Commons Sitting of 26 January 1976

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

    Steel Industry
    Mr. Hendersonasked the Secretary of State for Industry if he will make a statement on the position of the steel industry.
    Mr. Teddy Taylorasked the Secretary of State for Industry if he will make a further statement on the outlook for the steel industry in Scotland.
    Mr. Stonehouseasked the Secretary of State for Industry if he will make a statement on the current state of the steel industry.
    Mr. Hooleyasked the Secretary of State for Industry if he will appoint
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    an independent commission to review the structure and operations of the British Steel Corporation.
    The Secretary of State for Industry (Mr. Eric G. Varley): As the House will know, the British Steel Corporation and the TUC Steel Committee signed on Friday a joint statement on reductions in employment costs and improvements in labour productivity. The unions recognised the need for reductions in manning levels, increased mobility of labour and other increases in labour productivity. The Corporation agreed to restore the status quo on premium shift working at those plants where a reduction in premium shifts has taken place since 4th January and an unresolved dispute exists. The unions undertook to ensure an immediate return to normal working at those plants.
    The agreement represents a very encouraging move towards the target of an efficiently manned and competitive nationalised steel industry. I should like to congratulate both management and union representatives on their achievement and to pay tribute to them for the hard work they put into it.
    Mr. Henderson: I welcome the good news that the right hon. Gentleman has brought to us about this agreement. However, is he aware that there is still considerable disquiet in the steel industry in Scotland? Is he aware that figures made available to me from within the British Steel Corporation indicate that

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    for the first 11 months of last year, compared with a similar period in 1974, production in Yorkshire and Humberside remained about the same, in East Anglia, the South-East and South-West it rose by 60 per cent., but in Scotland there was a reduction of 25 per cent. in orders placed with steel plants? Will he investigate the matter and inform the Corporation that Scotland expects its fair share of steel business?
    Mr. Varley: As I told the House on 6th August, the Scottish steel industry will be more balanced and competitive when announced changes have been carried through. I do not think that it has escaped the notice of hon. Members that the Corporation is having to suffer the worst industrial recession for 40 years, but I will look into the point raised by the hon. Member.
    Mr. Taylor: Is the right hon. Gentleman aware that morale in the Scottish steel industry is particularly low because of the uncertainty that has gone on for so long and because so many people in the industry do not know what the future will bring? In the light of the agreement at the weekend, can the Secretary of State say how many job reductions were called for in Scotland and what will happen if agreement cannot be reached at plant level about the scale of redundancies hoped for by the Corporation?
    Mr. Varley: I very much agree with what the hon. Member said in the first part of his question. I regret that the development plan was not pushed through in 1970 after it had been agreed by the previous Labour Government. It was a matter of great regret to me that for two years the industry was not allowed to get ahead. I do not want to underestimate the great difficulties facing the industry. It will certainly be a long time before we get the internationally competitive industry that we all want to see. The scale of redundancies will depend to a great extent on how the negotiations go at plant level and between the Steel Committee and the Corporation.
    Mr. Stonehouse: To what extent will the agreement reduce the current weekly losses of £8½ million?
    Mr. Varley: Substantial progress will take place and there is a realistic possi-
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    bility of the Corporation's achieving its cost-savings target. I want to be cautious and not over-optimistic, but major savings will be achieved when the upswing in the economy takes place and the steel industry can get back to full capacity.
    Mr. Heseltine: The right hon. Gentleman was asked for specific figures. Is it not very difficult for him to welcome the agreement unless he has some idea of the figure of cost savings that will result from the agreement? Did both sides agree the productivity comparisons, which were attached to the agreement but which were not necessarily part of it?
    Mr. Varley: I cannot read out the agreement in full, but I can read the first sentence of the document, signed by the whole TUC Steel Committee. It says:
    "Both the British Steel Corporation and the unions concerned believe the Corporation should be transformed into a profitable, high wage, high productivity industry, comparable to its major European competitors."
    One cannot be precise about figures, but the Corporation has told me that if the present agreement is implemented—and joint negotiations have to take place—it expects to achieve its target of £170 million cost savings. The hon. Member will know that since discussions took place in May and July last year, considerable savings have been made, but more needs to be done.
    Sir G. de Freitas: Will my right hon. Friend encourage those concerned with the industry to refer at all times at the end of negotiations to settlements or agreement and never to victory or defeat?
    Mr. Varley: My right hon. Friend is absolutely right. There has been great effort on both sides to achieve real cost savings and there is now a wide understanding within the industry and among those who give their lives to it that there must be savings and that they must be carried through humanely. Everyone should have a vested interest in harmonious, constructive industrial relations.

    Steel Production (Technological Change)
    Mr. Tim Rentonasked the Secretary of State for Industry what discussions he is having with the Chairman of

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    the BSC regarding future technological change in steel production.
    The Minister of State, Department of Industry (Mr. Gerald Kaufman): I am in regular contact with the chairman about a wide range of matters affecting the Corporation's present performance and future development. Technological change is one of the factors taken into account.
    Mr. Renton: Is not technological change intertwined with overmanning? Why is the BSC board blowing hot and cold in its demands that overmanning should be reduced? Will the Minister categorically assure the House that the Secretary of State did not pull the rug from under Mr. Scholey's feet during last week's negotiations?
    Mr. Kaufman: Mr. Scholey had his feet on the ground. There was no rug between him and the ground. The hon. Gentleman should be aware that it is not essential in this kind of situation to have a confrontation. The British Steel Corporation and the unions concerned came to an admirable agreement on the basis not of confrontation but of cooperation.
    Dr. Bray: Is my hon. Friend aware that the British Steel Corporation seems to be holding up investment plans, for example, in the steel foundry at Craigneuk works, which is particularly anomalous in view of the measures being taken by the Government to modernise the ferrous foundry industry? Will he check that the BSC is taking all due technological steps to increase productivity?
    Mr. Kaufman: We are in regular contact with the BSC on this matter, but I shall be glad to look into the specific point made by my hon. Friend.
    Mr. Lane: Reverting to the point made by my hon. Friend the Member for Mid-Sussex (Mr. Renton), is it not clear that the Corporation has been pushed considerably off course? Will the Minister undertake that, if and when the Corporation has to take a further initiative to secure the strong competitive position that we want in the industry within a reasonable time, it can rely totally on Government support?
    Mr. Kaufman: The hon. Gentleman should reconcile himself to a situation where we do not have a Government meddling in and interfering with the day-to-day activities of the Corporation. There was a sensible negotiation between the BSC and the unions and there was a sensible outcome.
    Mr. Tebbit: Does the Minister agree that if the British Steel Corporation is to go in for technological change it must achieve the right manning levels? Were the productivity comparisons issued in conjunction with the statement on the recent agreement between the unions and the Corporation? One or the other must be so—"Yes" or "No"?
    Mr. Kaufman: The productivity comparisons appended to that agreement were international comparison statistics, as the hon. Gentleman knows. It is not necessary for the unions or anybody else to agree objective figures. The Corporation demonstrated the ground that needs to be made up to pull back on the lack of competitiveness that was so signal in the period before nationalisation.

    Small Businesses
    Mr. Luceasked the Secretary of State for Industry whether he will review the position of small businesses in the United Kingdom, with a view to removing obstacles to expansion.
    The Minister of State, Department of Industry (Mr. Gregor Mackenzie): Business expansion is dependent chiefly on a general expansion of trade which would benefit firms of every size and which the Government can best promote by their efforts to restore the health of the economy and to counter inflation. The particular needs of small firms are kept under review and taken into account in all our policies.
    Mr. Luce: Does the Minister accept that the small businessman has a key role to play in terms of innovation, creating wealth, providing employment and sustaining his individual independence against the State? If so, when will the Government take urgent action to remove the iron curtain of obstacles against either starting or expanding small businesses, ranging from penalising taxation, heavy rate demands and shortage of

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    working capital to unnecessary paper work? When will the Minister take a lead?
    Mr. Mackenzie: The present Government, like previous Governments, have been and are concerned about the health of small firms. However, the health of any small firm is dependent on the health of the larger firms in both the public and private sectors. We certainly take these matters into account in framing our policies.
    On the specific point about taxation, the hon. Gentleman will know that over many years consideration has been given by the Chancellor in framing his Budget proposals to the difficulties of small firms. This is borne out by the corporation tax provisions and special provisions relating to capital transfer tax. The Department has set up a number of small firms information centres, counselling services, and so on, which are of considerable value to people in business now and to those who want to start small businesses.
    Mr. Blenkinsop: Is my hon. Friend aware of the extremely valuable and successful work done by some of the new towns and local authorities in encouraging small businesses and industries?
    Mr. Mackenzie: Yes. I think that we should pay tribute to the many local authorities that recognise the needs of small businesses. The Development Commission, the new towns and local authorities do a very useful job in this respect.
    Mr. Tom King: The Minister said that the Government were keeping the situation of small businesses under review. Is he aware that bankruptcies among small firms are now double what they were for the previous year? The problems of small businesses are now obviously acute. May we see a more active programme than merely keeping their situation under review?
    Mr. Mackenzie: The number of small firms have been reducing markedly over many years, irrespective of whether my party was in power. My Department is always concerned to assist small businesses in every possible way. Tribute has been paid by some organisations responsible for small businesses for the cooperation, guidance and counselling services that we give.
    Mr. Hooky: On a point of order, Mr. Speaker. I have been informed within the last two or three minutes that the Secretary of State answered Question No. 17 with Question No. 1. In the circumstances, would you be prepared to call No. 17 in its normal order?
    Mr. Speaker: No. Hon. Members must be here at the beginning of Question Time.

    British Leyland
    Mr. Hurdasked the Secretary of State for Industry what directions he has given to the Chairman of the National Enterprise Board about the release of further public funds to the Leyland company.
    Mr. Kaufman: As the Ryder team recommended, the release of further funds will be conditional upon the Government and the NEB being satisfied that there has been real progress in productivity and industrial relations.
    Mr. Hurd: Does the hon. Gentleman recall that in this month's White Paper the Government promised to give the House the targets of achievement that will have to be met by British Leyland before further Government funds are released? Will he define the first of those targets of achievement and the date by which it will have to be met?
    Mr. Kaufman: The first of those targets will have to be met by the middle of this year, when there will have to be a review point for the next injection of finance. We shall have to get much nearer that period before we decide how matters are progressing.
    Mr. R. C. Mitchell: Leaving aside British Leyland and Chrysler, have the Government received requests from any other leading motor manufacturing companies for allocations of public funds?
    Mr. Kaufman: No, Sir.
    Mr. Heseltine: Does the Minister understand that British Leyland has conducted such a review in consequence of which it has stopped capital investment in the car plant because the schedules are not being maintained for the anticipated programme?
    Mr. Kaufman: The hon. Gentleman always jumps to early conclusions. My right hon. Friend the Prime Minister and

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    Lord Ryder laid down the conditions upon which any future tranches will be forthcoming. Those conditions were fully stated in my right hon. Friend's statement nine months ago. It is not satisfactory that, six months before the review term, hon. Gentlemen opposite, some of whom have British Leyland workers in their constituencies, should decide whether the conditions have been met.
    Mr. Rooker: Has my hon. Friend ever heard of management by objectives? How can the management and work force of British Leyland be expected to perform without the objectives being stated?
    Mr. Kaufman: The objectives were laid down by my right hon. Friend the Prime Minister in his statement. I am prepared to send a copy of that statement to any hon. Member who wishes to have it. Those objectives deal with productivity, reductions in the number of industrial disputes, and the improvement of industrial relations. The progress already made in forming a framework for participation by the workers is in advance of anything so far achieved in any other sector of British industry.

    Chrysler Corporation
    Mr. Aitkenasked the Secretary of State for Industry if he will make a statement on his most recent negotiations with the Chrysler Corporation.
    Mr. Varley: A copy of the agreement signed on 5th January and certain supporting documents were placed in the Library on 19th January. We are now pursuing a number of issues with the company, including arrangements for monitoring, a planning agreement and the appointment of Government-nominated directors.
    Mr. Aitken: Is the right hon. Gentleman aware that the House has a real responsibility to monitor the spending of taxpayers' money on Chrysler? Is he further aware that this responsibility cannot adequately be dealt with so long as the Government refuse to allow his right hon. Friend the Chancellor of the Duchy of Lancaster to come before the Select Committee on Expenditure and answer questions on this whole matter? Finally, does he by any chance
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    recall the parliamentary phrase, used in the context of ministerial responsibility by the late Aneurin Bevan, to the effect "Why do we bother to put questions to the monkey when we really need to question the organ grinder?" Is not that peculiarly appropriate to the refusal to allow the Chancellor of the Duchy of Lancaster to answer questions?
    Mr. Varley: My right hon. Friend the Prime Minister has made the position absolutely clear with regard to my right hon. Friend the Chancellor of the Duchy of Lancaster, and I have nothing at all to add to that.
    Mr. William Hamilton: Can my right hon. Friend venture an opinion himself on whether he would object to the Chancellor of the Duchy of Lancaster appearing before the Select Committee? Does not my right hon. Friend recognise that it is one of the most important principles of the House that all Select Committees shall have the right to send for persons and papers which the Committee—not the Executive—thinks relevant to its investigations?
    Mr. Varley: Ministerial responsibility for the Chrysler support operation rests squarely with the Department of Industry. That is the position that we have adopted, and that is the position to which we shall adhere.
    Mr. Madel: Can the right hon. Gentleman say a little more about how public money will be used on the investment front? Surely the House has a right to know how investment money will be apportioned among Dunstable, the Midlands and Linwood. As a new van or truck is promised in 1978, can he be more forthcoming on this matter?
    Mr. Varley: I do not know precisely what information the hon. Gentleman would like in addition to what we have already provided. If he would like to ask a specific question about the allocation of money for particular developments, I should be pleased if he would do so in writing to me. If it is appropriate for me to answer his question, I shall do so, but if it is something exclusively for the Chrysler Corporation, perhaps I could pass his letter on to the Corporation.

    Government Assistance
    Mr. Canavanasked the Secretary of State for Industry how many representations he has received from private industrialists for Government assistance since 1st January 1976.
    Mr. Gregor Mackenzie: I regret that statistics for this period are not yet available.
    Mr. Canavan: Can my hon. Friend tell me whether there has been any recent change in the Government's strategy for dealing with such representations? Can he give me assurance that if Mr. Riccardo or some similar character comes along with a begging bowl, not one penny of public money will be used unless there is adequate public control over it and special measures are taken to safeguard the job security of the workers employed in the industry?
    Mr. Mackenzie: There has been no change in the method of collecting statistics. I give my hon. Friend the assurance that all applications under any section of the Industry Act are dealt with on an individual basis. We shall have to see what the applications are before we make a judgment on them.
    Mr. Teddy Taylor: Does the hon. Gentleman agree that it is insulting and distorting the truth for him to talk about private industry coming forward with a begging bowl when the Government have been round with the begging bowl to every sheikhdom that might have some money to lend to Britain? Does he further agree that British industry contributes a vast sum in taxation without which it would not be possible for the Government to carry on?
    Mr. Mackenzie: I do not think that that matter arises on this Question. British industry makes a substantial contribution. We are not the only people who are running around with begging bowls. If I were a member of the Tory Party I should bear in mind the begging bowls that go round to industrialists at every election, and I should have less to say for myself. The issue raised by the hon. Gentleman does not arise here. If he has a specific question to ask, perhaps he will do so.
    Mr. Peter Morrisonasked the Secretary of State for Industry what criteria he uses when he is dispensing public money to companies which are in financial difficulties.
    Mr. Varley: I would refer the hon. Member to "Criteria for Assistance to Industry" placed in the Library on 12th January which sets out the Government's present guidelines for selective assistance.
    Mr. Morrison: Is the right hon. Gentleman aware that many employees in successful and strike-free plants believe that the Government decision to bail out unsuccessful companies, particularly Chrysler, is endangering their security of employment? They also believe that, despite their admirable record, they are being put at a disadvantage compared with employees in the unsuccessful plants.
    Mr. Varley: I think that the hon. Gentleman over-simplifies this matter. For example, if he casts his mind back, he will remember that his own Government introduced the Industry Act 1972, Sections 7 and 8 of which were specifically designed to help companies in difficulties. Of course assistance should be given to achieve long-term viability. If he gets a chance to study the paper "Criteria for Assistance to Industry", which is not only in the Library for him to read but has been considered by the National Economic Development Council, he will know our general approach to this matter.
    Dr. M. S. Miller: May I suggest that my right hon. Friend adds to those criteria the criterion that if an industry or part of an industry or a company in an industrial group is viable, efficient and profitable—like the Rolls-Royce factory at Blantyre—it should not be closing complete factories in its rationalisation programme?
    Mr. Varley: I know something of the problem at Blantyre to which my hon. Friend refers; I think that he is in correspondence with my Department about it. We hope to consider the matter carefully and to let him have an answer in due course.
    Mr. Rookerasked the Secretary of State for Industry if he will seek powers to make it a condition of Government assistance under the new industrial

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    strategy that recipient firms should have in their employ properly qualified engineering personnel.
    The Under-Secretary of State for Industry (Mr. Neil Carmichael): No, Sir. But the appraisal of applications for selective assistance includes an examination of the management resources and expertise relevant to the objective of the proposal.
    Mr. Rooker: As one of the very small band of chartered engineers in the House, may I urge my hon. Friend to look carefully at the suggestion and to ensure that something is done, as the engineering institutions are in complete disarray at the moment? Does not my hon. Friend agree that some stick is required to get them to pull together for the benefit of the economy and to bring about an improvement in training and qualifications, in which respect we are lamentably behind the rest of Europe?
    Mr. Carmichael: I shall certainly take note of my hon. Friend's point, but, as he will see from the criteria discussed in relation to an earlier Question, the Department deals with a very wide range of cases, from pharmaceuticals to poultry, and each has to be looked at individually. Our concern is that there should be proper experts within each industry when it comes within an agreement.
    Mr. Tebbit: I accept what the Minister says about the difficulties of administering cases ranging from pharmaceuticals to poultry, from pills to lame ducks, or whatever it is. However, will he agree that it would be a good idea to check the qualifications of those giving the assistance? Would it not be a good idea for the Chancellor of the Duchy of Lancaster to appear before the Select Committee so that we can discover the medicine that enabled him in the Cabinet to override the judgment of the Secretary of State for Industry on the Chrysler affair?
    Mr. Carmichael: That is rather wide of the Question. The decision on Chrysler was a Cabinet decision. My right hon. Friend is the Minister responsible and is the appropriate person to go before the Select Committee.

    Aircraft Industry (Nationalisation)
    Mr. Gryllsasked the Secretary of State for Industry what consultations have
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    been held this year with representatives of the employees of the British Aircraft Corporation's factories on the proposed nationalisation of the aircraft industry.
    Mr. Carmichael: Ministers and officials at the Department of Industry keep in close touch with representatives of employees in the aerospace industry, in eluding those working at BAC factories, on our proposals for public ownership.
    Mr. Grylls: Is not the hon. Gentleman aware that there are reports that even workers in the industry do not want this nationalisation? As their wish for nationalisation is one of the prime reasons put forward for nationalising the industry, and in the light of the Chancellor of the Exchequer's talks today with the TUC on the problem of unemployment, would it not be more sensible to abandon this irrelevant expenditure of money and use it instead on supporting worthwhile projects that might create more jobs and reduce unemployment?
    Mr. Carmichael: This matter was explored in Standing Committee. The workers in the industry have made it clear that they wish the aircraft industry to be nationalised.
    Mr. Michael McNair-Wilson: Can the hon. Gentleman say when during the discussions he could have argued about employment levels in the industry once nationalisation had taken place? What promises have been given to the workers in these companies?
    Mr. Carmichael: On Second Reading my right hon. Friend made it clear that there would almost certainly be rationalisation in the aircraft industry and an increase in productivity because of the combination of the two main airframe firms. This, too, is being discussed in Standing Committee.
    Mr. Cryer: Will my hon. Friend accept that Government supporters do not wish to see a nationalised aircraft industry consisting solely of the construction of Concorde and the MRCA? Can he say what plans he has for the replacement of the production of Concorde by something more socially useful at the end of the current production run?
    Mr. Carmichael: These matters are being taken up by the organising committee, and they will be matters for the

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    boards of corporations once they are set up.
    Mr. Heseltine: Does the hon. Gentleman agree that the fact that he cannot answer any of the questions in Standing Committee is no reason why he should not answer them on the Floor of the House? Will he confirm, following what he said about rationalisation, that it is the Government's expectation that the number of jobs in the industry will decline?
    Mr. Carmichael: The hon. Gentleman and my hon. Friend the Minister of State debated this matter in Standing Committee and the point was fully answered there.
    Mr. Thorneasked the Secretary of State for Industry whether he has already established a number of joint planning committees involving the British Aerospace Organising Committee and the Confederation of Shipbuilding and Engineering Unions; and, if not, when he expects so to do.
    Mr. Carmichael: My right hon. Friend the Secretary of State has asked the Confederation of Shipbuilding and Engineering Unions for advice on how best to ensure that the views of workers in the industry are given due weight.
    Mr. Thorne: I thank my hon. Friend for that reply. May I draw his attention to the fact that there is considerable disquiet in the industry that it is only at the eleventh hour, apparently, that discussions that have any real value are taking place with the Confederation? May we have an assurance that speed will be the essence of my hon. Friend's activities in this regard for the future?
    Mr. Carmichael: My hon. Friend is not quite accurate. Discussions have been going on for some time with the organising committee on the development of industrial democracy within the new corporations, and my right hon. Friend wrote to the CSEU asking for its advice.
    Mr. Gordon Wilson: In view of the orders crisis facing the shipbuilding industry and the failure of the Government to produce a shipbuilding policy prior to the implementation of their nationalisation proposals, does the hon. Gentleman care to confirm or deny reports in the Press
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    this week that the Government intend to introduce a shipbuilding policy to allow shipbuilding firms to go for orders on a world-wide basis and to try to attract orders from British shipping interests?
    Mr. Carmichael: The main help that we intend to give the shipbuilding industry is in the reorganisation that will be brought about when the Bill goes through. On the other hand, there have been discussions with individual shipbuilding areas. For instance, last week I attended one on the Clyde when specific discussions took place with both management and unions in the industry with a view to finding ways of helping certain areas over this particularly difficult patch in world shipping.
    Mrs. Hayman: But is my hon. Friend aware that there is concern not only about the implementation of industrial democracy within the nationalised aircraft industry but about present projects or planned projects on which we are not getting decisions? Can he give some indication of whether the organising committee will itself be able to consider and give an opinion on, for example, the tripartite report on the HS146 project? Can he assure us that if the organising committee cannot do that, the Department of Industry will look at that report and give us some comments?
    Mr. Carmichael: The organising committee will be able to look at these projects. It is important to remember that, had it not been for this Government assisting it and allowing it to be "put on ice" until a firm decision could be made, the whole HS146 project would have fallen.
    Mr. Ridley: If in his consultations with the workers the Minister finds that the workers of any particular concern, whether in shipbuilding or in aircraft building, express a majority preference not to be nationalised, will he give an undertaking that he will respect their wishes?
    Mr. Carmichael: We have no evidence of any general—[HON. MEMBERS: "Answer."] My right hon. Friend has made it clear from the beginning that the CSEU is the organisation which we consider to be representative of the mass of the workers in the industry. There is no question but that the CSEU and

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    the mass of the workers in the industry who have approached us are firmly of the opinion that this industry should be nationalised.

    Planning Agreements
    Mr. Clemitsonasked the Secretary of State for Industry if he will list those companies with whom discussions have been initiated with a view to the conclusion of planning agreements and the industries within which those companies principally operate.
    Mr. Kaufman: In parallel with discussions with the CBI and the TUC there have been exploratory discussions of a general nature with a number of companies. I am not yet in a position to make a statement.
    Mr. Clemitson: But would not my hon. Friend agree that it is essential that planning agreements get off on the right foot and that there should be no unnecessary secrecy in their development? Will he give an absolute assurance that the commitments given throughout debates on the Industry Act, in the White Paper and the consultative committee and so on—that trade unions would be involved at every stage from the initiation of discussions about planning agreements—will be honoured?
    Mr. Kaufman: We certainly fully stand by the commitments given during the passage of the Act. My hon. Friend may know that, following my meeting with him and another hon. Member and representatives of Vauxhall, I have sent a letter to my hon. Friend the Member for Luton, West (Mr. Sedgemore) fully setting out the position about planning agreements. That is fully in accord with everything said during the passage of the Act.
    Mr. Lawson: Can the Minister give us an assurance that the existence or nonexistence of planning agreements will have no bearing on any application for Government assistance by any company? In that context, while one thanks him for the paper "Criteria for Assistance to Industry", which was placed in the Library following a Written Question from me, will he explain how it is that it seems to differ from the criteria used in practice—for example, the need under
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    the criteria for a project to have a reasonable presumption of profitability within three years, which does not apply to Chrysler, and the statement in paragraph 27 that the calling in of a receiver to make better use of the assets rather than the propping up of failed enterprises should be the main contribution of the Industry Act? Can he assure us that that document is still official Government policy?
    Mr. Kaufman: I am grateful that the hon. Member was satisfied with my providing him with those criteria and also grateful for the courteous letter he sent me, which was a contrast with some other comments made later on that subject. Of course we adhere to the criteria, but, as I have said on other occasions, they do not represent a straitjacket in which we are imprisoned. These criteria are guidance within which we operate—[Laughter.] Hon. Members opposite sit there giggling as though it were not their Industry Act 1972 under which all the aid originally came and which we have now amended in the 1975 Act. It is they who laid down the original criteria. What we have done is improve upon them.
    Mr. Loyden: In considering planning agreements in the shipbuilding industry and particularly in ship repairing, will the Minister take into account the tendency of small firms and factories now outside the scope of the Act to form themselves into federations, a tendency that could affect the outcome of a planning agreement for the industry?
    Mr. Kaufman: If my hon. Friend has any information to draw to my attention, I should be glad to consider it.
    Mr. Tom King: Is it not clear that the whole idea of planning agreements has now been overtaken by the Government's policy, announced at Chequers, of working together on sectoral plans? Is it not much more sensible for them to abandon their idea of planning agreements and to work on the much more sensible basis of sectoral planning in industry?
    Mr. Kaufman: The hon. Member totally fails to understand what was said at Chequers and the place that planning agreements were given within the Chequers framework. Of course the

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    Confederation of British Industry would prefer us to go for sectoral agreements, but if he can explain to me how a sector of an industry can deliver on an agreement in the way that a company can, I am open to persuasion.

    Business Confidence
    Mr. Laneasked the Secretary of State for Industry what is his current assessment of business confidence in the private sector.
    Mr. Varley: There are several indications that confidence is strengthening in the private sector of industry.
    Mr. Lane: But is it not obvious on any honest assessment that confidence in the private sector is still lamentably low? Will the Secretary of State urge the Chancellor that companies in the private sector, particularly small businesses, should be strong candidates for any tax concessions in the forthcoming Budget?
    Mr. Varley: I know that the hon. Member will not expect me to say anything about the Budget judgment, which is not my responsibility in any case, but there are indications that confidence is improving. The Financial Times Survey of Business Opinion published on 5th January and the CBI Monthly Trends Survey published in December are examples.
    Mr. Richard Wainwright: Is the Secretary of State aware that the recovery of confidence in many industrial sectors is being handicapped by the form of the Price Code and the way in which his colleague is applying it? Will he make representations on behalf of industry to the right hon. Lady the Secretary of State for Prices and Consumer Protection?
    Mr. Varley: I am sure that my right hon. Friend the Secretary of State for Prices and Consumer Protection will take note of what the hon. Gentleman has said.
    Mr. James Lamond: Is my right hon. Friend aware that there is some sign of a slight upturn in trade in the textile industry, which is very much to be welcomed? Will he take the opportunity afforded by this upturn to have talks with his right hon. Friends about how best to protect the textile industry—without necessarily giving it financial assistance—
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    so that when the next trough arrives the industry will not be in the position in which it found itself some three months ago?
    Mr. Varley: My hon. Friend is right to express the concern within the textile industry. I have met leaders of the industry on two occasions in the last six months, and they have expressed their concern to me directly. It is a very important industry, employing about 900,000 people. I shall do everything I can to strengthen its position along the lines mentioned by my hon. Friend.
    Mr. Heseltine: Does not the Secretary of State realise that he and his predecessor have for two years been promising that tomorrow will be better for British industry? Are not the most meaningful statistics those issued by his own Department, showing that industrial investment this year is likely to reach levels not seen in this country since the early 1960s?
    Mr. Varley: We shall do all we can to improve upon the encouragement that we are giving. I hope very shortly to be able to give the House some information about the accelerated investment scheme being developed within the Department, and some further information about industry schemes. But the best incentive and the best boost to confidence within British industry will come when there is realistic and substantial proof of the effectiveness of the counter-inflation policy. I was interested to see only the other day a letter from the Selsdon Group pointing out that much of the inflation resulted from the policies of the previous Conservative Government.

    Regional Policies
    Mr. Ashleyasked the Secretary of State for Industry if he proposes to make any changes in his regional policies.
    Mr. Gregor Mackenzie: No, Sir.
    Mr. Ashley: Is my hon. Friend aware that if nothing is done to arrest the decline of the West Midlands it could in the end become a lame duck region, and that North Staffordshire could become a backward sub-region? Will he therefore consult the Secretary of State for Employment about the serious unemployment in the area and about ways of

    21
    improving and assisting industry in the West Midlands and in North Staffordshire?
    Mr. Mackenzie: I am very well aware of the unemployment problems in North Staffordshire and the need for diversification in that area. I suggest to my hon. Friend, however, that regional grants and so forth already cover some 43 per cent. of the working population of the country. Accordingly, therefore, one does not want to spread what there is too thinly. Nevertheless, I assure my hon. Friend that the effect of regional policy is constantly kept in mind.
    Mrs. Kellett-Bowman: Will the Minister give at least some comfort to my constituency by making it into a full development area, bearing in mind that unemployment in my constituency is very nearly 10 per cent. and that the job ratio is well over 60 unemployed to every vacancy? The Minister has been saying for a long time that when the position got worse he would do something about it. What does "worse" mean? Is 10 per cent. not bad enough?
    Mr. Mackenzie: The hon. Lady ought to appreciate what I said to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley). About 43 per cent. of the working population is already covered by assisted area status of one kind or another. If the help is to be spread out even more thinly, the question arises whether there is any value in anyone having assisted area status. What the hon. Lady said about unemployment is worth bearing in mind. It is one—but only one—of the factors taken into consideration in framing regional policies.
    Mr. Crawford: Is the Minister aware that regional policies have been an almost total failure in Scotland? Will he not agree that, with unemployment in Scotland now over 7 per cent. and with the increasing centralisation in London of decision-making affecting Scottish industry, the only solution to the problem of the recovery of the Scottish economy is for the Scottish Assembly to be given total control over trade and industry and over the Scottish Development Agency?
    Mr. Mackenzie: The hon. Gentleman should take some care to look at the unemployment figures for Scotland. We recognise that they are serious, but the
    22
    gap has been diminishing over a long period of years. The gap in wage rates, too, has been diminishing over a long period of years. The Scottish Development Agency, as the hon. Gentleman knows, has now gone from the Department of Industry and has been taken over by the Secretary of State for Scotland. I have no doubt that the hon. Gentleman would wish to put questions of that sort to my right hon. Friend the Secretary of State for Scotland.
    Mr. McNamara: Is my hon. Friend aware that many hon. Members representing English constituencies would like the sort of development assistance that is available to Wales and Scotland?
    Will he agree that, with the present degree of unemployment and the way in which assistance is being given to particular firms, the whole nature of regional assistance and policies needs to be looked at seriously, as that assistance is not necessarily creating new jobs? Does he believe that blanket provision over a period of years will necessarily be of assistance to those areas with particularly deep-rooted unemployment problems?
    Mr. Mackenzie: The whole point of having regional policies has been to assist countries like Scotland and Wales and areas such as the North-East of England. Although I cannot claim that this policy has been 100 per cent. successful by any manner of means, there has been a degree of success over a long period of years in balancing the disparities between the various regions. The problems we now face are mainly associated with the recession and they are quite different from the disparities brought in by regional policies.
    Mr. Dykes: Will the Minister reduce the waffle and tell us why the Government are not applying for the total amount of EEC regional assistance to which they are entitled under the allocations?
    Mr. Mackenzie: The amount of money that we receive from the Regional Development Fund, as I have often said in the House, has been a factor in decisions on regional matters and regional grants. As I said on the last occasion when we had Questions to the Secretary of State for Industry, we should not have been

    23
    able to go ahead with such a good programme of advance factories had it not been for the Regional Development Fund.
    Mr. Skinner: However much of a success or failure regional policies have been, they are not the answer to the major problem with which the country is currently faced—namely, mass unemployment from John o' Groat's to Land's End. Will my hon. Friend accept that what is really needed is a major attempt—during this week, no less—to change this situation? Will he persuade his right hon. Friend the Secretary of State to use his pressure within the Cabinet to force a change of policy in the Government's current activities? Will he also take into account the fact that if some Scottish nationalists are not concerned about what little they have got out of regional policies, my hon. Friend can transfer some of the benefits to Shirebrook?
    Mr. Mackenzie: The point made by my hon. Friend is well taken. The whole purpose of regional policies, as I indicated earlier, is not primarily to deal with any unemployment situation at a given time. Regional policies are meant to break up the disparities between various regions.
    Of course we are concerned about unemployment. That is why the Government have been taking measures to accelerate investment and so on. We have announced these measures in the past two or three weeks.

    TERRORIST OFFENCES
    Mr. Cryerasked the Attorney-General how many people were convicted for terrorist offences during 1974 and 1975.
    The Attorney-General (Mr. S. C. Silkin): I understand the Question to refer to Northern Ireland. During the year 1974, 1,073 persons either pleaded guilty or were convicted on indictment in respect of scheduled offences. During the year 1975 the corresponding figure was 1,090.
    Mr. Cryer: Does my right hon. and learned Friend accept that the ending of detention without trial has not resulted in a diminution of prosecution of offenders? Will he ensure that offenders are prosecuted with vigour? Will he at
    24
    the same time convey to his right hon. Friend the Secretary of State for Northern Ireland the view that this country and the present Government, having courageously ended detention without trial, can reasonably expect some sort of response from the sectarian organisations that indulge in terrorist activities? Will he make that plain?
    The Attorney-General: I am grateful for both parts of my hon. Friend's Question. Certainly my right hon. Friend will take note of, and I am sure agree with, the second part. Certainly the prosecution process has been carried on with great force and vigour and has been extremely successful.
    Mr. Lawrence: In the light of the statements of two identifiable people in the national Press in December—to the effect that money was still being collected in public houses in London on behalf of the IRA—will the Attorney-General say why no charges have been preferred under Section 1 of the Prevention of Terrorism (Temporary Provisions) Act 1974? Will the Attorney-General also tell the House what is being done now to make sure that those collections cease?
    The Attorney-General: As the hon. Gentleman knows, that is a matter for the police and, accordingly, for my right hon. Friend the Home Secretary. I have no knowledge of any evidence that supports what the hon. Gentleman said. I am not responsible for what the newspapers say.

    CROSSMAN DIARIES
    Mr. Stonehouseasked the Attorney-General what is the ascertainable cost to public funds to date of his attempt to stop the publication of the Crossman Diaries, Volume One; and when he expects to be able to make a statement on the total cost to public funds.
    The Attorney-General: I regret that the cost to public funds is not yet available as the parties' bills of costs have not yet been completed. I cannot say when the total cost will be known.
    Mr. Stonehouse: Is not this action among very many steps that the Attorney-General has personally authorised and that have been shown to be ill-advised

    25
    and wrongly based? Will he give an undertaking that he will not take any more proceedings to stop further volumes of the Crossman Diaries, and will he make a statement as soon as these costs are known?
    The Attorney-General: When the costs are known, I shall be prepared to state them.
    I do not agree with what the right hon. Gentleman put to me. The basic principle that I was seeking to achieve was achieved and the Radcliffe Committee has commented upon that. I am bound to add—although I am not criticising in any way the judgment of the Lord Chief Justice—that if the Lord Chief Justice had taken the 15-year period that Radcliffe has taken, the action would have succeeded in toto instead of, as now, merely establishing the principle for which I was contending.
    Mr. Ridley: Is the Attorney-General aware, however, that it is very easy to make prosecutions left, right and centre if it is taxpayers' funds that are paying the costs? Will he try to think up some scheme of passing the hat around the Cabinet to make at least some token reimbursement to taxpapers for the expenses that they are continually having to incur on behalf of the present Government who make all these silly decisions?
    The Attorney-General: I cannot agree with the premises and therefore the question does not arise.

    TRIBUNALS (LEGAL AID)
    Mr. Ashleyasked the Attorney-General whether he remains satisfied with the operation of the system of tribunals, especially in relation to the continued lack of provision of legal aid.
    The Attorney-General: The operation of particular tribunals is a matter for the particular Ministers concerned. My noble Friend has already made it clear that he supports in principle the extension of legal aid to certain tribunals but that, in view of competing claims for expenditure, he cannot give it priority.
    Mr. Ashley: How does my right hon. and learned Friend justify the remarkable fact that powerful organisations and individuals are allowed legal representa-
    26
    tion before tribunals because they can afford it and yet poor people are denied legal representation under the legal aid scheme? In the interests of justice, will he either provide legal representation to poor people under the legal aid scheme or ban legal representation altogether at tribunals?
    The Attorney-General: As my hon. Friend very well knows, my noble Friend and I are extremely anxious to provide a fair balance. We agree that the use of legal aid is a weapon with which that can be achieved. However, apart from tribunals, there are many other fields—I am certain from his many Written Questions which I shall be answering today that my hon. Friend will agree—which can claim priority. Denying all representation because we cannot deal with tribunals now as we should like is not an answer to the problem, because at tribunals it is a matter not merely of legal representation but of the use of expert witnesses and all kinds of other expenditure in which the richer can have an advantage over the poorer. My hon. Friend's suggestion of a ban on legal representation would be throwing out the bath water with the baby.
    Mr. Raphael Tuck: As the whole purpose of the Legal Aid and Advice Act 1949 was to enable people to take cases to law and as the number of cases before tribunals has increased enormously since then and many poor people have to resort to tribunals, will my right hon. and learned Friend use his best efforts to persuade the Government to bring cases before tribunals within the ambit of the legal aid scheme?
    The Attorney-General: My noble Friend needs no persuasion about this. He is fully aware of and is greatly in sympathy with what my hon. Friends have said. However, at an early stage after my noble Friend's appointment he set in motion a study of the whole area of unmet need. He hopes to have the report on that very shortly. He will then be in a position within available resources—my hon. Friend must not think that they are limitless—to assess the important priorities and to take what action he can to meet them.
    Mr. Percival: I think that the Attorney-General knows that the Opposition support the statement of principle which

    27
    was the first part of his reply to the Question. I am sure that he knows that we accept that this is a question of competing claims within the legal aid system to increase the limits. However, can he give the House any estimate of what it would cost to extend legal aid to tribunals? Only if we have some idea of that can we judge the competing claims and their merits.
    The Attorney-General: I am grateful for what the hon. and learned Gentleman said in the first part of his question and I fully understand the final part. This is precisely one of the matters that will necessarily arise in the survey of the unmet need for legal services, which I understand will be reported upon to my noble Friend within a very short time. As soon as this has been studied, we shall have the answer to that kind of question.

    QUESTIONS TO MINISTERS
    Mr. Crouch: On a point of order, Mr. Speaker. In your last week of office, will you make an observation which might help us in the future proceedings of the House? No doubt it will not have escaped your notice that today the Secretary of State for Industry answered barely one-third of the Questions directed to him on the Order Paper. We come here in force to hear what he has to say, and it can be extremely inadequate and unsatisfactory when the answers by Ministers of State and Under-Secretaries
    28
    of State are less than successful in reply to Questions.
    Mr. Speaker: I do not think that the hon. Gentleman will succeed in drawing me on this topic. I think that I must maintain my position that the content of answers and the selection of Ministers to answer Questions is not a matter for the Chair.

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft OECD Financial Support Fund (Immunities and Privileges) Order 1976 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Pavitt.]
Ordered,
That the draft Inter-American Development Bank (Immunities and Privileges) Order 1976 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Pavitt.]
Ordered,
That the draft European Centre for Medium-Range Weather Forecasts (Immunities and Privileges) (Amendment) Order 1976 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Pavitt.]
Ordered,
That the draft European Free Trade Association (Immunities and Privileges) (Revocation) Order 1976 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Pavitt.]
Ordered,
That the draft International Organisations (Immunities and Privileges) Miscellaneous Provisions Order 1976 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Pavitt.]

ORDERS OF THE DAY
  SUPPLY
  [6th ALLOTTED DAY]—considered.
  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pavitt.]

  MENTAL HEALTH SERVICES
  3.31 p.m.
  Dr. Gerard Vaughan: In choosing the topic of provision for the mentally sick for this very short debate, we seek to discuss three particular aspects. First, we in the Conservative Party attach very great importance to improving the care of the mentally ill and we are specially studying the implications of the Government's recent White Paper. Secondly, we want to draw attention to the apparently appalling situation, recently reported by the Daily Mirror, in the Birmingham area, partly because of our anxiety about Birmingham and partly because we suspect that other areas are in a similar situation. Thirdly, there is still great anxiety over the way in which dangerous patients are discharged back into the community.
  These are all very large subjects, and I hope that the Government will not see today's debate as an excuse to hide from a further full day's debate on their White Paper. The White Paper "Better Services for the Mentally Ill" is, in our view, very important. The Government have a clear duty, if they really care about the mentally sick, to give us a proper, full debate in the near future on it. We have been pressing for this and we shall continue to do so.
  The White Paper says that there will almost certainly be no additional resources for mental health provision in the next 20 years. If that is the case, improvements will have to come from a better use of existing resources.
  Mrs. Elaine Kellett-Bowman: Is it not deplorable that there seems to be so little information about the resources which are to be put into
  30
  this sector? In response to repeated Questions, the only answer we got last May was that information was not available about capital expenditure.
  Dr. Vaughan: It is not for me to answer for the Government. As my hon. Friend knows, the Government's position is that there are not likely to be additional resources and that, in fact, there may be quite significant cut-backs. Therefore, any improvements for the mentally sick will, at best, have to come out of existing resources.
  Quite rightly, there has been a great deal of criticism of the White Paper, which has been described variously as a monumental damp squib, as having a dangerous lack of purpose and as showing practical flabbiness. These comments are probably true. Even the Secretary of State for Social Services in her foreword lost heart and said that she wondered and queried how useful it would be to publish the White Paper.
  I think that it was useful to publish it because it tells us with depressing candour that very little progress has been made since the enactment of the Mental Health Act 1959. I was working in psychiatry at that time and I remember the high hopes we all had that psychiatry was about to come in from the cold. Those hopes have certainly not been fulfilled.
  I was working in a 2,000-bed psychiatric hospital, a whole private world cut off from ordinary life. We were filled at that time with enthusiasm at the thought that in future patients would remain in hospital only if they needed the security of the hospital's surroundings or if they were actually going to receive active treatment, and that all other patients would eventually go out into the care of the community. Of course that has not happened, not because of psychiatric inertia but because the local authorities were not given the incentive and the resources to carry out their tasks. There has been far too much talk of old, stale, faded policies rather than a practical and imaginative look into the future to see what can be done.
  The Minister of State said recently that he thought there had been far too much special pleading in this sector. When 5 million people consult their doctors with mental symptoms each year, when 31

  31
  local authorities have no residential accommodation at all, when 63 local authorities have no day care facilities, when 24,000 patients do not have full personal clothing of their own, when 645 children under the age of 15 are in general psychiatric hospitals—the Minister will have seen, as I have, children of 12 or 14 wandering disconsolately amongst grossly deluded and often very degraded adult patients—and when 32,000 patients have been in hospital for over 20 years, I would say to the hon. Gentleman that, if it is special pleading to keep ourselves constantly aware of this situation, let us have more special pleading.
  I very much welcome the activities of organisations, like MIND, which have constantly brought these problems before our notice. I am afraid that all too often today the saying "Out of sight, out of mind" really means "You are out of your mind, so I will keep you out of my sight."
  The White Paper says that an extra £38 million a year is needed. How ironic it is that that figure is almost identical with the income which will be lost by closing down pay beds. We in the Conservative Party know where our priorities would lie on these issues. The criticism of the White Paper is very widespread because it contains no recommendation at all for the short-term and immediate future. Indeed, it is filled with phrases such as "more assessment is necessary", "research is required" and "better liaison is needed".
  There is a great danger that, the Government having produced a White Paper of this kind, people will feel that something has been done and complacency will settle down again. Since the Government seem unable to take action, we will tell them that we can suggest action which would not involve major extra expenditure. If necessary, we can give them pointers as to directions in which they could go.
  The first pointer I would give is a psychological one. The Government should follow the White Paper with a short, sharp document on immediate proposals for the next five years. This would immediately regenerate enthusiasm in the mental health field. They should inquire immediately into the Birmingham cases and say that for patients to be dis-
  32
  charged with no proper follow-up but to be allowed to wander around the streets or to go into Salvation Army hostels is totally unacceptable. One does not even have to go to Birmingham. One can walk the streets of Westminster and see these cases. With this debate in mind, I actually passed three patients today, between Horseferry Road and this place, who were clearly deluded and were wandering along the pavement talking to themselves.
  In our view the Government should re-examine the Crossman scheme whereby certain patients were able to carry their hospital costs into the community service. We shall never achieve a community service while spending £300 million a year at the hospital end and only £15 million at the personal social services end. I suggest that this figure is quite staggeringly low. The whole basis of mental health has been to try to transfer patients from hospital into the community. We are now facing a standstill in real terms in local government spending.
  I pose the question: where do we go from here? It will be false economy if local authorities cut back on support services for the mentally ill to such an extent that many who could be looked after in the community have to be looked after at greater cost in a hospital. This is a most urgent problem. We should like to see immediate steps taken to improve the collaboration between hospitals and the local authorities, with hospital units being directly involved in small districts, in small sections of the community, and nurses being used much more in the community together with health visitors.
  More than this, however, we believe that the rôle of the local authority should change. Local authorities should see themselves much more as identifying needs, showing people locally what should be done and how to organise themselves to do it, and then leaving other bodies, particularly the voluntary organisations, to get on with it. We see this as a great opportunity for local groups to help locally. For example, the local trade union branches and the churches could give massive help in day care. I think that the trade union movement could do a great deal to help to rehabilitate and contain these patients within the community.

  33
  It seems to me quite unrealistic to say, as the White Paper says, that there must be a massive housing programme, with high-standard—many of us would think excessively high-standard—purpose-built hostels, because in the foreseeable future we are unlikely to have them. Instead, we should concentrate perhaps on bed-sitters, unstaffed hostels and temporary buildings which would be cheap and easy to arrange, and would totally transform the situation. We on this side of the House would like to see an immediate paper giving clear guidance on achieving proper community action and more emphasis on voluntary help, and we would like the Minister to make a proper start on co-ordination between local authorities and the hospital service.
  It is disappointing that the White Paper did not consider reviewing the Mental Health Act 1959. While I do not agree with all the points that Larry Gostin makes in his book "The Human Condition", there seems to be a strong case for reviewing the work of the mental health tribunals and for re-examining the rights of psychiatric patients.
  Mr. Leslie Spriggs: May I ask the hon. Gentleman a question? He has referred to the 1959 Act. Will he tell the House what steps he took to try to get a Conservative Government to review that Act?
  Dr. Vaughan: The hon. Member is clearly unaware that Mr. Crossman, for example, said that the Conservative Government had on the whole a very much better record for looking at this problem than Labour Governments had. He was quite congratulatory about the amount of attention that we had given to this matter.
  Finally, there is the difficult question of discharging dangerous psychiatric patients into the community. In my area and that of my hon. Friend the Member for Abingdon (Mr. Neaves), we have been concerned recently about the case of Dunlop who was convicted of 34 sexual offences against children, was transferred from Broadmoor to an open psychiatric hospital and was then allowed to live in a home where there were very young children. This appears, with hindsight, to have been a cavalier and mistaken decision. I know at first hand how difficult these decisions can be, particularly for
  34
  the doctors concerned, but in my view we need to tilt the balance rather further towards protecting the community, and we should look much more carefully at the criteria for discharging into society patients with long records of dangerous behaviour.
  I urge the Government to speed on with the Butler recommendations. I am particularly interested in the possibilities of an indefinite sentence for certain kinds of disorders. This has been used for many years in some Scandinavian countries, and I have actually been to Herstedvester, which is an indefinite sentence psychopaths' prison in Denmark. Many people think that this is one of the solutions we need to explore in our community, and the Butler recommendations seem to support this view.
  I also hope that we shall pursue rapidly the setting up of an effective independent advisory body to reconsider possible discharges. I do not think that it is right to leave the decision in the hands of a doctor whose personal professional responsibility must tilt itself towards the patient whom he is trying to help rather than towards society.
  The mentally sick are a much talked about but much neglected group of patients. I believe that they represent a challenge to which the Secretary of State should rise. We hope that she will not only produce a report, a consultation document, with real action it it, but will ensure that in the very near future we have a further debate on this subject.
  3.48 p.m.
  The Minister of State, Department of Health and Social Security (Dr. David Owen): I welcome the opportunity to discuss the White Paper "Better Services for the Mentally Ill". Despite some of the things which the hon. Member for Reading, South (Dr. Vaughan) has said about that White Paper, I think it has been remarkable how warmly it has been received, if for no other reason than for its extraordinary frankness. I think it is rare for a Government document to be quite so open about the deficiencies of a service, to be quite so blunt about the gaps, and to be quite so realistic about assessing failures to achieve as much as everyone hoped with the passing of the Mental Health Act in 1959.

  35
  The harsh facts are stated quite clearly, as the hon. Gentleman said:
  "Mental illness is a major health problem, perhaps the major health problem of our time. … At least 24 million working days are lost … each year by people suffering from mental ill-health. Some 5 million people each year consult their general practitioners about a mental health problem."
  I have no quarrel with anybody who wishes to argue the case for mental health. I myself used to be a member of the executive of the National Association for Mental Health. But what calls for special pleading, if special pleading it be, is the need to see mental illness and care for the mentally ill against the background of the financial restrictions facing us, and, what is more, to see mental illness in the context of National Health Service and personal social service expenditure.
  I must say that I get a little concerned about the way in which everyone in this place espouses every cause, especially when it is praiseworthy in itself, and demands more resources though without facing the challenge of trying to define our priorities. A lot of things are highly desirable in this field, and the difficult choice lies in determining that which must have first priority.
  For 16 years or more we have all, both inside and outside Parliament, paid lip-service to the need to care for the great majority of the mentally ill within the community, yet, as the hon. Gentleman said—and as the figures in the White Paper show—in 1973–74 nearly £300 million was spent on hospital services for the mentally ill whereas only about £15 million was spent on personal social services for the mentally ill, and of that sum £6·5 million went on day and residential facilities. Yet in March 1974, 31 local authorities as then constituted had no residential accommodation and 63 had no day facilities.
  It is, however, no good for us, in the House or in the Government to blame local government, for one can point to many years under both Administrations when local government has requested loan sanction for capital facilities which have exceeded that which the central Government felt able to finance. The central problem, therefore, is one of determining the priorities for mental illness within the
  36
  whole health and personal social services budget.
  If we are to fulfil our aspirations towards community care, we have to face our inability to recognise sufficiently strongly the necessity for joint planning and joint financing of the health and personal social services for the mentally ill—and not just the mentally ill, for we must bear in mind here the combination of needs and services for the mentally handicapped, the elderly, the disabled and children.
  We do not yet have a unified service, despite the National Health Service Reorganisation Act 1973. I accept that as a reality. It would be mere escapism if I were now to reopen the arguments about structure or to advocate yet another reorganisation. What is now required is that we face squarely the problems of mental illness, recognising that we have to act within the structure which we have, and seeing provision for health and personal social services as one, working across the arbitrary administrative boundaries which exist and refusing to accept the narrow distinction between, on the one hand, the National Health Service and, on the other, local authority personal services.
  Almost every policy initiative taken by my right hon. Friend the Secretary of State and by the Government over nearly two years now has had that aim of unification as its central objective. It was for this reason that we attached importance to increasing the local authority membership on area health authorities, so that district councils responsible for housing will now be able to have representation on area health authorities. Who can doubt the crucial rôle that housing plays in health and social service problems generally, and especially for the mentally ill—whether sheltered housing for the mildly mentally disturbed elderly person or for the long-stay patient when first discharged from hospital into the community.
  We hope soon to introduce changes in the hospital advisory service so that it can set a report on a psychiatric hospital in its wider setting, reviewing the community service for the mentally ill in the whole catchment area. For that reason, we have stressed the importance of the role of the joint consultative committees.

  37
  If we cannot achieve through them the joint planning objectives with health and local authorities, then in 15 or 20 years the strategy envisaged in the White Paper for a radical change in the balance between hospital and community care will have failed to be implemented. With the experience of the past 15 years before us, there could in such circumstances be no encouragement for the next 20 years.
  The White Paper envisages over a 20 to 30-year period an adjustment of capital investment to an average of around £30 million a year on health services and £8 million a year on personal social services. Many people will argue that there should be a more radical shift, though not, I hope, by reducing further capital investment plans for the hospital sector, which was already deprived over the past few years—for it was believed that the long-stay hospital would automatically be closed, and then, when it was not, it was still not given the resources necessary—but by finding larger resources for the social services for the mentally ill.
  There is, however, a danger of all of us becoming too fixed on capital investment at the expense of revenue investment and what must certainly be envisaged over a period of years is a substantial increase in the revenue allocation for the mentally ill through the social services budget.
  The White Paper—and my right hon. Friend's introduction, in particular—is realistic, saying that over the next few years we must be honest and admit that very little extra resources can be available, but that is not to say, as the hon. Gentleman seemed to imply, that over the next 20 or 30 years, after the country's economy makes its upturn, as we hope it will, the mentally ill and others suffering mental handicap cannot expect a preferentially increased share of any resources which may be allocated to the health and personal social services.
  The problem in the short term is how to achieve that aim when the social services budget, together with the health budget, faces a period of severe restraint. There is also the problem of getting things right at the local level. The allocation of funds, including funds for the social services, is made centrally in the rate support grant, so that the problem of apportionment and getting things
  38
  right in the local situation remains. There is, therefore, need for a mechanism to promote projects which both the health and local authorities regard as of high priority but which central allocations are not sensitive enough to pick up.
  We hope to publish before the end of February a paper for consultation on joint planning and joint financing for health and local authorities. It is intended in this coming financial year April 1976–77 to identify for each joint consultative committee the amount of money available to each area health authority. These specific sums of money will be used in financing either capital or revenue joint projects. But the money will be Health Service money and as such the responsibility of the area health authority and, where appropriate, the regional health authority.
  We envisage starting off with a figure for all forms of collaboration of £8 million, building up over five years to a little short of £20 million. The total involved will be more than this, of course, since it is envisaged that the area health authority should normally at the maximum make a 60 per cent. contribution, and only in exceptional circumstances will the whole cost be met from NHS funds; and there would be need for a tapering of revenue support over a period of year so that the social services department eventually bears the full cost. This switch, of course, would have to be reflected in the annual rate support grant negotiations.
  Some will advocate that the money should be earmarked and that the JCCs should be made executive bodies, but I do not believe that this is the right way forward at this stage, for that would merely create yet another tier of management in the health and personal social services. What is needed, however, in order to ensure the success of joint projects is a far greater degree of joint care planning between the area health authority and the local authority.
  At present, the Health Service has established health care planning teams at district level, but with insufficient linkage with the local authority personal social services. We hope to take into account the strong criticisms that have been made by local authorities of a draft circular on health care planning so as to reflect particularly in these four main areas where

  39
  community care is so crucial—mental illness, mental handicap, geriatrics and disablement—a far greater degree of joint activity than has hitherto been envisaged
  It may well be that in the present financial difficulty joint financing will have its biggest impact in revenue support. I should, however, stress that the criteria on which an area health authority will agree to use its money for joint financing will be that such a project is in the interests of the NHS as well as the social services, either allowing the Health Service to discharge more patients into the community or to ensure that more people in the community can stay there and not need admission to an NHS hospital.
  Some local authorities may argue that the mere notification of the sum of money potentially available will give them insufficient leverage. I hope that this will not be the case—that the mutual self-interest of the two authorities will ensure that the money is used—and the Department will be monitoring the whole process and will certainly want to know why an area health authority has not used its allocation if that were to be so.
  I believe that this financing could be a powerful catalyst for achieving some progress towards real community care and really successful joint planning. It could give the JCC machinery the stimulus which it badly needs. Another area in which we intend to stimulate joint planning is to allow—
  Mr. Michael Alison: Is this to be a net extra allocation of resources from central funds or a redistribution of planned expenditure with-in the district health service?
  Dr. Owen: It will be a redistribution among existing levels which we shall be announcing in the Public Expenditure White Paper. It will be earmarked as an allocation identified for each area health authority to try to encourage the practical movement of the switch of resources from the hospital service into the community services.
  I was saying that some local authorities will argue that they have insufficient leverage and that we shall be monitoring the process. A movement which I hope to stimulate is to allow land or property surplus to NHS requirements to be made
  40
  available to local authorities for personal social services purposes under specially favourable financial arrangements, subject only to the proviso that the use of the land or property by the local authority shall not be changed without the approval of the Secretary of State, or that if it ceases to be used for a social service purpose there will be a reversion of the land or property to the Secretary of State. Many local authorities that wish to use hospital land in their community are unable either to afford the capital amounts or to make satisfactory arrangements because of the present governmental restrictions that apply.
  I am also prepared to discuss with health authorities the proposal that has been put forward by MIND in the past of safeguarding the priority that should be given to mental illness and to the mentally handicapped when land is released. Some hospitals hold large amounts of land, and at least a portion of the profit that is made from the sale of land could go back into mental illness or mental handicap. There are considerable problems, but unless we allow some leverage in the allocation of priorities against the ever-increasing demands of the acute sector I believe that history shows there is a danger that these services will miss out.
  Mr. Patrick Jenkin: One of the last things I remember doing at the Treasury before I left in the beginning of 1974 was to approve in outline a scheme which was put forward by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) for achieving exactly what the Minister has said about allowing some part of the profit on disposal to remain with health authorities. Will the hon. Gentleman tell the House whether his Government have decided to proceed with the scheme which my right hon. Friend proposed?
  Dr. Owen: The right hon. Gentleman will realise that I did not respond to some of the remarks that were made by the hon. Member for Reading, South. I think he will agree that it is much better to keep party politics out of the matter. There has been no change of policy. The policy to which he refers is the sensible policy of allowing the allocation of land that is surplus to stay

  41
  with the regional health authority and not to go back into overall central allocation. That allows authorities some share of the land as well as providing a far greater devolution of authority. That is the praiseworthy policy which we are following. As I understand it, that is exactly what the right hon. Member for Leeds, North-East (Sir K. Joseph) outlined. It is important to remember when reallocating resources across the Health Service that we must be a little careful. Some wellfavoured regions may have a great deal of land from which they can make large profits from land sales. I would not be happy if such profits were retained within those regions. However, it is desirable to give some stimulus to the sensible use of land planning. If it is felt that it will all be done by central government there will be no stimulus for local authorities to act. I am thinking of extending this concept and I want to discuss the matter of sales with the health authorities.
  I think that these arrangements will allow those concerned to establish a closer working relationship than at present exists, and with the least possible intervention. I believe that overall planning arrangements from central Government should be subject to consultation. There may well be changes in the light of our experience. They mark, I believe, a breakthrough in our whole attitude to health and social service planning, coming to grips with the central problem of how to persuade a local authority already under pressure from hard-pressed ratepayers to accept the financial burdens of the NHS, knowing that the service will be reducing its financial commitment in the long term with no compensatory transfer to the social services. They should also help hard-pressed doctors in the NHS who face the depressing prospect of having their hospital beds full of patients who could well be discharged into the community but who cannot be discharged because of the inadequacy of community facilities. In consequence, the highly desirable emphasis on active rehabilitation in hospital care is stultified. I stress that the figures I have given cover the whole range of personal social services, but I hope that they are material. There is nothing against area health authorities entering into joint financing projects on a much larger scale than the one I have envisaged.
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  Reference has been made to the situation that has arisen following the articles in the Daily Mirror about Birmingham. I pay tribute to those articles in that they raise yet again a picture of the sordid and unsuitable conditions in which many ex-mentally-ill patients are living when they have been discharged from hospital. This is a matter of great concern to all of us. For many of us such revelations are not new. Community-based services for the mentally ill have not kept pace with the ever-increasing demands that have been put upon them for many years. However, with a major national newspaper championing the cause, I believe that the sector will be given the priority which it certainly needs. I think that MIND is to launch very shortly a campaign entitled "Home from Hospital". I hope that we may be able to give some pump-priming in the form of financial assistance.
  Mr. Eric Moonman: Following the reports in the Daily Mirror, will my hon. Friend tell the House whether he has taken any steps by circular or any other method to see whether authorities can engage in similar practices and what reports he has had?
  Dr. Owen: I have asked for reports from the AHAs and the RHAs. I have said that I intend to go to Birmingham to discuss the matter with the area health authority and the local authority. I hope that the initiative we shall be taking on joint financing will be as helpful to them as anything else as it is capital and revenue. I do not think that there is only one health authority that is involved. It is a joint problem. It is a problem that falls on the social services. In many cases it falls on the housing departments. This is a particular problem where housing is separated from the social services and is under a different authority. I am ready to consider issuing a circular. We have concentrated on this problem but there are many others to be tackled. There is a lot to be said for leaving local people to try to determine the priorities in their own situation.
  The conditions that exist for the mentally handicapped are often appalling and sordid. There is also much argument and debate about geriatrics. As my hon. Friend knows more than anyone else, some areas have particular deficiencies.

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  For example, there is the problem of discharging patients from psychiatric hospitals. Another problem might be a large geriatric hospital that faces great problems because it has been starved of resources over the years. There is a lot to be said for trying to see the situation in the round. The Hospital Advisory Service has reported on psychiatric hospitals, and future terms of reference must include consideration of the whole question of community services. I hope that it will be able to concentrate on the problems which have been outlined.
  Dr. Vaughan: Before the Minister leaves this subject, will he comment on the possibility of a much greater use of voluntary organisations and a possible rôle shared between voluntary organisations and local authorities?
  Dr. Owen: I think that we must make distinctions. More needs to be done for those patients who can never be discharged, but in developing new policies for the future there may be a situation in which it will be extremely unsatisfactory for patients who have been discharged not to receive adequate community facilities.
  Mr. Wyn Roberts: The hon. Gentleman has been talking about patients leaving hospital, but is he aware of the conditions of patients in certain mental hospitals, where I understand the feeding allowance per head is less than that enjoyed by other patients in other hospitals? Is he aware that this is causing quite a problem in many hospitals?
  Dr. Owen: The hon. Gentleman makes the point that one can point to problem areas elsewhere. The late Dick Crossman did more than anyone to make massive changes when he resisted standard vetting of patients in psychiatric hospitals and sought to improve the conditions for mentally handicapped patients. When I go round the country visiting these establishments, I do not hear the kind of complaints one heard about food in psychiatric hospitals 10 years ago. Changes were also made by the right hon. Member for Leeds, North-East when he was Secretary of State for Social Services in terms of the priorities one should give to mental illness and mental
  44
  health. Of course, Ministers constantly face demands from other sectors for more money to meet various needs.
  I believe that in the next few years we shall have to develop a "low-cost" mentality, a willingness to make and mend. This applies across the whole area of activity. It also means a readiness to harness voluntary effort with professional skills, a readiness to accept the attainable and not always to hold out for the desirable.
  There are many schemes, despite their low cost, embodying what is recognised to be good—even best—practice. Some are obvious and involve adapting existing premises for use by the mentally ill as day centres or social clubs, for example, instead of costly new purpose built centres, as well as the sharing of facilities with other groups. If we could universalise existing best practice in caring for the mentally ill, we would be surprised how much could be done even in a time of economic restraint. Not everybody who leaves a psychiatric hospital needs special residential provision. The great majority of people can, and do, return to their own homes to live with their families. We must remember that over 90 per cent. of patients in hospital are there voluntarily. It is for those patients to decide whether they are ready to be discharged. It is not always the hospital that has that choice.
  However, the demands placed on relatives can be considerable and should not be under-estimated. A very welcome development is the way in which the National Schizophrenia Fellowship has set up a series of local self-help groups for the relatives of people suffering from schizophrenia so that they can share their problems and pool their knowledge and experience of how best to solve them.
  Community psychiatric nursing services can provide a valuable means of follow-up and care for discharged hospital patients, as has already been done in enabling those people to live in homes and to maintain contact with nurses. This is an old idea in the sense that such a system operated in Croydon as long ago as 1954, but there are many areas that do not operate that system. An increasing number of psychiatric hospitals has adopted the system. The nurse pays regular visits to the patient's home to ensure that prescribed treatment is being

  45
  carried out, to assess the patient's progress and to supervise general welfare. I am discussing with MIND ways in which we can stimulate volunteers to take responsibilities in this area, working in the way in which NACRO has done in the probation service. We are trying to overcome the problems faced by nurses and other workers who face heavy case loads.
  A relatively inexpensive and successful approach to the problem of providing accommodation for the mentally ill who cannot manage entirely independently is the establishment of group homes. These are particularly suitable for people who have been in hospital for some time and have lost touch with relatives and friends. Ordinary houses and flats can be used for this purpose, and some local housing authorities are willing to make accommodation available for this purpose. A small group of residents—up to five or six—who may often have got to know one another in hospital, live together as a family and organise their own finances, with a worker or voluntary helper to check that all is going well. If there is difficulty or trouble, the group can fall back on a specialised professional worker. I believe that this is a form of help which has already been developed in many places with considerable success and to which we should give further consideration.
  Boarding out is another comparatively low-cost means of providing mentally ill people with satisfactory accommodation and care outside hospitals. Some local authorities and voluntary organisations have already begun to develop schemes of this kind whereby mentally ill people are found foster homes in sympathetic households where they can live as one of the family with the help and support of other members.
  Supervised lodging schemes provide similar accommodation, except that they allow for a more independent existence, often in sub-let bed-sitters, which some people prefer, but with a sympathetic landlady available to help if required. In both cases, although no capital cost is involved, considerable social work effort has to be invested particularly in the early stages either by the local authority social workers or by voluntary agencies. It
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  must be remembered that such workers are hard pressed in many other respects. The selection of boarders and landladies must be handled with a great deal of care and all concerned need to know that, if necessary, they can obtain skilled support and advice.
  The full potential of many of the voluntary bodies involved in mental illness has not yet been realised. They must he encouraged to raise the scale of their effort to match the scale of what is needed. Statutory authorities can by their attitude have a crucial impact on the scale of voluntary effort. Local authorities can help by undertaking some pump-priming under the present legislation.
  Central Government already provide funds for these purposes. Therefore, a little pump-priming money for a local campaign, using voluntary workers to find families or landladies willing to take mentally ill boarders, could be one initiative. An effort to organise volunteers with some basic training to befriend and support individuals or groups can relieve hard-pressed social service departments from at least some demands on their time.
  I wish to stress the fact that these are all low cost factors. In the present financial climate we cannot avoid the fact that local authorities already shoulder heavy burdens. It is impossible for hon. Members on either side of the House to seek to put restraints on expenditure and at the same time to expect local authorities to provide all these services. Those authorities cannot do so, and they will become disillusioned and bitter if we lay on them statutory obligations which they cannot carry out.
  That does not mean that we can give up the battle and say, "We cannot do better." We can, even while using exactly the same resources, do a great deal better than we have done before. We have become too accustomed to think that progress is measured only by the opening of new purpose-built centres, often built on too lavish a scale. I plead guilty on that score on behalf of central Government. We must recognise that many of the professionals in this area carry an appallingly heavy case load. Our society, and our newspapers in their comments, must recognise that it is no

  47
  good constantly bullying people about their mistakes. Of course mistakes are made, but they may be due to the fact that we have not been prepared to earmark sufficient resources.
  It is no good willing the ends and failing to provide the means. There are whole areas of need in dealing with mental illness and the White Paper has not attempted to hide them. The mentally ill need a champion, and it is nice to see that role being taken by a Government Department. I do not believe there is one central answer. I am convinced that it will be solved only if the health and personal social services recognise in their approach to the mentally ill that they must plan together and see the problem as a unified whole.
  Mr. Spriggs: On the question of the use of resources, is the Minister aware that I have a young constituent who has reached a high standard of academic education, that this young lady was discharged from Rainham hospital as cured and that when she attended several interviews to obtain employment she was not accepted—in other words, as soon as the prospective employer learned that she had been an in-patient at a mental health hospital, she was not considered. She had no chance of obtaining employment. Does the Minister realise that such young people have no opportunity to play a full part in society again?
  Dr. Owen: I wish I could answer my hon. Friend on that point and assist him, but he is talking of discrimination against a patient who was mentally ill and it is a matter of attitude—an attitude that has existed for many decades. It will continue to exist until people accept that they themselves carry a high probability of being affected by mental illness. Mental illness is no respecter of persons. Indeed, there are Members of this House who have been acutely depressed, or who have suffered mental illness, or can expect to do so.
  The only way in which we shall eradicate that type of discrimination in employment is to make people realise that mental illnes is part of the pattern of illness that affects the community as a whole and that one person who refuses to employ another might, in a few years' time, find himself or herself in exactly
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  the same position. The Government can persuade, Members of Parliament can sponsor and help the cause of the mentally ill in their constituencies and many do. That is a great tribute to the work of the all-party group which has all the time fought for a higher priority for, and a greater awareness of, the problems of the mentally ill.
  I could have dealt with many other problems in this short debate. There is the worrying problem of the increasing trend of alcoholism, the minority problems of the homeless alchoholic and that of drugs. To some extent that is not as bad as some of us thought it would become five to 10 years ago. Still, it is devastating for a family to be affected by it.
  My overall claim is this—that there is a need to try all of these solutions in the next few years, to exercise restraint, to start afresh, and above all to change attitudes. It is attitudes which must change, and it is this which is the key to most of the improvements in mental Illness. This will ensure that it gets a higher priority when it comes to the question of what can be afforded. This will ensure that people—because they realise that there is a sense of urgency—will be prepared to adapt themselves and to make do with that which is, perhaps, much less than perfect. There must also be the realisation that if something is not done, these mentally ill people suffer. It is in that spirit that we conduct this debate.
  I have no immediate answers to the problem. I believe that we are agreed in our analysis that more of the mentally ill can be looked after in the community than hitherto. At the same time, let us not forget the realism in this White Paper about the necessity to keep open some of the long-stay psychiatric hospitals for well beyond 15 or 20 years. Again we have not faced up to that sufficiently in the past. We have believed that they would all be closed. Consequently, they have been starved of resources. There has not been enough recognition of the fact that many of the pioneering innovations in mental illness started in these psychiatric hospitals. There must be the acknowledgment that the movement out into the community could well hold the key to changes in the future.
  4.23 p.m.
  Mrs. Lynda Chalker: Although this is a short debate it is better that we should have it now than put off the date when we start to discuss this subject and change the attitudes towards this vital issue of mental health. I must declare my interest. As a Council member of HIND, I particularly welcome this debate. We hope that, as a result of it, people in the community will not just take note of what we say but will begin to perpetuate some of the work taking place only in tiny corners of the country for the benefit of discharged mental health patients.
  There are many schemes, some of them mentioned by the Minister. The difficulty is that often there is total lack of flexibility in the approach to the problem in hand. Many different schemes are operating in only a few places. Had we asked the Minister to state how often boarding out took place and how many local authorities were truly trying to help with day care and so on, he would have been forced to say that there were only a few here and there. That is the tragedy of the situation.
  We talk of switching resources, but I believe that a great deal more can be done within the community. I congratulate my branch of MIND in Wallasey, which has set up five new community homes, each with four or five patients, in the past financial year.
  There is one situation which must be clarified before it clouds this debate. It has already been touched on in the speech of my hon. Friend the Member for Reading, South (Dr. Vaughan). It concerns the position about mental health abnormal offenders. On every occasion that there is something desperately wrong there is, quite rightly, a great public outcry in the newspapers. What the public must realise is that out of 197,000 admissions in 1973, less than 1 per cent, came from the criminal courts or penal establishments. Of all admissions only 14 per cent. were compulsory. Of that number only 11 per cent. came from the criminal courts, penal establishments or the police. Altogether, psychiatric cases account for fewer than ½ per cent. of the 736,860 non-motoring convictions in our courts. We must get this situation into perspective. Most mental patients are
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  passive. They are often silent, fearful and withdrawn. Some are severely handicapped. Rarely are they violent.
  The Minister estimates that one-third to a half of our mentally ill adults could be re-located in the community if hostels were available. This is saying something about our mental hospital patients which most of the community fail to realise. They think that anyone coming out when the bell sounds at Moss Side is about to rape someone down the road. That is not true. We must put this into perpective. If we examine the recommendations of Butler we see that it was thought that 500 people in the special hospitals—usually those holding the worst offenders—ought not to be there.
  We come to the thorny, vexed question of people leaving mental hospitals for the community. We in this House must realise that there should be two stages in this process. There are vast differences in types of mental illness and in the ability gradually to move from an enclosed society—and it is very enclosed—back into a much more cruel world than any of these people ever knew before they entered the hospital. We must remember that a large number of these people may have been in hospital for 10 years or more. Life outside has changed drastically in that time.
  We must also realise that the responsible medical officers in the hospitals are cautious about releasing patients. We must work out a system under which the mental health review tribunals take more note of what the responsible medical officer is saying. The layman, the lawyer and the doctor together are not the only people with knowledge. When it is found that there is a problem over releases from a certain mental hospital, each case should be looked at to discover what can be learned from it as well as to see what can be done to safeguard the rights of the community. I do not say that the community should not come first and foremost. I say only that we should get the matter into the correct proportions.
  What further action is needed? A week ago I was privileged to spend some time at Moss Side. Later I hope to see a number of other local hospitals. I welcome the attitude of the staff at all the mental hospitals I have visited. We

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  often fail to recognise that they care, not on a daily basis, like hon. Members, but year in and year out. We owe them a great debt of gratitude for the completely selfless way in which they look after in-patients.
  Can we not set up a system whereby patients may either be released from a special hospital on parole over a time into the community but under strict supervision or else released into one of the local mental hospitals? Here we face a grave problem. In a number of recent cases when Moss Side and Park Lane have wished to release patients into a local mental hospital that hospital has refused, partly because there could not be an exchange on a one-to-one basis and partly because it did not want someone from Moss Side. I hope that the House will forgive me for using Merseyside examples but I know that area better than others. We have to get an understanding between the staffs of these hospitals. Mental health review tribunals, together with the responsible medical officer, have to recommend, as they could, that these people be discharged to a local hospital. It is a stage in the process of rehabilitation.
  Surely this is what we must be aiming at, bearing in mind not only the cost of custodial or institutional care compared with the cost of community care but the right of such people to freedom after they are cured. I hope that the halfway house through the local mental hospital will be a necessary step in the process of release.
  The advisory body suggested in Section 65 of the 1959 Act should be instituted. It is wrong that the decision whether restricted patients should be released should rest wholly on the Home Secretary. There is a place for the advisory body, as Butler suggested, and the Home Office could make this condition. I am also concerned that Section 65 patients should never be released into the community without pro-diving supervision for them. In some cases the supervision starts too late after discharge. I hope that, as a result of Dr. Acres' study and of other studies which are now taking place, we shall learn from previous discharges and experience.
  I have already mentioned the question of patients having home leave before
  52
  final discharge. Such leave should be supervised. I have been interested to note recently the number of cases of voluntary supervision. The system works well, but there is doubt whether voluntary supervision is sufficient. The Cambridge Institute of Criminology's Report showed that there was a higher reconviction rate among voluntarily supervised patients than there was among compulsorily supervised patients.
  There is, however, more than can be done. There are people who, with a little training, could help in the supervisory task. In the probation service there are people who assist probation officers. They are not fully trained probation officers. I see no reason why people who wish to help in the rehabilitation of mentally ill people should not be trained along similar lines to work with social workers or probation officers in the task of supervision and rehabilitation.
  Within existing budgets, and without spending more money, we are supposed to be doing something about the training of social workers. I have been terrified by the reaction of some young social workers when faced with the potential care of former mental hospital patients. They do not know what to do. They are frightened, and this fear transmits itself quickly to the people supposedly in their care. There is no confidence and there is no shoulder for the patients to lean on. The whole system then begins to break down because the pressure builds up on the social worker, who already has a very heavy load. A slight diversion of resources from other worthwhile projects would perhaps ensure that there were sufficient people equipped in carrying out personal social services in each local authority to look after discharged patients when they returned to the community.
  I turn to the aspect mentioned by my hon. Friend the Member for Reading, South and the Minister, namely, getting other people to help in the community. I have been staggered by the amount that is being done. At the last annual general meeting of the National Association for Mental Health there was reference to experiments taking place in the community where volunteers, under the guidance of specialist workers, and often with probation officers, were helping in their spare time with the boarding-out issue. They were going round and talking to

  53
  potential landladies and explaining the problem. I was pleased to see the Granada programme, which was televised in the North-West only, I believe, which explained some of the problems and successes. Such programmes might well allay the fears of people who perhaps would otherwise care for someone in the community but did not know how to go about it and were fearful of it.
  A number of churches are beginning to run day centres for people who are totally listless and who otherwise would not know to acclimatise themselves to a fast-moving world on their return to the community. The tragedy is that the local authorities are cutting the grants of the voluntary agencies which are working at what is termed the sharp end so that they do not have the money to help them with the small expenditure that they undertake. The Minister should do something to help in this respect, because there is no provision in many areas apart from that afforded by the voluntary agencies.
  The hostel situation all over the country is absolutely desperate. I have no hesitation in saying that the hostel situation for homeless former mental health patients is worse than that for any other group. Hon. Members opposite laughed when my hon. Friend the Member for Reading, South said that he had seen three deluded people between Horseferry Road and the House of Commons on his way here today. It is not a laughing matter, but society has turned its face away from it and has closed its ears to it.
  I shall not ask the Minister to take on the responsibility for homelessness, but there is a total lack of co-ordination from the day when the application is made to a mental health review tribunal or the discharge is organised. It is always somebody else's responsibility. Whether we believe that we should persuade local authorities not to cut the grants of voluntary bodies which are doing useful work, or should divert resources, or set up more joint planning committees, the aim must be the same, namely, to allow people, after they have received treatment and have been rehabilitated, to return to the community to which they rightfully belong. We have no right to say that they shall not live free and normal lives, provided they are well enough to do so. The trouble is that, instead of helping them, society, in its prejudice, puts up
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  every bar that it can think of against them.
  4.38 p.m.
  Mr. Eric Moonman: I am grateful that the Opposition have allocated part of this Supply Day to a subject that has been debated far too rarely in the House. I echo the hope of the Opposition that the Government will allocate time for a more far-reaching debate than is possible today.
  It is about 10 years since the all-party committee on mental health was set up. Some of us on both sides of the House were anxious to ensure that there would be a continuing pressure group on the subject. In view of the poor attendance in the Chamber today, one might wonder whether we have succeeded or whether our work has been all that useful. I think that it has been useful, because to some extent the job of those who feel anxiously and deeply about the mentally sick and mentally handicapped is to give information, recognising that this will never be an attractive subject. It is an embarrassing subject.
  Although there are many statistics—some have been given today—which show that this problem affects a large proportion of the community in the western world, when it strikes a family it is still treated as something which is very personal, which is perhaps right, and it is contained rather than discussed. Although the statistics put the bite on the subject and put pressure on the Minister, they also conceal the personal anxiety and harrowing experiences of those who need or must obtain mental treatment.
  I am also troubled about the use to which statistics are put. We are inclined to think in terms of those who are in need of mental treatment. The statistics do not take account of the enormous responsibility that is suddenly thrust on a family, or on the employer or neighbours. Very rarely is mental illness successfully dealt with within the family. At some point it is necessary to call upon the resources of the wider community. We have heard that about 5 million people consult their doctor about mental illness, but that figure is nothing like the total of those who require assistance.
  The question remains: does the plea from both sides of the House move the House or move and activate the nation?

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  One of the jobs that we must do, without in any way qualifying it, is to ensure that local authorities are fulfilling their responsibilities. Perhaps my hon. Friend the Minister, who has a different rôle, feels that he should be a little more judicious about the local authorities. I have no such discretion. Unless we ensure that every local authority is fully aware of what is expected of it, we shall not bring about improvements and there will be the dumping that we have seen in one or two areas.
  I think that the hon. Member for Reading, South (Dr. Vaughan) was a little harsh about the White Paper. It does not attempt to lay down priorities. We must await the consultative document for that. Although the White Paper is overdue, it lays down a series of suggested practices and describes research and experiences in a way which is extremely helpful. At the very least it is a good teaching aid for those in the social services. The problem of resources, which affects the National Health Service as a whole, is nowhere more critical than in the mental health sector. It receives the lowest proportion of resources per patient. Any erosion due to inflation will therefore have a fundamental effect on already inadequate services.
  My hon. Friend is wrong to say that there can be no special pleading. Deciding priorities is the Government's responsibility. As parliamentarians we do not have that responsibility. If others have the opportunity to serve in the Government, it will then be their responsibility. It is not fair for any Minister to say that a group of people cannot make a case for dealing with the issue with which they are concerned. If there is a priority to be related to other parts of the Service, it must be defined.
  That, presumably, is what will be done in the consultative document. If we are to be criticised for making our case, it is the fault of the White Paper, because it does not indicate the Government's thinking on the priorities. The mental health service must have priority. The current information and advice and the experience of the last 10 years make that clear.
  I wish to make a number of points, the first being about prevention. Many of the factors that lead to mental illness are
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  outside the control of society at large. We can begin to deal with such illness without any capital expenditure by looking more intelligently at the areas of stress. I am talking about the type of work performed in many of our factories, the type of houses that we continue to produce, town planning, and how we fail to understand some of the stresses within our communities.
  Dealing with those matters would go a long way towards beating the problem before there was any need for expenditure on the mental health service. We may not always be able to alleviate stress, but we do not have to add to it. It is one of the follies of our contemporary society that we do so.
  My second point concerns recognition of the illness. The White Paper says that general practitioners treat 90 per cent. of all diagnosed mental illness. This means that the GPs' rôle is extended. Training in recognition is needed, not only by those who will be coming into general practice in the next few years but by existing doctors—men of over 45—who may not have had the benefit of this sort of training and analysis. A training programme should be given priority to enable doctors to treat mental illness quickly and to recognise those cases requiring specialist psychiatric help.
  The other group of key workers in recognising mental illness, especially in families with a number of problems, are the social workers, who are also responsible for the valuable work of rehabilitation after treatment. I regret that the morale of social workers is as low as I have ever known it, partly because of reorganisation and partly because, despite the greater efforts to talk about communication and co-ordination, they have not been implemented in an intelligent way. My hon. Friend needs to keep a close watch on the way in which the new authorities use social work staff, so that their specialist skills are not lost behind desks or buried in local government bureaucracy.
  Thirdly, in the White Paper and elsewhere there is evidence of the importance of volunteers, and not only because the Health Service does not have the resources for all the staff it needs. Even if we had all the resources needed, there would still be a valuable rôle for the volunteers. There is always room for

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  the little extra, the acts of individual kindness which are a spontaneous expression of the community's concern and a continuing link with the world outside the hospital. I welcome the steps to integrate voluntary work with the official services, which will make the volunteers' work more effective and more satisfying, which is equally important.
  I was disappointed that the White Paper made little reference to the 1959 Mental Health Act. One of my hon. Friends asked whose responsibility the Act was. It does not matter. The important thing is that the Act was a reflection of the mood of the period, but that was a long time ago. We might not have a new Act until 20 years after the passage of that Act. We should distinguish between what was in that Act and what we need. It was a revolutionary Act, but after 16 years of operation its shortcomings are apparent. It has not triggered off a positive response from the community, because its provisions have left too many loopholes for local authorities to opt out of their responsibilities. This is an underlying theme of the discussions.
  There is still considerable anxiety about the area in which mental health and criminal responsibility overlap. The whole procedure relating to compulsory admissions, renewals of committal orders and the rights of patients in relation to mental health review tribunals all give rise to great concern. Liaison between the Home Office and medical staff in these matters is not always as it should be.
  Fourthly, the gaps in the Health Service reflect the attitudes of local authorities that have made little or no contribution to helping with their own case loads. To that extent they cheat. Their passing on work to another authority is a macabre joke. There is disgust in London and elsewhere at the way in which some local authorities pass on their problem families and other cases to other authorities, which is totally wrong. What happened in the West Midlands is not unique. Other authorities, too, are dumping their psychiatric patients.
  I have questioned the Minister on this subject before and I was not entirely satisfied with his response. I can understand that he does not wish to engage in one particular inquiry—there are many other problems—but we have evidence of dump-
  58
  ing without adequate back-up, and we ought to be aware that it could happen elsewhere. Indeed, to judge from the evidence I have, it has already happened elsewhere. It is extremely important that we discover the extent of this problem, and to do so needs only a simple circular asking what facilities and back-ups exist. This is in line with the White Paper.
  The situation in Birmingham is not unique. It has started to happen elsewhere. Dumping is monstrous at any time, and where there are not sufficient provisions of community services, it means that local authorities have failed to fulfil their responsibilities.
  Co-ordination is a utility word that we all enjoy using. It has become part of the contemporary language in industry, the social services and elsewhere. Professor Evans of the King Edward Fund has started an important project to make the word meaningful. I am sure that my hon. Friend is aware of the work and will continue to give attention to it. Professor Evans says "Do not talk about coordination or failures and breakdowns between different levels of staff. What does it mean?"
  We have often seen, for instance, after inquiries into battered baby cases, that we are dealing with the situation too late. Professor Evans found that one problem in connection with mentally handicapped people—and this could apply equally to the mentally sick—was a failure of communication. There was an absence of uniformity in the completeness of case records, with two groups of people talking about different types of records. One group had well-prepared, fully documented case records of a family and the other group was talking about something quite different. They were not talking the same language and did not have information relating to each other.
  Another example was the inability of providers and parents to see eye to eye on the requirements of the mentally handicapped and their families. There were great gaps of understanding about what should be done. Providers of services have different perceptions of their own rôles and those of their colleagues. One of the case workers' most common complaints was that they did not know what they were doing in relation to people in other departments. Practitioners fail

  59
  to see themselves as co-ordinators. There is a tremendous job to be done in communications and supervisory training for the social services.
  I have argued this before and I will continue to do so. I am not sure that those who take the decisions fully understand that this is basically a management problem—an element that has always seemed to be lacking from the Civil Service. We shall never make the breakthrough in care and supervision of care unless we have people talking meaningful language about some of these problems of communication and co-ordination. If we fail the question of whether we should allocate a larger budget becomes much less meaningful.
  I am a little unhappy about the Minister's saying that we need a low-cost mentality. It is a dangerous phrase which he might regret. I can see it being brought up at a future General Election. I think he means—and this has not been rejected by the Opposition—that we should not just go for the major items, the conventional purpose-built accommodation, but should also make use of existing buildings.
  He is quite right, but that should not be a short cut and there are many local authorities that will go along with the Minister's words in that way. Those of us on the all-party committee found that the low-cost mentality had been in existence for far too long. The evidence that has been given about less food being provided in mental hospitals than in ordinary hospitals is a terrible reflection and indictment of us all. What a terrible approach to this problem!
  We must ensure that the low-cost mentality means getting value for money, but we must also make sure that everything else is right. It means an intelligent understanding of the services putting the maximum pressure on local authorities, closing loopholes and continuing to educate this House. We must have another debate. It is absurd that we should have to rattle off our speeches in three hours. We are grateful to the Opposition, but it should not have been left to them to give up their Supply time.
  I wonder whether we have our priorities right. I do not wish to offend hon Members on the Scottish National Party
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  Bench, but I cannot understand why we spread ourselves for a week on problems north of the border when this problem affects us far more deeply in the long term than does anything in the short term. Education involves not just local authorities. It starts here. If we do not have the information, we shall not be able to win the batle for the mentally sick.
  4.56 p.m.
  Mr. Cecil Parkinson: I congratulate the hon. Member for Basildon (Mr. Moonman) on his powerful and well-informed speech. Those of us who take an interest in this subject know how hard he works to ensure that the House and the country is better informed about the problems of the mentally ill and the mentally handicapped.
  In discussing this subject and bombarding the Minister with complaints, grievances and grouses, we should set the scene a little more clearly. For most people in mental hospitals or sub-normality hospitals, the standard of care and facilities is an infinite improvement on what was available a few years ago. I have five large hospitals in my constituency and anyone who goes to hospitals can see the difference between an upgraded ward and an old ward. The upgraded wards are in the majority now. Hospitals have left very few wards in their previous condition, and we should realise that a great deal is being done. We shall dismay and discourage hard-working hospital staffs if we do not pay tribute to that fact. There are now better facilities and better ways of giving a better life to people who have had very low expectations in the past.
  There is agreement on all sides with the policy of moving people from hospitals into the community and building up community facilities. One rarely hears a case being made against it, but although the policy is unexceptionable in theory, it is not working in practice. In one hospital in my constituency, there are 200 patients who are capable of being discharged and are regarded as being reasonably self-supporting, but they have nowhere to go, and this is very depressing for the staffs of the hospitals who work very hard to get the patients to a level where they are capable of going into the world and making a stab at providing

  61
  for themselves. The patients' expectations are aroused and then destroyed when they are told that there is nowhere for them to go. They have to stay in places which staff have been training them to be capable of leaving, and this situation has a devastating effect on both staff and patients.
  A subnormality hospital in my constituency has a children's ward with 200 beds. Of those, 120 are occupied by people who, by no stretch of the imagination, are children. Some of them are in their thirties. But there is no room in the main hospital because, thanks to the upgrading of the wards, there has been a reduction in the number of available beds. Therefore, although in theory there are 200 places for children—indeed, there is a need for 200 places for children—only 80 beds are available.
  It is almost impossible to get a severely disturbed child into hospital for a week or two to give the parents and family a chance to reorient themselves. A great deal of horse trading goes on between hospitals to find beds in holiday homes, to which children from one hospital can go for a week or a fortnight so that others may be transferred for a change. An unbelievable waste of doctors' and staff time is involved. That is happening all the time.
  In my constituency there is a chronic shortage of secure places. In virtually every hospital there are patients who, doctors frankly admit, should be in secure hospitals, but there are no places available. Therefore, they must stay in general mental hospitals, and the staff have to divert a great deal of additional time and resources to lookin1g after them.
  We have heard about the article in the Daily Mirror. It is not news to anyone who takes an interest in this area that patients are being discharged into the community and that the community consists of dosshouses, rooming houses, or any place where a patient can find a bed. Week in, week out, one reads in the Press of patients who are sent to prison by the courts because there is nowhere else for them. They should be in hospital, but no hospital wants to know. Therefore, magistrates, to their fury, week after week are remanding people into prison. The prison service is being used to prop up the mental health service.
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  All these points are evidence that our policy is faulty, that it is not working as well as it should be working, and that it has been too clear-cut in its concept. The idea of being either in hospital or in the community is not good enough.
  The one thing that the White Paper did, if it did anything, was to settle that argument. It clearly stated that existing institutions will be in use for a long time. It stated that there was no prospect of local authorities making provision on the scale required in the immediate future. The White Paper has, in effect, said that we accept the long-term objective of getting many more of the mentally ill into the community, of treating them as far as possible in the community, and of keeping them with their families, but that we also accept that it is a pipe dream.
  I agree, with the Minister that a note of reality and frankness distinguished this White Paper from others. A lot of the cant and hypocritical chat of the last few years was dispelled by the White Paper. It is clear that we shall have to use existing facilities, that we shall not get this clear-cut division between the community and hospital, that we shall have to make do, and that we shall have to be more imaginative and flexible.
  The Minister was generous to local authorities when he said that we should not criticise them. The duty to provide facilities has been placed firmly on local authorities. The facilities are not being provided on the scale required. Therefore, where else can the blame be put?
  I often feel that local authorities simply do not face the scale of the problem. We all know of the token show hostel around which anybody who wants to see what the borough or town is doing for the mentally ill can be taken. But when somebody says, "That is lovely; that is a beautiful hostel; another 20 and we shall be on the way to dealing with the problem", the chairman of the local housing authority virtually keels over. As far as he is concerned that borough or town has made its contribution and can show it to the world. The implication is, "Nobody can accuse this borough of not making provision, because there is something to show." However, local authorities still have no grasp of the sheer size of the problem.

  63
  I referred earlier to a hospital with 200 patients ready for discharge. The borough from which it draws its patients has provided only eight places and, as far as I know, has no plans to provide any more. It needs to provide 25 times that number of places, but it has no plans to do so. Indeed, it is feeling quite pleased about what it has already done. This is a criticism of the Department, because it has not yet convinced local authorities that the problems of the mentally ill and handicapped are not matters for token gestures. Local authorities have the duty of making suitable provision.
  I suggest that local authorities are slow, and are likely to be slower, in providing suitable facilities because, when a patient is in hosital, he is the taxpayers' problem. He is not the local authority's problem. The taxpayer is paying the bill. I suggest that a local authority which has 200 patients capable of being discharged into its area should be charged by the Health Service for the cost of maintaining those patients for which it is not prepared to provide. I think that there would be a spectacular increase not only in provision, but in interest by local authorities if that suggestion were put into operation. I cannot think of any other way of encouraging local authorities to grasp this nettle. It is wrong that a local authority should be free of all expense and duty to patients in hospitals. There is an incentive for local authorities not to make provision because, if they do not, the taxpayer will continue to pay.
  Another problem concerns the failure of the follow-up services. I should declare to the House that I am setting up a policy group on behalf of the Conservative Party to look into this area of health care and I have had a number of letters about it. An elderly lady wrote to me saying:
  "I hope when you look at this idea of discharging everybody into the community you will remember the case of my sister who is 63 years of age and 5 ft 2 in. tall and not well and has a husband who is 6 ft. 3 in. tall, is a tremendous handful, and when he is discharged from hospital, as far as she and the public are concerned, she is the community."
  We may feel that we are being more humane to patients by discharging them into the community, but often we are just landing them back with families who
  64
  are ill prepared and ill supported to deal with the problem. We are not solving the problem. We are simply hiding it.
  The Birmingham exposé clearly showed that many people who are theoretically discharged from hospital go straight into not very good facilities—dosshouses and secondary hotels—and that they can become the subject of exploitation. I do not want to minimise the contribution which the private sector can make. The Minister was right to point out that the small boarding house with a friendly landlady who takes an interest is much better than many of the other facilities which are available.
  I suggest that the Department should look at the licensing rules again. I appreciate that a discharged mental patient is not a mental patient any longer or he should not have been discharged. However, there should be legislation to enable the Department to supervise the working of private homes. I am sure that those who want to make provision for profit would accept having to conform to certain minimum standards. It is important that this House sets those standards as quickly as possible.
  Housing is the critical area time after time, and I was delighted to hear what the Minister said about the possibility of using land or the proceeds of the sale of land. There are five large hospitals in my area, and the one thing that distinguishes them all is that they have huge areas of land. This is because the prewar approach to mental patients was almost literally to put them out to grass. There is a lot of land in almost every hospital, several of which are on the fringes of towns, and that land could easily be made available for joint development with the local authority and the Department. This would dramatically reduce the unit costs of housing.
  There are two final matters with which I propose to deal. The first is the special problem of children and adolescents. I mentioned earlier the problem that there are so many people in the subnormal category that hospitals are totally gummed up and have no leeway when it comes to the provision of beds. If a family is under tremendous pressure with a severely disturbed child, very often if the child can be taken away from the family for a month that gives the

  65
  family a break and gives the doctors an opportunity to treat the child. The child can then be reintroduced to the family, and in that way we can save the family tremendous wear and tear and give all concerned a chance.
  There is a chronic lack of facilities for mentally handicapped children. My policy committee will, as a matter of urgency, be looking at the whole matter of the special problems of children and adolescents, because it is absurd to say that as soon as a child is 19 he ceases to be a child, that many of the facilities that had previously been made available are no longer to be provided, and that he is virtually on his own. Many parents dread the growing up of their disturbed and handicapped children.
  My last point concerns the shortage of secure places. It has been interesting listening to this afternoon's debate. Nearly every speaker has touched on the problem of the shortage of secure places. Everybody feels that patients should not be discharged from the Broadmoors and the Ramptons. Everybody feels that there should be other units for the mentally handicapped, but everybody equally feels that they should not be accommodated anywhere near their own constituencies. In my area two of my hospitals are being examined as possible sites for a secure ward of 30 people, and already the cries are going up of rape and murder.
  The truth of the matter is that many people who ought now to be in secure hospitals are in general mental hospitals, and the creation of a secure unit would ensure that the public are better protected, not that they would be worse off. Proper facilities would be available, and proper staffing ratios would be provided. It is incumbent upon us as Members of Parliament not to fall for the easy line of scaring the life out of our constituents at the prospect of such a unit but of reminding them that the danger exists now. The 30 people to be housed in the unit will not be created when the unit is built. They are alive now and living somewhere, and, by implication, they are in less secure premises.
  A great deal needs to be done here, and not least is the job of engaging the public's attention and of persuading the community that this is a problem which we must all make a contribution towards
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  solving. I thought that we were on our way here, but if one looks at the national societies one sees that almost invariably they are composed to a large extent of parents and relatives and that the general public are active in only a marginal way
  Only last weekend one of my local newspapers refused to print a picture that was taken at a Christmas party for mentally handicapped children. The photograph was of two charming little girls, with the chairman of the council and myself. The newspaper refused to print it, on the ground that it did not like printing pictures of handicapped people because readers found it disturbing. It seems a straw in the wind. There is a big job to be done in persuading the public that they must get involved in a community problem, and I hope that in having this debate the House in its small way is making a contribution towards that exercise.
  5.15 p.m.
  Mrs. Margaret Bain: I, too, am delighted at this opportunity to discuss the great problem of mental illness. I have a few brief points to make to the Minister and I am glad to see the Under-Secretary of State for Scotland here because he and I recognise that there are different aspects of administration pertaining to the Scottish situation.
  In terms of hospitals for the mentally ill, it is disturbing that only 5 per cent. of mental illness hospitals have reached the staffing ratios recommended by the Department. This is a cause for great concern amongst many people, including the nursing profession. As other hon. Members have said, members of that profession are dedicated people, and they are concerned that they are not able to use their abilities and capabilities to the full to deal with the problems because there are not enough staff to help throughout the day and night.
  Equally, people are concerned about the ratio between qualified and unqualified nurses in mental hospitals because this is still only 55 to 45 and, as far as they are concerned, that is not good enough. Union representatives have put it to me strongly that they are not deprecating the use of unqualified staff in the hospitals, because they value their work,

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  but they would like to see an improvement in standards by the attraction of more qualified nurses.
  In my area, both COHSE and NUPE have raised this matter with me. I could not agree with the Minister when he said that we should not attack local boards because in my area there are cut-backs in the staffing ratio at a major mental hospital. No vacancies are being notified to get qualified staff into that hospital. This is causing concern not only to the nurses but to the local community because standards at the hospital will be reduced.
  There is also the feeling that the security aspects will be neglected. Many hon. Members have referred to security aspects being neglected if there is a reduction in staff, and it is only natural that local communities feel slightly upset at such a prospect. It seems logical to me that, at a time of high unemployment, the Government should start a recruiting campaign to attract people into the nursing profession and make sure that they are highly qualified.
  There is a need to bring the problem of mental illness and its treatment to the notice of the community, because only in this way shall we get the change of attitude to which the Minister referred. There are still people who have fears and suspicions about the mentally ill. By hospitalising people all the time we endorse those fears, because people believe that those suffering from mental illness should be locked away.
  The problem is acute in Scotland. The Scottish Society for the Mentally Handicapped, when dealing with the problem of community services, said:
  "Many children are placed in hospital unnecessarily, due to lack of community services, In Scotland 11·4 per 10,000 children are in mental deficiency hospitals: in England and Wales only 7·5."
  That same organisation said that there is a need for hostel accommodation, and the Government in their memorandum of 1972 said that there was a need for 2,500 hostel places in the community. So far, only about 500 places have been provided in Scotland, and we must bear in mind all the time that it is 50 per cent. cheaper to have hostel places and community services than to provide institutionalised care.
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  There are 64 local authority centres in Scotland for the mentally ill and handicapped. Stephen Jackson and Margaret Struthers produced an interesting report which said:
  "Of the supervisors of the centres, only seven considered the buildings adequate"
  —and they went on to talk about various problems that they found.
  There has been report after report on the problems of mental illness and mentally handicapped people, yet although they are read they are seldom acted upon. I hope that this White Paper, which has recognised many of these problems—public ignorance, general neglect, the failure to initiate real planning or to provide training facilities and so on—will be implemented and not allowed to gather dust on the shelves. In a time of economic recession we all know the problems, but let us not make it the mentally handicapped, the mentally ill and the most vulnerable sections of the community who suffer.
  5.21 p.m.
  Mr. Ronald Atkins: What concerns me most, especially in this time of financial stringency, is the low priority given to the mental health services. Fewer crumbs come from a smaller cake. I wish that I had been reassured by the Minister's speech that he intends to raise this priority. I do not think that there will be any fundamental improvement without a greater proportion of the funds of the National Health Service going into mental care.
  The Minister has said that some help will come from the Department for social service and community work and from local government for local government work. But there is a need for an improvement in the attitude towards the priority of these services. Just as in education, money will be found for the gifted children while the mentally handicapped children go without, so in the health services the mental patient is placed at the end of the queue. This is probably because there is nothing glamorous about mental wards. No one could make a romantic film or television series about mental medicine as one can about an emergency ward or a maternity ward or a ward in a general hospital. That shows the weakness of the position of

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  the service, which depends on a fundamental change in the attitude of the public.
  The public and therefore their public representatives often turn their backs on mental illness as something sordid, frightening or incurable and best left to itself. The consequences of this neglect will be more evident as the proportion of mental illness increases progressively with the increasing complexity of our civilisation and the change in the social age structure, which will also increase the incidence of mental illness. Money spent on mental health now will save expenditure and distress in future.
  Treatment of the mentally sick in the past has ranged from flogging to exorcism, from the padded cell to the straitjacket. The weakness in our case is that some people today would still favour this kind of treatment. Some mental treatment today is no great advance on the old methods. Drugs are used as a kind of chemical straitjacket because scarcity of staff and resources prevents the individual and personal treatment that the staff would like to give.
  Drugs are frequently given to control the patient, although the effects of some are irreversible. Once started, they will have to be given to a patient all his life and frequently cause the patient to deteriorate physically and mentally because of various side effects. Many mental patients are very intelligent and are aware of this. It must affect them mentally to know that their treatment is doomed to a sort of holding exercise. These drugs are sometimes given without conclusive tests in the diagnosis of the complaint—again through lack of facilities. That is even more disgusting, but we should not blame the staff, who are tremendously under strength and lack the vital resources. Some wards in mental institutions have become clinical dosshouses or even medical prisons.
  Is this the most economical way of running the mental health service—to incarcerate a large proportion of the patients for most of their lives? Such a system wastes a great deal of money through the failure to spend more money on fewer patients in order to cure or understand them and more effectively to help others suffering from the same disease. A great deal of money also
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  is wasted through failure to provide accommodation and care in the community for patients who otherwise are forced to live, and, without cure or understanding, to die, in hospitals.
  Local authorities should be informed of their responsibilities and forced to provide the badly needed accommodation and community care. Like other hon. Members, I disagree with the Minister's suggestion that local authorities are doing enough. They are certainly not doing enough. It is true that they need more resources and more Government help, but they do not work as hard as they should for the mentally ill. I know of several patients in my constituency who have attempted suicide or gone into the local mental hospital for treatment and who have left without this accommodation being provided or with conflict remaining in the family or unemployment difficulties increasing. In those circumstances, it is not long before they go back to hospital after a temporary stay in the community. Without this provision by the local community the ex-hospital patient cannot fit in. He finds the adaptation even more difficult than does the ex-convict.
  Sometimes mental patients return to an environment even less favourable than that which triggered off their complaint. Overcrowding in the home is one of the more obvious causes. I can understand the difficulties of local 'authorities when councillors are approached by more articulate people. When there is a difficult housing problem, patients who cannot plead for themselves, even if represented by social workers, are forgotten. There is a tendency for hard-pressed local authorities to make excuses for dealing with people who are already on their lists. I can understand the difficulty, but that just makes Government help all the more necessary.
  Much has been said about the need for a new attitude to mental health in the community, and indeed in this House and among local public representatives. Especially do we need to impress on the public the need for a greatly improved budget for the mental health services. In a community that is generally unsympathetic to the needs of the mentally sick and the mentally handicapped, it behoves the Members of this House

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  to espouse the cause of the least articulate and least vociferous of all patients.
  5.30 p.m.
  Mrs. Jill Knight: In what is intended to be a very brief speech I shall touch on three areas of concern. The first is an area of great public concern, the second an area of wider professional concern, and the third is causing a good deal of localised concern.
  My hon. Friend the Member for Wallasey (Mrs. Chalker) dwelt particularly on the fact that relatively few patients—I think she said a tiny minority—from mental hospitals committed crimes when released. She added that it was most unfortunate that great anxiety was felt, because the minority involved was so very small. Nevertheless, it is most important to recognise that when instances come to public notice of dangerous people getting outs of mental hospitals and murdering or injuring others, incalculable harm is done to the cause in which all of us here are so very involved—that of giving real care to mental patients.
  It does not help to pretend that these cases are not important. My hon. Friend the Member for Reading, South (Dr. Vaughan) spoke particularly of the case of Ian Dunlop. I remind the House that his own defence counsel said after four appalling attacks on young boys while on leave from Broadmoor, that letting him out of hospital was like letting a mad dog loose and expecting it not to bite. Then there was the case of Thomas Pankhurst who was freed from Broadmoor having murdered his wife and five children in 1971. There was the case of Peter David Mackay who was twice released from a mental hospital and who killed three old people. Brian Knight was released from Broadmoor and then stabbed a flat mate to death. Terence Iliffe was released from Broadmoor having been committed there for attacking his third wife. He subsequently dumped the body of his fourth wife in the family deep freeze only 15 days after marrying her.
  All those cases have come up only in the last few months, and it is a matter of great public anxiety that such dangerous people should be released into the community. The fact that they are released and then murder or harm their
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  fellow citizens creates enormous difficulties for all relationships between the public and mental patients. It is important that that should be recognised
  Next, there is the area of professional concern. Here the subject of secure units arises. Very often the people who leave or release themselves from mental hospitals for an afternoon or an evening do not make the headlines, because they are not so much the murderers as perhaps the rapists.
  In Birmingham recently a known rapist simply walked out of St. Margaret's Mental Hospital in Great Barr and went for a drink. He followed that by raping a 13-year-old girl. Ever since 1968 I have repeatedly raised in the House the need for secure accommodation within some of our mental hospitals. The 1959 Act, although a very enlightened Act, made it possible henceforth for cases such as that to happen, because it meant that there were no longer secure units in mental hospitals. Most of the patients can be trusted—one would wish them to be so trusted—but a minority cannot be trusted to behave properly when they walk out, as they are able to do.
  It is now recognised that there is an unanswerable case for secure units. Ever since the Butler Committee reported, we have had evidence and acceptance of this need for regional secure units, and there are now plans for them. But the problem worrying RHAs, AHAs and administrators is from where the money is to come to build and run such units. There has been no public statement so far that any money is to be made available.
  Is it the Minister's intention that the running costs of these units will have to be found by the reallocation of existing funds? Hard-up AHAs feel that they cannot find the money. There is an indication that there may be some delaying tactics here. I read recently that even when everything is clear to go ahead, it will be five years at least before these secure units are ready. Will the Minister confirm whether that is correct? There is great urgency about this matter. Innocent people will be the victims if we still have to wait another five, six, seven or more years for secure units.
  Mental hospitals nowadays often resist taking patients because they cannot keep them secure. I do not know how many

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  patients there are in general hospitals who ought to be in mental hospitals, but I know that there are some. In the Birmingham area alone, I am told, because the authorities are so nervous about their lack of ability to keep certain patients secure, such people are often not accepted and they have to go into ordinary hospitals. The professions are asking for a clear statement by the Minister on how it is intended to finance secure units and how these units are rated against other priorities.
  My third and last area of concern is the local after-care units. The spotlight of publicity beamed upon Birmingham is not altogether justified, because there are other parts of Great Britain where the problem is as severe as it is in Birmingham, but certainly it is true that a scandal of major proportions has blown up about the care of mental patients released from hospital.
  About 8,000 patients have been readmitted to the community in Birmingham. It is reckoned that the figure is about 2,500 per year, but the local authority provides beds for only 130, a very tiny number. Up to 2,000 ex-mental patients live in 200 lodging houses in Birmingham, and they are often left to wander the streets during the day.
  The scandal has arisen for various reasons. One is that the standard of care has been very low in two lodging houses run by a housing association. There is an argument about whether the grants by the local authority to that housing association were made in such a way as not to be available when the housing association needed the funds.
  The Salvation Army in Birmingham states that 30 per cent. of the men using its hostels are ex-psychiatric patients. I do not think that there has ever been any suggestion that the Salvation Army has not looked after them well. The House will recognise the sterling and wonderful service given by the Salvation Army to the community in so many ways.
  It is reported that the Minister has said that £20 million is to be made available. The Birmingham spokesmen have said that they hope for £1 million of that. I do not know whether it is accurate, but it has been reported. It may just be wishful thinking. Has any sum been mentioned? If it has, is it intended that
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  that sum should come from the area health authorities? Which of the two priorities—after-care units or secure units—does the Minister regard as more important?
  It is also reported that the Minister will shortly visit Birmingham. He will be very welcome and given every help that we or anyone else in Birmingham can give him. We all recognise the problems. This is not a party political matter, but it is giving rise to great anxiety. If the Minister will answer those questions Birmingham and I will be most grateful
  5.40 p.m.
  Mrs. Millie Miller: There has been a great deal of agreement on both sides of the House about this topic. As Chairman of the Labour Campaign for Mental Health, I am deeply concerned about many of the issues that have arisen in the debate, and about many others that have not.
  I start by referring to the opening speech by the hon. Member for Reading, South (Dr. Vaughan). He referred to the part that trade unions and trade unionists might play in helping in this field and in dealing with the effects of mental illness. I should like to refer him to an example which has been going on in Bristol since 1960—an organisation called the Bristol Industrial Training Organisation. It is providing and has provided over the last 15 years work to the value of about £1 million.
  The trade unions that have involved themselves directly and personally and in helping in the raising of funds with this organisation have been the local branch of the Transport and General Workers' Union and NATSOPA. Both unions have chosen to publicise the needs of people in their local area and to make this the campaign that they are supporting.
  Over the years, this organisation has provided not only work and occupation for people recovering from mental illness but a hostel, which has 100 places for full board. It has also had the use of local authority housing to provide extra accommodation for those with whom it is working. That is a worthwhile example not just of what is being done but of how much more might be done were other large industrial groups to feel that they wanted to commit themselves to this type of work.

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  A number of hon. Members have commended the Minister on the White Paper and a number have complained that it looks too far into the future. There was a brief letter in Saturday's issue of The Times. It is probably one of the shortest that The Times has ever printed It said,
  "Sir. If Concorde, why not pay beds?"
  My question would be: if Concorde, why not help for those who are worst off in our society? Why not extra consideration? Why not the special treatment that the Minister would deny those who are mentally sick or mentally handicapped? I am sure that if most hon. Members had the opportunity to choose priorities, they might well decide on that kind of help rather than the type that will slowly beggar the country, for every time we sell a Concorde, we lose many millions of pounds.
  I want to mention in particular the problems of children. I commend to those hon. Members who have spoken about children and mental health a small book published by the Council for Children's Welfare as part of its evidence to the Court Committee on child health. It is entitled "No Childhood." It reveals a tragic situation for children who are mentally or physically handicapped in some way, but who are treated as if they were ill.
  Often, as the book's title says, they have no childhood because they remain incarcerated in a hospital setting for all their childhood years, for all the period when for other children there is freedom to expand their experience and freedom to learn with a large number of teachers to help them. All kinds of opportunities that able-bodied and mentally capable children can take are utterly denied to the many children who remain permanently institutionalised.
  The tragedy is that many of them are not ill. Although many of them have mental handicaps, they still have abilities. They certainly still have the ability to enjoy the company of a variety of people, the ability to enjoy taking part in art activities, or of being part of a musical setting. All these are possible for them, yet, because of the lack of facilities in so many of the big institutions, they do not have the opportunities. It is a great
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  tragedy that we who spend so much time in the House talking about education, who last Session spent so many hours on the Children's Act and on the needs of children being taken into the care of local authorities and foster homes and so on, do not manage to find a little time to think of these other children whose only home is the hospital.
  The Minister has said that we ought to call on the services of the voluntary organisations. I heartily endorse that, because I know from my experience as a member of various local authorities that there are many people only too willing and anxious to help if they know what the needs are. When we call on these people to help, we should ask them to help with the education needs of these young children, in the same way as nowadays people often go into schools to help youngsters who do not get enough backing from their homes to help with the development of their reading.
  There is a great deal that local authorities can do. I do not accept what the Minister said about being sorry for the local authorities because of their difficulties, because the financial difficulties have developed very quickly in the last two years. Many of the years since the introduction of the 1959 Act were golden years for local authorities when they were encouraged to spend. In spite of that, we have heard statistics today to show that when they had the opportunity to choose, many authorities did not choose the most disadvantaged and often the most handicapped in our society on whom to spend ratepayers' money.
  However, some authorities have given fine examples. I should like to mention in particular the type of work that is done in training volunteers so that they can make a better contribution to the work that they have chosen to do. There is a great opportunity for councils of social service, for example, to take on this work and to give those who are dedicated and want to be dedicated to a cause the right guidance about how to use their abilities.
  One of the problems is that the White Paper talks about the care of the mentally ill when we have not even entered into some aspects of the care of mental illness. I want to mention one tragic case which occurred recently in my constituency.

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  Because of a tragic bereavement, a woman became completely mentally unbalanced. Her husband took care of her as best he could for 24 hours a day for a week. Then, unable to carry on, he took her to the local mental hospital and she was admitted. No one told him that, as a voluntary patient, she would be free to leave. Within hours of her admission to the hospital she had left. She went into the grounds, which are huge, wearing only a nightdress. Eventually her husband found her drowned in a stream running through the grounds. He assured me that no one had ever told him when she was being admitted that she would be free to go. Had he known, he would never have allowed her to go.
  If this can happen in any of our mental institutions, it is certainly one aspect of the care of the mentally ill that ought to be taken up and dealt with without any delays before further tragedies occur, not to the public outside, but to patients who, in all good faith, are taken into these institutions to be cared for.
  Many of the problems in our society arise in families with a history of mental illness. How many of the babies who have been battered or stolen from prams have been the victims of those who are not themselves fully capable of making mature judgments? This, too, is a area in which one should not be too hasty about pushing people out of hospital and back into the community, unless there is absolute certainty that they are capable of complete rehabilitation and that young children or adults will not be their victims later on.
  To the extent that there will not be unlimited means, either in the local authorities or in the National Health Service, to provide for mental patients the kind of attention we should like them to have, a great deal more must be done in intertwining the training of nurses and social workers. As somebody who has had a good deal of experience in social work, I am far from happy about the type of social work training given today. I am far from happy about the freemasonry being developed in the social work profession, which is demanding higher and higher qualifications and spending more and more of the produc-
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  tive life of the social worker on training of various kinds when the great need is for them to be out in the field with families and patients who need them so badly. There is a need for nurses who have been trained primarily in the medical field to understand more about the ways of dealing with their patients from the social work angle.
  One of the aspects of joint financing that might be of great value would be for the hospital services and the local authority services, together with the Central Council for Education and Training in Social Work, to see what kind of curriculum they can prepare to ensure that both sides of the fence get experience to help in dealing with the many tragic cases that come into their line of duty. I agree that this is not a romantic subject, but I feel very sad that the White Paper is so forlorn about the hopes of interesting the public in this topic. Paragraph 2.26 states:
  "Whether much can usefully be done to influence public attitudes directly is uncertain."
  I am surprised that the Government take this line.
  The Government have not felt unable to influence public opinion about other aspects of their activities, such as influencing the public to accept the £6 pay norm, or the idea of our entry into Europe. If the Government were sufficiently confident of their propaganda abilities in those respects, surely they could try a bit harder to get the public to understand the requirements and to accept the contribution that needs to be made in this. The Government should also show that they appreciate the voluntary work by not bearing down too heavily, as they now are, on the finances of the voluntary organisations.
  5.54 p.m.
  Mr. Charles Irving: I have listened to the speeches from both sides of the House in this debate with growing anxiety. The one figure which depressed me most was that mentioned by my hon. Friend the Member for Reading, South (Dr. Vaughan) who referred to the 32,000 patients who have spent over 20 years in mental hospitals. Those who have been involved, through social service and other local authority work, are fully aware that a very large number of those patients would have no need at

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  all to be in hospital if the community would provide them with somewhere to go. It seems to me that there has been no real sense of urgency in providing facilities for out -patient treatment of mental illness. I propose to say more about that in a moment.
  Additionally, the local authorities must surely through their social services provide, and I hope speedily, more small units to take care of a substantial number of the 32,000 who could well return to live in the community. I was at Stoke Park Hospital near Bristol this weekend, and the consultant psychiatrist told me that out of his 1,500 mentally handicapped children and adults, at least one-third could safely return to the community provided they had somewhere to go and there were supportive facilities of a minimum nature.
  Let us examine briefly the cost of our negligence in this respect and our failure to tackle this problem energetically and imaginatively. At Stoke Park the cost of hospitalisation is at the moment about £74 per patient per week. Multiply that by 500 patients who could return to the community, and we have in this group alone a cost of £37,000 per week. If this were equated to what it would cost to provide a simple hostel or home facilities, there must surely be a very substantial saving in cost which could be equalised between the health service and the social services. I should have thought it was well worth while considering this aspect.
  In the South-West there are one or two authorities which have provided surplus police houses or hostel accommodation of one kind or another, mainly managed by the National Association for Mental Health. Splendidly backed up by voluntary care and affection, these former patients have returned to a happy life at minimum cost. If the will were there, our mental illness hospitals could be greatly relieved of overcrowding and would at least have beds available for those who seriously require the care and affection of the dedicated staff in those hospitals to restore them to health.
  Over the years I have visited many mental hospitals, and I am astonished at how cheerful the staff remain, often in depressingly sub-standard conditions. The
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  pressures that they are under and the situations with which they have to deal are sufficient to turn them from the profession into patients. But they carry on and hope that one day, one or other of the successive Governments who have failed realistically to assist will tackle as a matter of urgency this totally unacceptable, disgraceful and nationally scandalous situation of which we are all aware.
  I took the opportunity of reading an incredible document produced by the Department of Health and Social Security in 1971. I then examined various papers concerning this problem and sadly came to the conclusion that the words of wisdom set out as a pattern were nothing more than pie in the sky. I only hope that the consultative arrangements to which the Minister referred will not be yet again another bit of pie in the sky. In being critical I accept that certain improvements have taken place, but there seems to be a continuing argument between the health authorities and the social services as to whose is the responsibility and whose budget shall be tapped for real improvement. I therefore urgently hope that the Minister will feel able to bring the parties together, and, if they cannot decide, decide for them.
  Additionally I should like to see an instruction issued to local authorities that in all housing schemes some accommodation must be specifically earmarked for ex-hospital patients. Experience has proved that with care, such schemes work extremely satisfactorily. I think I am not far out in saying that at present there are only about 200 such homes throughout the country. These provide for just over 2,000 people, and it is pitiful when one relates it to the fact that there are about 180,000 patients who leave mental hospitals each year over and above those who could leave but cannot.
  Community care, as one could describe the social services rôle and that of the local authority—I happen to be chairman of a social services committee—is not simply a matter of providing accommodation and occasional support. One has to tackle the lack of purpose in life, the loneliness, the inability to earn a living. Therefore, in view of the nation's restricted resources, we must turn even more to the voluntary movement and seek its continued help and co-operation in

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  providing day centres and clubs and a range of employment from sheltered to open.
  Perhaps we could encourage the Government to ensure that the Housing Corporation, now one of the main motivators of rented accommodation, put a requirement or condition on local housing associations that they provide a small percentage of their accommodation specifically for ex-patients. I am chairman of a housing association, and we are at present progressing a scheme which will provide 142 bungalow-type houses, and the design will be in the shape of nine courtyards making an attractive site, but specifically included in this development will be units of accommodation for the elderly, the disabled and the ex-hospital patient. With that mix, with young and old families as well, it is hoped that they will merge into the outside community life and become a part of it. We are encouraged to do that because of the success we have seen in the Gloucestershire area.
  Finally, I refer to the tragedy of the discharge of mentally disordered homeless people, people who, because of an uncaring community, are likely to find themselves alternating between lodging house and prison or, perhaps even worse, roughing it in derelict houses. One can only imagine the misery of all this. We greatly miss the reception centres, which were closed prematurely because, according to the thinking at that time, the Welfare State would provide. The Welfare State has failed miserably in that respect.
  We are all aware, I hope, that about 3,000 people are sent to prison every year for drunkenness or for inability to pay fines. But about 300 people go to prison for sleeping rough or begging, and the point I make is that many of these people are in urgent need of psychiatric or hospital treatment, but the breakdown comes with inadequate resources for aftercare.
  Recently, I believe, the Howard League disclosed in a paper that two-thirds of those convicted of petty offences in the South-East were either disordered or maladjusted, 38 per cent. being homeless and 24 per cent. unable to settle. Prison is known to be useless as a deterrent to people who have known no other home
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  for years. These people must not be overlooked in our assessment of accommodation and support needed in the community for the mentally disordered. Our penal institutions are a highly expensive way of providing a roof for people who should not be there at all.
  We must more adequately support the National Association for Mental Health. We must take steps to insist that the bickering between the Health Service and the social services shall cease. We must insist on local authorities and housing associations playing their part by a firm allocation of accommodation, and we must ensure that the voluntary workers who are such a credit to the nation receive more help in their efforts to deal with this depressing and heartbreaking problem. What has been achieved so far has been but snail-pace progress over the past 10 years, and, to judge from what the Minister said this afternoon, I suspect that it will be much the same in the next 10 years.
  Mr. Deputy Speaker (Mr. Oscar Murton): I remind the House that there are still four right hon. and hon. Members desirous of taking part in the debate, and there remain only 25 minutes or so for them.
  6.3 p.m.
  Mr. Tom Litterick: I shall do my best to be brief, Mr. Deputy Speaker. We are talking here about a group of people who are casualties, but it is a group that is growing rapidly, even more rapidly than the elderly, as a proportion of the total population. We are considering a phenomenon of human damage created by the process of change.
  We constantly tell ourselves that change becomes more rapid each year and each decade, without recognising explicitly enough that the very process of change brings with it stresses which turn people into mental patients, and the rate of growth of this sector of the population throughout the developed world, whatever be the social or economic system, is indication enough that every legislative assembly in the developed world should give this problem priority not only in the present but for the future.
  As I understood him, the Minister was saying, in his own way, that the mentally ill were likely to include any one of us,

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  and probably a significant minority of hon. Members, within the foreseeable future. But the mentally ill do not have a voting strength. They are not a pressure group. They do not lobby. They cannot do what even the physically disabled have been able to do. They cannot come and beat on our door saying "Look at us. We are disfranchised, we are underprivileged". Since they cannot do that, others have to speak for them, but, unfortunately, the political process being what it is, there are no votes in saying "Let us have lots of money to take care of the mentally ill".
  The expression "mentally ill" is itself a polite phrase. We all know that it is not the kind of phrase commonly applied to people who are mentally ill. Perhaps it is a sign of progress that we have heard only one speech this afternoon in which the traditional primitive attitude to the mentally ill, regarding them as dangerous and violent, was emphasised. As I say, perhaps that is a sign that society is coming round to a more civilised view of mental illness.
  The profession itself, however, is divided on the meaning of mental illness. I speak as a layman, but, as I see it, the medical profession is not yet sure whether to treat mental illness as an aberration from some sort of norm which in itself is impossible to define, or—as I suggested at the outset—as a consequence of a society, which asks the impossible of people, with the result, in my belief, that the orthodox approach of psychiatry, that is, to get people to adjust to things as they are, may in effect mean no more than asking the impossible of people who have been so damaged by the status quo that they can never properly adjust to it or ever be what we should call sane. Perhaps the descendants of Wilhelm Reich may prevail in society in the end, but that day seems a long way off yet.
  What is true—several hon. Members have emphasised this—is that there has been a catalogue of errors of omission by us collectively as a society. We have not been ignorant of what is going on. There was the sensational report in 1971 of the goings-on in certain establishments on the Kent coast, at Ramsgate, Broad-stairs and Margate, similar to the scandal revealed recently in Trafalgar Road,
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  Moseley, in my constituency. But nothing was done, either by the Kent County Council or, sadly, by the House of Commons, because it has been convenient not to do anything about it. It is an embarrassing subject, and, as I said, the mentally ill have no votes. But, unwittingly, we have created a new class of Mr. Bumbles who have discovered that there is money to be made out of sick people in a certain category—the mentally ill—that one can set up rackets which can be highly lucrative, that one can dip one's spoon into the public trough and help oneself liberally, under the guise of being benevolent.
  I do not suggest that all those who are involved in the running of such establishments as the now notorious institution in Trafalgar Road, Moseley, are of a like character. However, the present situation is one which creates circumstances in which such people can thrive. They know that so far we have not evinced enough anxiety about the mentally ill to ensure that such people are subject to close scrutiny.
  The individual who runs an establishment in Trafalgar Road has two institutions. He calls one institution Whipp Enterprises. That is his property speculation company. The other institution he calls Dawn Trust. He uses the first for his commercial advantage and the second to obtain public money. When members of the Community Health Council seek to visit his establishment he gets them out by saying "This belongs to Whipp Enterprises". When he wants public money it is not Whipp Enterprises but Dawn Trust.
  This man has currently asked for no less than £100,000 of public money. I am happy to tell the House that he has not obtained it as he is unwilling or unable to fulfil the 19 conditions which the local authority is attempting to extract from him by way of agreement.
  He is not effectively spending the money which he has already been given on the people who are in his institution. It is obvious that the clothing allowance that he has received is not being spent on the patients. It is obvious that the money he is given to buy food for them is not being spent in that way, as he owes the local authority a great deal of money for lunches consumed by his people when they go to the local authority day centre. He is using the problem that now exists

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  as a cover for money-making. At the same time he is posing as a public benefactor. It is Mr. Bumble all over again.
  Authors have scandalised Victorian England but maybe we need another Dickens to write about the present situation. The public need to be galvanised into an awareness that vultures are around and that mental illness needs to be considered in a different light. I am not one to suggest habitually setting up committees. The Curtis Committee was set up some years ago to investigate the circumstances of boarded-out children. Although Birmingham has been highlighted recently, the present difficulties exist not only in Birmingham but in urban areas throughout the country. It seems that we are not fully aware of the extent of the problem.
  When my hon. Friend visits Birmingham—I am happy to know that he will be doing so—I hope he will use his visit as a platform. I know that he is passionately concerned for the interests of these defenceless people, but I suggest, with the deepest respect, that he directs his words to the general public.
  As a councillor I have been involved in establishing half-way houses in various housing estates. I am aware of the difficulties and the attitudes that are prompted by establishing such places. No matter what social class is involved, the attitude is equally primitive. People do not want the mentally ill in their streets. They dredge up dark stories about what mentally ill people are supposed to do. There is phenomenal and abysmal ignorance.
  I hope that when my hon. Friend visits Birmingham he will talk about these matters. If I may say so, for a Minister he has unusual qualifications to do so. By public activity we might encourage a new, healthier and saner attitude to this form of illness.
  6.15 p.m.
  Mr. Graham Page: I am not acquainted with the sort of establishment which the hon. Member for Birmingham, Selly Oak (Mr. Litterick) has described, where profit is made out of the misfortune of the mentally ill. I know about the voluntary work that is done for the mentally sick. The Minister of State rightly mentioned the great aid which the voluntary organisations can give. I think that
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  almost every contributor this debate has mentioned it. However, we can reach saturation point.
  In one small community in my constituency—namely, Magull—there is the now well-known Moss Side special hospital which receives the mentally ill when they have gone through the courts. Next door to Moss Side is being built the new Broadmoor. In addition, there are seven large homes for epileptics and the usual old people's home. The point has been reached at which the League of Friends of Moss Side is wondering how it can assist. One reaches the point at which it is difficult to find more and more voluntary help. That is especially so when there is considerable concern about discharges from the special hospitals.
  My hon. Friend the Member for Wallasey (Mrs. Chalker) says that we must keep matters in perspective. She said that it is a very small percentage of the mentally sick who go through the courts and who are sent to security hospitals. She said that it is only a small percentage of those who are sent to such hospitals who are discharged and who commit further crimes. Yes, we must keep these matters in perspective and we can produce overall figures for the nation, but when we start to consider the figures of one small town in my constituency the situation is very worrying. My hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) has demonstrated the public concern that now exists about those who have been discharged and who have committed further crimes. They may be a small percentage but they produce an extremely serious situation.
  I express my great gratitude to the Minister for the sympathetic and informative answers which he produces to my queries. As my constituency includes Moss Side hospital, I receive many letters from patients asking for a transfer to an ordinary mental hospital. They ask to be discharged and they ask for a Mental Health Review Tribunal. When I read the pathetic cases of those who were put in Moss Side many years ago for what seems a comparatively small offence, I am faced with a difficulty. Should I press for a tribunal? If I do, what responsibility do I bear if the tribunal allows a dangerous criminal to be released?

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  There is deep concern about these matters in my area, but the concern about people escaping is misplaced. There is concern about whether applications for discharge are being properly considered. There is concern about the discharge criteria. The public should be assured about the criteria that are applied. There is concern about the tribunals. They are composed of worthy people, but the public wonder whether they are the right people to judge such matters. Should there be an advisory body set up by statute? Should such a body operate between advice on discharge and actual discharge?
  What evidence do the tribunals hear and what weight do they give to it? It is suspected that a medical officer's opinion is not always given its full weight by the tribunal. It is suspected that the nurses, the people who really know about the patients and who know far more than the medical officer, do not have much weight placed on their evidence by the tribunals.
  Then there is the question whether the tribunals consider what is to happen to the patient if he is discharged. Do they consider whether a half-way house is available? I know only too well that time and time again I have received requests from Moss Side patients to be discharged or to be transferred to an ordinary mental hospital, only to be told that it is impossible to find a place for them.
  If there is no half-way house, should they be given home leave and, it so, what are their home conditions? Is that aspect considered by the tribunal? Does the tribunal consider what supervision is to be carried out when somebody is discharged and when it is well known that he or she has committed offences in the past? How is the tribunal to be satisfied that offences will not be committed again in future?
  All those matters cause public concern. Therefore, I believe that the time has come for the system to be reexamined. I ask the Minister to set up an interdepartmental inquiry—interdepartmental because the Department of Health and Social Security and the Home Office are deeply concerned about these matters—under an eminent person outside those Departments, and to ensure that the
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  evidence is taken in private. I do not ask for a public inquiry because people would not then let their hair down—and that applies particularly to the medical and nursing personnel—when giving their evidence. Therefore, I seek a private inquiry, the report of which could eventually be made public so that the public will see that these matters are being taken seriously.
  The public take this matter seriously, as I and other hon. Members know from our postbags and from discussions with constituents. The time has come to reexamine the system to see whether the tribunal has the correct constitution and applies the right criteria in considering the after-care of patients. Such an exercise should reassure the public that the system is correct—and, if not, that it will be improved.
  6.23 p.m.
  Dr. Reginald Bennett: As my right hon. and hon. Friends know, before I began occupying myself in this institution, I used to work in other institutions such as those we are discussing. Therefore, with full knowledge of the huge burden of custodial care that weighs down the health Votes, I am fully aware that the scale of burden has prevented any dramatic improvements, even, perhaps, in terms of discharging some of the 32,000 people who have been in institutions for over 20 years. Those patients can loosely be referred to as burnt-out schizophrenics from way back and they are now leading an inoffensive and probably harmless existence. But the problem is that there is no home for them.
  Nevertheless, to my certain knowledge, even since I left those other institutions some valuable reforms have taken place and indeed there has been a revolution in the type of work undertaken, and even in the buildings. The hospital on the borders of my constituency where I worked for a while consisted of tunnel-shaped wards dating from the Crimean War. That hospital has been transformed.
  Could the Minister give me some information about security and high security developments at the Knowle Hospital, to which I understand a high security wing is being transferred? I have heard of this project, but I have no direct knowledge of it. I received my information

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  from a bunch of what might be called local vigilantes. Perhaps we could be told the Government's intentions?
  I can vouch for the capacity of that hospital to preserve security. There never was a more secure building. When I was in the Navy, we used to transfer Service personnel to that hospital because it was more secure than our own security arrangements. It may sound a little like the "Gulag Archipelago", but it is a most secure institution.
  We all know that there is great public alarm about the discharge of more or less violent patients from institutions. Some patients are extremely dangerous and have committed crimes. On the other hand, there are other patients who have not committed crimes but who are thought to be dangerous to themselves, if not to other people.
  I appreciate the problems of doctors who have to decide whether such people are fit to be discharged, because I undertook that task when I worked in those institutions. Doctors are under relentless pressure about whether to discharge patients. I would be told that it was a mistake to compel some of them to remain inside because "They were at least as sane as I". There is no question of doctors taking a dictatorial attitude in these matters. No doctor ever wishes to keep anybody in an institution if it is unnecessary to do so. It is decided to detain people in such places only if they are considered to be a danger if allowed outside. But at present some doctors are being blamed for letting people out when they should not have been discharged.
  In cases that do not involve high security patients or quasi-criminal considerations, there may be some way in which perhaps the ordinary mental hospital doctor could be backed by a lay authority to whom he could refer when in doubt. If the decision were made to discharge somebody considered to be unsuitable for his freedom, that lay authority could take the blame rather than the odium falling upon the doctor. It may be unfair that an overworked junior hospital doctor should be expected to take the blame.
  6.28 p.m.
  Mr. Michael Shersby: A number of hon. Members have expressed concern about the availability of hostel accommodation for patients discharged by the hospital authorities or patients who have discharged themselves. I wish to express concern about a slightly different subject—namely, the number of patients and ex-patients still disturbed and suffering from mental illness in one degree or another who have been discharged or who have discharged themselves into the community and who are now wandering about rootless, friendless and without the care and accommodation they need. I am referring to accommodation of a residential and institutional character.
  I question whether local authorities are able to provide the kind of accommodation needed by patients when they have been discharged from hospital. I listened with great interest to the speech of my hon. Friend the Member for Cheltenham (Mr. Irving), who dealt so ably with that point. I believe that there is something fundamentally wrong with the way in which the mentally ill are treated and with the facilities available to them under the National Health Service.
  My interest stems from the problems of two families in my constituency. Both have mentally ill sons who are now middle aged and who are proving to be an increasing source of worry to their parents. There is a great danger that both men may find themselves discharged into the community without the care they need once their parents have passed away. In addition to specialised hostel accommodation, there is still a need for longterm residential institutional care for those for whom hostel accommodation would not be a satisfactory alternative. I hope that later in the debate we shall hear more about this problem.
  This afternoon I was visited by a constituent who has a mentally ill son, a man who has spent a number of years in Broadmoor, but who has now been discharged. He is living part of the time with his parents and spends most of the time wandering about rootless in the community. He has committed a number of petty crimes and has gone from court

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  to court. He has been admitted to hospital for short periods of 72 hours for assessment and has then been discharged. He continues to wander about the community getting into more and more trouble.
  For that man the National Health Service appears to have broken down. For his parents a serious problem exists. They are getting older. They will not be able to care for their son for many more years. They cannot see how his future is to be secured. That is a dreadful thing. It is terrible that someone so clearly in need of long-stay residential accommodation should be wandering about the community and gradually sinking into petty crime in this way.
  All is not well with the provision for the mentally ill in our community. This debate has clearly illustrated that many hon. Members share my view. I hope that we shall hear something from the Minister to assure us that the future is brighter.
  6.31 p.m.
  Mr. Michael Alison: This has been an all too brief but nevertheless wide-ranging debate on the subject of mental illness. It is the first that we have had this Session. The fact that the Opposition have raised the matter so early is an indication of the clear priority we give in our thinking about social policy to the provision for this much-neglected, long-suffering and severely afflicted section of the community. It is also a reflection of the priority in terms of real expenditure which my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) accorded to this subject when he was Secretary of State in the last Conservative Government. He deliberately made what I hope and believe was an irreversible shift in the priorities we give to the needs of the mentally handicapped and the mentally ill. That was one of the most marked features of his administration at the Department of Health.
  I very much hope that the Government will match the priority we have given in expenditure and in the timing of this debate by providing Government time for a full-dress, full-day debate on the White Paper on mental illness. It is not enough
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  to fit this subject into a half-day debate on Opposition initiative in Opposition time. I hope that this is the forerunner of a full-scale debate.
  In the few minutes I have, I want to deal mainly with the dangerous mentally disordered offender. This is an area in which there is real, noticeable and widespread public disquiet. It is not simply a disquiet voiced by particular pressure groups but that which arises from genuine concern in the community at large. In the past three years there have been three dreadful cases of most serious crimes, including repeated murder and sexual assaults on children committed by dangerous mentally disordered offenders either while on conditional discharge or on parole from hospital.
  I refer in these three cases to that of Graham Young the poisoner, whose case came up in 1972, Terence Iliffe, who murdered his fourth wife, whose case arose in 1974, and Ian Jack Dunlop, the sexual offender, whose case arose last year. His is an appalling record of no fewer than 34 cases of homosexual assault on small boys.
  Governments of both parties have reacted promptly to these tragic and disturbing cases. The last Conservative Government set up the Aarvold Committee and the Butler Committee. It is the lot of this Government to implement the far-reaching proposals and findings in the definitive final Butler Report, in which there were no fewer than 140 recommendations. I hope that the Minister will be able to give us some reassurances about the Butler Report.
  I fully accept the Butler findings that
  "there is no way which would be acceptable in a civilised society by which the public can be absolutely assured that no one released from an institution will ever commit a violent offence subsequently."
  I accept that that is a common starting point. However, I believe there is clearly more that should and could be done to make the existing system of scrutiny and evaluation of particular cases and of conditional discharge procedures more foolproof and watertight.
  I refer to what seems to be a startling loophole in the procedures under the Mental Health Act 1959. Section 66(2) of the Act sets out certain conditions for

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  what is known as the conditional discharge procedure for a dangerous mentally disordered offender. I will enumerate these conditions in outline. First, the patient is normally required to live at a particular, known and registered address. Second, he has to be under supervision there. Third, he must have there, in addition, the support of a social worker or probation officer. Finally, he has to attend from time to time at a psychiatric outpatient clinic. The House will note that these are four specific conditions for aftercare surveillance of the seriously disordered mental offender if he is to be discharged.
  The House may not know that in the case of Dunlop, the sexual offender, a conditional discharge order had specifically not been made because these conditions of surveillance could not be arranged. Here I refer to a letter which the Under-Secretary of State for the Home Department sent to my hon. Friend the Member for Abingdon (Mr. Neave) on 9th January. In the letter the hon. Lady said:
  "there was some delay in making satisfactory after care arrangements and final authority for discharge from hospital had not been given at the time of Mr. Dunlop's arrest for his recent offences."
  Because the four basic minimum conditions of surveillance were not available he had not been made subject to a conditional discharge order. No doubt the problem was a shortage of resources—either finding suitable external accommodation in the community or finding suitable social workers to supervise him.
  The staggering and deeply disturbing fact is that by Section 65 of the Mental Health Act the Home Secretary can nevertheless authorise short weekend leaves—even extended leaves—away from hospital on a parole basis. The paradox is that this short-term parole leave—which is meant to be in preparation for conditional discharge—does not render the person liable to these four crucial surveillance conditions. The period on parole or leave is entirely unsupervised.
  It happened in the case of Ian Jack Dunlop that the Home Office authorised him to be away for six weeks with apparently no surveillance conditions whatever. It is no part of the duty of a hospital to apply such surveillance in a leave period. Dunlop committed offences at
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  Poole in Dorset, Oxford and Blackpool whilst on parole leave. On none of those occasions was it required or could it be so required that the hospital should exercise surveillance over him. How can the hospital do that when the patient is allowed by Home Office authority to be wandering round the country without surveillance.
  The Sunday Express, in a leading article last Sunday, made a severe judgment on the doctor concerned, Dr. David Duncan, at the Fair Mile Hospital, Wallingford, for having done nothing about Dunlop and allowing him out. But the responsibility is not Dr. Duncan's; it is entirely that of the Home Office. It was Dr. Duncan's recommendation—and this is an area in which no one can be certain—that the man seemed to be making good progress. The hospital reported to the Home Office about the circumstances in which Dunlop was once or twice apparently absent without leave. It reported to the Home Office about the family with which Dunlop was allowed to stay, which included four young boys. The probation officer suggested that the family might be the early warning system to see whether there would be any regression in Dunlop.
  The Home Office knew all about the matter, yet Dunlop was allowed out on the authority of the Home Office without the imposition of any of the conditions of surveillance which usually and properly apply to cases of conditional discharge. That is what Section 65 allows one to do. It is unacceptable that loopholes of this sort should exist. It is essential that henceforth preparation for conditional discharge involving parole leave should be subject to exactly the same degree of surveillance, oversight and reporting back as cases of conditional discharge entail.
  The administration of the interaction between Section 65 and Section 66 is entirely a Home Office responsibility, and no blame really attaches to the Fair Mile Hospital for the way in which the Dunlop case tragically transpired. I hope that the Home Office will without hesitation accept full responsibility.
  Through the kindness of Sir John Hedges, Chairman of the Berkshire Health Authority, I have read carefully that authority's report into what happened at the hospital in Dunlop's case.

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  There is no doubt that the doctor's advice and recommendation to the Home Office fell within that category to which Lord Butler referred when he spoke of the impossibility of being certain in these cases. However, having made its recommendations, it is unacceptable that the Home Office should have allowed Dunlop to wander round the country without making a serious attempt to keep an eye on him, as it would have been bound to do if it thought that he was subject to a conditional discharge order.
  Mr. Litterick: Is the hon. Gentleman aware that he has spent 13 minutes of a 15-minute speech emphasising a minuscule and unrepresentative aspect of a huge problem which exercises the House? Hon. Members on both sides of the House will deplore the hon. Gentleman's emphasis as distorting the nature of the problem and influencing the public mind in a regressive way with reference to the cause of mental illness.
  Mr. Alison: At the outset of my speech I made an appeal for a proper, full debate in Government time on the White Paper. Meanwhile, a critical case has thrown up a serious loophole in the arrangements for administering the discharge of dangerous mentally ill patients. I make no apology for focusing attention on what must be a major Government responsibility.
  Whatever we do, not least in dealing with the problem of surveillance of patients on parole under Section 65, we must face the fact that more resources are required in this sector of public expenditure. They are necessary for the implementation of the two most important recommendations of the Butler Committee—the setting up of the extended advisory Board—and I hope that the Under-Secretary of State will be able to give us some information on how the Board's enlargement is progressing—and for the establishment of the extra 2,000 recommended secure places in regional hospital establishments outside the special hospitals. The Government have accepted responsibility for funding 1,000 of those places. I hope that the Under-Secretary will tell us how the provision of them is proceeding and when we may expect them to be fully established.
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  The question of the progress made in providing secure regional places is of critical importance to the morale of and treatment given in the special hospitals. There has recently been a Hospital Advisory Service visit to Broadmoor. From what I hear, the report made as a result of the visit is very disturbing, but whatever may or may not be said in it—it has not been published, so I cannot speak with authority—it is clear that Broadmoor is overcrowded and until secure places in regional hospitals are provided to which patients who are getting better can be transferred there is no possibility of introducing a proper programme for progressive patient care and rehabilitation in the overcrowded special hospitals.
  The suggested balance of expenditure in the next few years—£8 million a year on personal social services for the mental health aspect and £30 million a year on the hospital side—is inadequate in present circumstances. I do not call for greater overall public expenditure. It is simply a question of shifting the priorities. Let me give the Under-Secretary of State a few ideas about where he might obtain extra money.
  It is a priority that provision should be made for the mentally ill. It is not nearly such a high priority that we should be spending £3 million a year on setting up and financing the Equal Opportunities Commission. Important though that is, it must give way in the order of priorities to the needs of the mentally ill. We should not be setting up the Police Complaints Board, which will cost, in my view, at least £1 million a year. We should not be phasing out the extra revenue which accrues to the National Health Service through the finances of the private patient.
  Leaving aside the relatively small amount which we had to cut from public expenditure in our last year of office, which the present Government have not restored, the last Tory Government made massive increases in expenditure on resources for the mentally ill. One could now go through the list of departmental expenditures—whether it be on general environmental improvements, airport development, road expenditure, car parking developments or prison projects—and suggest ways in which millions of pounds

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  could be reallocated without making any net increase in public expenditure, and yet finance is the crucial priority of provision for long-stay mentally ill patients in hospital and the need to make community provision for them.
  I hope that the Under-Secretary of State will show a proper sense of priorities in his attitude to the recommendations of the Butlers Committee, with special reference to the loophole which I have mentioned and the longer-term programme for financing these vital services.
  6.48 p.m.
  The Under-Secretary of State for Health and Social Security (Mr. Michael Meacher): This has been a low-key debate, but it has been strongly characterised by the sincere and determined demands made on both sides of the House for an improvement in services for the mentally ill and full implementation of the White Paper.
  The debate has focused largely on the recent Press reports alleging that many former mental health patients in Birmingham are living in sordid accommodation and that some of them are being exploited by unscrupulous landlords. We have written detailed letters to the West Midlands Regional Health Authority and the Social Services Department and have asked for their detailed comments. My hon. Friend the Member for Basildon (Mr. Moonman) asked that the Government should issue more general guidance. We are awaiting answers to our letters and, in the light of the situation which they reveal, we shall consider what further action needs to be taken. It is, however, right that we should examine the general structure of supervision, because I agree with hon. Members that this problem is by no means confined to Birmingham.
  The arrangements for the registration and inspection by local authorities of homes and hostels for the mentally disordered fall under Section 19 of the Mental Health Act 1959. But these apply only to homes and hostels whose "sole or main purpose" is the provision of accommodation for the mentally ill or mentally handicapped.
  The legislation does not lay down specific criteria for registration. It is left to local authorities to determine, in the light of local needs and circumstances,
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  what standards must be met. They are simply required to satisfy themselves of the fitness of managers and premises and that it is proposed to conduct the home in such a way as to provide the services and facilities that would normally be required in such a home.
  Of course, not all mentally ill or mentally handicapped people go to registered hostels or homes when they leave hospital. Many return to their own homes. Many, either because they choose to do so or because accommodation for people with a history of mental disorder is not necessarily easy to come by in the area, find accommodation in private lodging houses, or hostels, which are not registrable as homes for the mentally disordered, as it is claimed that this is not the sole or main purpose. It is this kind of unregistered accommodation which has been the subject of recent Press attacks. It has been argued in the Press that more of them should be registered.
  There are undoubtedly very difficult problems about that, not least the question of how to differentiate between such an establishment and an ordinary private hotel. I can give the assurance which the House has asked for—that my Department is considering the whole subject of the registration and inspection of voluntary and private homes of all types, including those catering for the mentally disordered. If the conditions in some of the unregistered establishments have been accurately reported in the Press, there is a strong case for supervision.
  But we must realise that the local authorities, in the absence of better alternative provision, might be reluctant, even if they had the power, strictly to enforce the registration of private and voluntary establishments in many borderline cases. The consequences would simply be that the establishments might be closed down, or they might be forced to put up their charges beyond what the residents could afford to pay, leaving them with no better alternative accommodation.
  The issue is, therefore, inseparable from the amount of local authority residential accommodation that exists for the mentally ill. It is undeniable that this falls very far short of what is needed. The total number of places made available by local authorities for homes and

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  hostels for the mentally ill, including those run by voluntary organisations or registered private establishments, at 31st March 1975 was only 4,496.
  I should add at once that this was an increase of no less than 24 per cent. on the position just one year previously. But I must also say that this is a sharp increase on a low base and one that has hitherto grown slowly over the last decade and a half. In 1963 the total number of persons resident in local authority homes and hostels for the mentally ill was less than 1,200, and by 1975 it had risen to only about 4,500.
  Even the present total of about 4,500 places must be set in context against the extent of unmet need. There can be no definitive measure of this, but if a target for local authority residential provision for the mentally ill of 20 to 30 places per 100,000 population is accepted, there is a national requirement which may be estimated at some 12,000 places. Against this it can be seen that our national performance has been to move from a level of provision in 1963 of about one-tenth to a level now of only about one-third. On that trend it would take us three or four decades even to reach this fairly modest target of national provision.
  But even within the meagre existing totality of community provision for the mentally ill there are great local variations. Birmingham Social Services Department was recently reported to be providing only 120 places in hostels for the discharged mentally handicapped and only 15 places for the mentally ill. There is no reason to suppose that this is such an isolated and unrepresentative example, for when Christian Action carried out a survey in 1971 of psychiatric after-care hostels for the mentally it found that against a national average background of five places per 100,000 population, some very few authorities such as Cardiff, Sunderland, Newcastle and Lewisham had achieved a ratio of 20 or more places.
  I mention those authorities deliberately. But many more authorities—which I could name—had built none at all up to that date. The picture has certainly changed since then, which is why it is, perhaps, improper to mention them, but it remains true that big and seemingly
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  unwarranted variations exist between localities, and that only in a few areas can community care for the mentally ill yet be regarded as adequate or even nearly so. According to the latest figures, for 1973–74, the average number of places for all authorities is only 10 per 100,000 population—less than half of what we might regard as a proper national average target.
  Therefore, there can be no question but that this is a main area of social policy which has been starved for a long time, where the nation is faced with significant extra costs if the indictments now being made are to be overcome. I regret that the hon. Member for Barkston Ash (Mr. Alison) suggested that we had not made considerable efforts to re-order our priorities. As he has introduced that tone, it is not unreasonable to ask him how it is possible for his party realistically to ask for major increases in provision for the mentally ill while his leader is recommending a significant reducton in public expenditure and an increase in, or maintenance of, the level of defence expenditure. It cannot be done.
  Perhaps in the long term the new pattern of services will not in itself be more expensive to run than the present one, because the cost of district services will be offset by the phasing out of mental illness hospitals and there will be substantially less in-patient accommodation But in the short term the cost of the change is bound to be considerable because of the major capital investment involved and because for a number of years the new services will have to operate side by side with those of the mental hospitals.
  Altogether the White Paper estimated that a capital programme of about £30 million a year on health services and £8 million a year on social services for the mentally ill, over 20–30 years, would be needed to provide all the new facilities required. That is a total of around £1 billion over a quarter of century at constant 1975 prices.
  But if that remains our longer-term objective, what of the Government's short-term strategy during a period of no growth in overall resources? My hon. Friend the Member for Preston, North (Mr. Atkins) wished to see an increase in the funds allocated to the National Health Service so that more would be

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  spent on the mentally ill. But the Government have already injected nearly £750 million of extra funds into the National Health Service so that its share of the GNP is now greater than ever before. As to local expenditure, we have modified the rate support grant formula by attaching four new weights to the needs element to assist areas with an above-average number of disadvantaged families. To promote real joint planning and financing between the health and social services we shall soon be issuing an important consultative document to clarify the options and priorities for the next few years.
  The hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) asked from where the money was coming for the regional secure units. To meet the Butler Committee's recommendation of secure units for violent patients in the NHS regions we are making available special revenue funds in addition to the capital programme already agreed. For the immediate future of community care in present economic circumstances we are examining how to provide increased facilities at lower cost. I wish to pay particular tribute to the work of the Psychiatric Rehabilitation Unit in East London and the Industrial Therapy Organisation in Bristol.
  Under the Housing Act 1974, which, for the first time, made local authorities and housing associations eligible for grants and subsidies for building homes and hostels for single persons, as opposed to families, we have paved the way for giving special aid to former psychiatric patients who might otherwise find themselves in situations reminiscent of the recent Birmingham reports. This new financial provision has also enabled voluntary bodies, like MIND and the Guideposts Trust, to show the way forward in community care by buying up houses and adapting them as group homes manned by voluntary workers at much lower cost than the full-scale supervised hostels.
  I hope that the hon. Member for Reading, South (Dr. Vaughan), who asked whether we were making full use of voluntary workers, will feel reassured that we are doing just that. I would also lay stress on one further important initiative that we are taking and the con-
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  sequences of which could be far-reaching. Although the Mental Health Act 1959 was welcomed at the time as a beacon, some people now feel that some aspects of its working may need reconsideration. Some hon. Members have referred to this in the debate, particularly the right hon. Member for Crosby (Mr. Page).
  We have therefore instituted a review, which is now being undertaken by an interdepartmental steering committee. The review is taking account of comments made by various bodies on the working of the Act, including the Butler Committee, the Royal College of Psychiatrists, MIND and social work organisations. A document will be issued as soon as possible as a result of this work. The document will cover such aspects of the Act as compulsory admission and continued detention, the function and powers of mental health review tribunals and issues such as the protection of the rights of patients and staff.
  The hon. Lady the Member for Dunbartonshire, East (Mrs. Bain) made particular reference to staff and fears that had been aroused about cuts in the number of staff. She also made a number of comments about the situation in Scotland, and I shall ask my hon. Friend the Under-Secretary of State for Scotland to reply to her on those matters.
  Another issue at which the Government are looking concerns the discharge of compulsorily detained patients, recent cases of which have attracted considerable publicity. These procedures were strengthened in 1972 to provide safeguards for the public following the case of Graham Young and were revised again in 1973 following the recommendations of the Aarvold Committee. They have since been thoroughly re-examined by the Butler Committee which has proposed certain other safeguards. The Committee found that existing discharge procedure for Section 65 patients had been largely successful, but to improve the protection of the public, it recommended that procedures instituted in 1973 for the special assessment of certain Section 65 patients should be modified and extended to cover all restricted patients in special hospitals.
  We share the Committee's view that there should be a substantial expansion of existing arrangements for submitting proposals for the discharge or transfer of these patients to the scrutiny of an

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  independent advisory body and, as we have already announced, the Home Office intends to introduce wider procedures along these lines as soon as possible, and this is the reason an enlarged advisory board will be required. Its constitution and functions are now being worked out.
  The hon. Member for Barkston Ash made considerable reference to the Dunlop case. He seemed to spend a disproportionate amount of his speech on this single issue which, perhaps, does not deserve the degree of attention that he gave it. I think that he was wrong to suggest that there is an inconsistency between Section 65 and Section 66 and that Section 65 is inappropriate in permitting parole without conditional discharge.
  Dunlop had not been discharged when he committed this further crime. It is at the discretion of the Home Secretary and the responsible medical officer what conditions should be imposed on temporary leave for Section 65 patients. In May 1973 the patient was transferred from Broadmoor to Fairmile Hospital and the consultant at the hospital was authorised by the then Home Secretary to allow Dunlop day parole and weekend leave provided that he was satisfied that there was no risk in so doing.
  Clearly the Fairmile doctor did not feel any serious cause for anxiety or think that it was necessary to impose conditions on Dunlop once he was out of the hospital. The Berkshire AHA inquiry recommended some supervision for patients working outside the hospital or on leave. There is already power to do this if those concerned believe it to be necessary. The Home Office will consider whether responsible medical officers should be given advice on this matter.
  Nobody with a strong social conscience can believe that the present provision is adequate to meet the unmet need. Following our essential strategy, we have outlined in the White Paper the Government's proposals for joint health authority and social services financing, together with an extension of low-cost residential and day care, making a much fuller use of voluntary resources. This represents a realistic and forceful commitment to maintaining the momentum and quality of care for the mentally ill in economic
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  conditions almost universally recognised as unprecedented since the war.
  Our commitment is clear and, having set our hands to it, we intend to see it through.

  MUNICIPAL TRADING AND DIRECT LABOUR
  7.9 p.m.
  Mr. Timothy Raison: The House has just been debating a subject which is dominated by public expenditure constraints. We now turn to a subject where unnecessary public expenditure is involved. We have chosen the subject of direct labour and municipal trading for several reasons. The fundamental reason is that we reject the endless extension of collective provision into more and more aspects of our lives. The public sector is already far too large for efficiency, freedom or the health of our economy.
  Everybody knows that once an activity enters the public sector, the prospects of any kind of economic discipline are reduced. Why? Because there is always the taxpayer and the ratepayer to fall back on. Moreover, why should public money be used to provide services which may undercut and drive out of business those ratepayers and tax payers who have provided that money?
  These important issues are raised because of current attempts to extend direct labour and municipal trading. There is a fairly clear divide between the parties on this subject. I can only hope that in the debate, we shall obtain some reassurances from the Government.
  We do not suggest that local authorities should not have direct labour departments or should not sell anything at all. Obviously it can be reasonable for councils to handle some of their own repair work, and so on, or to sell booklets about their buildings or buns in their sports grounds. However, we believe that it is entirely wrong that councils should plunge further into commercial activities or into the management of building operations for which they are generally unsuited.
  We know that the Government take a different view. On direct labour, the Minister for Housing and Construction,

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  who is to reply to the debate, has been explicit. On 14th October last year, in a speech to the Institute of Municipal Building Management, he said:
  "Some of the ideas I want to examine are the scope for co-operative enterprise; the possible evolution of direct labour departments into more widely based building organisations, as well as the conventional expansion of work".
  Later he said that he was setting up a departmental working group on these matters which would include representatives of local authorities, but not, needless to say, of the construction industry.
  On 13th January this year, in answer to a Question by my hon. Friend the Member for Gainsborough (Mr. Kimball), the Minister said:
  "Subject to the constraints on local authority activities, I wish to see the maximum possible expansion of efficient direct labour organisations."—[Official Report, 13th January 1976; Vol. 903, c. 108.]
  The Government's policy is clear. They wish to see "the maximum possible expansion".
  What about the other side to the debate—municipal trading? The Labour Party manifesto of October 1974, referring to housing, stated:
  "Local councils' lending will be expanded so that they can play a major part in helping house purchasers and keep down costs by supplying unified services for estate agency, surveying, conveyancing and mortgages".
  On 16th April 1975, the Minister for Planning and Local Government was asked by the hon. Member for Cannock (Mr. Roberts)
  "if he will introduce legislation to enable local authorities to act as estate agents, undertake the legal side of house purchase, and provide a wide range of community services such as funeral arrangements and taxi services".
  The reply was:
  "I sympathise with the general objectives to which my hon. Friend has referred, and we shall keep these possibilities in mind along with other candidates for legislative time."—[Official Report, 16th April 1975; Vol. 890, c. 423.]
  The Government clearly want more direct labour and municipal trading. We do not.
  This matter has become highly topical partly because of actions by the Minister for Housing and Construction to promote direct labour and partly because of three Bills which are being promoted by Socialist-controlled local authorities. The
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  first is the West Midlands County Council Bill, which contains astonishing powers to extend municipal trading, as well as some pretty rum powers to provide a scheme for registering dogs.
  The second is the Greater London Council (General Powers) Bill, which would allow any local authority in London to carry out virtually any construction work for anybody in London.
  The third is the Tyne and Wear Bill, which would extend the powers of local authorities to engage in construction and civil engineering, including repairs and maintenance, for an ever-increasing range of public and voluntary bodies.
  All this comes at a time of massive unemployment in the private construction industry. I believe that about 200,000 are out of work in that industry. It comes at a time of bankruptcies and near despair among many private traders, especially the smaller traders. It also comes at a time when there is general agreement that local government staffing must be pruned, not expanded.
  The forthcoming public expenditure White Paper is expected to set out the need for big reductions in public service manpower, which, incidentally, the Government are busy expanding through measures such as the Community Land Act.
  It is nonsense to talk about new powers of this kind. The Government should have the guts to tell their supporters in these areas to call a halt and to tell local authorities that expansion of their activities in the ways I have described is completely out of the question.
  I have no doubt that my hon. Friends will deal with those Bills in considerable detail. I should like to give a few examples of what has been happening.
  First, I will deal with the direct labour side. The record of direct labour departments is extremely patchy and often worse. I will quote a few examples. The first comes from Building of 28th November 1975. Referring to what happened in Newcastle, it states:
  "The £8,000 a year head of Newcastle upon Tyne District Council's direct labour department, John Chick, has been suspended from his job following the discovery of 'arithmetical errors' in the department's bills of quantity for a £1·3 million housing project in the city…. Before suspending Mr. Chick,

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  Newcastle Council announced that it had abandoned the deal with its own building department and that it was negotiating with Shepherd Construction, the second lowest tenderer, to take over the contract. The department won the job in September after submitting a tender some £180,000 lower than Shepherd's price."
  Another example comes from Hammersmith, reported in the Fulham Chronicle on 4th July last year:
  "The council's Housing Directorate has reported: 'There is no longer any routine inspection of buildings or periodic maintenance other than repainting and most of the day-to-day repairs have stopped'. Delays in maintenance on one estate were reported to vary from weeks to months. The report states that Hammersmith Council's Direct Labour Building Organisation is the direct cause of the crisis: that more than 30,000 orders for repair jobs are sent out in a year—many are bodged, many simply do not get done."
  The next example comes from Norwich:
  "Norwich ratepayers will have to pay 1p in the pound extra in 1976–77 for its council's services—a rise of 5 per cent. … Half of the 1p increase is to meet anticipated losses of £300,000 on housebuilding by direct labour over the next three years."
  Incredibly enough, the reaction in Norwich was:
  "Three days later the Norwich city council's works committee decided to ask for the promotion of legislation to allow the direct labour department to tender for work outside the city."
  I will give one more example which comes from Wigan. The Wigan Evening Post and Chronicle on 6th November last year reported:
  "The council decided to give a scheme for building 249 homes to direct labour, though two contractors submitted lower tenders. Acceptance of the direct labour estimate involved a extra £42,000—and would, with interest charges, have cost the council another £220,000. The department had a poor record of success in obtaining work in competition in 1975. A suggestion was made that, if it was not given the job, 100 men would have to be made redundant. The Minister for Housing and Construction has now decided that all tenders are too high and that the project was to go out to tender again."
  Thank goodness for that. Many other examples have accumulated over the past few years.
  Of course, things go wrong in the private sector as well. Nobody would dispute that. However, the House must understand that there are certain fundamental differences between the two
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  systems. First, in the public sector there is always the possibility of fall-back on the ratepayer. In the private sector, mismanagement leads to bankruptcy. Secondly, it is all too easy to work things in favour of direct works departments. Local authorities can set the level at which works go out to tender and exclude overheads from their accounting.
  Thirdly—this is very important—there is no contract with direct labour.
  Direct labour departments can submit unrealistically low tenders, get the jobs and then come along and say, "We are terribly sorry, but the price has gone up." That is not possible in the private sector. There is a fixed contract, and it is not possible for builders to get away with incompetence in the way that it is possible for direct labour departments to do.
  Mr. John Cartwright: Is the hon. Gentleman saying that there is no example of a private tenderer putting in a contract figure and then going to the local authority concerned two years later and saying, "I am sorry, but the cost has gone up and we must have a higher figure"?
  Mr. Raison: The normal contract has provision for dealing with rising costs.
  Next, there can be a sheer lack of businesslike attitude in local government departments. I am not saying that this is always the case. We know some that are very well run, but far too often the local authority is not equipped to take decisions about business matters. All in all, as Aneurin Bevan, oddly enough, said, "Direct labour can be an expensive luxury".
  The question before the House and the Government is: what should be done about this situation? Obviously, the inquiry which the Minister has set up is inadequate and it cannot possibly carry the confidence either of the industry or of the public as a whole.
  First, it seems to me that there must be some tightening of the rules set out in the circular of 1969 which recommended that direct labour departments would have to obtain work by tendering
  "in competition with contractors for a considerable and representative proportion by value of its work."

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  That has proved to be quite inadequate, because the proportion has never been defined and apparently some building managers have claimed that 10 per cent, is a sufficient proportion to test whether tenders are competitive.
  Next, it is important that we take seriously the recommendations of the Chartered Institute of Public Finance and Accountancy. These have been set forth in a paper called "Direct Works Undertakings Accounting". What they aim to do is to provide a minimum acceptable standard. After all, CIPFA is entirely a public sector body. Nobody can accuse it of being in the hands of the contractors. Its members are public servants.
  I shall not try to summarise CIPFA's Report, which is fairly detailed, but in our view there are certain points in it that are essential. First, it is vital that competitive tendering should be the normal practice. Secondly, direct labour departments must be separate trading units, with a fair share of overheads allocated to them and accounts which show the ratepayer absolutely clearly the cost and balance sheet of the service. Work should be monitored not only by the district auditor but by independent quantity surveyors.
  I repeat that CIPFA, in its Report, provides the basis of what is necessary, but if there is to be an inquiry on top of this, it should go far wider than the present Government working party. It seems wrong that the Minister should have said that there is some doubt about whether this Report will ever be published. He told one of my hon. Friends in answer to a Question on 14th January that he would not decide whether the Report was to be published until after it had been received. It seems to me that that gives the Minister a clear chance to withhold the Report if it is unfavourable to what he believes in. There is a serious issue of confidence in local government here, as well as the right of the construction industry and the ratepayer to receive fair treatment.
  It is intolerable that, for example, the £ million contract for the construction of the Sheffield-Rotherham link road has recently been awarded by the South Yorkshire County Council to its direct labour department without any effort at all being made to secure competitive tenders, so that quite clearly the council
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  is running the risk of paying substantially too high a price for this major contract.
  It seems to be equally intolerable that, according to the Building Trades Journal of 12th December 1975, in the Wear Valley building firms were reported to be carrying out more than £7½ million worth of new construction work for the district council on houses, bungalows and flats, but suddenly the direct labour department put forward an estimate for one project lower than the tenders obtained from builders. The project was for three houses. On the strength of this estimate, not even on the successful completion of the job, the council indicated that it would tell the Department of the Environment that there was no longer any need to invite tenders for work from private firms. That cannot be a proper way to run a municipal undertaking.
  The truth is that direct labour in this form can be an example of the delusions of grandeur that afflict Socialist local authorities in particular, and the GLC is a classic example of this. The committee chairman, Mr. Balfe, is apparently aiming at a huge construction department to take on all sorts of work, no doubt encouraged by the words of the Minister for Housing and Construction. On the whole, the GLC is manic-depressive nowadays rather than purely manic but this GLC Bill reveals only the manic side.
  Now I turn to another example of the manic—in the realm of municipal trading: the astonishing West Midlands County Council Bill. Part II of the Bill provides for a fantastic array of powers for any council in the West Midlands, not just the county council. Clauses 5 and 6 include the power to provide and sell from butcheries, bakeries and cook-freeze units. The Bill provides the power to grow and sell horticultural produce. It provides the power for making and supplying house furniture. It provides the power to build anything the councils want. It provides the power to run garages. It provides the power to act as estate and travel agents. It provides the power to sell pharmaceutical and cosmetic products. It provides the power to act as jobbing printers.
  Clause 7 is the most alarming of all. It would allow a local authority to carry on
  "inside their area such other commercial activities as are in their opinion in the interests of their area…".

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  I understand that even the leader of the West Midland County Council is beginning to have qualms about that proposed power. The Bill also appears to give the right to local authorities to take over private firms. It also says that local authorities can borrow what they like to implement the Bill without reference to the Secretary of State.
  If Part II of the Bill were ever to reach the statute book it would set the most appalling precedent and, as I think most of the House knows, there has been a storm of absolutely justified protest throughout the West Midlands about the Bill.
  Mr. Norman Tebbit: On hearing my hon. Friend read that list it occurs to me that the powers that the Bill would give the West Midland County Council are wider than those which the Government are proposing to give the Scottish Assembly in economic matters.
  Mr. Raison: My hon. Friend has made a pertinent point. It is interesting that in the West Midlands, as I understand it, several of the district councils themselves are unhappy about the power that it is proposed to thrust upon them. What is equally interesting is that several people in the Labour movement are also unhappy about the Bill. I understand that the Secretary of the Walsall and District and Co-operative Society has written to my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) on the subject of the Bill saying:
  "I am writing on behalf of the Walsall and District Co-operative Society to ask you to oppose Part II of the Private Bill which is being introduced in the House of Commons by West Midlands County Council."
  I am sure that if my hon. Friend is called in the debate he will expand on that.
  At the same time, even the trade union movement is not happy about that Bill. The Birmingham Mail of 6th January, speaking about USDAW, said:
  "The union says it is opposing the Bill because there is no evidence that municipal shops are needed in the West Midlands.
  It could lead to a monopoly situation and 'might go to the extent of effectively eliminating consumer choice in a particular area'."
  So much for the claim that the object is to provide better choice for consumers.
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  The Government must surely recognise and say to the House that that sort of thing has nothing to do with the reasons for local government. Local government exists to provide certain basic services to the community, not to destroy the livelihood of its own ratepayers. Anyway, what confidence can there be in the ability of local government to manage commercial services any more than in its ability to become developers under the Community Land Act?
  The only thing that we can be sure of is that if the Bill went through there would be more bureaucracy and more highly paid jobs. No doubt we would see in the West Midlands County Council someone called the Director of Trading Services, probably on about £10,000 to £12,000 a year. No doubt there would be a Chief Officer for Bakeries, probably a £9,000-a-year job. He would be not a mere master baker or master butcher but a dough insertion officer or bread extraction officer—perhaps more appropriately, a dough extraction officer.
  We must ask the West Midlands County Council who are to run the garages, the estate agents, the furniture makers, the beauty product sellers and so on. No doubt in some cases it will be those who are bankrupted by the Bill, but in others it will be Buggins who has missed his turn for something else. Ultimately, we shall all end up on the public service payroll, with nice salaries, splendid pensions and agreeable offices. But one day, someone, in a still small voice, will say, "I wonder who is paying for all this".
  It is time to ask that question now. This debate gives the Government a chance to call a halt to this ludicrous and damaging spread of bureaucratic Socialism through local government. If they do not, we shall ask the House to show in the Lobby what it thinks of this dangerous nonsense.
  7.32 p.m.
  The Minister for Housing and Construction (Mr. Reginald Freeson): I am sorry that the hon. Member for Aylesbury (Mr. Raison) should, as usual, deal with a subject of social ownership, in whatever field—[Laughter.] That reaction underlines the point that I was about to make. It is about time that the Conservatives stopped this rigid, doctrinaire

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  and rather dreary examination of something of considerable importance which should be treated coolly and rationally. We had very little of that from the hon. Member for Aylesbury. It was certainly a good knockabout speech but it did not discuss the issues in the way in which they should be treated.
  This issue never fails to raise a sub-rational reaction from Conserative Members. This is shown by the way in which they react. Even their heckling illustrates their knockabout approach to this subject—
  Mr. Tebbit: Get on with it.
  Mr. Freeson: That illustrates my point. It is difficult to have a constructive discussion on a serious issue—
  Mr. Patrick Cormack: Stop being so peevish. Get on with it.
  Mr. Freeson:—if we do not have more sensible interjections as well as speeches from the Conservative Party.
  I shall be pleased to deal as I go along with such points of merit as the hon. Member for Aylesbury raised about direct labour. Since time is short, I shall leave the Under-Secretary to deal with the municipal trading aspects of what the hon. Gentleman said, and other related matters raised in the debate, and confine myself to questions of direct labour organisation.
  Mr. Tebbit Mr. Tebbit rose—
  Mr. Freeson: May I at least proceed a little before I am further interrupted?
  Let me first described the position of direct labour organisations in the construction industry—quietly and objectively, I trust—so that we may know what we are discussing.
  Mr. Tebbit Mr. Tebbit rose—
  Mr. Freeson: It would be far better if the hon. Gentleman were to listen to what is being said just for a few moments.
  There are 637 local authority direct labour organisations in Britain. They employ in total over 171,000 workers. In 1974, they undertook about 14 per cent. of the total public sector construction work in this country. Their share of the total construction industry's new housing work was about 3 per cent., of all other
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  new work 2 per cent. and of all repairs and maintenance work 22 per cent. Their share of the value of all construction work in 1974, which are the latest figures I have, throughout the country—
  Mr. Teddy Taylor: Which country?
  Mr. Freeson: Great Britain. Are we now to have statements from the hon. Member about the economies of separate countries? Throughout the country, which is Great Britain, their share of the value of all construction work in 1974 was just under 8 per cent.
  I repeat that this Government want to see the maximum possible expansion of efficient direct labour departments. We want to do so for a number of reasons. Not least among them is our general view that social enterprise, if properly developed, can involve its workers as members, instead of alienating them as so much of industry has done in past generations. Relatively small-scale public enterprises, such as direct works building departments, have a particular scope here, I believe. But there are other more pragmatic reasons for our support for direct labour departments.
  There is the very practical consideration that some building operations are by their very nature best carried out by direct labour—for instance, those works that are not readily definable and quantifiable in advance, like maintenance and improvements. Here the most sensible, efficient and economic approach, as private as well as public property owners know, is to have work done by a conscientious work force responsible directly to the owner. This is widespread in private enterprise as well as local authorities.
  There are also the inherent virtues of social enterprise—in relation to good employment practices, the use of advanced methods and, especially, nowadays, training.
  On the capital works side, another consideration is the benefit to the construction industry as a whole of a competitive, vigorous and efficient publicly-owned sector. The industry consists of various types of organisation in both the private and the public sectors. Individual corporate identity and organisation and competition are important in stimulating efficiency. A vigorous public sector

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  operating under fair and reasonable rules can help to provide this. The efficiency and economy of direct labour organisations should be tested in competition with private contractors.
  This has been made clear in the policy circular to which the hon. Member referred and which was issued to local authorities last May. I must correct myself. In fact, he referred to an earlier circular dealing with the same topic. Another was issued last May in which we made it clear to local authorities that the lines laid down in the last Labour Government's policy circular on this issue should be pursued.
  Mr. Teddy Taylor: This is a very serious point. How can the Minister give figures for Great Britain, including Scotland, and details of numbers employed and work done when I have a letter from the Minister of State, Scottish Office, dated 6th January, saying that he does not know which authorities have direct labour departments or how many are employed? Where does the Minister get his information about Scotland, in view of the letter in which his right hon. Friend says that he does not know which local authorities have direct labour departments and how many are employed in them, if any?
  Mr. Freeson: The hon. Gentleman does not need to repeat the point. I thought that I had made it clear that the figures which I have quoted are for 1974. If he wants to pursue later figures relating to Scotland alone I suggest he takes those queries up with the Minister concerned and not with me.
  Mr. Cormack Mr. Cormack rose—
  Mr. Freeson: Not straight away. Let me continue. [Laughter.] I hope that the building industry, private enterprise as well as public, takes note of the style in which this debate is being conducted. [HON. MEMBERS: "Hear, hear."] I can tell hon. Members opposite that I have had a much more responsible and serious reaction from representatives of private enterprise in the building industry on this subject than I am getting from hon. Members tonight. If they do not believe me I suggest that they check with representatives of the industry.
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  The strength of the management of direct labour organisations is of obvious importance in achieving and maintaining that efficiency and economy. It is the Government's policy to help local authorities to achieve the kind of policies and practices which we have referred to in the circular that we issued last and the one issued towards the end of the last Labour Government. Some guidance has been given to local authorities on the financial and management control of direct labour organisations. This was contained in a manual of principles which was commended to local authorities—not by the Tory Government but by the last Labour Government—in 1969.
  There is a need—popular or unpopular as it may sound, and underlined by the ignorance and prejudices frequently expressed by the Opposition—for a better appreciation of the way in which direct labour organisations operate. This was why I announced in October that I intended to set up a departmental working party to review the organisation and operation of local authority direct labour organisations. This review will include tendering and accounting procedures, and I am asking the working party to consider the report, to which the hon. Gentleman referred, and which was published last year by the Chartered Institute of Public Finance and Accountancy, on accounting procedures.
  The working party's job will be basically a fact-finding exercise. This is why I have limited the membership to departmental officers and local government officers. Arrangements will be made for obtaining evidence from outside bodies, and the private sector of the industry will have the opportunity to draw attention to any matters it wishes to have considered by the working party within its remit. This has been made clear by me personally to representatives of the building industry in discussions I have had with them. The first meeting of the working party is expected to be held next month.
  While this is going on, we need to sort out once and for all the muddles caused by the last Government's local government reorganisation, and to provide by general legislation a proper statutory framework for the activities of direct labour organisations.
  Mr. Graham Page: As the Minister is now talking about the working party and about local government reorganisation, will he give the right figures? The figures the Minister has given the House cannot possibly be right. Local government was reorganised on 1st April 1974, and there are not now 637 local authorities, so how the 637 direct labour organisations can exist I do not know.
  Mr. Freeson: I am talking about the number existing today.
  Mr. Graham Page: With respect, the Minister stated just now that he was giving figures for 1974, and the correct number of direct labour organisations is 425, not 637.
  Mr. Freeson: My figures related to the volume of work and the number of employees. It will be on the record and can be read in the Official Report. I quoted very accurate and clear figures for the volume of work and number of employees in 1974—the latest available figures.
  I want to deal with the position created largely by the Conservative Government. This arises as a result of the Local Government Act 1972. A number of rather foolish anomalies were created, and we are trying to sort them out.
  Under the legislation that we are operating as a result of the 1972 Act direct labour organisations may not, in general, carry out new work for another local authority. This was why on local government reorganisation, difficulties arose for some of the direct labour organisations of the former county boroughs. With the transfer of functions to the new counties, the scope for employment of those organisations which became part of the new districts was severely restricted. We therefore made two transitional orders under the Local Government Act. These enable the direct labour organisations of 24 named district authorities to carry out work for their associated county councils within the former county borough area. These orders expire, however, at the end of March 1977.
  We intend to introduce substantive legislation to deal with this and related matters as soon as possible. In framing the legislation we shall have regard to
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  the inter relationship between counties and district councils, and we shall ensure that the resources of direct labour organisations can be used to the best advantage. I want to avoid a situation in which the efficiency of these organisations is impeded by a legislative strait jacket of the kind that the last Government introduced, I think unwittingly. Therefore, we shall propose sensible adjustments to their fields of operation in the shorter term.
  Mr. Michael Latham: Will the Minister explain why he proposes to introduce legislation and has announced a decision to do so in advance of the report of the working party he has set up, which was supposed to be engaged oil a fact-finding exercise?
  Mr. Freeson: I have been explaining that this legislation will deal primarily with the anomalies created by the passage of the 1972 Act. The working party will be collecting facts about the internal organisation of direct labour organisations, and will also take into account the report referred to in the discussion.
  I have mentioned the shorter term deliberately because the two exercises to which I have referred—the working party and the legislative proposals that we shall introduce—are essentially designed to reinforce and rationalise existing arrangements.
  I should like now to turn to what I regard as the major aspect to which we should direct our attention for the longer-term future. The deliberations of the departmental working party will provide a sound basis for the development of future policy towards the rôe of the public sector in the construction industry. There are, of course, difficulties at present in the context of the overall constraints, to which I have referred, under which local authorities are having to operate. But we need to develop now our ideas on the wider issues.
  There are a number of ideas—I refer to the speech that I made to the Institute of Municipal Building Managers not long ago—which I shall examine and, I hope, discuss constructively and widely throughout the industry. These include the possible evolution of direct labour departments into more widely based building organisations. The report to which our

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  attention was commended drew attention to this. Also included is the idea of turning them into trading organisations. This idea is not unpopular in certain quarters in local government already. There is scope, too, for co-operative enterprise, and I would not rule out cooperative enterprise on a large scale.
  I also want to consider the extension of public enterprise by way of a building agency that could act flexibly, using its own direct labour resources, private contractors and co-operatives in a rational and efficient way.
  Mr. Raison: Why has the Minister set up an inquiry into the future of direct labour without any representatives on it of the construction industry?
  Mr. Freeson: I wish the hon. Member would listen to this carefully set out explanation of the position. I said that the working party would not be looking at these wider future issues and that its essential job was to collect information about the methods being used in a wide range of direct labour organisations up and down the country, and that it would also take account, fortuitously, of the publication of the report to which reference was made. But the wider and longer-term issues, to which I am now referring, go beyond the scope of the working party, which will be engaged essentially on a fact-finding and fact-relating exercise.
  The ideas to which I have referred have not been decided upon, but I am committed to examining the ways by which we can improve the efficiency of the industry, and effectively involve building workers, by hand or by brain, in running that industry.
  I should like to have views from all those with a constructive contribution to make. We need to consider these issues realistically and rationally in the light of the characteristics of the construction industry. We need to involve all those who work in the industry in considering how it should develop in the future. This is why I shall welcome views from people on all sides with knowledge and experience of the industry. I am here, of course, speaking in a much wider context, but the future of direct labour organisations will fit into an examination of these alternative and further ideas as
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  to development in the industry related to the public sector. Against this broad background that I have been indicating, each individual proposal coming from local authorities in the meantime must be judged on its merits.
  As to the private legislation before Parliament this Session, it is not for me tonight to comment here on the detailed provisions of the Bills. There will, as all hon. Members know, be ample and proper opportunity for the Government to make the required report and the required submission on Private Members' Bills, as is normally the practice. But I will say this. I am not impressed by rabid diatribes from either side in the argument on this matter. In general I sympathise with local authorities which seek to extend their powers in a responsible way for the good of the community. We shall be considering our own attitude to the detailed provisions of these Bills in the light of our own general legislative proposals.
  It is in that spirit that I deal with the debate tonight. I hope that from now on we shall seek to avoid the rather prejudiced—
  Mr. Raison: Do not be pompous.
  Mr. Freeson: That is rich, coming from the hon. Gentleman.
  I hope that from now on we shall seek to avoid the kind of prejudiced statements and fun-making debates which do not do the construction industry any good and are certainly no service to responsible and sensible local government action in these matters.
  7.50 p.m.
  Mr. Reginald Eyre: In the public discussion in which I took part in Birmingham about the West Midlands County Council Special Powers Bill, to which the Minister referred, there was never any serious attempt to justify the enormously wide extension of municipal trading powers given under the Bill. When the Minister said tonight that he wanted seriously to discuss social ownership for a few moments, I thought that he would be developing some kind of justification—to use his own words, "quietly and objectively" to justify the Bill. However, he made no attempt to deal with the Bill or to justify it in any way. The tremendous Socialist

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  explanation for which we are all waiting is postponed to the last speech in the debate. That had better be a good one.
  Mr. A. W. Stallard: It will be.
  Mr. Eyre: Part II of the proposed West Midlands County Council Special Powers Bill, which is to be presented to Parliament tomorrow, contains 13 clauses of ominous purpose which provide for a monstrous and totally unjustified extension of the powers of local government. At a time when shopkeepers, traders, small companiees and locally based businesses of all kinds are struggling for survival and to counter some of the damaging effects of Government policies, their very existence is threatened across the whole range of their business activities by the Bill. I say "across the whole range of business activities" because the breadth of the Bill is gigantic. The only kind of trading activity that is left out of the Bill is shipping, and that was included in the original West Midlands Bill.
  Part II of the Bill brings profoundly into question the proper rôle of local government. It was very disappointing that the Minister did not seek to deal with that in any way. Most sensible people believe that local government already has sufficient problems and responsibilities on its hands and that it should concentrate its efforts and talents upon improving the present performance of its duties, and that this would be much to be preferred rather than its undertaking extra trading activities, many of the problems of which its salaried staffs do not begin to comprehend.
  The implications of Part II of the Bill are also extremely wide in geographical terms. For example—and this is only one example—power is sought to extend the operation of construction services and the supply of building materials throughout the country on request. There is also power to enter into trading arrangements with other persons or with local authorities anywhere in the country. There is also power for the formation of companies, if desired, further to achieve these purposes. In addition, undoubtedly—I think that the Minister understands the significance of this—other Socialist-controlled councils are regarding the Bill as a pilot scheme upon which they could base their legislative proceedings.
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  Even worse, we see from the terms of Early-Day Motion No. 137, supported by more than 40 Labour Members, clear evidence of the desire of Left-wing Members to pressurise the Government to introduce general legislation to enable all local authorities to engage in similar activities.
  Mr. Ivor Clemitson: The hon. Gentleman has used the emotive term "Left-wing". Does he agree that the list of the names of hon. Members appearing on that Early-Day Motion shows that they come from all sections of the Labour Party?
  Mr. Eyre: The hon. Gentleman is entitled to express his judgment as to where he places his colleagues on the political spectrum.
  Mr. Clemitson: I choose not to do so. The hon. Gentleman introduced the matter.
  Mr. Eyre: On examination, the motion is clearly entitled to be labelled "Left-wing".
  Mr. Clemitson: Absolute nonsense.
  Mr. Eyre: If those hon. Members who support that motion had their way, the prospect would be a series of communes across the country, developing along the lines of the Marxist pattern, and it would mean the end of a way of life for those working in small, independent businesses.
  In this respect the House should note the opposition of the Union of Shop, Distributive and Allied Workers, expressed in Birmingham earlier this month. I was very glad that my hon. Friend the Member for Aylesbury (Mr. Raison) referred to this very important announcement. The union opposes the Bill because, its spokesman said,
  "There is no evidence that municipal shops are needed in the West Midlands."
  The spokesman said that the Bill could lead to a monopoly situation and
  "might go to the extent of effectively eliminating consumer choice in a particular area".
  It was not only that. The union spokesman went on to say that the Bill could lead to unemployment among his 62,000 members. That is very significant in the West Midlands, where the unemployment situation has grown so markedly worse during the last two years. Unemployment there has trebled in that period.

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  The carefully considered and measured terms in which Walsall and District Cooperative Society has asked Members of Parliament to oppose the Bill should also be noted and very carefully considered by the Minister. I hope that the Minister who is to reply to the debate will deal expressly with these points. I quote from a letter dated 31st December 1975 which was sent to me and to other West Midlands Members by the Secretary and Chief Executive Officer of the Walsall and District Co-operative Society. It says,
  "While the Bill contains assurances that separate accounts will be kept of the results of commercial activities under Part II, the Bill is silent on the question of trading losses. It seems inevitable that these, if any, will fall on ratepayers in general, including Co-operative Societies which are both substantial ratepayers as well as being non-profit voluntary associations founded on self-help."
  The Secretary goes on to say,
  "You will be aware that local authorities now act as enforcement agents in respect of many laws affecting retailers. In addition, they are planning authorities with wide powers, including compulsory purchase. Soon, under the Community Land Act, they will be able to acquire development land either for their own use or disposal at market values. They may also enter into arrangement with others for such land transactions and will share in the profits arising therefrom."
  He goes on:
  "In our opinion, no local authority could compete fairly with other traders in view of its special position as described above. Retailing is a fiercely competitive business and consumers can shop where they wish."
  He concludes by inviting hon. Members to oppose Part II of the Bill.
  I emphasise not only the burden which would be put on ratepayers in respect of losses—and the Minister will have to make clear the Government's attitude to the fact that the Bill does not deal with this aspect—but the unfair trading aspect which is in the Bill because the Bill would authorise unlimited borrowing by local authorities, without requiring the consent of the Secretary of State, to be repaid over a term not exceeding 60 years.
  Mr. Cormack: Does not my hon. Friend think it regrettable that virtually no Labour Members from the West Midlands are present?
  Mr. Eyre: It is certainly desirable that they should have been here so that we could have ascertained their reaction to
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  the letter from the Walsall Co-operative Society.
  As I was saying, the Bill would authorise unlimited borrowing, and in view of the implications for public expenditure at present, the Chancellor of the Exchequer would be out of his mind if he agreed to that. Small businesses and traders could not hope to borrow money for business purposes on such favourable terms. Colossal debts for future generations could be built up by improvident borrowing secured on the rate funds of local authorities, and all for the purpose of carrying out these doctrinaire objectives. Every ratepayer in the West Midlands could be forced under these powers to provide funds for unlimited investment in commercial enterprises not of his choosing.
  Against the background of nationalised industry losses, this prospect should fill every ratepayer with dread. It is becoming clear from the Bill and the motion that the self-employed and small independent businesses have no place in Socialist philosophy. I believe that Socialists do not care for individuals but only for the system they seek to impose upon individuals. I ask the Minister to say quite clearly to the West Midlands County Council that the Bill is not suitable for treatment within the Private Bill procedure. He should point out that it is far too drastic and political in the nature of its proposals. On behalf of the Government, he should indicate that in no circumstances will official Government support be forthcoming for the Bill.
  Finally, I ask the Minister to advise the West Midlands County Council to omit Part II of the Bill as being totally objectionable. Otherwise, he and the promoters of the Bill and hon. Members opposite can be sure of our total opposition to that Part of the Bill.
  8.5 p.m.
  Mr. Ivor Clemitson: I was under the apprehension, or perhaps misapprehension, that this was a general debate about municipal trading and local authority enterprise and not specifically about the West Midland County Council's Bill.
  The local authorities are under considerable attack and suspicion. Their powers have diminished while their budgets have grown. They are saddled with a system of local taxation which in

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  many ways is unfair and outdated and needs changing. But Opposition Members are only too willing to exploit this unpopularity, and when anyone suggests that we should do something which would increase the initiatives open to local authorities and which, very arguably, would relieve the burden on the ratepayers—on the evidence, would do so—we find opposition to these suggestions which at times borders on the hysterical. For example, Mr. Bernard Levin, who uses the word "mad" with great profligacy, wrote a particularly violent piece in The Times about the Bill.
  How times have changed! In 1913, on the eve of the First World War, 80 per cent. of the water, 65 per cent. of the electricity and 40 per cent. of the gas were supplied by local authorities, which also ran 80 per cent. of the tramways. Yet the hon. Member for Aylesbury (Mr. Raison) bemoaned the increasing public expenditure. From the point of view of local authorities, the public sector has been contracting violently in the last 30 or 40 years.
  These enterprises in 1913 and before were presided over not by what Mr. Levin described as "Socialist loonies" but by very upright and sober citizens who would not have subscribed to what the hon. Member for Birmingham, Hall Green (Mr. Eyre) called doctrinaire Socialist Marxist philosophies.
  Let us come to more recent times. When the electricity undertakings were being nationalised the spokesman of the Conservative Party said:
  "The right hon. Gentleman talked about local authorities. The fact that he is taking over distribution from the local authorities is just one more example of the present Government's policy or whittling down the power of the local authorities."—[Official Report, 3rd February 1947; Vol. 432, c. 1426.]
  More recently, the Redcliffe-Maud Report said:
  "Local authorities must—and can—be given a real measure of freedom in reaching their own decisions and in settling, within broad national policies, their own priorities. They must be allowed to develop their own methods, to use their own initiative, to experiment."
  It was a great pity that the Conservative Government, when they made such a botched job of local authority reorganisation, did not take those words to heart.
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  Surely what we need is the maximum encouragement of local initiative and local enterprise. I do not want to see the kind of all-powerful monolithic, bureaucratic, remote State apparatus that Opposition Members are rightly afraid of, I want to see local initiative, local enterprise and local democracy, not bureaucracy.
  We are told that the ratepayers would have an added burden, but it is interesting again to recall the debates, for example, when the gas industry was nationalised. The Tory spokesmen were then bemoaning the way in which efficient and viable local gas undertakings were being taken over. One of them mentioned Wigan, as the hon. Member for Aylesbury has done, and he said that the Wigan gas undertaking was worth no less than £626,638 and bemoaned the fact that the Government were taking it over without adequate compensation. We were told that there would be competition with other traders. At other times hon. Members opposite are the great champions of competition. On the jobs argument, it may well be that municipal enterprise could increase job opportunities rather than reduce them.
  The hon. Member for Hall Green was earlier referring to the case for municipal enterprise, and I should like to quote at some length again from the debate on the Gas Bill, to show how Conservative Members have made a complete volte-face on this point. A Member of what was then the Opposition Front Bench said:
  "The next point is that the Bill undoubtedly removes a great portion of public control. It follows the familiar anti-democratic method to which we are accustomed in Government's schemes. The third of the industry"—
  that is the gas industry—
  "which is at present in public ownership, is in democratic public ownership. It is under elected representatives. It is under representatives in the choice of whom the people have had a say. Under these conditions, the ordinary, small individual"—
  about whom the hon. Member was so rightly concerned—
  "has often learned great business and come into contact with the management of great affairs and great industrial undertakings. The gas committee, the water committee, the electricity committee—these, as the hon. Member for Bridgton (Mr. Carmichael) and other hon. Members will know, were their apprenticeships, the schools in which great affairs have been brought to the knowledge of simple folk who otherwise would never have had control of enterprise with millions of pounds of capital and many scores of thousands of employees."

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  —[Official Report, 11th February 1948; Vol. 447, c. 392.]
  That is the case for local authority enterprise. It was made 30 years ago by a Member of the party opposite.
  The one thing which is mad about the West Midlands County Council Bill and the Greater London Bill is the fact that the local authorities concerned have had to go to the great expense and trouble of introducing those Bills. I urge the Government to introduce, as a matter of urgency, a general enabling Bill to enable all local authorities to engage in commercial and trading activities and save them that expense.
  8.14 p.m.
  Mr. Arthur Jones: I wish to direct what I have to say to the question of direct labour departments in local authorities. This is a very important part of our debate. The Minister spent a long time on it, and I shall devote my attention to it because the other issue which is before us, that of municipal trading, has been dealt with adequately by my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre), who was able to call in aid institutions which usually support hon. Members opposite, and clearly, there is a great cleavage of opinion within the Socialist Party on the question of municipal trading.
  On the subject of building departments in local authorities, there are important economic and political questions which are inescapable if proper regard is to be paid to the important issues involved. The Minister made no issue of the maladministration which he knows exists in direct labour departments. Specific examples were quoted by my hon. Friend the Member for Aylesbury (Mr. Raison), and the hon. Gentleman knows them to be true. He knows that the very unfortunate practices to which my hon. Friend referred are widespread. He said nothing to deny the existence of something of which he and the Government disapprove. He made no suggestion that he was taking steps to ensure that these malpractices were corrected or that there would be any requirement to monitor performance within local authority direct labour departments.
  The necessity is clearly for separate accountancy for each contract of any size
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  and the independent auditing of accounts relating to direct labour departments. That is my essential criticism of the hon. Gentleman's approach to the whole question of direct labour. I agree that it has an acceptable part to play in local government administration. There are emergency repairs of various sorts which require urgent attention. To hold labour for this purpose must involve other work if continued employment within a direct labour department is to be maintained. I do not deny the validity of that assertion.
  Clearly, there is a wide divergence of performance in regard to costing. Concern in this respect led to the preparation of a Report, "Direct works undertakings accounting", published in June of last year by the Chartered Institute of Public Finance and Accountancy. It produced a competent analytical report with practices recommended to ensure effective use of men and materials and a proper accounting for the expenditure of public resources. I take two quotations, the first on page 39, paragraph 2.2:
  "The only reason for the continued existence of a direct works undertaking is its ability to provide a service at least as effective and economical as its competitors."
  The Minister was well aware of that comment, but he made no attempt to criticise the malpractices which are widespread in direct labour departments throughout local government.
  Paragraph 2.3 of the Report says:
  The style of final accounts of the direct works undertaking must be like that of commercial undertakings rather than the other executive departments of a local authority. It must be capable of use in testing whether or not the direct works undertaking is able to produce a service at no more overall cost than alternative competitive organisations."
  When will the hon. Gentleman take that line of approach to this material question? All he has referred to are, to use his own words, "flexibly" and "rationally". He has made no comment about the necessity for the proper conduct of direct works departments in local government.
  Mr. Freeson: I hope I made clear, as I did publicly, that the Report to which the hon. Gentleman has referred has been noted by the Department and will be studied carefully. May I ask the hon. Gentleman, in return for that assurance, for which I presume he was asking, that

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  he will point out where in that Report the word "malpractice" is used, or else please desist from using it as he has done?
  Mr. Jones: The word "malpractices" is my own. My hon. Friend the Member for Aylesbury referred to the issues about which I say there are malpractices. This Report was concerned with the effective monitoring within direct labour departments.
  There should be proper commercial accounting procedures with allowances made for rent and rates of accommodation occupied, interest on working capital and borrowed money, allowance for all overheads with proper stock valuations and costings on a current account basis. Performance must be tested against contractors in the private sector. This can be done in a variety of ways, the principal method being by way of a tender on a competitive basis between the direct works department as a nominated contractor and private sector contractors.
  In a direct works department, regard must be had to the necessity for mobility of labour which is characteristic in the industry, and one suspects that management is often concerned with the maintenance of its existing labour force rather than the hiring and firing which is characteristic of the building and contracting industry.
  I quote again from the CIPFA Report, this time from page 41, paragraph 4.4—
  Mr. Gordon A. T. Bagier rose—
  Mr. Jones: I hope that the hon. Gentleman will not ask me to give way. Time is very short. This is what is said in paragraph 4.4:
  "Implicit in these criteria is the view that the building department should be treated as a trading undertaking. Such treatment is considered to be justified since it should:—

  (i) make performance explicit within the accounts;

  (ii) allow more valid comparisons of performance;

  (iii) provide both an encouragement to and a discipline within the department by abandoning the charging of actual cost".

  There must be a positive determination in local government to direct a labour force to those objectives essential for our economic and social welfare. The present
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  policies of many Socialists in local government are clearly directed towards political objectives, and I accuse the Minister of being biased in that respect. The powers which are sought in, for example, the Private Bill prepared by the West Midlands County Council for the extension of municipal trading are in furtherance not of economic progress but of moves towards the implementation of State Socialism.
  If the expansion of direct labour departments and the extension of municipal trading are pursued, except on the basis of sound business practice and carefully monitored financial performance, it can only be at the expanse of the ratepayer and taxpayer. I share the doubts and fears which have been expressed from this side of the House.
  Mr. Deputy Speaker (Sir Myer Galpern): I ought to acquaint the House that the winding-up speeches are due to begin in an hour from now, which leaves but one hour precisely for the 10 hon. Members still anxious to take part. According to my arithmetic, that is six minutes each. Perhaps it will interest the House to know that the hon. Member for Daventry (Mr. Jones) took about six minutes, and made quite a considerable contribution. I hope that that will be a precedent for other hon. Members.
  8.22 p.m.
  Mr. R. E. Bean: It seems that whenever we discuss municipal trading or direct labour the subject generates more heat than light, as we have just witnessed. I am glad that the Minister showed the scope of direct labour organisations, since we constantly hear it said that they represent a large section of the construction industry, whereas the truth is that their actual output is very small. We want to see it increase.
  The hon. Member for Aylesbury (Mr. Raison) detailed a long list of failures, but he did not mention the successes. I take him up at once on one important point. He said that when private enterprise fails, when a contractor goes bankrupt or is in trouble, this happens at no cost to the ratepayer. That is not true. It means that a contract is delayed, or that the local authority has to put money into the company to keep it going. The Greater London Council's returns for

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  1975–76 show that it was forced to put some £2 million to £3 million into private enterprise in the form of ex gratin payments in order to get contracts completed. Moreover, in the current year, 1976, the GLC is having to allow for about £4 million in anticipation of failure in the private enterprise sector. Plainly, therefore, it is not all one way.
  Examining the situation from the point of view of successful direct labour organisations, on the other hand, we see a different picture. In Manchester, probably the best example of direct contract work in the country, the productivity of the direct labour force is one-third higher than the national average. We hear no mention of that. In the maintenance sector of the GLC, also a pioneering organisation in its methods of finance and cost control, there is a saving—this is an audited figure—of about £8 million a year in maintenance costs to the ratepayer. In the past year alone the GLC has had visitors from EEC countries and from America to study its methods and working. But we do not hear about that, either. All we hear about is dismal failure.
  There has been reference to the report prepared by the Chartered Institute of Public Finance and Accounting, and it is suggested that the direct labour organisations fear this report. The contrary is true. The managers of direct labour organisations, who are represented by the Institute of Municipal Managers, welcome the report. They want it enacted. They want the freedoms which are given to ordinary private concerns. All they ask is that they be allowed to compete with private enterprise on proper terms. They will then be able to show how successful they can be.
  In increasing the scope of direct labour we should not confine it strictly to the local government area. The hon. Member for Daventry (Mr. Jones) said that work is often created to keep men employed. Having spent many years in the building industry I assure him that the one thing we want is stability, a guarantee that work will be there next year. In such circumstances, a local government direct labour organisation may have to fabricate work to keep its lads in employment, but if it could look for work outside its
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  area it would not have to use those forms of manipulation. It could then balance its books in the proper sense.
  The GLC is asking that its direct labour organisation be given power to compete with private enterprise on the same terms. This should not frighten private enterprise firms. On the contrary, they should welcome it. The controversial Clause 6 in the GLC Bill makes two proposals. First, it would enable local authorities to do contract work as opposed to repair work for other authorities. This could be of particular interest to housing associations, which at present can ask only private enterprise firms to do their work. Second, it would enable public authorities to do work for the private sector. There is no attempt to take over private enterprise work. The purpose is to enable the GLC to perform its full social functions in housing action areas.
  The truth is that a great deal of heat has been generated over something which is essential. If our effective direct labour organisations are allowed to compete on proper competitive lines there can be only one result. They will force private enterprise to improve its public image, to improve its standard of workmanship and to improve its reliability in terms of time and cost. In my view, that could do only good.
  8.26 p.m.
  Mr. Nigel Lawson: In view of the time and your stern injunction, Mr. Deputy Speaker, I shall not take up in detail the argument advanced by the hon. Member for Rochester and Chatham (Mr. Bean), but I will follow him in referring to the Greater London Council.
  Apart from the intoxicating extravagance of the West Midlands County Council Bill, the subject we are discussing—municipal trading and direct labour work—is largely work ancillary to housing. In trying to judge the matter objectively and dispassionately, as hon. Members on both sides wish to do, I am sure, it is useful to judge the spirit in which local authorities generally, and the GLC in particular, look at their housing responsibilities.
  I am indebted here to a curious document for an insight into that very matter, and it illustrates the point to which I now address myself. Apparently, the GLC is

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  planning to engage in a new piece of municipal trading, the launching of a magazine called You and Your Home. That magazine is to be launched in September this year, and it will be delivered free by GLC employees into the letter boxes of all its 220,000 council tenants.
  Commendably, it is the Greater London Council's intention that the magazine should pay its way. Therefore, it is seeking revenue from advertising. It is beginning to circulate a small glossy sheet to all potential advertisers to try to persuade them to advertise in You and Your Home. It is interesting to see the sort of copy that it employs. It points out that GLC tenants have a
  "weekly disposable income … in excess of £8 million."
  It continues:
  "The typical 'You and Your Home' family enjoys a reasonable income. The husband's basic take-home pay of £48 per week is supplemented by a second income in 40 per cent. of households."
  Later it reads:
  "The average weekly rent is £5·50 plus £2 for rates leaving a large fraction of the weekly wage as disposable income."
  Later in the same paragraph it reads:
  "Two-thirds of families own a motor car."
  The next paragraph explains:
  "GLC tenants are encouraged to decorate their own homes with cash help from the Council—around £25 per room, and up to £40 for a hall and staircase. 'You and Your Home' will tell readers how to claim this help and follow up with pages of practical advice."
  The magazine then promises sections dealing with the purchase of furnishings, heating systems and all domestic appliances. It is not surprising that it refers to the image of the council tenant. It reads:
  "The image of the council tenant has changed radically in recent years. Average tenants are no longer the poor …"
  Not at all. We are told that families can decorate as they wish. It explains that they receive considerable financial help from the GLC—
  "central heating, double glazing, a new bathroom suite—these can be installed at the discretion of the tenant and the GLC will repay part of the cost should they move."
  Then comes the clincher:
  "A comparatively low rent makes expenditure on all three projects a realistic proposition and, in fact, leaves a good deal over for furnishings, floor coverings and domestic appliances of all kinds."
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  In other words, the GLC is saying "We keep our rents so low that our tenants have plenty of money to spend on deep-pile carpets, colour televisions and all the other luxuries." That is why advertisers are urged to advertise in You and Your Home.
  But who is to pay for all the luxury appliances which the advertisers will be encouraged to advertise to council tenants whose rents are so low that they can afford them? They will be paid for by the ratepayers and taxpayers. On official GLC figures for 1976–77, the next financial year, the year in which You and Your Home is to be launched, it is officially estimated that rents will not even cover maintenance and management costs. The figures disclose that net rents will cover only 30 per cent. of housing costs and that the remaining 70 per cent. will have to come from the ratepayer, and particularly the taxpayer. The subsidy for these council tenants from the general taxpayer will be approximately £120 million. About £60 million will come from the ratepayer. In each case that is six times as much as in 1973–74, a mere three years ago.
  These subsidies from the taxpayer and ratepayer are to enable council tenants to buy luxury bathroom fittings, colour televisions and the other pieces of equipment which advertisers are being asked to advertise in this new magazine. This is why we need to pause before allowing any extension of municipal trading. It is totally and abundantly clear that municipal trading is a licence to plunder the taxpayer and ratepayer—and to no social purpose.
  8.32 p.m.
  Mr. John Cartwright: I hope that the hon. Member for Blaby (Mr. Lawson) will forgive me if I do not follow him through the glossy catalogue of home improvements which he has recited.
  I want to balance some of the horror stories about direct labour organisations that we have heard from Conservative Members by setting out my own experiences. The hon. Member for Aylesbury (Mr. Raison) could not find very much of a kindly nature to say about direct labour organisations. The kindest thing he could find to say was that their record was patchy. He could not bring himself to admit that there were any successful

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  direct labour organisations operating. My experience relates to the direct labour organisation in the borough of Greenwich, the borough which I had the honour to lead for three years before coming to this House. That organisation was not a product of the revolutionary Marxist fervour which we have heard about from Conservative Members. Indeed, if I were plotting the violent overthrow of society as we know it, I do not think that I would use local government as the vehicle for such an exercise.
  The direct labour organisation in my borough dates back to 1928 when the Metropolitan Borough of Woolwich established a direct labour maintenance organisation. It did so when it discovered, as many other local authorities have since, that it was expensive and wasteful to undertake private maintenance of council estates.
  In 1936 the organisation undertook new building, and in the 40 years that have ensued the value of its production of homes runs into hundreds of millions of pounds. At 9 o'clock this morning it had a labour force of 1,049 operatives. It is responsible for the maintenance of 25,000 council houses and flats and 200 public buildings. Its current modernisation and improvement programme is between 400 and 500 units a year. On capital and new building schemes it is responsible at present for nine building sites representing 1,610 new homes. The value of that programme is £20 million. During the current year, the value of the direct labour building force's output on maintenance will be over £2½ million, on minor works over £2 million, and on new buildings over £5 million. That makes a total output this year of almost £10 million.
  It is right to point out, in view of what we have heard from Conservative Members, that Greenwich wins its contracts, as do many other direct labour organisations, in open competition with private enterprise—when, that is, it can obtain competition from private enterprise. Many of us remember that in the building boom of 1972 and 1973 we could not get any private enterprise firms to tender for the building of council houses. In that situation if we had not gone to direct labour we would not have had a housing programme.
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  The Woolwich Dockyard scheme was a typical example. It involved the building of about 400 homes, a community centre and social and recreational facilities at a capital cost in 1973 of £6·5 million. We advertised that contract widely throughout Great Britain. Indeed, we even had to advertise it in EEC countries to see whether they were interested. We had no response. Then, cap in hand, we went to 12 major building companies in this country and said, "Please tender for this job". But they were not interested. Those thrusting terriers of private enterprise were gathering the shekels from building office blocks, hotels, shopping precincts and other lush building projects. Therefore, we had to approach our direct labour organisation, which was already overstretched at that time, and we obtained a tender from it. That tender was approved the first time round by the Department of the Environment, then adminstered by the Conservative Government. That scheme is 35 per cent. complete and well on time.
  The acid test for our direct labour organisation was the attitude of the Conservative members on the Greenwich Council. They learned to live with the organisation, if not to love it. They controlled the council for three years and, although they indulged in some ideological nibbling, they did not attack the organisation directly. They have judged its work on its efficiency and have been happy that it should continue. Is that not the attitude we should all adopt?
  The hon. Member for Aylesbury spent a good deal of time poking fun and pointing to mistakes made by direct labour organisations. The hon. Member for Daventry (Mr. Jones) made a blanket condemnation when he spoke of malpractice by such organisations. However, he did not specify any.
  The hon. Member for Aylesbury said that in the outcome it was the ratepayer who had to pick up the bill. He even said that while direct labour organisations adjusted tenders after they got the job, that was unheard of with private enterprise tendering. I recall occasions two or three years ago when it was a joke trying to find a private enterprise building firm to tender on a fixed price basis. They would not undertake such work unless there were sufficient escape

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  clauses to get them off the hook. Many of us have had experience of arithmetical errors in private enterprise tenders, of intolerable delays in private enterprise contracts, and even of firms going bankrupt half way through the job. All this added to the costs and, as my hon. Friend the Member for Rochester and Chatham (Mr. Bean) pointed out, in these cases it was the ratepayer who picked up the check.
  Surely the most unfair comment of all on direct labour that we have heard tonight relates to their management. Among the managers of which I have experience I do not recognise the time-servers on large salaries in plush offices—as pictured by some Conservative Members this evening. Nor do I recognise a political dedication to the overthrow of private enterprise building on the part of building managers in direct labour organisations.
  The District Auditors' Society had something very clear and impartial to say about this. It said:
  "Given viability and efficient cost-conscious management working with the discipline of having to compete with contractors, then the benefits of a works department to the council, its ratepayers and its tenants can be very successful."
  I endorse that. What we ought to do is to leave the management of direct labour building forces to the managers who believe that they can do a worthwhile job for their ratepayers. We should leave them to get on with that job and not subject them to the sort of neurotic political sniping that we have heard tonight.
  8.40 p.m.
  Mr. Michael Latham: I declare an interest in that I am a director of Lovell Homes Ltd., which is a subsidiary of Y. J. Lovell Ltd., a large contracting company.
  We know that this subject of direct labour arouses strong feelings among many people. We have heard that tonight. I am sorry to say that the Secretary of State holds fairly strong ideological views on the matter. For example, at an election meeting in Leicester on 19th November 1974 he not only said that he was
  "a passionate believer in council direct labour departments",
  but went on to add that he would
  "also like to see competition not only from the local direct labour departments but also from a major publicly-owned national firm competing with the Wimpeys and so on."
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  Fortunately even this Government's tendency to throw away public money has not led them into the folly of nationalising individual building companies, which would require hybrid legislation, or setting up their own State company from scratch. The Treasury would never allow such a futile gesture. It would only make sense from the Socialist point of view if the State-owned company were to be awarded all its contracts without competition or irrespective of whether it had submitted the lowest tender. Even if the Treasury were to be browbeaten into accepting such a potentially corrupt and scandalous arrangement, the Public Accounts Committee would undoubtedly have something to say about it. That fantasy of the Secretary of State has been abandoned. I hope that the electors of Leicester were not too badly taken in by it.
  There is also the attitude of the Minister for Housing and Construction. The hon. Gentleman knows, although he did not mention it tonight, that the work load in the construction industry at present is appalling. It fell sharply in 1974 and 1975 and we have the Economic Development Council for Building reporting that there will be another fall this year and perhaps another in 1977, including, incidentally, a predicted decline in council housing output about which I have warned on previous occasions, usually to scoffing from the Secretary of State. The builders' federation recently produced yet another gloomy report on the state of trade. The Minister's reaction to this is to set up a working party designed "to develop"—his very word—"direct labour" and thus add to the problems of the industry he is supposed to be sponsoring.
  It is not without significance that the working party has deliberately been made up of people with an interest in maintaining or expanding direct labour departments, people such as civil servants or local authority officials. Attempts by me, my hon. Friend the Member for Aylesbury (Mr. Raison) and others suggesting that not only contractors but also members of the District Auditor's Society with all their experience of exposing scandalous over-spending by direct labour should be represented on the working party have been met by evasions or blank refusals. Clearly, the purpose of this working party

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  is to tell the Minister what he wants to hear, namely, that direct labour should be expanded and developed as quickly as possible.
  Let me suggest a more constructive rôle for the Minister. He could try to carry out the policy of the 1966–70 Labour Government, or rather that part of it set by Lord Greenwood of Rossendale when he was Minister for Housing and Local Government. It was Lord Greenwood who got rid of the deplorable Circular 50/65 produced by Richard Crossman and who advised direct labour to compete for work "as a general practice". Lord Greenwood also specifically drew the attention of local authorities to the report of the previous working party which had produced the Manual of Principles and which had followed a critical report by the District Auditors' Society in 1967 after the scandals at Salford and elsewhere. That manual, which Lord Greenwood suggested to local authorities should be followed, would among other things have required the chief finance officer to keep records which would allow him to report savings or losses on each direct labour scheme and the overall savings or losses by the department during the year.
  What can be more reasonable than that? Yet how many local authorities have produced such reports since the manual was published in 1969? If they have produced such wonderful reports, why have we not heard more about them in the period which has elapsed? Lord Greenwood's policy was quite right. It was practical and non-ideological. It endorsed a sensible report and said that local authorities should follow its recommendations.
  Now we have the even more valuable Report by CIPFA which sets out specific practical recommendations. Rather than fiddling about with more working parties in the Ministry—they are not needed: there have been enough already—the Minister should send a circular to local authorities telling them to implement the CIPFA Report, not only in the letter but in the spirit, and saying that he will not grant loan sanction to any direct labour project which does not meet its requrements. It is a practical non-ideological report by non-partisan public officials.
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  On 24th June the Sunderland Echo reported that the latest estimate for the cost of the town's new sports centre was nearly double the original estimate and that the job was 13 months behind schedule. It is being carried out by the direct labour department. On 10th July the Evening Despatch—
  Mr. Eric S. Heffer rose—
  Mr. Bagier Mr. Bagier rose—
  Mr. Latham: I shall not give way to the hon. Member for Liverpool, Walton (Mr. Heffer). I shall give way to the hon. Member for Sunderland, South (Mr. Bagier).
  Mr. Bagier: Does the hon. Gentleman agree that the difficulties of building the sports centre were partly to do with the supply of materials? Also, will he explain why the right hon. Member for Crosby (Mr. Page), when he was a Minister responsible for local government, specifically debarred local authorities with direct works departments from tendering for houses for sale in Sunderland, stopping them halfway through a contract? Will he not also—
  Mr. Deputy Speaker: Order. The intervention has been long enough.
  Mr. Bagier: May I quickly ask the hon. Member whether he agrees that profits made by the local authority have been exceptionally good?
  Mr. Latham: The Sunderland direct labour department went into a contract knowing the conditions about materials and the specifications, just like any other contractor. If it could not get it right and ended 13 months behind schedule, that is a good reason why it should not have been awarded the contract in the first place. If a contractor had gone wrong, the penalty clauses would have been enforced against him. It is no good the hon. Member for Liverpool, Walton shouting. That is the truth of the matter and he knows it. Let us get on and implement the CIPFA Report.
  8.48 p.m.
  Mr. Joseph Dean: It is interesting to listen to a debate on the merits and demerits of direct labour. When I was in local government I was chairman of possibly one of the most

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  successful large direct labour organisations in the country—the one in Manchester. I do not proclaim that everything is right with direct labour. A bad direct labour organisation is a bad advertisement for that type of building organisation. I have always professed that it must be measured by its financial as well as its social success. Naturally, the hon. Member for Aylesbury (Mr. Raison) dwelt only on its failures.
  The hon. Member for Melton (Mr. Latham) mentioned the question of the Salford direct labour department and what happened there about a decade ago. He did not mention that next to Salford was a direct works organisation, four or five times as large, which was operating extremely successfully. It would be well if I were to recount that success. It was all done in competition.
  In 1959 we decided to form in Manchester a comprehensive direct labour department from some of the splinter departments which already existed. The success of that department is shown by the fact that it has built in competition 17,000 houses of various types, including high-rise flats, so that Manchester is in sight of the end of its building programme. Nobody else in the area could have built the houses. Perhaps it was 30 to 40 per cent. of its building programme. If the direct labour organisation had not been operating, Manchester would have had a shortfall of 15,000 houses or more.
  During that time it also built 50 schools, almost breaking the back of its slum school problem. Quite a lot of work, which was secured for the department in competition with the private sector, was sanctioned by a Conservative Secretary of State.
  The only time the matter became political was when the Labour Party lost control in 1967 and the Conservatives were looking for niggers in the woodpile. They were trying to discover something, and there was a full and comprehensive examination of the direct works department by no less a person than Mr. Harry Page, now Sir Harry, an adviser to the National Savings Movement and other reputable national organisations. After a long and intensive examination of the accounts, he expressed the opinion that the direct labour organisation in Manchester was of immense value to the city
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  and had saved the ratepayers great sums of money. Apart from showing realistic savings on contracts compared with the lowest private sector tender, it had kept down the level of other tenders.
  I could give other examples of success stories across the board. One concerns an electric wiring scheme. To test the water in this direction, we asked the Electrical Suppliers Association to nominate a contractor to carry out a scheme at the same time as the direct works department, based on the same bills of quantity and the same number of houses, on an almost identical estate. The department showed savings of 33 per cent. or more. Are the Opposition saying that we should abandon such departments? I do not believe that we should.
  The hon. Member for Daventry (Mr. Jones) talked about social responsibility. I am not sure what his context was. Can any Conservative Member tell me who in the private sector is accepting social responsibility today by enrolling apprentices in sufficient numbers? I do not know of any firms that are, though the apprentices are the industry's seed corn of the future. The city which with I used to be associated, and of which I have spoken at some length, has more than 4,000 employees, of whom 500 are apprentices. When they end their apprenticeships most will probably go into the private building sector and serve it very well, as they will have had a comprehensive education in the building industry.
  Mr. Tebbit: The hon. Gentleman asked a question about apprentices, and I can give him the answer. In 1974, 36,519 apprentices were registered with the National Joint Council. Only 8,981 of them were employed by local authorities, according to Housing and Construction Statistics, No. 14.
  Mr. Dean: I am not disputing the figures, but I do not think that the hon. Gentleman's comparisons are fair. The number of employees in the private sector is far bigger. Can the hon. Gentleman tell me of any major building company that will employ 500 apprentices in a construction department employing 4,000 workers? I know that building firms are not employing apprentices. Some time ago representatives of the Federation of

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  Civil Engineering Contractors expressed alarm to me because they could not take on apprentices owing to the cutback in building and construction programmes.
  It would be remiss of me not also to mention the employment of disabled people. Are any of the wonderful building organisations in the private sector honouring their commitment to employ a percentage of disabled people? They are not. But the department about which I have spoken has a social conscience and is employing more than the required percentage. This debate illustrates the differences of philosophy and thinking between the two sides of the House.
  I have referred to the attack which took place in Manchester. When the city treasurer's report indicated that the department had been successful, the sordidness of the political attack by members on the other side had to be seen to be believed. They could not find anything wrong, so they moved a resolution that the direct labour department should be allowed only to construct houses and maintain houses and other corporation buildings. They wanted to take the department out of the school building programme where it had been showing savings of 5 per cent. to 10 per cent. on the lowest tenders from the private sector. If this were not a criminal attack within the law on ratepayers' money, I do not know what would be. Some of the people on the other side of the political spectrum were delving in murky waters and we resisted their resolutions. The department is flourishing as strongly as ever.
  Of course, there are bad direct labour organisations which need to be organised properly. There are just as many bad private builders who need to be organised better, but the suggestion propounded by the Opposition tonight that ratepayers do not pick up the bill if a private firm fails is nonsense. In Manchester, a contractor went bust and before we could get a man on to the site to take over the contract, we had to spend £40,000 shifting rubbish.
  We should have a more balanced approach to this subject. Let us take it out of politics and give encouragement where it is deserved. Direct labour departments have to stand on their success.
  8.57 p.m.
  Mr. Stephen Ross: I agree entirely with the last few words of the hon. Member for Leeds, West (Mr. Dean). The argument about direct labour in local authorities is stale. There are good as well as bad direct labour departments. We have to root out the bad ones.
  I am opposed to the far-reaching powers sought by the West Midlands County Council in its Private Bill and I also have grave doubts about the Greater London Council's Bill which seeks additional powers to bid for work in the private building market. It is inevitable that that will lead to abuses, and it is unfortunate that it comes at a time when the building industry is suffering from unemployment and many other difficulties.
  However, I do not want to put the clock back and to bar all local government building work. There is a good case for authorities maintaining a direct labour department, especially for highways, building, and maintenance. They must be properly controlled. There may even be a case for extension. This is a possibility that we might look at in a regional context and perhaps it will be dealt with in the White Pacer. In cases of emergency first aid and disasters—for instance, in the recent gales and floods—local authority direct labour departments could get in fast with first aid work.
  My own county council is obliged to go out to tender where labour costs exceed £20,000—except where the full council decides not to do so, and that would be only in the case of threatened redundancies in its own department. I am satisfied that everything done by that authority—I was a member of it for seven years—is in accord with the CIPFA recommendations. I will not go into them now, but they are important.
  Local authorities—my local authority is one—can be faced with near monopolistic situations when going out to tender for bigger schemes. That is another reason why it is important to maintain direct labour departments. There is such a situation in the Isle of Wight where there are few big contractors.
  The former county architect was opposed to the setting up of a direct

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  labour department at one time—it now has over 40 employees—but he became fully convinced that it was a good thing after it had been in operation for a number of years. If it had not been in existence in 1972–73, we would have been in terrible trouble. It was almost impossible to get tenders even for small jobs. I vividly recall one case in my village which concerned a disabled lady who required some small fittings put in her bathroom—hand rails, and so on. We eventually got some cowboy to do the job for £2,500. The workmanship was so shoddy that we had to do the job all over again. That cost the ratepayers a pretty penny. There was a terrible waste of public money at this time. There is a sensible middle path. In a well-run economy, which we must hope finally to get, such violent fluctuations as occurred in those years should not occur.
  Why councils should want to enter the whole gambit of retail trading is beyond me. I suggest that they do not have the necessary entrepreneurial flair. Who will work on Saturday mornings and afternoons? Will they work a five-day week? From where will the managers come to run the enterprises? The nationalised industries already are reputedly short of managers. From where will local government get them?
  Before coming to this House I was involved in estate agency. I am a chartered surveyor. Estate agency, understandably, is a favourite whipping boy of hon. Gentlemen opposite when it comes to local authorities moving into this area. Some authorities have already played a small part in it. Southampton was involved in the early 1970s, but it soon stopped. It had a multiple listing scheme. However, it did not have a happy experience.
  Certainly a great deal needs to be done by estate agents to put their house in order. We have seen examples, because they have had a bad Press. The whole business of buying and selling is unsatisfactory. I have said so many times from this Bench. It is costly and complicated. However, it would be a great deal worse if it were municipalised. It is up to the profession to put its own house in order. I would welcome further legislation on the question of registration. The estate agents' council was established at one time, but it has since folded up.
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  The West Midlands County Council Bill comes at an unfortunate time. There are now welcome signs of new faces coming into the secondary shopping units. On Saturday I was eating fresh baked bread from a new bakery which has opened in a local village. People are beginning to come back into arts and crafts. They are manufacturing glass, furniture, and so on. I consider the proposed West Midlands County Council Bill to be a gross waste of the ratepayers' money. I do not know what it has cost the authority, but I suspect it is about £10,000. If there is a call to extend the powers of local authorities in this area, it should be implemented in a Government Bill. I certainly look forward to the Minister's remarks on the West Midlands County Council Bill, because I want to know the Government's position. If it is not made clear, I shall advise my right hon. and hon. Friends to join the Opposition if they decide to divide the House.
  9.4 p.m.
  Mr. George Park: I should like to join my hon. Friend the Member for Leeds, West (Mr. Dean) in his appeal for a more balanced approach to matters affecting local government. Regrettably, on each occasion when any aspect of local government is discussed in this House, prejudiced views colour the comments of right hon. and hon. Gentlemen of the Opposition.
  There can be no doubt that this is because some of their opinions are based on prejudice and are not the result of a serious examination of the various matters that come under the head of this debate. Conservative Members reserve to themselves the right to criticise local government in connection with rates. Taken to the extreme, there is the commitment that rates will be done away with when the Layfield Committee reports. It is a fair bet that, whatever Layfield says, rates will remain a major element of local authority financing.
  Particular fun has been had tonight at the expense of the West Midlands County Council. One would think that this proposition by the county council was the result of a capricious whim, but the fact is that, fundamentally, this measure springs from local government reorganisation on 1st April 1974. There were many local Acts applying in the west Midlands

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  prior to that date, but when local government boundaries were reorganised those local Acts applied only to the old areas. In 1979 all the local legislation in the west Midlands area will lapse. At minimum there has to be a consolidation exercise.
  Local government cannot win when it tries to put a proposition to Parliament. If it brings in single items to be enacted by legislation, and even if there is general agreement on them, the local authority is asked why it brings in things in penny numbers, and it is told to bring in a number of things together and Parliament will deal with them in one measure. When a local authority puts forward a Bill that contains, admittedly, disparate elements, people choose to make fun of it.
  In this case the West Midlands County Council is acting as a co-ordinator. In large part, the content of the Bill has been put forward by the district councils which go to make up the county council area. Rather than a summary dismissal of the Bill, which is what we have had from Tory Members, I appeal for an opportunity to be found for these district councils to come to deploy their case and give chapter and verse for wishing to pursue certain activities. I do not ask the Opposition to accept the whole measure off the cuff, as it were. I ask that the district councils be given a chance to put their case.
  Mr. Eyre: I hope the hon. Gentleman is aware that three of the district councils have voted against the adoption of these powers.
  Mr. Park: By that comment the hon. Gentleman illustrates the non-attention to what goes to make up this proposition. It is true that there are elements in it that are not related. Motor racing applies only to Birmingham. The Birmingham District Council is the only authority talking about this matter. None of the others has mentioned it.
  Dogs are another subject of debate. Many letters have been written about the trouble caused by dogs, and on three successive evenings the Coventry evening papers reported incidents. Dogs were running wild at a playground and dragging children across it. People were
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  totally unable to control these animals. Old people are frightened to go outside their homes because of the dogs. The opposition comes not from the owners, or nominal owners, of these vagrant dogs but from responsible people who care for animals. We get protests from the wrong section of the community. If all the local legislation is to lapse in 1979 it is no good people saying that existing legislation will deal with the problem.
  As I understand it, there is no intention on the part of the county council to operate in direct competition with privately-owned businesses, but only where private enterprise has been unwilling or unable to provide for a clearly-seen need. Probably the most outstanding example is chemists' shops. On many housing estates in the West Midlands there are no altogether satisfactory chemists' shops and people have to travel long distances for them. Whether it is private enterprise or the Co-op, they are unable or unwilling to provide these facilities. Local authorities should have the opportunity to fill such gaps.
  The county council is drawing together the threads of the desires of other district councils, but it is not true to suggest that a whole host of new provisions is suggested. These are mainly extensions of existing powers. How can anyone ask the West Midlands County Council to be the arbiter, given the delicate relationships which have applied since local government reorganisation? All metropolitan, shire and district councils, irrespective of political party, have a hard task trying to establish relationships after a reorganisation introduced by the Conservative Party despite the fact that no one wanted it.
  I hope that the House will give the county council the opportunity to make its case and to be examined. Where there are flaws, amendments can be suggested, but the whole Bill should not be summarily thrown out.
  We had a direct labour department when I was Leader of Coventry City Council. After we lost power, the opposition disbanded that department almost overnight and sold off, at bargain basement prices, the expensive equipment which had been painfully built up over a number of years. Hon. Members talk about wasting ratepayers' money, but nothing grated on me more than the fact

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  that, within a matter of weeks of that deal, we were hiring back, from private enterprise, equipment which had been flogged off to it at rock bottom prices.
  Currently under the West Midlands County Council, there is being carried out by private enterprise a contract which started with a price of £1,372,000. It has now reached the figure of £2,840,000 and is the subject of legal proceedings. That is under private enterprise, not direct labour. I therefore hope that the hon. Member who suggested that this never happened under private enterprise will have second thoughts.
  Several Hon. Members Several Hon. Members rose—
  Mr. Deputy Speaker: May I thank hon. Members for responding so readily to my appeal for brevity? As a result, in one hour we have had eight useful contributions.
  9.14 p.m.
  Mr. Teddy Taylor rose—
  Mr. Heffer: This will be the exception.
  Mr. Taylor: More than half the people of Scotland live in council homes or homes owned by public agencies and almost all are repaired or maintained by direct labour departments. In those circumstances, I have been staggered that throughout this important debate not one Scottish National Party Member, all of whom claim to speak for Scotland, has been present. If this is a prelude to what we might expect from self-government, I hope that the people of Scotland will notice that on such a vital issue the nationalists do not appear to care or want to know.
  I am also surprised that on this issue we have not had a Scottish Minister present during the debate, despite the fact that many important Scottish aspects are involved. I hope that the Minister, in winding up the debate, will give some information on this matter.
  It is certainly my intention, if I do not get a satisfactory explanation, to seek to raise tomorrow, as a matter of privilege, a most astonishing situation which, in my view, shows on the part of the Government almost a conspiracy to hide the facts about direct labour in Scotland.
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  I say this because the Minister, in his very interesting and rather constructive speech at the beginning, gave details of numbers employed and work undertaken by what he claimed to be direct labour departments in Scotland.
  I have been very anxious for some time to find out the facts about direct labour in Scotland. I wrote a letter to the Secretary of State for Scotland on the 18th December asking whether he had any records or any information, without specifying a date. I did not ask for today's information or for last year's information. I simply asked whether he had any records available about the number of direct labour departments in Scotland or the number of people employed by such departments.
  I received a letter on 6th January, several weeks later, from Lord Kirkhill, Minister of State at the Scottish Office, saying,
  "You asked if there are any records available about the number of Scottish local authorities who have direct labour departments and the number of people they employ. I am sorry that no such information is available to the Scottish Office, nor is there any requirement on local authorities to supply it."
  First of all, if the Minister says that the information he has is different, I should like to know from which source the information given by the Minister for Housing and Construction came. If the answer is that he received it from the Scottish Office, in my opinion there is a case for investigation as to conspiracy to hide the facts. This is a vital issue. We want to have information about direct labour so that we can talk from a basis of knowledge.
  If a man in the street were listening to this debate he would wonder who on earth to believe. There have been compelling arguments from the Conservative side about rotten direct labour departments, and there have been compelling arguments from Labour Members about good direct labour departments.
  My own opinion is that direct labour is not successful, and that is based on five years experience on the Glasgow City Council. There were some astonishing attempts at direct labour, involving the running of farms and attempts to engage in property development. We even won prizes at cattle shows. But invariably these attempts at direct labour were a

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  financial disaster. This does not in any way condemn direct labour, but that was my experience, and in Glasgow we have a committee of inquiry looking into our affairs at the present time.
  What we need to know is whether there is any way in which we can protect the ratepayer and private industry from unfair competition. I believe that it is in the interests of those who support direct labour and also of those who oppose it that we should have the facts. Competition ought to be on a just basis.
  In a publication of the Institute of Municipal Treasurers and Accountants it is stated that in Glasgow we have 169,000 council houses, of which over 100,000 are post-war. This is in a tight area, therefore presumably they are easier to maintain than houses in a scattered council community. But, according to this report, the full cost per year for repairs and maintenance was over £80 per house.
  I challenge the Government to say whether they know of any city or district anywhere in Scotland where the cost of repairs and maintenance—almost exclusively by direct labour in this case—is anything like that figure. Do they know of any area where the tenants of council houses are so dissatisfied with the standard of maintenance and the attention they receive? They are not getting the kind of service that council tenants are entitled to get.
  The Government ought to do something to help both their supporters and those on the Conservative side who are concerned with the cost of direct labour. We must first have properly detailed accounts for every direct labour department, so that we can see whether the whole story has been told about repair and maintenance contracts and new building work. Secondly, every council should be obliged, when an excess cost is declared for either a private contractor or a building department, to refer it to some kind of independent tribunal. My experience on the city council was that if the direct labour department faced a prospect of overspending, there was an application for an excess cost relating to some special structural problem, and the bill was always paid. What we want to ensure is fair and equal treatment. That is why all excesses on top of normal escalations should go to an independent tribunal—
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  perhaps a Scottish office tribunal and a Department of the Environment tribunal as well.
  Thirdly, we should never have or be permitted to have an exclusive monopoly for a direct labour department for any service. For example, let us say that we agree that the department is to do all the house maintenance in Liverpool or in Manchester, Birmingham or London. We should say, in order to obtain a comparison of costs and efficiency, that there must always be provision that the maintenance in one area should be done differently. Many of Glasgow's problems would be resolved if we had a comparison, services in part of the city being done by tendering by private firms and in other parts by direct labour.
  Lastly, there should be no subsidy, general or indirect, of building departments.
  We want more information and fair competition. It is in the interests of both those who support and those who oppose direct labour that all the facts are disclosed so that we can be seen to have fair competition in the interests of ratepayers and taxpayers.
  9.21 p.m.
  Mr. Robert Hughes: I am rather surprised at the naiveté of the hon. Member for Glasgow, Cathcar (Mr. Taylor), concerning statistics about construction and so on in Scotland. His letter to the Scottish Office must have been very badly phrased. He is also showing a depth of ignorance at which I am surprised, bearing in mind his past. There is a document called "Housing and Construction Statistics", published quarterly, I think, by the Department of the Environment, the Scottish Development Department and the Welsh Office, which includes all the statistics that the hon. Gentleman wants. On page 72, for example, we see that in October 1974 there were 24,702 building operatives employed in construction work in Scotland for local authorities. I am referring to the latest edition of the document that is available to me. In the third quarter of 1974 they had completed nearly £26 million worth of work.
  The hon. Gentleman is an ex-Minister of the Scottish Office. Unless I am mistaken, he had the Scottish Development Department under his control—admittedly

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  for a very short period of two or three weeks, but I should have thought that even in that time he would have been able to glean the fact that these statistics were published quarterly and would not have to rest on a letter sent to a Scottish Office Minister to get the figures. As is often the case, the hon. Gentleman is far too lazy in doing his own research and therefore seeks someone else to do it for him.
  However, the hon. Gentleman has also gone on record as looking at only the bad side in respect of local authorities. The truth is that up and down Scotland there are direct labour departments which are a great credit to local authorities. I mention Fife and Dundee as two examples. Their direct labour departments not only build houses but also go into other work. Dundee has built schools and community centres through the direct labour department, and they are an outstanding success.
  The trouble with Opposition Members is that they see things in a totally black-and-white situation. They are concerned only to criticise that which is bad. If things can be shown to be bad, all of us would wish to criticise them. However, I wish that Opposition Members were a little fairer and would point out the good things in local authority direct labour departments.
  This is not confined only to house-building and repairs and maintenance. It is curious that some hon. Members want the local authority direct labour departments to do only the repairs and maintenance, which is the side of the industry that most builders in Scotland and, I am sure, elsewhere do not want to touch. It is too difficult, too scuttery, and there is not much profit in it.
  Direct labour departments up and down Scotland have done splendid work on roads. I am sure that the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith), who was also at the Scottish Office, will know that Aberdeenshire County Council, as it then was—it no longer exists because of local government reform—had an outstanding record in major road building in the North-East of Scotland in direct competition with private enterprise. There is a case for good local authorities doing good direct labour work.
  One could say a lot about companies which have gone bust and have had to
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  be bailed out at tremendous cost to ratepayers. Some socially desirable projects, such as occupational centres for the mentally handicapped, could not even be finished by the builders, despite their being bailed out by the local authority, which paid the bill to keep them going.
  I believe that there is a very great role for direct labour departments, for local authorities to spread their wings and provide competition. It never ceases to amaze me when building companies in Scotland, particularly in Aberdeen, combine to form big construction groups, because even when they were separate and submitted separate tenders for work, even when tenders were for contracts costing £7 million or £8 million, they were within pence of each other. We should encourage the local authorities to spread their wings. It would be good for the public, good for the local authorities, and good for the ratepayers.
  9.25 p.m.
  Mr, Keith Speed: I begin by declaring my interest. I am consultant to a company engaged in competition with direct labour, so I have a certain detailed knowledge of the subject.
  The debate has been marked by an air of sweet reasonableness among hon. Members opposite. They have leaped to the defence of individual direct labour departments. They have missed the point. We have never said that there should be no such thing as direct labour organisations. I am the first to say that there are direct labour organisations which are efficient and well run and which, by and large, comply with the CIPFA recommendations. But the important point is that many of them do not, and we still do not know the Government's attitude to trying to tighten up the system and prevent waste of resources and the drain upon the ratepayers of these inefficient organisations.
  The Minister for Housing and Construction seemed to try to eat his cake and have it par excellence on the CIPFA Report. To use an American expression, the membership of the new committee is a hung jury. My hon. Friend the Member for Melton (Mr. Latham) pointed out that its members lack experience and also expert advice from the auditors on how they can get to grips with the problem. He said that the committee would not start its work until next month. He

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  said that it would look at all the problems and that, because it would be taking the CIPFA evidence into account, it would be wrong for the Government to put a point of view at the moment on the CIPFA recommendations.
  Mr. Freeson: I did not say anything of the kind.
  Mr. Speed: If the hon. Gentleman did not say anything of the kind, I will ask him or the Secretary of State now whether they will accept the main CIPFA recommendations. I have asked this at Question Time several times. If, without prejudice to whatever comes out in the committee's report, the Government would accept the main CIPFA recommendations about separate trading accounts, proper competition and comparing like with like, many of our doubts and hesitations would disappear. But they are not prepared to do so.
  The hon. Gentleman went further and said, apparently, that it is right for the Greater London Council or other local authorities to seek to extend the powers of direct labour well in advance of his own committee reporting. That is not good enough. He also used the phrases "social ownership" and "social enterprise". They are delightful euphemisms, but who, at the end of the day, is responsible and picks up the tab? All experience of nationalised industries if nothing else shows that no one, at the end of the day, feels either responsible financially or a sense of paternity or maternity for these organisations.
  Let us look at the situation which many small and not-so-small businesses are facing. The Chancellor of the Exchequer does his best to help by introducing multiple rates of value added tax. They are paying more in taxation. Regulations stream from the Department of Prices and Consumer Protection and other Government Departments. We know the problems of the rates, particularly commercial rates. The hon. Gentleman will recollect that last April the Government refused to help commercial undertakings with a modest improvement which would have given a modest relief from commercial rates. Now there is the West Midland County Council's Bill.
  The Under-Secretary of State is a very reasonable and modest Minister—I hope
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  I do not embarrass him by saying so. The Minister for Planning and Local Government is a very reasonable man, although I am not sure that he is so moderate. But last April, when the right hon. Gentleman was questioned, not only by the hon. Member for Cannock (Mr. Roberts) but by me, he said that basically he was very much in favour of the sort of thing that the West Midlands County Council was trying to achieve. He was being asked for Government time for legislation, but said he could not promise it at the moment, although it was the sort of thing he wanted. When I said I thought this was wrong and I suggested that it would be better to ask local authorities to say that they would cut back, he said that it might be better but that it would be dishonest.
  We are entitled to know from the Minister, whatever he says or whatever his right hon. Friend said last April, what is the Government's view about this. I think the West Midlands County Council has wasted a great deal of ratepayers' money in preparing this Bill. There are many things in the Bill which are unacceptable not only to hon. Members but to many of the people whom they represent.
  We have already heard about organisations such as the co-operative society and USDAW. If at the end of the day the West Midlands County Council gets its Bill through, is the Under-Secretary going to give a pledge and a commitment that he will not take advice of his 43 hon. Friends who signed an Early-Day Motion that he will go against his right hon. Friend who made sympathetic noises last April?
  On the question of direct labour, nobody tonight has mentioned one matter which concerns me greatly. That is the growth of direct-labour in some of our nationalised industries and in some of the water authorities. Here we have a situation in which the Secretary of State, I think, will agree that water authorities, like local authorities, have got to watch their staff, expansion and costs very closely. Yet I am concerned that it is possible for many of the problems mentioned by my hon. Friends tonight to arise with the growth that some of these water authorities may be seeking. Many of them are discussing their budgets at the moment, and they may be taking

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  on additional staff at a time, as my hon. Friend the Member for Melton pointed out, when the building industry is up against it and is finding it extremely difficult to get work and, as we all know, there is massive unemployment among building operatives.
  Nowhere is the difference between the two main parties more evident than in the sort of debate we are now having. We on this side of the House believe in the strength and the freedom of local authorities to do what they alone can do. I believe—and I say this having had experience in the Department of the Environment—that much should be moved from Whitehall to county hall and town hall. This is a kind of devolution which strikes a particular chord with me and, in terms of England, I think it is something which many county councils and local authorities would wish to see happen.
  If the Under-Secretary agrees with me, hope he will bear in mind the comprehensive-secondary reorganisation Bill which the Government are determined to introduce, which goes contrary to that concept. As a nation, I am convinced that we are over-governed, both at national and local level. The public sector is growing at a rate that is not sustainable even by a thriving economic private sector, and after two years of Socialism we do not have that.
  One fundamental gut point which has not come through in this debate is that it is no part of local authorities' activities to undertake direct labour organisations where they have no control, where they can be putting their own local building firms out of business, and neither is it a part of local authorities' activities to engage in a massive expansion of municipalisation, from manufacturing furniture to travel agencies and flower shops at a time when the Secretary of State and even the Prime Minister, if I read correctly his remarks at Eastbourne, are saying that local government has got to cut back and trim its suit according to its cloth.
  If that is the situation, how it be that Socialist local authorities—and Tyne-Wear, West Midlands and Greater London are Socialist local authorities—are embarking upon this course? The fact is that they have embarked upon this course because they fundamentally believe in what they are doing. The right hon.
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  Gentleman the Minister for Planning and Local Government fundamentally believed in the sort of support that he was giving, and we do not. We take the view that, at the end of the day, the consumer is best served by the choice, the competition and the sort of service which free enterprise and small and large businesses can give.
  In direct labour organisations, on the other hand, we do not know whether the competition is fair, since many direct labour departments do not publish any sort of accounts so that the ratepayer or anyone else may judge whether it is fair. We know also that the Government, by hedging and prevaricating over the CIPFA Report, are not prepared to say that they will see that a proper account and report of stewardship by direct labour organisations can be given to those who foot the bill, the ratepayer and the taxpayer.
  There is growing evidence that these Private Bills and what the Minister has had to say both last year at conferences and more recently at Question Time spring from a fairly stubborn Socialist prejudice, the belief that the way to bring about the sort of social revolution which hon. Members opposite wish to see can be found not necessarily in open front-door nationalisation but through this sort of measure, so that more and more people are put out of business and, at the same time, to their chagrin, have to subsidise unfair competition.
  The hon. Member for Coventry, North-East (Mr. Park), unlike most of his hon. Friends, spoke directly about the West Midlands County Council Bill. The truth is that he is talking about chemists' shops, and whether it is in the best interests of West Midlands ratepayers and residents that there should be chemists' shops in out of town estates or wherever it may be, requiring the spending of considerable sums of money—that being the situation of many private chemists today. I cannot believe that that can be right.
  If there is difficulty in dealing with prescriptions and the supply of drugs, the obvious thing to do is to talk to the area health authority or other authorities dealing with these matters. My information is that no such discussions have taken place. But if there is a problem, that is the first step to take. The local authority should talk to those who are in the best

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  position to influence matters and see that prescriptions can be dealt with.
  Mr. Park: After talking to the area health authority, where do we go from there? Will the hon. Gentleman give us the follow up? We have talked to them. What happens now?
  Mr. Speed: My information is that constructive discussion has not taken place, and I understand further that there has been no constructive consultation between the West Midlands County Council and others interested who were originally asked to comment on the Bill. The truth is that the West Midlands Bill and the other Bills which we are discussing—
  Mr. Michael Morris: The simple answer is that family practitioners are empowered to run a dispensing service over a three-mile radius from a chemist, and I believe that they may seek permission to reduce that to one-mile radius if they choose.
  Mr. Speed: I am grateful to my hon. Friend. The fact is that there has not been meaningful consultation with any outside interest, and the West Midlands County Council is determined to pursue its path. No doubt many hon. Members opposite would support the council in that, but I shall be most interested to hear the Government's view.
  I give warning, both nationally and locally, that the Conservative Party will frustrate these knavish tricks, because we believe in responsible capitalism, whereas so many hon. Members on the Government side do not. We believe in thriving and prosperous small businesses, and many Labour Members and others in the Labour Party do not. We believe in fair competition, in the power of the customer and in choice, and many hon. Members opposite do not.
  We are at present engaged in a battle for free enterprise, which is threatened on many fronts as never before. This is a battle which we shall win, for the destiny of this country is not in the boggy quagmire of municipal Marxism which so many hon. Members, especially those who signed the Early-Day Motion, would like. When the district elections come in 14 weeks, the people will show in no
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  uncertain manner what they think, when Socialism is swept out of our town halls. In the meantime, in view of what has been said so far, unless we have some firm assurances from the Minister I shall recommend my right hon. and hon. Friends to join me in the Division Lobby.
  9.40 p.m.
  The Under-Secretary of State for the Environment (Mr. Gordon Oakes): The hon. Member for Ashford (Mr. Speed) had the decency and goodness to say that most of the sweet reason he had heard in the debate had come from the Government side of the House. I think that he is right. On balance the debate has been a dismal, dreary repetition of many of the hysterical arguments that we have heard from Conservative Members over decades on municipal trading and direct labour departments.
  I find it a matter of astonishment that the Opposition chose on a Supply Day to debate during the afternoon releases from mental hospitals and during the evening, on a three-line Whip, to debate municipal trading and direct labour. They chose to do so at a time when the Leader of the Opposition is attacking the Government and criticising the build up of Russian naval power. Of course, I defend the right hon. Lady's right, or anyone else's right, to say what she wants about the Soviet Union or any other country. However, I find it astonishing that the Opposition, given the chance to debate major issues, decided to use a Supply Day on a debate such as this.
  I must comment on the superb timing of the Opposition. At a time when their Leader is making her remarks against the Soviet Union and when Dr. Kissinger has been engaged in Moscow, they choose to introduce this debate a week before a major municipal enterprise that was backed by them as well as by my hon. Friends—namely, the National Exhibition Centre—will open.
  Mr. Raison: What has that got to do with it?
  Mr. Oakes: That building and that construction results directly from certain clauses in a Private Bill. That building is the result of a municipal enterprise in the West Midlands that has been criticised tonight by the Opposition. On this very day that building has received from the Institute of Marketing, a completely

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  non-political body, an award for the enterprise and initiative shown by the City of Birmingham and the Birmingham Chambers of Commerce. That award has been given even before the centre has started operating. We have this building because of the powers that have been given to local authorities in this House.
  Mr. Tony Durant rose—
  Mr. Oakes: I do not wish to dwell at great lengt on direct labour organisations. That subject was fully dealt with by my hon. Friend the Minister for Housing and Construction. His arguments have stood very firm against all the petty sniping that come from the Opposition.
  The hon. Member for Daventry (Mr. Jones) said of direct labour departments that he honed that a Minister would condemn maladministration. Of course I condemn it. Where it exists I condemn maladminstration in direct labour departments as much as in private firms. However, what the hon. Gentleman calls maladministration is when a local authority tender is put out and then it is decided that it can do the job far more cheaply itself. That is what he calls maladministration. He would not say so if that action were taken by a private firm. I accept that there are regrettable cases of direct labour departments doing things wrongly, but the hon. Gentleman should not castigate every direct labour department as some tend to do, any more than I or my hon. Friends would criticise all private industry because of the mistakes that it makes.
  Some Conservative Members have mentioned the ratepayers. Let it be remembered that the mistakes of private industry often lead to redundancies. Various difficulties are then experienced by local authorities. Many private firms come to central Government for money. Private consumers are often left to pay for an inadequate house. That is the result of inefficiency. However, I do not condemn the whole of private industry because of that. I ask Conservative Members to be reasonable about direct labour departments and not to criticise all of them for a few mistakes.
  Mr. Arthur Jones: I welcome the Minister's assurance. May I ask him to go step further and say to what extent the Government are prepared to monitor the
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  performance of direct labour departments with the benefit of independent audited figures in respect of large contracts?
  Mr. Oakes: My hon. Friend the Member for Housing and Construction said that the working party was now considering that matter. No doubt eventually my hon. Friend will be making a statement on the matter.
  The hon. Member for Daventry said that some direct building departments had an acceptable part to play. Certainly his right hon. and hon. Friends when in Government agreed with him. For example, direct labour departments were even allowed to build houses for sale—but the Conservative Government denied them that right.
  We heard an intriguing speech from the hon. Member for Blaby (Mr. Lawson). The hon. Gentleman quoted from advertisements placed by the Greater London Council. I did not understand the purpose of the hon. Gentleman's speech. I could not discover whether he was saying that GLC tenants should not own cars or television sets. Having heard the long list of details presented by the hon. Gentleman, I was expecting him at any moment to produce a document showing that coal merchants were interested in the size of the average GLC bath so that they would be better informed as to customers' requirements. His argument almost reached that level.
  Mr. Lawson Mr. Lawson rose—
  Mr. Oakes: No, I will not give way. I wish to inform the hon. Member for Aylesbury (Mr. Raison) that the recommendations of the committee to which he referred are being considered and a statement will be made to this House.
  Mr. Thomas Swain rose—
  Hon. Members: Do not give way.
  Mr. Oakes: I will give way to my hon. Friend.
  Mr. Swain: Will my hon. Friend inform the House about the situation regarding direct labour departments in local authorities where young men are employed, extraneous to requirements, to clean parks and so on? When the final accounting is dealt with for the payment of those wages, will those final accounts

  163
  be passed by the district auditor? If that is to be the case, how does the Minister explain why the Clay Cross authorities were castigated for doing just that?
  Mr. Oakes: Opposition Members were right to warn me not to give way. It serves me right. No doubt the Minister will write to my hon. Friend about the detailed point he mentioned, but I shall not pursue the matter now.
  I turn to the other main theme of the debate, the subject of municipal trading. Many Opposition Members sought to generate a great deal of heat, rather than light, on the subject of building promoted by the West Midlands County Council. My hon. Friend the Member for Coventry, North-East (Mr. Park) was right in his approach to the Bill.
  Dealing with the comments made by the hon. Member for the Isle of Wight (Mr. Ross), although I do not think we are in danger in the Division Lobby tonight, I should not like to think that the Liberal Party wants to be associated with the attack levelled at us by the Conservative Opposition without the House having heard an explanation from me on the Government's approach to the Bill which has been mentioned.
  Hon. Members have been referring to a Private Bill that can be dealt with through the ordinary procedures of this House and not during a Supply Day debate. My hon. Friend the Member for Coventry, North-East pointed out that the powers which local authorities now have will lapse under the Local Government Act 1972, in metropolitan areas in 1979, and in 1984 in the non-metropolitan boroughs. Local authorities will, therefore, seek Private Bills so as to rationalise the legislation and provide for continuing powers beyond those dates. I understand that the West Midlands County Council proposes to promote two Private Bills, a major one in the next Session and a shorter Bill, deposited with the House authorities in this Session. Among other things the Bill contains some new powers with regard to municipal trading.
  I will not comment in detail on that Bill. I have seen a great deal of correspondence about it in which some people seem to have become almost hysterical about its provisions. The hon. Member
  164
  for Birmingham, Hall Green (Mr. Eyre) is a solicitor and the hon. Member for Isle of Wight is an auctioneer. Conservative Members are accustomed to the way in which a company, when it is promoted, frames its article and memorandum. All kinds of things are included which are unlikely ever to be used. When a county council or a private body brings a Bill to this House it aims for the stars. Then it is for this House, Conservative Members as much as anyone else, to go through the provisions of the Bill and decide to what the private authority really needs as opposed to what it is asking for. That is exactly the position with the West Midlands County Council.
  Mr. Stephen Ross: Since the Minister is also a member of the legal profession may I ask him whether he would not feel that it would be better advice to West Midlands County Council, if it wanted to build a race track around Birmingham, to tell it not to include all the other clauses which are bound to cause great controversy and which must be opposed?
  Mr. Oakes: It goes much further than a race track round Birmingham. The authority is not seeking to engage in massive monopoly trading in the way that is being suggested. I wonder whether the hon. Member for Birmingham, Hall Green is aware that, under existing powers, Birmingham Corporation has extensive farming rights and owns half of every sheep in the area of the reservoirs of North Wales.
  Mr. Eyre: Under the Bill the West Midlands County Council has power to raise, without restriction by the Secretary of State, unlimited sums for public expenditure. They can be secured by loans repayable over 60 years. Is the Minister saying that the Chancellor could contemplate such unlimited expenditure at this time.
  Mr. Oakes: I said that I will not comment on the Bill in detail. I will say that my right hon. Friend the Secretary of State will be making a statement on the Bill to the House. I do not know what he or any other Secretary of State would say about a Private Bill that demands unlimited financial powers of that nature—but I can guess.

  165
  I turn to some more general remarks about local authority enterprise. Like my hon. Friend the Member for Luton, East (Mr. Clemitson) I am amazed at the philosophical maze into which Conservative Members wander when discussing municipal trading. It was a great Conservative, Sir Joseph Chamberlain, who introduced "municipal Marxism" and it has worked very well indeed. This has been a continuing thread in the philosophy of those Conservatives who were more concerned with the welfare of people in cities and towns as a whole than with the welfare of a tiny section of the population.
  The right hon. Member for Crosby (Mr. Page) only last year introduced a measure which was vigorously supported by his hon. Friends to allow local authorities to run lotteries. Is not that a form of municipal trading? Would not that be in competition with existing trading? The right hon. Gentleman said, rightly, that it would offer significant relief to the hard-pressed ratepayers. What a difference that was from the approach of the Opposition today.
  I should now like to consider the broader principle of local authorities acting as trading bodies. My right hon. Friend the Minister for Planning and Local Government has said before in the House that, in his view, local authorities should be given as much independence and freedom as possible—and that that independence and freedom should be given a purpose and a means to support that purpose. I fully associate myself with those remarks. I sympathise with local authorities which seek to extend their powers in a responsible way for the good of the community. I am proud to be a member of the party that, in its programme for 1973, said:
  "As a demonstration of our intention to breathe
  new life into local government and
  encourage local initiative … we would be prepared to implement the Maud Committee's recommendations that: 'Local authorities should be given a general competence to do (in addition to what legislation already requires or permits them to do) whatever in their opinion is in the interests of their areas or their inhabitants, subject to their not encroaching on the duties of other governmental bodies and to appropriate safeguards for the protection of private and public interests'."
  That is in our manifesto—
  "appropriate safeguards for the protection of private and public interests".
  One of the functions of the House, when considering a Private Bill, is to do precisely that. It does not need a Supply Day debate to determine such matters. In 1973 and early 1974 the Opposition piled injury on to local government. As a result of the disastrous reorganisation which introduced, democratic local government was put in an extremely difficult position. In debate after debate in the House, on subject after subject, the Opposition have added insult to that injury.
  In contrast, I am proud to be a member of the present Government who, for the first time in 30 years, gave local government the greatest single extension of its powers through the Community Land Act. The difference of approach to local authorities and local democracy between the Opposition and the Government can be seen in the Conservative Party's opposition to that Act as well as its sniping today about a Private Bill related to municipal trading. The deeds and speeches of the right hon. and hon. Members opposite tonight give the lie to the claim that they are concerned with responsible local government. I call upon my right hon. and hon. Friends to express in the Lobby their disapproval of the Opposition's peevish, petty, Poujadist view.
  Question put, That this House do now adjourn:—
  The House divided: Ayes 255, Noes 278.

  Division No. 34.]

  AYES

  [10.0 p.m.

  Adley, Robert

  Berry, Hon Anthony

  Bryan, Sir Paul

  Aitken, Jonathan

  Biffen, John

  Buchanan-Smith, Alick

  Alison, Michael

  Biggs-Davison, John

  Budgen, Nick

  Amery, Rt Hon Julian

  Blaker, Peter

  Bulmer, Esmond

  Arnold, Tom

  Body, Richard

  Burden, F. A.

  Atkins, Rt Hon H. (Spe borne)

  Boscawen, Hon Robert

  Butler, Adam (Bosworth)

  Awdry, Daniel

  Bottomley, Peter

  Carlisle, Mark

  Baker, Kenneth

  Bowden, A. (Brighton, Kemptown)

  Chalker, Mrs Lynda

  Banks, Robert

  Boyson, Dr Rhodes (Brent)

  Churchill, W. S.

  Beith, A. J.

  Braine, Sir Bernard

  Clark, Alan (Plymouth, Sutton)

  Bell, Ronald

  Brittan, Leon

  Clark, William (Croydon S)

  Bennett, Dr Reginald (Fareham)

  Brocklebank-Fowler, C.

  Clarke, Kenneth (Rushcliffe)

  Benyon, W.

  Brown, Sir Edward (Bath)

  Clegg, Walter

  Cockcrott, John

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

  Raison, Timothy

  Cooke, Robert (Bristol W)

  Johnson Smith, G. (E Grinstead)

  Rathbone, Tim

  Cope, John

  Jones, Arthur (Daventry)

  Rawlinson, Rt Hon Sir Peter

  Cormack, Patrick

  Jopling, Michael

  Rees, Peter (Dover & Deal)

  Corrie, John

  Joseph, Rt Hon Sir Keith

  Rees-Davies, W. R.

  Costain, A. P.

  Kaberry, Sir Donald

  Renton, Rt Hon Sir D. (Hunts)

  Crouch, David

  Kellett-Bowman, Mrs Elaine

  Renton, Tim (Mid-Sussex)

  Crowder, F. P.

  Kershaw, Anthony

  Rhys Williams, Sir Brandon

  Davies, Rt Hon J. (Knutsford)

  Kilfedder, James

  Ridley, Hon Nicholas

  Dean, Paul (N Somerset)

  Kimball, Marcus

  Ridsdale, Julian

  Dodsworth, Geoffrey

  King, Evelyn (South Dorset)

  Rifkind, Malcolm

  Douglas-Hamilton, Lord James

  King, Tom (Bridgwater)

  Roberts, Michael (Cardiff NW)

  Drayson, Burnaby

  Kitson, Sir Timothy

  Roberts, Wyn (Conway)

  du Cann, Rt Hon Edward

  Knight, Mrs Jill

  Ross, Stephen (Isle of Wight)

  Durant Tony

  Knox, David

  Rossi, Hugh (Hornsey)

  Dykes, Hugh

  Lamont, Norman

  Rost, Peter (SE Derbyshire)

  Eden, Rt Hon Sir John

  Lane, David

  Royle, Sir Anthony

  Edwards, Nicholas (Pembroke)

  Langford-Holt, Sir John

  Sainsbury, Tim

  Elliott, Sir William

  Latham, Michael (Melton)

  St. John-Stevas, Norman

  Emery peter

  Lawrence, Ivan

  Scott-Hopkins, James

  Eyre, Reginald

  Lawson, Nigel

  Shaw, Giles (Pudsey)

  Fairbairn Nicholas

  Lester, Jim (Beeston)

  Shaw, Michael (Scarborough)

  Fairgrieve, Russell

  Lewis, Kenneth (Rutland)

  Shelton, William (Streatham)

  Fell, Anthony

  Lloyd, Ian

  Shepherd, Colin

  Finsberg, Geoffrey

  Loveridge, John

  Shersby, Michael

  Fisher, Sir Nigel

  Luce, Richard

  Silvester, Fred

  Fletcher, Alex (Edinburgh N)

  McAdcien, Sir Stephen

  Sims, Roger

  Fletcher-Cooke, Charles

  Mc Crindle, Robert

  Sinclair, Sir George

  Fookes, Miss Janet

  Macfarlane, Neil

  Skeet, T. H. H.

  Fowler, Norman (Sutton C'f'd)

  MacGregor, John

  Smith, Cyril (Rochdale)

  Fox, Marcus

  Macmillan, Rt Hon M. (Farnham)

  Smith, Dudley (Warwick)

  Fry, Peter

  McNair-Wilson, M. (Newbury)

  Speed, Keith

  Gatbraith Hon T G D.

  McNair-Wilson. P. (New Forest)

  Spence, John

  Gardiner, George (Reigate)

  Madel, David

  Spicer, Michael (S Worcester)

  Gardner, Edward (S Fylde)

  Marshall, Michael (Arundel)

  Sproat, Iain

  Gilmour, Rt Hon Ian (Chesham)

  Marten, Neil

  Stainton, Keith

  Gilmour, Sir John (East Fife)

  Mather, Carol

  Stanbrook, Ivor

  Glyn, Dr Alan

  Maude, Angus

  Stanley, John

  Godber, Rt Hon Joseph

  Mauding, Rt Hon Reginald

  Steel, David (Roxburgh)

  Goodhart, Philip

  Mawby, Ray

  Stokes, John

  Goodhew, Victor

  Maxwell-Hyslop, Robin

  Stradling Thomas, J.

  Goodlad, Alstair

  Mayhew, Patrick

  Tapsell, Peter

  Gorst, John

  Meyer, Sir Anthony

  Taylor, Teddy (Cathcart)

  Mills, Peter

  Tebbit, Norman

  Gow, Ian (Eastbourne)

  Miscampbell, Norman

  Temple-Morris, Peter

  Gower, Sir Raymond (Barry)

  Mitchell, David (Basingstoke)

  Thatcher, Rt Hon Margaret

  Grant, Anthony (Harrow C)

  Moate, Roger

  Thomas, Rt Hon P. (Hendon S)

  Gray, Hamish

  Monro, Hector

  Thorpe, Rt Hon Jeremy (N Devon)

  Griffiths, Eldon

  Montgomery, Fergus

  Grist, Ian

  Moore, John (Croydon C)

  Townsend, Cyril D.

  Grylls, Michael

  More, Jasper (Ludlow)

  Trotter, Neville

  Hall, Sir John

  Morgan, Geraint

  Tugendhat, Christopher

  Hall-Davis, A. G. F.

  Morris, Michael (Northampton S)

  van Straubenzee, W. R.

  Hamilton, Michael (Salisbury)

  Morrison, Charles (Devizes)

  Vaughan, Dr Gerard

  Hampson, Dr Keith

  Morrison, Hon Peter (Chester)

  Viggers, Peter

  Hannam, John

  Mudd, David

  Wainwright, Richard (Coine V)

  Harvie Anderson, Rt Hon Miss

  Neave, Airey

  Wakeham, John

  Hastings, Stephen

  Nelson, Anthony

  Walder, David (Clitheroe)

  Havers, Sir Michael

  Neubert, Michael

  Walker, Rt Hon P. (Worcester)

  Hawkins, Paul

  Newton, Tony

  Walker-Smith, Rt Hon Sir Derek

  Hayhoe, Barney

  Nott, John

  Wall, Patrick

  Heath, Rt Hon Edward

  Onslow, Cranley

  Walters, Dennis

  Heseltine, Michael

  Oppenhelm, Mrs Sally

  Weatherill, Bernard

  Hicks, Robert

  Osborn, John

  Wells, John

  Higgins, Terence L.

  Page, Rt Hon R. Graham (Crosby)

  Whitelaw, Rt Hon William

  Holland, Philip

  Paisley, Rev Ian

  Wiggin, Jerry

  Hordern, Peter

  Pardoe, John

  Winterton, Nicholas

  Howell, David (Guildford)

  Pattie, Geoffrey

  Wood, Rt Hon Richard

  Howell, Ralph (North Norfolk)

  Percival Ian

  Young, Sir G. (Ealing, Acton)

  Hurd, Douglas

  Peyton, Rt Hon John

  Younger, Hon George

  Hutchison, Michael Clark

  Pink, R. Bonner

  TELLERS FOR THE AYES:

  Irvine, Bryant Godman (Rye)

  Price, David (Eastleigh)

  Mr. Spencer Le Marchant and

  Irving, Charles (Cheltenham)

  Prior, Rt Hon James

  Mr. Cecil Parkinson.

  James, David

  Pym, Rt Hon Francis

  168

  169

  NOES

  Allaun, Frank

  Flannery, Martin

  Marquand, David

  Anderson, Donald

  Fletcher, Ted (Darlington)

  Marshall, Dr Edmund (Goole)

  Archer, Peter

  Foot, Rt Hon Michael

  Marshall, Jim (Leicester S)

  Armstrong, Ernest

  Ford, Ben

  Mason, Rt Hon Roy

  Ashley, Jack

  Forrester, John

  Maynard, Miss Joan

  Ashton, Joe

  Fowler, Gerald (The Wrekin)

  Meacher, Michael

  Atkins, Ronald (Preston N)

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

  Mellish, Rt Hon Robert

  Atkinson, Norman

  Freeson, Reginald

  Mendelson, John

  Bagier, Gordon A. T.

  Garrett, John (Norwich S)

  Mikardo, Ian

  Barnett, Rt Hon Joel (Heywood)

  Garrett, W. E. (Wallsend)

  Millan, Bruce

  Bates, Alf

  George, Bruce

  Miller, Dr M. S. (E Kilbride)

  Bean, R. E.

  Gilbert, Dr John

  Miller, Mrs Millie (Ilford N)

  Benn, Rt Hon Anthony Wedgwood

  Ginsburg, David

  Mitchell, R. C. (Soton, Itchen)

  Bennett, Andrew (Stockport N)

  Golding, John

  Molloy, William

  Bldwell, Sydney

  Gould, Bryan

  Moorman, Eric

  Bishop, E. S.

  Gourlay, Harry

  Morris, Alfred (Wythenshawe)

  Blenkinsop, Arthur

  Graham, Ted

  Morris, Charles R. (Openshaw)

  Boardman, H.

  Grant, George (Morpeth)

  Morris, Rt Hon J. (Aberavon)

  Booth, Albert

  Grant, John (Islington C)

  Mulley, Rt Hon Frederick

  Boothroyd, Miss Betty

  Grocott, Bruce

  Murray, Rt Hon Ronald King

  Bottomley, Rt Hon Arthur

  Hamilton, W. W. (Central Fife)

  Newens, Stanley

  Boyden, James (Bish Auck)

  Harper, Joseph

  Noble, Mike

  Bradley, Tom

  Harrison, Walter (Wakefield)

  Oakes, Gordon

  Bray, Dr Jeremy

  Hart, Rt Hon Judith

  Ogden, Eric

  Brown, Hugh D. (Provan)

  Hattersley, Rt Hon Roy

  O'Halloran, Michael

  Brown, Robert C. (Newcastle W)

  Hatton, Frank

  O'Malley, Rt Hon Brian

  Buchan, Norman

  Hayman, Mrs Helene

  Orme, Rt Hon Stanley

  Buchanan, Richard

  Healey, Rt Hon Denis

  Ovenden, John

  Butler, Mrs Joyce (Wood Green)

  Heffer, Eric S.

  Owen, Dr David

  Callaghan, Rt Hon J. (Cardiff SE)

  Hooley, Frank

  Padley, Walter

  Callaghan, Jim (Mlddleton & P)

  Horam, John

  Palmer, Arthur

  Campbell, Ian

  Howell, Denis (B'ham, Sm H)

  Park, George

  Canavan, Dennis

  Hoyle, Doug (Nelson)

  Parker, John

  Cant, R. B.

  Huckfleld, Les

  Parry, Robert

  Carmichael, Nell

  Hughes, Rt Hon C. (Anglesey)

  Pavitt, Laurie

  Carter-Jones, Lewis

  Hughes, Mark (Durham)

  Peart, Rt Hon Fred

  Cartwright, John

  Hughes, Robert (Aberdeen N)

  Perry, Ernest

  Castle, Rt Hon Barbara

  Hughes, Roy (Newport)

  Prescott, John

  Clemitson, Ivor

  Hunter, Adam

  Price, C. (Lewisham W)

  Cocks, Michael (Bristol S)

  Irvine, Rt Hon Sir A. (Edge Hill)

  Price, William (Rugby)

  Coleman, Donald

  Irving, Rt Hon S. (Dartford)

  Radice, Giles

  Colquhoun, Mrs Maureen

  Jackson, Colin (Brighouse)

  Richardson, Miss Jo

  Concannon, J. D.

  Jackson, Miss Margaret (Lincoln)

  Roberts, Albert (Normanton)

  Conlan, Bernard

  Janner, Greville

  Roberts, Gwilym (Cannock)

  Cook, Robin F. (Edin C)

  Jenkins, Hugh (Putney)

  Robertson, John (Paisley)

  Corbett, Robin

  Johnson, James (Hull West)

  Roderick, Caerwyn

  Cox, Thomas (Tooting)

  Johnson, Walter (Derby S)

  Rodgers, George (Chorley)

  Craigen, J. M. (Maryhill)

  Jones, Alec (Rhondda)

  Rodgers, William (Stockton)

  Crawshaw, Richard

  Jones, Barry (East Flint)

  Rooker, J. W.

  Cronin, John

  Jones, Dan (Burnley)

  Rose, Paul B.

  Crosland, Rt Hon Anthony

  Kaufman, Gerald

  Rowlands, Ted

  Cryer, Bob

  Kelley, Richard

  Sandelson, Neville

  Cunningham, G. (Islington S)

  Kerr, Russell

  Sedgemore, Brian

  Cunningham, Dr J. (Whiteh)

  Kilroy-Silk, Robert

  Selby, Harry

  Dalyell, Tam

  Kinnock, Neil

  Shaw, Arnold (Ilford South)

  Davidson, Arthur

  Lambie, David

  Sheldon, Robert (Ashton-u-Lyne)

  Davies, Bryan (Enfield N)

  Lamborn, Harry

  Shore, Rt Hon Peter

  Davies, Denzil (Llanelli)

  Lamond, James

  Short, Rt Hon E. (Newcastle C)

  Davis, Clinton (Hackney C)

  Latham, Arthur (Paddington)

  Short, Mrs Renée (Wolv NE)

  Deakins, Eric

  Leadbitter, Ted

  Silkin, Rt Hon John (Deptford)

  Dean, Joseph (Leeds W)

  Lee, John

  Silkin, Rt Hon S. C. (Dulwich)

  de Freltas, Rt Hon S'r Geoffrey

  Lestor, Miss Joan (Eton & Slough)

  Sillars, James

  Delargy, Hugh

  Lever, Rt Hon Harold

  Silverman, Julius

  Dell, Rt Hon Edmund

  Lewis, Ron (Carlisle)

  Skinner, Dennis

  Dempsey, James

  Litterick, Tom

  Small, William

  Doig, Peter

  Loyden, Eddie

  Smith, John (N Lanarkshire)

  Dormand, J. D.

  Luard, Evan

  Snape, Peter

  Douglas-Mann, Bruce

  Lyon, Alexander (York)

  Spearing, Nigel

  Duffy, A. E. P.

  Lyons, Edward (Bradford W)

  Spriggs, Leslie

  Dunn, James A.

  McCartney, Hugh

  Stallard, A. W.

  Dunnett, Jack

  McElhone, Frank

  Stewart, Rt Hon M. (Fulham)

  Dunwoody, Mrs Gwyneith

  MacFarquhar, Roderick

  Stoddart, David

  Eadle, Alex

  McGuire, Michael (Ince)

  Stott, Roger

  Edge, Geoft

  Mackenzie, Gregor

  Strang, Gavin

  Edwards, Robert (Wolv SE)

  Mackintosh, John P.

  Strauss, Rt Hon G. R.

  Ellis, John (Brigg & Scun)

  Maclennan, Robert

  Summerskill, Hon Dr Shirley

  Ellis, Tom (Wrexham)

  McMillan, Tom (Glasgow C)

  Swain, Thomas

  English, Michael

  McNamara, Kevin

  Taylor, Mrs Ann (Bolton W)

  Ennals, David

  Madden, Max

  Thomas, Jeffrey (Abertillery)

  Evans, Fred (Caerphilly)

  Magee, Bryan

  Thomas, Mike (Newcastle E)

  Evans, Ioan (Aberdare)

  Mahon, Simon

  Thomas, Ron (Bristol NW)

  Fernyhough, Rt Hon E.

  Mallalieu, J. P. W.

  Thorne, Stan (Preston South)

  Fitch, Alan (Wigan)

  Marks, Kenneth

  Tierney, Sydney

  170

  171

  Tinn, James

  Watkins, David

  Wilson, Rt Hon H. (Huyton)

  Tomlinson, John

  Weetch, Ken

  Wilson, William (Coventry SE)

  Tomney, Frank

  Wellbeloved, James

  Wise, Mrs Audrey

  Torney, Tom

  White, Frank R. (Bury)

  Woodall, Alec

  Tuck, Raphael

  White, James (Pollok)

  Woof, Robert

  Varley, Rt Hon Eric G.

  Whitlock, William

  Wrigglesworth, Ian

  Wainwright, Edwin (Dearne V)

  Willey, Rt Hon Frederick

  Young, David (Bolton E)

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

  Williams, Alan (Swansea W)

  Walker, Harold (Doncaster)

  Williams, Alan Lee (Hornch'ch)

  TELLERS FOR THE NOES:

  Walker, Terry (Kingswood)

  Williams, W. T. (Warrington)

  Mr. James Hamilton and

  Ward, Michael

  Wilson, Alexander (Hamilton)

  Mr. Tom Pendry.

  Question accordingly negatived.

  INDUSTRY (FINANCIAL ASSISTANCE)
  10.14 p.m.
  The Minister of State, Department of Industry (Mr. Gerald Kaufman): I beg to move,
  That the Financial Assistance for Industry (Increase of Limit) (No. 2) Order 1976, a draft of which was laid before this House on 15th January, be approved.
  The House will recall that Section 8(6) of the Industry Act 1972 lays down that the aggregate of sums paid plus the liabilities under any guarantees granted under Section 8 less repayments of loans or principal sums paid to meet any guarantees shall—[Interruption.]
  Mr. Speaker: Order. I am having difficulty in hearing what the Minister is saying. Will conversationalists proceed outside the Chamber?
  Mr. Kaufman:—not exceed the limits defined in Section 8(7). This in turn stipulates that the limits shall be £150 million but may be increased by £100 million on not more than four occasions with the agreement of the Treasury.
  In order to avoid any chance of incurring commitments in advance of the authority of the House, we have adopted the practice of counting commitments arising from offers of assistance made and accepted, irrespective of the phasing of actual payment. These, together with sums already paid in discharging commitments and liabilities under guarantees, are carefully logged.
  On this basis, the total of sums counting against the statutory limit is just over £245 million as against the present statutory limit of £250 million approved by the House on 18th February last year. At present, there is a moratorium on accepting further commitments under Section 8, unless these are made subject to the approval by the House of the draft Order, and the House is requested to authorise a further increase in the limit to £350 million, to permit on-going programmes to continue.
  174
  The House will wish me to describe briefly how the current total of commitments is made up. At the time of the debate on the first Order to increase the statutory limit in February last year, there were two industry schemes under Section 8—the Wool Textile Scheme, and the Offshore Interest Relief Grant Scheme. Since then, the Government have set in train further schemes to assist sectors of industry, for clothing, machine tools and ferrous foundries. The total of payments and commitmenes to date under these schemes is £15·6 million.
  Of the assistance provided to individual companies, the sums paid and guarantees to Norton Villiers Triumph and Meriden have remained within the total of just over £18 million already approved by the House. Assistance to projects in connection with the country's offshore capability has been about £1·4 million.
  As notified to the House on 13th October, the financial assistance to Kierney Trekker Marwin has been increased to £5·2 million through the granting of a guarantee of £250,000.
  In terms of magnitude, the most significant cases affecting the total sums to be set against the statutory limit have been, first, those where assistance was initially provided in the form of interim guarantees, but where the guarantees were subsequently extinguished by a financial reconstruction. The three particular cases were Scientific and Medical Instruments, whose guarantee was extinguished by a Government contribution of £4·5 million to the formation of a new company, Cambridge Instruments; Alfred Herbert, where the guarantee was expunged through the provision of £26·2 million in a financial reconstruction; and British Leyland, where the guarantee totalling £100 million was extinguished through the assistance made available under the British Leyland Act 1975. In consequence, the total of payments and commitments had reached £162 million by 10th November, but was reduced to £62 million as the £100 million guarantee to British Leyland was withdrawn.
  The second major factor has been the Government's agreement to provide assistance to Chrysler UK Limited. Immediately prior to the conclusion of these negotiations, the total sums accountable

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  against the statutory limit stood at £81·8 million.
  Under the terms concluded, whilst the maximum liability would be £162·5 million, the full sum must be counted against the statutory limit, which immediately pushed the total close to the existing limit of £250 million. Since then, steps have been taken to ensure that further commitments are not accepted pending the approval of the House to the draft Order currently before hon. Members.
  A further, and very important, source of assistance has been directed under a special scheme to encouraging companies to bring forward significant investment projects which they have been compelled to defer through pressures of the economic recession. All hon. Members will, I am sure, acknowledge the urgent need to encourage industry to invest now.
  This scheme, introduced by my right hon. Friend the Chancellor of the Exchequer in his Budget in April last year, has proved to be very successful in generating additional investment. Assistance totalling £11·77 million has been made available to bring forward projects of a total capital cost of £67 million. Companies assisted have embraced the chemical, pharmaceutical, mechanical, electrical and motor engineering industries. The appraisal of more than 20 other cases is well advanced, and a further 50 are in the early stages of appraisal. The potential new investment that would be brought forward will be measured in terms of hundreds of millions of pounds, and will make a major contribution to the vital need to modernise and strengthen manufacturing industry.
  The same considerations apply to the industry schemes which are concentrated upon key sectors of the economy. Here again, the investment generated will have major national significance. Offers under these schemes are also in suspense.
  Accordingly, in recognition of the wide benefits flowing from the investment schemes in progress, and in order to provide scope for further schemes to be introduced in the context of the Government's strategic policies, I would commend the draft Order to hon. Members and seek the approval of the House.
  Mr. Peter Rees: Would the Minister enlighten us on one point? Are we to understand that applications have already been put in which have absorbed the extra £100 million? Does he have actual projects in mind or is this purely hypothetical?
  Mr. Kaufman: We are examining applications. No applications which would take us over the top of the limit approved by Parliament are being accepted. I cannot say to what extent the new total that we are asking the House to approve tonight will be taken up because we have not yet completed our examination of all the applications. They are still coming in.
  10.22 p.m.
  Mr. Michael Heseltine: The Minister of State tonight asks the House for the third tranche of money authorised under Section 8 of the Industry Act 1972. As he says, if he has his way in the Lobby, the Order will bring to a total of £350 million the expenditure and commitments entered into under that section.
  From the outset these powers have been controversial. There are those who, on philosophical grounds, question the desirability in principle of using Government money in any circumstances to assist industry, and there are those who on more practical issues doubt the ability of Government to substitute their judgment for that of the commercial market. Many question whether Government in this country in existing circumstances can augment the judgment of the market. The present absence of knowledge and professional machinery in Whitehall and Westminster simply appears too great. The argument, as all of us know who have taken part in industry debates, ranges across the entire political spectrum.
  The Industry Act 1972 gave the opportunity to the overwhelming majority of us on both sides to enact a framework wherein Government and industry could have worked together in the pursuit of those common aims of industrial excellence upon which our industrial future must depend. To achieve them, the powers of Section 8 were made very wide. Many people believe that those powers were made too wide. Their very width therefore transfers the responsibility to Ministers for the way in which they are exercised and the granting of these powers

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  in the first place can be justified only on the basis that Ministers will act with discipline and discretion.
  Even so, in 1972, certain limitations were built into the legislation to restrict the use of the powers for political ends. An advisory board was set up, drawn from industry and the unions, to assist the judgment of Ministers who, if they had used the powers as they were originally intended, would inevitably have faced the unpalatable and harsh decisions which would have been consequent upon saying, "No". That is the sort of decision that the Government constantly talk about but rarely take.
  Now this Government in two years have justified the worst forecasts of those of my hon. Friends who had such deep reservations at the time that the Bill was discussed, when they warned exactly what was likely to happen.
  The reality is that the conspicuous mistakes associated with Section 8 of the Industry Act greatly overshadow the parts of the Order to which the Minister of State devoted virtually all his speech, because it is the conspicuous mistakes that have set the hallmark for the industrial policy of this Government.
  The reality is that, as time has passed, the decisions have become more indefensible, the specialist advice available from IDAB has been flagrantly ignored, and, predictably, the cost of each decision has become larger. The Meridens and the Kirkby's have now given way to the Leylands and the Chryslers, and industrial decision-making by the Labour Government has become associated with a mixture of personal expediency and political opportunism. The fact is that the Scottish Daily News and Meriden have become drops in the ocean when we compare them with what followed.
  British Leyland represented the largest ever commitment to a single company. The justification at the time had an all-too-familiar ring. It was said that the company needed investment. The Government therefore promised to divert investment from elsewhere, via its tax or borrowing powers and to monitor the company's progress, to ensure that a proper accountability was maintained on its expenditure.
  The House will not have forgotten that, long before Mr. Riccardo's name
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  was ever heard and the suggestion about threats ever introduced, it was the Prime Minister who was claiming to put a pistol to the heads of the workers of British Leyland. If the targets were not met, the funds from public sources would cease to flow.
  This very afternoon, when the Minister of State was asked whether the targets were being maintained, whether the standards were being set by which the second tranche of funds was to flow, he was quite unable to answer the questions put to him.
  The reality, as forecast at the time, is that, whatever words were used by the Prime Minister, to whom we were referred, or by the Minister of State, the workers of British Leyland knew better. The strikes have continued. The losses have exceeded the budget. In practice, the new investment—which this section of the Industry Act was supposed to be all about—has now, as far as the car parts are concerned, been brought to a halt. The funds have not stopped flowing. The funds are being used to finance the losses, which are running ahead of the original budget.
  Anyone who really believes that the next tranche of money for British Leyland will be actually surrounded by more restrictions than the earlier tranche simply has not come to understand the weakness with which this Government administer their industrial policies.
  Then we had Chrysler. Perhaps the House will allow me to read from a document on industrial strategy. It states:
  "By and large, profitability and return on capital, measured in financial terms, remain the best prima facie indicator of an industry's or company's efficiency in using resources and in giving consumer satisfaction.… Thus, if we are to achieve the over-riding objective of improving our industrial performance, available resources should go into those industries and companies which have the soundest performance and/or the best prospects as regards viability and rate of return."
  I doubt very much whether that text will immediately strike a familiar note in this House, but it is the Government's latest statement of their industrial strategy. It is dated December 1975, and I should like to pay tribute to my hon. Friend the Member for Blaby (Mr. Lawson), whose adroitness led to the

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  extraction of that document from the fastnesses of the Government's most inner secret cells. It was published in the same month—for the benefit of the Government, but not for the public—as the Government announced a decision to commit £162 million to an American multinational company which had lost £4·3 million over the past 10 years, and which was generally agreed to have no longterm prospects of viability.
  On 16th December the Secretary of State for Industry promised a viable strategy for Chrysler for the 1980's. In the same statement he explained his plans for dealing with potential financial losses for that company of £40 million in 1976, £24 million in 1977, and £24 million in 1978. A week later, on 23rd December, he explained to me that he could not give the figures for his viable strategy after these three loss-making years no one had worked them out for after 1979.
  The reality is to be seen in the flood of volunteers for redundancy pay. The fact that they had come forward from the workforce of Chrysler shows just how much confidence they put in the future of this rescued giant that is supposed to have such a long-term viability. But this is the process which is so eloquently described in the same document on Government strategy which in theory sets out their latest thinking. Under the heading "Assessment of Viability" it says,
  "An assessment of viability is a matter of facts, figures and commercial judgment in which wider economic and social factors have no part to play."
  However, it is not all bad news. The British taxpayer may be committed for £162 million. Twenty-five per cent. of the Chrysler jobs are gone. But for the American stockholder in Chrysler Incorporated it is quite another story. On the day that the Secretary of State for Industry told this House the details of the Chrysler deal, the quotation of Chrysler Incorporated on Wall Street was $10 a share. Late last week, that quotation stood at $14 a share. In the period from then to now, we all know that the Dow Jones index has risen. General Motors shares rose 1¾ per cent. less than the index. Ford shares rose 5 per cent. more than the index. But shares in Chrysler Incorporated rose 25 per cent. more than the index. At the time of the
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  Secretary of State's announcement Chrysler Incorporated was worth £300 million. Today it is worth £427 million.
  So for the American shareholders it was good news all the way. The British taxpayer had handed out £162 million, and the American shareholders personally, at our expense, gained £127 million profit in just 37 days. Even the hard-nosed Lord Ryder would have been impressed with profits of that scale and at that speed.
  I have always been staggered by the fact that the present Government's priorities are to find £300 million for the shareholders of the British aerospace and shipbuilding companies when investment is back to the levels of the early 1960s and unemployment is up to the levels of the 1930s. In these circumstances surely that money could be better used. But at least they are British shareholders. In the case of Chrysler they are American shareholders, American multinational shareholders.
  Some harsh words have been passed over the Chrysler deal. But as we decide tonight whether to satiate the present Government's appetite for taxpayers' money, let it not be my judgment, let it not be the judgment of virtually every independent British commentator, and let it not be even the judgment of the Secretary of State for Industry, who was rumoured in the national Sunday Press to have described the Chrysler deal as the worst Government decision for years. Let the Americans speak for themselves. I quote from Newsweek of 23rd December 1975, under the heading "Danegeld for Chrysler". It had this to say:
  "Not since Ethelred the Unready had a British ruler been so generous to a foreign invader. Like a Viking chieftain, Chrysler chairman John Riccardo arrived with a threat … Prime Minister Harold Wilson decided that tribute was the better part of valor."
  The record of profligate expenditure on industrial schemes of no or dubious commercial prospect has destroyed the present Government's claim to further trust. We shall attempt to deny them further funds in the only way open to us—by voting against the Order tonight.
  10.34 p.m.
  Mr. Douglas Crawford: The Scottish National Party gives a very qualified welcome to the

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  implementation of the third tranche of money under the Act passed by the Conservative Government. SNP Members welcome it because one of the beneficiaries will be Scotland, as a development area, and certain parts of which are a special development area. We take no pride in the fact that we are a development area, because it is a dreadful indictment of the Union of 1707 and the fact that we are governed from London. But it is a fact that we hope that Scotland will benefit from the Government's proposals as contained in the Order.
  We have 7 per cent—plus unemployment. We have been told by a Minister that certain other countries in the Common Market are doing very much better than the United Kingdom, but we do not want to be compared with them. We want to be compared with Norway, Sweden, Switzerland and Austria in this matter. More significanly to the question of our own money which has been passed back to Scotland from Whitehall is the question of the 1969 paper, prepared by the Scottish Council, which said that the centralisation of decision-making over industry in Scotland had been increasing and ought to stop. Since then, nothing has happened—and the fact that nothing has happened has to stop.
  We welcome this increase in money from the Government, particularly because, under Section 7 of the Industry Act 1972, the Secretary of State for Scotland will be administering it. But we have certain reservations, and with those reservations I want to put certain questions.
  First, how much of the extra money is to go to Scottish companies in Cumnock and Prestwick? Secondly, how much of it is going to Marathon Shipbuilders on Clydebank? Thirdly, since the Secretary of State for Scotland is responsible for the administration of Sections 7 and 8 of the Conservatives' Industry Act, what proportion of the extra £100 million will come under his aegis and control?
  My next question concerns certain newspaper reports over the weekend saying that the Government have changed their minds and have decided that the Scottish Assembly is to be given powers over trade and industry. We are told that we must not believe everything we read in the Press unless it helps the Gov-
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  ernment. If we are to believe these reports, does it mean that the Secretary of State for Scotland is relinquishing his powers over trade and industry in Scotland under the 1972 Act? If he is, what proportion of the extra £100 million is the Assembly to control?
  It is important to know the answer to this question because of the vagueness of the Government's commitment to the Scottish Development Agency. We have been told that the Government are to give £300 million to it, but we do not know over how many years—whether it is five, six or seven years, for example. We do not know how much money is to go to it for a particular year. It is very important to know how much of this extra £100 million is to go to the Assembly, especially as, out of that sum, quite a lot is already in the hands of the Scottish Industrial Estates Corporation for rural areas.
  Because of the doubts surrounding the agency, what is the relationship of Sections 7 and 8 of the 1972 Act to Scotland, particularly as they affect the position of the Secretary of State for Scotland? We also wish to know, in this context, the relationship of Sections 7 and 8 as they affect the Assembly. These questions are vital to Scotland.
  We favour the wish of the Government that more money should be given under Section 7(2) of the Industry Act, to promote the development or modernisation and efficiency of industry in the assisted areas. We welcome it cautiously—very cautiously. We hope that the Order will be passed, but we have those reservations.
  10.40 p.m.
  Mr. Norman Tebbit: My hon. Friend the Member for Henley (Mr. Heseltine), in a characteristic speech, summed up the situation well. He graciously referred back to those days when the Conservative Government's Industry Act 1972 was going through the House, recalling the criticism of it made by some Conservative Members, who were told then that it was all right because Ministers behaved responsibly. As my hon. Friend the Member for Henley has said, unhappily these criticisms proved to be true, and we have seen a series of investments ranging from the irresponsible to the downright lunatic.
  We finish up with this new version of overseas aid, which once again comes under the heading of poor countries giving

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  to rich countries, the poor British taxpayer supporting the American stock exchange with the willing votes of the Tribune-ites, speeding the money on its way.
  We have no idea what new ventures the Minister has in mind to support with the next £100 million. The Minister has. We cannot ask him tonight which companies he has in mind. We can only pray. But we can ask him whether he is considering applications for aid in the light of the criteria laid down in the Chequers strategy. Is he looking for companies and industries which are profitable? The Minister is nodding. I do not know whether he is nodding at me or at his PPS, who is perhaps telling him that he should be looking for profitable industries to invest in. Is he looking for companies which conform to the criteria of the Chequers strategy?
  Mr. Kaufman: I very much welcome the presence of the hon. Member for Oswestry (Mr. Biffen) on the Opposition Front Bench. It is an extremely satisfactory and agreeable sight which has diverted me from my wish to reply to the hon. Member for Chingford (Mr. Tebbit). The other day I published the Government's criteria for assistance. We seek projects which qualify under those criteria. As for Chrysler and its qualification under those criteria, I shall reply to the hon. Member for Henley (Mr. Heseltine) when I wind up the debate.
  Mr. Tebbit: I am grateful to the Minister, but he only makes me more puzzled as to how investment in a company like Chrysler can fit the criteria. If he pledges himself tonight not to put more public funds into sure-fire loss-makers like Chrysler, he may even have a degree of sympathy from us. I am not sure whether he would have any sympathy from his Friends, because this would imply that there was no more money for the next Scottish Daily News, although that was sold to this House by the present Secretary of State for Energy as a sure-fire money-maker. We assume that the Minister will clear up that matter later.
  All we are told time and again, when we criticise Government policy on investment in industry, is that it is not their fault that every day a queue of business men turns up at the Department of In-
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  dustry with begging bowls. The Minister nods. In that case he chooses very unreliable chaps to invite in with their begging bowls, and he chooses begging bowls with no bottoms to pour taxpayers' money through. If so many begging bowls are being presented, why cannot he find one or two which are profitable? He does not have to go as far as Lord Ryder, making money at that sort of rate—we would all have hesitations about that—but surely there are one or two profitable enterprises he can launch. The rate of spending is becoming frightening. It is accelerating. The demands come in faster and faster. The money is consumed faster and faster.
  We are entitled to some clear answers from the Minister before anyone—let alone we on this side of the House—goes into the Lobby to vote for another handout for another bust company which cannot be put back on its feet.
  10.45 p.m.
  Mr. Nick Budgen: I note with interest that the Scottish National Party gives the Order a cautious welcome. I am sure that many, if not all, my constituents would wish to give it a vigorous rejection. They know that increased taxation leads inevitably to increased unemployment. Coming as I do from the home of industrial Britain, I realise that most of my constituents will know that this increased hand out can be paid for honestly only by increased taxation or dishonestly by increased inflation. They know that for every extra £100 million paid by the State there is a declining chance for individual private entrepreneurs to give employment to the many people who, unhappily, are unemployed in Wolverhampton.
  Many people in my constituency will be looking to this debate for a declaration of principle so that they can understand what the consistent theme is which allows Chrysler to be bailed out and NVT not to be bailed out. They will wish to know whether it was merely electoral bribery which made is necessary to bail out the Linwood plant. Was it just a plea to the SNP, a way of buying off the irreconcilable forces of the SNP, which made it necessary to bribe them with English taxpayers' money? Or did not the unhappy people of NVT have sufficient political leverage to extract more money from the taxpayer for them?

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  Those are some of the questions which my constituents would wish to ask the Minister, as he sits on the Government Front Bench amiably grinning and laughing, for they regard it as a matter of grave importance. Many of my constituents do not agree with my attitude to a proposed bail-out for NVT—I respect their point of view—but they are entitled to have a consistent view put forward from the Government benches. They are entitled to be able to look at some document setting forth the Government's principles and to say, "These are the principles which were fairly and honestly applied to NVT and Chrysler". They are not entitled to have to say to themselves, "There was one bribe, but we were not big enough to be bribed. Perhaps we did not behave unlawfully enough. Perhaps if we had kicked in a few policemen's teeth, perhaps if we had voted in a local Poujadist Member, like the SNP in Scotland, we would have been bought off".
  My constituents are entitled to ask of the Government that their claim, if they make a claim for any discretionary grant, should be dealt with in an honourable and just way which showed some consistency and equity. They should not be treated as pawns in a political game, with money being handed out as some eighteenth century duke would hand out rotten boroughs to those who would support his particular interest in Parliament. For this is the ultimate corruption of a system of State handout which is being perpetrated by the Government.
  Those of my constituents who agree with my view about NVT would also wish to know whether this is just one of a number of handouts which is to be made by the Government. The Minister is a far subtler parliamentary performer than I could ever hope to be, but my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) put a clear question to him a few moments ago. He asked whether the £100 million in aid had already been spoken for. [HON. MEMBERS: "He did not."] He did, in a very clear intervention. The Minister, who is a very cunning parliamentary performer, gave him a reply which was as clear as mud. He said that applications were not being accepted but that they were being examined, by which, I suppose, he meant—in using the word "accepted"
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  —that they had come in but that they had not yet been approved.
  So what we are to understand is that once the Labour Lobby fodder have done their duty tonight and the extra £100 million has been voted, if this £100 million has already been spoken for, we shall have to have this same debate asking for another £100 million pretty soon, and there will be another increase in tax.
  The public-spirited entrepreneurs in my constituency who wish to take risks and who wish to provide employment for those who have become unemployed as a result of the failure of NVT will be faced once again with increased taxation, and once again by increased and arbitrary interference from the ever-growing power of the State. We shall be back to this once again, and the chances of those unhappy people in NVT getting back into profitable private employment will decline as we have to go through this charade night after night while the present Government continue in power.
  10.52 p.m.
  Mr. Peter Rees: I had not intended to intervene in this debate but, as my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) reminded the House, the answer from the Minister of State to, I hope, an intelligible question from myself was so obscure that I feel moved to press him a bit further on his intentions. The obscurity of his reply was only matched by the obscurity of the hon. Member for Perth and East Perthshire (Mr. Crawford), who represents the Scottish National Party in this Chamber, who appeared to deprecate the Act under which this Order is moved but welcomed its results because they might benefit the area from which he derives.
  Mr. Crawford: Country.
  Mr. Rees: I said "area". The hon. Gentleman represents only part of Perthshire. If he tells me that he represents the whole of Caledonia I shall be compelled to appeal to my hon. Friends who represent more favoured areas in Scotland.
  We are entitled to ask the Minister of State with a little more particularity what is the proposed destination of the funds that we are being asked to vote tonight. Are they to give a little more boost to the high-flying drakes in whatever part of the

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  United Kingdom, or are they to recover winged ducks most of which have fallen into the Clyde? This is a question that the country will wish us to put to the Minister.
  We have heard the brave objectives pronounced at Chequers before Christmas, singularly unmatched by subsequent acts of the present Government. We have observed Mr. Riccardo come. He came, he saw and he conquered. He returned to Detroit to a triumph unmatched by any triumph seen in ancient Rome. He at least was able to overcome a Government of singular ineptitude and weakness.
  I suspect that when we have the debate on unemployment on Thursday, the brave words of the Chancellor of the Exchequer that we have heard from time to time will again prove to be unmatched by deeds, and I suspect that he will be manoeuvred by his own left wing, by the hon. Member for Luton, West (Mr. Sedgemore), who sits so surprisingly silently, to reflate contrary to all the economic auguries. It may be too late to quibble over the question of Government intervention in industry and Government support for industry, although I would have preferred to see the previous Conservative Administration take a rather stricter line on this question. That is past history, but we are entitled to ask to which industries precisely—item by item and category by category—the Minister of State will, in his generosity, devote the extra £100 million he is asking us to provide tonight.
  Mr. Budgen: Will my hon. and learned Friend agree that what we must press for most of all is a consistent statement of policy, so that we may know in advance which industry will dies and which will live?
  Mr. Rees: I was coming to that, though I doubt that I shall suggest an answer which will encourage my hon. Friends, because I suspect that at the end of the day the criteria which the Minister will apply will not be economic but political. This is why so many of us on this side—not all, perhaps, but a great number—profoundly suspect the principle of Government intervention and support, whether it comes from a Conservative Government, a Labour Government, a Liberal Government, or even, dare I say, a Scottish National Party Government.
  Mr. Crawford: A Scottish Government.
  Mr. Rees: The hon. Gentleman must make his peace with his own taxpayers. Let him consider what might be the position if ever the time came when he was presiding over a Scottish adminstration, whether in Perth, Edinburgh or Glasgow—and I suspect that in the end it would be sited politically in Strathclyde even if it were geographically in Glasgow. It is all very well for the hon. Gentleman to shake his head. He must reassure his electors—I hope that they have paid heed to his utterances—that by asking for Scottish independence he is not delivering them over to the voters of Strathclyde and certain parts of Fife who, on the whole, would be rather more in favour of Socialism and Government direction than I suspect he is. Perhaps he will declare himself.
  Mr. Crawford: I remind the hon. and learned Gentleman that the only party ever to have had an overall majority of votes in Scotland has been the Conservative Party. The Labour Party has never had an overall majority of votes in Scotland.
  Mr. Rees: I am fascinated by that little historical interlude. If the hon. Gentleman is suggesting that, in offering home rule for Scotland, he will deliver the Scots over to a Conservative future, I must tell him that I should vote wholeheartedly for home rule for Scotland, because that is a consummation devoutedly to be hoped for. I have many Scottish friends and relations, and if I could be convinced that they would be controlled according to good Scottish Conservative principles, or even British Conservative principles, I should regard that as a future to contemplate with some relish.
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. I think that the hon. and learned Gentleman is making a rather long aside. The Chair would be grateful if he would return to the main theme.
  Mr. Rees: I am always diffident when corrected by the Chair—in particular, by its present distinguished occupant—but I have always understood it to be a principle of our debates that one should try as far as possible to follow where the

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  debate leads. Therefore, when a percipient and acute Caledonian intervention is made, I feel it behoves someone who has the privilege to represent an English constituency to try to follow as best he can.
  Mr. Nicholas Ridley: Perhaps my hon. and learned Friend would more readily keep within the strict confines of the debate if he were to advance as one of the criteria—perhaps the main criteria—that Scotland is a nation.
  Mr. Rees: I find that a very difficult point. But I have some anxiety on this matter, since I represent a constituency in East Kent where a great number of people with Scottish antecedents live. Indeed, I am privileged to celebrate the occasion of St. Andrew's day with the Caledonian Society in St. Margaret's, as I am privileged also to celebrate St. David's day with the Welsh, and I am not aware that the whole Scottish nation is confined north of the border. In fact, I see among my right hon. and hon. Friends a great number with distinguished Scottish names who have the good fortune to represent English constituencies.
  Perhaps with the concurrence of the Chair—and also of my hon. Friend who represents the Anglo-Saxon seat of Cirencester and Tewkesbury (Mr. Ridley) and of the hon. Member for Perth and East Perthshire, whether he has Scottish, Welsh or English antecedents—perhaps I may try to return to the main economic theme of this discussion, because at the end of the day it is the plaudits of Mr. Deputy Speaker rather than those of the House that I seek to achieve.
  I want to put one further point to the Minister of State, should he be fortunate enough to catch Mr. Deputy Speaker's eye. Has he considered whether the liberal distribution of cash that he has in mind would do more good if it were distributed among the self-employed and service industries? It appears that the Administration which he so ably and eloquently represents is still unaffected by the view that the big and the beautiful is not necessarily the good.
  Would not the distribution of largess, involving thousands rather than millions of pounds, in the service industries and among the self-employed achieve more in
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  the industrial regeneration of this country and to alleviate the nation's employment situation then the distribution of millions of pounds to ailing and possibly outdated industries? The Minister should apply his mind a little more closely to that problem. We should like to know how he justifies the expenditure of the extra £100 million that he hopes to cajole out of the House tonight.
  We know that the Minister of State is capable of sharp judgments, in pointed language. I hope he will realise that, although we have tended to poke a little fun—and the Minister has taken it with his usual placidity—we are making a serious point. I hope that he will not brush the matter aside and give us a frivolous or doctrinaire speech in reply.
  Perhaps he will tell the House what kind of applications he has received and how favourably he has looked upon them. He might also give his view whether the infusion of money in different sectors of the economy might not do much more for the industrial, social and economical health of the country.
  11.3 p.m.
  Mr. Nigel Lawson: I, like my hon. and learned Friend the Member for Dover (Mr. Rees), had not intended to intervene in the debate, but I wish to try to answer the questions asked by my hon. and learned Friend about criteria. He returned to that theme several times. Admittedly, he went up several byways but he eventually returned to the matter at hand. Indeed, he travelled up as far as John o'Groat's but he came back again.
  Let us examine the criteria used by the Government. I take this opportunity to pay a tribute to the Secretary of State for Industry on his paper on the criteria for assistance to industry, from which my hon. Friend the Member for Henley (Mr. Heseltine) quoted. That document came out in a surprising way as a result of a Written Question tabled by me. I was surprised because those of us who serve on the expenditure Committee asked for this information a long time ago. We were told by the Chief Secretary to the Treasury that it was forthcoming—but nothing happened. Indeed, we have not yet had a reply from the Treasury to our request. The matter has been overtaken by events. I understand that the reply is due in a few weeks' time.

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  I wish to draw attention to Section 5, paragraph 27, of that document headed "Rescue Operations". That paragraph gives a little lesson in industry and the economics of industry and how the system works—a lesson that many Labour Members would do well to learn. It begins:
  "The number of bankruptcies every year runs into thousands (as does the number of new businesses) and it would certainly not be sensible to allow expectations to rise that the Government would step in regularly to keep loss-making activities going. A receivership or a liquidation"—
  The right hon. Gentleman even dares to mention those words. There are some hon. Members on the Conservative side of the House who are sometimes unwilling to mention them. But no! The Secretary of State is bold. He says:
  "A receivership or a liquidation does not necessarily involve the complete cessation of a company's activities, since the responsibilities of the receiver or liquidator towards creditors will often be best fulfilled by maintaining the business as a going concern in order to secure the highest price."
  That is excellent stuff.
  The right hon. Gentleman goes on:
  "The resources of manpower, premises and equipment of insolvent businesses are in many cases taken up in whole or in part by other enterprises expanding or starting up."
  That is a great paean of praise to the private enterprise capitalist system and how it works. It is all true.
  The document goes on:
  "In the assisted areas a new employer, if he purchases the assets from a receiver, is eligible for help under Section 7 of the Industry Act under the Category A criterion, since he is held to he creating new employment. This, rather than the propping up of failed enterprises, is and should remain the principal contribution that the Industry Act—although not primarily an instrument for dealing with redundancies as distinct from promoting development and employment—can make towards dealing with redundancies; and it is likely to have the advantage of involving new management and additional private sector resources."
  This is a splendid paragraph, the best one in the whole document, and it is altogether a good document. It is the best ever to have come from this Government. It should be celebrated by the whole House, even at this late hour.
  What puzzles many of us is that if these are the criteria, what on earth are the Government doing? There seems to be no relationship between what the Government do and the criteria they put
  192
  forward. I ask the Minister to do two things. First, I ask that this document, with its criteria, should be incorporated into the legislation—as a sort of codicil to the Industry Act. It should be given legislative force. Second, I ask the Minister to publish the criteria for departing from the criteria.
  11.8 p.m.
  Mr. Michael Marshall: There is a certain familiar feeling about yet another late-night session in which we are being asked to approve yet another tranche of public expenditure. Some of the points that have been made are of vital importance as we look to the Minister to give us, if not some crumbs of comfort, at least an assurance about precisely how the criteria with which my hon. Friend the Member for Blaby (Mr. Lawson) has dealt are working in practice.
  Any brief summary of the ways in which the Government have used the Industry Act 1972 as amended gives cause for concern. We have seen, time and again, this emerging principle, which seems to be outside and overriding that which is in the notes of guidance so skilfully extracted by my hon. Friend the Member for Blaby, of subsidising competition within industry. We have had this absurdity, as my hon. Friend the Member for Henley (Mr. Heseltine) pointed out, whereby we are now propping up different parts of the motor industry so that they may compete with one another. The view is shared on all sides of the House that this cannot make sense.
  I hope that the Minister will say something about it. If we go back to the Triumph-Norton-Villiers failure we see a continuing thread whereby money is apparently to be spread throughout the industry to encourage competition. With Chrysler, it is hard for many of us to swallow the events of recent weeks, since money was offered to Mr. Riccardo on terms which so clearly favoured the American stockholders rather than the people of this country.
  The second matter to emerge in recent months is that the search for profitable investment, as outlined in the criteria before us, does not seem to add up to the kind of policy decisions the Government are making. When we consider the whole question of the nationalisation of the

  193
  aerospace and shipbuilding industries we find it hard to see how any assistance which might be provided under the order, or any part of the Industry Act, will fit in with the criteria of profitability which are so boldly claimed as part of the Government's current strategy.
  The paper does not cover the older nationalised industries directly, but it says in paragraph 1:
  "The same principles are in fact applicable to any subsidies paid to the older-established nationalised industries."
  If that is so, will the Minister tell us how he can in all honesty sustain the Government's policy that the nationalised industries must have economic pricing? The steel industry, for example, is having to absorb the impact of decisions which are not taken on an economic basis. As I interpret the Act, in the arguments about plant closures the British Steel Corporation would have a fair claim to assistance for maintaining plant which would have been closed under its strategy.
  Hon. Members on both sides of the House are worried about the Shotton-Port Talbot situation. The Minister could help us by telling us when we may expect a decision on that, which will be relevant to the appeals for aid which I believe will come from the Corporation, on an increasing scale and very likely within the terms of the Act as I now interpret it.
  Under the subheading "Market prospects", paragraph 15 of the splendid notes which the Department put out only in December says:
  "A realistic appraisal of the market for the company's products, at home and overseas, and of the company's ability to sell in those markets at competitive prices, is essential."
  We can only go by the evidence of recent Government decisions. When we think of the whole motor industry situation we have reason to wonder precisely what vetting of market prospects is undertaken. We had the CPRS Report, which had to be dragged from the Prime Minister, screaming and protesting. There was also the Report of the Trade and Industry Sub-Committee of the Expenditure Committee. Those Reports added up to an overwhelming case for doubting British Leyland's future market feasibility. Yet the Government, turning aside advice from many quarters, and on a basis which has never been explained to us, com-
  194
  mitted the country once more to massive investment in internal competition within the motor industry.
  The Minister would help us if he gave an assurance that there is some positive vetting within the Department of market prospects. A number of us have questioned this in recent days in various contexts, notably the Post Office (Banking Services) Bill. Tonight, as we talk about help for manufacturing industry, we are entitled to more chapter and verse than we have had so far. We at least have "Criteria for Assistance to Industry", but we should like to know that behind the document's broad headings there are flesh-and-blood figures who can interpret those desirable criteria and put them into practice.
  It is because I have such fears and reservations about the lack of information that I shall have no difficulty in joining hon. Members in all parts of the House in opposing the Order.
  11.15 p.m.
  Mr. Geoffrey Dodsworth: I would like to follow my hon. Friend the Member for Arundel (Mr. Marshall) and ask the same question in a slightly different way. There are people called "number crunchers". May I ask who crunched the numbers tonight? It will assist hon. Members to know that number crunchers are people who do sums—sometimes on the back of envelopes, sometimes with calculators and sometimes with refined electronic devices. Did the Minister and his Department have any assistance in deciding the sum of money that should be authorised tonight?
  We are told there should be criteria, but not what they are. We have asked for details and whether there have been any acceptances. We are told there have been applications, but no acceptances. Did the Minister consult with the Treasury before arriving at a situable figure to present to the House? I understand that a £100 million order falls within the area of book-keeping error for the Treasury, so we should not have too much confidence in its assistance. I have tried to get information from the Treasury on activities of this nature. On 20th January, I asked for a breakdown of information on all nationalised industry borrowing powers, the existing statutory limits, the increases permissible by Order and the

  195
  estimated amounts outstanding on 31st December last year. One would think that with all the powerful machinery of government and its massive physical and mental resources, those questions could have been answered with the speed of light. Hon. Members will be disappointed to learn that the answers were not instantaneously available from the Treasury. I was told that the information was being collected and would be published as soon as possible. That is the basis on which we are controlling expenditure in Orders of hundreds of millions of pounds at a time.
  We are being asked to give the go-ahead for another £100 million and not worry about it too much because it is in good hands. Many of us do not have much confidence that there is control and monitoring or that the figures are being added up correctly. Perhaps it is being done on the back of an envelope. If so, the Minister could give us more confidence and have a more favourable disposition of votes by showing us the calculations.
  11.19 p.m.
  Mr. Giles Shaw: The debate has been useful if only for the fact that hon. Members have continually probed the Minister to obtain clarification. We need clarification on why he feels this sum is appropriate, what criteria should apply to these disbursements and how they should be controlled.
  The demand for clarification has been the common factor in every contribution so far. At a time when the Government are seeking to encourage industry to reequip and re-invest for the boom the Chancellor of the Exchequer has just around the corner, it is vital that we are told in clear and unequivocal terms what the Government's policy on aid for industry will be. It is timely that we ask for clarification.
  I should like to put three points to the Minister in addition to those which have already been made. The first, which follows from the comments made by my hon. Friend the Member for Blaby (Mr. Lawson) on the splendid Chequers criteria for the Industry Act 1972, concerns the effect of those criteria. My hon. Friend suggested that they be incor-
  196
  porated as a codicil to the Industry Act 1975.
  I remind the Minister that in those interminable debates in Committee on the Industry Bill we tried to pin down himself and his colleagues to providing criteria for the National Enterprise Board as to the measurement by which the Government would seek to judge the effectiveness and efficiency of that organisation. At no time did we get anywhere in trying to find a form of words or even a form of financial discipline which was acceptable to the Government at that date. The hon. Gentleman should at least agree to publish the criteria in the form of a directive under the Industry Act 1975 for all investments that the NEB may seek to make.
  The Minister will note that Clause 1(6) of the criteria contains the statement:
  "By and large, profitability and return on capital, measured in financial terms, remain the best prima facie indicator of an industry's or company's efficiency in using resources and in giving consumer satisfaction."
  That is an important phrase to have been included in the criteria. It is right. Indeed, it is time that the Government recognised that consumer satisfaction is as much measured by the return on capital employed as by any selective price restraint or price increase scheme which may or may not be in their mind.
  Secondly, the Minister referred to schemes for selective assistance under Section 8—for example, the wool textile industry scheme. I give full credit to the Government for going over the top of the £15 million tranche to the £18 million requirement. But the return made by the industry was a massive reduction in the number of companies. There was a swing from about 120,000 operatives, in production terms, to about 67,000 currently and a trimming down of the industry to combat modern competitive market conditions. That was a major return to the country for that money.
  In similar schemes the hon. Gentleman must seek a similar willingness by industry to contract, to re-equip and to reshape to face modern competitive conditions. I ask him to apply those criteria to the scheme he may have in mind in the projected examination of the £100 million under discussion.
  Thirdly, to what extent is the professional expertise of the IDAB or, if

  197
  necessary, the CPRS available in interpreting the viability of companies and their susceptibility to investment? Is that expertise regarded as paramount?
  If we are to recover from our present deep malaise, we must have a combination of Government money, where this is regarded as essential, expertise to indicate whether the investment will produce any return, willingness by industry to demonstrate and measure that return and, above all, a climate in which risks properly taken will bring effective dividends. Those are the criteria by which this £100 million should surely be judged.
  11.24 p.m.
  Mr. Tom King: We are dealing with the second application by the Government for a further £100 million tranche under the Industry Act 1972, as amended by the Industry Act 1972. I am not surprised that my hon. Friend the Member for Chingford (Mr. Tebbit) got the impression that the occasions on which the Government ask for yet more money are becoming frequent. The frequency of application is an indicator of the Government's profligate spending in this area.
  My hon. and learned Friend the Member for Dover and Deal (Mr. Rees) has a sinister suspicion that this money might already be spoken for. I am sorry to confirm that my researches show that that is not only the case but that the Government have already allocated more money than is being asked for in this Order. My researches show that the Government have already allocated £400 million under various programmes. They have permission from this House for £250 million, and this Order will entitle them to a further £100 million, but they have entered into other commitments in their various programmes. There is the accelerated investment programme, and there is the machine tool scheme. I can find no trace of any expenditure committed in those respects, but I know that they are allocated under separate allocations. The fact is that more than £400 million has been attributed.
  The difficulty in trying to establish the true situation is that we have a confused picture. Sums go in and out under Section 8 of the Industry Act with alarming frequency. The Minister made this clear. We had British Leyland money
  198
  of £100 million. "Now you see it, now you do not", because then it became the British Leyland Act and the money has gone again and is no longer attributed to Section 8. We have the Alfred Herbert guarantee, which at one stage was under the guarantee section, and then it was suddenly switched under an Order to a full finding and total share acquisition.
  We also have the funding powers of the NEB, which further confuse the position, and it is difficult to trace what is happening. When one looks at the figures supplied in an answer by the Minister of State to my hon. Friend the Member for Henley (Mr. Heseltine) one is struck by the extraordinary contrast between the sums involved. There are detailed and minute payments to Kierney Trekker Marwin, including one payment of £100,000 in March 1975, and slipped in at the bottom there is a small item of £162 million for Chrysler.
  It may be the law of diminishing interest, but we might ask what has happened to Kierney Trekker and Marwin, because we ought to pay some attention to these small companies which are no doubt on their sixth application for special extra funds which they want for some project of which we have no information. In the scale of things, because our rate of expenditure in this Order is £1 million a minute, it is a little difficult to spend too much time on the last £100,000 for Kierney Trekker and Marwin, but I think that we ought to pay some attention to these sums.
  We oppose this application tonight because we are totally opposed not only to the gross abuse of the reasonable powers that exist under the 1972 Industry Act but to the substantial amendment which the Government made to that Act by their 1975 Industry Act. It is stretching the bounds of credibility in this House to talk piously in the guidelines which have been referred to by my hon. Friend the Member for Blaby (Mr. Lawson). The guidelines say that the way in which Section 8 is operated depends on what opinion is obtained in each case from the Industrial Development Advisory Board. What the document does not go on to say is that we and the Government cannot ignore every opinion that the Board gives us, and it might have been more honest if that had been stated.

  199
  We have in this Order one of the main reasons why it is necessary to ask for a further advance on the tranche, and that is the expenditure on Chrysler. The Chrysler expenditure of £162 million has still not been adequately explained to the House. We have never had explained what is the new process by which Chrysler will produce a new model for £5 million, a technique quite unknown to other car manufacturers in the world. I know that the House will wish the Select Committee well in its attempt to establish the true facts of the whole Chrysler situation. Whatever the Minister of State's ambitions in entering the House and reaching his present high position in the Government, I doubt whether he saw himself as an invigorator of the Dow Jones Index. His constituents may view with mixed pride his achievement on behalf of the American shareholders of Chrysler.
  My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) has been absolutely consistent in his attitude on this. When his constituents were directly involved in Norton Villiers Triumph, he made clear his principles, and the whole House respected him for it. In this case, he asked for simple justice between different parts of the country and asked that political interests should not totally sway Government decisions.
  It is at least gratifying to have had the Government's guidelines. My hon. Friend the Member for Blaby played a big part in getting them. However, although there are funds under Section 8 of the Industry Act, they are not as large as the funds of the NEB. We still have not had guidelines about how the NEB will operate, yet it is already set up and acquiring shareholdings.
  This strategy and this application for funds might be more acceptable if they were consistent with the Government's overall economic strategy. But the Government's summing-up of their position in the paper on their criteria is:
  "Thus, if we are to achieve the over-riding objective of improving our industrial performance"—
  an objective to which the whole House would subscribe—
  "available resources should go into those industries and companies which have the
  200
  soundest performance and/or the best prospects as regards viability and rate of return."
  Because the Government have totally failed in their expenditure under so much of this section to live by their own criteria, and in support of their own principles, we shall vote against them tonight.
  11.32 p.m.
  Mr. Kaufman: By leave of the House, I should like to reply. This debate has been another curious exercise in innocence by dissociation by the Opposition. They have been busy dissociating themselves from their own Act of Parliament. One of the reasons why I so welcomed the momentary appearance of the hon. Member for Oswestry (Mr. Biffen) on the Front Bench a short time ago is that when the Industry Act 1972 was going through the House he and a few very lonely hon. Friends kept the House sitting late into Friday night, forlornly opposing their Government, some members of whom have been attacking us tonight for implementing their legislation.
  For example, the hon. Member for Pudsey (Mr. Shaw) asked why £100 million was the appropriate sum. Section 8(7) of the 1972 Act says:
  "The said limit shall be £150 million, but the Secretary of State may, on not more than four occasions, by order made with the consent of the Treasury increase or further increase that limit by a sum specified in the order, being a sum not exceeding £100 million."
  That is why £100 million is the appropriate sum.
  The hon. Member for Bridgwater (Mr. King), winding up this truncated debate, complained that this money was being voted at the rate of £1 million a minute—precisely under his party's legislation, forlornly opposed by the hon. Member for Oswestry during that battle four years ago, which I remember very well since I hung about for the legislation because I prided myself in those days on my Division record.
  Mr. Tebbit: Was there anything to stop the hon. Gentleman from tabling an Order for £50 million in 90 minutes, or even £25 million, if only he could restrain himself?
  Mr. Kaufman: No. The legislation enacted by the present Opposition is generous in this respect and we have

  201
  availed ourselves of its flexibility. As my right hon. Friend the Secretary of State for Energy always used to say, they left us with a valuable instrument.
  The hon. Member for Henley (Mr. Heseltine), in introducing the debate on behalf of his party, drew attention to what he regarded as some inconsistency between the criteria which I readily published in response to the question of the hon. Member for Blaby (Mr. Lawson)—the hon. Gentleman has been kind enough to acknowledge the fact—and the aid that we gave to Chrysler, for which the House voted with a substantial majority just before the Christmas Recess. The hon. Gentleman was very selective in his quotations from the criteria, and I add, not subtracting from or substituting for his quotation, paragraph 21 of the criteria. The paragraph reads:
  "In considering an assessment of viability along with an assessment of the social costs and benefits involved, the Government have always been more prepared to give proposals for assistance the benefit of the doubt as to the prospects of viability where the social cost of withholding assistance would be particularly high."
  That was one of the criteria which we used for the Chrysler rescue as well as the criteria to which the hon. Member for Henley fairly referred.
  The hon. Member for Perth and East Perthshire (Mr. Crawford) asked a number of questions which relate more to Section 7 than to Section 8. As Scotland is now totally an assisted area, it is covered by Section 7, although the Chrysler rescue assisted Linwood. [Interruption.] The industry schemes and the accelerated project schemes also apply to Scotland.
  Scottish Aviation, about which the hon. Gentleman asked, is one of the companies which comes within Schedule 1 to the Aircraft and Shipbuilding Industries Bill. It will become part of British Aerospace when it becomes publicly owned. The hon. Gentleman may be interested to know that on the invitation of my hon. Friend the Member for Central Ayrshire (Mr. Lambie) I shall be visiting Scottish Aviation soon to discuss its particular problems. As regards Marathon, the hon. Gentleman will be pleased to know that the immediate crisis which we feared is not now so severe because of the order
  202
  from the Persian Gulf which happily was recently gained.
  The hon. Member for Chingford (Mr. Tebbit) and his hon. and learned Friend the Member for Dover and Deal (Mr. Rees) wished to know what kind of schemes we were considering under the latest tranche under Section 8. We have in mind, although this does not stand alone, the industry schemes—the hon. Member for Pudsey was good enough to refer to one of them—and the accelerated projects scheme. They are both excellent schemes because they generate a great deal of investment additional to the relatively small sums which the Government invest. They are considerable multipliers. That is one reason for their being such excellent schemes and having met with such a very good response.
  I cannot vie with the hon. Member for Wolverhampton, South-West (Mr. Budgen) in talking about local Poujadists. He seems to be, with the greatest affection, an emblematic figure when it comes to Poujadists in his part of the country. I advise him, when he speaks of selective industrial assistance, not to refer so easily to rotten boroughs. Those of us who were in the House during the office of the Conservative Government remember how curiously a number of Conservative seaside towns, plus Oswestry, were suddenly and irrationally declared assisted areas when other areas which elected Labour Members were curiously omitted from being so designated.
  Mr. Budgen: I am sure that the House has much enjoyed the Minister's jokes at my expense and my party's expense, but he has not answered the point I was making. What are the consistent criteria which allowed Chrysler to be bailed out and NVT not to be bailed out?
  Mr. Kaufman: I have just read to the hon. Gentleman from the criteria that we published. I draw his attention to those criteria. His hon. Friend the Member for Blaby is quite right. They form a key document in consideration of these matters. I have read out part of those criteria as they applied to Chrysler and this should be added to that section of the criteria, read out by the hon. Member for Henley. If the hon. Member for Wolverhampton, South-West examines

  203
  these and looks back to the speeches that we made when the NVT decision came before the House, he will appreciate that both these decisions are entirely consonant with the criteria.
  Mr. Lawson: I am grateful to the hon. Gentleman for making the criteria available to the whole House, but the part he read was from paragraph 21, which deals with the employment criteria particularly in areas of high unemployment. That is a Section 7 matter. It is not a Section 8 matter, which we are now discussing. Paragraph 11 makes that absolutely clear.
  Mr. Kaufman: The hon. Gentleman is not being as accurate as he generally is. The criterion for Section 7 is that of an assisted area. Section 7 relates to assisted areas. Section 8 relates to nation-wide interests. [Interruption.] Wolverhampton is not in an assisted area. The areas of the Chrysler rescue were partly in assisted areas and partly not in assisted areas.
  We also had to take into account the fact that unemployment in Coventry, for example, is extremely high at present. That was one of the factors which had to be set against the expense of the Chrysler rescue.
  Mr. Heseltine: If the level of unemployment in Coventry was so worrying in the circumstances, why was it not possible for NVT, also in the West Midlands, to attract assistance?
  Mr. Kaufman: I believe that the hon. Gentleman was once a parliamentary candidate in Coventry. He ought to keep in touch with the things that are taking place there and get hold of the unemployment figures for the West Midlands. He would then find that Coventry has been hit extremely hard, by matters which have not affected the rest of the West Midlands to the same extent.
  Mr. Crawford: Does the Minister agree with the hon. Member for Wolverhampton, South-West (Mr. Budgen), who was saying from a sedentary position that the reason why Linwood was saved was pressure from the Scottish National Party?
  Mr. Kaufman: I rarely agree with the hon. Member for Wolverhampton, South-West. If he was saying that—I do not recollect it—I would have to disagree.
  Mr. Bugden: I assure the Minister that I was saying that. It is my view that the Chrysler bail-out was in order to offer a bribe to the SNP in the support to Linwood.
  Mr. Kaufman: Then the hon. Gentleman is as inaccurate as usual. He has merely maintained his record for inaccuracy.
  It being one and a half hours after the commencement of proceedings, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted business):—
  The House divided: Ayes 279, Noes 254.

  Division No. 35.]

  AYES

  [11.44 p.m.

  Allaun, Frank

  Brown, Hugh D. (Provan)

  Cronin, John

  Anderson, Donald

  Brown, Robert C. (Newcastle W)

  Crosland, Rt Hon Anthony

  Archer, Peter

  Buchan, Norman

  Cryer, Bob

  Armstrong, Ernest

  Buchanan, Richard

  Cunningham, G. (Islington S)

  Ashley, Jack

  Butler, Mrs Joyce (Wood Green)

  Cunningham, Dr J. (Whiteh)

  Ashton, Joe

  Callaghan, Jim (Middleton & P)

  Dalyell, Tam

  Atkins, Ronald (Preston N)

  Campbell, Ian

  Davidson, Arthur

  Atkinson, Norman

  Canavan, Dennis

  Davies, Bryan (Enfield N)

  Bagier, Gordon A. T.

  Cant, R. B.

  Davies, Denzil (Llanelli)

  Bain, Mrs Margaret

  Carmichael, Neil

  Davis, Clinton (Hackney C)

  Barnett, Rt Hon Joel (Heywood)

  Carter-Jones, Lewis

  Deakins, Eric

  Bates, Alf

  Cartwright, John

  Dean, Joseph (Leeds W)

  Bean, R. E.

  Castle, Rt Hon Barbara

  de Freitas, Rt Hon Sir Geoffrey

  Benn, Rt Hon Anthony Wedgwood

  Clemitson, Ivor

  Delargy, Hugh

  Bennett, Andrew (Slockport N)

  Cocks, Michael (Bristol S)

  Dell, Rt Hon Edmund

  Bidwell, Sydney

  Coleman, Donald

  Dempsey, James

  Bishop, E. S.

  Colquhoun, Mrs Maureen

  Dolg, Peter

  Blenkinsop, Arthur

  Concannon, J. D.

  Douglas-Mann, Bruce

  Boardman, H.

  Conlan, Bernard

  Duffy, A. E. P.

  Booth, Albert

  Cook, Robin F. (Edin C)

  Dunn, James A.

  Boothroyd, Miss Betty

  Corbett, Robin

  Dunnett, Jack

  Bottomley, Rt Hon Arthur

  Cox, Thomas (Tooting)

  Dunwoody, Mrs Gwyneth

  Boyden, James (Bish Auck)

  Craigen, J. M. (Maryhill)

  Eadle, Alex

  Bradley, Tom

  Crawford, Douglas

  Edge, Geoff

  Bray, Dr Jeremy

  Crawshaw, Richard

  Edwards, Robert (Wolv SE)

  Ellis, John (Brigg & Scun)

  Lee, John

  Rooker, J. W.

  Ellis, Tom (Wrexham)

  Lestor, Miss Joan (Eton & Slough)

  Rose, Paul B.

  English, Michael

  Lewis, Ron (Carlisle)

  Rowlands, Ted

  Ennals, David

  Litterick, Tom

  Sandelson, Neville

  Evans, Fred (Caerphilly)

  Loyden, Eddie

  Sedgemore, Brian

  Evans, Ioan (Aberdare)

  Luard, Evan

  Selby, Harry

  Fernyhough, Rt Hon E.

  Lyon, Alexander (York)

  Shaw, Arnold (Ilford South)

  Fitch, Alan (Wigan)

  Lyons, Edward (Bradford W)

  Sheldon, Robert (Ashton-u Lyne)

  Flannery, Martin

  McCartney, Hugh

  Shore, Rt Hon Peter

  Fletcher, Ted (Darlington)

  MacCormick, Iain

  Short, Rt Hon E. (Newcastle C)

  Ford, Ben

  McElhone, Frank

  Short, Mrs Renée (Wolv NE)

  Forrester, John

  MacFarquhar, Roderick

  Silkin, Rt Hon John (Deptford)

  Fowler, Gerald (The Wrekin)

  McGuire, Michael (Ince)

  Silkin, Rt Hon S. C. (Dulwich)

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

  Mackenzie, Gregor

  Sillars, James

  Freeson, Reginald

  Mackintosh, John P

  Silverman, Julius

  Garrett, John (Norwich S)

  Maclennan, Robert

  Skinner, Dennis

  Garrett, W. E. (Wallsend)

  McMillan, Tom (Glasgow C)

  Small, William

  George Bruce

  McNamara, Kevin

  Smith, John (N Lanarkshire)

  Gilbert, Dr John,

  Madden, Max

  Snape, Peter

  Ginsburg, David

  Magee, Bryan

  Spearing, Nigel

  Golding, John

  Mahon, Simon

  Spriggs, Leslie

  Gould, Bryan,

  Marks, Kenneth

  Stallard, A. W.

  Gourlay, Harry

  Marquand, David

  Stewart, Rt Hon M.(Fulham)

  Graham, Ted

  Marshall, Dr Edmund(Goole)

  Stoddart, David

  Grant, George (Morpeth)

  Marshall, Jim (Leicester S)

  Stott, Roger

  Grant, John (Islington C)

  Mason, Rt Hon Roy

  Strang, Gavin

  Grocott, Bruce

  Maynard, Miss Joan

  Strauss, Rt Hon G. R.

  Hamilton, James (Bothwell)

  Meacher, Michael

  Summerskill, Hon Dr Shirley

  Hamilton, W. W. (Central Fife)

  Mellish, Rt Hon Robert

  Swain, Thomas

  Mendelson, John

  Taylor, Mrs Ann (Bolton W)

  Harper, Joseph

  Mikardo, Ian

  Thomas, Jeffrey (Abertillery)

  Harrison, Walter (Wakefield)

  Millan, Bruce

  Thomas, Mike (Newcastle E)

  Hart, Rt Hon Judith

  Miller, Dr M. S. (E Kilbride)

  Thomas, Ron (Bristol NW)

  Hatton, Frank

  Miller, Mrs Millie (Ilford N)

  Thompson, George

  Hayman, Mrs Helene

  Mitchell, R. C. (Soton, Itchen)

  Thorne, Stan (Preston South)

  Healey, Rt Hon Denis

  Molloy, William

  Tierney, Sydney

  Helfer, Eric S.

  Moonman, Eric

  Tinn, James

  Henderson, Douglas

  Morris, Alfred (Wythenshawe)

  Tomlinson, John

  Hooley, Frank

  Morris, Charles R. (Openshaw)

  Torney, Tom

  Horam, John

  Morris, Rt Hon J. (Aberavon)

  Tuck, Raphael

  Howell, Denis (B'ham, Sm H)

  Mulley, Rt Hon Frederick

  Varley, Rt Hon Eric G.

  Hoyle, Doug (Nelson)

  Murray, Rt Hon Ronald King

  Wainwright, Edwin (Dearne V)

  Huckfield, Les

  Newens, Stanley

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

  Hughes, Rt Hon C. (Anglesey)

  Noble, Mike

  Walker, Harold (Doncaster)

  Hughes, Mark (Durham)

  Oakes, Gordon

  Walker, Terry (Kingswood)

  Hughes, Robert (Aberdeen N)

  Ogden, Eric

  Ward, Michael

  Hughes, Roy (Newport)

  O'Halloran, Michael

  Watkins, David

  Hunter, Adam

  O'Malley, Rt Hon Brian

  Weetch, Ken

  Irvine, Rt Hon Sir A. (Edge Hill)

  Orme, Rt Hon Stanley

  Wellbeloved, James

  Irving, Rt Hon S. (Dartford)

  Ovenden, John

  White, Frank R. (Bury)

  Jackson, Colin (Brighouse)

  Owen, Dr David

  White, James (Pollok)

  Jackson, Miss Margaret (Lincoln)

  Padley, Walter

  Whitlock, William

  Janner, Greville

  Palmer, Arthur

  Willey, Rt Hon Frederick

  Jenkins, Hugh (Putney)

  Park, George

  Williams, Alan (Swansea W)

  Jenkins, Rt Hon Roy (Stechford)

  Parker, John

  Williams, Alan Lee (Hornch'ch)

  Johnson, James (Hull West)

  Parry, Robert

  Williams, W. T. (Warrington)

  Johnson, Walter (Derby S)

  Pearl, Rt Hon Fred

  Wilson, Alexander (Hamilton)

  Jones, Alec (Rhondda)

  Pendry, Tom

  Wilson, Gordon (Dundee E)

  Jones, Barry (East Flint)

  Perry, Ernest

  Wilson, Rt Hon H. (Huyton)

  Jones, Dan (Burnley)

  Prescott, John

  Wilson, William (Coventry SE)

  Kaufman, Gerald

  Price, C. (Lewisham W)

  Wise, Mrs Audrey

  Kelley, Richard

  Price, William (Rugby)

  Woodall, Alec

  Kerr, Russell

  Radice, Giles

  Woof, Robert

  Kilroy-Silk, Robert

  Richardson, Miss Jo

  Wrigglesworth, Ian

  Kinnock, Neil

  Roberts, Albert (Normanton)

  Young, David (Bolton E)

  Lamble, David

  Roberts, Gwllym (Cannock)

  Lamborn, Harry

  Robertson, John (Paisley)

  TELLERS FOR THE AYES:

  Lamond, James

  Roderick, Caerwyn

  Mr. J. D. Dormand and

  Latham, Arthur (Paddington)

  Rodgers, George (Chorley)

  Mr. Laurie Pavitt.

  Leadbitter, Ted

  Rodgers, William (Stockton)

  NOES

  Adley, Robert

  Benyon, W.

  Brocklebank-Fowler, C.

  Aitken, Jonathan

  Berry, Hon Anthony

  Brown, Sir Edward (Bath)

  Alison, Michael

  Biffen, John

  Bryan, Sir Paul

  Amery, Rt Hon Julian

  Biggs-Davison, John

  Buchanan-Smith, Alick

  Arnold, Tom

  Blaker, Peter

  Budgen, Nick

  Atkins, Rt Hon H. (Spelthorne)

  Body, Richard

  Bulmer, Esmond

  Awdry, Daniel

  Boscawen, Hon Robert

  Burden, F. A.

  Baker, Kenneth

  Bottomley, Peter

  Butler, Adam (Bosworth)

  Banks, Robert

  Bowden, A. (Brighton, Kemptown)

  Carlisle, Mark

  Beith, A. J.

  Boyson, Dr Rhodes (Brent)

  Chalker, Mrs Lynda

  Bell, Ronald

  Braine, Sir Bernard

  Churchill, W. S.

  Bennett, Dr Reginald (Fareham)

  Brittan, Leon

  Clark, Alan (Plymouth, Sutton)

  206

  207

  Clark, William (Croydon S)

  Irving, Charles (Cheltenham)

  Raison, Timothy

  Clarke, Kenneth (Rushclifle)

  James, David

  Rathbone, Tim

  Clegg, Walter

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

  Rawlinson, Rt Hon Sir Peter

  Cockcroft, John

  Johnson Smith, G. (E Grinstead)

  Rees, Peter (Dover & Deal)

  Cooke, Robert (Bristol W)

  Jones, Arthur (Daventry)

  Rees-Davies, W. R.

  Cope, John

  Jopling, Michael

  Renton, Rt Hon Sir D. (Hunts)

  Cormack, Patrick

  Joseph, Rt Hon Sir Keith

  Renton, Tim (Mid-Sussex)

  Corrie, John

  Kaberry, Sir Donald

  Rhys Williams, Sir Brandon

  Costain, A. P.

  Kellett-Bowman, Mrs Elaine

  Ridley, Hon Nicholas

  Crouch, David

  Kershaw, Anthony

  Ridsdale, Julian

  Crowder, F. P.

  Kilfedder, James

  Rifkind, Malcolm

  Davies, Rt Hon J. (Knutsford)

  Kimball, Marcus

  Roberts, Michael (Cardiff NW)

  Dean, Paul (N Somarset)

  King, Evelyn (South Dorset)

  Roberts, Wyn (Conway)

  Dodsworlh, Geoffrey

  King, Tom (Bridgwater)

  Ross, Stephen (Isle of Wight)

  Douglas-Hamilton, Lord James

  Kitson, Sir Timothy

  Rossi, Hugh (Hornsey)

  Drayson, Burnaby

  Knight, Mrs Jill

  Rost, Peter (SE Derbyshire)

  du Cann, Rt Hon Edward

  Knox, David

  Royle, Sir Anthony

  Durant, Tony

  Lamont, Norman

  Sainsbury, Tim

  Dykes, Hugh

  Lane, David

  St. John-Stevas, Norman

  Eden, Rt Hon Sir John

  Langford-Holl, Sir John

  Scott-Hopkins, James

  Edwards, Nicholas (Pembroke)

  Latham, Michael (Melton)

  Shaw, Giles (Pudsey)

  Elliott, Sir William

  Lawrence, Ivan

  Shaw, Michael (Scarborough)

  Emery, Peter

  Lawson, Nigel

  Shelton, William (Streatham)

  Eyre, Reginald

  Lester, Jim (Beeston)

  Shepherd, Colin

  Fairbairn, Nicholas

  Lewis, Kenneth (Rutland)

  Shersby, Michael

  Fairgrieve, Russell

  Lloyd, Ian

  Silvester, Fred

  Fell, Anthony

  Loveridge, John

  Sims, Roger

  Finsberg, Geoffrey

  Luce, Richard

  Sinclair, Sir George

  Fisher, Sir Nigel

  McCrindle, Robert

  Skeet, T. H. H.

  Fletcher, Alex (Edinburgh N)

  Macfarlane, Neil

  Smith, Cyril (Rochdale)

  Fletcher-Cooke, Charles

  MacGregor, John

  Smith, Dudley (Warwick)

  Fookes, Miss Janet

  Macmillan, Rt Hon M. (Farnham)

  Speed, Keith

  Fowler, Norman (Sutton C'f'd)

  McNair-Wilson, M. (Newbury)

  Spence, John

  Fox, Marcus

  McNair-Wilson, P. (New Forest)

  Spicer, Michael (S Worcester)

  Fry, Peter

  Madel, David

  Sproat, Iain

  Galbraith, Hon T. G. D.

  Marshall, Michael (Arundel)

  Stainton, Keith

  Gardiner, George (Reigate)

  Marten, Neil

  Stanbrook, Ivor

  Gardner, Edward (S Fylde)

  Mather, Carol

  Stanley, John

  Gilmour, Rt Hon Ian (Chesham)

  Maude, Angus

  Steel, David (Roxburgh)

  Gilmour, Sir John (East Fife)

  Maudling, Rt Hon Reginald

  Stokes, John

  Glyn, Dr Alan

  Mawby, Ray

  Stradling Thomas, J.

  Godber, Rt Hon Joseph

  Maxwell-Hyslop, Robin

  Tapsell, Peter

  Goodhart, Philip

  Mayhew, Patrick

  Taylor, Teddy (Cathcart)

  Goodhew, Victor

  Meyer, Sir Anthony

  Tebbit, Norman

  Goodlad, Alastair

  MillS, Peter

  Temple-Morris, Peter

  Gorst, John

  Miscampbell, Norman

  Thatcher, Rt Hon Margaret

  Gow, Ian (Eastbourne)

  Mitchell, David (Basingstoke)

  Thomas, Rt Hon P. (Hendon S)

  Gower, Sir Raymond (Barry)

  Moate, Roger

  Thorpe, Rt Hon Jeremy (N Devon)

  Grant, Anthony (Harrow C)

  Monro, Hector

  Townsend, Cyril D.

  Montgomery, Fergus

  Trotter, Neville

  Gray, Hamish

  Moore, John (Croydon C)

  Tugendhat, Christopher

  Griffiths, Eldon

  More, Jasper (Ludlow)

  van Straubenzee, W. R.

  Grist, Ian

  Morgan, Geraint

  Vaughan, Dr Gerard

  Grylls, Michael

  Morris, Michael (Northampton S)

  Viggers, Peter

  Hall, Sir John

  Morrison, Charles (Devizes)

  Wainwright, Richard (Coine V)

  Hall-Davis, A. G. F.

  Morrison, Hon Peter (Chester)

  Wakeham, John

  Hamilton, Michael (Salisbury)

  Mudd, David

  Walder, David (Clitheroe)

  Hampson, Dr Keith

  Neave, Airey

  Walker, Rt Hon P. (Worcester)

  Hannam, John

  Nelson, Anthony

  Walker-Smith, Rt Hon sir Derek

  Harvie Anderson, Rt Hon Miss

  Neubert, Michael

  Wall, Patrick

  Hastings, Stephen

  Newton, Tony

  Walters, Dennis

  Havers, Sir Michael

  Nott, John

  Weatherill, Dennis

  Hawkins, Paul

  Onslow, Cranley

  Hayhoe, Barney

  Oppenheim, Mrs Sally

  Wells, John

  Heath, Rt Hon Edward

  Osborn, John

  Whitelaw, Rt Hon William

  Heseltine, Michael

  Page, Rt Hon R. Graham (Crosby)

  Wiggin, Jerry

  Hicks, Robert

  Paisley, Rev Ian

  Winterton, Nicholas

  Higgins, Terence L.

  Pardoe, John

  Wood, Rt Hon Richard

  Holland, Philip

  Pattie, Geoffrey

  Young, Sir G. (Ealing, Acton)

  Hordern, Peter

  Percival Ian

  Younger, Hon George

  Howell, David (Guildford)

  Peyton, Rt Hon John

  TELLERS FOR THE NOES:

  Howell, Ralph (North Norfolk)

  Pink, R. Bonner

  Mr. Spencer Le Marchant and

  Hurd, Douglas

  Price, David (Eastlerigh)

  Mr. Cecil Parkinson.

  Hutchison, Michael Clark

  Prior, Rt Hon James

  Irvine, Bryant Godman (Rye)

  Pym, Rt Hon Francis

  Question accordingly agreed to.
  Resolved,
  That the Financial Assistance for Industry (Increase of Limit) (No. 2) Order 1976, a draft of which was laid before this House on 15th January, be approved.

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dormand.]

  SILVER STREET SUB-POST OFFICE, EDMONTON
  11.58 p.m.
  Mr. Ted Graham: I am grateful for the opportunity to raise a matter which is not only of great importance and concern to many thousands of my constituents but has significance in a wider national context.
  I begin with some basic facts. The Silver Street sub-post office has served its community since before the First World War. It existed in 1913, and for the past 63 years the shop has been sited on the corner of Silver Street and Sheldon Road. The shop has changed its uses and owners, but there has always been a sub-post office in it. It has always been a minor hub of activity and a centre of life in the community it serves.
  In June 1971 the business being carried on at 101 Silver Street was bought by Mr. V. S. Patel and Mr. H. T. Patel in partnership from a Mr. Green. With it went the sub-post office and the sub-post-mastership, because the sub-post-mastership was thereafter transferred from Mr. Green to Mr. V. S. Patel. The Post Office authorities at all times knew that Mr. H. T. Patel ran the business, evidently to their satisfaction, and that Mr. V. S. Patel, who held the authority, lived not at 101 Silver Street but elsewhere, in North Harrow. All the correspondence from the Post Office to Mr. Patel was addressed to him at North Harrow.
  The two Mr. Patels then decided in mid-June to terminate their business partnership and they assumed, wrongly, that it would be a simple matter to arrange that the authority which was being held by Mr. V. S. Patel should be transferred to his partner. They believed that this would be approved by the Post Office automatically. Up to that moment there had been no question of efficiency, integrity or viability. In fact, it is interesting to learn that the way in which the Post Office measures the level of business conducted is in what is called a unit of account. This unit of account is made up of the value of the postal orders, the allowances, the licences and other uses of the post office.
  In 1971 the flow of traffic through the post office was measured at 236,531 units of account. In 1975 it had declined to
  210
  225,771 units of account, a decline of 10,760. But over five years, in an area where the houses were being demolished for road widening and so on, there had been a decline in the business of the post office of only 5 per cent. It is a simple matter to arrange that the authority which had been held by one of the Mr. Patels should be transferred to the other. They were shocked and dismayed to find that their partnership dissolution would lead to the eventual decision to close the post office.
  I fully understand the right—in fact, the duty—of the Post Office to examine the viability of a post office whenever a resignation occurs and that the disposal of the licence is not in the gift of the resigning sub-postmaster but is the responsibility of the Post Office.
  What happened next after the resignation had been handed in gives me grounds for the gravest disquiet. Without consulting anyone or any body, the district postmaster decided to close the post office, by letter to the then sub-postmaster of 15th October. It is important to note that at that stage, after the decision had been made to close the post office and it had been made public, no contact or consultation had taken place with either the council of the London borough of Enfield or any organisation of a welfare or social kind or with the local Member of Parliament.
  I should like to read briefly a letter which was signed by the chief executive of the London borough of Enfield to Sir William Ryland last week. In this letter he says:
  "The resignation of Mr. V. Patel led to an examination of the present and future requirements of the area. This was carried out last Autumn resulting on the 4th November, 1975 in a formal notification to the Council (without any prior consultation at official level with the Council or apparently any other interested bodies) to permanently close the sub-Post Office as from the 18th November, 1975."
  Within days of the news being made public, a petition was signed by more than 1,000 users of the Post Office. One needs to appreciate why so many people so quickly decided to sign that petition. Many of the users of the post office were not only old-age pensioners but extremely elderly and infirm. They are now invited by the district postmaster to collect their pensions either at the main post office in

  211
  Silver Street or at the Cambridge roundabout. It should be remembered that there have been major road alignments in the area, which have created a race track of frightening speed. The elderly and the infirm are involved in a journey on foot which is extremely dangerous for the agile and for the foolhardy. It could be suicidal for anyone unsure of himself or herself either physically or mentally. I submit that there are compelling social grounds for this post office to remain.
  When the petition was handed to me on 1st November, I immediately made inquiries and was astounded to find the state of non-consultation to which I have just referred. I at once saw the district postmaster, and I say at once that all my dealings with the district postmaster have been cordial, courteous, friendly and fruitful, to the extent that he has been frank and honest in answering my questions. He frankly admitted that no consultation had taken place save for a telephone inquiry to ascertain whether there was any development in the vicinity. He told me that he had been informed that there was none planned and that this had formed part of his reasons in coming to the judgment to close the post office.
  I put it bluntly to my hon. Friend the Minister that anyone with any knowledge of the area around the post office would find it incredible that a decision to close that office could be taken in the belief that no development was planned. At my request, the district postmaster postponed the closure and agreed to meet the council.
  At this point I wish to pay full tribute to the council, which has throughout shared my incredulity and anger at the action which has been proposed. The chief executive and the councillors have continued to make the strongest protest and representation, the latest to Sir William Ryland and Lord Peddie as recently as last week.
  Contrary to there being no development planned, the council told the postmaster that at six separate sites all within 300 or 400 yards of the post office, starting in 1976 and scheduled to be completed in 1978, the council and the GLC will build 450 units accommodating 1,600 people.
  Again, I think it appropriate to quote from the letter from the Enfield Council
  212
  to Sir William Ryland which went off last week:
  "Sterling Way has recently been opened to divert the North Circular Road from Silver Street. Thus, Silver Street is now a much safer area in which to shop. There are approximately 1,000 dwellings already served by the sub-post office. A further 500 are in the course of construction or about to be constructed.
  "While there are few businesses in the locality, there is the North Middlesex Hospital, which is being redeveloped and extended and where the Area Health Authority also have set up their headquarters. Both the hospital and the headquarters of the AHA must generate a considerable amount of post office business. At present, the hospital has 658 available beds. Shortly accommodation for a further 640 patients will become available.… There is a pedestrian way from the North Middlesex Hospital under Sterling Way (the dual carriage North Circular Road)."
  A list of the developments is then set out, and, significantly, the chief executive says, with reference to Sterling Way and the other developments:
  "I should perhaps say that when the initial decision to close the post office was made, this was without the knowledge of the above developments".
  Not only will these units generate more business from old-age pensioners and others, but every unit will become a post office user, because while the properties which have been destroyed were in disparate ownerships all the new units will be council units. The rents, whether paid to the GLC or to the London borough, will be paid by Giro, and the post office business will be increased, in my view, by about 50 per cent.
  I believe that, under pressure to effect savings, the Post Office has seized the chance provided by the resignation of Mr. V. S. Patel and has failed completely to take account of the growth of post office business in the near future. The closure of this post office will cause great hardship to many of my constituents.
  Not only has a petition been signed, but more than 900 local residents have taken the trouble to write to me. They comprise residents from Silver Street, Bulwer Road, Denton Road, Haselbury Road, Sheldon Road, Sweet Briar Walk, Warwick Road, Cheddington Road, Henley Road, Huish Road, Hinton Road, Huxley Road, Lopen Road and Oakfield Avenue. The occupants of two out of three houses in the vicinity of the post office have taken the trouble to write to

  213
  me giving their views. I thank them for the way in which they have backed my efforts on their behalf in the past few weeks.
  This experience has highlighted the disturbing way in which it is possible for the Post Office to blight the social life of the community and to cause great worry to elderly people, and, indeed, to take such action without adequate or early consultation.
  In a report in the Evening Standard tonight a Post Office spokesman is alleged to have said:
  "A lot of ignorant and misguided abuse has been levelled at us. People tend to get blindly hysterical in their criticism when offices close."
  I assure the Minister that the many people who have been to see me on this matter have not been ignorant, abusive or misguided, and they are certainly not blindly hysterical.
  What concerned me was the fact that the spokesman went on to say:
  "We do not consult local people, but after announcing a possible closure we allow time for comments to come in."
  That is a disgraceful way of operating a publicly-owned business and of taking account of the views of local people.
  A letter from the district postmaster dated 15th October 1975 said:
  "I have to inform you, therefore, that the above office will be closed permanently on 18th November 1975."
  When that letter was written, there had obviously been no time for consultation or comments.
  I thought that there was national significance in this matter and I wrote to my hon. Friend the Minister of State, Department of Prices and Consumer Protection. He replied as follows:
  "It has not apparently been customary for the Post Office to enter into consultation before making closures. The Post Office Users' National Council tell us that where such closures have come to their attention, it has been through protests from those affected (either individually or through petitions) or their MPs. The Post Office Users' National Council have apparently had a number of representations about such closures this year and have become concerned about the whole question of sub-post office provision. I understand that they are currently in touch with the Post Office, the Federation of Sub Postmasters and such organisations as Age Concern and the Women's Institutes."
  214
  I very much hope that the Minister will welcome the fact that the inquiry now taking place under the National Consumers' Council, headed by Mr. Michael Young, will look searchingly into this subject. It appears that the Post Office, without paying any regard to people's wishes, is closing sub-post offices.
  It must be emphasised that in 1972 some 127 sub-post offices were closed; in 1973 the number of closures was 166; in 1974, 196; and in 1975, 216. No doubt I shall be told that globally this amounts only to 1 or 2 per cent, of the total, but I wish to point out that in 1975 twice the number of such offices were closed compared with 1972.
  In view of the weight of evidence on this matter, I ask the Minister to take the view that we should keep these offices open where that is reasonable. I hope he will add his weight to ensuring that that happens and that it will lead the Post Office to think again.
  12.15 a.m.
  The Minister of State, Department of Industry (Mr. Gregor Mackenzie): I express my thanks to my hon. Friend the Member for Edmonton (Mr. Graham) for raising what I have always regarded as an important subject, namely, the closure of sub-post offices. I recognise that any closure must be a matter of concern to the community concerned. It is understandable in circumstances of this kind that those affected will question the necessity of the closure and the sensitivity of those responsible to local needs and sentiments.
  I was particularly concerned when my hon. Friend drew my attention to the comments which appeared in today's Evening Standard, particularly the last paragraph which he quoted concerning consultations. I shall return to the question of consultations in a moment. I have no doubt that the Post Office authorities will have noted the article and my hon. Friend's comments.
  I must make clear my standing in decisions of this sort. The plain fact is that the 1969 Post Office Act changed the Post Office into a nationalised corporation and, as such, gave it full responsibility for the running of its day-to-day affairs.

  215
  The Act gave the Post Office powers to provide postal services, including counter services, and imposed on it a duty so to exercise its powers as to meet the social, industrial and commercial needs of the British Isles while having regard, among other things, to efficiency and economy. The Act gives the Secretary of State certain reserve powers to give the Post Office directions of a general character. I am sure the House will agree that detailed decisions affecting particular sub-post offices do not fall into this category.
  Since 1969 successive Ministers, of both parties, have maintained a consistent attitude in their refusal to intervene in operational matters. To do so would clearly he against the wishes of Parliament as expressed in the 1969 Act. To adopt any other course would be a retrograde step and would progressively undermine the authority and judgment of the Post Office Board. So long as the Post Office continues to conduct its business in accordance with the Act, it is right that Ministers should not interfere in the day-to-day management.
  The general policy of the Post Office in respect of the closures of sub-post offices is to strike a balance between meeting the needs of the community being served and the cost of providing the service. This is not in any sense to discount the importance of the social factors but is to recognise that these cannot be the sole criteria. I am sure my hon. Friend would not regard this as unreasonable.
  The broad yardstick which is adopted by the Post Office in reviewing the need for a sub-post office is that an office is not normally opened within one mile of an existing office in a town or within two miles in a rural area. Local factors are also taken into account including the volume of business transacted at the office concerned, the nature and terrain of the area it serves and the availability of local bus services. Full consideration is also given to the needs of local residents, pensioners in particular.
  Well before the event, local authorities and Post Office advisory committees are notified of any impending closures and the reasons for them. Their views and those of other interested parties are taken fully into account before a final decision is reached. That is why I am concerned
  216
  about the comments of my hon. Friend and the Evening Standard article in particular. I am sure my hon. Friend will appreciate that the closure of a sub-post office is not undertaken lightly and that the Post Office rarely closes one unless the postmaster resigns or retires or, as sometimes happens, it cannot find a replacement.
  My hon. Friend referred to the number of closures. The number of sub-post offices is published each year in the Post Office Report and Accounts. The figures show conclusively that the Post Office has acted with a full and proper degree of responsibility, although I can fully appreciate that national figures may be cold comfort to my hon. Friend and those whose views he expresses in the House. Over the past 10 years the number of sub-post offices has fallen from 23,200 to 22,000, representing a rate of net decline, after taking account of new offices opened as well as old offices closed, of less than one-half of 1 per cent. a year.
  These figures give no support to the view sometimes expressed that the Post Office is engaging in a massive cut-back in its counter services, nor do they imply that the Post Office is failing in its duties under the 1969 Act. By comparison with other countries, both in terms of the area served per post office and in terms of population served per post office, the service provided by the Post Office is amongst the best in the world.
  I fully understand my hon. Friend's concern about the need for full and adequate consultation in reaching a decision on the future of a particular sub-post office, and I am aware of his own dedicated efforts in this case. However, in view of my earlier comments, I am sure he will not expect me to go into great detail on that case.
  Although it is true, I am told by the postal authorities, that the initial notice was perhaps somewhat shorter than is customary in such cases, the Post Office decided as a result of the representations received, including those from my hon. Friend, to postpone the date of closure for a further three months while the original decision was reviewed. It concluded, however, that in the light of all the known factors, including welfare and social considerations, the original decision should stand.

  217
  I am told that there is a Crown post office less than half a mile to the east and that there are two sub-post offices less than a mile away. In such circumstances it would hardly be right for me directly to intervene, although I am sure that the Chairman of the Post Office and his board take note of the comments of hon. Members.
  As for the Post Office's future plans, I remind the House of the pledge given by the Chairman of the Post Office to the Post Office Users' National Council in February 1972:
  "it is not in fact our intention to reduce the number of offices on such a scale that might in any way be regarded as substantial".
  Sub-post offices are an integral part of the national Post Office network. Without them it would not be possible to provide anything like the present number of counters to the public.
  The Post Office is a large and diverse business covering the spectrum from small sub-post offices in rural areas to advanced telecommunications complexes. Each of these activities presents its own problems and opportunities. It was in recognition of the many changes which had taken place over the six years since the Post Office became a corporation that the Government accepted the advice of the Post Office Users' National Council to set up a committee, under the chairmanship of Mr. C. F. Carter, to review the whole range of the Post Office activities. My hon. Friend referred to that committee. I am sure he will be aware of the letter which hon. Members have received from my noble Friend Lord Peddie to the effect that the Council is making a study of sub-post offices.
  Mr. Stephen Ross: As one who is suffering from a similar problem on the Isle of Wight, may I ask
  218
  whether the Minister feels that the Post Office Users' National Council should be involved in this sort of situation? If people cannot get complaints dealt with by a Minister, surely the Council should have some sort of appeal procedure for these problems. I have a case where a petition of more than 2,500 signatures is backing the local authority and everybody else against the closure of a post office. We cannot get a change of mind, and I know that it is no use coming here for an Adjournment debate.
  Mr. Mackenzie: I am always concerned about post office closures. I have already indicated the standing given to the Secretary of State and myself by hon. Members. This is not a standard I have laid down for myself. There is no way in which I am permitted to interfere with the day-to-day management of the Post Office, and I would never seek to do so. An opportunity has now been afforded to the hon. Member for the Isle of Wight (Mr. Ross) to raise these matters with Lord Peddie and I hope he will do so.
  I know that there is great strength of feeling in the House. I have post offices in my own areas about which I am concerned, though I shall make no further comment on that.
  I would like to say how much we appreciate the work done by sub-postmasters and sub-postmistresses and the Post Office staff at larger offices. They provide a valuable service to the community, and we have seen how the many extra duties they take on are always carried out in the highest standards of public service.
  Question put and agreed to.
  Adjourned accordingly at twenty-seven minutes past Twelve o'clock.