next week—like a certain hon. Member, and taking half an hour as official spokesman to do it.

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  Perhaps that is acceptable in this House because it is looked upon as part and parcel of the job. However, when we say that we look upon devolution as a first step towards a new unity of the United Kingdom we mean it.
  Ultimately, logic and history will demand a self-governing Scotland. Devolution is only a first tentative step towards meeting the dynamic re-awakening of Scottish political consciousness and the wish of our ancient nation to take our place in the world and to play our individual and distinct part.
  Ultimately and rightly, the decision rests with the Scottish people themselves. Only they will decide how far this process shall go. They know where we stand. They know where the Bill stands. Ultimately the Scottish people will decide. Personally, I await their decision with confidence.
  Debate adjourned.—[Mr. Bates.]
  Debate to be resumed tomorrow.

  ROAD TRAFFIC (SPEED LIMITS)
  9.57 p.m.
  Mr. Norman Fowler: I beg to move,
  That an humble Address be presented to Her Majesty praying that the 60 miles per hour and 50 miles per hour (Temporary Speed Limit) Order 1976 (S.I., 1976, No. 1872), dated 9th November 1976, a copy of which was laid before this House on 10th November 1976 in the last session of Parliament, be annulled.
  There is at least one notable feature of tonight's debate on speed limits. It is the first time that the House has had the opportunity of hearing a transport Minister explain and defend the operation of the 50 mph and 60 mph limits. As the House will know, those limits were introduced at the end of 1974. At the end of their first year of operation, the Opposition prayed against the Order, but the Government so arranged business that the House was allowed a mere 12 minutes' debate on this question. In spite of all the representations made to the Government, they refused time for that debate to be continued.
  That brings me to my fast point. What the House is dealing with here is criminal law. The police are required to enforce the limits and motorists are prosecuted for failing to observe them. In the extreme, drivers may lose their licences and, perhaps, their means of livelihood. We know that to date over 25,000 motorists have been prosecuted for failing to observe the 50 mph and 60 mph limits.
  It seems to me, therefore, that it was quite wrong for the Government to refuse debate of this question. It seems particularly wrong when it is a matter of common knowledge that there is public concern about the operation of these limits—concern that there are too many limits, that the 50 mph and 60 mph limits are unmarked, and that the limits make no real contribution to fuel economy or to road safety.
  Nor was this concern in any way answered when we actually had the Government's view on the question. Six weeks ago, the Under-Secretary of State for Energy was persuaded to take the Floor. To put that more accurately, he was required to take the Floor to reply to an Opposition amendment to the Energy Bill. But did the Government then reject our views on this issue? Not in the least. They shared our opposition

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  to these limits, for the Under-Secretary of State for Energy said:
  "We accept that it may well be that on a number of grounds the present limits are not quite right from either the fuel economy or the safety point of view".—[Official Report, 21st October 1976; Vol. 916, c. 1809.]
  What did the Government then propose? Anyone who studies their transport strategy will know the answer to that. They issue a consultation document. We are already ankle-deep in consultation documents. We have a consultation document, plus a volume of appendices, on transport policy generally. We have another transport consultation document on the control of private non-residential parking, and now we have a consultation document on national speed limits. We on this side of the House are fast coming to the conclusion that the last occasion when a decision was actually made on transport was in the happy days when my right hon. Friend the Member for Yeovil (Mr. Peyton) was Minister for Transport Industries.
  Why did the Government issue a consultation document on these limits? Was it, perhaps, to seek public participation? Not a bit of it. The fact is that the Government had left it too late to decide what should be the new limits. They discovered that if the existing order were just allowed to expire, the effect would not be to go back to the old national 70 mph limit. There would have been no speed limits at all in some places. There would have been a 70 mph limit on motorways, and also speed limits in urban areas, but on country roads which were not motorways there would have been no speed limit whatsoever. That was the sort of mess into which the Government had got themselves.
  Therefore, to save themselves from that fate—not to mention saving us from that fate—the Government have gone into the consultation process and wish to renew these limits. They are seeking the permission of the House to renew the limits for six months to enable consultation to take place. It is an extraordinary tale, and we look forward to the Under-Secretary's explanation tonight.
  Regrettably, even that is not the end of the matter. Even in consultation the Government are still blundering about. The orders for 50 mph and 60 mph limits stem from the Energy Act 1976. That
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  great defender of free expression in the Labour Party, the Secretary of State for Energy, remembered at the eleventh hour that a commencement order was necessary, so he very properly printed it, again saving us from having country roads without speed limits. But he forgot one small detail. He forgot to have the Act itself printed.
  May I have the Under-Secretary's attention? Obviously, something is causing consternation among the Government Whips, the Parliamentary Private Secretary and the Under-Secretary. If the Under-Secretary could join us in the debate we should be very grateful.
  The Secretary of State for Energy forgot to have the Act itself printed. Ministers can make such mistakes at any time—and most do—but in this case the mistake meant that motorists were not only being prosecuted for failing to observe unmarked speed limits but they were being prosecuted under powers in an Act which was unpublished. That was the result of the Minister's failure in the first few days of December, and the position was not resolved until copies of the Act were delivered to the Vote Office on Saturday 4th December—Saturday, of course, being well-known as an active day at Westminster.
  I hope, therefore, that the Government will approach this debate with a certain amount of humility, for in all conscience they have much to be humble about over their handling of this matter.
  I will briefly summarise the case against the 50 mph and 60 mph limits. In my view, the fundamental case against them is that they are bad law. They can lead to uncertainty among motorists and they can affect relations between police and motorists.
  I am in no way defending motorists who deliberately ignore speed limits. Speed limits are obviously necessary in the interests of safety and, equally clearly, they should be observed. However, any speed limit system must meet certain requirements. The first of these requirements is that the speed limit system should be as simple as possible. Yet we in Britain have a system of speed limits in which there are no fewer than five limits in general operation. As a result, motorists pass from one limit to another with a bewildering frequency on relatively short journeys.

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  Secondly, speed limits should be clear. The 50 mph and 60 mph limits in Britain are unmarked and very little effort has ever been made to remind the public that they remain in force. That is unlike, for example, the approach of the Department of Transportation in the United States where publicity of speed limits is considered to be of paramount importance.
  Perhaps, above all, speed limits should be seen to be necessary and to be fair. It is clear that many motorists simply do not believe that that is the case, and for some good reason. The Government introduced these limits as a fuel economy measure, but there is precious little evidence to suggest that they have accounted for any great savings in fuel. Even the Government themselves say that the limits are unlikely to have affected consumption by more than 1 per cent., and the chances are that it is lower than 1 per cent. A more likely reason for the drop in consumption is that the price has risen and that the motorist has obviously made his own decision.
  Mr. Nick Budgen: I wonder whether my hon. Friend would agree that the proper way to limit consumption of a commodity is to allow the price to rise and certainly not to do it by this form of very crude rationing.
  Mr. Fowler: As a general proposition, without getting into my hon. Friend's well-known views on the economy, I agree with that. Certainly, as it has turned out in this case, what he said is very pertinent.
  An additional argument advanced by the Government themselves is that relations between the police and the public are likely to be strained when motorists are prosecuted for failing to observe limits fixed primarily for reasons of fuel economy or, as my hon. Friend says, for fuel rationing reasons. That point becomes even stronger when the fuel economy which it was hoped to achieve by the introduction of the limits has not been secured. That is the case at present.
  One point remains, and that is the point of road safety, an issue to which personally I attach enormous importance, as do hon. Members on both sides. Again, I do not believe that there is a road safety argument for continuing with these 50 mph and 60 mph limits. I say that for
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  two reasons. First there is no convincing evidence that the limits are having a real effect on accident rates. The Government themselves in their consultation document agree that no reduction in the accident rate was identified after the first three months of operation.
  It could be that we should have a slower speed on some country roads. The Institute of Advanced Motorists, for example—I declare an interest—suggests that there should be 70 mph limits on motorways and dual carriageways and a 60 mph limit on other routes. There is some argument for that, because it is clear that it reduces speed and it also reduces the number of limits.
  The second reason I say that there is no road safety argument for the 50 mph and 60 mph limits is that all the evidence suggests that the observance of limits is falling. Taking the evidence of what the Department of Transport calls free flow conditions, in July 1975 82 per cent. of drivers observed the 50 mph limit, whereas in July 1976 that figure was down to 76 per cent. In July 1975, 79 per cent. of drivers observed the 60 mph limit. In July 1976 the figure was down to 71 per cent. On the latest evidence, between 25 per cent. and 30 per cent. of drivers do not observe the limits. That is the evidence of the Department of Transport. The trend is downwards. That is bad for road safety and bad for the police, whose task is obviously made more difficult.
  Mr. Robin Maxwell-Hyslop: Is my hon. Friend aware that in many parts of the country, owing to the price of petrol, police cars have to spend most of their time on patrol static, not mobile, and that therefore they cannot enforce the limits anyway?
  Mr. Fowler: I was not aware of that, but obviously if 25 per cent. to 30 per cent. of drivers are not observing the limits, that places an extra burden on the already overstretched police service.
  I believe that essentially these limits are bad law. They should have been revised by the Government months ago. We deplore the manner in which the Government have handled this issue over the last two years. They have now undertaken to produce new proposals after consultation. I suggest that they must also give an undertaking tonight to present

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  their proposals to the House in good time before the six months extension runs out. We obviously require to discuss these proposals, and we may well want to amend them. The Government must give an assurance today that they will make that possible. There can be no question of presenting proposals at the last minute on a take it or leave it basis.
  I hope that the Department recognises what it has failed to recognise over the last two years, that traffic law is an important question in the House, that it affects millions of motorists, and that it has an important bearing on relations between police and public. The unmarked 50 m.p.h. and 60 m.p.h limits have continued for too long, and in my view they must now be replaced.
  10.13 p.m.
  Mr. Robin Maxwell-Hyslop: My hon. Friend the Member for Sutton Coldfield (Mr. Fowler) rightly drew attention to the fact that the speed limits which we are dealing are not marked. They were introduced as an emergency measure, and it is doubtful that they have met any of the purposes for which they were introduced. Doubtless they have had many unintended effects. They have exacerbated relations between the police and the public, and they have endangered the driving licences of citizens who are otherwise law-abiding. Neither of those factors is desirable.
  Not only in the Devon and Cornwall Constabulary has the shortage of funds resulted in many police cars having to patrol from a static position because they cannot afford the petrol to carry out a mobile patrol. For that reason they are often seen parked on bridges, the officers looking along the motorway, thereby reducing the two carriageways on the bridge to one. There has certainly been one case where a police car ran out of petrol while pursuing an authentic criminal because it was allowed to have only three gallons in case the bill became too great.
  This is the sort of absurdity that has resulted from trying to enforce laws which do not seem reasonable to the public at large. Many members of the public, including myself, are not sure what is and what is not a dual carriageway. For instance, when is a dual carriageway recognisable? Is it when one can see
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  the other carriageway across the intervening central reservation? Where these carriageways diverge by perhaps as much as several hundred yards as happens in hilly country are these two unilateral roads halves of a dual carriageway or not? If not, it would be ridiculous, but I am not sure that in law they are. I am not sure that they are two halves of a dual carriageway. I am not sure that they are not two single unilateral roads.
  It is this sort of nonsense where native wit does not tell one whether one is breaking the law and which brings legislation into disrepute. There is no good reason to have a 50 mph limit on a road if the other half of it is several hundred yards away but to have a 60 mph limit on it if the other half is adjacent. But I suspect that that is possibly the case. In many rural areas, where a three-lane road turns into a dual carriageway every so often, for perhaps 10 yards or 50 yards or 100 yards, presumably the speed limit goes to 60 mph and then comes down again to 50 mph.
  The effect in hilly country of a 50 mph limit is to build up long queues on hills behind heavy vehicles, and one is then unable to overtake when it is otherwise safe to do so. In other words, there is a congesting result from the 50 mph limit. That militates against safety rather than acting for it. In many parts of the country on class A roads, there are heavy gradients where the pile-up of traffic is constantly occurring. I do not think that there is a case even in terms of safety for these unmarked and largely incomprehensible speed limits.
  They also militate against the Government's general economic policy. Let us take Cornwall as an example. No motorway goes there. When the motorway programme is complete, the motorway will end just after Exeter. The rest of the way to Plymouth and Cornwall will be dual carriageway. It is a beautifully-engineered road, but it is subject to a 60 mph limit. That means that the cost of transporting goods from Cornwall to the markets in densely-populated areas is unnecessarily increased, while the work that can be attracted to development areas is also artificially restricted because the restrictions on drivers' hours mean that there is a certain radius beyond which one needs double the number of vehicles and drivers. That must militate against

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  the Government's general development area policy, not just in the South-West of England but in Wales and Scotland and other parts of the United Kingdom.
  What started as a temporary measure, which was never good but was bad law because it was indefinite and difficult to determine in any one place, and was essentially unreasonable, has become not only bad law but bad habit. The occasion for stopping it is tonight.
  10.19 p.m.
  Mr. Graham Page: This order is not technical in any way. It does not relate only to certain professions or certain businesses which have to interpret it. It affects very much the ordinary man, the ordinary car driver, with regard to the speed at which he can go.
  Unfortunately, a number of us from time to time find that we are exceeding the speed limit and have to find out under which law we are being prosecuted. On looking at the order we find the most extraordinary muddle of dates, Statutory Instruments and statutes. There is the Fuel and Electricity Control Act 1973, the Fuel and Electricity Control Order and, finally, the Energy Act. On examining the order to find the parent statute we discover that it is Section 77(3) of the Road Traffic Regulation Act 1967. It we looked up that section to find what power it gives to the Secretary of State to make the order, we would find nothing in it authorising an order of this sort.
  We read on and find that it has been extended by the Fuel Control (Modification of Enactments) (Speed Limits) Order 1973, which has the distinction of having no fewer than four brackets in its title.
  When we look up that order we find that it was made not under the Road Traffic Act—it has nothing to do with that measure—but under the Fuel and Electricity Control Act 1973, which lasts only from year to year. It was a yearly Act that requires to be renewed each year by Statutory Instrument. If that is the measure that gives the necessary power under the Road Traffic Regulation Act 1967, it has to be in force at the time that an order is made under the 1967 Act.
  The next task is to ascertain the date that the Fuel and Electricity Control Act 1973 died. It is true that it was alive
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  on 9th November when the order was made. It was alive on 10th November when the order was laid. However, on 1st December, when the order is said to have come into operation, its parent statute had died. On the face of it, the order appeared to be a bastard. It had no parents. In no document before the House could it be ascertained that the fault had been corrected in any way.
  To give the Minister his due, he has corrected the matter. The birth took place in the vestry at the last moment. That is how the correction was made. It was made by the Energy Act, which keeps alive the Fuel Control (Modification of Enactments) (Speed Limits) Order 1973. In fact, I have gone wrong. The Energy Act keeps alive the 50 miles per hour (Temporary Speed Limit) Order 1976, but when we read the order we find that the Energy Act had not come into force. In fact, it came into operation on 23rd November. That could not have been discovered by anyone in the House, as a commencement order is not laid before it.
  When I looked at the order I had to ask the Department whether there was a commencement order for the Energy Act. Some dear little lady came running round to this place with the order. It was kind of her and I was much obliged, but how do the general public get to know about these matters? Having obtained the commencement order for the Energy Act on 23rd November, where was the Energy Act itself? It is no good making an order for an Act to come into operation when no one can look at the Act. It is no good saying that the Act has gone through the House. In fact, it was being given its final stage—this kept the order alive—in a Message from their Lordships in another place.
  Only by getting the last print of the Bill and combining amendments made in this House on Report, Lords amendments, Commons amendments and Lords messages can we interpret whether the order was alive. This is an ordinary order that the ordinary man in the street has to try to interpret.
  If this is the way that the Government are to do things, and if the Energy Act was printed on 4th December, it was possible to know what had taken place

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  only by standing at the Vote Office, where the public do not stand. The only way to ascertain what had happened was to seize the Act immediately and devour it page by page. On reaching the last page one would know that the order had been kept alive. This is an important order affecting the ordinary man. It is contempt of the public as well as contempt of the House to impose laws on them in this way.
  10.25 p.m.
  Mr. Phillip Whitehead: I am glad to follow the right hon. Member for Crosby (Mr. Page) and the hon. Member for Sutton Coldfield (Mr. Fowler) because I think that there is a great deal of merit in what they say. I do not feel that the argument has been laid out for continuation of these orders in any permanent sense. What is at issue is whether we are right to have the full process of consultation before the final decision is reached. I hope that decision will be negative and the orders rescinded some time in 1977.
  I want to look at the reasons why I think the orders should be recalled or annulled. Various reasons were advanced for their introduction in the first place. They were introduced against a background of the energy crisis, and tacked on to this we had the argument of safety.
  If we look at the safety and fuel saving factors we find that both were significantly in error when they were advanced as reasons for maintaining the orders. I do not believe that there is much evidence that safety has been improved by the orders. I pay tribute to the Department in this regard as there is precious little indication that the level of accidents has decreased as a result of the orders in the evidence it has put forward in the document which has been issued for consultation.
  As the hon. Member for Tiverton (Mr. Maxwell-Hyslop) pointed out, the orders are in force on roads which themselves vary widely in form. Motorists are in ignorance from one mile to another about the particular category of road on which they are travelling. They do not know whether they should be observing a 50 mph or a 60 mph limit, or whether there is a temporary derestriction.
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  More often than not, the motorist is not even open to the sanction of the law because very few police cars will pursue him to tell him whether he is observing the limit.
  When he replies, my hon. Friend should tell us the incidence of prosecutions, both successful and unsuccessful, over the period since the orders came into force. My guess is that they are honoured in the breach almost always. I must admit that I honour them in the breach, partly out of simple ignorance and partly because when there is a 50 mph limit on a road which is safe and on which motorists are never stopped or chased because it is outside the normal marked restrictions, the motorist usually ends up travelling at a speed which is convenient to him. I suspect that most motorists do this and I suspect that there have been very few prosecutions brought, particularly in recent months.
  The second question is whether these orders have reduced the number of road accidents or made people drive more carefully. I doubt it. Those of us who travel up the motorways regularly would be in favour of many more differential markings for differential conditions. We are introducing this on motorways to some extent, but on many Continental roads this system is much more sophisticated and has been in existence for longer periods over greater stretches of road. Under this system a temporary speed limit comes into effect by warning lights when road conditions are difficult. If the Government want to attack the safety problem, this is the way to do it. They should not do it by saying that there will be a 50 mph or 60 mph limit on roads on which no markings have been placed at one-mile, or even 10-mile intervals.
  Just as I view the safety argument with some scepticism, I am also sceptical about the speed limits being a significant factor in fuel saving. I looked at the section of the consultative document dealing with petrol and price economy. It says:
  "It is estimated that a reduction of between 5 and 10 mph on roads subject to the 60 and 50 mph limits is needed to achieve fuel savings of the order of 1 per cent. of the total consumption of motor spirit. There is not enough evidence to suggest that driving

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  speeds have been reduced sufficiently to reduce the average speed on all roads by more than 5 mph. It is therefore likely that the major part of the fall in motor spirit consumption was due to changes in driving habits—such as more cautious use of accelerator and brake—and to more use of smaller vehicles."
  I agree with that. Not even the Department's figures suggest that there has been a significant saving as a result of these provisions. Therefore, to that degree the argument for the measure is diminished.
  If we are looking for a pattern of fuel consumption and also have in mind the shrinking supply of fossil fuels, we should consider very seriously indeed energy conservation in respect of motor vehicles. We should be considering the fact that eventually we shall have to deal with a form of petrol rationing for motor vehicles. [Hon. Members: "No."] Then we shall have rationing by price, which Opposition Members may prefer, rather than rationing by quantity. Rationing by price to some sections of the community is as onerous as is rationing by quantity to hon. Gentlemens. I am not saying that I want to see such an eventuality, but it is something which the House will have to consider before many years elapse.
  A much more significant impact could be made in the area of energy consumption other than by the use of provisions such as those contained in the order. Equally important in our minds should be the design of vehicles and the type of fuel used. We should examine the proposition involving the question when and when not to take a motor car out on to the roads. These factors may bear on the energy question, but whether one drives at 55, 60 or 65 m.p.h. on a 10-mile stretch of road is not an important factor in the equation. I take the view that a saving of fuel brought about by these provisions has not been proved.
  The final and most important point is whether the provisions bring the law into disrepute. We are to some extent guided by the number of prosecutions and the extent to which these provisions lead to an exacerbation of relations between the police and the citizen. My guess is that if police cars are parked at the top of a motorway bridge observing traffic travelling
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  along the motorway, they are not exacerbating relations with motorists who pass by at 50 m.p.h. or 60 m.p.h. on a carriageway which those police cars are partially impeding.
  I doubt whether the police find the order so much of a burden in terms of any worsening of relations with the public, but I know for a fact that we do not need laws on the statute book which are honoured in the breach and which the vast majority of the population regard as a nonsense. It is not the effect of those laws that concerns me but the effect on the observation of the law in general in respect of traffic offences. If the public come to believe that there is a section of road traffic law which is nonsense, and which they know to be nonsense, their respect for other elements of the traffic law will be very much affected.
  We are all concerned about safety matters, and the subject of seat belts will come before us in the near future. The motorist must not be led to think that there is any diminishing of the role of the State in protecting him and at the same time in cutting down the number of road accidents.
  My hon. Friend the Under-Secretary of State for Transport will have to say something gripping tonight to convince me that we have to keep these provisions in force during a prolonged period of consultation. I do not know how long the consultations will last. I am in no doubt about the role of the public in those consultations because members of the public write to me on these, this subject, and every letter I have received favours the abolition of these limits—and soon.
  The public have put a strong case to me and it is that case that I put to the Minister. I hope that he will take note of it and accept that the period of consultation should be brief. It need go no further than the first month of next year. If, as I believe and as the spirit of the consultative document suggests, there is no material evidence for keeping the limits, the order should be withdrawn.
  10.36 p.m.
  Mr. Jerry Wiggin: With pleasure I tell the House how much I agree with the hon. Member for Derby, North (Mr. Whitehead) and I shall attempt to reinforce some of his arguments.

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  This law came into force nearly two years ago but this is the first time we have had a proper debate and an opportunity to come to a conclusion on an issue which affects the rights of every motorist. I intervened during the Report stage of the Energy Bill when we discussed this, but that was a general debate. This is not an energy issue and it should not have been tackled in an energy Bill. It is right that we should discuss the matter tonight when a Minister from the Transport Department can answer the debate.
  Not for the first time we are discussing a retrospective order which has been law for a fortnight already. That is unacceptable and wrong. We could and should have discussed this before it came into effect.
  Tonight we have heard an answer to the energy argument from my Front Bench, and my hon. Friend the Member for Sutton Coldfield (Mr. Fowler) is right. Many countries have tried to introduce speed limits in the interests of saving petrol but those are countries where there are many more miles of dual carriageway and where high speeds lead to high consumption of petrol. That is not true of the majority of British roads. We are allowed to speed at 70 m.p.h. on motorways. In America a 50 m.p.h. limit is ruthlessly imposed by the police. One can travel anywhere on those roads and average 50 m.p.h., but not in this country. In South Africa a £500 fine makes speed limits work. That is a totally unacceptable way of dealing with energy saving. Speed limits did not exist on most of our roads seven years ago. Only with the imposition of speed limits on motorways was a general order of speed limits introduced.
  I am not aware of any criticisms of the 70 m.p.h. limit. The lower the limits the fewer the accidents. If we reduced the speed limits to 30 m.p.h. or even 20 m.p.h. the accident statistics would improve. The longer such limits operated the better the situation would appear. It has been said that 60 per cent. of drivers obey the limits. But they probably obeyed the limits before they existed because they did not wish to travel faster. Most of the 30 per cent. who now break the limits probably always drove fast. I say that limits have little affect upon the people
  1676
  who want to go about at a reasonable speed.
  I was delighted to hear the hon. Member for Derby, North say that the Bill dealing with seat belts might be reintroduced because that is the quick and easy way to reduce casualties on the roads. For a Government to argue that this order might be a safety measure when they are not prepared to introduce the Road Traffic (Seat Belts) Bill—or at any rate in a way in which it can be passed—would be total hypocrisy. I hope that the Minister will not do that or, better still, that he will assure us of the introduction of that long-awaited measure, the delay in introducing which has already cost several thousand lives in this country.
  The conflict with the police is one of the most important aspects of this matter. A police car sitting on a motorway bridge can have in it a new electronic device called Vascar, which can very effectively assess the speed of a vehicle on the road. I have had the opportunity recently of inspecting this device at close quarters, by courtesy of the local constabulary. It is quite possible for a stationary police car—perhaps hiding behind some obstacle and not even in sight—to time the speed of a car, by means of marks on a road, so accurately that a court will uphold the conclusion, and successful prosecutions can take place.
  I mentioned on the last occasion the question of the margin that the police will allow in the matter of speeding offences. It is worth considering that if people travel at 40 m.p.h. in an area limited to 30 m.p.h., the police can often simply issue a warning. That is a one-third excess over the speed limit. But the police use the same 10 m.p.h. in regard to speed limits of 70,60 or 50 m.p.h.
  If I were to make a positive suggestion, it would be that there should be a full and true review of all speed limits and that equally there should be an imposition of penalties to see that these limits are obeyed, commensurate with a wider, more sensible and more general approach to motorists' difficulties.
  With modern roads it is possible to go faster in a safer way, but it is important that the rules should be kept. There seems to be a completely "red flag"

  1677
  attitude on the part of civil servants from the Road Research Laboratory and others who are interested in only one specific matter, whether it be accidents or fuel saving—anything, in fact, but getting from A to B, which is what roads and motor cars are about. If a few of these people had to get out from behind their desks and conduct the business and commerce of this country, particularly in London, with our inadequate road system, the order that we are debating tonight would be very much better.
  I suspect that the Minister may argue that all our points should be ignored on the ground that consultation is now taking place. Would it not be better to consult first and then to introduce legislation as a result of that consultation, instead of introducing legislation, running for 18 months, and then say that we are to have it for another 18 months while we consult? It is completely back to front.
  I hope the Minister will have the boldness to consider the merits of this debate across the Floor and across party lines and will consider whether it is right to press on with the order tonight.
  10.44 p.m.
  Mr. Jim Craigen: Never mind the speed limits. Where are we going with this type of order? This afternoon the Chancellor of the Exchequer was spelling out some grim facts, and it struck me that we would spend the next year "unlegislating" many of the pieces of legislation which are imposed on the local authorities. The plain fact is that many local authorities will be unable to comply with some of the legislation which already exists.
  Reference has been made to a consultation document. I think we are going consultation daft in some of our Departments of State. Many of our top civil servants seem to be spending most of their time writing up consultation documents, issuing them to people, and then telling us the outcome of their review. I wonder how much petrol has been saved by this type of Statutory Instrument? Would it not be preferable actually to be helping the public transport sector and assisting many of our bus companies up and down the country to offer cheaper and better bus services to the general public?
  1678
  I represent an area where the majority of people travel by public transport. We have more holes in the road than I can remember for many years. How much attention is being paid in the Transport Department, the Scottish Office and the Welsh Office to these more important matters?
  I turn to the question of accidents, which is an important and sensitive matter. How many accidents have been prevented by the operation of the order? How much police manpower is tied up in chasing, with the aid of computers or other modern methods, those who may well not realise that they have breached the law by travelling at certain speeds?
  The hon. Member for Sutton Coldfield (Mr. Fowler) said that 25 per cent. to 30 per cent. of people did not observe the limits. Have we reached the stage of absurdity where we keep figures about the number of people who are not complying with the law, with intellectual skills in the Department tied up keeping figures about folk breaching regulations that Ministry officials spent a good deal of time introducing?
  A point was made about seat belts. The nation needs a safety belt. Let us not waste more time introducing legislation on safety belts. If folk are daft enough not to put on a belt when they make a journey and then unfortunately have an accident, it is their fault if they are injured.
  I hope that the Minister will concentrate on some of the real issues that worry folk throughout the country, such as better public transport services and more sensible legislation on road traffic.
  10.48 p.m.
  Mr. Nicholas Ridley: My right hon. Friend the Member for Crosby (Mr. Page) made a devastating speech on the dubious legality of the order. I want to say a few words about the dubious economics underlying it. To the extent to which the reason for these speed limits is to save fuel, the argument for them seems to be totally fallacious. I shall deal later with the issue of road safety, which is the only other conceivable reason for speed limits.

  1679
  Some of my hon. Friends have fallen into the trap of arguing that we should save fuel. Let us examine why we should. First, petrol is only 14 per cent. of a barrel of crude oil, so if the ambition were to save oil it would be more sensible to have a go at the 86 per cent. which is not petrol. But I do not advance that as an argument, because I do not understand why we should save oil.
  Oil is admittedly a big import, but it is not the only big import. We import nearly £3 billion-worth of timber and wood pulp each year. The Chamber is strewn with paper that we do not need. I do not understand why the Government, who are the biggest consumers of wasteful, useless bumf, do not try to save bumf if that is the argument.
  Mr. Whitehead: The hon. Gentleman should realise that that is the force of our argument. We think that the Government and all of us should save bumf as well, that there should be paper saving to escape the colossal increase in the cost of newsprint and wood pulp that we shall experience, just as in fuel.
  Mr. Ridley: I know that the hon. Gentleman believes in general misery for everyone, but I do not. I think that everyone should have what he wants. That is a much more helpful general philosophy. If people want paper and petrol, they should have them.
  Let us consider another commodity—food. We do not produce all we need. We have to import some. The Government are subsidising the importing of food. What terrible damage we must be doing to our balance of payments.
  What is the reason for wishing to save energy, petrol and oil? It fits in exactly with the intervention of the hon. Member for Derby, North (Mr. Whitehead). He thinks that it is good for the people that they should eat; he is neutral on how much bumf should be produced to bewilder them; and he thinks that it is luxurious and wicked that they should drive about in cars. The real reason for the order is prejudice against private transport.
  In a most curious speech, the hon. Member for Glasgow, Maryhill (Mr. Craigen) suggested that we needed more public transport. The Minister would tell the hon. Gentleman that this would be disastrous because it would result in
  1680
  more fuel being used as empty buses trundle up and down.
  Mr. Craigen: I do not know about empty buses trundling up and down, but many cars can be seen, each carrying only one person. It could equally be said that they are travelling threequarters empty. I was not arguing that we necessarily need more public transport but that we must keep what we have. I am not necessarily on the other side of the argument which the hon. Gentleman is making to rescind the Statutory Instrument, but he is not being very helpful or sensible in winning allies tonight.
  Mr. Ridley: I am not absolutely desperate for the hon. Gentleman's support, but let me ask him a question. Which is better—a private car with three empty seats or a bus with 33 empty seats? That is the fuel economy argument. It is no part of my case, but if anyone wishes to argue it, there is no doubt that the private car is infinitely more efficient than public transport.
  This campaign on speed limits and petrol taxes is part of a semi-sublimated hatred of private cars by the Labour Party which has always resented the independence they give to the citizen. That is why we have car and petrol taxes and every sort of obstruction on the motorist, including the insult of bus lanes and other places where only public transport can go. This is not traffic engineering. It is social engineering.
  The Government ought to understand that 70 per cent. of the population like cars and that the other 30 per cent. would have cars if they could afford them. The Government are on a political hiding to nothing if they pursue this sort of order.
  Of course, it is right for the State to make regulations to improve road safety. I would support any such regulations.
  I never understand why it is al0ways speed that is assumed to be dangerous. The man who causes most hazard is very often the man who drives too slowly, the man who turns right, across the traffic, at a very slow speed when the traffic is moving quickly. The offence is not necessarily speed. It is inadequate, dangerous, drunken or careless driving.
  If only we could get out of our minds the ideas that private motoring is intrinsically wicked and that speed is even more

  1681
  wicked. It is the bureaucratic mind that makes the assumption that speed is wicked and that is the parent of the order.
  Therefore, I hope that we shall not have speed limits. It is an interesting fact that more people were killed on the roads in 1930 than were killed in 1960. I say killed, and not injured. I do not think that it is speed limits or lack of speed limits, or excessive speed, that is the cause of accidents on the roads. I believe that accidents are due to a whole mass of factors, including incompetence, bad driving, slowness and drunkenness. We should address our minds to those factors in legislating about road safety and not to the obvious and easy target, the man who has a fast car and drives fast.
  I suspect that in the criticism of the people who drive fast there is again a sublimated hate of the man who can afford a fast car. With the Labour Party there is always this submerged prejudice that governs everything that its members do. They dress it up as if it were some great science to which the rest of the world must immediately adhere.
  There is no need for consultations. There is no need to go into this great programme of talking to everyone except the House of Commons. The Government are not listening to what Opposition Members are saying. They are consulting everyone except the representatives of the people. That is their idea of democracy. If they were listening to what the representatives of the people were saying, they would withdraw the order immediately and abolish the speed limits. But no, they will not do that. They are determined to find some reason for allowing their prejudices to continue even after the period of six months to which the order refers has lapsed.
  I adjure the Government to be more courageous. They might even win some votes. I do not like helping the enemy. However, if only they would tear up the whole thing for once, sack the bureaucrats who deal with the matter, abolish the police involvement and the court cases and licence endorsements, and abolish the whole fussy nonsense that the Government are so expert at producing in every walk of our national life, they might find that someone loved them one day and voted for them at the next election.
  10.58 p.m.
  Mr. Nick Budgen: The essential argument that has come from Opposition Members is that the order is bad law. With that argument I entirely agree. The first condition of good law is that it should be based upon widespread consent.
  Plainly, the only argument that could support the order would be that it was necessary to restrict the speed at which persons use the roads for reasons of safety. I have never yet heard the argument for the order advanced purely on the basis of safety. It is plain that speeds up to 70 mph with modern cars do not pose an unreasonable risk of injury to other road users.
  The whole basis of the order arises from the period immediately after the price of oil was increased by four times in 1973. I put the matter quite baldly. Those emergency measures were wrong in principle in 1973, and they have remained wrong in principle ever since.
  In my view, there is no need whatever for further consultation about this order. The need is to vote against it as frequently as necessary to ensure that this abortion of legislation is not repeated.
  The truth is that the order was first presented as the crudest form of rationing. It was quite the wrong way to approach the problem. The problem should have been approached by allowing the price of oil to rise, and to rise immediately. That would have had three useful consequences. First, those who drive large motor cars fast on the roads would have been hit in the pocket. That would have been by far the best way, through the market mechanism, to deal with the increase in the price of oil.
  Second, there would have been a major effect upon the country as a whole, since a large part of our present problem is psychological, arising from the inability of everyone in Britain to understand the basic economic fact that there has been a massive transfer of real purchasing power from the countries which use oil to those which produce oil. By far the best way to demonstrate that to the man in the street is not to make speeches at the Guildhall or even to make announcements in the House but to bring him to understand it when he fills his petrol

  1683
  tank at the garage. Indeed, the emergency measures announced today might almost have been unnecessary, and all the deficit financing we have had might have been unnecessary, if it had been clear right from October 1973 that our economic prospects and our whole way of life had been totally transformed by the unilateral action of OPEC.
  Third, there is this further important consideration. The significance of such orders as this lies in the effect which they have on the citizen's desire to obey the law and to assist the police generally. This can be easily illustrated. All of us who have been stopped by the police—and I am one—for being in breach of these orders have felt a deep sense of resentment. We have felt that once more the law was thoroughly unreasonable. We have felt that there was no basis in either sense or morality for the orders to which we were required to conform. We felt a sense of injustice, and we had that sense of fear which all of us feel when stopped by the police.
  The consequence is that when next we see somebody else breaking the law, perhaps even breaking it in a most reprehensible way, we are just that bit less likely to help the police. Thus, we in Parliament have once more gone a little further to break up the fabric of a law-abiding society.
  This is bad law. It is law which is wrong in principle as well as being economic nonsense. We do not want more consultation. We want to vote against it.
  11.4 p.m.
  Mr. Ivan Lawrence: Now that the fuel crisis is over, there could be only one justification for these restrictive laws—that they improve road safety. As so many of my hon. Friends have shown, that is the question to which we should be devoting our minds, and so far an affirmative answer to it has not come from the Government. Indeed the contrary is true, since in their consultative letter they say that apart from the first three months, there has been "no further reduction" in the accident rate.
  That is an absolutely damning sentence for anyone who seeks to prove the case which ought to be proved on this order, namely, that it will contribute to road safety. But, quite apart from the
  1684
  Government's own statistical view, it must be recognised that all my hon. Friends here are drivers. Most of us drive many thousands of miles a year. Therefore, we are particularly representative of the people in the country at large on this occasion.
  As my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) said, when one asks whether the maintenance of these limits contributes to road safety, the one test of preeminent importance is whether they contribute to irritation and resentment. One thing that orders of this nature have done is to stimulate resentment and irritation.
  As my hon. Friend the Member for Sutton Coldfield (Mr. Fowler) said, it is bad enough for the ordinary motorist to have to drive on cluttered-up roads which are subject to five different speed limits. That is confusing enough, but aggravation and resentment enter into it when it is remembered that the ordinary motorist receives very little guidance. Sometimes there are no signs indicating what the maximum speed is, with the result that there is a large number of accidental infringements and convictions.
  There is a damning point in the consultative letter, where it is said:
  "In 1976 there was a lower degree of compliance with the law than in 1975."
  It is remarkable that it should be sought to perpetuate this system of limits, when the original justification for them has gone and when such resentment occurs when a motorist is confused about whether he is driving lawfully or unlawfully and he is then stopped, charged and fined for something as to the truth of which he was utterly unaware.
  Since the original order was introduced at least 25,000 people have been "done" under it. Being caught for an offence under the order must aggravate and infuriate drivers, just as the police must become aggravated and infuriated by having, at a time when they are hard pressed and short of men, vehicles and equipment, to patrol these limits.
  I understand from the Government's figures that 25 per cent. to 30 per cent. of drivers do not observe the law. I have forgotten how many drivers there are in this country, but it must be well over 10 million. Any law which makes 3

  1685
  million or 4 million decent citizens liable to infringe the law and, therefore, to become criminals, however petty, is not worthy of the name.
  As it has no sufficient consent from the people, as it has no commonsense justification, as it causes resentment and irritation, as the Government's own figures cannot prove that it contributes to road safety and as road safety is the only factor that we should consider tonight, there is every reason for voting against the order, and that is what I propose to do.
  11.8 p.m.
  Mr. David Knox: Everyone who has participated in the debate so far has supported the case made by my hon. Friend the Member for Sutton Coldfield, (Mr. Fowler). When the Minister replies, he will find that he is on his own. I hope that he will not take it personally, because he is very popular in the House.
  The Minister has a very poor case tonight. These speed limits were introduced three years ago at a time of national emergency. They were introduced at a time when the price of oil had increased fourfold. They were introduced—this is an important point which has not yet been made in the debate—at a time when there was a big question mark hanging over the supplies of oil. The national emergency in its acute form passed a long time ago. Certainly there is not, and has not for a long time been, any threat to supplies of oil. The higher price of oil has had adverse effects on the balance of payments, but the need to save fuel, which was certainly a fact in 1973, has not existed for a long time.
  In the debate considerable doubt has been expressed about the fuel-saving effect of these limits. The previous Minister for Transport, now Minister of State, Ministry of Defence, told the House a year ago that motor spirit consumption was between 3 and 4 per cent. less than in the equivalent period of 1973, in addition to what would have been accounted for by reductions in traffic. Savings resulting from these speed limits, if there have been any such savings, are certainly very small. My hon. Friend the Member for Sutton Coldfield and other hon. Members have mentioned a figure of 1 per cent. It would be difficult to justify the
  1686
  limits on the basis of such a small saving in fuel.
  Of course, there are other reasons why the limits should go. For a start, they are widely ignored. The former Minister said a year ago that about one-fifth of motorists in the samples taken were ignoring the limits. My hon. Friend the Member for Sutton Coldfield referred to the fact that the figure had further increased to about one-quarter. If a quarter of all motorists are ignoring these limits, it would seem that there is an enormously strong case for dropping them altogether.
  The very existence of these speed limits causes a great deal of police time to be wasted. There has been a very large number of prosecutions. In 1975, I understand that 11,587 people were convicted for exceeding the 50 m.p.h. limit and 13,074 for exceeding the 60 m.p.h. limit. It is a great waste of time for the police that they should be engaged in this sort of fatuous activity when there is so much crime to which they should be devoting their attention.
  When the right hon. Member for Sheffield Park (Mr. Mulley) was the Minister, he said:
  "if speed limits do not command general support from road users, their enforcement puts serious extra strain on police resources."—[Official Report, 9th December 1974: Vol. 883, c. 38.]
  Clearly that is the case at present. It is clear that these speed limits should be discontinued at the earliest possible moment and that no consultation period is necessary. I hope, therefore, that the House will support my hon. Friends tonight.
  11.13 p.m.
  Mr. Paul Hawkins: I have written to the present Minister's predecessor on several occasions about the situation in Norfolk. The county council there has on several occasions told the Department that the limits are entirely unnecessary and that they are a great burden on the police. The police force in Norfolk has supported the county council.
  Driving through Norfolk as I do every weekend, I encounter no stretch of more than 100 yards on which I am permitted by law to exceed 50 m.p.h., and yet for mile after mile I shall probably never see another vehicle. The limits are ridiculous and they are time-consuming for the police.

  1687
  Driving home from London to Norfolk, one passes a variety of notices telling one that the limit is 40 mph, then 50 mph and then that one is free of any restriction, except that one knows that one cannot exceed 60 mph—or is it 70 mph? The situation is completely confusing. Heaven help foreign drivers, because their confusion must be even greater.
  The practice of pulling up motorists who are travelling at 57 or 58 mph on a nearly-empty road in Norfolk infuriates both the police and motorists. I urge the Minister to drop the order as quickly as possible and to get back to sensible motoring.
  11.15 p.m.
  Mr. Charles Morrison: I suppose that I have had more letters in opposition to this order than about almost anything else in the 13 years since I came to the House. I am not surprised, for the many and varied reasons put by my hon. Friends. I should like, however, to add a point which has not so far been made in the debate.
  From time to time over the years, I have written to the Government Department currently responsible for speed limits or to my county surveyor in the light of representations made to me in support of the introduction of a 30 or perhaps 40 mph speed limit in built-up village areas. All too many of our villages are still crossed by fairly major roads, and not surprisingly many of the local residents from time to time are concerned about the speed of vehicles, particularly heavy lorries but also of cars, going through their villages, with the result that there is considerable danger to local people.
  All too often—indeed, in 99 cases out of 100—I have received a reply to the effect that the village concerned does not meet the necessary Ministry criteria for the introduction of a speed limit and that, in addition and by the way, there is no point in introducing a speed limit because no one would keep to it. If there is no point in introducing a speed limit when there is, as so often is the case, a safety argument, what argument can there be for a speed limit such as this one, for which there is much less of a safety argument because the limit refers to the open road?
  As we know only too well, such speed limits are widely disregarded—again, indeed, in 99 cases out of 100—with no
  1688
  disadvantage to the driver. Only on odd occasions are people caught by the police, and I suspect that even then the police are wasting their time in the sense that they would be much better employed doing other things than caring about speed limits on the open road. There is no case for the continuation of these limits, and I hope that the House will reject the order.
  11.19 p.m.
  The Under-Secretary of State for Transport (Mr. John Horam): I should first explain what would be the position if the order were annulled. There would be no speed limits on rural roads. It is not just a question of having no speed limits at all, which is what the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) argued for. His is perhaps a perfectly logical position: if one is against speed limits, one is against them, and that is understandable and rational. But that would not be the position.
  Speed limits have a role to play, but the international situation is not very clear. No other country in the Western world has no speed limits as such. Most countries have some speed limits, and many of them, including the most market-orientated, such as the United States, have strict limits. The situation would not be one in which there were no speed limits but would be speed limits of 30 m.p.h. or 40 m.p.h. in urban areas, a speed limit of 70 m.p.h. on motorways and nothing in between. Whatever side of the argument one takes, surely it would be absurd to end up in that position. I hope that Opposition Members will agree about that.
  Mr. Roger Moate: Is the Minister saying that the 70 m.p.h. national limit which previously applied has been swept away by recent orders? If that is so, would it not be relatively simple to introduce a new order restoring the national 70 m.p.h. limit under the Road Traffic Act or the Energy Act?
  Mr. Horam: Obviously action would have to be taken on an emergency basis if the orders were annulled. That is something that I should dislike doing. We could end up by pre-empting the consultation process on which we have embarked, which would be a great pity. We could wake up to an absurd situation tomorrow morning—namely, a 70 m.p.h.

  1689
  limit on motorways, which are the safest roads, and 30 m.p.h. and 40 m.p.h. limits in towns, with nothing in between. That is not a sensible position. That is not an argument that could be sensibly advanced by the Government.
  The whole process of speed limits started with the national 50 m.p.h. limit in 1973. That was the genesis of the whole issue. Speed limit orders have traditionally emerged in the House in 18-month periods. They have been renewable after 18 months. That is why we are faced with the present situation. I respect the strong feelings on this issue on both sides of the House and I accept that the argument has gone one way during the debate, but the House would be foolish to take the view that on that basis the orders should not be allowed to continue. If that view were taken, we should be placed in an anomalous position that would cause the Government to have to act extremely hastily and in a way that would inevitably preempt the consultation process, which would be a pity. I put that argument to the House in, I hope, a sensible way and not by way of commenting on the arguments that have been put forward.
  We are in a neutral position. We are open-minded. We have set out the facts in the consultation letter that was sent out to many organisations. We have been perfectly plain about the facts when the facts have not supported the previous arguments. For example, the amount of fuel saved over the past two years has not been great as a result of these measures. We have considered that argument, and maybe it is not sufficiently strong to justify these measures, but we have set out the facts in the consultation document. We hope that those who reply to it will send in their comments in the same open-minded and objective manner as we have adopted.
  Motorists and others want a period of stability. They want to know the practical situation in respect of speed limits. They want a clear balance between the various considerations. We must put into the balance the fading consideration of energy. I agree that the whole business of limits started out at a time of national crisis. The hon. Member for Leek (Mr. Knox) said that there was doubt about supplies of fuel as opposed to price and
  1690
  other factors. He said that the situation has changed, and I agree with him.
  The need for energy conservation in this area is less than it was. It is a subject on which we shall invite comments. We shall listen open-mindedly to the views that are put forward. I hope that at the end of the six months, which started on 1st December, we shall be able to put forward a clear view on what the country wants. I hope that we shall be able to arrive at that view. We have asked for the replies to be submitted by 31st January. We hope to be able to arrive at a view at some time before the end of the six-month continuation. I am hopeful that we can achieve that but I do not promise. That is the assurance for which the hon. Member for Sutton Coldfield (Mr. Fowler) asked, and I am happy to give it to him.
  Mr. Norman Fowler Mr. Norman Fowler rose——
  Mr. Horam: Does the hon. Gentleman wish to intervene?
  Mr. Norman Fowler: If that is an assurance, it is one of the weakest that I have ever received in the House. I want an assurance that the House will have time before the expiration of the six months to debate and, if necessary, change the order which the hon. Gentleman is to bring forward. That is what we want, and it is on that that I want an assurance.
  Mr. Horam: I give an assurance that we shall try to beat the end of the consultation period. We gave ourselves six months because that seemed a sensible period in which to do this operation. Tory Members may say that they know what people's views are, but, with respect, there are conflicting views. We have so far received only one reply to the consultation document. Nevertheless there are conflicting views, and we must take them into account as much as we can. Indeed, conflicting views have been expressed in this Chamber tonight.
  The country wants a clear position, a simple position, a position to which it can look forward to having for some time. The right way to achieve that is by a process of consultation, and that will take a few months more. It is easy to wait until the end of the consultation period rather than, on the basis of a short debate tonight—and

  1691
  hon. Gentlemen have suggested that they might vote against the order—take the sort of action that would not be in the best interests of the country.
  Mr. Graham Page: It has been known for 12 months that the order would run out on 30th November. Why were the consultations not started earlier?
  Mr. Horam: We had to have more evidence. If the right hon. Gentleman reads the consultation letter, he will see that we carried out a market survey on observance of the law. That is a legitimate issue in this argument. If the law is being brought into disrepute by nonobservance of these energy speed limits, that is something on which we need a clear opinion. We have some evidence. We know that observance of these laws is slipping, and we are concerned about that. That is one reason why we are limiting this order to six months and not continuing the full cycle. We are doing that to enable us to get through the necessary process of consultation and discover people's opinions.
  There are diverse views on this matter. The Royal Society for the Prevention of Accidents may have different views from those expressed by the hon. Member for Cirencester and Tewkesbury, who has rather extreme views and wants no speed limits. These are rational positions, and we have to take them into account and come to a clear conclusion.
  I take the point made by the hon. Member for Sutton Coldfield. He may be dissatisfied with the debates in the past on this matter, but the fact is that when we tried to have a transport debate which could have included this topic we were upset by the Opposition playing games
  My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen), who spoke about getting matters into perspective and doing the important things in transport, was right. It is a pity that all the time we have to concentrate on issues which are not central to the important transport matters with which we are concerned, and my hon. Friend was right in what he said about that.
  The hon. Member for Tiverton (Mr. Maxwell-Hyslop) made a sensible point when he spoke about one aspect of the problems that was not mentioned by other speakers, and that is bunching. If a number of people are trying to observe a 50 m.p.h. limit, whether or not they are on a gradient, that may result in a queue of cars. We have received many representations about this, and it is possibly disadvantageous to have a speed limit on certain roads. That is something that we shall take into account in our deliberations.
  The hon. Member for Tiverton also raised a point about whether roads on which the two carriageways are far apart are dual carriageways. I assure him that even if cows are grazing on a wide stretch of land between a dual carriageway it is still a dual carriageway and not a hybrid road.
  My hon. Friend the Member for Derby, North (Mr. Whitehead) raised a number of issues. I see that he is no longer in the House. He said——
  It being half-past Eleven o'clock, Mr. SPEAKER put the Question forthwith, pursuant to Standing Order No. 4 (Statutory Instruments, &c. (Procedure)).
  The House divided: Ayes 51, Noes 65.

  Division No. 21.]

  AYES

  [11.30 p.m.

  Adley, Robert

  Hawkins, Paul

  Ovenden, John

  Beith, A. J.

  Hicks, Robert

  Page, Rt Hon R. Graham (Crosby)

  Biggs-Davison, John

  Hodgson, Robin

  Pattie, Geoffrey

  Boscawen, Hon Robert

  Hooson, Emlyn

  Penhaligon, David

  Brittan, Leon

  Hordern, Peter

  Pym, Rt Hon Francis

  Buck, Antony

  Jopling, Michael

  Rees, Peter (Dover & Deal)

  Budgen, Nick

  Kimball, Marcus

  Ridley, Hon Nicholas

  Canavan, Dennis

  Lambie, David

  Ross, Stephen (Isle of Wight)

  Carlisle, Mark

  Lawrence, Ivan

  Shepherd, Colin

  Chalker, Mrs Lynda

  Lawson, Nigel

  Steel, David (Roxburgh)

  Cope, John

  McCartney, Hugh

  Vaughan, Dr Gerard

  Eyre, Reginald

  Mather, Carol

  Wainwright, Richard (Colne V)

  Fairgrieve, Russell

  Maxwell-Hyslop, Robin

  Walder, David (Clitheroe)

  Gardiner, George (Reigate)

  Mayhew, Patrick

  Winterton, Nicholas

  Gilmour, Sir John (East Fife)

  Moate, Roger

  Goodhew, Victor

  More, Jasper (Ludlow)

  TELLERS FOR THE AYES:

  Gourlay, Harry

  Morrison, Charles (Devizes)

  Mr. Jerry Wiggin and

  Gower, Sir Raymond (Barry)

  Newton, Tony

  Mr. David Knox

  Hamilton, Michael (Salisbury)

  NOES

  Ashton, Joe

  Fletcher, L. R. (Ilkeston)

  Rodgers, George (Chorley)

  Atkinson, Norman

  Ford, Ben

  Roper, John

  Bates, Alf

  Forrester, John

  Sedgemore, Brian

  Blenkinsop, Arthur

  George, Bruce

  Skinner, Gennis

  Brown, Hugh D. (Provan)

  Golding, John

  Small, William

  Buchan, Norman

  Grant, George (Morpeth)

  Smith, John (N Lanarkshire)

  Buchanan, Richard

  Horam, John

  Stoddart, David

  Callaghan, Jim (Middleton & P)

  Jones, Barry (East Flint)

  Thomas, Ron (Bristol NW)

  Cant, R. B.

  Jones, Dan (Burnley)

  Tinn, James

  Carmichael, Neil

  Loyden, Eddie

  Urwin, T. W.

  Cocks, Rt Hon Michael

  Lyons, Edward (Bradford W)

  Wainwright, Edwin (Dearne V)

  Cohen, Stanley

  McCusker, H.

  Walker, Harold (Doncaster)

  Cook, Robin F, (Edin C)

  McElhone, Frank

  Walker, Terry (Kingswood)

  Cowans, Harry

  McMillan, Tom (Glasgow C)

  Weetch, Ken

  Crowther, Stan (Rotherham)

  Marks, Kenneth

  White, Frank R. (Bury)

  Cryer, Bob

  Mendelson, John

  Whitlock, William

  Davidson, Arthur

  Millan, Rt Hon Bruce

  Wilson, Alexander (Hamilton)

  Davis, Clinton (Hackney C)

  Morris, Charles R. (Openshaw)

  Woodall, Alec

  Dempsey, James

  Noble, Mike

  Woof, Robert

  Dormand, J. D.

  Oakes, Gordon

  Duffy, A. E. P.

  Palmer, Arthur

  TELLERS FOR THE NOES:

  Ewing, Harry (Stirling)

  Parry, Robert

  Mr. Ted Graham and

  Flannery, Martin

  Roderick, Caerwyn

  Mr. Joseph Harper.

  Question accordingly negatived.

  RETURNING OFFICERS (SCOTLAND) BILL
  Order for Second Reading read.
  Motion made, and Question put forthwith pursuant to Standing Order No. 67 (Public Bills relating exclusively to Scotland), That the Bill be committed to a Scottish Standing Committee.—[Mr. Stoddart.]
  Question agreed to.

  MR. B. T. ALLEN (HOUSE PURCHASE)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Stoddart.]
  11.41 p.m.
  Mr. Peter Hordern: I wish to bring to the attention of the House the case of my constituent Mr. B. T. Allen and the Official Receiver.
  Mr. Allen has been living through a nightmare experience. He bought a house in good faith, he sold his own house, he raised a mortgage on his new house, and he moved in, but before the completion document had been signed on the property a receiving order was made by the seller of the house on his own petition and the Official Receiver was appointed. I wish to trace the actions of the Official Receiver from that point
  1694
  because they demonstrate an extraordinary indifference to the fate of an individual who was in no way to blame for the circumstances in which he found himself.
  The fact is that the Official Receiver knew all the facts of the case and yet decided himself to impose an interest penalty amounting to £2,400 on Mr. Allen because of the time which elapsed before the contract was completed, for which Mr. Allen could not conceivably been held responsible.
  I believe that the work of Official Receivers is frequently misunderstood and that they are often able to perform rescue operations to the benefit of all concerned. In this case, however, it is clear that the Official Receiver has not acted with the fairness to all concerned which one has the right to expect.
  I am sorry that the Minister in his letter to me of 18th November took the view that neither he nor his deputy could intervene, because it means that there is no power effectively to overrule the Official Receiver's decision. But what I have to say, if it does nothing to help Mr. Allen, will, I hope, provide a salutary warning to anybody who becomes involved with the Official Receiver in future. I find it incredible that an innocent member of the public should suffer so much damage, which would not have been caused if the Official Receiver had warned him that he might have to pay interest on any delay which might occur, even though he was in no way responsible.

  1695
  This is not a hard luck story. It is the story of a man being dunned for money by the Official Receiver for a delay for which that man was not responsible and which the Official Receiver could have avoided.
  I turn to the evidence. Mr. Fowlie, who sold the house to Mr. Allen and later declared himself bankrupt, concealed from his solicitor the fact that the house was already mortgaged to the hilt. The completion date was agreed for 30th January. Mr. Allen moved in as he had already sold his own house and obtained a mortgage on the new one. Unfortunately, the sale was not completed due to technical difficulties experienced by the solicitors acting for both parties.
  On 17th February the receiving order was made against Mr. Fowlie, the seller, on his own petition. Technically, therefore, the house was the property of the creditors, to the despair of Mr. Allen, who naturally wished to stay there.
  In his letter to me, the Minister said that in an endeavour to be of assistance the Official Receiver approached the Midland Bank, one of the principal creditors, asking it to complete the sale. If the Official Receiver really wished to be of assistance—and I accept that he did—he should have told Mr. Allen that there was another creditor involved whose consent was necessary if completion was to take place. He did not do so. The Official Receiver therefore plainly was culpable in not informing my constituent not only that he had no power to bring about early completion but that a penal rate of interest might be levied on him for a period of time which neither he nor Mr. Allen could determine.
  It might be claimed that the Official Receiver's duty was solely to the creditors and that it is not part of his function to consider the plight of Mr. Allen, who bought his house in good faith. But I do not think that such behaviour is tolerable in a public official. I do not think that the Official Receiver foresaw the penalties that lay ahead of Mr. Allen. Nevertheless he should have done so, and he should have informed Mr. Allen, particularly since Mr. Allen constantly pressed him for information about the possible extent of the liability.
  1696
  It could be argued that it was the duty of Mr. Allen's solicitor to warn him of the possible consequences. Not only did he do so, but in a letter to Mr. Fowlie's solicitors of 16th March he made clear that Mr. Allen was not willing to pay interest if the matter had to drift on indefinitely. The matter did drift on indefinitely. Mr. Allen's solicitor wrote to the Official Receiver's solicitors, Messrs. Carpenter and Oldham, in April but received no reply until 13th May. He did not receive the complete answer until 15th July. He sent a draft conveyance on 8th July but did not receive it back from the Official Receiver's solicitors until 11th October.
  Mr. Allen's case does not rest with solicitor's delays. Even if the solicitor had acted with extraordinary speed, the contract would not have been completed until the creditors had agreed that it should be signed. Hon. Members should note my constituent's position. If he signed a release so that the contract could be completed, he stood to gain nothing at all. If this contract was delayed for any reason, he stood to gain something from any interest that might be paid. The contract was delayed and interest was charged. Furthermore, there was no limit to the time involved. To suggest, as the Minister did, that interest on the purchase price could properly be demanded by the vendor as one of the standard conditions of sale when Mr. Allen was able, willing and anxious to complete is the most specious argument that I have heard for a long time.
  At the end of his letter, the Minister said that Mr. Allen should make representation through his solicitor to the Official Receiver's solicitors so that he might decide on the basis of their advice to what extent, if at all, this claim should be pursued. It is being pursued—at 16 per cent. The Official Receiver has been advised in this matter by his solicitors. They said that Mr. Allen had possession worth £22,000 for nine months, had not had to pay interest on his mortgage and had the balance of the purchase money in his pocket. But Mr. Allen derives no benefit from his mortgage. He has to pay the money 25 years after completion, whatever date that might be. To say that Mr. Allen should pay £2,400 in interest for a delay which was imposed upon him by these solicitors is breathtaking.

  1697
  The Official Receiver has been badly advised. He should not have accepted that advice. He should have advised Mr. Allen exactly what risks he ran if he remained in the house. Then Mr. Allen could have decided whether to allow the creditors to take over the house and move out.
  Even now, I feel sure that this problem can be satisfactorily resolved. I do not think it is unreasonable that Mr. Allen should have been asked to pay a nominal amount in rent, but for a public official to demand payment of 16 per cent. interest for a period for which he and his advisers are solely and entirely responsible is a most disgraceful abuse of power which needs to be exposed.
  11.51 p.m.
  The Under-Secretary of State for Trade (Mr. Clinton Davis): I had my attention drawn to this case first of all by the hon. Member for Horsham and Crawley (Mr. Hordern) when he wrote to me on 4th November concerning the letter that he had received from Mr. Allen, his constituent. That letter explained that Mr. Allen considered that he had been treated harshly by the Official Receiver, for the reasons which have been eloquently deployed by the hon. Gentleman.
  I am bound to say that I think the hon. Gentleman was exaggerating somewhat in the allegations he made against the Official Receiver. Indeed, he said that the Official Receiver had acted with indifference, that he had acted without fairness to Mr. Allen, and that the Official Receiver should not have accepted the advice of his own legal advisers. With respect, I think that that is a little farfetched bearing in mind the fact that the Official Receiver carries a personal responsibility—I stress the word "personal"—for his conduct.
  The hon. Gentleman was also mistaken in saying that, apart from raising the matter in a parliamentary sense, his constituent was without effective remedy. The fact is that the Official Receiver in Bankruptcy is an officer of and answerable to the court. It is on the one hand his duty, when trustee, to realise and distribute the assets of bankrupt estates, and in that respect the Department of Trade cannot intervene. It is the Official Receiver alone who can decide what course he should adopt, subject to the overriding
  1698
  provision, set out in Section 80 of the Bankruptcy Act 1914, that, if any person is aggrieved by any act or decision of the trustee, that person may apply to the court and the court may confirm, reverse or modify the act or decision complained of and make such order on the premises as it thinks fit. Mr. Allen has made no such application to the court.
  The hon. Gentleman has outlined some of the salient facts—I need not reiterate them—in so far as they lead up to the Official Receiver's entry on to the scene. He became aware of the contract which Mr. Fowlie had entered into to sell the property to Mr. Allen and that Mr. Allen had entered into possession of the property, with Mr. Fowlie's consent, before the petition in bankruptcy had been filed, as the hon. Gentleman has indicated.
  At that point of time Mr. Allen was legally advised, and one would think that his solicitor would have advised him as to the consequences of entering into possession prior to completion of the contract. They are clearly set out in the national conditions of sale, to which the contract was subject. They include the payment of interest at 1 per cent. over and above the current Bank Rate.
  The Official Receiver, as the hon. Gentleman has also indicated, discovered that there had been granted by Mr. Fowlie three charges on the property, so that the property was, as the hon. Gentleman put it, mortgaged to the hilt. The first charge was to the Commission for the New Towns, Crawley, which was owed, according to the statement of affairs lodged by Mr. Fowlie, a sum of £2,500. The second was to the Midland Bank, which was owed £19,683. The third charge, which was not scheduled as such in the statement of affairs, had been granted by Mr. Fowlie as part of another transaction and to provide security for the repayment of sums in excess of £15,000.
  After the adjourned meeting of creditors on 16th March 1976, the Official Receiver remained the trustee. As I said in my letter to the hon. Gentleman, the Official Receiver as trustee would not normally deal with the sale of the property where there is no equity for the general body of creditors, since there would be no benefit to the estate in his doing so. Indeed, by Section 7(2) of

  1699
  the Bankruptcy Act 1914 the making of a receiving order does not affect the power of any secured creditor to realise or otherwise deal with his security. But the Official Receiver sometimes assists where the mortgagee's title needs to be perfected.
  To avoid delay, the Official Receiver in March 1976 suggested to the second mortgagees, Midland Bank, that the bank should complete the sale as mortgagees. Unhappily it was not able to do so, because of a technical deficiency in the deed which granted its charge. No fault can be attributed to the Official Receiver in this regard.
  In April 1976 the Official Receiver agreed to act on the sale in order to minimise the delay and costs, on the bank's undertaking to meet his solicitor's costs and to pay the Official Receiver £20 towards his administration costs. The Official Receiver, I again emphasise, took this course only to be of assistance, although there would be no funds becoming available from the sale of the property for the creditors of Mr. Fowlie's estate.
  The Official Receiver obtained the sanction of the Department on 3rd May 1976 to the employment of solicitors to act for him, and he instructed them on 12th May 1976. Suffice it to say that a variety of complications arose as to questions of title, precedence and amounts due to secured creditors. There was also some delay encountered by the Official Receiver's solicitors in dealing with the purchaser's solicitors, as the purchaser acknowledged subsequently, and it was not until 12th November that completion took place.
  As Mr. Allen had been in occupation of the premises since 30th January 1976, without making any payment for his occupation, and because of the delay in completion of the purchase—although it is accepted that all of the delay was not of his making—on representations being made to them by the third mortgagees' solicitors the Official Receiver's solicitors wrote to Mr. Allen's solicitors in October 1976 requesting payment of interest under the conditions of the contract for purchase. I stress that these representations were made by the third mortgagee's solicitors. The Official Receiver
  1700
  had no alternative but to take these representations into account and pass on the request for payment. The interest claimed was calculated, under condition 7 of the national conditions of sale, at about £2,400. Mr. Allen was aggrieved at receiving this demand.
  The Official Receiver could not, in the circumstances, act in any way other than as advised by his solicitors. They have recently advised him that prima facie the interest is payable, but there are possibly problems in sustaining a claim for the full period.
  Mr. Hordern: It has been said that Mr. Allen had recourse open to him in that he could have gone to the courts. I accept that, but it is not something that is lightly undergone by individuals, particularly somebody under the pressure that Mr. Allen was under.
  Be that as it may, the argument about the third creditor should have been in the Official Receiver's mind. He accepted that Mr. Allen had brought the house, and encouraged the Midland Bank to realise it. He knew very well that the third creditor had to sign a form of release, and he or his solicitors should have told my constituent that there was a doubt in the matter, in that the third creditor would have to sign his release, and that there was a possibility of my constituent's having to pay interest on any delay. It was that point about which I was complaining. It was wholly outside my constituent's power to deal with it.
  Mr. Davis: I cannot accept that it is all that difficult to make an application to the courts when someone feels agrieved. It is done by thousands of people every judicial year. It would not have been outside the realms of possibility for Mr. Allen to have done so.
  On the hon. Gentleman's second point, the Official Receiver was not there as adviser to Mr. Allen. He tried to be helpful, but Mr. Allen must have known that there were consequences of going into possession prior to completion. He must have known that it was somewhat unusual and was bound by certain conditions which are clearly laid down. I cannot understand why there was this lacuna in the advice given to Mr. Allen at this vital stage of the transaction.

  1701
  The Official Receiver was bound to act in accordance with the legal advice given to him, in good faith, by his solicitors. He had to pass on the claim because he was legally bound to do so.
  The possibility of sustaining the totality of the claim for the entire period raises legal arguments which I do not wish to go into because of certain circumstances which I shall come to later.
  It was contended that, after the assistance of the second and third mortgagees, the claim to interest could not be formally abandoned. Mr. Allen was not entirely innocent. He must have been aware of some of the complications. He was being legally advised virtually throughout.
  Following a "without prejudice" approach by the Official Receiver to Mr. Allen, Mr. Allen has offered by letter dated 7th December 1976 to pay £676.50 which he has calculated on the rent he considers he would have paid for the accommodation he has had for the period of his occupation—41 weeks at £16.50 per week. The Official Receiver has indicated that this sum has been agreed verbally by the mortgagee's solicitors and that, subject to written confirmation and following this debate, for which he was right to wait, he proposes to write to Mr. Allen indicating that he would be disposed to accept this offer if payment could be made by Mr. Allen forthwith or in a short time. I suggest that 28 days would be an appropriate period
  1702
  and I hope that Mr. Allen will respond expeditiously as it is in everybody's interest that the matter should be resolved as speedily as possible. Despite the serious allegations made by the hon. Member, who is properly making representations on behalf of a constituent, I believe that the Official Receiver has acted perfectly properly and has done all he can to determine the matter satisfactorily.
  In agreeing to complete the sale, the Official Receiver has been burdened with a troublesome matter which will provide him with only a nominal £20—quite out of proportion to the time, expense and trouble it has caused him.
  It should also be said that if Mr. Fowlie had not filed his petition in bankruptcy the same problems as were encountered by the Official Receiver and his solicitors would have been encountered by solicitors who would have acted for Mr. Fowlie. The same requirement of the purchaser to pay interest for delay in completion would undoubtedly have been raised.
  Having said that, I hope that, following the letter which the Official Receiver will send to the hon. Gentleman's constituent within a day or so, the result will be a satisfactory resolution of a somewhat unpleasant matter. I hope that the hon. Gentleman will accept that that is probably the best conclusion that can be arrived at.
  Question put and agreed to.
  Adjourned accordingly at five minutes past Twelve o'clock.