Commons Sitting of 22 December 1976

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  ANGLIAN WATER AUTHORITY BILL [Lords] (By Order)
  Read a Second time and committed.
ORAL ANSWERS TO QUESTIONS
  FOREIGN AND COMMONWEALTH AFFAIRS

    Spain
    Mr. David Huntasked the Secretary of State for Foreign and Commonwealth Affairs what plans he has to visit Madrid.
    The Minister of State, Foreign and Commonwealth Office (Dr. David Owen): None, Sir.
    Mr. Hunt: In advance of his plans to visit Madrid, will the right hon. Gentleman tell the House the attitude of Her Majesty's Government to Spain becoming a member of the European Community?
    Dr. Owen: Any application which might be made by the Spanish Government would be to the Community as a whole, and Her Majesty's Government would be only one of the members of the Nine to take a view of it. It is normal practice to consult amongst the Nine before reaching a conclusion on any application. But, clearly, Her Majesty's Government's attitude would be conditioned by the sort of changes towards democracy which are now beginning to occur in Spain and which we welcome.
    Mr. Hurd: Have not the King, the Government and the people of Spain made remarkably fast progress in the last year or so towards building a parliamentary democracy, and at this particularly difficult
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    time would it not be right for us to send out from this House a message of our congratulations and good wishes?
    Dr. Owen: The course to be followed by Spain is a matter for the Spanish people themselves without outside interference. It is very much to be hoped that they will soon have a genuinely democratic system of government. But it is for them to decide these matters.
    Mr. MacFarquhar: Does not my right hon. Friend agree that, although we welcome the changes which have occurred since the death of Franco, Her Majesty's Government should not take any steps within the European Community to encourage Spanish membership until there have been full democratic elections in that country?
    Dr. Owen: I agree with my hon. Friend.

    United States of America
    Mr. Formanasked the Secretary of State for Foreign and Commonwealth Affairs if he will pay an official visit to Washington DC.
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Crosland): I have no current plans to visit Washington, but I look forward to a further meeting with the Secretary of State-designate at an early opportunity.
    Mr. Forman: When the Foreign Secretary or his right hon. Friend the Prime Minister has an opportunity to pay a visit to Washington or to have consultations with members of the American Government in London, will he make it a high priority to discuss and pursue with the American Government the question of nuclear proliferation? Further, will he reassure the American Government that Her Majesty's Government will give the fullest support to what we believe will be President Carter's efforts to raise this question, to take it further and to see whether we cannot tighten up on the international safeguards which every sensible person wants?
    Mr. Crosland: The answer to both questions is in the affirmative. The question of nuclear proliferation played a very substantial part in the United States presidential campaign, and it has been made clear already that the Carter

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    Administration will be giving high priority to this question. That is a matter which we wholeheartedly welcome.
    Mr. Thorpe: Does the Foreign Secretary agree that one priority which we should discuss with the Americans is the early reconvening of the North-South Conference, which has been postponed? Does the right hon. Gentleman agree that, just as Sheikh Yamani has shown some initiative and leadership in trying to keep down the ever-escalating price of oil, we likewise have a responsibility to see whether some long-term agreement can be made for writing off the debts of the Third World?
    Mr. Crosland: The two co-chairmen of the CIEC are at the moment consulting the participant members to try to agree on a renewed date, the conference having been postponed from mid-December, and we shall fit in with any date which is convenient. But it is very hard to fix a date until the new Administration has taken over in the United States. Clearly, talks without them would be counter-productive. When the CIEC reconvenes, however, the West as a whole and not simply this country will need to take a very much more coherent view than it has done so far on what it is prepared to do about debt and the various other questions which have come up in the last 12 months.
    Mr. Robert Hughes: Will my right hon. Friend discuss with the American Government the ways in which a mandatory arms embargo can be applied to South Africa, since the efforts of the British Government to have an embargo have been frustrated by other countries simply filling the vacuum caused by that policy?
    Mr. Crosland: It is very important to tighten up wherever we can the United Nations arms embargo which exists already and in which the British Government have participated. I have no evidence that the United States Government are prominent in trying to break this embargo. If my hon. Friend has any evidence, I should be glad if he would send it to me.

    New Hebrides
    Mr. Christopher Priceasked the Secretary of State for Foreign and Commonwealth
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    Affairs when he next expects to visit the Condominium of the New Hebrides.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Evan Luard): My right hon. Friend has no present plans to do so.
    Mr. Price: Does my hon. Friend agree that it is very important for Britain to reassure the National Party in the New Hebrides, which looks to Britain for protection, about complex electoral machinery which has given it the majority of votes but denied it the majority of seats and that the system is not simply rigged against it? Is my hon. Friend aware that when independence comes it should be genuine and not subject to the economic domination of the French, who are in the South Pacific, in French Polynesia and New Caledonia, only for nuclear motives? Can my hon. Friend give any target date for independence?
    Mr. Luard: The National Party is the largest single party in the new Assembly. Therefore, there is no doubt that it will play a dominant part in framing proposals for constitutional advance in the New Hebrides. On the second point, there is no question that independence in the New Hebrides will provide a specially privileged place for any particular Power, European or otherwise. So far, no date has been set for independence.
    Mr. Thorpe: Will the Minister go further and reject this monstrous attack by his hon. Friend on the Westminster electoral system, which is well known and well tried and is guaranteed to ensure that minority interests are represented, and nearly always ensures that the minority are returned as the Government of the day?
    Mr. Luard: I refrain from commenting on the way in which our electoral system operates for the Liberal Party. Let me make clear, however, that the National Party secured the largest number of votes in the election and that it is the largest single party represented in the Assembly.
    Mr. Newens: Has my hon. Friend studied the plans which have been made to deal with defects in the system for registering voters, with the failure to take

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    action to put an end to an illegal radio station, and with violence and intimidation? Will he seek to consult the French authorities to make sure that there are no attempts to frustrate democracy or to cultivate separatist tendencies for purely unnecessary ends?
    Mr. Luard: As my hon. Friend knows, there were a small number of incidents in the recent elections, and in one or two cases special by-elections were held to remedy the situation. Given that the country is not yet fully accustomed to the democratic system, I believe that the elections were held with a considerable degree of success and public participation.

    Rhodesia
    Mr. Wallasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Geneva Conference.
    Mr. Brocklebank-Fowlerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Rhodesia.
    Mr. Brothertonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about progress at the Geneva talks on Rhodesia.
    Mr. Crosland: I refer the hon. Members to my statement on Rhodesia of 14th December.
    Mr. Wall: Does the Foreign Secretary agree that the problem now is the transfer of power not so much from white hands to black but from white hands to non-Marxist black? Does he agree that failure here will mean that Rhodesia will follow the fate of Angola and Mozambique? Will he comment on the recent massacre by guerrilla forces on the Mozambique border?
    Mr. Crosland: I do not accept the hon. Gentleman's interpretation in the first part of the question, which gives a totally inaccurate view of how matters stand and will stand in the forthcoming talks in Southern Africa. On his second point, clearly there have been atrocities on both sides with an escalation of the guerrilla war, as most people foresaw there would be. We in the Government strongly deplore any atrocities, whoever commits them, but the plain fact is that all this
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    will continue until a settlement is reached.
    Mr. Brotherton: In view of the recent disgusting atrocity, will the Foreign Secretary tell Mr. Ivor Richard when he starts his tour of Africa that no aid will be given to any of the five front-line countries until those countries, particularly Mozambique, stop giving aid and succour to these murdering guerrillas?
    Mr. Crosland: I do not think that it would be a very productive exercise. Accusations of atrocities have been made on both sides. I will not go into them because we have no means of verifying whether they are correct. Atrocities are deplorable, and everyone accepts that, but I have no doubt, as we have discovered in other cases nearer to our borders, that where a civil war of this kind occurs it will be an unpleasant and disagreeable affair.
    Mr. James Lamond: Will my right hon. Friend bear in mind, in view of the Government's public expenditure cuts, that it is not desirable for them to spend vast sums compensating white Rhodesians who, after 10 years of supporting the illegal régime, may now feel that it is time to abandon their property in Rhodesia?
    Mr. Crosland: The Government have no intention whatever of offering compensation to people for leaving Rhodesia.
    Mr. John Davies: Will the right hon. Gentleman bear in mind that the prime objective of the Geneva Conference must be to find a means of ensuring an orderly interim Government pending the advent of majority rule? Will he assure the House that after Mr. Ivor Richard's visit to the United States and subsequently to Africa the Government will be taking a positive line in the Geneva Conference and will be seeking very hard to use their influence to achieve a right and just settlement?
    Mr. Crosland: Yes, I can give the right hon. Gentleman that assurance. Mr. Richard has already been to discuss these matters in New York with Dr. Kissinger and others, and he will be going to Southern Africa armed with very positive proposals from our side. When the conference reconvenes in Geneva, we certainly propose to play as positive and constructive a rôle as we possibly can.

    South Africa
    Mr. Tim Rentonasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to have a meeting with the Foreign Affairs Minister of South Africa.
    The Minister of State, Foreign and Commonwealth Office (Mr. Edward Rowlands): My right hon. Friend has at present no plans for such a meeting.
    Mr. Renton: Bearing in mind the extent to which developments in Rhodesia will inevitably impinge on South Africa, would it not be advisable for such a meeting to be held in the near future? To what extent does the Minister now regard the end of separate development in South Africa as inevitable? Over what time scale will that be? What effect does he think that will have on Britain's supply of vital raw materials?
    Mr. Rowlands: On the first part of the question, we are in consultation with South Africa, and when Mr. Richard undertakes his shuttle during the Christmas Recess I think that there will be further consultations with the South African Government about Rhodesia. It is difficult at the moment to forecast the impact of the end of separate development on the South African economy or on the international economy. There seems to be no reason to suppose that the South Africans will have a change of heart on this issue.
    Mr. Hooley: If the Minister meets the Foreign Secretary of South Africa, will he make clear that the United Kingdom completely stands by the resolution of the United Nations Security Council of 13th January this year and that we shall have nothing to do with any puppet régime set up in Namibia by the South African authorities?
    Mr. Rowlands: Our views on Namibia are clearly expressed in the United Nations and in other international fora. We cannot support certain recent resolutions on this subject because of their extreme features, but that does not mean that we would support a puppet régime in Namibia.
    Mr. Rifkind: Given the Government's refusal to accept that the Transkei is no longer a part of South Africa, will the
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    Minister indicate how British interests are represented there?
    Mr. Rowlands: They are not represented there because we do not recognise it to be an independent sovereign State.

    France
    Mr. Martenasked the Secretary of State for Foreign and Commonwealth Affairs when he will next meet the French Foreign Minister.
    Dr. Owen: My right hon. Friend next expects to meet the French Foreign Minister at the European Economic Community Council of Ministers meeting on 18th January.
    Mr. Marten: I wish the Foreign Secretary the best of British luck during his chairmanship of the Council of Ministers. May I suggest that he might think of getting together with our French friends and giving a clear lead to saying that the British and French want neither more centralisation in the Common Market nor any step taken which would lead us down the road to a federal State? If he did that, it would not only be a very good move but would be very popular in this country.
    Dr. Owen: The hon. Gentleman has his well-known views on the European Community. The issues that he raises concerning centralisation and a federal State have been discussed many times. It is possible to be a strong supporter of the European Community, as I am, and a strong believer in decentralisation, which I also am.
    Mr. Newens: When my right hon. Friend next meets the French Foreign Secretary, will he raise with him the question of securing full co-operation on our policy of refusing to supply arms to South Africa?
    Dr. Owen: Her Majesty's Government's views on the supply of arms to South Africa are well known, as are the views of the French Government. These subjects can be raised in normal bilateral discussions, but I do not think that there is any doubt among the French Government of our views on this issue. We continue to espouse our cause and argue it where appropriate.
    Mr. Adley: As is predictable, the American anti-Concorde industry is

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    hotting up its activities in anticipation of the forthcoming hearings in New York. Will the right hon. Gentleman communicate to his French colleagues the vital importance of the British and French Governments remaining in the closest possible contact and co-ordinating their policy on Concorde in the representations they will shortly have to make to the incoming American Government?
    Dr. Owen: Yes, but there is already very close co-ordination.

    Argentina
    Mr. George Rodgersasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations between the United Kingdom and the Argentine.
    Mr. Rowlands: Relations with Argentina are normal.
    Mr. Rodgers: Is my hon. Friend aware that there is widespread concern about the reported ill treatment of religious and politically concerned groups in Argentina? Will he tell the House of any representations that have been made to the Argentine Government and whether any United Kingdom citizens have been involved?
    Mr. Rowlands: In recent months there have been a number of individual British citizens affected in one way or another. We have made every representation to the Argentine Government in individual British cases. As for the general position in Argentina, obviously the Argentine Government will be fully aware of the widespread international concern, which might, for example, have affected some of the decisions and actions that they have taken in respect of the Jehovah's Witnesses, a matter on which we have received a large number of letters from Members on both sides of the House. We have no direct locus. I understand that there is no individual British citizen involved in the case of the Jehovah's Witnesses.
    Mr. Flannery: Does my hon. Friend accept that Argentina is seen by a large number of refugees from other countries in the South American orbit as a place of refuge, only to arrive there and, as in the case of the Whitelaw family, who were British nationals, to be murdered
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    by some maverick Right-wing band? Will he therefore make every attempt to try to ensure that refugees from that country who apply to this country are given some sort of precedence to get them here in safety?
    Mr. Rowlands: I think that our record on political refugees from South America stands any comparison and is comparable with that of any other nation. We have done our best to help political refugees from South America.

    Belize
    Mr. Durantasked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in the British Government's negotiations with Guatemala over the State of Belize.
    Mr. Rowlands: Five meetings have been held this year in the current negotiations with Guatemala on the future of Belize, two of them at ministerial level. British proposals for a settlement have been discussed but some fundamental issues have yet to be resolved.
    Mr. Durant: Is the hon. Gentleman aware that the Belizeans wish to keep our presence in the country until there is a just settlement? Is he further aware that our forces in Belize are doing a magnificent job for us that is not realised in this country? Further, what is happening about a Belizean defence force of their own?
    Mr. Rowlands: I am sure that everyone would wish to be associated with the hon. Gentleman's remarks about the rôle, function and part that the British forces are playing in Belize. I am happy to say that in principle we support the development of a defence force, and the Premier, Mr. Price, has been so informed.
    Mr. Luce: In the light of the overwhelming support for Britain's policy for Belize at the United Nations, will the hon. Gentleman convey to Guatemala that international opinion expects it to co-operate with Britain in reaching an early and honourable settlement—in fact, a settlement that responds to the overwhelming wishes of the Belizeans?
    Mr. Rowlands: I am sure that the Guatemalan Government are more than conscious of the international support for Belizean aspirations for independence.

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    The negotiations that I have been conducting over the past 12 months are at a delicate stage. We hope to achieve an early negotiated settlement with Guatemala on this 150-year-old problem.

    Chile
    Mr. McCrindleasked the Secretary of State for Foreign and Commonwealth Affairs if he is now prepared to reappoint an ambassador in Santiago.
    Mr. Rowlands: My right hon. Friend continues to keep this matter under review in the light of our relations with Chile.
    Mr. McCrindle: But is it not just possible that certain changes are overtaking the regime in Chile and that it would be wise for this country to be fully represented so that those changes can be properly assessed? Will the hon. Gentleman confirm that we cannot for ever govern our relations with this important Latin American country on the basis of the prejudice of some of his hon. Friends?
    Mr. Rowlands: Our relations with Chile have not been based on the prejudice of any Members. The withdrawal of our ambassador from Chile, which received support from both sides of the House, as the House will recall, took place in circumstances which the House understood as a result of the circumstances that arose in the case of Dr. Cassidy. There have been releases of political prisoners, which we welcome, but there are still many more detained for basically political offences. We see no change at present in the basic nature of the regime to indicate that we should modify our policy.
    Mr. Robert Hughes: Is my hon. Friend aware that concern has recently been expressed about the slowness of admission of refugees from Chile to this country? As visas are a matter for the Home Office—at least, that is the case with entry certificates—will he discuss the matter with the Home Office to ensure that there is no hold-up or delay?
    Mr. Rowlands: We have regular discussions with the Home Office about visas and entry certificates for refugees from Chile, as from other parts of South America, and we have done our best to speed up the processes.
    Mr. Tapsell: Will the hon. Gentleman explain whether Her Majesty's Government still support the traditional criteria for the granting of diplomatic recognition—namely, the claiming of an advantage rather than the conferment of a compliment? If that is so, will he explain why it is that in Chile, where we have some thousands of British subjects who may at some time require the protection of a British mission, we have broken off diplomatic relations whereas, by contrast, in Cambodia, the scene of one of the greatest acts of genocide, running to perhaps 800,000 people murdered in recent months, we have established relations? What is the logic either in morality or in practicality behind such a policy?
    Mr. Rowlands: We have not broken off diplomatic relations with the Chilean Government. We have diplomatic relations. We withdrew our ambassador because of a distasteful, dislikeable and terrible incident involving a British citizen. Before such action was taken we made tremendous efforts to persuade the Chilean Government, through diplomatic channels and through our ambassador, to do the right and proper thing. The fact that the Chilean Government did not do it forced us to take appropriate action, which was widely supported in the country at the time. That was the decision taken in relation to Chile, which was taken in the light of a specific incident and a specific problem and has no bearing on our relations with other countries or the way in which we conduct our affairs with other nations.

    Cyprus
    Miss Richardsonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the British attitude in the recent debate in the United Nations on Cyprus.
    Dr. Owen: Unfortunately the non-aligned resolution was tabled with insufficient time to secure more acceptable amendments to it and so Britain, with a number of other countries, abstained.
    Miss Richardson: Does my right hon. Friend agree that Britain has a special and major responsibility as a guarantor to the independence of Cyprus? In view of the continuing disturbing reports coming from the island through, for

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    example, the United Nations civilian police reports, part of which were published recently, about the expulsion by the Turks of Greek Cypriots and looting in the North, does he agree that the Greek Cypriots are entitled to feel somewhat embittered by the lack of action on the part of the British Government? Will he seek a meeting with the Turkish Government to discuss the matter fully?
    Dr. Owen: I share my hon. Friend's concern. In fact, I discussed many of these issues with both Turkish and Cypriot individuals when I was in Cyprus very recently. We are all of us concerned at reports that Greek Cypriots in the north of Cyprus have been forced against their wishes to leave their homes and that looting is taking place. I think that the inter-communal talks should be the area in which we can look at these humanitarian questions. Whatever the reason for the exodus from the North, it is not calculated to improve the overall climate and atmosphere in Cyprus or the chances of achieving a settlement.
    Mr. Rees-Davies: Surely the Government should now realise that there has not been any measure of success through the United Nations and that it is now time for a new initiative to be taken, as has been suggested by my right hon. Friend the Leader of the Opposition, with the countries of the EEC, after securing their agreement, and in association with the new régime in America. Will the Government now seek a really good British initiative, together with the EEC and the President of the United States, to ensure that there is a just and lasting solution by bringing together the people of Turkey and Cyprus?
    Dr. Owen: The British Government have been pursuing those objectives for the past few months. Intensive discussions have taken place within the European Economic Community and through the vehicle of political co-operation and discussions with the United States Administration. We fully support the concepts outlined in Dr. Kissinger's speech to the United Nations General Assembly in September, many of which had been discussed among member nations.
    Mr. Atkinson: Is not my right hon. Friend now announcing the end of the Commonwealth as such? Is not Cyprus
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    a member of the Commonwealth, and are not a Government outside the Commonwealth—the Turkish Government—using their armed forces stationed in the northern part of Cyprus to accelerate or escalate the number of expulsions of Greek citizens from the North of the territory to the South? Therefore, have the British Government now washed their hands of all responsibilities there? Are we saying that progress in the matter can be made only as a result of intercommunal talks?
    Dr. Owen: No, Sir. That is certainly not our position. We think that inter-communal talks could be, and in the last analysis will be, the only way of reaching a settlement, but if there can be some outside help we stand ready to provide it. As for my hon. Friend's allegations about the Commonwealth, Cyprus remains a full member of the Commonwealth. What everyone on both sides wants is to see full democratic participation of Turkish and Greek Cypriots, with the two communities brought together.
    Mr. Townsend: Will the Minister take a personal interest in the plight of some 2,000 people who are missing following the Turkish invasion, and see what can be done quietly and diplomatically to release them from Turkey, if they can be found?
    Dr. Owen: When I visited Cyprus 1 discussed not only the problem of missing persons, which is very serious, but the question of displaced people. I also discussed with some Greek Cypriots living in camps outside their homes their difficult personal problems. The facts are clear. We must bring the Turkish and Greek Cypriot communities together and forge again a proper Government of Cyprus, capable of speaking for all the people, and break down some of the historic enmities. But this will be very difficult to achieve.
    Mr. Christopher Price: Reverting to my right hon. Friend's original answer, may I ask whether on second thoughts he does not consider that our vote at the United Nations was very wishy-washy? Now that he is fully in command of the Cyprus situation in the Foreign and Commonwealth Office, will he ensure that that sort of attitude in the United Nations is not repeated and that we take the lead in producing an initiative on Cyprus while

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    we have the chairmanship of the EEC Council of Ministers?
    Dr. Owen: Any United Nations resolution needs time. Those who wish to achieve the maximum amount of agreement and consensus must seek the agreement of member nations. That was not done in this case. I believe that if it had been done it would have been possible to achieve a resolution which commanded much more support.

    Thailand
    Mr. Newensasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on British relations with Thailand since the coup d-état of 6th October 1976.
    Mr. Luard: Her Majesty's Government maintain normal diplomatic relations with the present Government of Thailand. Our friendship for the Thai people is longstanding.
    Mr. Newens: Will my hon. Friend find a convenient way of expressing revulsion at the murder, torture and imprisonment of Thai journalists, students, teachers and others since the coup? Will he note that many of us, at least on the Labour Benches, would utterly deprecate the sale of Centurion tanks to the new régime, if the reports that agreement has been reached on the matter are confirmed?
    Mr. Luard: In the first part of his question it sounded to me as though my hon. Friend was referring to the incident at Thammasat University, which occurred just before the present Government in Thailand took power.
    Mr. Newens: Since.
    Mr. Luard: The main incidents of which we have knowledge occurred when the transition was taking place. Therefore, the present Government cannot take the responsibility. My hon. Friend knows that we do not give details about our arms sales to individual Governments, but I can say that present sales are on a very small scale.
    Mr. Fletcher-Cooke: Does the hon. Gentleman agree that Thailand is under some threat from her eastern frontiers—some think a considerable threat? Will he confirm that our obligations, such as
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    they are, under the SEATO Treaty still stand?
    Mr. Luard: the degree of threat to Thailand from her eastern borders is a matter of opinion. Certainly, all existing commitments remain.
    Mr. Dykes: Inspired, although perhaps less boldly, by the courageous conduct yesterday of his right hon. Friend the Member for Newham, North-East (Mr. Prentice), will the hon. Gentleman tell the House why the hon. Member for Harlow (Mr. Newens) and his hon. Friends below the Gangway are dreaming of the day when the whole of Indo-China is Communist?
    Mr. Luard: I do not think for a moment that my hon. Friend the Member for Harlow (Mr. Newens), whom I know very well, is dreaming of that outcome. If my hon. Friend is concerned about the interruption of democratic Government in Thailand, I entirely share his concern, and I hope that Conservative Members also share it.

    Zambia
    Mr. Tebbitasked the Secretary of State for Foreign and Commonwealth Affairs if he will pay an official visit to Zambia.
    Mr. Rowlands: My right hon. Friend has no plans to do so.
    Mr. Tebbit: Even so, will the hon. Gentleman accept my thanks for his efforts and those of the Foreign and Commonwealth Office on behalf of my constituent, Mr. Balaam? Is he aware that my constituent has still not been paid the money owed to him after more than three years, and that the Zambian authorities are still obstructing the payment? Does not the hon. Gentleman think that the time may come when we must make it plain to Governments in receipt of foreign aid from this country that that aid is conditional upon their ending the bilking of British subjects?
    Mr. Rowlands: I am grateful for the first part of the hon. Gentleman's question. We have dealt with a number of cases concerning personal remittances from Zambia that hon. Members on both sides of the House have brought to my attention. Hon. Members will appreciate the Zambian Government's very difficult

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    problem of foreign exchange reserves. We have been making quite good progress. I do not think that attaching conditions to our programme of aid to Zambia would help deal with individual problems that hon. Members have raised with me in the past few months.
    Mr. Jim Spicer: The hon. Gentleman has stressed the problem of foreign exchange. Would not this be an appropriate time for him to have discussions with the Zambian Government about their problem of dealing with the many thousands of refugees who have streamed across the border from Angola? Will he then perhaps deal with the problems of those refugees who have moved into South-West Africa, again under pressure from the Cuban-led forces in Angola, and see what we can do to help?
    Mr. Rowlands: We have regular consultations with the Zambian Government on many issues of bilateral concern. Many of the matters that the hon. Gentleman raised are for the Zambian Government alone and are not of particular British concern.

    Rhodesia
    Mr. Townsendasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the present security situation in Rhodesia.
    Mr. Crosland: The security situation in Rhodesia continues to give cause for grave concern and underlines the need for an early settlement.
    Mr. Townsend: Does the Foreign and Commonwealth Secretary appreciate that terrorist activity in Rhodesia, particularly the murder on Sunday night of 27 unarmed African civilians, is bound to reduce support for moderate opinion in Rhodesia and outside, and that without such moderate opinion it will be very hard to reach a settlement? What is he personally doing to put this fundamental point over to the front-line Presidents in Africa?
    Mr. Crosland: I recognise only too well that atrocities by whichever side—hot pursuit raids, whether into Mozambique or into Rhodesia—will do nothing to make a moderate settlement any easier. I accept what the hon. Gentleman said on that. But the important
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    influence that the British Government can exercise is not to make our views known to the two sides—those views are perfectly well known already—but to do everything we can to bring about a settlement, which alone will bring atrocities to an end.
    Mr. Ioan Evans: Has my right hon. Friend seen a statement by Mr. Joshua Nkomo that his life has been threatened in Rhodesia? What has he done to protect African Rhodesian leaders returning to Rhodesia to meet their people?
    Mr. Crosland: I fully accept that the British Government have a great deal of responsibility in these matters, but our responsibility does not extend to the protection of individual African leaders in Rhodesia. We have no armed forces or police there or in any of the surrounding countries.
    Mr. Churchill: Is the right hon. Gentleman aware of the horror and distaste that the British people hold for these continuing acts of terrorism, which are causing such suffering not only to whites but, above all, to the black population of Rhodesia? Will he explain why he has not made representations to the Government of the Soviet Union, who are responsible for arming, equipping and training these forces?
    Mr. Crosland: I have already made it clear today, and do so again, that I share the general feeling of horror and distaste although I hope that when the hon. Gentleman expresses horror and distaste in future he will do so in a more evenhanded way than he has done today, because this is not simply a one-sided business. It is two-sided. As for the Soviet Union and any intervention it is carrying out or intends to carry out in Southern Africa, we have made it clear to the Soviet Government that, if they believe in detente, detente is a worldwide concept covering Southern Africa also and is not confined to Europe.
    Mr. John Davies: Can the right hon. Gentleman reassure us that Mr. Ivor Richard, in his visits to Africa, has been guided by the right hon. Gentleman very firmly to bring to the notice of the frontline Presidents how gravely these incidents affect the whole course of the Geneva Conference and the attainment of a just and reasonable settlement?
    Mr. Crosland: Yes, Sir. Mr. Richard will bring this to the attention of the front-line Presidents, and, similarly, when he goes to Salisbury, as he certainly will, he will draw the attention of the Government there to the views held by most people here, if not by the hon. Member for Stretford (Mr. Churchill), about some of the hot-pursuit incidents that we have seen and some allegations made against the white security forces by the Catholic Institute of International Relations.

  EUROPEAN COMMUNITY

    Foreign Ministers
    Mr. Hendersonasked the Secretary of State for Foreign and Commonwealth Affairs when next he intends to meet the Foreign Ministers of other EEC countries.
    Mr. Skinnerasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet EEC Foreign Ministers; and if he will make a statement.
    Mr. Crosland: On 18th January 1977, when, following the United Kingdom's first assumption of the Presidency, I shall chair the next meeting of the Council of Ministers.
    Mr. Henderson: Will the right hon. Gentleman undertake to make that a historic event by marking his chairmanship by getting agreement on a new fisheries regime? Is he aware of the statement by the Minister of State yesterday that if there is gross over-fishing in January it will be difficult to control? Will he accept that many people in the fishing industry are genuinely concerned about how seriously he takes this matter? Does he regard it as sufficiently serious a crunch issue to say that he will withdraw from participation in the Council of Ministers and prevent a unanimous decision being taken unless our interests are recognised in this issue?
    Mr. Crosland: Anyone in the fishing industry who thinks that I do not take fishing seriously must be out of his mind.
    Mrs. Winifred Ewing: Tell that to the North Sea skippers.
    Mr. Crosland: As for agreeing to give priority to getting a proposal accepted
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    for an interim regime in January, the answer is "No", unless that regime suits the interests not only of Humberside fishermen but of those off the coast of Scotland. It is only given that condition that we would accept an interim fisheries regime.
    Mr. Skinner: Are these Common Market meetings doing any good at all? Does my right hon. Friend appreciate that it seems to me that every time we have these meetings they finish up with Britain going under once again, as with the recent remarks made about fishing? When he meets his colleagues again—if he finds he has to—will he tell them that we obliged them by borrowing £2,300 million in order that we could go on financing their manufactured goods in the Common Market, which in the year of reckoning totalled £912 million sold to us in excess of what we sold to them, and that that situation will be even worse this year?
    Mr. Crosland: Yes, Sir. I shall try to incorporate some of those statesmanlike sentiments.
    Mr. Blaker: Has the right hon. Gentleman yet discussed with his Community colleagues the important point he made recently at the NATO ministerial meeting about the risks involved in the transfer of resources from the West to the Soviet Union, in that it might help the Soviet Union to achieve its objectives in the Third World and to manufacture goods which would be sold to Western countries at unfair prices? If so, what was the reaction of his colleagues?
    Mr. Crosland: I cannot say that there was a single conclusion, since these Councils do not pass resolutions, but the matter was discussed at the last European Council, and I would like an opportunity to raise it again because I attach great importance to it.
    Mr. Greville Janner: When my right hon. Friend meets his Common Market colleagues, will he suggest a joint approach to Mr. Brezhnev to express, first, the delight of the House at the release of Mr. Bukovsky from prison and, secondly, the disgust of the House at the arrest of 30 professors and their wives in Moscow yesterday, and, thirdly, to suggest that if Mr. Brezhnev really wants détente he should beat his new sword

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    into ploughshares and release from prison those whose only crime is that they want to emigrate to Israel?
    Mr. Crosland: I, too, welcome, on grounds of personal liberty, the release of Mr. Bukovsky and the exchange which occurred, although it is an appalling commentary on these two totalitarian régimes that an incident like this had to occur. We lose no opportunity of pressing these points on visiting Soviet officials, whoever they may be, and a large part of the time taken up in the discussions with Mr. Ponomarev a few weeks ago was on precisely the matters my hon. and learned Friend has raised.

    Direct Elections
    Mr. Dykesasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the European Community's progress with plans to introduce direct elections to the European Parliament by 1978.
    Mr. George Gardinerasked the Secretary of State for Foreign and Commonwealth Affairs when he will next have discussions with other EEC Ministers on arrangements for direct elections to the European Parliament.
    Mr. Madelasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to discuss direct elections to the European Parliament with his EEC ministerial colleagues; and if he will make a statement.
    Mr. Shepherdasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet his EEC colleagues to discuss direct elections to the European Parliament.
    Dr. Owen: My right hon. Friend has no immediate plans to discuss arrangements for direct elections with his EEC colleagues. The Council will in due course need to determine the date of the first elections, but it is for member States first to take the necessary steps in accordance with their respective constitutional requirements. As far as the United Kingdom is concerned, the Government have committed themselves to introduce the legislation this Session.
    Mr. Dykes: I thank the right hon. Gentleman for that reply. Will he confirm
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    none the less that the European Parliament, for example, would be seriously disappointed if the Foreign Secretary did not refer at length to the prospects for direct elections during his scheduled visit on 12th January to Luxembourg? Will the Minister of State also confirm that, since the European Governments have definitely decided that these direct elections should take place at the same time, the biggest impediment to that would be the British Government if the appropriate Bill were not introduced immediately in the new year?
    Dr. Owen: The timing of the legislation is still under consideration. It will be influenced by the progress being made on other major constitutional issues before the House. I am sure that my right hon. Friend will bear in mind the hon. Gentleman's plea to make an extensive reference to this in his speech to the European Parliament, and 1 shall at least make sure that he notes the suggestion.
    Miss Boothroyd: When does my right hon. Friend intend to have preliminary talks with the Boundaries Commission with a view to establishing electoral divisions within the United Kingdom?
    Dr. Owen: That is primarily a matter for my right hon. Friend the Home Secretary, and I will draw his attention to my hon. Friend's question. It is one of the matters which must be considered in the question of the timing of the introduction of the legislation and is, perhaps, the biggest problem we have in meeting the date of May-June 1978.
    Mrs. Winifred Ewing: Have any of the member States indicated that they insist on a list system for the direct elections? Do the Government favour a regional responsibility? If so, what progress does the right hon. Gentleman hope to make to stop us from being saddled with a list system?
    Dr. Owen: The hon. Lady will know that many of these issues were discussed by the Select Committee which looked into the matter. It is recognised that it will not be possible to have a uniform electoral system operating for all nine member countries on the first elections to the European Parliament, but it is envisaged and hoped that it should be possible for the next round of elections.
    Mr. Scott-Hopkins: Why is the Minister of State being so coy? Is he trying to stall and to say that we shall not have the elections? Can he not say when the Bill will be published and when we shall have its Second Reading? Cannot he answer his hon. Friend the Member for West Bromwich, West (Miss Boothroyd) about the Boundaries Commission? Granted that it is the Home Secretary's responsibility, can he not say what will happen about it? Are not the Government committed to the Bill, or are they now back-pedalling, as they are on most other things?
    Dr. Owen: The hon. Gentleman will have to get used to the fact that responsibility for direct elections does not lie with my right hon. Friend the Foreign Secretary. The main responsibility lies with the Home Secretary, as is the case with all electoral changes that are introduced. I should obviously like to be able to tell the House a date for Second Reading of the Bill, but I am in no position to do so at present.
    Mr. Jay: Do the Government intend to comply with the provision in the Treaty of Rome that any direct elections must take place in accordance with a uniform procedure in all member States?
    Dr. Owen: I thought that I had already covered that point in answer to an earlier question. I think it is widely recognised that it will not be possible to do this in the first round of elections. It is a hope, and my right hon. Friend is right to draw the attention of the House to the Treaty of Rome in this regard. It will not be the first case, or the last, I suspect, when the literal interpretation of the Treaty of Rome is not followed.
    Mr. Thorpe: Is it not better that we should be entirely frank with our European partners and tell them that as we shall probably have to have 81 individual inquiries before the Boundary Commissioners, which is essential if we have a single-Member system, which is archaic, unequal and capable of every sort of change, permutation and combination, there is not a hope in hell under that system that we shall be ready by 1978? Some of us think that it would be better to have nominations that do not pretend to be democratic rather than a bogus system that is not democratic.
    Dr. Owen: This will have to be discussed. The Select Committee drew attention to many of these matters. The right hon. Gentleman made a dissenting note on a number of its recommendations relating to the electoral system. His views on this subject are not entirely unknown to hon. Members on both sides of the House.
    Mr. Hurd: The Minister of State has told us in the presence of the Leader of the House that the Foreign Office is not responsible for the delay in publishing the Bill. Who is responsible? It is, after all, five months since the Prime Minister agreed with his colleagues on the number and distribution of seats within the Community, and four months since the Select Committee gave its views of what it thought were urgent matters. If the delay continues into the new year, will it not undermine our bargaining strength inside the Community, given that it has been agreed inside the Community—as the right hon. Member for Devon, North (Mr. Thorpe) does not seem to realize—that if any one member fails to achieve the target date the whole enterprise founders?
    Dr. Owen: I have not made any such allegation that someone else is responsible for the delay. As the hon. Gentleman should know, the publication of a Bill precedes its Second Reading usually by only a few weeks. That is quite common practice. Anyone who has been concerned in the House over the last few weeks during this Session will have realised that some of the legislation that has been passing through the House had to be put through the House for specific and special reasons, in some cases to be able to operate, such as in the case of the Fishery Limits Bill, by 1st January. That is why that legislation has had to take priority over other legislation. However, I am sure that my right hon. Friend the Leader of the House will take note of the hon. Gentleman's comments.

    Community Documents (Public Access)
    Mr. Spearingasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the arrangements made for public access to EEC documents, including those originating from the European Assembly.
    Dr. Owen: No, but I would refer my hon. Friend to the reply which I gave to his Written Question on 16th December.
    Mr. Spearing: That reply merely said that my right hon. Friend was continuing to investigate this matter. I know that he has been doing so carefully for three months. Will he say whether the public have a list which is equivalent to that provided by the demand form for EEC papers which is available to hon. Members? Does he agree that, if they do not already have access to it, when a system is permanently brought into operation they should have equivalent access to an equivalent list?
    Dr. Owen: My hon. Friend well knows that I am dissatisfied with the arrangements. When I look into the matter—I am still doing so—one of the problems that I meet is cost. That is not a mile away from the issue of public expenditure. It is perfectly possible to produce a system that will give access to the public, but it will be costly. We must bear in mind that a system already exists in the European Communities Information Office in London.
    Mr. Spearing: No, it does not.
    Dr. Owen: I have arranged for people to go to that office and ask for certain documents, so I have had some "consumer investigation" of the situation. I am not totally satisfied, but I am afraid that any ambitious scheme which would resolve this problem would not be justified on the ground of cost. I am looking at ways in which matters might be improved, and we are discussing it with Her Majesty's Stationery Office.
    Mr. Powell: Will the Minister of State assist in ensuring that EEC documents, when placed before the House for debate, are in the latest form of such documents and not in a form which is already obsolete?
    Dr. Owen: The Scrutiny Committee has drawn attention to that fair and valid criticism. We have slipped up on a number of occasions. We shall do our best in this matter. The problem is that many of the documents go through three or four revises before coming before the House. There has also been a problem over numbering in order to ensure that dates on the documents are clear. We
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    shall do our best in the matter and, if necessary, issue explanatory memoranda covering changes that have occurred in the documents. This is a difficult problem, which is not easy to circumvent.
    Sir G. de Freitas: On the whole question of public access, will the right hon. Gentleman discuss with other Foreign Ministers the strange way in which the legislative functions of the Council of Ministers are performed? Is he aware of the strength of the criticism that he will meet in the European Parliament and elsewhere, and that this is the only case in the whole democratic world where Ministers legislate in secret?
    Dr. Owen: Over the last few months I have looked into this question. It was raised by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) earlier. It is true to say that there is a considerable resistance to doing this, but one of the problems is that there is no immediate parallel to Community decision-making. In some senses the Council of Ministers is a Cabinet. In some senses it is a legislature. The two functions frequently fuse together, as my right hon. Friend, with his experience in these things, knows well. There are great difficulties in trying to achieve a compromise between nine nations and in exposing that compromise procedure to public gaze. There are arguments on both sides, and I think that we should be perfectly prepared, open-minded, to keep the matter under review.

    Fishing Limits
    Mr. James Johnsonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement upon the talks in Brussels with EEC Foreign Ministers regarding the 200-mile exclusive economic zone and relations between the EEC and Iceland.
    Dr. Owen: I did so yesterday.
    Mr. Johnson: I am not quite sure that I heard my right hon. Friend's reply. However, in view of yesterday's statement and the discussion that we had then, I should like to ask two factual questions. First, when will the legislation on 200-mile limits come into force after 1st January? This matter is vital to our Navy and its operations and the job

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    that it has to do. Secondly, the Yorkshire Post has informed us that telegrams have been sent from Humberside to the Foreign Secretary and the Secretary of State for Industry concerning deputations to discuss matters affecting Humberside. Is it possible to have an answer to them today?
    Dr. Owen: I know that my right hon. Friend the Foreign Secretary is still considering the telegram that he has received about Humberside, and with a great deal of sympathy, as he is well aware of the problems. I confirm that the legislation will be operating from 1st January. We shall be taking all the necessary measures to ensure enforcement, across a very extensive area of water. I hope that hon. Members are under no illusions about that. I hope that that answers my hon. Friend's main points.

    ENGLISH CHINA CLAYS, ST. AUSTELL
    Mr. Penhaligonasked the hon. Member for Kingswood, as representing the Church Commissioners, what communications have taken place during the past 12 months between the Church Commissioners and English China Clays at St. Austell regarding the safety of the company's employees.
    Mr. Terry Walker (Second Church Estates Commissioner representing Church Commissioners): Letters were exchanged in March of this year relating to one specific case of an employee who was awarded damages following a claim that he had contracted the chest disease kaolinosis, caused by inhaling clay dust. The Commissioners are satisfied that the company's safety regulations and systems are conscientiously applied and kept under close review in consultation with the unions and the work force.
    Mr. Penhaligon: Many people appreciate the Church Commissioners' interest in the safety of employees. However, will the hon. Gentleman say whether the Church Commissioners looked into the safety record of the company before seeking so much publicity for this case? If they did, what did they find? If they did not, why did they not do so?
    Mr. Walker: The Church Commissioners deeply regret that the substance of
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    the recent Church Investors' meeting should have been leaked to the general public. This discussion was agreed among the denominations that were present and considered by all concerned to be informal and confidential. It is in keeping with the Commissioners' declared policy of discussing informally and confidentially with company management ethical and social matters such as this. But certainly we have taken steps to send people down to see the position at first hand, and we are perfectly satisfied with the safety provisions there.

WINDSCALE
The Secretary of State for the Environment (Mr. Peter Shore): With permission, Mr. Speaker, I wish to make a statement on Windscale.
On 3rd November I undertook to report further to the House on the planning application from British Nuclear Fuels Limited for further development at Windscale, which the planning committee of the Cumbria County Council had referred to me.
The application falls effectively into three parts: first, improved arrangements for handling and reprocessing irradiated Magnox fuel; second, development of a pilot demonstration plant for vitrifying long-lived radioactive waste; and, third, new facilities for reprocessing oxide fuel from the current generation of United Kingdom advanced gas-cooled reactors and from overseas. I have received many representations that the proposals in the application should be allowed to go ahead at once and I have received many other representations that the matters involved are of such national importance that the application ought not to be decided without full public scrutiny.
I have now made a thorough examination of all the issues involved. If proposals relating to the handling of Magnox fuel and the development of the vitrification plant on the lines I have already seen were all that were before me, I should be unlikely to see any justification for calling these in for my own decision. That part relating to the reprocessing of Magnox fuel is designed to improve the treatment of the fuel already at Windscale with a consequent improvement of the discharges. The vitrification plant is part of the research programme

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into the disposal of a long-lived highly radioactive waste on which the Royal Commission on Environmental Pollution, in its Sixth Report, urged the Government to press ahead.
Any discharges of radioactive material arising as a result of these proposals will be closely controlled under the Radioactive Substances Act 1960, and I intend to be personally assured that high standards of control are maintained at all times. My right hon. Friend the Secretary of State for Energy has also indicated similar intentions in respect of his responsibilities under the Nuclear Installations Act 1965.
The third proposal, on the other hand, which is concerned with the reprocessing of oxide fuel, raises different issues of major importance. Since I have no power to call in this one part of a single application and since I wish to avoid delay to the other proposals, I have decided to invite British Nuclear Fuels Limited to bring its proposals forward in separate parts. If and when a separate application is submitted for the oxide fuel reprocessing plant, I would propose to call it in to deal with myself and order a public inquiry under Section 282 of the Town and Country Planning Act 1971. This will enable all the relevant safety, environmental and planning considerations fully to be examined. It is my hope that the inquiry would proceed as speedily as it can.
The wide-ranging environmental implications relating to the development of nuclear power generally, which were the subject of the Sixth Report of the Royal Commission on Environmental Pollution, are under urgent consideration and the Government will be making their views on these matters known in due course.
Mr. Heseltine: Does the Secretary of State realise that it will be generally welcomed that he has decided to become involved in the particularly controversial aspects of these proposals while causing the minimum delay to the less controversial features? I should like to ask the right hon. Gentleman three questions.
First, would I be right in assuming that British Nuclear Fuels Limited intends to proceed as the Secretary of State has suggested in his statement? Secondly, will the first two parts of the proposals now receive formal approval
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so that the minimum delay may be caused, as the right hon. Gentleman has already made it clear that he does not intend to intervene? Thirdly, the right hon. Gentleman says that he hopes that the inquiry will be as speedy as possible. In what way will the inquiry differ from others? The right hon. Gentleman, I am sure, would be the first to agree that planning inquiries of this sort usually are not characterised by a speedy process.
Mr. Shore: I thank the hon. Gentleman for his general welcome of my statement.
British Nuclear Fuels Limited has two options. It is for that concern to decide whether to withdraw the present application and to submit separate applications; or, I think, it is open to it simply to withdraw one part of its existing application. That is a matter to which no doubt it will be giving urgent attention.
I have already made clear to the House my general view on the two applications—the Magnox one, and that relating to the vitrification plant.
On the question of speed, I am sure that we all wish this matter to be settled as soon as possible. In looking for the chairman of the inquiry I shall be looking for some-one of great experience and distinction in handling inquiries and who, therefore, would be in a better position than most to bring the inquiry to a proper and thorough but also speedy conclusion.
Mr. Palmer: My right hon. Friend will know of the interest of the Select Committee on Science and Technology in this matter, but, that apart, may I ask him whether he will give the House an assurance that in ordering the inquiry he is not succumbing in any way to the extravagant fears that seem to be gripping this country about nuclear energy? If he is, it bodes ill for the industrial future of our nation.
Mr. Shore: My hon. Friend's great interest in and knowledge of the nuclear power industry is well established. I can certainly give him the assurance that I have not been unduly influenced by the less authoritative voices that have been casting doubt on the development of nuclear energy in this country. The conclusion to which I came was based mainly upon my study of the planning report

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of the Cumbria County Council and the fact that it said that this was a matter which it thought—and I agree with it—was for me to decide.
Mr. Penhaligon: I am delighted about the announcement of the Secretary of State, but does he agree that the decision to process oxide fuel for the world, thus making Britain the centre for the world's nuclear rubbish, is, at least in part, a political decision? Will the right hon. Gentleman arrange an opportunity for the House to make a pronouncement on such an important matter?
Mr. Shore: It is open to the House to make known its views on these and other matters. The processing of oxide fuel is a development of major importance which needs to be studied with proper care. However, I remind the hon. Gentleman that, leaving aside the question of trade in fuels and the processing of fuels, we have an AGR programme which will put some requirement upon us to reprocess those fuels, too.
Mr. Dalyell: My right hon. Friend said that if a separate application were submitted for the oxide fuel reprocessing plant he would call it in to deal with himself, under Section 282 of the Town and Country Planning Act 1971. Does not that manifest a lack of confidence in the authorities? Is it a fact that present AGRs require oxide reprocessing plant, and what will happen to the AGR programme if the decision goes against it?
Does my right hon. Friend understand that some of us, such as my hon. Friend the Member for Bristol, North-East (Mr. Palmer), are increasingly fed up with the attacks on the competence and integrity of the Atomic Energy Authority and British Nuclear Fuels Limited and with all the emotional briefs churned out by, no doubt, do-good organisations such as Friends of the Earth which are ill-informed and greatly damaging to British industry and do not face up to the fact that if we do this job, that will help the proliferation of nuclear power in the world?
Mr. Shore: I understand my hon. Friend's feelings, and I acknowledge his point about AGRs. We have a problem arising from the nuclear power programme apart from any additional quantities
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of fuel that we may wish to process from abroad. I have great confidence in British nuclear science—
Mr. Dalyell: Then say so.
Mr. Shore: I am saying so. I have confidence in British nuclear science and technology. We have a deserved reputation for leading the world in many parts of nuclear technology. But I do not take it as being a sign of lack of confidence in British technology that this process is subject to a planning application. We have planning applications on many matters that are of far less importance than this. It seems to be an expression of confidence in our industry that I am prepared to take this course.
Sir D. Walker-Smith: I welcome the Minister's decision to call in this application in view of its broad implications of national importance. Will he say a little more about the constitution and procedures of the inquiry? He has referred to the chairman of the tribunal. What will the invitation consist of, what assessors will there be reflecting the various technical aspects, and will the inquiry follow the normal procedures of a planning nature or the little-used but possible procedures of a national planning commission provided for by the Town and Country Planning Act 1971?
Mr. Shore: This is not a PIC, but it is a planning inquiry. I hesitate to go beyond that. No doubt the right hon. and learned Gentleman knows more than I do about what are normal or abnormal procedures in town and country planning inquiries. I shall he looking for somebody with great experience who commands general support to be chairman. I shall support that chairman with at least two assessors to assist in the many difficult problems arising from this complex subject matter.
Mr. Blenkinsop: Is my right hon. Friend aware that, although many of us are conscious of the employment considerations in this regard, many of us strongly support his decision to attempt to differentiate between the three parts of the application? Will he do his utmost to ensure that the two parts of the application to which there is little or no objection may go ahead as speedily as possible? Will he consider a time limit to be applied to the major application,

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about which there are proper national anxieties?
Mr. Shore: It would not be right to impose any time limit, and I shall not do so. However, I am sure that all concerned will be aware of the need to move forward as quickly as possible, consistent with a thorough inquiry. That is what we shall seek to do. My hon. Friend is right to mention the employment problem. We know that the proposed Windscale development will assist the employment situation. It will be of great help in regard to the two parts of the proposal involving the Magnox fuel facility and the vitrification plant so that it may go ahead without much delay.
Mr. David Steel: Will the right hon. Gentleman resist the siren voice of the hon. Member for West Lothian (Mr. Dalyell) and explain whether his statement involves, as I think it does, the implication that the Atomic Energy Authority will continue to look for sites in Scotland for the dumping of glassified blocks? Will he also ensure that it confines its searches to West Lothian?
Mr. Shore: I do not think that it is for me to answer the second part of the hon. Gentleman's question. I shall do my best to resist the siren voice of my hon. Friend the Member for West Lothian (Mr. Dalyell).
Mr. Thompson: Is the right hon. Gentleman aware that there will be a sigh of relief, however temporary, in my part of the Solway area? How is it possible to proceed speedily with the inquiry when the problem of the ultimate disposal of high-level radioactive nuclear waste has still not been solved?
Mr. Shore: These are complex matters, but they are very much within the area with which the inquiry will deal.
Mr. Robin F. Cook: Will my right hon. Friend accept that many of us who have followed these matters closely appreciate his personal efforts to secure a public inquiry? Will he also accept that it would have been inadequate to have allowed the local authority to take a decision on a matter such as this which raises questions of national importance and concern, especially when the local authority faces a number of aspects on which it is
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not competent to give a judgment? Would not his position have been untenable if he had failed to call in the application which would fulfil all four criteria if ever again he has to call in a more minor application, such as the decision to build a municipal dump outside Carlisle, which he has already called in?
Mr. Shore: I thank my hon. Friend for his remarks. I believe that it would not be right for the matter to be settled by the county council, although I pay full tribute to the responsible way in which it conducted its planning inquiry.
Mr. Whitelaw: Speaking as a Cumbrian Member, may I ask the right hon. Gentleman to ensure that the public inquiry will not be used by those who are totally opposed to any development at all to the extent of delaying the matter, thereby losing to this country valuable orders and also losing valuable jobs for the people of West Cumbria?
Mr. Shore: I am sure that the right hon. Gentleman speaks for most hon. Members who agree that we have two duties. The first duty is to have a proper inquiry. The second is to have an inquiry that is not disrupted in any way by those whose interests are not aimed at establishing the facts of the matter.
Mr. Jim Marshall: Does my right hon. Friend realise that there are those on the Labour Benches who regretted his decision to call in the planning application in the first instance since it appeared to give undue weight to the criticisms voiced against the nuclear power industry? Once the decision has been announced, does he not agree that the inquiry should provide a suitable vehicle to show that the allegations presented by certain organisations are without foundation and groundless? Will it not also show the general public that cats or any other animals that go into dangerous places are likely to get killed?
Mr. Shore: I believe that what is false and misleading in the argument put against this development will be exposed in such an inquiry. I think that we have the duty to assure ourselves that what is proposed can take place safely, and with due regard to the future.
Several Hon. Members rose——
Mr. Speaker: I propose to call those who have already tried to catch my eye, but nobody else, because we have an enormous amount of business still before us. I call Mr. Arthur Jones.
Mr. Arthur Jones: May I take up the point made by my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) in regard to the form of the inquiry? I know that the right hon. Gentleman will have regard to the interminable proceedings before the Roskill inquiry. Should that not be an example of how the present inquiry should not proceed?
Mr. Shore: I do not think that there is any analogy between the Roskill inquiry and the reasons for which it was set up and the terms of reference of the present inquiry.
Mr. Skinner: I speak as an ex-inhabitant of the earth and not on behalf of the Friends of the Earth, with whom I have some sympathy. I am concerned about future inhabitants of the earth. Is it not important to place growing emphasis on the fact that we have about 400 years' reserves of coal, plus North Sea oil and gas, which is sufficient for our energy resources over the coming generations so that we need not concern ourselves too much about nuclear energy?
Mr. Shore: In many ways we are a fortunate and happy land and I intend to keep it so.
Mr. Hugh Fraser: Would the right hon. Gentleman bear two considerations in mind? The first is the necessity for a quick decision on this matter; otherwise the plant will go to France. The Liberal Party ought to realise that that is of infinitely greater potential danger for this country than a plant in the North of England. That is a major fact as far as the environment is concerned. If the plant goes to France, the dangers to this country will be just as great for our population.
Mr. Shore: It is up to the French Government and the French people to make their own decisions in their own way and it is for us to do it in our own British way. I believe that we ought to have this inquiry and I can only add that it must be as quick as is reconcilable with thoroughness.
Mr. Atkinson: Are not the planning procedures a particularly tortuous and inappropriate method of coming to a fundamental decision of this sort? Will my right hon. Friend confirm that the scientific and engineering advisers who have already advised, approved and endorsed all the recommendations, both for the Department of Industry and for the Department of Energy, are the same people who will now advise my right hon. Friend's Department in this planning inquiry on engineering and scientific efficacy?
Is it not a contradiction that we should be coming in this way to fundamental conclusions of the sort now required, which, if the decision is adverse, would shift our whole nuclear policy in the opposite direction? Further, should we not have some sort of reassessment of what is involved in this inquiry, or, at least, cannot some lines of guidance be given to the inquiry, as to its purpose and the things it will be looking for?
Mr. Shore: There are certainly special features in an inquiry of this kind which do not make it easy to decide what is the best way of holding an inquiry. But I do not think that the procedures are tortuous and ineffective. I believe that this is the normal and the right way for establishing whether we should proceed with these particular proposals. I believe that we shall get the technical expertise necessary both in terms of assessors and witnesses who come before it.
Mr. Rost: As the issues involved in the proposed expansion of Windscale and the important matters raised by the Royal Commission are as much matters for the long-term energy strategy planning of this country as they are to do with the environment, what assurance do we have that there is proper co-ordination within Government Departments to guarantee that the views of the Department of Energy will be properly represented?
Mr. Shore: There is no problem about that, I can assure the hon. Gentleman. My right hon. Friend and I are in touch on all matters where interests overlap, but there is a separate matter to be debated, and I am sure that it will be debated, and that is the long-term energy policy of this country. I hope that the House will soon have an opportunity to address itself to this subject.
Mr. Hooley: Will my right hon. Friend make it clear to the House that proper anxieties about the development of nuclear power are not confined to this country, but are shared by such backward and unsophisticated countries as the United States, Sweden, France and Germany? Will at least one distinguished scientist be included in the inquiry?
Mr. Shore: As I have said, I am thinking about the appointment of assessors, and a distinguished scientist may be the sort of person who might serve in that capacity. My hon. Friend is entirely right in making the point that it is a problem which has a major international content. Many other countries are also concerned with these processes.
Mr. Forman: Will the right hon. Gentleman accept that a growing number of Members on both sides of the House will welcome his statement today and feel that his assurance about there being an early debate on the Flowers report is an important step for the Government to take? Will he also take into account the inquiry conducted in Australia by the Fox Commission, the so-called ranger environmental uranium inquiry, which could offer some helpful suggestions to the Government in proceeding with this inquiry?
Mr. Shore: I shall look at the Fox Commission report in the light of the hon. Gentleman's remarks. Perhaps the Fox Commission is one more contribution to growing international literature dealing with the whole future of nuclear power.
Mr. Tom King: The right hon. Gentleman said that he had two objectives. One was to call the matter in for his own attention and for a public inquiry and the second was to see that this was resolved speedily. Is he aware that we recognise that he has achieved his first objective, but we fail to see how he has made any progress whatsoever in achieving his second? He said that all those concerned would wish to make speedy progress. What evidence do we have for that statement? The only accelerator he seems to have built in is an experienced chairman. What will he be able to do in the face of the sort of pressures involved in this type of inquiry?
Mr. Shore: The hon. Gentleman will recall that other major inquiries which
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we have held involving difficult environmental matters—I am thinking of the recent Flixborough inquiry—suggest that it is possible, particularly with skilled chairmanship, to have a thorough, yet not unduly prolonged, study.

STATE OPENING OF PARLIAMENT (TELEVISION)
Mr. Speaker: Yesterday the hon. Member for Totnes (Mr. Mawby) raised with me the question of the televising of the House without the permission of the House. I have been making inquiries, but it is quite clear to me that I need to have further consultations, and, with the permission of the hon. Member and that of the House, I shall make a considered statement when we return after Christmas.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 14TH JANUARY
Members successful in the Ballot were:

Mr. Geoffrey Finsberg

Mr. Arnold Shaw

Mr. David Hunt.

BILLS PRESENTED
  NEW TOWNS (SCOTLAND)
  Mr. Secretary Millan presented a Bill to make provision as respects the revocation or variation of orders made under section 1, 2 or 5(1) of the New Towns (Scotland) Act 1968; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed [Bill 16].
  INSURANCE BROKERS (REGISTRATION)
  Mr. John Page, supported by Mr. Tim Renton, Mr. Michael Shersby, Mr. Ernest Perry, Mr. John Farr, and Mr. Julian Ridsdale, presented a Bill to provide for the registration of insurance brokers and for the regulation of their professional standards; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 28th January and to be printed [Bill 17].
  EMPLOYEE INVESTMENT
  Mr. Julian Ridsdale, supported by Mr. W. Benyon, Mr. Michael Grylls, Mr. Jeremy Thorpe, Mr. Brian Walden, Mr. Peter Hordern, Mr. Nick Budgen, Mr. L. R. Fletcher, Mr. Keith Stainton, Mr. David James, and Mr. Michael Marshall, presented a Bill to encourage companies to extend investment in the ownership of their shares to employees; to regulate the terms, conditions and extent of such investment including the liability to tax of the companies and employees; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 4th February and to be printed [Bill 18].
  PASSENGER VEHICLES (EDUCATIONAL AND OTHER PURPOSES)
  Mr. David Hunt, supported by Mr. Norman Fowler, Mr. Roderick MacFarquhar, Mrs. Lynda Chalker, Mr. John Watkinson, Mr. Richard Luce, Mr. Peter Hardy, Mr. Malcolm Rifkind, Mr. Paul Dean, Mr. Robert Hicks, and Mr. James Scott-Hopkins, presented a Bill to make provision for the use of certain motor vehicles by bodies concerned with education, with churches, with social welfare or with other activities for the benefit of the community; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 11th February and to be printed [Bill 19].

  HOUSING (HOMELESS PERSONS)
  Mr. Stephen Ross, supported by Mr. David Steel, Mr. Peter Walker, Mr. Bruce Douglas-Mann, Mr. Andrew Welsh, Mr. Dafydd Wigley, Mr. David Knox, Mr. John Cartwright, Mr. Nicholas Scott, Mrs. Millie Miller, Mr. Fred Evans, and Mrs. Gwyneth Dunwoody, presented a Bill to make further provision as to the functions of local authorities with respect to persons who are homeless or threatened with homelessness; to provide for the giving of assistance to voluntary organisations concerned with homelessness by the Secretary of State and local authorities; to repeal section 25 of the National Assistance Act 1948; and for connected purposes: And the same was read the First
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  time; and ordered to be read a Second time upon Friday 18th February and to be printed [Bill 20].

  ABORTION (AMENDMENT)
  Mr. W. Benyon, supported by Mr. Frederick Willey, Mr. James White, Mr. Ian Campbell, Mr. Leo Abse, Dr. Jeremy Bray, Mrs. Elaine Kellett-Bowman, Sir Bernard Braine, Mr. Michael Roberts, Mr. Cyril Smith, Mrs. Margaret Bain, and Reverend Robert Bradford, presented a Bill to amend the Abortion Act 1967, and to make further provision with respect to the termination of pregnancy and matters consequential thereto: And the same was read the First time; and ordered to be read a Second time upon Friday 25th February and to be printed [Bill 21].
  PROTECTION OF CHILDREN
  Mr. Geraint Howells, supported by Mr. Cledwyn Hughes, Mr. Emlyn Hooson, Mr. Malcolm Rifkind, Mr. Dafydd Thomas, Mrs. Margaret Bain, Mr. James Kilfedder, Mr. Tony Newton, Mr. Torn Ellis, Mr. Russell Johnston, Mr. Cyril Smith, and Mr. Terry Walker, presented Bill to enable a person other than the parent to claim child benefit, or any other benefits or allowances payable in respect of a child, in circumstances where the child is living with that person and one parent: and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 4th March and to be printed [Bill 22].
  TOWN AND COUNTRY PLANNING (AMENDMENT)
  Mr. Dudley Smith, supported by Mr. Geoffrey Rippon, Mr. Frederick Willey, Mr. Charles Fletcher-Cooke, Mr. Tom Bradley, Mr. Michael Grylls, Mr. David Ginsburg, Mr. Michael Marshall, and Mr. Kenneth Lewis, presented a Bill to amend the Town and Country Planning Act 1971 as respects stop notices and the provision of information to the Secretary of State for the Environment and Local Authorities; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 28th January and to be printed [Bill 23].
  RENTCHARGES
  Mr. Fred Evans, supported by Mr. Andrew Bennett, Mrs. Ann Taylor, Mr. Jim Callaghan, Mr. Frank Hatton, Mr. Mike Noble, Mr. George Rodgers, Mr. Ron Thomas, Mr. Terry Walker, Mr. John Watkinson, Mr. Joseph Dean, and Mr. Ted Garrett, presented a Bill to prohibit the creation and provide for the extinguishment, apportionment and redemption of certain rentcharges: And the same was read the First time; and ordered to be read a Second time upon Friday 11th February and to be printed [Bill 24].
  BUILDING SOCIETIES (REORGANISATION AND NATIONALISATION)
  Mr. John Ryman, supported by Mr. Max Madden, Mr. George Rodgers, Mr. John Lee, Mr Ivor Clemitson, Mr. J. W. Rooker, Miss Jo Richardson, Mr. Geoff Edge, Mr. Donald Anderson, Mr. Ted Leadbitter, Mr. James Sillars, and Mr. Norman Buchan, presented a Bill to provide for the establishment of a British Building Societies Corporation; to make provision with respect to the staff and functions of the Corporation; to provide for the transfer to the Corporation of all property, securities and other assets, rights, obligations, and liabilities of building societies; to amend the law on the activities carried on hitherto by building societies under the Building Societies Acts; to make provision for compensation; to make provision for the existing staff of building societies; and for purposes connected with the aforesaid matters: And the same was read the First time; and ordered to be read a Second time upon Friday 4th March and to be printed [Bill 25].
  ROAD TRAFFIC ACT 1960 (AMENDMENT)
  Mr. Tom Bradley, supported by Mr. Walter Johnson, Mr. Gordon A. T. Bagier, Mr. Greville Janner, Mr. Richard Mitchell, and Mr. Michael English, presented a Bill to amend the Road Traffic Act 1960, with respect to road service licences: And the same was read the First time; and ordered to be read a Second time upon Friday 18th February and to be printed [Bill 26].
  CLEAN AIR (PLACES OF ENTERTAINMENT)
  Mr. Roger Sims, supported by Mr. John Cartwright, Mr. Robert Kilroy-Silk, Mr. Laurie Pavitt, Sir George Young, Mr. Andrew Bowden, Mr. Clement Freud, Mr. Dafydd Wigley, and Mr. George Thompson, presented a Bill to provide for the control of smoking in places of public entertainment; to require the provision of non-smoking facilities in such places, and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 4th March and to be printed [Bill 27].
  FIREARMS ACT 1968 (AMENDMENT)
  Mr. Marcus Kimball, on behalf of Mr. William Whitelaw, supported by Mr. Marcus Kimball, Mr. Jasper More, Mr. John Farr, Mr. Ben Ford, Mr. Alan Beith. Mr. Robert Boscawen, Mr. Michael Hamilton, Mr. Peter Rees, and Mr. Nicholas Ridley, presented a Bill to amend the Firearms Act 1968 with respect to the duration of firearm certificates and short-gun certificates; And the same was read the First time; and ordered to be read a Second time upon Friday 28th January and to be printed [Bill 28].
  AVOIDANCE OF LIABILITY (ENGLAND AND WALES)
  Mr. Michael Ward, supported by Mr. Arthur Bottomley, Mr. John Cartwright, Mr. Robin Corbett, Miss Janet Fookes, Mr. Arthur Latham, Mr. Richard Luce, Mrs. Millie Miller, Mr. Stephen Ross, Mr. Kenneth Weetch, and Mr. Alan Lee Williams, presented a Bill to impose further limits on the extent to which civil liability for breach of contract, or for negligence, or other duty can, under the law of England and Wales, be avoided by means of contract terms and otherwise: And the same was read the First time; and ordered to be read a Second time upon Friday 28th January and to be printed [Bill 29].

  FIREARMS ACT 1968 (AMENDMENT) (No. 2)
  Mr. Roderick MacFarquhar, supported by Mr. Patrick Cormack, Mr. George Cunningham, Mr. Peter Hardy, Mr. Max

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  Madden, Mr. Cyril D. Townsend, Mr. Philip Whitehead, Miss Janet Fookes, Mr. Dafydd Wigley, and Mr. Russell Johnston, presented a Bill to amend the Firearms Act 1968 in respect to the use and possession of firearms and crossbows by young people; and for purposes connected therewith: And the same was read the First time; and orders to be read a Second time upon Friday 11th February and to be printed [Bill 30].

  OCCUPIERS' LIABILITY
  Mr. J. W. Rooker, on behalf of Mr. Donald Anderson, supported by Mr. Peter Temple-Morris, and Mr. John Watkinson, presented a Bill to amend the law of England and Wales and Northern Ireland as to the liability of occupiers for injury to trespassers and certain other persons on any land or other property from dangers due to the state of the property or things done or omitted to be done thereon; to impose further limits on the extent to which the liability of occupiers for injury to persons on any property from such dangers can under that law be avoided; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 4th March and to be printed [Bill 31].
  PARLIAMENTARY COMMISSIONER (AMENDMENT)
  Mr. Charles Fletcher-Cooke, supported by Mr. Dan Jones, Mr. Antony Buck, and Mr. Ian Gow, presented a Bill to amend the Parliamentary Commissioner Act 1967. And the same was read the First time; and ordered to be read a Second time upon Friday 4th February and to be printed [Bill 32].

  SCOTTISH BANK NOTES
  Mr. Iain MacCormick, supported by Mr. Douglas Henderson, Mr. Donald Stewart, Mr. Gordon Wilson, Mrs. Margaret Bain, Mr. Douglas Crawford, Mrs. Winifred Ewing, Mr. George Reid, Mr. George Thompson, Mr. Hamish Watt, and Mr. Andrew Welsh presented a Bill to make Scottish bank notes legal tender throughout the United Kingdom: and the same was read the First time; and ordered to be read a Second time
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  upon Friday 4th February and to be printed [Bill 33].

  EMPLOYMENT PROTECTION ACT 1975 (AMENDMENT)
  Mr. James Lamond, supported by Mr. Martin Flannery, Mr. Robert KilroySilk, Mr. John Ovenden, Mr. Ivor Clemitson, Mr. Brian Sedgemore, Mr. Frank Hatton, Mr. Ron Thomas, Mr. Eric S. Heffer, Mr. George Rodgers, Mr. Stan Thorne, and Mr. David Watkins, presented a Bill to amend the Employment Protection Act 1975 with reference to the certification of trade unions as independent; and for connected purposes: and the same was read the First time; and ordered to be read a Second time upon Friday 28th January and to be printed [Bill 34].
  COUNCIL TENANTS' CHARTER
  Mr. Reginald Eyre, supported by Sir William Elliott, Mr. Walter Clegg, Mr. Anthony Grant, Mr. Geoffrey Finsberg, Mr. Anthony Steen, Mr. Fred Sylvester, Mr. Peter Rees, and Mr. Peter Bottomley, presented a Bill to provide for improved organisational and administrative arrangements under a Tenants' Charter; to give tenants of council houses and other occupiers certain rights; to provide for improved security of tenure in appropriate cases and improved rights as to transfer of tenancy; to enable tenants to purchase upon reasonable terms the freehold or a long lease of the property they occupy; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 11th February and to be printed [Bill 35].
  CONTROL OF FOOD PREMISES (SCOTLAND)
  Mr. George Younger, supported by Mr. Robin F. Cook, Mr. Hector Monro, and Mr. George Thompson, presented a Bill to prohibit as respects Scotland the sale, etc. of food in circumstances where there is a likely danger to health: And the same was read the First time; and ordered to be read a Second time upon Friday 18th February and to be printed [Bill 36].

  SITTINGS OF THE HOUSE
  Resolved,
  That this House do meet tomorrow at Eleven o'clock, that no Questions be taken after Twelve o'clock and that at Five o'clock Mr. Speaker do adjourn the House without putting any Question.—[Mr. Foot.]

ADJOURNMENT (CHRISTMAS)
motion made, and question proposed, That this House at its rising tomorrow do adjourn till Monday 10th January.—[Mr.Foot.]
4.3 p.m.
Mr. W. R. Rees-Davies: The Leader of the House will correct me if I am wrong, but I think that this is the only year in this century in which there has not been more than one day set apart for a foreign affairs debate. Certainly we have had no proper discussion of matters relating to foreign affairs. Further, the Select Committee on Cyprus has sat and reported to this House as long ago as April. Yet we have still not had an opportunity to debate that report, which is of the deepest concern to hon. Members in all parts of the House.
The mismanagement of the business of the House this year has been intolerable. Every single moment has been taken up with a volume of indigestible legislation. Because of this we have not fully discussed the financial state of the nation and we have as a result shut away from ourselves, in true parochial fashion, the opportunities which the House has always hitherto had for full and proper discussion of international affairs.
I would not have sought to raise this subject on the Adjournment but I do not believe that it is right that we should go into recess this Christmas without an opportunity for some of us to express a view upon the Middle Eastern situation at a time when a new initiative can be seized in different parts thereof, not only in Greece and Turkey but—and I see the hon. and learned Member for Leicester, West (Mr. Janner) in his place—in Israel and throughout the Arab States. An international initiative to break the deadlock is now vital. That international initiative must come from British leadership.
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More than any other country we have an obligation with Greece and Turkey to find a solution to this problem. We must not sit back. We must take active steps to secure that solution. I would like to draw attention to some wise words uttered by my right hon. Friend the Leader of the Opposition at a dinner on 24th November, which I believe represent the policy which ought to be adopted not only by the Conservative Party but by the Government. My right hon. Friend said:
" I would like to see a much stronger effort to concert the foreign policies of the Nine and to ensure that the economic strength and importance of the Community are used to further our common interests. Let us take for example, the unsolved problems of Cyprus which continue to overshadow peace in the Eastern Mediterranean. Cyprus, Greece and Turkey all have agreements with the Community; and Greece, with our full support, is negotiating for membership. I would like to see a joint initiative between the Community and the new American administration to bring together the different parties on the island and outside and make a strenuous effort to achieve the settlement which has eluded us all for so long."
In the recent election in the United States we know that strong support was given to President-elect Carter by the Greek community. We know, too, that the new Foreign Secretary in Mr. Carter's administration is an experienced man with a desire to secure a solution in the Middle East, more particularly with a desire to bring together Turkey and Greece and to resolve the problems of Cyprus and the Aegean.
This is the moment for our country, for the first time for many years, to seek to show true British leadership. In the report of the Select Committee on Cyprus, which I had the honour to initiate, we said:
"Her Majesty's Government should raise with the Members of the EEC the need for an early solution of the constitutional problems in Cyprus and invite early consideration of this issue in the European Parliament.
A further initiative on Cyprus should be made at the Commonwealth Prime Ministers' Conference.
Britain had a legal right, a moral obligation, and the military capacity to intervene".
That the Government had that opportunity and could have intervened in July and August 1974 there is no doubt. Had they decided to intervene at that stage, we should not be in the serious predicament in which we find ourselves in today.

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On 14th June this year, Lord Caradon, speaking in another place, said:
"But if, when with the authority of my Government "—
and this comes from a person very close and dear to the heart of the Leader of the House—
"I signed the Treaty of Guarantee, I had been told that the events—of which we now know—would take place without our Government intervening to take effective action to prevent the disasters which have befallen the island, I would not have believed it possible. I should have thought it was inconceivable."—[Official Report, House of Lords; 14th June 1976; Vol. 371, c. 1047.]
The Leader of the House knows full well that members of the Labour Party in another place are unanimous in their view that it is time we secured effective action. It is also true in this House, from the extreme Left of the political spectrum to the extreme Right, across all parties. We all believe that we should exert much greater effort to secure a solution in Cyprus.
Nobody could be so arrogant as to suggest that he had any one solution which would necessarily prove to be successful. But the Select Committee drew attention to a number of options, all of a constructive nature, that were open to us. We pointed out that everything hinged on unanimity of thinking in the EEC, and whether the EEC would seek to use the mailed fist or take more diplomatic action. The EEC could virtually force a solution. It has control over the arms and over the economy of those nations. It is not for me to say whether that is the right approach, but I believe that the situation is now such that it is imperative that the newly appointed President of the Commission, who this year is British, should at the beginning of the year immediately seek an initiative for a joint foreign policy on this issue with all the countries of the EEC.
In this area we have not so far had the successes and initiatives in the Common Market that have been seen in many others. Some of the initiatives in other matters have been failures, but at least they have been tried. For example, the common agricultural policy may have met with many failures but no one could say that there has not been much effort and much discussion. In this area of foreign policy, on the other hand, there has been virtually no public effort.
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We are told that conversations and diplomatic talks are continuing. No doubt they are, but it is time now for positive action and debate here and in the European Assembly. Where is the joint approach of Right and Left, with both parties getting together to say that Britain will give a lead to secure a solution? This matter should, therefore, be debated before we rise for the recess.
I think that the problem is not always sufficiently understood. After all, the Republic of Cyprus was established as an independent State, except for the two base areas over which we have retained our sovereignty. The Government have stressed that that will continue and that the sovereign bases will not be handed over to NATO or anyone else. But the independence and basic constitutional order, guaranteed by Britain, Greece and Turkey, overrules and outlaws Enosis and Taksim—the division of the island—and both those solutions were ruled out again in 1965 by the United Nations mediator Galo Plaza.
In 1972 the population of Cyprus was about 650,000, of whom over 110,000 were Turkish. What is the present situation? The Turks command some 40 per cent. of the Island, including Famagusta, the heart of the tourist centre. At present it is being pillaged. Much of the property is being destroyed. The ownership of the property is, in fact, Greek Cypriot. The trouble is that it does not matter who the owners are; the whole of the valuable tourist industry is being set at naught by the continued retention of control of Famagusta by the Turks.
It is an open sercret that the Turks themselves do not particularly wish to retain Famagusta. If there is to be a partition, it can only be by the agreement of the peoples of Cyprus. Surely, this House could at least unite to say—whether or not one feels that the Turks may have been badly treated in the past, and no doubt there is a great deal of force in such arguments—that it is in the interests of both Turk and Greek alike, and not only in the island, to bring the two sides together. Only by a solution of the Cyprus problem and then of the problems in the Aegean can we, together with the other countries of Europe, secure them as valuable allies in NATO once more, and as partners whom we need in the battle against Soviet imperialism.

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This must be viewed as an extremely important matter for our nation. It is shameful that this Government have so mismanaged their business that we have not been able to discuss this problem on the Floor of the House or have an opportunity to discuss other wider and equally important problems throughout the Eastern Mediterranean. The problems in Israel, the Arab States and the Aegean, and the question of which issues can by law be referred to The Hague and which should be so referred are just some many such issues.
I hope profoundly that next year we shall have an opportunity in this House to discuss matters of overriding importance both to Britain and to the rest of the world rather than engage in the party-political bickering on small issues which casts a shadow on what this great assembly ought to be.
4.18 p.m.
Mr. Greville Janner: I shall not take up the argument presented by the hon. and learned Member for Thanet, West (Mr. Rees-Davies), except to say that I agree with him that we should have had a foreign affairs debate. I make but three comments on what he said. First, if we look to Israel at the moment we see the perils and horrors of coalition government and the sort of miseries that can come about when one is forced into partnership with those whom one would prefer not to have in the same Government.
Second, I agree that this is a time when we should be doing all we can to help the parties to come to terms in the Middle East. I hope that there will be a return to Geneva, and that it will be a meeting of representatives of decent Governments, not of terrorist organisations—of people who want to make peace, not war.
Third, it is a matter of the gravest concern both in the House and throughout the world that within the last 24 hours there have been arrests in Russia of people who had been seeking to leave the Soviet Union to go to live in Israel in peace and freedom and who have committed no crime whatever. I am sorry that we do not have an opportunity to debate that matter, and I ask the Leader of the House, who is known for his passionate concern for the freedom of all peoples, not just those privileged to live in and serve this country, to ask the
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Government to express to the Soviet authorities the disgust and anxiety of all right hon. and hon. Members at the current treatment of minorities in the Soviet Union, and our particular concern for the safety of those who have been arrested in the last 24 hours. I was told only a few minutes ago that they have simply disappeared. Their families do not know where they are, their children do not know and their colleagues do not know. They are among the most distinguished and bravest of the people fighting for freedom in the world today—professors and men of learning—and all they wished was to hold a seminar in a private house, having been forbidden to do so in public, as they should be entitled.
Mr. Ivan Lawrence: Before the House adjourns for Christmas there ought to be some expression of our concern about what Mr. Bukovsky has said. He claims that since the Helsinki Agreement the measures taken against dissidents in Moscow have been harsher than before.
Mr. Deputy Speaker (Sir Myer Galpern): The scope of the debate on the Adjournment for the recess always presents considerable problems for the House. What I have listened to since I came into the Chamber today is a foreign affairs debate. The hon. and learned Member for Leicester, West (Mr. Janner) has not yet made any reference to the Adjournment. I know that it is difficult, and that the scope of the debate is wide, but it is wholly irrelevant to have an Adjournment debate on foreign affairs.
Mr. Janner: I bow to your judgment, Mr. Deputy Speaker, but I thought I had twice referred to the fact that the House must not adjourn without discussing this matter. We in this House are concerned not only with our own freedoms but with the freedoms of others. I respectfully suggest that this is a matter of grave concern to all of us and that the hon. and learned Member for Thanet, West should have been able to make the speech that he did make.
Mr. Deputy Speaker: I am not disputing that this is a matter of grave concern. I must make that abundantly clear. The question is whether this is the occasion to express such concern, and whether this should be a foreign affairs debate.
Mr. Janner: In any event, I wish to raise, briefly, another matter which is of immediate and absolute concern, namely, the disgraceful behaviour of the Post Office in connection with discrimination against people who live in particular streets or areas. I had hoped that this could be debated before the House rose for the recess.
Mr. Deputy Speaker: I am sorry to interrupt so often, but the hon. and learned Member for Leicester, West was successful in the ballot to raise this matter in the Consolidated Fund Bill debate, but he chose to withdraw.
Mr. Janner: It was No. 19 in the list of subjects for debate and the reason that—
Mr. Deputy Speaker: It may have been nineteenth in the list and not reached until 10 o'clock in the morning, but that is the business of the House and the way in which the House conducts its business on the Consolidated Fund Bill.
Mr. Janner: I am much obliged to you for that indication, Mr. Deputy Speaker. I shall try to be extremely brief.
I wish especially to raise matters that have happened since then and that will concern all hon. Members—not only those who might have been awake at the hour at which the subject might have been raised during the Consolidated Fund Bill debate. The matter is of enormous interest and importance and it verges on a question of privilege.
Sir Edward Fennessy, who is the deputy chairman of the Post Office Corporation, responsible for telecommunications, has continued to refuse to give me details of those areas in my own constituency in which discrimination is exercised. It is bad enough that the Post Office should say that because someone lives in a particular street it will not give that person a telephone without payment of a large sum in advance. It is worse when a great corporation insists on shrouding its operations in a cloak of secrecy and refuses to give MPs information about the people against whom it is discriminating.
During the last few hours I have received a huge number of letters and telephone calls from all over the country.
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They indicate that this is not a local matter at all, but one which concerns people from the North of Scotland to the South of England.
In those circumstances, I am sorry that we cannot debate the Post Office and other establishments in the private and public sectors that seek to impose credit terms, demand advances and insist upon deposits, not because an individual person is or is not creditworthy—as they are entitled to do—but because of where a person happens to live. This form of guilt by habitation ought to be banned from both private and public sectors. Sir Edward Fennessy ought now to change his methods, apologise for refusing to give information and apologise for his delay in replying to constituency letters, or resign.
4.26 p.m.
Mr. Ian Percival: I wish to speak against the motion for the Adjournment of the House on the grounds that the House should not adjourn tomorrow until it has discussed Early-Day Motions Nos. 57, 58 and 59 that have been put down in the names of my hon. and learned Friend the Member for Wimbledon (Sir M. Havers) and myself and that relate to bankruptcy matters. The House should not adjourn until some assurances have been received from the Government about those matters.
In order that the House may form some view as to the merits of my proposition I must give the barest outline of the background upon which it is based. The House knows that a measure called the Insolvency Bill came to us from the Lords early this year and that it occupied much of our time until 26th October when the Bill went through its final stages here.
The Bill had a bad start because there had been no consultation at all. That matter was repaired through the joint efforts of Ministers, Opposition Members and a working party of banisters and solicitors that rendered very great assistance to all those who were concerned with this measure. That is of particular relevance to my motion for a reason which I will tie into my argument in a moment.
I need not remind the House that bankruptcy is one of the few remaining ways in which a person lawfully owed

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money may recover it from another who has assets but will not pay. It was proposed to put up the minimum debt upon which a bankruptcy petition could be founded, and quite rightly so because the value of money has changed. There was considerable argument about the threshold and the Government finally accepted our view that it should be £200 and not £300.
That is, however, only one of the monetary considerations which are very important when a person has to decide whether to take advantage of the bankruptcy procedure. The other consideration is the size of the deposit that must be paid when a bankruptcy petition is filed. At the moment it is £5 in the case of a man filing his own petition and £7·50 for a creditor filing a petition against a debtor.
These deposits are not altered by statute in the same way as the £200 limit which has therefore been fully discussed by the House. These limits are altered by Statutory Instrument made by the Lord Chancellor with the concurrence of the Secretary of State for Trade. Furthermore, the form of Statutory Instrument used is one which does not come before the House at all and is not even subject to the negative procedure. It is called a Statutory Instrument and it is laid before the House but there is no procedure open to us to discuss what is being done by such a Statutory Instrument.
Right from the start, it was known that the Government proposed to change these deposits and to put them up dramatically. It was also known that we could not discuss the merits and demerits of that within the debates on the Bill because the matter did not come within the provisions of the Bill. On 27th April the question of these deposits was raised and I ask the House to bear that date in mind because although the Government have frequently said since then that this matter of the deposits was urgent, nothing was done about it until 15th November, the date when the Bill received Royal Assent.
By 1st June we had all agreed that something else should be done. That was that a new Rules Committee should be set up to consider rules such as the one
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of which I have just spoken, and which hitherto had not been open to consideration either by hon. Members or by anyone else. It will be no surprise to the House to know that the argument was advanced at an early stage that because we could not discuss the question of raising these deposits in the House, that question should be postponed until this new Committee was in being and could consider them.
On 1st June, however, the Under-Secretary of State for Trade wrote to me as follows:
"I ought to add, however, that we shall not be able to delay, until the Committee has been set up, the amendment to the Bankruptcy Rules which will give effect to the increased deposits required to be paid on the presentation of bankruptcy petitions, as these are crucial features in reducing the present excessive strains on the Insolvency Service."
I ask the House, against that background, to bear in mind that nothing was in fact done until 15th November. It transpired that it was not quite as urgent as the Minister had at that stage suggested.
On 17th June in Committee I warned the Minister that if the deposits were to be put up in such a way or at such a time as to preclude the Committee from looking at them, that procedure would be open to serious criticism. That is exactly what has now happened, and I adhere to the view that what happened is open to serious criticism. Further, the Leader of the House knows, I think, that that view is held strongly by many hon. Members and by interested persons outside the House particularly those who did so much to help those of us in the House to improve the Bill.
It is fair to say that the Minister said that he could not give me the undertaking for which I asked on 17th June. The result was of course that we set up a watching system, to make sure that the order was not laid without our knowing, for if the order had been laid while the Bill was still going through the House, we would still have had our negotiating position to assist us with our argument about those changes.
But nothing happened, no order was made before, on 26th October, on Report, the Under-Secretary of State for Trade introduced a new clause setting up the Committee that we all wanted to see

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set up. I wish to quote one paragraph from what he then said:
"The purpose of the clause is to establish a committee which will be under a statutory duty to keep the bankruptcy and winding-up rules under review and to make recommendations to the Lord Chancellor about any changes in the rules which the committee deems it to be desirable."
But it is to the next sentence that I wish particularly to draw to the attention of the Leader of the House:
"In addition, the Lord Chancellor will be obliged to consult the committee before exercising his existing powers to make bankruptcy or winding-up rules."—[Official Report, 26th October 1976; Vol 918, c. 287.]
I and others inside and outside the House felt at that stage that the battle that had been waging was over, and that the Minister was saying in effect "We have not put up the deposits yet. We shall now have a Rules Committee which will do such-and-such in the future and, in addition, the Lord Chancellor will have to submit changes under his existing powers to that committee." On that day the Bill went through very amicably, and we all thought that that was the end of the matter.
On 11th November—after the Bill had completed all its stages here—the Lord Chancellor signed an order putting up the deposits. On 15th November that order was signed by the Secretary of State for Trade. Also on 15th November the Bill received the Royal Assent. No information about this was before Parliament even then because the order was not laid until 24th November. None of us suspected anything.
Had we not just passed a Bill which included provision for setting up a Rules Committee to which such rules would in future be submitted, and had we not received an assurance from the Under-Secretary of State for Trade that the committee would consider the rules made under the Lord Chancellor's existing power? How innocent we were! On 19th November another order had been made—the commencement order bringing into force Section 10, which set up the Rules Committee. This order brought that section into force on 20th December.
So the order putting up the deposits was made on 15th November, laid on 24th November, and came into operation on Friday 17th December whilst the
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order setting up the Rules Committee was made on 19th November, and brought those provisions into force on Monday 20th December. The various provisions had been so used that nothing was done until the House had lost its position in relation to the matter and, in particular, the Opposition had lost their negotiating position. The two powers were then used in such a way as to ensure that the deposits were raised to these highly controversial sums on the Friday before the Monday on which the Rules Committee which should have looked at them was to come into being.
An outside observer has made this moderate comment:
"The timing of these orders is striking."
So it is. The Opposition have so far taken the view that they could not believe that Ministers would deliberately so use their powers as to produce intentionally a situation in which matters of great interest to the public were precluded from discussion by anyone. If that were done deliberately, it would be disgraceful.
Two Ministers are concerned—the Lord Chancellor and the Secretary of State for Trade. I am happy to say at once that I am assured by the Under-Secretary of State for Trade that the Lord Chancellor was not concerned in the timing. I am not surprised at that, and I am happy to accept and repeat that information. I am left wondering about the actions of others who must be concerned.
I am choosing my words carefully, because I would still much rather see this put right than make a fuss about it. It can be put right. The new deposits came into operation on Monday, two days ago. If the order were withdrawn, the few who have paid the new deposits could be given their money back and for the short period it would take to deal with the matter properly the old rates could continue to apply.
I urge upon the Leader of the House that he should take action. It is very important that he do so for two main reasons. First, it simply is not right that such charges should be made without the opportunity for discussion of them particularly when, as in this instance, that opportunity could be so readily provided.
Secondly, I want to read one passage from a letter written by the chairman

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of the joint working party to which I referred earlier, to the Solicitor-General. Having set out the timing to which I have referred, he said:
"Sorry as I am to say it, it is precisely conduct of this kind which fosters the disillusionment and lack of trust which already constitutes a very serious division between politicians and the rest of the community, including, I fear, the professions."
I know the writer of that letter as a moderate and fair man. I want the Leader of the House to understand that that is the feeling of people outside the House who have taken an interest in this matter and themselves worked hard for so long to assist us in improving the Bill. If at the end of it all, because of some mistake or because somebody—at what level I do not know—thought that it was clever, we were to set all that at nought when it could be so easily put right, I think we would be mad.
I end by relating my argument to the motion again. For the reasons that I have given I do not think that this House ought to adjourn without discussing this matter, or—I repeat my alternative—receiving an asurance from the Government that steps will be taken to remedy the grievances to which I have referred, I consider that they are very real and genuine grievances but whether they are or not, there are many people like the writer of the letter that I have quoted who feel very strongly that that is so. They are grievances which can do nothing but harm to this House and which could defeat any future efforts to ensure the kind of co-operation that we had on this Bill unless we take some steps to put them right—and it is so easy for us to take steps to put the matter right if we just have the will to do so.
4.42 p.m.
Mr. Robert Hughes: I would raise the £6½ million investment by Barclays Bank in the South Africa Defence Bond fund as a reason why the House should not go into recess tomorrow. This matter was reported last week when it was revealed that the £6½ million investment is the largest contribution so far to the South African Government's appeal for a fighting fund which now totals £60 million.
In response to questions about why the bank had done this, the managing director
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of Barclays National in South Africa said:
"We regard the contribution as part of our social responsibility, not only to the country at a particular stage in its history, but also to staff members called upon to do service on our borders."
That means South Africa's borders. The kind of social responsibility and the kind of society in that country is revealed in a report from Johannesburg on the 15th December headed:
"Another detainee dies in South Africa."
It stated:
"He is Mr. George Botha, aged 30 a teacher,"
who had been taken in for detention and questioning. Mr. Botha is the ninth person to die in detention in South Africa this year. The report adds:
"His death comes only three days after an Oxford graduate detainee, Mr. Wellington Tshasibane, was found dead in a police cell."
When the Press made inquiries to the South African police about what had happened the Commissioner, General Gert Prinsloo, said:
"He jumped down a staircase well next to the lift as he was being taken up to the office."
This kind of excuse with regard to the number of people who have died while in detention, or under questioning and torture in South African prisons, numbers many dozens. Often the excuse is that a person jumped out of a window nine storeys up and was under no pressure or harassment. General Prinsloo said of Mr. Botha:
"He hadn't been questioned yet."
That is a common reply—that a person had not been under questioning and had been under no pressure or harassment. These people were just so terrified about what might happen to them that they had to take this course of action. The number of times and the number of ways that this kind of death to people in detention occurs is serious.
It was reported that on 10th December, 433 people were held in detention, some of them without trial and many of them without charge. It is true that some of them are released. But we know that there are many hundreds still in detention and that this is only the tip of the iceberg of the violence in South Africa.
One has only to remember the events in Soweto and many other townships to realise the kind of society in which

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Barclays National believes that it has a social responsibility. Barclays Bank is important not just because of this investment. We ought to realise the important part that Barclays National plays in the banking system of South Africa itself.
Mr. Tim Rathbone (Lewes): It is important to point out that Barclays Bank, while in no way condoning the Government in South Africa—indeed, I in no way condone the Government in South Africa—was simply making an investment switch from one necessary form of investment for continuing operations within South Africa to another necessary form of investment under the Government's rules. The bank was not condoning any action by the Government by making this cross-investment.
Mr. Hughes: If the hon. Gentleman will allow me to say so, I think that is the lamest excuse that I have heard.
Mr. Rathbone: It is true.
Mr. Hughes: There is no compulsion on Barclays National to put one farthing or one rand or one pound or whatever into the fighting fund. Barclays Bank is under an obligation to hold a certain amount of its investment in general stock within South Africa, but there is nothing whatever to compel it to cross-reference that investment. The hon. Member for Lewes (Mr. Rathbone) suggests the lamest of excuses.
The hon. Gentleman recognised the importance of Barclays, but Barclays is not the only bank. Barclays and the Standard Bank have dominated the South African banking scene for the last 50 years, despite pressure from the buildup in the number of Afrikaner banks. Two major British-owned banks control over 60 per cent. of South Africa's banking deposits. Indeed, they have gone much further. Taking all the different types of banks together—commercial banks, merchant banks, general banks and hire-purchase houses—British companies have majority holdings in four of the South African top 20 and substantial minority holdings in many others. Their banking business goes right across the board within South Africa itself.
As the hon. Member for Lewes said, Barclays Bank and other British companies
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and multinationals have told us many times that they do not condone apartheid and that they are against apartheid. We have had enough of those pious protestations. We have been told that they had their money in South Africa not to defend or support the white minority but to help the black majority. All of us on this side of the House, and, I believe, many hon. Gentlemen on the Opposition side, know that that is not true.
We have always known that these companies had a vested interest in maintaining apartheid. In the past we have described the multinationals and British companies that had such investments as the accomplices of apartheid. With hindsight and in view of what has happened recently, that is too charitable. It is perfectly clear that they are the bulwark of apartheid. They are the mainstay and an integral part of the apartheid system, because neither investments nor apartheid could exist one without the other.
The assertion by Barclays that the investment is a social responsibility clearly shows that it is firmly in support of the apartheid system. It is investing voluntarily, without any pressure whatever, in defence bonds to ensure that the South African army is built up and that it has the best of equipment in order to carry out its policy of oppression.
Mr. Robert Adley (Christchurch and Lymington): In the hon. Gentleman's opinion does the same situation pertain because the present Government are making available long-term, low-interest loans to the Soviet Union? Does that mean that the present Government are in support of the Communist Party in Russia?
Mr. Hughes: I think that we are speaking about different matters. We are speaking, on the one hand, about bilateral trade and, on the other hand, about a company which, in the view of many of its supporters, has said that it is entirely opposed to apartheid, yet is willing to place itself firmly in that system and to support the deliberate oppression and massacre of people. Does the hon. Member for Christchurch and Lymington (Mr. Adley) defend the system of apartheid? I certainly do not defend the Soviet system. We always hear these selective arguments from the hon. Gentleman.

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I raised this question with the Prime Minister by letter, but so far I have received only an acknowledgement. I also raised the matter with the Leader of the House during business questions last Thursday. My right hon. Friend said that he would look into the matter, try to discover what the position was, and report to the House. The House certainly should not go into recess until it has a report on what action the Government intend to take.
I hope that we shall not be told that the matter is purely and simply for Barclays National in South Africa and that the Government have no locus. I point out that 65 per cent. of Barclays National is owned by Barclays in the United Kingdom, so there is a direct British rôle in this investment.
The Government took the view—I welcomed it, although it did not go far enough—that they had a responsibility for the way in which British companies behaved in South Africa when, following the Public Expenditure Committee Report, they sent guidelines to British companies operating in South Africa regarding the conditions that they should offer to black workers, wage rates, trade union participation, and so on. The Government recognised that, although the companies may be subsidiaries of British companies, they had a clear locus in the matter.
I believe that the matter goes further. The Labour Party has adopted a tough programme of action to try to end apartheid in South Africa. If, by means of shifting money from one place to another, multinationals can bypass the Government's policy on apartheid, particularly the arms embargo, it is an extremely serious matter.
Many people, having heard of this investment, have called upon the Government to insist that the investment be cancelled. We believe that apartheid brings nothing but horror to the people who have to live under it. This system has gone on for many years. It is time that the Government took strong action on their policy towards South Africa. In particular, they should tell the multinationals that they do not regard their
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presence in South Africa as helpful to the people who have suffered under such domination for so long.
4.53 p.m.
Mr. A. J. Beith (Berwick-upon-Tweed): I wish to speak against the motion.
In common with other hon. Members, I had raised with me late last night matters which I believe call for a ministerial statement—namely, the effects of the Government's measures on the concrete pipe industry. Only yesterday we had the opportunity of debating at length the general economic measures, but little specific information was forthcoming. Many hon. Members will have constituents and constituent firms who are beginning to realise what the effects of the economic measures will mean to them.
I want to draw the Lord President's attention to the concrete pipe industry. It is important that we get a ministerial statement regarding the effects of the economic measures on that industry. However, the procedure open to us offers little prospect of any such statement being made. I hope that the Leader of the House will use the means at his disposal of averting the necessity for opposing the motion by ensuring that he has information to bring before the House when he winds up the debate. The House should not go into recess before this serious matter has been dealt with.
It is all very well for us to pass a motion saying that we can go home and enjoy Christmas with our families, but we must show concern for constituents who may pack up work for Christmas for the last time, because, unlike us, they will have no work waiting for them after the recess. That is the position facing the concrete pipe industry, which is closely tied to the water and sewerage industries and the work of the regional water authorities which are to be heavily subject to the Government's measures.
I should like to draw to the attention of the Leader of the House messages received by the Under-Secretary of State for the Environment last night and a telegram which I received late last night from a factory in my constituency belonging to Hume Pipe Ltd. The factory is at

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Howick, near Longhoughton, in my constituency. The telegram reads:
"Howick factory under threat of closure if six month moratorium is imposed on water authorities."
The telegram then quotes the message given last night to the Under-Secretary of State for the Environment:
"'Mr. Armstrong, Concrete Pipe Association reported six month moratorium being imposed on all regional water authority new contracts. If this is done literally my company and I feel the whole industry will have to give formal notice of redundancy to all employees before Christmas. Current levels of deliveries have already reduced the industry to near breaking point. We have since November 1973 taken disproportionate share of cuts and merit exemption from this round of cuts. We require assurances and guidance'".
I hope that the right hon. Gentleman will find some way of giving that guidance and those assurances before Christmas, because some of my constituents will be breaking up for the holiday period with no certainty of jobs afterwards.
Mr. Lawrence: I share a common cause with the hon. Gentleman on this occasion. Is he aware that Spun Concrete (Branston) Ltd will almost certainly have to sack 100 employees within six weeks after Christmas if this moratorium goes through, because the company is dependdent for 98 per cent. of its work on the regional water authority and has hitherto been working at 50 per cent. under capacity?
Mr. Beith: The situation described by the hon. Gentleman closely parallels that in my constituency, where a firm employing 66 men is in a similar position. About 90 per cent. of that firm's work is for the regional water authorities. Less than 10 per cent. of its work is for other organisations. If further work on the construction of concrete pipes for the regional water authorities is not available, there will be no employment for those 66 men. There is not the slightest prospect of other employment for those men in my constituency. Where else can they go? The construction industry—the only industry which could employ them—is in a desperate state and in no position to offer jobs to people made redundant in other industries.
The factory concerned has been threatened with closure before under earlier cuts. As the telegram pointed
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out, the industry has suffered a whole series of these cuts. The industry needs to know straight away whether there will be any prospect of continuity of work or whether the six months' moratorium will become a 12 months' moratorium.
I hope that the Lord President will find some way of communicating with the Department of the Environment and of ensuring that some guidance is given to the firms involved. We are dealing with men who have little or no prospect of alternative employment—men who have already been on short-time and have spent periods out of work in this badly hit industry.
We shall need the concrete pipe industry if we are to solve our major pollution problems. Without the pipes for the sewage and water systems, we cannot tackle the problems that the public are demanding that we should tackle in future years. I fear that if the industry does not get more detailed guidance on the effects of these measures now, individual firms will close. Most of the firms involved have factories in different parts of the country. Therefore, they are bound to consider which of their units to close down completely and which to keep going during the moratorium with virtually no work at all. I greatly fear that the unit in my constituency will be closed. I beg the Government to give an indication of how they see this important industry getting through what is bound to be a difficult period.
I think that it would be more manageable if we had more detailed guidance than we have had so far, and I do not think that right hon. and hon. Members can pass motions casually giving ourselves a holiday without recognising that the holiday for some of our constituents could be the beginning of a long period of unemployment.
Several Hon. Members rose—
Mr. Deputy Speaker: It would help the Chair to keep a proper balance in the debate if any right hon. or hon. Member wishing to participate in it would indicate whether he thought that the period of the recess was too short. In that way, the Chair will be able to keep the debate on an even keel.
5 p.m.
Mr. William Molloy: You are aware, Mr. Deputy Speaker, that

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certain Members of this House and of the other place are members of the British delegation to the European Parliament.
I regret that time has not been found for this House to examine the procedures and the hopes and aspirations of the European Parliament and, not least, the experience of some of those who have served in it for a little while. I believe that many of the advantages which may materialise in due course will not do so if some of the bad features of the administrative and structural make-up of the European Parliament are allowed to persist.
I am sure that most right hon. and hon. Members acknowledge that the existing procedures of the European Parliament hardly qualify that institution for being called a parliament at all. However, it must be added that these may be regarded as early days and that, since the advent of the British delegation to it, especially of the Conservative and Labour Members who have been part of that delegation, a massive improvement has been brought about, and I have no doubt that this will continue. [Interruption.] I did not catch what the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, but it was with deliberate honesty that I excluded his party from my comment.
I believe that this House should be made aware of the frustration, irritation and annoyance of those of us who endeavour to contribute to the work of the European Parliament and that this House ought to debate such matters as the power of the Commission and of the Commissioners. We appreciate the administrative necessity for them. At the same time, many of us believe that the powers vested in the Commissioners are far too great. Although, until now, the EEC Commissioners may have been reasonable men, that does not mean that in exercising their powers in the future they will not be unreasonable men.
An EEC Commissioner is, after all, the equivalent of a Permanent Under-Secretary in one of our great Departments of State. I sometimes wonder what would happen here if a Permanent Under-Secretary decided to override and disregard a motion of this House or a statement by a Cabinet Minister. That is the kind of situation that can arise under EEC procedures, and there seems
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to be no way of checking that it has occurred. That is one matter that I want this House to acknowledge.
We do not see in the near future any likelihood of the creation of ways and means whereby we might change the massive power which is vested in the Commision and its staff, although there is some hope that, with a British President this coming year, we shall see a move towards a more democratic structure in the European Parliament and some diminution of the present authoritarian powers of the Commission.
Taking into account the contributions of the Members of the European Parliament who come from the various countries, it might be expected that, when motions of that parliamentary gathering have been passed, there would be some way of ensuring that the expressions of opinion in the European Parliament would be taken cognisance of, if not incorporated in legislation. That is not always the case, however. Perhaps one small example of it is to be found in the present fishing dispute with Iceland and the endeavours of the relevant Commissioner and his staff. In this instance they have tried very hard. However, it must be stressed that the procedure was set in motion thanks primarily to the efforts of the British delegation.
Here again, hon. Members who are at one on this issue as Members of the European Parliament sit in various parts of this House, and I believe that if some of their endeavours had been embarked upon much earlier we might not have reached the present impasse.
As I understand it, in a few years there will be direct elections to the European Parliament. It seems to me that, unless the men and women who ultimately will be elected from our country have some parliamentary experience and unless they know precisely what it involves, there is a grave danger that these almost almighty bodies will gather unto themselves total power. That is the danger, and I believe that this House should be made aware of it.
Having lived on the Continent for many years and having had experience of all that was involved when I was employed in one of the Departments of State, I was opposed originally to the idea of Great Britain joining the EEC.

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What is more, the British people were never asked whether they wished to go into the Community. However, after a period of years they were asked whether they wanted to stay in, and their answer was an overwhelming "Yes". That had to be accepted, and I have accepted it in my own endeavours. But it must be said that some of the apprehensions which many of us had about the EEC are now seen as proven fact, especially when we see the lack of power of the European Parliament when compared with the power vested in the Commission of the EEC.
I believe that it would be of advantage to our people and to the people of the other eight member States if, long before the holding of direct elections to the European Parliament, the Mother of Parliaments took the time to examine in detail the procedures of the EEC, and I regret that we have not had an opportunity to do so before rising for the Christmas Recess. However, I hope that what I have said today will merit attention by my right hon. Friend the Leader of the House and that he will try to make good this omission when we return to the House after the recess.
5.9 p.m.
Mr. Tim Rathbone: Before I make my one brief point, I wish to add my support to what was said by the hon. Member for Aberdeen, North (Mr. Hughes) in asking for the debate that he wanted. I am sorry that the hon. Gentleman is not here to hear me voice my support, because it may surprise him. I give him my support because it may bring home to him and other Government supporters that there are many Opposition Members who also deplore apartheid but that right hon. and hon. Members in all parts of the House also believe that, despite all their drawbacks, the banks in this country, as in South Africa, help to build bridges between people rather than to burn them. The hon. Member's condemnation of Barclays Bank in South Africa was unwarranted, unnecessary and unfair.
I wish to add my support to the request by the hon. Member for Ealing, North (Mr. Molloy) for a debate on the EEC because it seems that hidden within his contribution was advocacy of direct elections to the European Parliament.
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Answers to Questions only this afternoon caused me and, I believe, other hon. Members to doubt the Government's solid commitment to introduce direct elections within the life of this Parliament.
I believe that instead of adjourning on Thursday we should sit on Friday and debate transport. The debate we were to have had on this subject last Session failed to take place, as even the Leader of the House will admit, because the Government were frightened to put in tellers for a vote on the motion for the Adjournment which preceded it on the Order Paper since they feared that they would lose the vote. The House therefore adjourned and the transport debate failed to take place.
The debate would be even more pertinent now than it was then because of the recently announced cuts in Government expenditure which encompassed, among other things, expenditure on transport. This is an important subject in all areas of the country, but nowhere is it more important than in Sussex. That county has drawn the short straw on road building programmes over the years from all Governments. Road schemes have been postponed in the county more often than elsewhere, and there is a delay in the crucially important scheme to relieve South Street, Lewes. That road is an integral part of the communications system to the thriving and expanding port of Newhaven.
It seems impossible to extract from the Secretary of State for Transport a decision about what the scheme will be and when it will start. The scheme is crucial to this part of the country. The Government have not yet given any indication of their policy on the ports, a policy which has assumed immense importance since they decided to cancel the Channel Tunnel.
In addition to the elements related to road transport we could also cover in a transport debate the question of rail transport. This point was well developed by my hon. Friend the Member for Arundel (Mr. Marshall) earlier this week. These many other elements of transport would catch the interest of the House. If the Leader of the House cannot undertake to change the date of the Adjournment from Thursday to Friday, at least he could commit himself to providing time for a debate early in the new year.
5.14 p.m.
Mr. Ioan Evans: I agree with the hon. Member for Lewes (Mr. Rathbone) in his support for my hon. Friend the Member for Aberdeen, North (Mr. Hughes) who said that we should have a debate on South Africa. Many of my hon. Friends would welcome the chance to find out where the Opposition stand on the condemnation of apartheid. If we were to have, as has been suggested, a two-day debate on foreign affairs we could spend one day on South African matters and discuss developments in Rhodesia and Namibia. It is important that we in this House, like the United Nations, should condemn what is taking place in South Africa and the activities of the Club of Ten by which South African finance is being used in our newspapers to whitewash an evil system.
It comes ill from the Conservatives to condemn the Government for not having a foreign affairs debate. When we recently debated the Queen's Speech the Opposition chose the subjects for debate each day. If they had wanted a foreign affairs debate they could have arranged one then.
The Government have also been criticised for not having a foreign affairs debate in the last year. The Opposition are free, however, to choose which subjects will be debated on supply days. If they wanted such a debate they could at least have provided a day for one.
I want to deal with the question of unemployment. Wales and Scotland are at present engaged in discussing devolution and the machinery of Government, but my constituents are more concerned about the prospects for employment and job opportunities. Obviously we cannot now expect a debate this side of Christmas unless we have it on Christmas Eve—
Mr. Rathbone: Why not?
Mr. Evans: If the hon. Member will suggest sitting on Christmas Eve I will support him. I hope, however, that the Government will consider making a statement before we rise. We have had an economic statement. The Chancellor referred to import controls, and while some of us do not argue for a siege economy, we believe that the Government
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could constructively consider the recommendations made to them by the joint deputation from the CBI and the TUC.
I hope that as soon as we resume after Christmas the Government will make a statement about whether—
Mr. Deputy Speaker: Order. The hon. Member is raising a matter which should be raised during supplementary questions on the Business Statement tomorrow. The hon. Member is not discussing the motion which is before the House.
Mr. Evans: I am arguing, Mr. Deputy Speaker, that we should not go into recess before we have a statement from the Government. I am making these points now in case I am unsuccessful in doing so during supplementary questions on the Business Statement tomorrow.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Is my hon. Friend suggesting that he might not be able to catch my eye from Aberdare?
Mr. Evans: No. I realise that my right hon. Friend has deep anxieties about current unemployment. We might differ on the question of devolution, but I know that we heartily agree about unemployment.
Perhaps I may read a telegram that I received from a manufacturer in my constituency. It says:
"Deeply concerned about discontinuation of REP without prior warning. Serious repercussions of future employment in Welsh valleys unavoidable due to sudden substantial loss of revenue. Please call for full effect to be investigated before implementation to achieve at very least gradual phasing out to enable alternative financial arrangements to be made".
That telegram demonstrates the deep anxiety which is felt by manufacturing concerns.
The regional policies pursued in Britain have helped to maintain its economic unity because they have permitted jobs to be taken to the people in areas such as Wales, the North-East, the North-West and Scotland. I hope that the Government will seriously look at this question again.
This Christmas many people are unemployed and many others have a deep

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foreboding. I hope that the Government will give their highest priority to bringing forward proposals to create conditions of full employment. I hone that at least in the course of next year we shall see that we are altering our economic and industrial strategy so that we can improve manufacturing conditions. I hope that we shall stick to the Government's policy, which I understand is to divert the money that is being given to public administration to manufacturing industry. If we are to stop the regional employment premium and put those resources into additional administration, we shall be moving in reverse of what the Government intend. I hope that my right hon. Friend will take note.
5.21 p.m.
Mr. Paul Hawkins: I feel that it would be quite wrong, as would my constituents, if we adjourned without mentioning certain matters which are of the greatest importance to my constituency. Before doing so I take up one of the remarks of the hon. Member for Aberdeen, North (Mr. Hughes), who I am sorry is no longer in the Chamber. The hon. Gentleman referred to Barclays Bank, which I always call a fine Norfolk company. In fact, it started in Norfolk. I do not think anyone in this place believes in apartheid. Surely it cannot be imagined that Barclays seeks to support apartheid. Surely it has acted to support Africa as a bulwark against Communism.
We have spent the whole of 1976 doing things that we should not have done, and, as the Bible says, leaving things undone that we should have done. The nation's problems have not been tackled. I urge that we should not adjourn without a debate on what I call an attack on the rural areas.
Reference has already been made to transport, which is extremely important in rural areas. I must also draw attention to what seems to be the Government's attack on agriculture by the appointment of the new Minister of Agriculture, Fisheries and Food. Agriculture is our greatest industry, but it is losing valuable land which is being put under concrete. That land will never again produce food. Our present Minister does not seem to realise the importance to the industry of losing farming land. That is a matter
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that should be debated in the House before we adjourn.
Agriculture is our greatest industry. We could save millions of pounds worth of imports if we supported home agriculture, which is quite capable of producing foodstuffs for our consumers at reasonable prices. I am not talking about knock-down prices or about prices that are derisory in contrast to the prices found in the Common Market countries, our partners with whom we have to trade.
Mr. Lardinois came to Norfolk a month or so ago and pointed out that we shall go short of meat unless we are prepared to pay prices to the farming community that are nearly equal to our partners in the EEC. Italy already has a meatless week once a month. We are selling so many calves abroad that we shall not have enough to be fattened as fat cattle in this country. That means that we shall be short of beef in one or two years' time. If that happens, prices will increase and then we shall not have the money to buy from Argentina, Australia or elsewhere. In fact, I do not believe that there is much to come from those sources.
I am extremely worried by the way in which the Government have appeared to appoint a Minister who is no longer a Minister of Agriculture but a Minister of Food.
Again, the rural areas are being attacked by rate increases. The country districts are being discriminated against in favour of the London and metropolitan areas. I shall point out one way in which my constituents are already discriminated against, and I know that many Members who represent rural areas will agree with me. If my constituents want to seek a job outside their village, where they have to live because that is where the council houses were built to serve the farms which then needed more labour, they have to travel between 15 and 20 miles to go to a job and to get back. They start earlier than their neighbours and return later. This is costing my constituents between £5 and £7 a week. This is never taken into account when unemployment pay is fixed. It is not taken into account in income tax payments or in social benefits. The man who goes out of his village to get a better job, to do better for his country and family, is discriminated against. In the same way

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people in Norfolk are discriminated against in the payment of rates.
My constituents will be extremely worried if we do not debate the attack on our defence forces, which has led to an alarming lack of morale among some of my Royal Air Force constituents. The other day a technical sergeant told me that he had been instructed not to report to his station for a week except on pay day to draw his pay because there was no work for him to do. The Services are being cut back to such an extent that in some instances they are not allowed to have the petrol or ammunition that is necessary to undertake exercises. That being so, there was no job to be done by the technical sergeant.
But to come back to the most serious matter that it is necessary to debate—that is, the attack on the rural areas as opposed to the town areas. My constituents produce food for the rest of the country. Only about 3 per cent. of the country's work force is employed on the land. During the drought this summer the rest of the country began to realise that the job done by the 3 per cent. is extremely important. If we should have a time when farmers are starved of money so that they put their land down to grass instead of producing crops, we as a nation shall starve. That will be the consequence if we do not support agriculture sufficiently.
5.28 p.m.
Mr. Tam Dalyell: I hope that my hon. Friend the Member for West Bromwich. East (Mr. Snape), who is in juxtaposition to my right hon. Friend the Lord President, will give my right hon. Friend a nudge and tell him that we want a debate on transport—namely, the debate that we did not get at an earlier stage.
It is with difficulty and characteristic self-restraint that for the first time in 15 years I somehow resist the temptation, Mr. Deputy Speaker, to follow your advice urging someone to argue that we should have a much longer recess. If the truth be known, the dropping of a certain piece of legislation would not cause me to grieve.
Mr. Deputy Speaker: Order. I am obliged to the hon. Gentleman but I was not thinking in terms of extending the recess for a whole year.
Mr. Dalyell: No, just until such time as the daffodils come out in the West Country and in Ebbw Vale and the snows melt in Scotland. That would be sufficient. I should busy myself in West Lothian and Brussels and doubtless the Government would busy themselves in more productive areas.
I give the undertaking that there will be no filibustering on my part when we consider the Bill. I shall say nothing that I think is irrelevant and there will be no unnecessary repetition.
Mr. Deputy Speaker: I do not know why the hon. Gentleman is so anxious not to have the debate. He anticipates the debate and starts telling us what contribution he will make. He should tell us why we should not adjourn for the Christmas Recess.
Mr. Dalyell: What I have said does not mean that there will be no long speeches, since there is so much to discuss.
I should like to talk quietly to my right hon. Friend the Lord President to suggest why he should make a statement before the House adjourns. I do not want to abuse the House by getting onto the substance of the Scotland and Wales Bill. but the matter is a bit difficult, because my right hon. Friend has a Jekyll and Hyde rôle. As Leader of the House, he should tell himself that as Secretary of State for Devolution he should make a statement, before we rise, on the mechanics of the proposed referendum on devolution. How much will it cost? Who will pay? Will public funds go to umbrella organisations? If so, to which umbrella organisations will they go? Will the "Scotland is British" organisation, for example, qualify as an umbrella organisation? What will be the attitude on free votes? If there is a referendum, the participants in it can hardly be muzzled at earlier stages.
I should like to make it clear, however, that I have had nothing but kindness and generosity from my party on this subject. The Whips have perhaps been more decent than Whips should be to dissidents.
Mr. Deputy Speaker: I should like also to extend my kindness to the hon. Gentleman from the Chair. But he knows full well that the matters he is

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raising will all be relevant during the Bill's Committee stage, when they will be discussed at length and most thoroughly.
Mr. Dalyell: Before the House adjourns my right hon. Friend should, in his capacity as Lord President, ask my right hon. Friend the Prime Minister the following question: "Is it right and sensible that a Lord President who is also chairman of the Cabinet's Legislation Committee should at the same time carry possibly the heaviest of all burdens as a Secretary of State?"
We should have a statement about ministerial representation. I am not one for making personal allegations of any kind, but those who sat through virtually every speech in the four-day Second Reading debate noticed that the Government Front Bench was denuded of Cabinet Ministers. That should not have happened. Very often it was populated by relatively junior Ministers—no discredit to them—or a Whip was standing in. I in no way attack the Whips, but on a major constitutional issue members of the Cabinet should not be constantly absent they might learn the ugly reality of devolution.
I understand very well that my right hon. Friend the Lord President has many other key jobs, particularly as chairman of Cabinet committees. That was the undoing of Dick Crossman in that position when he undertook Lords reform, compared with which devolution is a much heavier burden.
Therefore, I ask, first, for consideration of a statement about representation on the Government Front Bench during the passage of this vital constitutional Bill. Secondly, in particular, what representation will there be of the Law Officers, not only the Scottish Law Officers but the English Law Officers? It was argued during the passage of the European Communities Act that they should be present, and throughout these proceedings the Attorney-General or the Solicitor-General should be required by the Cabinet to be present.
There is one thing on which I think all Members can be agreed, whatever their views on the Bill. It is that the House should be taken seriously on this matter, and that does not mean Ministers
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merely asserting that they have read Hansard for the previous day or previous week. Taking the House seriously during the passage of this major constitutional Bill means the physical presence of senior members of the Cabinet on the Front Bench from time to time.
5.36 p.m.
Mr. Hector Monro (Dumfries): I shall not take up any of the points made by the hon. Member for West Lothian (Mr. Dalyell), because time is desperately short, except to comment that perhaps it is appropriate for a pro-devolutionist to follow an anti-devolutionist.
There are several reasons why I believe the House should not adjourn for such a long break. The basic reason is that in the past Session and in the current Session the Lord President has been trying to push through far too much legislation that is not appropriate to the problems of our time. One of those problems is the high level of unemployment. The detailed figures not being available because of industrial action, we can but guess, but I believe that in Scotland there are now 150,000 to 155,000 unemployed. That is nearly double the October 1974 figure, when the Government retained office on all sorts of promises to improve the employment position. Since then we have had eight or nine Budgets, and nobody, except perhaps himself, has any confidence that the Chancellor of the Exchequer has it right yet.
It is obviously wrong to leave Westminster unless we have encouraging news about employment trends in the coming weeks. There have been endless messages of hope, but they are wearing thin. Whether we have advance factories or promises from the Scottishs Development Agency, we must all feel grave concern that unemployment will not improve between now and the spring.
Mr. Robert Hughes rose—
Mr. MonroI shall not give way.
Secondly, we are desperately concerned about leaving London when the fishing crisis is as serious as it is. The Government have failed to push home the policies that they should be adopting in the interests of fishermen, whether relating to Icelandic waters or to the problems

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of our inshore fishermen. These have a particular impact in my constituency, where we have an important processing factory.
Thirdly, we should not adjourn until we see a glimmer of hope in regard to inflation, which seems to be increasing beyond today's 15 per cent. I share the views of hon. Members on both sides of the House about the cost of transport in rural areas, including the cost of petrol, diesel fuel and rail tickets. These serious matters should be discussed before we break up.
Fourthly, there is the serious rates burden. We are to debate rates later tonight, but we shall have to decide on this motion before we have a chance to make clear our views on the impact of rates on our constituents.
Fifthly, the House should not adjourn without a debate on the Flowers Report on nuclear energy. During Monday night we had a chance to talk about our nuclear power programme and nuclear waste, but we need a full day's debate at reasonable hours on what is one of the major issues facing the country.
All in all, it is not a happy Christmas for the Government or the vast majority of our people. We should not go away without the Lord President's saying something much more helpful about the Government's policies, particularly on economic matters.
5.40 p.m.
Mr. James Sillars: I, too, argue that we should not adjourn tomorrow for the recess—in case my right hon. Friend the Leader of the House has not been persuaded even by the eloquence of my hon. Friend the Member for West Lothian (Mr. Dalyell). It is incumbent upon the Government to resolve first a number of serious questions arising from the decision in principle to hold a referendum on the Scottish Assembly.
When the Government come to reflect on that decision, I think they will realise that they have raised more problems than they believe they are solving. I refer to correspondence between my right hon. Friend and myself on the question of the referendum. In a letter on 14th October he said, referring to the referendum on British membership of the EEC:
"the Scottish vote was in line with that of the rest of the country. The answer given was
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not the one for which you and I campaigned, but all of us, I believe, have to accept it as final."
But the point is whether that referendum was really binding and final, and whether the referendum on an Assembly is to open up to the Scottish people the question of continued membership. If the EEC referendum was not binding, this second referendum offers the Scottish people a chance not only of opting out of the United Kingdom but of opting out of the Common Market, which is the double-take of separation.
If the Common Market referendum was final and binding and all other referenda are to be within the context of the EEC, the question of independence could not be defined as separatist in any circumstances by any Government, because if the Scottish people were to say, "Yes" to independent representation within the EEC they would not be so much leaving England as joining with England in a new partnership along with the other countries in the Community. The highly emotive phrases that one would expect in the referendum campaign such as "breaking off", "rupturing trade between Scotland and England", "separation", "Scotland going into isolation", or "Scotland going off on its own" would all be invalidated as nonsensical propaganda.
There is another problem besides the question of Scotland's status within the Community. It revolves round the question 'whose oil is it?" If the Government put the question to the Scottish people, "Do you want to be independent?" they have to define very clearly—
Mr. Deputy Speaker: Order. I have already drawn the attention of the hon. Member for West Lothian (Mr. Dalyell) to the position. I think that the hon. Member for South Ayrshire (Mr. Sillars) is in exactly the same difficulty. This is not a matter which will take place during the recess. There will be a Committee stage of the whole House when all these matters which are being raised will be adequately discussed.
Mr. Sillars: The substance of my argument, within the rules of order, is that I believe that these matters should be tackled by the Government before we come to the Committee stage. That is

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why I do not think that the House should adjourn for the recess until the Government have addressed themselves to the principle and the details arising from the principle. The point I was making is that if the independence question is set, the Government must define what they mean by "Scotland".
The Government cannot say to the Scottish people "You can have the waters off the West Coast round about the Minch and further west because they contain only herring but the waters off the East Coast are not Scottish because underneath is oil." There is a range of considerable problems for the Government if they are tempted, as it were, to go for the separatist question, and the Government should address themselves to them before the House rises.
I undertook, Mr. Deputy Speaker, not to speak beyond five minutes. You will be delighted that I have managed it in four.
5.44 p.m.
Mr. George Younger: I apologise to the Leader of the House for the fact that my right hon. Friend the Member for Cambridgeshire (Mr. Pym) cannot be present. My right hon. Friend asked me to deputise for him, which I will do to the best of my ability.
I do not suppose that the Leader of the House is surprised that so many hon. Members on both sides of the House have been anxious to complain about the numerous different matters for which it has been impossible for the Government to find time to discuss in this Session so far. All those who have spoken have, for various reasons, suggested that it would be inappropriate, in view of these omissions in the Government's programme, to adjourn for the period specified in the motion.
These complaints are not surprising because, by almost common consent, the business of the Government during this year has been uniquely badly mismanaged. We have spent an inordinate amount of time throughout the year discussing matters of little interest to the general public, and, indeed, of little interest to many hon. Members—matters of Socialist programmes which have passed through various manifestos and so on but which have raised no spark of
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enthusiasm in the country. They have consumed an enormous amount of time of the House and have involved a great deal of money which, we are now bitterly discovering, could well have been spent on many more important things.
That is why my hon. Friend and learned Friend the Member for Thanet, West (Mr. Rees-Davies) began by referring to the unsatisfactory position with regard to the discussion of foreign affairs. I wonder whether we are right to go off for the recess leaving the discussion of foreign affairs in the immensely unsatisfactory situation in which it is. According to the researches I have been able to make—they may not be complete—in this year we have had in Government time only one day for the general discussion of foreign affairs—that is leaving aside such matters as discussion of Rhodesia sanctions orders and the rest, which are particular matters.
My hon. and learned Friend pointed out that the very important question of the situation between Greece and Turkey as it affects Cyprus has lasted through almost the whole of this year without there having been a proper debate on the subject. I think that hon. Members on both sides will agree that this subject greatly influences and interests many of our constituents. Many of us see people who have relatives in Cyprus and are extremely concerned. It is regrettable that the Government's overstretched and overcrowded programme for a lot of irrelevancies has squeezed out the question of Cyprus. I hope that the right hon. Gentleman will consider this very carefully before he just goes off home.
The hon. and learned Member for Leicester, West (Mr. Janner) raised the question of the disturbing news in the last few hours about the new arrests taking place in the Soviet Union of Jews who were trying to hold a seminar. This, again, is a matter that concerns many of our constituents, some of whom have relatives involved, and who have a very strong interest in trying to keep alight some sort of freedom in the Soviet Union. I hope that the Leader of the House will take seriously the hon. and learned Gentleman's request that the Government should find some way of expressing clearly and strongly to the Soviet Union our concern—in all parties—whether these new reports are correct,

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and our additional concern that this is precisely the sort of thing that we thought the Helsinki Agreement was supposed to prevent from happening.
While we are on the question of the need for foreign affairs to be considered before we rise for the recess I should mention the remarks of the hon. Member for Ealing, North (Mr. Molloy) about the European Parliament. We have been somewhat surprised that at this time in the Session we still have not seen the Bill introducing direct elections. We had expected to have had it by now. I hope that the right hon. Gentleman will be able to assure us that it will be coming soon, because there should be full opportunity for studying it before it comes for discussion in the House.
I hope that the right hon. Gentleman will take seriously these comments about the unsatisfactory state of discussion of foreign affairs.
Mr. Ioan Evans: Would the hon. Gentleman address himself to the fact that during the debate on the Queen's Speech there was opportunity for the Opposition to provide a Supply Day for a foreign affairs debate, but that there was no request from the Opposition through the usual channels? Was that omission perhaps because the Shadow Foreign Secretary was being moved out and his successor being moved in?
Mr. Younger: I am not sure that the hon. Gentleman is on a good point there. In the first place, I believe that so far in the Session we have not been offered any Supply Days, although I may be wrong; but it is not in any case satisfactory to say, when we refer to certain matters which have not been debated, that the Opposition should have raised them on Supply Days. I am sorry to have to make this point, but the Government have been making such an imperial mess on every other aspect of their policy that there have been 10 different candidates for every Supply Day. The Opposition cannot be expected to give up those important days for matters for which the Government ought to provide their own time. I hope that the Leader of the House will assure us that he regards it as part of the Government's responsibility to make a reasonable allocation of Government time for the discussion of foreign affairs.
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We had a most important and interesting contribution from my hon. and learned Friend the Member for Southport (Mr. Percival) about his great concern at the way in which the Government have been dealing with the implementation of the Insolvency Act. I shall not go over the points that he made, but I hope very much that the Leader of the House has received advice about the questions raised my my hon. and learned Friend, and I hope that he will directly answer the particular question. Can the order which has been introduced in the unfortunate circumstances described by my hon. and learned Friend please now be withdrawn in order to give a chance for further discussions to take place and to try to get the Act off to a better footing? Its passage was conducted very much in discussion between the parties involved, and the events that have been described are very unfortunate.
The hon. Member for Aberdeen, North (Mr. Hughes), in a very sincere but totally illogical contribution, mentioned the question of Barclays National Bank in South Africa and its shareholdings and investments.
I do not think that the hon. Gentleman will find on either side of the House anyone who has any time for apartheid as a system. I think that it is generally agreed throughout this country, and by all parties in the House, that the system of apartheid is one that we do not support or agree with, and that we should try our best to persuade the people of South Africa to avoid apartheid.
However, I suggest to the hon. Gentleman that he should try to find out more about the facts on the question of investment by Barclays National Bank before he comes to the House to talk about it. As I understand it—no doubt I shall be corrected if I am wrong—this is a South African company, albeit with its ownership being in a holding company in this country. It is a South African company, and, as such, it is obliged to hold a certain percentage of its deposits from the public in a certain number of particular prescribed national institutions in South Africa, and they include Government and quasi-Government and municipal stocks, and loan stocks issued by universities, local authorities and so on. What has

727
happened in this case, as I understand it, is that Barclays National Bank, which is managed on a day-to-day basis not in this country but in South Africa, has decided to switch some of its investments from one of those types of holdings to another.
Mr. Deputy Speaker: Order. The hon. Member is going into far too much detail in answering the debate; we are not debating that matter. I want to hear his views on the question of the Christmas Adjournment.
Mr. Younger: I shall comply with your wishes, Mr. Deputy Speaker. I thought that as the hon. Member for Aberdeen, North had made a number of points, it would be right in the interests of good debate that another point of view should be put forward. I am sure that you will tell me if I am in any way out of order, and I shall gladly bow to any ruling that you make. It is sufficient for me to finish on this point by saying to the hon. Member for Aberdeen, North that this is a matter of investment, and it is not one in which the British Government have any responsibility, and not one which makes any difference either way towards approval or disapproval of apartheid. For that reason, I do not believe that this is a very good reason for suggesting that we should not pass the motion.
Mr. Robert Hughes rose——
Mr. Deputy Speaker: Had the hon. Member for Ayr (Mr. Younger) resumed his seat?
Mr. Younger: No, Mr. Deputy Speaker, I had given way to the hon. Gentleman.
Mr. Deputy Speaker: I must have been mistaken.
Mr. Hughes: I am grateful to the hon. Member for Ayr (Mr. Younger) for giving way, especially as he has said that I ought not to come to the House without being aware of the facts. He should know that the facts of the matter, as I acknowledged earlier—and I accept his viewpoint about the stocks—are that there is absolutely nothing that compels Barclays National Bank in South Africa to invest in the fighting fund for apartheid, and that it is
728
a propaganda exercise to boost South African morale. Barclays has not used as a defence the suggestion that it is compelled to make this investment.
Mr. Deputy Speaker: Order. I shall not allow a debate on the situation in South Africa on this motion, which concerns the Adjournment of the House for the Christmas Recess.
Mr. Younger: I am happy to pass on from that matter now. I have made the points that I wanted to make, as has the hon. Gentleman.
Another very important matter which has been raised is the question of why we are rising for the recess without having a long-awaited debate on transport. This is assuming a high degree of importance now because I understand that the Government are committed to producing a White Paper on this subject in the spring. It would be very unfortunate if they were to produce that White Paper when the consultative document, which we have had for some months, has not been properly and fully debated in the House. I wonder, therefore, whether it is right that the House should rise without that matter being discussed.
My hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) mentioned the very serious situation that has arisen in the last few days as a result of the further defence cuts the Government are introducing as part of their package and the extremely unsatisfactory nature of the reason given, which has been purely that in any serious expenditure cuts defence must carry some of them. That is the attitude of a blind man with a pin. It is wrong for a Government responsible for this country's defence to carry out these expenditure reductions in a completely haphazard manner. They might as well be filling in football pools as working out defence expenditure in this most irresponsible way.
My hon. Friend the Member for Dumfries (Mr. Monro) raised a number of important points, which we would greatly have liked to debate before rising for the recess. There is the situation of rising unemployment, which affects many people all over the country, and the grave difficulties into which all of us are put by the fact that we cannot have accurate figures on this subject because those employed

729
in compiling them are in some dispute which makes them unable to provide the Government with the figures that they require. It is ironic, at least for Opposition Members, that it should be in the middle of this appalling level of unemployment, the highest since the war and further, that the Government find themselves miraculously unable to produce the figures. This is not a happy situation. I hope that the Leader of the House will assure us that maximum efforts are being made to give full information on this serious matter.
There is no time to go any further into the equally serious problem facing our fishing industry. This was discussed after the statement made yesterday by the Minister of State, Foreign and Commonwealth Office. I could not possibly agree to the motion without registering once again our very deep concern for the fishing industry and for the many communities around the country who will be affected, directly or indirectly, by the continued delay in coming to an agreement about a new fisheries policy, and the effects of the unilateral creation of the 200-mile zone by some countries, and now ours, from 1st January.
I hope that the right hon. Gentleman will take to his colleagues the message that we expect the Government to put at the top of their priorities from the New Year onwards the putting of proper pressure on their colleagues in the Community, and upon those others who are involved outside the Community, to see that the new regulations are agreed as soon as possible and that proper arrangements are made for our fishermen to be properly protected, because at present they have very little confidence that the Government have realised the increased policing difficulty that will arise with the much greater limits that we shall have to cover.
Finally, I return to the point with which I started. This has been an extremely unsatisfactory Session in every way from a parliamentary point of view. I hope that the Government have learned their lesson this time. The Government have forced through vast amounts of unpalatable and hopelessly partisan legislation with a majority that has dwindled at times to practically nothing. I should have thought that the right hon. Gentleman, of
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all people, would have known that. If he did not know it before, I hope that he has learned it the hard way now and will consider that matter before we asks us to rise for the Christmas Recess.
Mr. Deputy Speaker: The Lord President.
6.0 p.m.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot)rose——
Mr. Adley: On a point of order, Mr. Deputy Speaker. May I point out to you, with respect, that some of my hon. Friends and I have sat in the Chamber since the beginning of this short debate? Is it your intention, after the Lord President of the Council has spoken, to accept a closure motion even though some of us have sat here throughout the debate?
Mr. Deputy Speaker: The question of choice of speakers is entirely a matter for the Chair. I have no intentions. I do not know what will happen after the Lord President of the Council has resumed his seat.
Mr. Foot: The hon. Member for Ayr (Mr. Younger) began with a most courteous apology for the absence of his right hon. Friend the Member for Cambridgeshire (Mr. Pym). The hon. Gentleman did not need to apologise, and I mean no reflection on his right hon. Friend in saying that. I fully understand the reasons for the absence of the right hon. Gentleman from the debate.
I hope that the hon. Member for Ayr will excuse me if I do not enter into an elaborate debate on the question whether the business of the Session has been appropriately conducted. I am sure that I shall satisfy the hon. Gentleman in the period after the recess when we shall be discussing the excellent Bill on devolution, which I know he greets with such impartial enthusiasm. I am therefore glad that the hon. Gentleman is looking forward to the next part of the Session.
The hon. and learned Member for Thanet, West (Mr. Rees-Davies) raised, in particular, a question about Cyprus. Her Majesty's Government, in concert with her European partners and American ally, have been engaged in sustained and Vigorous diplomatic

731
activity to secure the resumption of the inter-communal talks on Cyprus. Our aims are to support the efforts of the United Nations Secretary-General, to foster continuing and substantive exchanges between the two communities, and to impress on all concerned the need for flexibility in the conduct of these negotiations. Her Majesty's Government earnestly hope that these efforts will soon bear fruit but believe that they are best pursued in confidence. I see no advantage in having a debate on the matter at the present juncture.
The hon. and learned Member for Thanet, West quoted remarks made by Lord Caradon in another place. I am sure that he was wise in the choice of person he quoted, but I have nothing to add to what I have said already.
I agree with hon. Members who have said that they would like the House to have a full day's debate on foreign affairs. I appreciate that we should have one at an early date to discuss the questions on South Africa referred to by my hon. Friend the Member for Aberdeen, North (Mr. Hughes) and other subjects which have been raised. Like many hon. Members, I am sorry that in recent weeks we have not had the opportunity to debate foreign affairs. However, as my hon. Friend the Member for Aberdare (Mr. Evans) rightly said, the choice of subjects for debate in the House does not rest solely with the Government; it rests with the Opposition as well.
My hon. and learned Friend the Member for Leicester, West (Mr. Janner) raised important questions on foreign affairs. I think that these matters were dealt with at Question Time today by my right hon. Friend the Foreign Secretary. He stressed that the British Government have raised strongly with representatives of the Soviet Government the question of civil liberties whenever opportunities have arisen in this country, in the United Nations, or in other places where we meet. In making those representations, the Soviet Government should understand that the Foreign Secretary has been speaking for the whole of the House and for the whole country, and he will continue to make those representations in the way that he thinks most effective. I believe that most hon. Members will agree that he has raised them effectively in the
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past and that he will continue to do that in future.
The hon. Member for Burton (Mr. Lawrence) referred to the remarks made by Mr. Bukovsky about the consequences and events which followed Helsinki. We must take into account what Mr. Bukovsky says. Perhaps we should also take into account the views of the Government and of others about the possibilities since Helsinki.
My hon. and learned Friend the Member for Leicester, West referred also to the telephone installation question which he had raised on another occasion. I must, with diffidence, agree with you, Mr. Deputy Speaker, that if a subject could have been raised in a debate on the Consolidated Fund Bill, that is perhaps a reason why it is not an appropriate subject to raise in a debate such as this. The practice of the Post Office of charging deposits in some cases before installing telephones is designed to protect the generality of subscribers who would otherwise have to pay higher charges to cover bad debts. The Post Office has for some time been seeking alternative methods of dealing with the problem, and discussions to this end are taking place. I am sure that both the Post Office and others will take careful note of the strongly held views of my hon. and learned Friend, and this discussion may assist in that purpose.
The hon. and learned Member for Southport (Mr. Percival) certainly raised a matter which came strictly within the rules of a debate on the Adjournment motion, if I may be so presumptuous thereby to cast any conceivable doubt on the remarks of other hon. Members. No one could say that the matter that the hon. and learned Gentleman raised was not one of urgency, in view of the dates he cited. From my experience of debate in the House, I say that it is a most unwise hon. Member who does not take note of what the hon. and learned Gentleman says because often it needs to be noted very carefully. The hon. and learned Gentleman went on to say how innocent he was. That was the only part of his speech which did not have the same familiar ring of truth about it as the rest of it. I take careful note of what the hon. and learned Gentleman said.

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The hon. and learned Member raised the question of the bankruptcy amendment rules. I should like to acknowledge how consistently helpful he was during the passage of the Insolvency Act, but I regret, at any rate on the advice that I have received—I shall say something further about that—that I cannot offer him any comfort about the subject he raised.
The erosion of money values since 1915 has brought within the framework of bankruptcy an ever-increasing number of small and unproductive cases, and the increase in the deposits payable on the bankruptcy petitions cannot be delayed any longer because of the completely unacceptable burden of work which this imposes on the staff of the Insolvency Service.
I understand that the Government's position on this matter has been clear for a long time. It is not true to say that we have moved stealthily or have attempted to deceive anyone. My hon. Friend the Under-Secretary of State for Trade made this clear to the hon. and learned Member for Southport as long ago as June 1976 when he wrote to him as follows:
"I ought to add, however, that we shall not be able to delay until the Committee has been set up the amendment to the bankruptcy rules which will give effect to the increased deposits required to be paid on the presentation of bankruptcy petitions as these are crucial features in reducing the present excessive strain on the Insolvency Service."
Therefore, the Government's intentions have been clear for a long time and I cannot accept that this matter should delay the Christmas Adjournment. However, I promise the hon. and learned Member for Southport that, in view of what he has said today, I shall make further investigations and if there are other aspects of the matter to which Government attention should be given we shall give it and I shall ensure that we communicate directly with the hon. and learned Gentleman to make certain that we are dealing properly with it.
I replied in general terms to my hon. Friend the Member for Aberdeen, North when he raised, the other day, the subject to which he referred today. I believe that many of the questions that he raised would figure in a general debate on foreign affairs, and I can understand the desire of the House for such a debate. I
734
shall not enter into the dispute which arose between my hon. Friend and the hon. Member for Lewes (Mr. Rathbone) on the attitude of the different parties to apartheid. There is no doubt about the Government's attitude. We regard apartheid as utterly evil. We believe that further steps have always to be examined in order to ensure that the economic support given to apartheid cannot be sustained. It is in that spirit that my hon. Friend put his case to the House.
The hon. Member for Berwick-upon-Tweed (Mr. Beith), the hon. Member for Dumfries (Mr. Monro) and others spoke of the appalling unemployment problem. Many people throughout the country have expressed anxiety about the unemployment total this Christmas, despite the fact that, owing to industrial action, we cannot have the actual figures. Undoubtedly this problem causes great anxiety all over the country, as I know from my constituency and from the way in which these problems have built up in other constituencies.
The hon. Member for Berwick-upon-Tweed raised the subject of possible redundancies in the concrete pipe industry and cited a letter from a firm in his constituency. I understand that the six months' moratorium just announced relates to lettings in regard to construction contracts and not to routine maintenance work. There is no cessation of work on existing water authority contracts. I assure my hon. Friend that the Government are aware of the consequences of the moratorium and are doing everything that can be done to alleviate the situation. Hon. Members can raise with the Department of Employment immediate questions involving threatened redundancies in their areas. I am sure that the Department will do what it can to assist.
There are some cases in which temporary employment subsidy can assist. The subject of the regional employment premium was mentioned, and the removal of the premium under the recent Government measures. One of the reasons why we felt it was necessary to consider the removal of the premium related to the considerable growth in the operation of the temporary employment supplement, which has proved to be of far wider significance in preventing unemployment than many people appreciated

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when the temporary employment subsidy arrangements were originally introduced. That is one way in which assistance can be given to firms in difficulty. In that case and in others I am sure that hon. Members will wish urgently to approach the Departments of Industry and Employment to see how they can assist.
The hon. Member for Lewes asked about the possibility of a transport debate, and criticised the fact that we had not had a debate recently. Other hon. Members underlined the desirability of such a debate. My hon. Friend the Member for West Lothian (Mr. Dalyell) also asked about this subject in one of the more pertinent parts of his speech. We hope that there will soon be a debate on transport, possibly in the week when we return. There is to be a business announcement tomorrow. I cannot say for certain, but I hope that we shall be able to have such a debate in the week that the House returns. I hope hon. Members will realise that we have tried to satisfy demands from many of my hon. Friends, and indeed from Opposition Members.
My hon. Friend the Member for Aberdare mentioned the Club of Ten and the article in the Observer on the subject. That was an article of great significance and should be examined carefully. The implications can be far-reaching. I hope that I have covered that aspect in reply to my hon. Friend's point.
My hon. Friend the Member for Ealing, North (Mr. Molloy) commented on the operation of the Common Market Commissioners. I should stray outside the rules of order if I were to comment on that subject.
My hon. Friend and others also mentioned the subject of direct elections. I wish to make clear to the House that there will be no direct elections to the European Assembly before we meet on 10th January. I do not believe that topic need give any anxiety to my hon. Friends as to what will happen between now and when we reassemble.
Mr. John Lee: May we have an assurance that there will be no maturing of thoughts in the Government's bosom before 10th January about the application of a guillotine
736
since some of us intend to talk at great length on that Bill should there be any danger of its becoming law?
Mr. Foot: I can assure my hon. Friend that any thoughts I have do not mature in my bosom. They are entirely the product of another part of my anatomy. I also assure my hon. Friend that we shall proceed properly and sedately in these matters. We shall have proper debates on all these subjects. There is no reason why there should be any anxieties about these matters before we reassemble in January.
Mr. Ioan Evans: My right hon. Friend mentioned 10th January—but he did not say of which year.
Mr. Foot: We may well have another debate of this character in December 1977. If I can give the same answer to my hon. Friend as I have given now, nobody will be more satisfied than I.
I turn to the speech of the hon. Member for Norfolk, South-West (Mr. Hawkins), whose remarks covered comments made by other Opposition Members who, throughout the last few months, have been demanding public expenditure cuts. However many of them devoted a considerable proportion of their remarks today to reasons why there should not be individual cuts in expenditure. They should sort out some of these matters before they seek to attack the Government. These general questions cannot be dealt with in an Adjournment debate. Many were covered in yesterday's debate. Many more will be covered when we reassemble in January 1977.
My hon. Friend the Member for West Lothian raised the general subject of the referendum, as did the hon. Member for South Ayrshire (Mr. Sillars). I agree that such important questions must be carefully thought out, but that will not be achieved in propositions presented to the House either before Christmas or immediately after it. We shall provide proper time for these matters to be decently debated in the House and for the House to reach conclusions on them. But when we come to these debates, everybody will agree that the Government have provided a proper way of deciding these matters. We believe that if the settlement that is to arise from our devolution proposals is to be satisfactory, it will be all the better,

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and we shall accept it all the more clearly, if the people of Scotland and Wales have an opportunity to pronounce on the matter. I agree with the hon. Member for South Ayrshire that the form and manner in which that occurs is a matter of major importance. I assure him that the Government approach these matters in that sense.
I believe that I have touched on almost every question that has been raised in this debate although I cannot say that I have relieved every anxiety in the minds of every hon. Member. I believe that I can say with some diffidence that my speech has been even more in order than some other contributions to this debate.
Mr. Walter Harrison (Treasurer of Her Majesty's Household)rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question accordingly put and agreed to.
Resolved,
That this House at its rising tomorrow do adjourn till Monday 10th January.

RATE SUPPORT GRANT
6.20 p.m.
The Secretary of State for the Environment (Mr. Peter Shore): I beg to move.
That the Rate Support Grant Order 1976, a copy of which was laid before this House on 6th December, be approved.
Mr. Deputy Speaker (Sir Myer Galpern): With this we may take the other support grant orders for England and Wales.
Mr. Shore: I understand that the separate order relating to Scotland will be debated when we conclude this debate.
The main order relates to the rate support grant settlement for 1977–78. This will inevitably be my main theme today. I shall begin with a few words about the two increase orders. The first increase order relates to the financial year 1975–76. The Exchequer grants for that year were originally determined at November 1974 prices. We have already made some adjustment, last year, to these grants to take account of changes in costs up to November 1975. We have now decided to accept for grant further increases in costs during the remainder of 1975–76, totalling £77 million.
The grant for 1975–76 was 66½ per cent. That percentage also applies to the increase order. After deducting specific grants, the amount of further rate support grant and supplementary grants to be paid out through this increase order will be £49 million. The additional needs element will be distributed by the same formula as was used to distribute the original 1975–76 grant.
I turn now to the current year, 1976–77, for which the Government propose that an increase order be made for additional rate support and supplementary grants to authorities of £388 million in respect of increased costs since the main order was made last December.
The House will no doubt already be aware that this sum has been affected by two decisions which the Government have taken in the course of the past year. The first, announced at the time the last rate support grant settlement was made by my predecessor, was that the grant total should be subject to a cash limit. This cash limit, which was based on the latest estimate of inflation at the time, would

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have been exceeded if the Government had paid grant on all the claims for additional expenditure made by authorities. The Government have carefully reviewed the position, as they promised they would do, but have come to the conclusion that, in view of the economic circumstances now prevailing and their general policy on cash limits the cash limit must stand.
The second decision that the Government took during the year was to limit the total amount of the increase in grant to a figure of £50 million less than the amount calculated as a percentage of increased expenditure which the Government were prepared to take into account. We took this decision in the light of the knowledge that local authorities had raised revenue from rates which was, together with their balances, sufficient to finance expenditure proposed by them of £400 million above the level accepted by the Government and authorities in the rate support grant settlement for 1976–77. We have looked carefully at the position again when considering whether the decision must stand.
Sir John Hall: Is it not true that this way of dealing with the problems means that those authorities that have tried their best to follow the guidelines laid down by the right hon. Gentleman have been penalised in the same way as those who have made no attempt to follow the guidelines?
Mr. Shore: The hon. Gentleman has made that point on other occasions. I shall deal with this general question a little later. Of course, the hon. Gentleman is right. I accept all the premises that led him to that conclusion. It does mean that we are dealing collectively, rather than individually, with local authorities in seeking to reduce the amount of grant paid under the increase order for 1976–77.
The rate support grant settlement for 1977–78 has been a particularly difficult one to propose. The settlement involves a fresh judgment each year on a number of different points. These include the level of current expenditure for which local government should plan, the extent to which this expenditure should be financed by the taxpayer or the ratepayer, and whether some of it can be financed
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from authorities' own balances. We also have to be sure that the grant is distributed with proper regard to the expenditure needs of areas and the ways these needs may be changing. On many of these issues there is no simple arithmetical answer; it is a question of judgment and priorities. But in 1977–78 our room for manoeuvre, because of our severe economic difficulties, is so limited that the judgments have been more difficult than ever. I do not expect everyone to agree with my judgments but they have been made in the belief that they provide for a settlement fair both to local authorities and ratepayers and right for our economic situation.
I turn first to expenditure. The level of relevant expenditure I propose for the settlement, £11,717 million, will require local authorities to reduce their current expenditure in real terms in 1977–78 by around 1·6 per cent. compared with what they are now estimated to be spending in 1976–77. This level of expenditure is in line with the Government's original plans for 1977–78 set out in the last White Paper on Public Expenditure, Cmnd. 6393, published in February of this year. The only significant modification of the plans incorporated in that White Paper has been the switch of about £125 million from capital to current expenditure. This was a change endorsed by the Consultative Council on Local Government Finance.
Mr. Timothy Raison: Will the Secretary of State clear up one point arising from the Chancellor's statement of a few days ago and a subsequent statement by the Secretary of State for Education, when it was said that the Government believe that the amount of money spent on the administration of school meals should be reduced? Can the Secretary of State explain whether this has any bearing on either the rate support grant or the Public expenditure figures and if not how is it meant to be implemented?
Mr. Shore: It will have an effect on the rate support grant settlement. As I recall it, my right hon. Friend spoke of a figure—I think a saving of £20 million—in education current expenditure. Given the settlement that I am proposing, that would affect the rate support grant expenditure by something in

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the order of £12 million. We shall have to make adjustments for that sum. I propose to make those at a later stage in the increase orders.
I was explaining the only change in the original figures in the White Paper. That has been brought about by the shift from capital to current expenditure. By adhering in this way to their published plans, the Government are not, therefore, presenting local authorities with an unexpected level of expenditure in 1977–78. All authorities will have seen the White Paper. They will also all have had, in May of this year, a joint departmental circular—Circular 45/76—setting out current expenditure figures for local authorities up to 1979–80.
There have been many demands for slashing reductions in local government current expenditure. This settlement does not provide for slashing cuts and would be wrong, in my view, if it did. Such reductions could be achieved only at the expense of severe reductions in social and other services and extensive redundancies.
We should consider, too, the fall in the rate of growth in local authority current expenditure. Local authority expenditure was rising dramatically in the years up to 1974–75—8 per cent. in 1972–73, 9 per cent. in 1973–74 and nearly 10 per cent. in 1974–75. Since then we have seen the rate of increase progressively reduced. The growth, at nearly 10 per cent. in 1974–75, was halved in 1975–76 to around 5 per cent. and to under 2 per cent. in 1976–77. For 1977–78 we are now looking, not for an increase, but for a reduction of about 1½ per cent. I cannot see, at present, that it would help the economic wellbeing of this country to pursue a faster rate of change.
We are therefore proceeding in a firm but orderly way which allows local authorities to adjust with minimum cost and dislocation to their new financial position. Indeed, I have been impressed—I speak with only eight months' experience behind me—in my contacts with local authority leaders by the helpful and responsible attitude they have brought to all our discussions. They did not welcome the settlement. But I know they are determined to play their part in keeping public expenditure in line with the Government plans.
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I have, of course—here I take up the point made by the hon. Member for Wycombe (Sir J. Hall) a moment ago—thought carefully about whether I should discriminate between authorities in 1977–78 on the basis of their expenditure in 1976–77. I think that it would be wrong to do so, for two reasons. First, it would be entirely to misconceive the basis of the proposed settlement. It is not based on retribution for past alleged misdeeds. It reflects a judgment on how best the Government's expenditure objective for 1977–78 can be achieved. This inevitably takes account of the resources which local authorities as a whole should already have at their disposal.
Second, to attempt to relate the settlement to the action of individual authorities would raise serious practical difficulties. The needs of authorities, and therefore their need to spend, will vary. We do not have sufficient information at national level to estimate the needs of individual authorities sufficiently precisely for use as a basis for discrimination, and even if we did there would be a radical break in the relationship between local and central government and an end to effective local democracy. We should perforce have to use some more or less arbitrary formula, and this might well cause more injustice than it would resolve.
Any attempt to discriminate would involve the Government closely in the day-to-day affairs of local authorities. This was not contemplated when the Local Government Act 1974 was passed by our Conservative predecessors, and as a consequence—I must tell the House this frankly—new legislation would be required. Even if we thought that it was the right thing to do and if we thought that we could achieve greater justice, it would require new legislation.
Mr. Tim Sainsbury: The right hon. Gentleman referred to a more or less arbitrary formula. Does he not regard the multiple regression analysis by which the needs element is allocated as a more or less arbitrary formula?
Mr. Shore: I know that it has been criticised, but I do not think that it is an arbitrary formula. Indeed, it is in many ways, I suppose, a more refined way of trying to define needs than we

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have had in the past. I claim no particular authorship for it; it is something else which we picked up from the wisdom and inheritance left by right hon. and hon. Members opposite. All I can say is that I shall have a further word about it, if I may, as I go along and deal with the question of the distribution as between different authorities and, above all, the needs element.
As the House knows, the Government were deeply concerned that their early call for a standstill in current expenditure in 1976–77 was not reflected in the first returns of expenditure made by local authorities in April this year. The House will recall that these first returns indicated an intention to spend over £400 million in excess of the Government's expenditure plans in the White Paper, Cmnd. 6393. However, following discussions with the consultative council, and with the support of the local authority associations, authorities responded well to later joint departmental circulars issued in May and August of this year, which reiterated the Government's continued commitment to the figures set out in the February White Paper.
The result has been successive downward revisions of the amount of excess expenditure. A second return of expenditure in July 1976 indicated an excess, at November 1975 prices, of about £250 million, and later evidence in the course of the rate support grant negotiations indicated a figure of about £170 million. I should add that a modest saving on capital expenditure also is expected during this year.
The gap between local authority intentions and Government expectations may not yet have been finally closed, but overall the change of spending intentions revealed so far represents an impressive achievement for local government. The spirit of realism and co-operation now being shown by the local authorities will, I am sure, enable them to achieve their task—difficult task that it is—next year.
I recognise, however, that it is not always possible for individual authorities to relate their own actions to national targets, and for this reason I have given authorities a clear guideline on expenditure. They should aim to restrict their current expenditure in 1977–78 in cash
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terms to no more than 8½ per cent. over what they are spending in 1976–77. We believe that this figure should not be exceeded, save in exceptional circumstances.
I carefully consider also whether I should give an average figure of rate increases. There are dangers in giving such a figure, and one of these is that it may appear that the Secretary of State is trying to take a decision for individual local authorities which only they, in the light of their own knowledge of their own circumstances, can take. Nevertheless, I have decided to do so. I have said that the national average domestic rate increase should be about 15 per cent. It is an average, not a target, in this case. It is a calculation based on assumptions about expenditure, balances and inflation, and I shall explain it in a moment.
Some authorities will need to raise more than others in rates if local authority spending is to be kept in line with the limits set by the Government. The Government are concerned that local authorities should not overspend next year, but they are concerned also that spending on important community services should not be cut back too drastically. We need a period of careful national retrenchment, not a sharp and violent drop in the standards of our services. A wide variation between increases has to be accepted as the price of keeping rate increases at local level within proper bounds. Nevertheless, I believe that to give the average figure which underlies the settlement will help the public and authorities to understand our calculations.
The House may welcome some further explanation now of the assumptions which underlie the two figures—the 8½ per cent. and the 15 per cent. I refer, first, to the ceiling of 8½ per cent. on the growth in cash terms of each authority's expenditure. In 1977–78, as was the case this year, there will be a cash limit on the grant towards the estimated increase in costs affecting the accepted level of expenditure. This is based on the expected rise in local authorities' costs in 1977–78, which in total should not exceed 10 per cent. This is lower than the expected rate of general inflation for the same period because of the relative importance of employee costs in local authority expenditure. For example, pay

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costs up to July 1977 can be calculated by reference to the present pay policy and thereafter, up to 31st March 1978, it has been assumed that pay awards will be between 5 per cent. and 6 per cent.
On non-pay items, the assumption is that over the period covered by the cash limit costs will rise by no more than 15 per cent. between the average level during 1976–77 and the average level during 1977–78, which is the normal basis of comparison.
The net result of these different assumptions is a cash limit which assumes that total local authority costs will rise by just under 10 per cent. between 1976–77 and 1977–78. For current expenditure in 1977–78 the increase should be less, so that, allowing for the reduction in real terms of 1·6 per cent., local authorities' current expenditure should need to rise in cash terms by no more than 8½ per cent. The assumptions about inflation which underlie the 8½ per cent. have, I hope, been stated, and I am sure that by stating now what our assumptions are we can only help local authorities in their forward planning.
I turn now to the estimated average 15 per cent. increase in domestic rates. Rate increases in any individual authority are the product of its expenditure proposals, its assumptions about inflation, the amount it draws from balances and the amount of grant. The situation in every authority will be different, and I have to work in aggregate figures. Hence, any figure which I produce can be no more than a national average, but I have assumed, in giving the figure of 15 per cent., that authorities will stick to the Government's expenditure plans, will provide for the same degree of inflation for which we have provided in the cash limit and will draw about £175 million from balances.
I entirely accept, however, that there may be cases of individual authorities where, for example, there are no balances or where, as a result of the distribution proposals, the share of grant is reduced. In such cases increases in rates are likely to be higher. [Interruption.] I am not trying to disguise anything. I am being quite frank with the House. In other cases, authorities may have large balances or may be able to keep their expenditure significantly
746
within the 8½ per cent. maximum. In these cases rate rises will be lower.
Some hon. Members have made the point that the settlement involves a shift in the burden from taxpayer to ratepayer. This is marginally so compared with last year, but I want to make two points. First, there is no particular reason why the distribution of burden between ratepayer and taxpayer should remain the same from one year to the next. Secondly, the grant percentage that we now proposed is far from being, an historically low one. Indeed it is marginally higher than the grant percentage initially set in 1974–75. I am referring of course, to the figure of 60½ per cent.
The distribution of the grant has caused considerable interest. It has resulted in many letters to me and provoked comment from many hon. Members on both sides of the House. The general financial situation and the need to restrain public expenditure form the background to the proposals for the level of the rate support grant. With the level being reduced to 61 per cent. of relevant expenditure, the distribution of the total grant takes on a greater significance for individual authorities. It is only right, at a time when the grant is restricted, that it should be concentrated in those areas with the most acute social and economic need. Against this background, I have had to recognise that loss of grant could have a considerable effect on local authorities and their rate levels. My proposals seek to achieve a fair balance between conflicting pressures.
Distribution arrangements for the allocation of the needs grant have been discussed in great detail with local authorities and their associations. There has been pressure from the ACC and the ADC for the pattern of distribution of the 1977–78 grant to be kept as closely as possible to that of 1967. However, this easy solution would have been unfair, and would have left certain authorities without adequate support to meet the growing problems of the under-privileged and disadvantaged in their areas at a time when rate increases must be kept to reasonable limits. The regression analysis method for the assessment of needs, introduced for 1974 to 1975 by our Tory predecessors, has provided, until this year, the only generally

747
acceptable means of measuring the varying expenditure needs of authorities. We have been right to continue with it.
The major contribution that we have made to this system of assessment has been to extend the range of social and economic factors that are included in the needs formula. In 1977 to 1978, for the first time, a factor for unemployment has been included in the need distribution formula for authorities outside London. I shall come back to the internal London distribution later.
Having established a measure of the varying needs of authorities, I have had to consider how far we should protect authorities whose relative needs have been shown to be declining and who, therefore, will lose grant. Protection for losing authorities can be achieved by phasing—a process which, in this world of local authorities, is known as damping. It allows some recognition of the grant distribution of previous years to be carried forward into the distribution of the new grant. In 1977–78 this will be achieved by combining the needs grant formula for 1975–76 and 1976–77 with that developed for 1977–78. All the needs indicators in this combined formula are listed. It makes for a longer, but at least a more informative, order.
Compared with this year the non-metropolitan counties will get a smaller share of the needs grant. The most pressing social and economic problems are concentrated in urban areas and particularly in the inner cities.
Sir David Renton: Has the Minister borne in mind the fact that the problems of urban areas are being relieved by the building of new towns under the New Towns Act? People are moving out of urban areas and transferring their social and financial problems to the receiving areas which are in counties. Is it not most unfair to penalise those receiving areas and to benefit urban areas?
Mr. Shore: The fact that new towns and extended new town arrangements existed during most of the post-war period did not lead the right hon. and learned Member for Hexham (Mr. Rippon), when he was Secretary of State for the Environment, to decide not to
748
propose that which he did propose. That was a new formula aimed precisely at giving extra resources to inner cities. This is not a Labour Government policy. It is now, and will continue to be, a bipartisan policy shared by all sides of the House.
Mr. Joseph Dean: When the right hon. and learned Member for Hexham (Mr. Rippon) was the Minister involved, the formula that the Government now proposes was discussed and its introduction was considered. It was seen that it would have an adverse effect on Tory areas of the country and the whole scheme was scrapped.
Mr. Shore: The recollection of my hon. Friend the Member for Leeds, West (Mr. Dean) is probably closer and more accurate than my own. I do not recall the matter in detail. What I do recall, and what I have with me, are the actual words of the right hon. and learned Member for Hexham that he spoke as recently as 12th November 1973, just a few months before the General Election. During the debate on local government he had this to say:
"I can tell the House that our proposals include a new needs element formula, based on an analysis of recent local government spending and a new level of resources element. The result will be to divert more of these two elements than before to the problem areas of cities."—[Official Report, 12th November 1973; Vol. 864, c. 41.]
Sir John Hall: Does the Secretary of State agree that the areas in which need arises change over the years? My right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) has drawn attention to the fact that need is beginning to move from the inner city areas to outer areas. In my own county of Buckinghamshire, to which many families are coming from London to settle at Milton Keynes, many people are bringing all their social problems, adding a considerable strain to the social services of the county, and, therefore, adding to the costs of the individual ratepayer.
Mr. Shore: Surely, provided that the needs formula is reasonably sensitive—and I do not think any hon. Members seriously disagree with the formula—it will take up the needs as they emerge. I do not need to rely on what the hon.

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Member for Henley (Mr. Heseltine) said three years ago. On 26th November 1976, speaking from the Opposition Front Bench, he said:
"No one questions the grave urban crisis … There is no question that resources will have to be found to cope with that crisis."—[Official Report, 26th November 1976; Vol. 921, c. 361.]
There is a general agreement that if we are going to be fair we must reflect the shift in the distribution of the needs element.
Mr. Nicholas Winterton: Does the Secretary of State accept that this year Cheshire has to find an additional 3,000 secondary school places? This is an area which is undertaking an increasing burden. Yet, for the second or third year running, the percentage of the rate support grant that Cheshire will receive, in relation to urban areas, is to be reduced. The shire counties have suffered under this Government.
Mr. Shore: The needs and resources of Cheshire—as is the case with the needs and resources of all other local authority areas—are taken account of in the formula which has been generally accepted. If hon. Members, apart from voicing feelings that their own areas have been adversely affected, can put forward a method by which we can operate the system more sensitively, I am always prepared to listen to them.
In addition to the economic and social problems, it is in these areas that in general one finds the heaviest rate burdens. I know that there are forecasts of the potential percentage increases in the rate poundages, particularly in the shire counties, which seem high. Of course I am concerned about the bills that face householders in the rural counties, but I must also consider those facing ratepayers in the inner urban areas. The differences in the amount of rates paid cannot be explained by the differences in incomes between the rural and inner city areas.
Mr. Nicholas Winterton: What about Westminster?
Mr. Shore: I shall come to that in a moment. In the environment debate on 26th November the hon. Member for Henley implied that the changes in the needs grants distribution were in someway
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politically motivated. That is not so. As I have already pointed out, the present system of needs assessment was introduced by our predecessors. We have made no change in the basic principles of their methods of needs assessment, other than to increase the range of needs indicators used in the formula. I am sure that hon. Gentlemen would be anxious to make the system more sensitive than was the first model.
The machinery of regression analysis, which has been used ever since the passing of the Conservative Government's Act, has been used again for very good reasons. For all its faults, it produces a pattern of distribution linked to expenditure needs. To what extent authorities of a particular political persuasion benefit is irrelevant. [Interruption.] If Opposition Members were to talk to their colleagues who control local authorities in some of our major conurbations they would find that their colleagues would have difficulty in understanding their remarks.
There are two main points about London. London has a considerable advantage—although it is debated among London Members—in its high rateable resources. A downward adjustment has, therefore, been made—as it was for this year—to take account of that advantage. Nevertheless, London will get a greater share of the smaller grant cake in 1977–78. Its share of the England and Wales total of needs element will increase, thus consolidating the big improvement made in London's relative position last year.
Secondly, we have made a number of improvements to the arrangements for the distribution of the grant within London. Notably, the bulk of the arrangements for spreading across London the benefits of the high rateable values of certain authorities are now in the Rate Support Grant Order. This, I believe, will be welcomed by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) in particular. Also, the transfers have been made, I think, fairer and certainly more explicit. This year's scheme for making the transfers caused serious differences of opinion among the London authorities. I am glad to say that the arrangements for 1977–78 were strongly recommended to me by the London Boroughs Association. I have letters from hon.

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Members on both sides of the House urging me to proceed on the lines set out in the order.
This leaves us with a fiendishly complicated looking order; but I think that this is a price we should be ready to pay for the improvements being made. I should add that a small separate equalisation scheme will be necessary to transfer ratable resources from the City to other boroughs. This scheme will meet the requirements of existing legislation and complete the rate equalisation provisions proposed for London.
Hon. Members may have noticed in the order that it is proposed to give extra domestic relief to ratepayers in the City, Camden and Westminster. This extra help is being financed by inner London authorities only. It was asked for by the London Boroughs Association, which felt that domestic ratepayers in these three areas would otherwise be asked to bear an excessive burden. For the rest of England and Wales, the level of domestic relief will remain unchanged at 18½p in England and 36p in Wales.
Turning to the resources element, its relationship to the needs element will be unchanged in 1977–78 and remain at the 1976–77 ratio of 32½ per cent. to 67½ per cent.
Mr. Stephen Ross: The right hon. Gentleman referred to the domestic relief of 18p for England and 36p for Wales. There is a Bill coming before the House which is designed to help Wales by equalising water charges. Will there be any change as a result of that Bill?
Mr. Shore: There will be no change in terms of the order. I agree with the hon. Gentleman that in future we may want to take account of changes which have the effect of helping Wales in areas not covered by the rate support grant. I cannot say more than that. It is obviously something we should look at.
I have dealt with the levels of expenditure and grant in 1977–78 and the way we propose to distribute grant. There remain two interrelated questions—the effect of the Government's proposals on local authority services and the effect on employment.
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On services, a reduction in the total level of expenditure must mean that all standards will cease to rise unless authorities so re-order their priorities that some activities benefit at the expense of others. The Government believe it is right that local authorities should continue to exercise their considerable discretion, in the light of their own unique knowledge of local needs. We have however, in the report on the main order for 1977–78, set out the likely main consequences as the Government see them. I intend to include the same message in the circular I hope to send to local authorities shortly.
That circular will also set out the Government's view on the implications of the settlement for manpower. We have seen in the last two or three weeks a lot of comment about local authority employment; from calls for massive redundancies, without regard to the capacity of other sectors to absorb the manpower released, to gross overestimates of the job losses implied by the Government's proposals for 1977–78.
As some hon. Members will have seen in the Press, some of the local authority associations' own estimates have put the job loss at around 50,000. But in negotiations with the associations I, and officials on my behalf, have consistently told the associations that we regard their estimates as far too high, for the reasons which I have given, and we have explained to them in great detail the reasoning behind our forecast of 20,000–30,000 job losses in 1977–78.
The planned fall in current expenditure in 1977–78 is 1·6 per cent. If authorities follow past practice, they will make proportionately heavier cuts in their non-pay costs. In broad terms, the settlement may be expected to entail a reduction of about 1 per cent. of jobs in 1977–78. In practice such a reduction will not be achieved unless local authorities start straight away to review and adjust their manpower requirements, taking full advantage of the vacancies that occur from now on.
On this basis, I do not think that the reduction in 1977–78 need be greater than the 20,000 to 30,000 jobs I have mentioned. Local authorities plan ahead. They do not wait until each financial year arrives with its set of fresh problems. Authorities have known for some time

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the broad task they were likely to face in 1977–78. The settlement confirms that expected trend of expenditure and the need to continue with economies in staffing.
In national terms, I am confident that the job losses being sought can be achieved by natural wastage, which has been running at the rate of 5 per cent. a year.
Mr. Raison: The right hon. Gentleman persists in looking at this problem in terms of national averages. The trouble is that some counties will have to make very much bigger reductions than others. While the average picture may be as the Secretary of State describes it, it will be impossible for many counties to keep to the targets he mentions.
Mr. Shore: I admit that I have been speaking in averages. That is the problem when addressing oneself to the rate support grant. While it is true that some counties will be faced with greater expenditure problems than others, we must not hide the fact that they can meet those expenditures and maintain the level of services we wish them to maintain by raising their rates. If hon. Gentlemen on the Opposition Benches are saying that they do not value sufficiently the services in their areas, and are prepared to see not a careful slimming down but a drastic cut, that is their local judgment. But hon. Gentlemen should not expect me to agree with it and should not expect me to support it.
Mr. Michael Heseltine: Will the Secretary of State explain whether he agrees with the Chancellor of the Exchequer that taxes are now too high? How does the right hon. Gentleman equate that conviction with the view now that local taxes should be increased as dramatically as he has suggested?
Mr. Shore: I do not think my right hon. Gentleman made such a sweeping statement as the hon. Member for Henley implies. My right hon. Friend has frequently said that in his view income tax is high, but my right hon. Friend has not made what I would consider to be an uncharacteristically rash statement about taxation in general. The Chancellor has specifically set the effects of income tax and their rates against a background of inflation. I think that we should leave it at that.
Sir John Hall: Does the Secretary of State not agree that one of the problems which faces the county authorities is that the statement about the average rise of 15 per cent. has been publicised fairly widely? Most ratepayers were expecting to pay no more than an additional 15 per cent. Those counties will now be in the position of having to raise far more if they are to maintain their services. They will meet considerable criticism from the ratepayers who will expect the county to remain within the average set by the Secretary of State himself.
Mr. Shore: That is one of the problems, and that was why I hesitated before producing any average figure at all. I do not wish to be misunderstood. The figure was meant as an average. Quoting 15 per cent. as an average means that some are bound to pay above the average and others below it. I willingly repeat that and make it plain to the House tonight.
We all know that rates of wastage will vary from area to area and from service to service. I am getting a little closer to a local and away from the national picture. I have always acknowledged that in a particular area today, as indeed in the past, there may have to be some redundancies, but they should be the exception rather than the rule, and should be minimised if employers take up the opportunities to reduce staffing levels by natural wastage as I have described.
When we last debated local government matters on 26th November the hon. Member for Henley indicated his opposition to the rate support grant settlement, claiming that the public would not be satisfied that the Government had acted with the firmness required. I am not clear what the hon. Member does want. He wants more resources to the inner cities, but will not say where these should come from. He objects to the relative reduction in grant to some of the shire areas because of the adverse effects this may have on ratepayers in these areas, but goes on to suggest that our overall settlement was not firm enough—by which I presume he means not harsh enough. Yet if we acted on the hon. Member's advice we should have a situation where the big cities were not helped through the needs element to keep down their rates, and where the rates in shire areas rose even more.

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If we reduced the rate support grant, what else could happen but that people in all areas would have to suffer wholly unjustified cuts in the basic reduction in services in order to satisfy what I increasingly suspect is the atavistic design of the Opposition.
I believe that the settlement that we have made is right. I do not wish to underestimate the task that we have set local authorities in 1977–78. In setting the task the Government are adhering to their published plans for local authority expenditure. I hope that the spirit of co-operation and support that has been evident from responsible local authorities this year will continue into 1977–78. I commend the orders to the House.

ROYAL ASSENT
Mr. Deputy Speaker (Mr. Oscar Murton): I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Consolidated Fund (No. 2) Act 1976.

2. National Insurance Surcharge Act 1976.

3. Fishery Limits Act 1976.

4. Scottish Transport Corporation (Castle Bay Pier) Order Confirmation Act 1976.

RATE SUPPORT GRANT
Question again proposed.
7.6 p.m.
Mr. Michael Heseltine: Many hon. Gentlemen who listened to the Secretary of State's rather cosy description of the reaction of the local authority associations to his recent settlement will wonder whether something has not gone wrong with the communication channels between local and national government. Certainly the representations that have been made to me, and reports in the Press, paint a very different picture from the one that the Secretary of State painted this afternoon.
One overall generalisation that increasingly struck me as I listened to the Secretary of State explaining the growing complexities of finance in the rate
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support grant considerations, and the growing concern about the way in which the whole system operates, was that the commitment of my party to abolish the domestic rating system was one of the wisest political commitments that we have ever made.
The reality, which the Secretary of State and hon. Members opposite must understand, is that the rating system is now an arbitrary system. It is an arbitrary system of allocating resources, locally, and, as has been made perfectly clear today, it is made with the minimum of information about the impact on local communities and with the need to resort to broad brush approaches which must be unfair in their impact on local people depending on which community they live in. It is no longer a system that we as national politicians should tolerate.
Mr. George Cunningham: If rates were abolished, central Government would have to provide more to local authorities. Surely that would increase the arbitrariness of the distribution arrangements?
Mr. Heseltine: It would not increase the arbitrariness, but there would have to be some form of revenue-producing activities to replace the rates. That is the commitment that must follow. I see members of the Government Front Bench jumping all over the place with glee as though the thought had never occurred to them. I think they set up the Layfield Committee to look into these matters. They must be as aware as I am that other alternatives exist. It is certainly a commitment that my party has entered into and we will announce our proposals for alternative means of dealing with this local funding in the future.
Mr. Peter Hardy: I do not know whether the hon. Gentleman has had the chance to read the Layfield Report. I hope that he will, because he will find that the Conservative commitment may not be so easily achieved as he supposes. Would the hon. Gentleman reconsider the assumption in his remark about the growing share of personal budgets that the rates require? Is it not the case that the rates burden is the same today as it was 20, 30 or 40 years ago?
Mr. Heseltine: The amount that has to be found in terms of post-tax incomes is extremely serious for large numbers in the community.
To an extent the Government have done what I believe to be necessary in approaching the question of local government expenditure. They have moved in the direction of reducing the proportion of funding that comes from the central taxpayer. I believe that is a step in the right direction.
The Government have failed to grasp the overall need to reduce public expenditure on a more significant scale than they have achieved. They have ended up by reducing net expenditure by 1·6 per cent. and the proportion of support from the national exchequer by 4·5 per cent. The effect has been to leave the responsibility for carrying the consequences of the decisions that the Government should have taken in the hands of local authorities and the private sector. The dirty work that flows from this rate support grant will be done by people other than the Government. The Government should have done their own dirty work which inevitably they will be forced to do.
It was interesting to hear the Secretary of State again rehearse the argument that anything more severe would have caused a great deal of unpleasantness and harshness and that the consequences would have been hard to bear. We have heard that argument, not only by the Secretary of State, but by the Chancellor of the Exchequer for the past two years. Every three to four months after that argument is put forward, one of them comes back to the Dispatch Box to explain that all the things which were impossible three to four months ago have now to be done because of the worsening financial crisis.
That is the dilemma. I believe that I put the position clearly and in much franker language than that used by the Secretary of State today in my speech on the Loyal Address to which the right hon. Gentleman referred. I then made it clear that there was a need for a harsher approach to local government expenditure. I understand clearly the consequences that I spelled out on that occasion, some of which the Secretary of State quoted, as flowing from such a decision. I believe that, faced with the choice between reducing staff levels and services in local authorities and increasing
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rates, the vast majority of people would prefer rates to be held at lower levels than the Secretary of State suggested. That is a harsh judgment, but, if I read the situation correctly, that is precisely the judgment that this country knows must be taken sooner or later.
As I see it, there are four reasons why the Secretary of State's proposals are wrong. First, I do not believe that the reductions in local authority expenditure are sufficiently large to meet the economic crisis facing this country.
Secondly, I believe that the responsibility for doing what has to be done is being transferred from central Government to the local authorities. The main cause of the agonising reappraisal in local government is inflation. The burst of inflationary pressures which gave rise to the crisis with which the Government are now grappling began some time in the early months of 1974 in consequence of policies pursued by the Government after they were first elected. That led to dramatic increases in the staffing costs of local authorities. That has been a major inflationary factor the consequences of which the Government are only now being forced to cope with.
Thirdly, the cuts have been engineered to cause the minimum impact upon people's daily lives. They have been designed to cut capital projects, as opposed to ongoing consumption, in the hope that the painful consequences that everyone knows follow from public expenditure reductions can somehow be delayed a little longer on the offchance that something will turn up—preferably North Sea oil. The fact is that, where it has been possible to abandon a road scheme, to cut house building and to reduce educational construction, that option has been chosen as opposed to reducing the numbers employed by local authorities. That is another misjudgment by the Government.
Fourthly, the changes are unfairly spread. They are unfairly spread for two reasons, both of which were inadequately dealt with by the Secretary of State. First, the right hon. Gentleman made no attempt to try to grapple with the difficult problem of those authorities which have tried to co-operate with the Government's economies and those authorities which have taken not a blind bit of notice.

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Secondly, within the unfairness of the spread, there is no justification for suggesting that the genuine problems within inner cities, which I recognise, should be financed to an increasing extent by ratepayers who do not live in those areas and whose problems they cannot conceivably be.
The Secretary of State was at pains to suggest that he was not doing anything that my right hon. and learned Friend the Member for Hexham (Mr. Rippon) or myself a few days ago had advocated. But that is to misrepresent the situation. I do not have the figures before me, but I believe that my right hon. and learned Friend certainly moved in the direction of increasing support for the inner city areas. But my right hon. and learned Friend was administering a rising budget and, within the context of a rising budget and a rising proportion of central Government support, he was moving in the direction of helping the inner city areas. The Secretary of State is dealing with a different situation. The right hon. Gentleman is dealing with a smaller proportion of central Government support and a reducing budget. In those circumstances, it is particularly harsh to try to continue to move in the direction in which my right hon. and learned Friend was able to move, because the action taken by my right hon. and learned Friend was in the context of an expanding situation.
When I spoke about much the same kind of problem, I made it clear that, to find the resources for the inner city crisis, the Secretary of State would do better to seek to enter into partnership with the private sector and to attract the savings of the institutions and pension funds into investment in land and other developments in those areas, if only the economic climate were conducive to profitable investment in those areas. I specifically precluded any suggestion that the Secretary of State should seek to inveigle ratepayers outside those areas to take on tasks which could not be considered to be their responsibility.
The Secretary of State made it clear that he had what I would describe as inadequate information to try to distinguish between those authorities which have conformed to the general pattern of economic behaviour that he wanted
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to see them adopt and those authorities which have not. In that event, his decisions must be arbitrary. On the basis of inadequate information, the Secretary of State must take decisions the implications of which he cannot fully understand in their local impact. It would have been better to face the real difficulties with which the right hon. Gentleman undoubtedly has to deal and to ensure that he had the information upon which better judgments were capable of being made.
Many authorities have had great pressures put upon them because they have tried to do what the Government asked them to do. They have cut their expenditure to the bone and run down their balances to help their ratepayers. They have done what the Secretary of State wanted them to do. However, those authorities have seen other authorities that not only have done none of those things, but have publicly flaunted their refusal to do so. Those authorities are now able to turn to the authorities which co-operated and say "What fools you were. We told you that under this Government there was nothing to gain from co-operating. All you had to do was to go on with your profligate expenditure and business would be precisely as before in terms of Government support"
What conceivable incentive is there this time round for those authorities which co-operated so well and to which the Secretary of State paid tribute to go on co-operating knowing that their only benefit will be more aggro in the local election results and the local Press?
Mr. William Wilson: Speaking as a member of the Warwickshire County Council, I should point out that its budget for a year is £69 million, that as a result of the present arrangements it will be short by £8 million, and that it has complied right up to the hilt with the Government's requirements.
Mr. Heseltine: The hon. Member for Coventry, South-East (Mr. Wilson) is quite right. His ratepayers are to be asked to pay not the additional 15 per cent. which is the convenient average which the Secretary of State produced, but 24 per cent. because they co-operated with the Labour Government who then

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stabbed them in the back because other Labour authorities had not co-operated in the same way.
It is encouraging to speak from the Opposition Dispatch Box nowadays. Yesterday, the right hon. Member for Newham, North-East (Mr. Prentice) explained the workings of the Cabinet. Today, the hon. Member for Coventry, South-East has explained the harshness which follows from the activities of the Secretary of State for the Environment. One begins to wonder about the survival capability of this Government as we listen to the stories that are beginning to flow from their supporters.
I believe that it would have been right for the Secretary of State to face the fact that there is a crisis of expenditure in local government and that it is his duty to find out the details of the figures. Only then could he have a dialogue with those authorities that are persistently flaunting their independence of him at the expense of those who have co-operated with him. It is not good enough for him to say that it is too difficult, that he does not know how to go about it, or that it will cause him great agony. He would have been more widely praised if he had got on with the job.
Mr. George Cunningham: Are we to take it that the sentence in the Conservative Party manifesto for one of the 1974 General Elections about "setting local government free" is null and void now?
Mr. Heseltine: The hon. Gentleman apparently assumes that if people use their freedom to overspend grossly and, therefore, prejudice the freedom of those who do not overspend, it is right to hitch one's wagon to those who abuse the freedom given to them. I do not see that argument. In order to protect the freedom of those who have helped the Government, the Secretary of State should at least have some conversation with those who have abused the Government.
I believe that my hon. Friend the Member for Northampton, South (Mr. Morris) was right to increase the pressure that has come from the Opposition by asking the Secretary of State to find out and to publish a list of those authorities that indulged in the overspending. But I do not understand how the Secretary of State can produce a wealth of detail about
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individual local authorities and not know those which have overspent from one year to another.
Mr. Shore: That is the difficulty. There will not be any great problem in revealing what is the percentage expenditure of individual local authorities, taking the current year over last year. The Department will be producing those figures for all to study in the coming month. The difficulty is, having got the figures, how to interpret them. All that they show is how much, against the previous year, an authority has spent in aggregate. The hon. Gentleman must understand that that in itself will not show whether an individual authority has overspent. That in itself reflects all the changing circumstances of each individual authority.
Mr. Heseltine: I do not want to tell the Secretary of State how to control budgeting, but I should have thought that, if he started with that aggregate figure, it did not require great ingenuity on his part to say how he added up what figures to get that aggregate. The calculations have all to be done. Someone has produced a detailed budget to get to the total. Those figures should be available to the Secretary of State.
I believe that the mood of the nation is that people want to see an end to the inflationary spiral. That means that people at all levels, as we heard yesterday from the right hon. Member for Newham, North-East, have to adopt a different approach, and it should start with the Secretary of State for the Environment.
I want to draw attention to some of the representations which have been received from various authorities across the country. I have before me a Telex message from Stockport explaining how the authority had used up all its balances and therefore had none left to keep down rates but that it would now be penalised as if it had not done so. The London borough of Havering wrote saying that its calculations now showed that it would receive some £700,000 less than it had assumed that it would receive in earlier calculations. In all those circumstances, we must sympathise with authorities that tried to behave as the Government wished only to find at the last moment their assumptions changed dramatically.

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The second aspect of the unfair spread comes back to a point raised by the Secretary of State. It is that we now see a situation where, because of the crisis in our city centres, county ratepayers will have to pay over and above the average rate increases of 15 per cent. mentioned by the Secretary of State.
I have heard no argument from the Secretary of State explaining why the ratepayers of Avon face an 18 per cent. increase, those of Cambridgeshire a 23 per cent. increase, those of Cumbria a 25 per cent. increase, those of Northumberland a 25 per cent. increase, those of my own county of Oxfordshire a 25 per cent. increase, and those of Stafford-shire a 20 per cent. increase in order to cope with crises in some inner city areas whose ratepayers will not be asked to pay any addition at all.
I could understand the argument if it was that all ratepayers would have to pay more and that the Government intended to spend it on the inner city areas because of the dramatic crises there. But I cannot understand an argument which says "We have a crisis in many of our inner city areas, and we shall so arrange the rate support grant that the ratepayers in those areas in many cases will pay no addition, but the ratepayers in other areas will pay an additional 30 per cent." How can there be any justification for that?
The Secretary of State has made no attempt to justify his proposals. However, it is interesting to look to see which of the Parties controls many of these areas. It may be only coincidence that many are Labour-controlled and that the Labour Party will be on the defensive in the spring elections. Those are the areas where in the main a considerable degree of additional support appears to be going.
Mr. Shore: Not at all.
Mr. Heseltine: The Secretary of State says that that is not the case. But I notice that he did not produce any evidence. He did not quote any of the authorities. I have before me a list of all the authorities, all the increases in rates and all the controls politically. It is difficult to avoid the conclusion, although there are one or two exceptions—
Mr. George Cunningham: They voted Labour. That is the conclusion.
Mr. Heseltine: The hon. Member for Islington, South and Finsbury (Mr. Cunningham) says it for me. I was not expecting so helpful an intervention. The conclusion is "You have no problems if you vote Labour." But that is not strictly true, of course. There are problems, but they take longer to manifest themselves and they are always much more expensive to resolve in the end.
The Secretary of State made no attempt to explain the fundamental injustice of treating ratepayers in one part of the country differently from those in another part.
Mr. George Cunningham: I want to clear up any misunderstanding that there may be. I am saying that the inner city areas, with all their social problems, naturally look to the Labour Party to help to solve those problems. That is why they are, and should be, in receipt of the largest amount of assistance, according to the philosophy of the Labour Party and according to the philosophy which, at its best, the Conservative Party has also enunciated. Those areas happen to be represented by the Labour Party most of the time. There is nothing odd about that.
Mr. Heseltine: I understand the delusions under which members of the Labour Party operate. I am sure that the hon. Member for Islington, South and Finsbury believes quite genuinely that, despite all the evidence, the growing poverty, the growing crime rate, the growing homelessness and all the other tensions of our cities which are worsening rapidly under a Labour Government somehow have nothing to do with this Government.
One of the most interesting features in the speech of the Secretary of State was that, for the first time, a new factor had been introduced into the needs element of the rate support grant—unemployment. For the first time, under a Labour Government, unemployment has become the factor to decide where to put the needs element in local government because, for the first time, under a Labour Government, unemployment is so serious in the

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city areas that it has to become a factor. The evidence is overwhelmingly against the hon. Member for Islington, South and Finsbury when we look at what is happening in our inner cities. To believe that a Labour Government protect them is to spit in the face of reality.
Mrs. Millie Miller: The hon. Gentleman has drawn attention to a factor which belies his earlier statement that these arrangements were drawn with such a broad brush that they could not take account of individual changes in circumstances. But the fact that unemployment is a factor shows that needs are being recognised.
Mr. Heseltine: Unemployment is a factor, but it is not restricted to the big cities. There is no bonus in being unemployed in the shire counties as opposed to being unemployed in the cities. Under a Labour Government, unemployment has become a disaster. It is now so high that it has been introduced in a separate element in the rate support grant.
Sir David Renton: In any event, since 1929 unemployment has been a national responsibility, and not a responsibility of local authorities.
Mr. Heseltine: My right hon. and learned Friend is undoubtedly right. He chooses a particularly apposite year, because 1929 was the last time that unemployment began to soar under a Labour Government. It rose to 3 million by 1931. I know that Labour Members do not like being reminded of these facts. They have some way to go before they break their previous record. Unemployment records are always broken under Labour Governments, but these things never have anything to do with the Government so long as the Government are a Labour Government.
The Secretary of State said that he had done everything possible in the current economic situation to cut rigorously, and that anything more would have caused hardship. I understand from the Cabinet leaks and from the right hon. Member for Newham, North-East yesterday that the latest round of public expenditure constraints have had to be introduced without legislation. The last thing that the Government want is for their back benchers to get near these issues. The trade unions, it seems, must not be allowed to feel
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any hardship under these circumstances. The rate support grant is part of the overall package. That is the most that the Government can do.
The Secretary of State estimates that 25,000 people in local government will lose their jobs, but that this will cause the minimum of hardship. I challenge the right hon. Gentleman's fundamental assumption about the whole issue of job losses in local government. What has actually happened is a consequence of the rate support grant calculations. The effects of the changes introduced by the Government will be higher unemployment, lower levels of production, and a perpetuation of the malaise which afflicts our manufacturing industry. I am prepared to accept that the right hon. Gentleman may have saved some jobs in local government for a short time. But the price for doing that is to destroy more jobs outside local government.
To preserve the public expenditure levels associated with the rate support grant we have to tolerate crisis rates of interest. These rates of interest are adding to the burden of local authorities and are destroying jobs in the private sector. They are driving small companies and shop keepers out of the city centres. There are record levels of bankruptcy, and the link between public expenditure levels and the mounting destruction of the private sector is absolute. That is why the Secretary of State's analogy is wholly wrong.
We have to break out from the position that prevents the private sector from raising or investing money. As long as the right hon. Gentleman has his way, and as long as the arguments he put forward in Cabinet hold sway there will not be an alternative growth of employment in the private sector.
We have reached the situation where the private sector can no longer carry the burden which the Secretary of State believes it should. Nowhere is this clearer than in the Government's housing programme. When they came to power the Government wanted a surge forward in local authority housing. This was to be secured in partnership with the provisions of the Community Land Act and all the centralised power associated with it.
With the burden that was placed on the private sector in the form of rising rates of interest small property developers and

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builders were unable to maintain the momentum. The Government believed that the public sector would pick it up and carry it on, but the price for that has been even higher rates of interest and an economic squeeze that has strained the public sector's ability to maintain the momentum. The result is that next year will see the worst housing record for decades. The Government will go down in history for having destroyed the country's housing programme.
The hon. Member for Bolsover (Mr. Skinner)—I do not often quote him—said only a week ago that the housing crisis was the failure of the Government and of no one else. I believe that the Government have failed to secure a viable long-term economic policy because of the attitudes which underlie the concept of maintaining high levels of public expenditure associated with crisis rates of interest. It would have been better for the Secretary of State to make clear that he was intending to bite into the vicious cycle of inflation, but for him to accept an average increase in rates of 15 per cent. next year is to contribute to the vicious inflationary cycle which other Ministers are trying to halt.
To avoid that would mean telling local authority employees that they would not have a job, and they expected that. They must be told that; because, unless we condition people to that attitude, which is what I presume the Government mean when they say they want to switch resources from the public sector to the private sector, we will not succeed. How can the Secretary of State argue that these policies will have no real consequence when public sector employment is to be maintained at its present level? That is the last thing that the country expects to hear. The country expects to be told how much local government expenditure is to be reduced, and the Secretary of State has missed the opportunity of doing that.
The Government claim that they want to give a new sense of purpose to the private sector, and that is all right as long as their words are never translated into practice. But we know that they will be seeking powers to extend the scale of direct labour organisations. That is what we now come to expect. All of the Government's arguments are in favour of
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giving greater strength to the private sector, but when it comes to taking a decision they act in precisely the opposite direction. We shall resist the powers to be given to direct labour organisations with all our constitutional strength. That legislation will represent a further diversion of effort and the misuse of resources. It represents yet another appalling prospect for our economic revival.
We know the Government's attitude on public expenditure. We now face the prospect of inflation of 15 per cent. on a year-on-year basis starting next April. In spite of what we have been promised consistently by the Chancellor in his repeated Budget statements, we know that we face reductions in the levels of services, and the Secretary of State knows that that is the prospect.
It is no use saying that rates will not continue rising and that they will be reduced. In fact, we shall have rising unemployment in both the public sector and the private sector as a consequence of the policies that are being pursued. We shall have soaring rate increases. The increases will be up to 30 per cent. in many parts of the country. There is no prospect yet of any of these trends being reversed or of any change in direction.
The Secretary of State has missed an opportunity. He could have matched the mood of the country if he had put forward a very different approach—namely, the one that the country wants to adopt and the policy it wants to follow. However, he has missed the opportunity. That is his responsibility, and as things worsen next year—we all know on both sides of the House that they will—the responsibility will come home to roost.
7.41 p.m.
Mr. John Forrester: The hon. Member for Henley (Mr. Heseltine) made a typically vigorous speech, although he did not carry with him everyone on both sides of the House. I was surprised to hear the hon. Gentleman talk about the harshness of the Labour Government. In debate after debate we have been told how harsh the Government should be about public expenditure and how lax they have been. It seems that the words of Opposition Front Bench spokesmen do not always quite fit.

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This is a time of year when the Secretary of State for the Environment is urged to play Santa Claus. It seems that it does not matter whether he comes before us in a red cloak or a blue cloak, as he usually resists the invitations that are put to him. One of the many sins of local government reform has been to shift some of our loyalties into directions that we did not think possible before. I believe that there is a general acceptance in local government circles that there must be some curtailment of public expenditure in the present economic climate. There are those who still resist that idea, and they are entitled so to do provided that they accept the consequences of unacceptable rate increases.
We have reached the stage at which everyone accepts that we cannot make further cuts without hurting someone. There may be a little fat left in local government that could be trimmed but I do not think that there is sufficient to avoid taking unpleasant decisions. We must face the prospect that we shall have to learn to live with lower standards.
What usually happens in these debates is that each of us puts forward differing priorities. We cannot agree on what should be cut and by how much, and in the end it appears that the Government are the only party to come out on the side of the angels.
I cannot resist the temptation to say that local government reform has left us with a number of people surplus to requirements in some departments of local government. Perhaps it would be possible to include them among those who will lose their jobs. That is not to say that they are now under-worked, because I have always been taught that Satan finds work for idle hands. Certainly some of the work that has been found has led us into avenues of increasing expenditure. I rather suspect that that is something that happens in central Government as well. That can be the only explanation for some of the schemes and ideas that are put before the House.
I accept that the Government must reduce public expenditure, but surely it was not unreasonable for the shire counties to expect to receive the same amount of money for next year as they received this year. I understand that the
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shire counties will receive less cash next year than they received this year. They feel strongly that next year's total should at least have been the same as this year's. They feel that this year's total should have been the minimum thresh-hold for grant next year.
As a result of the changes in the formula and the percentage, Stafford-shire will receive £14 million less in 1977–78 than it would have received under the present rules. When we are refining the formula, especially in times of great difficulty, we should not do so in such a way as to add unfairly to the burdens of those who are the losers. That sort of refinement should be saved for better times. It is not possible to believe that in a time of high inflation we can contemplate paying less money than we paid out last year. I ask my right hon. Friend to give serious consideration to that point and the need for real transitional adjustments when a case may have been proved for alterations in the formula.
My right hon. Friend will know that many local authorities have to make plans years in advance for many of their services. It is unfair to inflict on them alterations in grants and formulae at the eleventh hour. If we are to expect good government from local authorities, we must avoid wild fluctuations in rate support grant from year to year. It would take a comparatively small sum to maintain last year's grant to the shire counties. If that sum were raised by taxation, it would cause hardly a ripple on the taxation scene, but if it is to be raised from taxpayers that could be the last straw for some. However, whether it is raised from taxation or from rates, it does not make any difference to the sum total of public expenditure, except that raising it by taxation may be less painful for some people.
Many local authorities have unavoidable commitments. Even if the average rate of inflation can be kept to 8½ per cent. over the year, it is a fact that many authorities, including Staffordshire, will face tremendous rate increases. Indeed, the figure of 30 per cent. has been mentioned to me.
Mr. Ivan Lawrence: The hon. Gentleman speaks for the same

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county as I represent. Will he confirm that the Labour leader of Stafford-shire County Council has indicated that the rates that the East Staffordshire District might have to face—it is a Conservative Council—might be as high as 35 per cent.?
Mr. Forrester: I cannot confirm that, but I shall take the hon. Gentleman's word for it. There has been talk in the county of rate increases well above 15 per cent. I wonder whether some authorities are crying "Wolf!" in anticipation of being able to say next May that they have kept the rates down. Certainly the increases will be quite substantial in many areas. I know that authorities with balances are being encouraged to spend them to keep the rates down, but we must look forward to what the situation will be in 1978–79 if all the money is spent in one year.
The alternative in many cases seems to be to attack the fabric of the social services, but I believe that in all spheres of our national life we need a period of stability. Violent fluctuations in rates will do nothing for the climate for the social contract.
I accept that London and the metropolitan districts have stress problems, but the same problems of social deprivation occur in many areas, including many of the old county boroughs that are now part of the shire counties. The theme now is that the problems are diluted when spread over their respective counties. However, it is just as traumatic to be homeless in Stoke, Nottingham or Derby as in London, Manchester or Merseyside. I hope that successive Ministers will not overlook that. I hope that they will in some way revise the formula, or give some special assistance which will take account of the dilemma.
We cannot but come to the conclusion that the Department, in refining the formula in favour of the large conurbation, has perhaps overlooked the effect on some of the other authorities.
I am not quite as happy as my right hon. Friend about the rebel councils. I know that there may be the practical problems that he mentioned. But if the effect of the changes in the formula is that some local authorities which publicly
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declared that they would not co-operate with the Government's economies can then levy a smaller rate increase than most others, or have a standstill rate, there could be a traumatic effect on the morale of the rest of the country. Nor do I think that the grant should be distributed in such a way that some authorities can maintain or perhaps substantially increase their services whilst others must drastically cut back.
The main popular victim of the cuts now seems to be the road programme. I suppose that that is an easy choice for a Government. It certainly has no impact on individuals. But we must remember that the roads are the main arteries of this country and must be maintained in a reasonable state, especially if we are to improve our productivity and the distribution of manufactured goods, which are supposed to be the basis of our economic recovery. We should not contemplate running down our roads to a dangerous extent or to the point at which they will eventually require more to put right than if they were under normal maintenance.
If we are to reduce capital expenditure on car parks, will my right hon. Friend call a moratorium on the painting of yellow lines? I have the impression that in many areas traffic management engineers are a bit brush-happy. I once wondered whether there was a national competition to see who could paint the most yellow lines.
Will my right hon. Friend also abandon any further consideration of the consultative document on the parking of non-residential vehicles in city centres? If the proposed policy were adopted it would not only be yet another reversal of past policies but an extremely expensive innovation.
I should like to repeat a plea I made last year. If there is to be no alteration in concessionary fares, can the opportunity be taken to consider introducing a national scheme to be brought into force when times are better? The matter is a source of great resentment throughout the country.
Mr. Nicholas Winterton: The hon. Gentleman's knowledge of local government is well known and respected. Does he agree that if his Government introduced a scheme of concessionary fares

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it would be a great injustice to the many people in rural areas who do not live on a bus route or anywhere near a public service route? Would it not be sensible for authorities that run the existing concessionary fares schemes to enable the tokens to be used for taxi transport, which would at least enable people to take advantage of the system which exists for many others in urban areas?
Mr. Forrester: That is an interesting suggestion. Perhaps the Department will, in its full-scale review this year, consider whether that would be possible in the light of the public expenditure restrictions.
Mr. Nicholas Winterton: It is a matter of social justice.
Mr. Forrester: Social justice is sometimes rough justice. I understand the hon. Gentleman's concern and why he makes that point, knowing the district from which he comes.
The document says that local authorities may want to have their own priorities on other environmental services. I wish to plead for the continuation of the grants for land reclamation, the only form of special assistance that Stoke has received. In some areas derelict land can quickly be converted to good ground for housing and industry, without special treatment, but in areas such as Stoke, with a long history of mining, in addition to the spoil heaps it is not unusual to come across half a dozen pit shafts that nobody knew anything about, and to have unstable ground which will take years of settlement before it can be used commercially. The only hope for places such as Stoke attracting new industry is to improve the environment. That is our insurance policy for the future. As with roads, it would be a tragedy if the design teams and skilled workers were dispersed so that we had to start again in a few years' time.
Many local authorities will co-operate with the Government to achieve acceptable levels of public expenditure that are within our means. If there is any spare cash, they have ample services on which they can spend it. The plea from the local authorities to the Government is "Please pass no more laws which will add to our expenditure burdens, but if you feel compelled so to do, provide 100
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per cent. of the cash to save us more expense."
7.56 p.m.
Sir Derek Walker-Smith: I am grateful for the opportunity to make a brief contribution to the debate and to follow the thoughtful and temperate speech by the hon. Member for Stoke-on-Trent, North (Mr. Forrester), to which we all listened with much interest.
As I propose to express some criticism of the orders and of the Government's policies in regard to the mechanism of the rate support grant, it is proper that I start by defining the limits of my criticism and identifying its substance. I do not join issue on the principle of economy on the public service or constraints on public expenditure. It is not a question of my admitting their relevance. Indeed, I assert it. I do not need to learn these economic lessons from the present Government. I certainly do not need to learn the basic truth that expenditure on social and local services is inherently, inescapably and ineluctably dependent on the economic strength of the nation. I promulgated this doctrine consistently for the three years in which I had the responsibility for one of the great social service Departments.
My criticism is that the Government's approach is ill-suited to serve the ends and promote the object of economy in public spending, that the methods selected and embodied in the orders are illogical and unfair, that they press too hardly on some, and that with others they even contain a positive inducement to further higher spending.
My criticism is that the Government have failed to distinguish between the sheep and the goats, the savers and the spenders, the prudent and the prodigal, the saints and the sinners. In so far as their policies do distinguish between those categories, they favour the spenders, not the savers, the prodigal, not the prudent.
Mr. Nicholas Winterton: And the sinners.
Sir D. Walker-Smith: I was not going through the whole catalogue. I understand my hon. Friend's preoccupation with sin, but as we are approaching the season of good will to all men I thought that I need not repeat that.
Mr. Nicholas Winterton: Very unkind.
Sir D. Walker-Smith: I am always kind to my hon. Friend.
I propose to make good these general criticisms by reference to the particular case of the county of Hertfordshire, part of which I have the honour to represent. But it is a general criticism, with a firm foundation of general support. I shall cite two declarations in support of that statement. The first is by the Association of County Councils, which says that it considers that
"these proposals are grossly inequitable and therefore unacceptable."
The second is the opinion of the Association of District Councils, of which I am a Vice-President, though I hasten to say that I did not draft the declaration that I am about to quote. It says:
"the distribution of grant will, in our opinion, be counter-productive and will mean that large towns receiving higher amounts in grant aid will have less incentive to keep expenditure down, and those authorities receiving less will not only have to cut services but be forced to put up rates above the average".
These criticisms apply generally in the case of the shire counties and with very strong force in the case of Hertfordshire. That being so, I, supported by other of my hon. Friends representing the county, tabled Early-Day Motion No. 38, which criticises the inequity deriving from these proposals.
To assess the degree of inequity and hardship inflicted on the citizens and ratepayers of Hertfordshire, we have first to look at recent history. In the years 1973–74 to 1976–77, Hertfordshire has suffered a clear and sustained reduction of rate support grant in terms of the percentage of the national total, from 1·82 per cent. to 1·44 per cent. Looking ahead to the effect of this order, Hertfordshire's loss for 1977–78 will be £11·7 million, and of this £8 million is due to adverse changes in the formula proposed.
Of course, the problem of Hertford-shire is exacerbated by its high level of domestic rateable values. Because of the way the resources grant is calculated, Hertfordshire receives only a small proportion of grant as against areas with low domestic rateable values. It is, in my submission, wholly inequitable that highly-assessed areas should have to bear more of the strain while areas with low
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rateable values should get extra Government help.
Mr. Ronald Bell: That point is valid. Is there not contained in it the further point that in Hertfordshire, just as much as in any city centre, there are poor as well as rich people, and that the effect of this formula is that the poor people of Hertfordshire are subsidising the rich people in London?
Sir D. Walker-Smith: I am grateful to my hon. and learned Friend who, with his customary perspicacity and prognosis, has identified the very point to which I was about to come. The result of the figures I have given is a massive disparity between the range of rates paid for similar properties in Hertfordshire and elsewhere. For 1975–76, the figures showed the range of domestic rates for the Hertfordshire ratepayer as £118 to £144. His counterpart in a similar property in Staffordshire paid, I understand, between £82 and £108, and in Leeds—I do not think that we have the benefit of the presence of a Leeds Members here—only between £59 and £83.
This was because the rateable value for the standard house in Hertfordshire is £277, in Staffordshire £216, and in Leeds only £96. That situation will worsen because, as the rate support grant is cut in 1977–78, the burden of the cuts will fall on those with high domestic rateable values. The principle is clear—there should be parity of treatment. Comparable hereditaments should be rated alike, which indeed, as I understand it, was the object of the switch from local to central valuation under the Local Government Act 1948. On the contrary, however, there is disparity and inequity from which my constituents and the ratepayers of Hertfordshire generally suffer. Obviously, I say, revaluation is essential in the interests of fairness and parity.
Mr. Ronald Bell: There is surely a point here. My right hon. and learned Friend said that, under the Inland Revenue assessments and the revaluation, similar hereditaments should be rated alike. We would need to change the law on net annual value. Does not my right hon. and learned Friend think that a house in a constituency represented by a Labour Member is bound to have a lower net annual value than one represented by a Tory?
Sir D. Walker-Smith: If that last proposition is true, it is something that should be corrected in a great many areas within the coming months. One would think and hope so. However, on the first point raised by my hon. and learned Friend, I think that the situation results from the method of valuation of the net annual value paid by the hypothetical tenant. But my hon. and learned Friend was perhaps less preoccupied with the 1948 Act than I was, owing to his enviable youthfulness.
Mr. Ronald Bell: Temporary absence.
Sir D. Walker- Smith: My hon. and learned Friend's temporary absence, then. Had he been here at the time, he would have heard that this was a central proclaimed objective for that legislation.
Although these disparities of valuation aggravate the effects of the Government's treatment of the rate support grant, there is, in addition, the central illogicality and inequity of the discrimination against those authorities which have managed their finances prudently and have hearkened to the exhortations of the Government. Hertfordshire has consistently kept within the Government's expenditure guidelines. During the past four years, and as projected for 1977–78, Hertfordshire's growth has been minimal even where Government policy permitted an increase. Hertfordshire has not contributed to the overspending. That is admitted by Ministers, who, however, unfortunately have not been able to reward such cooperation by an appropriate shaping of the formula of grant distribution.
The result is that adherence to Government policy has been penalised. The upright and the wayward have been punished alike. Hertfordshire has suffered because of the profligacy of other authorities, profligacy which has caused the Government to cut the grant by £50 million in the current year. If the profligates alone had their rate support grant cut, it might be considered fair, although perhaps still harsh; but a county like Hertfordshire, which has tailored its budget so rigorously, now has to pay for the massive overspending of other authorities.
What mitigation is proposed by the Government? The Secretary of State says that rate increases can be cushioned next year by dipping into balances. That is
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perhaps a natural reaction from a Government so dependent on the International Monetary Fund. The right hon. Gentleman quoted a figure of £175 million, but of course he admitted that it was an overall figure and with some authorities balances do not exist. That is cold comfort to Hertfordshire. Because of Government policy the cupboard is bare, and once again the long-suffering ratepayers of Hertfordshire will have to bear the burden.
For some of our ratepayers in Hertfordshire there will be added poignancy and irony in the situation. I refer to those who have recently moved into the county from London—and there are many of them. Had they stayed in London, they might have benefited both from the profligate spending of some London authorities and from the preferential treatment given by the Government to urban areas generally. As it is, they join the ranks of the hard-pressed ratepayers of Hertfordshire.
The impact of the rate support grant proposal on the Hertfordshire rates is calculated to bring about an increase of domestic rates 6 per cent. above the average national increase—6 per cent above in Hertfordshire and 10 per cent. below in Liverpool and South Tyneside. For what? Next year, the citizens of Hertfordshire will pay higher rates and enjoy reduced services, although perhaps the word "enjoy" is hardly the mot juste having regard to what they get. This is inequitable, unreasonable and undeservedly burdensome on deserving people.
Amongst the services which will or may well be prejudiced are nursery schools, old people's homes, and services for the mentally handicapped—the last a particularly deserving and demanding category for which much needs to be done and much should be done as a priority in Hertfordshire, as indeed in the county as a whole.
In conclusion, it is small wonder that these proposals and their impact find the citizens of Hertfordshire critical and resentful—not of the basic object that the Government seek to pursue, but of the clumsiness of their chosen methods and the unfairness and the illogicality that will result.
Clearly, the situation calls for two lines of action to promote fairness and

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efficiency in economy: first, the urgent revaluation of hereditaments throughout the country, of which I have spoken; secondly, a close and vigilant control of expenditure so that the proper stewardship of resources is rewarded and overspending discouraged.
Clearly, the Government have much to learn in this context, as appears all the more forcefully from yesterday's criticism by the right hon. Member for Newham, North-East (Mr. Prentice), who could not find it in conscience or reason to continue to share collective responsibility for the actions of Ministers.
Hopefully, by the time we consider these matters next autumn, other Ministers will occupy the Treasury Bench. But if, unfortunately, the present Government are still in office, I trust that it is not too much to hope that they will by then have learned from their mistakes and profited from the constructive criticisms that we seek to make.
8.12 p.m.
Mrs. Millie Miller: I am sorry that my right hon. Friend the Secretary of State is not present at the moment, because I was hoping to start by dispelling one of his illusions. In his speech he paid tribute to the Opposition for having introduced in 1973 a scheme which was foreshadowing the kind of redistribution about which we are talking today. It is true that such a scheme was discussed. What my right hon. Friend might not have realised was that when Opposition Members, notably the right hon. and learned Member for Hex-ham (Mr. Rippon), realised that redistribution of the type about which we are talking today would have had the disadvantage, from the Tory point of view, of putting increased burdens on the largely residential suburbs, particularly in the Home Counties, they immediately dropped the formula and we were back to Square One again, except that those very areas received considerable benefit from the scheme which was eventually introduced to the detriment of the urban areas that are being helped today.
In spite of the criticisms that have been made about the way in which the Government are handling this matter, it is very interesting that although many local authorities are extremely distressed about the way that redistribution is affecting
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them and although many of their services will be affected, the discussions that have been taking place between the Government and local authorities have been on a basis that has produced a formula that has been acceptable, particularly to those with the greatest needs.
I have no doubt—I have said this previously—that the changed approach of the Government to their discussions with local government has been greatly to the benefit of all those people who use local government services.
I want to make another point before turning to my main theme. We have heard so much about cutting local government expenditure from the Opposition, as we hear almost every day of the week, but they completely neglect to mention the part that their Government played in the disastrous reorganisations. Those reorganisations meant that local ratepayers now bear heavy burdens. They also meant increases in staff in order to cope with the reorganisations. I should like to repeat a figure that I have quoted previously on this subject. Between 1972–73, when local government reorgantion took place, and the following year, in the whole country the cost of administration to local authorities rose from £835 million to £982 million. That is something that we cannot overlook.
Mr. Raison: I accept the point that there was a very big increase in the cost of administration and so on, but surely the point is that it is quite clear that the increase was just as great in London, which was not reorganised at that time, as it was in other parts of the country that were reorganised. That shows that, fundamentally it was not reorganisation that added this heavy cost.
Mrs. Miller: There are factors in London, however, which we are now trying to redress—factors which had been developing over the years as the imbalance in population became more marked. Let us remember that during the period of the previous Conservative Government, heavy pressure was put on the poorest people in the poorest London boroughs and in some of the richest London boroughs, by the depredations of the property speculators and their activities in housing. We should not forget that. It had a great effect on local government in the inner London boroughs. This

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is borne out by the fact that in the London Boroughs Association proposals, which have been mentioned by the Minister, all 32 boroughs have agreed that the three main central boroughs should have special treatment because of the special problems that they have over and above those of the rest of Greater London.
That is a very telling fact. After all, within the London area there are 32 boroughs. A number of them are Conservative-controlled, but this year, for the first time, there has been unanimity on the formula to redistribute rates within the London area, and that unanimity has included giving extra help to the very boroughs which Opposition Members talk of as being profligate but which have some of the most terrible burdens of, for instance, old age, immigration into the borough, the separation of families, and a hundred and one other social elements. That is something of which people ought to be reminded in the discussion of local government expenditure.
It is interesting that in spite of the constant campaign being waged in the House and the media about the overspending in local government, the Minister said tonight that for the current year overspending will be less than 2 per cent. Moreover, I understand from the London Boroughs Association that if the offset in savings in capital expenditure of £90 million is taken into account, it will bring the overspending to about 1 per cent.
Perhaps there are those of us who wish that some of the Government's estimates could get as near as that to fact when we hear some of the massive figures that are put before the House.
I am very relieved at the way that the rate support grant is working out, although a number of problems still remain. Thank goodness that, in line with the policies announced by the Prime Minister, resources will be concentrated on the depressed inner city areas and that the rate support grant will be distributed in their favour. However, this may well not be sufficient in the London area. It is my duty as a London Member to point out that factor.
I think that the Department has established an Inner City Directorate, which is to bring together information on which
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strategic discussions can be held so that all agencies operating public services will be able to consider the needs of the inner London area. I hope that the day will come when this will work down to local levels so that all those operators of public services, whether they be local government, the nationalised industries, the National Health Service, or the fire service, will link together in considering the problems of their local districts.
There is a great deal that can be achieved in economy and satisfaction with services by that kind of movement. Structure plans could be developed, and possibly by the very fact that such organisations worked together we would see a great improvement.
Within the last few days I have been shown a cutting from the local government journal of Majorca. There a law has been passed which says that when roads are to be dug consultations have to take place with all the services, such as gas, water and electricity, and that roads may not be opened unless they have co-ordinated the plans to do all the necessary work while there is still a hole in the ground, after which it can be filled up and there will be no further trouble to the surface of the road. What a saving it would be if we could achieve that small amount of co-ordination on the number of roads with which we are concerned compared with the number in Majorca.
Mr. Ronald Brown: It happened in a borough in inner London with which I was associated. A road was like a battlefield for nearly 14 months, at the end of which time it was beautifully resurfaced, but the Post Office decided that it wanted to lay some transformers under the road, so the process started all over again.
Mrs. Miller: My hon. Friend makes a valid point. If we had a regular, ongoing relationship between the services, we might be able to achieve our aim in 14 days, four months—who knows?
The Government have promised that cuts in housing and capital expenditure will not affect stress areas, but there is an urgent need to deal with many of the housing problems which concern not simply people in the queue for housing accommodation from the local authority but the poorest people, many of them in

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privately rented properties, who are suffering severely.
So much has been said about equity in this debate that I should draw the attention of hon. Members opposite to the fact that the London Boroughs Association informs me that the average amount paid in rates by householders in the London area is about 70 per cent. above the amount paid elsewhere in the country and that, although Londoners were assisted this year, it is probable that the amount will be between 72 per cent. and 73 per cent. in the coming financial year.
Mr. George Cunningham: Say it again.
Mrs. Miller: I will say it again: the average amount paid in rates by householders in London is 70 per cent. more than the average paid elsewhere in the country, and in the coming year it will probably be between 72 per cent. and 73 per cent. more.
However much redistribution takes place, it is noticeable that the Minister has said that it must be done gradually, and so it has been acknowledged this year in the rate support grant settlement by giving an extra ½ per cent. to London. I am not very good at mathematics, but on my calculations, taking the figure at between 72 per cent. and 73 per cent. next year, at the rate of ½ per cent. it will be about 150 years before London gets its fair share of the needs element, and the gradual change will have taken place.
Great efforts have been made by the London Boroughs Association, and it is to be congratulated on having achieved a formula which satisfies inner and outer London boroughs alike. If this kind of co-operation continues, as the needs element is recognised more effectively there may be a general improvement in relationships between local authorities. The trouble is that the people of London are hard pressed. Cost limits have been imposed on the National Health Service, with the consequent closure of an unknown number of hospitals. No consideration has been given to the serious health problems and the problems of morbidity in the London area. A new word has been coined in our language in the last few months—RAWP—the
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allocation of resources in the health service. This has not even been reflected in the cuts in services to Londoners, who face the prospect of even more serious cuts in their health services. This is serious in an area with such severe social problems.
Another threat is in wait for Londoners of which I hope the Minister will take particular notice. There is a seemingly innocuous Bill entitled the Water Charges Equalisation Bill. The Government should be warned that the careful work done by the local authority-controlled Metropolitan Water Board to provide good and adequate services for London could well be undermined. Londoners could be severely disadvantaged by the Bill's proposals. It would be most unfair if they had to carry the burden for authorities which have been so concerned with saving rates that they have overlooked the provision of proper services to their residents.
Mr. Ronald Brown: Will my hon. Friend underline the fact that only a small proportion of Londoners in the inner city areas will have to pay the extra 7 per cent?
Mrs. Miller: I agree. The root of the problem is that in all the inner urban areas it is the poor people who carry the lion's share of the burdens. For this to be even contemplated when there is a consultative document before the House on the future of the water industry seems to be beyond the imagination.
I refer briefly to the general problems of local authorities. I realise that throughout the country they have severe problems to tackle. The cuts in social services amounting to £26 million will bear very heavily and tragically on the elderly and the disabled. For example, the Government have given guidance to protect field and domiciliary social services at the expense of residential care. That is terrible. It is incredible that any Government claiming to have a conscience, particularly a social conscience, should say, when local government cannot take on more social workers because it has not the means, that residential care should be cut in favour of domiciliary care and not provide the funds for domiciliary care to be made available.

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However sympathetic the Government may have been in the rate support grant discussions, there are still many faults, and unfortunately it is too late for us to rectify them this year. I hope that thought will be given to this matter in the coming year. As one who has served in local government and is proud of the local government system, I hope that the Government will not go too far in undermining the right of local government to make its own decisions, to choose how to spend the money it raises and how to use its balances.
As the Secretary of State said, local government is, in the main, responsible and responsive and has shown itself to be so—far more, perhaps, than some of the people who produce to the House non-estimates of public expenditure, and it is difficult to get to the root of the reasons for them. I hope that this debate, which, in the main, has not been party political, will be of help to the Government in their future discussions with local authorities.
8.28 p.m.
Mr. Timothy Raison: The hon. Member for Ilford, North (Mrs. Miller) has spoken up for London, and I do not blame her. She spoke as much for her old local authority as for her present constituency, and again I do not blame her for that. The only point I would query was when she spoke about health provision in London. London seems to be suffering from the problem of over-provision in that respect. In Buckinghamshire we suffer from a sheer lack of provision due to our expanding needs and because of the fact that resources are not keeping up with those requirements.
I speak primarily in this debate as a Buckinghamshire Member of Parliament, but I shall seek to make a number of general points about the order. I regard the Rate Support Grant Order as a shabby set of provisions. I do not grumble at the reduction, because I believe that the Government are right to reduce the percentage from 65½ per cent. to 61 per cent., and I make no complaint about that. I grumble at the method of distribution used in the order. I also grumble at the fact that the Government's policy will damage thrifty local authorities.
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The Government are not looking seriously enough at the possibility that something can be done about this problem. The Secretary of State for the Environment said blandly that we cannot do anything about the situation without interfering in great detail in the local authorities. But Schedule 1 of the order sets out in enormous detail the "additional factors" so-called. It lists all the things such as number of acres, number of children and other elements. I cannot understand, and I hope that the Minister will explain, why it is possible to set out these factors in the schedule and yet not to move to a genuine assessment of needs.
I believe the right way to approach the matter is not as is done at present. I believe that the base rate of support grant should not be related to what local authorities spent in the previous year, with something added on top. The right way to go about the matter is to have a genuine needs element and a genuine assessment of local needs, and to concentrate on that and forget what local authorities spent in the previous year. I hope that the Government will explain why it is not possible to do this. This does not seem to be interfering in any sense with local democracy.
The hon. Member for Stoke-on-Trent, North (Mr. Forrester) and others have made it clear that the main objection to the order is in its excessive unfairness to the shire counties. My right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) also set out this matter eloquently. This policy has been presented by the Government in a way that conceals the toughness of the decisions that will have to be taken by some local authorities. The Government in the last few months have tried to shift the blame for the inevitable repercussions from their own shoulders to the shoulders of local authorities. I have principally in mind Conservative local authorities.
Let us examine the impact of the order on Buckinghamshire. Buckinghamshire ratepayers have had a tough time in the last few years. The prospects for next year are grim. I have already said that I do not grumble at the reduction in the overall total of rate support grant. If the Government had not changed the formula from last year, the effect of the

787
reduction would have been to leave the county £5·4 million worse off. Because they have changed the formula, we shall lose much more than that amount compared with the previous year. As a result of the new bias in the formula, no less than £9·7 million is the figure by which the county will be worse off as compared with last year's formula. We are talking about a total expenditure of nearly £100 million and that is a heavy burden.
What rankles in my county, and indeed in others, is that we have toed the line. We have already economised sharply, yet we have obtained no reward whatever. The situation now is that if the Government's advice is followed and we run down the balances to 5 per cent. of gross spending, and reduce earlier expenditure forecasts by £5 million and at the same time take up all the options for reductions, it might be found possible to hold the general rate rise to 20 per cent. and the domestic rate to 30 per cent. These are steep figures of rate increases and they are accompanied by the inevitably severe reductions in services.
The most appalling moment in the Secretary's speech today was when he said, "If you do not like it, all you have to do is to put up the rates". It seemed a particularly cynical remark coming from a Government who are allegedly anxious about the social contract. We have a grim picture before us.
The rate of inflation is soaring while the incomes policy has the effect of holding down the pay of a vast number of my constituents. There will inevitably be a big and damaging effect on services.
What makes us bitter—as I said in an earlier intervention—is the bland way in which the Government keep talking about averages and then slide over the fact that there are bound to be big variations in those averages. For example, in the Secretary of State's rate support grant speech to the Consultative Council, he said:
"We have also taken the view that the average domestic ratepayer should not have to face rate increases greater than the expected increase of cuts through general inflation."
Later in that speech he said:
"The national average increase in domestic rates should not be greater than 15 per cent."
But in Buckinghamshire the figures will be way above that. I believe that other
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hon. Members from other counties will say that in their counties there are still greater increases.
We are faced with cuts, and the question is: what do we cut? We can fairly say that we get precious little help from the Government on this, but the cuts we have to contemplate are grave. I am as deeply concerned as the hon. Member for Ilford, North about the impact on the social services. One cannot help but be concerned. In the neighbouring constituency to mine—Buckingham—the local authority is apparently unable to provide the fire engines necessary for the new town of Milton Keynes.
Above all there is bound to be a heavy cut in education. It may be that one can save a bit by cutting down on administrative expenses, and I welcome that. It may be that one can save a bit on school meals and so on. That is a perfectly sensible thing to do. But the fact remains that the size of the cuts—about £5 million—likely to be borne by education can be achieved only by shifting teachers around and by making them redundant. It worries me that the Government will not accept responsibility for the fact that redundancies will be caused. It is the failure of the Government's economic policy which is bringing about those redundancies.
It is disgraceful that the Secretary of State should be trying to shift all the blame for this on to the local authorities. It is regrettable that the Chancellor of the Exchequer tried to give the same impression in the debate yesterday. The House may recall that on 22nd July the Prime Minister, at Question Time, acknowledged that there would have to be redundancies. Indeed, he made it clear that he believed that there should be redundancies. Ever since then the Secretary of State has been trying to duck the issue. In correspondence with me he refused to say that he endorses what the Prime Minister said. I believe that he has behaved very badly. As my hon. Friend the Member for Henley (Mr. Heseltine) said in his spirited speech, the upshot of all this is quite simply that the already discredited rating system is becoming more and more discredited.
We all know that one of the great difficulties here is the incredible complexity of

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the rate support grant system. I do not know why the Buckinghamshire rate support grant has dropped by quite as much as it has. I doubt if anyone can explain in detail—perhaps one or two boffins in the Department of the Environment could—what is the impact of the rate support grant. I doubt whether they can explain the equally great disparities in other parts of the country. But I am sure that too little allowance is made for a growing population.
So there is a formula which nobody understands, and its very incomprehensibility makes it easier for the Government to manipulate the rate support grant system. This constant manipulation is undermining confidence in the rating system as a whole.
We have from the Government a policy which sounds constructive and sensible, that is, a policy of trying to help inner city areas. I agree with my hon. Friend the Member for Henley and other hon. Members on both sides that inner city areas have very grave problems, but I seriously question whether the rate support grant, used in the present fashion, is the right means of redistributing income to help the inner city areas. In some respects the inner city areas are already much better off in the provision of services. They are not having to skimp on services in the same way as areas such as my own county are having to skimp.
When I recently went to a conference attended by local government representatives, I could not help being struck by the fact that north-eastern authorities sent large delegations. It was the sort of conference at which representatives could get their local authorities to pay for the cost of their travel, their hotel bills and so on. The north-eastern local authorities were able to send large delegations, but the rural counties were conspicuously absent because they are having to scrutinise every penny in a way that does not apply to some urban areas.
Even if the Secretary of State is trying to push more money into urban areas because they need more services, it seems rather paradoxical that the money is then used to keep rates down rather than to provide those services. Perhaps it is sensible and helps people more if they have money in their pockets and less in the way of services—one could argue that—but,
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although the object is to try to produce additional services in these areas, that is not what happens. The money goes towards keeping down the rates.
Of course, rates overall are bound to be part of the system of redistribution, but I believe that the rate support grant is a peculiarly arbitrary way of doing this. For example, if one is a rich person living in, shall we say, Sutton Coldfield or some other salubrious city suburb one will do well out of the Government's system, but if one is a poor person living in Buckinghamshire or some other county one does badly. This seems grossly inequitable. It shows that the rate support grant is not a good method of redistributing income in that sort of way.
Councils cannot redistribute income and wealth in their own areas. If a council had the money it could effect a major transfer of income from the rich people in its area to the poorer, and, although one could argue about that, it would at least be some kind of justification for this particular mechanism for redistribution, but because of the nature of the rating system the money goes to everyone in, say, the city of Birmingham, whether rich or poor, and does not go in the same way to everyone in rural areas.
The Under-Secretary of State for Wales (Mr. Alec Jones): I am sure that the hon. Gentleman will realise that, if one is trying to compare the position of a rich person in one area and a poor person in another, no one suggests that the rate support grant is the right method. But, surely, that is why successive Governments have supported the idea of rate rebate schemes.
Mr. Raison: I agree that rate rebate schemes come into it, but they affect only a limited number of people. What the hon. Gentleman said does not meet my point that the rich residents of authorities that contain inner city areas do well out of the system but poorer people elsewhere do badly. That seems quite incontrovertible and is a serious criticism of the present system.
What is the relevance of the unemployment factor? My hon. Friend the Member for Henley made some pertinent points about what has been happening to unemployment in the past year or two. It is questionable whether the unemployment factor is a valid element, because

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unemployment produces few extra burdens on local authorities. It produces huge burdens in other ways—I do not seek to decry that—but the actual amount of extra spending entailed for local authorities as a result of unemployment is minimal. There may be a little in the careers advisory services and so on, but it is not a genuine factor in local authority spending, and the elements in the rate support grant should all be directly related to local authority spending.
The truth about this Rate Support Grant Order is that it is a highly political order, with next year's elections very much in mind. The Secretary of State was thoroughly disingenuous about this. The political facts of the matter are that the Government are desperate to hold on to some of the metropolitan counties where there will be elections next year, but they will fail. We shall win at least a majority of them. It is quite evident that in constructing this year's rate support grant the Government have decided to pour money into those areas in order to try to hang on to seats. At the same time they are reducing the money to be sent to the counties that are largely Tory-controlled and that they know they cannot win anyway. They hope that the Tory authorities will carry the blame for the big rate increases.
There is no doubt that the Government are manipulating the Rate Support Grant Order for directly political ends. If the Secretary of State had been honest, he would have included in the rate support grant formula the needs element, the resources element, the domestic element and the new electoral element.
8.46 p.m.
Mr. George Cunningham: I have enough respect for the hon. Member for Aylesbury (Mr. Raison) to know that he does not really believe the last part of his speech.
I am at least the third hon. Member from an English constituency who has so far spoken in this debate while there has been no Minister from the Department of the Environment present on the Treasury Bench. I know that a Minister from the Welsh Office will wind up tonight,
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but looking round the Chamber now, among those wishing to speak, I can see no Welsh hon. Member apart from the Minister. The other hon. Members who will speak will, presumably, be those who represent English constituencies. It is therefore necessary that there should be a Minister from the Department of the Environment on the Treasury Bench.
Mr. Raison: Another odd thing about this is that, although the order covers the transport supplementary grant as well as the rate support grant, no Minister responsible for transport has appeared in the Chamber today.
Mr. Cunningham: I will not comment on that. One has to draw the line somewhere, and I am not sure whether I agree on that point. I hope that my message will get through. When there is a debate in the House that largely concerns the Department of the Environment—no matter what reasons there may be for Ministers being elsewhere—at least one Environmental Minister must appear on the Treasury Bench, even if he has to starve for seven hours to do it.
I do not believe in asking Ministers for favours. They have committed a grievous affront to me and to other hon. Members. My practice is to wreak my own vengeance in my own way, and I will do that. I hope that the message will be received by Ministers that this behaviour must not be repeated. I hope that you, Mr. Speaker, will use your influence to ensure that when the House is debating a matter of this sort a Minister from the relevant Department appears on the Treasury Bench to listen to it.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Perhaps I can help the hon. Member for Islington, South and Finsbury (Mr. Cunningham) in this matter. The question of which Ministers should be present, if any, has nothing to do with the Chair.
Mr. Cunningham: I know that that is technically correct, but I can recall occasions when the Chair has intervened on such matters in order to ensure that debates take place with the relevant Ministers present. I do not accept that debates in this Chamber are not a dialogue between hon. Members and the

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Government and that in many cases the Government are irrelevant because we should be talking to each other and trying to win each other's votes.
I am glad to say that my highly respected colleague, the Minister who is responsible for housing, has now appeared on the Treasury Bench, but I still wonder why his Department was not represented there for between 20 minutes and half an hour. It had better not happen again.
The hon. Member for Henley (Mr. Heseltine) made a great deal of the point that authorities that have exceeded the base line for expenditure in the previous year are not in this rate support grant being specially penalised. I know the resentment that that causes to some people, but I wish that he and others who make this point would recognise the practical difficulties that any Minister from any party would face in attempting to impose such a penalty. [Interruption.] I am embarrassed by the number of Department of the Environment Ministers now present, but it is no more than right.
It should be recognised that if it is possible to have a base line for the crude control of expenditure that takes account only of past expenditure it is not possible to have a system that imposes a penalty on authorities that overstep that line. It would be like saying that the relative expenditure of various authorities must be frozen for all time at what it stood at a year or two back. If the Government are trying to help, for example, inner city areas there will be higher expenditure by those authorities than there was in the past. If the Government try to hold down that expenditure to a base level related to past expenditure, no flow of expenditure between one kind of authority and another will ever be possible.
Overspending above the base line of the past is not by definition wrong, and, if my right hon. Friend did what he was urged to do, there would be no substitute for his having to say, for example, that Birmingham could spend so much and Islington could spend so much, and having a figure settled for every authority in the country.
Mr. Ronald Bell: I understand what the hon. Gentleman means, but what my
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hon. Friends have been saying is that no regard is had in the formula to the spending of the authority in the past year as an indication of its needs and resources. The counties were asked to run down their balances to approximately 5 per cent. of their gross spending. Those that have done that in response to the Government's request are now in a very thin position. Authorities that have not done that—mainly the inner city authorities—are sitting in a nice position. No account is taken of that in the present formula.
Mr. Cunningham: I understand that. It is sometimes extremely hard for an authority that has laid itself out to pare away to see another authority that has been irresponsible going ahead. But the fact that an authority has increased its expenditure is not in itself a sign of irresponsibility. One authority that has increased its expenditure might be irresponsible, and another might be behaving responsibly in having done so. Therefore, it is necessary to have a tremendously sophisticated base line—as sophisticated perhaps as the needs element, which is complicated enough—or something close to it. It is not as easy as the hon. Member for Henley suggested.
We should recognise that central Government now bear two-thirds of the cost of the most massive element in local authority expenditure—staff salaries. The time is coming, if it has not already come, when central Government cannot remain as detached as they have been in the past from the settlement of the levels of local government staff salaries and numbers. God knows, if central Government get into that business it will be extremely difficult and embarrassing, and the question of local government independence will certainly arise.
I cannot see how it is possible for us at national level to continue to be responsible for bearing 60 per cent. of the cost of salaries—and bearing the costs of the increase in numbers of local authority personnel—when we say that we shall not directly influence the levels at which those salaries are set.
My hon. Friend the Member for Ilford. North (Mrs. Miller) drew attention to the relationship between the amount spent in rates outside London and in London. Having listened to the debate, apart from my hon. Friend's remarks, one would have

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thought that London ratepayers were spending much less on rates than those outside London. The figures bear repetition. Those that I have taken are probably drawn from a different year than the one to which my hon. Friend's figures relate, but my figures are bad enough.
Outside London the average domestic ratepayer pays £94 a year actual cash. Inside London the average domestic ratepayer pays £148 in cash. That is 57 per cent. more than outside London. The expectation is that, if all the authorities in the country were to have an average 15 per cent. rise, the London rise—because of the arrangement in this rate support grant—might be about 11 per cent. in this coming year.
If we applied that sort of increase in London, there would be a very slight coming together of the figures. But on this year's showing the London cash figure would still be 54 per cent. higher than expenditure outside London. No one can argue that London has in the past been, or will be next year, massively sub-sidised by areas outside London.
In the past London has had far less than its proper share of the needs element. I know that it has its so-called excess resources some large part of which we are permitted to keep by this order, but our problems are excessive compared with those of most other areas and the needs element distribution in the past has not reflected that.
I want to mention the proposed water charge equalisation scheme. There will be great resentment about that in the areas that have to pay for it. The only good thing about it is that it attempts to equalise the cash incidence—not rates in the pound, but cash incidence—of the charge. That is a concept that some of us in London have been trying to get accepted as a legitimate one for a considerable period. It is one that the Secretary of State has gone some way towards recognising and accepting in this order. Here is another little precedent that we shall use in future.
Mr. D. E. Thomas: With regard to the water charges equalisation scheme, the hon. Gentleman should be aware that he has got away lightly because many of us would have liked to
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have seen a realistic economic charge made for water taken out of the areas of the Welsh Water Authority and used in other water authorities. The equalisation scheme will ensure that a far lower rate of return is made for water impounded in Wales than there would have been if some of us had been making the charge.
Mr. Cunningham: I hope that the hon. Gentleman will understand when I say that he knows better than most that Wales is not a natural water area. Some parts have a water surplus and some have not. The hon. Gentleman should remember that the whole of Wales receives a domestic rate subsidy virtually twice as great as the domestic rate subsidy that England receives and that England receives only two-thirds as much as Scotland. If we were not to go ahead with that scheme, there would be a slight offset with the advantage which Wales possesses.
The needs element coming to London next year is extremely modest—a rise from 19 per cent. to 19½ per cent. It is so modest that the Secretary of State preferred not to mention the figure in his speech. As he said, it confirms the shift of last year. It does not increase it, except to an insignificant degree. It will be necessary in future years to proceed with the rectification of past errors which have denied to London the amounts which it ought to receive in the needs element.
The Secretary of State is entitled to my congratulations and thanks because in this rate support grant he has abolished the old London rate equalisation scheme. There will still be one, but nothing like the old one. I am glad to throw some dust on the coffin of the old scheme. I thought that it might take another year to get rid of it. I am as pleased as I am surprised that those who were so bitterly opposed to the change 12 months ago now seem to find themselves strongly in support of it and will no doubt be supporting it tonight. That goes for some of the people in the London Boroughs Association and in the Department of the Environment.
One of the features of the new arrangements which is particularly welcome is that the London boroughs will be treated

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on a more individual basis. I have always taken the line that in local government financial matters London does not exist. The boroughs exist. The amount of local authority expenditure which is managed on an all-London basis is about 25 per cent. to 30 per cent. The rest is controlled by individual boroughs. The arrangements in this rate support grant base themselves more on the separate needs of the boroughs and the separate excess resources, if that is the word, of the individual boroughs. That is to be welcomed.
However, in this new order there are elements from the old régime. I understand that it will take time to get rid of them. But I make the plea that work should start now to ensure that the removal of the illogically based equalisation arrangements continues in next year's rate support grant. The indications are that what we are doing tonight will benefit outer London more than inner London. No one knows the exact figures, because they will depend on the rates levied and how much additional expenditure particular authorities care to indulge in. But, making the same assumptions about each authority, outer London seems likely to be better than the national average by about 4 per cent., whereas inner London will be better than the national average by about 2 per cent.
Regarding the intra-London situation, we have not done anything of enormous advantage to inner London compared with outer London. That is the argument for proceeding with the eradication of the intra-London equalisation arrangements which remain in the present rate support grant.
However, this is a good basis for the future. I think that there has been a great breakthrough in recognising that London is a collection of boroughs rather than one local authority. I see in the rate support grant this year a perfectly good basis for proceeding with even better arrangements next year.
9.5 p.m.
Sir David Renton: The hon. Member for Islington, South and Finsbury (Mr. Cunningham) gave the House a vivid view of the needs of his own constituency. But I ask him to bear in mind that the problems of his
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borough would be even greater but for the fact that many people who formerly resided in it have over the last 15 years or so come to my constituency—and very welcome they are. But their coming has added to the financial problem of the local authorities of my constituency, and I ask the hon. Member to bear with me while, by way of contrast with what he said, I describe some of the difficulties that we are experiencing so that he and other hon. Members may judge whether the Government's attitude in this matter is equitable.
My main complaint is about the preference given to urban authorities at the expense of the non-metropolitan counties. When this rate support grant comes into operation next year, the result will be that Cambridgeshire will find itself deprived of £10 million which it might otherwise have had and that the Government's proposals could involve an increase in rates of up to 23 per cent.
It so happens that the county of Cambridgeshire is the fastest growing in the United Kingdom. In that county, I represent Huntingdonshire—still called that as a parliamentary constituency although no longer an administrative county—which contains the whole of Huntingdon District plus part of Peterborough. Those two parts of Cambridgeshire are the fastest-growing parts of Cambridgeshire and of the whole country.
The fast growth is due partly to immigration as a result of the Town Development Act and, in the case of Peterborough, the New Towns Act. It is due also, to an extent, to ordinary growth, which I can only call "magnetic" growth because this is an attractive area, which is expanding rapidly. It is also due to our having about the highest birth rate in England. The combination of these factors produces great social and financial problems for the local authorities, especially in education, as my hon. Friend the Member for Aylesbury (Mr. Raison) pointed out.
The other side of the coin is that those developments under the Town Development Act and the New Towns Act are intended to ease the problems of the metropolitan authorities by passing them on to the receiving authorities. That sort of development is the main cause of our problems.

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Under the Town Development Act and the New Towns Act some financial help is given towards housing and infrastructure but not towards education. This enormous education burden has been increasing rapidly for some years and is still increasing fast. It is largely in relation to that burden that the rate support grant is so important for us.
It is most unfair that even those cities, including London, which shift their problems on to the counties should be better treated than us for the purposes of the rate support grant. It is not disputed by anyone that there are problems, and sometimes very acute ones, for the urban areas but the rate support grant is not the best way of solving these problems financially, especially when it means helping them at the expense of those authorities which are already trying to help solve part of the problems.
Cambridgeshire spends less per person than the average non-metropolitan county. I do not have a comparative figure for the metropolitan authorities. Our assessed needs increase, as they are bound to do, through the large number of children of school age. The net result of the method of calculation chosen by the Secretary of State is, therefore, that the fastest growing county appears to be suffering the greatest reduction of grant, and that is because, without going into all the complicated matters involved, a statistical quirk which has a flavour of gerrymandering is taking pride of place and is pushing both equity and logic into the background.
Mr. Shore: The right hon. and learned Gentleman used the phrase "a flavour of gerrymandering". Would he care to substantiate that? It is not the language that is normally used.
Sir D. Renton: I do not want to repeat what my hon. Friends have already said with great force and clarity about the remarkable coincidence of the help given to those constituencies which are represented by Labour Members compared to those which are represented by Members of other parties. Are we asked to assume that there is nothing whatever in this?
Mr. Shore: Yes. All the facts are fed into a computer. I do not know whether
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the right hon. and learned Gentleman has any idea what a computer does with these massive loads of facts—
Mr. Nicholas Winterton: What is the programme?
Mr. Shore: Come, come!
Sir D. Renton: If a computer has produced this remarkable coincidence—
Mr. Sainsbury: Is my right hon. and learned Friend familiar with one of the best-known expressions of the computer world—GIGO? It means "garbage in, garbage out".
Sir D. Renton: I do not have the experience of or the faith in computers that some people possess. I was about to suggest that instead of putting his trust in computers which produce the most extraordinary statistics which financial statistics experts and the local authorities find it exceedingly difficult to fathom, the Secretary of State should act in accordance with a simple assessment in accordance with equity and social justice applied to the needs of different areas.
If the inner city areas need special treatment of a quite different character from that given to the counties, there should be other ways of helping them. After all, those areas which are particularly affected by the rapid Commonwealth immigration of the last 12 years or so are entitled to special financial provisions. That is the right way to handle those sorts of problems. It is done through us all as taxpayers but to afflict innocent ratepayers in the non-metropolitan counties in the way that is proposed, especially when they have problems of rapid growth, seems to me to be quite wrong. If that is the answer that the computer is giving, I suggest that the right hon. Gentleman tries another method.
Another factor but of a felicitous nature—I agree that it is marginal and not as important as education—is that we tend to be very long-lived people in Huntingdonshire—indeed, that applies throughout East Anglia. We have to spend plenty of money in caring for the aged. I should not like to see a reduction in the services that are provided for them.
There are many matters that require increased expenditure in these hard years

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of inflation. The local authorities are faced with a choice of three evils, plus one option that I do not regard as an evil. They can increase the rates up to 23 per cent. I gather that is the figure that has been given by the Government. Alternatively, they can raid their dwindling balances, not ignoring what the Government may order them to do by way of maintaining them. In fact, their balances have dwindled since the reorganisation of local government. Thirdly, they can cut services, or slash them, if "slash" is preferred. I must point out that the county police forces have already been slashed to the bone, including the Cambridgeshire force.
There are therefore the three options, each of them involving a choice of evils. Perhaps a bit of each of them will have to be chosen. The further option is one that I should not like to discourage. The Secretary of State would not wish it to be discouraged, either. It is the option of the authorities trying to look for further economies. They will be forced to do that if salaries in local government are to be controlled, negotiated and imposed from the centre. If salaries increase sharply—we know that there are pressures in spite of the Government's wages policies—the authorities will have to make further economies and certain personnel redundant. I should not wish to discourage the Cambridgeshire County Council or other authorities operating in my constituency from making whatever economies they have to make to try to prevent great increases in rates. Whatever they do, they will eventually incur the displeasure of the ratepayers.
The people should be told where the blame lies. It lies not with the local authorities, which are doing their best to provide the services that Parliament requires them to provide and which the people need. The blame lies with the Government, who have made inflation worse by overspending at the centre and have diverted to the cities too large a share of the rate support grant. That is most discouraging for the counties.
This is an unsatisfactory method of procedure. I know that the rate support grant system has continued for a long time and that it is purported to have been negotiated by all concerned, but the process takes place a long way from Parliament. We are presented with a fait
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accompli of a most complicated sort in an order which, in effect, alters the law. We have no control over it. We have no opportunity of amending. Those of us who are involved in the interesting work of the Select Committee on Practice and Procedure—as is the hon. Member for Islington, South and Finsbury—should in due course come to consider whether it is right that the law should be changed in this way, and whether it is right that Parliament should be presented with this sort of fait accompli, especially the sort that we have on this occasion.
9.20 p.m.
Mr. Ronald Brown: The usual standard of courtesy of the right hon. and learned Member for Huntingdonshire (Sir D. Renton) fell a little when he accused my right hon. Friend the Secretary of State for the Environment of gerrymandering. The right hon. and learned Gentleman followed a little too closely his hon. Friend the Member for Henley (Mr. Heseltine), who is a past master at that sort of thing. We remember his having to apologise for misleading the House. Therefore, I urge the right hon. and learned Gentleman not to follow the hon. Gentleman's practice, which is not nice.
I join in congratulating my right hon. Friend on the rate support grant that he has produced in the documents that we are considering. We have been fighting to secure London's rightful share of the grant for many years. In the early days we did not have so many eager beavers supporting us. We fought hard, but nothing happened until my right hon. Friend the Member for Grimsby (Mr. Crosland) took the point and introduced the London needs element into the analysis, thus producing the first fair result for London. Equalisation between the London boroughs, which had been carried out because of the inequities, was then no longer necessary. This year my right hon. Friend the Secretary of State has been able to make the decision towards which we were all working.
My hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) referred to the absence of my right hon. Friend at one point. What intrigues me is that all the London Conservative Members are absent. Where are the hon. Members for Hampstead (Mr. Finsberg) and St. Marylebone (Mr.

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Baker)? One would have expected them to be here, commending my right hon. Friend on his work for the London boroughs, which has received the support of Labour and Conservative boroughs. We do not even have with us the London Front Bench spokesman for the Opposition, the hon. Member for Hornsey (Mr. Rossi), who could give his colleagues help and guidance about the importance of London.
Apart from my hon. Friends the Members for Islington, South and Finsbury, and Ilford, North (Mrs. Miller), we have heard from no London Member. London Conservative Members recognise the value of the order, but have chosen to stay away and leave it to their hon. Friends to pretend that London is being given an unfair advantage. The right hon. and learned Gentleman spoke of the rich people of London gaining, but my hon. Friends pointed out the facts.
I should like to take the matter a stage further. Opposition Members were able to have the figures that they gave because my right hon. Friend has continued the clawback principle of 1975–76 and 1976–77. In 1976–77 he will have clawed back £210 million and in 1977–78 he is to claw back £403 million. Whereas in 1976–77 the figure was only 33⅓ per cent. of the so-called resource advantage, by 1977–78 it will be 62½ per cent.
Sir David Renton: Perhaps the hon. Gentleman would wish to make sure whether he should give credit to his right hon. Friend or his right hon. Friend's computer.
Mr. Brown: I am not concerned with discussing the question whether my right hon. Friend did it with his matches, which was the 1963 method of doing these things, or with up-to-date machinery. The right hon. and learned Gentleman must remember that London is still not receiving what it is entitled to. All that the rate support grant has done is to show London what it should have. What London is getting is very much less than that.
Some tribute could have been paid by Opposition Members to the fact that London is not to get what it is entitled to, for the third year running. It is a little unusual to hear hon. Members
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opposite constantly referring to rich London and profligacy and overspending by London when I have shown that London is not getting what it is entitled to. My hon. Friends have shown that the amount of rates paid in London is far greater—twice as much in some cases—than that paid in areas for which hon. Members opposite have spoken.
Mr. Stephen Ross: This is the second time we have heard that statement. Surely the situation is a reflection of the fact that there are higher rateable values in London. The people there do not have commuter fares to pay, and the cost of living is higher in London than in my constituency.
Mr. Brown: The hon. Gentleman's assumption is not correct. Very many of my constituents do not work in London. London is losing work. Many of my constituents have to travel to outer areas. The person living in a two-bedroomed flat in my constituency is paying more rates than hon. Members living in the shire counties in their mansions. I have been through this story many times, and I would be happy to give the figures. I can show them that a council flat in my constituency pays far more in rates. That must be taken into account.
In paragraph 45, the order gives the impression that the London boroughs are happy to accept that there is justification for the clawback in their case. But the London Boroughs Association has informed me that it does not accept that the clawback is justified. It says that it appreciates that there has to be some gradualness in the matter and that it is prepared to co-operate in the exercise, but it would not like it to be thought that it believed the situation to be just. It believes it to be unjust to the people of London.
I pay tribute to the local government people who have worked so hard on this matter, including Sir Robert Thomas, of Manchester, and Sir Lou Sherman, of London. They have worked very hard with the Department to get a Rate Support Grant Order which is as reasonably just as possible to everyone. However, the rate support grant will never be absolutely just to everyone.
Over the years, my hon. Friends and I have complained bitterly about London's

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situation, but we never heard from hon. Members opposite in those days when we were unable to get justice for London. We did not hear then the arguments which they have adduced tonight. It was we who were adducing them then. Hon. Members opposite did not care because it was not happening to them. They were not suffering in the sense that London was and still is suffering. Now they are grumbling because they think they are not getting everything that they think they should have.
The hon. Member for Henley said that the London borough of Havering assumed that it was going to get £700,000 more than it is getting. That was an odd piece of accountancy. It started off in September with an assumption for the following April. Those of us with experience would not have made the fundamental error of assuming in September, long before the grant had been determined, that one would get £700,000 more for the year beginning the following March.
We understand the reason for the claw-back, but the important thing for us is the so-called excess resources of London, which are quoted frequently. But if we in London were to exploit our rateable resources, we would have such an intolerable rate burden—which is already much higher than in the rest of the country—that we could not possibly contemplate such action.
Therefore, the resources in London are purely paper resources. They can never be used. The rates being paid in my constituency by ordinary working-class people are already far too high. To try to exploit rateable values would make things impossible for them. I hope that the House will understand that the resources in London can be only a guide. They cannot be used to try to prove that there is a reservoir of financial opportunity of which local government in London is not taking advantage.
I do not wish to delay the House for much longer. I am satisfied that for this year my right hon. Friend has attempted to be just. I resent the imputations from Opposition Members. I have had my rows with my right hon. Friend. We shall be having another row on the Water Charges Equalisation Bill. I, too, dissent from it. Once again, we have heard not
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a word from the Opposition about that, not a sound about what is unfair in that Bill. In my constituency—and in my right hon. Friend's constituency—which is already burdened with the increased costs of this industry, people will have to bear very much higher rates in the pound than they bore last year, and soon they will be asked to suffer a further burden—but only those who happen not to have a metered supply and who are in the old Metropolitan Water Board area. All the private companies within London are being exempted. Industries that are metered are being exempted. All the commercial premises that are being metered are being exempted. Therefore, the burden will fall on only a very limited number of people. In my view, they are not able to bear it.
In conclusion, I put my right hon. Friend on notice that although I congratulate him very much on the way in which he has attempted to be fair in this rate support grant, I must tell him that I hope that he has second thoughts about bringing forward the Water Charges Equalisation Bill and will not put many of us in the difficult position of having to challenge him on the Floor of the House in that respect when we realise that he has worked very hard to help us in this respect.
Several Hon. Members rose——
Mr. Speaker: Order. Perhaps I may explain my difficulty to the House. Thirteen hon. Members and one right hon. Member wish to speak in the debate. I presume that the winding-up speeches will probably begin at 11 o'clock. I have just indicated to the Front Benches a quarter of an hour each for them. Even so, it will be exceedingly difficult to call everyone who still wishes to speak, so I appeal for shorter speeches if possible.
9.33 p.m.
Sir John Hall: I hope that the hon. Member for Hackney, South and Shoreditch (Mr. Brown) will understand if, in view of Mr. Speaker's request, I do not follow what he has said, except to comment on the Water Charges Equalisation Bill and to say that many Members who have constituencies in the Thames Water Board area will be happy to join him in any opposition that he Wishes to put forward against that Bill when it comes before the House.

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I support the Secretary of State in his efforts to reduce and control local authority expenditure. I agree at once that one cannot do that without it causing some pain. I remember that when I made my maiden speech I quoted from Colbert. The art of taxation is like the art of plucking a goose. One has to try to pluck it with the minimum number of squawks from the goose. One gets many squawks if one increases taxation.
I am sure that the Secretary of State would agree with the old maxim that taxation, to be acceptable, must be seen to be fair. That is a maxim that is honoured more often in the breach than in the observance, as can be seen by the protests and the avoidance of taxation which occur in this country, which is a commentary on the fairness or unfairness of the fiscal system, to which we take exception. But the unfairness of the income tax system is as nothing compared with the unfairness of the rating system. The rating system takes very little account of ability to pay. It falls with different ferocity on various areas depending on the way in which the rate support grant is to operate, and except on very limited occasions it is almost impossible to avoid.
I make no excuse for returning to a point that I made earlier in an intervention when I referred to the effect on local authorities of the Government's penalisation of the "just and the unjust fellow", to quote an old poem, to which several Opposition Members have referred already.
I wonder whether the Secretary of State understands the effect upon councillors of what seems to them this very unjust reaction of the Government. Buckinghamshire and other councillors have tried hard to meet the Government's demands and to keep their expenditure within the guidelines laid down. They have had agonising conferences with other councillors and officials. In many cases, they have incurred a great deal of local unpopularity following the cuts in essential services which they have had to make. Now they find that they need not have bothered. It would have been much better if they had done nothing of the kind and had gone on, not spending extravangantly but maintaining their services as they were without incurring the
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odium involved in trying to restrict and economise, because they find councils and authorities which have done nothing are penalised no more than they are. That is the kind of injustice which creates bitterness.
The Secretary of State has said time and again that he expects the average increase in rates throughout the country to be about 15 per cent. We understand, indeed anybody who stops to think about it understands, that an average means that some will pay less and others will pay more. However, the average ratepayer, when he finds that the increase in his rates is not 15 per cent. but 30 per cent., will condemn not the Government but the local authority forced to impose the additional rate. The unpopularity will fall not where it belongs, on the Government, but on the local authority, which has little or no option, unless it drastically reduces its social services and the other services for which it is responsible, although in many cases it may have already reduced them to a point where, to reduce them further, will have the most serious effect.
Mr. Nicholas Winterton: Surely local authorities, just like private employers, cannot afford to do this because of redundancy and employment protection measures.
Sir J. Hall: My hon. Friend has a point.
The Government have attempted to justify the variations between the authorities by claiming that the formula which they use takes account of spending or expenditure needs. I refer the Secretary of State to the wise words addressed by the March Hare to Alice. The March Hare pointed out "To say what you mean is not the same as to mean what you say". The March Hare could have gone on to point out to Alice "To spend what you need is not the same as needing what you spend". The present formula is an invitation to local authorities to spend more this year so that they can get a bigger grant next year. It is a curious way of encouraging economy in local authorities.
The effect upon Buckinghamshire has already been clearly explained by my hon. Friend the Member for Aylesbury (Mr. Raison). Buckinghamshire, taking heed of the Government's request, has already

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cut back quite severely on many services—educational provision, administration, highway maintenance, which is giving hostage to fortune to the future, building maintenance and social services. With the cut-back of £9·7 million in the rate support grant, it faces the prospect of making savage and, to many people, unthinkable further cuts in the services for which it is responsible, or facing the ratepayers of the county with the kind of swingeing increase to which we have, unfortunately, become accustomed in the past few years.
Mr. Ronald Bell: My hon. Friend has mentioned the question of economies. Does he agree that when he refers to Buckinghamshire he means the county council? I believe that the balances maintained by the counties are, on average, 5 per cent. of gross spending, whereas the balances currently maintained by district councils are about 23 per cent. of gross spending. Therefore, the Government, through their formula, have forced the cuts and economies in county services, namely, education, welfare and highways, not merely last year, but this year.
Sir J. Hall: My hon. and learned Friend the Member for Beaconsfield (Mr. Bell) is correct. The cuts forced on the county council in the extremely important service of education are by far the most important. I am bitterly opposed to a reduction in the basic essentials of education. If we cut back drastically on educational expenditure, we shall pay dearly for it. This is the choice that will face the county, which must take such steps, or impose an increased domestic rate of between 25 per cent. and 30 per cent. on ratepayers.
My constituents ask me "How do the Government arrive at these extraordinary variations between metropolitan boroughs and English and Welsh counties? What is the formula?" One tries to explain the situation, but it is impossible. Even the experts in local authorities, such as the county treasurers and others, are unable to understand the situation. One can only come to the conclusion that the formula adopted is to think of a number and double it. Some of the variations appear to be incomprehensible. This is not a question that I have been able to examine carefully because the formula is beyond me. I have tried to find
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out how it works from those who are so-called experts in this area of activity, but so far without success.
My constituents also say "Are the Government imposing these heavy burdens on us because they think that Buckinghamshire is a rich county?" If this was suggested to the workers of High Wycombe, a manufacturing town, they would laugh in your face.
Many commuters in the Wycombe area have had to bear the brunt of the mortgage increases and have faced a number of savage rail fare rises in recent years. Many are finding it impossible to make ends meet since their incomes have been almost frozen and their tax burdens appear to increase all the time. This order will comprise another form of tax and the worst feature of this particular tax is that it has little relation to the income of the person affected.
Mr. George Cunningham: The average cash payment for rates in regard to domestic ratepayers in my constituency is £148 a year. What is the figure in the hon. Gentleman's constituency?
Sir J. Hall: If the hon. Gentleman is referring to the average amount of rates payable per household I would have to search my memory for the figure, but I think that the average in my constituency as a whole would be in excess of the figure mentioned by him, namely, about £150.
Mr. George Cunningham: It is much more than that.
Sir J. Hall: I may be wrong. I am quoting from memory. Apart from the effect of the rate increase on the individuals, the effect on small businesses is considerable. Many small businesses have been existing on the margins for a long time. This additional rate will push many of them over the edge. Small businesses are finding it impossible to meet continuing rising costs and this order will make the situation even more difficult.
To summarise the situation, it can be said that the vast majority of metropolitan districts are below and some well below the national average. The vast majority of English and Welsh counties are above the national average. The people of the shires will think they are being grossly discriminated against, and they will be right. The more cynical of

811
my constituents will believe that the formula has been adjusted for political reasons. Nobody who knows the Secretary of State will think that such a thought would enter his head.
I am sure that I can tell my constituents with authority that this has not been done for any political reason. It has been done as a result of a formula, carefully worked out, which I do not understand but perhaps someone else does. But it is not for political reasons and I would not accuse the Secretary of State of that.
I shall speak finally of my constituents in Buckinghamshire, who want to impress on the Secretary of State, if he needs impressing, that they feel unjustly treated. An illustrious son of Buckinghamshire, John Hampden raised the flag of revolt against the Government of the day because he objected to the ship tax. In common with other citizens he thought that a pernicious tax.
Today, we do not rise in armed revolt when we do not like a tax although we have far more reason to do so than had our ancestors. We try to adopt a more rational, reasonable approach and we try to convince the Government by argument that the taxes are unjust and burdensome. I hope that the Secretary of State will take these arguments into account and not force us one day to repeat past history.
9.47 p.m.
Mr. Arthur Blenkinsop: This is a natural opportunity for everyone in the House to raise his constituency problems. Rightly, hon. Members put before the House the way in which the rate support grant affects their constituents. What I find offensive is the way in which Conservative Members cloak their constituency concern in the enunciation of great principles when we are discussing practical problems. I should have thought that it was beneath at least some hon. Members to raise such cynical issues. Naturally, Conservative Members have expressed their dissatisfaction with the elements of the proposals that have been disadvantageous to their constituents. That is a perfectly natural and normal situation, but it is by no means exclusive to those on the Opposition Benches. As was pointed out, Conservative Members representing London constituencies, who are noticeably absent tonight, benefited as much as Labour Members representing constituencies in London.
Sir Anthony Royle: Perhaps the hon. Member has not noticed that the hon. Member for Richmond, Surrey is present.
Mr. Blenkinsop: Naturally one welcomes late arrivals, however late. The general point stands, however. Some ridiculous points were made by Conservative Members about the element provided for in the unemployment grant, as though that was benefiting only Labour-held constituencies. On the contrary, this applies throughout the country. The provision is not peculiar to one area.
The hon. Member for Henley (Mr. Heseltine) opened the debate in his usual superficial and swashbuckling style. He is not yet sufficiently run-in on this subject to understand some of the problems. I do not know how some Conservative Members have the neck to object to the complications of these grant proposals. They are always complex and difficult to follow, but at least these were presented in decent time. Our experience of the last Conservative Government was that they were not even available at the end of the ordinary financial year in March, and that the new authorities that were taking over still did not know in February or March of that year how they stood. They were faced with a problem of trying to calculate what to do with proposals as complicated as—or, in my view, more complicated than—the proposals that we have here.
Mr. Ronald Brown: In terms of cynical political decisions, I remind my hon. Friend that in those days those of us who were chairmen of finance committees were unable to find out from the then Department of Housing and Local Government what the rate support grant was likely to be so that we could make our estimates correctly. We genuinely believed then that it was being held back for political reasons.
Mr. Blenkinsop: That is absolutely true. The utter incompetence of the Administration of that time put an impossible strain on local authority staff and elected councillors. I am glad that, since we have had a change of Administration, this has never been repeated, and we have had proposals brought forward in good time to give Members of Parliament and local authorities proper opportunity to prepare their proposals.

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The orders impose a harsh but not insupportable discipline on local authorities. Any Opposition Member who imagines urban areas, such as my constituency, are receiving some measure of largesse from the Government is wildly mistaken. It is misleading for hon. Members to give the size of rate increases that may have to be imposed without taking account of the level from which the increases start. We are concerned with the total payment that has to be made. Urban areas, by their very nature and the nature of their problems, alas, start from a very much higher level of rate payments than do most of the areas represented by Opposition Members present. No one should imagine that urban areas are being favourably treated so as to encourage a vast new spending spree, or anything of that nature.
As my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) pointed out, it is very unwise not to recognise the real problems that any Government would face in trying to differentiate between local authorities which, it is said, have taken a responsible attitude towards their spending commitments and have attempted more than others to hold down the level of spending as against those which, as some hon. Members say, have been profligate. How does one determine profligacy? Over what period should it be determined? It would be unreal to take one year out of context with other years.
Sir Anthony Royle rose——
Mr. Blenkinsop: No, I shall not give way. I want to make sure that other hon. Members have an opportunity to speak, and the hon. Gentleman came into the Chamber only very recently.
It is essential to recognise the complexity of trying to examine each local authority's case. It would ultimately require the imposition of some diktat from the centre. That would perhaps be attractive to some, but it is unwise for Opposition Members to try to maintain that there is some principle here that is being disregarded by my right hon. Friend which would be perfectly practicable to carry through.
Some of us who read accounts of speeches made by my right hon Friend
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about the needs of inner urban areas were concerned lest he interpret inner urban areas to narrowly. Some of us have felt that in the long term their serious problems, such as loss of population and many others, can be solved only within a wider context.
I am glad that this rate support grant can be taken as some indication of the view of the Secretary of State, and I am glad that he is looking at urban problems in a wider sense. Although the Secretary of State is imposing a real and hard burden on urban authorities, it is one that is accepted by most of them as a reasonable burden in the current situation.
I agree with the Secretary of State that some of those who have criticised cuts and restrictions in local authority spending have begun complaining before their own areas have even been touched. After all, the position now is that there have been several years of considerable expansion in the employment of local authority staff and the development of services. It is therefore reasonable that with the current pressures on the country we should accept the restrictions imposed by the Government. Most of us recognise that although the solution is not ideal it is reasonable and fair.
9.56 p.m.
Mr. Arthur Jones: I listened to the hon. Member for South Shields (Mr. Blenkinsop) with considerable interest. I hope that I shall carry him with me in some of the comments that I wish to make on the subject before the House tonight.
It is generally recognised that standards of services are essentially determined and controlled by central Government and not by local authorities. This applies at least to major services. Therefore councils have requirements placed upon them for increasingly high levels and more costly standards of service. For example, there has been an increase in the school leaving age from 15 years to 16 years, the expansion of nursery education, the creation of social service departments, and higher standards required in public protection services.
But there has not been an adequate admission by the Government of their responsibility. The Government cannot

815
claim to have been unaware of the effects of their legislation. Evidence leads us to the conclusion that they have not been prepared to recognise the financial effects of their policy decisions. The lack of co-ordination, indeed what appears almost to be a spirit of competition to expand services by central Government departments, has been a continuing feature of the post-war period, unchecked and almost unmonitored by the Treasury.
In assessing the problems of local authorities since the introduction of the rate support grant arrangements by the 1966 Local Government Act—the arrangements have been operative since 1966–68—it is interesting to look at the outturn of budgeted and actual expenditure. That can be done by examining comparative figures based on negotiated settlements for the rate support grant. The information which I shall give was prepared from the report on the Rate Support Grant Order 1975, and was published jointly by the local authority associations last January.
On approved expenditure, which was £2,619 million in the first year, 1967–68, and which has risen to £11,717 million for 1977–78, it is interesting to see the overspending and under-spending figures over an eight-year period up to 1974–75. The figures I give include the increases under the Rate Support Grant (Increase) Orders.
During 1974–75 approved expenditure was £7,283 million. During the eight-year period from 1967–68 to 1974–75 there were five years in which there was over-spending and three years in which the local authorities under-spent the figure used in the rate support grant arrangements. In the first year there was over-spending of £44 million, which represented 1·7 per cent. of the total. In 1968–69 there was £49 million overspending, representing 1·8 per cent. In 1969–70 there was £31 million under-spending and a similar figure for 1970–71, representing 1 per cent. and 0·9 per cent. respectively. In 1971–72 there was overspending of £51 million, representing 1·2 per cent. In 1972–73 there was overspending of £77 million—1·6 per cent. In 1973–74 there was under-spending of £31 million—0·5 per cent. In 1974–75—
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the year of local government reform—there was over-spending of £396 million, representing 5·4 per cent. of the total.
The 1975–76 and 1976–77 figures are not available. The latest information indicates that in both years the outturn is likely to be about 2 per cent. above the settlement figures. The year of reorganization —1974–75—presented peculiar difficulties for the negotiators on both sides, in that figures had to be agreed before the new authorities were formed and before the division of functions and responsibilities was determined.
The year 1974–75 apart, it is a remarkably competent achievement that the aggregate net expenditure of more than 400 authorities—and prior to reorganisation more than 1,200 authorities —should have conformed so closely to the guidelines set by central Government. That is a remarkable tribute to the average local government outturn. Would that Westminster and Whitehall had an equally good record.
Turning to a particular question in the grant arrangement for next year, paragraph 14 of the statement made by the Secretary of State for the Environment, following a meeting of the Consultative Council on Local Government Finance in London on 22nd November, is as follows:
"The formula should therefore help those areas with severe social problems such as the major urban areas."
There has been considerable comment on that subject today.
The shift of grant aid to inner city areas has led to widespread comment and criticism that ratepayers as a whole throughout England and Wales will be required to make a significant cash contribution. Is that equitable? Ratepayers who are in no way responsible for the problems of inner cities and who derive no direct benefit from their rehabilitation should not in my judgment be required to contribute to a possible solution.
The disastrous situation in some inner city areas stems from misdirected policies by the councils concerned. Some have undertaken schemes of redevelopment involving vast clearance areas without ensuring that the necessary funds were

817
available for their rehabilitation. That has happened in one city and town after another and has permitted a rundown of areas awaiting development.
The issue is now of such great urgency, and resources within local government are so limited, that in my view central Government funds on a vast scale will be required if there is to be any likelihood of progress being made. The cost should not be laid at the door of the ratepayers. Capital resources should be made available by a roll-over of existing Government investment, for example, in the new towns. For 17 new towns, by way of example, expenditure on industrial premises totals £78·75 million and on commercial premises £45·6 million. Investments of a similar character for which the New Towns Commission is responsible in respect of Crawley, Hatfield, Hemel Hempstead and Welwyn Garden City amount to £91·7 million and £53·3 million respectively. These figures are at historic values and these investments could well realise between £500 million and £750 million.
It is only ideological considerations and a determination to extend State Socialism at all costs that prevents the enlightened use of these vast resources which could be utilised to revitalise desolate inner city areas including the London docklands. I support what my hon. Friend the Member for Henley (Mr. Heseltine) said in this respect—that the Government should look for ways and means to encourage the private involvement of institutional funds in these inner city areas.
I turn to the Secretary of State's prediction that the support grant arrangements this year will have the effect of raising rates on average by only some 15 per cent. We have had examples in one county after another. I would quote my own constituency county, Northamptonshire. The estimate there is that the increase cannot be less than 20 per cent., at the same time combined with a reduction in the standard of some services.
Mr. George Cunningham: Would the hon. Gentleman tell the House what the average domestic ratepayer in his constituency pays now in actual cash terms?
Mr. Jones: I estimate that in cash terms the average domestic ratepayer in my constituency is paying between £175 and £225 a year.
Mr. George Cunningham: That is rubbish.
Mr. Jones: Apart from the particular direction of resources to the inner city areas, the general effect of the proposals for next year is to shift the burden from central Government funds and the taxpayer to local government funds and the ratepayer. The Association of District Councils, in a recent letter which I think other hon. Members received, commented:
"the reduction of 4½ per cent. is, in our view, grossly unfair to ratepayers and is in effect no more than a book-keeping exercise which will do nothing to reduce the totality of public expenditure. It is in effect central government transferring more of the financial liabilities for local services from the taxpayer to the ratepayer".
The proposals in the Rate Support Grant Order 1976 are to some extent a cover-up exercise—further manifestations of the Government's policy of shifting around the burden of central Government expenditure. In turn the burden has fallen on private industry with two massive increases in social security payments; the extension of nationalisation, on the one hand, in the aircraft and shipbuilding and repair industries and its reduction, on the other, by the proposed sale of British Petroleum shares.
We have a further example in the order before the House this evening—a material burden of expenditure being removed from central Government funds on to local government and the ratepayer.
I predict that this Government, determined to stay in office at any cost whoever foots the bill, will not be saved by manipulations of this character.
10.9 p.m.
Mr. Stephen Ross: Until the hon. Member for South Shields (Mr. Blenkinsop) spoke I thought that we were having a battle royal between the London boroughts and the Home Counties.

819
I am grateful that I have been called to speak. I would reminisce with the hon. Member for South Shields because I was Chairman of the Policy and Resources Committee when we tried to find out from the Government early in 1974 what money we would get. I well remember the great difficulties that we faced. I agree with the hon. Gentleman that it is a good thing that the rate support grant is known in good time. It is something in the Government's favour.
I assure the hon. Member for Hackney, South and Shoreditch (Mr. Brown) that I interrupted the Secretary of State during his speech on the very point about water charges in Wales. I assure the hon. Gentleman that as a representative of a constituency in the Southern Water Authority catchment area I am virtually certain that we shall be going along with him in opposition to the Water Charges Equalisation Bill.
I join the hon. Member for Aylesbury (Mr. Raison) in openly admitting that I find rate support grants a complete mystery, despite the fact that I was supposed to present the accounts to my local council and constituents at one time. The order starts by referring to acres and then goes immediately on to hectares. Therefore, I wonder whether the calculations are soundly based.
I do not seek to challenge the Government's decision to reduce the rate support grant by 4½ per cent., but I strongly object to the method of distribution. One has only to look at the information provided by the Association of County Councils, which is based on mation provided by the Association of the Environment, to illustrate how unfairly the proposed needs element settlement has fallen on different authorities. We are told:
"If the average rate rise were 15 per cent. … ratepayers in Cumbria, Oxfordshire and Wiltshire would face rises of the order of 25 per cent. caused by the grant distribution whilst Knowsley, Liverpool, South Tyneside and Wolverhampton would not have to raise their rates by more than 4 per cent. to 5 per cent."
These are the anomalies which come from the settlement.
As one county council treasurer put it to me recently,
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"the concept of past expenditure as a measure of need is thoroughly discredited. The fact that each new needs element formula is 'damped' by the part-use of previous formulae makes the whole process pretty wet anyway. A service industry called "The Rate Support Grant Industry' has been created which only serves authorities who (by sheer accident) find they receive a larger share of total grant under each year's new formula."
My authority, which I think is the smallest in England—it did not actually ask to be a separate county; it wanted to be a county borough—has lost over £1 million due to the combination of the new needs element formula and the reduction in grant. The county has an increasing school population—over 18,000—and still rising slightly—and an above average number of pensioners—between 23 per cent. to 25 per cent. of the population. The problem can be resolved only by an increase in the domestic rate of over 15 per cent., more savage cuts than average—we are having plenty of them already—or a bigger reduction in our balances, which are dangerously low now. Having been a member of the county council for seven years between 1967–68 and 1973–74, I regret that the county did not have a massive spending spree in those years. It should have spent as much as it could. It would certainly have been better off had it done so.
We have a ridiculous, insulting situation. The Isle of Wight does not have an indoor heated swimming pool. However, £315,000 is now being spent on the provision of a recreational complex at Camp Hill Prison, to which my constituents do not have access. We should have spent the money in the past. We have not a hope in Hell of ever getting our pool now.
I remind London Members that the Isle of Wight has taken pensioners from the London area. The Greater London Council has permission to put up some 200 homes on the island, and many are there now. Those pensioners' needs will fall on the social services in some respects, so we face increasing difficulties.
No one has yet referred to the North. For example, North Yorkshire faces a probable rate increase of 25 per cent., although it has already made cuts of £5·6 million. The West Yorkshire County Council has already gobbled up £5

821
million of a special reserve. Only £414,500 is left in the contingency fund.
I am sorry that the Secretary of State is not in his place, because I wish to refer to his constituency—Stepney and Poplar. I do not wish to be party political. The right hon. Gentleman asked why some of us got worked up over differences between the allocations to the inner urban areas and the shire counties and provincial towns.
Yesterday I was in the London borough of Tower Hamlets. Whilst there, I picked up a leaflet with the heading
"Have a holiday with the Council."
I do not object to the fact that Tower Hamlets owns holiday homes or hotels in Sandgate, Kent, Southsea, Hampshire, and St. Leonards, Sussex, but not in the Isle of Wight. It offers elderly people reduced price holidays. I live in a holiday area, but many of my constituents want to go on holiday and a great many elderly people in my part of the world would like reduced price holidays. That may be one reason why rates are higher in Tower Hamlets.
Then we read in the Press that 20 councillors from Tower Hamlets have spent about £1,000 on a holiday in their hotel at Hastings deciding their future policies. Perhaps that is another reason why rates are higher in London.
Another question which I am asked more and more often by elderly people is "Why cannot we travel free on buses during the day? Why do we not have concessionary fares as they do in London and other cities?" Many people have retired to my constituency, and this is a sore point with them. But we are likely to have to wipe out concessionary fares altogether. We do little enough as it is. We set aside only £23,000, and I think that this time it will have to go. We cannot go on doing it, and this is yet another reason why people are getting extremely worked up about the rate increases in many of our rural areas. We cannot even staff adequately our new short-stay home.
I wish to put two specific questions to the Minister. The first is to ask him why the Isle of Wight, together with East and West Sussex, is excluded from the £2·24
822
per head above-average allocation for labour costs added to the needs element. We understand that the Isle of Wight is out because, apparently, there is an absence of suitable statistics. I can tell the Minister that we shall soon provide them, because this is costing us £250,000 and we want to get back into the act.
My second question is to ask what happens in the resources element, which includes an allowance for parishes, paid to districts which do not have parish councils? Is it included, or is a deduction made for districts without parish councils?
There are problems enough for local authorities, and we ought already to be facing the inevitability of further local government reform. It has to come. I had hoped to see the Government actively encouraging the amalgamation of authorities, where it made sense to do it, to the single-tier county borough status. They should be encouraged to get together to see whether they can make reductions. I am sure that staff reductions could be made in that way. I agree that reductions must come in administration. These problems must be faced. There have to be cuts in some of the top tier where people are not fully employed. However, the unfairness of the spread of the settlement could and should have been avoided. I feel that this RSG settlement should be opposed by the House.
10.18 p.m.
Mr. D. E. Thomas: I am sure that the House will understand if most of my remarks are directed to the Under-Secretary of State for Wales.
I wish to make a number of general comments and to endorse some of the criticisms that have been made about the way in which the rate support grant is allocated from year to year. I think it is fair to describe the grant allocation itself as a blunt instrument whose edges are carefully refined every year. That is how the system seems to operate.
We have a system based on existing patterns of spending to which additional weightings by means of different formulae are set annually. This cannot hope to reflect the real needs if those are to be defined in objective terms.

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One can criticise in this way and then reply by saying that at least in this area there is an attempt to an objective allocation of resources, whereas there are many other areas of social policy where we are not doing this. For example, the Government have only recently started to reallocate resources between the various health authorities and various health districts, and working parties in the DHSS, the Welsh Office and the Scottish Office have been looking at the balance of resources and searching for objective criteria. Here at least some objective criteria exist in terms of a variation on the basis of historic patterns of spending.
Although I can criticise the general way in which the RSG formula operates, I do not want to argue tonight that additional resources should not be allocated to the inner city areas. I want to stress instead that I do not believe that resources for the inner city areas, such as London, should be obtained from the low-income counties, such as all the Welsh counties except one.
If there is to be a reallocation of public expenditure to the inner cities, that should not have to come from within local government spending but should be reallocated from elsewhere. I have opposed public expenditure cuts in all areas of social policy, and I am, therefore, at least being consistent. We have heard some hon. Members on the Opposition Benches who are keen advocates of public expenditure cuts in the broader sense suddenly standing up as keen advocates for not reducing public expenditure when it affects the ratepayers in their constituencies.
The Welsh counties next year will face increases greater than the 15 per cent. average rise in England and Wales. Starting from the bottom, we see that Mid-Glamorgan, which will be under the control of Plaid Cymru after next May, will have a 16 per cent. increase. Clwyd will have a 17 per cent. increase.
Mr. Colin Shepherd: Does the hon. Member recall that in March 1974 the Welsh received a very substantial flat-rate rate support grant which substantially changes the basis of comparison with the English counties?
Mr. Thomas: I am not talking about the domestic element in the relief. I will come to that later. I am talking about the percentage increase in each of the Welsh counties. The increase for South Glamorgan will be 17 per cent., for Powis 18 per cent., for West Glamorgan 20 per cent., for Gwynedd 21 per cent., for Gwent 21 per cent., and for Dyfed 24 per cent.
I am concerned that every Welsh ratepayer has to face an increase greater than the England and Wales average next year, and that ratepayers in the counties which have a lower level of income and a lower rating base, because of the scarcity of manufacturing industry and large commercial enterprises, will have to bear most of the increase in rates.
Earlier the Secretary of State stressed that the rate rebate scheme was available in order to mitigate the effects of rate increases, particularly in low-income areas. However, I should like Ministers to look again at their figures of the take-up of the rate rebate schemes. A substantial proportion of those eligible for rate rebates—I believe it is now in excess of 30 per cent. or 40 per cent. of those eligible—do not take up those benefits. The Under-Secretary will be familiar with this state of affairs from his experience in the Department of Health and Social Security.
I am concerned that low-income families and pensioners in Gwynedd and Dafyd will be faced with massive rate increases but will be unwilling or unable to claim rate rebate or simply will not know about the scheme. Some of them will be pushed about between the DHSS local office and the rates office of the district council, and at the end of that the difference in benefit could be no more than 50p either way.
The average increase will, therefore, be greater than in England and Wales, and, in spite of the substantial need for services, services will be curtailed. I was at a school in Dyfed on Monday. That part of the county has to go comprehensive, but I was told that it cannot hope to go comprehensive for at least five or six years because the necessary resources were not available.
In Clwyd we have seen threats of withdrawal of labour and other industrial action by teacher unions because of the extremely high pupil-teacher ratios.

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We are seeing a reduction in the net amount of Government resources available to the counties at a time when demand is increasing due to the modernisation of the education service involved in going comprehensive and the more efficient level of service in education arising from reduced teacher-pupil ratios. We are finding ourselves in an impossible situation.
I am also concerned about the inevitable strain and decline in the level of personal social services that we are bound to see as a result of the cuts. As is indicated in the Government circular and in the commentary on the rate support grant order, the Government anticipated that residential accommodation will suffer—in other words, the provision made for that type of accommodation. However, the Government demand of local authorities that they limit the increase of unit costs in personal social services, find more efficient ways of delivering services and cut back on the less essential services.
We know what is meant by "less essential services"—telephones for the disabled and adaptations under the Chronically Sick and Disabled Persons Act. At our surgeries we shall have to correspond with and meet local authorities to press them to introduce services that are provided for by Act of Parliament although the authorities will be prevented from implementing them because of the cost.
I stress the problem of the delivery of social services in rural areas and point to a basic fallacy that always emerges in these debates—namely, that social deprivation exists only in urban areas and stress areas in the inner cities. I shall quote from an excellent introductory paper that was prepared by the research officer of the Gwynedd County Council social services department. When writing about the surveys now taking place in Gwynedd he states that it is clear
"that social deprivation is a phenomenon not strictly confined to more urbanised environments."
He continues, in assessing the information that has come from the surveys undertaken in Gwynedd:
"there is evidence to suggest that sparsely populated areas present proportionately as many demands on social services as do more urban areas."
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What is true of the personal social services is true throughout the whole range of social services provided. If we consider the indicators of social deprivation in the National Health Service, in housing and in education and the incidence of low income and dependence on supplementary benefit, we find that in rural areas and mixed areas—those are the partly urbanised areas that are found in parts of South Wales, which are not like the cities but are urbanised in the Welsh sense—there is as great an incidence of social deprivation as in inner city areas. Perhaps it is not on the scale that we would find in inner London, but certainly it is present in depth. The extent of the deprivation is as great.
When considering social indicators it is important to try to use them to allocate resources. It is important that we do so sensitively and realise that we do not have large pockets of deprivation only in urban areas. There is equally serious and deep social deprivation in the rural areas.
I should like to know how it will be possible, faced with the escalating costs of petrol and travel, to cut the unit cost of the delivery of social services in rural areas. I do not see how it is possible. The paper talks about a reduction in the unit cost of services. What do the Government mean by reducing unit costs? In most of the rural areas of Wales—
Mr. Dafydd Wigley: Does my hon. Friend agree that in these circumstances it would be regrettable if the Secretary of State were to transfer resources from rural areas to inner city areas—that is what has been suggested recently—without being sensitive to the indicators to which my hon. Friend has referred?
Mr. Nicholas Winterton: The right hon. Gentleman has done it two years running.
Mr. Thomas: That is the basic issue that we have been highlighting. We are seeing negotiations and transfers taking place throughout England and Wales without sensitivity being shown to the problems of rural Wales.
I must say something about the transport supplementary grant, which has not been sufficiently discussed so far. It is of vital concern to large parts of Wales, because we have a very thin transport

827
service. We shall have very serious transport problems connected with the need to develop the road network. The Welsh Office has decided to give priority to the extension of the M4, and trunk roads are being directed accordingly. We are also told that some time in the next 10 to 20 years we shall need a North Wales trunk road, and moneys are being directed towards the dualling of the A55. If that is happening, it is very important that county finance for road building and the maintenance of the transport network ensures that the road network in the rural areas is adequate.
This is where the transport supplementary grant is so important when we talk about the structure of our transport system. In Gwynedd and Dyfed there have been severe problems over the bus services. There has been a massive reduction in the services, which causes problems for the elderly and those who have to travel to work by public transport.
In England and Wales there has been a reduction in the overall transport supplementary grant from £286 million in 1975–76 to £255 million. Can the Minister give us some of the figures for individual Welsh counties? I appreciate that the calculations are complicated. I have not yet obtained figures on the effect of distribution for the Welsh counties, but I can say that important areas such as Gwynedd and Dyfed, which have had serious problems with their bus network and maintaining the public transport system, should not have to suffer a further reduction.
We have seen redundancies because of the impact of the transport supplementary grant in Gwynedd. There has already been a reduction in the number employed by the county council's highways and transportation department. There will be further reductions in bus services and the numbers directly employed in maintaining the communications network if the transport supplementary grant is substantially reduced. We have received many representations from the National Bus Company and the branch which operates in Gwynedd and Clwyd that it becomes more and more nearly impossible to operate anything like an adequate transport system because the grant, as it is allocated to Gwynedd and Clwyd, is not sufficient to maintain the bus system.
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Many of us, particularly those who represent areas with national parks, believe that there is an argument for a bigger transfer of resources from the urban to the rural areas for national parks than for any other service. They are a recreational service that we in the rural areas provide—though perhaps not the kind of recreation to which the hon. Member for the Isle of Wight (Mr. Ross) referred. Many of the additional burdens of rural areas are imposed because in the summer the areas must cater for a population five or six times the normal size. I am well aware that the salaries of officers of local authorities in such areas are decided according to a notional summer population. I should like other matters to be decided on the same basis.
I turn next to the rôle of the Welsh Office in the rate support grant negotiations. I do not believe everything I read in the Western Mail, but I should like to quote the following report from the edition of 23rd November:
"Yesterday a Welsh Office Press officer attend a Press briefing given by the Department of the Environment in London to find out what next year's rate support grant level would be."
I do not accept that story in its entirety.
Will the Under-Secretary of State tell us what rôle the Welsh Office plays at the various stages of the negotiations. I suspect that there are no direct negotiations between the Welsh counties and the Welsh Office but that the matter is settled by inter-departmental committees, and that perhaps at Cabinet level the Secretary of State is forced to acquiesce. Tonight, I suspect that the Under-Secretary of State is carrying the can for an England and Wales settlement not made in the interests of Welsh ratepayers on low incomes who will have to pay more next year.
Several Hon. Members rose——
Mr. Deputy Speaker: Order. I understand that Mr. Speaker has mentioned that brevity would be appreciated. I still have eight hon. Members who wish to catch my eye between now and eleven o'clock.
10.36 p.m.
Mr. Graham Page: Having regard to what you have said, Mr. Deputy Speaker, I will refrain from trespassing into the problems of Wales which the

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hon. Member for Merioneth (Mr. Thomas) has put before the House so ably.
Someone should have the enterprise to issue an old boy's tie for the rate support grant club. We have this reunion in this utterly frustrating debate every year. The orders are presented to us as fait accompli, and the best we can do is try to express public concern as we know it from our constituents. Public concern centres not on the services of local government but on the cost of them. That may be a measure of the success of local government. It functions pretty well and produces goods and services. But at what cost? That is what we are debating.
For the current year, the cost of the last rate support grant was £10,461 million; it is estimated that next year it will be £11,707 million. It is what that means in rate poundage and rates paid after the Government have made their grant that concerns the individual member of the public. He asks "What will that mean to me in the rate poundage fixed by the local authority? What do I pay?"
When the ratepayer sees the rate poundage and the rates rising relentlessly every year, he asks "Why don't they do something about it?"—"they" meaning the Government. Let us be frank. Under our present system of financial local government, despite the formulae which hon. Members have been talking about, the Government are practically impotent, both in law and in convention, to do anything at all about the amount of rates demanded by the local authority.
These orders do practically nothing to control the expenditure of local authorities and, therefore the rates to be collected and the rate poundage to be imposed by any particular local authority. To give a smaller percentage by way of rate support grant this year than last year really has little or no effect on the rate poundage of local authorities.
The Chancellor of the Exchequer was far too optimistic on 15th December when he said:
Local authority current expenditure is now more strictly influenced by the central Government through the recent reduction of the main rate support grant for England and Wales from 65½ per cent. to 61 per cent. in 1977–78 and the corresponding reduction for Scotland.—[Official Report, 15th December 1976; Vol. 922, c. 1527.]
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If the Chancellor really thinks that reducing the rate support grant percentage will have an effect on the rates charged he is far too optimistic. I remind the House of the basis on which the grant is decided. First and foremost, the relevant expenditure is decided. That is decided by haggling between civil servants and local government servants over a long period of weeks or even months. It is a pity that we have nothing whatever to do with that in this House before the order is presented to us here, but that is how it happens.
I should have thought that once that figure of the relevant expenditure is agreed, as it is this year—I would rather call it the necessary expenditure—at £11,717 million, that it what the local authorities will have to pay out. There is no question about whether they can cut that down. I should have thought that the haggling over it had got it down to that stage, so unless the duties of the local authorities are in some way cut down, there is little hope of cutting down the balance which has to be found by rates. What a local council does not receive by way of grant it is obliged to raise by rates or by drawing on its balance.
The figures for next year work out in this way. The relevant expenditure is increased by £1,256 million. This year the Government contributed, by the 65½ per cent. of the relevant expenditure, £6,852 million. Next year, according to the rate support grant that we are debating, they will contribute £7,147 million. It is true that that is an increase of £295 million, so that is a contribution by the Government towards the overall increase of £1,256 million.
That leaves the local authorities throughout the land to find £961 million out of rates or out of drawing on reserves. The Secretary of State has told us this evening that he expects them to draw on reserves £175 million. Therefore, as the law stands, there is no way out of their having to raise £786 million—nearly £800 million—out of rates. Compared with what they have raised out of rates this year—£3,609 million—it looks as though they will have to get about 22 per cent. more next year out of the ratepayer even after drawing on reserves.

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That is the average. The Secretary of State has talked about a 15 per cent. increase overall. I think that he is putting it far too low.
Of course, if we scrapped rates altogether and relied upon local income tax, that burden of the extra amount of rates would be spread much more evenly over those who have to pay. Instead of one-third of the public having to pay the sum—that is about the figure for the ratepayers—it would be spread over the taxpaying public. I shall refrain from arguing tonight that we should go straight to local income tax. However, what I must argue is that until we abandon the rating system it is intolerable that the increase in local government expenditure and the percentage decrease in the rate support grant should be borne entirely by the ratepayer. Some of this burden of a 22 per cent. increase in rates this year, as I work it out, must surely in future be raised out of other sources of revenue.
The Government ought to have looked at other sources of revenue before presenting the rate support grant to the House this year, because one of the easiest sources of local revenue is that out of which the Chancellor of the Exchequer last week pinched a 10 per cent. increase—alcohol and tobacco. Certainly a beer tax is the easiest tax to collect locally and one that is less noticeable, as the penny on the pint. The Chancellor told us that his 10 per cent. increase in alcohol and tobacco tax would produce £280 million.
One of such sources of further revenue which really should have been used by the Government before presenting this order was approved by Parliament nearly 17 months ago. Nearly 17 months ago the Lotteries Bill received the Royal Assent. It is absolutely scandalous that the Government have delayed bringing the Act into operation and prevented local authorities from obtaining the benefits which could be gained from the proceeds of lotteries. I am aware that Layfield classed local authority lotteries as low-yielding revenue sources. That may be right, as the law stands. But with the Lotteries Act the amount which could be gained from lotteries could be increased by a stroke of the pen. The Secretary of State has only to make an order to that effect.
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Again, to quote Layfield, local lotteries would
"arouse some local interest in council affairs".
The proceeds could provide those services in areas, such as amenities, sport, culture and so on, the cutting of which incenses the local people. It is a scandal that the Government have failed to bring that Act into operation over a period of 17 months. The Government ought to be considering other sources of revenue. They have been discussed so many times. There are, for example, a local sales tax, motor vehicle licence fees and motor vehicle fuel duties. All these are possible candidates to help prevent the continual increase in rate poundage and the amount of rates which can be collected.
I know that Layfield brushed those suggestions aside. But until local authorities are permitted to look to sources other than the taxpayer for their revenue the Government are powerless to control in any way the burden of rates, voluntarily or compulsorily. If there were such other sources of revenue this order could have been accompanied by something which would have been extremely popular with the public—an agreement to freeze rates at last year's figure. We could say to the local authorities "Here are other sources of revenue. If you want to spend more, look to them for the extra money." At present this order says to local authorities "We know that you will have to spend £11,717 million next year. We know that this is £1,256 million above last year's figure. We know that we are contributing only £295 million towards that increase, but you will not get the balance in any other way than from the ratepayers or by drawing on your reserves". This is becoming an impossible situation.
10.48 p.m.
Mr. Dudley Smith: One of the disadvantages in being almost the last Back Bencher to be called in a debate is that most of the runs have already been made—some at inordinate length. I will try to be brief, Mr. Deputy Speaker, because I know that some of my hon. Friends still hope to catch your eye.
Perhaps the best policy in these circumstances is to hit out. Underlying

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every speech we have heard on this subject has been the paramount need for rating reform. The more we go down the road the more evident it becomes to reasonable and sensible people that the system has to be changed because of its great unfairnesses and because, at a time of rampant inflation, it becomes more and more discriminatory.
I was delighted that in his strong speech my hon. Friend the Member for Henley (Mr. Heseltine) reaffirmed the pledge of the Conservative Party to reform the rating system after the next General Election. If we had won the last General Election such a reform would be well under way. We know that we cannot rely on the Labour Party. It will never change the rating system because it likes to perpetuate some of the unfairnesses in it.
I do not want to mince words about this legislation. It is a vicious piece of political discrimination against certain areas, which are regarded by the Government as Tory areas, in favour of those areas which are Socialist. I do not agree with my hon. Friend the Member for Aylesbury (Mr. Raison) that some element in all this is due to the fact that the county council elections are due. It is all part and parcel of the grand design against middle-income people who are being oppressed so strongly by the Government.
This is another move in that direction. It is not a lost issue, because many are begining to rumble what is happening. My county of Warwickshire is by no means a rich country, or a county flowing over with rich people. When one bears in mind the effects of these proposals on Warwickshire, one realises how bad an order it is. As a result of local government reorganisation, Warwickshire is one of the smallect counties in the country. Under these proposals we shall face a rate increase of about 25 per cent. The alternatives are severe cuts or a substantial rate increase.
I asked the chief executive of the county council what he felt about the situation. He is a sober realistic judge, and non-political. He said that the cuts would be disastrous to the county. If Warwickshire was able to hold the rate to 15 per cent., it would mean that about 200 whole-time jobs and 1,300 part-time
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jobs would go. It would also mean that buildings would be left uncleaned and residential establishments closed, and still further maintenance cuts—a long list which underlines how at present many of the standards in Warwickshire are below the national average because of the incidence of the penalties that flow from the rate burdens of the past.
Under the present proposals Warwickshire will receive £8½ million less than it would have received if grant arrangements had remained unchanged. In those circumstances it is impossible for the county to do its job properly. The county is aware why this has happened. It has been penalised because the Secretary of State refuses to discriminate between good and bad authorities. This point has been put to the right hon. Gentleman time and time again, but all he says is that it is something to do with computers. I do not know a great deal about computers, but I know that they produce only what they are programmed to produce. I believe that in this instance the computer was programmed to produce the result the Government wanted.
The Government need not think that they will get away with this. The so-called shire counties will not just bear this burden. I think the Government underestimate what is felt by many members of the public. The Government think that people will grin and bear it, but they must realise that in rating terms people are getting near breaking point. There will be rebellions against the system in due course if we go on with the same ideas.
We have reached the stage of gerrymandering over rate support grant. If I can obtain support, I shall certainly divide the Houe against the order as a gesture of protest.
10.53 p.m.
Mr. Nicholas Winterton: I shall be brief, in order to allow at least one further colleague an opportunity to take part in the debate.
I am delighted to be called to speak following the remarks of my hon. Friend the Member for Warwick and Leamington (Mr. Smith) because he represents a constituency in Warwickshire, a county which I served for six years as a councillor. It is an efficient county and a county that has carried out Government

835
requests by pruning expenditure, and dipping into balances to keep down rates, in the last two or three years. My own county of Cheshire—which is not to suffer quite as much as Warwickshire—has in recent years pruned its expenditure to the very bone. It has also dipped into its balances in heeding the Government's request and to keep the burden to the ratepayers as low as possible.
Various local government associations have said some unkind things about this rate support grant settlement. The Association of District Councils described it as
"a severe body blow to local authorities".
The Association of County Councils described the settlement as "grossly inequitable". Even the Association of Metropolitan Authorities, whose members come out of the situation best, describe it as "a very tough settlement". It is clear that it is a very tough settlement. I endorse the view of my hon. Friend the Member for Warwick and Leamington that it is biased against the shire areas, which predominantly, but not exclusively, are represented by Conservative authorities and Conservative Members of Parliament.
The Secretary of State must realise that some of the rural areas do not have all the facilities which urban areas possess, whether it be in the form of libraries, sporting facilities, recreation grounds, footpaths, street lighting, kerbing or regular patrols by police. That is an advantage which rural areas and shire counties do not have. Therefore, we would expect the rates to be lower, not higher, but this is not the case.
The cost which people living in rural areas incur in getting to their employment has dramatically increased.
Mr. Shepherd: Hear, hear.
Mr. Winterton: Many of the constituents of my hon. Friend the Member for Hereford (Mr. Shepherd), who says "Hear, hear", must travel many miles to work. The cost of owning, maintaining and licensing a car has dramatically increased in recent years.
The Government, who certainly have a problem of urban deprivation to deal with, will stand indicted of producing
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rural destruction and rural deprivation in addition to the problems which they already face. There are rural areas, market towns and areas such as that represented by the hon. Member for Stoke-on-Trent, North (Mr. Forrester), which is not an urban area but is in a shire county where great deprivation has, for reasons of industrial and commercial change, occurred in recent years. I support the speech of the hon. Gentleman, which was a breath of fresh air from the Benches opposite.
The hon. Member for Stoke-on-Trent, North mentioned briefly concessionary fares. I hope that I shall be permitted for about 20 seconds to raise that matter. If concessionary fares are to be available, they must be available to all old people, whether they live on bus routes or on public service routes or not. I have a parish council, the Henbury Parish Council, near Macclesfield, which is campaigning to get the Department of the Environment to allow the concessionary tokens issued to old-age pensioners who apply for them to be used for taxi fares. I must acknowledge that if this were taken up on a wide scale it could well increase public expenditure, but at this moment local authorities are not permitted to grant this right to the people who cannot use public transport. I hope that the Department will be very sensitive and receptive to this campaign.
The Under-Secretary of State for the Environment (Mr. Kenneth Marks): Concessionary fares are given entirely at the discretion of the local authority. They have nothing to do with the rate support grant or with any other grant. If there are no concessionary fares in an area, it is because the local council has decided not to grant them.
Mr. Winterton: The Minister has misunderstood. There are concessionary fares in my area, but the local authority is not permitted to allow the tokens to be used by old-age pensioners as part-payment for taxi fares to get them from where they live, which is not where public service vehicles operate, into the town to do their shopping or whatever they have to do. Therefore, I hope that the Secretary of State will be very sympathetic to this campaign.
In my area, the county council, on account of the burdens and restrictions

837
being placed on it, is being forced to close in the near future the Mount old people's home in the town in which I live, Congleton, in Cheshire, because it can no longer maintain it. I hope that a campaign will be mounted to persuade the Cheshire County Council to change its mind. But if this sort of action has to take place, if this is the sort of decision which county councils must take because of the discrimination which is shown against them in the rate support grant, it is a very sad and serious situation.
I wish to refer to the question of voluntary organisations whose grants from local authorities are being drastically reduced by the local authorities because they no longer have the money to make grants. This is a tragedy, because I am sure that the Secretary of State will agree that such organisations provide very good value for money, in fact, cost-wise they are probably better value than the maintained bodies. If this Government remain in office until the next rate support grant negotiations, and I have grave doubts about that, I hope that they will be more sensitive and understanding towards the problems of the shire counties, which have problems just as great as those of the urban areas.
11.0 p.m.
Mr. Nicholas Edwards: My right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) and my right hon. Friend the Member for Crosby (Mr. Page) spoke for many hon. Members, I am sure, when they expressed dissatisfaction with the way in which, over many years, we have had to deal with this enormously important and complex matter. I fear that it will not be until the House of Commons takes its courage in its hands one year and actually throws out one of these orders instead of engaging in the usual ritual dance that we shall force a reconsideration of the way in which these matters are handled.
The Opposition do not deny that savings have to be made, but we are entitled to ask for three responses from the Government. First, the Government should be absolutely honest in their approach. Second, they should not expect local authorities to do what they themselves are not prepared to do. Third, the burdens should be applied equitably.
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The truth is that the Government have failed on all three counts.
The Government are being less than honest because they are seeking to obscure the reality of what they are doing. For example, they have been playing with words about cash limits. Last year, they promised that the cash limits would be reviewed if the pace of inflation generally or the rate of cost increases affecting local authorities' expenditure was substantially higher than allowed for in the cash limits. The implication of that statement was clear—"Here are cuts of so much, but if we, the Government, fail in our job of reducing inflation, we shall not clobber you still more." Yet that is precisely what they then proceeded to do.
The Secretary of State talked about balances in justification of his decision, but many local authorities do not have those balances. The truth is that the Government have passed the buck to the local authorities for the whole of the additional cost which has arisen because they themselves have not met their own inflation targets.
Second, the Government should not ask the local authorities to do what they themselves are not prepared to do. It seems to me that they are seeking to cut local government expenditure more severely than they are prepared to cut their own. As my right hon. and learned Friend the Shadow Chancellor pointed out yesterday, the Government talk of making reductions of about 8,000 in the Government Civil Service as a consequence of their latest round of expenditure cuts, while on the Secretary of State's own estimate today they are looking for reductions in local authority staffs of 20,000 to 30,000, and many think that that figure will be exceeded. The local authorities should be given a better example by the Government and their agencies.
I give just one example. A letter received from a member of the West Sussex County Council draws attention in eloquent terms to the string of advertisements which have appeared offering highly paid posts with the Land Authority for Wales. This West Sussex counciilor points out that the English local authorities have been told by the Government that they should operate the Community Land Act with very few, if any, additional staff, and he speaks of a

839
recent survey which shows that only one county council in England has appointed additional staff for this purpose. If those advertisements have had any success, there must be a considerable number of staff now gathering in Wales.
Mr. D. E. Thomas rose—
Mr. Edwards: No, I shall not give way. We have limited time, and I have curtailed what I have to say in order to give other hon. Members a chance to speak. Perhaps the Under-Secretary of State for Wales will tell us how many are currently employed by the Land Authority for Wales, at what cost, how much land they have acquired, and at what price.
The central point of the debate has been that distribution must be equitable. Speaker after speaker has indicated just how unfairly and uneven distribution has been, starting with the hon. Member for Stoke-on-Trent, North. The complaint was also made, in the speech of my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), that the Government seem to be helping the sinners at the expense of the saints.
In the Government's initial set of figures there are enormous and unexplained discrepancies. Further calculations on the loss of the needs element for individual non-metropolitan counties indicate even wilder swings in the figures than appear in the original table. Last year, the Secretary of State spoke about protecting remote rural areas. That statement looks pretty sick against the background of the increases that have been described in tonight's debate. Not for the first time, a Labour Government have decided to clobber the countryside. It is hardly surprising that some of my hon. Friends have questioned the Government's real motives for concentrating resources on areas that are necessary to them for their political survival.
No explanation has been given for some of the more extraordinary discrepancies. Residents in Dudley will be keenly interested to know why they will suffer the largest increases in rates, of 11 per cent. above the average, while Wolverhampton will have increases of 10 per cent. below average. We who live in Cornwall do not envy the good fortune those in Dyfed who, we thought, had
840
problems and needs comparable to those of Cornwall. We are distinctly puzzled why that council should be as far on the right side of the national average as we are on the wrong side. It is hard to believe that the reasons are fairness, social justice and political principle—unless that principle is defined in purely party political terms.
My hon. Friend the Member for Aylesbury (Mr. Raison) pointed out that rural areas are not immune to social pressures. He said that rates are the wrong instrument for redistribution. My right hon. and learned Friend the Member for Huntingdonshire spoke about the problems of a rising population for which this system caters inadequately. The Secretary of State, in an extraordinary intervention, disclaimed responsibility for the arbitrary nature of these arrangements by blaming it on his computer. That is the level to which Ministers' excuses have sunk.
As to the Welsh position, the hon. Member for Merioneth (Mr. Thomas) pointed out that, on the basis of the Government's own figures, Wales has done badly. Every county there is on the wrong side of the national average. It is true that Wales maintains its previous share of the needs element, but I should hope so, because a number of Welsh counties—and Mid-Glamorgan is an obvious example—have more in common with the metropolitan districts than with the shires. In terms of social need and stress, problems are as severe in some Welsh counties as in some metropolitan districts.
The rural areas have fared particularly badly. Dyfed and Gwynedd suffer from low incomes, poverty and high unemployment. In my constituency, for example, the unemployment rate is the highest in the United Kingdom. They also suffer from sparsity of population and have to cater for an annual influx of tourists for which sufficient allowance is not made in the present formula. Yet these counties are among the worst sufferers under the system of distribution that the Government have imposed.
One thing that we do not yet know is the Welsh share of the transport supplementary grant of £255 million. I hope that the Under-Secretary will be able to tell us tonight that the percentage will

841
not be less than that of last year. The Secretary of State has pointed out that the Welsh domestic ratepayer is helped by a higher rate of relief and that his actual cash increase may, therefore, be rather less severe than the percentage figures indicate. But those higher rates of relief are given for good reasons, among them the higher water charges suffered in Wales.
Mr. Shepherd: Does my hon. Friend recollect that Herefordshire comes under the Welsh Water Authority but does not benefit by that extra support grant?
Mr. Edwards: I agree that Herefordshire did badly in that respect. That was the prime reason for which the grant was given, and it is as valid this year as it was originally. The proportionate aid given to the Welsh domestic ratepayers has fallen each year because the actual cash assistance has been maintained. The domestic rate relief offers no consolation to the small businesses of the area.
My impression is that the Welsh settlement is a good deal worse than the Secretary of State tried to make out. Welsh industrial regions have missed out on the switch of resources obtained by their English counterparts, and the rural areas have been particularly hard hit.
My hon. Friend the Member for Wycombe (Sir J. Hall) had some wise words to say on the subject of small businesses. It is impossible to over-emphasise the importance of small businesses to the economy, particularly in rural areas. Over much of the country they are the main providers of jobs, and their decline is the principal cause of the present unemployment levels. To many, this further imposition of rates will come as the final straw, and they will go out of business.
I wonder whether, in calculating the unemployment effects of their proposals, the Government have taken into account the impact of the rate burden. The Secretary of State referred only to direct job losses within the local authorities. I am bound to be critical of the Governmen when they continue housing subsidies indiscriminately to those with incomes of £100 a week and more, rely more on direct than on indirect taxation and add to the rate burden of small businesses at a time when they are uniquely depressed.
842
Last year my hon. Friend the Member for Ashford (Mr. Speed) said that the next to be hit would be rural transport, the old, the disabled, the handicapped and, of course, education. He was right. Those are the sectors that have taken the biggest hammering.
Nothing is more pressing than the paragraph in the report on the orders that refers to personal social services. This was referred to by the hon. Member for Ilford, North (Mrs. Miller) and my hon. Friend the Member for Aylesbury. I know that if he had been called it was the matter to which my hon. Friend the Member for Exeter (Mr. Hannam) particularly wished to draw the attention of the House. Is it necessary that it should be so? Cuts have to be made, and they are bound to be painful. People will either have to pay or go without things they have come to expect, but I am not clear why education and the social services are cut before rent subsidies.
The central question that has emerged from the debate is whether the Secretary of State has distributed the resources and the burdens fairly. In my judgment, the distribution has been grossly inequitable. Cuts in services can be acceptable only if justice is seen to be done. Nothing that the Secretary of State said this afternoon and nothing that has been said by Govenrment supporters dissuades me from the belief that a primary factor has been the electoral fortunes of the Labour Party.
11.14 p.m.
The Under-Secretary of State for Wales (Mr. Alec Jones): In opening the debate my right hon. Friend the Secretary of State for the Environment said that he had tried to produce a rate support grant settlement for 1977–78 which would be both fair to local authorities and ratepayers and right for the difficult economic conditions of our times.
I suppose that it is true that everyone taking part in the debate has tended to accept those as valid objectives, but many hon. Members have cast considerable doubt on whether my right hon. Friend has achieved them. I suspect that it was ever thus.
Reading through a few rate support grant debates over recent years, having taken part in some from both sides of the House, I find a great similarity

843
between the kind of complaints made then and today. It was clear tonight that, representing the many different areas of the country, we have understandably tended to view the settlement as it affects our own constituencies. A precis of the debate would be the shires versus the inner cities or even the shires versus London.
Similarly, we have all expressed our special interests and sought to leave our favourite services, our priority services, completely untouched. I believe that having endorsed the Government's economic strategy yesterday, the House will at least concede that my right hon. Friend has sought, with some success, to meet his objectives.
My right hon. Friend paid tribute to the work of the local authorities and local authority associations over past years. In that he was joined by the hon. Member for Daventry (Mr. Jones), who reminded us of the good work of the local authorities. The hon. Gentleman said that local authorities were better at keeping more accurate figures of estimates than the Government. I do not essentially disagree. However, taking the figures given by the hon. Gentleman, I suggest that he is at fault as the average rate payment in his constituency is £91, not £175.
Mr. Arthur Jones: I think that the Minister may be taking the figure for the country as a whole, not my constituency.
Mr. Alec Jones: I do not propose to make a great issue of this matter. If I am wrong I shall write and apologise to the hon. Gentleman, as I am sure he will do the same to me.
I should like to join my right hon. Friend in thanking the local authorities, especially Welsh local authorities and their associations, for what they have accomplished in the past year.
I fully appreciate the difficulties which keeping expenditure within the limits imposed present to local authorities. This year Welsh local authorities have made commendable efforts and have succeeded in cutting their original expenditure plans by about 1·7 per cent. Next year's requirement is for authorities in Wales, as
844
in England, to reduce expenditure by 1·6 per cent. on this year's estimated out-turn figures. Services will inevitably need to be trimmed, and this will involve a rundown in staff numbers, which, as my right hon. Friend explained, can in the main be dealt with through natural wastage.
I think that the hon. Member for Aylesbury (Mr. Raison) was somewhat unfair when he suggested that my right hon. Friend had ducked that issue. My right hon. Friend clearly indicated that in particular areas there may have to be some redundancies, and he went on to spell out in detail how they could be taken up by natural wastage. My right hon. Friend did not seek to pretend that he was giving an absolute guarantee that there would not be any redundancies anywhere.
The hon. Member for Pembroke (Mr. Edwards) kept up his perpetual harping about Wales being dealt with unfairly. In percentage terms the average increase in domestic rates in Wales is likely to be some points higher than in England—Wales approximately 19 per cent.; England 15 per cent. But I do not think that people in my constituency—Rhondda—or in Pembroke spend percentages. Because of the lower rateable values in Wales, the average increase in the actual rate bills is likely to be lower. The 15 per cent. increase in average rate bills in England will add £15 to the year's average domestic rate bill. The 19 per cent. increase in Wales will add only about £11 to the year's average rate bill.
One reason for the higher percentage increase in Wales is the gearing effect of the domestic element which subsidises the domestic ratepayer. Welsh domestic ratepayers currently receive 36p in the pound compared with 18·5p in the pound in England and, despite difficulties and the tough nature of the settlement, these levels are to be retained for 1977–78.
Another contributing factor to the high percentage increases in Wales is the reduction in the standard rateable value on the basis of which the resources element is calculated. Although, generally speaking, the effect of the formula for distributing the needs element is to favour the metropolitan areas, the share of the Welsh shire counties as a whole will not

845
be changed significantly from this year's level of 5·8 per cent. The actual figures are 5·815 per cent. reducing to 5·807 per cent. It is a reduction, but a very small one, of 0·008 per cent., amounting to about £300,000. Within that, the share of some counties will increase and that of others will decrease. Four counties will gain by the settlement and four will lose by it. The initial distribtion of the needs element to Welsh authorities for this year totals £207 million. For next year it will be about £215 million.
I must tell the hon. Member for Merioneth (Mr. Thomas) that the RSG system is currently operated on an English and Welsh system. It is one system, and Welsh Office officials and Ministers played a full part in all the decisions in arriving at this settlement. But it is not possible under the system to distribute grant between authorities in Wales other than according to the principles which apply to the distribution generally. However, I am sure that the hon. Gentleman will be pleased to know that we have already set up a working party to report on how a separate Welsh RSG system can be operated when the Welsh Assembly comes into being.
Many hon. Members said a great deal about the Government's decision to use the regression-based formula. The choice was either this or the no-change formula. I accept that the no-change formula was advocated by a number of local authorities and some of the associations. But if we had accepted no change, it would have meant abandoning any attempt to recognise that there are differences in local authority expenditure needs and that some of those needs are increasing in some areas faster than in others. If we had done as some hon. Members suggested and left the shires as they were, it would have meant ignoring and forgetting the problems of the inner cities.
We believe that there are two reasons why were right to accept the regression-based formula, as difficult as the hon. Member for the Isle of Wight (Mr. Ross) may find it. I sympathise with him in his difficulty. One reason is that, despite any defects, it is still considered the most objective method currently available for assesing differences between the expenditure needs of local authorities. The other reason is that this formula recognises that areas whose needs are found to be greatest, notably the inner urban
846
areas, should have those needs supported by grant distribution.
One of the major changes that we have carried out this year is to include the new factor of unemployment. The hon. Member for Henley (Mr. Heseltine) got himself into a great tangle about whether the use of unemployment was justified. He seemed to be suggesting that we might have left it out. If we had left it out, we would have made the distribution far less sensitive to the needs of certain areas. The evidence is that there is a direct relationship between the level of local authority expenditure and the level of unemployment in any given area, and it is because the evidence showed conclusively that there was that relationship that the unemployment factor was included in the formula.
Mr. Heseltine: I was not trying to suggest that it should not be taken into account. I was only making the point that it was under Labour Governments that there were such levels of unemployment.
Mr. Jones: That simply is not true. I have been in this House for 10 years, for a great deal of that time under Conservative Governments. During those periods, unemployment levels in my constituency were particularly high, and never once did a Conservative Government consider including unemployment in any rate support grant settlement.
I have listened with sympathy to the complaints that the local authorities hardest hit will be those with no balances to act as a cushion against high rate increases and/or where expenditure has been restricted within the Government's guidelines. On balance it must be said that ratepayers in the areas of local authorities with low balances will have been spared from the over-rating that is sometimes used to build up these balances. The money has to be found somewhere, but the decision must rest with the local authority.
As to the allegation that individual authorities are being penalised by keeping to the Government's guidelines, let me clear up one or two misconceptions. The present basis of needs assessment relies in part on past expenditure to determine the entitlement. It also relies on nearly 40 needs indicators which are completely unaffected by expenditure patterns. It is only if a significant number of authorities

847
rities with the same characteristics are excessive spenders that more grant will go to them. There is no evidence of such a group.
The shire counties as a whole are increasing their expenditure in 1976–77 at a faster rate than the metropolitan districts. The behaviour of an individual local authority should, therefore, make no difference at all to its own needs assessment, which is determined by the data for all the indicators. For instance, the more old people living in the authority area, the greater the grant paid.
I listened with little sympathy to Opposition Members who, in spite of the best efforts of my right hon. Friend, persisted in making what at best were innuendoes and at worst were accusations that the distribution of the package was motivated by political chicanery. It was based on the belief that we should channel more money into the inner cities. Many Conservative Members expressed sympathy for that idea, but when it came to putting their money where their sympathy lay they were reluctant to oblige.
I do not represent an inner city, but in the course of my travels to London, Liverpool, Wolverhampton, and so on I have been satisfied that many of these areas have special needs which do not exist even in many of our problem areas in Wales.
Mr. Nicholas Winterton: What are they?
Mr. Jones: If the hon. Gentleman believes that there are no additional difficulties
in London he can borrow my spectacles and go and have a look. I cannot give way any more; I only have a few minutes left to me—there is an appropriate Welsh phrase "Chwarae teg"—be fair.
If hon. Gentlemen suspect political motivation, let them look at the famous list and consider the effect that the settlement is likely to have on the county of Cornwall. I do not think that Cornwall considers itself a Labour stronghold. We are accused of political chicanery. But we have used a method which was introduced by the Conservatives and was enshrined in a Tory Act. Our approach was based on the 1974 Tory policy which required a more effective recognition of the needs of the inner cities. The Tories are now saying that this policy and this legislation should be abandoned.
I can assure my hon. Friends that the Water Charges Equalisation Bill has nothing to do with the rate support grant. That Bill does not propose to give domestic water consumers in Wales a financial advantage over consumers in England.
No one can disguise the fact that this has been a tough settlement. We believe that it had to be tough to reflect the Government's determination to get Government expenditure, local as well as central, under control.
It being half-past Eleven o'clock MR. DEPUTY SPEAKER put the Question pursuant to Standing Order No. 3 (Exempted Business):—
The House divided: Ayes 90, Noes 15.

Division No.25.]

AYES

[11.30 p.m.

Archer, Peter

Cryer, Bob

Kerr, Russell

Armstrong, Ernest

Cunningham, G. (lslington S)

Lamble, David

Ashton, Joe

Dalyell, Tam

Leadbitter, Ted

Atkinson, Norman

Deakins, Eric

Litterick, Tom

Barnett, Guy (Greenwich)

de Freitas, Rt Hon Sir Geoffrey

Lyons, Edward (Bradford W)

Bates, Alf

Dormand, J.D.

McElhone, Frank

Benn, Rt Hon Anthony Wedgwood

Duffy, A.E.P.

MacFarquhar, Roderick

Bishop, E.S.

Eadie, Alex

MacKenzie, Gregor

Blenkinsop, Arthur

Ewing, Harry (Stirling)

Magee, Bryan

Booth, Rt Hon Albert

Foot, Rt Hon Michael

Marks, Kenneth

Brown, Hugh D. (Provan)

Forrester, John

Marshall, Dr Edmund (Goole)

Brown, Robert C.(Newcastle W)

Fowler, Gerald (The Wrekin)

Mendelson, John

Brown, Ronald (Hackney S)

Freeson, Reginald

Millan, Rt Hon Bruce

Buchan, Norman

Golding, John

Miller, Dr M. S. (E Kilbride)

Buchanan, Richard

Gourlay, Harry

Morris, Alfred (Wythenshawe)

Campbell, lan

Grant, George (Morpeth)

Moyle, Roland

Canavan, Dennis

Hamilton, James (Bothwell)

Mulley, Rt Hon Frederlck

Carmichael, Neil

Harper, Joseph

Murray, Rt Hon Ronald King

Cocks, Rt Hon Michael

Harrison, Walter (Wakefield)

Orme, Rt Hon Stanley

Cohen, Stanley

Hughes, Robert (Aberdeen N)

Palmer, Arthur

Coleman, Donald

Jackson, Miss Margaret (Lincoln)

Roper, John

Cook, Robin F. (Edin C)

John, Brynmor

Ross, Rt Hon W. (KilmarnocK)

Cowans, Harry

Jones, Alec (Rhondda)

Rowlands, Ted

Cox, Thomas (Tooting)

Judd, Frank

Shore, Rt Hon Peter

Craigen, Jim (Maryhill)

Kaufman, Gerald

Silkin, Rt Hon S.C. (Dulwich)

Smith, John (N Lanarkshire)

Wainwright, Edwin (Dearne V)

Woodall, Alec

Stallard, A.W.

Ward, Michael

Wool, Robert

Stoddart, David

White, James (Pollok)

Strang, Gavin

Whitlock, William

TELLERS FOR THE AYES:

Tinn, James

Williams, Alan (Swansea W)

Mr. Peter Snape and

Tomlinson, John

Wilson, Rt Hon Sir Harold (Huyton)

Mr. Ted Graham.

Urwin, T.W.

NOES

Beith, A.J.

Raison, Timothy

Thomas, Dafydd (Merioneth)

Brotherton, Michael

Rees, Peter (Dover & Deal)

Winterton, Nicholas

Hannam, John

Rippon, Rt Hon Geoffrey

James, R. Rhodes (Cambridge)

Ross, Stephen (Isle of Wight)

TELLERS FOR THE NOES:

Johnston, Russell (Inverness)

Sproat, lain

Mr. Dudley Smith and

Jopling, Michael

Steel, David (Roxburgh)

Mr. Colin Shepherd.

Newton, Tony

Question accordingly agreed to.
Resolved,
That the Rate Support Grant Order 1976, a copy of which was laid before this House on 6th December, be approved.
Resolved,
That the Rate Support Grant (Increase) Order 1976, a copy of which was laid before this House on 6th December, be approved.—[Mr. Shore.]
Resolved,
That the Rate Support Grant (Increase) (No. 2) Order 1976, a copy of which was laid before this House on 6th December, be approved.—[Mr. Shore.]

RATE SUPPORT GRANT (SCOTLAND)
11.40 p.m.
The Secretary of State for Scotland (Mr. Bruce Millan): I beg to move,
That the Rate Support Grant (Scotland) Order 1976, a copy of which was laid before this House on 6th December, be approved.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): The amendment in the name of the hon. Member for Edinburgh, Central (Mr. Cook) and a number of his hon. Friends is not selected.
Mr. Milian: The order is described in great detail in the report laid with it, and, therefore, I shall not go over it in great detail, particularly as we have only a limited time for our debate.
The basic purpose of the order may be summarised as being to authorise rate support grants of £882·8 million to local authorities in Scotland in 1977–78 and to make additional grants of £52·6 million and £6·38 million for increased costs affecting expenditure in 1976–77 and 1975–76 respectively. The rate support grants constitute the largest single source of local authority income, and, therefore, I need not emphasise the importance of the order.
850
The order is being laid against a general economic background which is familiar to the House, and I need not elaborate on it. That background has been explained very thoroughly to the local authorities in Scotland on a number of occasions. For example, the February 1976 White Paper on public expenditure stated that the substantial rate of expansion in recent years in local authority manpower and in local spending could not continue, and that any increases in individual services had to be offset by reduced levels of provision in other services.
This was by no means the first intimation to Scottish local authorities of the need for restraint. In November 1974 the new authorities were asked, in preparing their budgets for 1975–76, to have regard to the very difficult economic circumstances which would prevail, and to avoid new commitments which would result in extra expenditure in 1975–76. Authorities were also asked to ensure that any increases in staff complements on reorganisation were justifiable. Subsequent circulars reinforced this advice, confirming that the restraint required in 1975–76 would have to be continued in subsequent years. The rate support grant settlement for 1976–77 was, therefore, related to a level of relevant expenditure lower than authorities would have wished, but nevertheless a higher level of expenditure—and indeed a larger grant—than in previous years. At that time local authorities were asked to regard the 1976–77 relevant expenditure figure as a ceiling on the assumption that in future years it would be reduced, and to avoid any staff increases.
I give that rehearsal of events because I want to make it absolutely clear that there can be no question of the order for 1977–78 coming as a great surprise to local authorities. They were given every

851
indication that for the next year we would be producing an order which was justified in terms of the February 1976 White Paper. Before that, other warnings had already been given.
It might be worth while if I were to tell the House something about the way in which local authority expenditure in Scotland has increased in real terms in recent years. The increase in the gross domestic product between 1971–72 and 1975–76 on a Great Britain basis was only 6 per cent. But the total public expenditure in Scotland in those four years increased by 20 per cent. and the local authority expenditure relevant for rate support grant increased by 31 per cent. in real terms. The gross domestic product rose by 6 per cent. and local authority expenditure by 31 per cent. in real terms in those four years. Even in an economic situation less stringent than at present, it would not have been possible to allow such a rate of increase in expenditure to continue. It is unrealistic to expect it to do so, given the growth we have had in these years in the gross domestic product.
Mr. Donald Stewart: Is not there a moral or ethical as well as a financial problem here? Many of the functions of local authorities have been legislated on to them by the Government. If the finance has been withdrawn, how can the Government expect them to keep those functions going?
Mr. Milian: I will come to that point, although it is not particularly relevant to the argument I am using now, which is that there has been a very considerable increase over the period in real expenditure by local authorities.
The relevant expenditure that was used as the basis of the rate support grant for the year 1976–77 was not agreed by the local authorities, but they were asked to budget within the figures on which the grant that year was based. I am sorry to say that they budgeted for £47 million in the current year more than the relevant grant figure.
I explained in the most explicit terms to the local authorities, at a meeting with the Convention of Scottish Local Authorities in July this year, that if they were not able to get their current year's
852
expenditure below the budgeted figure and somewhere nearer the figure on which the grant had been based, they were likely to face considerable problems of reduction of expenditure in 1977–78. I am sorry that, despite that plea—and I am not laying the blame on any particular authority—I got a very small response indeed—only possible savings of £2 million in the current year. I believe that the actual savings will, however, be more than that. Even at this late stage, I want to say that the more the local authorities are able to get their current year's expenditure down within the guideline figure, the less difficult it will be for them to deal with the position in 1977–78.
I turn now to the relevant expenditure which has been fixed for 1977–78. The main point is that in real terms it is higher than the relevant expenditure fixed for 1976–77, on which the current year's rate support grant was based. There is a lot of misunderstanding about this. I have seen comments suggesting that the basis of the grant for 1977–78 is a level of expenditure less than that which was the basis for 1976–77. That is not so. Far from cutting the figure in the 1976 White Paper for 1977–78—I am again referring to expenditure in real terms, taking into account adjustments in the value of money—I have increased the base figure for 1977–78 by switches from other parts of the expenditure programme, including capital expenditure programmes, by about £29 million. Therefore, while it was true that in the White Paper it was expected that the base level for 1977–78 would be rather less than that for 1976–77, it is, in terms of the order that we are debating, slightly more. It is £6 million more than the figure for 1976–77, and then it is revalued to bring it up to current prices. That means that the base figure, with loan charges added, is very considerably higher than the base figure for 1976–77.
The other thing that I want to say at this stage about the relevant expenditure on which this order for 1977–78 is based is that I am asking local authorities to keep within guidelines which are related to that relevant expenditure. I am not asking local authorities to cut below that figure. Therefore, I am not asking local authorities, for 1977–78 taken as a whole, to cut their expenditure for that

853
year below the figure on which the 1976–77 rate support grant settlement was based. It is admittedly below the figure for which they budgeted for the current year, but that is because they budgeted for the current year beyond the figures included in the grant for the current year.
I turn to the question of the rate of grant. The rate of grant has been decreased in the current year by 4 per cent. However, at 68½ per cent. it is still, by any kind of historical standards, a very high rate of grant indeed. It is the highest level of grant that we have ever had except in 1975–76 and 1976–77. In the last year for which the previous Conservative Government were responsible, the rate of grant was 68 per cent., and that was on a different expenditure base. There have been certain adjustments in expenditure since then.
If we were comparing like with like, a 68½ per cent. grant for 1977–78 is actually 2 per cent. higher than that of the last year of the previous Conservative Government, 1974–75. Therefore, I do not want to listen to a whole lot of lectures from the hon. Member for Glasgow, Cathcart (Mr. Taylor) or any other hon. Member about an allegedly unprecedentedly low level of grant, because it is higher than it has ever been in any year of Tory Government and higher than it was in 1974–75.
In 1975–76 and 1976–77, under the present Labour Government, we very considerably increased the level of rate support grant percentage. To some extent that was to take care of particular problems arising from local government reorganisation and from high levels of inflation. However, the figure at 68½ per cent. is still, by any historical standards, very high indeed.
Again, contrary to popular belief, the average domestic rate burden as a percentage of earnings has been going down over the last few years. The ordinary domestic ratepayer is under the misapprehension that he is paying as a percentage of his earnings more and more every year in rates. It is just not so. Taking rate payments as a percentage of average weekly manual worker earnings in Scotland in 1971–72 the figure was 4 per cent. In 1976–77, the current year, it is down to 3·2 per cent. Therefore, it is not true that we are putting a greater
854
and greater burden on the domestic ratepayer. In recent years, under the present Government, the figure has come down very substantially. I hope that some of those points will enable the House to get these matters into some kind of perspective.
Mr. Teddy Taylor: I hope that the right hon. Gentleman is not being selective in using figures. Does he recall giving me an answer last month in which he said that the burden of rates per head of population in Scotland in 1972–73 compared with 1976–77 had gone up from £42 to £86? Is he saying that the net wages of manual workers have more than doubled in the past four years?
Mr. Millan: Yes. I am saying that as a percentage of weekly manual earnings the rate burden has gone down. I have given the figures from 1971–72. I can give all the figures over the years, and the percentages. In other words, wages have gone up more rapidly than rate increases. I have the figures for England, too.
I also make the point that the domestic rate burden in Scotland has in recent years been slightly less than it is in England and Wales. Again, there is no justification for the claim that Scotland is in some way suffering when compared with England. If the local authorities stay within the expenditure guidelines for 1977–78—which, I repeat, in real terms are slightly up on 1976–77 and not a reduction as many seem to believe—the average increase in rates will he about 15 per cent. This is not simply a Scottish Office figure. It is one which is agreed by COSLA and was included in the document COSLA distributed to all hon Members about a week ago.
I agree that there will be some areas, and Strathclyde is one, where even when they keep within the guidelines, the increase, for particular reasons relating to those areas, will be considerably higher than 15 per cent. I have been over the figures for Strathclyde, and I accept that it is making every effort to keep to the guidelines. I applaud it for that. Even so, it will have a bigger increase. It is also true, therefore, that there will be other parts of Scotland where local authorities, keeping within the guidelines, will be able to have rate

855
increases which are less than 15 per cent. The figure I have quoted is one which applies on average over the whole of Scotland, and it is not a Scottish Office figure. It is a figure agreed with COSLA. It is also a figure which compares with the figure quoted for England, and it is one which takes account of the fact that we in Scotland do not have balances to be carried forward to cushion rate increases in 1977–78.
In comparing Scotland with England it has to be remembered that so far as there are balances in England they have not been contributed by the Government but by the English ratepayers who paid more in rates than the local authorities spent. The reduction in 1977–78 of the Scottish grant is by 4 per cent., while the English figure is 4½ per cent. The rate support grant in England and Wales for 1977–78 will be 61 per cent., compared with 68½ per cent. in Scotland. I make these points because it has been alleged that in some way Scotland is being treated in a worse fashion than England and Wales. That is absolutely untrue. The hon. Member for the Western Isles (Mr. Stewart) is shaking his head. The rate support grant in his constituency is considerably higher than 68½ per cent.
There are some detailed points to make before dealing with general matters. I have increased the domestic rate element from 27p in the £ to 31p in the £ to moderate the increases for the domestic ratepayer. Incidentally, in 1977–78 there will be no increase in the domestic rate element in England and Wales. Dealing with offshore oil-related expenditure, there is a further increase in the element of grant from £4·9 million to £7·3 million. That was introduced by the Labour Government. I propose to review the present arrangement for this "extraordinary expenses" portion in the light of the past two years' experience.
Mr. Douglas Henderson rose——
Mr. Millan: I would give way to the hon. Gentleman, but we have only a limited amount of time. I know that the hon. Gentleman is interested in these matters, but if he has an opportunity to take part in the debate I shall try to answer his points when I reply.
856
I shall make one or two other points about the detail of the order. We have tilted a little the percentage of grant paid to district councils. I was unable to obtain agreement between the districts and regions in COSLA because the district councils took one view and the regional councils another. The way indicated last year was, we thought, on balance unfavourable to the district councils, and the proportion going to district councils in the current year has been increased by about 10 per cent., which is a slight redressing of the balance. I do not pretend that it is more than that. It means overall that the percentage of the grant taken by district councils will be greater in 1977–78 than it will be in 1976–77. Furthermore, there are provisions for 1977–78 about cash limits roughly on the same basis as in the current year.
I wish to deal with two main points. The first relates to the effect of this settlement on services for 1977–78. I have not attempted to provide detailed guidance on how local authorities should reduce their expenditure, because they do not wish me to do so. I have discussed this matter at considerable detail with them, and they prefer that I should deal with the matter on the basis contained in the order.
Secondly, in terms of the effect on services and generally, I accept that this is a tough settlement for local authorities. I have never pretended that it would be otherwise. I accept that it will mean that hard decisions will have to be taken by local authorities about their services. I hope the House will keep the matter in proportion. I have already said that the figure of increase in local government expenditure in real terms over the four years 1971–72 to 1975–76 is 31 per cent. If in the next year we ask local authorities to freeze expenditure or reduce it slightly, I do not believe we shall find that this will lead to the collapse of local authority services. Next year we shall still provide services at expenditure which, by historical standards, is high indeed and compares favourably with what we were doing only a couple of years ago.
Although I recognise that there are difficulties with local authorities, I do not accept some of the extravagant claims made to the effect that this order will

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mean the end of local authority services. The only way in which that could happen would be if local authorities were to accept the advice given by many leaders of Conservative groups in local government—for example, in Strathclyde—to go in for an indiscriminate slashing of services all round, resulting in appalling cuts in services. I am interested to know whether the hon. Member for Cathcart with his great enthusiasm for cutting public expenditure, will support that approach this evening. If that happens, services will collapse, but given the maximum amount of restraint, although tough decisions will have to be made by local authorities in the next year, there will be no question of services being arbitrarily damaged, as some critics have suggested.
I pay tribute to the local authorities for the way in which most have faced the task of keeping expenditure within the limits I have laid down. The fact that so many find this difficult is a reflection of the fact that in the last few years we have got used to considerable improvements each year with a great deal of additional expenditure. I accept that much of this comes from legislation, but the Government have not been passing legislation in the past couple of years adding to the burdens on local authorities. We do not intend to do that in the present difficult economic and financial situation. When we have been used to a situation in which every year people expect more expenditure, even just to get on to a plateau, to freeze expenditure, is very difficult.
The same general observation applies to local authority manpower. It is indisputable that in recent years local authority manpower has considerably increased every year. Even between May 1975 and March 1976, in a period when the Government had in the most explicit terms asked local authorities not to increase manpower, there was an increase of about 18,000 in the number of local authority employees in Scotland. If one excludes teachers, police officers and firemen—I accept that it was right that teachers should be recruited to get teaching standards up to accepted limits—the number of general local government full-time employees increased between May 1975 and June 1976 by 9,000, from
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139,000 to 148,000. The indications are that that is levelling off.
However, the exaggerated claims about redundancy should be set against the fact that until recently local government staffing was on a high rising trend. I repeat the point I have made on numerous occasions, that although I do not exclude the possibility of redundancy altogether—I accept that that may be necessary in certain areas in particular circumstances—I believe that the bulk of the problem can be dealt with by the use of recruitment policies, by natural wastage and, in some cases, by early retirement.
In summing up, may I say that obviously this is a tough settlement from the local authorities' point of view. It has given me no pleasure to ask local authorities to accept it. But, given our general economic situation, it is a fair settlement. Its effects, in some respects, although they will be serious enough in terms of rate increases in some areas, have been grossly exaggerated. I commend the order to the House.
12.8 a.m.
Mr. Teddy Taylor: I shall try to be brief because time is short and the Minister spoke for some time in a one and a half hours' debate. Hon. Members will want to speak on what is undoubtedly a catastrophic order, despite what the right hon. Gentleman said.
The Secretary of State put up a very poor case. He said that local authorities should not have been surprised about the 4 per cent. reduction. After the meeting on 22nd November, Sir George Sharp said:
"A number of us went into the meeting anticipating a slight reduction in the percentage, but to have been told that it was being savagely cut by 4 per cent. was something none of us expected."
That is the general picture we get from local authorities. The Minister said that the percentage was larger than in the Conservative Government's years in office but a point which he significantly omitted was that in every Conservative year from 1970 to 1974 there was an increase—65½ per cent. to 66 per cent. to 66½ per cent. to 68 per cent. It was a general percentage increase because we thought it right to change the burden from rates to taxation.
Mr. Dennis Canavan: I deplore the effects of the Government's cut as much as the hon. Gentleman does, but will he admit that the percentages he mentioned relating to the Conservative Government apply to a much lower base? Would the hon. Gentleman care to mention any Conservative Government which managed to give a rate support grant as great as 68½ per cent.?
Mr. Taylor: I do not accept that. The hon. Gentleman is well aware that the greatest expansion in public services made in the interests of the Scottish people occurred when the Conservative Party was in office. I had the pleasure of being in office in one of those years when there was a dramatic increase in social work services rather than the restrictions on cash imposed by the present Government.
The Minister said that people are not paying more as a percentage of income in rates. He must have picked very selective figures. He spoke only of manual workers' average earnings, and he talked about particular areas, but the fact is that, according to his own figures given to me last month, the amount of rates paid per head of population in Scotland has more than doubled in four years, and the amount paid per household has increased from £65 to £123, that is, almost double in four years. It should be recognised also that it is a question not just of incomes but of disposable incomes, and the increased tax percentages imposed by this Government mean that the proportion of disposable incomes taken by rates has increased substantially.
We are concerned about the order for four reasons. First, it will have serious consequences for Scotland, its people and its industry. It represents simply a transfer of revenue collection from taxation to the rates at a time when there is mounting evidence that rate levels are passing the point at which people and industry can afford to pay.
We read in the papers that on Tayside rates arrears of £2 million are still outstanding, despite efforts to get the money in, and debt recovery action is to start tomorrow. Strathclyde has a greater problem because burdens have soared and when this further substantial increase
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takes place it will mean a considerable reduction in the number of jobs available and in the number of commercial enterprises. Moreover, with an enhancement of domestic derating, there will be a greater burden on industry and commerce, and for every factory and shop which closes there will be more burden to be carried by the others.
I hope that the Secretary of State will take into account the particular difficulties in Glasgow, where the chamber of commerce is concerned about a likely increase of about 40 per cent. in the rates burden, which will have a catastrophic effect on jobs in Glasgow, especially when that increase comes on top of other higher costs, including the removal of REP and the rise in national insurance contributions.
The Minister has been short-sighted in his order. If, as he says in the White Paper, the object is to restrain public spending, he is in fact taking no action to ensure that public spending will be restrained. He has taken Pontius Pilate's attitude, washing his hands, cutting the Government grant, and saying "You must try to reduce public spending". But there is no guarantee that public spending will be cut. There is nothing to prevent local authorities from simply increasing the rates burden.
I believe, and my party believes, that it we are to have a measure of this kind there is need for the Government themselves to fix a limit to the percentage rate increases charged by local authorities. The Minister has given some advice about, for example, what can be done in staff recruitment. He may be aware that there was a shake-out at the time of the reorganisation in 1973. A lot of people retired voluntarily then, and the amount of voluntary wastage is now limited for that reason.
What worries us in addition is that the cut in grant is far more serious that it seems, because inflation will be worse than we expected. The Chancellor is now taking about 15 per cent.—the indications are that that may be an underestimate—and the increases will not be fully covered.
Second, there is the problem of debit balances, which the Convention of Scottish Local Authorities dealt with very thoroughly in its representations. Third, there are inescapable commitments which are the result of capital spending in

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previous years. Fourth, there will undoubtedly be a greater demand on local authority services, with the possibility that more children will stay on at school because of lack of employment, plus the certainty that there will be more hardship to be dealt with by social service departments, as well as the fact that we have more elderly people whose needs must be cared for.
I want some assurances about the elderly. Will the Under-Secretary of State responsible for health and social work assure me that they will be protected? Inevitably, one of the easiest cuts to make—they are being made now by some local authorities—is a cut in the home help service for the elderly. It is short-sighted to make that cut. It does not save money in the long term.
In these circumstances, bearing in mind that this order will have a serious effect in Scotland, where we have a serious economic problem already, what is the right course to take? There is the traditional argument that if we do not pass the order there will be no cash for the local authorities. We should like some clear assurances from the Minister. Will he review the order in the event of inflation being much worse than is anticipated? Is he willing to consider the possibility of imposing limits on rate increases?
There is no doubt that this order is a total condemnation of the Government's disastrous policies which have brought about a situation in which the Government have virtually run out of money and in which we now face unemployment and misery. Ratepayers will suffer enormously because of the Government's failure to act on the economy in time, and one consequence is this appalling order.
The Minister adopted a complacent attitude in his speech today. He should appreciate that the order will do great damage and cause great hardship. It will undoubtedly add to the catastrophic level of unemployment in Scotland.
12.17 a.m.
Mr. Robin F. Cook: The Secretary of State produced a large number of impressive figures about the increases in local authority expenditure and staffing over the last four or five years. I do not disagree
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with those figues, but we are deluding ourselves if we do not recognise that part of the blame for those increases rests in this Chamber.
I spent a considerable part of my time in the Library during the last interminable debate, and I can tell the Minister that in the course of the last three Sessions the Government have produced and passed 180 Acts. That leaves aside Bills sponsored by private Members and other private legislation. Many of those Acts have had an effect on the obligations, duties and staffing of local authorities, and some of the Acts are explicit about that. I served on the Committee that considered the Community Land Bill. The Explanatory Memorandum to that legislation makes the explicit statement that total staff increases resulting from it will be
"of the order of 12,000 in local authorities in England and Scotland."
The fact that we have not achieved that number is due to our miserable record in implementing the Act. But it was our intention. We did not hesitate to require staffing increases in local authorities when we brought forward that Act.
The blunt truth is that local authorities are creatures of statute. There is not a single thing that they do without Parliament passing a law to say that they must do it or that they may do it, and as soon as a law is passed that says that a local authority may do something, we can be certain that an hon. Member will stand up to say that they should do it.
It is not just through legislation that we affect local authority staffing and expenditure. In the Library this evening I had a look through the six green box files containing circulars issued by Ministers. Since 1st October no fewer than 33 separate circulars have been issued to local authorities by the Scottish Office. The prize must go to the Under-Secretary of State for the Scottish Office who during those two months, in the midst of the most acute crisis in local government finance that this generation has ever known, sent, for chief executives to read, no fewer than three circulars about what local authorities should be doing to prepare against a nuclear attack.
It is not enough to blame the Government. There is not an hon. Member who could lay his hand on his heart and say that he has not at any time during the last

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12 months written to his local authority to make a complaint or suggestion that would involve that authority in greater expenditure. If there has been an unacceptable increase in local authority expenditure, we are largely to blame. If it is true that local authorities are now spending too much and taking on more than the country can afford, let us accept the implications of that and legislate. Let us take off some of the obligations we have piled on them during the past two decades. The cuts envisaged in the order cannot be met if local authorities are to fulfil their present functions.
My right hon. Friend repeatedly contrasted the level of expenditure he approved last year with the level of expenditure he is approving for next year. He said that there was no cut. The real decision faced by local authorities is how to reconcile the money they will have this year with the money they spent in the past year. That involves a massive reduction and a threat to their functions.
The Lothian Regional Council met yesterday. I have been unable to receive details of the decisions taken, partly because the local newspaper is in dispute, but I have seen the options the council considered. The options, never mind the decisions, are sufficiently distressing. In education they involved reducing staffing levels and increasing the mileage that children had to walk to school from two to three miles before qualifying for a bus pass. In social work the options were to reduce the home help service by 5 per cent. and to reduce support to voluntary playgroups. Even in a service so basic and non-controversial as the police force, the suggestion was that vacancies should not be filled and that there should be a 10 per cent. cut in vehicle mileage, though I do not know how the police can cut mileage by 10 per cent. when they are in hot pursuit of a criminal.
I recognise that these are cuts in increases that we had four years ago. We have more teachers and more home helps and, no doubt, police vehicles do more mileage than they did four years ago. Nevertheless, they are real cuts which will cause difficulty and hardship.
I have received information on one decision taken yesterday. The Council decided to close the Citizens' Rights Office, which is supported as an urban
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aid project in my constituency to assist in the counselling of welfare claimants. That office will now close within a matter of weeks. I cannot think of a more classic illustration of the truth that when public expenditure is cut it is the poor and the inarticulate who suffer first. Those who are most vulnerable and least likely to complain are the ones who suffer first. The irony is that they are the people we are supposed to represent.
In my constituency there is a high proportion of elderly people. The area social work team that operates from the centre of my constituency has within its boundary 25 per cent. of all the retired persons in Edinburgh. These are the people who will suffer from the cut in the number of home helps, even if it is a cut in the increase of four years ago.
This weekend I received a deputation from a residents' association which expressed concern about the marked decline in the cleansing service. The people who live in city centres and in dense residential areas, in drab urban streets without amenities, are the ones who will suffer when environmental services start to decay as a result of the lack of money.
I have served on a local authority. I say that with some humility, as many hon. Members have served for far longer than I did, but I did not come to this place to set my hand against so much I fought for as a councillor. That brings me to what we must do tonight.
I have two observations to make. First, we are considering the largest single element of public expenditure in Scotland. What we decide tonight will have the most profound effect on the level of public services in Scotland for the coming year. It is outrageous that we should have to consider the order in a truncated debate lasting for one-and-a-half hours, with barely half an hour left for Back Benchers, at the fag end of the last debating day of the term, after midnight.
Secondly, we have been told that we cannot amend the order. Hon. Members who have been to the Table Office and the Public Bill Office in the past fortnight will be aware that we cannot amend it. It has been suggested to me and my colleagues over the past week by Ministers that we cannot oppose the order. If we oppose it, we are told, there will be no money for local authorities. That

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statement is based on a logical fallacy. We are not saying that we are against a Scottish rate support grant order. We are saying that we are against this Scottish rate support grant order.
Leaving that aside, the logic of what we have been told is that we cannot amend the order and that we cannot oppose it. What control does that leave this Chamber over what orders the Government may choose to introduce? It is high time that this Chamber reasserted some of its control over the Executive. I believe that we should make a start tonight by rejecting the order, which achieves simultaneously the remarkable feat of bringing about unacceptable cuts in local services and unacceptable increases in local taxation. I propose to divide the House at the end of the debate, and I hope that many hon. Members will join me.
12.25 a.m.
Mr. Donald Stewart: The Secretary of State did not, as far as I recall, make reference to the fact that the increase order was based on the assumption that inflation would be about 7 per cent. The Chancellor of the Exchequer is now talking of a rate of 15 per cent. and the possibility of a rise even beyond that figure. Who can doubt that that will take place? It is an important factor for local authorities, which have to budget ahead.
Nor do I think that the comparisons that the right hon. Gentleman made between Scotland and England and Wales were quite fair. I shall not argue about whether the Scottish figures are higher or lower, but I must remind him that there have been two valuations in Scotland compared with only one in England. For that and other reasons, I do not think it is possible to make comparisons between the English and Scottish systems.
The right hon. Gentleman pointed out that the local authority in my constituency was receiving the highest rate of grant. I do not deny that. But it is for a simple reason, and it is unfair to make that kind of reference. The reason lies in the needs formula. It is because of the poverty of the area. We have a ratio of persons over 65 of one in four as against one in eight on the mainland, and the local authority has many other problems. At the same time, we have huge
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areas without a secondary school. The Scottish Office has recognised the need in principle.
I make no apology for the Western Isles being in receipt of a very high level of rate support grant. Their greater poverty is the reason why they are faced with even more severe problems than other areas of Scotland have.
Before 1973 it was impossible for the local authorities in Scotland to rate for the balances, and that is another factor which places them at a disadvantage compared with the English local authorities.
I join the hon. Member for Edinburgh, Central (Mr. Cook) in his protest against the time allowed for a speech on this vital matter for Scottish local authorities, and I also am surprised that, apart from the hon. Member for Glasgow, Cathcart (Mr. Taylor), only three Scottish Tories are interested in this subject.
12.28 a.m.
Mr. David Lambie: I shall not go over the arguments put forward by my hon. Friend the Member for Edinburgh, Central (Mr. Cook). I accept them all. In the short time we have for this debate, I shall make only two points.
First, I shall take part in the revolt against the Government and vote against the order. Like my hon. Friend, I am fed up with being a rubber stamp for confidential negotiations in which I, as a Member of Parliament, have taken no part. I ask that in future, if hon. Members are to have the final say on the level of the rate support grant in Scotland, we shall have open negotiations and open government, and do away with confidentiality.
Not only are we, as Members of Parliament, complaining about this confidentiality and the fait accompli with which we are faced. Most of the members of the Convention of Scottish Local Authorities are also complaining because unless Councillors are on the working party or the various negotiating committees they do not know what has been negotiated. They, too, are faced with a fait accompli. If in future my right hon. Friend does not want a Back Bench revolt he must see that we get open government and that negotiations are carried on in the open, with Members of

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Parliament participating, if, at the end of the day, we have to take the final vote.
My second argument relates to the actual distribution of the rate support grant. Arising from what I understand to have been a confidential proposal of the working party on local government finance, the districts' share of the RSG will be allocated to them on the basis of a weighted population with special allowances for density of population. This is a new element in the RSG. Because we are now using density of population, rich Tory and SNP areas such as Bearsden and Milngavie, Eastwood and East Kilbride, will have an advantage over poor Labour areas such as Cumnock and Doon Valley, Dunbarton, and my own district of Cunninghame. Because of this change in the negotiations and using part of the formula based on density of population, areas like my own district will suffer.
I realise the thinking behind it. If we use density of population, Glasgow must benefit. No matter how it is calculated, density of population will always benefit Glasgow because, even with a falling population, it has some of the most densely populated areas in the United Kingdom. I do not mind subsidising Glasgow and its Labour supporters, but I object to my own people in the Cuninghame district subsidising the Tories and SNP supporters in East Kilbride, Bearsden, Eastwood and all the other areas peripheral to the urban centre of Glasgow.
I ask my right hon. Friend to change this element and to realise that in areas like the Cunninghame district, because of an Act of Parliament, we have, in addition to traditional industrial towns and villages which are running down at present, areas such as the Kilbirnie Hills, which are moorland areas with no financial advantage to the local authorities, and we have island areas such as Arran and Cumbrae which might be attractive but which are expensive to service. Because we have these large areas with very low total populations, our density of population is reduced and we get a reduction in RSG.
If these negotiations had been carried out in public, this change to using density of population as one of the elements in
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calculating the RSG would never have been allowed. That is why I shall be taking part in the revolt against the Government tonight.
12.33 a.m.
Mr. Russell Johnston: It is not my contention that the extent of Government assistance to local authorities is unreasonable in present circumstances. What is arguable is the way that it is applied, which in many respects is unfair.
The rate support grant system formula is, after all, only marginally clearer to the ordinary person than some of the more esoteric forms of Eastern religions. Certainly it is no clearer to the ordinary man in the street. What is more, it is very difficult for Members of Parliament to criticise it, because we do not understand it, and a great many people in local government do not understand it, either.
What is relatively clear is that the new formula devised by the Government takes away from the rural areas and gives to the urban areas. In the case of the Highlands area, part of which I represent, the loss has been calculated to be about £2·25 million a year.
What is equally clear and equally inexplicable is that the basis of the system seems to be unrelated to any kind of United Kingdom system or pattern, and that is particularly odd because the Government are engaged in introducing a devolution Bill, the basis of which is that there should be the same standard of grant and the same treatment throughout the United Kingdom.
My hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) asked a question which was designed to compare the Borders with Powys, in Wales, two areas that are similar in size and population. The populations are 99,000 and 100,000, and the areas are much the same, at 1,154,000 for the Borders and 1,250,000 for Powys. Yet gross expenditure on Government grant is 75 per cent. in the case of the Borders and 85 per cent. for Powys. All other things appear to be equal. Why is there this distinction?
My area has been recognised for a long time by Governments as requiring development. The Highlands and Islands Development Board was set up by the Labour Government in 1967. Yet

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the projected protected rate of 147p, which is the estimated rate for the region, has been boosted by the rate support grant reduction of 16p and the redistribution of 7p. If the Government's objective remains, as it was with their predecessors, to equalise rates at some rough line by producing some sort of formula, that is fine, but we must face the fact that there is no equivalent level of standard of service. The Government must regard that as unsatisfactory. The Minister should take another look at the formula which has been agreed. In theory it is fine, but in practice it puts a heavy burden on the rural areas which are least able to bear it.
Why are road lengths excluded from the rate support grant calculations? The Government have sought to give general support to local authorities in times of expenditure restriction. But I complain bitterly that the rural areas which the Government claim to wish to develop are being squeezed and denied support by a method which the Labour Party, when in opposition, criticised when it was used by the Conservatives. That is most unsatisfactory.
12.38 a.m.
Mr. Norman Buchan: I shall be brief, especially in view of the excellent speech by my hon. Friend the Member for Edinburgh, Central (Mr. Cook). Most of us, however, wish to make our views known on this issue and to show clearly where we stand. This is the first time that I have spoken on the subject of local government, so I must have been moved a great deal to embark upon this complex subject.
There seems to be a curious myth, which is being perpetuated by the hon. Member for Glasgow, Cathcart (Mr. Taylor) and even by my right hon. Friend the Prime Minister. It is that we can solve the problems of expensive local government by sacking one or two highlypaid administrators.
Mr. Lambie: It would help.
Mr. Buchan: It might help morale, but it is a myth which we should not seek to perpetuate, even in the course of interjections such as that. The truth is that the kind of cuts which will be demanded as a result of this measure will make a massive inroad into the services
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provided. It might affect one service or a dozen services, and it might mean one service going altogether.
It is nonsense to suggest that the problem lies with highly-paid officials in town halls. That is the charge that we hear continually, but it is lodging the issue. The issue is that local government gives the direct service and carries out the wishes of the House in the sectors, for example, of education and social services.
Mr. Robin F. Cook: For the poor.
Mr. Buchan: As my hon. Friend says, it does so for the poor. The rich do not require assistance. They can buy what they need or want. It is the poorest section of the community that is to be hit. Local government has many devoted officials who receive few thanks but who have the task of implementation.
I have been disturbed by the loss of morale of local councillors in Scotland. Many good councillors tell me that they will not stand again. That is because of the vicious distortions by the Press and certain politicians about councillor's allowances. There are at least three councillors in my area who lose heavily. Councillors can no longer accept the continual Press distortions.
The regional and district councils have been in existence for a year and a half. The councillors say that they have discussed only what to cut, not what should be done. That has not been good for their morale. When that happens, it is not healthy democracy.
I listened to the humbug of the hon. Member for Cathcart. He must be honest enough to say, if he wishes to cut rates and taxes, that he is demanding greater and greater cuts in services. We could do with a little honesty, whatever section of pondlife it may come from.
Mr. Teddy Taylor: If we are to have grant reductions of this sort because of the serious situation in Scotland, I accept that there must be substantial cuts in local authority spending.
Mr. Buchan: Perhaps they would be welcomed by the hon. Gentleman.
What is now taking place must be set against the background of the real economic climate. I do not blame the

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Government for the crisis, although I blame them for some of the measures that they have taken to deal with it. For example, it is nonsense to think that by sacking people in local government we shall boost labour in manufacturing industry. That is not true. There is no mechanism to redirect such resources, and we all know it.
We have the choice of sacking people or of increasing the rates. A rate increase has been suggested for the Strathclyde Region which is a good region. It has been dragged into the debate by the SNP for party political purposes. The SNP does not choose to run an election in the Strathclyde Region or elsewhere on independence. Its slogans are attacks on Strathclyde. In many ways it is one of the best local councils I have met. That is the view of many who have been closely involved in these matters.
The problem is that rates are an unfair system of taxation. National taxation is fairest. A time of increasing economic difficulties for the country and for individuals is precisely the wrong time to alter the balance by increasing rates. That is the economic argument why the balance should not be changed.
I ask my right hon. Friend to think again. I have enormous respect for him but I sometimes think that he does not always feel close to local government. I wish that he could feel closer to it as it is the sector of government that carries out the demands that are made by the House.
12.44 a.m.
Mr. Robert Hughes: I hope that my right hon. Friend will be able to put me out of my misery about balances and enable me to sleep tonight. It has been said that it has not always been possible to rate for balances. We may be speaking about different things, but when I was in local government in Aberdeen we used to run a rates reserve fund. We ran a surplus to be used for various purposes in future years. Either I acted illegally for a number of years as a local councillor or we are speaking of different things when talking about balances and rating reserves.
My hon. Friend the Member for Edinburgh, Central (Mr. Cook) rightly emphasised the responsibilities that the House
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places on local authorities. What has not been mentioned is the ongoing effect that Government decisions directly have on capital expenditure. Every time that capital expenditure is approved, there follows a revenue cost. Insufficient account has been taken of this. This situation has reached the point of absurdity.
Yesterday the Labour group on the Grampian Regional Council pressed very hard that five nursery schools which have been built in the region should be opened. The local authority says that it can open only one of the schools, to which it can transfer staff, but that four nursery schools will remain closed because it cannot afford to staff them.
Are there any other examples of this throughout Scotland, and how often will it be repeated in the coming year? The Grampian authority could very well open the nursery schools, because I do not believe that the public expenditure cuts could have had their effect so quickly. It is the tip of the iceberg and it illustrates the problem. There is no point in the Government sanctioning a great public capital expenditure programme and boasting about all the capital expenditure they have authorised when they do not recognise that there is no point in, for instance, having buildings if they cannot be staffed. Because of this decision, a large number of children cannot attend nursery school. As I said in a speech on the Barber cuts, it is always working-class children that suffer. I hope that my right hon. Friend will recognise this and take appropriate action.
12.47 a.m.
Mr. Tam Dalyell: I strongly support my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) in his reference to what he suggested was the sport of councillor-bashing. If the Scottish Press continues with its campaign, the result will be that people will be unwilling to run for public office.
I want to ask one question which I have raised before as a matter of special pleading. Will my right hon. Friend reflect on whether he ought not in the new year to consider with his officials giving a definite directive to the new town of Livingston? My hon. Friend the Member for Midlothian (Mr. Eadie)—who is on the Front Bench—and I are

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bothered about the whole issue of Livingston. I realise the difficulties attached to special pleading, but the fact is that this new town is unique because of its size and the stage it is at. The way in which it is consuming the resources of Lothian Region worries the whole region, including my hon. Friend the Member for Edinburgh, Central (Mr. Cook).
For what it is worth, I shall support the Government tonight. I think that it must be done. We are borrowing from abroad. No more may be said about them. Perhaps I may in the same breath ask forgiveness for wondering how my right hon. Friend the Lord President of the Council, who does us the great courtesy of being present for this Scottish debate, can in the light of this measure support the expense of the Assembly. I leave it at that.
12.49 a.m.
Mr. Richard Buchanan: Last week representatives of the Strathclyde Regional Council came to see hon. Members to express their apprehensions about the cuts that were envisaged in the rate support grant. I think that those councillors will be a deal happier tonight. My right hon. Friend the Secretary of State merits the congratulations of all Members on saving the hundreds of jobs at the Marathon shipyard.
Where did the £13 million come from? Was it plucked out of the air or from savings? I have badgered the Government about their policies for redevelopment and the revitalisation of Scottish industry. For the first time we see that they are serious in their intention to revitalise industry in Britain. Marathon is a triumph for my right hon. Friend.
My hon. Friend the Member for Edinburgh, Central (Mr. Cook), with his usual perception, hit the nail on the head when he said that the present trouble was our fault, that we made the decisions, and so we had 13·5 per cent. inflation, 1½ million unemployed, massive overspending of £11 billion, a balance of payments deficit of £2 billion, interests rates of 15 per cent. and virtually no growth. That is why my right hon. Friend has had to take the action he has taken on the rate support grant. He had no option.
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My hon. Friend and some others are going to rebel against the Government tonight. They are entitled to do that, in a democratic assembly, but where will the local authorities get their money? The rate support grant does not deal simply with next year. There is current expenditure to be met to April 1977. If my hon. Friends defeat the order, they will put the local authorities in considerable trouble. There is no point in rebelling in these circumstances. My hon. Friends will make the difficulties of the Strathclyde and Lothian councillors a sight greater than they are now, and they will get worse.
Whatever policies we may have pursued six months, 12 months or 18 months ago, those options are no longer open. We have only one way to go. Today's decision on Marathon is an indication that we may be going the right way. There is no point in talking about reflation now. The other way, the siege economy advocated by some of my hon. Friends, would make the position of the Strathclyde and Lothian councillors very much worse than it is or will be under this order. My advice to my hon. Friends is to vote with the Government and try to do what is possible to improve the proposals in the order.
Having said all that in support of the Government, I must say that I am particularly worried about housing. When we start rebuilding there is always a shortage of carpenters, joiners, plumbers and bricklayers. When we halt the construction industry we halt the training of apprentices, who are vital to the future of the industry. I ask the Government to have another look at industry. Transport is an essential part.
If we are to revitalise, I do not want the transport grant to be mixed up in the rate support grant, as the old block grant was and subject to the constant erosion of special pleading. I hope that my right hon. Friend will be specific in identifying the money allocated to public transport.
I urge my right hon. Friend, having done a splendid job for Marathon, and the workers employed there, realising the difficulties of our colleagues in Strathclyde, Lothian and the other regions, to use his best endeavours to increase where possible the rate support grant for the deprived areas of Scotland.
12.53 a.m.
Mr. Dennis Canavan: I am opposed to the decrease in the grant because it will mean a decrease in people's living standards. I speak as one who in the past has not been entirely uncritical of certain aspects of local government spending. I make no apologies for referring again to the cheap home loan scandal involving highly paid executives in the Central Region, which covers part of my own local authority. I spoke out at the time, and have done so since. Those people, highly paid and in responsible positions, deserve no sympathy from me or the public, who have to foot the bill for their breaking of the law.
But to keep the matter in perspective I must add that the money involved in such abuses is a drop in the ocean of local government expenditure, most of which is essential spending on the social services. We must differentiate between the minimal extravagance and the vast bulk of local government expenditure which is absolutely necessary.
Local authorities are now being asked to cut back their spending programmes to such an extent that they are in danger of being unable to fulfil some of their statutory duties. Obviously, those who will suffer are those most in need, such as the old, who depend on social services such as meals on wheels, luncheon clubs, home helps and so on. The disabled are dependent on assistance for alterations to their homes to make life easier—for example, ramps for wheelchairs. Young people in education—not just formal education, but in the wider aspects of education such as leisure and recreation—will be affected.
There is also the threat of redundancy hanging over the heads of many local government workers. It is not good enough for the Secretary of State or for anyone else to say that these proposals can go through without massive redundancies taking place. Such redundancies are inevitable if the proposed cuts go ahead. According to trade union representatives, who are closer to the situation than either the Secretary of State or myself, massive redundancies will affect their members.
I have seen some of the options before the Central Regional Council, part of which comes into my constituency. It
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has some very painful decisions to make between redundancies and trying to maintain services of even minimum standards.
The whole Labour movement throughout the country, not just in this House, has always believed in municipal Socialism and involvement in local government in order to redistribute a fair amount of wealth and opportunity in favour of those who are most in need. The advances and achievements which have been made in the past half century are in danger of being dismantled. Those who are now speaking out and being critical of the Government in this respect are not only a militant minority but responsible people who have given a lifetime of service in local government.
An increase in public or local government expenditure is not intrinsically evil. I want to see more public and local government expenditure. But we shall not get it with the silly policies advocated by the hon. Member for Glasgow, Cathcart (Mr. Taylor). We shall get it only by convincing the Treasury that it has the wrong economic strategy because it is not Socialist enough. For example, we should not throw away good, profitable public investment in BP shares.
By decreasing public investment and public expenditure we shall be going contrary to the manifesto on which we were elected. I shall continue to fight not for a siege economy, but for an alternative Socialist growth economy. That is why I shall vote against the order.
12.53 a.m.
Mr. George Younger (Ayr): This is an appalling hour of night at which to have such an important debate. I hope that the Leader of the House will note what has been said and that this time next year he will arrange for this important debate to be taken at a better time for Scottish Members.
The one point that we must get across to the Secretary of State is that the cuts will be considerably more severe and unpleasant than he seems to realise. That is certainly the view of the local authority associations. Indeed, all those who have been to see us believe, whether rightly or wrongly, that the right hon Gentleman does not realise the seriousness of these cuts and their effects.
This unhappy chapter started at the beginning of the new local government

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set-up with the guidelines which were drawn up on which these grants are still being based, albeit at a year or two years' remove. The guidelines—the best which could be devised at the time—were not specific. They were not carefully calculated. Indeed, they were very much in the nature of a guesstimate. Guidelines were the original source of the trouble and the reason why the first rate support grant orders turned out to be much less accurate than one would have hoped. Built upon that there is mounting inflation and the great difficulties that have arisen.
It is no use the Secretary of State just saying that because he warned local authorities about this they ought to have been able to deal with it. It is true that he has been warning them. We have seen the warnings in the Press. But it is not as easy as that for one who is running a local authority, particularly an authority without much experience, to make these tremendous sea changes quite suddenly and as quickly as has been requested.
The Secretary of State cannot underestimate the fact that, whether by accident or for some other reason, he has not made sufficient allowance for inflation in the calculations. The local authority associations have complained that they were given an allowance of 7 per cent. for inflation in a year in which it turned out to be running at an annual rate of 10.9 per cent., and the authorities are carrying the difference.
Many Acts of Parliament that have been introduced by previous Governments and even by the present Government cannot be undone. Local authorities are forced to provide more expenditure and more people to fulfil the provisions of those Acts. Everyone has been encouraging local authorities to get extra police, for example, and they have been able to get some in the last year or two. But it all costs money. The local authorities have a legitimate case. They feel that they are not able to reverse the ship as quickly as the Secretary of State has requested.
Then there is the National Insurance Surcharge. Local authorities never expected that. The Government introduced that out of the blue. Just as it affects industry very seriously, the 2 per
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cent. surcharge on the employer's contribution affects local government, which is very labour-intensive as we all know, in exactly the same way. Allowance has not been made for that, either. All of this is piled upon us now.
Having said all that, I hope that all hon. Members will realise that the Secretary of State has no option but to bring before us this measure. His Government have so failed in their economic policy that they have run out of money and cannot afford to give a better order than that before us. The Secretary of State is in the unhappy position of having to put this across to us and the local authorities, and we must feel doubly sorry for him in what he is having to do because he knows that he would very much rather not do it.
Here my sympathy rather evaporates. Labour Members below the Gangway—if in this case that is the right way of describing them—have been talking grandly about a revolt tonight. If this was something that had been done over their dead bodies, I would have some sympathy. However, they are turning on their own Government when it is they who have been pressing the Government all the time that they have been in office to overstep the mark, to increase the rate of inflation, to reflate the economy, to spend more on everything and to increase public expenditure.
It is the Left wing that has been asking for this all the time. The result of what they have done—they have been very successful—is to lead the Government into the runaway inflation which has led the Secretary of State and his colleagues into the deeply unhappy situation in which they now find themselves, and it has led all their local authority friends into the position of having to face a rate support grant order much less generous than anyone would have wished.
Hon. Members who are thinking so grandly of their consciences tonight and of revolting against their own Government ought to have a care for the fact that they have put the Government where they are. It is very largely their fault that the Government are there. If hon. Members had half the decency that they should have, they would support the Secretary of State tonight in his unpleasant task. If they do not do so, they will be

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going against everything that they have forced the Government to do. The Secretary of State has an unenviable task and is giving local authorities a very difficult task. Unfortunately, the incompetence of the Government gives them no option.
1.4 a.m.
Mr. Millan: That was a particularly equivocal speech, even from the Opposition Front Bench. However, at least tonight we have got the hon. Member for Glasgow, Cathcart (Mr. Taylor) on record as saying that he is in favour of major cuts in public expenditure at local authority level. I suppose that it is some little advance to have that on record.
As to the timing of the debate, I am sorry that because of the loquaciousness of the English and the Welsh, the debate came on rather later than I would have wished.
I make the point that it is important from the point of view of the local authorities that we approve this order tonight. It would put the local authorities at a considerable disadvantage if the order were not effective before Christmas. That is why it is before us tonight. Perhaps my hon. Friends will have that in mind when they come to vote.
If by any mischance or miscalculation the order were not approved, I am afraid that the £60 million which the local authorities are due to receive under the increase order could not be paid. We are to begin these payments in January. Without the order the local authorities will not get the money.
Mr. Buchan: In the event of the order being rejected tonight, we would expect my right hon. Friend to introduce an even better order in January.
Mr. Millan: If my hon. Friend is expecting me to introduce an even better order, he is being rather optimistic. We have considered all these points in proposing the settlement. To delay the order will simply do damage to local authorities.
It is not true, despite what my hon. Friend the Member for Edinburgh, Central (Mr. Cook) has said, that the Government have continually placed
obligations upon local authorities. I accept that local authorities carry out obligations which are largely imposed on them by this House. But we have been careful in recent years to limit considerably any additional obligations on local authorities.
Mention might have been made of my statement on 5th November about considerable changes in procedures for dealing with, for example, educational building projects for local authorities. These will considerably reduce the amount of staff time involved at local authority and Government level. There are a lot of other things I could mention, given time, to demonstrate that we are seriously attempting to disengage from a number of procedures in which we are involved so as to save staff time.
I do not accept that the order will lead to massive reductions in services. My hon. Friends have referred to the police. The police staffing figures for the past year are interesting. In the period between May 1975 and June 1976 the number of policemen in Scotland rose from 11,900 to 12,800. It is absurd to argue that unless we have constant increases the whole of the service will collapse. I do not accept that as a serious statement of the position.
We know that there is room for economy in local authority expenditure without damaging services. I do not pretend that all of the economies over the next year can be made painlessly. The local authorities have never said that to me. Equally, they have never said that there are no areas of local authority expenditure where certain economies cannot be made without causing considerable damage.
Of course the order has to be taken in conjunction with the economic background. In other situations I should like to produce a more generous order. A number of painful decisions have been taken by local authorities in difficult circumstances. Equally—
It being one and a half hours after the commencement of proceedings on the motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business):—
The House divided: Ayes 66, Noes 19.

Division No. 26.]

AYES

[1.10 a.m.

Archer, Peter

Barnett, Guy (Greenwich)

Benn, Rt Hon Anthony Wedgwood

Armstrong, Ernest

Bates, Alf

Bishop, E. S.

Brown, Hugh D. (Provan)

Harper, Joseph

Rowlands, Ted

Brown, Robert C. (Newcastle W)

Harrison, Walter (Wakefield)

Smith, John (N Lanarkshire)

Brown, Ronald (Hackney S)

Jackson, Miss Margaret (Lincoln)

Snape, Peter

Buchanan, Richard

Jones, Alec (Rhondda)

Stallard, A.W.

Campbell, Ian

Judd, Frank

Stoddart, David

Cocks, Rt Hon Michael (Bristol S)

Kaufman, Gerald

Strang, Gavin

Coleman, Donald

Kerr, Russell

Tinn, James

Cowans, Harry

Leadbitter, Ted

Tomlinson, John

Cox, Thomas (Tooting)

McElhone, Frank

Urwin, T. W.

Cryer, Bob

MacFarquhar, Roderick

Wainwright, Edwin (Dearne V)

Dalyell, Tam

MacKenzie, Gregor

Ward, Michael

Davidson, Arthur

Marks, Kenneth

White, James (Pollok)

Deakins, Eric

Marshall, Dr Edmund (Goole)

Whitehead, Phillip

de Freitas, Rt Hon Sir Geoffrey

Mendelson, John

Williams, Alan (Swansea W)

Dormand, J. D.

Millan, Rt Hon Bruce

Wilson, Rt Hon Sir Harold (Huyton)

Duffy, A. E. P.

Morris, Alfred (Wythenshawe)

Woodall, Alec

Eadie, Alex

Moyle, Roland

Woof, Robert

Ewing, Harry (Stirling)

Mulley, Rt Hon Frederick

Foot, Rt Hon Michael

Murray, Rt Hon Ronald King

TELLERS FOR THE AYES:

Freeson, Reginald

Roper, John

Mr. Joseph Ashton and

Golding, John

Ross, Rt Hon W. (Kilmarnock)

Mr. James Hamilton.

Graham, Ted

NOES

Bain, Mrs Margaret

Lambie, David

Thorpe, Rt Hon Jeremy (N Devon)

Buchan, Norman

MacCormick, Iain

Watt, Hamish

Carmichael, Neil

McMillan, Tom (Glasgow C)

Welsh, Andrew

Cook, Robin F. (Edin C)

Selby, Harry

Craigen, Jim (Maryhill)

Steel, David (Roxburgh)

TELLERS FOR THE NOES:

Ewing, Mrs Winifred (Moray)

Stewart, Donald (Western Isles)

Mr. Denis Canavan and

Henderson, Douglas

Thomas, Dafydd (Merioneth)

Mr. Robert Hughes.

Johnston, Russell (Inverness)

Thompson, George

Question accordingly agreed to.

Resolved,

That the Rate Support Grant (Scotland)Order 1976, a copy of which was laid before this House on 6th December, be approved.

ADJOURNMENT

Resolved,

That this House do now adjourn.—[Mr.Stoddart.]

Adjourned accordingly at twenty-one minutes past One o'clock.